Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 12, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | REPUBLIC BANCORP INC /KY/ | ||
Entity Central Index Key | 921,557 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 251,521,884 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 18,659,147 | ||
Class B Common Stock | |||
Entity Common Stock, Shares Outstanding | 2,245,250 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 210,082 | $ 72,878 |
Securities available for sale | 517,058 | 435,911 |
Securities held to maturity (fair value of $39,196 in 2015 and $45,807 in 2014) | 38,727 | 45,437 |
Mortgage loans held for sale, at fair value | 4,083 | 6,388 |
Other loans held for sale, at the lower of cost or fair value | 514 | |
Loans | 3,326,610 | 3,040,495 |
Allowance for loan and lease losses | (27,491) | (24,410) |
Loans, net | 3,299,119 | 3,016,085 |
Federal Home Loan Bank stock, at cost | 28,208 | 28,208 |
Premises and equipment, net | 29,921 | 32,987 |
Premises, held for sale | 1,185 | 1,317 |
Goodwill | 10,168 | 10,168 |
Other real estate owned | 1,220 | 11,243 |
Bank owned life insurance | 52,817 | 51,415 |
Other assets and accrued interest receivable | 37,187 | 34,976 |
TOTAL ASSETS | 4,230,289 | 3,747,013 |
Deposits: | ||
Non interest-bearing | 634,863 | 502,569 |
Interest-bearing | 1,852,614 | 1,555,613 |
Total deposits | 2,487,477 | 2,058,182 |
Securities sold under agreements to repurchase and other short-term borrowings | 395,433 | 356,108 |
Federal Home Loan Bank advances | 699,500 | 707,500 |
Subordinated note | 41,240 | 41,240 |
Other liabilities and accrued interest payable | 30,092 | 25,252 |
Total liabilities | $ 3,653,742 | $ 3,188,282 |
Commitments and contingent liabilities (Footnote 20) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, no par value | ||
Class A Common Stock and Class B Common Stock, no par value | $ 4,915 | $ 4,904 |
Additional paid in capital | 136,910 | 134,889 |
Retained earnings | 432,673 | 414,623 |
Accumulated other comprehensive income | 2,049 | 4,315 |
Total stockholders' equity | 576,547 | 558,731 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 4,230,289 | $ 3,747,013 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Securities held to maturity, fair value (in dollars) | $ 39,196 | $ 45,807 |
Preferred stock, no par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Non cumulative convertible preferred stock (as a percent) | 8.50% | 8.50% |
Preferred stock, issued | 0 | 0 |
Class A Common Stock | ||
Common Stock, no par value | $ 0 | $ 0 |
Common Stock, shares authorized | 30,000,000 | 30,000,000 |
Common Stock, issued | 18,651,841 | 18,603,354 |
Common Stock, outstanding | 18,651,841 | 18,603,354 |
Class B Common Stock | ||
Common Stock, no par value | $ 0 | $ 0 |
Common Stock, shares authorized | 5,000,000 | 5,000,000 |
Common Stock, issued | 2,245,250 | 2,245,492 |
Common Stock, outstanding | 2,245,250 | 2,245,492 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
INTEREST INCOME: | |||
Loans, including fees | $ 133,958 | $ 123,360 | $ 124,843 |
Taxable investment securities | 7,046 | 7,481 | 8,067 |
Federal Home Loan Bank stock and other | 1,428 | 1,536 | 1,658 |
Total interest income | 142,432 | 132,377 | 134,568 |
INTEREST EXPENSE: | |||
Deposits | 4,380 | 3,905 | 4,093 |
Securities sold under agreements to repurchase and other short-term borrowings | 92 | 112 | 70 |
Federal Home Loan Bank advances | 11,934 | 13,072 | 14,715 |
Subordinated note | 2,056 | 2,515 | 2,515 |
Total interest expense | 18,462 | 19,604 | 21,393 |
NET INTEREST INCOME | 123,970 | 112,773 | 113,175 |
Provision for loan and lease losses | 5,396 | 2,859 | 2,983 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | 118,574 | 109,914 | 110,192 |
NON-INTEREST INCOME: | |||
Service charges on deposit accounts | 13,015 | 13,807 | 13,954 |
Net refund transfer fees | 17,388 | 16,130 | 13,884 |
Mortgage banking income | 4,411 | 2,862 | 7,258 |
Interchange fee income | 8,353 | 7,017 | 6,927 |
Bargain purchase gain | 1,324 | ||
Gain on call of securities available for sale | 88 | ||
Net gain (loss) on other real estate owned | (301) | (2,218) | 346 |
Increase in cash surrender value of bank owned life insurance | 1,402 | 1,329 | 86 |
Other | 3,638 | 3,592 | 2,451 |
Total non-interest income | 47,994 | 42,519 | 46,230 |
NON-INTEREST EXPENSES: | |||
Salaries and employee benefits | 58,091 | 54,373 | 57,778 |
Occupancy and equipment, net | 20,689 | 22,008 | 21,918 |
Communication and transportation | 3,752 | 3,866 | 4,128 |
Marketing and development | 3,161 | 3,264 | 3,106 |
FDIC insurance expense | 2,084 | 1,865 | 1,682 |
Bank franchise tax expense | 4,734 | 4,616 | 4,115 |
Data processing | 4,340 | 3,513 | 3,120 |
Interchange related expense | 3,873 | 3,450 | 3,063 |
Supplies | 1,101 | 1,009 | 1,157 |
Other real estate owned expense | 735 | 1,024 | 1,948 |
Legal and professional fees | 3,306 | 2,766 | 5,955 |
Other | 7,458 | 6,364 | 7,954 |
Total non-interest expenses | 113,324 | 108,118 | 115,924 |
INCOME BEFORE INCOME TAX EXPENSE | 53,244 | 44,315 | 40,498 |
INCOME TAX EXPENSE | 18,078 | 15,528 | 15,075 |
NET INCOME | $ 35,166 | $ 28,787 | $ 25,423 |
Class A Common Stock | |||
BASIC EARNINGS PER SHARE: | |||
Basic earnings per share (in dollars per share) | $ 1.70 | $ 1.39 | $ 1.23 |
DILUTED EARNINGS PER SHARE: | |||
Diluted earnings per share (in dollars per share) | 1.70 | 1.38 | 1.22 |
DIVIDENDS DECLARED PER COMMON SHARE: | |||
Dividend declared per common share (in dollars per share) | 0.781 | 0.737 | 0.693 |
Class B Common Stock | |||
BASIC EARNINGS PER SHARE: | |||
Basic earnings per share (in dollars per share) | 1.55 | 1.32 | 1.17 |
DILUTED EARNINGS PER SHARE: | |||
Diluted earnings per share (in dollars per share) | 1.54 | 1.32 | 1.16 |
DIVIDENDS DECLARED PER COMMON SHARE: | |||
Dividend declared per common share (in dollars per share) | $ 0.710 | $ 0.670 | $ 0.630 |
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 | |||
Net income | $ 35,166 | $ 28,787 | $ 25,423 |
OTHER COMPREHENSIVE INCOME | |||
Change in fair value of derivatives used for cash flow hedges | (514) | (1,082) | 147 |
Reclassification adjustment for derivative losses realized in income | 402 | 424 | 23 |
Change in unrealized gain (loss) on securities available for sale | (3,160) | 2,021 | (4,747) |
Reclassification adjustment for gain on security available for sale recognized in earnings | (88) | ||
Change in unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings | (125) | 475 | 742 |
Net unrealized gains (losses) | (3,485) | 1,838 | (3,835) |
Tax effect | 1,219 | (644) | 1,344 |
Total other comprehensive income (loss), net of tax | (2,266) | 1,194 | (2,491) |
COMPREHENSIVE INCOME | $ 32,900 | $ 29,981 | $ 22,932 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common StockClass A Common Stock | Common StockClass B Common Stock | Common Stock | Additional Paid In Capital. | Retained EarningsClass A Common Stock | Retained EarningsClass B Common Stock | Retained Earnings | Accumulated Other Comprehensive Income | Class A Common Stock | Class B Common Stock | Total |
Balance at Dec. 31, 2012 | $ 4,932 | $ 132,686 | $ 393,472 | $ 5,612 | $ 536,702 | ||||||
Balance (in shares) at Dec. 31, 2012 | 18,694 | 2,271 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 25,423 | 25,423 | |||||||||
Net change in accumulated other comprehensive income | (2,491) | (2,491) | |||||||||
Dividend declared Common Stock: | |||||||||||
Dividend declared Common Stock | $ (12,735) | $ (1,424) | $ (12,735) | $ (1,424) | |||||||
Stock options exercised, net of shares redeemed | 5 | 610 | (148) | 467 | |||||||
Stock options exercised, net of shares redeemed (in shares) | 24 | ||||||||||
Repurchase of Class A Common Stock | (43) | (1,230) | (2,822) | (4,095) | |||||||
Repurchase of Class A Common Stock (in shares) | (193) | ||||||||||
Conversion of Class B Common Stock to Class A Common Stock (in shares) | 11 | (11) | |||||||||
Net change in notes receivable on Class A Common Stock | 250 | 250 | |||||||||
Deferred director compensation expense - Class A Common Stock | 193 | 193 | |||||||||
Deferred director compensation expense - Class A Common Stock (in shares) | 5 | ||||||||||
Stock based compensation - restricted stock | 298 | 298 | |||||||||
Stock based compensation expense - stock options | 205 | 205 | |||||||||
Balance at Dec. 31, 2013 | 4,894 | 133,012 | 401,766 | 3,121 | 542,793 | ||||||
Balance (in shares) at Dec. 31, 2013 | 18,541 | 2,260 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 28,787 | 28,787 | |||||||||
Net change in accumulated other comprehensive income | 1,194 | 1,194 | |||||||||
Dividend declared Common Stock: | |||||||||||
Dividend declared Common Stock | (13,680) | (1,508) | (13,680) | (1,508) | |||||||
Stock options exercised, net of shares redeemed | 13 | 1,586 | (496) | 1,103 | |||||||
Stock options exercised, net of shares redeemed (in shares) | 62 | ||||||||||
Repurchase of Class A Common Stock | (3) | (95) | (249) | (347) | |||||||
Repurchase of Class A Common Stock (in shares) | (15) | ||||||||||
Conversion of Class B Common Stock to Class A Common Stock (in shares) | 15 | (15) | |||||||||
Net change in notes receivable on Class A Common Stock | (256) | (256) | |||||||||
Deferred director compensation expense - Class A Common Stock | 187 | 187 | |||||||||
Deferred director compensation expense - Class A Common Stock (in shares) | 2 | ||||||||||
Stock based compensation - restricted stock | 402 | 3 | 405 | ||||||||
Stock based compensation - restricted stock (in shares) | (2) | ||||||||||
Stock based compensation expense - stock options | 53 | 53 | |||||||||
Balance at Dec. 31, 2014 | 4,904 | 134,889 | 414,623 | 4,315 | 558,731 | ||||||
Balance (in shares) at Dec. 31, 2014 | 18,603 | 2,245 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 35,166 | 35,166 | |||||||||
Net change in accumulated other comprehensive income | (2,266) | (2,266) | |||||||||
Dividend declared Common Stock: | |||||||||||
Dividend declared Common Stock | $ (14,531) | $ (1,594) | $ (14,531) | $ (1,594) | |||||||
Stock options exercised, net of shares redeemed | 16 | 1,708 | (588) | 1,136 | |||||||
Stock options exercised, net of shares redeemed (in shares) | 67 | ||||||||||
Repurchase of Class A Common Stock | (5) | (143) | (403) | (551) | |||||||
Repurchase of Class A Common Stock (in shares) | (22) | ||||||||||
Net change in notes receivable on Class A Common Stock | (189) | (189) | |||||||||
Deferred director compensation expense - Class A Common Stock | 223 | 223 | |||||||||
Deferred director compensation expense - Class A Common Stock (in shares) | 5 | ||||||||||
