Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 25, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CBTX, INC. | |
Entity Central Index Key | 0001473844 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 24,949,027 | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and due from banks | $ 47,895 | $ 51,259 |
Interest-bearing deposits at other financial institutions | 237,003 | 320,805 |
Total cash and cash equivalents | 284,898 | 372,064 |
Securities | 234,014 | 231,262 |
Equity investments | 16,807 | 16,710 |
Loans held for sale | 882 | 1,463 |
Loans, net of allowance for credit losses of $31,194 and $25,280 at March 31, 2020 and December 31, 2019, respectively | 2,640,393 | 2,613,805 |
Premises and equipment, net of accumulated depreciation of $33,665 and $32,923 at March 31, 2020 and December 31, 2019, respectively | 50,243 | 50,875 |
Goodwill | 80,950 | 80,950 |
Other intangible assets, net of accumulated amortization of $16,020 and $15,809 at March 31, 2020 and December 31, 2019, respectively | 4,700 | 4,938 |
Bank-owned life insurance | 72,297 | 71,881 |
Operating lease right-to-use asset | 12,577 | 12,926 |
Deferred tax asset, net | 7,026 | 7,432 |
Other assets | 20,863 | 14,238 |
Total assets | 3,425,650 | 3,478,544 |
Liabilities | ||
Noninterest-bearing deposits | 1,195,541 | 1,184,861 |
Interest-bearing deposits | 1,596,692 | 1,667,527 |
Total deposits | 2,792,233 | 2,852,388 |
Federal Home Loan Bank advances | 50,000 | 50,000 |
Repurchase agreements | 1,415 | 485 |
Operating lease liabilities | 15,356 | 15,704 |
Other liabilities | 29,772 | 24,246 |
Total liabilities | 2,888,776 | 2,942,823 |
Commitments and contingencies (Note 16) | ||
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, 25,601,835 and 25,837,048 shares issued at March 31, 2020 and December 31, 2019, respectively, 24,746,013 and 24,979,702 shares outstanding at March 31, 2020 and December 31, 2019, respectively | 256 | 258 |
Additional paid-in capital | 341,713 | 346,559 |
Retained earnings | 203,080 | 201,080 |
Treasury stock, at cost, 855,822 and 857,346 shares held at March 31, 2020 and December 31, 2019, respectively | (14,536) | (14,562) |
Accumulated other comprehensive gain, net of tax of $1,058 and $634 at March 31, 2020 and December 31, 2019, respectively | 6,361 | 2,386 |
Total shareholders’ equity | 536,874 | 535,721 |
Total liabilities and shareholders’ equity | $ 3,425,650 | $ 3,478,544 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Allowance for credit losses on loans | $ 31,194 | $ 25,280 |
Premises and equipment, accumulated depreciation | 33,665 | 32,923 |
Other intangible assets, accumulated amortization | $ 16,020 | $ 15,809 |
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 | 25,601,835 | 25,837,048 |
Common stock, shares outstanding | 24,746,013 | 24,979,702 |
Treasury stock, shares | 855,822 | 857,346 |
Accumulated other comprehensive gain (loss), tax | $ 1,058 | $ 634 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest income | ||
Interest and fees on loans | $ 33,617 | $ 33,793 |
Securities | 1,363 | 1,557 |
Other interest-earning assets | 1,055 | 1,483 |
Equity investments | 176 | 152 |
Total interest income | 36,211 | 36,985 |
Interest expense | ||
Deposits | 3,766 | 3,584 |
Federal Home Loan Bank advances | 221 | 64 |
Repurchase agreements | 1 | |
Note payable and junior subordinated debt | 4 | 8 |
Total interest expense | 3,991 | 3,657 |
Net interest income | 32,220 | 33,328 |
Provision for credit losses for loans | 4,739 | 1,147 |
Provision for credit losses for unfunded commitments | 310 | |
Total provision for credit losses | 5,049 | 1,147 |
Net interest income after provision for credit losses | 27,171 | 32,181 |
Noninterest income | ||
Deposit account service charges | 1,485 | 1,629 |
Card interchange fees | 922 | 864 |
Earnings on bank-owned life insurance | 416 | 430 |
Net gain on sales of assets | 123 | 88 |
Other | 1,381 | 482 |
Total noninterest income | 4,327 | 3,493 |
Noninterest expense | ||
Salaries and employee benefits | 14,223 | 13,822 |
Occupancy expense | 2,424 | 2,267 |
Professional and director fees | 1,152 | 2,091 |
Data processing and software | 1,222 | 1,154 |
Regulatory fees | 103 | 464 |
Advertising, marketing and business development | 364 | 440 |
Telephone and communications | 419 | 378 |
Security and protection expense | 374 | 323 |
Amortization of intangibles | 221 | 232 |
Other expenses | 1,587 | 1,414 |
Total noninterest expense | 22,089 | 22,585 |
Net income before income tax expense | 9,409 | 13,089 |
Income tax expense | 1,868 | 2,599 |
Net income | $ 7,541 | $ 10,490 |
Earnings per common share | ||
Basic | $ 0.30 | $ 0.42 |
Diluted | $ 0.30 | $ 0.42 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income | $ 7,541 | $ 10,490 |
Change in unrealized gains on securities available for sale arising during the period, net | 5,023 | 3,027 |
Reclassification adjustments for net realized gains included in net income | 10 | 3 |
Change in related deferred income tax | (1,058) | (637) |
Other comprehensive income, net of tax | 3,975 | 2,393 |
Total comprehensive income | $ 11,516 | $ 12,883 |
Condensed Consolidated Statem_3
Condensed 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, 2018 | $ 258 | $ 344,497 | $ 160,626 | $ (14,781) | $ (2,975) | $ 487,625 |
Beginning balance, shares at Dec. 31, 2018 | 25,777,693 | (870,272) | ||||
Net income | 10,490 | 10,490 | ||||
Dividends on common stock, $0.10 and $0.10 per share for the three months ended March 31, 2020 and 2019, respectively | (2,513) | (2,513) | ||||
Stock-based compensation expense | 545 | 545 | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities | (2) | (2) | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities (in shares) | 211 | |||||
Exercise of stock options, net of shares withheld for employee tax liabilities | (69) | $ 184 | 115 | |||
Exercise of stock options, net of shares withheld for employee tax liabilities (in shares) | 10,844 | |||||
Other comprehensive income, net of tax | 2,393 | 2,393 | ||||
Ending balance at Mar. 31, 2019 | $ 258 | 344,971 | 168,603 | $ (14,597) | (582) | 498,653 |
Ending balance, shares at Mar. 31, 2019 | 25,777,904 | (859,428) | ||||
CECL implementation, net of deferred tax asset | ASU 2016-13 | (3,045) | (3,045) | ||||
Beginning balance at Dec. 31, 2019 | $ 258 | 346,559 | 201,080 | $ (14,562) | 2,386 | 535,721 |
Beginning balance, shares at Dec. 31, 2019 | 25,837,048 | (857,346) | ||||
Net income | 7,541 | 7,541 | ||||
Dividends on common stock, $0.10 and $0.10 per share for the three months ended March 31, 2020 and 2019, respectively | (2,496) | (2,496) | ||||
Stock-based compensation expense | 557 | 557 | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities | (35) | (35) | ||||
Vesting of restricted stock, net of shares withheld for employee tax liabilities (in shares) | 5,232 | |||||
Exercise of stock options, net of shares withheld for employee tax liabilities | (10) | $ 26 | 16 | |||
Exercise of stock options, net of shares withheld for employee tax liabilities (in shares) | 1,524 | |||||
Shares repurchased | $ (2) | (5,358) | (5,360) | |||
Shares repurchased, Shares | (240,445) | |||||
Other comprehensive income, net of tax | 3,975 | 3,975 | ||||
Ending balance at Mar. 31, 2020 | $ 256 | $ 341,713 | $ 203,080 | $ (14,536) | $ 6,361 | $ 536,874 |
Ending balance, shares at Mar. 31, 2020 | 25,601,835 | (855,822) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders Equity (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Changes in Shareholders Equity | ||
Dividends on Common Stock | $ 0.10 | $ 0.10 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 7,541 | $ 10,490 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||
Provision for credit losses | 5,049 | 1,147 |
Depreciation expense | 775 | 824 |
Amortization of intangibles | 221 | 232 |
Amortization of premiums on securities | 368 | 256 |
Amortization of lease right-to-use assets | 349 | 329 |
Accretion of lease liabilities | 133 | 131 |
Earnings on bank-owned life insurance | (416) | (430) |
Stock-based compensation expense | 557 | 545 |
Deferred income tax provision | 158 | 622 |
Net gain on sales of assets | (123) | (88) |
Earnings on securities | (24) | (9) |
Change in operating assets and liabilities: | ||
Loans held for sale | 670 | (820) |
Other assets | (6,625) | 303 |
Other liabilities | 1,759 | (3,517) |
Total adjustments | 2,851 | (475) |
Net cash provided by operating activities | 10,392 | 10,015 |
Cash flows from investing activities: | ||
Purchases of securities | (160,580) | (153,962) |
Proceeds from sales, calls and maturities of securities | 153,005 | 153,056 |
Principal repayments of securities | 9,522 | 4,969 |
Net increase in loans | (30,168) | (97,639) |
Purchases of loan participations | (2,500) | (1,256) |
Proceeds from sales of Small Business Administration loans | 508 | 818 |
Net contributions to equity investments | (97) | (2,039) |
Net purchases sales of premises and equipment | (143) | |
Proceeds from sales of repossessed real estate and other assets | 20 | |
Proceeds from insurance claims | (653) | |
Net cash used in investing activities | (30,453) | (96,686) |
Cash flows from financing activities: | ||
Net increase in noninterest-bearing deposits | 10,680 | 46,114 |
Net decrease in interest-bearing deposits | (70,835) | (61,397) |
Net increase (decrease) in securities sold under agreements to repurchase | 930 | (898) |
Redemption of trust preferred securities | (1,571) | |
Dividends paid on common stock | (2,501) | (1,245) |
Payments to tax authorities for stock-based compensation | (35) | (2) |
Proceeds from exercise of stock options | 16 | 115 |
Repurchase of common stock | (5,360) | |
Net cash provided by financing activities | (67,105) | (18,884) |
Net decrease in cash, cash equivalents and restricted cash | (87,166) | (105,555) |
Cash, cash equivalents and restricted cash, beginning | 372,064 | 382,070 |
Cash, cash equivalents and restricted cash, ending | $ 284,898 | $ 276,515 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations CBTX, Inc., or the Company, or CBTX, operates 35 branches, 19 in the Houston market area, 15 in the Beaumont/East Texas market area and one in Dallas, through its wholly-owned subsidiary, CommunityBank of Texas, N.A., or the Bank. The Bank provides relationship-driven commercial banking products and services primarily to small and mid-sized businesses and professionals with operations within the Bank’s markets. The Bank operates under a national charter and therefore is subject to regulation by the Office of the Comptroller of the Currency, or OCC, and the Federal Deposit Insurance Corporation, or FDIC. The Company is subject to regulation by the Board of Governors of the Federal Reserve, or the Federal Reserve. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP, but do not include all the information and footnotes required for complete consolidated financial statements. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated financial position at March 31, 2020 and December 31, 2019, consolidated results of operations and consolidated shareholders’ equity for the three months ended March 31, 2020 and 2019, and consolidated cash flows for the three months ended March 31, 2020 and 2019. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included within the Company’s Annual Report on Form 10-K. Reclassification—Within noninterest expense for 2019, data processing and software have been combined together. In addition, printing, stationary and office, correspondent bank and customer related transaction fees, loan processing costs and repossessed real estate and other asset expenses have been combined with other expenses. These reclassifications were made to conform to the 2020 financial statement presentation in the condensed consolidated statements of income. Share Repurchase Program During the three months ended March 31, 2020, 240,445 shares were repurchased under the Company’s share repurchase program at an average price of $22.29 per share and retired and returned to the status of authorized but unissued shares. There were no shares repurchased during the three months ended March 31, 2019. Accounting Standards Recently Adopted The Company adopted Accounting Standards Update, or ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments effective January 1, 2020. The scope of ASU 2016-13 includes loans, debt securities classified as held to maturity, 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. In addition, ASU 2016-13 amends the accounting and reporting for credit losses on available for sale securities. 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. As part of the implementation of ASU 2016-13, the Company changed its methodology of determining the allowance for credit losses, or ACL, for loans and for determining an ACL associated with the Company’s off-balance sheet credit exposures, which are primarily unfunded commitments to borrowers. Through a one-time cumulative effect reduction of retained earnings of $3.0 million, the adoption of ASU 2016-13 increased the ACL for loans by $874,000, increased the liability related to the ACL for unfunded commitments by $2.9 million, with the associated deferred tax assets increasing by $809,000. 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 January 1, 2020. Additionally, the Company assessed the impact of ASU 2016-13 on its available for sale securities utilizing various qualitative factors and determined there were 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. See Note 6 —Allowance for Credit Losses for further discussion related to ASC 2016-13 and related disclosures. Accounting Standards Not Yet Adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued, if certain criteria are met. LIBOR is used as an index rate for the Company’s interest-rate swaps and approximately 12.9% of the Company’s loans as of March 31, 2020. If reference rates are discontinued, the existing contracts will be modified to replace the discontinued rate with a replacement rate. For accounting purposes, such contract modifications would have to be evaluated to determine whether the modified contract is a new contract or a continuation of an existing contract. If they are considered new contracts, the previous contract would be extinguished. Under one of the optional expedients of ASU 2020-04, modifications of contracts within the scope of Topic 310, Receivables, and 470, Debt, will be accounted for by prospectively adjusting the effective interest rates and no such evaluation is required. When elected, the optional expedient for contract modifications must be applied consistently for all eligible contracts or eligible transactions. The expedients and exceptions in this update are available to all entities starting March 12, 2020 through December 31, 2022. The Company is in the process of evaluating the impact of this pronouncement on those financial assets where LIBOR is used as an index rate. Cash Flow Reporting The Bank is required to maintain regulatory reserves with the Federal Reserve Bank and the reserve requirements for the Bank were $17.2 million and $18.6 million at March 31, 2020 and December 31, 2019, respectively. Additionally, as of March 31, 2020 and December 31, 2019, the Company had $9.3 million and $3.1 million, respectively, in cash collateral for interest rate swap transactions. The reserves maintained with the Federal Reserve Bank and the cash collateral used in interest rate swap transactions are considered restricted cash. Supplemental disclosures of cash flow information are as follows for the periods indicated below: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest 3,944 3,599 Supplemental disclosures of non-cash flow information: Operating lease right-to-use asset obtained in exchange for lease liabilities — 13,208 Dividends accrued 5 1,268 Repossessed real estate and other assets — 41 |
SECURITIES
SECURITIES | 3 Months Ended |
Mar. 31, 2020 | |
SECURITIES. | |
SECURITIES | NOTE 2: SECURITIES The amortized cost and fair values of investments in securities, including the gross unrealized gains and losses reported net of tax in other comprehensive income, as of the dates shown below were as follows: Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value March 31, 2020 Debt securities available for sale: State and municipal securities $ 48,988 $ 1,898 $ — $ 50,886 U.S. agency securities: Collateralized mortgage obligations 51,433 1,632 — 53,065 Mortgage-backed securities 124,370 4,522 — 128,892 Equity securities 1,161 10 — 1,171 Total $ 225,952 $ 8,062 $ — $ 234,014 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 The amortized cost and estimated fair value of securities, by contractual maturities, as of the dates shown below were as follows: Available for Sale Amortized Fair (Dollars in thousands) Cost Value March 31, 2020 Amounts maturing in: 1 year or less $ 1,759 $ 1,776 1 year through 5 years 3,050 3,131 5 years through 10 years 15,042 15,536 After 10 years 206,101 213,571 $ 225,952 $ 234,014 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 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 $358,000 were sold in the three months ended March 31, 2019. No securities were sold in the three months ended March 31, 2020. At March 31, 2020 and December 31, 2019, securities with a carrying amount of $51.5 million and $50.8 million, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes required or permitted by law. The Company held 3 securities at March 31, 2020 and 27 securities at December 31, 2019, respectively, that were in a gross unrealized loss position. Total gross unrealized losses at March 31, 2020 was below $1,000. The unrealized losses are attributable primarily to changes in market interest rates relative to those available when the securities were acquired. There are multiple qualitative factors considered by the Company in its assessment to determine if an ACL was necessary for those securities where the amortized cost basis exceeds the fair value. These factors include, among other things, (i) the extent to which the fair value was less than the amortized cost basis of the security and the length of time; (ii) the structure of the payments and likelihood that the issuer has the ability to make future payments; (iii) adverse conditions related to the security, industry or geographic area; (iv) changes in any credit ratings or financial conditions of the issuer; (v) failure by the issuer to make previous payments; and (vi) past events related to the security, current economic conditions and reasonable and supportable forecasts. Management did not believe that any of the securities the Company held were impaired due to reasons of credit quality and believed the unrealized losses detailed in the tables below were temporary. No ACL for available for sale securities has been recorded in the Company’s condensed consolidated balance sheets at March 31, 2020 and upon adoption of ASU 2016-03. Amortized costs, as defined by GAAP, includes acquisition costs, applicable accrued interest and accretion or amortization of premiums and discounts. The Company made a policy election to exclude accrued interest from amortized costs in the determination of ACL. The Company continues its policy of reversing previously accrued interest when it has been deemed uncollectible. Accrued interest receivable for securities was $674,000 and $1.1 million at March 31, 2020 and December 31, 2019, respectively, and is included in other assets in the condensed consolidated balance sheets. Securities with unrealized losses as of the dates shown below, aggregated by category and the length of time were as follows: Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses March 31, 2020 Debt securities available for sale: State and municipal securities $ 489 $ — $ — $ — U.S. agency securities: Collateralized mortgage obligations — — — — Mortgage-backed securities — — — — Equity securities — — — — $ 489 $ — $ — $ — December 31, 2019 Debt securities available for sale: State and municipal securities $ 3,539 $ (7) $ 106 $ — U.S. agency securities: Debt 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) |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 3 Months Ended |
