Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CBTX, Inc. | ||
Entity Central Index Key | 0001473844 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 498.7 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Common Stock, Shares Outstanding | 25,195,123 | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 51,259 | $ 54,450 |
Interest-bearing deposits at other financial institutions | 320,805 | 327,620 |
Total cash and cash equivalents | 372,064 | 382,070 |
Securities | 231,262 | 229,964 |
Equity investments | 16,710 | 13,026 |
Loans held for sale | 1,463 | |
Loans, net of allowance for loan loss of $25,280 and $23,693 at December 31, 2019 and 2018, respectively | 2,613,805 | 2,423,130 |
Premises and equipment, net of accumulated depreciation of $32,923 and $29,867 at December 31, 2019 and 2018, respectively | 50,875 | 51,622 |
Goodwill | 80,950 | 80,950 |
Other intangible assets, net of accumulated amortization of $15,809 and $14,915 at December 31, 2019 and 2018, respectively | 4,938 | 5,775 |
Bank-owned life insurance | 71,881 | 71,525 |
Operating lease right-to-use asset | 12,926 | |
Deferred tax asset, net | 7,432 | 7,201 |
Other assets | 14,238 | 13,833 |
Total assets | 3,478,544 | 3,279,096 |
Liabilities | ||
Noninterest-bearing deposits | 1,184,861 | 1,183,058 |
Interest-bearing deposits | 1,667,527 | 1,583,224 |
Total deposits | 2,852,388 | 2,766,282 |
Federal Home Loan Bank advances | 50,000 | |
Repurchase agreements | 485 | 2,498 |
Junior subordinated debt | 1,571 | |
Operating lease liabilities | 15,704 | |
Other liabilities | 24,246 | 21,120 |
Total liabilities | 2,942,823 | 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, 25,837,048 and 25,777,693 shares issued at December 31, 2019 and 2018, respectively, 24,979,702 and 24,907,421 shares outstanding at December 31, 2019 and 2018, respectively | 258 | 258 |
Additional paid-in capital | 346,559 | 344,497 |
Retained earnings | 201,080 | 160,626 |
Treasury stock, at cost, 857,346 and 870,272 shares held at December 31, 2019 and 2018, respectively | (14,562) | (14,781) |
Accumulated other comprehensive gain (loss), net of tax of $634 and ($791) at December 31, 2019 and 2018, respectively | 2,386 | (2,975) |
Total shareholders’ equity | 535,721 | 487,625 |
Total liabilities and shareholders’ equity | $ 3,478,544 | $ 3,279,096 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Allowance of loan losses | $ 25,280 | $ 23,693 |
Premises and equipment, accumulated depreciation | 32,923 | 29,867 |
Other intangible assets, accumulated amortization | $ 15,809 | $ 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 | 25,837,048 | 25,777,693 |
Common stock, shares outstanding | 24,979,702 | 24,907,421 |
Treasury stock, shares | 857,346 | 870,272 |
Accumulated other comprehensive gain (loss), tax | $ 634 | $ (791) |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income | |||
Interest and fees on loans | $ 141,388 | $ 123,895 | $ 107,368 |
Securities | 5,954 | 6,020 | 5,347 |
Other interest-earning assets | 5,333 | 5,030 | 3,204 |
Equity investments | 720 | 814 | 740 |
Total interest income | 153,395 | 135,759 | 116,659 |
Interest expense | |||
Deposits | 15,999 | 10,586 | 7,652 |
Federal Home Loan Bank advances | 1,386 | 73 | |
Repurchase agreements | 3 | 4 | 5 |
Note payable and junior subordinated debt | 19 | 435 | 1,228 |
Total interest expense | 17,407 | 11,098 | 8,885 |
Net interest income | 135,988 | 124,661 | 107,774 |
Provision (recapture) for loan losses | 2,385 | (1,756) | (338) |
Net interest income after provision (recapture) for loan losses | 133,603 | 126,417 | 108,112 |
Noninterest income | |||
Deposit account service charges | 6,554 | 6,281 | 5,800 |
Net gain on sale of assets | 652 | 660 | 1,524 |
Card interchange fees | 3,720 | 3,741 | 3,453 |
Earnings on bank-owned life insurance | 5,011 | 1,815 | 1,580 |
Other | 2,691 | 1,755 | 1,847 |
Total noninterest income | 18,628 | 14,252 | 14,204 |
Noninterest expense | |||
Salaries and employee benefits | 56,222 | 51,524 | 48,573 |
Net occupancy expense | 9,506 | 9,394 | 9,151 |
Regulatory fees | 1,138 | 2,053 | 2,176 |
Data processing | 2,678 | 2,677 | 2,629 |
Software | 1,757 | 1,576 | 1,208 |
Printing, stationery and office | 1,302 | 1,161 | 1,097 |
Amortization of intangibles | 894 | 985 | 1,079 |
Professional and director fees | 7,048 | 3,537 | 3,105 |
Correspondent bank and customer related transaction expenses | 268 | 265 | 286 |
Loan processing costs | 445 | 448 | 461 |
Advertising, marketing and business development | 1,831 | 1,824 | 1,461 |
Repossessed real estate and other asset expense | 1 | 72 | 609 |
Security and protection expense | 1,464 | 1,276 | 1,355 |
Telephone and communications | 1,774 | 1,530 | 1,316 |
Other expenses | 3,815 | 3,694 | 3,786 |
Total noninterest expense | 90,143 | 82,016 | 78,292 |
Net income before income tax expense | 62,088 | 58,653 | 44,024 |
Income tax expense | 11,571 | 11,364 | 16,453 |
Net income | $ 50,517 | $ 47,289 | $ 27,571 |
Earnings per common share | |||
Basic | $ 2.03 | $ 1.90 | $ 1.23 |
Diluted | $ 2.02 | $ 1.89 | $ 1.22 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 50,517 | $ 47,289 | $ 27,571 |
Change in unrealized gains (losses) on securities available for sale arising during the period, net | 6,728 | (3,302) | 897 |
Reclassification adjustments for net realized gains included in net income | 57 | 29 | 27 |
Change in related deferred income tax | (1,424) | 687 | (391) |
Other comprehensive income (loss), net of tax | 5,361 | (2,586) | 533 |
Total comprehensive income | $ 55,878 | $ 44,703 | $ 28,104 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2016 | $ 230 | $ 278,501 | $ 95,274 | $ (15,446) | $ (922) | $ 357,637 |
Beginning balance, shares at Dec. 31, 2016 | 22,971,504 | (909,432) | ||||
Sale of common stock in initial public offering, net of offering costs of $7,241 | $ 27 | 64,492 | 64,519 | |||
Sale of common stock in initial public offering, net of offering costs of $7,241, shares | 2,760,000 | |||||
Net income | 27,571 | 27,571 | ||||
Dividends on common stock, $0.20, $0.20 and $0.40 per share for the year ended December 31, 2017, 2018 and 2019, respectively | (4,561) | (4,561) | ||||
Exercise of stock options | (73) | $ 190 | 117 | |||
Exercise of stock options (in shares) | 11,160 | |||||
Stock-based compensation expense | 329 | 329 | ||||
Other comprehensive income (loss), net of tax | 533 | |||||
Other comprehensive income, net of tax | 69 | 533 | 602 | |||
Ending balance at Dec. 31, 2017 | $ 257 | 343,249 | 118,353 | $ (15,256) | (389) | 446,214 |
Ending balance, shares at Dec. 31, 2017 | 25,731,504 | (898,272) | ||||
Net income | 47,289 | 47,289 | ||||
Dividends on common stock, $0.20, $0.20 and $0.40 per share for the year ended December 31, 2017, 2018 and 2019, respectively | (5,016) | (5,016) | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities | $ 1 | (172) | (171) | |||
Vesting of restricted stock, net of shares withheld for employee tax liabilities (in shares) | 46,189 | |||||
Exercise of stock options | (181) | $ 475 | 294 | |||
Exercise of stock options (in shares) | 28,000 | |||||
Stock-based compensation expense | 1,601 | 1,601 | ||||
Other comprehensive income (loss), net of tax | (2,586) | (2,586) | ||||
Ending balance at Dec. 31, 2018 | $ 258 | 344,497 | 160,626 | $ (14,781) | (2,975) | 487,625 |
Ending balance, shares at Dec. 31, 2018 | 25,777,693 | (870,272) | ||||
Net income | 50,517 | 50,517 | ||||
Dividends on common stock, $0.20, $0.20 and $0.40 per share for the year ended December 31, 2017, 2018 and 2019, respectively | (10,063) | (10,063) | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities | (239) | (239) | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities (in shares) | 59,455 | |||||
Exercise of stock options, net of shares withheld for employee tax liabilities | (98) | $ 219 | 121 | |||
Exercise of stock options, net of shares withheld for employee tax liabilities (in shares) | 12,926 | |||||
Shares repurchased | (3) | (3) | ||||
Shares repurchased, Shares | (100) | |||||
Stock-based compensation expense | 2,402 | 2,402 | ||||
Other comprehensive income (loss), net of tax | 5,361 | 5,361 | ||||
Ending balance at Dec. 31, 2019 | $ 258 | $ 346,559 | $ 201,080 | $ (14,562) | $ 2,386 | $ 535,721 |
Ending balance, shares at Dec. 31, 2019 | 25,837,048 | (857,346) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders’ Equity (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Changes in Shareholders’ Equity | |||
Sale of common stock in IPO, offering costs | $ 7,241 | ||
Dividends on Common Stock | $ 0.40 | $ 0.20 | $ 0.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 50,517 | $ 47,289 | $ 27,571 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Provision (recapture) for loan losses | 2,385 | (1,756) | (338) |
Depreciation expense | 3,203 | 3,309 | 3,353 |
Amortization of intangibles | 894 | 985 | 1,079 |
Amortization of premiums on securities | 1,194 | 1,091 | 1,294 |
Amortization of lease right-to-use assets | 1,343 | ||
Accretion of lease liabilities | 534 | ||
Earnings on bank-owned life insurance | (5,011) | (1,815) | (1,580) |
Stock-based compensation expense | 2,402 | 1,601 | 329 |
Deferred income tax (benefit) provision | (1,657) | (734) | 2,932 |
Net gains on sales of assets | (652) | (660) | (1,524) |
Earnings on securities | (18) | (54) | (50) |
Valuation adjustments on repossessed real estate and other assets | 341 | ||
Change in operating assets and liabilities: | |||
Loans held for sale | (1,185) | 1,921 | (420) |
Other assets | 81 | 994 | (3,156) |
Operating lease liabilities | (1,895) | ||
Other liabilities | 3,955 | (2,850) | 5,759 |
Total adjustments | 5,573 | 2,032 | 8,019 |
Net cash provided by operating activities | 56,090 | 49,321 | 35,590 |
Cash flows from investing activities: | |||
Purchases of securities | (651,908) | (495,870) | (355,525) |
Proceeds from sales, calls and maturities of securities | 625,550 | 462,842 | 317,284 |
Principal repayments of securities | 30,726 | 21,962 | 20,692 |
Net increase in loans | (226,817) | (147,416) | (187,030) |
Sales of loan participations | 31,868 | 45,921 | 46,067 |
Purchases of loan participations | (2,314) | (35,281) | (18,491) |
Proceeds from sales of Small Business Administration loans | 4,423 | 1,972 | 2,173 |
Net contributions to equity investments | (3,684) | (800) | (162) |
Redemption (purchases) of bank-owned life insurance | 4,655 | (1,700) | (15,000) |
Net (purchases) sales of premises and equipment | (2,488) | (1,293) | 1,985 |
Proceeds from sales of repossessed real estate and other assets | 141 | 1,054 | 2,574 |
Net decrease in time deposits in other banks | 600 | ||
Proceeds from insurance claims | 108 | 287 | |
Net cash used in investing activities | (189,740) | (147,722) | (185,433) |
Cash flows from financing activities: | |||
Net increase in noninterest-bearing deposits | 1,803 | 73,269 | 84,364 |
Net increase (decrease) in interest-bearing deposits | 84,303 | 90,041 | (22,152) |
Net increase in Federal Home Loan Bank advances | 50,000 | ||
Net (decrease) increase in securities sold under agreements to repurchase | (2,013) | 973 | (818) |
Repayments of note payable | (27,679) | ||
Redemption of trust preferred securities | (1,571) | (5,155) | |
Proceeds from sale of stock in initial public offering | 71,760 | ||
Offering costs for initial public offering | (7,241) | ||
Dividends paid on common stock | (8,757) | (4,979) | (4,412) |
Payments to tax authorities for stock-based compensation | (239) | (171) | |
Proceeds from exercise of stock options | 121 | 294 | 117 |
Repurchase of common stock | (3) | ||
Net cash (used) provided in financing activities | 123,644 | 154,272 | 93,939 |
Net (decrease) increase in cash and cash equivalents | (10,006) | 55,871 | (55,904) |
Cash, cash equivalents and restricted cash, beginning | 382,070 | 326,199 | 382,103 |
Cash, cash equivalents and restricted cash, ending | $ 372,064 | $ 382,070 | $ 326,199 |
BASIS OF PRESENTATION, NATURE O
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | NOTE 1: BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Nature of Operations —CBTX, Inc., or the Company, or CBTX, operates 35 branches, 19 in the Houston market area, 15 in 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 System. Basis of Presentation —The accompanying consolidated financial statements include the accounts of the Company and the Bank. All material intercompany balances and transactions have been eliminated in consolidation. Reclassification —Within interest income, equity investment income for 2018 and 2017 has been reclassified from other interest-earning assets to a separate line and within interest expense, interest expense on notes payable and junior subordinated debt have been combined. On the December 31, 2018 balance sheet, repossessed real estate and other assets were combined with other assets. These reclassifications were made to conform to the 2019 financial statement presentation in the consolidated statements of income and consolidated balance sheets. Segment Reporting —The Company has one reportable segment. The Company’s activities are inter-related, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing the interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit. The Company’s chief operating decision‑maker, the Chief Executive Officer, uses the consolidated results to make operating and strategic decisions. Use of Estimates —In preparing financial statements in conformity with accounting principles generally accepted in the United States, or GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term include, but are not limited to, determination of the allowance for loan losses and fair values of financial instruments and goodwill and other intangible assets. Cash and Due from Banks —Cash, cash equivalents and restricted cash include cash, interest‑bearing and noninterest‑bearing transaction accounts with other banks and federal funds sold. A majority of cash, cash equivalents and time deposits of the Company are maintained with major financial institutions in the United States, or U.S., and have original maturities less than 90 days. Interest-bearing deposit accounts with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and therefore, bear minimal risk. The Company periodically evaluates the stability of the financial institutions with which it has deposits to monitor this credit risk. The Company has cash deposits in correspondent financial institutions in excess of the amount insured by the FDIC in the amount of $100.0 million and $99.4 million at December 31, 2019 and 2018, respectively. The Bank is required to maintain regulatory reserves with the Federal Reserve Bank and the reserve requirements for the Bank were $18.6 million and $18.5 million at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, the Company had $3.1 million and $1.6 million in cash collateral used in its interest rate swap transactions. The Federal Reserve Bank reserve requirements and the cash collateral used in interest rate swap transactions are considered restricted cash. Loans —Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay‑off, are measured at historical cost and generally reported at their outstanding unpaid principal balances, net of any unearned income, charge‑offs and unamortized deferred fees and costs. Interest income is accrued on the unpaid principal balance. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. The Company records lines of credit at their funded portion. All unfunded amounts for loans in process and credit lines are reported as unfunded commitments. Government Guaranteed Loans —The Company originates loans that are partially guaranteed by the Small Business Administration, or SBA, and the Company may sell the guaranteed portion of these loans as market conditions and pricing allow for a gain to be recorded on the sale. Loan sales are recorded when control over the transferred asset has been relinquished. Control over the transferred portion is deemed to be surrendered when the assets have been removed from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In calculating the gain on sale of SBA loans, the Company’s investment in the loan is allocated among the unguaranteed portion of the loan, the servicing amount retained, and the guaranteed portion of the loan sold, based on the relative fair market value of each portion. The gain on the sold portion of the loan is recognized based on the difference between the sale proceeds and the allocated investment. Nonperforming and Impaired Loans —Nonperforming loans includes loans which have been categorized by management as nonaccrual because of delinquency status or because collection of principal and interest is doubtful. Loans restructured in a troubled debt restructuring are not considered nonperforming if the loans are not delinquent and otherwise performing in accordance with their restructured terms. When the payment of principal or interest on a loan is delinquent for 90 days or more, or earlier in some cases, the loan is placed on nonaccrual status, unless the loan is in the process of collection or renewal and the underlying collateral fully supports the carrying value of the loan. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan and the probability that the Company will collect all principal and interest amounts outstanding. When a loan is placed on nonaccrual status, interest accrued and uncollected during any period prior to the judgment of uncollectability is charged to operations, unless the loan is well secured with collateral values sufficient to ensure collection of both principal and interest. Generally, any payments received on nonaccrual loans are applied first to outstanding loan amounts, reducing the Company’s recorded investment in the loan and next to the recovery of charged‑off principal or interest amounts. Any excess is treated as recovery of lost interest. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are considered impaired if, based on current information and events, it is probable that the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Interest income received on impaired loans is either applied against principal or realized as interest income, according to management’s judgment as to the collectability of principal. Troubled Debt Restructurings — From time to time, the Company modifies loan agreements with borrowers. A modified loan is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the borrower has been granted a concession. Modifications to loan terms may include interest rate reductions, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. Interest is generally accrued on such loans in accordance with the new terms. Loans restructured in a troubled debt restructuring are not considered nonperforming if the loans are not delinquent and otherwise performing in accordance with their restructured terms. Allowance for Loan Losses —The allowance for loan losses represents management’s estimate of probable losses inherent in the loan portfolio. Credit exposures deemed to be uncollectible are charged against these accounts. Cash recovered on previously charged‑off amounts is recorded as a recovery to these accounts. The allowance for loan losses does not include amounts related to accrued interest receivable as accrued interest receivable is reversed when a loan is placed on nonaccrual or is charged‑off. The Company employs a systematic methodology for determining the allowance for loan losses that consists of two components: (i) specific valuation allowances based on probable losses on certain loans and (ii) historical valuation allowances based on historical average loss experience for similar loans with similar characteristics and trends adjusted, as necessary, to reflect the impact of current conditions and further adjusted for general economic conditions and other risk factors both internal and external to the Company. A specific allowance is established for loans considered impaired when the carrying value of the loan is more than the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The Company uses fair market value, less reasonable and customary costs to sell, for collateral dependent loans. In certain instances, a specific allowance will be established to protect against market deterioration. The allowance on the remaining portfolio segments is calculated using historical loss rates adjusted for qualitative factors. Criticized and classified loans, not deemed impaired, are subject to an allowance based on the historical loss migration analysis by grade adjusted for qualitative factors. Pass loans are subject to an allowance based on historical losses by product type adjusted for qualitative factors. The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio. The general valuation factor is based upon a more qualitative analysis of risk. Various risks are considered in the determination of the environmental adjustment factor such as asset quality, lending management and staff, loan policies and procedures, loan review, credit concentrations, loan volumes, collateral values, compliance and economic trends on both a local and national level. A majority of the loan portfolio is comprised of loans to businesses and individuals in the Houston metropolitan and Beaumont/East Texas area. This geographic concentration subjects the loan portfolio to the general economic conditions within this area. The risks created by this concentration have been considered by management in the determination of the adequacy of the allowance for loan losses. Loans Held for Sale —Loans held for sale include mortgage loans originated with the intent to sell on the secondary market. Loans held for sale are carried at the lower of cost or estimated fair value on an individual loan basis. These loans are held for an interim period, usually less than 30 days. Accordingly, these loans are classified as held for sale and are carried at cost, which is determined on an aggregate basis and deemed to be the equivalent of fair value based on the short-term nature of the loans. Securities —Securities that the Company intends to hold for an indefinite period of time are classified as available for sale, carried at fair value and unrealized gains and losses are excluded from earnings and reported as accumulated other comprehensive income (loss), net of taxes in shareholders’ equity until realized. Securities that the Company has both the positive intent and ability to hold to maturity are classified as held to maturity and are carried at cost, adjusted for the amortization of premiums and the accretion of discounts. Securities are evaluated for other‑than‑temporary impairment, or OTTI, on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. Premiums and discounts are amortized and accreted to income using the level‑yield method of accounting, adjusted for prepayments as applicable. The specific identification method of accounting is used to compute gains or losses on the sales of these assets. Equity Investments —The Company’s equity investments are carried at cost and evaluated for impairment at least annually and on an interim basis if an event or circumstance indicates that it is likely that an impairment has occurred as these investments do not have readily determinable fair values. Premises and Equipment —Premises and equipment are carried at cost, less accumulated depreciation. Depreciation expense is computed on the straight‑line method over the estimated useful lives of the assets. Land is carried at cost. Leasehold improvements are amortized over the life of the lease, plus renewal options or the estimated useful lives, whichever is shorter. Buildings are depreciated over a period not to exceed 32 years. Depending upon the type of furniture and equipment, the depreciation period will range from three to 10-years. Bank vehicles are amortized over a period of three years. Gains and losses on dispositions are included in other noninterest income. During periods of real estate development, interest on construction costs is capitalized if considered material by management. Operating Leases — The Company leases certain office space, stand-alone buildings and land are recognized as operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets. Lease liabilities represent the Company’s liability to make lease payments under these leases, on a discounted basis and are amortized on a straight-line basis over the lease term for each related lease agreement. Right-of-use assets represent the Company’s right to use, or control the use of, leased assets for their lease term and are amortized over the lease term of the related lease agreement. See further discussion of Accounting Standards Update, or ASU 2016-02, Leases (Topic 842) below. The Company does not recognize short-term operating leases on the consolidated balance sheets. A short-term lease has term of 12 months or less and does not have a purchase option that is likely to be exercised. The Company subleases certain facilities to outside parties; however, these leases are not significant. Goodwill and Other Intangible Assets —Goodwill is not amortized and is evaluated for impairment at least annually as of December 31 and on an interim basis if an event or circumstance indicates that it is likely that an impairment has occurred. Impairment would exist if the fair value of the reporting unit at the date of the test is less than the goodwill recorded on the financial statements. If an impairment of goodwill exists, a loss would then be recognized in the consolidated financial statements to the extent of the impairment. The Company’s identified intangibles are core deposits, customer relationship intangibles and loan servicing assets. Core deposit and customer relationship intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable from future undiscounted cash flows. Servicing assets are assessed for impairment or increased obligation based on fair value at each reporting date. Core deposit intangibles are amortized over a seven to 10-year period using an accelerated method in keeping with the anticipated benefits derived from those core deposits. Customer relationship intangibles are amortized over a 15- year period on a straight-line basis. Servicing assets are recognized as separate assets when rights are acquired through the sale of financial assets. Servicing assets are initially recorded at fair market value and amortized in proportion to and over the service period and assessed for impairment or increased obligation based on fair value at each reporting date. Fair value is based on the gross coupon less an assumed contractual servicing cost or based upon discounted cash flows using market‑based assumptions. Servicing assets are amortized into noninterest expense in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing fee income is recorded for fees earned from servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. 