Stock based compensation - restricted stock | 253 | 253 | |||||||||
Stock based compensation - restricted stock (in shares) | (1) | ||||||||||
Stock based compensation expense - stock options | 169 | 169 | |||||||||
Balance at Dec. 31, 2015 | $ 4,915 | $ 136,910 | $ 432,673 | $ 2,049 | $ 576,547 | ||||||
Balance (in shares) at Dec. 31, 2015 | 18,652 | 2,245 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
OPERATING ACTIVITIES: | |||
Net income | $ 35,166 | $ 28,787 | $ 25,423 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization on investment securities, net | 729 | 424 | 394 |
Accretion on loans, net | (2,835) | (6,263) | (9,479) |
Depreciation of premises and equipment | 6,742 | 6,363 | 5,311 |
Amortization of mortgaging servicing rights | 1,400 | 1,330 | 2,173 |
Amortization of core deposit intangible asset | 510 | ||
Provision for loan and lease losses | 5,396 | 2,859 | 2,983 |
Net gain on sale of mortgage loans held for sale | (3,915) | (2,440) | (6,979) |
Origination of mortgage loans held for sale | (160,989) | (82,457) | (291,155) |
Proceeds from sale of mortgage loans held for sale | 167,209 | 82,015 | 305,242 |
Origination of other loans held for sale | (137,551) | ||
Proceeds from sale of other loans held for sale | 137,037 | ||
Net realized recovery of value in mortgage servicing rights | (345) | ||
Net realized gain on sales, calls and impairment of securities | (88) | ||
Net gain realized on sale of other real estate owned | (956) | (883) | (2,170) |
Writedowns of other real estate owned | 1,257 | 3,101 | 1,824 |
Net gain on sale of banking center | (28) | ||
Deferred director compensation expense - Company Stock | 223 | 187 | 193 |
Stock based compensation expense | 422 | 458 | 503 |
Bargain purchase gains on acquisition | (1,324) | ||
Increase in cash surrender value of bank owned life insurance | (1,402) | (1,329) | (86) |
Net change in other assets and liabilities: | |||
Accrued interest receivable | (426) | (535) | 973 |
Accrued interest payable | (33) | (197) | 56 |
Other assets | (2,785) | (2,145) | 488 |
Other liabilities | 5,473 | (2,570) | (12,278) |
Net cash provided by operating activities | 50,046 | 26,705 | 22,257 |
INVESTING ACTIVITIES: | |||
Purchases of securities available for sale | (1,512,809) | (876,854) | (194,527) |
Purchases of securities to be held to maturity | (15,000) | ||
Proceeds from calls, maturities and paydowns of securities available for sale | 1,427,696 | 875,978 | 195,553 |
Proceeds from calls, maturities and paydowns of securities to be held to maturity | 6,663 | 5,137 | 10,294 |
Net change in outstanding warehouse lines of credit | (67,298) | (169,855) | 67,000 |
Purchase of loans, including premiums paid | (117,516) | (235,824) | |
Net change in other loans | (100,660) | (46,383) | (11,048) |
Proceeds from redemption of Federal Home Loan Bank stock | 134 | 35 | |
Proceeds from sales of other real estate owned | 9,412 | 9,532 | 21,267 |
Proceeds from sale of banking center | 1,623 | ||
Net purchases of premises and equipment | (5,319) | (7,759) | (5,022) |
Purchase of bank owned life insurance | (25,000) | (25,000) | |
Net cash (used in) provided by investing activities | (358,208) | (470,894) | 43,552 |
FINANCING ACTIVITIES: | |||
Net change in deposits | 429,295 | 67,325 | 7,929 |
Net change in securities sold under agreements to repurchase and other short-term borrowings | 39,325 | 190,553 | (85,329) |
Payments of Federal Home Loan Bank advances | (218,000) | (188,000) | (37,600) |
Proceeds from Federal Home Loan Bank advances | 210,000 | 290,500 | 100,000 |
Repurchase of Common Stock | (551) | (347) | (4,095) |
Net proceeds from Common Stock options exercised | 1,136 | 1,103 | 467 |
Cash dividends paid | (15,839) | (14,930) | (14,009) |
Net cash provided by (used in) financing activities | 445,366 | 346,204 | (32,637) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 137,204 | (97,985) | 33,172 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 72,878 | 170,863 | 137,691 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 210,082 | 72,878 | 170,863 |
Cash paid during the period for: | |||
Interest | 18,495 | 19,801 | 21,337 |
Income taxes | 17,942 | 18,828 | 31,875 |
SUPPLEMENTAL NONCASH DISCLOSURES: | |||
Transfers from loans to real estate acquired in settlement of loans | 2,938 | 7,333 | 15,271 |
Loans provided for sales of other real estate owned | $ 3,248 | $ 1,442 | $ 2,377 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Principles of Consolidation — The consolidated financial statements include the accounts of Republic Bancorp, Inc. (the “Parent Company”) and its wholly-owned subsidiaries, Republic Bank & Trust Company (“RB&T” or the “Bank”) and Republic Insurance Services, Inc. (the “Captive”). The Bank is a Kentucky-based, state chartered non-member financial institution. The Captive, which was formed during the third quarter of 2014, is a wholly-owned insurance subsidiary of the Company. The Captive provides property and casualty insurance coverage to the Company and the Bank as well as eight other third-party insurance captives for which insurance may not be available or economically feasible. Republic Bancorp Capital Trust (“RBCT”) is a Delaware statutory business trust that is a wholly-owned unconsolidated finance subsidiary of Republic Bancorp, Inc. All companies are collectively referred to as “Republic” or the “Company.” All significant intercompany balances and transactions are eliminated in consolidation. As of December 31, 2015, the Company was divided into four distinct operating segments: Traditional Banking, Warehouse Lending (“Warehouse”), Mortgage Banking and Republic Processing Group (“RPG”). Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” activities. Correspondent Lending operations are considered part of the Traditional Banking segment. The RPG segment includes the following divisions: Tax Refund Solutions (“TRS”), Republic Payment Solutions (“RPS”) and Republic Credit Solutions (“RCS”). TRS generates the majority of RPG’s income, with the relatively smaller divisions of RPG, RPS and RCS, considered immaterial for separate and independent segment reporting. All divisions of the RPG segment operate through the Bank. Traditional Banking, Warehouse Lending and Mortgage Banking (collectively “Core Banking”) As of December 31, 2015, in addition to Internet Banking and Correspondent Lending delivery channels, Republic had 40 full-service banking centers with locations as follows: · Kentucky – 32 · Metropolitan Louisville – 19 · Central Kentucky – 8 · Elizabethtown – 1 · Frankfort – 1 · Georgetown – 1 · Lexington – 4 · Shelbyville – 1 · Western Kentucky – 2 · Owensboro – 2 · Northern Kentucky – 3 · Covington – 1 · Florence – 1 · Independence – 1 · Southern Indiana – 3 · Floyds Knobs – 1 · Jeffersonville – 1 · New Albany – 1 · Metropolitan Tampa, Florida – 2 · Metropolitan Cincinnati, Ohio – 1 · Metropolitan Nashville, Tennessee – 2 Republic’s headquarters are located in Louisville, which is the largest city in Kentucky based on population. Core Banking results of operations are primarily dependent upon net interest income, which represents the difference between the interest income and fees on interest-earning assets and the interest expense on interest-bearing liabilities. Principal interest-earning Core Banking assets represent investment securities and commercial and consumer loans primarily secured by real estate and/or personal property. Interest-bearing liabilities primarily consist of interest-bearing deposit accounts, securities sold under agreements to repurchase, as well as short-term and long-term borrowing sources. FHLB advances have traditionally been a significant borrowing source for the Bank. Other sources of Core Banking income include service charges on deposit accounts, debit and credit card interchange fee income, title insurance commissions, fees charged to clients for trust services, increases in the cash surrender value of Bank Owned Life Insurance (“BOLI”) and revenue generated from Mortgage Banking activities. Mortgage Banking activities represent both the origination and sale of loans in the secondary market and the servicing of loans for others, primarily the Federal Home Loan Mortgage Corporation (“Freddie Mac” or “FHLMC”). Core Banking operating expenses consist primarily of salaries and employee benefits, occupancy and equipment expenses, communication and transportation costs, data processing, interchange related expenses, marketing and development expenses, FDIC insurance expense, franchise tax expense and various general and administrative costs. Core Banking results of operations are significantly impacted by general economic and competitive conditions, particularly changes in market interest rates, government laws and policies and actions of regulatory agencies. The Core Bank began acquiring single family, first lien mortgage loans for investment through its Correspondent Lending channel in May 2014. Correspondent Lending generally involves the Bank acquiring, primarily from its Warehouse clients, closed loans that meet the Bank’s specifications. Substantially all loans purchased through the Correspondent Lending channel are purchased at a premium. The Core Bank provides short-term, revolving credit facilities to mortgage bankers across the Nation through its Warehouse segment in the form of warehouse lines of credit. These credit facilities are secured by single family, first lien residential real estate loans. Outstanding balances on these credit facilities may be subject to significant fluctuations consistent with the overall market demand for mortgage loans. Republic Processing Group All divisions of the RPG segment operate through the Bank. Nationally, RPG facilitates the receipt and payment of federal and state tax refunds under the TRS division, primarily through refund transfers (“RTs”). RTs are products whereby a tax refund is issued to the taxpayer after the Bank has received the refund from the federal or state government. There is no credit risk or borrowing cost associated with these products because they are only delivered to the taxpayer upon receipt of the tax refund directly from the governmental paying authority. Fees earned on RTs, net of rebates, are the primary source of revenue for the TRS division and the RPG segment, and are reported as non interest income under the line item “Net refund transfer fees.” The RPS division offers general purpose reloadable prepaid debit cards through third party program managers. The RCS division offers short-term consumer credit products. Use of Estimates — Financial statements prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates and assumptions impact the amounts reported in the financial statements and the disclosures provided. Actual amounts could differ from these estimates. Concentration of Credit Risk — With the exception of loans originated through its Correspondent Lending channel, most of the Company’s Traditional Banking business activity is with clients located in Kentucky, Indiana, Florida, and Tennessee. The Company’s Traditional Banking exposure to credit risk is significantly affected by changes in the economy in these specific areas. Loans originated through the Traditional Bank’s Correspondent Lending channel are primarily secured by single family, first lien residences located outside the Company’s market footprint, with 78% of such loans secured by collateral located in the state of California as of December 31, 2015. Furthermore, warehouse lines of credit are secured by single family, first lien residential real estate loans originated by the Bank’s mortgage clients across the Nation. As of December 31, 2015, 35% of collateral securing warehouse lines were located in California. Earnings Concentration — For 2015, 2014 and 2013, approximately 1 3 %, 12% and 9% of total Company net revenues (net interest income plus non interest income) were derived from the RPG segment. For 2015, 2014 and 2013, approximately 7%, 5% and 4% of total Company net revenues (net interest income plus non interest income) were derived from the Company’s Warehouse segment. Cash Flows — Cash and cash equivalents include cash, deposits with other financial institutions with original maturities less than 90 days and federal funds sold. Net cash flows are reported for client loan and deposit transactions, interest-bearing deposits in other financial institutions, repurchase agreements and income taxes. Interest-Bearing Deposits in Other Financial Institutions — Interest-bearing deposits in other financial institutions mature within one year and are carried at cost. Trust Assets — Property held for clients in fiduciary or agency capacities, other than trust cash on deposit at the Bank, is not included in the consolidated financial statements since such items are not assets of the Bank. Securities — Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Interest income includes amortization of purchase premiums and accretion of discounts. Premiums and discounts on securities are amortized and accreted on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more-likely-than-not that it would be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. OTTI related to credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings. In order to determine OTTI for purchased beneficial interests that, on the purchase date, were not highly rated, the Bank compares the present value of the remaining cash flows as estimated at the preceding evaluation date to the current expected remaining cash flows. OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows. Acquisition Accounting — The Bank maintains an acquisition strategy to selectively grow its franchise as a complement to its internal growth strategies. The Bank accounts for acquisitions in accordance with the acquisition method as outlined in Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . The acquisition method requires: a) identification of the entity that obtains control of the acquiree; b) determination of the acquisition date; c) recognition and measurement of the identifiable assets acquired and liabilities assumed, and any noncontrolling interest in the acquiree; and d) recognition and measurement of goodwill or bargain purchase gain. Identifiable assets acquired, liabilities assumed, and any noncontrolling interest in acquirees are generally recognized at their acquisition date (“day-one”) fair values based on the requirements of ASC Topic 820, Fair Value Measurements and Disclosures. The measurement period for day-one fair values begins on the acquisition date and ends the earlier of: (a) the day management believes it has all the information necessary to determine day-one fair values; or (b) one year following the acquisition date. In many cases, the determination of day-one fair values requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly complex and subjective in nature and subject to recast adjustments, which are retrospective adjustments to reflect new information existing at the acquisition date affecting day-one fair values. More specifically, these recast adjustments for loans and other real estate owned may be made, as market value data, such as appraisals, are received by the bank. Increases or decreases to day-one fair values are reflected with a corresponding increase or decrease to bargain purchase gain or goodwill. Acquisition related costs are expensed as incurred unless those costs are related to issuing debt or equity securities used to finance the acquisition. Mortgage Banking Activities — Mortgage loans originated and intended for sale in the secondary market are carried at fair value, as determined by outstanding commitments from investors. Net gains on mortgage loans held for sale are recorded as a component of Mortgage Banking income and represent the difference between the selling price and the carrying value of the loans sold. Substantially all of the gains or losses on the sale of loans are reported in earnings when the interest rates on loans are locked. Commitments to fund mortgage loans (“interest rate lock commitments”) to be sold into the secondary market and non-exchange traded mandatory forward sales contracts (“forward contracts”) for the future delivery of these mortgage loans are accounted for as free standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the Bank enters into the derivative. Generally, the Bank enters into forward contracts for the future delivery of mortgage loans when interest rate lock commitments are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these mortgage derivatives are included in net gains on sales of loans, which is a component of Mortgage Banking income on the income statement. Mortgage loans held for sale are generally sold with the mortgage servicing rights (“MSRs”) retained. When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded as a component of net servicing income within Mortgage Banking income. Fair value is based on market prices for comparable mortgage servicing contracts, when available or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into Mortgage Banking income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Amortization of MSRs are initially set at seven years and subsequently adjusted on a quarterly basis based on the weighted average remaining life of the underlying loans. MSRs are evaluated for impairment quarterly based upon the fair value of the MSRs as compared to carrying amount. Impairment is determined by stratifying MSRs into groupings based on predominant risk characteristics, such as interest rate, loan type, loan terms and investor type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Bank later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation allowance is recorded as an increase to income. Changes in valuation allowances are reported within Mortgage Banking income on the income statement. The fair value of the MSR portfolios is subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates. A primary factor influencing the fair value is the estimated life of the underlying serviced loans. The estimated life of the serviced loans is significantly influenced by market interest rates. During a period of declining interest rates, the fair value of the MSRs generally will decline due to higher expected prepayments within the portfolio. Alternatively, during a period of rising interest rates the fair value of MSRs generally will increase as prepayments on the underlying loans would be expected to decline. Based on the estimated fair value at December 31, 2015 and 2014, management determined there was no impairment within the MSR portfolio. Loan servicing income is reported on the income statement as a component of Mortgage Banking income. Loan servicing income is recorded as loan payments are collected and includes servicing fees from investors and certain charges collected from borrowers. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan and are recorded as income when earned. Loan servicing income totaled $1.9 million, $1.8 million and $2.1 million for the years ended December 31, 2015, 2014 and 2013. Late fees and ancillary fees related to loan servicing are considered nominal. Loans — The Bank’s financing receivables consist primarily of loans and a minimal amount of lease financing receivables (together referred to as “loans”). Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, inclusive of purchase premiums or discounts, deferred loan fees and costs and the Allowance. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method. Premiums on loans held for investment acquired though the Correspondent Lending channel are amortized into interest income on the level-yield method over the expected life of the loan. Lease financing receivables, all of which are direct financing leases, are reported at their principal balance outstanding net of any unearned income, deferred fees and costs and applicable Allowance. Leasing income is recognized on a basis that achieves a constant periodic rate of return on the outstanding lease financing balances over the lease terms. Interest income on mortgage and commercial loans is typically discontinued at the time the loan is 80 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan, which may define past due status by the number of days or the number of payments past due. In most cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Non-accrual loans and loans past due 80 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Interest accrued but not received for all classes of loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured, typically a minimum of six months of performance. Consumer and credit card loans, are not placed on non-accrual status, but are reviewed periodically and charged off when the loans reach 90 days past due or at any point the loan is deemed uncollectible. Loans purchased in an acquisition are accounted for using one of the following accounting standards: · ASC Topic 310-20, Non Refundable Fees and Other Costs , is used to value loans that have not demonstrated post origination credit quality deterioration and the acquirer expects to collect all contractually required payments from the borrower. For these loans, the difference between the loan’s day-one fair value and amortized cost would be