Mar. 31, 2020 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENTS | NOTE 3: EQUITY INVESTMENTS The Company’s unconsolidated investments that are considered equity securities as they represent ownership interests, such as common or preferred stock, were as follows for the dates indicated below: (Dollars in thousands) March 31, 2020 December 31, 2019 Federal Reserve stock $ 9,271 $ 9,271 Federal Home Loan Bank stock 4,286 4,249 The Independent Bankers Financial Corporation stock 141 141 Community Reinvestment Act investments 3,109 3,049 $ 16,807 $ 16,710 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, the Bank is required to annually subscribe to Federal Reserve stock in specific ratios to the Bank’s equity. Although Federal Home Loan Bank and Federal Reserve stock are considered equity securities, they do not have readily determinable fair values because ownership is restricted, and they lack a readily-available 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 the 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 investment funds and limited partnerships that are qualified Community Reinvestment Act, or CRA, and investments under the Small Business Investment Company program of the Small Business Administration, or SBA. There are limited to no observable price changes in orderly transactions for identical investments or similar investments from the same issuers that are actively traded and, as a result, these investments are stated at cost. At March 31, 2020 and December 31, 2019, the Company had $4.8 million and $4.9 million, respectively, in outstanding unfunded commitments to these funds, which are subject to call. The Company’s equity investments are evaluated for impairment based on an assessment of qualitative indicators. Impairment indicators to be considered include, but are not limited to (i) a significant deterioration in the earnings, performance, credit rating, asset quality or business prospects of the investee, (ii) a significant adverse change in the regulatory, economic or technological environment of the investee, (iii) a significant adverse change in the general market conditions of either the geographical area or the industry in which the investee operates, and (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 March 31, 2020. |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2020 | |
LOANS | |
LOANS | NOTE 4: LOANS Loans by loan class, or major loan category, as of the dates shown below were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Commercial and industrial $ 542,650 $ 527,607 Real estate: Commercial real estate 904,395 900,746 Construction and development 558,343 527,812 1-4 family residential 276,142 280,192 Multi-family residential 267,152 277,209 Consumer 38,133 36,782 Agriculture 7,520 9,812 Other 84,076 86,513 Total gross loans 2,678,411 2,646,673 Less allowance for credit losses for loans (31,194) (25,280) Less deferred loan fees and unearned discounts (5,942) (6,125) Less loans held for sale (882) (1,463) Loans, net $ 2,640,393 $ 2,613,805 Accrued interest receivable for loans was $7.8 million and $7.5 million at March 31, 2020 and December 31, 2019, respectively, and is included in other assets in the condensed consolidated balance sheets. From time to time, the Company will acquire and dispose of interests in loans under participation agreements with other financial institutions. Loan participations purchased and sold during the three months ending March 31, 2020 and 2019, by loan class, were as follows: Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period March 31, 2020 Commercial real estate $ 2,500 $ — March 31, 2019 Commercial real estate $ 1,256 $ — The Company participates in the SBA loan program. When advantageous, the Company will sell the guaranteed portions of these loans with servicing retained. SBA loans that were sold with servicing retained during the three months ended March 31, 2020 and 2019, totaled $508,000 and $818,000, respectively. |
LOAN PERFORMANCE
LOAN PERFORMANCE | 3 Months Ended |
Mar. 31, 2020 | |
LOAN PERFORMANCE | |
LOAN PERFORMANCE | NOTE 5: LOAN PERFORMANCE Nonaccrual loans, segregated by loan class, as of the dates shown below were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Commercial and industrial $ 449 $ 596 Real estate: Commercial real estate 67 67 Construction and development 519 — 1-4 family residential 413 314 Total nonaccrual loans $ 1,448 $ 977 Interest income that would have been earned under the original terms of the nonaccrual loans was $33,000 and $48,000 for the three months ended March 31, 2020 and 2019, respectively. The following is an aging analysis of the Company’s past due loans, segregated by loan class, as of the dates shown below: 90 days or 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing March 31, 2020 Commercial and industrial $ 1,549 $ 7 $ — $ 1,556 $ 541,094 $ 542,650 $ — Real estate: Commercial real estate 1,532 — — 1,532 902,863 904,395 — Construction and development 2,973 — — 2,973 555,370 558,343 — 1-4 family residential 133 — 32 165 275,977 276,142 — Multi-family residential — — — — 267,152 267,152 — Consumer 15 — — 15 38,118 38,133 — Agriculture — — — — 7,520 7,520 — Other — — — 84,076 84,076 Total loans $ 6,202 $ 7 $ 32 $ 6,241 $ 2,672,170 $ 2,678,411 $ — 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 $ — There were no loans restructured due to borrower’s financial difficulties during the three months ended March 31, 2019. Loans restructured due to the borrower’s financial difficulties during the three months ending March 31, 2020, which remained outstanding as of the end of that period 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 March 31, 2020 Commercial and industrial 3 $ 657 $ 426 $ — $ 231 $ — Commercial real estate 3 4,813 4,813 — — — Total 6 $ 5,470 $ 5,239 $ — $ 231 $ — The recorded investment in troubled debt restructurings was $15.9 million and $8.8 million as of March 31, 2020 and December 31, 2019, respectively. At March 31, 2020 and December 31, 2019, $1.0 million and $393,000 of restructured loans were nonaccrual loans and $14.9 million and $8.4 million of restructured loans were accruing interest as of those periods, respectively. At December 31, 2019, the Company had an outstanding commitment to fund $2.0 million on a line of credit previously restructured. The Company had no such commitment at March 31, 2020. 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. Loan modifications related to a loan refinancing or restructuring other than a troubled debt restructuring are accounted for as a new loan if the terms provided to the borrower are at least as favorable to the Company as terms for comparable loans to other borrowers with similar collection risks that is not a loan refinancing or restructuring. If the loan refinancing or restructuring does not meet this condition or if only minor modifications are made to the original loan contract, it is not considered a new loan and is considered a renewal or modification of the original contract. In support of customers impacted by the corona-virus, or COVID-19, the Company began providing short-term loan modifications by offering relief through payment deferrals during the first quarter of 2020. The Company has deferred payments, including principal and interest, totaling $936,000 as of March 31, 2020. The majority of the deferral arrangements provide for one-month to six-month deferral periods. Under regulatory guidance, there short-term deferrals are not assessed as troubled debt restructurings. |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 3 Months Ended |
Mar. 31, 2020 | |
ALLOWANCE FOR CREDIT LOSSES | |
ALLOWANCE FOR CREDIT LOSSES | NOTE 6: ALLOWANCE FOR CREDIT LOSSES Effective on January 1, 2020 upon adoption of Topic 326, the Company’s ACL for the loan portfolio has two main components: a reserve for expected losses determined from the historical loss rates, adjusted for qualitative factors, and forecasted expected losses on the segments associated with the individual loan classes with similar risk characteristics, or general reserve, and a separate allowance representing the reserves assigned to individually evaluated loans that do not share similar risk characteristics with other loans, or specific reserve. The Company defines the loan class to be the grouping of the loan receivable based on risk characteristics and the method for monitoring and assessing credit risk, which is represented by the loan type or major category of loans. For specific reserves, loans identified as not sharing similar risk characteristics with other assets are individually evaluated for the net amount expected to be collected and reserves are determined for them outside of general reserve computation. For determination of credit losses on loans individually evaluated, the Company utilizes various methods such as discounted cash flow analysis, appraisal valuation on collateral, among others, to determine any impairment of the loan and need for additional allowance for expected losses. For the general reserve computation, the Company selected an aged-based vintage model, or the Vintage model, based on the model’s ability to predict credit risks associated with the loan portfolio and capture the expected life of loan losses associated with each segment of loans. The Company primarily manages credit quality and determines credit risk of its loans based on the risk grade assigned to each individual loan within the loan class. See risk grade discussion later in this footnote. The factors considered include the age of the loan, interest rate, loan size, payment structure, term, risk ratings, loan to value, collateral type, geographical pattern, and industrial sector. The breakdown of the loan classes into portfolio segments was a judgement election based upon identified risk criteria. The Company has limited specific historical loss experience to directly tie to an attribute and thus the use of one factor over another is based on management’s perceived risk of the identified factor in combination with the data analyzed. After consideration of the factors previously discussed, the Company determined segmenting the portfolio into 16 segments, plus overdrafts, based on the identified risk characteristics present within each segment. These risk characteristics are determined based on call code, collateral types, and loan terms. The Company believes that this segmentation best represents the portfolio segments at a level to develop the systematic methodology in the determination of the ACL. Certain loans were aggregated and disaggregated to align with the concentrations of risk and expected loss exposures associated with those loans. Oil and gas loans were carved out of commercial and industrial loans and oil and gas real estate loans were carved out of commercial real estate loans due to the inherent risk related to the oil and gas industry, the volatile nature of the price of oil and its potential impact on the local economy of the Company’s primary geographical area. Commercial and industrial loans were divided into two pools based on terms greater than one year and less than or equal to one year. Commercial and industrial loans with terms less than or equal to one year are typically revolving credits and have different risk characteristics based on the short-term nature of the loan than commercial and industrial loans with terms longer than one year. Commercial real estate loans are split out further into owner occupied and non-owner occupied based on their different risk profiles. Community development loans were split-out as a separate component of construction and multi-family residential loans based on the unique underwriting of these loans and some underlying guarantees which impact the risk profile of these loans. The remaining construction loans were split between 1-4 family primary construction and 1-4 family single family residential construction loans as they are deemed to have differing risk profiles. The loans were then subdivided by year of origination or vintage, as determined by an identifiable credit decision date. See the table that follows this discussion. Historical net losses are used to calculate a historical loss rate for each vintage within each portfolio segment and then subjective adjustments for internal and external qualitative risk factors are applied to the historical loss rates to generate a total expected loss rate for each vintage within each portfolio segment. For portfolio segments of loans with no historical losses, the Company is using the weighted average of its the annual historical loss rates as a proxy loss rate floor or, specifically for oil and gas and oil and gas real estate portfolio segments, historical average loss rate based on peer group data. There are multiple qualitative factors, both internal and external, that could impact potential collectability of the underlying loans. The various internal factors that may be considered include, among other things, (i) effectiveness of loan policies, procedures and internal controls; (ii) portfolio growth and changes in loan concentrations; (iii) changes in loan quality; (iv) experience, ability and effectiveness of lending management and staff; (v) legal and regulatory compliance requirements associated with underwriting, originating and servicing a loan and the impact of exceptions; and (vi) the effectiveness of the internal loan review function. The various external factors that may be considered include, among other things, (i) current national and local economic conditions; (ii) changes in the political, legal and regulatory landscape; (iii) industry trends, in particular those related to loan quality and (iv) forecasted changes in the economy. As part of this assessment, the Company considers the need to adjust historical information to reflect the extent to which current conditions and forecasts differ from the conditions that existed for the period over which historical information was evaluated. The Company uses an economic forecast qualitative factor as noted above to adjust the expected loss rates for the effects of forecasted changes in the economy. The Company uses economic indicators and indexes including, but not limited to, inflation indexes, unemployment rates, fluctuations of interest rates, economic growth, government expenditures, gross domestic product indexes, productivity indicators, leading indexes and debt levels and narratives such as those supplied by the Federal Reserve’s beige book and Moody’s Analytics that provide information for determining an appropriate impact ratio for macro-economic conditions. The Company has determined that a two-year forecast period provides a balance between the level of forecast periods reasonably available and forecast accuracy. The Company utilized, at adoption and during the three-month period ending March 31, 2020, an immediate reversion to historical levels after the two-year forecast period. The Company believes a two-year period is the limit of a reasonable and supportable forecast and chose to revert to historical levels immediately afterward as current adjusted loss history is the more relevant indicator of expected losses beyond the forecast period. The historical loss rates, adjusted for current conditions and forecasting assumptions, are multiplied by the respective loan’s amortized cost balances in each vintage within each segment to compute an estimated quantitative reserve for expected losses in the portfolio. The quantitative reserve for expected loan losses and the qualitative reserve for expected loan losses combined together make up the total estimated loan loss reserve. Loan amortized costs, as defined by GAAP, includes principal, deferred fees or costs associated with the loan, premiums, discounts and accrued interest. The Company made a policy election to exclude accrued interest in the determination of an ACL. The Company continues its policy of reversing previously accrued interest when it has been deemed uncollectible and accrued interest receivable is included in other assets in the consolidated balance sheets. Loans available for sale are excluded from the computation of expected loan loss as they are carried at the lower of cost or market value. As part of the implementation of ASU 2016-13, the Company changed its methodology for determining the ACLs for loans. As a result of this adoption, the percentage of the ACL for loans to loans increased from 0.96% to 0.99%, effective January 1, 2020. At March 31, 2020, the percentage of the ACL for loans to total loans increased to 1.16%, reflecting the impact of current and forecasted economic factors for the local and national economy due to the impact of COVID-19 and the drop in the price of oil and gas during the first quarter of 2020. The Company’s total factors ranged from 0.67% to 2.42% at January 1, 2020 and ranged from 0.85% to 2.61% at March 31, 2020 and all factors were reassessed at the end of the first quarter. At the time of the assessment, there was limited economic forecasted data related to COVID-19 and the drop in the price of oil and gas. The increase in the ACL related to these events reflects the Company’s assessment based on the information available at March 31, 2020. Risk Grading As part of the on‑going monitoring of the credit quality of the Company’s loan portfolio, 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 a 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 methodology used by the Company in the determination of its ACL, which is performed at least on a quarterly basis, is designed to be responsive to changes in the credit quality of the loan portfolio as well as forecasted economic conditions. The credit quality of the loan portfolio is assessed through different processes. At origination, a risk grade is assigned to each loan based on underwriting procedures and criteria. The Company monitors the credit quality of the loan portfolio on an on-going basis by performing loan reviews, both internally and through a third-party vendor, on loans meeting certain risk and exposure criteria. Through these reviews, loans that require risk grade changes are approved by executive management. In addition, executive management reviews classified and criticized loans on to assess changes in credit quality of the underlying loan, and when determined appropriate based on an individual evaluation, approve specific reserves. The review of the appropriateness of the ACL, which includes evaluation of historical loss trends, qualitative adjustments and forecasted economic conditions applied to general reserves, is performed by executive management and presented to the board of directors for their review on a quarterly basis as part of our interim and annual consolidated financial statements. The loans by risk grades, loan class and vintage at March 31, 2020 were as follows: (Dollars in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Converted Revolving Loans Total Commercial and industrial: Pass $ 16,734 $ 120,547 $ 67,560 $ 19,418 $ 12,466 $ 9,688 $ 270,877 $ 11,585 $ 528,875 Special mention 33 266 — 15 — — 436 — 750 Substandard 1,000 786 464 39 354 2,406 4,012 3,964 13,025 Total commercial and industrial 17,767 121,599 68,024 19,472 12,820 12,094 275,325 15,549 542,650 Commercial real estate: Pass 57,116 213,693 214,659 