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. Repossessed Real Estate and Other Assets —Real estate and other assets acquired through repossession or foreclosure are held for sale and are initially recorded at the fair value of the asset less estimated costs to sell. Outstanding loan balances are reduced to reflect this value through charges to the allowance for loan losses. If the fair value of the repossessed real estate and other assets declines after foreclosure, adjustments to reflect changes in fair value are recognized in income in the period such determinations are assessed. Any developmental costs associated with foreclosed property under construction are capitalized and considered in determining the fair value of the property. Any operating expenses of these assets, net of related income and gains and losses on their disposition are included in other noninterest income or expense. Other Assets —Other assets include accrued interest receivables on loans and investments, derivative financial instruments assets, prepaid expenses, repossessed real estate and other assets. Other Liabilities —Other liabilities include accrued interest payable on deposits, accrued bonuses, deferred compensation, derivative financial instruments liabilities and other liabilities. Repurchase Agreements — The Company utilizes securities sold under repurchase agreements to facilitate the needs of our customers and to facilitate short-term borrowing needs. Securities sold under agreements to repurchase are stated at the amount of cash received in the transaction. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. Derivative Financial Instruments —All derivatives are recorded at fair value on the balance sheet. Derivatives executed with the same counterparty are generally subject to master netting arrangements. Fair value amounts recognized for derivatives and fair value amounts recognized for the right/obligation to reclaim/return cash collateral are not offset for financial reporting purposes. The Company had no derivative instruments that qualified for hedge accounting during the periods reported herein, but it may in the future as circumstances arise. Fair Value Measurements —Fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is estimated based upon models that primarily use observable market‑based parameters as inputs. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Revenue Recognition —Accounting Standards Codification (Topic 606) or ASU 2014-09 requires entities to recognize revenue 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 insurance 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 noninterest income in the consolidated income statements as deposit account service charges, net gain on sale of assets, card interchange fees and other noninterest income. 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. Income Taxes —The Company prepares and reports income taxes on a consolidated basis. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized. The Company may recognize the tax benefit of an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements would be the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Company includes any interest expense assessed by taxing authorities in interest expense and any penalties related to income taxes in other expense on its consolidated statements of income. Transfers of Financial Assets —Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. The Company’s loan participations sold subject to this guidance which met the conditions to be treated as a sale were recorded as such. Any securities sold under agreements to repurchase that did not meet the sale criteria are treated as a secured borrowing with pledge of collateral and included in securities available for sale and repurchase agreements in the Company’s consolidated balance sheets. Stock‑Based Compensation —Stock-based compensation is recognized as compensation cost in the consolidated statements of income based on the fair value on the date of grant. A Black‑Scholes model is utilized to estimate the fair value of stock options and the market value of the Company’s common stock at the date of grant is used as the estimate of fair value of restricted stock. Compensation expense for awards not based on performance criteria is recognized over the required service period, on a straight-line basis. The impact of forfeitures is recognized as they occur. The number of shares earned under the Company’s performance-based restricted stock award agreements is based on the achievement of certain levels of certain performance goals. The fair value of performance-based restricted stock is estimated based on the market value of the Company’s common stock at the date of grant. 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 and other goals must be achieved within five years or the awards expire. Earnings Per Share —Basic earnings per common share is computed as net income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed using the weighted-average shares determined for the basic earnings per share computation plus the potential dilution that could occur if outstanding stock options were exercised and restricted stock awards were vested and converted into common stock using the treasury stock method. Share Repurchase Program — In July 2019, the Company’s Board of Directors authorized a share repurchase program under which the Company may repurchase up to $40.0 million of the Company’s common stock through September 30, 2020. During 2019, 100 shares were repurchased at $27.98 per share and retired and returned to the status of authorized but unissued shares. Accounting Standards Recently Adopted The Company adopted 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, 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 during the first quarter of 2019. 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. The amendments affect loans, debt securities, other receivables, off-balance sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company’s adoption of ASU 2016-13 was effective on January 1, 2020. The Company has completed its evaluation and assessment of ASU 2016-13 and finalized the impact upon adoption of ASU 2016-13 on the consolidated financial statements. The Company developed a functional working group, with the assistance of an outside consultant, which is comprised of individuals from various areas including credit, risk management, and accounting, among others. The Company has determined an aged based vintage model, or the Vintage Model, to be the most appropriate model as it provides the best predictor of credit risks associated with the loan portfolio and reasonably captures the expected life of loan losses associated with each segment of loans. The aging of the loans is determined by an identifiable credit decision date, and the loans will be segmented into pools based on similar risks characteristics and credit risk indicators. The methodology associated with utilizing the Vintage Model takes into consideration historical loss rates associated with each segment as well as other qualitative factors and economic forecasts to derive an allowance for credit losses associated with expected credit losses within the loan portfolio. The Company has finalized the processes and internal controls related to the estimation process, model development and validation, as well as system configuration. Existing technology has been adapted to conform to the requirements of ASU 2016-13 and the Company has utilized a third-party vendor solution to assist in the application of ASU 2016-13. The implementation of ASU 2016-13 also impacted the methodology for determining an allowance for credit losses associated with the Company’s off-balance sheet credit exposures. These exposures primarily related to unfunded commitments with borrowers through line of credit or letter of credit arrangements. The Company has utilized similar methodology associated with the Vintage Model and considers historical utilization rates to determine an appropriate allowance for credit losses. The adoption of ASU 2016-13 will require changes to the Company’s accounting policies and disclosures for credit losses on financial instruments. The adoption of ASU 2016-13 did not have any impact on held-to-maturity securities as the Company did not hold any as of December 31, 2019. Additionally, the Company assessed the impact of ASU 2016-13 on the available for sale securities utilizing various qualitative factors and determined there to be no credit losses within the portfolio requiring an allowance upon adoption. The Company did not have any purchased financial assets with credit deterioration as of January 1, 2020. The Company has determined that the expected adoption of ASU 2016-13 will increase the allowance for credit losses by approximately $874,000 associated with the loan portfolio and increase other liabilities by approximately $3.0 million pertaining to an allowance for credit losses associated with the Company’s unfunded commitments through a one-time cumulative effect adjustment to retained earnings. As the Company is currently finalizing the execution of its implementation controls and processes in which the estimate may be subject to further refinement, the ultimate impact of the adoption of ASU 2016-13 as of January 1, 2020 could differ from current expectations. Cash Flow Reporting —Supplemental disclosures of cash flow informa |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2019 | |
SECURITIES. | |
SECURITIES | NOTE 2: SECURITIES The amortized cost and fair values of investments in securities as of the dates shown below were as follows: Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value December 31, 2019 Debt securities available for sale: State and municipal securities $ 51,525 $ 1,761 $ (7) $ 53,279 U.S. agency securities: Collateralized mortgage obligations 55,784 324 (119) 55,989 Mortgage-backed securities 119,787 1,315 (255) 120,847 Equity securities 1,155 — (8) 1,147 Total $ 228,251 $ 3,400 $ (389) $ 231,262 Debt securities held to maturity: Mortgage-backed securities $ — $ — $ — $ — 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 Equity 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 securities by contractual maturities as of the dates shown below were as follows: Available for Sale Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value December 31, 2019 Amounts maturing in: 1 year or less $ 2,535 $ 2,532 $ — $ — 1 year through 5 years 3,081 3,145 — — 5 years through 10 years 14,564 14,874 — — After 10 years 208,071 210,711 — — $ 228,251 $ 231,262 $ — $ — 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. Securities with a carrying amount of $20.4 million, $56.5 million and $6.1 million were sold during the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, 2019 and 2018, securities with a carrying amount of approximately $50.8 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 27 and 100 securities at December 31, 2019 and 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 securities were acquired. The fair value of these securities is expected to recover as the 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 securities that the Company holds are impaired due to reasons of credit quality and believes the unrealized losses detailed in the tables below are temporary. No impairment loss has been recorded in the Company’s consolidated statements of income for the years ended December 31, 2019, 2018 and 2017. Securities with unrealized losses as of the dates shown below, aggregated by investment 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 December 31, 2019 Debt securities available for sale: State and municipal securities $ 3,539 $ (7) $ 106 $ — U.S. agency securities: Collateralized mortgage obligations 10,687 (46) 7,994 (73) Mortgage-backed securities 11,628 (26) 21,745 (229) Equity securities — — 1,147 (8) $ 25,854 $ (79) $ 30,992 $ (310) 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) Equity securities — — 1,088 (41) $ 51,491 $ (773) $ 116,894 $ (3,666) |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended |
Dec. 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. December 31, (Dollars in thousands) 2019 2018 Federal Reserve stock $ 9,271 $ 9,271 Federal Home Loan Bank stock 4,249 1,250 The Independent Bankers Financial Corporation stock 141 141 Community Reinvestment Act investments 3,049 2,364 $ 16,710 $ 13,026 Banks that are members of the Federal Home Loan Bank are required to maintain a stock investment in the Federal Home Loan Bank calculated as a percentage of aggregate outstanding mortgages, outstanding Federal Home Loan Bank advances and other financial instruments. As a member of the Federal Reserve System, the Bank is required to annually subscribe to Federal Reserve Bank stock in specific ratios to the Bank’s equity. Although Federal Home Loan Bank 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, which has limited marketability. As a result, this investment is 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 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 December 31, 2019 and 2018, the Company had $4.9 million and $3.0 million, respectively, in outstanding unfunded commitments to these funds, which are subject to call. The Company entered into a new CRA investment agreement in December 2019, with a commitment of $2.5 million and as of December 31, 2019, the Company had made no investments into this fund. 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 the investment. There were no such qualitative indicators as of December 31, 2019. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2019 | |
LOANS | |
LOANS | NOTE 4: LOANS Loans by loan class as of the dates shown below were as follows: December 31, (Dollars in thousands) 2019 2018 Commercial and industrial $ 527,607 $ 519,779 Real estate: Commercial real estate 900,746 795,733 Construction and development 527,812 515,533 1-4 family residential 280,192 282,011 Multi-family residential 277,209 221,194 Consumer 36,782 39,421 Agriculture 9,812 11,076 Other 86,513 68,382 Total gross loans 2,646,673 2,453,129 Less allowance for loan loss (25,280) (23,693) Less deferred loan fees and unearned discounts (6,125) (6,306) Less loans held for sale (1,463) — Loans, net $ 2,613,805 $ 2,423,130 Accrued interest receivable for loans is $7.5 million and $6.8 million at December 31, 2019 and 2018, respectively and is included in other assets in the consolidated balance sheets. Loan Participations Purchased and Sold 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 years ending December 31, 2019, 2018 and 2017, by loan class, are summarized as follows: Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period December 31, 2019 Commercial real estate $ 2,314 $ 31,868 December 31, 2018 Commercial and industrial $ 7,000 $ 1,620 Commercial real estate 28,281 35,000 Construction and development — 9,301 $ 35,281 $ 45,921 December 31, 2017 Commercial and industrial $ — $ 23,000 Commercial real estate 12,885 20,505 Construction and development 5,606 2,562 $ 18,491 $ 46,067 Loans Guaranteed by the SBA 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 years ended December 31, 2019, 2018 and 2017 were $4.4 million, $2.0 million and $2.2 million, respectively. N et gains recognized on sales of SBA loans were $330,000, $153,000 and $149,000 for the years ended December 31, 2019, 2018 and 2017, respectively and are included in net gain on sales of assets in the consolidated income statements. |
LOAN PERFORMANCE
LOAN PERFORMANCE | 12 Months Ended |
Dec. 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: December 31, (Dollars in thousands) 2019 2018 Commercial and industrial $ 596 $ 1,317 Real estate: Commercial real estate 67 1,517 1-4 family residential 314 656 Total nonaccrual loans $ 977 $ 3,490 Interest income that would have been earned under the original terms of the nonaccrual loans was $57,000 $163,000 and $402,000 for the years ended December 31, 2019, 2018 and 2017, 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 December 31, 2019 Commercial and industrial $ 664 $ 31 $ 240 $ 935 $ 526,672 $ 527,607 $ — Real estate: Commercial real estate 865 — 865 899,881 900,746 — Construction and development — 532 — 532 527,280 527,812 — 1-4 family residential 499 — 499 279,693 280,192 — Multi-family residential — — — — 277,209 277,209 — Consumer 43 — — 43 36,739 36,782 — Agriculture — — — — 9,812 9,812 — Other — — — 86,513 86,513 Total loans $ 2,071 $ 563 $ 240 $ 2,874 $ 2,643,799 $ 2,646,673 $ — 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 restructured due to the borrower’s financial difficulties during the years ending December 31, 2019 and 2018, which remain outstanding as of the end of those periods were as follows: Post-modification recorded investment Extended Maturity, Pre-modification Extended Restructured Outstanding Maturity and Payments Number Recorded Restructured Extended Restructured and Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate December 31, 2019 Commercial and industrial 3 $ 202 $ 39 $ — $ 163 $ — 1-4 family residential 1 111 — — — 115 Total 4 $ 313 $ 39 $ — $ 163 $ 115 December 31, 2018 Commercial and industrial 6 $ 1,419 $ 916 $ — $ 503 $ — Commercial real estate 3 1,406 1,406 — — — Other 1 1,646 — — — 1,646 Total 10 $ 4,471 $ 2,322 $ — $ 503 $ 1,646 The recorded investment in troubled debt restructurings was $8.8 million and $11.4 million as of December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, $393,000 and $1.8 million of restructured loans were nonaccrual loans and $8.4 million and $9.6 million of restructured loans were accruing interest as of those periods. At December 31, 2019 and 2018, the Company had outstanding commitment to potentially fund $2.0 million and $2.1 million on a line of credit previously restructured. 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 | 12 Months Ended |
Dec. 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 years indicated 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 December 31, 2019 Beginning balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Provision for loan loss 715 1,209 148 (15) 188 27 2 111 2,385 Charge-offs (1,252) (45) — (12) — (97) — (52) (1,458) Recoveries 489 81 — 3 — 71 10 6 660 Net (charge-offs) recoveries (763) 36 — (9) — (26) 10 (46) (798) Ending balance $ 7,671 $ 7,975 $ 4,446 $ 2,257 $ 1,699 $ 388 $ 74 $ 770 $ 25,280 Period-end amount allocated to: Specific reserve $ 416 $ — $ — $ 15 $ — $ — $ — $ 6 $ 437 General reserve 7,255 7,975 4,446 2,242 1,699 388 74 764 24,843 Total $ 7,671 $ 7,975 $ 4,446 $ 2,257 $ 1,699 $ 388 $ 74 $ 770 $ 25,280 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 December 31, 2018 Beginning balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Provision (recapture) for loan loss (347) (3,494) 817 953 92 (181) (16) 420 (1,756) Charge-offs (1,928) (171) (1) (4) — (1) — (3) (2,108) Recoveries 2,737 20 — 6 — 3 10 3 2,779 Net (charge-offs) recoveries 809 (151) (1) 2 — 2 10 — 671 Ending balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Period-end amount allocated to: Specific reserve $ 525 $ 44 $ — $ 89 $ — $ — $ — $ 100 $ 758 General reserve 7,194 6,686 4,298 2,192 1,511 387 62 605 22,935 Total $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 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 December 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 642 (284) (1,116) 35 503 263 (63) (318) (338) Charge-offs (904) (120) — (8) — (93) — — (1,125) Recoveries 1,110 9 — 13 — 43 52 8 1,235 Net (charge-offs) recoveries 206 (111) — 5 — (50) 52 8 110 Ending balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Period-end amount allocated to: Specific reserve $ 852 $ 64 $ — $ 119 $ — $ — $ — $ — $ 1,035 General reserve 6,405 10,311 3,482 1,207 1,419 566 68 285 23,743 Total $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. In addition to the amounts indicated in the tables above, the Company had a reserve for loan losses on unfunded commitments of $378,000 recorded in other liabilities as of December 31, 2019 and 2018. 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, that 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 individually 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 December 31, 2019 and 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 December 31, 2019 Commercial and industrial $ 513,417 $ 2,963 $ 11,227 $ 527,607 Real estate: Commercial real estate 876,207 18,570 5,969 900,746 Construction and development 515,247 12,565 — 527,812 1-4 family residential 274,731 594 4,867 280,192 Multi-family residential 277,209 — — 277,209 Consumer 36,566 — 216 36,782 Agriculture 9,733 50 29 9,812 Other 79,860 — 6,653 86,513 Total loans $ 2,582,970 $ 34,742 $ 28,961 $ 2,646,673 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 recorded investment in impaired loans, as of the dates shown below, by loan class and disaggregated based on the Company’s impairment methodology were 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 December 31, 2019 Commercial and industrial $ 1,111 $ 300 $ 699 $ 999 $ 416 $ 2,452 Real estate: Commercial real estate 1,407 1,404 — 1,404 — 2,165 1-4 family residential 3,761 2,166 1,485 3,651 15 4,020 Consumer 210 210 210 — 128 Other 6,653 5,411 1,242 6,653 6 6,825 Total loans $ 13,142 $ 9,491 $ 3,426 $ 12,917 $ 437 $ 15,590 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 $665,000, $996,000 and $1.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. The recorded investment in loans as of the dates shown below by loan class and based on the Company’s impairment methodology was as follows: December 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 $ 999 $ 526,608 $ 527,607 $ 4,277 $ 515,502 $ 519,779 Real estate: Commercial real estate 1,404 899,342 900,746 3,970 791,763 795,733 Construction and development — 527,812 527,812 — 515,533 515,533 1-4 family residential 3,651 276,541 280,192 4,436 277,575 282,011 Multi-family residential — 277,209 277,209 — 221,194 221,194 Consumer 210 36,572 36,782 — 39,421 39,421 Agriculture — 9,812 9,812 — 11,076 11,076 Other 6,653 79,860 86,513 6,813 61,569 68,382 Total $ 12,917 $ 2,633,756 $ 2,646,673 $ 19,496 $ 2,433,633 $ 2,453,129 At December 31, 2019 and 2018, the allowance allocated to specific reserves for loans individually evaluated for impairment was $437,000 and $758,000, respectively. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | NOTE 7: PREMISES AND EQUIPMENT The components of premises and equipment as the dates shown below were as follows: December 31, (Dollars in thousands) 2019 2018 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 53,869 52,188 Furniture and equipment 15,917 15,426 Vehicles 203 232 Construction in progress 343 177 83,798 81,489 Less accumulated depreciation (32,923) (29,867) Premises and equipment, net $ 50,875 $ 51,622 Depreciation expense was $3.2 million, $3.3 million and $3.4 million for the years ended December 31, 2019, 2018 and 2017, respectively, which is included in net occupancy expense on the Company’s consolidated statements of income. A net loss of $32,000 on dispositions of premises and equipment for the year ended December 31, 2019 and net gains of $31,000 and $742,000 for the years ended December 31, 2018 and 2017, respectively, were recognized and are included in net gain on sale of assets in the consolidated statements of income. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 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 December 31, 2019 and 2018 and there have been no changes in goodwill during those years. Based on the results of the Company’s assessment, management does not believe any impairment of goodwill or other intangible assets existed at December 31, 2019 or 2018. Other intangibles, net of accumulated amortization, were as follows as of the dates shown below: Weighted- Average Remaining Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets December 31, 2019 Core deposits 4.2 years $ 13,750 $ (12,979) $ 771 Customer relationships 9.0 years 6,629 (2,651) 3,978 Servicing assets 12.8 years 368 (179) 189 Total other intangible assets, net $ 20,747 $ (15,809) $ 4,938 December 31, 2018 Core deposits 5.2 years $ 13,750 $ (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 shown indicated below were as follows: Years Ended December 31, (Dollars in thousands) 2019 2018 Balance at beginning of year $ 166 $ 209 Increase from loan sales 87 38 Decrease from serviced loans paid off or foreclosed (30) (48) Amortization (34) (33) Balance at end of period $ 189 $ 166 Estimated future amortization for core deposits and customer relationship intangible assets was as follows for the date shown below: (Dollars in thousands) December 31, 2019 2020 768 2021 675 2022 584 2023 495 2024 459 Thereafter 1,768 Total $ 4,749 |