amortized or accreted into income using the interest method. · ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality , is used to value purchase credit impaired (“PCI”) loans. For these loans, it is probable the acquirer will be unable to collect all contractually required payments from the borrower. Under ASC Topic 310-30, the expected cash flows that exceed the initial investment in the loan, or fair value, represent the “accretable yield,” which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. Purchased loans accounted for under ASC Topic 310-20 are accounted for as any other Bank-originated loan, potentially becoming nonaccrual or impaired, as well as being risk rated under the Bank’s standard practices and procedures. In addition, these loans are considered in the determination of the Allowance once day-one fair values are final. In determining the day-one fair values of PCI loans, management considers a number of factors including, among other things, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, estimated holding periods and net present value of cash flows expected to be received. The Bank generally accounts for PCI loans individually, as opposed to aggregating the loans into pools based on common risk characteristics such as loan type. Management separately monitors the PCI portfolio and on a quarterly basis reviews the loans contained within this portfolio against the factors and assumptions used in determining the day-one fair values. In addition to its quarterly evaluation, a loan is typically reviewed when it is modified or extended, or when material information becomes available to the Bank that provides additional insight regarding the loan’s performance, estimated life, the status of the borrower, or the quality or value of the underlying collateral. To the extent that a PCI loan’s performance does not reflect an increased risk of loss of contractual principal beyond the non-accretable yield established as part of its initial day-one evaluation, such loan would be classified in the Purchased Credit Impaired - Group 1 (“PCI-1”) category, whose credit risk is considered by management equivalent to a non-PCI Special Mention loan within the Bank’s credit rating matrix. PCI-1 loans are considered impaired if, based on current information and events, it is probable that the future estimated cash flows of the loan have deteriorated from management’s initial acquisition day estimate. Provisions are made for impaired PCI-1 loans to further discount the loan and allow its yield to conform to at least management’s initial expectations. Any improvement in the expected performance of a PCI-1 loan would result in a reversal of the Provision to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income. If during the Bank’s periodic evaluations of its PCI loan portfolio, management deems a PCI-1 loan to have an increased risk of loss of contractual principal beyond the non-accretable yield established as part of its initial day-one evaluation, such loan would be classified PCI-Substandard (“PCI-Sub”) within the Bank’s credit risk matrix. Management deems the risk of default and overall credit risk of a PCI-Sub loan to be greater than a PCI-1 loan and more analogous to a non-PCI Substandard loan. PCI-Sub loans are considered to be impaired. Any improvement in the expected performance of a PCI-Sub loan would result in a reversal of the Provision to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income. PCI loans are placed on non-accrual if management cannot reasonably estimate future cash flows on such loans. If a troubled debt restructuring is performed on a PCI loan, the loan is considered impaired under the applicable troubled debt restructurings (“TDRs”) accounting standards and transferred out of the PCI population. The loan may require an additional Provision if its restructured cash flows are less than management’s initial day-one expectations. PCI loans for which the Bank simply chooses to extend the maturity date are generally not considered TDRs and remain in the PCI population. Allowance for Loan and Lease Losses (“Allowance”) — The Allowance is a valuation allowance for probable incurred credit losses and includes overdrawn deposit accounts. Loan losses are charged against the Allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the Allowance. Management estimates the Allowance required using historical loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors. Allocations of the Allowance may be made for specific classes, but the entire Allowance is available for any loan that, in management’s judgment, should be charged off. Management evaluates the adequacy of the Allowance on a monthly basis and presents and discusses the analysis with the Audit Committee and the Board of Directors on a quarterly basis. The Allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component is based on historical loss experience adjusted for qualitative factors. A non-PCI loan is impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. A PCI loan is considered impaired when, based on current information and events, it is probable that the future estimated cash flows of the loan have deteriorated from management’s initial acquisition day estimate. The Bank defines impaired loans as follows: · All loans internally rated as “Substandard,” “Doubtful” or “Loss”; · All loans on non-accrual status and non-PCI loans past due 90 days-or-more still on accrual; · All retail and commercial TDRs; · All loans internally rated in a PCI category with cash flows that have deteriorated from management’s initial acquisition day estimate; and · Any other situation where the full collection of the total amount due for a loan is improbable or otherwise meets the definition of impaired. Generally, loans are designated as classified or Special Mention to ensure more frequent monitoring. These loans are reviewed to ensure proper earning status and management strategy. If it is determined that there is serious doubt as to performance in accordance with original or modified contractual terms, then the loan is generally downgraded and often placed on non-accrual status. GAAP recognizes three methods to measure specific loan impairment, including: · Cash Flow Method — The recorded investment in the loan is measured against the present value of expected future cash flows discounted at the effective interest rate. The Bank employs this method for a significant portion of its impaired TDRs. Impairment amounts under this method are reflected in the Bank’s Allowance as specific reserves on the respective impaired loan. These specific reserves are adjusted quarterly based upon reevaluation of the expected future cash flows and changes in the recorded investment. · Collateral Method — The recorded investment in the loan is measured against the fair value of the collateral value less applicable selling costs. The Bank employs the fair value of collateral method for its impaired loans when repayment is based solely on the sale of or the operations of the underlying collateral. Collateral fair value is typically based on the most recent real estate valuation on file. Measured impairment under this method is generally charged off unless the loan is a smaller balance, homogeneous mortgage loan. The Bank’s selling costs for its collateral dependent loans typically range from 10-13% of the fair value of the underlying collateral, depending on the asset class. Selling costs are not applicable for collateral dependent loans whose repayment is based solely on the operations of the underlying collateral. · Market Value Method — The recorded investment in the loan is measured against the loan’s obtainable market value. The Bank does not currently employ this technique, as it is typically found impractical. In addition to obtaining appraisals at the time of origination, the Bank typically updates appraisals and/or broker price opinions for loans with potential impairment. Updated valuations for commercial related credits exhibiting an increased risk of loss are typically obtained within one year of the previous valuation. Collateral values for past due residential mortgage loans and home equity loans are generally updated prior to a loan becoming 90 days delinquent, but no more than 180 days past due. When measuring impairment, to the extent updated collateral values cannot be obtained due to the lack of recent comparable sales or for other reasons, the Bank discounts the valuation of the collateral primarily based on the age of the appraisal and the real estate market conditions of the location of the underlying collateral. The general component of the Allowance covers loans collectively evaluated for impairment and is based on historical loss experience, with potential adjustments for current relevant qualitative factors. Historical loss experience is determined by loan performance and class and is based on the actual loss history experienced by the Bank. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are included in the general component unless the loans are classified as TDRs or on non-accrual. In determining the historical loss rates for each respective loan class, management evaluates the following historical loss rate scenarios: · Rolling four quarter average · Rolling eight quarter average · Rolling twelve quarter average · Rolling sixteen quarter average · Rolling twenty quarter average · Rolling twenty-four quarter average · Rolling twenty-eight quarter average · Current year to date historical loss factor average · Peer group loss factors In order to take account of periods of economic growth and economic downturn, management generally uses the highest of the rolling four, eight, twelve, sixteen, twenty, twenty-four, or twenty-eight quarter averages for each loan class when determining its historical loss factors for its “Pass” rated and nonrated credits. Loan classes are also evaluated utilizing subjective factors in addition to the historical loss calculations to determine a loss allocation for each class. Management assigns risk multiples to certain classes to account for qualitative factors such as: · Changes in nature, volume and seasoning of the portfolio; · Changes in experience, ability and depth of lending management and other relevant staff; · Changes in the quality of the Bank’s credit review system; · Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; · Changes in the volume and severity of past due, non-performing and classified loans; · Changes in the value of underlying collateral for collateral-dependent loans; · Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of portfolios, including the condition of various market segments; · The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and · The effect of other external factors such as competition and |
