Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 04, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | INDEPENDENT BANK CORP /MI/ | ||
Entity Central Index Key | 39,311 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 300,922,717 | ||
Entity Common Stock, Shares Outstanding | 21,361,594 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and due from banks | $ 54,260 | $ 48,326 |
Interest bearing deposits | 31,523 | 25,690 |
Cash and Cash Equivalents | 85,783 | 74,016 |
Interest bearing deposits - time | 11,866 | 13,561 |
Trading securities | 148 | 203 |
Securities available for sale | 585,484 | 533,178 |
Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 15,471 | 19,919 |
Loans held for sale, carried at fair value | 27,866 | 23,662 |
Loans | ||
Commercial | 748,398 | 690,955 |
Mortgage | 500,454 | 472,628 |
Installment | 231,599 | 206,378 |
Payment plan receivables | 34,599 | 40,001 |
Total Loans | 1,515,050 | 1,409,962 |
Allowance for loan losses | (22,570) | (25,990) |
Net Loans | 1,492,480 | 1,383,972 |
Other real estate and repossessed assets | 7,150 | 6,454 |
Property and equipment, net | 43,103 | 45,948 |
Bank-owned life insurance | 54,402 | 53,625 |
Deferred tax assets, net | 39,635 | 48,632 |
Capitalized mortgage loan servicing rights | 12,436 | 12,106 |
Vehicle service contract counterparty receivables, net | 7,229 | 7,237 |
Other intangibles | 2,280 | 2,627 |
Accrued income and other assets | 23,733 | 23,590 |
Total Assets | 2,409,066 | 2,248,730 |
Deposits | ||
Non-interest bearing | 659,793 | 576,882 |
Savings and interest-bearing checking | 988,174 | 943,734 |
Reciprocal | 50,207 | 53,668 |
Time | 387,789 | 350,018 |
Total Deposits | 2,085,963 | 1,924,302 |
Other borrowings | 11,954 | 12,470 |
Subordinated debentures | 35,569 | 35,569 |
Vehicle service contract counterparty payables | 797 | 1,977 |
Accrued expenses and other liabilities | 23,691 | 24,041 |
Total Liabilities | $ 2,157,974 | $ 1,998,359 |
Commitments and contingent liabilities | ||
Shareholders' Equity | ||
Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding | $ 0 | $ 0 |
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 22,251,373 shares at December 31, 2015 and 22,957,323 shares at December 31, 2014 | 339,462 | 352,462 |
Accumulated deficit | (82,334) | (96,455) |
Accumulated other comprehensive loss | (6,036) | (5,636) |
Total Shareholders' Equity | 251,092 | 250,371 |
Total Liabilities and Shareholders' Equity | $ 2,409,066 | $ 2,248,730 |
CONSOLIDATED STATEMENTS OF FIN3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Shareholders' Equity | ||
Convertible preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Convertible preferred stock, shares authorized (in shares) | 200,000 | 200,000 |
Convertible preferred stock, shares issued (in shares) | 0 | 0 |
Convertible preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 22,251,373 | 22,957,323 |
Common stock, shares outstanding (in shares) | 22,251,373 | 22,957,323 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
INTEREST INCOME | ||||
Interest and fees on loans | $ 70,930 | $ 71,823 | $ 80,664 | |
Interest on securities | ||||
Taxable | 7,805 | 6,341 | 4,059 | |
Tax-exempt | 907 | 991 | 1,101 | |
Other investments | 1,200 | 1,400 | 1,297 | |
Total Interest Income | 80,842 | 80,555 | 87,121 | |
INTEREST EXPENSE | ||||
Deposits | 4,009 | 4,967 | 5,706 | |
Other borrowings | 1,847 | 2,332 | 3,456 | |
Total Interest Expense | 5,856 | 7,299 | 9,162 | |
Net Interest Income | 74,986 | 73,256 | 77,959 | |
Provision for loan losses | (2,714) | (3,136) | (3,988) | |
Net Interest Income After Provision for Loan Losses | 77,700 | 76,392 | 81,947 | |
NON-INTEREST INCOME | ||||
Service charges on deposit accounts | 12,389 | 13,446 | 14,076 | |
Interchange income | 8,481 | 8,164 | 7,362 | |
Net gains (losses) on assets | ||||
Mortgage loans | 7,448 | 5,628 | 10,022 | |
Securities | 20 | 329 | 395 | |
Other than temporary impairment loss on securities | ||||
Total impairment loss | 0 | (9) | (26) | |
Loss recognized in other comprehensive income (loss) | 0 | 0 | 0 | |
Net impairment loss recognized in earnings | 0 | (9) | (26) | |
Mortgage loan servicing, net | 1,751 | 791 | 3,806 | |
Title insurance fees | 1,156 | 995 | 1,682 | |
Net gain on branch sale | 1,193 | 0 | 0 | |
Gain on extinguishment of debt | 0 | 500 | 0 | |
Increase in fair value of U.S. Treasury warrant | 0 | 0 | (1,025) | |
Other | 7,692 | 8,931 | 8,537 | |
Total Non-interest Income | 40,130 | 38,775 | 44,829 | |
NON-INTEREST EXPENSE | ||||
Compensation and employee benefits | 48,186 | 47,221 | 47,924 | |
Occupancy, net | 8,369 | 8,912 | 8,845 | |
Data processing | 7,944 | 7,532 | 8,019 | |
Furniture, fixtures and equipment | 3,892 | 4,137 | 4,293 | |
Loan and collection | 3,609 | 5,392 | 6,886 | |
Communications | 2,957 | 2,926 | 2,919 | |
Advertising | 2,121 | 2,193 | 2,433 | |
Legal and professional | 2,013 | 1,969 | 2,459 | |
FDIC deposit insurance | 1,366 | 1,567 | 2,435 | |
Interchange expense | 1,125 | 1,291 | 1,645 | |
Credit card and bank service fees | 797 | 946 | 1,263 | |
Vehicle service contract counterparty contingencies | 119 | 199 | 4,837 | |
Costs (recoveries) related to unfunded lending commitments | 113 | 31 | (90) | |
Provision for loss reimbursement on sold loans | (59) | (466) | 2,152 | |
Net (gains) losses on other real estate and repossessed assets | (180) | (500) | 1,237 | |
Other | 6,078 | 6,601 | 6,861 | |
Total Non-interest Expense | 88,450 | 89,951 | 104,118 | |
Income Before Income Tax | 29,380 | 25,216 | 22,658 | |
Income tax expense (benefit) | 9,363 | 7,195 | (54,851) | |
Net Income | 20,017 | 18,021 | 77,509 | |
Preferred stock dividends and discount accretion | 0 | 0 | (3,001) | |
Preferred stock discount | 0 | 0 | 7,554 | |
Net income applicable to common stock | $ 20,017 | $ 18,021 | $ 82,062 | |
Net income per common share | ||||
Basic (in dollars per share) | [1] | $ 0.88 | $ 0.79 | $ 5.87 |
Diluted (in dollars per share) | 0.86 | 0.77 | 3.55 | |
Cash dividends declared per common share (in dollars per share) | $ 0.26 | $ 0.18 | $ 0 | |
[1] | Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net income | $ 20,017 | $ 18,021 | $ 77,509 |
Securities available for sale | |||
Unrealized gain (loss) arising during period | (540) | 5,095 | (4,698) |
Change in unrealized losses for which a portion of other than temporary impairment has been recognized in earnings | 0 | 398 | 270 |
Reclassification adjustment for other than temporary impairment included in earnings | 0 | 9 | 26 |
Reclassification adjustments for gains included in earnings | (75) | (329) | (7) |
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale | (615) | 5,173 | (4,409) |
Income tax expense (benefit) | (215) | 1,811 | (1,544) |
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale, net of tax | (400) | 3,362 | (2,865) |
Derivative instruments | |||
Unrealized loss arising during period | 0 | 0 | (37) |
Reclassification adjustment for expense recognized in earnings | 0 | 0 | 208 |
Reclassification adjustment for accretion on settled derivatives | 0 | 380 | 189 |
Unrealized gains recognized in other comprehensive income (loss) on derivative instruments | 0 | 380 | 360 |
Income tax expense (benefit) | 0 | 133 | (1,318) |
Unrealized gains recognized in other comprehensive income (loss) on derivative instruments, net of tax | 0 | 247 | 1,678 |
Other comprehensive income (loss) | (400) | 3,609 | (1,187) |
Comprehensive income | $ 19,617 | $ 21,630 | $ 76,322 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at beginning of period at Dec. 31, 2012 | $ 84,204 | $ 251,237 | $ (192,408) | $ (8,058) | $ 134,975 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 0 | 0 | 77,509 | 0 | 77,509 |
Dividends on Preferred | 2,856 | 0 | (2,856) | 0 | 0 |
Issuance of common stock | 0 | 99,075 | 0 | 0 | 99,075 |
Share based compensation | 0 | 1,238 | 0 | 0 | 1,238 |
Share based compensation withholding obligation | 0 | (513) | 0 | 0 | (513) |
Accretion of preferred stock discount | 146 | 0 | (146) | 0 | 0 |
Common stock warrant | 0 | 1,484 | 0 | 0 | 1,484 |
Redemption of convertible preferred stock and common stock warrant | (87,206) | (1,348) | 7,554 | 0 | (81,000) |
Other comprehensive income (loss) | 0 | 0 | 0 | (1,187) | (1,187) |
Balances at end of the period at Dec. 31, 2013 | 0 | 351,173 | (110,347) | (9,245) | 231,581 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 0 | 0 | 18,021 | 0 | 18,021 |
Cash dividends declared | 0 | 0 | (4,129) | 0 | (4,129) |
Issuance of common stock | 0 | 97 | 0 | 0 | 97 |
Share based compensation | 0 | 1,192 | 0 | 0 | 1,192 |
Other comprehensive income (loss) | 0 | 0 | 0 | 3,609 | 3,609 |
Balances at end of the period at Dec. 31, 2014 | 0 | 352,462 | (96,455) | (5,636) | 250,371 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 0 | 0 | 20,017 | 0 | 20,017 |
Cash dividends declared | 0 | 0 | (5,896) | 0 | (5,896) |
Repurchase of common stock | 0 | (13,498) | (13,498) | ||
Issuance of common stock | 0 | 112 | 0 | 0 | 112 |
Share based compensation | 0 | 1,477 | 0 | 0 | 1,477 |
Share based compensation withholding obligation | 0 | (1,091) | 0 | 0 | (1,091) |
Other comprehensive income (loss) | 0 | 0 | 0 | (400) | (400) |
Balances at end of the period at Dec. 31, 2015 | $ 0 | $ 339,462 | $ (82,334) | $ (6,036) | $ 251,092 |
CONSOLIDATED STATEMENTS OF SHA7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | |||
Preferred stock stated dividend rate | 5.00% | ||
Cash dividends declared (in dollars per share) | $ 0.26 | $ 0.18 | $ 0 |
Repurchase of shares of common stock (in shares) | 967,199 | ||
Issuance of shares of common stock (in shares) | 39,610 | 30,828 | 13,604,963 |
Share based compensation, common stock (in shares) | 299,263 | 107,359 | 175,789 |
Share based compensation withholding obligation, common stock (in shares) | 77,624 | 55,348 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS [Abstract] | |||
Net income | $ 20,017 | $ 18,021 | $ 77,509 |
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM OPERATING ACTIVITIES | |||
Proceeds from sales of loans held for sale | 288,852 | 228,906 | 415,442 |
Disbursements for loans held for sale | (285,608) | (226,550) | (378,323) |
Provision for loan losses | (2,714) | (3,136) | (3,988) |
Deferred federal income tax expense (benefit) | 8,997 | 8,918 | (57,550) |
Deferred loan fees | (1,234) | (753) | 17 |
Depreciation, amortization of intangible assets and premiums and accretion of discounts on securities, loans and interest bearning deposits - time | 4,553 | 3,014 | (2,197) |
Net gains on mortgage loans | (7,448) | (5,628) | (10,022) |
Net gains on securities | (20) | (329) | (395) |
Securities impairment recognized in earnings | 0 | 9 | 26 |
Net (gains) losses on other real estate and repossessed assets | (180) | (500) | 1,237 |
Vehicle service contract counterparty contingencies | 119 | 199 | 4,837 |
Share based compensation | 1,477 | 1,192 | 1,238 |
Net gain on branch sale | (1,193) | 0 | 0 |
Gains on extinguishment of debt | 0 | (500) | 0 |
(Increase) decrease in accrued income and other assets | (1,387) | (2,579) | 7,747 |
Decrease in accrued expenses and other liabilities | (196) | (7,213) | (3,508) |
Total Adjustments | 4,018 | (4,950) | (25,439) |
Net Cash From Operating Activities | 24,035 | 13,071 | 52,070 |
CASH FLOW USED IN INVESTING ACTIVITIES | |||
Proceeds from the sale of securities available for sale | 12,037 | 14,633 | 2,940 |
Proceeds from the maturity of securities available for sale | 36,808 | 58,220 | 29,866 |
Principal payments received on securities available for sale | 130,232 | 84,487 | 43,702 |
Purchases of securities available for sale | (234,693) | (224,946) | (332,060) |
Purchases of interest bearing deposits - time | (4,595) | (2,401) | (20,260) |
Proceeds from the maturity of interest bearing deposits - time | 6,222 | 6,719 | 2,142 |
Redemption of Federal Home Loan Bank and Federal Reserve Bank stock | 4,906 | 3,814 | 0 |
Purchase of Federal Reserve Bank stock | (458) | (314) | (2,581) |
Net (increase) decrease in portfolio loans (loans originated, net of principal payments) | (74,343) | (37,195) | 33,192 |
Purchase of portfolio loans | (32,872) | 0 | 0 |
Net proceeds from the sale of watch, substandard and non-performing loans | 0 | 0 | 6,721 |
Net cash from (paid for) branch sale | (7,229) | 0 | 3,292 |
Proceeds from the collection of vehicle service contract counterparty receivables | 1,092 | 385 | 6,751 |
Proceeds from the sale of other real estate and repossessed assets | 6,179 | 18,471 | 13,546 |
Proceeds from the sale of property and equipment | 555 | 309 | 52 |
Capital expenditures | (4,354) | (4,298) | (8,371) |
Net Cash Used in Investing Activities | (160,513) | (82,116) | (221,068) |
CASH FLOW FROM FINANCING ACTIVITIES | |||
Net increase in total deposits | 170,314 | 39,496 | 105,269 |
Net increase (decrease) in other borrowings | (1) | (1) | 4 |
Proceeds from Federal Home Loan Bank advances | 100 | 100 | 100 |
Payments of Federal Home Loan Bank advances | (615) | (4,817) | (541) |
Net decrease in vehicle service contract counterparty payables | (1,180) | (2,112) | (3,636) |
Dividends paid | (5,896) | (4,129) | 0 |
Proceeds from issuance of common stock | 112 | 97 | 98,066 |
Repurchase of common stock | (13,498) | 0 | 0 |
Share based compensation withholding obligations | (1,091) | 0 | (513) |
Redemption of subordinated debt | 0 | (4,654) | (9,452) |
Redemption of convertible preferred stock and common stock warrant | 0 | 0 | (81,000) |
Net Cash From Financing Activities | 148,245 | 23,980 | 108,297 |
Net Increase (Decrease) in Cash and Cash Equivalents | 11,767 | (45,065) | (60,701) |
Cash and Cash Equivalents at Beginning of Year | 74,016 | 119,081 | 179,782 |
Cash and Cash Equivalents at End of Year | 85,783 | 74,016 | 119,081 |
Cash paid during the year for | |||
Interest | 5,769 | 7,365 | 15,914 |
Income taxes | 295 | 216 | 43 |
Transfers to other real estate and repossessed assets | 6,694 | 6,143 | 6,932 |
Transfer of payment plan receivables to vehicle service contract counterparty receivables | 1,203 | 180 | 792 |
Purchase of securities available for sale and interest bearing deposits - time not yet settled | $ 0 | $ 265 | $ 4,146 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
ACCOUNTING POLICIES [Abstract] | |
ACCOUNTING POLICIES | NOTE 1 – ACCOUNTING POLICIES The accounting and reporting policies and practices of Independent Bank Corporation and subsidiaries conform to accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. Our critical accounting policies include the assessment for other than temporary impairment (“OTTI”) on investment securities, the determination of the allowance for loan losses, the determination of vehicle service contract counterparty contingencies, the valuation of originated mortgage loan servicing rights and the valuation of deferred tax assets. We are required to make material estimates and assumptions that are particularly susceptible to changes in the near term as we prepare the consolidated financial statements and report amounts for each of these items. Actual results may vary from these estimates. Our subsidiary Independent Bank (“Bank”) transacts business in the single industry of commercial banking. Our Bank’s activities cover traditional phases of commercial banking, including checking and savings accounts, commercial lending, direct and indirect consumer financing and mortgage lending. Our principal markets are the rural and suburban communities across Lower Michigan that are served by our Bank’s branches and loan production offices. We also purchase payment plans from companies (which we refer to as “counterparties”) that provide vehicle service contracts and similar products to consumers, through our wholly owned subsidiary, Mepco Finance Corporation (“Mepco”). At December 31, 2015, 72.6% of our Bank’s loan portfolio was secured by real estate. PRINCIPLES OF CONSOLIDATION STATEMENTS OF CASH FLOWS INTEREST BEARING DEPOSITS INTEREST BEARING DEPOSITS - TIME LOANS HELD FOR SALE MORTGAGE LOAN SERVICING RIGHTS TRANSFERS OF FINANCIAL ASSETS SECURITIES We evaluate securities for OTTI at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In performing this evaluation, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) an assessment of whether we intend to sell, or it is more likely than not that we will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. For securities that do not meet the aforementioned recovery criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income (loss). The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Gains and losses realized on the sale of securities available for sale are determined using the specific identification method and are recognized on a trade-date basis. FEDERAL HOME LOAN BANK (“FHLB”) STOCK FEDERAL RESERVE BANK (“FRB”) STOCK LOAN REVENUE RECOGNITION Certain loan fees and direct loan origination costs are deferred and recognized as an adjustment of yield generally over the contractual life of the related loan. Fees received in connection with loan commitments are deferred until the loan is advanced and are then recognized generally over the contractual life of the loan as an adjustment of yield. Fees on commitments that expire unused are recognized at expiration. Fees received for letters of credit are recognized as revenue over the life of the commitment. PAYMENT PLAN RECEIVABLE REVENUE RECOGNITION ALLOWANCE FOR LOAN LOSSES Some loans will not be repaid in full. Therefore, an AFLL is maintained at a level which represents our best estimate of losses incurred. In determining the allowance and the related provision for loan losses, we consider four principal elements: (i) specific allocations based upon probable losses identified during the review of the loan portfolio, (ii) allocations established for other adversely rated commercial loans, (iii) allocations based principally on historical loan loss experience, and (iv) additional allocations based on subjective factors, including local and general economic business factors and trends, portfolio concentrations and changes in the size and/or the general terms of the loan portfolios. The first AFLL element (specific allocations) reflects our estimate of probable incurred losses based upon our systematic review of specific loans. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, discounted collateral exposure and discounted cash flow analysis. Impaired commercial, mortgage and installment loans are allocated allowance amounts using this first element. The second AFLL element (other adversely rated commercial loans) reflects the application of our loan rating system. This rating system is similar to those employed by state and federal banking regulators. Commercial loans that are rated below a certain predetermined classification are assigned a loss allocation factor for each loan classification category that is based upon a historical analysis of both the probability of default and the expected loss rate (“loss given default”). The lower the rating assigned to a loan or category, the greater the allocation percentage that is applied. The third AFLL element (historical loss allocations) is determined by assigning allocations to higher rated (“non-watch credit”) commercial loans using a probability of default and loss given default similar to the second AFLL element and to homogenous mortgage and installment loan groups based upon borrower credit score and portfolio segment. For homogenous mortgage and installment loans a probability of default for each homogenous pool is calculated by way of credit score migration. Historical loss data for each homogenous pool coupled with the associated probability of default is utilized to calculate an expected loss allocation rate. The fourth AFLL element (additional allocations based on subjective factors) is based on factors that cannot be associated with a specific credit or loan category and reflects our attempt to ensure that the overall allowance for loan losses appropriately reflects a margin for the imprecision necessarily inherent in the estimates of expected credit losses. We consider a number of subjective factors when determining this fourth element, including local and general economic business factors and trends, portfolio concentrations and changes in the size, mix and the general terms of the overall loan portfolio. Increases in the AFLL are recorded by a provision for loan losses charged to expense. Although we periodically allocate portions of the AFLL to specific loans and loan portfolios, the entire AFLL is available for incurred losses. We generally charge-off commercial, homogenous residential mortgage and installment loans and payment plan receivables when they are deemed uncollectible or reach a predetermined number of days past due based on loan product, industry practice and other factors. Collection efforts may continue and recoveries may occur after a loan is charged against the AFLL. While we use relevant information to recognize losses on loans, additional provisions for related losses may be necessary based on changes in economic conditions, customer circumstances and other credit risk factors. A loan is impaired when full payment under the loan terms is not expected. Generally, those loans included in each commercial loan class that are rated substandard, classified as non-performing or were classified as non-performing in the preceding quarter, are evaluated for impairment. Those loans included in each mortgage loan or installment class whose terms have been modified and considered a troubled debt restructuring are also impaired. Loans which have been modified resulting in a concession, and which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired. We measure our investment in an impaired loan based on one of three methods: the loan’s observable market price, the fair value of the collateral or the present value of expected future cash flows discounted at the loan’s effective interest rate. Large groups of smaller balance homogeneous loans, such as those loans included in each installment and mortgage loan class and each payment plan receivable class, are collectively evaluated for impairment and accordingly, they are not separately identified for impairment disclosures. TDR loans are measured at the present value of estimated future cash flows using the loan’s effective interest rate at inception of the loan. If a TDR is considered to be a collateral dependent loan, the loan is reported net, at the fair value of collateral. A loan can be removed from TDR status if it is subsequently restructured and the borrower is no longer experiencing financial difficulties and the newly restructured agreement does not contain any concessions to the borrower. The new agreement must specify market terms, including a contractual interest rate not less than a market interest rate for new debt with similar credit risk characteristics, and other terms no less favorable to us than those we would offer for similar new debt. PROPERTY AND EQUIPMENT BANK OWNED LIFE INSURANCE OTHER REAL ESTATE AND REPOSSESSED ASSETS OTHER INTANGIBLE ASSETS VEHICLE SERVICE CONTRACT COUNTERPARTY RECEIVABLES, NET INCOME TAXES A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. We recognize interest and/or penalties related to income tax matters in income tax expense. We file a consolidated federal income tax return. Intercompany tax liabilities are settled as if each subsidiary filed a separate return. VEHICLE SERVICE CONTRACT COUNTERPARTY PAYABLES COMMITMENTS TO EXTEND CREDIT AND RELATED FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS At the inception of the derivative we designate the derivative as one of three types based on our intention and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“Fair Value Hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“Cash Flow Hedge”), or (3) an instrument with no hedging designation. For a Fair Value Hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item, are recognized in current earnings as fair values change. For a Cash Flow Hedge, the gain or loss on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. We did not have any Fair Value Hedges or Cash Flow Hedges at December 31, 2015 or 2014. For both types of hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. For instruments with no hedging designation, the gain or loss on the derivative is reported in earnings. These free standing instruments currently consist of (i) mortgage banking related derivatives and include rate-lock loan commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and mandatory forward commitments for the future delivery of these mortgage loans, (ii) certain pay-fixed and pay-variable interest rate swap agreements related to commercial loan customers and (iii) certain purchased and written options related to a time deposit product. Fair values of the mortgage derivatives are estimated based on mortgage backed security pricing for comparable assets. We enter into mandatory forward commitments for the future delivery of mortgage loans generally when interest rate locks are entered into in order to hedge the change in interest rates resulting from our commitments to fund the loans. Changes in the fair values of these derivatives are included in net gains on mortgage loans. Fair values of the pay-fixed and pay-variable interest rate swap agreements are based on discounted cash flow analyses and are included in net interest income. Fair values of the purchased and written options are based on prices of financial instruments with similar characteristics and are included in net interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest expense. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income (mortgage banking related derivatives) or net interest income (interest rate swap agreements and options). Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. We formally document the relationship between derivatives and hedged items, as well as the risk- management objective and the strategy for undertaking hedge transactions, at the inception of the hedging relationship. This documentation includes linking Fair Value or Cash Flow Hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. We also assess, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. We discontinue hedge accounting when it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded in earnings. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive loss are amortized into earnings over the same periods which the hedged transactions will affect earnings. COMPREHENSIVE INCOME INCOME PER COMMON SHARE SHARE BASED COMPENSATION COMMON STOCK RECLASSIFICATION ADOPTION OF NEW ACCOUNTING STANDARDS In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606) ”. In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation (Topic 718) – Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period”. This ASU amends existing guidance related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. These amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This amended guidance is effective for us on January 1, 2016, and is not expected to have a material impact on our consolidated operating results or financial condition. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This ASU amends existing guidance related to the accounting for certain financial assets and liabilities. These amendments, among other things, requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. This amended guidance is effective for us on January 1, 2018, and is not expected to have a material impact on our consolidated operating results or financial condition. |
RESTRICTIONS ON CASH AND DUE FR
RESTRICTIONS ON CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2015 | |
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract] | |
RESTRICTIONS ON CASH AND DUE FROM BANKS | NOTE 2 – RESTRICTIONS ON CASH AND DUE FROM BANKS Our Bank is required to maintain reserve balances in the form of vault cash and non-interest earning balances with the FRB. The average reserve balances to be maintained during 2015 and 2014 were $3.2 million and $15.3 million, respectively. We do not maintain compensating balances with correspondent banks. We are also required to maintain reserve balances related primarily to our merchant payment processing operations and for certain investment security transactions. These balances are held at unrelated financial institutions and totaled $2.5 million and $2.8 million at December 31, 2015 and 2014, respectively. |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2015 | |
SECURITIES [Abstract] | |
SECURITIES | NOTE 3 – SECURITIES Securities available for sale consist of the following at December 31: Amortized Cost Unrealized Fair Value Gains Losses (In thousands) 2015 U.S. agency $ 47,283 $ 309 $ 80 $ 47,512 U.S. agency residential mortgage-backed 195,055 1,584 583 196,056 U.S. agency commercial mortgage-backed 34,017 94 83 34,028 Private label residential mortgage-backed 5,061 161 319 4,903 Other asset backed 117,431 54 581 116,904 Obligations of states and political subdivisions 145,193 941 1,150 144,984 Corporate 38,895 9 290 38,614 Trust preferred 2,916 — 433 2,483 Total $ 585,851 $ 3,152 $ 3,519 $ 585,484 2014 U.S. agency $ 34,936 $ 133 $ 63 $ 35,006 U.S. agency residential mortgage-backed 256,387 1,838 667 257,558 U.S. agency commercial mortgage-backed 33,779 68 119 33,728 Private label residential mortgage-backed 6,216 187 390 6,013 Other asset backed 32,314 77 38 32,353 Obligations of states and political subdivisions 143,698 961 1,244 143,415 Corporate 22,690 53 79 22,664 Trust preferred 2,910 — 469 2,441 Total $ 532,930 $ 3,317 $ 3,069 $ 533,178 Total OTTI recognized in accumulated other comprehensive loss for securities available for sale was zero at both December 31, 2015 and 2014, respectively. Our investments’ gross unrealized losses and fair values aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position, at December 31 follows: Less Than Twelve Months Twelve Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) 2015 U.S. agency $ 12,164 $ 47 $ 6,746 $ 33 $ 18,910 $ 80 U.S. agency residential mortgage-backed 57,538 316 23,340 267 80,878 583 U.S. agency commercial mortgage-backed 16,747 60 2,247 23 18,994 83 Private label residential mortgage-backed — — 3,393 319 3,393 319 Other asset backed 102,660 434 5,189 147 107,849 581 Obligations of states and political subdivisions 52,493 597 12,240 553 64,733 1,150 Corporate 30,550 290 — — 30,550 290 Trust preferred — — 2,483 433 2,483 433 Total $ 272,152 $ 1,744 $ 55,638 $ 1,775 $ 327,790 $ 3,519 Less Than Twelve Months Twelve Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) 2014 U.S. agency $ 12,851 $ 58 $ 606 $ 5 $ 13,457 $ 63 U.S. agency residential mortgage-backed 89,547 531 15,793 136 105,340 667 U.S. agency commercial mortgage-backed 21,325 119 — — 21,325 119 Private label residential mortgage-backed 208 1 4,013 389 4,221 390 Other asset backed 2,960 15 8,729 23 11,689 38 Obligations of states and political subdivisions 28,114 106 37,540 1,138 65,654 1,244 Corporate 8,660 79 — — 8,660 79 Trust preferred — — 2,441 469 2,441 469 Total $ 163,665 $ 909 $ 69,122 $ 2,160 $ 232,787 $ 3,069 Our portfolio of securities available for sale is reviewed quarterly for impairment in value. In performing this review, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) an assessment of whether we intend to sell, or it is more likely than not that we will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. For securities that do not meet the aforementioned recovery criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income (loss). U.S. agency, U.S. agency residential mortgage-backed securities and U.S. agency commercial mortgage backed securities — at December 31, 2015, we had 39 U.S. agency, 108 U.S. agency residential mortgage-backed and 18 U.S. agency commercial mortgage-backed securities whose fair market value is less than amortized cost. The unrealized losses are largely attributed to increases in interest rates since acquisition and widening spreads to Treasury bonds. As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary. Private label residential mortgage backed securities — at December 31, 2015, we had five of this type of security whose fair value is less than amortized cost. Two of the five issues are rated by a major rating agency as investment grade, two are rated below investment grade and one is split rated. Two of these bonds have an impairment in excess of 10% and all five of these holdings have been impaired for more than 12 months. The unrealized losses are largely attributable to credit spread widening on these securities since their acquisition. All of these securities are receiving principal and interest payments. Most of these transactions are pass-through structures, receiving pro rata principal and interest payments from a dedicated collateral pool. The nonreceipt of interest cash flows is not expected and thus not presently considered in our discounted cash flow methodology discussed below. All private label residential mortgage-backed securities are reviewed for OTTI utilizing a cash flow projection. The cash flow analysis forecasts cash flow from the underlying loans in each transaction and then applies these cash flows to the bonds in the securitization. Our cash flow analysis forecasts complete recovery of our cost basis for four of the five securities whose fair value is less than amortized cost while the fifth security had credit related OTTI recognized in prior years and is discussed in further detail below. As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no other declines discussed above are deemed to be other than temporary. Other asset backed — at December 31, 2015, we had 129 other asset backed securities whose fair value is less than amortized cost. The unrealized losses are primarily due to credit spread widening and increases in interest rates since acquisition. As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary. Obligations of states and political subdivisions — at December 31, 2015, we had 79 municipal securities whose fair value is less than amortized cost. The unrealized losses are primarily due to increases in interest rates since acquisition. As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary. Corporate — at December 31, 2015, we had 27 corporate securities whose fair value is less than amortized cost. The unrealized losses are primarily due to credit spread widening and increases in interest rates since acquisition. As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary. Trust preferred securities — at December 31, 2015, we had three trust preferred securities whose fair value is less than amortized cost. All of our trust preferred securities are single issue securities issued by a trust subsidiary of a bank holding company. The pricing of trust preferred securities has suffered from credit spread widening. One of the three securities is rated by two major rating agencies as investment grade, while one (a Bank of America issuance) is rated below investment grade by two major rating agencies and the other one is non-rated. The non-rated issue is a relatively small bank and was never rated. The issuer of this non-rated trust preferred security, which had a total amortized cost of $1.0 million and total fair value of $0.8 million as of December 31, 2015, continues to have satisfactory credit metrics and make interest payments. The following table breaks out our trust preferred securities in further detail as of December 31: 2015 2014 Fair Value Net Unrealized Loss Fair Value Net Unrealized Loss (In thousands) Trust preferred securities Rated issues $ 1,690 $ (226 ) $ 1,643 $ (267 ) Unrated issues 793 (207 ) 798 (202 ) As management does not intend to liquidate these securities and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines are deemed to be other than temporary. During 2015, 2014 and 2013, we recorded in earnings credit related OTTI charges on securities available for sale of zero, $0.01 million and $0.03 million, respectively. At December 31, 2015, three private label residential mortgage-backed securities had credit related OTTI and are summarized as follows: Senior Security Super Senior Security Senior Support Security Total (In thousands) As of December 31, 2015 Fair value $ 1,616 $ 1,331 $ 79 $ 3,026 Amortized cost 1,635 1,249 — 2,884 Non-credit unrealized loss 19 — — 19 Unrealized gain — 82 79 161 Cumulative credit related OTTI 757 457 380 1,594 Credit related OTTI recognized in our Consolidated Statements of Operations For the years ended December 31, 2015 $ — $ — $ — $ — 2014 9 — — 9 2013 26 — — 26 Each of these securities is receiving principal and interest payments similar to principal reductions in the underlying collateral. Two of these securities have unrealized gains and one has an unrealized loss at December 31, 2015. Prior to the second quarter of 2013, all three of these securities had an unrealized loss. The original amortized cost for each of these securities has been permanently adjusted downward for previously recorded credit related OTTI. The unrealized loss (based on original amortized cost) for two of these securities is now less than previously recorded credit related OTTI amounts. The remaining non-credit related unrealized loss in the senior security is attributed to other factors and is reflected in other comprehensive income (loss) during those same periods. A roll forward of credit losses recognized in earnings on securities available for sale for the years ending December 31 follow: 2015 2014 2013 (In thousands) Balance at beginning of year $ 1,844 $ 1,835 $ 1,809 Additions to credit losses on securities for which no previous OTTI was recognized — — — Increases to credit losses on securities for which OTTI was previously recognized — 9 26 Total $ 1,844 $ 1,844 $ 1,835 The amortized cost and fair value of securities available for sale at December 31, 2015, by contractual maturity, follow: Amortized Cost Fair Value (In thousands) Maturing within one year $ 34,565 $ 34,591 Maturing after one year but within five years 69,976 69,916 Maturing after five years but within ten years 46,512 46,641 Maturing after ten years 83,234 82,445 234,287 233,593 U.S. agency residential mortgage-backed 195,055 196,056 U.S. agency commercial mortgage-backed 34,017 34,028 Private label residential mortgage-backed 5,061 4,903 Other asset backed 117,431 116,904 Total $ 585,851 $ 585,484 The actual maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. A summary of proceeds from the sale of securities available for sale and gains and losses for the years ended December 31 follow: Proceeds Realized Gains (1) Losses (2) (In thousands) 2015 $ 12,037 $ 75 $ — 2014 14,633 329 — 2013 2,940 15 8 (1) Gains in 2014 exclude $0.3 million of realized gain related to a U.S. Treasury short position. (2) Losses in 2014 and 2013 exclude $0.01 million and $0.03 million, respectively of credit related OTTI recognized in earnings. During 2015, 2014 and 2013, our trading securities consisted of various preferred stocks. During each of those years, we recognized gains (losses) on trading securities of $(0.06) million, $(0.30) million and $0.39 million, respectively, that are included in net gains on securities in the Consolidated Statements of Operations. All of these amounts relate to gains (losses) recognized on trading securities still held at December 31, 2015 and 2014. Securities with a book value of $1.1 million at both December 31, 2015 and 2014, respectively, were pledged to secure borrowings, derivatives, public deposits and for other purposes as required by law. There were no investment obligations of state and political subdivisions that were payable from or secured by the same source of revenue or taxing authority that exceeded 10% of consolidated shareholders’ equity at December 31, 2015 or 2014. |
LOANS AND PAYMENT PLAN RECEIVAB
LOANS AND PAYMENT PLAN RECEIVABLES | 12 Months Ended |
Dec. 31, 2015 | |
LOANS AND PAYMENT PLAN RECEIVABLES [Abstract] | |