139,415 86,079 129,764 36,851 2,322 879,899 Special mention — — — — 1,587 — — 11,000 12,587 Substandard — 1,926 4,967 216 1,600 3,200 — — 11,909 Total commercial real estate 57,116 215,619 219,626 139,631 89,266 132,964 36,851 13,322 904,395 Construction and development: Pass 35,419 184,260 196,235 45,597 8,477 35,240 40,564 — 545,792 Substandard — 519 1,500 10,532 — — — — 12,551 Total construction and development 35,419 184,779 197,735 56,129 8,477 35,240 40,564 — 558,343 1-4 family residential: Pass 7,110 35,961 66,602 49,164 27,973 70,808 11,094 1,277 269,989 Special mention — — 40 — 392 386 — — 818 Substandard — 547 — 249 20 3,034 — 1,485 5,335 Total 1-4 family residential 7,110 36,508 66,642 49,413 28,385 74,228 11,094 2,762 276,142 Multi-family residential: Pass 7,770 8,527 23,743 50,750 4,361 172,001 — — 267,152 Total multi-family residential 7,770 8,527 23,743 50,750 4,361 172,001 — — 267,152 Consumer: Pass 3,020 6,506 3,443 2,528 323 411 19,689 2,208 38,128 Substandard — — — — — 5 — — 5 Total consumer 3,020 6,506 3,443 2,528 323 416 19,689 2,208 38,133 Agriculture: Pass 936 1,701 547 162 38 5 3,975 79 7,443 Substandard — — — — — 27 50 — 77 Total agriculture 936 1,701 547 162 38 32 4,025 79 7,520 Other: Pass 623 15,233 5,026 162 128 1,551 35,662 17,424 75,809 Substandard — — 1,381 — 1,241 — 5,645 — 8,267 Total other 623 15,233 6,407 162 1,369 1,551 41,307 17,424 84,076 Total $ 129,761 $ 590,472 $ 586,167 $ 318,247 $ 145,039 $ 428,526 $ 428,855 $ 51,344 $ 2,678,411 Loans by risk grades and loan class as of the date 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 Charge-offs and recoveries by loan class and vintage for the three months ended March 31, 2020 were as follows: (Dollars in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Total Commercial and industrial: Charge-off $ — $ — $ — $ (29) $ — $ — $ (1) $ (30) Recovery — 2 87 16 10 133 180 428 Total commercial and industrial — 2 87 (13) 10 133 179 398 1-4 family residential: Charge-off — — — — — — — — Recovery — — — — — 1 — 1 Total 1-4 family residential — — — — — 1 — 1 Consumer: Charge-off — — (8) (95) — — — (103) Recovery 3 — — — — 1 — 4 Total consumer 3 — (8) (95) — 1 — (99) Other: Charge-off — — — — — — — — Recovery — — — 1 — — — 1 Total other — — — 1 — — — 1 Total $ 3 $ 2 $ 79 $ (107) $ 10 $ 135 $ 179 $ 301 Activity in the total ACL for loans for the three months ended March 31, 2020 and 2019, was as follows: Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2020 Beginning balance $ 7,671 $ 7,975 $ 4,446 $ 2,257 $ 1,699 $ 388 $ 74 $ 770 $ 25,280 Impact of CECL adoption 852 (140) 100 (275) 294 (25) 64 4 874 Provision (recapture) for credit losses for loans 614 1,741 1,249 447 420 213 (9) 64 4,739 Charge-offs (30) — — — — (103) — — (133) Recoveries 428 — — 1 — 4 — 1 434 Net (charge-offs) recoveries 398 — — 1 — (99) — 1 301 Ending balance $ 9,535 $ 9,576 $ 5,795 $ 2,430 $ 2,413 $ 477 $ 129 $ 839 $ 31,194 Period-end amount allocated to: Specific reserve $ 409 $ — $ — $ — $ — $ — $ — $ — $ 409 General reserve 9,126 9,576 5,795 2,430 2,413 477 129 839 30,785 Total $ 9,535 $ 9,576 $ 5,795 $ 2,430 $ 2,413 $ 477 $ 129 $ 839 $ 31,194 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2019 Beginning balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Provision (recapture) for credit losses for loans 903 52 402 (33) (54) (36) (12) (75) 1,147 Charge-offs (280) — — — — (4) — — (284) Recoveries 74 2 — 1 — 10 — — 87 Net (charge-offs) recoveries (206) 2 — 1 — 6 — — (197) Ending balance $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 Period-end amount allocated to: Specific reserve $ 582 $ 33 $ — $ 77 $ — $ — $ — $ 96 $ 788 General reserve 7,834 6,751 4,700 2,172 1,457 357 50 534 23,855 Total $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 The ACL for loans by loan class as of the periods indicated was as follows: March 31, 2020 December 31, 2019 (Dollars in thousands) Amount Percent Amount Percent Commercial and industrial $ 9,535 30.6 % $ 7,671 30.3 % Real estate: Commercial real estate 9,576 30.7 % 7,975 31.6 % Construction and development 5,795 18.6 % 4,446 17.6 % 1-4 family residential 2,430 7.8 % 2,257 8.9 % Multi-family residential 2,413 7.7 % 1,699 6.7 % Consumer 477 1.5 % 388 1.5 % Agriculture 129 0.4 % 74 0.3 % Other 839 2.7 % 770 3.1 % Total allowance for credit losses for loans $ 31,194 100.0 % $ 25,280 100.0 % Allocation of a portion of the ACL to one class of loans above does not preclude its availability to absorb losses in other classes. The loans evaluated individually and the related specific ACL at the dates shown below were as follows: March 31, 2020 December 31, 2019 (Dollars in thousands) Recorded Investment Specific ACL Net Recorded Investment Specific ACL Net Loans evaluated individually Commercial and industrial $ 1,528 $ 409 $ 1,119 $ 999 $ 416 $ 583 Commercial real estate 5,818 — 5,818 1,404 — 1,404 Construction and development 519 — 519 — — — 1-4 family residential 3,703 — 3,703 3,651 15 3,636 Consumer — — — 210 — 210 Other 8,267 — 8,267 6,653 6 6,647 Total $ 19,835 $ 409 $ 19,426 $ 12,917 $ 437 $ 12,480 At March 31, 2020, the Company had one 1-4 family residential collateral dependent loan with a principal balance of $32,000. (Dollars in thousands) March 31, 2020 Beginning balance $ 378 Impact of CECL adoption 2,981 Provision for credit losses for unfunded commitments 310 Ending balance $ 3,669 |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2020 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | NOTE 7: PREMISES AND EQUIPMENT The components of premises and equipment as of the dates shown below were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 53,874 53,869 Furniture and equipment 16,022 15,917 Vehicles 203 203 Construction in progress 343 343 83,908 83,798 Less accumulated depreciation (33,665) (32,923) Premises and equipment, net $ 50,243 $ 50,875 Depreciation expense was $775,000 and $824,000 for the three months ended March 31, 2020 and 2019, respectively, which is included in net occupancy expense on the Company’s condensed consolidated statements of income. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8: GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $81.0 million at March 31, 2020 and December 31, 2019 and there were no changes in goodwill during the three months ended March 31, 2020 or the year ended December 31, 2019. Based on the results of the Company’s assessment, management does not believe any impairment of goodwill or other intangible assets existed at March 31, 2020 or December 31, 2019. 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 March 31, 2020 Core deposits 3.9 years $ 13,750 $ (13,069) $ 681 Customer relationships 8.8 years 6,629 (2,762) 3,867 Servicing assets 11.2 years 341 (189) 152 Total other intangible assets, net $ 20,720 $ (16,020) $ 4,700 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 Servicing Assets Changes in the related servicing assets as of the dates indicated below were as follows: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Balance at beginning of year $ 189 $ 166 Increase from loan sales 9 14 Decrease from serviced loans paid off or foreclosed (26) (19) Amortization (20) (8) Balance at end of period $ 152 $ 153 |
BANK OWNED LIFE INSURANCE
BANK OWNED LIFE INSURANCE | 3 Months Ended |
Mar. 31, 2020 | |
BANK OWNED LIFE INSURANCE. | |
BANK OWNED LIFE INSURANCE | NOTE 9: BANK OWNED LIFE INSURANCE Bank-owned life insurance policies and the net change in cash surrender value during the periods shown below were as follows: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Balance at beginning of period $ 71,881 $ 71,525 Purchases — — Redemptions — — Net change in cash surrender value 416 430 Balance at end of period $ 72,297 $ 71,955 |
DEPOSITS
DEPOSITS | 3 Months Ended |
Mar. 31, 2020 | |
DEPOSITS | |
DEPOSITS | NOTE 10: DEPOSITS Deposits as of the dates shown below were as follows: (Dollars in thousands) March 31, 2020 December 31, 2019 Interest-bearing demand accounts $ 359,943 $ 369,744 Money market accounts 760,036 805,942 Saving accounts 90,227 92,183 Certificates and other time deposits, $100,000 or greater 212,341 208,018 Certificates and other time deposits, less than $100,000 174,145 191,640 Total interest-bearing deposits 1,596,692 1,667,527 Noninterest-bearing deposits 1,195,541 1,184,861 Total deposits $ 2,792,233 $ 2,852,388 At March 31, 2020 and December 31, 2019, the Company had $60.4 million and $56.8 million in deposits from public entities and brokered deposits of $112.4 million and $128.9 million, respectively. Accrued interest payable for deposits was $976,000 and $931,000 at March 31, 2020 and December 31, 2019 and is included in other liabilities in the condensed consolidated balance sheets. The Company had no major concentrations of deposits at March 31, 2020 or December 31, 2019 from any single or related groups of depositors. |
LINES OF CREDIT
LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2020 | |
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, or Loan Agreement, which has been periodically amended and provides for a $30.0 million revolving line of credit, or Line of Credit. At March 31, 2020, there were no outstanding borrowings on this Line of Credit and the Company did not draw on this Line of Credit during 2019. The Company can make draws on the Line of Credit 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 over 24 months beginning December 13, 2019, 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 Loan 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 Loan Agreement include, among other things, the Company maintaining tangible net worth of not less than $300 million, the Company maintaining a free cash flow coverage ratio of not less than 1.25 to 1.00, the Bank’s Texas Ratio (as defined in the Loan Agreement) not to exceed 15%, the Bank’s Total Capital Ratio (as defined under the Loan Agreement) of not less than 12% and restrictions on the ability of the Company and its subsidiaries to incur certain additional debt. The Company was in compliance with these covenants at March 31, 2020. Additional Lines of Credit The Federal Home Loan Bank allows the Company to borrow on a blanket floating lien status collateralized by certain loans. Total borrowing capacity available under this agreement was $1.0 billion at both March 31, 2020 and December 31, 2019. Federal Home Loan Bank advances outstanding totaled $50.0 million both March 31, 2020 and December 31, 2019, and these borrowings were on a long-term basis. See maturity information below. There were no borrowings under this agreement during the three months ended March 31, 2020. During the three months ended March 31, 2019, the Company borrowed under this agreement on a short-term basis. The average outstanding balance for Federal Home Loan Bank advances for the three months ended March 31, 2020 and 2019, was $50.0 million and $9.7 million, respectively. The weighted-average rate for the three months ended March 31, 2020 and 2019, was 1.78% and 2.67%, respectively. The scheduled maturities of Federal Home Loan Bank advances as of the date shown below were as follows: (Dollars in thousands) March 31, 2020 2020 $ — 2021 — 2022 10,000 2023 20,000 2024 20,000 Thereafter — Total $ 50,000 At March 31, 2020 and December 31, 2019, 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 at March 31, 2020 or December 31, 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 12: 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 $155.8 million and $158.7 million in loans to related parties at March 31, 2020 and December 31, 2019, respectively. At March 31, 2020 and December 31, 2019, there were no loans made to related parties deemed nonaccrual, past due, restructured in a trouble debt restructuring or classified as potential problem loans. Unfunded Commitments —At March 31, 2020 and December 31, 2019, the Company had approximately $52.2 million and $48.7 million in unfunded loan commitments to related parties, respectively. Deposits —The Company held related party deposits of approximately $233.8 million and $233.9 million at March 31, 2020 and December 31, 2019, respectively. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE DISCLOSURES | |
FAIR VALUE DISCLOSURES | NOTE 13: 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 three months ended March 31, 2020 and the year ended December 31, 2019, 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 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 National Association of Securities Dealers Automated Quotations, or 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: (Dollars in thousands) March 31, 2020 December 31, 2019 Fair value of financial assets: Level 1 inputs: securities available for sale - equity securities $ 1,171 $ 1,147 Level 2 inputs: Debt securities available for sale State and municipal securities 50,886 53,279 U.S. Agency Securities: Collateralized mortgage obligations 53,065 55,989 Mortgage-backed securities 128,892 120,847 Interest rate swaps 9,092 2,638 Total fair value of financial assets $ 243,106 $ 233,900 Fair value of financial liabilities: Level 2 inputs: interest rate swaps $ 9,092 $ 2,638 Total fair value of financial liabilities $ 9,092 $ 2,638 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 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: March 31, 2020 December 31, 2019 (Dollars in thousands) Recorded Investment Specific ACL Net Recorded Investment Specific ACL Net Level 3 inputs Loans evaluated individually Commercial and industrial $ 1,528 $ 409 $ 1,119 $ 999 $ 416 $ 583 1-4 family residential 3,703 — 3,703 3,651 15 3,636 Other 8,267 — 8,267 6,653 6 6,647 $ 13,498 $ 409 $ 13,089 $ 11,303 $ 437 $ 10,866 Non-Financial Assets and Non-Financial Liabilities Measured 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 three months ended March 31, 2020 and during 2019. There were no outstanding foreclosed assets at March 31, 2020 and December 31, 2019. Financial Instruments Reported at Amortized Cost Fair market values and carrying amounts of financial instruments that are reported at cost as of the dates shown below were as follows: March 31, 2020 December 31, 2019 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 284,898 $ 284,898 $ 372,064 $ 372,064 Level 2 inputs: Bank-owned life insurance 72,297 72,297 71,881 71,881 Accrued interest receivable 8,653 8,653 8,742 8,742 Servicing asset 152 152 189 189 Level 3 inputs: Loans, including held for sale, net 2,611,139 2,641,275 2,654,362 2,615,268 Other investments 16,807 16,807 16,710 16,710 Total financial assets $ 2,993,946 $ 3,024,082 $ 3,123,948 $ 3,084,854 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,214,222 $ 1,195,541 $ 1,184,861 $ 1,184,861 Level 2 inputs: Interest-bearing deposits 1,595,014 1,596,692 1,651,359 1,667,527 Federal Home Loan Bank advances 50,727 50,000 48,822 50,000 Repurchase agreements 1,414 1,415 485 485 Accrued interest payable 1,049 1,049 1,005 1,005 Total financial liabilities $ 2,862,426 $ 2,844,697 $ 2,886,532 $ 2,903,878 The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value and as such the fair values shown above are not necessarily indicative of the amounts the Company will realize. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 14: DERIVATIVE FINANCIAL INSTRUMENTS The Company, through the Bank, has outstanding interest rate swap contracts in which the Bank entered into an interest rate swap with a customer and entered into an equal and offsetting interest rate swap with another financial institution at the same time. These interest rate swap contracts are not designated as hedging instruments for mitigating interest rate risk of the Bank. The objective of the transactions is to allow the Bank’s customers to effectively convert a variable rate loan to a fixed rate. In connection with each swap transaction, the Bank agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Bank agrees to pay a third-party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. Because the Bank acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts are designed to offset each other and would not significantly impact the Company’s operating results except in certain situations where there is a significant deterioration in the customer’s credit worthiness or that of the counterparties. At March 31, 2020 and December 31, 2019, no such deterioration was determined by management. At March 31, 2020 and December 31, 2019, the Company had 22 and 19 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. 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) March 31, 2020 Interest rate swaps with customers Other Assets $ 144,101 $ 9,092 3.25% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.90 Interest rate swaps with financial institution Other Liabilities 144,101 (9,092) 3.25% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.90 Total derivatives $ 288,202 $ — 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 $ — |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2020 | |
OPERATING LEASES | |
OPERATING LEASES | NOTE 15: OPERATING LEASES The Company’s lease liabilities represent the Company’s liability to make lease payments under operating leases of office space, stand-alone buildings and land leases, on a discounted basis and at March 31, 2020, totaled $15.4 million. The weighted-average discount rate for the three months ended March 31, 2020 was 3.50%. Right-of-use assets represent the Company’s right to use, or control the use of, leased assets for their lease term and at March 31, 2020, totaled $12.6 million. The weighted-average remaining lease term for operating leases outstanding at March 31, 2020 was 11.1 years. Cash paid for amounts included in the measurement of operating lease liabilities for the three months ended March 31, 2020 totaled $481,000. Lease costs for the period shown below were as follows: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Operating lease cost $ 481 $ 461 Short-term lease cost 17 19 Sublease income (25) (6) Total lease cost $ 473 $ 474 A maturity analysis of operating lease liabilities as of the date shown below was as follows: (Dollars in thousands) March 31, 2020 2020 $ 2,140 2021 2,423 2022 2,482 2023 2,405 2024 1,812 Thereafter 9,792 Total undiscounted lease liability 21,054 Less: Discount on cash flows (3,658) Lease signed, but not yet commenced (2,040) Total operating lease liability $ 15,356 |
COMMITMENTS AND CONTINGENCIES A
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | NOTE 16: 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: (Dollars in thousands) March 31, 2020 December 31, 2019 Commitments to extend credit, variable interest rate $ 603,620 $ 652,611 Commitments to extend credit, fixed interest rate 145,160 141,439 $ 748,780 $ 794,050 Standby letters of credit $ 28,440 $ 23,547 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 may 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 | 3 Months Ended |