BANK OWNED LIFE INSURANCE
BANK OWNED LIFE INSURANCE | 12 Months Ended |
Dec. 31, 2019 | |
BANK OWNED LIFE INSURANCE. | |
BANK OWNED LIFE INSURANCE | NOTE 9: BANK-OWNED LIFE INSURANCE During 2019, the Company received proceeds in the amount of $4.7 million as the owner and beneficiary under a bank-owned life insurance policy as the result of the death of a former employee, and the Company recorded a gain of $3.3 million. Bank-owned life insurance policies and the net change in cash surrender value during the periods shown below were as follows: Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Balance at beginning of period $ 71,525 $ 68,010 $ 51,430 Purchases — 1,700 15,000 Redemptions (4,655) — — Net change in cash surrender value 5,011 1,815 1,580 Balance at end of period $ 71,881 $ 71,525 $ 68,010 |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2019 | |
DEPOSITS | |
DEPOSITS | NOTE 10: DEPOSITS Deposits as of the dates shown below were as follows: December 31, (Dollars in thousands) 2019 2018 Interest-bearing demand accounts $ 369,744 $ 387,457 Money market accounts 805,942 737,770 Saving accounts 92,183 96,962 Certificates and other time deposits, $100,000 or greater 208,018 189,007 Certificates and other time deposits, less than $100,000 191,640 172,028 Total interest-bearing deposits 1,667,527 1,583,224 Noninterest-bearing deposits 1,184,861 1,183,058 Total deposits $ 2,852,388 $ 2,766,282 Scheduled maturities of time deposits as of the date shown below were as follows: (Dollars in thousands) December 31, 2019 Three months or less $ 77,801 Over three months through six months 57,362 Over six months through 12 months 163,055 Over 12 months through three years 70,490 Over three years 30,950 Total $ 399,658 At December 31, 2019 and 2018, the Company had $56.8 million and $51.5 million in deposits from public entities and brokered deposits of $128.9 million and $104.5 million, respectively. Accrued interest payable for deposits was $931,000 and $594,000 at December 31, 2019 and 2018, respectively, and is included in other liabilities in the consolidated balance sheets. The Company had no major concentrations of deposits at December 31, 2019 or 2018 from any single or related groups of depositors. |
LINES OF CREDIT
LINES OF CREDIT | 12 Months Ended |
Dec. 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 with Frost Bank, which provides for a $30.0 million revolving line of credit, or Line of Credit Agreement. The Company can make draws on the Line of Credit Agreement for a period of 24 months, which began on December 13, 2019, 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, 2026. The Company may prepay the principal amount of the Line of Credit without premium or penalty. The obligations of the Company under the Line of Credit 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 Line of Credit 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 in the Line of Credit Agreement) not to exceed 15%, the Bank’s Total Capital Ratio (as defined under the Line of Credit 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 December 31, 2019. Additional Lines of Credit The Federal Home Loan Bank allows us to borrow on a blanket floating lien status collateralized by certain loans. At December 31, 2019 and 2018, total borrowing capacity of $1.0 billion and $919.9 million, respectively, was available under this arrangement. During the year ended December 31, 2019, funds were borrowed under this agreement on both a short-term basis and long-term basis, and at December 31, 2019, $50.0 million of Federal Home Loan Bank advances were outstanding. During the year ended December 31, 2018, funds were borrowed under this agreement on a short-term basis only, and at December 31, 2018, there were no outstanding Federal Home Loan Bank advances. The average balances for Federal Home Loan Bank advances outstanding at December 31, 2019 and 2018 was $61.6 million and $3.4 million, respectively, and the weighted-average interest rate for the years ended December 31, 2019 and 2018 was 2.25% and 2.18%, respectively. (Dollars in thousands) December 31, 2019 2020 $ — 2021 — 2022 10,000 2023 20,000 2024 20,000 Thereafter — Total $ 50,000 At December 31, 2019 and 2018, the Company 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 December 31, 2019 and 2018. |
JUNIOR SUBORDINATED DEBT
JUNIOR SUBORDINATED DEBT | 12 Months Ended |
Dec. 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 $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 | 12 Months Ended |
Dec. 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 shareholders and their affiliates who 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 $158.7 million and $168.9 million in loans to related parties at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, there were no loans made to related parties deemed nonaccrual, past due, restructured or classified as potential problem loans. Activity in loans to related parties as of the periods shown below was as follows: Years Ended December 31, (Dollars in thousands) 2019 2018 Beginning balance $ 168,851 $ 205,768 New loans 15,934 107,303 Repayments (26,058) (144,220) Ending balance $ 158,727 $ 168,851 Unfunded Commitments —At December 31, 2019 and 2018, the Company had approximately $48.7 million and $55.7 million in unfunded loan commitments to related parties, respectively. Deposits —The Company held related party deposits of approximately $233.9 million and $311.2 million at December 31, 2019 and 2018, respectively. Advertising —The Company incurred advertising expenses of approximately $97,000 and $94,000 for the years ended December 31, 2019 and 2018, respectively, to a vendor that is solely owned by a director of the Company. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 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, the Company uses 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 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 years ended December 31, 2019 and 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 estimates of fair value. Fair value estimates are based on judgments 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 judgment 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 security’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. Equity Securities Available for Sale —Equity securities are classified as available for sale and are recorded at fair value. The fair value measurements are based on observable data obtained from a third-party pricing service. The Company reviews the prices supplied by the services against publicly available information. The equity securities are mutual funds publicly traded on the Nasdaq 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: December 31, (Dollars in thousands) 2019 2018 Fair value of financial assets: Level 1 inputs: securities available for sale - equity securities $ 1,147 $ 1,088 Level 2 inputs: Debt securities available for sale State and municipal securities 53,279 57,691 U.S. Agency Securities: Debt securities — 16,881 Collateralized mortgage obligations 55,989 65,414 Mortgage-backed securities 120,847 88,859 Interest rate swaps 2,638 962 Total fair value of financial assets $ 233,900 $ 230,895 Fair value of financial liabilities: Level 2 inputs: interest rate swaps $ 2,638 $ 962 Total fair value of financial liabilities $ 2,638 $ 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. Financial assets measured at fair value on a non-recurring basis during the dates shown below include certain impaired loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral or a discounted cash flow method if not. Prior to foreclosure, estimated fair values for collateral is estimated based on Level 3 inputs based on customized discounting criteria. 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: December 31, 2019 2018 (Dollars in thousands) Recorded Investment with Allowance Related Allowance Net Recorded Investment with Allowance Related Allowance Net Level 3 inputs Impaired loans: Commercial and industrial $ 699 $ 416 $ 283 $ 635 $ 525 $ 110 Commercial real estate — — — 596 44 552 1-4 family residential 1,485 15 1,470 1,824 89 1,735 Consumer — — — — — — Other 1,242 6 1,236 1,241 100 1,141 Total impaired loans $ 3,426 $ 437 $ 2,989 $ 4,296 $ 758 $ 3,538 Non‑Financial Assets and Non‑Financial Liabilities Measured at Fair Value on a Non-recurring Basis The Company’s non-financial assets measured at fair value on a non-recurring basis for the periods reported are foreclosed assets (upon initial recognition or subsequent impairment). The Company’s other non-financial assets whose fair value may be measured on a non-recurring basis when there is evidence of impairment and may be subject to impairment adjustments include goodwill and intangible assets, among other assets. The fair value of foreclosed assets may be estimated using level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria less estimated selling costs. There were no write-downs of foreclosed assets for fair value remeasurement subsequent to initial foreclosure during the years ended December 31, 2019 and 2018. There were no outstanding foreclosed assets as of December 31, 2019. 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: December 31, (Dollars in thousands) 2019 2018 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ — $ 13 Charge-offs recognized in the allowance for loan losses — (1) Fair value $ — $ 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: December 31, 2019 2018 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 372,064 $ 372,064 $ 382,070 $ 382,070 Level 2 inputs: Debt securities held to maturity — — 32 31 Bank-owned life insurance 71,881 71,881 71,525 71,525 Accrued interest receivable 8,742 8,742 8,227 8,227 Servicing asset 189 189 166 166 Level 3 inputs: Loans, including held for sale, net 2,654,362 2,615,268 2,432,753 2,423,130 Other investments 16,710 16,710 13,026 13,026 Total financial assets $ 3,123,948 $ 3,084,854 $ 2,907,799 $ 2,898,175 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,184,861 $ 1,184,861 $ 1,183,058 $ 1,183,058 Level 2 inputs: Interest-bearing deposits 1,651,359 1,667,527 1,522,366 1,583,224 Federal Home Loan Bank advances 48,822 50,000 — — Repurchase agreements 485 485 2,498 2,498 Junior subordinated debt — — 1,571 1,571 Accrued interest payable 1,005 1,005 653 653 Total financial liabilities $ 2,886,532 $ 2,903,878 $ 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 | 12 Months Ended |
Dec. 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 December 31, 2019 and 2018, no such deterioration was determined by management. At December 31, 2019 and 2018, the Company had 19 and 13 interest rate swap agreements outstanding with borrowers and financial institutions, respectively. 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 Average Notional Fair Maturity (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate (Years) December 31, 2019 Interest rate swaps with customers Other Assets $ 69,189 $ 2,599 4.40% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.65 Interest rate swaps with financial institution Other Assets 5,987 39 4.00% LIBOR 1M + 2.50% 6.71 Interest rate swaps with customers Other Liabilities 5,987 (39) 4.00% LIBOR 1M + 2.50% 6.71 Interest rate swaps with financial institution Other Liabilities 69,189 (2,599) 4.40% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.65 Total derivatives $ 150,352 $ — Weighted Average Notional Fair Maturity (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate (Years) 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 Interest rate swaps with financial institution Other Assets 32,923 793 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 Interest rate swaps with customers Other Liabilities 32,923 (793) 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 Interest rate swaps with financial institution Other Liabilities 8,901 (169) 5.45% - 7.25% LIBOR 1M + 2.50% - 3.20% 6.22 Total derivatives $ 83,648 $ — |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Dec. 31, 2019 | |
OPERATING LEASES | |
OPERATING LEASES | NOTE 16: OPERATING LEASES The Company leases certain office space, stand-alone buildings and land are recognized as operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets. Lease liabilities represent the Company’s liability to make lease payments under these leases, on a discounted basis and at December 31, 2019, totaled $15.7 million. The weighted-average discount rate for the year ended December 31, 2019 was 3.54%. The discount rate is estimated based on Federal Home Loan Bank advance rates applicable to the remaining terms. Right-of-use assets represent the Company’s right to use, or control the use of, leased assets for their lease term and at December 31, 2019, totaled $12.9 million. During the year ended December 31, 2019, the Company obtained $1.3 million of right-of-use assets in exchange for new operating lease liabilities related to two leases commenced in that period. The weighted-average remaining lease term for operating leases outstanding at December 31, 2019 was 11.2 years. Cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2019 totaled $1.9 million. The Company’s leases have no variable costs. Lease costs for the period shown below were as follows: Year Ended (Dollars in thousands) December 31, 2019 Operating lease cost $ 1,876 Short-term lease cost 61 Sublease income (153) Total lease cost $ 1,784 A maturity analysis of operating lease liabilities as of the date shown below was as follows: (Dollars in thousands) December 31, 2019 2020 $ 2,025 2021 2,362 2022 2,474 2023 2,478 2024 1,916 Thereafter 10,231 Total undiscounted lease liability 21,486 Less: Discount on cash flows (3,741) Lease signed, but not yet commenced (2,041) Total operating lease liability $ 15,704 |
COMMITMENTS AND CONTINGENCIES A
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | 12 Months Ended |
Dec. 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: December 31, (Dollars in thousands) 2019 2018 Commitments to extend credit, variable interest rate $ 652,611 $ 726,277 Commitments to extend credit, fixed interest rate 141,439 105,359 $ 794,050 $ 831,636 Standby letters of credit $ 23,547 $ 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 the Company’s 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. |
EMPLOYEE BENEFIT PLANS AND DEFE
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | NOTE 18: 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 matches a portion of each employee’s contribution and may, at its discretion, make additional contributions. During the years ended December 31, 2019 and 2018, the Company contributed $1.9 million and $1.7 million 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 December 31, 2019 and 2018, the amount payable, including interest, for this deferred plan was $2.7 million and $2.5 million, respectively, and is included in other liabilities in the 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 $335,000 and $421,000 at December 31, 2019 and 2018, respectively, which is included in other liabilities in the 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 $437,000 and $219,000 at December 31, 2019 and 2018, respectively, and is included in other liabilities in the 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. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 19: 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 December 31, 2019, 963,200 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 December 31, 2019, 314,913 shares were available for future grant under the 2017 Plan. Stock option activity for the periods shown below was as follows: Years Ended December 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 (15,244) 12.74 (28,000) 10.52 Forfeited/expired (4,000) 17.73 — — Outstanding at end of period 213,078 16.92 232,322 16.66 A summary of stock options as of the date shown below was as follows: December 31, 2019 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 148,879 64,199 213,078 Weighted-average exercise price per share $ 15.62 $ 19.94 $ 16.92 Aggregate intrinsic value (in thousands) $ 2,307 $ 718 $ 3,025 Weighted-average remaining contractual term (years) 4.9 6.9 5.5 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 December 31, 2017 212,580 $ 26.71 — $ — Granted 21,500 30.44 24,000 — Vested (51,307) 27.04 — — Forfeited (1,000) 28.64 — — Outstanding at December 31, 2018 181,773 $ 27.05 24,000 $ 34.46 Granted 44,492 31.64 — — Vested (61,590) 27.20 (6,000) 34.46 Forfeited (3,232) 29.99 — — Outstanding at December 31, 2019 161,443 $ 28.20 18,000 $ 34.46 A summary of restricted stock as of the date shown below was as follows: December 31, 2019 Restricted Stock Non-performance Based Performance-based Number of shares underlying restricted stock 161,443 18,000 Weighted-average grant date fair value per share $ 28.20 $ 34.46 Aggregate fair value (in thousands) $ 5,024 $ 560 Weighted-average remaining vesting period (years) 2.9 2.8 The Company’s stock compensation plans allow employees to elect to have shares withheld to satisfy their tax liabilities related to options exercised or restricted stock vested or to pay the exercise price of the options. During the periods shown below, the shares of stock options exercised, restricted stock vested, shares withheld, and shares issued were as follows: Exercised/Vested Shares Withheld Shares Issued Year Ended December 31, 2019 Stock options 15,244 (2,318) 12,926 Non-performance based restricted stock 61,590 (6,672) 54,918 Performance-based restricted stock 6,000 (1,463) 4,537 Year Ended December 31, 2018 Stock options 28,000 — 28,000 Non-performance based restricted stock 51,307 (5,118) 46,189 Performance-based restricted stock — — — For the years ended December 31, 2019, 2018 and 2017, stock compensation expense was $2.4 million, $1.6 million and $329,000, respectively. As of December 31, 2019, there was approximately $4.8 million of total unrecognized compensation expense related to unvested stock options, non-performance based restricted stock and performance-based restricted, which is expected to be recognized in the Company’s consolidated statements of income over a weighted-average period of 2.8 years. |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2019 | |
REGULATORY MATTERS | |
REGULATORY MATTERS | NOTE 20: REGULATORY MATTERS 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, that as of December 31, 2019 and 2018, 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. At December 31, 2019 and 2018, the Company and the Bank, were “well capitalized” based on the ratios presented below. Actual and required capital ratios as the dates shown below 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 December 31, 2019 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 448,445 $ 129,997 $ 202,218 N/A N/A Bank Only $ 406,675 $ 129,988 $ 202,203 $ 187,760 Tier I Capital to Risk-Weighted Assets: Consolidated $ 448,445 $ 173,330 $ 245,550 N/A N/A Bank Only $ 406,675 $ 173,317 $ 245,532 $ 231,089 Total Capital to Risk-Weighted Assets: Consolidated $ 474,104 $ 231,106 $ 303,327 N/A N/A Bank Only $ 432,334 $ 231,089 $ 303,304 $ 288,861 Tier 1 Leverage Capital to Average Assets: Consolidated $ 448,445 $ 136,798 $ 136,798 N/A N/A Bank Only $ 406,675 $ 136,754 $ 136,754 $ 170,943 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 | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 21: INCOME TAXES The components of the provision for income tax expense for the periods listed below were as follows: For the Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Current federal income tax $ 12,988 $ 11,908 $ 13,364 Current state income tax 240 190 157 Deferred income tax (1,657) (734) 2,932 Total income tax expense $ 11,571 $ 11,364 $ 16,453 Income tax expense for the periods listed below differs from the applicable statutory rate of 21% for the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017 as follows: For the Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Tax expense calculated at statutory rate $ 13,038 $ 12,317 $ 15,408 Increase (decrease) resulting from: State income tax 190 150 102 Tax exempt interest income (807) (834) (1,504) Life insurance (1,047) (381) (553) Impact of tax law rate change — — 3,857 Other 197 112 (857) Total income tax expense $ 11,571 $ 11,364 $ 16,453 Effective tax rate The Tax Cuts and Jobs Act of 2017 became effective January 1, 2018 and lowered the corporate federal income tax rate in the U.S. from 35% to 21%. Based upon this tax law enactment, the Company analyzed and remeasured its deferred tax positions to the new tax rate and recorded a $3.9 million adjustment to income tax expense in the consolidated income statement for the year ended December 31, 2017. Deferred income taxes are provided for differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. The components of the net deferred tax asset for the periods shown below were as follows: December 31, (Dollars in thousands) 2019 2018 Deferred tax assets: Allowance for possible credit losses $ 5,308 $ 4,976 Compensation related 3,068 2,681 Deferred loan origination fees and loan costs 1,261 1,312 Loan related 253 137 Unrealized loss on securities available for sale — 790 Operating lease liabilities 3,298 — Other 8 230 Total deferred tax assets 13,196 10,126 Deferred tax liabilities: Accumulated depreciation (1,140) (1,203) Operating lease right-to-use asset (2,714) — Compensation 481(a) adjustment (238) (476) Core deposit intangibles (997) (1,178) Unrealized loss on securities available for sale (634) — Other (41) (68) Total deferred tax liabilities (5,764) (2,925) Net Deferred Tax Asset $ 7,432 $ 7,201 As of December 31, 2019, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2015 forward for the State of Texas and from the year 2016 forward for federal. When necessary, the Company would include interest expense assessed by taxing authorities in interest expense and penalties related to income taxes in other expense on its consolidated statements of income. The Company did not record any interest or penalties related to income tax for the years ended December 31, 2019, 2018 and 2017. For the years ended December 31, 2019 and 2018, management has determined there were no material uncertain tax positions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 22: EARNINGS PER SHARE The computation of basic and diluted earnings per share for the periods shown is below. Years Ended December 31, (Dollars in thousands, except per share data) 2019 2018 2017 Net income for common shareholders $ 50,517 $ 47,289 $ 27,571 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,926 24,859 22,457 Dilutive effect of outstanding stock options and unvested restricted stock awards 127 159 116 Diluted weighted-average shares outstanding 25,053 25,018 22,573 Earnings per share: Basic $ 2.03 $ 1.90 $ 1.23 Diluted $ 2.02 $ 1.89 $ 1.22 For the years ended December 31, 2019 and 2018, the Company has excluded from diluted weighted-average shares, the impact of 2,400 and 3,000 shares of unvested non-performance based restricted stock as they are anti-dilutive and 18,000 and 24,000 shares of performance-based restricted stock, respectively, as they are contingently issuable and the performance conditions for these issuances have not been met. |
PARENT COMPANY
PARENT COMPANY | 12 Months Ended |
Dec. 31, 2019 | |
PARENT COMPANY. | |