ACQUISITION (SUBSEQUENT EVENT)
ACQUISITION (SUBSEQUENT EVENT) | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition (Subsequent Event) [Abstract] | |
Acquisition (Subsequent Event) | 2. ACQUISITION (SUBSEQUENT EVENT) Effective October 6, 2015, the Company and Cornerstone Bancorp, Inc. (“Cornerstone”), the parent company of Cornerstone Community Bank (“CCB”), entered into an Agreement and Plan of Merger (the “Agreement”) pursuant to which the Company will acquire Cornerstone, with CCB merging into RB&T. Cornerstone and CCB are headquartered in St. Petersburg, Florida. Under the terms of the Agreement, the Company will acquire all of Cornerstone’s outstanding common stock in an all-cash transaction, resulting in a total cash payment to Cornerstone’s existing shareholders and stock option holders of approximately $32.3 million. The Company will fund the cash payment through existing resources on-hand. The acquisition is expected to close during the first half of 2016. On December 31, 2015, Cornerstone operated four banking centers in the Tampa, Florida metropolitan statistical area, with approximately $250 million in total assets, approximately $190 million in loans and approximately $200 million in deposits. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2015 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | 3. INVESTMENT SECURITIES Securities Available for Sale The gross amortized cost and fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows: Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ $ Private label mortgage backed security — Mortgage backed securities - residential Collateralized mortgage obligations Freddie Mac preferred stock — — Mutual fund — Corporate bonds Trust preferred security — — Total securities available for sale $ $ $ $ Gross Gross Amortized Unrealized Unrealized Fair December 31, 2014 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ $ Private label mortgage backed security — Mortgage backed securities - residential Collateralized mortgage obligations Freddie Mac preferred stock — — Mutual fund — Corporate bonds — Total securities available for sale $ $ $ $ Securities Held to Maturity The carrying value, gross unrecognized gains and losses, and fair value of securities held to maturity were as follows: Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2015 (in thousands) Value Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ — $ Mortgage backed securities - residential — Collateralized mortgage obligations — Corporate bonds — Total securities held to maturity $ $ $ $ Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2014 (in thousands) Value Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ $ Mortgage backed securities - residential — Collateralized mortgage obligations Corporate bonds — Total securities held to maturity $ $ $ $ At December 31, 2015 and 2014, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity. Sales of Securities Available for Sale During 2015, the Bank recognized a gross gain of $88,000 on the call of one security available for sale. The tax provision related to the Bank’s realized gain totaled $31,000 for the year ended December 31, 2015. During 2015, 2014 and 2013, there were no sales of securities available for sale. Investment Securities by Contractual Maturity The amortized cost and fair value of the investment securities portfolio by contractual maturity at December 31, 2015 follows. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are detailed separately. Securities Securities Available for Sale Held to Maturity Amortized Fair Carrying Fair December 31, 2015 (in thousands) Cost Value Value Value Due in one year or less $ $ $ — $ — Due from one year to five years Due from five years to ten years — — Due beyond ten years — — Private label mortgage backed security — — Mortgage backed securities - residential Collateralized mortgage obligations Freddie Mac preferred stock — — — Mutual fund — — Total securities $ $ $ $ Freddie Mac Preferred Stock During 2008, the U.S. Treasury, the Federal Reserve Board, and the Federal Housing Finance Agency (“FHFA”) announced that the FHFA was placing Freddie Mac under conservatorship and giving management control to the FHFA. The Bank contemporaneously determined that its 40,000 shares of Freddie Mac preferred stock were fully impaired and recorded an OTTI charge of $2.1 million in 2008. The OTTI charge brought the carrying value of the stock to $0. During the second quarter of 2014, based on active trading volume of Freddie Mac preferred stock, the Company determined it appropriate to record an unrealized gain to OCI related to its Freddie Mac preferred stock holdings. Based on the stock’s market closing price as of December 31, 2015, the Company’s unrealized gain for its Freddie Mac preferred stock totaled $173,000. Corporate Bonds During 2013, the Bank purchased $20 million in floating rate corporate bonds with an initial weighted average yield of 1.36%. The bonds had a weighted average life of seven years and were rated “investment grade” by accredited rating agencies as of their respective purchase dates. The total fair value of the Bank’s corporate bonds represented 4% of the Bank’s investment portfolio as of December 31, 2015 and 2014. Mortgage backed Securities and Collateralized Mortgage Obligations At December 31, 2015, with the exception of the $5.1 million private label mortgage backed security, all other mortgage backed securities held by the Bank were issued by U.S. government-sponsored entities and agencies, primarily Freddie Mac and Fannie Mae (“FNMA”), institutions that the government has affirmed its commitment to support. At December 31, 2015 and 2014, there were gross unrealized losses of $1.1 million and $1. 2 million related to available for sale mortgage backed securities and collateralized mortgage obligations. Because these unrealized losses are attributable to changes in interest rates and illiquidity, and not credit quality, and because the Bank does not have the intent to sell these securities, and it is likely that it will not be required to sell these securities before their anticipated recovery, management does not consider these securities to be other-than-temporarily impaired. Trust Preferred Security During the fourth quarter of 2015, the Parent Company purchased a $3 million floating rate trust preferred security at a price of 68% of par. The coupon on this security is based on the 3-month LIBOR rate plus 159 basis points, giving the Parent Company an expected yield to maturity of 4.27% when considering the discount. The Company performed an initial analysis prior to acquisition and performs ongoing analysis of the credit risk of the underlying borrower in relation to this security. Market Loss Analysis Securities with unrealized losses at December 31, 2015 and 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows: Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2015 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ $ $ $ $ $ Mortgage backed securities - residential — — Collateralized mortgage obligations Corporate bonds — — Total securities available for sale $ $ $ $ $ $ Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2014 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ $ $ — $ — $ $ Mortgage backed securities - residential — — Collateralized mortgage obligations Total securities available for sale $ $ $ $ $ $ Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2015 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities held to maturity: Corporate bonds $ $ $ — — $ $ Total securities held to maturity $ $ $ — $ — $ $ Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2014 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities held to maturity: U.S. Treasury securities and U.S. Government agencies $ $ $ — $ — $ $ Collateralized mortgage obligations — — Corporate bonds — — Total securities held to maturity $ $ $ — $ — $ $ At December 31, 2015, the Bank’s portfolio consisted of 162 securities, 34 of which were in an unrealized loss position. At December 31, 2014, the Bank’s portfolio consisted of 157 securities, 17 of which were in an unrealized loss position. Other-Than-Temporary Impairment Unrealized losses for all investment securities are reviewed to determine whether the losses are “other-than-temporary.” Investment securities are evaluated for OTTI on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to determine whether a decline in value below amortized cost is other-than-temporary. In conducting this assessment, the Bank evaluates a number of factors including, but not limited to: · The length of time and the extent to which fair value has been less than the amortized cost basis; · The Bank’s intent to hold until maturity or sell the debt security prior to maturity; · An analysis of whether it is more-likely-than-not that the Bank will be required to sell the debt security before its anticipated recovery; · Adverse conditions specifically related to the security, an industry, or a geographic area; · The historical and implied volatility of the fair value of the security; · The payment structure of the security and the likelihood of the issuer being able to make payments; · Failure of the issuer to make scheduled interest or principal payments; · Any rating changes by a rating agency; and · Recoveries or additional decline in fair value subsequent to the balance sheet date. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a general lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the value of the security is reduced and a corresponding charge to earnings is recognized for the anticipated credit losses. The Bank owns one private label mortgage backed security with a total carrying value of $5.1 million at December 31, 2015. This security, with an average remaining life currently estimated at five years, is mostly backed by “Alternative A” first lien mortgage loans, but also has an insurance “wrap” or guarantee as an added layer of protection to the security holder. This asset is illiquid, and as such, the Bank determined it to be a Level 3 security in accordance with ASC Topic 820, Fair Value Measurements and Disclosures. Based on this determination, the Bank utilized an income valuation model (“present value model”) approach, in determining the fair value of the security. This approach is beneficial for positions that are not traded in active markets or are subject to transfer restrictions, and/or where valuations are adjusted to reflect illiquidity and/or non-transferability. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. Management’s best estimate consists of both internal and external support for this investment. See additional discussion regarding the Bank’s private label mortgage backed security in this section of the filing under Footnote 5 “Fair Value.” The following table presents a rollforward of the Bank’s private label mortgage backed security credit losses recognized in earnings: Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Recovery of losses previously recorded Realized pass through of actual losses — — — Balance, end of year $ $ $ Further deterioration in economic conditions could cause the Bank to record an additional impairment charge related to credit losses of up to $4.0 million, which is the current gross amortized cost of the Bank’s remaining private label mortgage backed security. Pledged Investment Securities Investment securities pledged to secure public deposits, securities sold under agreements to repurchase and securities held for other purposes, as required or permitted by law are as follows: December 31, (in thousands) 2015 2014 Carrying amount $ $ Fair value |