Mar. 31, 2020 | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | NOTE 17: 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 three months ended March 31, 2020 and 2019, the Company contributed $758,000 and $683,000 to the plan, respectively. Executive Deferred Compensation Arrangements The Company established an executive incentive compensation arrangement with several officers of the Bank, in which these officers are eligible for performance-based incentive bonus compensation. As part of this compensation arrangement, the Company contributes one‑fourth of the incentive bonus amount into a deferred compensation account. The deferred amounts accrue at a market rate of interest and are payable to the employees upon separation from the Bank provided vesting arrangements have been met. At March 31, 2020 and December 31, 2019, the amount payable, including interest, for this deferred plan was approximately $2.7 million and $2.7 million, respectively, which is included in other liabilities in the condensed consolidated balance sheets. Salary Continuation Agreements The Company entered into a salary continuation arrangement in 2008 with the Company’s then President and CEO that calls for payments of $100,000 per year for a period of 10 years commencing at age 65. Payments under the plan began during 2014. The Company’s liability was $313,000 and $335,000 at March 31, 2020 and December 31, 2019, respectively, which is included in other liabilities in the condensed consolidated balance sheets and equals the present value of the benefits expected to be provided. In October 2017, the Company entered into a salary continuation arrangement with the Company’s President and CEO that calls for payments of $200,000 per year payable for a period of 10 years commencing at age 70. Payments under the plan will begin in 2024. The Company’s liability was $476,000 and $437,000 at March 31, 2020 and December 31, 2019, respectively, which is included in other liabilities in the condensed consolidated balance sheets. The liability will continue to accrue over the remaining period until payments commence such that the accrued amount at the eligibility date will equal the present value of all the future benefits expected to be paid. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 18: 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 under this plan 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 to acquire the Company’s common stock at an exchange ratio equal to the acquisition exchange rate for common shares. No options were granted under this plan after October 24, 2016. In May 2014, the Company adopted the 2014 Stock Option Plan, or the 2014 Plan. The 2014 Plan was approved by the Company’s shareholders and limits the number of shares that may be optioned to 1,127,200. The 2014 Plan provides that no options may be granted after May 20, 2024. Options granted under the 2014 Plan expire 10 years from the date of grant and become exercisable in installments over a period of one to five years, beginning on the first anniversary of the date of grant. At March 31, 2020, 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 March 31, 2020, 279,228 shares were available for future grant under the 2017 Plan. Stock option activity for the periods shown below was as follows: Three Months Ended March 31, 2020 2019 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise Options Price Options Price Outstanding at beginning of period 213,078 $ 16.92 232,322 $ 16.66 Granted — — — — Exercised (1,524) 10.34 (10,844) 10.68 Forfeited/expired — — — — Outstanding at end of period 211,554 16.97 221,478 16.96 A summary of stock options as of the dates shown below was as follows: March 31, 2020 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 161,355 50,199 211,554 Weighted-average exercise price per share $ 15.78 $ 20.81 $ 16.97 Aggregate intrinsic value (in thousands) $ 425 $ 2 $ 427 Weighted-average remaining contractual term (years) 4.7 7.2 5.3 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, 2018 181,773 $ 27.05 24,000 $ 34.46 Granted 19,187 32.25 — — Vested (300) 29.27 — — Forfeited — — — — Outstanding at March 31, 2019 200,660 $ 27.54 24,000 $ 34.46 Outstanding at December 31, 2019 161,443 $ 28.20 18,000 $ 34.46 Granted 37,107 29.55 — — Vested (6,450) 32.11 — — Forfeited (204) 30.64 — — Outstanding at March 31, 2020 191,896 $ 28.33 18,000 $ 34.46 A summary of restricted stock as of the dates shown below was as follows: March 31, 2020 Restricted Stock Non-performance Based Performance-based Number of shares underlying restricted stock 191,896 18,000 Weighted-average grant date fair value per share $ 28.33 $ 34.46 Aggregate fair value (in thousands) $ 3,410 $ 320 Weighted-average remaining vesting period (years) 2.6 2.6 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 subject to options exercised, restricted stock vested, shares withheld, and shares issued were as follows: Exercised/Vested Shares Withheld Shares Issued Three Months Ended March 31, 2020 Stock options 1,524 — 1,524 Non-performance based restricted stock 6,450 (1,218) 5,232 Performance-based restricted stock — — — Three Months Ended March 31, 2019 Stock options 10,844 — 10,844 Non-performance based restricted stock 300 (89) 211 Performance-based restricted stock — — — For the three months ended March 31, 2020 and 2019, stock compensation expense was $557,000 and $545,000, respectively. As of March 31, 2020, there was approximately $5.3 million of total unrecognized compensation expense related to the unvested stock options, non-performance based restricted stock and performance-based restricted stock, which is expected to be recognized in the Company’s consolidated statements of income over a weighted-average period of 2.5 years. |
REGULATORY MATTERS
REGULATORY MATTERS | 3 Months Ended |
Mar. 31, 2020 | |
REGULATORY MATTERS | |
REGULATORY MATTERS | NOTE 19: 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 capital. Common Equity Tier 1 capital for both the Company and the Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities. 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, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to risk‑weighted assets of at least 7.0%), (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, effectively resulting in a minimum Tier 1 capital ratio of 8.5%), (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, effectively resulting in a minimum total capital ratio of 10.5%); and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average quarterly assets. 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. In October 2019, the federal bank regulatory agencies, or the Agencies, issued a final rule, the Community Bank Leverage Ratio Framework, or the Framework, to simplify capital calculations for community banks. The Framework provides for a simple measure of capital adequacy for certain community banking organizations and is consistent with Section 201 of the Economic Growth, Regulatory Relief and Consumer Protection Act. The Framework is optional and is designed to reduce burden by removing requirements for calculating and reporting risk-based capital ratios. Depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio of greater than 9%, are considered qualifying community banking organizations and are eligible to opt into the Framework. The final rule became effective January 1, 2020, and organizations that opt into the Framework and meet the criteria established by the rule can use the Framework for regulatory reports for the quarter ending March 31, 2020. In April 2020, the Agencies announced two interim final rules to provide relief associated with Section 4012 of the Coronavirus Aid, Relief and Economic Security Act. For institutions that elect the Framework, the interim rules temporarily lower the leverage ratio requirement to 8% for the second quarter of 2020 through the end of calendar year 2020 and to 8.5% for the 2021 calendar year. An institution will have until January 1, 2022 before the 9% leverage ratio requirement is re-established. The Company has elected not to opt into the Framework and will continue to compute regulatory capital ratios based on the Basel III Capital Rules discussed above. In March 2020, the Agencies issued an interim final rule that allows banking organizations to mitigate the effects of CECL on their regulatory capital computations. This interim rule is in addition to the three-year transition period already in place under the capital transition rule previously issued in February 2019. Banking organizations that are required under U.S. accounting standards to adopt CECL in 2020 can mitigate the estimated cumulative regulatory capital effects for an additional two years. This rule allows an institution to defer the full effect of adopting CECL in January 2020 and transitioning that impact into its regulatory capital calculation, including ratios, over an extended period. Additionally, the interim rule extends the transition period whereby an institution can defer the impact from CECL on the current period, determined based on the difference between the new CECL ACL and the allowance for loan losses under the incurred loss method from previous GAAP, for up to two years. The total impact related to CECL would then be transitioned into regulatory capital and the associated ratios over a three-year transition period, beginning after the initial two-year deferral period, for a total transition period of five years. The Company has elected not to opt into the transition election and has reported the full effect of CECL upon adoption and for the current reporting period in its regulatory capital calculation and ratios. The Company is subject to the regulatory capital requirements administered by the Federal Reserve and, for the Bank, those administered by the OCC. Regulatory authorities can initiate certain mandatory actions if the Company or the Bank fail to meet the minimum capital requirements, which could have a direct material effect on the Company’s financial statements. Management believes, as of March 31, 2020 and December 31, 2019, that the Company and the Bank met all capital adequacy requirements to which they were subject. At March 31, 2020 and December 31, 2019, the Company and the Bank, were “well capitalized” based on the ratios presented below. Actual and required capital ratios for the Company and the Bank were as follows for the dates presented: Minimum Required to be Capital Required Considered Well Actual Basel III Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio March 31, 2020 Common Equity Tier 1 to Risk-Weighted Assets: Consolidated $ 445,818 $ 204,968 N/A N/A Bank Only $ 408,922 $ 204,950 $ 190,311 Tier 1 Capital to Risk-Weighted Assets: Consolidated $ 445,818 $ 248,889 N/A N/A Bank Only $ 408,922 $ 248,868 $ 234,229 Total Capital to Risk-Weighted Assets: Consolidated $ 480,681 $ 307,451 N/A N/A Bank Only $ 443,785 $ 307,425 $ 292,786 Tier 1 Leverage Capital to Average Assets: Consolidated $ 445,819 $ 135,334 N/A N/A Bank Only $ 408,922 $ 135,307 $ 169,133 December 31, 2019 Common Equity Tier 1 to Risk-Weighted Assets: Consolidated $ 448,445 $ 202,218 N/A N/A Bank Only $ 406,675 $ 202,203 $ 187,760 Tier 1 Capital to Risk-Weighted Assets: Consolidated $ 448,445 $ 245,550 N/A N/A Bank Only $ 406,675 $ 245,532 $ 231,089 Total Capital to Risk-Weighted Assets: Consolidated $ 474,104 $ 303,327 N/A N/A Bank Only $ 432,334 $ 303,304 $ 288,861 Tier 1 Leverage Capital to Average Assets: Consolidated $ 448,445 $ 136,798 N/A N/A Bank Only $ 406,675 $ 136,754 $ 170,943 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. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 20: INCOME TAXES The provision for income tax expense and effective tax rates for the periods shown below was as follows: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Income tax expense $ 1,868 $ 2,599 Effective tax rate The differences between the federal statutory rate of 21% and the effective tax rates presented in the table above were largely attributable to permanent differences primarily related to tax exempt interest income and bank‑owned life insurance related earnings. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 21: EARNINGS PER SHARE The computation of basic and diluted earnings per share for the periods shown was as follows: Three Months Ended March 31, (Dollars in thousands, except per share data) 2020 2019 Net income for common shareholders $ 7,541 $ 10,490 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,926 24,910 Dilutive effect of outstanding stock options and unvested restricted stock awards 74 144 Diluted weighted-average shares outstanding 25,000 25,054 Earnings per share: Basic $ 0.30 $ 0.42 Diluted $ 0.30 $ 0.42 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Bank. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP, but do not include all the information and footnotes required for complete consolidated financial statements. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated financial position at March 31, 2020 and December 31, 2019, consolidated results of operations and consolidated shareholders’ equity for the three months ended March 31, 2020 and 2019, and consolidated cash flows for the three months ended March 31, 2020 and 2019. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included within the Company’s Annual Report on Form 10-K. Reclassification—Within noninterest expense for 2019, data processing and software have been combined together. In addition, printing, stationary and office, correspondent bank and customer related transaction fees, loan processing costs and repossessed real estate and other asset expenses have been combined with other expenses. These reclassifications were made to conform to the 2020 financial statement presentation in the condensed consolidated statements of income. |
Share Repurchase Program | Share Repurchase Program During the three months ended March 31, 2020, 240,445 shares were repurchased under the Company’s share repurchase program at an average price of $22.29 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 Accounting Standards Update, or ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments effective January 1, 2020. The scope of ASU 2016-13 includes loans, debt securities classified as held to maturity, 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. In addition, ASU 2016-13 amends the accounting and reporting for credit losses on available for sale securities. 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. As part of the implementation of ASU 2016-13, the Company changed its methodology of determining the allowance for credit losses, or ACL, for loans and for determining an ACL associated with the Company’s off-balance sheet credit exposures, which are primarily unfunded commitments to borrowers. Through a one-time cumulative effect reduction of retained earnings of $3.0 million, the adoption of ASU 2016-13 increased the ACL for loans by $874,000, increased the liability related to the ACL for unfunded commitments by $2.9 million, with the associated deferred tax assets increasing by $809,000. 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 January 1, 2020. Additionally, the Company assessed the impact of ASU 2016-13 on its available for sale securities utilizing various qualitative factors and determined there were 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. See Note 6 —Allowance for Credit Losses for further discussion related to ASC 2016-13 and related disclosures. |
Accounting Standards Not Yet Adopted | Accounting Standards Not Yet Adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued, if certain criteria are met. LIBOR is used as an index rate for the Company’s interest-rate swaps and approximately 12.9% of the Company’s loans as of March 31, 2020. If reference rates are discontinued, the existing contracts will be modified to replace the discontinued rate with a replacement rate. For accounting purposes, such contract modifications would have to be evaluated to determine whether the modified contract is a new contract or a continuation of an existing contract. If they are considered new contracts, the previous contract would be extinguished. Under one of the optional expedients of ASU 2020-04, modifications of contracts within the scope of Topic 310, Receivables, and 470, Debt, will be accounted for by prospectively adjusting the effective interest rates and no such evaluation is required. When elected, the optional expedient for contract modifications must be applied consistently for all eligible contracts or eligible transactions. The expedients and exceptions in this update are available to all entities starting March 12, 2020 through December 31, 2022. The Company is in the process of evaluating the impact of this pronouncement on those financial assets where LIBOR is used as an index rate. |
Cash Flow Reporting | Cash Flow Reporting The Bank is required to maintain regulatory reserves with the Federal Reserve Bank and the reserve requirements for the Bank were $17.2 million and $18.6 million at March 31, 2020 and December 31, 2019, respectively. Additionally, as of March 31, 2020 and December 31, 2019, the Company had $9.3 million and $3.1 million, respectively, in cash collateral for interest rate swap transactions. The reserves maintained with the Federal Reserve Bank and the cash collateral used in interest rate swap transactions are considered restricted cash. Supplemental disclosures of cash flow information are as follows for the periods indicated below: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest 3,944 3,599 Supplemental disclosures of non-cash flow information: Operating lease right-to-use asset obtained in exchange for lease liabilities — 13,208 Dividends accrued 5 1,268 Repossessed real estate and other assets — 41 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Supplemental disclosures of cash flow information | Three Months Ended March 31, (Dollars in thousands) 2020 2019 Supplemental disclosures of cash flow information: Cash paid for taxes $ — $ — Cash paid for interest 3,944 3,599 Supplemental disclosures of non-cash flow information: Operating lease right-to-use asset obtained in exchange for lease liabilities — 13,208 Dividends accrued 5 1,268 Repossessed real estate and other assets — 41 |
SECURITIES (Tables)
SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SECURITIES. | |
The amortized cost and estimated fair values of investments in securities | Gross Gross Amortized Unrealized Unrealized (Dollars in thousands) Cost Gains Losses Fair Value March 31, 2020 Debt securities available for sale: State and municipal securities $ 48,988 $ 1,898 $ — $ 50,886 U.S. agency securities: Collateralized mortgage obligations 51,433 1,632 — 53,065 Mortgage-backed securities 124,370 4,522 — 128,892 Equity securities 1,161 10 — 1,171 Total $ 225,952 $ 8,062 $ — $ 234,014 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 |
Schedule of amortized cost and estimated fair value of securities by contractual maturities | Available for Sale Amortized Fair (Dollars in thousands) Cost Value March 31, 2020 Amounts maturing in: 1 year or less $ 1,759 $ 1,776 1 year through 5 years 3,050 3,131 5 years through 10 years 15,042 15,536 After 10 years 206,101 213,571 $ 225,952 $ 234,014 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 |
Information pertaining to securities with gross unrealized losses | Less Than Twelve Months Twelve Months or More Gross Gross Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses March 31, 2020 Debt securities available for sale: State and municipal securities $ 489 $ — $ — $ — U.S. agency securities: Collateralized mortgage obligations — — — — Mortgage-backed securities — — — — Equity securities — — — — $ 489 $ — $ — $ — December 31, 2019 Debt securities available for sale: State and municipal securities $ 3,539 $ (7) $ 106 $ — U.S. agency securities: Debt 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) |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EQUITY INVESTMENTS | |
Schedule of equity investments that do not have readily determinable fair values | (Dollars in thousands) March 31, 2020 December 31, 2019 Federal Reserve stock $ 9,271 $ 9,271 Federal Home Loan Bank stock 4,286 4,249 The Independent Bankers Financial Corporation stock 141 141 Community Reinvestment Act investments 3,109 3,049 $ 16,807 $ 16,710 |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LOANS | |