PARENT COMPANY | NOTE 23: PARENT COMPANY The following balance sheets, statements of income and statements of cash flows for CBTX, Inc. should be read in conjunction with the consolidated financial statements and the related notes. Balance Sheets December 31, (Dollars in thousands) 2019 2018 Assets Cash and due from banks $ 44,130 $ 44,189 Investment in subsidiary 493,951 445,754 Deferred tax asset, net 131 145 Other assets 438 911 Total assets $ 538,650 $ 490,999 Liabilities and shareholders’ equity Liabilities Junior subordinated debt $ — $ 1,571 Other liabilities 2,929 1,803 Total liabilities 2,929 3,374 Shareholders’ equity Common stock 258 258 Additional paid-in capital 346,559 344,497 Retained earnings 201,080 160,626 Treasury stock (14,562) (14,781) Accumulated other comprehensive loss 2,386 (2,975) Total shareholders’ equity 535,721 487,625 Total liabilities and shareholders’ equity $ 538,650 $ 490,999 Statements of Income Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Interest income Other $ 5 $ 187 $ 142 Interest expense Note payable 15 15 906 Junior subordinated debt 4 420 322 Total interest expense 19 435 1,228 Net interest expense (14) (248) (1,086) Noninterest income Dividend income from subsidiary 8,901 7,800 8,806 Total noninterest income 8,901 7,800 8,806 Noninterest expense Salaries and employee benefits 673 755 344 Data processing 13 44 37 Printing, stationery and office 8 12 20 Professional and director fees 652 728 842 Other expenses 201 196 17 Total noninterest expense 1,547 1,735 1,260 Income before income tax benefit and equity in undistributed income of subsidiary 7,340 5,817 6,460 Income tax benefit (341) (437) (1,518) Income before equity in undistributed income of subsidiary 7,681 6,254 7,978 Equity in undistributed income of subsidiary 42,836 41,035 19,593 Net income $ 50,517 $ 47,289 $ 27,571 Statements of Cash Flows Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Cash flows from operating activities: Net income $ 50,517 $ 47,289 $ 27,571 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Equity in undistributed net income loss of subsidiary (42,836) (41,035) (19,593) Stock-based compensation expense 2,402 1,601 329 Deferred tax provision (benefit) 14 (4) 391 Change in operating assets and liabilities: Other assets 473 1,549 (1,216) Other liabilities (180) (836) 552 Total adjustments (40,127) (38,725) (19,537) Net cash provided by operating activities 10,390 8,564 8,034 Cash flows from investing activities: — — — Cash flows from financing activities: Repayment of note payable — — (27,679) Redemption of trust preferred securities (1,571) (5,155) — Proceeds from sale of common stock in initial public offering — — 64,519 Dividends paid on common stock (8,757) (4,979) (4,412) Payments to tax authorities for stock-based compensation (239) (171) — Proceeds from exercise of stock options 121 294 117 Repurchase of common stock (3) — — Net cash (used) provided in financing activities (10,449) (10,011) 32,545 Net (decrease) increase in cash and cash equivalents (59) (1,447) 40,579 Cash and cash equivalents, beginning 44,189 45,636 5,057 Cash and cash equivalents, ending $ 44,130 $ 44,189 $ 45,636 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE 24: QUARTERLY FINANCIAL DATA (UNAUDITED) Unaudited quarterly financial data for the periods indicated below was as follows: Year Ended December 31, 2019 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 36,985 $ 38,649 $ 39,193 $ 38,568 Interest expense 3,657 4,350 4,618 4,782 Net interest income 33,328 34,299 34,575 33,786 Provision (recapture) for loan losses 1,147 807 579 (148) Net interest income after provision (recapture) for loan losses 32,181 33,492 33,996 33,934 Noninterest income 3,493 7,303 4,115 3,717 Noninterest expense 22,585 23,403 22,045 22,110 Income before income taxes 13,089 17,392 16,066 15,541 Income tax expense 2,599 3,077 2,990 2,905 Net income $ 10,490 $ 14,315 $ 13,076 $ 12,636 Earnings per share: Basic $ 0.42 $ 0.57 $ 0.52 $ 0.51 Diluted $ 0.42 $ 0.57 $ 0.52 $ 0.50 Year Ended December 31, 2018 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 31,085 $ 33,127 $ 34,665 $ 36,882 Interest expense 2,046 2,251 3,139 3,662 Net interest income 29,039 30,876 31,526 33,220 Provision (recapture) for loan losses 865 690 (1,142) (2,169) Net interest income after provision (recapture) for loan losses 28,174 30,186 32,668 35,389 Noninterest income 3,361 3,506 3,526 3,859 Noninterest expense 20,284 20,012 19,964 21,756 Income before income taxes 11,251 13,680 16,230 17,492 Income tax expense 2,139 2,638 3,207 3,380 Net income $ 9,112 $ 11,042 $ 13,023 $ 14,112 Earnings per share: Basic $ 0.37 $ 0.44 $ 0.52 $ 0.57 Diluted $ 0.37 $ 0.44 $ 0.52 $ 0.56 |
BASIS OF PRESENTATION, NATURE_2
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | |
Basis of Presentation | Basis of Presentation —The accompanying consolidated financial statements include the accounts of the Company and the Bank. All material intercompany balances and transactions have been eliminated in consolidation. |
Reclassification | Reclassification —Within interest income, equity investment income for 2018 and 2017 has been reclassified from other interest-earning assets to a separate line and within interest expense, interest expense on notes payable and junior subordinated debt have been combined. On the December 31, 2018 balance sheet, repossessed real estate and other assets were combined with other assets. These reclassifications were made to conform to the 2019 financial statement presentation in the consolidated statements of income and consolidated balance sheets. |
Segment Reporting | Segment Reporting —The Company has one reportable segment. The Company’s activities are inter-related, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing the interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit. The Company’s chief operating decision‑maker, the Chief Executive Officer, uses the consolidated results to make operating and strategic decisions. |
Use of Estimates | Use of Estimates —In preparing financial statements in conformity with accounting principles generally accepted in the United States, or GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term include, but are not limited to, determination of the allowance for loan losses and fair values of financial instruments and goodwill and other intangible assets. |
Cash and Due from Banks | Cash and Due from Banks —Cash, cash equivalents and restricted cash include cash, interest‑bearing and noninterest‑bearing transaction accounts with other banks and federal funds sold. A majority of cash, cash equivalents and time deposits of the Company are maintained with major financial institutions in the United States, or U.S., and have original maturities less than 90 days. Interest-bearing deposit accounts with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and therefore, bear minimal risk. The Company periodically evaluates the stability of the financial institutions with which it has deposits to monitor this credit risk. The Company has cash deposits in correspondent financial institutions in excess of the amount insured by the FDIC in the amount of $100.0 million and $99.4 million at December 31, 2019 and 2018, respectively. The Bank is required to maintain regulatory reserves with the Federal Reserve Bank and the reserve requirements for the Bank were $18.6 million and $18.5 million at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, the Company had $3.1 million and $1.6 million in cash collateral used in its interest rate swap transactions. The Federal Reserve Bank reserve requirements and the cash collateral used in interest rate swap transactions are considered restricted cash. |
Loans | Loans —Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay‑off, are measured at historical cost and generally reported at their outstanding unpaid principal balances, net of any unearned income, charge‑offs and unamortized deferred fees and costs. Interest income is accrued on the unpaid principal balance. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. The Company records lines of credit at their funded portion. All unfunded amounts for loans in process and credit lines are reported as unfunded commitments. |
Government Guaranteed Loans | Government Guaranteed Loans —The Company originates loans that are partially guaranteed by the Small Business Administration, or SBA, and the Company may sell the guaranteed portion of these loans as market conditions and pricing allow for a gain to be recorded on the sale. Loan sales are recorded when control over the transferred asset has been relinquished. Control over the transferred portion is deemed to be surrendered when the assets have been removed from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In calculating the gain on sale of SBA loans, the Company’s investment in the loan is allocated among the unguaranteed portion of the loan, the servicing amount retained, and the guaranteed portion of the loan sold, based on the relative fair market value of each portion. The gain on the sold portion of the loan is recognized based on the difference between the sale proceeds and the allocated investment. |
Nonperforming and Impaired Loans | Nonperforming and Impaired Loans —Nonperforming loans includes loans which have been categorized by management as nonaccrual because of delinquency status or because collection of principal and interest is doubtful. Loans restructured in a troubled debt restructuring are not considered nonperforming if the loans are not delinquent and otherwise performing in accordance with their restructured terms. When the payment of principal or interest on a loan is delinquent for 90 days or more, or earlier in some cases, the loan is placed on nonaccrual status, unless the loan is in the process of collection or renewal and the underlying collateral fully supports the carrying value of the loan. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan and the probability that the Company will collect all principal and interest amounts outstanding. When a loan is placed on nonaccrual status, interest accrued and uncollected during any period prior to the judgment of uncollectability is charged to operations, unless the loan is well secured with collateral values sufficient to ensure collection of both principal and interest. Generally, any payments received on nonaccrual loans are applied first to outstanding loan amounts, reducing the Company’s recorded investment in the loan and next to the recovery of charged‑off principal or interest amounts. Any excess is treated as recovery of lost interest. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are considered impaired if, based on current information and events, it is probable that the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Interest income received on impaired loans is either applied against principal or realized as interest income, according to management’s judgment as to the collectability of principal. |
Troubled Debt Restructurings | Troubled Debt Restructurings — From time to time, the Company modifies loan agreements with borrowers. A modified loan is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the borrower has been granted a concession. Modifications to loan terms may include interest rate reductions, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. Interest is generally accrued on such loans in accordance with the new terms. Loans restructured in a troubled debt restructuring are not considered nonperforming if the loans are not delinquent and otherwise performing in accordance with their restructured terms. |
Allowance for Loan Losses | Allowance for Loan Losses —The allowance for loan losses represents management’s estimate of probable losses inherent in the loan portfolio. Credit exposures deemed to be uncollectible are charged against these accounts. Cash recovered on previously charged‑off amounts is recorded as a recovery to these accounts. The allowance for loan losses does not include amounts related to accrued interest receivable as accrued interest receivable is reversed when a loan is placed on nonaccrual or is charged‑off. The Company employs a systematic methodology for determining the allowance for loan losses that consists of two components: (i) specific valuation allowances based on probable losses on certain loans and (ii) historical valuation allowances based on historical average loss experience for similar loans with similar characteristics and trends adjusted, as necessary, to reflect the impact of current conditions and further adjusted for general economic conditions and other risk factors both internal and external to the Company. A specific allowance is established for loans considered impaired when the carrying value of the loan is more than the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The Company uses fair market value, less reasonable and customary costs to sell, for collateral dependent loans. In certain instances, a specific allowance will be established to protect against market deterioration. The allowance on the remaining portfolio segments is calculated using historical loss rates adjusted for qualitative factors. Criticized and classified loans, not deemed impaired, are subject to an allowance based on the historical loss migration analysis by grade adjusted for qualitative factors. Pass loans are subject to an allowance based on historical losses by product type adjusted for qualitative factors. The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio. The general valuation factor is based upon a more qualitative analysis of risk. Various risks are considered in the determination of the environmental adjustment factor such as asset quality, lending management and staff, loan policies and procedures, loan review, credit concentrations, loan volumes, collateral values, compliance and economic trends on both a local and national level. A majority of the loan portfolio is comprised of loans to businesses and individuals in the Houston metropolitan and Beaumont/East Texas area. This geographic concentration subjects the loan portfolio to the general economic conditions within this area. The risks created by this concentration have been considered by management in the determination of the adequacy of the allowance for loan losses. |
Loans Held for Sale | Loans Held for Sale —Loans held for sale include mortgage loans originated with the intent to sell on the secondary market. Loans held for sale are carried at the lower of cost or estimated fair value on an individual loan basis. These loans are held for an interim period, usually less than 30 days. Accordingly, these loans are classified as held for sale and are carried at cost, which is determined on an aggregate basis and deemed to be the equivalent of fair value based on the short-term nature of the loans. |
Securities | Securities —Securities that the Company intends to hold for an indefinite period of time are classified as available for sale, carried at fair value and unrealized gains and losses are excluded from earnings and reported as accumulated other comprehensive income (loss), net of taxes in shareholders’ equity until realized. Securities that the Company has both the positive intent and ability to hold to maturity are classified as held to maturity and are carried at cost, adjusted for the amortization of premiums and the accretion of discounts. Securities are evaluated for other‑than‑temporary impairment, or OTTI, on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. Premiums and discounts are amortized and accreted to income using the level‑yield method of accounting, adjusted for prepayments as applicable. The specific identification method of accounting is used to compute gains or losses on the sales of these assets. |
Equity Investments | Equity Investments —The Company’s equity investments are carried at cost and evaluated for impairment at least annually and on an interim basis if an event or circumstance indicates that it is likely that an impairment has occurred as these investments do not have readily determinable fair values. |
Premises and Equipment | Premises and Equipment —Premises and equipment are carried at cost, less accumulated depreciation. Depreciation expense is computed on the straight‑line method over the estimated useful lives of the assets. Land is carried at cost. Leasehold improvements are amortized over the life of the lease, plus renewal options or the estimated useful lives, whichever is shorter. Buildings are depreciated over a period not to exceed 32 years. Depending upon the type of furniture and equipment, the depreciation period will range from three to 10-years. Bank vehicles are amortized over a period of three years. Gains and losses on dispositions are included in other noninterest income. During periods of real estate development, interest on construction costs is capitalized if considered material by management. Operating Leases — The Company leases certain office space, stand-alone buildings and land are recognized as operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets. Lease liabilities represent the Company’s liability to make lease payments under these leases, on a discounted basis and are amortized on a straight-line basis over the lease term for each related lease agreement. Right-of-use assets represent the Company’s right to use, or control the use of, leased assets for their lease term and are amortized over the lease term of the related lease agreement. See further discussion of Accounting Standards Update, or ASU 2016-02, Leases (Topic 842) below. The Company does not recognize short-term operating leases on the consolidated balance sheets. A short-term lease has term of 12 months or less and does not have a purchase option that is likely to be exercised. The Company subleases certain facilities to outside parties; however, these leases are not significant. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets —Goodwill is not amortized and is evaluated for impairment at least annually as of December 31 and on an interim basis if an event or circumstance indicates that it is likely that an impairment has occurred. Impairment would exist if the fair value of the reporting unit at the date of the test is less than the goodwill recorded on the financial statements. If an impairment of goodwill exists, a loss would then be recognized in the consolidated financial statements to the extent of the impairment. The Company’s identified intangibles are core deposits, customer relationship intangibles and loan servicing assets. Core deposit and customer relationship intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable from future undiscounted cash flows. Servicing assets are assessed for impairment or increased obligation based on fair value at each reporting date. Core deposit intangibles are amortized over a seven to 10-year period using an accelerated method in keeping with the anticipated benefits derived from those core deposits. Customer relationship intangibles are amortized over a 15- year period on a straight-line basis. Servicing assets are recognized as separate assets when rights are acquired through the sale of financial assets. Servicing assets are initially recorded at fair market value and amortized in proportion to and over the service period and assessed for impairment or increased obligation based on fair value at each reporting date. Fair value is based on the gross coupon less an assumed contractual servicing cost or based upon discounted cash flows using market‑based assumptions. Servicing assets are amortized into noninterest expense in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing fee income is recorded for fees earned from servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. |
Bank owned life insurance | 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. |
Repossessed Real Estate and Other Assets | Repossessed Real Estate and Other Assets —Real estate and other assets acquired through repossession or foreclosure are held for sale and are initially recorded at the fair value of the asset less estimated costs to sell. Outstanding loan balances are reduced to reflect this value through charges to the allowance for loan losses. If the fair value of the repossessed real estate and other assets declines after foreclosure, adjustments to reflect changes in fair value are recognized in income in the period such determinations are assessed. Any developmental costs associated with foreclosed property under construction are capitalized and considered in determining the fair value of the property. Any operating expenses of these assets, net of related income and gains and losses on their disposition are included in other noninterest income or expense. |
Other Assets | Other Assets —Other assets include accrued interest receivables on loans and investments, derivative financial instruments assets, prepaid expenses, repossessed real estate and other assets. |
Other Liabilities | Other Liabilities —Other liabilities include accrued interest payable on deposits, accrued bonuses, deferred compensation, derivative financial instruments liabilities and other liabilities. |
Repurchase Agreements | Repurchase Agreements —The Company utilizes securities sold under repurchase agreements to facilitate the needs of our customers and to facilitate short-term borrowing needs. Securities sold under agreements to repurchase are stated at the amount of cash received in the transaction. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. |
Derivative Financial Instruments | Derivative Financial Instruments —All derivatives are recorded at fair value on the balance sheet. Derivatives executed with the same counterparty are generally subject to master netting arrangements. Fair value amounts recognized for derivatives and fair value amounts recognized for the right/obligation to reclaim/return cash collateral are not offset for financial reporting purposes. The Company had no derivative instruments that qualified for hedge accounting during the periods reported herein, but it may in the future as circumstances arise. |
Fair Value Measurements | Fair Value Measurements —Fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is estimated based upon models that primarily use observable market‑based parameters as inputs. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. |
Revenue Recognition | Revenue Recognition —Accounting Standards Codification (Topic 606) or ASU 2014-09 requires entities to recognize revenue 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 insurance 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 noninterest income in the consolidated income statements as deposit account service charges, net gain on sale of assets, card interchange fees and other noninterest income. 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. |
Income Taxes | Income Taxes —The Company prepares and reports income taxes on a consolidated basis. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized. The Company may recognize the tax benefit of an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements would be the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Company includes any interest expense assessed by taxing authorities in interest expense and any penalties related to income taxes in other expense on its consolidated statements of income. |
Transfers of Financial Assets | Transfers of Financial Assets —Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. The Company’s loan participations sold subject to this guidance which met the conditions to be treated as a sale were recorded as such. Any securities sold under agreements to repurchase that did not meet the sale criteria are treated as a secured borrowing with pledge of collateral and included in securities available for sale and repurchase agreements in the Company’s consolidated balance sheets. |
Stock-Based Compensation | Stock‑Based Compensation —Stock-based compensation is recognized as compensation cost in the consolidated statements of income based on the fair value on the date of grant. A Black‑Scholes model is utilized to estimate the fair value of stock options and the market value of the Company’s common stock at the date of grant is used as the estimate of fair value of restricted stock. Compensation expense for awards not based on performance criteria is recognized over the required service period, on a straight-line basis. The impact of forfeitures is recognized as they occur. The number of shares earned under the Company’s performance-based restricted stock award agreements is based on the achievement of certain levels of certain performance goals. The fair value of performance-based restricted stock is estimated based on the market value of the Company’s common stock at the date of grant. 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 and other goals must be achieved within five years or the awards expire. |
Earnings Per Share | Earnings Per Share —Basic earnings per common share is computed as net income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed using the weighted-average shares determined for the basic earnings per share computation plus the potential dilution that could occur if outstanding stock options were exercised and restricted stock awards were vested and converted into common stock using the treasury stock method. Share Repurchase Program — In July 2019, the Company’s Board of Directors authorized a share repurchase program under which the Company may repurchase up to $40.0 million of the Company’s common stock through September 30, 2020. During 2019, 100 shares were repurchased at $27.98 per share and retired and returned to the status of authorized but unissued shares. |
Accounting Standards Recently Adopted | Accounting Standards Recently Adopted The Company adopted 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, 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 during the first quarter of 2019. 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. The amendments affect loans, debt securities, other receivables, off-balance sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company’s adoption of ASU 2016-13 was effective on January 1, 2020. The Company has completed its evaluation and assessment of ASU 2016-13 and finalized the impact upon adoption of ASU 2016-13 on the consolidated financial statements. The Company developed a functional working group, with the assistance of an outside consultant, which is comprised of individuals from various areas including credit, risk management, and accounting, among others. The Company has determined an aged based vintage model, or the Vintage Model, to be the most appropriate model as it provides the best predictor of credit risks associated with the loan portfolio and reasonably captures the expected life of loan losses associated with each segment of loans. The aging of the loans is determined by an identifiable credit decision date, and the loans will be segmented into pools based on similar risks characteristics and credit risk indicators. The methodology associated with utilizing the Vintage Model takes into consideration historical loss rates associated with each segment as well as other qualitative factors and economic forecasts to derive an allowance for credit losses associated with expected credit losses within the loan portfolio. The Company has finalized the processes and internal controls related to the estimation process, model development and validation, as well as system configuration. Existing technology has been adapted to conform to the requirements of ASU 2016-13 and the Company has utilized a third-party vendor solution to assist in the application of ASU 2016-13. The implementation of ASU 2016-13 also impacted the methodology for determining an allowance for credit losses associated with the Company’s off-balance sheet credit exposures. These exposures primarily related to unfunded commitments with borrowers through line of credit or letter of credit arrangements. The Company has utilized similar methodology associated with the Vintage Model and considers historical utilization rates to determine an appropriate allowance for credit losses. The adoption of ASU 2016-13 will require changes to the Company’s accounting policies and disclosures for credit losses on financial instruments. The adoption of ASU 2016-13 did not have any impact on held-to-maturity securities as the Company did not hold any as of December 31, 2019. Additionally, the Company assessed the impact of ASU 2016-13 on the available for sale securities utilizing various qualitative factors and determined there to be no credit losses within the portfolio requiring an allowance upon adoption. The Company did not have any purchased financial assets with credit deterioration as of January 1, 2020. The Company has determined that the expected adoption of ASU 2016-13 will increase the allowance for credit losses by approximately $874,000 associated with the loan portfolio and increase other liabilities by approximately $3.0 million pertaining to an allowance for credit losses associated with the Company’s unfunded commitments through a one-time cumulative effect adjustment to retained earnings. As the Company is currently finalizing the execution of its implementation controls and processes in which the estimate may be subject to further refinement, the ultimate impact of the adoption of ASU 2016-13 as of January 1, 2020 could differ from current expectations. |