LOANS AND ALLOWANCE FOR LOAN AN
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | 12 Months Ended |
Dec. 31, 2015 | |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | 4. LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES The composition of the loan portfolio at period end follows: December 31, (in thousands) 2015 2014 Residential real estate: Owner occupied $ $ Owner occupied - correspondent* Non owner occupied Commercial real estate Commercial real estate - purchased whole loans* Construction & land development Commercial & industrial Lease financing receivables Warehouse lines of credit Home equity Consumer: RPG loans* Credit cards Overdrafts Purchased whole loans* Other consumer Total loans** Allowance for loan and lease losses Total loans, net $ $ * Identifies loans to borrowers located primarily outside of the Bank’s market footprint. ** Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs. See table directly below for expanded detail. The table below reconciles the contractually receivable and carrying amounts of loans at December 31, 2015 and 2014: December 31, (in thousands) 2015 2014 Contractually receivable $ $ Unearned income(1) Unamortized premiums(2) Unaccreted discounts(3) Net unamortized deferred origination fees and costs Carrying value of loans $ $ (1) Unearned income relates to lease financing receivables. (2) Premiums predominately relate to loans acquired through the Bank’s Correspondent Lending channel. (3) Unaccreted discounts includes both accretable and non-accretable discounts and predominately relates to loans acquired in the Bank’s 2012 FDIC-assisted transactions. Loan Purchases In May 2014, the Bank began acquiring single family, first lien mortgage loans for investment within its loan portfolio through its Correspondent Lending channel. Correspondent Lending generally involves the Bank acquiring, primarily from Warehouse clients, closed loans that meet the Bank’s specifications. Substantially all loans purchased through the Correspondent Lending channel are purchased at a premium. Loans acquired through the Correspondent Lending channel generally reflect borrowers outside of the Bank’s historical market footprint, with 78% of loans acquired through this origination channel as of December 31, 2015, secured by collateral in the state of California. In addition to secured mortgage loans acquired through its Correspondent Lending channel, the Bank also began acquiring unsecured consumer installment loans for investment from a third-party originator in April 2014. Such consumer loans are purchased at par and are selected by the Bank based on certain underwriting characteristics. The table below reflects the purchase activity of single family, first lien mortgage loans and unsecured consumer loans, by class, during 2015 and 2014. No purchases of these types of loans were made during 2013. Years Ended December 31, (in thousands) 2015 2014 Residential real estate: Owner occupied - correspondent* $ $ Consumer: Purchased whole loans* Total purchased loans $ $ *Represents origination amount, inclusive of applicable purchase premiums. Subprime Lending The Bank has certain classes of loans that are considered to be “subprime” strictly due to the credit score of the borrower at the time of origination. These loans totaled approximately $5 1 million and $5 3 million at December 31, 2015 and 2014. Approximately $1 4 million and $1 5 million of the outstanding subprime loans at December 31, 2015 and 2014 were originated for Community Reinvestment Act (“CRA”) purposes. Management does not consider these loans to possess significantly higher credit risk due to other underwriting qualifications. Purchased Credit Impaired (“PCI”) Loans PCI loans acquired during the Bank’s 2012 FDIC-assisted transactions are accounted for under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. The table below reconciles the contractually required and carrying amounts of PCI loans at December 31, 2015 and 2014: December 31, (in thousands) 2015 2014 Contractually-required principal $ $ Non-accretable amount Accretable amount Carrying value of loans $ $ The following table presents a rollforward of the accretable amount on PCI loans for years ended December 31, 2015, 2014 and 2013: Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Transfers between non-accretable and accretable Net accretion into interest income on loans, including loan fees Other changes — — — Balance, end of year $ $ $ Credit Quality Indicators Bank procedures for assessing and maintaining credit gradings differs slightly depending on whether a new or renewed loan is being underwritten, or whether an existing loan is being re-evaluated for potential credit quality concerns. The latter usually occurs upon receipt of updated financial information, or other pertinent data, that would potentially cause a change in the loan grade. Specific Bank procedures for the years ending December 2015 and 2014 follow: · For new and renewed commercial and industrial (“C&I”), commercial real estate (“CRE”) and construction and land development loans, the Bank’s CAD assigns the credit quality grade to the loan. Loan grades for new C&I, CRE and construction and land development loans with an aggregate credit exposure of $2 million or greater are validated by the Senior Loan Committee (“SLC”). · The SLC consists of senior and executive personnel. · Commercial loan officers are responsible for monitoring their respective loan portfolios and reporting any adverse material changes to the senior management. When circumstances warrant a review and possible change in the credit quality grade, loan officers are required to notify the Bank’s CAD. · A senior officer meets monthly with commercial loan officers to discuss the status of past due loans and possible classified loans. These meetings are designed to give loan officers an opportunity to identify existing loans that should be downgraded. · Monthly, members of senior management along with managers of Commercial Lending, CAD, Accounting, Special Assets and Retail Collections attend a Special Asset Committee (“SAC”) meeting. The SAC reviews all C&I and CRE, classified, and impaired loans in excess of $100,000 and discusses the relative trends and current status of these assets. In addition, the SAC reviews all retail residential real estate loans exceeding $750,000 and all home equity loans exceeding $100,000 that are 80-days or more past due or that are on non-accrual status. SAC also reviews the actions taken by management regarding credit quality grades, foreclosure mitigation, loan extensions, troubled debt restructurings and collateral repossessions. Based on the information reviewed in this meeting, the SAC approves all specific loan loss allocations to be recognized by the Bank within the Allowance analysis. · All new and renewed warehouse lines of credit are approved by the SLC and Executive Loan Committee. The CAD assigns the initial credit quality grade to warehouse facilities. Monthly, members of senior management along with the SLC, review warehouse lending activity and monitor key performance indicators such as average days outstanding, average Fair Isaac Corporation (“FICO”) credit report score, average loan-to-value (“LTV”) and other important factors. On at least an annual basis, the Bank’s internal loan review department analyzes all aggregate lending relationships with outstanding balances greater than $1 million that are internally classified as “Special Mention,” “Substandard,” “Doubtful” or “Loss.” In addition, for all “Pass” rated loans, the Bank analyzes, on at least an annual basis, all aggregate lending relationships with outstanding balances exceeding $4 million. The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, public information, and current economic trends. The Bank also considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s). The Bank analyzes loans individually, and based on this analysis, establishes a credit risk rating. The Bank uses the following definitions for risk ratings: Risk Grade 1 — Excellent (Pass): Loans fully secured by liquid collateral, such as certificates of deposit, reputable bank letters of credit, or other cash equivalents; loans fully secured by publicly traded marketable securities where there is no impediment to liquidation; or loans to any publicly held company with a current long-term debt rating of A or better. Risk Grade 2 — Good (Pass): Loans to businesses that have strong financial statements containing an unqualified opinion from a Certified Public Accounting firm and at least three consecutive years of profits; loans supported by unaudited financial statements containing strong balance sheets, five consecutive years of profits, a five-year satisfactory relationship with the Bank, and key balance sheet and income statement trends that are either stable or positive; loans that are guaranteed or otherwise backed by the full faith and credit of the U.S. government or an agency thereof, such as the Small Business Administration; or loans to publicly held companies with current long-term debt ratings of Baa or better. Risk Grade 3 — Satisfactory (Pass): Loans supported by financial statements (audited or unaudited) that indicate average or slightly below average risk and having some deficiency or vulnerability to changing economic conditions; loans with some weakness but offsetting features of other support are readily available; loans that are meeting the terms of repayment, but which may be