Loans, by portfolio segment | (Dollars in thousands) March 31, 2020 December 31, 2019 Commercial and industrial $ 542,650 $ 527,607 Real estate: Commercial real estate 904,395 900,746 Construction and development 558,343 527,812 1-4 family residential 276,142 280,192 Multi-family residential 267,152 277,209 Consumer 38,133 36,782 Agriculture 7,520 9,812 Other 84,076 86,513 Total gross loans 2,678,411 2,646,673 Less allowance for credit losses for loans (31,194) (25,280) Less deferred loan fees and unearned discounts (5,942) (6,125) Less loans held for sale (882) (1,463) Loans, net $ 2,640,393 $ 2,613,805 |
Loan participations purchased and sold | Participations Participations Purchased Sold During the During the (Dollars in thousands) Period Period March 31, 2020 Commercial real estate $ 2,500 $ — March 31, 2019 Commercial real estate $ 1,256 $ — |
LOAN PERFORMANCE (Tables)
LOAN PERFORMANCE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LOAN PERFORMANCE | |
Nonaccrual loans, segregated by loan class | (Dollars in thousands) March 31, 2020 December 31, 2019 Commercial and industrial $ 449 $ 596 Real estate: Commercial real estate 67 67 Construction and development 519 — 1-4 family residential 413 314 Total nonaccrual loans $ 1,448 $ 977 |
Aging analysis of loans past due segregated by loan class | 90 days or 90 days 30 to 59 days 60 to 89 days greater Total past Total current past due and (Dollars in thousands) past due past due past due due loans Total loans still accruing March 31, 2020 Commercial and industrial $ 1,549 $ 7 $ — $ 1,556 $ 541,094 $ 542,650 $ — Real estate: Commercial real estate 1,532 — — 1,532 902,863 904,395 — Construction and development 2,973 — — 2,973 555,370 558,343 — 1-4 family residential 133 — 32 165 275,977 276,142 — Multi-family residential — — — — 267,152 267,152 — Consumer 15 — — 15 38,118 38,133 — Agriculture — — — — 7,520 7,520 — Other — — — 84,076 84,076 Total loans $ 6,202 $ 7 $ 32 $ 6,241 $ 2,672,170 $ 2,678,411 $ — 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 $ — |
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 March 31, 2020 Commercial and industrial 3 $ 657 $ 426 $ — $ 231 $ — Commercial real estate 3 4,813 4,813 — — — Total 6 $ 5,470 $ 5,239 $ — $ 231 $ — |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ALLOWANCE FOR CREDIT LOSSES | |
Loans by risk grades, loan class and vintage | The loans by risk grades, loan class and vintage at March 31, 2020 were as follows: (Dollars in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Converted Revolving Loans Total Commercial and industrial: Pass $ 16,734 $ 120,547 $ 67,560 $ 19,418 $ 12,466 $ 9,688 $ 270,877 $ 11,585 $ 528,875 Special mention 33 266 — 15 — — 436 — 750 Substandard 1,000 786 464 39 354 2,406 4,012 3,964 13,025 Total commercial and industrial 17,767 121,599 68,024 19,472 12,820 12,094 275,325 15,549 542,650 Commercial real estate: Pass 57,116 213,693 214,659 139,415 86,079 129,764 36,851 2,322 879,899 Special mention — — — — 1,587 — — 11,000 12,587 Substandard — 1,926 4,967 216 1,600 3,200 — — 11,909 Total commercial real estate 57,116 215,619 219,626 139,631 89,266 132,964 36,851 13,322 904,395 Construction and development: Pass 35,419 184,260 196,235 45,597 8,477 35,240 40,564 — 545,792 Substandard — 519 1,500 10,532 — — — — 12,551 Total construction and development 35,419 184,779 197,735 56,129 8,477 35,240 40,564 — 558,343 1-4 family residential: Pass 7,110 35,961 66,602 49,164 27,973 70,808 11,094 1,277 269,989 Special mention — — 40 — 392 386 — — 818 Substandard — 547 — 249 20 3,034 — 1,485 5,335 Total 1-4 family residential 7,110 36,508 66,642 49,413 28,385 74,228 11,094 2,762 276,142 Multi-family residential: Pass 7,770 8,527 23,743 50,750 4,361 172,001 — — 267,152 Total multi-family residential 7,770 8,527 23,743 50,750 4,361 172,001 — — 267,152 Consumer: Pass 3,020 6,506 3,443 2,528 323 411 19,689 2,208 38,128 Substandard — — — — — 5 — — 5 Total consumer 3,020 6,506 3,443 2,528 323 416 19,689 2,208 38,133 Agriculture: Pass 936 1,701 547 162 38 5 3,975 79 7,443 Substandard — — — — — 27 50 — 77 Total agriculture 936 1,701 547 162 38 32 4,025 79 7,520 Other: Pass 623 15,233 5,026 162 128 1,551 35,662 17,424 75,809 Substandard — — 1,381 — 1,241 — 5,645 — 8,267 Total other 623 15,233 6,407 162 1,369 1,551 41,307 17,424 84,076 Total $ 129,761 $ 590,472 $ 586,167 $ 318,247 $ 145,039 $ 428,526 $ 428,855 $ 51,344 $ 2,678,411 |
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 |
Schedule of Charge-offs and recoveries by loan type and vintage | Charge-offs and recoveries by loan class and vintage for the three months ended March 31, 2020 were as follows: (Dollars in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Total Commercial and industrial: Charge-off $ — $ — $ — $ (29) $ — $ — $ (1) $ (30) Recovery — 2 87 16 10 133 180 428 Total commercial and industrial — 2 87 (13) 10 133 179 398 1-4 family residential: Charge-off — — — — — — — — Recovery — — — — — 1 — 1 Total 1-4 family residential — — — — — 1 — 1 Consumer: Charge-off — — (8) (95) — — — (103) Recovery 3 — — — — 1 — 4 Total consumer 3 — (8) (95) — 1 — (99) Other: Charge-off — — — — — — — — Recovery — — — 1 — — — 1 Total other — — — 1 — — — 1 Total $ 3 $ 2 $ 79 $ (107) $ 10 $ 135 $ 179 $ 301 |
Activity in the total allowance for credit losses for loans | Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2020 Beginning balance $ 7,671 $ 7,975 $ 4,446 $ 2,257 $ 1,699 $ 388 $ 74 $ 770 $ 25,280 Impact of CECL adoption 852 (140) 100 (275) 294 (25) 64 4 874 Provision (recapture) for credit losses for loans 614 1,741 1,249 447 420 213 (9) 64 4,739 Charge-offs (30) — — — — (103) — — (133) Recoveries 428 — — 1 — 4 — 1 434 Net (charge-offs) recoveries 398 — — 1 — (99) — 1 301 Ending balance $ 9,535 $ 9,576 $ 5,795 $ 2,430 $ 2,413 $ 477 $ 129 $ 839 $ 31,194 Period-end amount allocated to: Specific reserve $ 409 $ — $ — $ — $ — $ — $ — $ — $ 409 General reserve 9,126 9,576 5,795 2,430 2,413 477 129 839 30,785 Total $ 9,535 $ 9,576 $ 5,795 $ 2,430 $ 2,413 $ 477 $ 129 $ 839 $ 31,194 Real Estate Commercial Construction and Commercial and 1-4 family Multi-family (Dollars in thousands) industrial real estate development residential residential Consumer Agriculture Other Total March 31, 2019 Beginning balance $ 7,719 $ 6,730 $ 4,298 $ 2,281 $ 1,511 $ 387 $ 62 $ 705 $ 23,693 Provision (recapture) for credit losses for loans 903 52 402 (33) (54) (36) (12) (75) 1,147 Charge-offs (280) — — — — (4) — — (284) Recoveries 74 2 — 1 — 10 — — 87 Net (charge-offs) recoveries (206) 2 — 1 — 6 — — (197) Ending balance $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 Period-end amount allocated to: Specific reserve $ 582 $ 33 $ — $ 77 $ — $ — $ — $ 96 $ 788 General reserve 7,834 6,751 4,700 2,172 1,457 357 50 534 23,855 Total $ 8,416 $ 6,784 $ 4,700 $ 2,249 $ 1,457 $ 357 $ 50 $ 630 $ 24,643 |
Allowance for loan losses by loan category | March 31, 2020 December 31, 2019 (Dollars in thousands) Amount Percent Amount Percent Commercial and industrial $ 9,535 30.6 % $ 7,671 30.3 % Real estate: Commercial real estate 9,576 30.7 % 7,975 31.6 % Construction and development 5,795 18.6 % 4,446 17.6 % 1-4 family residential 2,430 7.8 % 2,257 8.9 % Multi-family residential 2,413 7.7 % 1,699 6.7 % Consumer 477 1.5 % 388 1.5 % Agriculture 129 0.4 % 74 0.3 % Other 839 2.7 % 770 3.1 % Total allowance for credit losses for loans $ 31,194 100.0 % $ 25,280 100.0 % |
Loans evaluated individually and the related specific ACL | March 31, 2020 December 31, 2019 (Dollars in thousands) Recorded Investment Specific ACL Net Recorded Investment Specific ACL Net Loans evaluated individually Commercial and industrial $ 1,528 $ 409 $ 1,119 $ 999 $ 416 $ 583 Commercial real estate 5,818 — 5,818 1,404 — 1,404 Construction and development 519 — 519 — — — 1-4 family residential 3,703 — 3,703 3,651 15 3,636 Consumer — — — 210 — 210 Other 8,267 — 8,267 6,653 6 6,647 Total $ 19,835 $ 409 $ 19,426 $ 12,917 $ 437 $ 12,480 |
Schedule of allowance for credit losses for unfunded commitments | (Dollars in thousands) March 31, 2020 Beginning balance $ 378 Impact of CECL adoption 2,981 Provision for credit losses for unfunded commitments 310 Ending balance $ 3,669 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
PREMISES AND EQUIPMENT | |
Schedule of premises and equipment | (Dollars in thousands) March 31, 2020 December 31, 2019 Land $ 13,466 $ 13,466 Buildings and leasehold improvements 53,874 53,869 Furniture and equipment 16,022 15,917 Vehicles 203 203 Construction in progress 343 343 83,908 83,798 Less accumulated depreciation (33,665) (32,923) Premises and equipment, net $ 50,243 $ 50,875 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 Core deposits 3.9 years $ 13,750 $ (13,069) $ 681 Customer relationships 8.8 years 6,629 (2,762) 3,867 Servicing assets 11.2 years 341 (189) 152 Total other intangible assets, net $ 20,720 $ (16,020) $ 4,700 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 |
Schedule of changes in related servicing assets | Three Months Ended March 31, (Dollars in thousands) 2020 2019 Balance at beginning of year $ 189 $ 166 Increase from loan sales 9 14 Decrease from serviced loans paid off or foreclosed (26) (19) Amortization (20) (8) Balance at end of period $ 152 $ 153 |
BANK OWNED LIFE INSURANCE (Tabl
BANK OWNED LIFE INSURANCE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
BANK OWNED LIFE INSURANCE. | |
Schedule of change in cash surrender value | Three Months Ended March 31, (Dollars in thousands) 2020 2019 Balance at beginning of period $ 71,881 $ 71,525 Purchases — — Redemptions — — Net change in cash surrender value 416 430 Balance at end of period $ 72,297 $ 71,955 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DEPOSITS | |
Schedule of deposits | (Dollars in thousands) March 31, 2020 December 31, 2019 Interest-bearing demand accounts $ 359,943 $ 369,744 Money market accounts 760,036 805,942 Saving accounts 90,227 92,183 Certificates and other time deposits, $100,000 or greater 212,341 208,018 Certificates and other time deposits, less than $100,000 174,145 191,640 Total interest-bearing deposits 1,596,692 1,667,527 Noninterest-bearing deposits 1,195,541 1,184,861 Total deposits $ 2,792,233 $ 2,852,388 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LINES OF CREDIT | |
Schedule of maturity of FHLB advances | (Dollars in thousands) March 31, 2020 2020 $ — 2021 — 2022 10,000 2023 20,000 2024 20,000 Thereafter — Total $ 50,000 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE DISCLOSURES | |
Summary financial assets and financial liabilities measured at fair value on a recurring basis | (Dollars in thousands) March 31, 2020 December 31, 2019 Fair value of financial assets: Level 1 inputs: securities available for sale - equity securities $ 1,171 $ 1,147 Level 2 inputs: Debt securities available for sale State and municipal securities 50,886 53,279 U.S. Agency Securities: Collateralized mortgage obligations 53,065 55,989 Mortgage-backed securities 128,892 120,847 Interest rate swaps 9,092 2,638 Total fair value of financial assets $ 243,106 $ 233,900 Fair value of financial liabilities: Level 2 inputs: interest rate swaps $ 9,092 $ 2,638 Total fair value of financial liabilities $ 9,092 $ 2,638 |
Summary of certain assets measured on a non‑recurring basis | March 31, 2020 December 31, 2019 (Dollars in thousands) Recorded Investment Specific ACL Net Recorded Investment Specific ACL Net Level 3 inputs Loans evaluated individually Commercial and industrial $ 1,528 $ 409 $ 1,119 $ 999 $ 416 $ 583 1-4 family residential 3,703 — 3,703 3,651 15 3,636 Other 8,267 — 8,267 6,653 6 6,647 $ 13,498 $ 409 $ 13,089 $ 11,303 $ 437 $ 10,866 |
Summary of fair market values of all financial instruments | March 31, 2020 December 31, 2019 Carrying Carrying (Dollars in thousands) Fair Value Amount Fair Value Amount Financial assets: Level 1 inputs: Cash and due from banks $ 284,898 $ 284,898 $ 372,064 $ 372,064 Level 2 inputs: Bank-owned life insurance 72,297 72,297 71,881 71,881 Accrued interest receivable 8,653 8,653 8,742 8,742 Servicing asset 152 152 189 189 Level 3 inputs: Loans, including held for sale, net 2,611,139 2,641,275 2,654,362 2,615,268 Other investments 16,807 16,807 16,710 16,710 Total financial assets $ 2,993,946 $ 3,024,082 $ 3,123,948 $ 3,084,854 Financial liabilities: Level 1 inputs: Noninterest-bearing deposits $ 1,214,222 $ 1,195,541 $ 1,184,861 $ 1,184,861 Level 2 inputs: Interest-bearing deposits 1,595,014 1,596,692 1,651,359 1,667,527 Federal Home Loan Bank advances 50,727 50,000 48,822 50,000 Repurchase agreements 1,414 1,415 485 485 Accrued interest payable 1,049 1,049 1,005 1,005 Total financial liabilities $ 2,862,426 $ 2,844,697 $ 2,886,532 $ 2,903,878 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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) March 31, 2020 Interest rate swaps with customers Other Assets $ 144,101 $ 9,092 3.25% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.90 Interest rate swaps with financial institution Other Liabilities 144,101 (9,092) 3.25% - 5.89% LIBOR 1M + 2.50% - 3.00% 6.90 Total derivatives $ 288,202 $ — 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 $ — |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
OPERATING LEASES | |
Summary of lease costs | Three Months Ended March 31, (Dollars in thousands) 2020 2019 Operating lease cost $ 481 $ 461 Short-term lease cost 17 19 Sublease income (25) (6) Total lease cost $ 473 $ 474 |
Summary of maturity analysis of operating lease liabilities | (Dollars in thousands) March 31, 2020 2020 $ 2,140 2021 2,423 2022 2,482 2023 2,405 2024 1,812 Thereafter 9,792 Total undiscounted lease liability 21,054 Less: Discount on cash flows (3,658) Lease signed, but not yet commenced (2,040) Total operating lease liability $ 15,356 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | |
Summary of the various financial instruments whose contract amounts represent credit risk | (Dollars in thousands) March 31, 2020 December 31, 2019 Commitments to extend credit, variable interest rate $ 603,620 $ 652,611 Commitments to extend credit, fixed interest rate 145,160 141,439 $ 748,780 $ 794,050 Standby letters of credit $ 28,440 $ 23,547 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION | |
Schedule of summary of restricted stock | March 31, 2020 Restricted Stock Non-performance Based Performance-based Number of shares underlying restricted stock 191,896 18,000 Weighted-average grant date fair value per share $ 28.33 $ 34.46 Aggregate fair value (in thousands) $ 3,410 $ 320 Weighted-average remaining vesting period (years) 2.6 2.6 |
Schedule of shares of stock options exercised and restricted stock vested, shares withheld for taxes and shares issued | Exercised/Vested Shares Withheld Shares Issued Three Months Ended March 31, 2020 Stock options 1,524 — 1,524 Non-performance based restricted stock 6,450 (1,218) 5,232 Performance-based restricted stock — — — Three Months Ended March 31, 2019 Stock options 10,844 — 10,844 Non-performance based restricted stock 300 (89) 211 Performance-based restricted stock — — — |
Stock options | |
STOCK-BASED COMPENSATION | |
Schedule of summary of activity under the stock option plans | Three Months Ended March 31, 2020 2019 Number of Weighted Number of Weighted Shares Average Shares Average Underlying Exercise Underlying Exercise Options Price Options Price Outstanding at beginning of period 213,078 $ 16.92 232,322 $ 16.66 Granted — — — — Exercised (1,524) 10.34 (10,844) 10.68 Forfeited/expired — — — — Outstanding at end of period 211,554 16.97 221,478 16.96 |
Schedule of exercisable, unvested and outstanding of stock options and restricted stock | March 31, 2020 Stock Options Exercisable Unvested Outstanding Number of shares underlying options 161,355 50,199 211,554 Weighted-average exercise price per share $ 15.78 $ 20.81 $ 16.97 Aggregate intrinsic value (in thousands) $ 425 $ 2 $ 427 Weighted-average remaining contractual term (years) 4.7 7.2 5.3 |
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, 2018 181,773 $ 27.05 24,000 $ 34.46 Granted 19,187 32.25 — — Vested (300) 29.27 — — Forfeited — — — — Outstanding at March 31, 2019 200,660 $ 27.54 24,000 $ 34.46 Outstanding at December 31, 2019 161,443 $ 28.20 18,000 $ 34.46 Granted 37,107 29.55 — — Vested (6,450) 32.11 — — Forfeited (204) 30.64 — — Outstanding at March 31, 2020 191,896 $ 28.33 18,000 $ 34.46 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
REGULATORY MATTERS | |
Summary of actual and required capital ratios for the Company and Bank under the Basel III Capital Rules | Minimum Required to be Capital Required Considered Well Actual Basel III Capitalized (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio March 31, 2020 Common Equity Tier 1 to Risk-Weighted Assets: Consolidated $ 445,818 $ 204,968 N/A N/A Bank Only $ 408,922 $ 204,950 $ 190,311 Tier 1 Capital to Risk-Weighted Assets: Consolidated $ 445,818 $ 248,889 N/A N/A Bank Only $ 408,922 $ 248,868 $ 234,229 Total Capital to Risk-Weighted Assets: Consolidated $ 480,681 $ 307,451 N/A N/A Bank Only $ 443,785 $ 307,425 $ 292,786 Tier 1 Leverage Capital to Average Assets: Consolidated $ 445,819 $ 135,334 N/A N/A Bank Only $ 408,922 $ 135,307 $ 169,133 December 31, 2019 Common Equity Tier 1 to Risk-Weighted Assets: Consolidated $ 448,445 $ 202,218 N/A N/A Bank Only $ 406,675 $ 202,203 $ 187,760 Tier 1 Capital to Risk-Weighted Assets: Consolidated $ 448,445 $ 245,550 N/A N/A Bank Only $ 406,675 $ 245,532 $ 231,089 Total Capital to Risk-Weighted Assets: Consolidated $ 474,104 $ 303,327 N/A N/A Bank Only $ 432,334 $ 303,304 $ 288,861 Tier 1 Leverage Capital to Average Assets: Consolidated $ 448,445 $ 136,798 N/A N/A Bank Only $ 406,675 $ 136,754 $ 170,943 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
Schedule of provision for income tax expense and effective tax rates | Three Months Ended March 31, (Dollars in thousands) 2020 2019 Income tax expense $ 1,868 $ 2,599 Effective tax rate |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per common share | Three Months Ended March 31, (Dollars in thousands, except per share data) 2020 2019 Net income for common shareholders $ 7,541 $ 10,490 Weighted-average shares (thousands) Basic weighted-average shares outstanding 24,926 24,910 Dilutive effect of outstanding stock options and unvested restricted stock awards 74 144 Diluted weighted-average shares outstanding 25,000 25,054 Earnings per share: Basic $ 0.30 $ 0.42 Diluted $ 0.30 $ 0.42 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Operations (Details) | 3 Months Ended |
Mar. 31, 2020location | |
Number of Operating Segments | 35 |
Houston market area | |
Number of Operating Segments | 19 |
Beaumont/East Texas market area | |
Number of Operating Segments | 15 |
Dallas market area | |
Number of Operating Segments | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share Repurchase Program (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares repurchased | 240,445 | 0 |
Shares repurchased and retired, price per share | $ 22.29 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting Standards Recently Adopted (Details) | Jan. 01, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Accounting Standards Recently Adopted | |||
Purchased financial assets with credit deterioration | $ 0 | ||
Operating lease right-to-use asset | $ 12,577,000 | $ 12,926,000 | |
Operating lease liabilities | $ 15,356,000 | $ 15,704,000 | |
LIBOR | Interest rate swaps | |||
Accounting Standards Recently Adopted | |||
Percentage of Loans | 12.9 | ||
ASU 2016-13 | |||
Accounting Standards Recently Adopted | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Cumulative Effect on Retained Earnings, Net of Tax | $ (3,000,000) | ||
Increase in allowance for credit losses | $ 874,000 | ||
Allowance for credit losses, unfunded commitments | 2,900,000 | ||
Fresh-Start Adjustment, Increase (Decrease), Deferred Income Tax Assets, Noncurrent | $ 809,000 | ||
Amount of Credit Losses | $ 0 | ||