LOANS AND PAYMENT PLAN RECEIVABLES | NOTE 4 – LOANS AND PAYMENT PLAN RECEIVABLES Our loan portfolios at December 31 follow: 2015 2014 (In thousands) Real estate (1) Residential first mortgages $ 432,215 $ 411,423 Residential home equity and other junior mortgages 106,297 108,162 Construction and land development 62,629 54,644 Other (2) 498,706 447,837 Consumer 193,350 154,591 Commercial 180,424 186,875 Payment plan receivables 34,599 40,001 Agricultural 6,830 6,429 Total loans $ 1,515,050 $ 1,409,962 (1) Includes both residential and non-residential commercial loans secured by real estate. (2) Includes loans secured by multi-family residential and non-farm, non-residential property. Loans include net deferred loan costs of $2.2 million and $1.0 million at December 31, 2015 and 2014, respectively. Payment plan receivables totaling $36.9 million and $42.6 million at December 31, 2015 and 2014, respectively, are presented net of unamortized discount of $2.3 million and $2.6 million at December 31, 2015 and 2014, respectively. These payment plan receivables had effective yields of 13% and 14% at December 31, 2015 and 2014, respectively. These receivables have various due dates through January 2018. In December 2015, we purchased $32.6 million of single-family residential fixed rate jumbo mortgage loans from another Michigan-based financial institution. These mortgage loans were all on properties located in Michigan, had a weighted average interest rate (after a 0.25% servicing fee) of 3.94% and a weighted average remaining contractual maturity of 344 months. An analysis of the allowance for loan losses by portfolio segment for the years ended December 31 follows: Commercial Mortgage Installment Payment Plan Receivables Subjective Allocation Total (In thousands) 2015 Balance at beginning of period $ 5,445 $ 13,444 $ 1,814 $ 64 $ 5,223 $ 25,990 Additions (deductions) Provision for loan losses (737 ) (1,744 ) (274 ) (8 ) 49 (2,714 ) Recoveries credited to allowance 2,656 1,258 1,108 — — 5,022 Loans charged against the allowance (1,694 ) (2,567 ) (1,467 ) — — (5,728 ) Balance at end of period $ 5,670 $ 10,391 $ 1,181 $ 56 $ 5,272 $ 22,570 2014 Balance at beginning of period $ 6,827 $ 17,195 $ 2,246 $ 97 $ 5,960 $ 32,325 Additions (deductions) Provision for loan losses (1,683 ) (1,029 ) 349 (36 ) (737 ) (3,136 ) Recoveries credited to allowance 4,914 1,397 1,104 5 — 7,420 Loans charged against the allowance (4,613 ) (4,119 ) (1,885 ) (2 ) — (10,619 ) Balance at end of period $ 5,445 $ 13,444 $ 1,814 $ 64 $ 5,223 $ 25,990 Commercial Mortgage Installment Payment Plan Receivables Subjective Allocation Total (In thousands) 2013 Balance at beginning of period $ 11,402 $ 21,447 $ 3,378 $ 144 $ 7,904 $ 44,275 Additions (deductions) Provision for loan losses (2,336 ) 71 314 (93 ) (1,944 ) (3,988 ) Recoveries credited to allowance 5,119 1,996 1,074 81 — 8,270 Loans charged against the allowance (7,358 ) (6,319 ) (2,520 ) (35 ) — (16,232 ) Balance at end of period $ 6,827 $ 17,195 $ 2,246 $ 97 $ 5,960 $ 32,325 Allowance for loan losses and recorded investment in loans by portfolio segment follows: Commercial Mortgage Installment Payment Plan Receivables Subjective Allocation Total (In thousands) 2015 Allowance for loan losses: Individually evaluated for impairment $ 2,708 $ 7,818 $ 457 $ — $ — $ 10,983 Collectively evaluated for impairment 2,962 2,573 724 56 5,272 11,587 Total ending allowance balance $ 5,670 $ 10,391 $ 1,181 $ 56 $ 5,272 $ 22,570 Loans Individually evaluated for impairment $ 16,868 $ 66,375 $ 5,888 $ — $ 89,131 Collectively evaluated for impairment 733,399 436,349 226,409 34,599 1,430,756 Total loans recorded investment 750,267 502,724 232,297 34,599 1,519,887 Accrued interest included in recorded investment 1,869 2,270 698 — 4,837 Total loans $ 748,398 $ 500,454 $ 231,599 $ 34,599 $ 1,515,050 2014 Allowance for loan losses: Individually evaluated for impairment $ 3,194 $ 9,311 $ 728 $ — $ — $ 13,233 Collectively evaluated for impairment 2,251 4,133 1,086 64 5,223 12,757 Total ending allowance balance $ 5,445 $ 13,444 $ 1,814 $ 64 $ 5,223 $ 25,990 Loans Individually evaluated for impairment $ 34,147 $ 72,340 $ 6,679 $ — $ 113,166 Collectively evaluated for impairment 658,423 402,458 200,368 40,001 1,301,250 Total loans recorded investment 692,570 474,798 207,047 40,001 1,414,416 Accrued interest included in recorded investment 1,615 2,170 669 — 4,454 Total loans $ 690,955 $ 472,628 $ 206,378 $ 40,001 $ 1,409,962 Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. If these loans had continued to accrue interest in accordance with their original terms, approximately $0.6 million, $0.8 million and $1.2 million of interest income would have been recognized in 2015, 2014 and 2013, respectively. Interest income recorded on these loans was approximately zero during the years ended 2015 and 2014 and $0.1 million in 2013. Loans on non-accrual status and past due more than 90 days (“Non-performing Loans”) at December 31 follow: 90+ and Still Accruing Non- Accrual Total Non- Performing Loans (In thousands) 2015 Commercial Income producing - real estate $ — $ 1,027 $ 1,027 Land, land development and construction - real estate 49 401 450 Commercial and industrial 69 2,028 2,097 Mortgage 1-4 family — 4,744 4,744 Resort lending — 1,094 1,094 Home equity - 1st lien — 187 187 Home equity - 2nd lien — 147 147 Purchased loans — 2 2 Installment Home equity - 1st lien — 106 106 Home equity - 2nd lien — 443 443 Loans not secured by real estate — 421 421 Other — 2 2 Payment plan receivables Full refund — 2 2 Partial refund — 2 2 Other — 1 1 Total recorded investment $ 118 $ 10,607 $ 10,725 Accrued interest included in recorded investment $ 2 $ — $ 2 2014 Commercial Income producing - real estate $ — $ 1,233 $ 1,233 Land, land development and construction - real estate — 594 594 Commercial and industrial — 2,746 2,746 Mortgage 1-4 family 7 5,945 5,952 Resort lending — 2,168 2,168 Home equity - 1st lien — 331 331 Home equity - 2nd lien — 605 605 Installment Home equity - 1st lien — 576 576 Home equity - 2nd lien — 517 517 Loans not secured by real estate — 454 454 Other — 48 48 Payment plan receivables Full refund — 2 2 Partial refund — 12 12 Other — — — Total recorded investment $ 7 $ 15,231 $ 15,238 Accrued interest included in recorded investment $ — $ — $ — An aging analysis of loans by class at December 31 follows: Loans Past Due Loans not Past Due Total Loans 30-59 days 60-89 days 90+ days Total (In thousands) 2015 Commercial Income producing - real estate $ 203 $ 209 $ 647 $ 1,059 $ 305,155 $ 306,214 Land, land development and construction - real estate — — 252 252 44,231 44,483 Commercial and industrial 785 16 151 952 398,618 399,570 Mortgage 1-4 family 1,943 640 4,744 7,327 272,298 279,625 Resort lending 307 — 1,094 1,401 114,619 116,020 Home equity - 1st lien 50 — 187 237 22,327 22,564 Home equity - 2nd lien 439 54 147 640 50,618 51,258 Purchased loans 9 1 2 12 33,245 33,257 Installment Home equity - 1st lien 315 107 106 528 16,707 17,235 Home equity - 2nd lien 231 149 443 823 19,727 20,550 Loans not secured by real estate 567 83 421 1,071 191,262 192,333 Other 15 3 2 20 2,159 2,179 Payment plan receivables Full refund 492 62 2 556 21,294 21,850 Partial refund 415 228 2 645 5,834 6,479 Other 110 3 1 114 6,156 6,270 Total recorded investment $ 5,881 $ 1,555 $ 8,201 $ 15,637 $ 1,504,250 $ 1,519,887 Accrued interest included in recorded investment $ 53 $ 17 $ 2 $ 72 $ 4,765 $ 4,837 2014 Commercial Income producing - real estate $ 89 $ — $ 214 $ 303 $ 252,763 $ 253,066 Land, land development and construction - real estate 131 — 223 354 33,984 34,338 Commercial and industrial 2,391 279 209 2,879 402,287 405,166 Mortgage 1-4 family 1,877 1,638 5,952 9,467 269,719 279,186 Resort lending 226 — 2,168 2,394 126,342 128,736 Home equity - 1st lien 39 50 331 420 19,782 20,202 Home equity - 2nd lien 711 89 605 1,405 45,269 46,674 Installment Home equity - 1st lien 466 37 576 1,079 20,995 22,074 Home equity - 2nd lien 369 81 517 967 28,125 29,092 Loans not secured by real estate 589 231 454 1,274 152,115 153,389 Other 15 3 48 66 2,426 2,492 Payment plan receivables Full refund 838 214 2 1,054 26,799 27,853 Partial refund 409 123 12 544 6,550 7,094 Other 96 24 — 120 4,934 5,054 Total recorded investment $ 8,246 $ 2,769 $ 11,311 $ 22,326 $ 1,392,090 $ 1,414,416 Accrued interest included in recorded investment $ 55 $ 29 $ — $ 84 $ 4,370 $ 4,454 Impaired loans are as follows: December 31, 2015 2014 (In thousands) Impaired loans with no allocated allowance TDR $ 2,518 $ 9,325 Non - TDR 203 299 Impaired loans with an allocated allowance TDR - allowance based on collateral 4,810 5,879 TDR - allowance based on present value cash flow 81,002 94,970 Non - TDR - allowance based on collateral 260 2,296 Non - TDR - allowance based on present value cash flow — — Total impaired loans $ 88,793 $ 112,769 Amount of allowance for loan losses allocated TDR - allowance based on collateral $ 2,436 $ 2,025 TDR - allowance based on present value cash flow 8,471 10,188 Non - TDR - allowance based on collateral 76 1,020 Non - TDR - allowance based on present value cash flow — — Total amount of allowance for loan losses allocated $ 10,983 $ 13,233 Impaired loans by class as of December 31 are as follows (1): 2015 2014 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance (In thousands) With no related allowance recorded: Commercial Income producing - real estate $ 641 $ 851 $ — $ 5,868 $ 6,077 $ — Land, land development & construction-real estate 818 1,393 — 1,051 1,606 — Commercial and industrial 1,245 1,241 — 2,685 2,667 — Mortgage 1-4 family 23 183 — — 49 — Resort lending — — — 48 397 — Home equity - 1st lien — — — — — — Home equity - 2nd lien — — — — — — Installment Home equity - 1st lien — 76 — — 40 — Home equity - 2nd lien — — — — — — Loans not secured by real estate — — — — — — Other — — — — — — 2,727 3,744 — 9,652 10,836 — With an allowance recorded: Commercial Income producing - real estate 8,377 9,232 516 12,836 13,797 689 Land, land development & construction-real estate 1,690 1,778 296 3,456 3,528 499 Commercial and industrial 4,097 4,439 1,896 8,251 8,486 2,006 Mortgage 1-4 family 47,792 49,808 5,132 53,206 56,063 6,195 Resort lending 18,148 18,319 2,662 18,799 18,963 3,075 Home equity - 1st lien 168 172 9 162 177 14 Home equity - 2nd lien 244 325 15 125 205 27 Installment Home equity - 1st lien 2,364 2,492 143 2,744 2,930 219 Home equity - 2nd lien 2,929 2,951 271 3,212 3,215 419 Loans not secured by real estate 587 658 42 711 835 89 Other 8 8 1 12 12 1 86,404 90,182 10,983 103,514 108,211 13,233 Total Commercial Income producing - real estate 9,018 10,083 516 18,704 19,874 689 Land, land development & construction-real estate 2,508 3,171 296 4,507 5,134 499 Commercial and industrial 5,342 5,680 1,896 10,936 11,153 2,006 Mortgage 1-4 family 47,815 49,991 5,132 53,206 56,112 6,195 Resort lending 18,148 18,319 2,662 18,847 19,360 3,075 Home equity - 1st lien 168 172 9 162 177 14 Home equity - 2nd lien 244 325 15 125 205 27 Installment Home equity - 1st lien 2,364 2,568 143 2,744 2,970 219 Home equity - 2nd lien 2,929 2,951 271 3,212 3,215 419 Loans not secured by real estate 587 658 42 711 835 89 Other 8 8 1 12 12 1 Total $ 89,131 $ 93,926 $ 10,983 $ 113,166 $ 119,047 $ 13,233 Accrued interest included in recorded investment $ 338 $ 397 (1) There were no impaired payment plan receivables or purchased mortgage loans at December 31, 2015 or 2014. Average recorded investment in and interest income earned on impaired loans by class for the years ended December 31 follows (1): 2015 2014 2013 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no related allowance recorded: Commercial Income producing - real estate $ 4,520 $ 387 $ 7,660 $ 250 $ 5,765 $ 340 Land, land development & construction-real estate 952 79 1,145 64 3,092 240 Commercial and industrial 2,125 257 3,351 152 3,980 226 Mortgage 1-4 family 19 11 29 — 5 11 Resort lending 12 — 40 1 28 — Home equity - 1st lien — — — — — — Home equity - 2nd lien — — — — — — Installment Home equity - 1st lien — 5 — 2 1,604 83 Home equity - 2nd lien — — — — 1,841 96 Loans not secured by real estate — — — — 470 23 Other — — — — 15 1 7,628 739 12,225 469 16,800 1,020 With an allowance recorded: Commercial Income producing - real estate 12,677 439 12,772 677 18,164 587 Land, land development & construction-real estate 2,219 54 3,939 149 6,186 149 Commercial and industrial 6,663 104 8,500 294 11,795 457 Mortgage 1-4 family 50,421 2,140 55,877 2,286 60,858 2,622 Resort lending 18,448 670 19,458 753 21,708 836 Home equity - 1st lien 161 8 160 6 136 4 Home equity - 2nd lien 172 13 57 2 42 2 Installment Home equity - 1st lien 2,539 176 2,837 174 1,448 85 Home equity - 2nd lien 3,055 193 3,359 188 1,546 86 Loans not secured by real estate 653 37 719 35 314 17 Other 10 1 14 1 3 1 97,018 3,835 107,692 4,565 122,200 4,846 Total Commercial Income producing - real estate 17,197 826 20,432 927 23,929 927 Land, land development & construction-real estate 3,171 133 5,084 213 9,278 389 Commercial and industrial 8,788 361 11,851 446 15,775 683 Mortgage 1-4 family 50,440 2,151 55,906 2,286 60,863 2,633 Resort lending 18,460 670 19,498 754 21,736 836 Home equity - 1st lien 161 8 160 6 136 4 Home equity - 2nd lien 172 13 57 2 42 2 Installment Home equity - 1st lien 2,539 181 2,837 176 3,052 168 Home equity - 2nd lien 3,055 193 3,359 188 3,387 182 Loans not secured by real estate 653 37 719 35 784 40 Other 10 1 14 1 18 2 Total $ 104,646 $ 4,574 $ 119,917 $ 5,034 $ 139,000 $ 5,866 (1) There were no impaired payment plan receivables or purchased mortgage loans during the years ending December 31, 2015, 2014 and 2013. Our average investment in impaired loans was approximately $104.6 million, $119.9 million and $139.0 million in 2015, 2014 and 2013, respectively. Cash receipts on impaired loans on non-accrual status are generally applied to the principal balance. Interest income recognized on impaired loans was approximately $4.6 million, $5.0 million and $5.9 million in 2015, 2014 and 2013, respectively, of which the majority of these amounts were received in cash. Troubled debt restructurings at December 31 follow: 2015 Commercial Retail Total (In thousands) Performing TDR’s $ 13,318 $ 68,194 $ 81,512 Non-performing TDR’s (1) 3,041 3,777 (2) 6,818 Total $ 16,359 $ 71,971 $ 88,330 2014 Commercial Retail Total (In thousands) Performing TDR’s $ 29,475 $ 73,496 $ 102,971 Non-performing TDR’s (1) 1,978 5,225 (2) 7,203 Total $ 31,453 $ 78,721 $ 110,174 (1) Included in non-performing loans table above. (2) Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis. We have allocated $10.9 million and $12.2 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2015 and 2014, respectively. We have committed to lend additional amounts totaling up to $0.04 million at both December 31, 2015 and 2014, respectively, to customers with outstanding loans that are classified as troubled debt restructurings. The terms of certain loans were modified as troubled debt restructurings and generally included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. Modifications involving a reduction of the stated interest rate of the loan have generally been for periods ranging from 9 months to 36 months but have extended to as much as 480 months in certain circumstances. Modifications involving an extension of the maturity date have generally been for periods ranging from 1 month to 60 months but have extended to as much as 230 months in certain circumstances. Loans that have been classified as troubled debt restructurings during the years ended December 31 follow: Number of Contracts Pre-modification Recorded Balance Post-modification Recorded Balance (Dollars in thousands) 2015 Commercial Income producing - real estate 2 $ 229 $ 227 Land, land development & construction-real estate — — — Commercial and industrial 17 3,188 2,960 Mortgage 1-4 family 8 1,345 1,128 Resort lending 1 313 307 Home equity - 1st lien 1 20 20 Home equity - 2nd lien 1 27 27 Purchased loans — — — Installment Home equity - 1st lien 6 220 186 Home equity - 2nd lien 8 228 217 Loans not secured by real estate 2 19 25 Other — — — Total 46 $ 5,589 $ 5,097 2014 Commercial Income producing - real estate 4 $ 426 $ 389 Land, land development & construction-real estate 2 55 44 Commercial and industrial 13 2,236 1,606 Mortgage 1-4 family 15 1,576 1,570 Resort lending 6 1,583 1,572 Home equity - 1st lien 1 17 14 Home equity - 2nd lien 1 85 84 Installment Home equity - 1st lien 13 631 523 Home equity - 2nd lien 9 400 400 Loans not secured by real estate 6 114 106 Other — — — Total 70 $ 7,123 $ 6,308 2013 Commercial Income producing - real estate 6 $ 4,798 $ 3,869 Land, land development & construction-real estate 1 16 — Commercial and industrial 23 2,522 1,901 Mortgage 1-4 family 20 1,968 1,995 Resort lending 5 1,240 1,231 Home equity - 1st lien 1 95 97 Home equity - 2nd lien — — — Installment Home equity - 1st lien 25 659 657 Home equity - 2nd lien 16 508 508 Loans not secured by real estate 5 149 110 Other — — — Total 102 $ 11,955 $ 10,368 The troubled debt restructurings described above increased (decreased) the allowance for loan losses by $0.4 million, $0.2 million and $(0.3) million during the years ended December 31, 2015, 2014 and 2013, respectively and resulted in charge offs of $0.16 million, $0.04 million and $0.5 million during the years ended December 31, 2015, 2014 and 2013, respectively. Loans that have been classified as troubled debt restructured during the past twelve months and that have subsequently defaulted during the years ended December 31 follows: Number of Contracts Recorded Balance (Dollars in thousands) 2015 Commercial Income producing - real estate — $ — Land, land development & construction-real estate — — Commercial and industrial 2 157 Mortgage 1-4 family 2 73 Resort lending — — Home equity - 1st lien — — Home equity - 2nd lien — — Purchased loans — — Installment Home equity - 1st lien — — Home equity - 2nd lien — — Loans not secured by real estate 1 4 Other — — Total 5 $ 234 2014 Commercial Income producing - real estate — $ — Land, land development & construction-real estate — — Commercial and industrial 2 319 Mortgage 1-4 family 1 125 Resort lending — — Home equity - 1st lien — — Home equity - 2nd lien — — Installment Home equity - 1st lien — — Home equity - 2nd lien — — Loans not secured by real estate — — Other — — Total 3 $ 444 Number of Contracts Recorded Balance (Dollars in thousands) 2013 Commercial Income producing - real estate 1 $ 693 Land, land development & construction-real estate 1 334 Commercial and industrial 2 143 Mortgage 1-4 family 1 106 Resort lending 1 156 Home equity - 1st lien — — Home equity - 2nd lien — — Installment Home equity - 1st lien 2 32 Home equity - 2nd lien 1 22 Loans not secured by real estate — — Other — — Total 9 $ 1,486 A loan is generally considered to be in payment default once it is 90 days contractually past due under the modified terms for commercial loans and installment loans and when four consecutive payments are missed for mortgage loans. The troubled debt restructurings that subsequently defaulted described above increased (decreased) the allowance for loan losses by $(0.03) million, $0.02 million and zero during the years ended December 31, 2015, 2014 and 2013, respectively and resulted in charge offs of zero, zero and $0.2 million during the years ended December 31, 2015, 2014 and 2013, respectively. The terms of certain other loans were modified during the years ending December 31, 2015, 2014 and 2013 that did not meet the definition of a troubled debt restructuring. The modification of these loans could have included modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant. In order to determine whether a borrower is experiencing financial difficulty, we perform an evaluation of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy. Credit Quality Indicators For commercial loans, we use a loan rating system that is similar to those employed by state and federal banking regulators. Loans are graded on a scale of 1 to 12. A description of the general characteristics of the ratings follows: Rating 1 through 6 Rating 7 and 8 Rating 9 Rating 10 and 11 Rating 12 The following table summarizes loan ratings by loan class for our commercial loan segment at December 31: Commercial Non-watch 1-6 Watch 7-8 Substandard Accrual 9 Non- Accrual 10-11 Total (In thousands) 2015 Income producing - real estate $ 296,898 $ 6,866 $ 1,423 $ 1,027 $ 306,214 Land, land development and construction - real estate 40,844 2,995 243 401 44,483 Commercial and industrial 371,357 19,502 6,683 2,028 399,570 Total $ 709,099 $ 29,363 $ 8,349 $ 3,456 $ 750,267 Accrued interest included in total $ 1,729 $ 108 $ 32 $ — $ 1,869 2014 Income producing - real estate $ 241,266 $ 8,649 $ 1,918 $ 1,233 $ 253,066 Land, land development and construction - real estate 30,869 2,485 390 594 34,338 Commercial and industrial 372,947 23,475 5,998 2,746 405,166 Total $ 645,082 $ 34,609 $ 8,306 $ 4,573 $ 692,570 Accrued interest included in total $ 1,479 $ 111 $ 25 $ — $ 1,615 For each of our mortgage and installment segment classes we generally monitor credit quality based on the credit scores of the borrowers. These credit scores are generally updated semi-annually. The following tables summarize credit scores by loan class for our mortgage and installment loan segments at December 31: Mortgage (1) 1-4 Family Resort Lending Home Equity 1st Lien Home Equity 2nd Lien Purchased Loans Total (In thousands) 2015 800 and above $ 28,760 $ 13,943 $ 4,374 $ 7,696 $ 2,310 $ 57,083 750-799 78,802 40,888 7,137 17,405 23,283 167,515 700-749 56,519 31,980 4,341 11,022 6,940 110,802 650-699 51,813 17,433 3,203 7,691 — 80,140 600-649 27,966 4,991 1,467 3,684 — 38,108 550-599 16,714 3,070 1,027 1,918 — 22,729 500-549 10,610 1,051 572 1,295 — 13,528 Under 500 4,708 554 244 265 — 5,771 Unknown 3,733 2,110 199 282 724 7,048 Total $ 279,625 $ 116,020 $ 22,564 $ 51,258 $ 33,257 $ 502,724 Accrued interest included in total $ 1,396 $ 477 $ 87 $ 196 $ 114 $ 2,270 Mortgage (1) 1-4 Family Resort Lending Home Equity 1st Lien Home Equity 2nd Lien Purchased Loans Total (In thousands) 2014 800 and above $ 27,918 $ 14,484 $ 3,863 $ 6,225 $ — $ 52,490 750-799 72,674 45,950 6,128 14,323 — 139,075 700-749 52,843 32,660 3,054 9,642 — 98,199 650-699 51,664 20,250 3,257 8,194 — 83,365 600-649 27,770 6,538 1,704 3,862 — 39,874 550-599 21,361 3,639 994 1,721 — 27,715 500-549 14,575 2,156 699 1,401 — 18,831 Under 500 6,306 875 261 632 — 8,074 Unknown 4,075 2,184 242 674 — 7,175 Total $ 279,186 $ 128,736 $ 20,202 $ 46,674 $ — $ 474,798 Accrued interest included in total $ 1,311 $ 562 $ 88 $ 209 $ — $ 2,170 (1) Credit scores have been updated within the last twelve months. Installment (1) Home Equity 1st Lien Home Equity 2nd Lien Loans not Secured by Real Estate Other Total (In thousands) 2015 800 and above $ 1,792 $ 1,782 $ 44,254 $ 58 $ 47,886 750-799 4,117 5,931 86,800 531 97,379 700-749 2,507 3,899 34,789 694 41,889 650-699 3,508 4,182 16,456 499 24,645 600-649 2,173 2,153 4,979 200 9,505 550-599 1,800 1,346 1,997 109 5,252 500-549 1,056 855 1,170 61 3,142 Under 500 223 370 385 23 1,001 Unknown 59 32 1,503 4 1,598 Total $ 17,235 $ 20,550 $ 192,333 $ 2,179 $ 232,297 Accrued interest included in total $ 78 $ 83 $ 520 $ 17 $ 698 2014 800 and above $ 2,272 $ 2,835 $ 31,507 $ 60 $ 36,674 750-799 5,677 8,557 66,558 583 81,375 700-749 3,111 6,358 28,179 689 38,337 650-699 3,963 5,477 16,152 615 26,207 600-649 3,434 2,408 5,128 255 11,225 550-599 2,019 1,913 1,896 134 5,962 500-549 1,128 1,036 1,672 84 3,920 Under 500 393 427 455 28 1,303 Unknown 77 81 1,842 44 2,044 Total $ 22,074 $ 29,092 $ 153,389 $ 2,492 $ 207,047 Accrued interest included in total $ 93 $ 112 $ 445 $ 19 $ 669 (1) Credit scores have been updated within the last twelve months. Mepco is a wholly-owned subsidiary of our Bank that operates a vehicle service contract payment plan business throughout the United States. See note #11 for more information about Mepco’s business. As of December 31, 2015, approximately 63.2% of Mepco’s outstanding payment plan receivables relate to programs in which a third party insurer or risk retention group is obligated to pay Mepco the full refund owing upon cancellation of the related service contract (including with respect to both the portion funded to the service contract seller and the portion funded to the administrator). These receivables are shown as “Full Refund” in the table below. Another approximately 18.7% of Mepco’s outstanding payment plan receivables as of December 31, 2015, relate to programs in which a third party insurer or risk retention group is obligated to pay Mepco the refund owing upon cancellation only with respect to the unearned portion previously funded by Mepco to the administrator (but not to the service contract seller). These receivables are shown as “Partial Refund” in the table below. The balance of Mepco’s outstanding payment plan receivables relate to programs in which there is no insurer or risk retention group that has any contractual liability to Mepco for any portion of the refund amount. These receivables are shown as “Other” in the table below. For each class of our payment plan receivables we monitor financial information on the counterparties as we evaluate the credit quality of this portfolio. The following table summarizes credit ratings of insurer or risk retention group counterparties by class of payment plan receivable at December 31: Payment Plan Receivables Full Refund Partial Refund Other Total (In thousands) 2015 AM Best rating A+ $ — $ 6 $ — $ 6 A 2,712 5,203 — 7,915 A- 3,418 1,177 6,265 10,860 Not rated 15,720 93 5 15,818 Total $ 21,850 $ 6,479 $ 6,270 $ 34,599 2014 AM Best rating A+ $ — $ 43 $ — $ 43 A 10,007 6,190 — 16,197 A- 1,989 685 5,054 7,728 Not rated 15,857 176 — 16,033 Total $ 27,853 $ 7,094 $ 5,054 $ 40,001 Although Mepco has contractual recourse against various counterparties for refunds owing upon cancellation of vehicle service contracts, see Note #11 below regarding certain risks and difficulties associated with collecting these refunds. Mortgage loans serviced for others are not reported as assets on the Consolidated Statements of Financial Condition. The principal balances of these loans at December 31 follow: 2015 2014 (In thousands) Mortgage loans serviced for: Fannie Mae $ 898,443 $ 913,863 Freddie Mac 707,891 748,833 Ginnie Mae 37,884 — Other 107 104 Total $ 1,644,325 $ 1,662,800 Custodial deposit accounts maintained in connection with mortgage loans serviced for others totaled $21.8 million and $20.9 million, at December 31, 2015 and 2014, respectively. If we do not remain well capitalized for regulatory purposes (see note #20), meet certain minimum capital levels or certain profitability requirements or if we incur a rapid decline in net worth, we could lose our ability to sell and/or service loans to these investors. This could impact our ability to generate gains on the sale of loans and generate servicing income. A forced liquidation of our servicing portfolio could also impact the value that could be recovered on this asset. Fannie Mae has the most stringent eligibility requirements covering capital levels, profitability and decline in net worth. Fannie Mae requires seller/servicers to be well capitalized for regulatory purposes. For the profitability requirement, we cannot record four or more consecutive quarterly losses and experience a 30% decline in net worth over the same period. Finally, our net worth cannot decline by more than 25% in one quarter or more than 40% over two consecutive quarters. The highest level of capital we are required to maintain is at least $2.5 million plus 0.25% of loans serviced for Freddie Mac. An analysis of capitalized mortgage loan servicing rights for the years ended December 31 follows: 2015 2014 2013 (In thousands) Balance at beginning of year $ 12,106 $ 13,710 $ 11,013 Originated servicing rights capitalized 2,697 1,823 3,210 Amortization (2,868 ) (2,509 ) (3,745 ) Change in valuation allowance 501 (918 ) 3,232 Balance at end of year $ 12,436 $ 12,106 $ 13,710 Valuation allowance $ 3,272 $ 3,773 $ 2,855 Loans sold and serviced that have had servicing rights capitalized $ 1,643,086 $ 1,661,269 $ 1,732,476 The fair value of capitalized mortgage loan servicing rights was $12.9 million and $12.6 million at December 31, 2015 and 2014, respectively. Fair value was determined using an average coupon rate of 4.32%, average servicing fee of 0.254%, average discount rate of 10.04% and an average Public Securities Association (“PSA”) prepayment rate of 203 for December 31, 2015; and an average coupon rate of 4.44%, average servicing fee of 0.253%, average discount rate of 10.07% and an average PSA prepayment rate of 200 for December 31, 2014. |
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2015 | |
OTHER REAL ESTATE OWNED [Abstract] | |
OTHER REAL ESTATE OWNED | NOTE 5 – OTHER REAL ESTATE OWNED A summary of other real estate owned activity for the years ended December 31 follows (1): 2015 2014 2013 (In thousands) Balance at beginning of year, net of valuation allowance $ 6,370 $ 18,088 $ 25,748 Loans transferred to other real estate owned 6,694 6,143 6,932 Sales of other real estate owned (5,502 ) (17,198 ) (11,994 ) Additions to valuation allowance charged to expense (492 ) (663 ) (2,598 ) Balance at end of year, net of valuation allowance $ 7,070 $ 6,370 $ 18,088 (1) Table excludes other repossessed assets totaling $0.08 million at both December 31, 2015 and 2014, respectively. We periodically review our real estate owned properties and establish valuation allowances on these properties if values have declined since the date of acquisition. An analysis of our valuation allowance for other real estate owned follows: 2015 2014 2013 (In thousands) Balance at beginning of year $ 2,511 $ 4,047 $ 5,958 Additions charged to expense 492 663 2,598 Direct write-downs upon sale (1,311 ) (2,199 ) (4,509 ) Balance at end of year $ 1,692 $ 2,511 $ 4,047 At December 31, 2015 and 2014, the balance of other real estate owned includes $2.8 million and $2.9 million of foreclosed residential real estate properties. Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $1.1 million and $2.5 million at December 31, 2015 and 2014, respectively. Other real estate and repossessed assets totaling $7.2 million and $6.5 million at December 31, 2015 and 2014, respectively, are presented net of the valuation allowance on the Consolidated Statements of Financial Condition. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT A summary of property and equipment at December 31 follows: 2015 2014 (In thousands) Land $ 15,152 $ 14,904 Buildings 57,638 59,486 Equipment 79,842 79,809 152,632 154,199 Accumulated depreciation and amortization (109,529 ) (108,251 ) Property and equipment, net $ 43,103 $ 45,948 Depreciation expense was $6.6 million, $6.7 million and $6.7 million in 2015, 2014 and 2013, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | NOTE 7 – INTANGIBLE ASSETS Intangible assets, net of amortization, at December 31 follows: 2015 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Amortized intangible assets - core deposits $ 6,118 $ 3,838 $ 6,118 $ 3,491 Intangible amortization expense was $0.3 million, $0.5 million and $0.8 million in 2015, 2014 and 2013, respectively. A summary of estimated core deposit intangible amortization at December 31, 2015, follows: (In thousands) 2016 $ 347 2017 346 2018 346 2019 346 2020 346 2021 and thereafter 549 Total $ 2,280 |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2015 | |
DEPOSITS [Abstract] | |
DEPOSITS | NOTE 8 – DEPOSITS A summary of interest expense on deposits for the years ended December 31 follows: 2015 2014 2013 (In thousands) Savings and interest bearing checking $ 1,056 $ 1,064 $ 1,131 Time deposits under $100,000 1,586 2,467 2,995 Time deposits of $100,000 or more 1,367 1,436 1,580 Total $ 4,009 $ 4,967 $ 5,706 Aggregate time deposits in denominations of $250,000 or more amounted to $110.4 million and $42.8 million at December 31, 2015 and 2014, respectively. A summary of the maturity of time deposits at December 31, 2015, follows: (In thousands) 2016 $ 302,136 2017 66,288 2018 27,367 2019 15,432 2020 11,763 2021 and thereafter 3,234 Total $ 426,220 Time deposits acquired through broker relationships totaled zero and $11.3 million at December 31, 2015 and 2014, respectively. Reciprocal deposits totaled $50.2 million and $53.7 million at December 31, 2015 and 2014, respectively. These deposits represent demand, money market and time deposits from our customers that have been placed through Promontory Interfinancial Network’s Insured Cash Sweep® service and Certificate of Deposit Account Registry Service®. These services allow our customers to access multi-million dollar FDIC deposit insurance on deposit balances greater than the standard FDIC insurance maximum. A summary of reciprocal deposits at December 31 follows: 2015 2014 (In thousands) Demand $ 3,436 $ 5,867 Money market 8,340 7,692 Time 38,431 40,109 Total $ 50,207 $ 53,668 |
OTHER BORROWINGS
OTHER BORROWINGS | 12 Months Ended |
Dec. 31, 2015 | |
OTHER BORROWINGS [Abstract] | |
OTHER BORROWINGS | NOTE 9 – OTHER BORROWINGS A summary of other borrowings at December 31 follows: 2015 2014 (In thousands) Advances from the FHLB $ 11,949 $ 12,464 Other 5 6 Total $ 11,954 $ 12,470 Advances from the FHLB are secured by unencumbered qualifying mortgage and home equity loans with a market value equal to at least 135% to 174%, respectively, of outstanding advances. Advances are also secured by FHLB stock that we own, which totaled $7.8 million at December 31, 2015. Unused borrowing capacity with the FHLB (subject to the FHLB’s credit requirements and policies) was $179.6 million at December 31, 2015. Interest expense on advances amounted to $0.8 million, $0.9 million and $1.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. No FHLB advances were terminated during 2015, 2014 or 2013. As a member of the FHLB, we must own FHLB stock equal to the greater of 1.0% of the unpaid principal balance of residential mortgage loans or 5.0% of our outstanding advances. At December 31, 2015, we were in compliance with the FHLB stock ownership requirements. The maturity dates and weighted average interest rates of FHLB advances at December 31 follow: 2015 2014 Amount Rate Amount Rate (Dollars in thousands) Fixed-rate advances 2016 $ 2,089 6.55 % $ 2,205 6.55 % 2017 1,258 7.04 1,320 7.04 2018 5,437 5.99 5,671 5.99 2019 — — 2020 3,165 7.49 3,268 7.49 Total advances $ 11,949 6.59 % $ 12,464 6.59 % A summary of contractually required repayments of FHLB Advances at December 31, 2015, follows: (In thousands) 2016 $ 2,521 2017 1,587 2018 5,042 2019 143 2020 2,656 Total $ 11,949 We had no borrowings outstanding with the FRB during the years ended or at December 31, 2015, 2014 or 2013. We had unused borrowing capacity with the FRB (subject to the FRB’s credit requirements and policies) of $307.7 million at December 31, 2015. Collateral for FRB borrowings are certain commercial loans. Assets, consisting of FHLB stock and loans, pledged to secure other borrowings and unused borrowing capacity totaled $781.8 million at December 31, 2015. |
SUBORDINATED DEBENTURES
SUBORDINATED DEBENTURES | 12 Months Ended |
Dec. 31, 2015 | |
SUBORDINATED DEBENTURES [Abstract] | |
SUBORDINATED DEBENTURES | NOTE 10 – SUBORDINATED DEBENTURES We have formed various special purpose entities (the “trusts”) for the purpose of issuing trust preferred securities in either public or pooled offerings or in private placements. Independent Bank Corporation owns all of the common stock of each trust and has issued subordinated debentures to each trust in exchange for all of the proceeds from the issuance of the common stock and the trust preferred securities. Trust preferred securities totaling $34.5 million at both December 31, 2015 and 2014, respectively, qualified as Tier 1 regulatory capital. These trusts are not consolidated with Independent Bank Corporation and accordingly, we report the common securities of the trusts held by us in accrued income and other assets and the subordinated debentures that we have issued to the trusts in the liability section of our Consolidated Statements of Financial Condition. Summary information regarding subordinated debentures as of December 31 follows: 2015 and 2014 Entity Name Issue Date Subordinated Debentures Trust Preferred Securities Issued Common Stock Issued (In thousands) IBC Capital Finance III May 2007 $ 12,372 $ 12,000 $ 372 IBC Capital Finance IV September 2007 15,465 15,000 465 Midwest Guaranty Trust I November 2002 7,732 7,500 232 $ 35,569 $ 34,500 $ 1,069 Other key terms for the subordinated debentures and trust preferred securities that were outstanding at December 31, 2015 and 2014 follow: Entity Name Maturity Date Interest Rate First Permitted Redemption Date IBC Capital Finance III July 30, 2037 3 month LIBOR plus 1.60% July 30, 2012 IBC Capital Finance IV September 15, 2037 3 month LIBOR plus 2.85% September 15, 2012 Midwest Guaranty Trust I November 7, 2032 3 month LIBOR plus 3.45% November 7, 2007 The subordinated debentures and trust preferred securities are cumulative and have a feature that permits us to defer distributions (payment of interest) from time to time for a period not to exceed 20 consecutive quarters. Interest is payable quarterly on each of the subordinated debentures and trust preferred securities and no distributions were deferred at December 31, 2015 and 2014. We have the right to redeem the subordinated debentures and trust preferred securities (at par) in whole or in part from time to time on or after the first permitted redemption date specified above or upon the occurrence of specific events defined within the trust indenture agreements. During 2014, we redeemed trust preferred securities issued by IBC Capital Finance IV with a par value of $5.0 million. These trust preferred securities were redeemed at a discount of $0.5 million and we recognized a gain on extinguishment of debt in our Consolidated Statements of Operations for this same amount. Issuance costs have been capitalized and are being amortized on a straight- line basis over a period not exceeding 30 years and are included in interest expense in the Consolidated Statements of Operations. Distributions (payment of interest) on the trust preferred securities are also included in interest expense in the Consolidated Statements of Operations. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 11 – COMMITMENTS AND CONTINGENT LIABILITIES In the normal course of business, we enter into financial instruments with off-balance sheet risk to meet the financing needs of customers or to reduce exposure to fluctuations in interest rates. These financial instruments may include commitments to extend credit and standby letters of credit. Financial instruments involve varying degrees of credit and interest-rate risk in excess of amounts reflected in the Consolidated Statements of Financial Condition. Exposure to credit risk in the event of non-performance by the counterparties to the financial instruments for loan commitments to extend credit and standby letters of credit is represented by the contractual amounts of those instruments. We do not, however, anticipate material losses as a result of these financial instruments. A summary of financial instruments with off-balance sheet risk at December 31 follows: 2015 2014 (In thousands) Financial instruments whose risk is represented by contract amounts Commitments to extend credit $ 243,458 $ 204,827 Standby letters of credit 3,582 2,757 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 generally require payment of a fee. Since commitments may expire without being drawn upon, the commitment amounts do not represent future cash requirements. Commitments are issued subject to similar underwriting standards, including collateral requirements, as are generally involved in the extension of credit facilities. Standby letters of credit are written conditional commitments issued to guarantee the performance of a customer to a third party. The credit risk involved in such transactions is essentially the same as that involved in extending loan facilities and, accordingly, standby letters of credit are issued subject to similar underwriting standards, including collateral requirements, as are generally involved in the extension of credit facilities. The majority of the standby letters of credit are to corporations, have variable rates that range from 2.75% to 8.25% and mature through 2018. We are involved in various litigation matters in the ordinary course of business. At the present time, we do not believe any of these matters will have a significant impact on our consolidated financial position or results of operations. The aggregate amount we have accrued for losses we consider probable as a result of these litigation matters is immaterial. However, because of the inherent uncertainty of outcomes from any litigation matter, we believe it is reasonably possible we may incur losses in addition to the amounts we have accrued. At this time, we estimate the maximum amount of additional losses that are reasonably possible is approximately $1.0 million. However, because of a number of factors, including the fact that certain of these litigation matters are still in their early stages, this maximum amount may change in the future. The litigation matters described in the preceding paragraph primarily include claims that have been brought against us for damages, but do not include litigation matters where we seek to collect amounts owed to us by third parties (such as litigation initiated to collect delinquent loans or vehicle service contract counterparty receivables). These excluded, collection-related matters may involve claims or counterclaims by the opposing party or parties, but we have excluded such matters from the disclosure contained in the preceding paragraph in all cases where we believe the possibility of us paying damages to any opposing party is remote. Risks associated with the likelihood that we will not collect the full amount owed to us, net of reserves, are disclosed elsewhere in this report. Our Mepco segment conducts its payment plan business activities across the United States. Mepco acquires the payment plans from companies (which we refer to as Mepco’s “counterparties”) at a discount from the face amount of the payment plan. Each payment plan (which are classified as payment plan receivables in our Condensed Consolidated Statements of Financial Condition) permits a consumer to purchase a vehicle service contract by making installment payments, generally for a term of 12 to 24 months, to the sellers of those contracts (one of the “counterparties”). Mepco thereafter collects the payments from consumers. In acquiring the payment plan, Mepco generally funds a portion of the cost to the seller of the service contract and a portion of the cost to the administrator of the service contract. The administrator, in turn, pays the necessary contractual liability insurance policy (“CLIP”) premium to the insurer or risk retention group. Consumers are allowed to voluntarily cancel the service contract at any time and are generally entitled to receive a refund from the administrator of the unearned portion of the service contract at the time of cancellation. As a result, while Mepco does not owe any refund to the consumer, it also does not have any recourse against the consumer for nonpayment of a payment plan and therefore does not evaluate the creditworthiness of the individual consumer. If a consumer stops making payments on a payment plan or exercises the right to voluntarily cancel the service contract, the service contract seller and administrator are each obligated to refund to Mepco the amount necessary to make Mepco whole as a result of its funding of the service contract. In addition, the insurer or risk retention group that issued the CLIP for the service contract often guarantees all or a portion of the refund to Mepco. See note #4 above for a breakdown of Mepco’s payment plan receivables by the level of recourse Mepco has against various counterparties. Upon the cancellation of a service contract and the completion of the billing process to the counterparties for amounts due to Mepco, there is a decrease in the amount of “payment plan receivables” and an increase in the amount of “vehicle service contract counterparty receivables” until such time as the amount due from the counterparty is collected. These amounts represent funds actually due to Mepco from its counterparties for cancelled service contracts. At both December 31, 2015 and 2014, the aggregate amount of such obligations owing to Mepco by counterparties, net of write-downs and reserves made through the recognition of vehicle service contract counterparty contingencies expense, totaled $7.2 million. Mepco is currently in the process of working to recover these receivables, primarily through litigation against counterparties. In some cases, Mepco requires collateral or guaranties by the principals of the counterparties to secure these refund obligations; however, this is generally only the case when no insurance company is involved to guarantee the repayment obligation of the seller and administrator counterparties. In most cases, there is no collateral to secure the counterparties’ refund obligations to Mepco, but Mepco has the contractual right to offset unpaid refund obligations against amounts Mepco would otherwise be obligated to fund to the counterparties. In addition, even when collateral is involved, the refund obligations of these counterparties are not fully secured. Mepco incurs losses when it is unable to fully recover funds owing to it by counterparties upon cancellation of the underlying service contracts. The sudden failure of one of Mepco’s major counterparties (an insurance company, administrator, or seller/dealer) could expose us to significant losses. When counterparties do not honor their contractual obligations to Mepco to repay funds, we recognize estimated losses. Mepco pursues collection (including commencing legal action if necessary) of funds due to it under its various contracts with counterparties. Mepco has had to initiate litigation against certain counterparties, including third party insurers, to collect amounts owed to Mepco as a result of those parties’ dispute of their contractual obligations to Mepco. For 2015, 2014 and 2013, non-interest expenses include $0.1 million, $0.2 million and $4.8 million, respectively, of charges related to estimated losses for vehicle service contract counterparty contingencies. The significant decrease in this expense in 2014 (from 2013) is due to 2013 including write-downs of vehicle service contract counterparty receivables related to settlements of certain litigation to collect these receivables. Given the costs and uncertainty of continued litigation, we determined it was in our best interest to resolve these matters. These charges are being classified in non-interest expense because they are associated with a default or potential default of a contractual obligation under our counterparty contracts as opposed to loss on the administration of the payment plan itself. Our estimate of probable incurred losses from vehicle service contract counterparty contingencies requires a significant amount of judgment because a number of factors can influence the amount of loss that we may ultimately incur. These factors include our estimate of future cancellations of vehicle service contracts, our evaluation of collateral that may be available to recover funds due from our counterparties, and our assessment of the amount that may ultimately be collected from counterparties in connection with their contractual obligations. We apply a rigorous process, based upon historical payment plan activity and past experience, to estimate probable incurred losses and quantify the necessary reserves for our vehicle service contract counterparty contingencies, but there can be no assurance that our modeling process will successfully identify all such losses. We believe our assumptions regarding the collection of vehicle service contract counterparty receivables are reasonable, and we based them on our good faith judgments using data currently available. We also believe the current amount of reserves we have established and the vehicle service contract counterparty contingencies expense that we have recorded are appropriate given our estimate of probable incurred losses at the applicable Consolidated Statement of Financial Condition date. However, because of the uncertainty surrounding the numerous and complex assumptions made, actual losses could exceed the charges we have taken to date. An analysis of our vehicle service contract counterparty receivable, net follows: 2015 2014 2013 (In thousands) Balance at beginning of year, net of reserve $ 7,237 $ 7,716 $ 18,449 Transfers in from payment plan receivables 1,203 180 792 Reserves established and charge-offs recorded to expense (119 ) (199 ) (4,837 ) Transferred to (from) contingency reserves — (75 ) 63 Cash received (1,092 ) (385 ) (6,751 ) Balance at end of year, net of reserve $ 7,229 $ 7,237 $ 7,716 Reserve at end of year $ 56 $ 1,370 $ 1,300 An analysis of our vehicle service contract counterparty reserve follows: 2015 2014 2013 (In thousands) Balance at beginning of year $ 1,370 $ 1,375 $ 2,012 Additions charged to expense 119 199 4,837 Charge-offs, net (1,433 ) (204 ) (5,474 ) Balance at end of year $ 56 $ 1,370 $ 1,375 Reserves recorded in VSC counterparty receivables, net $ 56 $ 1,370 $ 1,300 Reserves recorded in accrued expenses and other liabilities — — 75 Total at end of year $ 56 $ 1,370 $ 1,375 The provision for loss reimbursement on sold loans represents our estimate of incurred losses related to mortgage loans that we have sold to investors (primarily Fannie Mae, Freddie Mac and Ginnie Mae). Since we sell mortgage loans without recourse, loss reimbursements only occur in those instances where we have breached a representation or warranty or other contractual requirement related to the loan sale. In November 2013, we executed a Resolution Agreement with Fannie Mae to resolve our existing and future repurchase and make whole obligations (collectively “Repurchase Obligations”) related to mortgage loans originated between January 1, 2000 and December 31, 2008 and delivered to them by January 31, 2009. Under the terms of the Resolution Agreement, we paid Fannie Mae approximately $1.5 million in November 2013 with respect to the Repurchase Obligations. We believe that it was in our best interest to execute the Resolution Agreement in order to bring finality to the loss reimbursement exposure with Fannie Mae for these years and reduce the resources spent on individual file reviews and defending loss reimbursement requests. In addition, we were notified by Freddie Mac in January 2014 that they had completed their review of mortgage loans that we originated between January 1, 2000 and December 31, 2008 and delivered to them. The reserve for loss reimbursements on sold mortgage loans totaled $0.5 million and $0.7 million at December 31, 2015 and 2014, respectively. This reserve is included in accrued expenses and other liabilities in our Consolidated Statements of Financial Condition. This reserve is based on an analysis of mortgage loans that we have sold which are further categorized by delinquency status, loan to value, and year of origination. The calculation includes factors such as probability of default, probability of loss reimbursement (breach of representation or warranty) and estimated loss severity. The reserve levels at December 31, 2015 and 2014 also reflect the resolution of the mortgage loan origination years of 2000 to 2008 with Fannie Mae and Freddie Mac. We believe that the amounts that we have accrued for incurred losses on sold mortgage loans are appropriate given our analyses. However, future losses could exceed our current estimate. |
SHAREHOLDERS' EQUITY AND INCOME
SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2015 | |
SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE [Abstract] | |
SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE | NOTE 12 – SHAREHOLDERS’ EQUITY AND INCOME PER COMMON SHARE On January 21, 2015, our Board of Directors authorized a share repurchase plan (the “Repurchase Plan”) to buy back up to 5% of our outstanding common stock through December 31, 2015. The repurchases were made through open market transactions and totaled 967,199 shares of common stock for an aggregate purchase price of $13.5 million. On July 26, 2013, we executed a Securities Purchase Agreement (“SPA”) with the U.S. Department of the Treasury (“UST”). Under the terms of the SPA, we agreed to purchase from the UST for $81.0 million in cash consideration: (i) 74,426 shares of our Series B Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, with an original liquidation preference of $1,000 per share (“Series B Preferred Stock”), including all accrued and unpaid dividends; and (ii) the Amended and Restated Warrant to purchase 346,154 shares of our common stock at an exercise price of $7.234 per share and expiring on December 12, 2018 (the “Amended Warrant”). On August 30, 2013, we closed the SPA transaction with the UST and we exited the Troubled Asset Relief Program (“TARP”). On that date, the Series B Preferred Stock and Amended Warrant had book balances of $87.2 million (including accrued dividends) and $1.5 million, respectively. This transaction resulted in a discount of $7.7 million, of which $7.6 million was allocated to the Series B Preferred Stock and included in net income applicable to common stock and $0.1 million was allocated to the Amended Warrant and recorded to common stock. On August 28, 2013, we sold 11.5 million shares of our common stock for gross proceeds of $89.1 million in a public offering and on September 10, 2013, we sold an additional 1.725 million shares of our common stock for gross proceeds of $13.4 million pursuant to the underwriters’ overallotment option (collectively, the “Common Stock Offering”). The net proceeds from the Common Stock Offering were approximately $97.1 million. On November 15, 2011, we entered into a Tax Benefits Preservation Plan (the “Preservation Plan”) with our stock transfer agent, American Stock Transfer & Trust Company. Our Board of Directors adopted the Preservation Plan in an effort to protect the value to our shareholders of our ability to use deferred tax assets, such as net operating loss carry forwards, to reduce potential future federal income tax obligations. Under federal tax rules, this value could be lost in the event we experienced an “ownership change,” as defined in Section 382 of the federal Internal Revenue Code. The Preservation Plan attempts to protect this value by reducing the likelihood that we will experience such an ownership change by discouraging any person who is not already a 5% shareholder from becoming a 5% shareholder (with certain limited exceptions). On November 15, 2011, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of our common stock under the terms of the Preservation Plan. The dividend is payable to the holders of common stock outstanding as of the close of business on November 15, 2011, or outstanding at any time thereafter but before the earlier of a “Distribution Date” and the date the Preservation Plan terminates. Each Right entitles the registered holder to purchase from us 1/1000 of a share of our Series C Junior Participating Preferred Stock, no par value per share (“Series C Preferred Stock”). Each 1/1000 of a share of Series C Preferred Stock has economic and voting terms similar to those of one whole share of common stock. The Rights are not exercisable and generally do not become exercisable until a person or group has acquired, subject to certain exceptions and conditions, beneficial ownership of 4.99% or more of the outstanding shares of common stock. At that time, each Right will generally entitle its holder to purchase securities of the Company at a discount of 50% to the current market price of the common stock. However, the Rights owned by the person acquiring beneficial ownership of 4.99% or more of the outstanding shares of common stock would automatically be void. The significant dilution that would result is expected to deter any person from acquiring beneficial ownership of 4.99% or more and thereby triggering the Rights. To date, none of the Rights have been exercised or have become exercisable because no unpermitted 4.99% or more change in the beneficial ownership of the outstanding common stock has occurred. The Rights will generally expire on the earlier to occur of the close of business on November 15, 2016 and certain other events described in the Preservation Plan, including such date as our Board of Directors determines that the Preservation Plan is no longer necessary for its intended purposes. A reconciliation of basic and diluted net income per common share for the years ended December 31 follows: 2015 2014 2013 (In thousands, except per share amounts) Net income applicable to common stock $ 20,017 $ 18,021 $ 82,062 Convertible preferred stock dividends — — 3,001 Preferred stock discount — — (7,554 ) Net income applicable to common stock for calculation of diluted earnings per share $ 20,017 $ 18,021 $ 77,509 Weighted average shares outstanding (1) 22,716 22,927 13,970 Restricted stock units 233 306 363 Effect of stock options 119 124 92 Stock units for deferred compensation plan for non-employee directors 112 114 125 Effect of convertible preferred stock — — 7,314 Weighted average shares outstanding for calculation of diluted earnings per share 23,180 23,471 21,864 Net income per common share Basic (1) $ 0.88 $ 0.79 $ 5.87 Diluted $ 0.86 $ 0.77 $ 3.55 (1) Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards. Weighted average stock options outstanding that were not considered in computing diluted net income per common share because they were anti-dilutive totaled 0.03 million, 0.03 million and 0.1 million for 2015, 2014 and 2013, respectively. The Amended Warrant issued to the UST to purchase 346,154 shares of our common stock was also not considered in computing the diluted net income per common share in 2013 as it was anti-dilutive. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAX [Abstract] | |
INCOME TAX | NOTE 13 – INCOME TAX The composition of income tax expense (benefit) for the years ended December 31 follows: 2015 2014 2013 (In thousands) Current $ 200 $ (359 ) $ (277 ) Deferred 9,128 7,672 — Disproportionate tax effect — — 1,444 Valuation allowance - change in estimate 35 (118 ) (56,018 ) Income tax expense (benefit) $ 9,363 $ 7,195 $ (54,851 ) Income tax expense (benefit) was $9.4 million, $7.2 million and $(54.9) million during the years ended December 31, 2015, 2014 and 2013. Prior to the second quarter of 2013, we had established a deferred tax asset valuation allowance against all of our net deferred tax assets. The reversal of substantially all of this valuation allowance on our deferred tax assets during the second quarter of 2013 resulted in our recording an income tax benefit of $57.6 million. In addition, during the second quarter of 2013, we recorded $1.4 million of income tax expense to clear from accumulated other comprehensive loss (“AOCL”) the disproportionate tax effects from cash flow hedges. These disproportionate tax effects had been charged to other comprehensive income (loss) and credited to income tax expense (benefit) due to our valuation allowance on deferred tax assets as more fully discussed in note #24. Because we terminated our last remaining cash flow hedge in the second quarter of 2013, it was appropriate to clear these disproportionate tax effects from AOCL. The income tax expense (benefit) in the Consolidated Statements of Operations also includes income taxes in a variety of other states due primarily to Mepco’s operations. The amounts of such state income taxes were an expense (benefit) of $(0.1) million, zero and $(0.2) million in 2015, 2014 and 2013, respectively. The deferred income tax expense of $9.1 million and $7.7 million during 2015 and 2014 can be primarily attributed to tax effects of temporary differences. The deferred income tax benefit of $56.0 million during 2013 is attributed to the reversal of our deferred tax valuation allowance on primarily all of our deferred tax assets. A reconciliation of income tax expense (benefit) to the amount computed by applying the statutory federal income tax rate of 35% in each year presented to the income before income tax for the years ended December 31 follows: 2015 2014 2013 (In thousands) Statutory rate applied to income before income tax $ 10,283 $ 8,826 $ 7,930 Bank owned life insurance (449 ) (480 ) (477 ) Tax-exempt income (434 ) (522 ) (402 ) Unrecognized tax benefit (135 ) (595 ) (186 ) Non-deductible meals, entertainment and memberships 43 53 55 Net change in valuation allowance 35 (118 ) (63,980 ) Disproportionate tax effect — — 1,444 U.S. Treasury warrant — — 359 Share-based compensation — — 8 Other, net 20 31 398 Income tax expense (benefit) $ 9,363 $ 7,195 $ (54,851 ) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31 follow: 2015 2014 (In thousands) Deferred tax assets Loss carryforwards $ 25,516 $ 32,933 Allowance for loan losses 7,901 9,099 Alternative minimum tax credit carry forward 3,427 3,037 Property and equipment 3,369 3,239 Purchase premiums, net 1,755 2,050 Share based payments 786 684 Valuation allowance on other real estate 592 879 Unrealized loss on trading securities 578 559 Deferred compensation 404 448 Other than temporary impairment charge on securities available for sale 382 436 Non accrual loan interest income 232 244 Reserve for unfunded lending commitments 228 189 Loss reimbursement on sold loans reserve 186 242 Unrealized loss on securities available for sale 128 — Vehicle service contract counterparty contingency reserve 21 521 Gross deferred tax assets 45,505 54,560 Valuation allowance (1,054 ) (1,019 ) Total net deferred tax assets 44,451 53,541 Deferred tax liabilities Capitalized mortgage loan servicing rights 4,353 4,237 Deferred loan fees 256 260 Federal Home Loan Bank stock 45 196 Unrealized gain on securities available for sale — 87 Other 162 129 Gross deferred tax liabilities 4,816 4,909 Net deferred tax assets $ 39,635 $ 48,632 We assess whether a valuation allowance on our deferred tax assets is necessary each quarter. Reversing or reducing the valuation allowance requires us to conclude that the realization of the deferred tax assets is “more likely than not.” The ultimate realization of this asset is primarily based on generating future income. As of June 30, 2013, we concluded that the realization of substantially all of our deferred tax assets was now more likely than not. This conclusion was primarily based upon the following factors: • Achieving a sixth consecutive quarter of profitability; • A forecast of future profitability that supported that the realization of the deferred tax assets is more likely than not; and • A forecast that future asset quality continued to be stable to improving and that other factors did not exist that could cause a significant adverse impact on future profitability. We have also concluded subsequent to June 30, 2013, that the realization of substantially all of our deferred tax assets continues to be more likely than not for substantially the same reasons as enumerated above, including 10 additional profitable quarters since June 30, 2013. The valuation allowance against our deferred tax assets totaled $1.1 million and $1.0 million at December 31, 2015 and 2014, respectively. The valuation allowance against our deferred tax assets at December 31, 2015 primarily relates to state income taxes from our Mepco segment. In this instance, we determined that the future realization of these particular deferred tax assets was not more likely than not. This conclusion was primarily based on the uncertainty of Mepco’s future earnings attributable to particular states (given the various apportionment criteria) and the significant reduction in the size of Mepco’s business over the past three years. Because of our net operating loss and tax credit carryforwards, we are still subject to the rules of Section 382 of the Internal Revenue Code of 1986, as amended. An ownership change, as defined by these rules, would negatively affect our ability to utilize our net operating loss carryforwards and other deferred tax assets in the future. If such an ownership change were to occur, we may suffer higher-than-anticipated tax expense, and consequently lower net income and cash flow, in those future years. Although we cannot control our shareholders’ activities in buying and selling our common stock, we do have in place a Tax Benefits Preservation Plan to dissuade any movement in our stock that would trigger an ownership change, and we limited the size of our Common Stock Offering to avoid triggering any Section 382 limitations. At December 31, 2015, we had federal net operating loss (“NOL”) carryforwards of approximately $73.4 million which, if not used against taxable income, will expire as follows: (In thousands) 2030 $ 18,496 2031 17,170 2032 37,739 Total $ 73,405 $3.4 million of NOL carryforwards in the table above relate to unrealized excess benefits on share based compensation for which a benefit will be recorded to additional paid in capital (common stock) when realized. We also had a minor amount of state NOL carryforwards in certain states where Mepco operates. In addition, we had $3.4 million of alternative minimum tax credit carryforwards with indefinite lives at December 31, 2015. Changes in unrecognized tax benefits for the years ended December 31 follow: 2015 2014 2013 (In thousands) Balance at beginning of year $ 1,091 $ 1,672 $ 1,871 Additions based on tax positions related to the current year 20 18 11 Reductions due to the statute of limitations (135 ) (595 ) (186 ) Reductions due to settlements — (4 ) (24 ) Balance at end of year $ 976 $ 1,091 $ 1,672 If recognized, the entire amount of unrecognized tax benefits, net of $0.3 million of federal tax on state benefits, would affect our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. No amounts were expensed for interest and penalties for the years ended December 31, 2015, 2014 and 2013. No amounts were accrued for interest and penalties at December 31, 2015, 2014 or 2013. At December 31, 2015, U.S. Federal tax years 2012 through the present remain open to examination. |
SHARE BASED COMPENSATION AND BE
SHARE BASED COMPENSATION AND BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
SHARE BASED COMPENSATION AND BENEFIT PLANS [Abstract] | |
SHARE BASED COMPENSATION AND BENEFIT PLANS | NOTE 14 – SHARE BASED COMPENSATION AND BENEFIT PLANS We maintain share based payment plans that include a non-employee director stock purchase plan and a long-term incentive plan that permits the issuance of share based compensation, including stock options and non-vested share awards. The long-term incentive plan, which is shareholder approved, permits the grant of additional share based awards for up to 0.3 million shares of common stock as of December 31, 2015. The non-employee director stock purchase plan permits the grant of additional share based payments for up to 0.2 million shares of common stock as of December 31, 2015. Share based awards and payments are measured at fair value at the date of grant and are expensed over the requisite service period. Common shares issued upon exercise of stock options come from currently authorized but unissued shares. During 2015 and 2014, pursuant to our long-term incentive plan, we granted in each year 0.07 million, shares of restricted stock and 0.03 million performance stock units (“PSUs”) to certain officers. The shares of restricted stock issued during 2015 cliff vest after a period of three years, the shares of restricted stock issued during 2014 vest ratably over three years and the PSUs issued in both years cliff vest after a period of three years. The performance feature of the PSUs is based on a comparison of our total shareholder return over the three year period starting on the grant date to the total shareholder return over that period for a banking index of our peers. During 2013, we issued 0.1 million restricted stock units to certain of our executive officers. These restricted stock units cliff vest after a period of three years. We used the market value of the common stock on the date of grant to measure compensation cost for these non-vested share awards. During 2013, pursuant to our performance-based compensation plans, we granted 0.1 million stock options to certain officers. The stock options have an exercise price equal to the market value on the date of grant, vest ratably over a three year period and expire 10 years from date of grant. We use the Black Scholes option pricing model to measure compensation cost for stock options. We also estimate expected forfeitures over the vesting period. Our directors may elect to receive at least a portion of their quarterly cash retainer fees in the form of common stock (either on a current basis or on a deferred basis) pursuant to the non-employee director stock purchase plan referenced above. Shares equal in value to that portion of each director’s fees that he or she has elected to receive in stock are issued each quarter and vest immediately. We issued 0.01 million shares, 0.01 million shares and 0.06 million shares to directors during 2015, 2014 and 2013, respectively, and expensed their value during those same periods. During 2013, a portion of our president’s annual salary was paid in the form of common stock. The amount paid in common stock (also referred to as “salary stock”) was $0.020 million. These shares were issued each pay period and vested immediately. No salary stock was paid during 2015 and 2014. Total compensation expense recognized for grants pursuant to our long-term incentive plan was $1.4 million, $1.0 million and $0.9 million in 2015, 2014 and 2013, respectively. The corresponding tax benefit relating to this expense was $0.5 million, $0.4 million and zero in 2015, 2014 and 2013, respectively. Total expense recognized for non-employee director share based payments was $0.1 million, $0.2 million and $0.3 million in 2015, 2014 and 2013, respectively. The corresponding tax benefit relating to this expense was $0.03 million, $0.1 million and zero in 2015, 2014 and 2013, respectively. At December 31, 2015, the total expected compensation cost related to non-vested stock options, restricted stock, PSUs and restricted stock unit awards not yet recognized was $1.5 million. The weighted-average period over which this amount will be recognized is 1.6 years. A summary of outstanding stock option grants and related transactions follows: Number of Shares Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregated Intrinsic Value (In thousands) Outstanding at January 1, 2015 281,820 $ 4.69 Granted — Exercised (42,204 ) 3.25 Forfeited (2,096 ) 4.77 Expired (1,924 ) 6.79 Outstanding at December 31, 2015 235,596 $ 4.94 6.12 $ 2,443 Vested and expected to vest at December 31, 2015 234,949 $ 4.93 6.11 $ 2,437 Exercisable at December 31, 2015 213,154 $ 4.78 5.98 $ 2,245 A summary of outstanding non-vested stock and related transactions follows: Number of Shares Weighted- Average Grant Date Fair Value Outstanding at January 1, 2015 407,130 $ 6.31 Granted 108,761 13.07 Vested (249,526 ) 3.92 Forfeited (4,384 ) 12.88 Outstanding at December 31, 2015 261,981 $ 11.29 A summary of the weighted-average assumptions used in the Black-Scholes option pricing model for grants of stock options follows (no stock options were granted in 2015 and 2014): 2013 Expected dividend yield 0.31 % Risk-free interest rate 1.12 Expected life (in years) 6.00 Expected volatility 101.30 % Per share weighted-average grant date fair value $ 4.98 The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life was obtained using a simplified method that, in general, averaged the vesting term and original contractual term of the stock option. This method was used as relevant historical data of actual exercise activity was very limited. The expected volatility was based on historical volatility of our common stock. Certain information regarding options exercised during the periods ending December 31 follows: 2015 2014 2013 (In thousands) Intrinsic value $ 444 $ 321 $ 117 Cash proceeds received $ 137 $ 96 $ 39 Tax benefit realized $ 155 $ 112 $ — We maintain 401(k) and employee stock ownership plans covering substantially all of our full-time employees. During 2015 we matched 50% of employee contributions to the 401(k) plan up to a maximum of 4% of participating employees’ eligible wages. During 2014 and 2013 we matched 100% of employee contributions up to a maximum of 2% and 1%, respectively of participating employees’ eligible wages. Contributions to the employee stock ownership plan are determined annually and require approval of our Board of Directors. The maximum contribution is 6% of employees’ eligible wages. Contributions to the employee stock ownership plan were 2% for 2015 and 2014 and 3% for 2013. Amounts expensed for these retirement plans were $1.2 million, $1.0 million, and $1.2 million in 2015, 2014 and 2013, respectively. Our officers participate in various performance-based compensation plans. Amounts expensed for all incentive plans totaled $5.7 million, $4.2 million and $5.0 million, in 2015, 2014 and 2013, respectively. We also provide certain health care and life insurance programs to substantially all full-time employees. Amounts expensed for these programs totaled $3.6 million, $3.9 million and $3.8 million in 2015, 2014 and 2013 respectively. These insurance programs are also available to retired employees at their own expense. |
OTHER NON-INTEREST INCOME
OTHER NON-INTEREST INCOME | 12 Months Ended |
Dec. 31, 2015 | |
OTHER NON-INTEREST INCOME [Abstract] | |
OTHER NON-INTEREST INCOME | NOTE 15 – OTHER NON-INTEREST INCOME Other non-interest income for the years ended December 31 follows: 2015 2014 2013 (In thousands) Investment and insurance commissions $ 1,827 $ 1,814 $ 1,709 ATM fees 1,551 1,599 1,661 Bank owned life insurance 1,282 1,371 1,363 Other real estate rental income 128 1,295 1,471 Other 2,904 2,852 2,333 Total other non-interest income $ 7,692 $ 8,931 $ 8,537 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS We are required to record derivatives on our Consolidated Statements of Financial Condition as assets and liabilities measured at their fair value. The accounting for increases and decreases in the value of derivatives depends upon the use of derivatives and whether the derivatives qualify for hedge accounting. Our derivative financial instruments according to the type of hedge in which they are designated at December 31 follow: 2015 Notional Amount Average Maturity (years) Fair Value (Dollars in thousands) No hedge designation Rate-lock mortgage loan commitments $ 20,581 0.1 $ 550 Mandatory commitments to sell mortgage loans 46,320 0.1 69 Pay-fixed interest rate swap agreements 27,587 8.0 (497 ) Pay-variable interest rate swap agreements 27,587 8.0 497 Purchased options 2,098 5.7 122 Written options 2,098 5.7 (122 ) Total $ 126,271 3.7 $ 619 2014 Notional Amount Average Maturity (years) Fair Value (Dollars in thousands) No hedge designation Rate-lock mortgage loan commitments $ 16,759 0.1 $ 437 Mandatory commitments to sell mortgage loans 38,600 0.1 (184 ) Pay-fixed interest rate swap agreements 3,300 9.4 (182 ) Pay-variable interest rate swap agreements 3,300 9.4 182 Total $ 61,959 1.1 $ 253 We have established management objectives and strategies that include interest-rate risk parameters for maximum fluctuations in net interest income and market value of portfolio equity. We monitor our interest rate risk position via simulation modeling reports. The goal of our asset/liability management efforts is to maintain profitable financial leverage within established risk parameters. To meet our asset/liability management objectives, we may periodically enter into derivative financial instruments to mitigate exposure to fluctuations in cash flows resulting from changes in interest rates (“Cash Flow Hedges”). Cash Flow Hedges during 2013 included certain pay-fixed interest rate swaps which converted the variable-rate cash flows on debt obligations to fixed-rates. During the second quarter of 2013 we terminated our last Cash Flow Hedge pay-fixed interest rate swap and paid a termination fee of $0.6 million. The remaining unrealized loss on the terminated pay-fixed interest rate swap which was equal to this termination fee was included as a component of accumulated other comprehensive loss and was amortized into earnings through December 31, 2014, the original remaining life of the pay-fixed interest rate swap. Certain derivative financial instruments have not been designated as hedges. The fair value of these derivative financial instruments has been recorded on our Consolidated Statements of Financial Condition and is adjusted on an ongoing basis to reflect their then current fair value. The changes in fair value of derivative financial instruments not designated as hedges are recognized in earnings. In the ordinary course of business, we enter into rate-lock mortgage loan commitments with customers (“Rate-Lock Commitments”). These commitments expose us to interest rate risk. We also enter into mandatory commitments to sell mortgage loans (“Mandatory Commitments”) to reduce the impact of price fluctuations of mortgage loans held for sale and Rate-Lock Commitments. Mandatory Commitments help protect our loan sale profit margin from fluctuations in interest rates. The changes in the fair value of Rate Lock Commitments and Mandatory Commitments are recognized currently as part of net gains on mortgage loans. We obtain market prices on Mandatory Commitments and Rate-Lock Commitments. Net gains on mortgage loans, as well as net income, may be more volatile as a result of these derivative instruments, which are not designated as hedges. During 2015, we began offering to our deposit customers an equity linked time deposit product (“Altitude CD”). The Altitude CD is a time deposit that provides the customer a guaranteed return of principal at maturity plus a potential equity return (a written option), while we receive a like stream of funds based on the equity return (a purchased option). The written and purchased options will generally move in opposite directions resulting in little or no net impact on our Consolidated Statements of Operations. All of the written and purchased options in the table above relate to this Altitude CD product. During 2014, we began a program that allows commercial loan customers to lock in a fixed rate for a longer period of time than we would normally offer for interest rate risk reasons. We will enter into a variable rate commercial loan and an interest rate swap agreement with a customer and then enter into an offsetting interest rate swap agreement with an unrelated party. The interest rate swap agreement fair values will generally move in opposite directions resulting in little or no net impact on our Consolidated Statements of Operations. All of the interest rate swap agreements in the table above relate to this program. During the second quarter of 2014, we completed a securities trade in which we shorted a $13 million UST security. This UST short was terminated during the fourth quarter of 2014 and the change in the fair value of the short position from the inception date to the termination date has been recorded in net gains on securities in our Consolidated Statements of Operations. During 2010, we entered into an amended and restated warrant with the UST that would allow them to purchase our common stock at a fixed price (see Note #12). Because of certain anti-dilution features included in the Amended Warrant, it was not considered to have been indexed to our common stock and was therefore accounted for as a derivative instrument and recorded as a liability. Any change in value of the Amended Warrant while it was accounted for as a derivative was recorded in non-interest income in our Consolidated Statements of Operations. However, the anti-dilution features in the Amended Warrant which caused it to be accounted for as a derivative and included in accrued expenses and other liabilities on our Consolidated Statements of Financial Condition expired on April 16, 2013. As a result, the Amended Warrant was reclassified into shareholders’ equity on that date at its then fair value which totaled $1.5 million. During the third quarter of 2013, we repurchased the Amended Warrant from the UST (see Note #12). The following tables illustrate the impact that the derivative financial instruments discussed above have on individual line items in the Consolidated Statements of Financial Condition for the periods presented: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives December 31, December 31, 2015 2014 2015 2014 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Derivatives not designated as hedging instruments Rate-lock mortgage loan commitments Other $ 550 Other $ 437 Other $ — Other $ — Mandatory commitments to sell mortgage loans Other 69 Other — Other — Other 184 Pay-fixed interest rate swap agreements Other — Other — Other 497 Other 182 Pay-variable interest rate swap agreements Other 497 Other 182 Other — Other — Purchased options Other 122 Other — Other — Other — Written options Other — Other — Other 122 Other — Total derivatives $ 1,238 $ 619 $ 619 $ 366 The effect of derivative financial instruments on the Consolidated Statements of Operations follows: Year Ended December 31, Loss Recognized in Other Comprehensive Income (Loss) (Effective Portion) Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Location of Gain (Loss) Recognized in Income (1) Gain (Loss) Recognized in Income (1) 2015 2014 2013 2015 2014 2013 2015 2014 2013 (In thousands) Cash Flow Hedges Pay-fixed interest rate swap agreements $ — $ — $ (37 ) Interest $ — $ (380 ) $ (397 ) Interest $ — $ — $ — Total $ — $ — $ (37 ) $ — $ (380 ) $ (397 ) $ — $ — $ — No hedge designation Rate-lock mortgage loan commitments Net gains on $ 113 $ 71 $ (1,002 ) Mandatory commitments to sell mortgage loans Net gains 253 (312 ) 250 Pay-fixed interest rate swap agreements Interest (315 ) (182 ) — Pay-variable interest rate swap agreements Interest 315 182 — Purchased options Interest 122 — — Written options Interest (122 ) — — UST short position Gain on — 295 — Amended Warrant Increase in — — (1,025 ) Total $ 366 $ 54 $ (1,777 ) (1) For cash flow hedges, this location and amount refers to the ineffective portion. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17 – RELATED PARTY TRANSACTIONS Certain of our directors and executive officers, including companies in which they are officers or have significant ownership, were loan and deposit customers during 2015 and 2014. A summary of loans to our directors and executive officers whose borrowing relationship (which includes loans to entities in which the individual owns a 10% or more voting interest) exceeds $60,000 for the years ended December 31 follows: 2015 2014 (In thousands) Balance at beginning of year $ 216 $ 351 New loans and advances — — Repayments (26 ) (135 ) Balance at end of year $ 190 $ 216 Deposits held by us for directors and executive officers totaled $1.3 million and $1.0 million at December 31, 2015 and 2014, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2015 | |
LEASES [Abstract] | |
LEASES | NOTE 18 – LEASES We have non-cancelable operating leases for certain office facilities, some of which include renewal options and escalation clauses. A summary of future minimum lease payments under non-cancelable operating leases at December 31, 2015, follows: (In thousands) 2016 $ 1,054 2017 862 2018 809 2019 720 2020 666 2021 and thereafter 253 Total $ 4,364 Rental expense on operating leases totaled $1.2 million, $1.3 million and $1.2 million in 2015, 2014 and 2013, respectively. |
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2015 | |
CONCENTRATIONS OF CREDIT RISK [Abstract] | |
CONCENTRATIONS OF CREDIT RISK | NOTE 19 – CONCENTRATIONS OF CREDIT RISK Credit risk is the risk to earnings and capital arising from an obligor’s failure to meet the terms of any contract with our organization or otherwise fail to perform as agreed. Credit risk can occur outside of our traditional lending activities and can exist in any activity where success depends on counterparty, issuer or borrower performance. Concentrations of credit risk (whether on- or off-balance sheet) arising from financial instruments can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions. Credit risk associated with these concentrations could arise when a significant amount of loans or other financial instruments, related by similar characteristics, are simultaneously impacted by changes in economic or other conditions that cause their probability of repayment or other type of settlement to be adversely affected. Our major concentrations of credit risk arise by collateral type and by industry. The significant concentrations by collateral type at December 31, 2015, include $538.5 million of loans secured by residential real estate and $62.6 million of construction and development loans. In addition, we have a concentration of credit within the vehicle service contract industry. At December 31, 2015, we had $34.6 million of payment plan receivables. Our recourse for nonpayment of these payment plan receivables is against our counterparties operating within the vehicle service contract industry. Additionally, within our commercial real estate and commercial loan portfolio, we had significant standard industry classification concentrations in the following categories as of December 31, 2015: Lessors of Nonresidential Real Estate ($259.1 million); Lessors of Residential Real Estate ($82.1 million); Health Care and Social Assistance ($67.8 million) and Construction General Contractors and Land Development ($54.4 million). A geographic concentration arises because we primarily conduct our lending activities in the State of Michigan. Our concentration of credit within the vehicle service contract industry relates to the business operated by our subsidiary, Mepco. This business and certain risks associated with this business are described in note #11 above. In addition, see note #4 above for a breakdown of Mepco’s payment plan receivables by the level of recourse Mepco has against various counterparties. Mepco monitors counterparty concentrations in order to attempt to manage our exposure for contractual obligations from its counterparties. In addition, even where an insurance company or risk retention group does not have a guarantee obligation to Mepco, the failure of the insurance company or risk retention group could result in a mass cancellation of the vehicle service contracts (and the related payment plans) insured by such entity. Such a mass cancellation would trigger and accelerate the contractual obligations of the counterparties that did have such obligations to Mepco. The counterparty concentration levels are managed based on the AM Best rating and statutory surplus level for an insurance company and on other factors including financial evaluation, collateral, funding holdbacks, guarantees, and distribution of concentrations for vehicle service contract administrators and vehicle service contract sellers/dealers. The five largest concentrations by insurance company, risk retention group or other party backing the service contract represents approximately 42.4%, 24.0%, 15.0%, 7.8% and 3.7%, respectively, of Mepco’s payment plan receivables at December 31, 2015. These companies have provided the insurance coverage for the vehicle service contracts underlying the payment plan receivables; however, these companies are not all obligated to Mepco for the repayment of the payment plan receivables upon cancellation of the underlying vehicle service contracts and payment plans. Mepco has varying levels of recourse against such companies. Still, the failure of any insurer backing service contracts related to Mepco’s payment plan receivables could have an adverse effect on Mepco’s collection of those receivables. The top five vehicle service contract sellers from which Mepco purchases payment plans represent approximately 62.2%, 11.7%, 9.4%, 5.4% and 3.8%, respectively of Mepco’s payment plan receivables at December 31, 2015. See note #11 for additional information on Mepco counterparties. |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2015 | |
REGULATORY MATTERS [Abstract] | |
REGULATORY MATTERS | NOTE 20 – REGULATORY MATTERS Capital guidelines adopted by federal and state regulatory agencies and restrictions imposed by law limit the amount of cash dividends our Bank can pay to us. Under these guidelines, the amount of dividends that may be paid in any calendar year is limited to the Bank’s current year’s net profits, combined with the retained net profits of the preceding two years. Further, the Bank cannot pay a dividend at any time that it has negative undivided profits. As of December 31, 2015, the Bank had negative undivided profits of $10.1 million. We can request regulatory approval for a return of capital from the Bank to the parent company. During the first quarter of 2014, we requested regulatory approval for a $15.0 million return of capital from the Bank to the parent company. This return of capital request was approved by our banking regulators on March 28, 2014 and the Bank returned $15.0 million of capital to the parent company on April 9, 2014. During January of 2015, we requested regulatory approval for an additional $18.5 million return of capital from the Bank to the parent company. This return of capital request was approved by our banking regulators on February 13, 2015, and the Bank returned $18.5 million of capital to the parent company on February 17, 2015. It is not our intent to have dividends paid in amounts that would reduce the capital of our Bank to levels below those which we consider prudent and in accordance with guidelines of regulatory authorities. We are also subject to various regulatory capital requirements. The prompt corrective action regulations establish quantitative measures to ensure capital adequacy and require minimum amounts and ratios of total, Tier 1, and common equity Tier 1 (as of January 1, 2015) capital to risk-weighted assets and Tier 1 capital to average assets. Failure to meet minimum capital requirements can result in certain mandatory, and possibly discretionary, actions by regulators that could have a material effect on our consolidated financial statements. Under capital adequacy guidelines, we must meet specific capital requirements that involve quantitative measures as well as qualitative judgments by the regulators. The most recent regulatory filings as of December 31, 2015 and 2014, categorized our Bank as well capitalized. Management is not aware of any conditions or events that would have changed the most recent Federal Deposit Insurance Corporation (“FDIC”) categorization. On July 2, 2013, the Federal Reserve approved a final rule that establishes an integrated regulatory capital framework (the “New Capital Rules”). The rule implements in the United States the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act. In general, under the New Capital Rules, minimum requirements have increased for both the quantity and quality of capital held by banking organizations. Consistent with the international Basel framework, the New Capital Rules include a new minimum ratio of common equity Tier 1 capital to risk-weighted assets of 4.5% and a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets that applies to all supervised financial institutions. The rule also raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and includes a minimum leverage ratio of 4% for all banking organizations. As to the quality of capital, the New Capital Rules emphasize common equity Tier 1 capital, the most loss-absorbing form of capital, and implement strict eligibility criteria for regulatory capital instruments. The New Capital Rules also change the methodology for calculating risk-weighted assets to enhance risk sensitivity. The New Capital Rules became effective for us on January 1, 2015. Our actual capital amounts and ratios at December 31 follow: Actual Minimum for Adequately Capitalized Institutions Minimum for Well-Capitalized Institutions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) 2015 Total capital to risk-weighted assets Consolidated $ 278,170 16.65 % $ 133,668 8.00 % NA NA Independent Bank 261,894 15.69 133,514 8.00 $ 166,893 10.00 % Tier 1 capital to risk-weighted assets Consolidated $ 257,050 15.38 % $ 100,251 6.00 % NA NA Independent Bank 240,867 14.43 100,136 6.00 $ 133,514 8.00 % Common equity tier 1 capital to risk-weighted assets Consolidated $ 239,271 14.32 % $ 75,188 4.50 % NA NA Independent Bank 240,867 14.43 75,102 4.50 $ 108,480 6.50 % Tier 1 capital to average assets Consolidated $ 257,050 10.91 % $ 94,217 4.00 % NA NA Independent Bank 240,867 10.23 94,145 4.00 $ 117,682 5.00 % 2014 Total capital to risk-weighted assets Consolidated $ 265,163 18.06 % $ 117,427 8.00 % NA NA Independent Bank 247,883 16.90 117,374 8.00 $ 146,718 10.00 % Tier 1 capital to risk-weighted assets Consolidated $ 246,628 16.80 % $ 58,714 4.00 % NA NA Independent Bank 229,361 15.63 58,687 4.00 $ 88,031 6.00 % Tier 1 capital to average assets Consolidated $ 246,628 11.18 % $ 88,206 4.00 % NA NA Independent Bank 229,361 10.46 87,687 4.00 $ 109,609 5.00 % NA — Not applicable The components of our regulatory capital are as follows: Consolidated Independent Bank December 31, December 31, 2015 2014 2015 2014 (In thousands) Total shareholders’ equity $ 251,092 $ 250,371 $ 259,947 $ 257,832 Add (deduct) Accumulated other comprehensive loss for regulatory purposes 238 5,636 238 5,636 Intangible assets (912 ) (2,627 ) (912 ) (2,627 ) Disallowed deferred tax assets (11,147 ) (40,500 ) (18,406 ) (30,728 ) Disallowed capitalized mortgage loan servicing rights — (752 ) — (752 ) Common equity tier 1 capital 239,271 212,128 240,867 229,361 Qualifying trust preferred securities 34,500 34,500 — — Disallowed deferred tax assets (16,721 ) — — — Tier 1 capital 257,050 246,628 240,867 229,361 Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets 21,120 18,535 21,027 18,522 Total risk-based capital $ 278,170 $ 265,163 $ 261,894 $ 247,883 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE DISCLOSURES [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 21 – FAIR VALUE DISCLOSURES FASB ASC topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 instruments include securities traded on active exchange markets, such as the New York Stock Exchange, as well as U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 instruments include securities traded in less active dealer or broker markets. Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. We used the following methods and significant assumptions to estimate fair value: Securities Loans held for sale Impaired loans with specific loss allocations based on collateral value Other real estate Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by us. Once received, an independent third party (for commercial properties over $0.25 million) or a member of our Collateral Evaluation Department (for commercial properties under $0.25 million) or a member of our Special Assets Group (for retail properties) reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. We compare the actual selling price of collateral that has been sold to the most recent appraised value of our properties to determine what additional adjustment, if any, should be made to the appraisal value to arrive at fair value. For commercial and retail properties we typically discount an appraisal to account for various factors that the appraisal excludes in its assumptions. These additional discounts generally do not result in material adjustments to the appraised value. Capitalized mortgage loan servicing rights Derivatives Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows: Fair Value Measurements Using Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) December 31, 2015: Measured at Fair Value on a Recurring Basis: Assets Trading securities $ 148 $ 148 $ — $ — Securities available for sale U.S. agency 47,512 — 47,512 — U.S. agency residential mortgage-backed 196,056 — 196,056 — U.S. agency commercial mortgage-backed 34,028 — 34,028 — Private label residential mortgage-backed 4,903 — 4,903 — Other asset backed 116,904 — 116,904 — Obligations of states and political subdivisions 144,984 — 144,984 — Corporate 38,614 — 38,614 — Trust preferred 2,483 — 2,483 — Loans held for sale 27,866 — 27,866 — Derivatives (1) 1,238 — 1,238 — Liabilities Derivatives (2) 619 — 619 — Measured at Fair Value on a Non-recurring basis: Assets Capitalized mortgage loan servicing rights (3) 8,481 — — 8,481 Impaired loans (4) Commercial Income producing - real estate 711 — — 711 Land, land development & construction-real estate 40 — — 40 Commercial and industrial 1,257 — — 1,257 Mortgage 1-4 Family 421 — — 421 Resort lending 129 — — 129 Other real estate (5) Commercial Land, land development & construction-real estate 639 — — 639 Commercial and industrial 165 — — 165 Mortgage 1-4 Family 26 — — 26 Resort lending 107 — — 107 Home equity - 1st lien 14 — — 14 Installment Home equity - 1st lien 36 — — 36 (1) Included in accrued income and other assets (2) Included in accrued expenses and other liabilities (3) Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance. (4) Only includes impaired loans with specific loss allocations based on collateral value. (5) Only includes other real estate with subsequent write downs to fair value. Fair Value Measurements Using Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) December 31, 2014: Measured at Fair Value on a Recurring Basis: Assets Trading securities $ 203 $ 203 $ — $ — Securities available for sale U.S. agency 35,006 — 35,006 — U.S. agency residential mortgage-backed 257,558 — 257,558 — U.S. agency commercial mortgage-backed 33,728 — 33,728 — Private label residential mortgage-backed 6,013 — 6,013 — Other asset backed 32,353 — 32,353 — Obligations of states and political subdivisions 143,415 — 143,415 — Corporate 22,664 — 22,664 — Trust preferred 2,441 — 2,441 — Loans held for sale 23,662 — 23,662 — Derivatives (1) 619 — 619 — Liabilities Derivatives (2) 366 — 366 — Measured at Fair Value on a Non-recurring basis: Assets Capitalized mortgage loan servicing rights (3) 9,197 — — 9,197 Impaired loans (4) Commercial Income producing - real estate 869 — — 869 Land, land development & construction-real estate 354 — — 354 Commercial and industrial 2,601 — — 2,601 Mortgage 1-4 Family 1,306 — — 1,306 Other real estate (5) Commercial Income producing - real estate 479 — — 479 Land, land development & construction-real estate 737 — — 737 Mortgage 1-4 Family 102 — — 102 Resort lending 575 — — 575 Installment Home equity - 1st lien 13 — — 13 (1) Included in accrued income and other assets (2) Included in accrued expenses and other liabilities (3) Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance. (4) Only includes impaired loans with specific loss allocations based on collateral value. (5) Only includes other real estate with subsequent write downs to fair value. There were no transfers between Level 1 and Level 2 during the years ended December 31, 2015 and 2014. Changes in fair values of financial assets for which we have elected the fair value option for the years ended December 31 were as follows: Net Gains (Losses) on Assets Total Change in Fair Values Included in Current Period Earnings Securities Loans (In thousands) 2015 Trading securities $ (55 ) $ — $ (55 ) Loans held for sale — 90 90 2014 Trading securities $ (295 ) $ — $ (295 ) Loans held for sale — 258 258 2013 Trading securities $ 388 $ — $ 388 Loans held for sale — (1,477 ) (1,477 ) For those items measured at fair value pursuant to our election of the fair value option, interest income is recorded within the Consolidated Statements of Operations based on the contractual amount of interest income earned on these financial assets and dividend income is recorded based on cash dividends. The following represent impairment charges recognized during the years ended December 31, 2015, 2014 and 2013 relating to assets measured at fair value on a non-recurring basis: • Capitalized mortgage loan servicing rights, whose individual strata are measured at fair value, had a carrying amount of $8.5 million, which is net of a valuation allowance of $3.3 million, at December 31, 2015, and had a carrying amount of $9.2 million, which is net of a valuation allowance of $3.8 million, at December 31, 2014. A recovery (charge) of $0.5 million, $(0.9) million and $3.2 million was included in our results of operations for the years ending December 31, 2015, 2014 and 2013, respectively. • Loans which are measured for impairment using the fair value of collateral for collateral dependent loans had a carrying amount of $5.1 million, with a valuation allowance of $2.5 million at December 31, 2015, and had a carrying amount of $8.2 million, with a valuation allowance of $3.1 million at December 31, 2014. An additional provision for loan losses relating to impaired loans of $1.1 million, $2.1 million and $1.5 million was included in our results of operations for the years ending December 31, 2015, 2014 and 2013, respectively. • Other real estate, which is measured using the fair value of the property, had a carrying amount of $1.0 million which is net of a valuation allowance of $1.7 million at December 31, 2015, and a carrying amount of $1.9 million, which is net of a valuation allowance of $2.5 million, at December 31, 2014. An additional charge relating to other real estate measured at fair value of $0.3 million, $0.3 million and $1.6 million was included in our results of operations during the years ended December 31, 2015, 2014 and 2013, respectively. We had no assets or liabilities measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) during the years ended December 31, 2015 and 2014. Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows: Asset Fair Value Valuation Technique Unobservable Inputs Weighted Average (In thousands) 2015 Capitalized mortgage $ 8,481 Present value of net Discount rate 10.04 % servicing revenue Cost to service $ 80 Ancillary income 24 Float rate 1.73 % Impaired loans Commercial (1) 1,605 Sales comparison Adjustment for differences (2.1 )% Income approach Capitalization rate 9.3 Mortgage 550 Sales comparison Adjustment for differences 0.7 Other real estate Commercial 804 Sales comparison Adjustment for differences (3.9 ) Mortgage and installment 183 Sales comparison Adjustment for differences 75.6 2014 Capitalized mortgage loan servicing rights $ 9,197 Present value of net Discount rate 10.07 % servicing revenue Cost to service $ 82 Ancillary income 25 Float rate 1.77 % Impaired loans Commercial (1) 2,751 Sales comparison Adjustment for differences (3.8 )% Income approach Capitalization rate 9.3 Mortgage 1,306 Sales comparison Adjustment for differences 8.6 Other real estate Commercial 1,216 Sales comparison Adjustment for differences (9.0 ) Mortgage and installment 690 Sales comparison Adjustment for differences 34.3 (1) In addition to the valuation techniques and unobservable inputs discussed above, at December 31, 2015 and 2014, we had an impaired collateral dependent commercial relationship that totaled $0.4 million and $1.1 million, respectively that was primarily secured by collateral other than real estate. Collateral securing this relationship primarily included machinery and equipment and inventory at December 31, 2015 and 2014 and also included accounts receivable at December 31, 2014. Valuation techniques at December 31, 2015, included appraisals and discounting restructuring firm valuations based on estimates of value recovery of each particular asset type. Discount rates used ranged from 0% to 100% of stated values. Valuation techniques at December 31, 2014, included discounting cost and financial statement value approaches based on estimates of value recovery of each particular asset type. Discount rates used ranged from 35% to 100% of stated values. The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected at December 31. Aggregate Fair Value Difference Contractual Principal (In thousands) Loans held for sale 2015 $ 27,866 $ 714 $ 27,152 2014 23,662 624 23,038 2013 20,390 366 20,024 |