susceptible to deterioration if adverse factors are encountered. Risk Grade 4 — Satisfactory/Monitored (Pass): Loans in this category are considered to be of acceptable credit quality, but contain greater credit risk than Satisfactory loans due to weak balance sheets, marginal earnings or cash flow, or other uncertainties. These loans warrant a higher than average level of monitoring to ensure that weaknesses do not advance. The level of risk in a Satisfactory/Monitored loan is within acceptable underwriting guidelines so long as the loan is given the proper level of management supervision. Risk Grade 5 — Special Mention: Loans that possess some credit deficiency or potential weakness that deserves close attention. Such loans pose an unwarranted financial risk that, if not corrected, could weaken the loan by adversely impacting the future repayment ability of the borrower. The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk and (2) credit weaknesses are considered potential and are not defined impairments to the primary source of repayment. Purchased Credit Impaired Loans - Group 1 (“PCI-1”): To the extent that a PCI loan’s performance does not reflect an increased risk of loss of contractual principal beyond the non-accretable yield established as part of its initial day-one evaluation, such loan would be classified in the Purchased Credit Impaired - Group 1 (“PCI-1”) category, whose credit risk is considered by management equivalent to a non-PCI “Special Mention” loan within the Bank’s credit rating matrix. PCI-1 loans are considered impaired if, based on current information and events, it is probable that the future estimated cash flows of the loan have deteriorated from management’s initial acquisition day estimate. Provisions are made for impaired PCI-1 loans to further discount the loan and allow its yield to conform to at least management’s initial expectations. Any improvement in the expected performance of a PCI-1 loan would result in a reversal of the Provision to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income. Purchased Credit Impaired Loans — Substandard (“PCI-Sub”): If during the Bank’s periodic evaluations of its PCI loan portfolio, management deems a PCI-1 loan to have an increased risk of loss of contractual principal beyond the non-accretable yield established as part of its initial day-one evaluation, such loan would be classified PCI-Substandard (“PCI-Sub”) within the Bank’s credit risk matrix. Management deems the risk of default and overall credit risk of a PCI-Sub loan to be greater than a PCI-1 loan and more analogous to a non-PCI “Substandard” loan within the Bank’s credit rating matrix. PCI-Sub loans are considered to be impaired. Any improvement in the expected performance of a PCI-Sub loan would result in a reversal of the Provision to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income. Risk Grade 6 — Substandard: One or more of the following characteristics may be exhibited in loans classified as Substandard: · Loans that possess a defined credit weakness. The likelihood that a loan will be paid from the primary source of repayment is uncertain. Financial deterioration is under way and very close attention is warranted to ensure that the loan is collected without loss. · Loans are inadequately protected by the current net worth and paying capacity of the obligor. · The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees. · Loans have a distinct possibility that the Bank will sustain some loss if deficiencies are not corrected. · Unusual courses of action are needed to maintain a high probability of repayment. · The borrower is not generating enough cash flow to repay loan principal, however, it continues to make interest payments. · The Bank is forced into a subordinated or unsecured position due to flaws in documentation. · The Bank is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan. · There is significant deterioration in market conditions to which the borrower is highly vulnerable. Risk Grade 7 — Doubtful: One or more of the following characteristics may be present in loans classified as Doubtful: · Loans have all of the weaknesses of those classified as Substandard. However, based on existing conditions, these weaknesses make full collection of principal highly improbable. · The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment. · The possibility of loss is high but because of certain important pending factors which may strengthen the loan, loss classification is deferred until the exact status of repayment is known. Risk Grade 8 — Loss: Loans are considered uncollectible and of such little value that continuing to carry them as assets is not feasible. Loans will be classified “Loss” when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future. For all real estate and consumer loans that do not meet the scope above, the Bank uses a grading system based on delinquency and nonaccrual status. Loans that are 80 days or more past due, on nonaccrual, or are troubled debt restructurings are graded “Substandard.” Occasionally, a real estate loan below scope may be graded as “Special Mention” or “Substandard” if the loan is cross-collateralized with a classified C&I or CRE loan. Purchased loans accounted for under ASC Topic 310-20 are accounted for as any other Bank-originated loan, potentially becoming nonaccrual or impaired, as well as being risk rated under the Bank’s standard practices and procedures. In addition, these loans are considered in the determination of the Allowance once day-one fair values are final. Management separately monitors PCI loans, and on at least a quarterly basis, reviews them against the factors and assumptions used in determining day-one fair values. In addition to its quarterly evaluation, a PCI loan is typically reviewed when it is modified or extended, or when information becomes available to the Bank that provides additional insight regarding the loan’s performance, the status of the borrower, or the quality or value of the underlying collateral. If a troubled debt restructuring is performed on a PCI loan, the loan is considered impaired under the applicable TDR accounting standards and transferred out of the PCI population. The loan may require an additional Provision if its restructured cash flows are less than management’s initial day-one expectations. PCI loans for which the Bank simply chooses to extend the maturity date are generally not considered TDRs and remain in the PCI population. Credit Quality Indicators Based on the Bank’s internal analysis performed, the risk category of loans by class follows: Purchased Purchased Credit Credit Impaired Impaired Total December 31, 2015 Special Doubtful / Loans - Loans - Rated (in thousands) Pass Mention* Substandard* Loss Group 1 Substandard Loans** Residential real estate: Owner occupied $ — $ $ $ — $ $ — $ Owner occupied - correspondent — — — — — — — Non owner occupied — — — Commercial real estate — — Commercial real estate - purchased whole loans — — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — — Warehouse lines of credit — — — — — Home equity — — — — Consumer: RPG loans — — — — — — — Credit cards — — — — — — — Overdrafts — — — — — — — Purchased whole loans — — — — — — — Other consumer — — — — Total rated loans $ $ $ $ — $ $ — $ *Special Mention and Substandard loans included $180,000 and $ 1 million, respectively, which were removed from PCI accounting in accordance with ASC 310-30-35-13 due to a post-acquisition troubled debt restructuring. **The above table excludes all non-classified residential real estate and consumer loans at the respective period ends. Purchased Purchased Credit Credit Impaired Impaired Total December 31, 2014 Special Doubtful / Loans - Loans - Rated (in thousands) Pass Mention* Substandard* Loss Group 1 Substandard Loans** Residential real estate: Owner occupied $ — $ $ $ — $ $ — $ Owner occupied - correspondent — — — — — — — Non owner occupied — — — Commercial real estate — — Commercial real estate - Purchased whole loans — — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — — Warehouse lines of credit — — — — — Home equity — — — — — Consumer: RPG loans — — — — — — — Credit cards — — — — — — — Overdrafts — — — — — — — Purchased whole loans — — — — — — — Other consumer — — — Total rated loans $ $ $ $ — $ $ — $ * Special Mention and Substandard loans included $443,000 and $6 million, respectively, which were removed from PCI accounting in accordance with ASC 310-30-35-13 due to a post-acquisition troubled debt restructuring. ** The above table excludes all non-classified residential real estate and consumer loans at the respective period ends. Allowance for Loan and Lease Losses Activity in the Allowance follows: Years Ended December 31, (in thousands) 2015 2014 2013 Allowance, beginning of year $ $ $ Charge-offs - Core Banking Charge-offs - RPG — Total charge-offs Recoveries - Core Banking Recoveries - RPG Total recoveries Net (charge-offs) recoveries - Core Banking Net (charge-offs) recoveries - RPG Net (charge-offs) recoveries Provision - Core Banking Provision - RPG Total provision Allowance, end of year $ $ $ The Allowance calculation includes the following qualitative factors, which are considered in combination with the Bank’s historical loss rates in determining the general loss reserve within the Allowance: · Changes in nature, volume and seasoning of the portfolio; · Changes in experience, ability and depth of lending management and other relevant staff; · Changes in the quality of the Bank’s credit review system; · Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; · Changes in the volume and severity of past due, non-performing and classified loans; · Changes in the value of underlying collateral for collateral-dependent loans; · Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of portfolios, including the condition of various market segments; · The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and · The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio. The following tables present the activity in the Allowance by portfolio class for the years ended December 31, 2015, 2014 and 2013: Residential Real Estate Commercial Owner Real Estate - Lease Year Ended Owner Occupied Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2015 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Beginning balance $ $ $ $ $ $ $ $ Provision Charge-offs — — — — Recoveries — — — — Ending balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Beginning balance $ $ $ $ $ $ $ $ Provision Charge-offs — Recoveries — Ending balance $ $ $ $ $ $ $ $ Residential Real Estate Commercial Owner Real Estate - Lease Year Ended