Accounting standards recently adopted | true |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Due from Banks (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Reserve required at federal reserve bank | $ 17.2 | $ 18.6 |
Cash collateral used in interest rate swap transactions | $ 9.3 | $ 3.1 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash flow reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $ 3,944 | $ 3,599 |
Supplemental disclosures of non-cash flow information: | ||
Dividends accrued | 13,208 | |
Operating lease right-to-use asset obtained in exchange for lease liabilities | $ 5 | 1,268 |
Repossessed real estate and other assets | $ 41 |
SECURITIES - Amortized cost and
SECURITIES - Amortized cost and estimated fair values of investments in securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt securities available for sale: | ||
Amortized cost | $ 225,952 | $ 228,251 |
Fair Value | 234,014 | 231,262 |
Securities Available for Sale | ||
Debt securities available for sale: | ||
Amortized cost | 225,952 | 228,251 |
Gross Unrealized Gains | 8,062 | 3,400 |
Gross Unrealized Losses | (389) | |
Fair Value | 234,014 | 231,262 |
Securities Available for Sale | State and municipal securities | ||
Debt securities available for sale: | ||
Amortized cost | 48,988 | 51,525 |
Gross Unrealized Gains | 1,898 | 1,761 |
Gross Unrealized Losses | (7) | |
Fair Value | 50,886 | 53,279 |
Securities Available for Sale | Collateralized mortgage obligations | ||
Debt securities available for sale: | ||
Amortized cost | 51,433 | 55,784 |
Gross Unrealized Gains | 1,632 | 324 |
Gross Unrealized Losses | (119) | |
Fair Value | 53,065 | 55,989 |
Securities Available for Sale | Mortgage-backed securities | ||
Debt securities available for sale: | ||
Amortized cost | 124,370 | 119,787 |
Gross Unrealized Gains | 4,522 | 1,315 |
Gross Unrealized Losses | (255) | |
Fair Value | 128,892 | 120,847 |
Securities Available for Sale | Equity securities | ||
Debt securities available for sale: | ||
Amortized cost | 1,161 | 1,155 |
Gross Unrealized Gains | 10 | |
Gross Unrealized Losses | (8) | |
Fair Value | $ 1,171 | $ 1,147 |
SECURITIES - Amortized cost a_2
SECURITIES - Amortized cost and estimated fair values of securities by contractual maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available for Sale - Amortized Cost | ||
Amortized cost, 1 year or less | $ 1,759 | $ 2,535 |
Amortized cost, 1 year through 5 years | 3,050 | 3,081 |
Amortized cost, 5 years through 10 years | 15,042 | 14,564 |
Amortized cost, After 10 years | 206,101 | 208,071 |
Available-for-sale Securities, Amortized Cost Basis, Total | 225,952 | 228,251 |
Available for Sale - Fair Value | ||
Estimated fair value, 1 year or less | 1,776 | 2,532 |
Estimated fair value, 1 year through 5 years | 3,131 | 3,145 |
Estimated fair value, 5 years through 10 years | 15,536 | 14,874 |
Estimated fair value, After 10 years | 213,571 | 210,711 |
Available-for-sale Securities, Total | 234,014 | 231,262 |
Securities Available for Sale | ||
Available for Sale - Amortized Cost | ||
Available-for-sale Securities, Amortized Cost Basis, Total | 225,952 | 228,251 |
Available for Sale - Fair Value | ||
Available-for-sale Securities, Total | $ 234,014 | $ 231,262 |
SECURITIES - Securities carryin
SECURITIES - Securities carrying amount (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)item | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)item | |
SECURITIES. | |||
Securities sold during the year | $ 0 | ||
Carrying amount of securities sold in the period | $ 358,000 | ||
Carrying value of securities pledged | $ 51,500,000 | $ 50,800,000 | |
Securities held in a gross unrealized loss position | item | 3 | 27 | |
Immaterial amount threshold | $ 1,000 | ||
Impairment loss on securities | 0 | $ 0 | |
Accrued interest receivable for securities | $ 674,000 | $ 1,100,000 |
SECURITIES - Securities with un
SECURITIES - Securities with unrealized losses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investment securities | ||
Fair Value - Less Than Twelve Months | $ 489 | $ 25,854 |
Gross Unrealized Losses - Less Than Twelve Months | (79) | |
Fair Value - Twelve Months or More | 30,992 | |
Gross Unrealized Losses - Twelve Months or More | (310) | |
State and municipal securities | ||
Investment securities | ||
Fair Value - Less Than Twelve Months | $ 489 | 3,539 |
Gross Unrealized Losses - Less Than Twelve Months | (7) | |
Fair Value - Twelve Months or More | 106 | |
Collateralized mortgage obligations | ||
Investment securities | ||
Fair Value - Less Than Twelve Months | 10,687 | |
Gross Unrealized Losses - Less Than Twelve Months | (46) | |
Fair Value - Twelve Months or More | 7,994 | |
Gross Unrealized Losses - Twelve Months or More | (73) | |
Mortgage-backed securities | ||
Investment securities | ||
Fair Value - Less Than Twelve Months | 11,628 | |
Gross Unrealized Losses - Less Than Twelve Months | (26) | |
Fair Value - Twelve Months or More | 21,745 | |
Gross Unrealized Losses - Twelve Months or More | (229) | |
Equity securities | ||
Investment securities | ||
Fair Value - Twelve Months or More | 1,147 | |
Gross Unrealized Losses - Twelve Months or More | $ (8) |
EQUITY INVESTMENTS - Equity Inv
EQUITY INVESTMENTS - Equity Investments (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Equity investments | ||
Equity investments, total | $ 16,807 | $ 16,710 |
Unfunded commitments | 4,800 | 4,900 |
Federal Reserve stock | ||
Equity investments | ||
Equity investments, total | $ 9,271 | 9,271 |
Par value (in dollars per share) | $ 100 | |
Federal Home Loan Bank stock | ||
Equity investments | ||
Equity investments, total | $ 4,286 | 4,249 |
Par value (in dollars per share) | $ 100 | |
The Independent Bankers Financial Corporation stock | ||
Equity investments | ||
Equity investments, total | $ 141 | 141 |
Community Reinvestment Act investments | ||
Equity investments | ||
Equity investments, total | $ 3,109 | $ 3,049 |
LOANS - By portfolio segment (D
LOANS - By portfolio segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Loans | ||||
Total loans | $ 2,678,411 | $ 2,646,673 | ||
Percentage of loan | 100.00% | 100.00% | ||
Less allowance for credit losses for loans | $ (31,194) | $ (25,280) | $ (24,643) | $ (23,693) |
Less deferred loan fees and unearned discounts | (5,942) | (6,125) | ||
Less loans held for sale | $ (882) | $ (1,463) | ||
Loans And Leases Receivable Allowance, Percent | 100.00% | 100.00% | ||
Loans, net | $ 2,640,393 | $ 2,613,805 | ||
Accrued interest receivable | 7,800 | 7,500 | ||
Commercial and industrial | ||||
Loans | ||||
Total loans | $ 542,650 | $ 527,607 | ||
Percentage of loan | 20.30% | 19.90% | ||
Less allowance for credit losses for loans | $ (9,535) | $ (7,671) | (8,416) | (7,719) |
Loans And Leases Receivable Allowance, Percent | 30.60% | 30.30% | ||
Commercial real estate | ||||
Loans | ||||
Total loans | $ 904,395 | $ 900,746 | ||
Percentage of loan | 33.80% | 34.00% | ||
Less allowance for credit losses for loans | $ (9,576) | $ (7,975) | (6,784) | (6,730) |
Loans And Leases Receivable Allowance, Percent | 30.70% | 31.60% | ||
Construction and development | ||||
Loans | ||||
Total loans | $ 558,343 | $ 527,812 | ||
Percentage of loan | 20.80% | 19.90% | ||
Less allowance for credit losses for loans | $ (5,795) | $ (4,446) | (4,700) | (4,298) |
Loans And Leases Receivable Allowance, Percent | 18.60% | 17.60% | ||
1-4 family residential | ||||
Loans | ||||
Total loans | $ 276,142 | $ 280,192 | ||
Percentage of loan | 10.30% | 10.60% | ||
Less allowance for credit losses for loans | $ (2,430) | $ (2,257) | (2,249) | (2,281) |
Loans And Leases Receivable Allowance, Percent | 7.80% | 8.90% | ||
Multi‑family residential | ||||
Loans | ||||
Total loans | $ 267,152 | $ 277,209 | ||
Percentage of loan | 10.00% | 10.50% | ||
Less allowance for credit losses for loans | $ (2,413) | $ (1,699) | (1,457) | (1,511) |
Loans And Leases Receivable Allowance, Percent | 7.70% | 6.70% | ||
Consumer | ||||
Loans | ||||
Total loans | $ 38,133 | $ 36,782 | ||
Percentage of loan | 1.40% | 1.40% | ||
Less allowance for credit losses for loans | $ (477) | $ (388) | (357) | (387) |
Loans And Leases Receivable Allowance, Percent | 1.50% | 1.50% | ||
Agriculture | ||||
Loans | ||||
Total loans | $ 7,520 | $ 9,812 | ||
Percentage of loan | 0.30% | 0.40% | ||
Less allowance for credit losses for loans | $ (129) | $ (74) | (50) | (62) |
Loans And Leases Receivable Allowance, Percent | 0.40% | 0.30% | ||
Other | ||||
Loans | ||||
Total loans | $ 84,076 | $ 86,513 | ||
Percentage of loan | 3.10% | 3.30% | ||
Less allowance for credit losses for loans | $ (839) | $ (770) | $ (630) | $ (705) |
Loans And Leases Receivable Allowance, Percent | 2.70% | 3.10% |
LOANS - Loan participations pur
LOANS - Loan participations purchased and sold and Loans Guaranteed (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Loans | ||
SBA loans that were sold with servicing retained | $ 508,000 | $ 818,000 |
Commercial and industrial | ||
Loans | ||
Participations purchased during the period | $ 1,256,000 | |
Commercial real estate | ||
Loans | ||
Participations purchased during the period | $ 2,500,000 |
LOAN PERFORMANCE - Nonaccrual l
LOAN PERFORMANCE - Nonaccrual loans, segregated by loan class (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Nonaccrual loans | ||
Total nonaccrual loans | $ 1,448 | $ 977 |
Commercial and industrial | ||
Nonaccrual loans | ||
Total nonaccrual loans | 449 | 596 |
Commercial real estate | ||
Nonaccrual loans | ||
Total nonaccrual loans | 67 | 67 |
Construction and development | ||
Nonaccrual loans | ||
Total nonaccrual loans | 519 | |
1-4 family residential | ||
Nonaccrual loans | ||
Total nonaccrual loans | $ 413 | $ 314 |
LOAN PERFORMANCE - Aging analys
LOAN PERFORMANCE - Aging analysis of loan past due (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Aging analysis | |||
Total past due | $ 6,241,000 | $ 2,874,000 | |
Total current loans | 2,672,170,000 | 2,643,799,000 | |
Total Loans | 2,678,411,000 | 2,646,673,000 | |
Interest income that would have been earned under the original terms of the nonaccrual loans | 33,000 | $ 48,000 | |
30 to 59 days past due | |||
Aging analysis | |||
Total past due | 6,202,000 | 2,071,000 | |
60 to 89 days past due | |||
Aging analysis | |||
Total past due | 7,000 | 563,000 | |
90 days or greater past due | |||
Aging analysis | |||
Total past due | 32,000 | 240,000 | |
Commercial and industrial | |||
Aging analysis | |||
Total past due | 1,556,000 | 935,000 | |
Total current loans | 541,094,000 | 526,672,000 | |
Total Loans | 542,650,000 | 527,607,000 | |
Commercial and industrial | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 1,549,000 | 664,000 | |
Commercial and industrial | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 7,000 | 31,000 | |
Commercial and industrial | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 240,000 | ||
Commercial real estate | |||
Aging analysis | |||
Total past due | 1,532,000 | 865,000 | |
Total current loans | 902,863,000 | 899,881,000 | |
Total Loans | 904,395,000 | 900,746,000 | |
Commercial real estate | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 1,532,000 | 865,000 | |
Construction and development | |||
Aging analysis | |||
Total past due | 2,973,000 | 532,000 | |
Total current loans | 555,370,000 | 527,280,000 | |
Total Loans | 558,343,000 | 527,812,000 | |
Construction and development | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 2,973,000 | ||
Construction and development | 60 to 89 days past due | |||
Aging analysis | |||
Total past due | 532,000 | ||
1-4 family residential | |||
Aging analysis | |||
Total past due | 165,000 | 499,000 | |
Total current loans | 275,977,000 | 279,693,000 | |
Total Loans | 276,142,000 | 280,192,000 | |
1-4 family residential | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 133,000 | 499,000 | |
1-4 family residential | 90 days or greater past due | |||
Aging analysis | |||
Total past due | 32,000 | ||
Multi‑family residential | |||
Aging analysis | |||
Total current loans | 267,152,000 | 277,209,000 | |
Total Loans | 267,152,000 | 277,209,000 | |
Consumer | |||
Aging analysis | |||
Total past due | 15,000 | 43,000 | |
Total current loans | 38,118,000 | 36,739,000 | |
Total Loans | 38,133,000 | 36,782,000 | |
Consumer | 30 to 59 days past due | |||
Aging analysis | |||
Total past due | 15,000 | 43,000 | |
Agriculture | |||
Aging analysis | |||
Total current loans | 7,520,000 | 9,812,000 | |
Total Loans | 7,520,000 | 9,812,000 | |
Other | |||
Aging analysis | |||
Total current loans | 84,076,000 | 86,513,000 | |
Total Loans | $ 84,076,000 | $ 86,513,000 |
LOAN PERFORMANCE - Restructured
LOAN PERFORMANCE - Restructured loans (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($) | Mar. 31, 2019loan | Dec. 31, 2019USD ($) | |
Restructured loans | |||
Number of loans | 6,000 | 0 | |
Pre‑modification outstanding Recorded Investment | $ 5,470,000 | ||
Recorded investment in troubled debt restructurings | 15,900,000 | $ 8,800,000 | |
Restructured loans that are nonaccrual status | 1,000,000 | 393,000 | |
Restructured loans accruing interest | 14,900,000 | 8,400,000 | |
Commitment to loan additional funds | 0 | $ 2,000,000 | |
Loans modified as a troubled debt restructured loan | 0 | ||
Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | 5,239,000 | ||
Extended Maturity and Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | 231,000 | ||
One-month to six-month deferral periods | |||
Restructured loans | |||
Recorded investment in troubled debt restructurings | $ 936,000 | ||
Commercial and industrial | |||
Restructured loans | |||
Number of loans | 3,000 | ||
Pre‑modification outstanding Recorded Investment | $ 657,000 | ||
Commercial and industrial | Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | 426,000 | ||
Commercial and industrial | Extended Maturity and Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 231,000 | ||
1-4 family residential | |||
Restructured loans | |||
Number of loans | 3,000 | ||
Pre‑modification outstanding Recorded Investment | $ 4,813,000 | ||
1-4 family residential | Restructured Payments | |||
Restructured loans | |||
Post‑modification recorded investment | $ 4,813,000 |
ALLOWANCE FOR CREDIT LOSSES (De
ALLOWANCE FOR CREDIT LOSSES (Details) | Jan. 01, 2020 | Mar. 31, 2020segment |
Financing Receivable, Recorded Investment [Line Items] | ||
Number of portfolio segments | 16 | |
ASU 2016-13 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Allowance for credit losses for loans (as a percent) | 1.16 | |
Minimum | ASU 2016-13 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Allowance for credit losses for loans (as a percent) | 0.96 | |
Total factors (as a percent) | 0.67 | 0.85 |
Maximum | ASU 2016-13 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Allowance for credit losses for loans (as a percent) | 0.99 | |
Total factors (as a percent) | 2.42 | 2.61 |
ALLOWANCE FOR CREDIT LOSSES - L
ALLOWANCE FOR CREDIT LOSSES - Loans by risk grades, loan class and vintage (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | $ 129,761 | |
2019 | 590,472 | |
2018 | 586,167 | |
2017 | 318,247 | |
2016 | 145,039 | |
Prior | 428,526 | |
Revolving Loans | 428,855 | |
Converted revolving loan | 51,344 | |
Total Loans | 2,678,411 | $ 2,646,673 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 542,650 | 527,607 |
Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 904,395 | 900,746 |
Construction and development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 558,343 | 527,812 |
1-4 family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 276,142 | 280,192 |
Multi‑family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 267,152 | 277,209 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 38,133 | 36,782 |
Agriculture | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 7,520 | 9,812 |
Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 84,076 | 86,513 |
Loans by risk grades | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 2,646,673 | |
Loans by risk grades | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 17,767 | |
2019 | 121,599 | |
2018 | 68,024 | |
2017 | 19,472 | |
2016 | 12,820 | |
Prior | 12,094 | |
Revolving Loans | 275,325 | |
Converted revolving loan | 15,549 | |
Total Loans | 542,650 | 527,607 |
Loans by risk grades | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 57,116 | |
2019 | 215,619 | |
2018 | 219,626 | |
2017 | 139,631 | |
2016 | 89,266 | |
Prior | 132,964 | |
Revolving Loans | 36,851 | |
Converted revolving loan | 13,322 | |
Total Loans | 904,395 | 900,746 |
Loans by risk grades | Construction and development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 35,419 | |
2019 | 184,779 | |
2018 | 197,735 | |
2017 | 56,129 | |
2016 | 8,477 | |
Prior | 35,240 | |
Revolving Loans | 40,564 | |
Total Loans | 558,343 | 527,812 |
Loans by risk grades | 1-4 family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 7,110 | |
2019 | 36,508 | |
2018 | 66,642 | |
2017 | 49,413 | |
2016 | 28,385 | |
Prior | 74,228 | |
Revolving Loans | 11,094 | |
Converted revolving loan | 2,762 | |
Total Loans | 276,142 | 280,192 |
Loans by risk grades | Multi‑family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 7,770 | |
2019 | 8,527 | |
2018 | 23,743 | |
2017 | 50,750 | |
2016 | 4,361 | |
Prior | 172,001 | |
Total Loans | 267,152 | 277,209 |
Loans by risk grades | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 3,020 | |
2019 | 6,506 | |
2018 | 3,443 | |
2017 | 2,528 | |
2016 | 323 | |
Prior | 416 | |
Revolving Loans | 19,689 | |
Converted revolving loan | 2,208 | |
Total Loans | 38,133 | 36,782 |
Loans by risk grades | Agriculture | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 936 | |
2019 | 1,701 | |
2018 | 547 | |
2017 | 162 | |
2016 | 38 | |
Prior | 32 | |
Revolving Loans | 4,025 | |
Converted revolving loan | 79 | |
Total Loans | 7,520 | 9,812 |
Loans by risk grades | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 623 | |
2019 | 15,233 | |
2018 | 6,407 | |
2017 | 162 | |
2016 | 1,369 | |
Prior | 1,551 | |
Revolving Loans | 41,307 | |
Converted revolving loan | 17,424 | |
Total Loans | 84,076 | 86,513 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 2,582,970 | |
Pass | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 16,734 | |
2019 | 120,547 | |
2018 | 67,560 | |
2017 | 19,418 | |
2016 | 12,466 | |
Prior | 9,688 | |
Revolving Loans | 270,877 | |
Converted revolving loan | 11,585 | |
Total Loans | 528,875 | 513,417 |
Pass | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 57,116 | |
2019 | 213,693 | |
2018 | 214,659 | |
2017 | 139,415 | |
2016 | 86,079 | |
Prior | 129,764 | |
Revolving Loans | 36,851 | |
Converted revolving loan | 2,322 | |
Total Loans | 879,899 | 876,207 |
Pass | Construction and development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 35,419 | |
2019 | 184,260 | |
2018 | 196,235 | |
2017 | 45,597 | |
2016 | 8,477 | |
Prior | 35,240 | |
Revolving Loans | 40,564 | |
Total Loans | 545,792 | 515,247 |
Pass | 1-4 family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 7,110 | |
2019 | 35,961 | |
2018 | 66,602 | |
2017 | 49,164 | |
2016 | 27,973 | |
Prior | 70,808 | |
Revolving Loans | 11,094 | |
Converted revolving loan | 1,277 | |
Total Loans | 269,989 | 274,731 |
Pass | Multi‑family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 7,770 | |
2019 | 8,527 | |
2018 | 23,743 | |
2017 | 50,750 | |
2016 | 4,361 | |
Prior | 172,001 | |
Total Loans | 267,152 | 277,209 |
Pass | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 3,020 | |
2019 | 6,506 | |
2018 | 3,443 | |
2017 | 2,528 | |
2016 | 323 | |
Prior | 411 | |
Revolving Loans | 19,689 | |
Converted revolving loan | 2,208 | |
Total Loans | 38,128 | 36,566 |