FAIR VALUES OF FINANCIAL INSTRU
FAIR VALUES OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract] | |
FAIR VALUES OF FINANCIAL INSTRUMENTS | NOTE 22 – FAIR VALUES OF FINANCIAL INSTRUMENTS Most of our assets and liabilities are considered financial instruments. Many of these financial instruments lack an available trading market and it is our general practice and intent to hold the majority of our financial instruments to maturity. Significant estimates and assumptions were used to determine the fair value of financial instruments. These estimates are subjective in nature, involving uncertainties and matters of judgment, and therefore, fair values cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Estimated fair values have been determined using available data and methodologies that are considered suitable for each category of financial instrument. For instruments with adjustable-interest rates which reprice frequently and without significant credit risk, it is presumed that estimated fair values approximate the recorded book balances. Cash and due from banks and interest bearing deposits Interest bearing deposits - time Securities Federal Home Loan Bank and Federal Reserve Bank Stock Net loans and loans held for sale Accrued interest receivable and payable Derivative financial instruments Deposits Other borrowings Subordinated debentures The estimated recorded book balances and fair values at December 31 follow: Fair Value Using Recorded Book Balance Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) 2015 Assets Cash and due from banks $ 54,260 $ 54,260 $ 54,260 $ — $ — Interest bearing deposits 31,523 31,523 31,523 — — Interest bearing deposits - time 11,866 11,858 — 11,858 — Trading securities 148 148 148 — — Securities available for sale 585,484 585,484 — 585,484 — Federal Home Loan Bank and Federal Reserve Bank Stock 15,471 NA NA NA NA Net loans and loans held for sale 1,520,346 1,472,613 — 27,866 1,444,747 Accrued interest receivable 6,565 6,565 5 1,969 4,591 Derivative financial instruments 1,238 1,238 — 1,238 — Liabilities Deposits with no stated maturity (1) $ 1,659,743 $ 1,659,743 $ 1,659,743 $ — $ — Deposits with stated maturity (1) 426,220 423,776 — 423,776 — Other borrowings 11,954 13,448 — 13,448 — Subordinated debentures 35,569 23,069 — 23,069 — Accrued interest payable 466 466 21 445 — Derivative financial instruments 619 619 — 619 — 2014 Assets Cash and due from banks $ 48,326 $ 48,326 $ 48,326 $ — $ — Interest bearing deposits 25,690 25,690 25,690 — — Interest bearing deposits - time 13,561 13,585 — 13,585 — Trading securities 203 203 203 — — Securities available for sale 533,178 533,178 — 533,178 — Federal Home Loan Bank and Federal Reserve Bank Stock 19,919 NA NA NA NA Net loans and loans held for sale 1,407,634 1,394,424 — 23,662 1,370,762 Accrued interest receivable 5,995 5,995 2 1,599 4,394 Derivative financial instruments 619 619 — 619 — Liabilities Deposits with no stated maturity (1) $ 1,534,175 $ 1,534,175 $ 1,534,175 $ — $ — Deposits with stated maturity (1) 390,127 389,139 — 389,139 — Other borrowings 12,470 14,560 — 14,560 — Subordinated debentures 35,569 23,328 — 23,328 — Accrued interest payable 380 380 21 359 — Derivative financial instruments 366 366 — 366 — (1) Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $11.8 million and $13.6 million at December 31, 2015 and 2014, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $38.4 million and $40.1 million at December 31, 2015 and 2014, respectively. The fair values for commitments to extend credit and standby letters of credit are estimated to approximate their aggregate book balance, which is nominal, and therefore are not disclosed. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale the entire holdings of a particular financial instrument. Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business, the value of future earnings attributable to off-balance sheet activities and the value of assets and liabilities that are not considered financial instruments. Fair value estimates for deposit accounts do not include the value of the core deposit intangible asset resulting from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 12 Months Ended |
Dec. 31, 2015 | |
OPERATING SEGMENTS [Abstract] | |
OPERATING SEGMENTS | NOTE 23 – OPERATING SEGMENTS Our reportable segments are based upon legal entities. We currently have two reportable segments: Independent Bank (“IB” or “Bank”) and Mepco. These business segments are also differentiated based on the products and services provided. We evaluate performance based principally on net income (loss) of the respective reportable segments. In the normal course of business, our IB segment provides funding to our Mepco segment through an intercompany line of credit priced at the prime rate of interest as published in the Wall Street Journal. Our IB segment also provides certain administrative services to our Mepco segment which are reimbursed at an agreed upon rate. These intercompany transactions are eliminated upon consolidation. The only other material intersegment balances and transactions are investments in subsidiaries at the parent entities and cash balances on deposit at our IB segment. A summary of selected financial information for our reportable segments follows: IB Mepco Other (1)(2) Elimination (3) Total (In thousands) 2015 Total assets $ 2,340,566 $ 57,208 $ 286,936 $ (275,644 ) $ 2,409,066 Interest income 75,552 5,290 72 (72 ) 80,842 Net interest income 71,448 4,487 (949 ) — 74,986 Provision for loan losses (2,705 ) (9 ) — — (2,714 ) Income (loss) before income tax 32,136 (1,183 ) (1,478 ) (95 ) 29,380 Net income (loss) 21,727 (712 ) (936 ) (62 ) 20,017 2014 Total assets $ 2,174,536 $ 63,378 $ 286,158 $ (275,342 ) $ 2,248,730 Interest income 73,551 7,004 64 (64 ) 80,555 Net interest income 68,948 5,706 (1,398 ) — 73,256 Provision for loan losses (3,098 ) (38 ) — — (3,136 ) Income (loss) before income tax 25,845 561 (1,095 ) (95 ) 25,216 Net income (loss) 18,550 366 (712 ) (183 ) 18,021 2013 Total assets $ 2,104,550 $ 94,648 $ 272,348 $ (261,603 ) $ 2,209,943 Interest income 76,018 11,103 — — 87,121 Net interest income 71,496 8,780 (2,317 ) — 77,959 Provision for loan losses (3,891 ) (97 ) — — (3,988 ) Income (loss) before income tax 29,605 (2,891 ) (3,961 ) (95 ) 22,658 Net income (loss) 74,313 (1,801 ) 5,092 (95 ) 77,509 (1) During 2013 IB and Other (parent company) include $47.1 million and $9.0 million, respectively of income tax benefit related to the reversal of the valuation allowance on our net deferred tax assets (see note #13). (2) Includes amounts relating to our parent company and certain insignificant operations. (3) Includes parent company’s investment in subsidiaries and cash balances maintained at subsidiary. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2015 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 24 – ACCUMULATED OTHER COMPREHENSIVE LOSS A summary of changes in accumulated other comprehensive loss (“AOCL”), net of tax during the years ended December 31 follows: Unrealized Losses on Available for Sale Securities Disproportionate Tax Effects from Securities Available for Sale Unrealized Losses on Cash Flow Hedges Unrealized Losses on Settled Derivatives Disproportionate Tax Effects from Cash Flow Hedges Total (In thousands) 2015 Balances at beginning of period $ 162 $ (5,798 ) $ — $ — $ — $ (5,636 ) Other comprehensive loss before reclassifications (351 ) — — — — (351 ) Amounts reclassified from AOCL (49 ) — — — — (49 ) Net current period other comprehensive loss (400 ) — — — — (400 ) Balances at end of period $ (238 ) $ (5,798 ) $ — $ — $ — $ (6,036 ) 2014 Balances at beginning of period $ (3,200 ) $ (5,798 ) $ — $ (247 ) $ — $ (9,245 ) Other comprehensive income before reclassifications 3,570 — — — — 3,570 Amounts reclassified from AOCL (208 ) — — 247 — 39 Net current period other comprehensive income 3,362 — — 247 — 3,609 Balances at end of period $ 162 $ (5,798 ) $ — $ — $ — $ (5,636 ) 2013 Balances at beginning of period $ (516 ) $ (5,617 ) $ (739 ) $ — $ (1,186 ) $ (8,058 ) Income tax 181 (181 ) 258 — (258 ) — Balances at beginning of period, net of tax (335 ) (5,798 ) (481 ) — (1,444 ) (8,058 ) Terminated cash flow hedge — — 370 (370 ) — — Other comprehensive loss before reclassifications (2,877 ) — (24 ) — — (2,901 ) Amounts reclassified from AOCL 12 — 135 123 1,444 1,714 Net current period other comprehensive income (loss) (2,865 ) — 111 123 1,444 (1,187 ) Balances at end of period $ (3,200 ) $ (5,798 ) $ — $ (247 ) $ — $ (9,245 ) The disproportionate tax effects from securities available for sale and cash flow hedges arose due to tax effects of other comprehensive income (“OCI”) in the presence of a valuation allowance against our deferred tax assets and a pretax loss from operations. Generally, the amount of income tax expense or benefit allocated to operations is determined without regard to the tax effects of other categories of income or loss, such as OCI. However, an exception to the general rule is provided when, in the presence of a valuation allowance against deferred tax assets, there is a pretax loss from operations and pretax income from other categories in the current period. In such instances, income from other categories must offset the current loss from operations, the tax benefit of such offset being reflected in operations. During the second quarter of 2013, we terminated our last remaining cash flow hedge and cleared the disproportionate tax effects relating to cash flow hedges from accumulated other comprehensive loss (see note #13). A summary of reclassifications out of each component of AOCL for the years ended December 31 follows: AOCL Component Reclassified From AOCL Affected Line Item in Consolidated Statements of Operations (In thousands) 2015 Unrealized losses on securities available for sale $ 75 Net gains on securities — Net impairment loss recognized in earnings 75 Total reclassifications before tax 26 Income tax expense (benefit) $ 49 Reclassifications, net of tax 2014 Unrealized losses on securities available for sale $ 329 Net gains on securities (9 ) Net impairment loss recognized in earnings 320 Total reclassifications before tax 112 Income tax expense (benefit) $ 208 Reclassifications, net of tax Unrealized losses on settled derivatives $ (380 ) Interest expense (133 ) Income tax expense (benefit) $ (247 ) Reclassification, net of tax $ (39 ) Total reclassifications for the period, net of tax 2013 Unrealized losses on securities available for sale $ 7 Net gains on securities (26 ) Net impairment loss recognized in earnings (19 ) Total reclassifications before tax (7 ) Income tax expense (benefit) $ (12 ) Reclassifications, net of tax Unrealized losses on cash flow hedges $ (208 ) Interest expense (73 ) Income tax expense (benefit) $ (135 ) Reclassification, net of tax Unrealized losses on settled derivatives $ (189 ) Interest expense (66 ) Income tax expense (benefit) $ (123 ) Reclassification, net of tax Disproportionate tax effects from cash flow hedges $ 1,444 Income tax expense (benefit) $ (1,714 ) Total reclassifications for the period, net of tax |
INDEPENDENT BANK CORPORATION (P
INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION [Abstract] | |
INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION | NOTE 25 – INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION Presented below are condensed financial statements for our parent company. CONDENSED STATEMENTS OF FINANCIAL CONDITION December 31, 2015 2014 (In thousands) ASSETS Cash and due from banks $ 10,800 $ 5,174 Interest bearing deposits - time 5,000 12,500 Investment in subsidiaries 261,016 258,901 Other assets 10,120 9,583 Total Assets $ 286,936 $ 286,158 LIABILITIES AND SHAREHOLDERS’ EQUITY Subordinated debentures $ 35,569 $ 35,569 Other liabilities 378 382 Shareholders’ equity 250,989 250,207 Total Liabilities and Shareholders’ Equity $ 286,936 $ 286,158 CONDENSED STATEMENTS OF OPERATIONS Year Ended December 31, 2015 2014 2013 (In thousands) OPERATING INCOME (LOSS) Interest income $ 72 $ 64 $ — Gain on extinguishment of debt — 500 — Gain on securities — 295 — Increase in fair value of U.S. Treasury warrant — — (1,025 ) Other income 31 35 63 Total Operating Income (Loss) 103 894 (962 ) OPERATING EXPENSES Interest expense 1,021 1,462 2,317 Administrative and other expenses 560 527 682 Total Operating Expenses 1,581 1,989 2,999 Loss Before Income Tax and Equity in Undistributed Net Income of Subsidiaries (1,478 ) (1,095 ) (3,961 ) Income tax benefit (542 ) (383 ) (9,053 ) Income (Loss) Before Equity in Undistributed Net Income of Subsidiaries (936 ) (712 ) 5,092 Equity in undistributed net income of subsidiaries 20,953 18,733 72,417 Net Income $ 20,017 $ 18,021 $ 77,509 CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, 2015 2014 2013 (In thousands) Net Income $ 20,017 $ 18,021 $ 77,509 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH USED IN OPERATING ACTIVITIES Deferred income taxes (542 ) (383 ) (8,955 ) Share based compensation 21 46 84 Gain on extinguishment of debt — (500 ) — Gain on securities — (295 ) — Decrease in other assets 5 118 738 Increase (decrease) in other liabilities (6 ) 287 (5,858 ) Equity in undistributed net income of subsidiaries operations (20,953 ) (18,733 ) (72,417 ) Total Adjustments (21,475 ) (19,460 ) (86,408 ) Net Cash Used in Operating Activities (1,458 ) (1,439 ) (8,899 ) CASH FLOW FROM INVESTING ACTIVITIES Purchases of interest bearing deposits - time (5,000 ) (17,500 ) — Maturity of interest bearing deposits - time 12,500 5,000 — Return of capital from subsidiary 18,500 15,000 7,500 Net Cash From Investing Activities 26,000 2,500 7,500 CASH FLOW FROM (USED IN) FINANCING ACTIVITIES Repurchase of common stock (13,498 ) — — Dividends paid (5,896 ) (4,129 ) — Proceeds from issuance of common stock 1,569 1,242 100,230 Share based compensation withholding obligation (1,091 ) — (513 ) Redemption of subordinated debt — (4,654 ) (9,452 ) Redemption of convertible preferred stock and common stock warrant — — (81,000 ) Net Cash From (Used in) Financing Activities (18,916 ) (7,541 ) 9,265 Net Increase (Decrease) in Cash and Cash Equivalents 5,626 (6,480 ) 7,866 Cash and Cash Equivalents at Beginning of Year 5,174 11,654 3,788 Cash and Cash Equivalents at End of Year $ 10,800 $ 5,174 $ 11,654 |
BRANCH SALE
BRANCH SALE | 12 Months Ended |
Dec. 31, 2015 | |
BRANCH SALE [Abstract] | |
BRANCH SALE | NOTE 26 – BRANCH SALE On April 29, 2015 we entered into a Purchase and Assumption Agreement (“PAA”) with Isabella Bank (based in Mt. Pleasant, Michigan). Pursuant to the PAA, on August 28, 2015, we sold the fixed assets, real property and certain other assets of our bank branch located in Midland, Michigan (the “Midland Branch”) to Isabella Bank. The deposit liabilities of the Midland Branch were assumed by Isabella Bank which totaled $8.7 million on the date of sale. Under the terms of the PAA, Isabella Bank paid a premium of $0.6 million (which was equal to 6.0% of the average deposit liabilities of $9.7 million based on the 20-day average ending two business days prior to the closing date of August 28, 2015) and $0.85 million for the real property and fixed assets (including the ATM). The real property and the fixed assets had a net book value of approximately $0.2 million as of August 28, 2015. We recorded a net gain of $1.2 million in the third quarter of 2015 on the sale of the Midland Branch. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
ACCOUNTING POLICIES [Abstract] | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION |
STATEMENTS OF CASH FLOWS | STATEMENTS OF CASH FLOWS |
INTEREST BEARING DEPOSITS | INTEREST BEARING DEPOSITS INTEREST BEARING DEPOSITS - TIME |
LOANS HELD FOR SALE | LOANS HELD FOR SALE |
MORTGAGE LOAN SERVICING RIGHTS | MORTGAGE LOAN SERVICING RIGHTS |
TRANSFERS OF FINANCIAL ASSETS | TRANSFERS OF FINANCIAL ASSETS |
SECURITIES | SECURITIES We evaluate securities for OTTI at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In performing this evaluation, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) an assessment of whether we intend to sell, or it is more likely than not that we will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. For securities that do not meet the aforementioned recovery criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income (loss). The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Gains and losses realized on the sale of securities available for sale are determined using the specific identification method and are recognized on a trade-date basis. |
FEDERAL HOME LOAN BANK ("FHLB") STOCK | FEDERAL HOME LOAN BANK (“FHLB”) STOCK |
FEDERAL RESERVE BANK ("FRB") STOCK | FEDERAL RESERVE BANK (“FRB”) STOCK |
LOAN REVENUE RECOGNITION | LOAN REVENUE RECOGNITION Certain loan fees and direct loan origination costs are deferred and recognized as an adjustment of yield generally over the contractual life of the related loan. Fees received in connection with loan commitments are deferred until the loan is advanced and are then recognized generally over the contractual life of the loan as an adjustment of yield. Fees on commitments that expire unused are recognized at expiration. Fees received for letters of credit are recognized as revenue over the life of the commitment. |
PAYMENT PLAN RECEIVABLE REVENUE RECOGNITION | PAYMENT PLAN RECEIVABLE REVENUE RECOGNITION |
ALLOWANCE FOR LOAN LOSSES | ALLOWANCE FOR LOAN LOSSES Some loans will not be repaid in full. Therefore, an AFLL is maintained at a level which represents our best estimate of losses incurred. In determining the allowance and the related provision for loan losses, we consider four principal elements: (i) specific allocations based upon probable losses identified during the review of the loan portfolio, (ii) allocations established for other adversely rated commercial loans, (iii) allocations based principally on historical loan loss experience, and (iv) additional allocations based on subjective factors, including local and general economic business factors and trends, portfolio concentrations and changes in the size and/or the general terms of the loan portfolios. The first AFLL element (specific allocations) reflects our estimate of probable incurred losses based upon our systematic review of specific loans. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, discounted collateral exposure and discounted cash flow analysis. Impaired commercial, mortgage and installment loans are allocated allowance amounts using this first element. The second AFLL element (other adversely rated commercial loans) reflects the application of our loan rating system. This rating system is similar to those employed by state and federal banking regulators. Commercial loans that are rated below a certain predetermined classification are assigned a loss allocation factor for each loan classification category that is based upon a historical analysis of both the probability of default and the expected loss rate (“loss given default”). The lower the rating assigned to a loan or category, the greater the allocation percentage that is applied. The third AFLL element (historical loss allocations) is determined by assigning allocations to higher rated (“non-watch credit”) commercial loans using a probability of default and loss given default similar to the second AFLL element and to homogenous mortgage and installment loan groups based upon borrower credit score and portfolio segment. For homogenous mortgage and installment loans a probability of default for each homogenous pool is calculated by way of credit score migration. Historical loss data for each homogenous pool coupled with the associated probability of default is utilized to calculate an expected loss allocation rate. The fourth AFLL element (additional allocations based on subjective factors) is based on factors that cannot be associated with a specific credit or loan category and reflects our attempt to ensure that the overall allowance for loan losses appropriately reflects a margin for the imprecision necessarily inherent in the estimates of expected credit losses. We consider a number of subjective factors when determining this fourth element, including local and general economic business factors and trends, portfolio concentrations and changes in the size, mix and the general terms of the overall loan portfolio. Increases in the AFLL are recorded by a provision for loan losses charged to expense. Although we periodically allocate portions of the AFLL to specific loans and loan portfolios, the entire AFLL is available for incurred losses. We generally charge-off commercial, homogenous residential mortgage and installment loans and payment plan receivables when they are deemed uncollectible or reach a predetermined number of days past due based on loan product, industry practice and other factors. Collection efforts may continue and recoveries may occur after a loan is charged against the AFLL. While we use relevant information to recognize losses on loans, additional provisions for related losses may be necessary based on changes in economic conditions, customer circumstances and other credit risk factors. A loan is impaired when full payment under the loan terms is not expected. Generally, those loans included in each commercial loan class that are rated substandard, classified as non-performing or were classified as non-performing in the preceding quarter, are evaluated for impairment. Those loans included in each mortgage loan or installment class whose terms have been modified and considered a troubled debt restructuring are also impaired. Loans which have been modified resulting in a concession, and which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired. We measure our investment in an impaired loan based on one of three methods: the loan’s observable market price, the fair value of the collateral or the present value of expected future cash flows discounted at the loan’s effective interest rate. Large groups of smaller balance homogeneous loans, such as those loans included in each installment and mortgage loan class and each payment plan receivable class, are collectively evaluated for impairment and accordingly, they are not separately identified for impairment disclosures. TDR loans are measured at the present value of estimated future cash flows using the loan’s effective interest rate at inception of the loan. If a TDR is considered to be a collateral dependent loan, the loan is reported net, at the fair value of collateral. A loan can be removed from TDR status if it is subsequently restructured and the borrower is no longer experiencing financial difficulties and the newly restructured agreement does not contain any concessions to the borrower. The new agreement must specify market terms, including a contractual interest rate not less than a market interest rate for new debt with similar credit risk characteristics, and other terms no less favorable to us than those we would offer for similar new debt. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT |
BANK OWNED LIFE INSURANCE | BANK OWNED LIFE INSURANCE |
OTHER REAL ESTATE AND REPOSSESSED ASSETS | OTHER REAL ESTATE AND REPOSSESSED ASSETS |
OTHER INTANGIBLE ASSETS | OTHER INTANGIBLE ASSETS |
VEHICLE SERVICE CONTRACT COUNTERPARTY RECEIVABLES, NET | VEHICLE SERVICE CONTRACT COUNTERPARTY RECEIVABLES, NET |
INCOME TAXES | INCOME TAXES A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. We recognize interest and/or penalties related to income tax matters in income tax expense. We file a consolidated federal income tax return. Intercompany tax liabilities are settled as if each subsidiary filed a separate return. |
VEHICLE SERVICE CONTRACT COUNTERPARTY PAYABLES | VEHICLE SERVICE CONTRACT COUNTERPARTY PAYABLES |
COMMITMENTS TO EXTEND CREDIT AND RELATED FINANCIAL INSTRUMENTS | COMMITMENTS TO EXTEND CREDIT AND RELATED FINANCIAL INSTRUMENTS |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS At the inception of the derivative we designate the derivative as one of three types based on our intention and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“Fair Value Hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“Cash Flow Hedge”), or (3) an instrument with no hedging designation. For a Fair Value Hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item, are recognized in current earnings as fair values change. For a Cash Flow Hedge, the gain or loss on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. We did not have any Fair Value Hedges or Cash Flow Hedges at December 31, 2015 or 2014. For both types of hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. For instruments with no hedging designation, the gain or loss on the derivative is reported in earnings. These free standing instruments currently consist of (i) mortgage banking related derivatives and include rate-lock loan commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and mandatory forward commitments for the future delivery of these mortgage loans, (ii) certain pay-fixed and pay-variable interest rate swap agreements related to commercial loan customers and (iii) certain purchased and written options related to a time deposit product. Fair values of the mortgage derivatives are estimated based on mortgage backed security pricing for comparable assets. We enter into mandatory forward commitments for the future delivery of mortgage loans generally when interest rate locks are entered into in order to hedge the change in interest rates resulting from our commitments to fund the loans. Changes in the fair values of these derivatives are included in net gains on mortgage loans. Fair values of the pay-fixed and pay-variable interest rate swap agreements are based on discounted cash flow analyses and are included in net interest income. Fair values of the purchased and written options are based on prices of financial instruments with similar characteristics and are included in net interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest expense. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income (mortgage banking related derivatives) or net interest income (interest rate swap agreements and options). Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. We formally document the relationship between derivatives and hedged items, as well as the risk- management objective and the strategy for undertaking hedge transactions, at the inception of the hedging relationship. This documentation includes linking Fair Value or Cash Flow Hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. We also assess, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. We discontinue hedge accounting when it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded in earnings. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive loss are amortized into earnings over the same periods which the hedged transactions will affect earnings. |
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME |
INCOME PER COMMON SHARE | INCOME PER COMMON SHARE |
SHARE BASED COMPENSATION | SHARE BASED COMPENSATION |
COMMON STOCK | COMMON STOCK |
RECLASSIFICATION | RECLASSIFICATION |
ADOPTION OF NEW ACCOUNTING STANDARDS | ADOPTION OF NEW ACCOUNTING STANDARDS In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606) ”. In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation (Topic 718) – Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period”. This ASU amends existing guidance related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. These amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This amended guidance is effective for us on January 1, 2016, and is not expected to have a material impact on our consolidated operating results or financial condition. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This ASU amends existing guidance related to the accounting for certain financial assets and liabilities. These amendments, among other things, requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. This amended guidance is effective for us on January 1, 2018, and is not expected to have a material impact on our consolidated operating results or financial condition. |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SECURITIES [Abstract] | |
Securities available for sale | Securities available for sale consist of the following at December 31: Amortized Cost Unrealized Fair Value Gains Losses (In thousands) 2015 U.S. agency $ 47,283 $ 309 $ 80 $ 47,512 U.S. agency residential mortgage-backed 195,055 1,584 583 196,056 U.S. agency commercial mortgage-backed 34,017 94 83 34,028 Private label residential mortgage-backed 5,061 161 319 4,903 Other asset backed 117,431 54 581 116,904 Obligations of states and political subdivisions 145,193 941 1,150 144,984 Corporate 38,895 9 290 38,614 Trust preferred 2,916 — 433 2,483 Total $ 585,851 $ 3,152 $ 3,519 $ 585,484 2014 U.S. agency $ 34,936 $ 133 $ 63 $ 35,006 U.S. agency residential mortgage-backed 256,387 1,838 667 257,558 U.S. agency commercial mortgage-backed 33,779 68 119 33,728 Private label residential mortgage-backed 6,216 187 390 6,013 Other asset backed 32,314 77 38 32,353 Obligations of states and political subdivisions 143,698 961 1,244 143,415 Corporate 22,690 53 79 22,664 Trust preferred 2,910 — 469 2,441 Total $ 532,930 $ 3,317 $ 3,069 $ 533,178 |
Investments in a continuous unrealized loss position | Our investments’ gross unrealized losses and fair values aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position, at December 31 follows: Less Than Twelve Months Twelve Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) 2015 U.S. agency $ 12,164 $ 47 $ 6,746 $ 33 $ 18,910 $ 80 U.S. agency residential mortgage-backed 57,538 316 23,340 267 80,878 583 U.S. agency commercial mortgage-backed 16,747 60 2,247 23 18,994 83 Private label residential mortgage-backed — — 3,393 319 3,393 319 Other asset backed 102,660 434 5,189 147 107,849 581 Obligations of states and political subdivisions 52,493 597 12,240 553 64,733 1,150 Corporate 30,550 290 — — 30,550 290 Trust preferred — — 2,483 433 2,483 433 Total $ 272,152 $ 1,744 $ 55,638 $ 1,775 $ 327,790 $ 3,519 Less Than Twelve Months Twelve Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) 2014 U.S. agency $ 12,851 $ 58 $ 606 $ 5 $ 13,457 $ 63 U.S. agency residential mortgage-backed 89,547 531 15,793 136 105,340 667 U.S. agency commercial mortgage-backed 21,325 119 — — 21,325 119 Private label residential mortgage-backed 208 1 4,013 389 4,221 390 Other asset backed 2,960 15 8,729 23 11,689 38 Obligations of states and political subdivisions 28,114 106 37,540 1,138 65,654 1,244 Corporate 8,660 79 — — 8,660 79 Trust preferred — — 2,441 469 2,441 469 Total $ 163,665 $ 909 $ 69,122 $ 2,160 $ 232,787 $ 3,069 |
Trust preferred securities | The following table breaks out our trust preferred securities in further detail as of December 31: 2015 2014 Fair Value Net Unrealized Loss Fair Value Net Unrealized Loss (In thousands) Trust preferred securities Rated issues $ 1,690 $ (226 ) $ 1,643 $ (267 ) Unrated issues 793 (207 ) 798 (202 ) |
Private label residential mortgage backed securities below investment grade | At December 31, 2015, three private label residential mortgage-backed securities had credit related OTTI and are summarized as follows: Senior Security Super Senior Security Senior Support Security Total (In thousands) As of December 31, 2015 Fair value $ 1,616 $ 1,331 $ 79 $ 3,026 Amortized cost 1,635 1,249 — 2,884 Non-credit unrealized loss 19 — — 19 Unrealized gain — 82 79 161 Cumulative credit related OTTI 757 457 380 1,594 Credit related OTTI recognized in our Consolidated Statements of Operations For the years ended December 31, 2015 $ — $ — $ — $ — 2014 9 — — 9 2013 26 — — 26 |
Credit losses recognized in earnings on securities available for sale | A roll forward of credit losses recognized in earnings on securities available for sale for the years ending December 31 follow: 2015 2014 2013 (In thousands) Balance at beginning of year $ 1,844 $ 1,835 $ 1,809 Additions to credit losses on securities for which no previous OTTI was recognized — — — Increases to credit losses on securities for which OTTI was previously recognized — 9 26 Total $ 1,844 $ 1,844 $ 1,835 |
Amortized cost and fair value of securities available for sale by contractual maturity | The amortized cost and fair value of securities available for sale at December 31, 2015, by contractual maturity, follow: Amortized Cost Fair Value (In thousands) Maturing within one year $ 34,565 $ 34,591 Maturing after one year but within five years 69,976 69,916 Maturing after five years but within ten years 46,512 46,641 Maturing after ten years 83,234 82,445 234,287 233,593 U.S. agency residential mortgage-backed 195,055 196,056 U.S. agency commercial mortgage-backed 34,017 34,028 Private label residential mortgage-backed 5,061 4,903 Other asset backed 117,431 116,904 Total $ 585,851 $ 585,484 |
Gains and losses realized on sale of securities available for sale | A summary of proceeds from the sale of securities available for sale and gains and losses for the years ended December 31 follow: Proceeds Realized Gains (1) Losses (2) (In thousands) 2015 $ 12,037 $ 75 $ — 2014 14,633 329 — 2013 2,940 15 8 (1) Gains in 2014 exclude $0.3 million of realized gain related to a U.S. Treasury short position. (2) Losses in 2014 and 2013 exclude $0.01 million and $0.03 million, respectively of credit related OTTI recognized in earnings. |
LOANS AND PAYMENT PLAN RECEIV37
LOANS AND PAYMENT PLAN RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
LOANS AND PAYMENT PLAN RECEIVABLES [Abstract] | |
Loan portfolios | Our loan portfolios at December 31 follow: 2015 2014 (In thousands) Real estate (1) Residential first mortgages $ 432,215 $ 411,423 Residential home equity and other junior mortgages 106,297 108,162 Construction and land development 62,629 54,644 Other (2) 498,706 447,837 Consumer 193,350 154,591 Commercial 180,424 186,875 Payment plan receivables 34,599 40,001 Agricultural 6,830 6,429 Total loans $ 1,515,050 $ 1,409,962 (1) Includes both residential and non-residential commercial loans secured by real estate. (2) Includes loans secured by multi-family residential and non-farm, non-residential property. |
Analysis of allowance for loan losses by portfolio segment | An analysis of the allowance for loan losses by portfolio segment for the years ended December 31 follows: Commercial Mortgage Installment Payment Plan Receivables Subjective Allocation Total (In thousands) 2015 Balance at beginning of period $ 5,445 $ 13,444 $ 1,814 $ 64 $ 5,223 $ 25,990 Additions (deductions) Provision for loan losses (737 ) (1,744 ) (274 ) (8 ) 49 (2,714 ) Recoveries credited to allowance 2,656 1,258 1,108 — — 5,022 Loans charged against the allowance (1,694 ) (2,567 ) (1,467 ) — — (5,728 ) Balance at end of period $ 5,670 $ 10,391 $ 1,181 $ 56 $ 5,272 $ 22,570 2014 Balance at beginning of period $ 6,827 $ 17,195 $ 2,246 $ 97 $ 5,960 $ 32,325 Additions (deductions) Provision for loan losses (1,683 ) (1,029 ) 349 (36 ) (737 ) (3,136 ) Recoveries credited to allowance 4,914 1,397 1,104 5 — 7,420 Loans charged against the allowance (4,613 ) (4,119 ) (1,885 ) (2 ) — (10,619 ) Balance at end of period $ 5,445 $ 13,444 $ 1,814 $ 64 $ 5,223 $ 25,990 Commercial Mortgage Installment Payment Plan Receivables Subjective Allocation Total (In thousands) 2013 Balance at beginning of period $ 11,402 $ 21,447 $ 3,378 $ 144 $ 7,904 $ 44,275 Additions (deductions) Provision for loan losses (2,336 ) 71 314 (93 ) (1,944 ) (3,988 ) Recoveries credited to allowance 5,119 1,996 1,074 81 — 8,270 Loans charged against the allowance (7,358 ) (6,319 ) (2,520 ) (35 ) — (16,232 ) Balance at end of period $ 6,827 $ 17,195 $ 2,246 $ 97 $ 5,960 $ 32,325 |
Allowance for loan losses and recorded investment in loans by portfolio segment | Allowance for loan losses and recorded investment in loans by portfolio segment follows: Commercial Mortgage Installment Payment Plan Receivables Subjective Allocation Total (In thousands) 2015 Allowance for loan losses: Individually evaluated for impairment $ 2,708 $ 7,818 $ 457 $ — $ — $ 10,983 Collectively evaluated for impairment 2,962 2,573 724 56 5,272 11,587 Total ending allowance balance $ 5,670 $ 10,391 $ 1,181 $ 56 $ 5,272 $ 22,570 Loans Individually evaluated for impairment $ 16,868 $ 66,375 $ 5,888 $ — $ 89,131 Collectively evaluated for impairment 733,399 436,349 226,409 34,599 1,430,756 Total loans recorded investment 750,267 502,724 232,297 34,599 1,519,887 Accrued interest included in recorded investment 1,869 2,270 698 — 4,837 Total loans $ 748,398 $ 500,454 $ 231,599 $ 34,599 $ 1,515,050 2014 Allowance for loan losses: Individually evaluated for impairment $ 3,194 $ 9,311 $ 728 $ — $ — $ 13,233 Collectively evaluated for impairment 2,251 4,133 1,086 64 5,223 12,757 Total ending allowance balance $ 5,445 $ 13,444 $ 1,814 $ 64 $ 5,223 $ 25,990 Loans Individually evaluated for impairment $ 34,147 $ 72,340 $ 6,679 $ — $ 113,166 Collectively evaluated for impairment 658,423 402,458 200,368 40,001 1,301,250 Total loans recorded investment 692,570 474,798 207,047 40,001 1,414,416 Accrued interest included in recorded investment 1,615 2,170 669 — 4,454 Total loans $ 690,955 $ 472,628 $ 206,378 $ 40,001 $ 1,409,962 |
Loans on non-accrual status and past due more than 90 days | Loans on non-accrual status and past due more than 90 days (“Non-performing Loans”) at December 31 follow: 90+ and Still Accruing Non- Accrual Total Non- Performing Loans (In thousands) 2015 Commercial Income producing - real estate $ — $ 1,027 $ 1,027 Land, land development and construction - real estate 49 401 450 Commercial and industrial 69 2,028 2,097 Mortgage 1-4 family — 4,744 4,744 Resort lending — 1,094 1,094 Home equity - 1st lien — 187 187 Home equity - 2nd lien — 147 147 Purchased loans — 2 2 Installment Home equity - 1st lien — 106 106 Home equity - 2nd lien — 443 443 Loans not secured by real estate — 421 421 Other — 2 2 Payment plan receivables Full refund — 2 2 Partial refund — 2 2 Other — 1 1 Total recorded investment $ 118 $ 10,607 $ 10,725 Accrued interest included in recorded investment $ 2 $ — $ 2 2014 Commercial Income producing - real estate $ — $ 1,233 $ 1,233 Land, land development and construction - real estate — 594 594 Commercial and industrial — 2,746 2,746 Mortgage 1-4 family 7 5,945 5,952 Resort lending — 2,168 2,168 Home equity - 1st lien — 331 331 Home equity - 2nd lien — 605 605 Installment Home equity - 1st lien — 576 576 Home equity - 2nd lien — 517 517 Loans not secured by real estate — 454 454 Other — 48 48 Payment plan receivables Full refund — 2 2 Partial refund — 12 12 Other — — — Total recorded investment $ 7 $ 15,231 $ 15,238 Accrued interest included in recorded investment $ — $ — $ — |
Aging analysis of loans by class | An aging analysis of loans by class at December 31 follows: Loans Past Due Loans not Past Due Total Loans 30-59 days 60-89 days 90+ days Total (In thousands) 2015 Commercial Income producing - real estate $ 203 $ 209 $ 647 $ 1,059 $ 305,155 $ 306,214 Land, land development and construction - real estate — — 252 252 44,231 44,483 Commercial and industrial 785 16 151 952 398,618 399,570 Mortgage 1-4 family 1,943 640 4,744 7,327 272,298 279,625 Resort lending 307 — 1,094 1,401 114,619 116,020 Home equity - 1st lien 50 — 187 237 22,327 22,564 Home equity - 2nd lien 439 54 147 640 50,618 51,258 Purchased loans 9 1 2 12 33,245 33,257 Installment Home equity - 1st lien 315 107 106 528 16,707 17,235 Home equity - 2nd lien 231 149 443 823 19,727 20,550 Loans not secured by real estate 567 83 421 1,071 191,262 192,333 Other 15 3 2 20 2,159 2,179 Payment plan receivables Full refund 492 62 2 556 21,294 21,850 Partial refund 415 228 2 645 5,834 6,479 Other 110 3 1 114 6,156 6,270 Total recorded investment $ 5,881 $ 1,555 $ 8,201 $ 15,637 $ 1,504,250 $ 1,519,887 Accrued interest included in recorded investment $ 53 $ 17 $ 2 $ 72 $ 4,765 $ 4,837 2014 Commercial Income producing - real estate $ 89 $ — $ 214 $ 303 $ 252,763 $ 253,066 Land, land development and construction - real estate 131 — 223 354 33,984 34,338 Commercial and industrial 2,391 279 209 2,879 402,287 405,166 Mortgage 1-4 family 1,877 1,638 5,952 9,467 269,719 279,186 Resort lending 226 — 2,168 2,394 126,342 128,736 Home equity - 1st lien 39 50 331 420 19,782 20,202 Home equity - 2nd lien 711 89 605 1,405 45,269 46,674 Installment Home equity - 1st lien 466 37 576 1,079 20,995 22,074 Home equity - 2nd lien 369 81 517 967 28,125 29,092 Loans not secured by real estate 589 231 454 1,274 152,115 153,389 Other 15 3 48 66 2,426 2,492 Payment plan receivables Full refund 838 214 2 1,054 26,799 27,853 Partial refund 409 123 12 544 6,550 7,094 Other 96 24 — 120 4,934 5,054 Total recorded investment $ 8,246 $ 2,769 $ 11,311 $ 22,326 $ 1,392,090 $ 1,414,416 Accrued interest included in recorded investment $ 55 $ 29 $ — $ 84 $ 4,370 $ 4,454 |
Impaired loans | Impaired loans are as follows: December 31, 2015 2014 (In thousands) Impaired loans with no allocated allowance TDR $ 2,518 $ 9,325 Non - TDR 203 299 Impaired loans with an allocated allowance TDR - allowance based on collateral 4,810 5,879 TDR - allowance based on present value cash flow 81,002 94,970 Non - TDR - allowance based on collateral 260 2,296 Non - TDR - allowance based on present value cash flow — — Total impaired loans $ 88,793 $ 112,769 Amount of allowance for loan losses allocated TDR - allowance based on collateral $ 2,436 $ 2,025 TDR - allowance based on present value cash flow 8,471 10,188 Non - TDR - allowance based on collateral 76 1,020 Non - TDR - allowance based on present value cash flow — — Total amount of allowance for loan losses allocated $ 10,983 $ 13,233 Impaired loans by class as of December 31 are as follows (1): 2015 2014 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance (In thousands) With no related allowance recorded: Commercial Income producing - real estate $ 641 $ 851 $ — $ 5,868 $ 6,077 $ — Land, land development & construction-real estate 818 1,393 — 1,051 1,606 — Commercial and industrial 1,245 1,241 — 2,685 2,667 — Mortgage 1-4 family 23 183 — — 49 — Resort lending — — — 48 397 — Home equity - 1st lien — — — — — — Home equity - 2nd lien — — — — — — Installment Home equity - 1st lien — 76 — — 40 — Home equity - 2nd lien — — — — — — Loans not secured by real estate — — — — — — Other — — — — — — 2,727 3,744 — 9,652 10,836 — With an allowance recorded: Commercial Income producing - real estate 8,377 9,232 516 12,836 13,797 689 Land, land development & construction-real estate 1,690 1,778 296 3,456 3,528 499 Commercial and industrial 4,097 4,439 1,896 8,251 8,486 2,006 Mortgage 1-4 family 47,792 49,808 5,132 53,206 56,063 6,195 Resort lending 18,148 18,319 2,662 18,799 18,963 3,075 Home equity - 1st lien 168 172 9 162 177 14 Home equity - 2nd lien 244 325 15 125 205 27 Installment Home equity - 1st lien 2,364 2,492 143 2,744 2,930 219 Home equity - 2nd lien 2,929 2,951 271 3,212 3,215 419 Loans not secured by real estate 587 658 42 711 835 89 Other 8 8 1 12 12 1 86,404 90,182 10,983 103,514 108,211 13,233 Total Commercial Income producing - real estate 9,018 10,083 516 18,704 19,874 689 Land, land development & construction-real estate 2,508 3,171 296 4,507 5,134 499 Commercial and industrial 5,342 5,680 1,896 10,936 11,153 2,006 Mortgage 1-4 family 47,815 49,991 5,132 53,206 56,112 6,195 Resort lending 18,148 18,319 2,662 18,847 19,360 3,075 Home equity - 1st lien 168 172 9 162 177 14 Home equity - 2nd lien 244 325 15 125 205 27 Installment Home equity - 1st lien 2,364 2,568 143 2,744 2,970 219 Home equity - 2nd lien 2,929 2,951 271 3,212 3,215 419 Loans not secured by real estate 587 658 42 711 835 89 Other 8 8 1 12 12 1 Total $ 89,131 $ 93,926 $ 10,983 $ 113,166 $ 119,047 $ 13,233 Accrued interest included in recorded investment $ 338 $ 397 (1) There were no impaired payment plan receivables or purchased mortgage loans at December 31, 2015 or 2014. |