Cash Flow Reporting | 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. The amendments affect loans, debt securities, other receivables, off-balance sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company’s adoption of ASU 2016-13 was effective on January 1, 2020. The Company has completed its evaluation and assessment of ASU 2016-13 and finalized the impact upon adoption of ASU 2016-13 on the consolidated financial statements. The Company developed a functional working group, with the assistance of an outside consultant, which is comprised of individuals from various areas including credit, risk management, and accounting, among others. The Company has determined an aged based vintage model, or the Vintage Model, to be the most appropriate model as it provides the best predictor of credit risks associated with the loan portfolio and reasonably captures the expected life of loan losses associated with each segment of loans. The aging of the loans is determined by an identifiable credit decision date, and the loans will be segmented into pools based on similar risks characteristics and credit risk indicators. The methodology associated with utilizing the Vintage Model takes into consideration historical loss rates associated with each segment as well as other qualitative factors and economic forecasts to derive an allowance for credit losses associated with expected credit losses within the loan portfolio. The Company has finalized the processes and internal controls related to the estimation process, model development and validation, as well as system configuration. Existing technology has been adapted to conform to the requirements of ASU 2016-13 and the Company has utilized a third-party vendor solution to assist in the application of ASU 2016-13. The implementation of ASU 2016-13 also impacted the methodology for determining an allowance for credit losses associated with the Company’s off-balance sheet credit exposures. These exposures primarily related to unfunded commitments with borrowers through line of credit or letter of credit arrangements. The Company has utilized similar methodology associated with the Vintage Model and considers historical utilization rates to determine an appropriate allowance for credit losses. The adoption of ASU 2016-13 will require changes to the Company’s accounting policies and disclosures for credit losses on financial instruments. The adoption of ASU 2016-13 did not have any impact on held-to-maturity securities as the Company did not hold any as of December 31, 2019. Additionally, the Company assessed the impact of ASU 2016-13 on the available for sale securities utilizing various qualitative factors and determined there to be no credit losses within the portfolio requiring an allowance upon adoption. The Company did not have any purchased financial assets with credit deterioration as of January 1, 2020. The Company has determined that the expected adoption of ASU 2016-13 will increase the allowance for credit losses by approximately $874,000 associated with the loan portfolio and increase other liabilities by approximately $3.0 million pertaining to an allowance for credit losses associated with the Company’s unfunded commitments through a one-time cumulative effect adjustment to retained earnings. As the Company is currently finalizing the execution of its implementation controls and processes in which the estimate may be subject to further refinement, the ultimate impact of the adoption of ASU 2016-13 as of January 1, 2020 could differ from current expectations. Cash Flow Reporting —Supplemental disclosures of cash flow information are as follows for the periods shown below: Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Supplemental disclosures of cash flow information: Cash paid for taxes $ 13,710 $ 11,627 $ 13,752 Cash paid for interest 17,040 10,803 9,094 Supplemental disclosures of non-cash flow information: Dividends accrued 1,306 43 11 Operating lease right-to-use asset obtained in exchange for lease liabilities 14,499 — — Repossessed real estate and other assets 121 349 881 |
BASIS OF PRESENTATION, NATURE_3
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | |
Supplemental disclosures of cash flow information | Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Supplemental disclosures of cash flow information: Cash paid for taxes $ 13,710 $ 11,627 $ 13,752 Cash paid for interest 17,040 10,803 9,094 Supplemental disclosures of non-cash flow information: Dividends accrued 1,306 43 11 Operating lease right-to-use asset obtained in exchange for lease liabilities 14,499 — — Repossessed real estate and other assets 121 349 881 |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 December 31, 2019 Debt securities available for sale: State and municipal securities $ 51,525 $ 1,761 $ (7) $ 53,279 U.S. agency securities: Collateralized mortgage obligations 55,784 324 (119) 55,989 Mortgage-backed securities 119,787 1,315 (255) 120,847 Equity securities 1,155 — (8) 1,147 Total $ 228,251 $ 3,400 $ (389) $ 231,262 Debt securities held to maturity: Mortgage-backed securities $ — $ — $ — $ — 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 Equity 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 | Available for Sale Held to Maturity Amortized Fair Amortized Fair (Dollars in thousands) Cost Value Cost Value December 31, 2019 Amounts maturing in: 1 year or less $ 2,535 $ 2,532 $ — $ — 1 year through 5 years 3,081 3,145 — — 5 years through 10 years 14,564 14,874 — — After 10 years 208,071 210,711 — — $ 228,251 $ 231,262 $ — $ — 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 December 31, 2019 Debt securities available for sale: State and municipal securities $ 3,539 $ (7) $ 106 $ — U.S. agency securities: Collateralized mortgage obligations 10,687 (46) 7,994 (73) Mortgage-backed securities 11,628 (26) 21,745 (229) Equity securities — — 1,147 (8) $ 25,854 $ (79) $ 30,992 $ (310) 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) Equity securities — — 1,088 (41) $ 51,491 $ (773) $ 116,894 $ (3,666) |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EQUITY INVESTMENTS | |
Schedule of equity investments that do not have readily determinable fair values | December 31, (Dollars in thousands) 2019 2018 Federal Reserve stock $ 9,271 $ 9,271 Federal Home Loan Bank stock 4,249 1,250 The Independent Bankers Financial Corporation stock 141 141 Community Reinvestment Act investments 3,049 2,364 $ 16,710 $ 13,026 |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOANS | |
Loans, by portfolio segment | December 31, (Dollars in thousands) 2019 2018 Commercial and industrial $ 527,607 $ 519,779 Real estate: Commercial real estate 900,746 795,733 Construction and development 527,812 515,533 1-4 family residential 280,192 282,011 Multi-family residential 277,209 221,194 Consumer 36,782 39,421 Agriculture 9,812 11,076 Other 86,513 68,382 Total gross loans 2,646,673 2,453,129 Less allowance for loan loss (25,280) (23,693) Less deferred loan fees and unearned discounts (6,125) (6,306) Less loans held for sale (1,463) — Loans, net $ 2,613,805 $ 2,423,130 |
Loan participations purchased and sold | Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period December 31, 2019 Commercial real estate $ 2,314 $ 31,868 December 31, 2018 Commercial and industrial $ 7,000 $ 1,620 Commercial real estate 28,281 35,000 Construction and development — 9,301 $ 35,281 $ 45,921 December 31, 2017 Commercial and industrial $ — $ 23,000 Commercial real estate 12,885 20,505 Construction and development 5,606 2,562 $ 18,491 $ 46,067 |
LOAN PERFORMANCE (Tables)
LOAN PERFORMANCE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOAN PERFORMANCE | |
Nonaccrual loans, segregated by loan class | December 31, (Dollars in thousands) 2019 2018 Commercial and industrial $ 596 $ 1,317 Real estate: Commercial real estate 67 1,517 1-4 family residential 314 656 Total nonaccrual loans $ 977 $ 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 December 31, 2019 Commercial and industrial $ 664 $ 31 $ 240 $ 935 $ 526,672 $ 527,607 $ — Real estate: Commercial real estate 865 — 865 899,881 900,746 — Construction and development — 532 — 532 527,280 527,812 — 1-4 family residential 499 — 499 279,693 280,192 — Multi-family residential — — — — 277,209 277,209 — Consumer 43 — — 43 36,739 36,782 — Agriculture — — — — 9,812 9,812 — Other — — — 86,513 86,513 Total loans $ 2,071 $ 563 $ 240 $ 2,874 $ 2,643,799 $ 2,646,673 $ — 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 Number Recorded Restructured Extended Restructured and Adjusted (Dollars in thousands) of Loans Investment Payments Maturity Payments Interest Rate December 31, 2019 Commercial and industrial 3 $ 202 $ 39 $ — $ 163 $ — 1-4 family residential 1 111 — — — 115 Total 4 $ 313 $ 39 $ — $ 163 $ 115 December 31, 2018 Commercial and industrial 6 $ 1,419 $ 916 $ — $ 503 $ — Commercial real estate 3 1,406 1,406 — — — Other 1 1,646 — — — 1,646 Total 10 $ 4,471 $ 2,322 $ — $ 503 $ 1,646 |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 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 December 31, 2019 Beginning balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Provision for loan loss 715 1,209 148 (15) 188 27 2 111 2,385 Charge-offs (1,252) (45) — (12) — (97) — (52) (1,458) Recoveries 489 81 — 3 — 71 10 6 660 Net (charge-offs) recoveries (763) 36 — (9) — (26) 10 (46) (798) Ending balance $ 7,671 $ 7,975 $ 4,446 $ 2,257 $ 1,699 $ 388 $ 74 $ 770 $ 25,280 Period-end amount allocated to: Specific reserve $ 416 $ — $ — $ 15 $ — $ — $ — $ 6 $ 437 General reserve 7,255 7,975 4,446 2,242 1,699 388 74 764 24,843 Total $ 7,671 $ 7,975 $ 4,446 $ 2,257 $ 1,699 $ 388 $ 74 $ 770 $ 25,280 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 December 31, 2018 Beginning balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Provision (recapture) for loan loss (347) (3,494) 817 953 92 (181) (16) 420 (1,756) Charge-offs (1,928) (171) (1) (4) — (1) — (3) (2,108) Recoveries 2,737 20 — 6 — 3 10 3 2,779 Net (charge-offs) recoveries 809 (151) (1) 2 — 2 10 — 671 Ending balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Period-end amount allocated to: Specific reserve $ 525 $ 44 $ — $ 89 $ — $ — $ — $ 100 $ 758 General reserve 7,194 6,686 4,298 2,192 1,511 387 62 605 22,935 Total $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 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 December 31, 2017 Beginning balance $ 6,409 $ 10,770 $ 4,598 $ 1,286 $ 916 $ 353 $ 79 $ 595 $ 25,006 Provision (recapture) for loan loss 642 (284) (1,116) 35 503 263 (63) (318) (338) Charge-offs (904) (120) — (8) — (93) — — (1,125) Recoveries 1,110 9 — 13 — 43 52 8 1,235 Net (charge-offs) recoveries 206 (111) — 5 — (50) 52 8 110 Ending balance $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 Period-end amount allocated to: Specific reserve $ 852 $ 64 $ — $ 119 $ — $ — $ — $ — $ 1,035 General reserve 6,405 10,311 3,482 1,207 1,419 566 68 285 23,743 Total $ 7,257 $ 10,375 $ 3,482 $ 1,326 $ 1,419 $ 566 $ 68 $ 285 $ 24,778 |
Loans by risk grades and loan class | Special (Dollars in thousands) Pass Mention Substandard Total Loans December 31, 2019 Commercial and industrial $ 513,417 $ 2,963 $ 11,227 $ 527,607 Real estate: Commercial real estate 876,207 18,570 5,969 900,746 Construction and development 515,247 12,565 — 527,812 1-4 family residential 274,731 594 4,867 280,192 Multi-family residential 277,209 — — 277,209 Consumer 36,566 — 216 36,782 Agriculture 9,733 50 29 9,812 Other 79,860 — 6,653 86,513 Total loans $ 2,582,970 $ 34,742 $ 28,961 $ 2,646,673 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 December 31, 2019 Commercial and industrial $ 1,111 $ 300 $ 699 $ 999 $ 416 $ 2,452 Real estate: Commercial real estate 1,407 1,404 — 1,404 — 2,165 1-4 family residential 3,761 2,166 1,485 3,651 15 4,020 Consumer 210 210 210 — 128 Other 6,653 5,411 1,242 6,653 6 6,825 Total loans $ 13,142 $ 9,491 $ 3,426 $ 12,917 $ 437 $ 15,590 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 | December 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 $ 999 $ 526,608 $ 527,607 $ 4,277 $ 515,502 $ 519,779 Real estate: Commercial real estate 1,404 899,342 900,746 3,970 791,763 795,733 Construction and development — 527,812 527,812 — 515,533 515,533 1-4 family residential 3,651 276,541 280,192 4,436 277,575 282,011 Multi-family residential — 277,209 277,209 — 221,194 221,194 Consumer 210 36,572 36,782 — 39,421 39,421 Agriculture — 9,812 9,812 — 11,076 11,076 Other 6,653 79,860 86,513 6,813 61,569 68,382 Total $ 12,917 $ 2,633,756 $ 2,646,673 $ 19,496 $ 2,433,633 $ 2,453,129 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PREMISES AND EQUIPMENT | |
Schedule of premises and equipment | December 31, (Dollars in thousands) 2019 2018 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 53,869 52,188 Furniture and equipment 15,917 15,426 Vehicles 203 232 Construction in progress 343 177 83,798 81,489 Less accumulated depreciation (32,923) (29,867) Premises and equipment, net $ 50,875 $ 51,622 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of intangible assets | Weighted- Average Remaining Gross Net Amortization Intangible Accumulated Intangible (Dollars in thousands) Period Assets Amortization Assets December 31, 2019 Core deposits 4.2 years $ 13,750 $ (12,979) $ 771 Customer relationships 9.0 years 6,629 (2,651) 3,978 Servicing assets 12.8 years 368 (179) 189 Total other intangible assets, net $ 20,747 $ (15,809) $ 4,938 December 31, 2018 Core deposits 5.2 years $ 13,750 $ (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 | Years Ended December 31, (Dollars in thousands) 2019 2018 Balance at beginning of year $ 166 $ 209 Increase from loan sales 87 38 Decrease from serviced loans paid off or foreclosed (30) (48) Amortization (34) (33) Balance at end of period $ 189 $ 166 |
Schedule of estimated future amortization for core deposits and customer relationship intangible assets | (Dollars in thousands) December 31, 2019 2020 768 2021 675 2022 584 2023 495 2024 459 Thereafter 1,768 Total $ 4,749 |
BANK OWNED LIFE INSURANCE (Tabl
BANK OWNED LIFE INSURANCE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BANK OWNED LIFE INSURANCE. | |
Schedule of change in cash surrender value | Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Balance at beginning of period $ 71,525 $ 68,010 $ 51,430 Purchases — 1,700 15,000 Redemptions (4,655) — — Net change in cash surrender value 5,011 1,815 1,580 Balance at end of period $ 71,881 $ 71,525 $ 68,010 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DEPOSITS | |
Schedule of deposits | December 31, (Dollars in thousands) 2019 2018 Interest-bearing demand accounts $ 369,744 $ 387,457 Money market accounts 805,942 737,770 Saving accounts 92,183 96,962 Certificates and other time deposits, $100,000 or greater 208,018 189,007 Certificates and other time deposits, less than $100,000 191,640 172,028 Total interest-bearing deposits 1,667,527 1,583,224 Noninterest-bearing deposits 1,184,861 1,183,058 Total deposits $ 2,852,388 $ 2,766,282 |
Scheduled maturities of time deposits | (Dollars in thousands) December 31, 2019 Three months or less $ 77,801 Over three months through six months 57,362 Over six months through 12 months 163,055 Over 12 months through three years 70,490 Over three years 30,950 Total $ 399,658 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LINES OF CREDIT | |
Schedule of maturity of FHLB advances | (Dollars in thousands) December 31, 2019 2020 $ — 2021 — 2022 10,000 2023 20,000 2024 20,000 Thereafter — Total $ 50,000 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
Schedule of loans to related parties | Years Ended December 31, (Dollars in thousands) 2019 2018 Beginning balance $ 168,851 $ 205,768 New loans 15,934 107,303 Repayments (26,058) (144,220) Ending balance $ 158,727 $ 168,851 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE DISCLOSURES | |
Summary financial assets and financial liabilities measured at fair value on a recurring basis | December 31, (Dollars in thousands) 2019 2018 Fair value of financial assets: Level 1 inputs: securities available for sale - equity securities $ 1,147 $ 1,088 Level 2 inputs: Debt securities available for sale State and municipal securities 53,279 57,691 U.S. Agency Securities: Debt securities — 16,881 Collateralized mortgage obligations 55,989 65,414 Mortgage-backed securities 120,847 88,859 Interest rate swaps 2,638 962 Total fair value of financial assets $ 233,900 $ 230,895 Fair value of financial liabilities: Level 2 inputs: interest rate swaps $ 2,638 $ 962 Total fair value of financial liabilities $ 2,638 $ 962 |
Summary of certain assets measured on a non‑recurring basis | December 31, 2019 2018 (Dollars in thousands) Recorded Investment with Allowance Related Allowance Net Recorded Investment with Allowance Related Allowance Net Level 3 inputs Impaired loans: Commercial and industrial $ 699 $ 416 $ 283 $ 635 $ 525 $ 110 Commercial real estate — — — 596 44 552 1-4 family residential 1,485 15 1,470 1,824 89 1,735 Consumer — — — — — — Other 1,242 6 1,236 1,241 100 1,141 Total impaired loans $ 3,426 $ 437 $ 2,989 $ 4,296 $ 758 $ 3,538 |
Summary of fair value of repossessed real estate and other foreclosed assets | December 31, (Dollars in thousands) 2019 2018 Foreclosed assets remeasured at initial recognition: Carrying value of foreclosed assets prior to measurement $ — $ 13 Charge-offs recognized in the allowance for loan losses — (1) Fair value $ — $ 12 |
Summary of fair market values of all financial instruments | December 31, 2019 2018 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 372,064 $ 372,064 $ 382,070 $ 382,070 Level 2 inputs: Debt securities held to maturity — — 32 31 Bank-owned life insurance 71,881 71,881 71,525 71,525 Accrued interest receivable 8,742 8,742 8,227 8,227 Servicing asset 189 189 166 166 Level 3 inputs: Loans, including held for sale, net 2,654,362 2,615,268 2,432,753 2,423,130 Other investments 16,710 16,710 13,026 13,026 Total financial assets $ 3,123,948 $ 3,084,854 $ 2,907,799 $ 2,898,175 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,184,861 $ 1,184,861 $ 1,183,058 $ 1,183,058 Level 2 inputs: Interest-bearing deposits 1,651,359 1,667,527 1,522,366 1,583,224 Federal Home Loan Bank advances 48,822 50,000 — — Repurchase agreements 485 485 2,498 2,498 Junior subordinated debt — — 1,571 1,571 Accrued interest payable 1,005 1,005 653 653 Total financial liabilities $ 2,886,532 $ 2,903,878 $ 2,710,146 $ 2,771,004 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of the derivative instruments outstanding | Weighted Average Notional Fair Maturity (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate (Years) December 31, 2019 Interest rate swaps with customers Other Assets $ 69,189 $ 2,599 4.40% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.65 Interest rate swaps with financial institution Other Assets 5,987 39 4.00% LIBOR 1M + 2.50% 6.71 Interest rate swaps with customers Other Liabilities 5,987 (39) 4.00% LIBOR 1M + 2.50% 6.71 Interest rate swaps with financial institution Other Liabilities 69,189 (2,599) 4.40% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.65 Total derivatives $ 150,352 $ — Weighted Average Notional Fair Maturity (Dollars in thousands) Classification Amounts Value Fixed Rate Floating Rate (Years) 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 Interest rate swaps with financial institution Other Assets 32,923 793 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 Interest rate swaps with customers Other Liabilities 32,923 (793) 4.00% - 5.37% LIBOR 1M + 2.50% - 3.25% 7.78 Interest rate swaps with financial institution Other Liabilities 8,901 (169) 5.45% - 7.25% LIBOR 1M + 2.50% - 3.20% 6.22 Total derivatives $ 83,648 $ — |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OPERATING LEASES | |
Summary of lease costs | Year Ended (Dollars in thousands) December 31, 2019 Operating lease cost $ 1,876 Short-term lease cost 61 Sublease income (153) Total lease cost $ 1,784 |
Summary of maturity analysis of operating lease liabilities | (Dollars in thousands) December 31, 2019 2020 $ 2,025 2021 2,362 2022 2,474 2023 2,478 2024 1,916 Thereafter 10,231 Total undiscounted lease liability 21,486 Less: Discount on cash flows (3,741) Lease signed, but not yet commenced (2,041) Total operating lease liability $ 15,704 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Tables) | 12 Months Ended |
Dec. 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 | December 31, (Dollars in thousands) 2019 2018 Commitments to extend credit, variable interest rate $ 652,611 $ 726,277 Commitments to extend credit, fixed interest rate 141,439 105,359 $ 794,050 $ 831,636 Standby letters of credit $ 23,547 $ 31,729 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
STOCK-BASED COMPENSATION | |
Schedule of shares of stock options exercised and restricted stock vested, shares withheld for taxes and shares issued | Exercised/Vested Shares Withheld Shares Issued Year Ended December 31, 2019 Stock options 15,244 (2,318) 12,926 Non-performance based restricted stock 61,590 (6,672) 54,918 Performance-based restricted stock 6,000 (1,463) 4,537 Year Ended December 31, 2018 Stock options 28,000 — 28,000 Non-performance based restricted stock 51,307 (5,118) 46,189 Performance-based restricted stock — — — |
Stock options | |
STOCK-BASED COMPENSATION | |
Schedule of summary of activity under the stock option plans | Years Ended December 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 (15,244) 12.74 (28,000) 10.52 Forfeited/expired (4,000) 17.73 — — Outstanding at end of period 213,078 16.92 232,322 16.66 |
Schedule of exercisable, unvested and outstanding of stock options and restricted stock | December 31, 2019 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 148,879 64,199 213,078 Weighted-average exercise price per share $ 15.62 $ 19.94 $ 16.92 Aggregate intrinsic value (in thousands) $ 2,307 $ 718 $ 3,025 Weighted-average remaining contractual term (years) 4.9 6.9 5.5 |
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 December 31, 2017 212,580 $ 26.71 — $ — Granted 21,500 30.44 24,000 — Vested (51,307) 27.04 — — Forfeited (1,000) 28.64 — — Outstanding at December 31, 2018 181,773 $ 27.05 24,000 $ 34.46 Granted 44,492 31.64 — — Vested (61,590) 27.20 (6,000) 34.46 Forfeited (3,232) 29.99 — — Outstanding at December 31, 2019 161,443 $ 28.20 18,000 $ 34.46 |
Schedule of exercisable, unvested and outstanding of stock options and restricted stock | December 31, 2019 Restricted Stock Non-performance Based Performance-based Number of shares underlying restricted stock 161,443 18,000 Weighted-average grant date fair value per share $ 28.20 $ 34.46 Aggregate fair value (in thousands) $ 5,024 $ 560 Weighted-average remaining vesting period (years) 2.9 2.8 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 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 December 31, 2019 Common Equity Tier I to Risk-Weighted Assets: Consolidated $ 448,445 $ 129,997 $ 202,218 N/A N/A Bank Only $ 406,675 $ 129,988 $ 202,203 $ 187,760 Tier I Capital to Risk-Weighted Assets: Consolidated $ 448,445 $ 173,330 $ 245,550 N/A N/A Bank Only $ 406,675 $ 173,317 $ 245,532 $ 231,089 Total Capital to Risk-Weighted Assets: Consolidated $ 474,104 $ 231,106 $ 303,327 N/A N/A Bank Only $ 432,334 $ 231,089 $ 303,304 $ 288,861 Tier 1 Leverage Capital to Average Assets: Consolidated $ 448,445 $ 136,798 $ 136,798 N/A N/A Bank Only $ 406,675 $ 136,754 $ 136,754 $ 170,943 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) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | For the Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Current federal income tax $ 12,988 $ 11,908 $ 13,364 Current state income tax 240 190 157 Deferred income tax (1,657) (734) 2,932 Total income tax expense $ 11,571 $ 11,364 $ 16,453 |
Schedule of provision for income tax expense and effective tax rates | For the Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Tax expense calculated at statutory rate $ 13,038 $ 12,317 $ 15,408 Increase (decrease) resulting from: State income tax 190 150 102 Tax exempt interest income (807) (834) (1,504) Life insurance (1,047) (381) (553) Impact of tax law rate change — — 3,857 Other 197 112 (857) Total income tax expense $ 11,571 $ 11,364 $ 16,453 Effective tax rate |