Pass | Agriculture | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 936 | |
2019 | 1,701 | |
2018 | 547 | |
2017 | 162 | |
2016 | 38 | |
Prior | 5 | |
Revolving Loans | 3,975 | |
Converted revolving loan | 79 | |
Total Loans | 7,443 | 9,733 |
Pass | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 623 | |
2019 | 15,233 | |
2018 | 5,026 | |
2017 | 162 | |
2016 | 128 | |
Prior | 1,551 | |
Revolving Loans | 35,662 | |
Converted revolving loan | 17,424 | |
Total Loans | 75,809 | 79,860 |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 34,742 | |
Special Mention | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 33 | |
2019 | 266 | |
2017 | 15 | |
Revolving Loans | 436 | |
Total Loans | 750 | 2,963 |
Special Mention | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2016 | 1,587 | |
Converted revolving loan | 11,000 | |
Total Loans | 12,587 | 18,570 |
Special Mention | Construction and development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 12,565 | |
Special Mention | 1-4 family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2018 | 40 | |
2016 | 392 | |
Prior | 386 | |
Total Loans | 818 | 594 |
Special Mention | Agriculture | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 50 | |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 28,961 | |
Substandard | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2020 | 1,000 | |
2019 | 786 | |
2018 | 464 | |
2017 | 39 | |
2016 | 354 | |
Prior | 2,406 | |
Revolving Loans | 4,012 | |
Converted revolving loan | 3,964 | |
Total Loans | 13,025 | 11,227 |
Substandard | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2019 | 1,926 | |
2018 | 4,967 | |
2017 | 216 | |
2016 | 1,600 | |
Prior | 3,200 | |
Total Loans | 11,909 | 5,969 |
Substandard | Construction and development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2019 | 519 | |
2018 | 1,500 | |
2017 | 10,532 | |
Total Loans | 12,551 | |
Substandard | 1-4 family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2019 | 547 | |
2017 | 249 | |
2016 | 20 | |
Prior | 3,034 | |
Converted revolving loan | 1,485 | |
Total Loans | 5,335 | 4,867 |
Substandard | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Prior | 5 | |
Total Loans | 5 | 216 |
Substandard | Agriculture | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Prior | 27 | |
Revolving Loans | 50 | |
Total Loans | 77 | 29 |
Substandard | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
2018 | 1,381 | |
2016 | 1,241 | |
Revolving Loans | 5,645 | |
Total Loans | $ 8,267 | $ 6,653 |
ALLOWANCE FOR CREDIT LOSSES - R
ALLOWANCE FOR CREDIT LOSSES - Risk Grades and loan class (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Amortized cost of loans by loan type | ||
Total loans | $ 2,678,411 | $ 2,646,673 |
Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 2,646,673 | |
Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 2,582,970 | |
Special Mention | ||
Amortized cost of loans by loan type | ||
Total loans | 34,742 | |
Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | 28,961 | |
Commercial and industrial | ||
Amortized cost of loans by loan type | ||
Total loans | 542,650 | 527,607 |
Commercial and industrial | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 542,650 | 527,607 |
Commercial and industrial | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 528,875 | 513,417 |
Commercial and industrial | Special Mention | ||
Amortized cost of loans by loan type | ||
Total loans | 750 | 2,963 |
Commercial and industrial | Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | 13,025 | 11,227 |
Commercial real estate | ||
Amortized cost of loans by loan type | ||
Total loans | 904,395 | 900,746 |
Commercial real estate | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 904,395 | 900,746 |
Commercial real estate | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 879,899 | 876,207 |
Commercial real estate | Special Mention | ||
Amortized cost of loans by loan type | ||
Total loans | 12,587 | 18,570 |
Commercial real estate | Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | 11,909 | 5,969 |
Construction and development | ||
Amortized cost of loans by loan type | ||
Total loans | 558,343 | 527,812 |
Construction and development | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 558,343 | 527,812 |
Construction and development | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 545,792 | 515,247 |
Construction and development | Special Mention | ||
Amortized cost of loans by loan type | ||
Total loans | 12,565 | |
Construction and development | Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | 12,551 | |
1-4 family residential | ||
Amortized cost of loans by loan type | ||
Total loans | 276,142 | 280,192 |
1-4 family residential | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 276,142 | 280,192 |
1-4 family residential | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 269,989 | 274,731 |
1-4 family residential | Special Mention | ||
Amortized cost of loans by loan type | ||
Total loans | 818 | 594 |
1-4 family residential | Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | 5,335 | 4,867 |
Multi‑family residential | ||
Amortized cost of loans by loan type | ||
Total loans | 267,152 | 277,209 |
Multi‑family residential | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 267,152 | 277,209 |
Multi‑family residential | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 267,152 | 277,209 |
Consumer | ||
Amortized cost of loans by loan type | ||
Total loans | 38,133 | 36,782 |
Consumer | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 38,133 | 36,782 |
Consumer | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 38,128 | 36,566 |
Consumer | Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | 5 | 216 |
Agriculture | ||
Amortized cost of loans by loan type | ||
Total loans | 7,520 | 9,812 |
Agriculture | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 7,520 | 9,812 |
Agriculture | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 7,443 | 9,733 |
Agriculture | Special Mention | ||
Amortized cost of loans by loan type | ||
Total loans | 50 | |
Agriculture | Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | 77 | 29 |
Other | ||
Amortized cost of loans by loan type | ||
Total loans | 84,076 | 86,513 |
Other | Loans by risk grades | ||
Amortized cost of loans by loan type | ||
Total loans | 84,076 | 86,513 |
Other | Pass | ||
Amortized cost of loans by loan type | ||
Total loans | 75,809 | 79,860 |
Other | Substandard | ||
Amortized cost of loans by loan type | ||
Total loans | $ 8,267 | $ 6,653 |
ALLOWANCE FOR CREDIT LOSSES - C
ALLOWANCE FOR CREDIT LOSSES - Charge-offs and recoveries by loan type and vintage (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Financing Receivable, Recorded Investment [Line Items] | ||
Charge-offs | $ (133) | $ (284) |
Recovery | 434 | 87 |
Net (charge-offs) recoveries | 301 | (197) |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Charge-offs | (30) | (280) |
Recovery | 428 | 74 |
Net (charge-offs) recoveries | 398 | (206) |
1-4 family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 1 | 1 |
Net (charge-offs) recoveries | 1 | 1 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Charge-offs | (103) | (4) |
Recovery | 4 | 10 |
Net (charge-offs) recoveries | (99) | $ 6 |
Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 1 | |
Net (charge-offs) recoveries | 1 | |
2020. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Net (charge-offs) recoveries | 3 | |
2020. | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 3 | |
Net (charge-offs) recoveries | 3 | |
2019. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Net (charge-offs) recoveries | 2 | |
2019. | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 2 | |
Net (charge-offs) recoveries | 2 | |
2018. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Net (charge-offs) recoveries | 79 | |
2018. | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 87 | |
Net (charge-offs) recoveries | 87 | |
2018. | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Charge-offs | (8) | |
Net (charge-offs) recoveries | (8) | |
2017. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Net (charge-offs) recoveries | (107) | |
2017. | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Charge-offs | (29) | |
Recovery | 16 | |
Net (charge-offs) recoveries | (13) | |
2017. | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Charge-offs | (95) | |
Net (charge-offs) recoveries | (95) | |
2017. | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 1 | |
Net (charge-offs) recoveries | 1 | |
2016. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Net (charge-offs) recoveries | 10 | |
2016. | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 10 | |
Net (charge-offs) recoveries | 10 | |
Prior. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Net (charge-offs) recoveries | 135 | |
Prior. | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 133 | |
Net (charge-offs) recoveries | 133 | |
Prior. | 1-4 family residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 1 | |
Net (charge-offs) recoveries | 1 | |
Prior. | Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recovery | 1 | |
Net (charge-offs) recoveries | 1 | |
Revolving Loans. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Net (charge-offs) recoveries | 179 | |
Revolving Loans. | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Charge-offs | (1) | |
Recovery | 180 | |
Net (charge-offs) recoveries | $ 179 |
ALLOWANCE FOR CREDIT LOSSES - A
ALLOWANCE FOR CREDIT LOSSES - Activity in the allowance for loan losses, segregated by loan class (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Loan losses segregated by loan class | ||
Beginning balance | $ 25,280 | $ 23,693 |
CECL implementation | 874 | |
Provision for Credit Loan Losses | 4,739 | 1,147 |
Charge-offs | (133) | (284) |
Recoveries | 434 | 87 |
Financing Receivable, Allowance for Credit Losses | 31,194 | 24,643 |
Net (charge-offs) recoveries | 301 | (197) |
Ending balance | 31,194 | 24,643 |
Specific reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 409 | 788 |
Ending balance | 409 | 788 |
General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 30,785 | 23,855 |
Ending balance | 30,785 | 23,855 |
Commercial and industrial | ||
Loan losses segregated by loan class | ||
Beginning balance | 7,671 | 7,719 |
CECL implementation | 852 | |
Provision for Credit Loan Losses | 614 | 903 |
Charge-offs | (30) | (280) |
Recoveries | 428 | 74 |
Financing Receivable, Allowance for Credit Losses | 9,535 | 8,416 |
Net (charge-offs) recoveries | 398 | (206) |
Ending balance | 9,535 | 8,416 |
Commercial and industrial | Specific reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 409 | 582 |
Ending balance | 409 | 582 |
Commercial and industrial | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 9,126 | 7,834 |
Ending balance | 9,126 | 7,834 |
Commercial real estate | ||
Loan losses segregated by loan class | ||
Beginning balance | 7,975 | 6,730 |
CECL implementation | (140) | |
Provision for Credit Loan Losses | 1,741 | 52 |
Recoveries | 2 | |
Financing Receivable, Allowance for Credit Losses | 9,576 | 6,784 |
Net (charge-offs) recoveries | 2 | |
Ending balance | 9,576 | 6,784 |
Commercial real estate | Specific reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 33 | |
Ending balance | 33 | |
Commercial real estate | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 9,576 | 6,751 |
Ending balance | 9,576 | 6,751 |
Construction and development | ||
Loan losses segregated by loan class | ||
Beginning balance | 4,446 | 4,298 |
CECL implementation | 100 | |
Provision for Credit Loan Losses | 1,249 | 402 |
Financing Receivable, Allowance for Credit Losses | 5,795 | 4,700 |
Ending balance | 5,795 | 4,700 |
Construction and development | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 5,795 | 4,700 |
Ending balance | 5,795 | 4,700 |
1-4 family residential | ||
Loan losses segregated by loan class | ||
Beginning balance | 2,257 | 2,281 |
CECL implementation | (275) | |
Provision for Credit Loan Losses | 447 | (33) |
Recoveries | 1 | 1 |
Financing Receivable, Allowance for Credit Losses | 2,430 | 2,249 |
Net (charge-offs) recoveries | 1 | 1 |
Ending balance | 2,430 | 2,249 |
1-4 family residential | Specific reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 77 | |
Ending balance | 77 | |
1-4 family residential | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 2,430 | 2,172 |
Ending balance | 2,430 | 2,172 |
Multi‑family residential | ||
Loan losses segregated by loan class | ||
Beginning balance | 1,699 | 1,511 |
CECL implementation | 294 | |
Provision for Credit Loan Losses | 420 | (54) |
Financing Receivable, Allowance for Credit Losses | 2,413 | 1,457 |
Ending balance | 2,413 | 1,457 |
Multi‑family residential | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 2,413 | 1,457 |
Ending balance | 2,413 | 1,457 |
Consumer | ||
Loan losses segregated by loan class | ||
Beginning balance | 388 | 387 |
CECL implementation | (25) | |
Provision for Credit Loan Losses | 213 | (36) |
Charge-offs | (103) | (4) |
Recoveries | 4 | 10 |
Financing Receivable, Allowance for Credit Losses | 477 | 357 |
Net (charge-offs) recoveries | (99) | 6 |
Ending balance | 477 | 357 |
Consumer | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 477 | 357 |
Ending balance | 477 | 357 |
Agriculture | ||
Loan losses segregated by loan class | ||
Beginning balance | 74 | 62 |
CECL implementation | 64 | |
Provision for Credit Loan Losses | (9) | (12) |
Financing Receivable, Allowance for Credit Losses | 129 | 50 |
Ending balance | 129 | 50 |
Agriculture | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 129 | 50 |
Ending balance | 129 | 50 |
Other | ||
Loan losses segregated by loan class | ||
Beginning balance | 770 | 705 |
CECL implementation | 4 | |
Provision for Credit Loan Losses | 64 | (75) |
Recoveries | 1 | |
Financing Receivable, Allowance for Credit Losses | 839 | 630 |
Net (charge-offs) recoveries | 1 | |
Ending balance | 839 | 630 |
Other | Specific reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 96 | |
Ending balance | 96 | |
Other | General reserve | ||
Loan losses segregated by loan class | ||
Financing Receivable, Allowance for Credit Losses | 839 | 534 |
Ending balance | 839 | $ 534 |
Unfunded Commitment | ||
Loan losses segregated by loan class | ||
Beginning balance | 378 | |
Financing Receivable, Allowance for Credit Losses | 3,669 | |
Ending balance | $ 3,669 |
ALLOWANCE FOR CREDIT LOSSES -_2
ALLOWANCE FOR CREDIT LOSSES - Loans evaluated individually and the related specific allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Loan Impairment Assessment | ||
Loans evaluated individually, Recorded Investment | $ 19,835 | $ 12,917 |
Loans evaluated individually, Specific ACL | 409 | 437 |
Loans evaluated individually, Net | 19,426 | 12,480 |
Commercial and industrial | ||
Loan Impairment Assessment | ||
Loans evaluated individually, Recorded Investment | 1,528 | 999 |
Loans evaluated individually, Specific ACL | 409 | 416 |
Loans evaluated individually, Net | 1,119 | 583 |
Commercial real estate | ||
Loan Impairment Assessment | ||
Loans evaluated individually, Recorded Investment | 5,818 | 1,404 |
Loans evaluated individually, Net | 5,818 | 1,404 |
Construction and development | ||
Loan Impairment Assessment | ||
Loans evaluated individually, Recorded Investment | 519 | |
Loans evaluated individually, Net | 519 | |
1-4 family residential | ||
Loan Impairment Assessment | ||
Loans evaluated individually, Recorded Investment | 3,703 | 3,651 |
Loans evaluated individually, Specific ACL | 15 | |
Loans evaluated individually, Net | 3,703 | 3,636 |
Loans Collateral | 32,000 | |
Consumer | ||
Loan Impairment Assessment | ||
Loans evaluated individually, Recorded Investment | 210 | |
Loans evaluated individually, Net | 210 | |
Other | ||
Loan Impairment Assessment | ||
Loans evaluated individually, Recorded Investment | 8,267 | 6,653 |
Loans evaluated individually, Specific ACL | 6 | |
Loans evaluated individually, Net | $ 8,267 | $ 6,647 |
ALLOWANCE FOR CREDIT LOSSES -_3
ALLOWANCE FOR CREDIT LOSSES - Allowance for credit losses for unfunded commitments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | |
Beginning balance | $ 25,280 |
Ending balance | 31,194 |
Unfunded Commitment | |
Financing Receivable, Recorded Investment [Line Items] | |
Beginning balance | 378 |
Impact of implementation | 2,981 |
Provision for credit losses for unfunded commitments | 310 |
Ending balance | $ 3,669 |
PREMISES AND EQUIPMENT - Compon
PREMISES AND EQUIPMENT - Components of premises and equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 83,908 | $ 83,798 | |
Less accumulated depreciation | (33,665) | (32,923) | |
Premises and equipment, net | 50,243 | 50,875 | |
Depreciation expense | 775 | $ 824 | |
Land | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 13,466 | 13,466 | |
Buildings and leasehold improvements | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 53,874 | 53,869 | |
Furniture and equipment | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 16,022 | 15,917 | |
Vehicles | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | 203 | 203 | |
Construction in progress | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment | $ 343 | $ 343 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill | $ 80,950 | $ 80,950 |
Changes in goodwill | 0 | 0 |
Other Intangible Assets, net | ||
Gross Intangible Assets | 20,720 | 20,747 |
Accumulated Amortization | (16,020) | (15,809) |
Net Intangible Assets | $ 4,700 | $ 4,938 |
Core deposits | ||
Other Intangible Assets, net | ||
Finite-Lived Intangible Asset, Useful Life | 3 years 10 months 24 days | 4 years 2 months 12 days |
Gross Intangible Assets | $ 13,750 | $ 13,750 |
Accumulated Amortization | (13,069) | (12,979) |
Net Intangible Assets | $ 681 | $ 771 |
Customer relationships | ||
Other Intangible Assets, net | ||
Finite-Lived Intangible Asset, Useful Life | 8 years 9 months 18 days | 9 years |
Gross Intangible Assets | $ 6,629 | $ 6,629 |
Accumulated Amortization | (2,762) | (2,651) |
Net Intangible Assets | $ 3,867 | $ 3,978 |
Servicing assets | ||
Other Intangible Assets, net | ||
Finite-Lived Intangible Asset, Useful Life | 11 years 2 months 12 days | 12 years 9 months 18 days |
Gross Intangible Assets | $ 341 | $ 368 |
Accumulated Amortization | (189) | (179) |
Net Intangible Assets | $ 152 | $ 189 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Servicing Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Servicing Assets | |||
Balance at beginning of year | $ 189 | $ 166 | |
Increase from loan sales | 9 | 14 | |
Decrease from serviced loans paid off or foreclosed | (26) | (19) | |
Amortization | (20) | (8) | |
Balance at end of period | 152 | $ 153 | |
Estimated future amortization for intangible assets | |||
Net Intangible Assets | $ 4,700 | $ 4,938 |
BANK OWNED LIFE INSURANCE (Deta
BANK OWNED LIFE INSURANCE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
BANK OWNED LIFE INSURANCE. | ||
Balance at beginning of year | $ 71,881 | $ 71,525 |
Net change in cash surrender value | 416 | 430 |
Balance at end of year | $ 72,297 | $ 71,955 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
DEPOSITS | ||
Interest-bearing demand accounts | $ 359,943 | $ 369,744 |
Money market accounts | 760,036 | 805,942 |
Saving accounts | 90,227 | 92,183 |
Certificates and other time deposits, $100,000 or greater | 212,341 | 208,018 |
Certificates and other time deposits, less than $100,000 | 174,145 | 191,640 |
Total interest-bearing deposits | 1,596,692 | 1,667,527 |
Noninterest-bearing deposits | 1,195,541 | 1,184,861 |
Total deposits | $ 2,792,233 | $ 2,852,388 |
DEPOSITS - Schedule of maturiti
DEPOSITS - Schedule of maturities of time deposits (Details) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Time Deposits, Fiscal Year Maturity [Abstract] | ||