Average recorded investment in and interest income earned on impaired loans by class | Average recorded investment in and interest income earned on impaired loans by class for the years ended December 31 follows (1): 2015 2014 2013 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (In thousands) With no related allowance recorded: Commercial Income producing - real estate $ 4,520 $ 387 $ 7,660 $ 250 $ 5,765 $ 340 Land, land development & construction-real estate 952 79 1,145 64 3,092 240 Commercial and industrial 2,125 257 3,351 152 3,980 226 Mortgage 1-4 family 19 11 29 — 5 11 Resort lending 12 — 40 1 28 — Home equity - 1st lien — — — — — — Home equity - 2nd lien — — — — — — Installment Home equity - 1st lien — 5 — 2 1,604 83 Home equity - 2nd lien — — — — 1,841 96 Loans not secured by real estate — — — — 470 23 Other — — — — 15 1 7,628 739 12,225 469 16,800 1,020 With an allowance recorded: Commercial Income producing - real estate 12,677 439 12,772 677 18,164 587 Land, land development & construction-real estate 2,219 54 3,939 149 6,186 149 Commercial and industrial 6,663 104 8,500 294 11,795 457 Mortgage 1-4 family 50,421 2,140 55,877 2,286 60,858 2,622 Resort lending 18,448 670 19,458 753 21,708 836 Home equity - 1st lien 161 8 160 6 136 4 Home equity - 2nd lien 172 13 57 2 42 2 Installment Home equity - 1st lien 2,539 176 2,837 174 1,448 85 Home equity - 2nd lien 3,055 193 3,359 188 1,546 86 Loans not secured by real estate 653 37 719 35 314 17 Other 10 1 14 1 3 1 97,018 3,835 107,692 4,565 122,200 4,846 Total Commercial Income producing - real estate 17,197 826 20,432 927 23,929 927 Land, land development & construction-real estate 3,171 133 5,084 213 9,278 389 Commercial and industrial 8,788 361 11,851 446 15,775 683 Mortgage 1-4 family 50,440 2,151 55,906 2,286 60,863 2,633 Resort lending 18,460 670 19,498 754 21,736 836 Home equity - 1st lien 161 8 160 6 136 4 Home equity - 2nd lien 172 13 57 2 42 2 Installment Home equity - 1st lien 2,539 181 2,837 176 3,052 168 Home equity - 2nd lien 3,055 193 3,359 188 3,387 182 Loans not secured by real estate 653 37 719 35 784 40 Other 10 1 14 1 18 2 Total $ 104,646 $ 4,574 $ 119,917 $ 5,034 $ 139,000 $ 5,866 (1) There were no impaired payment plan receivables or purchased mortgage loans during the years ending December 31, 2015, 2014 and 2013. |
Troubled debt restructurings | Troubled debt restructurings at December 31 follow: 2015 Commercial Retail Total (In thousands) Performing TDR’s $ 13,318 $ 68,194 $ 81,512 Non-performing TDR’s (1) 3,041 3,777 (2) 6,818 Total $ 16,359 $ 71,971 $ 88,330 2014 Commercial Retail Total (In thousands) Performing TDR’s $ 29,475 $ 73,496 $ 102,971 Non-performing TDR’s (1) 1,978 5,225 (2) 7,203 Total $ 31,453 $ 78,721 $ 110,174 (1) Included in non-performing loans table above. (2) Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis. |
Troubled debt restructuring during the period | Loans that have been classified as troubled debt restructurings during the years ended December 31 follow: Number of Contracts Pre-modification Recorded Balance Post-modification Recorded Balance (Dollars in thousands) 2015 Commercial Income producing - real estate 2 $ 229 $ 227 Land, land development & construction-real estate — — — Commercial and industrial 17 3,188 2,960 Mortgage 1-4 family 8 1,345 1,128 Resort lending 1 313 307 Home equity - 1st lien 1 20 20 Home equity - 2nd lien 1 27 27 Purchased loans — — — Installment Home equity - 1st lien 6 220 186 Home equity - 2nd lien 8 228 217 Loans not secured by real estate 2 19 25 Other — — — Total 46 $ 5,589 $ 5,097 2014 Commercial Income producing - real estate 4 $ 426 $ 389 Land, land development & construction-real estate 2 55 44 Commercial and industrial 13 2,236 1,606 Mortgage 1-4 family 15 1,576 1,570 Resort lending 6 1,583 1,572 Home equity - 1st lien 1 17 14 Home equity - 2nd lien 1 85 84 Installment Home equity - 1st lien 13 631 523 Home equity - 2nd lien 9 400 400 Loans not secured by real estate 6 114 106 Other — — — Total 70 $ 7,123 $ 6,308 2013 Commercial Income producing - real estate 6 $ 4,798 $ 3,869 Land, land development & construction-real estate 1 16 — Commercial and industrial 23 2,522 1,901 Mortgage 1-4 family 20 1,968 1,995 Resort lending 5 1,240 1,231 Home equity - 1st lien 1 95 97 Home equity - 2nd lien — — — Installment Home equity - 1st lien 25 659 657 Home equity - 2nd lien 16 508 508 Loans not secured by real estate 5 149 110 Other — — — Total 102 $ 11,955 $ 10,368 |
Troubled debt restructuring during the past twelve months that subsequently defaulted | Loans that have been classified as troubled debt restructured during the past twelve months and that have subsequently defaulted during the years ended December 31 follows: Number of Contracts Recorded Balance (Dollars in thousands) 2015 Commercial Income producing - real estate — $ — Land, land development & construction-real estate — — Commercial and industrial 2 157 Mortgage 1-4 family 2 73 Resort lending — — Home equity - 1st lien — — Home equity - 2nd lien — — Purchased loans — — Installment Home equity - 1st lien — — Home equity - 2nd lien — — Loans not secured by real estate 1 4 Other — — Total 5 $ 234 2014 Commercial Income producing - real estate — $ — Land, land development & construction-real estate — — Commercial and industrial 2 319 Mortgage 1-4 family 1 125 Resort lending — — Home equity - 1st lien — — Home equity - 2nd lien — — Installment Home equity - 1st lien — — Home equity - 2nd lien — — Loans not secured by real estate — — Other — — Total 3 $ 444 Number of Contracts Recorded Balance (Dollars in thousands) 2013 Commercial Income producing - real estate 1 $ 693 Land, land development & construction-real estate 1 334 Commercial and industrial 2 143 Mortgage 1-4 family 1 106 Resort lending 1 156 Home equity - 1st lien — — Home equity - 2nd lien — — Installment Home equity - 1st lien 2 32 Home equity - 2nd lien 1 22 Loans not secured by real estate — — Other — — Total 9 $ 1,486 |
Summary of loan ratings by loan class | The following table summarizes loan ratings by loan class for our commercial loan segment at December 31: Commercial Non-watch 1-6 Watch 7-8 Substandard Accrual 9 Non- Accrual 10-11 Total (In thousands) 2015 Income producing - real estate $ 296,898 $ 6,866 $ 1,423 $ 1,027 $ 306,214 Land, land development and construction - real estate 40,844 2,995 243 401 44,483 Commercial and industrial 371,357 19,502 6,683 2,028 399,570 Total $ 709,099 $ 29,363 $ 8,349 $ 3,456 $ 750,267 Accrued interest included in total $ 1,729 $ 108 $ 32 $ — $ 1,869 2014 Income producing - real estate $ 241,266 $ 8,649 $ 1,918 $ 1,233 $ 253,066 Land, land development and construction - real estate 30,869 2,485 390 594 34,338 Commercial and industrial 372,947 23,475 5,998 2,746 405,166 Total $ 645,082 $ 34,609 $ 8,306 $ 4,573 $ 692,570 Accrued interest included in total $ 1,479 $ 111 $ 25 $ — $ 1,615 The following tables summarize credit scores by loan class for our mortgage and installment loan segments at December 31: Mortgage (1) 1-4 Family Resort Lending Home Equity 1st Lien Home Equity 2nd Lien Purchased Loans Total (In thousands) 2015 800 and above $ 28,760 $ 13,943 $ 4,374 $ 7,696 $ 2,310 $ 57,083 750-799 78,802 40,888 7,137 17,405 23,283 167,515 700-749 56,519 31,980 4,341 11,022 6,940 110,802 650-699 51,813 17,433 3,203 7,691 — 80,140 600-649 27,966 4,991 1,467 3,684 — 38,108 550-599 16,714 3,070 1,027 1,918 — 22,729 500-549 10,610 1,051 572 1,295 — 13,528 Under 500 4,708 554 244 265 — 5,771 Unknown 3,733 2,110 199 282 724 7,048 Total $ 279,625 $ 116,020 $ 22,564 $ 51,258 $ 33,257 $ 502,724 Accrued interest included in total $ 1,396 $ 477 $ 87 $ 196 $ 114 $ 2,270 Mortgage (1) 1-4 Family Resort Lending Home Equity 1st Lien Home Equity 2nd Lien Purchased Loans Total (In thousands) 2014 800 and above $ 27,918 $ 14,484 $ 3,863 $ 6,225 $ — $ 52,490 750-799 72,674 45,950 6,128 14,323 — 139,075 700-749 52,843 32,660 3,054 9,642 — 98,199 650-699 51,664 20,250 3,257 8,194 — 83,365 600-649 27,770 6,538 1,704 3,862 — 39,874 550-599 21,361 3,639 994 1,721 — 27,715 500-549 14,575 2,156 699 1,401 — 18,831 Under 500 6,306 875 261 632 — 8,074 Unknown 4,075 2,184 242 674 — 7,175 Total $ 279,186 $ 128,736 $ 20,202 $ 46,674 $ — $ 474,798 Accrued interest included in total $ 1,311 $ 562 $ 88 $ 209 $ — $ 2,170 (1) Credit scores have been updated within the last twelve months. Installment (1) Home Equity 1st Lien Home Equity 2nd Lien Loans not Secured by Real Estate Other Total (In thousands) 2015 800 and above $ 1,792 $ 1,782 $ 44,254 $ 58 $ 47,886 750-799 4,117 5,931 86,800 531 97,379 700-749 2,507 3,899 34,789 694 41,889 650-699 3,508 4,182 16,456 499 24,645 600-649 2,173 2,153 4,979 200 9,505 550-599 1,800 1,346 1,997 109 5,252 500-549 1,056 855 1,170 61 3,142 Under 500 223 370 385 23 1,001 Unknown 59 32 1,503 4 1,598 Total $ 17,235 $ 20,550 $ 192,333 $ 2,179 $ 232,297 Accrued interest included in total $ 78 $ 83 $ 520 $ 17 $ 698 2014 800 and above $ 2,272 $ 2,835 $ 31,507 $ 60 $ 36,674 750-799 5,677 8,557 66,558 583 81,375 700-749 3,111 6,358 28,179 689 38,337 650-699 3,963 5,477 16,152 615 26,207 600-649 3,434 2,408 5,128 255 11,225 550-599 2,019 1,913 1,896 134 5,962 500-549 1,128 1,036 1,672 84 3,920 Under 500 393 427 455 28 1,303 Unknown 77 81 1,842 44 2,044 Total $ 22,074 $ 29,092 $ 153,389 $ 2,492 $ 207,047 Accrued interest included in total $ 93 $ 112 $ 445 $ 19 $ 669 (1) Credit scores have been updated within the last twelve months. The following table summarizes credit ratings of insurer or risk retention group counterparties by class of payment plan receivable at December 31: Payment Plan Receivables Full Refund Partial Refund Other Total (In thousands) 2015 AM Best rating A+ $ — $ 6 $ — $ 6 A 2,712 5,203 — 7,915 A- 3,418 1,177 6,265 10,860 Not rated 15,720 93 5 15,818 Total $ 21,850 $ 6,479 $ 6,270 $ 34,599 2014 AM Best rating A+ $ — $ 43 $ — $ 43 A 10,007 6,190 — 16,197 A- 1,989 685 5,054 7,728 Not rated 15,857 176 — 16,033 Total $ 27,853 $ 7,094 $ 5,054 $ 40,001 |
Other mortgage loans service's principal balances | Mortgage loans serviced for others are not reported as assets on the Consolidated Statements of Financial Condition. The principal balances of these loans at December 31 follow: 2015 2014 (In thousands) Mortgage loans serviced for: Fannie Mae $ 898,443 $ 913,863 Freddie Mac 707,891 748,833 Ginnie Mae 37,884 — Other 107 104 Total $ 1,644,325 $ 1,662,800 |
Schedule of capitalized mortgage loan servicing rights | An analysis of capitalized mortgage loan servicing rights for the years ended December 31 follows: 2015 2014 2013 (In thousands) Balance at beginning of year $ 12,106 $ 13,710 $ 11,013 Originated servicing rights capitalized 2,697 1,823 3,210 Amortization (2,868 ) (2,509 ) (3,745 ) Change in valuation allowance 501 (918 ) 3,232 Balance at end of year $ 12,436 $ 12,106 $ 13,710 Valuation allowance $ 3,272 $ 3,773 $ 2,855 Loans sold and serviced that have had servicing rights capitalized $ 1,643,086 $ 1,661,269 $ 1,732,476 |
OTHER REAL ESTATE OWNED (Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
OTHER REAL ESTATE OWNED [Abstract] | |
Summary of other real estate owned activity | A summary of other real estate owned activity for the years ended December 31 follows (1): 2015 2014 2013 (In thousands) Balance at beginning of year, net of valuation allowance $ 6,370 $ 18,088 $ 25,748 Loans transferred to other real estate owned 6,694 6,143 6,932 Sales of other real estate owned (5,502 ) (17,198 ) (11,994 ) Additions to valuation allowance charged to expense (492 ) (663 ) (2,598 ) Balance at end of year, net of valuation allowance $ 7,070 $ 6,370 $ 18,088 (1) Table excludes other repossessed assets totaling $0.08 million at both December 31, 2015 and 2014, respectively. |
Valuation allowance for other real estate owned | An analysis of our valuation allowance for other real estate owned follows: 2015 2014 2013 (In thousands) Balance at beginning of year $ 2,511 $ 4,047 $ 5,958 Additions charged to expense 492 663 2,598 Direct write-downs upon sale (1,311 ) (2,199 ) (4,509 ) Balance at end of year $ 1,692 $ 2,511 $ 4,047 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT [Abstract] | |
Summary of property and equipment | A summary of property and equipment at December 31 follows: 2015 2014 (In thousands) Land $ 15,152 $ 14,904 Buildings 57,638 59,486 Equipment 79,842 79,809 152,632 154,199 Accumulated depreciation and amortization (109,529 ) (108,251 ) Property and equipment, net $ 43,103 $ 45,948 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INTANGIBLE ASSETS [Abstract] | |
Other intangible assets, net of amortization | Intangible assets, net of amortization, at December 31 follows: 2015 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Amortized intangible assets - core deposits $ 6,118 $ 3,838 $ 6,118 $ 3,491 |
Estimated amortization of other intangible assets | A summary of estimated core deposit intangible amortization at December 31, 2015, follows: (In thousands) 2016 $ 347 2017 346 2018 346 2019 346 2020 346 2021 and thereafter 549 Total $ 2,280 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DEPOSITS [Abstract] | |
Summary of interest expense on deposits | A summary of interest expense on deposits for the years ended December 31 follows: 2015 2014 2013 (In thousands) Savings and interest bearing checking $ 1,056 $ 1,064 $ 1,131 Time deposits under $100,000 1,586 2,467 2,995 Time deposits of $100,000 or more 1,367 1,436 1,580 Total $ 4,009 $ 4,967 $ 5,706 |
Summary of maturity of time deposits | A summary of the maturity of time deposits at December 31, 2015, follows: (In thousands) 2016 $ 302,136 2017 66,288 2018 27,367 2019 15,432 2020 11,763 2021 and thereafter 3,234 Total $ 426,220 |
Summary of reciprocal deposits | A summary of reciprocal deposits at December 31 follows: 2015 2014 (In thousands) Demand $ 3,436 $ 5,867 Money market 8,340 7,692 Time 38,431 40,109 Total $ 50,207 $ 53,668 |
OTHER BORROWINGS (Tables)
OTHER BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
OTHER BORROWINGS [Abstract] | |
Summary of other borrowings | A summary of other borrowings at December 31 follows: 2015 2014 (In thousands) Advances from the FHLB $ 11,949 $ 12,464 Other 5 6 Total $ 11,954 $ 12,470 |
Schedule of maturity dates and weighted average interest rates FHLB | The maturity dates and weighted average interest rates of FHLB advances at December 31 follow: 2015 2014 Amount Rate Amount Rate (Dollars in thousands) Fixed-rate advances 2016 $ 2,089 6.55 % $ 2,205 6.55 % 2017 1,258 7.04 1,320 7.04 2018 5,437 5.99 5,671 5.99 2019 — — 2020 3,165 7.49 3,268 7.49 Total advances $ 11,949 6.59 % $ 12,464 6.59 % |
Schedule of repayments of federal home loan bank advances | A summary of contractually required repayments of FHLB Advances at December 31, 2015, follows: (In thousands) 2016 $ 2,521 2017 1,587 2018 5,042 2019 143 2020 2,656 Total $ 11,949 |
SUBORDINATED DEBENTURES (Tables
SUBORDINATED DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SUBORDINATED DEBENTURES [Abstract] | |
Schedule of information regarding subordinated debentures | Summary information regarding subordinated debentures as of December 31 follows: 2015 and 2014 Entity Name Issue Date Subordinated Debentures Trust Preferred Securities Issued Common Stock Issued (In thousands) IBC Capital Finance III May 2007 $ 12,372 $ 12,000 $ 372 IBC Capital Finance IV September 2007 15,465 15,000 465 Midwest Guaranty Trust I November 2002 7,732 7,500 232 $ 35,569 $ 34,500 $ 1,069 |
Schedule of subordinated debentures and trust preferred securities | Other key terms for the subordinated debentures and trust preferred securities that were outstanding at December 31, 2015 and 2014 follow: Entity Name Maturity Date Interest Rate First Permitted Redemption Date IBC Capital Finance III July 30, 2037 3 month LIBOR plus 1.60% July 30, 2012 IBC Capital Finance IV September 15, 2037 3 month LIBOR plus 2.85% September 15, 2012 Midwest Guaranty Trust I November 7, 2032 3 month LIBOR plus 3.45% November 7, 2007 |
COMMITMENTS AND CONTINGENT LI44
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |
Financial instruments with off-balance sheet risk | A summary of financial instruments with off-balance sheet risk at December 31 follows: 2015 2014 (In thousands) Financial instruments whose risk is represented by contract amounts Commitments to extend credit $ 243,458 $ 204,827 Standby letters of credit 3,582 2,757 |
Analysis of vehicle service contract counterparty receivable | An analysis of our vehicle service contract counterparty receivable, net follows: 2015 2014 2013 (In thousands) Balance at beginning of year, net of reserve $ 7,237 $ 7,716 $ 18,449 Transfers in from payment plan receivables 1,203 180 792 Reserves established and charge-offs recorded to expense (119 ) (199 ) (4,837 ) Transferred to (from) contingency reserves — (75 ) 63 Cash received (1,092 ) (385 ) (6,751 ) Balance at end of year, net of reserve $ 7,229 $ 7,237 $ 7,716 Reserve at end of year $ 56 $ 1,370 $ 1,300 |
Analysis of vehicle service contract counterparty reserve | An analysis of our vehicle service contract counterparty reserve follows: 2015 2014 2013 (In thousands) Balance at beginning of year $ 1,370 $ 1,375 $ 2,012 Additions charged to expense 119 199 4,837 Charge-offs, net (1,433 ) (204 ) (5,474 ) Balance at end of year $ 56 $ 1,370 $ 1,375 Reserves recorded in VSC counterparty receivables, net $ 56 $ 1,370 $ 1,300 Reserves recorded in accrued expenses and other liabilities — — 75 Total at end of year $ 56 $ 1,370 $ 1,375 |
SHAREHOLDERS' EQUITY AND INCO45
SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE [Abstract] | |
Reconciliation of basic and diluted loss per share | A reconciliation of basic and diluted net income per common share for the years ended December 31 follows: 2015 2014 2013 (In thousands, except per share amounts) Net income applicable to common stock $ 20,017 $ 18,021 $ 82,062 Convertible preferred stock dividends — — 3,001 Preferred stock discount — — (7,554 ) Net income applicable to common stock for calculation of diluted earnings per share $ 20,017 $ 18,021 $ 77,509 Weighted average shares outstanding (1) 22,716 22,927 13,970 Restricted stock units 233 306 363 Effect of stock options 119 124 92 Stock units for deferred compensation plan for non-employee directors 112 114 125 Effect of convertible preferred stock — — 7,314 Weighted average shares outstanding for calculation of diluted earnings per share 23,180 23,471 21,864 Net income per common share Basic (1) $ 0.88 $ 0.79 $ 5.87 Diluted $ 0.86 $ 0.77 $ 3.55 (1) Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards. |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAX [Abstract] | |
Composition of income tax expense (benefit) | The composition of income tax expense (benefit) for the years ended December 31 follows: 2015 2014 2013 (In thousands) Current $ 200 $ (359 ) $ (277 ) Deferred 9,128 7,672 — Disproportionate tax effect — — 1,444 Valuation allowance - change in estimate 35 (118 ) (56,018 ) Income tax expense (benefit) $ 9,363 $ 7,195 $ (54,851 ) |
Reconciliation of income tax benefit computed by applying the statutory federal income tax rate | A reconciliation of income tax expense (benefit) to the amount computed by applying the statutory federal income tax rate of 35% in each year presented to the income before income tax for the years ended December 31 follows: 2015 2014 2013 (In thousands) Statutory rate applied to income before income tax $ 10,283 $ 8,826 $ 7,930 Bank owned life insurance (449 ) (480 ) (477 ) Tax-exempt income (434 ) (522 ) (402 ) Unrecognized tax benefit (135 ) (595 ) (186 ) Non-deductible meals, entertainment and memberships 43 53 55 Net change in valuation allowance 35 (118 ) (63,980 ) Disproportionate tax effect — — 1,444 U.S. Treasury warrant — — 359 Share-based compensation — — 8 Other, net 20 31 398 Income tax expense (benefit) $ 9,363 $ 7,195 $ (54,851 ) |
Summary of deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31 follow: 2015 2014 (In thousands) Deferred tax assets Loss carryforwards $ 25,516 $ 32,933 Allowance for loan losses 7,901 9,099 Alternative minimum tax credit carry forward 3,427 3,037 Property and equipment 3,369 3,239 Purchase premiums, net 1,755 2,050 Share based payments 786 684 Valuation allowance on other real estate 592 879 Unrealized loss on trading securities 578 559 Deferred compensation 404 448 Other than temporary impairment charge on securities available for sale 382 436 Non accrual loan interest income 232 244 Reserve for unfunded lending commitments 228 189 Loss reimbursement on sold loans reserve 186 242 Unrealized loss on securities available for sale 128 — Vehicle service contract counterparty contingency reserve 21 521 Gross deferred tax assets 45,505 54,560 Valuation allowance (1,054 ) (1,019 ) Total net deferred tax assets 44,451 53,541 Deferred tax liabilities Capitalized mortgage loan servicing rights 4,353 4,237 Deferred loan fees 256 260 Federal Home Loan Bank stock 45 196 Unrealized gain on securities available for sale — 87 Other 162 129 Gross deferred tax liabilities 4,816 4,909 Net deferred tax assets $ 39,635 $ 48,632 |
Schedule of federal net operating loss forwards | At December 31, 2015, we had federal net operating loss (“NOL”) carryforwards of approximately $73.4 million which, if not used against taxable income, will expire as follows: (In thousands) 2030 $ 18,496 2031 17,170 2032 37,739 Total $ 73,405 |
Schedule of changes in unrecognized tax benefits | Changes in unrecognized tax benefits for the years ended December 31 follow: 2015 2014 2013 (In thousands) Balance at beginning of year $ 1,091 $ 1,672 $ 1,871 Additions based on tax positions related to the current year 20 18 11 Reductions due to the statute of limitations (135 ) (595 ) (186 ) Reductions due to settlements — (4 ) (24 ) Balance at end of year $ 976 $ 1,091 $ 1,672 |
SHARE BASED COMPENSATION AND 47
SHARE BASED COMPENSATION AND BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SHARE BASED COMPENSATION AND BENEFIT PLANS [Abstract] | |
Summary of outstanding stock option grants and transactions | A summary of outstanding stock option grants and related transactions follows: Number of Shares Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregated Intrinsic Value (In thousands) Outstanding at January 1, 2015 281,820 $ 4.69 Granted — Exercised (42,204 ) 3.25 Forfeited (2,096 ) 4.77 Expired (1,924 ) 6.79 Outstanding at December 31, 2015 235,596 $ 4.94 6.12 $ 2,443 Vested and expected to vest at December 31, 2015 234,949 $ 4.93 6.11 $ 2,437 Exercisable at December 31, 2015 213,154 $ 4.78 5.98 $ 2,245 |
Summary of non-vested restricted stock and stock units and transactions | A summary of outstanding non-vested stock and related transactions follows: Number of Shares Weighted- Average Grant Date Fair Value Outstanding at January 1, 2015 407,130 $ 6.31 Granted 108,761 13.07 Vested (249,526 ) 3.92 Forfeited (4,384 ) 12.88 Outstanding at December 31, 2015 261,981 $ 11.29 |
Summary of weighted-average assumptions used in Black-Scholes option pricing model for grants of stock options | A summary of the weighted-average assumptions used in the Black-Scholes option pricing model for grants of stock options follows (no stock options were granted in 2015 and 2014): 2013 Expected dividend yield 0.31 % Risk-free interest rate 1.12 Expected life (in years) 6.00 Expected volatility 101.30 % Per share weighted-average grant date fair value $ 4.98 |
Information regarding options exercised | Certain information regarding options exercised during the periods ending December 31 follows: 2015 2014 2013 (In thousands) Intrinsic value $ 444 $ 321 $ 117 Cash proceeds received $ 137 $ 96 $ 39 Tax benefit realized $ 155 $ 112 $ — |
OTHER NON-INTEREST INCOME (Tabl
OTHER NON-INTEREST INCOME (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
OTHER NON-INTEREST INCOME [Abstract] | |
Schedule of other non-interest income | Other non-interest income for the years ended December 31 follows: 2015 2014 2013 (In thousands) Investment and insurance commissions $ 1,827 $ 1,814 $ 1,709 ATM fees 1,551 1,599 1,661 Bank owned life insurance 1,282 1,371 1,363 Other real estate rental income 128 1,295 1,471 Other 2,904 2,852 2,333 Total other non-interest income $ 7,692 $ 8,931 $ 8,537 |
DERIVATIVE FINANCIAL INSTRUME49
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | |
Derivative financial instruments according to type of hedge designation | Our derivative financial instruments according to the type of hedge in which they are designated at December 31 follow: 2015 Notional Amount Average Maturity (years) Fair Value (Dollars in thousands) No hedge designation Rate-lock mortgage loan commitments $ 20,581 0.1 $ 550 Mandatory commitments to sell mortgage loans 46,320 0.1 69 Pay-fixed interest rate swap agreements 27,587 8.0 (497 ) Pay-variable interest rate swap agreements 27,587 8.0 497 Purchased options 2,098 5.7 122 Written options 2,098 5.7 (122 ) Total $ 126,271 3.7 $ 619 2014 Notional Amount Average Maturity (years) Fair Value (Dollars in thousands) No hedge designation Rate-lock mortgage loan commitments $ 16,759 0.1 $ 437 Mandatory commitments to sell mortgage loans 38,600 0.1 (184 ) Pay-fixed interest rate swap agreements 3,300 9.4 (182 ) Pay-variable interest rate swap agreements 3,300 9.4 182 Total $ 61,959 1.1 $ 253 |
Fair value of derivative instruments | The following tables illustrate the impact that the derivative financial instruments discussed above have on individual line items in the Consolidated Statements of Financial Condition for the periods presented: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives December 31, December 31, 2015 2014 2015 2014 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Derivatives not designated as hedging instruments Rate-lock mortgage loan commitments Other $ 550 Other $ 437 Other $ — Other $ — Mandatory commitments to sell mortgage loans Other 69 Other — Other — Other 184 Pay-fixed interest rate swap agreements Other — Other — Other 497 Other 182 Pay-variable interest rate swap agreements Other 497 Other 182 Other — Other — Purchased options Other 122 Other — Other — Other — Written options Other — Other — Other 122 Other — Total derivatives $ 1,238 $ 619 $ 619 $ 366 |
Effect of derivative financial instruments on consolidated statement of operation | The effect of derivative financial instruments on the Consolidated Statements of Operations follows: Year Ended December 31, Loss Recognized in Other Comprehensive Income (Loss) (Effective Portion) Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) Location of Gain (Loss) Recognized in Income (1) Gain (Loss) Recognized in Income (1) 2015 2014 2013 2015 2014 2013 2015 2014 2013 (In thousands) Cash Flow Hedges Pay-fixed interest rate swap agreements $ — $ — $ (37 ) Interest $ — $ (380 ) $ (397 ) Interest $ — $ — $ — Total $ — $ — $ (37 ) $ — $ (380 ) $ (397 ) $ — $ — $ — No hedge designation Rate-lock mortgage loan commitments Net gains on $ 113 $ 71 $ (1,002 ) Mandatory commitments to sell mortgage loans Net gains 253 (312 ) 250 Pay-fixed interest rate swap agreements Interest (315 ) (182 ) — Pay-variable interest rate swap agreements Interest 315 182 — Purchased options Interest 122 — — Written options Interest (122 ) — — UST short position Gain on — 295 — Amended Warrant Increase in — — (1,025 ) Total $ 366 $ 54 $ (1,777 ) (1) For cash flow hedges, this location and amount refers to the ineffective portion. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
Summary of loans to directors and executive officers | A summary of loans to our directors and executive officers whose borrowing relationship (which includes loans to entities in which the individual owns a 10% or more voting interest) exceeds $60,000 for the years ended December 31 follows: 2015 2014 (In thousands) Balance at beginning of year $ 216 $ 351 New loans and advances — — Repayments (26 ) (135 ) Balance at end of year $ 190 $ 216 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
LEASES [Abstract] | |
Summary of future minimum lease payments under non-cancelable operating leases | A summary of future minimum lease payments under non-cancelable operating leases at December 31, 2015, follows: (In thousands) 2016 $ 1,054 2017 862 2018 809 2019 720 2020 666 2021 and thereafter 253 Total $ 4,364 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
REGULATORY MATTERS [Abstract] | |
Actual capital amounts and ratios | Our actual capital amounts and ratios at December 31 follow: Actual Minimum for Adequately Capitalized Institutions Minimum for Well-Capitalized Institutions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) 2015 Total capital to risk-weighted assets Consolidated $ 278,170 16.65 % $ 133,668 8.00 % NA NA Independent Bank 261,894 15.69 133,514 8.00 $ 166,893 10.00 % Tier 1 capital to risk-weighted assets Consolidated $ 257,050 15.38 % $ 100,251 6.00 % NA NA Independent Bank 240,867 14.43 100,136 6.00 $ 133,514 8.00 % Common equity tier 1 capital to risk-weighted assets Consolidated $ 239,271 14.32 % $ 75,188 4.50 % NA NA Independent Bank 240,867 14.43 75,102 4.50 $ 108,480 6.50 % Tier 1 capital to average assets Consolidated $ 257,050 10.91 % $ 94,217 4.00 % NA NA Independent Bank 240,867 10.23 94,145 4.00 $ 117,682 5.00 % 2014 Total capital to risk-weighted assets Consolidated $ 265,163 18.06 % $ 117,427 8.00 % NA NA Independent Bank 247,883 16.90 117,374 8.00 $ 146,718 10.00 % Tier 1 capital to risk-weighted assets Consolidated $ 246,628 16.80 % $ 58,714 4.00 % NA NA Independent Bank 229,361 15.63 58,687 4.00 $ 88,031 6.00 % Tier 1 capital to average assets Consolidated $ 246,628 11.18 % $ 88,206 4.00 % NA NA Independent Bank 229,361 10.46 87,687 4.00 $ 109,609 5.00 % NA — Not applicable |
Components of regulatory capital | The components of our regulatory capital are as follows: Consolidated Independent Bank December 31, December 31, 2015 2014 2015 2014 (In thousands) Total shareholders’ equity $ 251,092 $ 250,371 $ 259,947 $ 257,832 Add (deduct) Accumulated other comprehensive loss for regulatory purposes 238 5,636 238 5,636 Intangible assets (912 ) (2,627 ) (912 ) (2,627 ) Disallowed deferred tax assets (11,147 ) (40,500 ) (18,406 ) (30,728 ) Disallowed capitalized mortgage loan servicing rights — (752 ) — (752 ) Common equity tier 1 capital 239,271 212,128 240,867 229,361 Qualifying trust preferred securities 34,500 34,500 — — Disallowed deferred tax assets (16,721 ) — — — Tier 1 capital 257,050 246,628 240,867 229,361 Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets 21,120 18,535 21,027 18,522 Total risk-based capital $ 278,170 $ 265,163 $ 261,894 $ 247,883 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE DISCLOSURES [Abstract] | |
Assets and liabilities measured at fair value | Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows: Fair Value Measurements Using Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) December 31, 2015: Measured at Fair Value on a Recurring Basis: Assets Trading securities $ 148 $ 148 $ — $ — Securities available for sale U.S. agency 47,512 — 47,512 — U.S. agency residential mortgage-backed 196,056 — 196,056 — U.S. agency commercial mortgage-backed 34,028 — 34,028 — Private label residential mortgage-backed 4,903 — 4,903 — Other asset backed 116,904 — 116,904 — Obligations of states and political subdivisions 144,984 — 144,984 — Corporate 38,614 — 38,614 — Trust preferred 2,483 — 2,483 — Loans held for sale 27,866 — 27,866 — Derivatives (1) 1,238 — 1,238 — Liabilities Derivatives (2) 619 — 619 — Measured at Fair Value on a Non-recurring basis: Assets Capitalized mortgage loan servicing rights (3) 8,481 — — 8,481 Impaired loans (4) Commercial Income producing - real estate 711 — — 711 Land, land development & construction-real estate 40 — — 40 Commercial and industrial 1,257 — — 1,257 Mortgage 1-4 Family 421 — — 421 Resort lending 129 — — 129 Other real estate (5) Commercial Land, land development & construction-real estate 639 — — 639 Commercial and industrial 165 — — 165 Mortgage 1-4 Family 26 — — 26 Resort lending 107 — — 107 Home equity - 1st lien 14 — — 14 Installment Home equity - 1st lien 36 — — 36 (1) Included in accrued income and other assets (2) Included in accrued expenses and other liabilities (3) Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance. (4) Only includes impaired loans with specific loss allocations based on collateral value. (5) Only includes other real estate with subsequent write downs to fair value. Fair Value Measurements Using Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) December 31, 2014: Measured at Fair Value on a Recurring Basis: Assets Trading securities $ 203 $ 203 $ — $ — Securities available for sale U.S. agency 35,006 — 35,006 — U.S. agency residential mortgage-backed 257,558 — 257,558 — U.S. agency commercial mortgage-backed 33,728 — 33,728 — Private label residential mortgage-backed 6,013 — 6,013 — Other asset backed 32,353 — 32,353 — Obligations of states and political subdivisions 143,415 — 143,415 — Corporate 22,664 — 22,664 — Trust preferred 2,441 — 2,441 — Loans held for sale 23,662 — 23,662 — Derivatives (1) 619 — 619 — Liabilities Derivatives (2) 366 — 366 — Measured at Fair Value on a Non-recurring basis: Assets Capitalized mortgage loan servicing rights (3) 9,197 — — 9,197 Impaired loans (4) Commercial Income producing - real estate 869 — — 869 Land, land development & construction-real estate 354 — — 354 Commercial and industrial 2,601 — — 2,601 Mortgage 1-4 Family 1,306 — — 1,306 Other real estate (5) Commercial Income producing - real estate 479 — — 479 Land, land development & construction-real estate 737 — — 737 Mortgage 1-4 Family 102 — — 102 Resort lending 575 — — 575 Installment Home equity - 1st lien 13 — — 13 (1) Included in accrued income and other assets (2) Included in accrued expenses and other liabilities (3) Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance. (4) Only includes impaired loans with specific loss allocations based on collateral value. (5) Only includes other real estate with subsequent write downs to fair value. |
Changes in fair value for financial assets | Changes in fair values of financial assets for which we have elected the fair value option for the years ended December 31 were as follows: Net Gains (Losses) on Assets Total Change in Fair Values Included in Current Period Earnings Securities Loans (In thousands) 2015 Trading securities $ (55 ) $ — $ (55 ) Loans held for sale — 90 90 2014 Trading securities $ (295 ) $ — $ (295 ) Loans held for sale — 258 258 2013 Trading securities $ 388 $ — $ 388 Loans held for sale — (1,477 ) (1,477 ) |
Quantitative information about Level 3 fair value measurements measured on a non-recurring basis | Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows: Asset Fair Value Valuation Technique Unobservable Inputs Weighted Average (In thousands) 2015 Capitalized mortgage $ 8,481 Present value of net Discount rate 10.04 % servicing revenue Cost to service $ 80 Ancillary income 24 Float rate 1.73 % Impaired loans Commercial (1) 1,605 Sales comparison Adjustment for differences (2.1 )% Income approach Capitalization rate 9.3 Mortgage 550 Sales comparison Adjustment for differences 0.7 Other real estate Commercial 804 Sales comparison Adjustment for differences (3.9 ) Mortgage and installment 183 Sales comparison Adjustment for differences 75.6 2014 Capitalized mortgage loan servicing rights $ 9,197 Present value of net Discount rate 10.07 % servicing revenue Cost to service $ 82 Ancillary income 25 Float rate 1.77 % Impaired loans Commercial (1) 2,751 Sales comparison Adjustment for differences (3.8 )% Income approach Capitalization rate 9.3 Mortgage 1,306 Sales comparison Adjustment for differences 8.6 Other real estate Commercial 1,216 Sales comparison Adjustment for differences (9.0 ) Mortgage and installment 690 Sales comparison Adjustment for differences 34.3 (1) In addition to the valuation techniques and unobservable inputs discussed above, at December 31, 2015 and 2014, we had an impaired collateral dependent commercial relationship that totaled $0.4 million and $1.1 million, respectively that was primarily secured by collateral other than real estate. Collateral securing this relationship primarily included machinery and equipment and inventory at December 31, 2015 and 2014 and also included accounts receivable at December 31, 2014. Valuation techniques at December 31, 2015, included appraisals and discounting restructuring firm valuations based on estimates of value recovery of each particular asset type. Discount rates used ranged from 0% to 100% of stated values. Valuation techniques at December 31, 2014, included discounting cost and financial statement value approaches based on estimates of value recovery of each particular asset type. Discount rates used ranged from 35% to 100% of stated values. |
Aggregate fair value and aggregate remaining contractual principal balance for loans held for sale | The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected at December 31. Aggregate Fair Value Difference Contractual Principal (In thousands) Loans held for sale 2015 $ 27,866 $ 714 $ 27,152 2014 23,662 624 23,038 2013 20,390 366 20,024 |
FAIR VALUES OF FINANCIAL INST54
FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract] | |
Estimated fair values and recorded book balances | The estimated recorded book balances and fair values at December 31 follow: Fair Value Using Recorded Book Balance Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands) 2015 Assets Cash and due from banks $ 54,260 $ 54,260 $ 54,260 $ — $ — Interest bearing deposits 31,523 31,523 31,523 — — Interest bearing deposits - time 11,866 11,858 — 11,858 — Trading securities 148 148 148 — — Securities available for sale 585,484 585,484 — 585,484 — Federal Home Loan Bank and Federal Reserve Bank Stock 15,471 NA NA NA NA Net loans and loans held for sale 1,520,346 1,472,613 — 27,866 1,444,747 Accrued interest receivable 6,565 6,565 5 1,969 4,591 Derivative financial instruments 1,238 1,238 — 1,238 — Liabilities Deposits with no stated maturity (1) $ 1,659,743 $ 1,659,743 $ 1,659,743 $ — $ — Deposits with stated maturity (1) 426,220 423,776 — 423,776 — Other borrowings 11,954 13,448 — 13,448 — Subordinated debentures 35,569 23,069 — 23,069 — Accrued interest payable 466 466 21 445 — Derivative financial instruments 619 619 — 619 — 2014 Assets Cash and due from banks $ 48,326 $ 48,326 $ 48,326 $ — $ — Interest bearing deposits 25,690 25,690 25,690 — — Interest bearing deposits - time 13,561 13,585 — 13,585 — Trading securities 203 203 203 — — Securities available for sale 533,178 533,178 — 533,178 — Federal Home Loan Bank and Federal Reserve Bank Stock 19,919 NA NA NA NA Net loans and loans held for sale 1,407,634 1,394,424 — 23,662 1,370,762 Accrued interest receivable 5,995 5,995 2 1,599 4,394 Derivative financial instruments 619 619 — 619 — Liabilities Deposits with no stated maturity (1) $ 1,534,175 $ 1,534,175 $ 1,534,175 $ — $ — Deposits with stated maturity (1) 390,127 389,139 — 389,139 — Other borrowings 12,470 14,560 — 14,560 — Subordinated debentures 35,569 23,328 — 23,328 — Accrued interest payable 380 380 21 359 — Derivative financial instruments 366 366 — 366 — (1) Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $11.8 million and $13.6 million at December 31, 2015 and 2014, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $38.4 million and $40.1 million at December 31, 2015 and 2014, respectively. |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
OPERATING SEGMENTS [Abstract] | |
Summary of selected financial information for reportable segments | A summary of selected financial information for our reportable segments follows: IB Mepco Other (1)(2) Elimination (3) Total (In thousands) 2015 Total assets $ 2,340,566 $ 57,208 $ 286,936 $ (275,644 ) $ 2,409,066 Interest income 75,552 5,290 72 (72 ) 80,842 Net interest income 71,448 4,487 (949 ) — 74,986 Provision for loan losses (2,705 ) (9 ) — — (2,714 ) Income (loss) before income tax 32,136 (1,183 ) (1,478 ) (95 ) 29,380 Net income (loss) 21,727 (712 ) (936 ) (62 ) 20,017 2014 Total assets $ 2,174,536 $ 63,378 $ 286,158 $ (275,342 ) $ 2,248,730 Interest income 73,551 7,004 64 (64 ) 80,555 Net interest income 68,948 5,706 (1,398 ) — 73,256 Provision for loan losses (3,098 ) (38 ) — — (3,136 ) Income (loss) before income tax 25,845 561 (1,095 ) (95 ) 25,216 Net income (loss) 18,550 366 (712 ) (183 ) 18,021 2013 Total assets $ 2,104,550 $ 94,648 $ 272,348 $ (261,603 ) $ 2,209,943 Interest income 76,018 11,103 — — 87,121 Net interest income 71,496 8,780 (2,317 ) — 77,959 Provision for loan losses (3,891 ) (97 ) — — (3,988 ) Income (loss) before income tax 29,605 (2,891 ) (3,961 ) (95 ) 22,658 Net income (loss) 74,313 (1,801 ) 5,092 (95 ) 77,509 (1) During 2013 IB and Other (parent company) include $47.1 million and $9.0 million, respectively of income tax benefit related to the reversal of the valuation allowance on our net deferred tax assets (see note #13). (2) Includes amounts relating to our parent company and certain insignificant operations. (3) Includes parent company’s investment in subsidiaries and cash balances maintained at subsidiary. |
ACCUMULATED OTHER COMPREHENSI56
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss (AOCL), Net of Tax | A summary of changes in accumulated other comprehensive loss (“AOCL”), net of tax during the years ended December 31 follows: Unrealized Losses on Available for Sale Securities Disproportionate Tax Effects from Securities Available for Sale Unrealized Losses on Cash Flow Hedges Unrealized Losses on Settled Derivatives Disproportionate Tax Effects from Cash Flow Hedges Total (In thousands) 2015 Balances at beginning of period $ 162 $ (5,798 ) $ — $ — $ — $ (5,636 ) Other comprehensive loss before reclassifications (351 ) — — — — (351 ) Amounts reclassified from AOCL (49 ) — — — — (49 ) Net current period other comprehensive loss (400 ) — — — — (400 ) Balances at end of period $ (238 ) $ (5,798 ) $ — $ — $ — $ (6,036 ) 2014 Balances at beginning of period $ (3,200 ) $ (5,798 ) $ — $ (247 ) $ — $ (9,245 ) Other comprehensive income before reclassifications 3,570 — — — — 3,570 Amounts reclassified from AOCL (208 ) — — 247 — 39 Net current period other comprehensive income 3,362 — — 247 — 3,609 Balances at end of period $ 162 $ (5,798 ) $ — $ — $ — $ (5,636 ) 2013 Balances at beginning of period $ (516 ) $ (5,617 ) $ (739 ) $ — $ (1,186 ) $ (8,058 ) Income tax 181 (181 ) 258 — (258 ) — Balances at beginning of period, net of tax (335 ) (5,798 ) (481 ) — (1,444 ) (8,058 ) Terminated cash flow hedge — — 370 (370 ) — — Other comprehensive loss before reclassifications (2,877 ) — (24 ) — — (2,901 ) Amounts reclassified from AOCL 12 — 135 123 1,444 1,714 Net current period other comprehensive income (loss) (2,865 ) — 111 123 1,444 (1,187 ) Balances at end of period $ (3,200 ) $ (5,798 ) $ — $ (247 ) $ — $ (9,245 ) |
Summary of reclassifications out of each component of AOCL | A summary of reclassifications out of each component of AOCL for the years ended December 31 follows: AOCL Component Reclassified From AOCL Affected Line Item in Consolidated Statements of Operations (In thousands) 2015 Unrealized losses on securities available for sale $ 75 Net gains on securities — Net impairment loss recognized in earnings 75 Total reclassifications before tax 26 Income tax expense (benefit) $ 49 Reclassifications, net of tax 2014 Unrealized losses on securities available for sale $ 329 Net gains on securities (9 ) Net impairment loss recognized in earnings 320 Total reclassifications before tax 112 Income tax expense (benefit) $ 208 Reclassifications, net of tax Unrealized losses on settled derivatives $ (380 ) Interest expense (133 ) Income tax expense (benefit) $ (247 ) Reclassification, net of tax $ (39 ) Total reclassifications for the period, net of tax 2013 Unrealized losses on securities available for sale $ 7 Net gains on securities (26 ) Net impairment loss recognized in earnings (19 ) Total reclassifications before tax (7 ) Income tax expense (benefit) $ (12 ) Reclassifications, net of tax Unrealized losses on cash flow hedges $ (208 ) Interest expense (73 ) Income tax expense (benefit) $ (135 ) Reclassification, net of tax Unrealized losses on settled derivatives $ (189 ) Interest expense (66 ) Income tax expense (benefit) $ (123 ) Reclassification, net of tax Disproportionate tax effects from cash flow hedges $ 1,444 Income tax expense (benefit) $ (1,714 ) Total reclassifications for the period, net of tax |
INDEPENDENT BANK CORPORATION 57
INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION [Abstract] | |
CONDENSED STATEMENTS OF FINANCIAL CONDITION | CONDENSED STATEMENTS OF FINANCIAL CONDITION December 31, 2015 2014 (In thousands) ASSETS Cash and due from banks $ 10,800 $ 5,174 Interest bearing deposits - time 5,000 12,500 Investment in subsidiaries 261,016 258,901 Other assets 10,120 9,583 Total Assets $ 286,936 $ 286,158 LIABILITIES AND SHAREHOLDERS’ EQUITY Subordinated debentures $ 35,569 $ 35,569 Other liabilities 378 382 Shareholders’ equity 250,989 250,207 Total Liabilities and Shareholders’ Equity $ 286,936 $ 286,158 |
CONDENSED STATEMENTS OF OPERATIONS | CONDENSED STATEMENTS OF OPERATIONS Year Ended December 31, 2015 2014 2013 (In thousands) OPERATING INCOME (LOSS) Interest income $ 72 $ 64 $ — Gain on extinguishment of debt — 500 — Gain on securities — 295 — Increase in fair value of U.S. Treasury warrant — — (1,025 ) Other income 31 35 63 Total Operating Income (Loss) 103 894 (962 ) OPERATING EXPENSES Interest expense 1,021 1,462 2,317 Administrative and other expenses 560 527 682 Total Operating Expenses 1,581 1,989 2,999 Loss Before Income Tax and Equity in Undistributed Net Income of Subsidiaries (1,478 ) (1,095 ) (3,961 ) Income tax benefit (542 ) (383 ) (9,053 ) Income (Loss) Before Equity in Undistributed Net Income of Subsidiaries (936 ) (712 ) 5,092 Equity in undistributed net income of subsidiaries 20,953 18,733 72,417 Net Income $ 20,017 $ 18,021 $ 77,509 |