Schedule of net deferred tax asset (liability) | December 31, (Dollars in thousands) 2019 2018 Deferred tax assets: Allowance for possible credit losses $ 5,308 $ 4,976 Compensation related 3,068 2,681 Deferred loan origination fees and loan costs 1,261 1,312 Loan related 253 137 Unrealized loss on securities available for sale — 790 Operating lease liabilities 3,298 — Other 8 230 Total deferred tax assets 13,196 10,126 Deferred tax liabilities: Accumulated depreciation (1,140) (1,203) Operating lease right-to-use asset (2,714) — Compensation 481(a) adjustment (238) (476) Core deposit intangibles (997) (1,178) Unrealized loss on securities available for sale (634) — Other (41) (68) Total deferred tax liabilities (5,764) (2,925) Net Deferred Tax Asset $ 7,432 $ 7,201 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per common share | Years Ended December 31, (Dollars in thousands, except per share data) 2019 2018 2017 Net income for common shareholders $ 50,517 $ 47,289 $ 27,571 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,926 24,859 22,457 Dilutive effect of outstanding stock options and unvested restricted stock awards 127 159 116 Diluted weighted-average shares outstanding 25,053 25,018 22,573 Earnings per share: Basic $ 2.03 $ 1.90 $ 1.23 Diluted $ 2.02 $ 1.89 $ 1.22 |
PARENT COMPANY (Tables)
PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PARENT COMPANY. | |
Balance Sheets | Balance Sheets December 31, (Dollars in thousands) 2019 2018 Assets Cash and due from banks $ 44,130 $ 44,189 Investment in subsidiary 493,951 445,754 Deferred tax asset, net 131 145 Other assets 438 911 Total assets $ 538,650 $ 490,999 Liabilities and shareholders’ equity Liabilities Junior subordinated debt $ — $ 1,571 Other liabilities 2,929 1,803 Total liabilities 2,929 3,374 Shareholders’ equity Common stock 258 258 Additional paid-in capital 346,559 344,497 Retained earnings 201,080 160,626 Treasury stock (14,562) (14,781) Accumulated other comprehensive loss 2,386 (2,975) Total shareholders’ equity 535,721 487,625 Total liabilities and shareholders’ equity $ 538,650 $ 490,999 |
Statements of Income | Statements of Income Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Interest income Other $ 5 $ 187 $ 142 Interest expense Note payable 15 15 906 Junior subordinated debt 4 420 322 Total interest expense 19 435 1,228 Net interest expense (14) (248) (1,086) Noninterest income Dividend income from subsidiary 8,901 7,800 8,806 Total noninterest income 8,901 7,800 8,806 Noninterest expense Salaries and employee benefits 673 755 344 Data processing 13 44 37 Printing, stationery and office 8 12 20 Professional and director fees 652 728 842 Other expenses 201 196 17 Total noninterest expense 1,547 1,735 1,260 Income before income tax benefit and equity in undistributed income of subsidiary 7,340 5,817 6,460 Income tax benefit (341) (437) (1,518) Income before equity in undistributed income of subsidiary 7,681 6,254 7,978 Equity in undistributed income of subsidiary 42,836 41,035 19,593 Net income $ 50,517 $ 47,289 $ 27,571 |
Statements of Cash Flows | Statements of Cash Flows Years Ended December 31, (Dollars in thousands) 2019 2018 2017 Cash flows from operating activities: Net income $ 50,517 $ 47,289 $ 27,571 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Equity in undistributed net income loss of subsidiary (42,836) (41,035) (19,593) Stock-based compensation expense 2,402 1,601 329 Deferred tax provision (benefit) 14 (4) 391 Change in operating assets and liabilities: Other assets 473 1,549 (1,216) Other liabilities (180) (836) 552 Total adjustments (40,127) (38,725) (19,537) Net cash provided by operating activities 10,390 8,564 8,034 Cash flows from investing activities: — — — Cash flows from financing activities: Repayment of note payable — — (27,679) Redemption of trust preferred securities (1,571) (5,155) — Proceeds from sale of common stock in initial public offering — — 64,519 Dividends paid on common stock (8,757) (4,979) (4,412) Payments to tax authorities for stock-based compensation (239) (171) — Proceeds from exercise of stock options 121 294 117 Repurchase of common stock (3) — — Net cash (used) provided in financing activities (10,449) (10,011) 32,545 Net (decrease) increase in cash and cash equivalents (59) (1,447) 40,579 Cash and cash equivalents, beginning 44,189 45,636 5,057 Cash and cash equivalents, ending $ 44,130 $ 44,189 $ 45,636 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of quarterly financial data (unaudited) | Year Ended December 31, 2019 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 36,985 $ 38,649 $ 39,193 $ 38,568 Interest expense 3,657 4,350 4,618 4,782 Net interest income 33,328 34,299 34,575 33,786 Provision (recapture) for loan losses 1,147 807 579 (148) Net interest income after provision (recapture) for loan losses 32,181 33,492 33,996 33,934 Noninterest income 3,493 7,303 4,115 3,717 Noninterest expense 22,585 23,403 22,045 22,110 Income before income taxes 13,089 17,392 16,066 15,541 Income tax expense 2,599 3,077 2,990 2,905 Net income $ 10,490 $ 14,315 $ 13,076 $ 12,636 Earnings per share: Basic $ 0.42 $ 0.57 $ 0.52 $ 0.51 Diluted $ 0.42 $ 0.57 $ 0.52 $ 0.50 Year Ended December 31, 2018 (Dollars in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 31,085 $ 33,127 $ 34,665 $ 36,882 Interest expense 2,046 2,251 3,139 3,662 Net interest income 29,039 30,876 31,526 33,220 Provision (recapture) for loan losses 865 690 (1,142) (2,169) Net interest income after provision (recapture) for loan losses 28,174 30,186 32,668 35,389 Noninterest income 3,361 3,506 3,526 3,859 Noninterest expense 20,284 20,012 19,964 21,756 Income before income taxes 11,251 13,680 16,230 17,492 Income tax expense 2,139 2,638 3,207 3,380 Net income $ 9,112 $ 11,042 $ 13,023 $ 14,112 Earnings per share: Basic $ 0.37 $ 0.44 $ 0.52 $ 0.57 Diluted $ 0.37 $ 0.44 $ 0.52 $ 0.56 |
BASIS OF PRESENTATION, NATURE_4
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Nature of Operations and Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2019locationsegment | |
Operating branches | 35 |
Number of Reportable Segments | segment | 1 |
Houston market area | |
Operating branches | 19 |
Beaumont/East Texas market area | |
Operating branches | 15 |
Dallas market area | |
Operating branches | 1 |
BASIS OF PRESENTATION, NATURE_5
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Cash and Due from Banks (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | ||
Cash, Uninsured Amount | $ 100 | $ 99.4 |
Reserve required at federal reserve bank | 18.6 | 18.5 |
Cash collateral used in interest rate swap transactions | $ 3.1 | $ 1.6 |
BASIS OF PRESENTATION, NATURE_6
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings | |
PREMISES AND EQUIPMENT | |
Useful life (in years) | 32 years |
Vehicles | |
PREMISES AND EQUIPMENT | |
Useful life (in years) | 3 years |
Minimum | Furniture and equipment | |
PREMISES AND EQUIPMENT | |
Useful life (in years) | 3 years |
Maximum | Furniture and equipment | |
PREMISES AND EQUIPMENT | |
Useful life (in years) | 10 years |
BASIS OF PRESENTATION, NATURE_7
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Goodwill and Other Intangible Assets and Stock Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Other Intangible Assets and Stock-Based compensations | |
Vesting period | 5 years |
Core deposits | Maximum | |
Goodwill and Other Intangible Assets and Stock-Based compensations | |
Amortization period of intangible assets (in years) | 10 years |
Core deposits | Minimum | |
Goodwill and Other Intangible Assets and Stock-Based compensations | |
Amortization period of intangible assets (in years) | 7 years |
Customer relationships | |
Goodwill and Other Intangible Assets and Stock-Based compensations | |
Amortization period of intangible assets (in years) | 15 years |
BASIS OF PRESENTATION, NATURE_8
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Derivative Financial Instruments (Details) - DerivativeInstrument | Dec. 31, 2019 | Dec. 31, 2018 |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | ||
Number of derivative instruments | 0 | 0 |
BASIS OF PRESENTATION, NATURE_9
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Jul. 31, 2019 | |
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | ||
Share repurchase program, authorized amount | $ 40 | |
Number of shares repurchased | 100 | |
Shares repurchased and retired, price per share | $ 27.98 |
BASIS OF PRESENTATION, NATUR_10
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Accounting Standards Recently Adopted (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2019 |
Accounting Standards Recently Adopted | |||
Practical Expedients | true | ||
Use of hindsight | true | ||
Operating lease right-to-use asset | $ 12,926 | ||
Operating lease liabilities | $ 15,704 | ||
Reversed accrued lease obligations and lease incentive liabilities reported in other liabilities | $ 2,300 | ||
ASU 2016-02 | |||
Accounting Standards Recently Adopted | |||
Accounting standards recently adopted | true | ||
ASU 2016-02 | Restatement | |||
Accounting Standards Recently Adopted | |||
Operating lease right-to-use asset | $ 13,200 | ||
Operating lease liabilities | $ 15,500 |
BASIS OF PRESENTATION, NATUR_11
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Accounting Standards Not Yet Adopted (Details) - USD ($) | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Standards Not Yet Adopted | ||||
Held-to-maturity Securities | $ 31,000 | |||
Increase in allowance for credit losses | $ 2,385,000 | $ (1,756,000) | $ (338,000) | |
ASU 2016-13 | ||||
Accounting Standards Not Yet Adopted | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false | |||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2020 | |||
Held-to-maturity Securities | $ 0 | |||
Forecast | ASU 2016-13 | ||||
Accounting Standards Not Yet Adopted | ||||
Purchased financial assets with credit deterioration | $ 0 | |||
Proforma Adjustment | ASU 2016-13 | ||||
Accounting Standards Not Yet Adopted | ||||
Increase in allowance for credit losses | 874,000,000 | |||
Allowance for credit losses, unfunded commitments | $ 3,000,000 |
BASIS OF PRESENTATION, NATUR_12
BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - Cash Flow Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental disclosures of cash flow information: | |||
Cash paid for taxes | $ 13,710 | $ 11,627 | $ 13,752 |
Cash paid for interest | 17,040 | 10,803 | 9,094 |
Supplemental disclosures of non-cash flow information: | |||
Dividends accrued | 1,306 | 43 | 11 |
Operating lease right-to-use asset obtained in exchange for lease liabilities | 14,499 | ||
Repossessed real estate and other assets | $ 121 | $ 349 | $ 881 |
SECURITIES - Amortized cost and
SECURITIES - Amortized cost and estimated fair values of investments in securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt securities available for sale: | ||
Amortized cost | $ 228,251 | $ 233,699 |
Fair Value | 231,262 | 229,933 |
Debt securities held to maturity: | ||
Amortized cost | 31 | |
Fair Value | 32 | |
Securities Available for Sale | ||
Debt securities available for sale: | ||
Amortized cost | 228,251 | 233,699 |
Gross Unrealized Gains | 3,400 | 673 |
Gross Unrealized Losses | (389) | (4,439) |
Fair Value | 231,262 | 229,933 |
Securities Available for Sale | State and municipal securities | ||
Debt securities available for sale: | ||
Amortized cost | 51,525 | 57,972 |
Gross Unrealized Gains | 1,761 | 345 |
Gross Unrealized Losses | (7) | (626) |
Fair Value | 53,279 | 57,691 |
Securities Available for Sale | Debt securities | ||
Debt securities available for sale: | ||
Amortized cost | 17,315 | |
Gross Unrealized Losses | (434) | |
Fair Value | 16,881 | |
Securities Available for Sale | Collateralized mortgage obligations | ||
Debt securities available for sale: | ||
Amortized cost | 55,784 | 66,438 |
Gross Unrealized Gains | 324 | 98 |
Gross Unrealized Losses | (119) | (1,122) |
Fair Value | 55,989 | 65,414 |
Securities Available for Sale | Mortgage-backed securities | ||
Debt securities available for sale: | ||
Amortized cost | 119,787 | 90,845 |
Gross Unrealized Gains | 1,315 | 230 |
Gross Unrealized Losses | (255) | (2,216) |
Fair Value | 120,847 | 88,859 |
Securities Available for Sale | Equity securities | ||
Debt securities available for sale: | ||
Amortized cost | 1,155 | 1,129 |
Gross Unrealized Losses | (8) | (41) |
Fair Value | $ 1,147 | 1,088 |
Securities Held to Maturity | Mortgage-backed securities | ||
Debt securities held to maturity: | ||
Amortized cost | 31 | |
Gross Unrealized Gains | 1 | |
Fair Value | $ 32 |
SECURITIES - Amortized cost a_2
SECURITIES - Amortized cost and estimated fair values of securities by contractual maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available for Sale - Amortized Cost | ||
Amortized cost, 1 year or less | $ 2,535 | $ 3,224 |
Amortized cost, 1 year through 5 years | 3,081 | 22,784 |
Amortized cost, 5 years through 10 years | 14,564 | 13,127 |
Amortized cost, After 10 years | 208,071 | 194,564 |
Available-for-sale Securities, Amortized Cost Basis, Total | 228,251 | 233,699 |
Available for Sale - Fair Value | ||
Estimated fair value, 1 year or less | 2,532 | 3,188 |
Estimated fair value, 1 year through 5 years | 3,145 | 22,370 |
Estimated fair value, 5 years through 10 years | 14,874 | 13,062 |
Estimated fair value, After 10 years | 210,711 | 191,313 |
Available-for-sale Securities, Total | 231,262 | 229,933 |
Held to Maturity - Amortized Cost | ||
Amortized cost, After 10 years | 31 | |
Held-to-maturity Securities, Total | 31 | |
Held to Maturity - Fair Value | ||
Estimated fair value, After 10 years | 32 | |
Held-to-maturity Securities, Fair Value, Total | 32 | |
Securities Available for Sale | ||
Available for Sale - Amortized Cost | ||
Available-for-sale Securities, Amortized Cost Basis, Total | 228,251 | 233,699 |
Available for Sale - Fair Value | ||
Available-for-sale Securities, Total | $ 231,262 | $ 229,933 |
SECURITIES - Securities carryin
SECURITIES - Securities carrying amount (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
SECURITIES. | |||
Securities sold during the year | $ 20.4 | $ 56.5 | $ 6.1 |
Carrying value of securities pledged | $ 50.8 | $ 49.9 | |
Securities held in a gross unrealized loss position | item | 27 | 100 | |
Impairment loss on securities | $ 0 | $ 0 | $ 0 |
SECURITIES - Securities with gr
SECURITIES - Securities with gross unrealized losses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investment securities | ||
Fair Value - Less Than Twelve Months | $ 25,854 | $ 51,491 |
Gross Unrealized Losses - Less Than Twelve Months | (79) | (773) |
Fair Value - Twelve Months or More | 30,992 | 116,894 |
Gross Unrealized Losses - Twelve Months or More | (310) | (3,666) |
State and municipal securities | ||
Investment securities | ||
Fair Value - Less Than Twelve Months | 3,539 | 20,892 |
Gross Unrealized Losses - Less Than Twelve Months | (7) | (324) |
Fair Value - Twelve Months or More | 106 | 6,584 |
Gross Unrealized Losses - Twelve Months or More | (302) | |
Debt securities | ||
Investment securities | ||
Fair Value - Twelve Months or More | 16,882 | |
Gross Unrealized Losses - Twelve Months or More | (434) | |
Collateralized mortgage obligations | ||
Investment securities | ||
Fair Value - Less Than Twelve Months | 10,687 | 8,854 |
Gross Unrealized Losses - Less Than Twelve Months | (46) | (81) |
Fair Value - Twelve Months or More | 7,994 | 46,157 |
Gross Unrealized Losses - Twelve Months or More | (73) | (1,041) |
Mortgage-backed securities | ||
Investment securities | ||
Fair Value - Less Than Twelve Months | 11,628 | 21,745 |
Gross Unrealized Losses - Less Than Twelve Months | (26) | (368) |
Fair Value - Twelve Months or More | 21,745 | 46,183 |
Gross Unrealized Losses - Twelve Months or More | (229) | (1,848) |
Other securities | ||
Investment securities | ||
Fair Value - Twelve Months or More | 1,147 | 1,088 |
Gross Unrealized Losses - Twelve Months or More | $ (8) | $ (41) |
EQUITY INVESTMENTS - Equity Inv
EQUITY INVESTMENTS - Equity Investments (Details) | Dec. 31, 2019USD ($)fund$ / shares | Dec. 31, 2018USD ($) |
Equity investments | ||
Equity investments, total | $ 16,710,000 | $ 13,026,000 |
Unfunded commitments | 0 | |
Federal Reserve stock | ||
Equity investments | ||
Equity investments, total | $ 9,271,000 | 9,271,000 |
Par value (in dollars per share) | $ / shares | $ 100 | |
Federal Home Loan Bank stock | ||
Equity investments | ||
Equity investments, total | $ 4,249,000 | 1,250,000 |
Par value (in dollars per share) | $ / shares | $ 100 | |
The Independent Bankers Financial Corporation stock | ||
Equity investments | ||
Equity investments, total | $ 141,000 | 141,000 |
Community Reinvestment Act investments | ||
Equity investments | ||
Equity investments, total | $ 3,049,000 | 2,364,000 |
Number of private investments | fund | 2 | |
Unfunded commitments | $ 4,900,000 | $ 3,000,000 |
New CRA agreement | ||
Equity investments | ||
Number of private investments | fund | 1 | |
Unfunded commitments | $ 2,500,000 |
LOANS - By portfolio segment (D
LOANS - By portfolio segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loans | ||||
Total loans | $ 2,646,673 | $ 2,453,129 | ||
Percentage of loan | 100.00% | 100.00% | ||
Less allowance for loan loss | $ (25,280) | $ (23,693) | $ (24,778) | $ (25,006) |
Less deferred loan fees and unearned discounts | (6,125) | (6,306) | ||
Less loans held for sale | (1,463) | |||
Loans, net | 2,613,805 | 2,423,130 | ||
Accrued interest receivable | 7,500 | 6,800 | ||
Commercial and industrial | ||||
Loans | ||||
Total loans | $ 527,607 | $ 519,779 | ||
Percentage of loan | 19.90% | 21.20% | ||
Less allowance for loan loss | $ (7,671) | $ (7,719) | (7,257) | (6,409) |
Commercial real estate | ||||
Loans | ||||
Total loans | $ 900,746 | $ 795,733 | ||
Percentage of loan | 34.00% | 32.40% | ||
Less allowance for loan loss | $ (7,975) | $ (6,730) | (10,375) | (10,770) |
Construction and development | ||||
Loans | ||||
Total loans | $ 527,812 | $ 515,533 | ||
Percentage of loan | 19.90% | 21.00% | ||
Less allowance for loan loss | $ (4,446) | $ (4,298) | (3,482) | (4,598) |
1-4 family residential | ||||
Loans | ||||
Total loans | $ 280,192 | $ 282,011 | ||
Percentage of loan | 10.60% | 11.50% | ||
Less allowance for loan loss | $ (2,257) | $ (2,281) | (1,326) | (1,286) |
Multi‑family residential | ||||
Loans | ||||
Total loans | $ 277,209 | $ 221,194 | ||
Percentage of loan | 10.50% | 9.00% | ||
Less allowance for loan loss | $ (1,699) | $ (1,511) | (1,419) | (916) |
Consumer | ||||
Loans | ||||
Total loans | $ 36,782 | $ 39,421 | ||
Percentage of loan | 1.40% | 1.60% | ||
Less allowance for loan loss | $ (388) | $ (387) | (566) | (353) |
Agriculture | ||||
Loans | ||||
Total loans | $ 9,812 | $ 11,076 | ||
Percentage of loan | 0.40% | 0.50% | ||
Less allowance for loan loss | $ (74) | $ (62) | (68) | (79) |
Other | ||||
Loans | ||||
Total loans | $ 86,513 | $ 68,382 | ||
Percentage of loan | 3.30% | 2.80% | ||
Less allowance for loan loss | $ (770) | $ (705) | $ (285) | $ (595) |
LOANS - Loan participations pur
LOANS - Loan participations purchased and sold and Loans Guaranteed (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loans | |||
Participations purchased during the period | $ 35,281,000 | $ 18,491,000 | |
Participations sold during the period | 45,921,000 | 46,067,000 | |
SBA loans that were sold with servicing retained | $ 4,400,000 | 2,000,000 | 2,200,000 |
Gain loss on disposition of asset | |||
Loans | |||
Net gains recognized on sales of loans | 330,000 | 153,000 | 149,000 |
Commercial and industrial | |||
Loans | |||
Participations purchased during the period | 7,000,000 | ||
Participations sold during the period | 1,620,000 | 23,000,000 | |
Commercial real estate | |||
Loans | |||
Participations purchased during the period | 2,314,000 | 28,281,000 | 12,885,000 |
Participations sold during the period | $ 31,868,000 | 35,000,000 | 20,505,000 |
Construction and development | |||
Loans | |||
Participations purchased during the period | 5,606,000 | ||
Participations sold during the period | $ 9,301,000 | $ 2,562,000 |
LOAN PERFORMANCE - Nonaccrual l
LOAN PERFORMANCE - Nonaccrual loans, segregated by loan class (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Nonaccrual loans | ||
Total nonaccrual loans | $ 977 | $ 3,490 |
Commercial and industrial | ||
Nonaccrual loans | ||
Total nonaccrual loans | 596 | 1,317 |
Commercial real estate | ||
Nonaccrual loans | ||
Total nonaccrual loans | 67 | 1,517 |
1-4 family residential | ||
Nonaccrual loans | ||
Total nonaccrual loans | $ 314 | $ 656 |
LOAN PERFORMANCE - Aging analys
LOAN PERFORMANCE - Aging analysis of loan past due (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Aging analysis | |||
Total past due | $ 2,874,000 | $ 8,108,000 | |
Total current loans | 2,643,799,000 | 2,445,021,000 | |
Total Loans | 2,646,673,000 | 2,453,129,000 | |
Interest income that would have been earned under the original terms of the nonaccrual loans | 57,000 | 163,000 | $ 402,000 |
30 to 59 days past due | |||
Aging analysis | |||
Total past due | 2,071,000 | 1,028,000 | |
60 to 89 days past due | |||
Aging analysis | |||
Total past due | 563,000 | 6,285,000 | |
90 days or greater past due | |||
Aging analysis | |||
Total past due | 240,000 | 795,000 | |
Commercial and industrial | |||
Aging analysis | |||
Total past due | 935,000 | 1,213,000 | |
Total current loans | 526,672,000 | 518,566,000 | |
Total Loans | 527,607,000 | 519,779,000 | |
Commercial and industrial | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 664,000 | 178,000 | |
Commercial and industrial | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 31,000 | 881,000 | |
Commercial and industrial | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 240,000 | 154,000 | |
Commercial real estate | |||
Aging analysis | |||
Total past due | 865,000 | 1,762,000 | |
Total current loans | 899,881,000 | 793,971,000 | |
Total Loans | 900,746,000 | 795,733,000 | |
Commercial real estate | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 865,000 | 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 | 605,000 | ||
Construction and development | |||
Aging analysis | |||
Total past due | 532,000 | 4,563,000 | |
Total current loans | 527,280,000 | 510,970,000 | |
Total Loans | 527,812,000 | 515,533,000 | |
Construction and development | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 359,000 | ||
Construction and development | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 532,000 | 4,204,000 | |
1-4 family residential | |||
Aging analysis | |||
Total past due | 499,000 | 542,000 | |
Total current loans | 279,693,000 | 281,469,000 | |
Total Loans | 280,192,000 | 282,011,000 | |
1-4 family residential | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 499,000 | 395,000 | |
1-4 family residential | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 111,000 | ||
1-4 family residential | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 36,000 | ||
Multi‑family residential | |||
Aging analysis | |||
Total current loans | 277,209,000 | 221,194,000 | |
Total Loans | 277,209,000 | 221,194,000 | |
Consumer | |||
Aging analysis | |||
Total past due | 43,000 | 28,000 | |
Total current loans | 36,739,000 | 39,393,000 | |
Total Loans | 36,782,000 | 39,421,000 | |
Consumer | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 43,000 | 28,000 | |
Agriculture | |||
Aging analysis | |||
Total current loans | 9,812,000 | 11,076,000 | |
Total Loans | 9,812,000 | 11,076,000 | |
Other | |||
Aging analysis | |||
Total current loans | 86,513,000 | 68,382,000 | |
Total Loans | $ 86,513,000 | $ 68,382,000 |
LOAN PERFORMANCE - Restructured
LOAN PERFORMANCE - Restructured loans (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Restructured loans | ||
Number of loans | loan | 4 | 10 |
Pre‑modification outstanding Recorded Investment | $ 313,000 | $ 4,471,000 |
Recorded investment in troubled debt restructurings | 8,800,000 | 11,400,000 |
Restructured loans that are nonaccrual status | 393,000 | 1,800,000 |
Restructured loans accruing interest | $ 8,400,000 | 9,600,000 |
Loans modified as a troubled debt restructured loan | loan | 0 | |
Restructured Payments | ||
Restructured loans | ||
Post‑modification recorded investment | $ 39,000 | 2,322,000 |
Extended Maturity and Restructured Payments | ||
Restructured loans | ||
Post‑modification recorded investment | 163,000 | 503,000 |
Extended Maturity, Restructured Payments and Adjusted Interest Rate | ||
Restructured loans | ||
Post‑modification recorded investment | $ 115,000 | $ 1,646,000 |
Commercial and industrial | ||
Restructured loans | ||
Number of loans | loan | 3 | 6 |
Pre‑modification outstanding Recorded Investment | $ 202,000 | $ 1,419,000 |
Commercial and industrial | Restructured Payments | ||
Restructured loans | ||
Post‑modification recorded investment | 39,000 | 916,000 |
Commercial and industrial | Extended Maturity and Restructured Payments | ||
Restructured loans | ||
Post‑modification recorded investment | $ 163,000 | $ 503,000 |
Commercial real estate | ||
Restructured loans | ||
Number of loans | loan | 3 | |
Pre‑modification outstanding Recorded Investment | $ 1,406,000 | |
Commercial real estate | Restructured Payments | ||
Restructured loans | ||
Post‑modification recorded investment | $ 1,406,000 | |
1-4 family residential | ||
Restructured loans | ||
Number of loans | loan | 1 | |
Pre‑modification outstanding Recorded Investment | $ 111,000 | |
1-4 family residential | Extended Maturity, Restructured Payments and Adjusted Interest Rate | ||
Restructured loans | ||
Post‑modification recorded investment | 115,000 | |
Other | ||
Restructured loans | ||
Number of loans | loan | 1 | |
Pre‑modification outstanding Recorded Investment | $ 1,646,000 | |
Other | Extended Maturity, Restructured Payments and Adjusted Interest Rate | ||