Deposits from public entities | $ 60,400,000 | $ 56,800,000 |
Brokered deposits | 112,400,000 | 128,900,000 |
Accrued interest payable for deposits | $ 976,000 | $ 931,000 |
Major concentrations of deposits from any single or related groups of depositors | 0 | 0 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
LINES OF CREDIT | |||
Capital to risk based assets ratio | 16.42% | 16.41% | |
FHLB advances | |||
LINES OF CREDIT | |||
Interest rate | 1.78% | 2.67% | |
Frost Line of Credit | |||
LINES OF CREDIT | |||
Outstanding borrowings | $ 0 | ||
Line of Credit | FHLB advances | |||
LINES OF CREDIT | |||
Outstanding borrowings | $ 50,000,000 | 50,000,000 | |
Total borrowing capacity available | $ 1,000,000,000 | ||
Average outstanding balance, FHLB advances | 50,000,000 | $ 9,700,000 | |
Line of Credit | Frost Line of Credit | |||
LINES OF CREDIT | |||
Revolving line of credit available | $ 30,000,000 | ||
Revolving line of credit draw period | 24 months | ||
Line of credit payment terms | payable quarterly over 24 months beginning December 13, 2019, and thereafter, quarterly principal and interest payments are required over a term of 60 months | ||
Debt term | 60 months | ||
Line of Credit | Frost Line of Credit | Minimum | |||
LINES OF CREDIT | |||
Tangible capital | $ 300,000,000 | ||
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 | Mar. 31, 2020USD ($)item | Dec. 31, 2019USD ($)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 | $ 50,000 |
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 | |
Outstanding borrowings | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
RELATED PARTY TRANSACTIONS | ||
Loans to related parties | $ 155.8 | $ 158.7 |
Deemed nonaccrual, past due, restructured or classified as potential problem loans | 0 | 0 |
Unfunded loan commitments to related parties | 52.2 | 48.7 |
Related party deposits | $ 233.8 | $ 233.9 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Financial Assets | ||
Securities available for sale | $ 234,014,000 | $ 231,262,000 |
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 | 243,106,000 | 233,900,000 |
Financial Liabilities | ||
Total financial liabilities | 9,092,000 | 2,638,000 |
Level 1 Inputs | Recurring basis | Equity securities | ||
Financial Assets | ||
Securities available for sale | 1,171,000 | 1,147,000 |
Level 2 Inputs | Recurring basis | Interest rate swaps with customers | ||
Financial Assets | ||
Interest rate swaps assets | 9,092,000 | 2,638,000 |
Financial Liabilities | ||
Interest rate swaps liabilities | 9,092,000 | 2,638,000 |
Level 2 Inputs | Recurring basis | State and municipal securities | ||
Financial Assets | ||
Securities available for sale | 50,886,000 | 53,279,000 |
Level 2 Inputs | Recurring basis | Collateralized mortgage obligations | ||
Financial Assets | ||
Securities available for sale | 53,065,000 | 55,989,000 |
Level 2 Inputs | Recurring basis | Mortgage-backed securities | ||
Financial Assets | ||
Securities available for sale | $ 128,892,000 | $ 120,847,000 |
FAIR VALUE DISCLOSURES - Certai
FAIR VALUE DISCLOSURES - Certain assets measured on a non recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Loan Impairment Assessment | ||||
Risk rating | $ 2,640,393 | $ 2,613,805 | ||
Financing Receivable, Allowance for Credit Losses | 31,194 | 25,280 | $ 24,643 | $ 23,693 |
Total loans | 2,678,411 | 2,646,673 | ||
Commercial and industrial | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 9,535 | 7,671 | 8,416 | 7,719 |
Total loans | 542,650 | 527,607 | ||
Commercial real estate | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 9,576 | 7,975 | 6,784 | 6,730 |
Total loans | 904,395 | 900,746 | ||
1-4 family residential | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 2,430 | 2,257 | 2,249 | 2,281 |
Total loans | 276,142 | 280,192 | ||
Consumer | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 477 | 388 | 357 | 387 |
Total loans | 38,133 | 36,782 | ||
Agriculture | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 129 | 74 | 50 | 62 |
Total loans | 7,520 | 9,812 | ||
Other | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 839 | 770 | 630 | $ 705 |
Total loans | 84,076 | 86,513 | ||
Level 3 Inputs | Non-recurring basis | ||||
Loan Impairment Assessment | ||||
Recorded Investment | 13,498 | 11,303 | ||
Specific ACL | 409 | 437 | ||
Net | 13,089 | 10,866 | ||
Level 3 Inputs | Non-recurring basis | Commercial and industrial | ||||
Loan Impairment Assessment | ||||
Recorded Investment | 1,528 | 999 | ||
Specific ACL | 409 | 416 | ||
Net | 1,119 | 583 | ||
Level 3 Inputs | Non-recurring basis | 1-4 family residential | ||||
Loan Impairment Assessment | ||||
Recorded Investment | 3,703 | 3,651 | ||
Specific ACL | 15 | |||
Net | 3,703 | 3,636 | ||
Level 3 Inputs | Non-recurring basis | Other | ||||
Loan Impairment Assessment | ||||
Recorded Investment | 8,267 | 6,653 | ||
Specific ACL | 6 | |||
Net | 8,267 | $ 6,647 | ||
Specific reserve | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 409 | 788 | ||
Specific reserve | Commercial and industrial | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | $ 409 | 582 | ||
Specific reserve | Commercial real estate | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 33 | |||
Specific reserve | 1-4 family residential | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | 77 | |||
Specific reserve | Other | ||||
Loan Impairment Assessment | ||||
Financing Receivable, Allowance for Credit Losses | $ 96 |
FAIR VALUE DISCLOSURES - Non Fi
FAIR VALUE DISCLOSURES - Non Financial Assets and Non Financial Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
FAIR VALUE DISCLOSURES | ||
Write-downs of foreclosed assets for fair value remeasurement subsequent to initial foreclosure | $ 0 | $ 0 |
Foreclosed assets | $ 0 | $ 0 |
FAIR VALUE DISCLOSURES - Fair m
FAIR VALUE DISCLOSURES - Fair market values of all financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial Assets: | ||
Accrued interest receivable | $ 7,800 | $ 7,500 |
Equity investments | 16,807 | 16,710 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,195,541 | 1,184,861 |
Interest-bearing deposits | 1,596,692 | 1,667,527 |
Federal Home Loan Bank advances | 50,000 | 50,000 |
Repurchase agreements | 1,415 | 485 |
Fair Value | ||
Financial Assets: | ||
Total financial assets | 2,993,946 | 3,123,948 |
Financial Liabilities: | ||
Total financial liabilities | 2,862,426 | 2,886,532 |
Carrying Amount | ||
Financial Assets: | ||
Total financial assets | 3,024,082 | 3,084,854 |
Financial Liabilities: | ||
Total financial liabilities | 2,844,697 | 2,903,878 |
Level 1 Inputs | Fair Value | ||
Financial Assets: | ||
Cash and due from banks | 284,898 | 372,064 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,214,222 | 1,184,861 |
Level 1 Inputs | Carrying Amount | ||
Financial Assets: | ||
Cash and due from banks | 284,898 | 372,064 |
Financial Liabilities: | ||
Noninterest-bearing deposits | 1,195,541 | 1,184,861 |
Level 2 Inputs | Fair Value | ||
Financial Assets: | ||
Bank-owned life insurance | 72,297 | 71,881 |
Accrued interest receivable | 8,653 | 8,742 |
Servicing asset | 152 | 189 |
Financial Liabilities: | ||
Interest-bearing deposits | 1,595,014 | 1,651,359 |
Federal Home Loan Bank advances | 50,727 | 48,822 |
Repurchase agreements | 1,414 | 485 |
Accrued interest payable | 1,049 | 1,005 |
Level 2 Inputs | Carrying Amount | ||
Financial Assets: | ||
Bank-owned life insurance | 72,297 | 71,881 |
Accrued interest receivable | 8,653 | 8,742 |
Servicing asset | 152 | 189 |
Financial Liabilities: | ||
Interest-bearing deposits | 1,596,692 | 1,667,527 |
Federal Home Loan Bank advances | 50,000 | 50,000 |
Repurchase agreements | 1,415 | 485 |
Accrued interest payable | 1,049 | 1,005 |
Level 3 Inputs | Fair Value | ||
Financial Assets: | ||
Loans, including held for sale, net | 2,611,139 | 2,654,362 |
Equity investments | 16,807 | 16,710 |
Level 3 Inputs | Carrying Amount | ||
Financial Assets: | ||
Loans, including held for sale, net | 2,641,275 | 2,615,268 |
Equity investments | $ 16,807 | $ 16,710 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | |
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Deterioration in the customer’s credit worthiness | $ 0 | $ 0 |
Number of interest rate swap agreements | item | 22 | 19 |
Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Weighted Average Maturity | 6 years 10 months 24 days | |
Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Weighted Average Maturity | 6 years 10 months 24 days | |
Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional Amount | $ 288,202,000 | $ 150,352,000 |
Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount asset | 144,101,000 | 69,189,000 |
Fair value asset | $ 9,092,000 | $ 2,599,000 |
Weighted Average Maturity | 6 years 10 months 24 days | 6 years 7 months 24 days |
Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount asset | $ 5,987,000 | |
Fair value asset | $ 39,000 | |
Weighted Average Maturity | 6 years 8 months 16 days | |
Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount liability | $ 5,987,000 | |
Fair value liability | $ (39,000) | |
Weighted Average Maturity | 6 years 8 months 16 days | |
Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Notional amount liability | $ 144,101,000 | $ 69,189,000 |
Fair value liability | $ (9,092,000) | $ (2,599,000) |
Weighted Average Maturity | 6 years 10 months 24 days | 6 years 7 months 24 days |
Minimum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 3.25% | 4.40% |
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 | 3.25% | 4.40% |
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% | |
Minimum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 2.50% | 2.50% |
Maximum | Not Designated as Hedging Instruments | Other Assets. | Interest rate swaps with customers | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Fixed rate | 5.89% | 5.89% |
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% | 5.89% |
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% | 3.00% |
Maximum | LIBOR | Not Designated as Hedging Instruments | Other liabilities. | Interest rate swaps with financial institutions | ||
Derivative Instruments and Hedging Activities Disclosures [Table] | ||
Floating rate | 3.00% | 3.00% |
OPERATING LEASES (Details)
OPERATING LEASES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
OPERATING LEASES | ||
Right-of-use assets | $ 12,577,000 | $ 12,926,000 |
Operating lease liabilities | $ 15,356,000 | $ 15,704,000 |
Weighted-average discount rate | 3.50% | |
Weighted-average remaining lease term | 11 years 1 month 6 days | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 481,000 |
OPERATING LEASES - Lease Costs
OPERATING LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease costs | ||
Operating lease cost | $ 481 | $ 461 |
Short-term lease cost | 17 | 19 |
Sublease income | (25) | (6) |
Total lease cost | $ 473 | $ 474 |
OPERATING LEASES - Maturity of
OPERATING LEASES - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2020 | $ 2,140 | |
2021 | 2,423 | |
2022 | 2,482 | |
2023 | 2,405 | |
2024 | 1,812 | |
Thereafter | 9,792 | |
Total undiscounted lease liability | 21,054 | |
Less: Discount on cash flows | (3,658) | |
Less: Lease signed, but not yet commenced | (2,040) | |
Total operating lease liability | $ 15,356 | $ 15,704 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
COMMITMENTS AND CONTINGENCIES AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | ||
Commitments to extend credit, variable interest rate | $ 603,620 | $ 652,611 |
Commitments to extend credit, fixed interest rate | 145,160 | 141,439 |
Total | 748,780 | 794,050 |
Standby letters of credit | $ 28,440 | $ 23,547 |
EMPLOYEE BENEFIT PLANS AND DE_2
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Term of service for 401K participation | 3 months | |||
Company's contributions to the 401K plan | $ 758,000 | $ 683,000 | ||
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 | $ 2,700,000 | ||
2008 Salary Continuation Agreement | ||||
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION ARRANGEMENTS | ||||
Deferred plan liability | 313,000 | 335,000 | ||
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 | $ 476,000 | $ 437,000 | ||
Annual compensation payment amount | $ 200,000 | |||
Contractual term | 10 years | |||
Commencement age | 70 years |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020shares | |
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 | 279,228 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock option activity (Details) - Stock options - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number of Shares Underlying Options | ||
Outstanding, beginning of period | 213,078 | 232,322 |
Exercised | (1,524) | (10,844) |
Outstanding, end of period | 211,554 | 221,478 |
Weighted Average Exercise Price | ||
Outstanding, beginning of period | $ 16.92 | $ 16.66 |
Exercised | 10.34 | 10.68 |
Outstanding, end of period | $ 16.97 | $ 16.96 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of stock options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
STOCK-BASED COMPENSATION | ||||
Number of shares underlying options exercisable | 161,355 | |||
Number of shares underlying options unvested | 50,199 | |||
Number of shares underlying options outstanding | 211,554 | |||
Weighted-average exercise price per share exercisable | $ 15.78 | |||
Weighted-average exercise price per share unvested | 20.81 | |||
Weighted-average exercise price per share outstanding | $ 16.97 | $ 16.92 | $ 16.96 | $ 16.66 |
Aggregate intrinsic value exercisable | $ 425 | |||
Aggregate intrinsic value unvested | 2 | |||
Aggregate intrinsic value outstanding | $ 427 | |||
Weighted-average remaining contractual term exercisable (years) | 4 years 8 months 12 days | |||
Weighted-average remaining contractual term unvested (years) | 7 years 2 months 12 days | |||
Weighted-average remaining contractual term outstanding (years) | 5 years 3 months 18 days |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Performance-based restricted stock | ||
Number of Shares | ||
Outstanding, beginning of period | 18,000 | 24,000 |
Outstanding, end of period | 18,000 | 24,000 |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period | $ 34.46 | $ 34.46 |
Outstanding, end of period | $ 34.46 | $ 34.46 |
Non-performance based restricted stock | ||
Number of Shares | ||
Outstanding, beginning of period | 161,443 | 181,773 |
Granted | 37,107 | 19,187 |
Vested | (6,450) | (300) |
Forfeited | (204) | |
Outstanding, end of period | 191,896 | 200,660 |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period | $ 28.20 | $ 27.05 |
Granted | 29.55 | 32.25 |
Vested | 32.11 | 29.27 |
Forfeited | 30.64 | |
Outstanding, end of period | $ 28.33 | $ 27.54 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of restricted stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Non-performance based restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares underlying restricted stock | 191,896 | 161,443 | 200,660 | 181,773 |
Weighted-average grant date fair value per share | $ 28.33 | $ 28.20 | $ 27.54 | $ 27.05 |
Aggregate fair value (in thousands) | $ 3,410 | |||
Weighted-average remaining vesting period (years) | 2 years 7 months 6 days | |||
Performance-based restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares underlying restricted stock | 18,000 | 18,000 | 24,000 | 24,000 |
Weighted-average grant date fair value per share | $ 34.46 | $ 34.46 | $ 34.46 | $ 34.46 |
Aggregate fair value (in thousands) | $ 320 | |||
Weighted-average remaining vesting period (years) | 2 years 7 months 6 days |
STOCK-BASED COMPENSATION - Su_3
STOCK-BASED COMPENSATION - Summary of Stock options exercised, restricted stock vested, shares withheld and shares issued (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number of Shares | ||
Stock compensation expense | $ 557,000 | $ 545,000 |
Unrecognized compensation expense | $ 5,300,000 | |
Weighted average period | 2 years 6 months | |
Stock options | ||
Number of Shares | ||
Stock Options, Exercised/Vested | 1,524 | 10,844 |
Stock Options, Shares Issued | 1,524 | 10,844 |
Non-performance based restricted stock | ||
Number of Shares | ||
Restricted Stock, Exercised/Vested | 6,450 | 300 |
Restricted Stock, Shares withheld | (1,218) | (89) |
Restricted Stock, Shares Issued | $ 5,232 | $ 211 |
REGULATORY MATTERS - Regulatory
REGULATORY MATTERS - Regulatory Capital (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Common Equity Tier I to Risk‑Weighted Assets | ||
Dividend restrictions term | 2 years | |
Actual amount | $ 445,818 | $ 448,445 |
Common Equity Tier One Capital Ratio | 15.23% | 15.52% |
Minimum Capital Required Basel III (amount) | $ 204,968 | $ 202,218 |
Minimum Capital Required‑Basel III (ratio) | 7.00% | 7.00% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 445,818 | $ 448,445 |
Actual ratio | 15.23% | 15.52% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 248,889 | $ 245,550 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 480,681 | $ 474,104 |
Actual ratio | 16.42% | 16.41% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 307,451 | $ 303,327 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Leverage Ratio | ||
Actual amount | $ 445,819 | $ 448,445 |
Actual ratio | 13.18% | 13.11% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 135,334 | $ 136,798 |
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 | $ 408,922 | $ 406,675 |
Common Equity Tier One Capital Ratio | 13.97% | 14.08% |
Minimum Capital Required Basel III (amount) | $ 204,950 | $ 202,203 |
Minimum Capital Required‑Basel III (ratio) | 7.00% | 7.00% |
Required to be Considered Well Capitalized, amount | $ 190,311 | $ 187,760 |
Required to be Considered Well Capitalized, ratio | 6.50% | 6.50% |
Tier I Capital to Risk‑Weighted Assets | ||
Actual amount | $ 408,922 | $ 406,675 |
Actual ratio | 13.97% | 14.08% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 248,868 | $ 245,532 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 8.50% | 8.50% |
Required to be Considered Well Capitalized, amount | $ 234,229 | $ 231,089 |
Required to be Considered Well Capitalized, ratio | 8.00% | 8.00% |
Total Capital to Risk‑Weighted Assets | ||
Actual amount | $ 443,785 | $ 432,334 |
Actual ratio | 15.16% | 14.97% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 307,425 | $ 303,304 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 10.50% | 10.50% |
Required to be Considered Well Capitalized, amount | $ 292,786 | $ 288,861 |
Required to be Considered Well Capitalized, ratio | 10.00% | 10.00% |
Leverage Ratio | ||
Actual amount | $ 408,922 | $ 406,675 |
Actual ratio | 12.09% | 11.90% |
Minimum Capital Required‑Basel III Fully Phased‑in (amount) | $ 135,307 | $ 136,754 |
Minimum Capital Required‑Basel III Fully Phased‑in (ratio) | 4.00% | 4.00% |
Required to be Considered Well Capitalized, amount | $ 169,133 | $ 170,943 |
Required to be Considered Well Capitalized, ratio | 5.00% | 5.00% |
INCOME TAXES - Components of pr
INCOME TAXES - Components of provision for income tax expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME TAXES | ||
Deferred tax provision (benefit) | $ 158 | $ 622 |
Effective Income Tax Rate Reconciliation, Percent | 19.85% | 19.86% |
Total income tax expense | $ 1,868 | $ 2,599 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
EARNINGS PER SHARE | ||
Net income for common shareholders | $ 7,541 | $ 10,490 |
Weighted-average shares (thousands) | ||
Basic weighted-average shares outstanding | 24,926 | 24,910 |
Dilutive effect of outstanding stock options and unvested restricted stock awards | 74 | 144 |
Diluted weighted-average shares outstanding | 25,000 | 25,054 |
Earnings per share: | ||
Basic | $ 0.30 | $ 0.42 |
Diluted | $ 0.30 | $ 0.42 |