CONDENSED STATEMENTS OF CASH FLOWS | CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, 2015 2014 2013 (In thousands) Net Income $ 20,017 $ 18,021 $ 77,509 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH USED IN OPERATING ACTIVITIES Deferred income taxes (542 ) (383 ) (8,955 ) Share based compensation 21 46 84 Gain on extinguishment of debt — (500 ) — Gain on securities — (295 ) — Decrease in other assets 5 118 738 Increase (decrease) in other liabilities (6 ) 287 (5,858 ) Equity in undistributed net income of subsidiaries operations (20,953 ) (18,733 ) (72,417 ) Total Adjustments (21,475 ) (19,460 ) (86,408 ) Net Cash Used in Operating Activities (1,458 ) (1,439 ) (8,899 ) CASH FLOW FROM INVESTING ACTIVITIES Purchases of interest bearing deposits - time (5,000 ) (17,500 ) — Maturity of interest bearing deposits - time 12,500 5,000 — Return of capital from subsidiary 18,500 15,000 7,500 Net Cash From Investing Activities 26,000 2,500 7,500 CASH FLOW FROM (USED IN) FINANCING ACTIVITIES Repurchase of common stock (13,498 ) — — Dividends paid (5,896 ) (4,129 ) — Proceeds from issuance of common stock 1,569 1,242 100,230 Share based compensation withholding obligation (1,091 ) — (513 ) Redemption of subordinated debt — (4,654 ) (9,452 ) Redemption of convertible preferred stock and common stock warrant — — (81,000 ) Net Cash From (Used in) Financing Activities (18,916 ) (7,541 ) 9,265 Net Increase (Decrease) in Cash and Cash Equivalents 5,626 (6,480 ) 7,866 Cash and Cash Equivalents at Beginning of Year 5,174 11,654 3,788 Cash and Cash Equivalents at End of Year $ 10,800 $ 5,174 $ 11,654 |
ACCOUNTING POLICIES (Details)
ACCOUNTING POLICIES (Details) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)EmployeePaymentsshares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
ACCOUNTING POLICIES [Abstract] | |||
Percentage of loan portfolio secured by real estate | 72.60% | ||
Mortgage Loan Servicing Rights [Abstract] | |||
Mortgage loan servicing fees | $ | $ 4.1 | $ 4.2 | $ 4.3 |
Loan Revenue Recognition [Abstract] | |||
Number of past due days for commercial loan, installment loans and payment plan receivables | 90 days | ||
Number of consecutive payments for mortgage loans misses | Payments | 4 | ||
Bank Owned Life Insurance [Abstract] | |||
Number of lives of group flexible premium non-participating variable life insurance contract | Employee | 270 | ||
Income Taxes [Abstract] | |||
Percentage of largest amount of tax benefit | 50.00% | ||
Minimum [Member] | |||
Other Intangible Assets [Line Items] | |||
Estimated useful lives | 10 years | ||
Maximum [Member] | |||
Other Intangible Assets [Line Items] | |||
Estimated useful lives | 15 years | ||
Building [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciated over a period | 39 years | ||
Equipment [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciated over a period | 7 years | ||
Dividend Reinvestment Plan [Member] | |||
Stock Reserved [Line Items] | |||
Common stock reserved for issuance (in shares) | 0.1 | ||
Long-Term Incentive Plans [Member] | |||
Stock Reserved [Line Items] | |||
Common stock reserved for issuance (in shares) | 0.5 |
RESTRICTIONS ON CASH AND DUE 59
RESTRICTIONS ON CASH AND DUE FROM BANKS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract] | ||
Average reserve balances maintained | $ 3.2 | $ 15.3 |
Reserve balances related to investment security transactions and merchant payment processing operations | $ 2.5 | $ 2.8 |
SECURITIES (Details)
SECURITIES (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015USD ($)SecurityGradeBond | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Mar. 31, 2013Security | ||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 585,851 | $ 532,930 | |||
Unrealized gains | 3,152 | 3,317 | |||
Unrealized losses | 3,519 | 3,069 | |||
Fair value | 585,484 | 533,178 | |||
Accumulated other comprehensive loss | 0 | 0 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 272,152 | 163,665 | |||
Less Than Twelve Months, Unrealized Losses | 1,744 | 909 | |||
Twelve Months or More, Fair Value | 55,638 | 69,122 | |||
Twelve Months or More, Unrealized Losses | 1,775 | 2,160 | |||
Total, Fair value | 327,790 | 232,787 | |||
Total, Unrealized Losses | 3,519 | 3,069 | |||
Private Label Residential Mortgage Backed Securities Below Investment Grade [Abstract] | |||||
Fair value | 3,026 | ||||
Amortized cost | 2,884 | ||||
Non-credit unrealized loss | 19 | ||||
Unrealized gain | 161 | ||||
Cumulative credit related OTTI | 1,594 | ||||
OTTI changes recorded in earnings | 0 | 9 | $ 26 | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||||
Balance at beginning of period | 1,844 | 1,835 | 1,809 | ||
Additions to credit losses on securities for which no previous OTTI was recognized | 0 | 0 | 0 | ||
Increases to credit losses on securities for which OTTI was previously recognized | 0 | 9 | 26 | ||
Balance at end of period | 1,844 | 1,844 | 1,835 | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract] | |||||
Maturing within one year | 34,565 | ||||
Maturing after one year but within five years | 69,976 | ||||
Maturing after five years but within ten years | 46,512 | ||||
Maturing after ten years | 83,234 | ||||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis | 234,287 | ||||
U.S. agency residential mortgage-backed | 195,055 | ||||
U.S. agency commercial mortgage-backed | 34,017 | ||||
Private label residential mortgage-backed | 5,061 | ||||
Other asset backed | 117,431 | ||||
Total | 585,851 | ||||
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract] | |||||
Maturing within one year | 34,591 | ||||
Maturing after one year but within five years | 69,916 | ||||
Maturing after five years but within ten years | 46,641 | ||||
Maturing after ten years | 82,445 | ||||
Available-for-sale Securities fair value total | 233,593 | ||||
U.S. agency residential mortgage backed | 196,056 | ||||
U.S. agency commercial mortgage-backed | 34,028 | ||||
Private label residential mortgage-backed | 4,903 | ||||
Other asset backed | 116,904 | ||||
Total | 585,484 | ||||
Gain and losses realized on sale of securities available for sale [Abstract] | |||||
Proceeds | 12,037 | 14,633 | 2,940 | ||
Realized Gains | [1] | 75 | 329 | 15 | |
Realized Losses | [2] | 0 | 0 | 8 | |
Realized gain related to U.S. Treasury short position | 300 | ||||
Credit Related OTTI Recognized in Earnings | 10 | 30 | |||
Trading Securities, Realized Gain (Loss) | (60) | (300) | 390 | ||
Securities Disclosures [Abstract] | |||||
Pledged securities with book value | $ 1,100 | 1,100 | |||
Shareholder equity threshold not exceeded by revenue or taxing authority amount | 10.00% | ||||
U.S. Agency [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 47,283 | 34,936 | |||
Unrealized gains | 309 | 133 | |||
Unrealized losses | 80 | 63 | |||
Fair value | 47,512 | 35,006 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 12,164 | 12,851 | |||
Less Than Twelve Months, Unrealized Losses | 47 | 58 | |||
Twelve Months or More, Fair Value | 6,746 | 606 | |||
Twelve Months or More, Unrealized Losses | 33 | 5 | |||
Total, Fair value | 18,910 | 13,457 | |||
Total, Unrealized Losses | $ 80 | 63 | |||
Number of securities with market fair value less than amortized cost | Security | 39 | ||||
U.S. Agency Residential Mortgage-Backed [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 195,055 | 256,387 | |||
Unrealized gains | 1,584 | 1,838 | |||
Unrealized losses | 583 | 667 | |||
Fair value | 196,056 | 257,558 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 57,538 | 89,547 | |||
Less Than Twelve Months, Unrealized Losses | 316 | 531 | |||
Twelve Months or More, Fair Value | 23,340 | 15,793 | |||
Twelve Months or More, Unrealized Losses | 267 | 136 | |||
Total, Fair value | 80,878 | 105,340 | |||
Total, Unrealized Losses | $ 583 | 667 | |||
Number of securities with market fair value less than amortized cost | Security | 108 | ||||
U.S. Agency Commercial Mortgage-Backed [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 34,017 | 33,779 | |||
Unrealized gains | 94 | 68 | |||
Unrealized losses | 83 | 119 | |||
Fair value | 34,028 | 33,728 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 16,747 | 21,325 | |||
Less Than Twelve Months, Unrealized Losses | 60 | 119 | |||
Twelve Months or More, Fair Value | 2,247 | 0 | |||
Twelve Months or More, Unrealized Losses | 23 | 0 | |||
Total, Fair value | 18,994 | 21,325 | |||
Total, Unrealized Losses | $ 83 | 119 | |||
Number of securities with market fair value less than amortized cost | Security | 18 | ||||
Private Label Residential Mortgage-Backed [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 5,061 | 6,216 | |||
Unrealized gains | 161 | 187 | |||
Unrealized losses | 319 | 390 | |||
Fair value | 4,903 | 6,013 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 0 | 208 | |||
Less Than Twelve Months, Unrealized Losses | 0 | 1 | |||
Twelve Months or More, Fair Value | 3,393 | 4,013 | |||
Twelve Months or More, Unrealized Losses | 319 | 389 | |||
Total, Fair value | 3,393 | 4,221 | |||
Total, Unrealized Losses | $ 319 | 390 | |||
Number of securities with market fair value less than amortized cost | Security | 5 | ||||
Number of issues rated as investment grade | Grade | 2 | ||||
Number of securities rated below investment grade | Security | 2 | ||||
Number of securities that are split rated | Security | 1 | ||||
Number of bonds with impairment in excess of ten percent | Bond | 2 | ||||
Percentage of excess impairment on bonds | 10.00% | ||||
Number of bonds with impairment for more than 12 months | Bond | 5 | ||||
Private Label Residential Mortgage Backed Securities Below Investment Grade [Abstract] | |||||
Number of private label mortgage backed securities complete recovery of cost basis | Security | 4 | ||||
Number of private label mortgage backed securities currently below investment grade with OTTI unrealized gains | Security | 2 | ||||
Number of private label mortgage backed securities currently below investment grade with OTTI unrealized loss | Security | 1 | 3 | |||
Number of private label mortgage backed securities currently below investment grade with OTTI unrealized loss less than previous OTTI credit | Security | 2 | ||||
Senior Security [Member] | |||||
Private Label Residential Mortgage Backed Securities Below Investment Grade [Abstract] | |||||
Fair value | $ 1,616 | ||||
Amortized cost | 1,635 | ||||
Non-credit unrealized loss | 19 | ||||
Unrealized gain | 0 | ||||
Cumulative credit related OTTI | 757 | ||||
OTTI changes recorded in earnings | 0 | 9 | 26 | ||
Super Senior Security [Member] | |||||
Private Label Residential Mortgage Backed Securities Below Investment Grade [Abstract] | |||||
Fair value | 1,331 | ||||
Amortized cost | 1,249 | ||||
Non-credit unrealized loss | 0 | ||||
Unrealized gain | 82 | ||||
Cumulative credit related OTTI | 457 | ||||
OTTI changes recorded in earnings | 0 | 0 | 0 | ||
Senior Support Security [Member] | |||||
Private Label Residential Mortgage Backed Securities Below Investment Grade [Abstract] | |||||
Fair value | 79 | ||||
Amortized cost | 0 | ||||
Non-credit unrealized loss | 0 | ||||
Unrealized gain | 79 | ||||
Cumulative credit related OTTI | 380 | ||||
OTTI changes recorded in earnings | 0 | 0 | $ 0 | ||
Other Asset Backed [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | 117,431 | 32,314 | |||
Unrealized gains | 54 | 77 | |||
Unrealized losses | 581 | 38 | |||
Fair value | 116,904 | 32,353 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 102,660 | 2,960 | |||
Less Than Twelve Months, Unrealized Losses | 434 | 15 | |||
Twelve Months or More, Fair Value | 5,189 | 8,729 | |||
Twelve Months or More, Unrealized Losses | 147 | 23 | |||
Total, Fair value | 107,849 | 11,689 | |||
Total, Unrealized Losses | $ 581 | 38 | |||
Number of securities with market fair value less than amortized cost | Security | 129 | ||||
Obligations of States and Political Subdivisions [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 145,193 | 143,698 | |||
Unrealized gains | 941 | 961 | |||
Unrealized losses | 1,150 | 1,244 | |||
Fair value | 144,984 | 143,415 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 52,493 | 28,114 | |||
Less Than Twelve Months, Unrealized Losses | 597 | 106 | |||
Twelve Months or More, Fair Value | 12,240 | 37,540 | |||
Twelve Months or More, Unrealized Losses | 553 | 1,138 | |||
Total, Fair value | 64,733 | 65,654 | |||
Total, Unrealized Losses | $ 1,150 | 1,244 | |||
Number of securities with market fair value less than amortized cost | Security | 79 | ||||
Corporate [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 38,895 | 22,690 | |||
Unrealized gains | 9 | 53 | |||
Unrealized losses | 290 | 79 | |||
Fair value | 38,614 | 22,664 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 30,550 | 8,660 | |||
Less Than Twelve Months, Unrealized Losses | 290 | 79 | |||
Twelve Months or More, Fair Value | 0 | 0 | |||
Twelve Months or More, Unrealized Losses | 0 | 0 | |||
Total, Fair value | 30,550 | 8,660 | |||
Total, Unrealized Losses | $ 290 | 79 | |||
Number of securities with market fair value less than amortized cost | Security | 27 | ||||
Trust Preferred [Member] | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Amortized cost | $ 2,916 | 2,910 | |||
Unrealized gains | 0 | 0 | |||
Unrealized losses | 433 | 469 | |||
Fair value | 2,483 | 2,441 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | |||||
Less Than Twelve Months, Fair Value | 0 | 0 | |||
Less Than Twelve Months, Unrealized Losses | 0 | 0 | |||
Twelve Months or More, Fair Value | 2,483 | 2,441 | |||
Twelve Months or More, Unrealized Losses | 433 | 469 | |||
Total, Fair value | 2,483 | 2,441 | |||
Total, Unrealized Losses | $ 433 | 469 | |||
Number of securities with market fair value less than amortized cost | Security | 3 | ||||
Number of issues rated as investment grade | Grade | 1 | ||||
Number of securities rated below investment grade | Security | 1 | ||||
Number of major credit rating agencies rating securities with fair value less than amortized cost | Grade | 2 | ||||
Number of securities not rated | Security | 1 | ||||
Non-rated securities, amortized cost | $ 1,000 | ||||
Fair value of non-rated trust preferred securities | 800 | ||||
Rated Issues [Member] | |||||
Trust preferred securities [Abstract] | |||||
Fair Value | 1,690 | 1,643 | |||
Net Unrealized Loss | (226) | (267) | |||
Unrated Issues - No OTTI [Member] | |||||
Trust preferred securities [Abstract] | |||||
Fair Value | 793 | 798 | |||
Net Unrealized Loss | $ (207) | $ (202) | |||
[1] | Gains in 2014 exclude $0.3 million of realized gain related to a U.S. Treasury short position. | ||||
[2] | Losses in 2014 and 2013 exclude $0.01 million and $0.03 million, respectively of credit related OTTI recognized in earnings. |
LOANS AND PAYMENT PLAN RECEIV61
LOANS AND PAYMENT PLAN RECEIVABLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Loans [Abstract] | |||
Total Loans | $ 1,515,050 | $ 1,409,962 | |
Net of deferred loan fees | 2,200 | 1,000 | |
Payment plan receivables | 36,900 | 42,600 | |
Unamortized discount | $ 2,300 | $ 2,600 | |
Effective yields of payment plan receivables | 13.00% | 14.00% | |
Single-family Residential Loans [Member] | |||
Loans [Abstract] | |||
Mortgage loans purchased | $ 32,600 | ||
Mortgage loans, servicing fee percentage | 0.25% | ||
Weighted average interest rate | 3.94% | ||
Weighted average remaining contractual maturity | 344 months | ||
Real Estate [Member] | Residential First Mortgages [Member] | |||
Loans [Abstract] | |||
Total Loans | [1] | $ 432,215 | $ 411,423 |
Real Estate [Member] | Residential Home Equity and Other Junior Mortgages [Member] | |||
Loans [Abstract] | |||
Total Loans | [1] | 106,297 | 108,162 |
Real Estate [Member] | Construction and Land Development [Member] | |||
Loans [Abstract] | |||
Total Loans | [1] | 62,629 | 54,644 |
Real Estate [Member] | Other [Member] | |||
Loans [Abstract] | |||
Total Loans | [1],[2] | 498,706 | 447,837 |
Commercial [Member] | |||
Loans [Abstract] | |||
Total Loans | 180,424 | 186,875 | |
Consumer [Member] | |||
Loans [Abstract] | |||
Total Loans | 193,350 | 154,591 | |
Payment Plan Receivables [Member] | |||
Loans [Abstract] | |||
Total Loans | 34,599 | 40,001 | |
Agricultural [Member] | |||
Loans [Abstract] | |||
Total Loans | $ 6,830 | $ 6,429 | |
[1] | Includes both residential and non-residential commercial loans secured by real estate. | ||
[2] | Includes loans secured by multi-family residential and non-farm, non-residential property. |
LOANS AND PAYMENT PLAN RECEIV62
LOANS AND PAYMENT PLAN RECEIVABLES , Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Analysis of allowance for loan losses by portfolio segment [Roll Forward] | ||||
Balance at beginning of period | $ 25,990 | $ 32,325 | $ 44,275 | |
Additions (deductions) [Abstract] | ||||
Provision for loan losses | (2,714) | (3,136) | (3,988) | |
Recoveries credited to allowance | 5,022 | 7,420 | 8,270 | |
Loans charged against the allowance | (5,728) | (10,619) | (16,232) | |
Balance at end of period | 22,570 | 25,990 | 32,325 | |
Allowance for loan losses [Abstract] | ||||
Individually evaluated for impairment | 10,983 | 13,233 | ||
Collectively evaluated for impairment | 11,587 | 12,757 | ||
Total ending allowance balance | 22,570 | 25,990 | ||
Loans [Abstract] | ||||
Individually evaluated for impairment | 89,131 | 113,166 | ||
Collectively evaluated for impairment | 1,430,756 | 1,301,250 | ||
Total loans recorded investment | 1,519,887 | 1,414,416 | ||
Accrued interest included in recorded investment | 4,837 | 4,454 | ||
Total Loans | 1,515,050 | 1,409,962 | ||
Commercial [Member] | ||||
Analysis of allowance for loan losses by portfolio segment [Roll Forward] | ||||
Balance at beginning of period | 5,445 | 6,827 | 11,402 | |
Additions (deductions) [Abstract] | ||||
Provision for loan losses | (737) | (1,683) | (2,336) | |
Recoveries credited to allowance | 2,656 | 4,914 | 5,119 | |
Loans charged against the allowance | (1,694) | (4,613) | (7,358) | |
Balance at end of period | 5,670 | 5,445 | 6,827 | |
Allowance for loan losses [Abstract] | ||||
Individually evaluated for impairment | 2,708 | 3,194 | ||
Collectively evaluated for impairment | 2,962 | 2,251 | ||
Total ending allowance balance | 5,670 | 5,445 | ||
Loans [Abstract] | ||||
Individually evaluated for impairment | 16,868 | 34,147 | ||
Collectively evaluated for impairment | 733,399 | 658,423 | ||
Total loans recorded investment | 750,267 | 692,570 | ||
Accrued interest included in recorded investment | 1,869 | 1,615 | ||
Total Loans | 748,398 | 690,955 | ||
Mortgage [Member] | ||||
Analysis of allowance for loan losses by portfolio segment [Roll Forward] | ||||
Balance at beginning of period | 13,444 | 17,195 | 21,447 | |
Additions (deductions) [Abstract] | ||||
Provision for loan losses | (1,744) | (1,029) | 71 | |
Recoveries credited to allowance | 1,258 | 1,397 | 1,996 | |
Loans charged against the allowance | (2,567) | (4,119) | (6,319) | |
Balance at end of period | 10,391 | 13,444 | 17,195 | |
Allowance for loan losses [Abstract] | ||||
Individually evaluated for impairment | 7,818 | 9,311 | ||
Collectively evaluated for impairment | 2,573 | 4,133 | ||
Total ending allowance balance | 10,391 | 13,444 | ||
Loans [Abstract] | ||||
Individually evaluated for impairment | 66,375 | 72,340 | ||
Collectively evaluated for impairment | 436,349 | 402,458 | ||
Total loans recorded investment | 502,724 | 474,798 | ||
Accrued interest included in recorded investment | [1] | 2,270 | 2,170 | |
Total Loans | 500,454 | 472,628 | ||
Installment [Member] | ||||
Analysis of allowance for loan losses by portfolio segment [Roll Forward] | ||||
Balance at beginning of period | 1,814 | 2,246 | 3,378 | |
Additions (deductions) [Abstract] | ||||
Provision for loan losses | (274) | 349 | 314 | |
Recoveries credited to allowance | 1,108 | 1,104 | 1,074 | |
Loans charged against the allowance | (1,467) | (1,885) | (2,520) | |
Balance at end of period | 1,181 | 1,814 | 2,246 | |
Allowance for loan losses [Abstract] | ||||
Individually evaluated for impairment | 457 | 728 | ||
Collectively evaluated for impairment | 724 | 1,086 | ||
Total ending allowance balance | 1,181 | 1,814 | ||
Loans [Abstract] | ||||
Individually evaluated for impairment | 5,888 | 6,679 | ||
Collectively evaluated for impairment | 226,409 | 200,368 | ||
Total loans recorded investment | 232,297 | 207,047 | ||
Accrued interest included in recorded investment | [1] | 698 | 669 | |
Total Loans | 231,599 | 206,378 | ||
Payment Plan Receivables [Member] | ||||
Analysis of allowance for loan losses by portfolio segment [Roll Forward] | ||||
Balance at beginning of period | 64 | 97 | 144 | |
Additions (deductions) [Abstract] | ||||
Provision for loan losses | (8) | (36) | (93) | |
Recoveries credited to allowance | 0 | 5 | 81 | |
Loans charged against the allowance | 0 | (2) | (35) | |
Balance at end of period | 56 | 64 | 97 | |
Allowance for loan losses [Abstract] | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 56 | 64 | ||
Total ending allowance balance | 56 | 64 | ||
Loans [Abstract] | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 34,599 | 40,001 | ||
Total loans recorded investment | 34,599 | 40,001 | ||
Accrued interest included in recorded investment | 0 | 0 | ||
Total Loans | 34,599 | 40,001 | ||
Subjective Allocation [Member] | ||||
Analysis of allowance for loan losses by portfolio segment [Roll Forward] | ||||
Balance at beginning of period | 5,223 | 5,960 | 7,904 | |
Additions (deductions) [Abstract] | ||||
Provision for loan losses | 49 | (737) | (1,944) | |
Recoveries credited to allowance | 0 | 0 | 0 | |
Loans charged against the allowance | 0 | 0 | 0 | |
Balance at end of period | 5,272 | 5,223 | $ 5,960 | |
Allowance for loan losses [Abstract] | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 5,272 | 5,223 | ||
Total ending allowance balance | $ 5,272 | $ 5,223 | ||
[1] | Credit scores have been updated within the last twelve months. |
LOANS AND PAYMENT PLAN RECEIV63
LOANS AND PAYMENT PLAN RECEIVABLES, Receivables Past Due (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Non performing loans [Abstract] | |||
Accrued Interest | $ 600 | $ 800 | $ 1,200 |
Interest Income | 0 | 0 | $ 100 |
Aging analysis of loans by class [Abstract] | |||
Total Loans | 1,515,050 | 1,409,962 | |
Total Recorded Investment [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 118 | 7 | |
Non-Accrual | 10,607 | 15,231 | |
Total Non-performing Loans | 10,725 | 15,238 | |
Aging analysis of loans by class [Abstract] | |||
Total | 15,637 | 22,326 | |
Loans not Past Due | 1,504,250 | 1,392,090 | |
Total Loans | 1,519,887 | 1,414,416 | |
Total Recorded Investment [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 5,881 | 8,246 | |
Total Recorded Investment [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 1,555 | 2,769 | |
Total Recorded Investment [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 8,201 | 11,311 | |
Accrued Interest Included in Recorded Investment [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 2 | 0 | |
Non-Accrual | 0 | 0 | |
Total Non-performing Loans | 2 | 0 | |
Aging analysis of loans by class [Abstract] | |||
Total | 72 | 84 | |
Loans not Past Due | 4,765 | 4,370 | |
Total Loans | 4,837 | 4,454 | |
Accrued Interest Included in Recorded Investment [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 53 | 55 | |
Accrued Interest Included in Recorded Investment [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 17 | 29 | |
Accrued Interest Included in Recorded Investment [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 2 | 0 | |
Commercial [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total Loans | 748,398 | 690,955 | |
Commercial [Member] | Income Producing - Real Estate [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 1,027 | 1,233 | |
Total Non-performing Loans | 1,027 | 1,233 | |
Aging analysis of loans by class [Abstract] | |||
Total | 1,059 | 303 | |
Loans not Past Due | 305,155 | 252,763 | |
Total Loans | 306,214 | 253,066 | |
Commercial [Member] | Income Producing - Real Estate [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 203 | 89 | |
Commercial [Member] | Income Producing - Real Estate [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 209 | 0 | |
Commercial [Member] | Income Producing - Real Estate [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 647 | 214 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 49 | 0 | |
Non-Accrual | 401 | 594 | |
Total Non-performing Loans | 450 | 594 | |
Aging analysis of loans by class [Abstract] | |||
Total | 252 | 354 | |
Loans not Past Due | 44,231 | 33,984 | |
Total Loans | 44,483 | 34,338 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 0 | 131 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 0 | 0 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 252 | 223 | |
Commercial [Member] | Commercial and Industrial [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 69 | 0 | |
Non-Accrual | 2,028 | 2,746 | |
Total Non-performing Loans | 2,097 | 2,746 | |
Aging analysis of loans by class [Abstract] | |||
Total | 952 | 2,879 | |
Loans not Past Due | 398,618 | 402,287 | |
Total Loans | 399,570 | 405,166 | |
Commercial [Member] | Commercial and Industrial [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 785 | 2,391 | |
Commercial [Member] | Commercial and Industrial [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 16 | 279 | |
Commercial [Member] | Commercial and Industrial [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 151 | 209 | |
Mortgage [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total Loans | 500,454 | 472,628 | |
Mortgage [Member] | 1-4 Family [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 7 | |
Non-Accrual | 4,744 | 5,945 | |
Total Non-performing Loans | 4,744 | 5,952 | |
Aging analysis of loans by class [Abstract] | |||
Total | 7,327 | 9,467 | |
Loans not Past Due | 272,298 | 269,719 | |
Total Loans | 279,625 | 279,186 | |
Mortgage [Member] | 1-4 Family [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 1,943 | 1,877 | |
Mortgage [Member] | 1-4 Family [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 640 | 1,638 | |
Mortgage [Member] | 1-4 Family [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 4,744 | 5,952 | |
Mortgage [Member] | Resort Lending [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 1,094 | 2,168 | |
Total Non-performing Loans | 1,094 | 2,168 | |
Aging analysis of loans by class [Abstract] | |||
Total | 1,401 | 2,394 | |
Loans not Past Due | 114,619 | 126,342 | |
Total Loans | 116,020 | 128,736 | |
Mortgage [Member] | Resort Lending [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 307 | 226 | |
Mortgage [Member] | Resort Lending [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 0 | 0 | |
Mortgage [Member] | Resort Lending [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 1,094 | 2,168 | |
Mortgage [Member] | Home Equity - 1st Lien [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 187 | 331 | |
Total Non-performing Loans | 187 | 331 | |
Aging analysis of loans by class [Abstract] | |||
Total | 237 | 420 | |
Loans not Past Due | 22,327 | 19,782 | |
Total Loans | 22,564 | 20,202 | |
Mortgage [Member] | Home Equity - 1st Lien [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 50 | 39 | |
Mortgage [Member] | Home Equity - 1st Lien [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 0 | 50 | |
Mortgage [Member] | Home Equity - 1st Lien [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 187 | 331 | |
Mortgage [Member] | Home Equity - 2nd Lien [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 147 | 605 | |
Total Non-performing Loans | 147 | 605 | |
Aging analysis of loans by class [Abstract] | |||
Total | 640 | 1,405 | |
Loans not Past Due | 50,618 | 45,269 | |
Total Loans | 51,258 | 46,674 | |
Mortgage [Member] | Home Equity - 2nd Lien [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 439 | 711 | |
Mortgage [Member] | Home Equity - 2nd Lien [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 54 | 89 | |
Mortgage [Member] | Home Equity - 2nd Lien [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 147 | 605 | |
Mortgage [Member] | Purchased Loans [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | ||
Non-Accrual | 2 | ||
Total Non-performing Loans | 2 | ||
Aging analysis of loans by class [Abstract] | |||
Total | 12 | ||
Loans not Past Due | 33,245 | ||
Total Loans | 33,257 | ||
Mortgage [Member] | Purchased Loans [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 9 | ||
Mortgage [Member] | Purchased Loans [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 1 | ||
Mortgage [Member] | Purchased Loans [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 2 | ||
Installment [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total Loans | 231,599 | 206,378 | |
Installment [Member] | Home Equity - 1st Lien [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 106 | 576 | |
Total Non-performing Loans | 106 | 576 | |
Aging analysis of loans by class [Abstract] | |||
Total | 528 | 1,079 | |
Loans not Past Due | 16,707 | 20,995 | |
Total Loans | 17,235 | 22,074 | |
Installment [Member] | Home Equity - 1st Lien [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 315 | 466 | |
Installment [Member] | Home Equity - 1st Lien [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 107 | 37 | |
Installment [Member] | Home Equity - 1st Lien [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 106 | 576 | |
Installment [Member] | Home Equity - 2nd Lien [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 443 | 517 | |
Total Non-performing Loans | 443 | 517 | |
Aging analysis of loans by class [Abstract] | |||
Total | 823 | 967 | |
Loans not Past Due | 19,727 | 28,125 | |
Total Loans | 20,550 | 29,092 | |
Installment [Member] | Home Equity - 2nd Lien [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 231 | 369 | |
Installment [Member] | Home Equity - 2nd Lien [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 149 | 81 | |
Installment [Member] | Home Equity - 2nd Lien [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 443 | 517 | |
Installment [Member] | Loans Not Secured By Real Estate [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 421 | 454 | |
Total Non-performing Loans | 421 | 454 | |
Aging analysis of loans by class [Abstract] | |||
Total | 1,071 | 1,274 | |
Loans not Past Due | 191,262 | 152,115 | |
Total Loans | 192,333 | 153,389 | |
Installment [Member] | Loans Not Secured By Real Estate [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 567 | 589 | |
Installment [Member] | Loans Not Secured By Real Estate [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 83 | 231 | |
Installment [Member] | Loans Not Secured By Real Estate [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 421 | 454 | |
Installment [Member] | Other [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 2 | 48 | |
Total Non-performing Loans | 2 | 48 | |
Aging analysis of loans by class [Abstract] | |||
Total | 20 | 66 | |
Loans not Past Due | 2,159 | 2,426 | |
Total Loans | 2,179 | 2,492 | |
Installment [Member] | Other [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 15 | 15 | |
Installment [Member] | Other [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 3 | 3 | |
Installment [Member] | Other [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 2 | 48 | |
Payment Plan Receivables [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total Loans | 34,599 | 40,001 | |
Payment Plan Receivables [Member] | Full Refund [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 2 | 2 | |
Total Non-performing Loans | 2 | 2 | |
Aging analysis of loans by class [Abstract] | |||
Total | 556 | 1,054 | |
Loans not Past Due | 21,294 | 26,799 | |
Total Loans | 21,850 | 27,853 | |
Payment Plan Receivables [Member] | Full Refund [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 492 | 838 | |
Payment Plan Receivables [Member] | Full Refund [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 62 | 214 | |
Payment Plan Receivables [Member] | Full Refund [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 2 | 2 | |
Payment Plan Receivables [Member] | Partial Refund [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 2 | 12 | |
Total Non-performing Loans | 2 | 12 | |
Aging analysis of loans by class [Abstract] | |||
Total | 645 | 544 | |
Loans not Past Due | 5,834 | 6,550 | |
Total Loans | 6,479 | 7,094 | |
Payment Plan Receivables [Member] | Partial Refund [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 415 | 409 | |
Payment Plan Receivables [Member] | Partial Refund [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 228 | 123 | |
Payment Plan Receivables [Member] | Partial Refund [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 2 | 12 | |
Payment Plan Receivables [Member] | Other [Member] | |||
Non performing loans [Abstract] | |||
90+ and Still Accruing | 0 | 0 | |
Non-Accrual | 1 | 0 | |
Total Non-performing Loans | 1 | 0 | |
Aging analysis of loans by class [Abstract] | |||
Total | 114 | 120 | |
Loans not Past Due | 6,156 | 4,934 | |
Total Loans | 6,270 | 5,054 | |
Payment Plan Receivables [Member] | Other [Member] | Loans Past Due, 30-59 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 110 | 96 | |
Payment Plan Receivables [Member] | Other [Member] | Loans Past Due, 60-89 days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | 3 | 24 | |
Payment Plan Receivables [Member] | Other [Member] | Loans Past Due, 90+ days [Member] | |||
Aging analysis of loans by class [Abstract] | |||
Total | $ 1 | $ 0 |
LOANS AND PAYMENT PLAN RECEIV64
LOANS AND PAYMENT PLAN RECEIVABLES, Impaired Financing Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Impaired loans [Abstract] | ||||
TDR | $ 2,518 | $ 9,325 | ||
Non - TDR | 203 | 299 | ||
TDR - allowance based on collateral | 4,810 | 5,879 | ||
TDR's allowance based on present value cash flow | 81,002 | 94,970 | ||
Non - TDR - allowance based on collateral | 260 | 2,296 | ||
Non - TDR - allowance based on present value cash flow | 0 | 0 | ||
Total impaired loans | 88,793 | 112,769 | ||
Amount of allowance for loan losses allocated [Abstract] | ||||
TDR - allowance based on collateral | 2,436 | 2,025 | ||
TDR - allowance based on present value cash flow | 8,471 | 10,188 | ||
Non - TDR - allowance based on collateral | 76 | 1,020 | ||
Non - TDR - allowance based on present value cash flow | 0 | 0 | ||
Total amount of allowance for loan losses allocated | 10,983 | 13,233 | ||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 2,727 | 9,652 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 3,744 | 10,836 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 86,404 | 103,514 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 90,182 | 108,211 | |
Recorded Investment | [1] | 89,131 | 113,166 | |
Unpaid Principal Balance | [1] | 93,926 | 119,047 | |
Related Allowance | [1] | 10,983 | 13,233 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 7,628 | 12,225 | $ 16,800 |
Interest Income Recognized, with No Related Allowance | [2] | 739 | 469 | 1,020 |
Average Recorded Investment, with Related Allowance | [2] | 97,018 | 107,692 | 122,200 |
Interest Income Recognized, with Related Allowance | [2] | 3,835 | 4,565 | 4,846 |
Average Recorded Investment | [2] | 104,646 | 119,917 | 139,000 |
Interest Income Recognized | [2] | 4,574 | 5,034 | 5,866 |
Accrued Interest Included in Recorded Investment [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment | [1] | 338 | 397 | |
Commercial [Member] | Income Producing - Real Estate [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 641 | 5,868 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 851 | 6,077 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 8,377 | 12,836 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 9,232 | 13,797 | |
Recorded Investment | [1] | 9,018 | 18,704 | |
Unpaid Principal Balance | [1] | 10,083 | 19,874 | |
Related Allowance | [1] | 516 | 689 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 4,520 | 7,660 | 5,765 |
Interest Income Recognized, with No Related Allowance | [2] | 387 | 250 | 340 |
Average Recorded Investment, with Related Allowance | [2] | 12,677 | 12,772 | 18,164 |
Interest Income Recognized, with Related Allowance | [2] | 439 | 677 | 587 |
Average Recorded Investment | [2] | 17,197 | 20,432 | 23,929 |
Interest Income Recognized | [2] | 826 | 927 | 927 |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 818 | 1,051 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 1,393 | 1,606 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 1,690 | 3,456 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 1,778 | 3,528 | |
Recorded Investment | [1] | 2,508 | 4,507 | |
Unpaid Principal Balance | [1] | 3,171 | 5,134 | |
Related Allowance | [1] | 296 | 499 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 952 | 1,145 | 3,092 |
Interest Income Recognized, with No Related Allowance | [2] | 79 | 64 | 240 |
Average Recorded Investment, with Related Allowance | [2] | 2,219 | 3,939 | 6,186 |
Interest Income Recognized, with Related Allowance | [2] | 54 | 149 | 149 |
Average Recorded Investment | [2] | 3,171 | 5,084 | 9,278 |
Interest Income Recognized | [2] | 133 | 213 | 389 |
Commercial [Member] | Commercial and Industrial [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 1,245 | 2,685 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 1,241 | 2,667 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 4,097 | 8,251 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 4,439 | 8,486 | |
Recorded Investment | [1] | 5,342 | 10,936 | |
Unpaid Principal Balance | [1] | 5,680 | 11,153 | |
Related Allowance | [1] | 1,896 | 2,006 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 2,125 | 3,351 | 3,980 |
Interest Income Recognized, with No Related Allowance | [2] | 257 | 152 | 226 |
Average Recorded Investment, with Related Allowance | [2] | 6,663 | 8,500 | 11,795 |
Interest Income Recognized, with Related Allowance | [2] | 104 | 294 | 457 |
Average Recorded Investment | [2] | 8,788 | 11,851 | 15,775 |
Interest Income Recognized | [2] | 361 | 446 | 683 |
Mortgage [Member] | 1-4 Family [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 23 | 0 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 183 | 49 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 47,792 | 53,206 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 49,808 | 56,063 | |
Recorded Investment | [1] | 47,815 | 53,206 | |
Unpaid Principal Balance | [1] | 49,991 | 56,112 | |
Related Allowance | [1] | 5,132 | 6,195 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 19 | 29 | 5 |
Interest Income Recognized, with No Related Allowance | [2] | 11 | 0 | 11 |
Average Recorded Investment, with Related Allowance | [2] | 50,421 | 55,877 | 60,858 |
Interest Income Recognized, with Related Allowance | [2] | 2,140 | 2,286 | 2,622 |
Average Recorded Investment | [2] | 50,440 | 55,906 | 60,863 |
Interest Income Recognized | [2] | 2,151 | 2,286 | 2,633 |
Mortgage [Member] | Resort Lending [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 0 | 48 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 0 | 397 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 18,148 | 18,799 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 18,319 | 18,963 | |
Recorded Investment | [1] | 18,148 | 18,847 | |
Unpaid Principal Balance | [1] | 18,319 | 19,360 | |
Related Allowance | [1] | 2,662 | 3,075 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 12 | 40 | 28 |
Interest Income Recognized, with No Related Allowance | [2] | 0 | 1 | 0 |
Average Recorded Investment, with Related Allowance | [2] | 18,448 | 19,458 | 21,708 |
Interest Income Recognized, with Related Allowance | [2] | 670 | 753 | 836 |
Average Recorded Investment | [2] | 18,460 | 19,498 | 21,736 |
Interest Income Recognized | [2] | 670 | 754 | 836 |
Mortgage [Member] | Home Equity - 1st Lien [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 0 | 0 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 0 | 0 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 168 | 162 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 172 | 177 | |
Recorded Investment | [1] | 168 | 162 | |
Unpaid Principal Balance | [1] | 172 | 177 | |
Related Allowance | [1] | 9 | 14 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 0 | 0 | 0 |
Interest Income Recognized, with No Related Allowance | [2] | 0 | 0 | 0 |
Average Recorded Investment, with Related Allowance | [2] | 161 | 160 | 136 |
Interest Income Recognized, with Related Allowance | [2] | 8 | 6 | 4 |
Average Recorded Investment | [2] | 161 | 160 | 136 |
Interest Income Recognized | [2] | 8 | 6 | 4 |
Mortgage [Member] | Home Equity - 2nd Lien [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 0 | 0 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 0 | 0 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 244 | 125 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 325 | 205 | |
Recorded Investment | [1] | 244 | 125 | |
Unpaid Principal Balance | [1] | 325 | 205 | |
Related Allowance | [1] | 15 | 27 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 0 | 0 | 0 |
Interest Income Recognized, with No Related Allowance | [2] | 0 | 0 | 0 |
Average Recorded Investment, with Related Allowance | [2] | 172 | 57 | 42 |
Interest Income Recognized, with Related Allowance | [2] | 13 | 2 | 2 |
Average Recorded Investment | [2] | 172 | 57 | 42 |
Interest Income Recognized | [2] | 13 | 2 | 2 |
Installment [Member] | Home Equity - 1st Lien [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 0 | 0 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 76 | 40 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 2,364 | 2,744 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 2,492 | 2,930 | |
Recorded Investment | [1] | 2,364 | 2,744 | |
Unpaid Principal Balance | [1] | 2,568 | 2,970 | |
Related Allowance | [1] | 143 | 219 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 0 | 0 | 1,604 |
Interest Income Recognized, with No Related Allowance | [2] | 5 | 2 | 83 |
Average Recorded Investment, with Related Allowance | [2] | 2,539 | 2,837 | 1,448 |
Interest Income Recognized, with Related Allowance | [2] | 176 | 174 | 85 |
Average Recorded Investment | [2] | 2,539 | 2,837 | 3,052 |
Interest Income Recognized | [2] | 181 | 176 | 168 |
Installment [Member] | Home Equity - 2nd Lien [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 0 | 0 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 0 | 0 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 2,929 | 3,212 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 2,951 | 3,215 | |
Recorded Investment | [1] | 2,929 | 3,212 | |
Unpaid Principal Balance | [1] | 2,951 | 3,215 | |
Related Allowance | [1] | 271 | 419 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 0 | 0 | 1,841 |
Interest Income Recognized, with No Related Allowance | [2] | 0 | 0 | 96 |
Average Recorded Investment, with Related Allowance | [2] | 3,055 | 3,359 | 1,546 |
Interest Income Recognized, with Related Allowance | [2] | 193 | 188 | 86 |
Average Recorded Investment | [2] | 3,055 | 3,359 | 3,387 |
Interest Income Recognized | [2] | 193 | 188 | 182 |
Installment [Member] | Loans Not Secured By Real Estate [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 0 | 0 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 0 | 0 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 587 | 711 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 658 | 835 | |
Recorded Investment | [1] | 587 | 711 | |
Unpaid Principal Balance | [1] | 658 | 835 | |
Related Allowance | [1] | 42 | 89 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 0 | 0 | 470 |
Interest Income Recognized, with No Related Allowance | [2] | 0 | 0 | 23 |
Average Recorded Investment, with Related Allowance | [2] | 653 | 719 | 314 |
Interest Income Recognized, with Related Allowance | [2] | 37 | 35 | 17 |
Average Recorded Investment | [2] | 653 | 719 | 784 |
Interest Income Recognized | [2] | 37 | 35 | 40 |
Installment [Member] | Other [Member] | ||||
Impaired Loans by class [Abstract] | ||||
Recorded Investment, with no related allowance recorded | [1] | 0 | 0 | |
Unpaid Principal Balance, with no related allowance recorded | [1] | 0 | 0 | |
With no related allowance recorded | [1] | 0 | 0 | |
Recorded Investment, with an allowance recorded | [1] | 8 | 12 | |
Unpaid Principal Balance, with an allowance recorded | [1] | 8 | 12 | |
Recorded Investment | [1] | 8 | 12 | |
Unpaid Principal Balance | [1] | 8 | 12 | |
Related Allowance | [1] | 1 | 1 | |
Average recorded investment in and interest income earned on impaired loans by class [Abstract] | ||||
Average Recorded Investment, with No Related Allowance | [2] | 0 | 0 | 15 |
Interest Income Recognized, with No Related Allowance | [2] | 0 | 0 | 1 |
Average Recorded Investment, with Related Allowance | [2] | 10 | 14 | 3 |
Interest Income Recognized, with Related Allowance | [2] | 1 | 1 | 1 |
Average Recorded Investment | [2] | 10 | 14 | 18 |
Interest Income Recognized | [2] | $ 1 | $ 1 | $ 2 |
[1] | There were no impaired payment plan receivables or purchased mortgage loans at December 31, 2015 or 2014. | |||
[2] | There were no impaired payment plan receivables or purchased mortgage loans during the years ending December 31, 2015, 2014 and 2013. |
LOANS AND PAYMENT PLAN RECEIV65
LOANS AND PAYMENT PLAN RECEIVABLES, Troubled Debt Restructurings (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015USD ($)Contract | Dec. 31, 2014USD ($)Contract | Dec. 31, 2013USD ($)Contract | ||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | $ 88,330 | $ 110,174 | ||
Troubled debt restructuring, specific reserve | 10,900 | 12,200 | ||
Additional amounts committed to lend as troubled debt restructurings | $ 40 | $ 40 | ||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 46 | 70 | 102 | |
Pre-modification recorded balance | $ 5,589 | $ 7,123 | $ 11,955 | |
Post-modification recorded balance | 5,097 | 6,308 | 10,368 | |
Increase (decrease) in allowance for loan losses | 400 | 200 | (300) | |
Charge offs due to troubled debt restructurings | $ 160 | $ 40 | $ 500 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 5 | 3 | 9 | |
Recorded Balance | $ 234 | $ 444 | $ 1,486 | |
Past due period for modified loans | 90 days | |||
Increase (decrease) in allowance for loan loss due to TDRs that subsequently defaulted | $ (30) | 20 | 0 | |
Charge-offs on TDRs that subsequently defaulted | $ 0 | 0 | $ 200 | |
Minimum [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Modification of stated interest rate of loans, range of period | 9 months | |||
Modifications involving extension of maturity date, period range | 1 month | |||
Maximum [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Modification of stated interest rate of loans, range of period | 36 months | |||