Restructured loans | ||
Post‑modification recorded investment | 1,646,000 | |
Unfunded Loan Commitment | ||
Restructured loans | ||
Commitment to loan additional funds | $ 2,000,000 | $ 2,100,000 |
ALLOWANCE FOR LOAN LOSSES - Act
ALLOWANCE FOR LOAN LOSSES - Activity in the allowance for loan losses, segregated by loan class (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loan losses segregated by loan class | |||
Beginning balance | $ 23,693,000 | $ 24,778,000 | $ 25,006,000 |
Increase in allowance for credit losses | 2,385,000 | (1,756,000) | (338,000) |
Charge-offs | (1,458,000) | (2,108,000) | (1,125,000) |
Recoveries | 660,000 | 2,779,000 | 1,235,000 |
Net (charge-offs) recoveries | (798,000) | 671,000 | 110,000 |
Ending balance | 25,280,000 | 23,693,000 | 24,778,000 |
Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 758,000 | 1,035,000 | |
Ending balance | 437,000 | 758,000 | 1,035,000 |
General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 22,935,000 | 23,743,000 | |
Ending balance | 24,843,000 | 22,935,000 | 23,743,000 |
Commercial and industrial | |||
Loan losses segregated by loan class | |||
Beginning balance | 7,719,000 | 7,257,000 | 6,409,000 |
Increase in allowance for credit losses | 715,000 | (347,000) | 642,000 |
Charge-offs | (1,252,000) | (1,928,000) | (904,000) |
Recoveries | 489,000 | 2,737,000 | 1,110,000 |
Net (charge-offs) recoveries | (763,000) | 809,000 | 206,000 |
Ending balance | 7,671,000 | 7,719,000 | 7,257,000 |
Commercial and industrial | Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 525,000 | 852,000 | |
Ending balance | 416,000 | 525,000 | 852,000 |
Commercial and industrial | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 7,194,000 | 6,405,000 | |
Ending balance | 7,255,000 | 7,194,000 | 6,405,000 |
Commercial real estate | |||
Loan losses segregated by loan class | |||
Beginning balance | 6,730,000 | 10,375,000 | 10,770,000 |
Increase in allowance for credit losses | 1,209,000 | (3,494,000) | (284,000) |
Charge-offs | (45,000) | (171,000) | (120,000) |
Recoveries | 81,000 | 20,000 | 9,000 |
Net (charge-offs) recoveries | 36,000 | (151,000) | (111,000) |
Ending balance | 7,975,000 | 6,730,000 | 10,375,000 |
Commercial real estate | Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 44,000 | 64,000 | |
Ending balance | 44,000 | 64,000 | |
Commercial real estate | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 6,686,000 | 10,311,000 | |
Ending balance | 7,975,000 | 6,686,000 | 10,311,000 |
Construction and development | |||
Loan losses segregated by loan class | |||
Beginning balance | 4,298,000 | 3,482,000 | 4,598,000 |
Increase in allowance for credit losses | 148,000 | 817,000 | (1,116,000) |
Charge-offs | (1,000) | ||
Net (charge-offs) recoveries | (1,000) | ||
Ending balance | 4,446,000 | 4,298,000 | 3,482,000 |
Construction and development | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 4,298,000 | 3,482,000 | |
Ending balance | 4,446,000 | 4,298,000 | 3,482,000 |
1-4 family residential | |||
Loan losses segregated by loan class | |||
Beginning balance | 2,281,000 | 1,326,000 | 1,286,000 |
Increase in allowance for credit losses | (15,000) | 953,000 | 35,000 |
Charge-offs | (12,000) | (4,000) | (8,000) |
Recoveries | 3,000 | 6,000 | 13,000 |
Net (charge-offs) recoveries | (9,000) | 2,000 | 5,000 |
Ending balance | 2,257,000 | 2,281,000 | 1,326,000 |
1-4 family residential | Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 89,000 | 119,000 | |
Ending balance | 15,000 | 89,000 | 119,000 |
1-4 family residential | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 2,192,000 | 1,207,000 | |
Ending balance | 2,242,000 | 2,192,000 | 1,207,000 |
Multi‑family residential | |||
Loan losses segregated by loan class | |||
Beginning balance | 1,511,000 | 1,419,000 | 916,000 |
Increase in allowance for credit losses | 188,000 | 92,000 | 503,000 |
Ending balance | 1,699,000 | 1,511,000 | 1,419,000 |
Multi‑family residential | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 1,511,000 | 1,419,000 | |
Ending balance | 1,699,000 | 1,511,000 | 1,419,000 |
Consumer | |||
Loan losses segregated by loan class | |||
Beginning balance | 387,000 | 566,000 | 353,000 |
Increase in allowance for credit losses | 27,000 | (181,000) | 263,000 |
Charge-offs | (97,000) | (1,000) | (93,000) |
Recoveries | 71,000 | 3,000 | 43,000 |
Net (charge-offs) recoveries | (26,000) | 2,000 | (50,000) |
Ending balance | 388,000 | 387,000 | 566,000 |
Consumer | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 387,000 | 566,000 | |
Ending balance | 388,000 | 387,000 | 566,000 |
Agriculture | |||
Loan losses segregated by loan class | |||
Beginning balance | 62,000 | 68,000 | 79,000 |
Increase in allowance for credit losses | 2,000 | (16,000) | (63,000) |
Recoveries | 10,000 | 10,000 | 52,000 |
Net (charge-offs) recoveries | 10,000 | 10,000 | 52,000 |
Ending balance | 74,000 | 62,000 | 68,000 |
Agriculture | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 62,000 | 68,000 | |
Ending balance | 74,000 | 62,000 | 68,000 |
Other | |||
Loan losses segregated by loan class | |||
Beginning balance | 705,000 | 285,000 | 595,000 |
Increase in allowance for credit losses | 111,000 | 420,000 | (318,000) |
Charge-offs | (52,000) | (3,000) | |
Recoveries | 6,000 | 3,000 | 8,000 |
Net (charge-offs) recoveries | (46,000) | 8,000 | |
Ending balance | 770,000 | 705,000 | 285,000 |
Other | Specific reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 100,000 | ||
Ending balance | 6,000 | 100,000 | |
Other | General reserve | |||
Loan losses segregated by loan class | |||
Beginning balance | 605,000 | 285,000 | |
Ending balance | 764,000 | 605,000 | $ 285,000 |
Unfunded Loan Commitment | |||
Loan losses segregated by loan class | |||
Beginning balance | 378,000 | ||
Ending balance | $ 378,000 | $ 378,000 |
ALLOWANCE FOR LOAN LOSSES - Ris
ALLOWANCE FOR LOAN LOSSES - Risk Grading (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Risk Grading | ||
Total loans | $ 2,646,673,000 | $ 2,453,129,000 |
Pass | ||
Risk Grading | ||
Total loans | 2,582,970,000 | 2,404,521,000 |
Special Mention | ||
Risk Grading | ||
Total loans | 34,742,000 | 22,763,000 |
Substandard | ||
Risk Grading | ||
Total loans | 28,961,000 | 25,845,000 |
Loss or Doubtful | ||
Risk Grading | ||
Total loans | 0 | 0 |
Commercial and industrial | ||
Risk Grading | ||
Total loans | 527,607,000 | 519,779,000 |
Commercial and industrial | Pass | ||
Risk Grading | ||
Total loans | 513,417,000 | 504,425,000 |
Commercial and industrial | Special Mention | ||
Risk Grading | ||
Total loans | 2,963,000 | 5,768,000 |
Commercial and industrial | Substandard | ||
Risk Grading | ||
Total loans | 11,227,000 | 9,586,000 |
Commercial real estate | ||
Risk Grading | ||
Total loans | 900,746,000 | 795,733,000 |
Commercial real estate | Pass | ||
Risk Grading | ||
Total loans | 876,207,000 | 781,035,000 |
Commercial real estate | Special Mention | ||
Risk Grading | ||
Total loans | 18,570,000 | 10,370,000 |
Commercial real estate | Substandard | ||
Risk Grading | ||
Total loans | 5,969,000 | 4,328,000 |
Construction and development | ||
Risk Grading | ||
Total loans | 527,812,000 | 515,533,000 |
Construction and development | Pass | ||
Risk Grading | ||
Total loans | 515,247,000 | 511,329,000 |
Construction and development | Special Mention | ||
Risk Grading | ||
Total loans | 12,565,000 | 4,204,000 |
1-4 family residential | ||
Risk Grading | ||
Total loans | 280,192,000 | 282,011,000 |
1-4 family residential | Pass | ||
Risk Grading | ||
Total loans | 274,731,000 | 274,781,000 |
1-4 family residential | Special Mention | ||
Risk Grading | ||
Total loans | 594,000 | 2,175,000 |
1-4 family residential | Substandard | ||
Risk Grading | ||
Total loans | 4,867,000 | 5,055,000 |
Multi‑family residential | ||
Risk Grading | ||
Total loans | 277,209,000 | 221,194,000 |
Multi‑family residential | Pass | ||
Risk Grading | ||
Total loans | 277,209,000 | 221,194,000 |
Consumer | ||
Risk Grading | ||
Total loans | 36,782,000 | 39,421,000 |
Consumer | Pass | ||
Risk Grading | ||
Total loans | 36,566,000 | 39,140,000 |
Consumer | Special Mention | ||
Risk Grading | ||
Total loans | 246,000 | |
Consumer | Substandard | ||
Risk Grading | ||
Total loans | 216,000 | 35,000 |
Agriculture | ||
Risk Grading | ||
Total loans | 9,812,000 | 11,076,000 |
Agriculture | Pass | ||
Risk Grading | ||
Total loans | 9,733,000 | 11,048,000 |
Agriculture | Special Mention | ||
Risk Grading | ||
Total loans | 50,000 | |
Agriculture | Substandard | ||
Risk Grading | ||
Total loans | 29,000 | 28,000 |
Other | ||
Risk Grading | ||
Total loans | 86,513,000 | 68,382,000 |
Other | Pass | ||
Risk Grading | ||
Total loans | 79,860,000 | 61,569,000 |
Other | Substandard | ||
Risk Grading | ||
Total loans | $ 6,653,000 | $ 6,813,000 |
ALLOWANCE FOR LOAN LOSSES - Loa
ALLOWANCE FOR LOAN LOSSES - Loan Impairment Assessment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loan Impairment Assessment | |||
Unpaid Contractual Principal Balance | $ 13,142,000 | $ 19,871,000 | |
Recorded Investment with No Allowance | 9,491,000 | 15,200,000 | |
Recorded Investment with Allowance | 3,426,000 | 4,296,000 | |
Total Recorded Investment | 12,917,000 | 19,496,000 | |
Related Allowance | 437,000 | 758,000 | |
Average Recorded Investment Year‑to‑Date | 15,590,000 | 24,490,000 | |
Interest income recognized on impaired loans | 665,000 | 996,000 | $ 1,100,000 |
Commercial and industrial | |||
Loan Impairment Assessment | |||
Unpaid Contractual Principal Balance | 1,111,000 | 4,378,000 | |
Recorded Investment with No Allowance | 300,000 | 3,642,000 | |
Recorded Investment with Allowance | 699,000 | 635,000 | |
Total Recorded Investment | 999,000 | 4,277,000 | |
Related Allowance | 416,000 | 525,000 | |
Average Recorded Investment Year‑to‑Date | 2,452,000 | 5,771,000 | |
Commercial real estate | |||
Loan Impairment Assessment | |||
Unpaid Contractual Principal Balance | 1,407,000 | 4,128,000 | |
Recorded Investment with No Allowance | 1,404,000 | 3,374,000 | |
Recorded Investment with Allowance | 596,000 | ||
Total Recorded Investment | 1,404,000 | 3,970,000 | |
Related Allowance | 44,000 | ||
Average Recorded Investment Year‑to‑Date | 2,165,000 | 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 | 3,761,000 | 4,551,000 | |
Recorded Investment with No Allowance | 2,166,000 | 2,612,000 | |
Recorded Investment with Allowance | 1,485,000 | 1,824,000 | |
Total Recorded Investment | 3,651,000 | 4,436,000 | |
Related Allowance | 15,000 | 89,000 | |
Average Recorded Investment Year‑to‑Date | 4,020,000 | 4,597,000 | |
Consumer | |||
Loan Impairment Assessment | |||
Unpaid Contractual Principal Balance | 210,000 | ||
Recorded Investment with No Allowance | 210,000 | ||
Total Recorded Investment | 210,000 | ||
Average Recorded Investment Year‑to‑Date | 128,000 | 7,000 | |
Other | |||
Loan Impairment Assessment | |||
Unpaid Contractual Principal Balance | 6,653,000 | 6,814,000 | |
Recorded Investment with No Allowance | 5,411,000 | 5,572,000 | |
Recorded Investment with Allowance | 1,242,000 | 1,241,000 | |
Total Recorded Investment | 6,653,000 | 6,813,000 | |
Related Allowance | 6,000 | 100,000 | |
Average Recorded Investment Year‑to‑Date | $ 6,825,000 | $ 7,841,000 |
ALLOWANCE FOR LOAN LOSSES - Rec
ALLOWANCE FOR LOAN LOSSES - Recorded investment in loans based on impairment methodology (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for loan losses on the basis of Company's impairment methodology | ||
Individually Evaluated by Impairment | $ 12,917,000 | $ 19,496,000 |
Collectively Evaluated by Impairment | 2,633,756,000 | 2,433,633,000 |
Total Loans | 2,646,673,000 | 2,453,129,000 |
Allowance allocated to specific reserves for loans individually evaluated for impairment | 437,000 | 758,000 |
Commercial and industrial | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Individually Evaluated by Impairment | 999,000 | 4,277,000 |
Collectively Evaluated by Impairment | 526,608,000 | 515,502,000 |
Total Loans | 527,607,000 | 519,779,000 |
Commercial real estate | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Individually Evaluated by Impairment | 1,404,000 | 3,970,000 |
Collectively Evaluated by Impairment | 899,342,000 | 791,763,000 |
Total Loans | 900,746,000 | 795,733,000 |
Construction and development | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Collectively Evaluated by Impairment | 527,812,000 | 515,533,000 |
Total Loans | 527,812,000 | 515,533,000 |
1-4 family residential | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Individually Evaluated by Impairment | 3,651,000 | 4,436,000 |
Collectively Evaluated by Impairment | 276,541,000 | 277,575,000 |
Total Loans | 280,192,000 | 282,011,000 |
Multi‑family residential | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Collectively Evaluated by Impairment | 277,209,000 | 221,194,000 |
Total Loans | 277,209,000 | 221,194,000 |
Consumer | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Individually Evaluated by Impairment | 210,000 | |
Collectively Evaluated by Impairment | 36,572,000 | 39,421,000 |
Total Loans | 36,782,000 | 39,421,000 |
Agriculture | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Collectively Evaluated by Impairment | 9,812,000 | 11,076,000 |
Total Loans | 9,812,000 | 11,076,000 |
Other | ||
Allowance for loan losses on the basis of Company's impairment methodology | ||
Individually Evaluated by Impairment | 6,653,000 | 6,813,000 |
Collectively Evaluated by Impairment | 79,860,000 | 61,569,000 |
Total Loans | $ 86,513,000 | $ 68,382,000 |
PREMISES AND EQUIPMENT - Compon
PREMISES AND EQUIPMENT - Components of premises and equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 83,798,000 | $ 81,489,000 | |
Less accumulated depreciation | (32,923,000) | (29,867,000) | |
Premises and equipment, net | 50,875,000 | 51,622,000 | |
Depreciation expense | 3,203,000 | 3,309,000 | $ 3,353,000 |
Net gains and losses on sale of assets | (32,000) | 31,000 | $ 742,000 |
Land | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 13,466,000 | 13,466,000 | |
Buildings and leasehold improvements | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 53,869,000 | 52,188,000 | |
Furniture and equipment | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 15,917,000 | 15,426,000 | |
Vehicles | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 203,000 | 232,000 | |
Construction in progress | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 343,000 | $ 177,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill | $ 80,950,000 | $ 80,950,000 |
Changes in goodwill | 0 | 0 |
Impairment of goodwill | 0 | 0 |
Impairment of intangible assets | 0 | 0 |
Other Intangible Assets, net | ||
Gross Intangible Assets | 20,747,000 | 20,690,000 |
Accumulated Amortization | (15,809,000) | (14,915,000) |
Net Intangible Assets | $ 4,938,000 | $ 5,775,000 |
Core deposits | ||
Other Intangible Assets, net | ||
Weighted Average Remaining Amortization Period | 4 years 2 months 12 days | 5 years 2 months 12 days |
Gross Intangible Assets | $ 13,750,000 | $ 13,750,000 |
Accumulated Amortization | (12,979,000) | (12,561,000) |
Net Intangible Assets | $ 771,000 | $ 1,189,000 |
Customer relationships | ||
Other Intangible Assets, net | ||
Weighted Average Remaining Amortization Period | 9 years | 10 years |
Gross Intangible Assets | $ 6,629,000 | $ 6,629,000 |
Accumulated Amortization | (2,651,000) | (2,209,000) |
Net Intangible Assets | $ 3,978,000 | $ 4,420,000 |
Servicing assets | ||
Other Intangible Assets, net | ||
Weighted Average Remaining Amortization Period | 12 years 9 months 18 days | 14 years 4 months 24 days |
Gross Intangible Assets | $ 368,000 | $ 311,000 |
Accumulated Amortization | (179,000) | (145,000) |
Net Intangible Assets | $ 189,000 | $ 166,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Servicing Assets | ||
Balance at beginning of year | $ 166 | $ 209 |
Increase from loan sales | 87 | 38 |
Decrease from serviced loans paid off or foreclosed | 30 | 48 |
Amortization | (34) | (33) |
Balance at end of period | 189 | 166 |
Estimated future amortization for intangible assets | ||
Net Intangible Assets | 4,938 | $ 5,775 |
Core deposits and customer relationship | ||
Estimated future amortization for intangible assets | ||
2020 | 768 | |
2021 | 675 | |
2022 | 584 | |
2023 | 495 | |
2024 | 459 | |
Thereafter | 1,768 | |
Net Intangible Assets | $ 4,749 |
BANK OWNED LIFE INSURANCE (Deta
BANK OWNED LIFE INSURANCE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
BANK OWNED LIFE INSURANCE. | |||
Proceeds from bank-owned life insurance policy | $ 4,700 | ||
Gain from bank-owned life insurance | 3,300 | ||
Balance at beginning of year | 71,525 | $ 68,010 | $ 51,430 |
Purchases | 1,700 | 15,000 | |
Redemptions | (4,655) | ||
Net change in cash surrender value | 5,011 | 1,815 | 1,580 |
Balance at end of year | $ 71,881 | $ 71,525 | $ 68,010 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
DEPOSITS | ||
Interest-bearing demand accounts | $ 369,744 | $ 387,457 |
Money market accounts | 805,942 | 737,770 |
Saving accounts | 92,183 | 96,962 |
Certificates and other time deposits, $100,000 or greater | 208,018 | 189,007 |
Certificates and other time deposits, less than $100,000 | 191,640 | 172,028 |
Total interest-bearing deposits | 1,667,527 | 1,583,224 |
Noninterest-bearing deposits | 1,184,861 | 1,183,058 |
Total deposits | $ 2,852,388 | $ 2,766,282 |
DEPOSITS - Schedule of maturiti
DEPOSITS - Schedule of maturities of time deposits (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Time Deposits, Fiscal Year Maturity [Abstract] | ||
Three months or less | $ 77,801,000 | |
Over three months through six months | 57,362,000 | |
Over six months through 12 months | 163,055,000 | |
Over 12 months through three years | 70,490,000 | |
Over three years | 30,950,000 | |
Total | 399,658,000 | |
Deposits from public entities | 56,800,000 | $ 51,500,000 |
Brokered deposits | 128,900,000 | 104,500,000 |
Accrued interest payable for deposits | $ 931,000 | $ 594,000 |
Major concentrations of deposits from any single or related groups of depositors | 0 | 0 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) - USD ($) $ in Millions | Dec. 13, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
LINES OF CREDIT | |||
Capital to risk based assets ratio | 16.41% | 15.63% | |
FHLB advances | |||
LINES OF CREDIT | |||
Interest rate | 2.25% | 2.18% | |
Line of Credit | FHLB advances | |||
LINES OF CREDIT | |||
Outstanding borrowings | $ 50 | $ 0 | |
Total borrowing capacity available | 1 | 919.9 | |
Average outstanding balance, FHLB advances | $ 61.6 | $ 3.4 | |
Line of Credit | Frost Line of Credit | |||
LINES OF CREDIT | |||
Revolving line of credit available | $ 30 | ||
Revolving line of credit draw period | 24 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 | ||
Line of Credit | Frost Line of Credit | Minimum | |||
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 Line of Credit | Maximum | |||
LINES OF CREDIT | |||
Free cash flow coverage ratio | 1.25% | ||
Capital to risk based assets ratio | 15.00% |
LINES OF CREDIT - Maturity and
LINES OF CREDIT - Maturity and Federal Funds Lines of Credit (Details) $ in Thousands | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item |
FHLB advances Maturity | ||
2020 | $ 0 | |
2021 | 0 | |
2022 | 10,000 | |
2023 | 20,000 | |
2024 | 20,000 | |
Thereafter | 0 | |
Total | 50,000 | |
FHLB advances | Line of Credit | ||
FHLB advances Maturity | ||
Outstanding borrowings | $ 50,000 | $ 0 |
Federal funds line of credit | ||
FHLB advances Maturity | ||
Number of federal funds line of credit | item | 4 | 4 |
Revolving line of credit available | $ 75,000 | $ 75,000 |
Outstanding borrowings | $ 0 | $ 0 |
JUNIOR SUBORDINATED DEBT (Detai
JUNIOR SUBORDINATED DEBT (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | Dec. 31, 2006 | |
Junior subordinated notes | |||||
Junior subordinate debt | $ 1,571 | ||||
Purchase of trust preferred securities | $ 1,571 | $ 5,155 | |||
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 ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS | |||
Loans to related parties | $ 158,727,000 | $ 168,851,000 | $ 205,768,000 |
Deemed nonaccrual, past due, restructured or classified as potential problem loans | 0 | 0 | |
Unfunded loan commitments to related parties | 48,700,000 | 55,700,000 | |
Related party deposits | 233,900,000 | 311,200,000 | |
Advertising expense to related party | $ 97,000 | $ 94,000 |
RELATED PARTY TRANSACTIONS - Lo
RELATED PARTY TRANSACTIONS - Loans to related parties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of loans to related parties | ||
Balance at beginning of year | $ 168,851 | $ 205,768 |
New loans | 15,934 | 107,303 |
Repayments | (26,058) | (144,220) |
Balance at end of year | $ 158,727 | $ 168,851 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financial Assets | ||
Securities available for sale | $ 231,262,000 | $ 229,933,000 |
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 | 233,900,000 | 230,895,000 |
Financial Liabilities | ||
Total financial liabilities | 2,638,000 | 962,000 |
Recurring basis | Interest rate swaps | ||
Financial Assets | ||
Securities available for sale | 2,638,000 | 962,000 |
Level 1 Inputs | Recurring basis | Equity securities | ||
Financial Assets | ||
Securities available for sale | 1,147,000 | 1,088,000 |
Level 2 Inputs | Recurring basis | Interest rate swaps | ||
Financial Liabilities | ||
Interest rate swaps liabilities | 2,638,000 | 962,000 |
Level 2 Inputs | Recurring basis | State and municipal securities | ||
Financial Assets | ||
Securities available for sale | 53,279,000 | 57,691,000 |
Level 2 Inputs | Recurring basis | Debt securities | ||
Financial Assets | ||
Securities available for sale | 16,881,000 | |
Level 2 Inputs | Recurring basis | Collateralized mortgage obligations | ||
Financial Assets | ||
Securities available for sale | 55,989,000 | 65,414,000 |
Level 2 Inputs | Recurring basis | Mortgage-backed securities | ||
Financial Assets | ||
Securities available for sale | $ 120,847,000 | $ 88,859,000 |
FAIR VALUE DISCLOSURES - Certai
FAIR VALUE DISCLOSURES - Certain assets measured on a non recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Loan Impairment Assessment | ||
Related Allowance | $ 437 | $ 758 |
Total Recorded Investment | 12,917 | 19,496 |
Risk rating | 2,613,805 | 2,423,130 |
Commercial and industrial | ||
Loan Impairment Assessment | ||
Related Allowance | 416 | 525 |
Total Recorded Investment | 999 | 4,277 |
Commercial real estate | ||
Loan Impairment Assessment | ||
Related Allowance | 44 | |
Total Recorded Investment | 1,404 | 3,970 |
1-4 family residential | ||
Loan Impairment Assessment | ||
Related Allowance | 15 | 89 |
Total Recorded Investment | 3,651 | 4,436 |
Consumer | ||
Loan Impairment Assessment | ||
Total Recorded Investment | 210 | |
Other | ||
Loan Impairment Assessment | ||
Related Allowance | 6 | 100 |
Total Recorded Investment | 6,653 | 6,813 |
Level 3 Inputs | Non-recurring basis | ||
Loan Impairment Assessment | ||
Recorded Investment with Allowance | 3,426 | 4,296 |
Related Allowance | 437 | 758 |
Total Recorded Investment | 2,989 | 3,538 |
Level 3 Inputs | Non-recurring basis | Commercial and industrial | ||
Loan Impairment Assessment | ||
Recorded Investment with Allowance | 699 | 635 |
Related Allowance | 416 | 525 |
Total Recorded Investment | 283 | 110 |
Level 3 Inputs | Non-recurring basis | Commercial real estate | ||
Loan Impairment Assessment | ||
Recorded Investment with Allowance | 596 | |
Related Allowance | 44 | |
Total Recorded Investment | 552 | |
Level 3 Inputs | Non-recurring basis | 1-4 family residential | ||
Loan Impairment Assessment | ||
Recorded Investment with Allowance | 1,485 | 1,824 |
Related Allowance | 15 | 89 |
Total Recorded Investment | 1,470 | 1,735 |
Level 3 Inputs | Non-recurring basis | Other | ||
Loan Impairment Assessment | ||
Recorded Investment with Allowance | 1,242 | 1,241 |
Related Allowance | 6 | 100 |
Total Recorded Investment | $ 1,236 | $ 1,141 |
FAIR VALUE DISCLOSURES - Non Fi
FAIR VALUE DISCLOSURES - Non Financial Assets and Non Financial Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Write-downs of foreclosed assets for fair value remeasurement subsequent to initial foreclosure | $ 0 | $ 0 |
Foreclosed assets | $ 0 | |
Level 2 Inputs | Previously reported | ||
Non‑Financial Assets and Non‑Financial Liabilities | ||
Carrying value of foreclosed assets prior to measurement | 13 | |
Charge-offs recognized in the allowance for loan losses | (1) | |
Fair value | $ 12 |
FAIR VALUE DISCLOSURES - Fair m
FAIR VALUE DISCLOSURES - Fair market values of all financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial Assets: | ||
Interest bearing deposits in banks | $ 320,805 | $ 327,620 |
Securities available for sale | 231,262 | 229,933 |
Securities held to maturity | 31 | |
Equity investments | 16,710 | 13,026 |
Accrued interest receivable | 7,500 | 6,800 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,184,861 | 1,183,058 |
Interest-bearing deposits | 1,667,527 | 1,583,224 |
Repurchase agreements | 485 | 2,498 |
Federal Home Loan Bank advances | 50,000 | |
Junior subordinated debt | 1,571 | |
Fair Value | ||
Financial Assets: | ||
Total financial assets | 3,123,948 | 2,907,799 |
Financial Liabilities: | ||
Total financial liabilities | 2,886,532 | 2,710,146 |
Carrying Amount | ||
Financial Assets: | ||
Total financial assets | 3,084,854 | 2,898,175 |
Financial Liabilities: | ||
Total financial liabilities | 2,903,878 | 2,771,004 |
Level 1 Inputs | Fair Value | ||
Financial Assets: | ||
Cash and due from banks | 372,064 | 382,070 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,184,861 | 1,183,058 |
Level 1 Inputs | Carrying Amount | ||
Financial Assets: | ||
Cash and due from banks | 372,064 | 382,070 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,184,861 | 1,183,058 |
Level 2 Inputs | Fair Value | ||
Financial Assets: | ||
Securities held to maturity | 32 | |
Bank-owned life insurance | 71,881 | 71,525 |
Accrued interest receivable | 8,742 | 8,227 |
Servicing asset | 189 | 166 |
Financial Liabilities: | ||
Interest-bearing deposits | 1,651,359 | 1,522,366 |
Repurchase agreements | 485 | 2,498 |
Federal Home Loan Bank advances | 48,822 | |
Junior subordinated debt | 1,571 | |
Accrued interest payable | 1,005 | 653 |
Level 2 Inputs | Carrying Amount | ||
Financial Assets: | ||
Securities held to maturity | 31 | |
Bank-owned life insurance | 71,881 | 71,525 |
Accrued interest receivable | 8,742 | 8,227 |
Servicing asset | 189 | 166 |
Financial Liabilities: | ||
Interest-bearing deposits | 1,667,527 | 1,583,224 |
Repurchase agreements | 485 | 2,498 |
Federal Home Loan Bank advances | 50,000 | |
Junior subordinated debt | 1,571 | |
Accrued interest payable | 1,005 | 653 |
Level 3 Inputs | Fair Value | ||
Financial Assets: | ||
Loans, including held for sale, net | 2,654,362 | 2,432,753 |
Equity investments | 16,710 | 13,026 |
Level 3 Inputs | Carrying Amount | ||
Financial Assets: | ||
Loans, including held for sale, net | 2,615,268 | 2,423,130 |
Equity investments | $ 16,710 | $ 13,026 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | |
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Deterioration in the customer’s credit worthiness | $ 0 | $ 0 |
Number of interest rate swap agreements | item | 19 | 13 |
Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional Amount | $ 150,352 | $ 83,648 |
Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount asset | 69,189 | 8,901 |
Fair value asset | $ 2,599 | $ 169 |
Weighted Average Maturity | 6 years 7 months 24 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 | $ 5,987 | $ 32,923 |
Fair value asset | $ 39 | $ 793 |
Fixed rate | 4.00% | |
Floating rate | 2.50% | |
Weighted Average Maturity | 6 years 8 months 16 days | 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 | $ 5,987 | $ 32,923 |
Fair value liability | $ (39) | $ (793) |
Fixed rate | 4.00% | |
Floating rate | 2.50% | |
Weighted Average Maturity | 6 years 8 months 16 days | 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 | $ 69,189 | $ 8,901 |
Fair value liability | $ (2,599) | $ (169) |
Weighted Average Maturity | 6 years 7 months 24 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 | 4.40% | 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% | |
Minimum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 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 | 4.40% | 5.45% |
Floating rate | 2.50% | 2.50% |
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% | |
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% | |
Maximum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.89% | 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 | 5.37% | |
Maximum | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 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 | 5.89% | 7.25% |
Floating rate | 3.00% | 3.20% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.00% | 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% | |
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% |
OPERATING LEASES (Details)
OPERATING LEASES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)lease | |
OPERATING LEASES | |
Variable costs | $ 0 |
Right-of-use assets | 12,926 |
New operating lease liabilities | $ 1,300 |
Number of lease commenced | lease | 2 |
Operating lease liabilities | $ 15,704 |
Weighted-average discount rate | 3.54% |
Weighted-average remaining lease term | 11 years 2 months 12 days |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 1,895 |
OPERATING LEASES - Lease Costs
OPERATING LEASES - Lease Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease costs | |
Operating lease cost | $ 1,876 |
Short-term lease cost | 61 |
Sublease income | (153) |
Total lease cost | $ 1,784 |
OPERATING LEASES - Maturity of
OPERATING LEASES - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2020 | $ 2,025 |
2021 | 2,362 |
2022 | 2,474 |
2023 | 2,478 |
2024 | 1,916 |
Thereafter | 10,231 |
Total undiscounted lease liability | 21,486 |
Less: Discount on cash flows | (3,741) |
Less: Lease signed, but not yet commenced | (2,041) |
Total operating lease liability | $ 15,704 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | ||
Commitments to extend credit, variable interest rate | $ 652,611 | $ 726,277 |
Commitments to extend credit, fixed interest rate | 141,439 | 105,359 |
Total | 794,050 | 831,636 |
Standby letters of credit | $ 23,547 | $ 31,729 |
EMPLOYEE BENEFIT PLANS AND DE_2
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS (Details) - USD ($) | Oct. 28, 2017 | Dec. 31, 2019 | 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 | $ 1,900,000 | $ 1,700,000 | |
Executive Deferred Compensation Arrangements | |||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | |||
Employers contribution of incentive bonus (as a percent) | 25.00% | ||
Deferred plan liability | $ 2,700,000 | 2,500,000 | |
2008 Salary Continuation Agreement | |||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | |||
Deferred plan liability | 335,000 | 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 | $ 437,000 | $ 219,000 | |
Annual compensation payment amount | $ 200,000 | ||
Contractual term | 10 years | ||
Commencement age | 70 years |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019shares | |
STOCK-BASED COMPENSATION | |
Vesting period | 5 years |
Non-performance based restricted stock | Minimum | |
STOCK-BASED COMPENSATION | |
Vesting period | 2 years |
Non-performance based restricted stock | Maximum | |
STOCK-BASED COMPENSATION | |
Vesting period | 5 years |
Performance-based restricted stock | |
STOCK-BASED COMPENSATION | |
Performance conditions goals achieved within period, years | 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 | 963,200 |
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 | 314,913 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock option activity (Details) - Stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares Underlying Options | ||
Outstanding, beginning of period | 232,322 | 260,322 |
Exercised | (15,244) | (28,000) |
Forfeited/expired | (4,000) | |
Outstanding, end of period | 213,078 | 232,322 |
Weighted Average Exercise Price | ||
Outstanding, beginning of period | $ 16.66 | $ 16 |
Exercised | 12.74 | 10.52 |
Forfeited/expired | 17.73 | |
Outstanding, end of period | $ 16.92 | $ 16.66 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of stock options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
STOCK-BASED COMPENSATION | |||
Number of shares underlying options exercisable | 148,879 | ||
Number of shares underlying options unvested | 64,199 | ||
Number of shares underlying options outstanding | 213,078 | ||
Weighted-average exercise price per share exercisable | $ 15.62 | ||
Weighted-average exercise price per share unvested | 19.94 | ||
Weighted-average exercise price per share outstanding | $ 16.92 | $ 16.66 | $ 16 |
Aggregate intrinsic value exercisable | $ 2,307 | ||
Aggregate intrinsic value unvested | 718 | ||
Aggregate intrinsic value outstanding | $ 3,025 | ||
Weighted-average remaining contractual term exercisable (years) | 4 years 10 months 24 days | ||
Weighted-average remaining contractual term unvested (years) | 6 years 10 months 24 days | ||
Weighted-average remaining contractual term outstanding (years) | 5 years 6 months |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Performance-based restricted stock | ||
Number of Shares | ||
Outstanding, beginning of period | 24,000 | |
Granted | 24,000 | |
Vested | (6,000) | |
Outstanding, end of period | 18,000 | 24,000 |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period | $ 34.46 | |
Vested | 34.46 | |
Outstanding, end of period | $ 34.46 | $ 34.46 |
Non-performance based restricted stock | ||
Number of Shares | ||
Outstanding, beginning of period | 181,773 | 212,580 |
Granted | 44,492 | 21,500 |
Vested | (61,590) | (51,307) |
Forfeited | (3,232) | (1,000) |
Outstanding, end of period | 161,443 | 181,773 |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period | $ 27.05 | $ 26.71 |
Granted | 31.64 | 30.44 |
Vested | 27.20 | 27.04 |
Forfeited | 29.99 | 28.64 |
Outstanding, end of period | $ 28.20 | $ 27.05 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of restricted stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Non-performance based restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares underlying restricted stock | 161,443 | 181,773 | 212,580 |
Weighted-average grant date fair value per share | $ 28.20 | $ 27.05 | $ 26.71 |
Aggregate fair value (in thousands) | $ 5,024 | ||
Weighted-average remaining vesting period (years) | 2 years 10 months 24 days | ||
Performance-based restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares underlying restricted stock | 18,000 | 24,000 | |
Weighted-average grant date fair value per share | $ 34.46 | $ 34.46 | |
Aggregate fair value (in thousands) | $ 560 | ||
Weighted-average remaining vesting period (years) | 2 years 9 months 18 days |
STOCK-BASED COMPENSATION - Su_3
STOCK-BASED COMPENSATION - Summary of Stock options exercised, restricted stock vested, shares withheld and shares issued (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Restricted Stock, Shares Issued | $ 64,519,000 | ||
Stock compensation expense | $ 2,400,000 | $ 1,600,000 | $ 329,000 |
Unrecognized compensation expense | $ 4,800,000 | ||
Weighted average period | 2 years 9 months 18 days | ||
Stock options | |||
Number of Shares | |||
Stock Options, Exercised/Vested | 15,244 | 28,000 | |
Stock Options, Shares withheld | (2,318) | ||
Stock Options, Shares Issued | 12,926 | 28,000 | |
Non-performance based restricted stock | |||
Number of Shares | |||
Restricted Stock, Exercised/Vested | 61,590 | 51,307 | |
Restricted Stock, Shares withheld | (6,672) | (5,118) | |
Restricted Stock, Shares Issued | $ 54,918 | $ 46,189 | |
Performance-based restricted stock | |||
Number of Shares | |||
Restricted Stock, Exercised/Vested | 6,000 | ||
Restricted Stock, Shares withheld | (1,463) | ||
Restricted Stock, Shares Issued | $ 4,537 |
REGULATORY MATTERS - Regulatory
REGULATORY MATTERS - Regulatory Capital (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 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 | $ 448,445 | $ 405,012 |
Common Equity Tier One Capital Ratio | 15.52% | 14.71% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 129,997 | $ 123,885 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.50% | 4.50% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 202,218 | $ 192,710 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 7.00% | 7.00% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 448,445 | $ 406,257 |
Actual ratio | 15.52% | 14.76% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 173,330 | $ 165,180 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 6.00% | 6.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 245,550 | $ 234,005 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 474,104 | $ 430,238 |
Actual ratio | 16.41% | 15.63% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 231,106 | $ 220,240 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 8.00% | 8.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 303,327 | $ 289,065 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Leverage Ratio | ||
Actual amount | $ 448,445 | $ 406,257 |
Actual ratio | 13.11% | 12.74% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 136,798 | $ 127,350 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.00% | 4.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 136,798 | $ 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 | $ 406,675 | $ 363,140 |
Common Equity Tier One Capital Ratio | 14.08% | 13.19% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 129,988 | $ 123,877 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.50% | 4.50% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 202,203 | $ 192,697 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 7.00% | 7.00% |
Required to be Considered Well Capitalized, amount | $ 187,760 | $ 178,933 |
Required to be Considered Well Capitalized, ratio | 6.50% | 6.50% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 406,675 | $ 363,140 |
Actual ratio | 14.08% | 13.19% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 173,317 | $ 165,169 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 6.00% | 6.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 245,532 | $ 233,989 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Required to be Considered Well Capitalized, amount | $ 231,089 | $ 220,225 |
Required to be Considered Well Capitalized, ratio | 8.00% | 8.00% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 432,334 | $ 387,211 |
Actual ratio | 14.97% | 14.07% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 231,089 | $ 220,225 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 8.00% | 8.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 303,304 | $ 289,046 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Required to be Considered Well Capitalized, amount | $ 288,861 | $ 275,282 |
Required to be Considered Well Capitalized, ratio | 10.00% | 10.00% |
Leverage Ratio | ||
Actual amount | $ 406,675 | $ 363,140 |
Actual ratio | 11.90% | 11.41% |
Minimum Capital Required for Capital Adequacy Purposes (amount) | $ 136,754 | $ 127,350 |
Minimum Capital Required for Capital Adequacy Purposes (ratio) | 4.00% | 4.00% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 136,754 | $ 127,350 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 4.00% | 4.00% |
Required to be Considered Well Capitalized, amount | $ 170,943 | $ 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 - Components of pr
INCOME TAXES - Components of provision for income tax expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES | |||||||||||
Current Federal Tax Expense (Benefit) | $ 12,988 | $ 11,908 | $ 13,364 | ||||||||
Current State and Local Tax Expense (Benefit) | 240 | 190 | 157 | ||||||||
Deferred tax provision (benefit) | (1,657) | (734) | 2,932 | ||||||||
Total income tax expense | $ 2,905 | $ 2,990 | $ 3,077 | $ 2,599 | $ 3,380 | $ 3,207 | $ 2,638 | $ 2,139 | $ 11,571 | $ 11,364 | $ 16,453 |
INCOME TAXES - Effective tax ra
INCOME TAXES - Effective tax rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount [Abstract] | |||||||||||
Tax expense calculated at statutory rate | $ 13,038 | $ 12,317 | $ 15,408 | ||||||||
State income tax | 190 | 150 | 102 | ||||||||
Tax exempt interest income | (807) | (834) | (1,504) | ||||||||
Life insurance | (1,047) | (381) | (553) | ||||||||
Impact of tax law rate change | 3,857 | ||||||||||
Other | 197 | 112 | (857) | ||||||||
Total income tax expense | $ 2,905 | $ 2,990 | $ 3,077 | $ 2,599 | $ 3,380 | $ 3,207 | $ 2,638 | $ 2,139 | $ 11,571 | $ 11,364 | $ 16,453 |
Effective tax rate (as a percent) | 18.64% | 19.37% | 37.37% | ||||||||
Statutory rate (as a percent) | 21.00% | 21.00% | 35.00% | ||||||||
Tax adjustment to income tax expense from enacted tax law change | $ 3,900 |
INCOME TAXES - Deferred deferre
INCOME TAXES - Deferred deferred tax asset (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Allowance for possible credit losses | $ 5,308 | $ 4,976 |
Compensation related | 3,068 | 2,681 |
Deferred loan origination fees and loan costs | 1,261 | 1,312 |
Loan related | 253 | 137 |
Unrealized loss on securities available for sale | 790 | |
Operating lease liabilities | 3,298 | |
Other | 8 | 230 |
Total deferred tax assets | 13,196 | 10,126 |
Deferred tax liabilities: | ||
Accumulated depreciation | (1,140) | (1,203) |
Operating lease right-to-use asset | (2,714) | |
Compensation 481(a) adjustment | (238) | (476) |
Core deposit intangibles | (997) | (1,178) |
Unrealized loss on securities available for sale | (634) | |
Other | (41) | (68) |
Total deferred tax liabilities | (5,764) | (2,925) |
Net Deferred Tax Asset | $ 7,432 | $ 7,201 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES | |||
Interest or penalties related to income tax | $ 0 | $ 0 | $ 0 |
Material uncertain tax positions | $ 0 | $ 0 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EARNINGS PER SHARE | |||||||||||
Net income for common shareholders | $ 50,517 | $ 47,289 | $ 27,571 | ||||||||
Weighted-average shares (thousands) | |||||||||||
Basic weighted-average shares outstanding | 24,926 | 24,859 | 22,457 | ||||||||
Dilutive effect of outstanding stock options and unvested restricted stock awards | 127 | 159 | 116 | ||||||||
Diluted weighted-average shares outstanding | 25,053 | 25,018 | 22,573 | ||||||||
Earnings per share: | |||||||||||
Basic | $ 0.51 | $ 0.52 | $ 0.57 | $ 0.42 | $ 0.57 | $ 0.52 | $ 0.44 | $ 0.37 | $ 2.03 | $ 1.90 | $ 1.23 |
Diluted | $ 0.50 | $ 0.52 | $ 0.57 | $ 0.42 | $ 0.56 | $ 0.52 | $ 0.44 | $ 0.37 | $ 2.02 | $ 1.89 | $ 1.22 |
EARNINGS PER SHARE - Weighted a
EARNINGS PER SHARE - Weighted average shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Diluted weighted-average shares outstanding | 25,053,000 | 25,018,000 | 22,573,000 |
Performance-based restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Diluted weighted-average shares outstanding | 18,000 | 24,000 | |
Non-performance based restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Diluted weighted-average shares outstanding | 2,400 | 3,000 |
PARENT COMPANY - Balance Sheets
PARENT COMPANY - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||||
Cash and due from banks | $ 51,259 | $ 54,450 | ||
Deferred tax asset, net | 7,432 | 7,201 | ||
Other assets | 14,238 | 13,833 | ||
Total assets | 3,478,544 | 3,279,096 | ||
Liabilities | ||||
Junior subordinated debt | 1,571 | |||
Other liabilities | 24,246 | 21,120 | ||
Total liabilities | 2,942,823 | 2,791,471 | ||
Shareholders’ equity | ||||
Common stock | 258 | 258 | ||
Additional paid-in capital | 346,559 | 344,497 | ||
Retained earnings | 201,080 | 160,626 | ||
Treasury stock | (14,562) | (14,781) | ||
Accumulated other comprehensive loss | 2,386 | (2,975) | ||
Total shareholders’ equity | 535,721 | 487,625 | $ 446,214 | $ 357,637 |
Total liabilities and shareholders’ equity | 3,478,544 | 3,279,096 | ||
Parent | ||||
Assets | ||||
Cash and due from banks | 44,130 | 44,189 | ||
Investment in subsidiary | 493,951 | 445,754 | ||
Deferred tax asset, net | 131 | 145 | ||
Other assets | 438 | 911 | ||
Total assets | 538,650 | 490,999 | ||
Liabilities | ||||
Junior subordinated debt | 1,571 | |||
Other liabilities | 2,929 | 1,803 | ||
Total liabilities | 2,929 | 3,374 | ||
Shareholders’ equity | ||||
Common stock | 258 | 258 | ||
Additional paid-in capital | 346,559 | 344,497 | ||
Retained earnings | 201,080 | 160,626 | ||
Treasury stock | (14,562) | (14,781) | ||
Accumulated other comprehensive loss | 2,386 | (2,975) | ||
Total shareholders’ equity | 535,721 | 487,625 | ||
Total liabilities and shareholders’ equity | $ 538,650 | $ 490,999 |
PARENT COMPANY - Statements of
PARENT COMPANY - Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income | |||||||||||
Other | $ 5,333 | $ 5,030 | $ 3,204 | ||||||||
Interest expense | |||||||||||
Total interest expense | $ 4,782 | $ 4,618 | $ 4,350 | $ 3,657 | $ 3,662 | $ 3,139 | $ 2,251 | $ 2,046 | 17,407 | 11,098 | 8,885 |
Net interest income | 33,786 | 34,575 | 34,299 | 33,328 | 33,220 | 31,526 | 30,876 | 29,039 | 135,988 | 124,661 | 107,774 |
Noninterest income | |||||||||||
Total noninterest income | 3,717 | 4,115 | 7,303 | 3,493 | 3,859 | 3,526 | 3,506 | 3,361 | 18,628 | 14,252 | 14,204 |
Noninterest expense | |||||||||||
Salaries and employee benefits | 56,222 | 51,524 | 48,573 | ||||||||
Data processing | 2,678 | 2,677 | 2,629 | ||||||||
Printing, stationery and office | 1,302 | 1,161 | 1,097 | ||||||||
Professional and director fees | 7,048 | 3,537 | 3,105 | ||||||||
Other expenses | 3,815 | 3,694 | 3,786 | ||||||||
Total noninterest expense | 22,110 | 22,045 | 23,403 | 22,585 | 21,756 | 19,964 | 20,012 | 20,284 | 90,143 | 82,016 | 78,292 |
Income tax benefit | 2,905 | 2,990 | 3,077 | 2,599 | 3,380 | 3,207 | 2,638 | 2,139 | 11,571 | 11,364 | 16,453 |
Net income | $ 12,636 | $ 13,076 | $ 14,315 | $ 10,490 | $ 14,112 | $ 13,023 | $ 11,042 | $ 9,112 | 50,517 | 47,289 | 27,571 |
Parent | |||||||||||
Interest income | |||||||||||
Other | 5 | 187 | 142 | ||||||||
Interest expense | |||||||||||
Note payable | 15 | 15 | 906 | ||||||||
Junior subordinated debt | 4 | 420 | 322 | ||||||||
Total interest expense | 19 | 435 | 1,228 | ||||||||
Net interest income | (14) | (248) | (1,086) | ||||||||
Noninterest income | |||||||||||
Dividend income from subsidiary | 8,901 | 7,800 | 8,806 | ||||||||
Total noninterest income | 8,901 | 7,800 | 8,806 | ||||||||
Noninterest expense | |||||||||||
Salaries and employee benefits | 673 | 755 | 344 | ||||||||
Data processing | 13 | 44 | 37 | ||||||||
Printing, stationery and office | 8 | 12 | 20 | ||||||||
Professional and director fees | 652 | 728 | 842 | ||||||||
Other expenses | 201 | 196 | 17 | ||||||||
Total noninterest expense | 1,547 | 1,735 | 1,260 | ||||||||
Income before income tax benefit and equity in undistributed income of subsidiary | 7,340 | 5,817 | 6,460 | ||||||||
Income tax benefit | (341) | (437) | (1,518) | ||||||||
Income before equity in undistributed income of subsidiary | 7,681 | 6,254 | 7,978 | ||||||||
Equity in undistributed income of subsidiary | 42,836 | 41,035 | 19,593 | ||||||||
Net income | $ 50,517 | $ 47,289 | $ 27,571 |
PARENT COMPANY - Statements o_2
PARENT COMPANY - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 50,517 | $ 47,289 | $ 27,571 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Stock-based compensation expense | 2,402 | 1,601 | 329 |
Deferred tax provision (benefit) | (1,657) | (734) | 2,932 |
Change in operating assets and liabilities: | |||
Other assets | 81 | 994 | (3,156) |
Other liabilities | 3,955 | (2,850) | 5,759 |
Total adjustments | 5,573 | 2,032 | 8,019 |
Net cash provided by operating activities | 56,090 | 49,321 | 35,590 |
Cash flows from investing activities: | |||
Cash flows from investing activities: | (189,740) | (147,722) | (185,433) |
Cash flows from financing activities: | |||
Repayments of note payable | (27,679) | ||
Redemption of trust preferred securities | (1,571) | (5,155) | |
Proceeds from sale of common stock in initial public offering | 71,760 | ||
Dividends paid on common stock | (8,757) | (4,979) | (4,412) |
Payments to tax authorities for stock-based compensation | (239) | (171) | |
Proceeds from exercise of stock options | 121 | 294 | 117 |
Repurchase of common stock | (3) | ||
Net cash (used) provided in financing activities | 123,644 | 154,272 | 93,939 |
Net (decrease) increase in cash and cash equivalents | (10,006) | 55,871 | (55,904) |
Parent | |||
Cash flows from operating activities: | |||
Net income | 50,517 | 47,289 | 27,571 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Equity in undistributed net income loss of subsidiary | (42,836) | (41,035) | (19,593) |
Stock-based compensation expense | 2,402 | 1,601 | 329 |
Deferred tax provision (benefit) | 14 | (4) | 391 |
Change in operating assets and liabilities: | |||
Other assets | 473 | 1,549 | (1,216) |
Other liabilities | (180) | (836) | 552 |
Total adjustments | (40,127) | (38,725) | (19,537) |
Net cash provided by operating activities | 10,390 | 8,564 | 8,034 |
Cash flows from financing activities: | |||
Repayments of note payable | (27,679) | ||
Redemption of trust preferred securities | (1,571) | (5,155) | |
Proceeds from sale of common stock in initial public offering | 64,519 | ||
Dividends paid on common stock | (8,757) | (4,979) | (4,412) |
Payments to tax authorities for stock-based compensation | (239) | (171) | |
Proceeds from exercise of stock options | 121 | 294 | 117 |
Repurchase of common stock | (3) | ||
Net cash (used) provided in financing activities | (10,449) | (10,011) | 32,545 |
Net (decrease) increase in cash and cash equivalents | (59) | (1,447) | 40,579 |
Cash and cash equivalents, beginning | 44,189 | 45,636 | 5,057 |
Cash and cash equivalents, ending | $ 44,130 | $ 44,189 | $ 45,636 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||
Interest income | $ 38,568 | $ 39,193 | $ 38,649 | $ 36,985 | $ 36,882 | $ 34,665 | $ 33,127 | $ 31,085 | $ 153,395 | $ 135,759 | $ 116,659 |
Interest expense | 4,782 | 4,618 | 4,350 | 3,657 | 3,662 | 3,139 | 2,251 | 2,046 | 17,407 | 11,098 | 8,885 |
Net interest income | 33,786 | 34,575 | 34,299 | 33,328 | 33,220 | 31,526 | 30,876 | 29,039 | 135,988 | 124,661 | 107,774 |
Provision (recapture) for loan losses | (148) | 579 | 807 | 1,147 | (2,169) | (1,142) | 690 | 865 | 2,385 | (1,756) | (338) |
Net interest income after provision (recapture) for loan losses | 33,934 | 33,996 | 33,492 | 32,181 | 35,389 | 32,668 | 30,186 | 28,174 | 133,603 | 126,417 | 108,112 |
Noninterest income | 3,717 | 4,115 | 7,303 | 3,493 | 3,859 | 3,526 | 3,506 | 3,361 | 18,628 | 14,252 | 14,204 |
Noninterest expense | 22,110 | 22,045 | 23,403 | 22,585 | 21,756 | 19,964 | 20,012 | 20,284 | 90,143 | 82,016 | 78,292 |
Net income before income tax expense | 15,541 | 16,066 | 17,392 | 13,089 | 17,492 | 16,230 | 13,680 | 11,251 | 62,088 | 58,653 | 44,024 |
Income tax expense | 2,905 | 2,990 | 3,077 | 2,599 | 3,380 | 3,207 | 2,638 | 2,139 | 11,571 | 11,364 | 16,453 |
Net income | $ 12,636 | $ 13,076 | $ 14,315 | $ 10,490 | $ 14,112 | $ 13,023 | $ 11,042 | $ 9,112 | $ 50,517 | $ 47,289 | $ 27,571 |
EARNINGS PER SHARE | |||||||||||
Basic | $ 0.51 | $ 0.52 | $ 0.57 | $ 0.42 | $ 0.57 | $ 0.52 | $ 0.44 | $ 0.37 | $ 2.03 | $ 1.90 | $ 1.23 |
Diluted | $ 0.50 | $ 0.52 | $ 0.57 | $ 0.42 | $ 0.56 | $ 0.52 | $ 0.44 | $ 0.37 | $ 2.02 | $ 1.89 | $ 1.22 |