Modifications involving extension of maturity date, period range | 60 months | |||
Maximum in Certain Circumstances [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Modification of stated interest rate of loans, range of period | 480 months | |||
Modifications involving extension of maturity date, period range | 230 months | |||
Commercial [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | $ 16,359 | 31,453 | ||
Retail [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | $ 71,971 | $ 78,721 | ||
Income Producing - Real Estate [Member] | Commercial [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 2 | 4 | 6 | |
Pre-modification recorded balance | $ 229 | $ 426 | $ 4,798 | |
Post-modification recorded balance | $ 227 | $ 389 | $ 3,869 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 1 | |
Recorded Balance | $ 0 | $ 0 | $ 693 | |
Land, Land Development and Construction Real Estate [Member] | Commercial [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 0 | 2 | 1 | |
Pre-modification recorded balance | $ 0 | $ 55 | $ 16 | |
Post-modification recorded balance | $ 0 | $ 44 | $ 0 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 1 | |
Recorded Balance | $ 0 | $ 0 | $ 334 | |
Commercial and Industrial [Member] | Commercial [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 17 | 13 | 23 | |
Pre-modification recorded balance | $ 3,188 | $ 2,236 | $ 2,522 | |
Post-modification recorded balance | $ 2,960 | $ 1,606 | $ 1,901 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 2 | 2 | 2 | |
Recorded Balance | $ 157 | $ 319 | $ 143 | |
1-4 Family [Member] | Mortgage [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 8 | 15 | 20 | |
Pre-modification recorded balance | $ 1,345 | $ 1,576 | $ 1,968 | |
Post-modification recorded balance | $ 1,128 | $ 1,570 | $ 1,995 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 2 | 1 | 1 | |
Recorded Balance | $ 73 | $ 125 | $ 106 | |
Resort Lending [Member] | Mortgage [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 1 | 6 | 5 | |
Pre-modification recorded balance | $ 313 | $ 1,583 | $ 1,240 | |
Post-modification recorded balance | $ 307 | $ 1,572 | $ 1,231 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 1 | |
Recorded Balance | $ 0 | $ 0 | $ 156 | |
Home Equity - 1st Lien [Member] | Mortgage [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 1 | 1 | 1 | |
Pre-modification recorded balance | $ 20 | $ 17 | $ 95 | |
Post-modification recorded balance | $ 20 | $ 14 | $ 97 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 0 | |
Recorded Balance | $ 0 | $ 0 | $ 0 | |
Home Equity - 1st Lien [Member] | Installment [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 6 | 13 | 25 | |
Pre-modification recorded balance | $ 220 | $ 631 | $ 659 | |
Post-modification recorded balance | $ 186 | $ 523 | $ 657 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 2 | |
Recorded Balance | $ 0 | $ 0 | $ 32 | |
Home Equity - 2nd Lien [Member] | Mortgage [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 1 | 1 | 0 | |
Pre-modification recorded balance | $ 27 | $ 85 | $ 0 | |
Post-modification recorded balance | $ 27 | $ 84 | $ 0 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 0 | |
Recorded Balance | $ 0 | $ 0 | $ 0 | |
Home Equity - 2nd Lien [Member] | Installment [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 8 | 9 | 16 | |
Pre-modification recorded balance | $ 228 | $ 400 | $ 508 | |
Post-modification recorded balance | $ 217 | $ 400 | $ 508 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 1 | |
Recorded Balance | $ 0 | $ 0 | $ 22 | |
Purchased Loans [Member] | Mortgage [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 0 | |||
Pre-modification recorded balance | $ 0 | |||
Post-modification recorded balance | $ 0 | |||
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | |||
Recorded Balance | $ 0 | |||
Loans Not Secured By Real Estate [Member] | Installment [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 2 | 6 | 5 | |
Pre-modification recorded balance | $ 19 | $ 114 | $ 149 | |
Post-modification recorded balance | $ 25 | $ 106 | $ 110 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 1 | 0 | 0 | |
Recorded Balance | $ 4 | $ 0 | $ 0 | |
Other [Member] | Installment [Member] | ||||
Loans classified as troubled debt restructurings [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 0 | |
Pre-modification recorded balance | $ 0 | $ 0 | $ 0 | |
Post-modification recorded balance | $ 0 | $ 0 | $ 0 | |
TDR that subsequently defaulted [Abstract] | ||||
Number of contracts | Contract | 0 | 0 | 0 | |
Recorded Balance | $ 0 | $ 0 | $ 0 | |
Performing TDR's [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | 81,512 | 102,971 | ||
Performing TDR's [Member] | Commercial [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | 13,318 | 29,475 | ||
Performing TDR's [Member] | Retail [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | 68,194 | 73,496 | ||
Non-performing TDR's [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | [1] | 6,818 | 7,203 | |
Non-performing TDR's [Member] | Commercial [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | [1] | 3,041 | 1,978 | |
Non-performing TDR's [Member] | Retail [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Troubled debt restructuring | [1],[2] | $ 3,777 | $ 5,225 | |
[1] | Included in non-performing loans table. | |||
[2] | Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis. |
LOANS AND PAYMENT PLAN RECEIV66
LOANS AND PAYMENT PLAN RECEIVABLES, Loan Ratings by Loan Class (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | $ 748,398 | $ 690,955 | |
Accrued interest included in total | $ 4,837 | 4,454 | |
Credit ratings of insurer or risk retention group counterparties [Abstract] | |||
Subsidiary's outstanding payment plan insured by third party | 63.20% | ||
Subsidiary's payment outstanding payment plan 2, insured by third party | 18.70% | ||
Payment Plan Receivables, Full Refund | $ 21,850 | 27,853 | |
Payment Plan Receivables, Partial Refund | 6,479 | 7,094 | |
Payment Plan Receivables, Other | 6,270 | 5,054 | |
Total | 34,599 | 40,001 | |
Commercial [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 750,267 | 692,570 | |
Accrued interest included in total | 1,869 | 1,615 | |
Commercial [Member] | Non-Watch 1-6 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 709,099 | 645,082 | |
Accrued interest included in total | 1,729 | 1,479 | |
Commercial [Member] | Watch 7-8 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 29,363 | 34,609 | |
Accrued interest included in total | 108 | 111 | |
Commercial [Member] | Substandard Accrual 9 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 8,349 | 8,306 | |
Accrued interest included in total | 32 | 25 | |
Commercial [Member] | Non Accrual 10-11 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 3,456 | 4,573 | |
Accrued interest included in total | 0 | 0 | |
Commercial [Member] | Income Producing - Real Estate [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 306,214 | 253,066 | |
Commercial [Member] | Income Producing - Real Estate [Member] | Non-Watch 1-6 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 296,898 | 241,266 | |
Commercial [Member] | Income Producing - Real Estate [Member] | Watch 7-8 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 6,866 | 8,649 | |
Commercial [Member] | Income Producing - Real Estate [Member] | Substandard Accrual 9 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 1,423 | 1,918 | |
Commercial [Member] | Income Producing - Real Estate [Member] | Non Accrual 10-11 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 1,027 | 1,233 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 44,483 | 34,338 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | Non-Watch 1-6 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 40,844 | 30,869 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | Watch 7-8 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 2,995 | 2,485 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | Substandard Accrual 9 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 243 | 390 | |
Commercial [Member] | Land, Land Development and Construction Real Estate [Member] | Non Accrual 10-11 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 401 | 594 | |
Commercial [Member] | Commercial and Industrial [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 399,570 | 405,166 | |
Commercial [Member] | Commercial and Industrial [Member] | Non-Watch 1-6 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 371,357 | 372,947 | |
Commercial [Member] | Commercial and Industrial [Member] | Watch 7-8 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 19,502 | 23,475 | |
Commercial [Member] | Commercial and Industrial [Member] | Substandard Accrual 9 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 6,683 | 5,998 | |
Commercial [Member] | Commercial and Industrial [Member] | Non Accrual 10-11 [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
Commercial loan | 2,028 | 2,746 | |
Mortgage [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 57,083 | 52,490 |
750-799 | [1] | 167,515 | 139,075 |
700-749 | [1] | 110,802 | 98,199 |
650-699 | [1] | 80,140 | 83,365 |
600-649 | [1] | 38,108 | 39,874 |
550-599 | [1] | 22,729 | 27,715 |
500-549 | [1] | 13,528 | 18,831 |
Under 500 | [1] | 5,771 | 8,074 |
Unknown | [1] | 7,048 | 7,175 |
Total | [1] | 502,724 | 474,798 |
Accrued interest included in total | [1] | 2,270 | 2,170 |
Mortgage [Member] | 1-4 Family [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 28,760 | 27,918 |
750-799 | [1] | 78,802 | 72,674 |
700-749 | [1] | 56,519 | 52,843 |
650-699 | [1] | 51,813 | 51,664 |
600-649 | [1] | 27,966 | 27,770 |
550-599 | [1] | 16,714 | 21,361 |
500-549 | [1] | 10,610 | 14,575 |
Under 500 | [1] | 4,708 | 6,306 |
Unknown | [1] | 3,733 | 4,075 |
Total | [1] | 279,625 | 279,186 |
Accrued interest included in total | [1] | 1,396 | 1,311 |
Mortgage [Member] | Resort Lending [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 13,943 | 14,484 |
750-799 | [1] | 40,888 | 45,950 |
700-749 | [1] | 31,980 | 32,660 |
650-699 | [1] | 17,433 | 20,250 |
600-649 | [1] | 4,991 | 6,538 |
550-599 | [1] | 3,070 | 3,639 |
500-549 | [1] | 1,051 | 2,156 |
Under 500 | [1] | 554 | 875 |
Unknown | [1] | 2,110 | 2,184 |
Total | [1] | 116,020 | 128,736 |
Accrued interest included in total | [1] | 477 | 562 |
Mortgage [Member] | Home Equity - 1st Lien [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 4,374 | 3,863 |
750-799 | [1] | 7,137 | 6,128 |
700-749 | [1] | 4,341 | 3,054 |
650-699 | [1] | 3,203 | 3,257 |
600-649 | [1] | 1,467 | 1,704 |
550-599 | [1] | 1,027 | 994 |
500-549 | [1] | 572 | 699 |
Under 500 | [1] | 244 | 261 |
Unknown | [1] | 199 | 242 |
Total | [1] | 22,564 | 20,202 |
Accrued interest included in total | [1] | 87 | 88 |
Mortgage [Member] | Home Equity - 2nd Lien [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 7,696 | 6,225 |
750-799 | [1] | 17,405 | 14,323 |
700-749 | [1] | 11,022 | 9,642 |
650-699 | [1] | 7,691 | 8,194 |
600-649 | [1] | 3,684 | 3,862 |
550-599 | [1] | 1,918 | 1,721 |
500-549 | [1] | 1,295 | 1,401 |
Under 500 | [1] | 265 | 632 |
Unknown | [1] | 282 | 674 |
Total | [1] | 51,258 | 46,674 |
Accrued interest included in total | [1] | 196 | 209 |
Mortgage [Member] | Purchased Loans [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 2,310 | 0 |
750-799 | [1] | 23,283 | 0 |
700-749 | [1] | 6,940 | 0 |
650-699 | [1] | 0 | 0 |
600-649 | [1] | 0 | 0 |
550-599 | [1] | 0 | 0 |
500-549 | [1] | 0 | 0 |
Under 500 | [1] | 0 | 0 |
Unknown | [1] | 724 | 0 |
Total | [1] | 33,257 | 0 |
Accrued interest included in total | [1] | 114 | 0 |
Installment [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 47,886 | 36,674 |
750-799 | [1] | 97,379 | 81,375 |
700-749 | [1] | 41,889 | 38,337 |
650-699 | [1] | 24,645 | 26,207 |
600-649 | [1] | 9,505 | 11,225 |
550-599 | [1] | 5,252 | 5,962 |
500-549 | [1] | 3,142 | 3,920 |
Under 500 | [1] | 1,001 | 1,303 |
Unknown | [1] | 1,598 | 2,044 |
Total | [1] | 232,297 | 207,047 |
Accrued interest included in total | [1] | 698 | 669 |
Installment [Member] | Home Equity - 1st Lien [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 1,792 | 2,272 |
750-799 | [1] | 4,117 | 5,677 |
700-749 | [1] | 2,507 | 3,111 |
650-699 | [1] | 3,508 | 3,963 |
600-649 | [1] | 2,173 | 3,434 |
550-599 | [1] | 1,800 | 2,019 |
500-549 | [1] | 1,056 | 1,128 |
Under 500 | [1] | 223 | 393 |
Unknown | [1] | 59 | 77 |
Total | [1] | 17,235 | 22,074 |
Accrued interest included in total | [1] | 78 | 93 |
Installment [Member] | Home Equity - 2nd Lien [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 1,782 | 2,835 |
750-799 | [1] | 5,931 | 8,557 |
700-749 | [1] | 3,899 | 6,358 |
650-699 | [1] | 4,182 | 5,477 |
600-649 | [1] | 2,153 | 2,408 |
550-599 | [1] | 1,346 | 1,913 |
500-549 | [1] | 855 | 1,036 |
Under 500 | [1] | 370 | 427 |
Unknown | [1] | 32 | 81 |
Total | [1] | 20,550 | 29,092 |
Accrued interest included in total | [1] | 83 | 112 |
Installment [Member] | Loans Not Secured By Real Estate [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 44,254 | 31,507 |
750-799 | [1] | 86,800 | 66,558 |
700-749 | [1] | 34,789 | 28,179 |
650-699 | [1] | 16,456 | 16,152 |
600-649 | [1] | 4,979 | 5,128 |
550-599 | [1] | 1,997 | 1,896 |
500-549 | [1] | 1,170 | 1,672 |
Under 500 | [1] | 385 | 455 |
Unknown | [1] | 1,503 | 1,842 |
Total | [1] | 192,333 | 153,389 |
Accrued interest included in total | [1] | 520 | 445 |
Installment [Member] | Other [Member] | |||
Loan ratings/credit scores by loan class [Abstract] | |||
800 and above | [1] | 58 | 60 |
750-799 | [1] | 531 | 583 |
700-749 | [1] | 694 | 689 |
650-699 | [1] | 499 | 615 |
600-649 | [1] | 200 | 255 |
550-599 | [1] | 109 | 134 |
500-549 | [1] | 61 | 84 |
Under 500 | [1] | 23 | 28 |
Unknown | [1] | 4 | 44 |
Total | [1] | 2,179 | 2,492 |
Accrued interest included in total | [1] | 17 | 19 |
AM Best Rating A+ [Member] | |||
Credit ratings of insurer or risk retention group counterparties [Abstract] | |||
Payment Plan Receivables, Full Refund | 0 | 0 | |
Payment Plan Receivables, Partial Refund | 6 | 43 | |
Payment Plan Receivables, Other | 0 | 0 | |
Total | 6 | 43 | |
AM Best Rating, A Ratings [Member] | |||
Credit ratings of insurer or risk retention group counterparties [Abstract] | |||
Payment Plan Receivables, Full Refund | 2,712 | 10,007 | |
Payment Plan Receivables, Partial Refund | 5,203 | 6,190 | |
Payment Plan Receivables, Other | 0 | 0 | |
Total | 7,915 | 16,197 | |
AM Best Rating, A- Rating [Member] | |||
Credit ratings of insurer or risk retention group counterparties [Abstract] | |||
Payment Plan Receivables, Full Refund | 3,418 | 1,989 | |
Payment Plan Receivables, Partial Refund | 1,177 | 685 | |
Payment Plan Receivables, Other | 6,265 | 5,054 | |
Total | 10,860 | 7,728 | |
Not Rated [Member] | |||
Credit ratings of insurer or risk retention group counterparties [Abstract] | |||
Payment Plan Receivables, Full Refund | 15,720 | 15,857 | |
Payment Plan Receivables, Partial Refund | 93 | 176 | |
Payment Plan Receivables, Other | 5 | 0 | |
Total | $ 15,818 | $ 16,033 | |
[1] | Credit scores have been updated within the last twelve months. |
LOANS AND PAYMENT PLAN RECEIV67
LOANS AND PAYMENT PLAN RECEIVABLES, Loans Serviced for Others (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)QuarterPSARate | Dec. 31, 2014USD ($)PSARate | Dec. 31, 2013USD ($) | |
Mortgage loans serviced for others [Abstract] | |||
Mortgage loans serviced | $ 1,644,325 | $ 1,662,800 | |
Custodial Escrow Balances | $ 21,800 | 20,900 | |
Maximum number of consecutive quarterly losses recorded for profitability requirement | Quarter | 4 | ||
Percentage of decline in net worth during the period | 30.00% | ||
Maximum percentage of decline in net worth for one consecutive quarter | 25.00% | ||
Maximum percentage of decline in net worth for two consecutive quarters | 40.00% | ||
Highest level of capital, Amount | $ 2,500 | ||
Highest level of capital | 0.25% | ||
Analysis of capitalized mortgage loan servicing rights [Abstract] | |||
Balance at beginning of year | $ 12,106 | 13,710 | $ 11,013 |
Originated servicing rights capitalized | 2,697 | 1,823 | 3,210 |
Amortization | (2,868) | (2,509) | (3,745) |
Change in valuation allowance | 501 | (918) | 3,232 |
Balance at end of year | 12,436 | 12,106 | 13,710 |
Valuation allowance | 3,272 | 3,773 | 2,855 |
Loans sold and serviced that have had servicing rights capitalized | 1,643,086 | 1,661,269 | $ 1,732,476 |
Fair value of capitalized mortgage loan servicing rights | $ 12,900 | $ 12,600 | |
Average coupon rate | 4.32% | 4.44% | |
Average servicing fee | 0.254% | 0.253% | |
Average discount rate | 10.04% | 10.07% | |
Average PSA Rate | PSARate | 203 | 200 | |
Fannie Mae [Member] | |||
Mortgage loans serviced for others [Abstract] | |||
Mortgage loans serviced | $ 898,443 | $ 913,863 | |
Freddie Mac [Member] | |||
Mortgage loans serviced for others [Abstract] | |||
Mortgage loans serviced | 707,891 | 748,833 | |
Ginnie Mae [Member] | |||
Mortgage loans serviced for others [Abstract] | |||
Mortgage loans serviced | 37,884 | 0 | |
Other [Member] | |||
Mortgage loans serviced for others [Abstract] | |||
Mortgage loans serviced | $ 107 | $ 104 |
OTHER REAL ESTATE OWNED (Detail
OTHER REAL ESTATE OWNED (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Other Real Estate [Roll Forward] | ||||
Balance at beginning of year, net of valuation allowance | [1] | $ 6,370 | $ 18,088 | $ 25,748 |
Loans transferred to other real estate owned | [1] | 6,694 | 6,143 | 6,932 |
Sales of other real estate owned | [1] | (5,502) | (17,198) | (11,994) |
Additions to valuation allowance charged to expense | [1] | (492) | (663) | (2,598) |
Balance at end of year, net of valuation allowance | [1] | 7,070 | 6,370 | 18,088 |
Real Estate Owned Valuation Allowance [Roll Forward] | ||||
Balance at beginning of year | 2,511 | 4,047 | 5,958 | |
Additions charged to expense | 492 | 663 | 2,598 | |
Direct write-downs upon sale | (1,311) | (2,199) | (4,509) | |
Balance at end of year | 1,692 | 2,511 | $ 4,047 | |
Other repossessed assets | 800 | 800 | ||
Foreclosed residential real estate | 2,800 | 2,900 | ||
Mortgage loans in process of foreclosure | 1,100 | 2,500 | ||
Other real estate and repossessed assets | $ 7,150 | $ 6,454 | ||
[1] | Table excludes other repossessed assets totaling $0.08 million at both December 31, 2015 and 2014, respectively. |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | $ 152,632 | $ 154,199 | |
Accumulated depreciation and amortization | (109,529) | (108,251) | |
Property and equipment, Net | 43,103 | 45,948 | |
Depreciation expense | 6,600 | 6,700 | $ 6,700 |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 15,152 | 14,904 | |
Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 57,638 | 59,486 | |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | $ 79,842 | $ 79,809 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible assets, net of amortization [Abstract] | |||
Intangible amortization expense | $ 300 | $ 500 | $ 800 |
Core Deposits [Member] | |||
Intangible assets, net of amortization [Abstract] | |||
Gross Carrying Amount | 6,118 | 6,118 | |
Accumulated Amortization | 3,838 | $ 3,491 | |
Summary of estimated core deposit intangible amortization [Abstract] | |||
2,016 | 347 | ||
2,017 | 346 | ||
2,018 | 346 | ||
2,019 | 346 | ||
2,020 | 346 | ||
2021 and thereafter | 549 | ||
Total | $ 2,280 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of interest expense on deposits [Abstract] | |||
Savings and interest bearing checking | $ 1,056 | $ 1,064 | $ 1,131 |
Time deposits under $100,000 | 1,586 | 2,467 | 2,995 |
Time deposits of $100,000 or more | 1,367 | 1,436 | 1,580 |
Total | 4,009 | 4,967 | $ 5,706 |
Time Deposits in denominations of 250,000 or more amounted | 110,400 | 42,800 | |
Summary of the maturity of time deposits [Abstract] | |||
2,016 | 302,136 | ||
2,017 | 66,288 | ||
2,018 | 27,367 | ||
2,019 | 15,432 | ||
2,020 | 11,763 | ||
2021 and thereafter | 3,234 | ||
Total | 426,220 | ||
Time deposits acquired through broker relationships | 0 | 11,300 | |
Summary of reciprocal deposits [Abstract] | |||
Demand | 3,436 | 5,867 | |
Money market | 8,340 | 7,692 | |
Time | 38,431 | 40,109 | |
Total | $ 50,207 | $ 53,668 |
OTHER BORROWINGS (Details)
OTHER BORROWINGS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of other borrowings [Abstract] | |||
Advances from the FHLB | $ 11,949 | $ 12,464 | |
Other | 5 | 6 | |
Total | $ 11,954 | 12,470 | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | |||
Federal home loan bank, advances, interest rate, minimum | 135.00% | ||
Federal home loan bank, advances, interest rate, maximum | 174.00% | ||
Federal home loan bank stock | $ 7,800 | ||
Unused borrowing capacity with FHLB | 179,600 | ||
Interest expense on FHLB advances | 800 | 900 | $ 1,100 |
FHLB advances terminated with no gain or loss | $ 0 | 0 | $ 0 |
FHLB stock as percentages of unpaid principal balance | 1.00% | ||
FHLB stock as percentages of outstanding advances | 5.00% | ||
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | |||
Total FHLB advances, Amount | $ 11,949 | 12,464 | |
Summary of repayments of FHLB Advances [Abstract] | |||
Available for sale and loans, pledged to secure other borrowings | 781,800 | ||
Fixed-Rate Advances [Member] | |||
Summary of other borrowings [Abstract] | |||
Advances from the FHLB | 11,949 | 12,464 | |
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | |||
2016, Amount | 2,089 | 2,205 | |
2017, Amount | 1,258 | 1,320 | |
2018, Amount | 5,437 | 5,671 | |
2019, Amount | 0 | 0 | |
2020, Amount | 3,165 | 3,268 | |
Total FHLB advances, Amount | $ 11,949 | $ 12,464 | |
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate of Amounts Due [Abstract] | |||
2016, Rate | 6.55% | 6.55% | |
2017, Rate | 7.04% | 7.04% | |
2018, Rate | 5.99% | 5.99% | |
2020, Rate | 7.49% | 7.49% | |
Total FHLB advances, Rate | 6.59% | 6.59% | |
Federal Reserve Bank Advances [Member] | |||
Short-term Debt [Line Items] | |||
Unused borrowing capacity with the FRB | $ 307,700 | ||
Advances from Federal Home Loan Bank ("FHLB") [Member] | |||
Summary of repayments of FHLB Advances [Abstract] | |||
2,016 | 2,521 | ||
2,017 | 1,587 | ||
2,018 | 5,042 | ||
2,019 | 143 | ||
2,020 | 2,656 | ||
Total | $ 11,949 |
SUBORDINATED DEBENTURES (Detail
SUBORDINATED DEBENTURES (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)Quarter | Dec. 31, 2014USD ($) | |
SUBORDINATED DEBENTURES [Abstract] | ||
Trust preferred securities | $ 34,500 | $ 34,500 |
Summary of information regarding subordinated debentures [Abstract] | ||
Subordinated Debentures | $ 35,569 | $ 35,569 |
Summary of subordinated debentures and trust preferred securities [Abstract] | ||
Distribution deferral period, maximum quarters | Quarter | 20 | |
Maximum period within which issuance costs have been capitalized and amortized on straight line basis | 30 years | |
IBC Capital Finance III [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Issue Date | May 30, 2007 | May 30, 2007 |
Summary of subordinated debentures and trust preferred securities [Abstract] | ||
Maturity Date | Jul. 30, 2037 | Jul. 30, 2037 |
Interest Rate | 3 month LIBOR plus 1.60% | 3 month LIBOR plus 1.60% |
First Permitted Redemption Date | Jul. 30, 2012 | Jul. 30, 2012 |
Interest Rate Spread | 1.60% | 1.60% |
IBC Capital Finance IV [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Issue Date | Sep. 30, 2007 | Sep. 30, 2007 |
Summary of subordinated debentures and trust preferred securities [Abstract] | ||
Maturity Date | Sep. 15, 2037 | Sep. 15, 2037 |
Interest Rate | 3 month LIBOR plus 2.85% | 3 month LIBOR plus 2.85% |
First Permitted Redemption Date | Sep. 15, 2012 | Sep. 15, 2012 |
Interest Rate Spread | 2.85% | 2.85% |
Redemptions of trust preferred securities at par value | $ 5,000 | |
Trust preferred securities redeemed at discount | $ 500 | |
Midwest Guaranty Trust I [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Issue Date | Nov. 30, 2002 | Nov. 30, 2002 |
Summary of subordinated debentures and trust preferred securities [Abstract] | ||
Maturity Date | Nov. 7, 2032 | Nov. 7, 2032 |
Interest Rate | 3 month LIBOR plus 3.45% | 3 month LIBOR plus 3.45% |
First Permitted Redemption Date | Nov. 7, 2007 | Nov. 7, 2007 |
Interest Rate Spread | 3.45% | 3.45% |
Subordinated Debentures Subject to Mandatory Redemption [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Subordinated Debentures | $ 35,569 | $ 35,569 |
Subordinated Debentures Subject to Mandatory Redemption [Member] | IBC Capital Finance III [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Subordinated Debentures | 12,372 | 12,372 |
Subordinated Debentures Subject to Mandatory Redemption [Member] | IBC Capital Finance IV [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Subordinated Debentures | 15,465 | 15,465 |
Subordinated Debentures Subject to Mandatory Redemption [Member] | Midwest Guaranty Trust I [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Subordinated Debentures | 7,732 | 7,732 |
Trust Preferred Securities Subject to Mandatory Redemption [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Trust Preferred Securities Issued | 34,500 | 34,500 |
Trust Preferred Securities Subject to Mandatory Redemption [Member] | IBC Capital Finance III [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Trust Preferred Securities Issued | 12,000 | 12,000 |
Trust Preferred Securities Subject to Mandatory Redemption [Member] | IBC Capital Finance IV [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Trust Preferred Securities Issued | 15,000 | 15,000 |
Trust Preferred Securities Subject to Mandatory Redemption [Member] | Midwest Guaranty Trust I [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Trust Preferred Securities Issued | 7,500 | 7,500 |
Common Stock Subject to Mandatory Redemption [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Common Stock Issued | 1,069 | 1,069 |
Common Stock Subject to Mandatory Redemption [Member] | IBC Capital Finance III [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Common Stock Issued | 372 | 372 |
Common Stock Subject to Mandatory Redemption [Member] | IBC Capital Finance IV [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Common Stock Issued | 465 | 465 |
Common Stock Subject to Mandatory Redemption [Member] | Midwest Guaranty Trust I [Member] | ||
Summary of information regarding subordinated debentures [Abstract] | ||
Common Stock Issued | $ 232 | $ 232 |
COMMITMENTS AND CONTINGENT LI74
COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loss Contingencies [Line Items] | ||||||
Aggregate amount of counterparty obligations | $ 7,237 | $ 7,237 | $ 18,449 | $ 7,229 | $ 7,237 | $ 7,716 |
VSC counterparty contingency expense | 119 | 199 | 4,837 | |||
Loss reimbursement on sold loans | (59) | (466) | 2,152 | |||
Reserve for loss reimbursements on sold mortgage loans | 500 | 700 | ||||
Vehicle service contract counterparty receivable [Roll Forward] | ||||||
Balance at beginning of year, net of reserve | 7,237 | 7,716 | 18,449 | |||
Transfers in from payment plan receivables | 1,203 | 180 | 792 | |||
Reserves established and charge-offs recorded to expense | (119) | (199) | (4,837) | |||
Transferred to (from) contingency reserves | 0 | (75) | 63 | |||
Cash received | (1,092) | (385) | (6,751) | |||
Balance at end of year, net of reserve | 7,229 | 7,237 | 7,716 | |||
Reserve at end of year | 56 | 1,370 | 1,300 | |||
Vehicle service contract counterparty reserve [Roll Forward] | ||||||
Balance at beginning of year | 1,370 | 1,375 | 2,012 | |||
Additions charged to expense | 119 | 199 | 4,837 | |||
Charge-offs, net | (1,433) | (204) | (5,474) | |||
Balance at end of year | $ 56 | 1,370 | 1,375 | |||
Reserves recorded in VSC counterparty receivables, net | 56 | 1,370 | 1,300 | |||
Reserves recorded in accrued expenses and other liabilities | 0 | 0 | 75 | |||
Total at end of year | 56 | 1,370 | $ 1,375 | |||
Fannie Mae [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Loss reimbursement on sold loans | 1,500 | |||||
Pending Litigation [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Maximum range of reasonably possible loss | 1,000 | |||||
Accounts Receivables Due to Mepco [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Installment payments period for service contract, minimum | 12 months | |||||
Installment payments period for service contract, maximum | 24 months | |||||
Aggregate amount of counterparty obligations | $ 7,200 | 7,200 | 7,200 | 7,200 | ||
VSC counterparty contingency expense | 100 | 200 | $ 4,800 | |||
Vehicle service contract counterparty receivable [Roll Forward] | ||||||
Balance at beginning of year, net of reserve | 7,200 | |||||
Balance at end of year, net of reserve | $ 7,200 | $ 7,200 | ||||
Commitments to Extend Credit [Member] | ||||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||||||
Financial instruments risk represented by contract amounts | 243,458 | 204,827 | ||||
Standby Letters of Credit [Member] | ||||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||||||
Financial instruments risk represented by contract amounts | $ 3,582 | $ 2,757 | ||||
Standby Letters of Credit [Member] | Minimum [Member] | ||||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||||||
Variable interest rate | 2.75% | |||||
Standby Letters of Credit [Member] | Maximum [Member] | ||||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||||||
Variable interest rate | 8.25% |
SHAREHOLDERS' EQUITY AND INCO75
SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 15, 2011 | Sep. 30, 2013 | Aug. 31, 2013 | Jul. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 21, 2015 | Aug. 30, 2013 | |
Class of Stock [Line Items] | |||||||||||
Stock repurchased (in shares) | 967,199 | ||||||||||
Stock repurchased | $ 13,498 | ||||||||||
Series B Preferred Stock issued (in shares) | 0 | 0 | |||||||||
Shares issued during period (in shares) | 39,610 | 30,828 | 13,604,963 | ||||||||
Shares issued value during period | $ 112 | $ 97 | $ 99,075 | ||||||||
Net proceeds from the issuance of common stock | 112 | 97 | 98,066 | ||||||||
Shareholders with certain limited exceptions | 5.00% | ||||||||||
Number of Series C Junior Participating Preferred Stock purchase by each right | 1/1000 | ||||||||||
Beneficial Ownership Level | 4.99% | ||||||||||
Discount to current market price of the common stock | 50.00% | ||||||||||
Earnings Per Share Reconciliation [Abstract] | |||||||||||
Net income applicable to common stock | 20,017 | 18,021 | 82,062 | ||||||||
Convertible preferred stock dividends | 0 | 0 | 3,001 | ||||||||
Preferred stock discount | 0 | 0 | (7,554) | ||||||||
Net income applicable to common stock for calculation of diluted earnings per share | $ 20,017 | $ 18,021 | $ 77,509 | ||||||||
Weighted average shares outstanding (in shares) | [1] | 22,716,000 | 22,927,000 | 13,970,000 | |||||||
Restricted stock units (in shares) | 233,000 | 306,000 | 363,000 | ||||||||
Effect of stock options (in shares) | 119,000 | 124,000 | 92,000 | ||||||||
Stock units for deferred compensation plan for non-employee directors (in shares) | 112,000 | 114,000 | 125,000 | ||||||||
Effect of convertible preferred stock (in shares) | 0 | 0 | 7,314,000 | ||||||||
Weighted average shares outstanding for calculation of diluted earnings per share (in shares) | 23,180,000 | 23,471,000 | 21,864,000 | ||||||||
Net income per common share [Abstract] | |||||||||||
Basic (in dollars per share) | [1] | $ 0.88 | $ 0.79 | $ 5.87 | |||||||
Diluted (in dollars per share) | $ 0.86 | $ 0.77 | $ 3.55 | ||||||||
Series B Preferred Stock [Member] | Amended and Restated Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Series B Preferred Stock issued (in shares) | 74,426 | ||||||||||
Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock repurchase program percentage of shares authorized to be repurchased | 5.00% | ||||||||||
Stock repurchased (in shares) | 967,199 | ||||||||||
Stock repurchased | $ 13,500 | ||||||||||
Shares issued during period (in shares) | 1,725,000 | 11,500,000 | |||||||||
Shares issued value during period | $ 13,400 | $ 89,100 | |||||||||
Net proceeds from the issuance of common stock | $ 97,100 | ||||||||||
Common Stock [Member] | Amended and Restated Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Amended warrants expiration date | Dec. 12, 2018 | ||||||||||
UST [Member] | Amended and Restated Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Book balance | $ 1,500 | ||||||||||
Discount | 100 | ||||||||||
UST [Member] | Series B Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Liquidation preference (in dollars per share) | $ 1,000 | ||||||||||
Book balance | 87,200 | ||||||||||
Discount | 7,600 | ||||||||||
UST [Member] | Series B Preferred Stock [Member] | Amended and Restated Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Amount agreed under securities purchase agreement | $ 81,000 | ||||||||||
Discount | $ 7,700 | ||||||||||
UST [Member] | Common Stock [Member] | Amended and Restated Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Warrants issued to purchase common stock (in shares) | 346,154 | ||||||||||
Warrants, exercise price (in dollars per share) | $ 7.234 | ||||||||||
Stock Options [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive shares excluded from computation of diluted loss per share (in shares) | 30,000 | 30,000 | 100,000 | ||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 30,000 | 30,000 | 100,000 | ||||||||
Warrant [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive shares excluded from computation of diluted loss per share (in shares) | 346,154 | ||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 346,154 | ||||||||||
[1] | Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards. |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income tax expense (benefit) [Abstract] | ||||
Current | $ 200 | $ (359) | $ (277) | |
Deferred | 9,128 | 7,672 | 0 | |
Disproportionate tax effect | 0 | 0 | 1,444 | |
Valuation allowance - change in estimate | 35 | (118) | (56,018) | |
Income tax expense (benefit) | $ 1,400 | $ 9,363 | 7,195 | (54,851) |
Statutory federal income tax rate | 35.00% | |||
Reconciliation of income tax benefit [Abstract] | ||||
Statutory rate applied to income before income tax | $ 10,283 | 8,826 | 7,930 | |
Bank owned life insurance | (449) | (480) | (477) | |
Tax-exempt income | (434) | (522) | (402) | |
Unrecognized tax benefit | (135) | (595) | (186) | |
Non-deductible meals, entertainment and memberships | 43 | 53 | 55 | |
Net change in valuation allowance | 35 | (118) | (63,980) | |
Disproportionate tax effect | 0 | 0 | 1,444 | |
U.S. Treasury warrant | 0 | 0 | 359 | |
Share-based compensation | 0 | 0 | 8 | |
Other, net | 20 | 31 | 398 | |
Income tax expense (benefit) | 1,400 | 9,363 | 7,195 | (54,851) |
Reversal of valuation allowance on net deferred tax assets | $ 57,600 | |||
Deferred tax assets [Abstract] | ||||
Loss carryforwards | 25,516 | 32,933 | ||
Allowance for loan losses | 7,901 | 9,099 | ||
Alternative minimum tax credit carry forward | 3,427 | 3,037 | ||
Property and equipment | 3,369 | 3,239 | ||
Purchase premiums, net | 1,755 | 2,050 | ||
Share based payments | 786 | 684 | ||
Valuation allowance on other real estate | 592 | 879 | ||
Unrealized loss on trading securities | 578 | 559 | ||
Deferred compensation | 404 | 448 | ||
Other than temporary impairment charge on securities available for sale | 382 | 436 | ||
Non accrual loan interest income | 232 | 244 | ||
Reserve for unfunded lending commitments | 228 | 189 | ||
Loss reimbursement on sold loans reserve | 186 | 242 | ||
Unrealized loss on securities available for sale | 128 | 0 | ||
Vehicle service contract counterparty contingency reserve | 21 | 521 | ||
Gross deferred tax assets | 45,505 | 54,560 | ||
Valuation allowance | (1,054) | (1,019) | ||
Total net deferred tax assets | 44,451 | 53,541 | ||
Deferred tax liabilities [Abstract] | ||||
Capitalized mortgage loan servicing rights | 4,353 | 4,237 | ||
Deferred loan fees | 256 | 260 | ||
Federal Home Loan Bank stock | 45 | 196 | ||
Unrealized gain on securities available for sale | 0 | 87 | ||
Other | 162 | 129 | ||
Gross deferred tax liabilities | 4,816 | 4,909 | ||
Net deferred tax assets | 39,635 | 48,632 | ||
Operating loss carryforwards [Abstract] | ||||
2,030 | 18,496 | |||
2,031 | 17,170 | |||
2,032 | 37,739 | |||
Total | 73,405 | |||
Changes in unrecognized tax benefits [Roll Forward] | ||||
Balance at beginning of year | 1,091 | 1,672 | 1,871 | |
Additions based on tax positions related to the current year | 20 | 18 | 11 | |
Reductions due to the statute of limitations | (135) | (595) | (186) | |
Reductions due to settlements | 0 | (4) | (24) | |
Balance at end of year | 976 | 1,091 | 1,672 | |
State income tax expense (benefit) | (100) | 0 | (200) | |
Unrecognized tax benefits of effective tax rate | 300 | |||
Penalties and interest expense | 0 | 0 | 0 | |
Penalties and interest accrued | 0 | 0 | $ 0 | |
NOL Unrealized excess benefits on share-based compensation | 3,400 | |||
Minimum tax credit carryforwards with indefinite lives | $ 3,400 | |||
Open tax year | 2,012 | |||
Mepco [Member] | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance against deferred tax assets attributable to Mepco | $ 1,100 | $ 1,000 |
SHARE BASED COMPENSATION AND 77
SHARE BASED COMPENSATION AND BENEFIT PLANS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share based compensation arrangements [Line Items] | |||
Number of additional shares approved for grant (in shares) | 300,000 | ||
Total compensation cost not yet recognized | $ 1,500 | ||
Total compensation cost not yet recognized, period for recognition | 1 year 7 months 6 days | ||
Number of Shares [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 407,130 | ||
Granted (in shares) | 108,761 | ||
Vested (in shares) | (249,526) | ||
Forfeited (in shares) | (4,384) | ||
Outstanding, ending balance (in shares) | 261,981 | 407,130 | |
Weighted-Average Grant Date Fair Value [Roll Forward] | |||
Outstanding, beginning balance (in dollars per share) | $ 6.31 | ||
Granted (in dollars per share) | 13.07 | ||
Vested (in dollars per share) | 3.92 | ||
Forfeited (in dollars per share) | 12.88 | ||
Outstanding, ending balance (in dollars per share) | $ 11.29 | $ 6.31 | |
Summary of weighted-average assumptions used in Black-Scholes option pricing model for grants of stock options [Abstract] | |||
Expected dividend yield | 0.31% | ||
Risk-free interest rate | 1.12% | ||
Expected life | 6 years | ||
Expected volatility | 101.30% | ||
Per share weighted-average fair value (in dollars per share) | $ 4.98 | ||
Information regarding options exercised [Abstract] | |||
Intrinsic value | $ 444 | $ 321 | $ 117 |
Cash proceeds received | 137 | 96 | 39 |
Tax benefit realized | $ 155 | $ 112 | $ 0 |
Maximum matching contribution, percent | 6.00% | ||
Employee matching contribution, percentage | 50.00% | 100.00% | 100.00% |
Maximum contribution of employees' eligible wages | 4.00% | 2.00% | 1.00% |
Employee stock ownership plan (ESOP), contributions | 2.00% | 2.00% | 3.00% |
401(k) and employee stock ownership plans amount expensed | $ 1,200 | $ 1,000 | $ 1,200 |
Performance-based compensation expense | 5,700 | 4,200 | 5,000 |
Health care and life insurance expense | 3,600 | 3,900 | 3,800 |
Long-term incentive plan [Member] | |||
Share based compensation arrangements [Line Items] | |||
Total compensation expense (recovery) recognized | 1,400 | 1,000 | 900 |
Tax benefit relating to compensation expense recognized | $ 500 | $ 400 | $ 0 |
Stock Options [Member] | |||
Number of Shares [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 281,820 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (42,204) | ||
Forfeited (in shares) | (2,096) | ||
Expired (in shares) | (1,924) | ||
Outstanding, ending balance (in shares) | 235,596 | 281,820 | |
Vested and expected to vest, period end (in shares) | 234,949 | ||
Exercisable, period end (in shares) | 213,154 | ||
Average Exercise Price [Roll Forward] | |||
Outstanding, beginning balance (in dollars per share) | $ 4.69 | ||
Exercised (in dollars per share) | 3.25 | ||
Forfeited (in dollars per share) | 4.77 | ||
Expired (in dollars per share) | 6.79 | ||
Outstanding, ending balance (in dollars per share) | 4.94 | $ 4.69 | |
Vested and expected to vest, period end (in dollars per share) | 4.93 | ||
Exercisable, period end (in dollars per share) | $ 4.78 | ||
Weighted-Average Remaining Contractual Term (Years) [Abstract] | |||
Outstanding, Weighted-Average Remaining Contractual Term | 6 years 1 month 13 days | ||
Vested and Expected to Vest, Weighted-Average Remaining Contractual Term | 6 years 1 month 10 days | ||
Exercisable, Weighted-Average Remaining Contractual Term | 5 years 11 months 23 days | ||
Aggregate Intrinsic Value [Abstract] | |||
Outstanding, Aggregate Intrinsic Value | $ 2,443 | ||
Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 2,437 | ||
Exercisable, Aggregate Intrinsic Value | $ 2,245 | ||
Director [Member] | |||
Share based compensation arrangements [Line Items] | |||
Shares issues as retainer fees (in shares) | 10,000 | 10,000 | 60,000 |
President [Member] | |||
Share based compensation arrangements [Line Items] | |||
Salary stock | $ 0 | $ 0 | $ 20 |
Executive Officers [Member] | Restricted Stock [Member] | Long-term incentive plan [Member] | |||
Share based compensation arrangements [Line Items] | |||
Number of restricted stock units issued to executive officers (in shares) | 70,000 | 70,000 | 100,000 |
Vesting period | 3 years | 3 years | 3 years |
Executive Officers [Member] | Performance stock units [Member] | Long-term incentive plan [Member] | |||
Share based compensation arrangements [Line Items] | |||
Number of restricted stock units issued to executive officers (in shares) | 30,000 | 30,000 | |
Vesting period | 3 years | 3 years | |
Senior Officers [Member] | Stock Options [Member] | Long-term incentive plan [Member] | |||
Share based compensation arrangements [Line Items] | |||
Vesting period | 3 years | ||
Number of stock options issued to officers (in shares) | 100,000 | ||
Expire period from date of grant of stock option | 10 years | ||
Non-Employee Directors [Member] | |||
Share based compensation arrangements [Line Items] | |||
Number of additional shares approved for grant (in shares) | 200,000 | ||
Total compensation expense (recovery) recognized | $ 100 | $ 200 | $ 300 |
Tax benefit relating to compensation expense recognized | $ 30 | $ 100 | $ 0 |
OTHER NON-INTEREST INCOME (Deta
OTHER NON-INTEREST INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
OTHER NON-INTEREST INCOME [Abstract] | |||
Investment and insurance commissions | $ 1,827 | $ 1,814 | $ 1,709 |
ATM fees | 1,551 | 1,599 | 1,661 |
Bank owned life insurance | 1,282 | 1,371 | 1,363 |
Other real estate rental income | 128 | 1,295 | 1,471 |
Other | 2,904 | 2,852 | 2,333 |
Total other non-interest income | $ 7,692 | $ 8,931 | $ 8,537 |
DERIVATIVE FINANCIAL INSTRUME79
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 16, 2013 | |
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Termination fee | $ 600 | ||||
Completed securities trade | $ 13,000 | ||||
Fair value of amended warrant was reclassified into shareholders' equity | $ 1,500 | ||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Asset Derivatives | $ 1,238 | $ 619 | |||
Liability Derivatives | 619 | 366 | |||
No Hedge Designation [Member] | |||||
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Notional Amount | $ 126,271 | $ 61,959 | |||
Average Maturity | 3 years 8 months 12 days | 1 year 1 month 6 days | |||
Fair Value | $ 619 | $ 253 | |||
No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member] | |||||
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Notional Amount | $ 20,581 | $ 16,759 | |||
Average Maturity | 1 month 6 days | 1 month 6 days | |||
Fair Value | $ 550 | $ 437 | |||
No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member] | |||||
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Notional Amount | $ 46,320 | $ 38,600 | |||
Average Maturity | 1 month 6 days | 1 month 6 days | |||
Fair Value | $ 69 | $ (184) | |||
No Hedge Designation [Member] | Purchased Options [Member] | |||||
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Notional Amount | $ 2,098 | ||||
Average Maturity | 5 years 8 months 12 days | ||||
Fair Value | $ 122 | ||||
No Hedge Designation [Member] | Written Options [Member] | |||||
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Notional Amount | $ 2,098 | ||||
Average Maturity | 5 years 8 months 12 days | ||||
Fair Value | $ (122) | ||||
Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | |||||
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Notional Amount | $ 27,587 | $ 3,300 | |||
Average Maturity | 8 years | 9 years 4 months 24 days | |||
Fair Value | $ (497) | $ (182) | |||
Variable Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | |||||
Derivative financial instrument according to type of hedge[ Abstract] | |||||
Notional Amount | $ 27,587 | $ 3,300 | |||
Average Maturity | 8 years | 9 years 4 months 24 days | |||
Fair Value | $ 497 | $ 182 | |||
Other Assets [Member] | No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Asset Derivatives | 550 | 437 | |||
Other Assets [Member] | No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Asset Derivatives | 69 | 0 | |||
Other Assets [Member] | No Hedge Designation [Member] | Purchased Options [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Asset Derivatives | 122 | 0 | |||
Other Assets [Member] | No Hedge Designation [Member] | Written Options [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Asset Derivatives | 0 | 0 | |||
Other Assets [Member] | Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Asset Derivatives | 0 | 0 | |||
Other Assets [Member] | Variable Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Asset Derivatives | 497 | 182 | |||
Other Liabilities [Member] | No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Liability Derivatives | 0 | 0 | |||
Other Liabilities [Member] | No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Liability Derivatives | 0 | 184 | |||
Other Liabilities [Member] | No Hedge Designation [Member] | Purchased Options [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Liability Derivatives | 0 | 0 | |||
Other Liabilities [Member] | No Hedge Designation [Member] | Written Options [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Liability Derivatives | 122 | 0 | |||
Other Liabilities [Member] | Fixed Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Liability Derivatives | 497 | 182 | |||
Other Liabilities [Member] | Variable Income Interest Rate [Member] | No Hedge Designation [Member] | Interest Rate Swap [Member] | |||||
Fair value of derivative instruments, balance sheet location [Abstract] | |||||
Liability Derivatives | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME80
DERIVATIVE FINANCIAL INSTRUMENTS, Effect on Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Cash Flow Hedge [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Loss Recognized in Other Comprehensive Income (Loss) (Effective Portion) | $ 0 | $ 0 | $ (37) | |
Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | 0 | (380) | (397) | |
Gain (Loss) Recognized in Income | [1] | 0 | 0 | 0 |
Cash Flow Hedge [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Loss Recognized in Other Comprehensive Income (Loss) (Effective Portion) | 0 | 0 | (37) | |
Cash Flow Hedge [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member] | Interest Expense [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | 0 | (380) | (397) | |
Gain (Loss) Recognized in Income | [1] | 0 | 0 | 0 |
No Hedge Designation [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | 366 | 54 | (1,777) |
No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member] | Mortgage Loan Gains [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | 113 | 71 | (1,002) |
No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member] | Mortgage Loan Gains [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | 253 | (312) | 250 |
No Hedge Designation [Member] | U.S. Treasury short position [Member] | Gain on securities [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | 0 | 295 | 0 |
No Hedge Designation [Member] | Amended Warrant [Member] | Decrease in Fair Value of U.S. Treasury Warrants [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | 0 | 0 | (1,025) |
No Hedge Designation [Member] | Purchased Options [Member] | Interest Expense [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | 122 | 0 | 0 |
No Hedge Designation [Member] | Written Options [Member] | Interest Expense [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | (122) | 0 | 0 |
No Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member] | Interest Income [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | (315) | (182) | 0 |
No Hedge Designation [Member] | Variable Income Interest Rate [Member] | Interest Rate Swap [Member] | Interest Income [Member] | ||||
Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract] | ||||
Gain (Loss) Recognized in Income | [1] | $ 315 | $ 182 | $ 0 |
[1] | For cash flow hedges, this location and amount refers to the ineffective portion. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Borrowing relationship exceeds level | $ 60,000 | |
Summary of loans and leases receivable [Roll Forward] | ||
Balance at beginning of year | 216,000 | $ 351,000 |
New loans and advances | 0 | 0 |
Repayments | (26,000) | (135,000) |
Balance at end of year | 190,000 | 216,000 |
Directors and executive officers deposit | $ 1,300,000 | $ 1,000,000 |
Minimum [Member] | ||
Related Party Transaction [Line Items] | ||
Related party entity ownership percentage | 10.00% |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of future minimum lease payments under non-cancelable operating leases [Abstract] | |||
2,016 | $ 1,054 | ||
2,017 | 862 | ||
2,018 | 809 | ||
2,019 | 720 | ||
2,020 | 666 | ||
2021 and thereafter | 253 | ||
Total | 4,364 | ||
Rental expense on operating leases | $ 1,200 | $ 1,300 | $ 1,200 |
CONCENTRATIONS OF CREDIT RISK (
CONCENTRATIONS OF CREDIT RISK (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Concentration Risk [Line Items] | ||
Payment plan receivables | $ 34,599 | $ 40,001 |
Residential Real Estate [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk loans receivable | 538,500 | |
Construction and Development Loans [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk loans receivable | 62,600 | |
Lessors of Nonresidential Real Estate [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk loans receivable | 259,100 | |
Lessors of Residential Real Estate [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk loans receivable | 82,100 | |
Health Care and Social Assistance [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk loans receivable | 67,800 | |
Construction General Contractors and Land Development [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk loans receivable | $ 54,400 | |
Service Contract 1 [Member] | ||
Concentration Risk [Line Items] | ||
Concentrations by insurance company | 42.40% | |
Concentration risk vehicle service | 62.20% | |
Service Contract 2 [Member] | ||
Concentration Risk [Line Items] | ||
Concentrations by insurance company | 24.00% | |
Concentration risk vehicle service | 11.70% | |
Service Contract 3 [Member] | ||
Concentration Risk [Line Items] | ||
Concentrations by insurance company | 15.00% | |
Concentration risk vehicle service | 9.40% | |
Service Contract 4 [Member] | ||
Concentration Risk [Line Items] | ||
Concentrations by insurance company | 7.80% | |
Concentration risk vehicle service | 5.40% | |
Service Contract 5 [Member] | ||
Concentration Risk [Line Items] | ||
Concentrations by insurance company | 3.70% | |
Concentration risk vehicle service | 3.80% |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) - USD ($) $ in Thousands | Feb. 13, 2015 | Mar. 28, 2014 | Dec. 31, 2015 | Feb. 17, 2015 | Dec. 31, 2014 | Apr. 09, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
REGULATORY MATTERS [Abstract] | ||||||||
Undivided profits | $ (10,100) | |||||||
Maximum percentage of allowance for loan losses and allowance for unfunded lending commitments | 1.25% | |||||||
Request for approval to transfer capital from bank to parent entity | $ 18,500 | $ 15,000 | ||||||
Transfer of capital from bank to the parent company | $ 18,500 | $ 15,000 | ||||||
Components of regulatory capital [Abstract] | ||||||||
Total shareholders' equity | $ 251,092 | $ 250,371 | $ 231,581 | $ 134,975 | ||||
Add (deduct) [Abstract] | ||||||||
Accumulated other comprehensive loss for regulatory purposes | (6,036) | (5,636) | ||||||
Intangible assets | (2,280) | (2,627) | ||||||
Consolidated [Member] | ||||||||
Total capital to risk-weighted assets [Abstract] | ||||||||
Total risk-based capital | 278,170 | 265,163 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | $ 133,668 | $ 117,427 | ||||||
Actual, Ratio | 16.65% | 18.06% | ||||||
Minimum for Adequately Capitalized Institutions, Ratio | 8.00% | 8.00% | ||||||
Tier 1 capital to risk-weighted assets [Abstract] | ||||||||
Actual, Amount | $ 257,050 | $ 246,628 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | $ 100,251 | $ 58,714 | ||||||
Actual, Ratio | 15.38% | 16.80% | ||||||
Minimum for Adequately Capitalized Institutions, Ratio | 6.00% | 4.00% | ||||||
Common equity tier 1 capital to risk-weighted assets [Abstract] | ||||||||
Actual, Amount | $ 239,271 | $ 212,128 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | $ 75,188 | |||||||
Actual, Ratio | 14.32% | |||||||
Minimum for Adequately Capitalized Institutions, Ratio | 4.50% | |||||||
Tier 1 capital to average assets [Abstract] | ||||||||
Tier 1 capital | $ 257,050 | 246,628 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | $ 94,217 | $ 88,206 | ||||||
Actual, Ratio | 10.91% | 11.18% | ||||||
Minimum for Adequately Capitalized Institutions, Ratio | 4.00% | 4.00% | ||||||
Components of regulatory capital [Abstract] | ||||||||
Total shareholders' equity | $ 251,092 | $ 250,371 | ||||||
Add (deduct) [Abstract] | ||||||||
Accumulated other comprehensive loss for regulatory purposes | 238 | 5,636 | ||||||
Intangible assets | (912) | (2,627) | ||||||
Disallowed deferred tax assets | (11,147) | (40,500) | ||||||
Disallowed capitalized mortgage loan servicing rights | 0 | (752) | ||||||
Common equity tier 1 capital | 239,271 | 212,128 | ||||||
Qualifying trust preferred securities | 34,500 | 34,500 | ||||||
Disallowed deferred tax assets | (16,721) | 0 | ||||||
Tier 1 capital | 257,050 | 246,628 | ||||||
Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets | 21,120 | 18,535 | ||||||
Total risk-based capital | 278,170 | 265,163 | ||||||
Independent Bank [Member] | ||||||||
Total capital to risk-weighted assets [Abstract] | ||||||||
Total risk-based capital | 261,894 | 247,883 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | 133,514 | 117,374 | ||||||
Minimum for Well Capitalized Institutions, Amount | $ 166,893 | $ 146,718 | ||||||
Actual, Ratio | 15.69% | 16.90% | ||||||
Minimum for Adequately Capitalized Institutions, Ratio | 8.00% | 8.00% | ||||||
Minimum for Well-Capitalized Institutions, Ratio | 10.00% | 10.00% | ||||||
Tier 1 capital to risk-weighted assets [Abstract] | ||||||||
Actual, Amount | $ 240,867 | $ 229,361 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | 100,136 | 58,687 | ||||||
Minimum for Well-Capitalized Institutions, Amount | $ 133,514 | $ 88,031 | ||||||
Actual, Ratio | 14.43% | 15.63% | ||||||
Minimum for Adequately Capitalized Institutions, Ratio | 6.00% | 4.00% | ||||||
Minimum for Well Capitalized Institutions, Ratio | 8.00% | 6.00% | ||||||
Common equity tier 1 capital to risk-weighted assets [Abstract] | ||||||||
Actual, Amount | $ 240,867 | $ 229,361 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | 75,102 | |||||||
Minimum for Well-Capitalized Institutions, Amount | $ 108,480 | |||||||
Actual, Ratio | 14.43% | |||||||
Minimum for Adequately Capitalized Institutions, Ratio | 4.50% | |||||||
Minimum for Well Capitalized Institutions, Ratio | 6.50% | |||||||
Tier 1 capital to average assets [Abstract] | ||||||||
Tier 1 capital | $ 240,867 | 229,361 | ||||||
Minimum for Adequately Capitalized Institutions, Amount | 94,145 | 87,687 | ||||||
Minimum for Well-Capitalized Institutions, Amount | $ 117,682 | $ 109,609 | ||||||
Actual, Ratio | 10.23% | 10.46% | ||||||
Minimum for Adequately Capitalized Institutions, Ratio | 4.00% | 4.00% | ||||||
Minimum for Well-Capitalized Institutions, Ratio | 5.00% | 5.00% | ||||||
Components of regulatory capital [Abstract] | ||||||||
Total shareholders' equity | $ 259,947 | $ 257,832 | ||||||
Add (deduct) [Abstract] | ||||||||
Accumulated other comprehensive loss for regulatory purposes | 238 | 5,636 | ||||||
Intangible assets | (912) | (2,627) | ||||||
Disallowed deferred tax assets | (18,406) | (30,728) | ||||||
Disallowed capitalized mortgage loan servicing rights | 0 | (752) | ||||||
Common equity tier 1 capital | 240,867 | 229,361 | ||||||
Qualifying trust preferred securities | 0 | 0 | ||||||
Disallowed deferred tax assets | 0 | 0 | ||||||
Tier 1 capital | 240,867 | 229,361 | ||||||
Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets | 21,027 | 18,522 | ||||||
Total risk-based capital | $ 261,894 | $ 247,883 |
FAIR VALUE DISCLOSURES, Part 1
FAIR VALUE DISCLOSURES, Part 1 (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
FAIR VALUE DISCLOSURES [Abstract] | |||
Value of collateral-dependent impaired loans that will be reviewed by independent third party, minimum | $ 250 | ||
Value of collateral-dependent impaired loans that will be reviewed by special assets group, maximum | 250 | ||
Assets [Abstract] | |||
Trading securities | 148 | $ 203 | |
Securities available for sale | 585,484 | 533,178 | |
U.S. Agency [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 47,512 | 35,006 | |
U.S. Agency Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 196,056 | 257,558 | |
U.S. Agency Commercial Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 34,028 | 33,728 | |
Private Label Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 4,903 | 6,013 | |
Other Asset Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 116,904 | 32,353 | |
Obligations of States and Political Subdivisions [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 144,984 | 143,415 | |
Corporate [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 38,614 | 22,664 | |
Trust Preferred [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 2,483 | 2,441 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | |||
Assets [Abstract] | |||
Trading securities | 148 | 203 | |
Loans held for sale | 27,866 | 23,662 | |
Derivatives | [1] | 1,238 | 619 |
Liabilities [Abstract] | |||
Derivatives | [2] | 619 | 366 |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 47,512 | 35,006 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 196,056 | 257,558 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Commercial Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 34,028 | 33,728 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | Private Label Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 4,903 | 6,013 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | Other Asset Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 116,904 | 32,353 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 144,984 | 143,415 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | Corporate [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 38,614 | 22,664 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Recurring [Member] | Trust Preferred [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 2,483 | 2,441 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
ASSETS [Abstract] | |||
Capitalized mortgage loan servicing rights | [3] | 8,481 | 9,197 |
Fair Value Measurements [Member] | Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [4] | 711 | 869 |
Land, land development & construction - real estate | [4] | 40 | 354 |
Commercial and industrial | [4] | 1,257 | 2,601 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 421 | 1,306 |
Resort Lending | [4] | 129 | |
Commercial [Abstract] | |||
Income producing - real estate | [4] | 711 | 869 |
Land, land development & construction - real estate | [4] | 40 | 354 |
Commercial and industrial | [4] | 1,257 | 2,601 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 421 | 1,306 |
Resort Lending | [4] | 129 | |
Fair Value Measurements [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Real Estate [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [5] | 479 | |
Land, land development & construction - real estate | [5] | 639 | 737 |
Commercial and industrial | [5] | 165 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 26 | 102 |
Resort Lending | [5] | 107 | 575 |
Commercial [Abstract] | |||
Income producing - real estate | [5] | 479 | |
Land, land development & construction - real estate | [5] | 639 | 737 |
Commercial and industrial | [5] | 165 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 26 | 102 |
Resort Lending | [5] | 107 | 575 |
Home Equity Mortgage 1st Lien Fair Value Disclosure | [5] | 14 | |
Installment [Abstract] | |||
Home equity - 1st lien | [5] | 36 | 13 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Assets [Abstract] | |||
Trading securities | 148 | 203 | |
Securities available for sale | 0 | 0 | |
Derivatives | 0 | 0 | |
Liabilities [Abstract] | |||
Derivatives | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | |||
Assets [Abstract] | |||
Trading securities | 148 | 203 | |
Loans held for sale | 0 | 0 | |
Derivatives | [1] | 0 | 0 |
Liabilities [Abstract] | |||
Derivatives | [2] | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Commercial Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Private Label Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Other Asset Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Corporate [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Trust Preferred [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
ASSETS [Abstract] | |||
Capitalized mortgage loan servicing rights | [3] | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [4] | 0 | 0 |
Land, land development & construction - real estate | [4] | 0 | 0 |
Commercial and industrial | [4] | 0 | 0 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 0 | 0 |
Resort Lending | [4] | 0 | |
Commercial [Abstract] | |||
Income producing - real estate | [4] | 0 | 0 |
Land, land development & construction - real estate | [4] | 0 | 0 |
Commercial and industrial | [4] | 0 | 0 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 0 | 0 |
Resort Lending | [4] | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Real Estate [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [5] | 0 | |
Land, land development & construction - real estate | [5] | 0 | 0 |
Commercial and industrial | [5] | 0 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 0 | 0 |
Resort Lending | [5] | 0 | 0 |
Commercial [Abstract] | |||
Income producing - real estate | [5] | 0 | |
Land, land development & construction - real estate | [5] | 0 | 0 |
Commercial and industrial | [5] | 0 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 0 | 0 |
Resort Lending | [5] | 0 | 0 |
Home Equity Mortgage 1st Lien Fair Value Disclosure | [5] | 0 | |
Installment [Abstract] | |||
Home equity - 1st lien | [5] | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | |||
Assets [Abstract] | |||
Trading securities | 0 | 0 | |
Securities available for sale | 585,484 | 533,178 | |
Derivatives | 1,238 | 619 | |
Liabilities [Abstract] | |||
Derivatives | 619 | 366 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | |||
Assets [Abstract] | |||
Trading securities | 0 | 0 | |
Loans held for sale | 27,866 | 23,662 | |
Derivatives | [1] | 1,238 | 619 |
Liabilities [Abstract] | |||
Derivatives | [2] | 619 | 366 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 47,512 | 35,006 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 196,056 | 257,558 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Commercial Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 34,028 | 33,728 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Private Label Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 4,903 | 6,013 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Other Asset Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 116,904 | 32,353 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 144,984 | 143,415 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Corporate [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 38,614 | 22,664 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Trust Preferred [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 2,483 | 2,441 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
ASSETS [Abstract] | |||
Capitalized mortgage loan servicing rights | [3] | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [4] | 0 | 0 |
Land, land development & construction - real estate | [4] | 0 | 0 |
Commercial and industrial | [4] | 0 | 0 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 0 | 0 |
Resort Lending | [4] | 0 | |
Commercial [Abstract] | |||
Income producing - real estate | [4] | 0 | 0 |
Land, land development & construction - real estate | [4] | 0 | 0 |
Commercial and industrial | [4] | 0 | 0 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 0 | 0 |
Resort Lending | [4] | 0 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Real Estate [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [5] | 0 | |
Land, land development & construction - real estate | [5] | 0 | 0 |
Commercial and industrial | [5] | 0 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 0 | 0 |
Resort Lending | [5] | 0 | 0 |
Commercial [Abstract] | |||
Income producing - real estate | [5] | 0 | |
Land, land development & construction - real estate | [5] | 0 | 0 |
Commercial and industrial | [5] | 0 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 0 | 0 |
Resort Lending | [5] | 0 | 0 |
Home Equity Mortgage 1st Lien Fair Value Disclosure | [5] | 0 | |
Installment [Abstract] | |||
Home equity - 1st lien | [5] | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | |||
Assets [Abstract] | |||
Trading securities | 0 | 0 | |
Securities available for sale | 0 | 0 | |
Derivatives | 0 | 0 | |
Liabilities [Abstract] | |||
Derivatives | 0 | 0 | |
ASSETS [Abstract] | |||
Capitalized mortgage loan servicing rights | 8,481 | 9,197 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | |||
Assets [Abstract] | |||
Trading securities | 0 | 0 | |
Loans held for sale | 0 | 0 | |
Derivatives | [1] | 0 | 0 |
Liabilities [Abstract] | |||
Derivatives | [2] | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Agency Commercial Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Private Label Residential Mortgage-Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Other Asset Backed [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Corporate [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Trust Preferred [Member] | |||
Assets [Abstract] | |||
Securities available for sale | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
ASSETS [Abstract] | |||
Capitalized mortgage loan servicing rights | [3] | 8,481 | 9,197 |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [4] | 711 | 869 |
Land, land development & construction - real estate | [4] | 40 | 354 |
Commercial and industrial | [4] | 1,257 | 2,601 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 421 | 1,306 |
Resort Lending | [4] | 129 | |
Commercial [Abstract] | |||
Income producing - real estate | [4] | 711 | 869 |
Land, land development & construction - real estate | [4] | 40 | 354 |
Commercial and industrial | [4] | 1,257 | 2,601 |
Mortgage [Abstract] | |||
1-4 Family | [4] | 421 | 1,306 |
Resort Lending | [4] | 129 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Real Estate [Member] | |||
Commercial [Abstract] | |||
Income producing - real estate | [5] | 479 | |
Land, land development & construction - real estate | [5] | 639 | 737 |
Commercial and industrial | [5] | 165 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 26 | 102 |
Resort Lending | [5] | 107 | 575 |
Commercial [Abstract] | |||
Income producing - real estate | [5] | 479 | |
Land, land development & construction - real estate | [5] | 639 | 737 |
Commercial and industrial | [5] | 165 | |
Mortgage [Abstract] | |||
1-4 Family | [5] | 26 | 102 |
Resort Lending | [5] | 107 | 575 |
Home Equity Mortgage 1st Lien Fair Value Disclosure | [5] | 14 | |
Installment [Abstract] | |||
Home equity - 1st lien | [5] | $ 36 | $ 13 |
[1] | Included in accrued income and other assets | ||
[2] | Included in accrued expenses and other liabilities | ||
[3] | Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance. | ||
[4] | Only includes impaired loans with specific loss allocations based on collateral value. | ||
[5] | Only includes other real estate with subsequent write downs to fair value. |
FAIR VALUE DISCLOSURES, Part 2
FAIR VALUE DISCLOSURES, Part 2 (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Impairment charges recognized [Abstract] | ||||
Capitalized mortgage loan servicing rights, carrying amount | $ 8,500 | $ 9,200 | ||
Capitalized mortgage loan servicing rights, valuation allowance | 3,272 | 3,773 | $ 2,855 | |
Capitalized mortgage loan servicing rights recoveries | 500 | (900) | 3,200 | |
Collateral dependent loans, carrying amount | 5,100 | 8,200 | ||
Collateral dependent loans, valuation allowance | 2,500 | 3,100 | ||
Additional provision for loan losses on impaired loans | 1,100 | 2,100 | 1,500 | |
Other real estate, carrying amount | 1,000 | 1,900 | ||
Other real estate, valuation allowance | 1,692 | 2,511 | 4,047 | $ 5,958 |
Other real estate, additional charge | 300 | 300 | 1,600 | |
Impaired Loans Commercial [Member] | ||||
Impairment charges recognized [Abstract] | ||||
Total impaired collateral value | $ 400 | $ 1,100 | ||
Impaired Loans Commercial [Member] | Minimum [Member] | ||||
Impairment charges recognized [Abstract] | ||||
Discount rate | 0.00% | 35.00% | ||
Impaired Loans Commercial [Member] | Maximum [Member] | ||||
Impairment charges recognized [Abstract] | ||||
Discount rate | 100.00% | 100.00% | ||
Trading Securities [Member] | ||||
Changes in fair value for financial assets [Abstract] | ||||
Net Gains (Losses) on Assets | $ (55) | $ (295) | 388 | |
Total Change in Fair Values Included in Current Period Earnings | (55) | (295) | 388 | |
Loans Held For Sale [Member] | ||||
Changes in fair value for financial assets [Abstract] | ||||
Net Gains (Losses) on Assets | 90 | 258 | (1,477) | |
Total Change in Fair Values Included in Current Period Earnings | $ 90 | $ 258 | $ (1,477) |
FAIR VALUE DISCLOSURES, Part 3
FAIR VALUE DISCLOSURES, Part 3 (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fair value option - Loans held for sale [Abstract] | |||
Loans held for sale | $ 27,866 | $ 23,662 | |
Difference | 714 | 624 | $ 366 |
Aggregate Fair Value [Member] | |||
Fair value option - Loans held for sale [Abstract] | |||
Loans held for sale | 27,866 | 23,662 | 20,390 |
Contractual Principal [Member] | |||
Fair value option - Loans held for sale [Abstract] | |||
Loans held for sale | $ 27,152 | $ 23,038 | $ 20,024 |
FAIR VALUE DISCLOSURES, Part 4
FAIR VALUE DISCLOSURES, Part 4 (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Significant Unobservable Inputs (Level 3) [Member] | |||
Asset (Liability) Fair Value [Abstract] | |||
Capitalized mortgage loan servicing rights | $ 8,481,000 | $ 9,197,000 | |
Impaired loan [Abstract] | |||
Commercial | [1] | 1,605,000 | 2,751,000 |
Mortgage | 550,000 | 1,306,000 | |
Other real estate [Abstract] | |||
Commercial | 804,000 | 1,216,000 | |
Mortgage and Installment | $ 183,000 | $ 690,000 | |
Income Approach [Member] | Impaired Loans Commercial [Member] | |||
Unobservable Inputs Weighted Average [Abstract] | |||
Capitalization rate | 9.30% | 9.30% | |
Present Value of Net Servicing Revenue [Member] | |||
Unobservable Inputs Weighted Average [Abstract] | |||
Discount rate | 10.04% | 10.07% | |
Cost to service | $ 80 | $ 82 | |
Ancillary income | $ 24 | $ 25 | |
Float rate | 1.73% | 1.77% | |
Sales Comparison Approach [Member] | Impaired Loans Commercial [Member] | |||
Unobservable Inputs Weighted Average [Abstract] | |||
Adjustment for differences between comparable sales | [1] | (2.10%) | (3.80%) |
Sales Comparison Approach [Member] | Impaired Loans Mortgage [Member] | |||
Unobservable Inputs Weighted Average [Abstract] | |||
Adjustment for differences between comparable sales | 0.70% | 8.60% | |
Sales Comparison Approach [Member] | Other Real Estate Commercial [Member] | |||
Unobservable Inputs Weighted Average [Abstract] | |||
Adjustment for differences between comparable sales | (3.90%) | (9.00%) | |
Capitalization rate | 75.60% | ||
Sales Comparison Approach [Member] | Other Real Estate Mortgage and Installment [Member] | |||
Unobservable Inputs Weighted Average [Abstract] | |||
Adjustment for differences between comparable sales | 34.30% | ||
[1] | In addition to the valuation techniques and unobservable inputs discussed above, at December 31, 2015 and 2014, we had an impaired collateral dependent commercial relationship that totaled $0.4 million and $1.1 million, respectively that was primarily secured by collateral other than real estate. Collateral securing this relationship primarily included machinery and equipment and inventory at December 31, 2015 and 2014 and also included accounts receivable at December 31, 2014. Valuation techniques at December 31, 2015, included appraisals and discounting restructuring firm valuations based on estimates of value recovery of each particular asset type. Discount rates used ranged from 0% to 100% of stated values. Valuation techniques at December 31, 2014, included discounting cost and financial statement value approaches based on estimates of value recovery of each particular asset type. Discount rates used ranged from 35% to 100% of stated values. |
FAIR VALUES OF FINANCIAL INST89
FAIR VALUES OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Assets [Abstract] | |||
Interest bearing deposits - time | $ 11,866 | $ 13,561 | |
Trading securities | 148 | 203 | |
Securities available for sale | 585,484 | 533,178 | |
Federal Home Loan Bank and Federal Reserve Bank Stock | 15,471 | 19,919 | |
Liabilities [Abstract] | |||
Deposits with stated maturity | 426,220 | ||
Other borrowings | 11,954 | 12,470 | |
Subordinated debentures | 35,569 | 35,569 | |
Reciprocal deposits included in deposits with no stated maturity | 11,800 | 13,600 | |
Reciprocal deposits included in deposits with stated maturity | 38,400 | 40,100 | |
Recorded Book Balance [Member] | |||
Assets [Abstract] | |||
Cash and due from banks | 54,260 | 48,326 | |
Interest bearing deposits | 31,523 | 25,690 | |
Interest bearing deposits - time | 11,866 | 13,561 | |
Trading securities | 148 | 203 | |
Securities available for sale | 585,484 | 533,178 | |
Federal Home Loan Bank and Federal Reserve Bank Stock | 15,471 | 19,919 | |
Net loans and loans held for sale | 1,520,346 | 1,407,634 | |
Accrued interest receivable | 6,565 | 5,995 | |
Derivative financial instruments | 1,238 | 619 | |
Liabilities [Abstract] | |||
Deposits with no stated maturity | [1] | 1,659,743 | 1,534,175 |
Deposits with stated maturity | [1] | 426,220 | 390,127 |
Other borrowings | 11,954 | 12,470 | |
Subordinated debentures | 35,569 | 35,569 | |
Accrued interest payable | 466 | 380 | |
Derivative financial instruments | 619 | 366 | |
Fair Value [Member] | |||
Assets [Abstract] | |||
Cash and due from banks | 54,260 | 48,326 | |
Interest bearing deposits | 31,523 | 25,690 | |
Interest bearing deposits - time | 11,858 | 13,585 | |
Trading securities | 148 | 203 | |
Securities available for sale | 585,484 | 533,178 | |
Net loans and loans held for sale | 1,472,613 | 1,394,424 | |
Accrued interest receivable | 6,565 | 5,995 | |
Derivative financial instruments | 1,238 | 619 | |
Liabilities [Abstract] | |||
Deposits with no stated maturity | [1] | 1,659,743 | 1,534,175 |
Deposits with stated maturity | [1] | 423,776 | 389,139 |
Other borrowings | 13,448 | 14,560 | |
Subordinated debentures | 23,069 | 23,328 | |
Accrued interest payable | 466 | 380 | |
Derivative financial instruments | 619 | 366 | |
Quoted Prices in Active Markets for Identical Assets, (Level 1) [Member] | |||
Assets [Abstract] | |||
Cash and due from banks | 54,260 | 48,326 | |
Interest bearing deposits | 31,523 | 25,690 | |
Interest bearing deposits - time | 0 | 0 | |
Trading securities | 148 | 203 | |
Securities available for sale | 0 | 0 | |
Net loans and loans held for sale | 0 | 0 | |
Accrued interest receivable | 5 | 2 | |
Derivative financial instruments | 0 | 0 | |
Liabilities [Abstract] | |||
Deposits with no stated maturity | [1] | 1,659,743 | 1,534,175 |
Deposits with stated maturity | [1] | 0 | 0 |
Other borrowings | 0 | 0 | |
Subordinated debentures | 0 | 0 | |
Accrued interest payable | 21 | 21 | |
Derivative financial instruments | 0 | 0 | |
Significant Other Observable Inputs, (Level 2) [Member] | |||
Assets [Abstract] | |||
Cash and due from banks | 0 | 0 | |
Interest bearing deposits | 0 | 0 | |
Interest bearing deposits - time | 11,858 | 13,585 | |
Trading securities | 0 | 0 | |
Securities available for sale | 585,484 | 533,178 | |
Net loans and loans held for sale | 27,866 | 23,662 | |
Accrued interest receivable | 1,969 | 1,599 | |
Derivative financial instruments | 1,238 | 619 | |
Liabilities [Abstract] | |||
Deposits with no stated maturity | [1] | 0 | 0 |
Deposits with stated maturity | [1] | 423,776 | 389,139 |
Other borrowings | 13,448 | 14,560 | |
Subordinated debentures | 23,069 | 23,328 | |
Accrued interest payable | 445 | 359 | |
Derivative financial instruments | 619 | 366 | |
Significant Unobservable Inputs, (Level 3) [Member] | |||
Assets [Abstract] | |||
Cash and due from banks | 0 | 0 | |
Interest bearing deposits | 0 | 0 | |
Interest bearing deposits - time | 0 | 0 | |
Trading securities | 0 | 0 | |
Securities available for sale | 0 | 0 | |
Net loans and loans held for sale | 1,444,747 | 1,370,762 | |
Accrued interest receivable | 4,591 | 4,394 | |
Derivative financial instruments | 0 | 0 | |
Liabilities [Abstract] | |||
Deposits with no stated maturity | [1] | 0 | 0 |
Deposits with stated maturity | [1] | 0 | 0 |
Other borrowings | 0 | 0 | |
Subordinated debentures | 0 | 0 | |
Accrued interest payable | 0 | 0 | |
Derivative financial instruments | $ 0 | $ 0 | |
[1] | Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $11.8 million and $13.6 million at December 31, 2015 and 2014, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $38.4 million and $40.1 million at December 31, 2015 and 2014, respectively. |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2013USD ($) | Dec. 31, 2015USD ($)Segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | ||
OPERATING SEGMENTS [Abstract] | |||||
Number of reportable segments | Segment | 2 | ||||
Selected financial information for reportable segments [Abstract] | |||||
Total assets | $ 2,409,066 | $ 2,248,730 | $ 2,209,943 | ||
Interest income | 80,842 | 80,555 | 87,121 | ||
Net interest income | 74,986 | 73,256 | 77,959 | ||
Provision for loan losses | (2,714) | (3,136) | (3,988) | ||
Income (loss) before income tax | 29,380 | 25,216 | 22,658 | ||
Net income (loss) | 20,017 | 18,021 | 77,509 | ||
Reversal of valuation allowance on net deferred tax assets | $ 57,600 | ||||
IB [Member] | |||||
Selected financial information for reportable segments [Abstract] | |||||
Reversal of valuation allowance on net deferred tax assets | 47,100 | ||||
Other [Member] | |||||
Selected financial information for reportable segments [Abstract] | |||||
Total assets | [1],[2] | 286,936 | 286,158 | 272,348 | |
Interest income | [1],[2] | 72 | 64 | 0 | |
Net interest income | [1],[2] | (949) | (1,398) | (2,317) | |
Provision for loan losses | [1],[2] | 0 | 0 | 0 | |
Income (loss) before income tax | [1],[2] | (1,478) | (1,095) | (3,961) | |
Net income (loss) | [1],[2] | (936) | (712) | 5,092 | |
Reversal of valuation allowance on net deferred tax assets | 9,000 | ||||
Reportable Segments [Member] | IB [Member] | |||||
Selected financial information for reportable segments [Abstract] | |||||
Total assets | 2,340,566 | 2,174,536 | 2,104,550 | ||
Interest income | 75,552 | 73,551 | 76,018 | ||
Net interest income | 71,448 | 68,948 | 71,496 | ||
Provision for loan losses | (2,705) | (3,098) | (3,891) | ||
Income (loss) before income tax | 32,136 | 25,845 | 29,605 | ||
Net income (loss) | 21,727 | 18,550 | 74,313 | ||
Reportable Segments [Member] | Mepco [Member] | |||||
Selected financial information for reportable segments [Abstract] | |||||
Total assets | 57,208 | 63,378 | 94,648 | ||
Interest income | 5,290 | 7,004 | 11,103 | ||
Net interest income | 4,487 | 5,706 | 8,780 | ||
Provision for loan losses | (9) | (38) | (97) | ||
Income (loss) before income tax | (1,183) | 561 | (2,891) | ||
Net income (loss) | (712) | 366 | (1,801) | ||
Elimination [Member] | |||||
Selected financial information for reportable segments [Abstract] | |||||
Total assets | [3] | (275,644) | (275,342) | (261,603) | |
Interest income | [3] | (72) | (64) | 0 | |
Net interest income | [3] | 0 | 0 | 0 | |
Provision for loan losses | [3] | 0 | 0 | 0 | |
Income (loss) before income tax | [3] | (95) | (95) | (95) | |
Net income (loss) | [3] | $ (62) | $ (183) | $ (95) | |
[1] | During 2013 IB and Other (parent company) include $47.1 million and $9.0 million, respectively of income tax benefit related to the reversal of the valuation allowance on our net deferred tax assets (see note #13). | ||||
[2] | Includes amounts relating to our parent company and certain insignificant operations. | ||||
[3] | Includes parent company's investment in subsidiaries and cash balances maintained at subsidiary. |
ACCUMULATED OTHER COMPREHENSI91
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance at beginning of period | $ 250,371 | $ 231,581 | $ 134,975 | |
Balances at end of the period | 251,092 | 250,371 | 231,581 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Net impairment loss recognized in earnings | 0 | 9 | 26 | |
Total reclassifications before tax | 29,380 | 25,216 | 22,658 | |
Interest expense | 5,856 | 7,299 | 9,162 | |
Tax expense (benefit) | $ 1,400 | 9,363 | 7,195 | (54,851) |
Total reclassifications for the period, net of tax | 20,017 | 18,021 | 77,509 | |
Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications for the period, net of tax | (39) | (1,714) | ||
Accumulated Other Comprehensive Loss [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax at beginning of period | (8,058) | |||
Accumulated other comprehensive income (loss), tax effect at beginning of period | 0 | |||
Balance at beginning of period | (5,636) | (9,245) | (8,058) | |
Terminated cash flow hedge | 0 | |||
Other comprehensive income (loss) before reclassifications | (351) | 3,570 | (2,901) | |
Amounts reclassified from AOCL | (49) | 39 | 1,714 | |
Net current period other comprehensive income (loss) | (400) | 3,609 | (1,187) | |
Balances at end of the period | (6,036) | (5,636) | (9,245) | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications for the period, net of tax | 0 | 0 | 0 | |
Unrealized Losses on Securities Available For Sale [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax at beginning of period | (516) | |||
Accumulated other comprehensive income (loss), tax effect at beginning of period | 181 | |||
Balance at beginning of period | 162 | (3,200) | (335) | |
Terminated cash flow hedge | 0 | |||
Other comprehensive income (loss) before reclassifications | (351) | 3,570 | (2,877) | |
Amounts reclassified from AOCL | (49) | (208) | 12 | |
Net current period other comprehensive income (loss) | (400) | 3,362 | (2,865) | |
Balances at end of the period | (238) | 162 | (3,200) | |
Unrealized Losses on Securities Available For Sale [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Net gains on securities | 75 | 329 | 7 | |
Net impairment loss recognized in earnings | 0 | (9) | (26) | |
Total reclassifications before tax | 75 | 320 | (19) | |
Tax expense (benefit) | 26 | 112 | (7) | |
Total reclassifications for the period, net of tax | 49 | 208 | (12) | |
Disproportionate Tax Effects from Securities Available for Sale [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax at beginning of period | (5,617) | |||
Accumulated other comprehensive income (loss), tax effect at beginning of period | (181) | |||
Balance at beginning of period | (5,798) | (5,798) | (5,798) | |
Terminated cash flow hedge | 0 | |||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | |
Amounts reclassified from AOCL | 0 | 0 | 0 | |
Net current period other comprehensive income (loss) | 0 | 0 | 0 | |
Balances at end of the period | (5,798) | (5,798) | (5,798) | |
Unrealized Losses on Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax at beginning of period | (739) | |||
Accumulated other comprehensive income (loss), tax effect at beginning of period | 258 | |||
Balance at beginning of period | 0 | 0 | (481) | |
Terminated cash flow hedge | 370 | |||
Other comprehensive income (loss) before reclassifications | 0 | 0 | (24) | |
Amounts reclassified from AOCL | 0 | 0 | 135 | |
Net current period other comprehensive income (loss) | 0 | 0 | 111 | |
Balances at end of the period | 0 | 0 | 0 | |
Unrealized Losses on Cash Flow Hedges [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense | (208) | |||
Tax expense (benefit) | (73) | |||
Total reclassifications for the period, net of tax | (135) | |||
Unrealized Losses on Settled Derivatives [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax at beginning of period | 0 | |||
Accumulated other comprehensive income (loss), tax effect at beginning of period | 0 | |||
Balance at beginning of period | 0 | (247) | 0 | |
Terminated cash flow hedge | (370) | |||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | |
Amounts reclassified from AOCL | 0 | 247 | 123 | |
Net current period other comprehensive income (loss) | 0 | 247 | 123 | |
Balances at end of the period | 0 | 0 | (247) | |
Unrealized Losses on Settled Derivatives [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense | (380) | (189) | ||
Tax expense (benefit) | (133) | (66) | ||
Total reclassifications for the period, net of tax | (247) | (123) | ||
Disproportionate Tax Effects from Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax at beginning of period | (1,186) | |||
Accumulated other comprehensive income (loss), tax effect at beginning of period | (258) | |||
Balance at beginning of period | 0 | 0 | (1,444) | |
Terminated cash flow hedge | 0 | |||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | |
Amounts reclassified from AOCL | 0 | 0 | 1,444 | |
Net current period other comprehensive income (loss) | 0 | 0 | 1,444 | |
Balances at end of the period | $ 0 | $ 0 | 0 | |
Disproportionate Tax Effects from Cash Flow Hedges [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Tax expense (benefit) | $ 1,444 |
INDEPENDENT BANK CORPORATION 92
INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
ASSETS [Abstract] | |||||
Cash and due from banks | $ 54,260 | $ 48,326 | |||
Interest bearing deposits - time | 11,866 | 13,561 | |||
Other assets | 23,733 | 23,590 | |||
Total Assets | 2,409,066 | 2,248,730 | $ 2,209,943 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY [Abstract] | |||||
Subordinated debentures | 35,569 | 35,569 | |||
Other liabilities | 23,691 | 24,041 | |||
Shareholders' equity | 251,092 | 250,371 | 231,581 | $ 134,975 | |
Total Liabilities and Shareholders' Equity | 2,409,066 | 2,248,730 | |||
OPERATING INCOME (LOSS) [Abstract] | |||||
Interest income | 80,842 | 80,555 | 87,121 | ||
Gains on extinguishment of debt | 0 | 500 | 0 | ||
Increase in fair value of U.S. Treasury warrant | 0 | 0 | (1,025) | ||
OPERATING EXPENSES [Abstract] | |||||
Interest expense | 5,856 | 7,299 | 9,162 | ||
Loss Before Income Tax and Equity in Undistributed Net Income of Subsidiaries | 29,380 | 25,216 | 22,658 | ||
Income tax benefit | $ 1,400 | 9,363 | 7,195 | (54,851) | |
Net Income | 20,017 | 18,021 | 77,509 | ||
CONDENSED STATEMENTS OF CASH FLOWS [Abstract] | |||||
Net income | 20,017 | 18,021 | 77,509 | ||
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH USED IN OPERATING ACTIVITIES [Abstract] | |||||
Deferred income taxes | 8,997 | 8,918 | (57,550) | ||
Share based compensation | 1,477 | 1,192 | 1,238 | ||
Gains on extinguishment of debt | 0 | (500) | 0 | ||
Decrease in other assets | (1,387) | (2,579) | 7,747 | ||
Increase (decrease) in other liabilities | (196) | (7,213) | (3,508) | ||
Total Adjustments | 4,018 | (4,950) | (25,439) | ||
Net Cash From Operating Activities | 24,035 | 13,071 | 52,070 | ||
CASH FLOW FROM INVESTING ACTIVITIES [Abstract] | |||||
Purchases of interest bearing deposits - time | (4,595) | (2,401) | (20,260) | ||
Maturity of interest bearing deposits - time | 6,222 | 6,719 | 2,142 | ||
Net Cash Used in Investing Activities | (160,513) | (82,116) | (221,068) | ||
CASH FLOW FROM (USED IN) FINANCING ACTIVITIES [Abstract] | |||||
Repurchase of common stock | (13,498) | 0 | 0 | ||
Dividends paid | (5,896) | (4,129) | 0 | ||
Proceeds from issuance of common stock | 112 | 97 | 98,066 | ||
Share based compensation withholding obligation | (1,091) | 0 | (513) | ||
Redemption of subordinated debt | 0 | (4,654) | (9,452) | ||
Redemption of convertible preferred stock and common stock warrant | 0 | 0 | (81,000) | ||
Net Cash From Financing Activities | 148,245 | 23,980 | 108,297 | ||
Net Increase (Decrease) in Cash and Cash Equivalents | 11,767 | (45,065) | (60,701) | ||
Cash and Cash Equivalents at Beginning of Year | 74,016 | 119,081 | 179,782 | ||
Cash and Cash Equivalents at End of Year | 85,783 | 74,016 | 119,081 | ||
Parent Company [Member] | |||||
ASSETS [Abstract] | |||||
Cash and due from banks | 10,800 | 5,174 | |||
Interest bearing deposits - time | 5,000 | 12,500 | |||
Investment in subsidiaries | 261,016 | 258,901 | |||
Other assets | 10,120 | 9,583 | |||
Total Assets | 286,936 | 286,158 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY [Abstract] | |||||
Subordinated debentures | 35,569 | 35,569 | |||
Other liabilities | 378 | 382 | |||
Shareholders' equity | 250,989 | 250,207 | |||
Total Liabilities and Shareholders' Equity | 286,936 | 286,158 | |||
OPERATING INCOME (LOSS) [Abstract] | |||||
Interest income | 72 | 64 | 0 | ||
Gains on extinguishment of debt | 0 | 500 | 0 | ||
Gain on securities | 0 | 295 | 0 | ||
Increase in fair value of U.S. Treasury warrant | 0 | 0 | (1,025) | ||
Other income | 31 | 35 | 63 | ||
Total Operating Income (Loss) | 103 | 894 | (962) | ||
OPERATING EXPENSES [Abstract] | |||||
Interest expense | 1,021 | 1,462 | 2,317 | ||
Administrative and other expenses | 560 | 527 | 682 | ||
Total Operating Expenses | 1,581 | 1,989 | 2,999 | ||
Loss Before Income Tax and Equity in Undistributed Net Income of Subsidiaries | (1,478) | (1,095) | (3,961) | ||
Income tax benefit | (542) | (383) | (9,053) | ||
Income (Loss) Before Equity in Undistributed Net Income of Subsidiaries | (936) | (712) | 5,092 | ||
Equity in undistributed net income of subsidiaries | 20,953 | 18,733 | 72,417 | ||
Net Income | 20,017 | 18,021 | 77,509 | ||
CONDENSED STATEMENTS OF CASH FLOWS [Abstract] | |||||
Net income | 20,017 | 18,021 | 77,509 | ||
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH USED IN OPERATING ACTIVITIES [Abstract] | |||||
Deferred income taxes | (542) | (383) | (8,955) | ||
Share based compensation | 21 | 46 | 84 | ||
Gains on extinguishment of debt | 0 | (500) | 0 | ||
Gain on securities | 0 | (295) | 0 | ||
Decrease in other assets | 5 | 118 | 738 | ||
Increase (decrease) in other liabilities | (6) | 287 | (5,858) | ||
Equity in undistributed net income of subsidiaries operations | (20,953) | (18,733) | (72,417) | ||
Total Adjustments | (21,475) | (19,460) | (86,408) | ||
Net Cash From Operating Activities | (1,458) | (1,439) | (8,899) | ||
CASH FLOW FROM INVESTING ACTIVITIES [Abstract] | |||||
Purchases of interest bearing deposits - time | (5,000) | (17,500) | 0 | ||
Maturity of interest bearing deposits - time | 12,500 | 5,000 | 0 | ||
Return of capital from subsidiary | 18,500 | 15,000 | 7,500 | ||
Net Cash Used in Investing Activities | 26,000 | 2,500 | 7,500 | ||
CASH FLOW FROM (USED IN) FINANCING ACTIVITIES [Abstract] | |||||
Repurchase of common stock | (13,498) | 0 | 0 | ||
Dividends paid | (5,896) | (4,129) | 0 | ||
Proceeds from issuance of common stock | 1,569 | 1,242 | 100,230 | ||
Share based compensation withholding obligation | (1,091) | 0 | (513) | ||
Redemption of subordinated debt | 0 | (4,654) | (9,452) | ||
Redemption of convertible preferred stock and common stock warrant | 0 | 0 | (81,000) | ||
Net Cash From Financing Activities | (18,916) | (7,541) | 9,265 | ||
Net Increase (Decrease) in Cash and Cash Equivalents | 5,626 | (6,480) | 7,866 | ||
Cash and Cash Equivalents at Beginning of Year | 5,174 | 11,654 | 3,788 | ||
Cash and Cash Equivalents at End of Year | $ 10,800 | $ 5,174 | $ 11,654 |
BRANCH SALE (Details)
BRANCH SALE (Details) - USD ($) $ in Thousands | Aug. 28, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Branch Location [Line Items] | |||||
Net gain on branch sale | $ 1,193 | $ 0 | $ 0 | ||
Midland Branch [Member] | |||||
Branch Location [Line Items] | |||||
Total deposit liabilities | $ 8,700 | ||||
Premium payment amount | $ 600 | ||||
Percentage of average deposit liabilities | 6.00% | ||||
Average deposit liabilities | $ 9,700 | ||||
Average days for deposit liabilities | 20 days | ||||
Number of business days prior to closing date | 2 days | ||||
Proceeds from Real property and fixed assets | $ 850 | ||||
Net book value of real property and fixed assets | $ 200 | ||||
Net gain on branch sale | $ 1,200 |