Owner Occupied Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2014 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Beginning balance $ $ — $ $ $ $ $ $ — Provision — Charge-offs — — — Recoveries — — — Ending balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Beginning balance $ $ $ — $ $ $ — $ $ Provision Charge-offs — — Recoveries — — Ending balance $ $ $ $ $ $ $ $ Commercial Residential Real Estate Real Estate - Lease Year Ended Owner Owner Occupied - Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2013 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Beginning balance $ NA $ $ $ $ $ NA Provision NA — NA Charge-offs NA — NA Recoveries NA — NA Ending balance $ NA $ $ $ $ $ NA Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Beginning balance $ $ $ — $ $ NA $ $ Provision NA Charge-offs — — NA Recoveries — NA Ending balance $ $ $ — $ $ NA $ $ NA - Not applicable. Non-performing Loans and Non-performing Assets Detail of non-performing loans and non-performing assets and select credit quality ratios follows: December 31, (dollars in thousands) 2015 2014 Loans on nonaccrual status* $ $ Loans past due 90-days-or-more and still on accrual** Total nonperforming loans Other real estate owned Total nonperforming assets $ $ Credit Quality Ratios: Nonperforming loans to total loans % % Nonperforming assets to total loans (including OREO) % % Nonperforming assets to total assets % % *Loans on nonaccrual status include impaired loans. **For all periods presented, loans past due 90-days-or-more and still on accrual consist entirely of PCI loans. The following table presents the recorded investment in nonaccrual loans and loans past due 90-days-or-more and still on accrual by class of loans: Past Due 90-Days-or-More Nonaccrual and Still Accruing Interest* December 31, (in thousands) 2015 2014 2015 2014 Residential real estate: Owner occupied $ $ $ — $ Owner occupied - correspondent — — — — Non owner occupied — — Commercial real estate — Commercial real estate - purchased whole loans — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — Warehouse lines of credit — — — — Home equity — — Consumer: RPG loans — — — — Credit cards — — — — Overdrafts — — — — Purchased whole loans — — — — Other consumer — — Total $ $ $ $ * For all periods presented, loans past due 90-days-or-more and still on accrual consist entirely of PCI loans. Nonaccrual loans and loans past due 90-days-or-more and still on accrual include both smaller balance, primarily retail, homogeneous loans that are individually evaluated for impairment and classified impaired loans. Nonaccrual loans are typically returned to accrual status when all the principal and interest amounts contractually due are brought current and held current for six consecutive months and future contractual payments are reasonably assured. TDRs on nonaccrual status are reviewed for return to accrual status on an individual basis, with additional consideration given to performance under the modified terms. The Bank considers the performance of the loan portfolio and its impact on the Allowance. For residential and consumer loan classes, the Bank also evaluates credit quality based on the aging status of the loan and by payment activity. The following tables present the recorded investment in residential and consumer loans based on payment activity as of December 31, 2015 and 2014: Residential Real Estate Consumer Owner Purchased December 31, 2015 Owner Occupied - Non Owner Home RPG Credit Whole Other (in thousands) Occupied Correspondent Occupied Equity Loans Cards Overdrafts Loans Consumer Performing $ $ $ $ $ $ $ $ $ Nonperforming — — — — — Total $ $ $ $ $ $ $ $ $ Residential Real Estate Consumer Owner Purchased December 31, 2014 Owner Occupied - Non Owner Home RPG Credit Whole Other (in thousands) Occupied Correspondent Occupied Equity Loans Cards Overdrafts Loans Consumer Performing $ $ $ $ $ $ $ $ $ Nonperforming — — — — — Total $ $ $ $ $ $ $ $ $ Delinquent Loans The following tables present the aging of the recorded investment in loans by class of loans: 30 - 59 60 - 89 90 or More December 31, 2015 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Residential real estate: Owner occupied $ $ $ $ $ $ Owner occupied - correspondent — — — — Non owner occupied — Commercial real estate — Commercial real estate - purchased whole loans — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — Warehouse lines of credit — — — — Home equity Consumer: RPG loans — — Credit cards — Overdrafts — — Purchased whole loans — Other consumer — Total $ $ $ $ $ $ Delinquency ratio*** % % % % *All loans past due 90 days-or-more, excluding PCI loans, were on nonaccrual status. **Delinquent status may be determined by either the number of days past due or number of payments past due. ***Represents total loans 30-days-or-more past due divided by total loans. 30 - 59 60 - 89 90 or More December 31, 2014 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Residential real estate: Owner occupied $ $ $ $ $ $ Owner occupied - correspondent — — — — Non owner occupied Commercial real estate — Commercial real estate - purchased whole loans — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — Warehouse lines of credit — — — — Home equity Consumer: RPG loans — Credit cards — Overdrafts — — Purchased whole loans — — Other consumer — Total $ $ $ $ $ $ Delinquency ratio*** % % % % *All loans past due 90 days-or-more, excluding PCI loans, were on nonaccrual status. **Delinquent status may be determined by either the number of days past due or number of payments past due. ***Represents total loans 30-days-or-more past due divided by total loans. Impaired Loans Information regarding the Bank’s impaired loans follows: December 31, (in thousands) 2015 2014 2013 Loans with no allocated allowance for loan losses $ $ $ Loans with allocated allowance for loan losses Total impaired loans $ $ $ Amount of the allowance for loan losses allocated $ $ $ Average of individually impaired loans during the year Interest income recognized during impairment Cash basis interest income recognized — — — Approximately $7 million and $ 10 million of impaired loans at December 31, 2015 and, 2014 were PCI loans. Approximately $1 million and $6 million of impaired loans at December 31, 2015 and 2014 were formerly PCI loans which became classified as “impaired” through a post-acquisition troubled debt restructuring. The following tables present the balance in the Allowance and the recorded investment in loans by portfolio class based on impairment method as of December 31, 2015 and 2014: Residential Real Estate Commercial Owner Real Estate - Lease Owner Occupied - Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2015 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ $ — $ $ $ — $ $ $ — Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ $ — $ $ $ — $ $ $ — Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — — Total ending loan balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — — PCI loans without post acquisition impairment — — — — — — — Total ending loan balance $ $ $ $ $ $ $ $ Residential Real Estate Commercial Owner Real Estate - Lease Owner Occupied - Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2014 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ $ — $ $ $ — $ $ $ — Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ $ — $ $ $ — $ $ $ — Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — Total ending loan balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — PCI loans without post acquisition impairment — — — — — — Total ending loan balance $ $ $ $ $ $ $ $ The following tables present loans individually evaluated for impairment by class of loans as of December 31, 2015, 2014 and 2013. The difference between the “Unpaid Principal Balance” and “Recorded Investment” columns represents life-to-date partial write downs/charge-offs taken on individual impaired credits. As of Twelve Months Ended December 31, 2015 December 31, 2015 Cash Basis Unpaid Average Interest Interest Principal Recorded Allowance Recorded Income Income (in thousands) Balance Investment Allocated Investment Recognized Recognized Impaired loans with no related allowance recorded: Residential real estate: Owner occupied $ $ $ — $ $ $ — Owner occupied - correspondent — — — — — — Non owner occupied — — |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE | |
FAIR VALUE | 5. FAIR VALUE Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (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. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Bank used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Securities available for sale: Quoted market prices in an active market are available for the Bank’s mutual fund investment and fall within Level 1 of the fair value hierarchy. Except for the Bank’s mutual fund investment, its private label mortgage backed security and its trust preferred security, the fair value of securities available for sale is typically determined by matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The Bank’s private label mortgage backed security remains illiquid, and as such, the Bank classifies this security as a Level 3 security in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures.” Based on this determination, the Bank utilized an income valuation model (present value model) approach in determining the fair value of this security. See in this section of the filing under Footnote 3 “Investment Securities” for additional discussion regarding the Bank’s private label mortgage backed security. The Company’s trust preferred security is also considered highly illiquid and also valued using Level 3 inputs. The Company acquired the security in November 2015 and considered the acquisition price to still approximate market value at December 31, 2015, as there has been no meaningful market activity or events that management believes changed the investment’s value subsequent to acquisition. Mortgage loans held for sale: The fair value of mortgage loans held for sale is determined using quoted secondary market prices. Mortgage loans held for sale are classified as Level 2 in the fair value hierarchy. Mortgage Banking derivatives : Mortgage Banking derivatives used in the ordinary course of business primarily consist of mandatory forward sales contracts (“forward contracts”) and interest rate lock loan commitments. The fair value of the Bank’s derivative instruments is primarily measured by obtaining pricing from broker-dealers recognized to be market participants. The pricing is derived from market observable inputs that can generally be verified and do not typically involve significant judgment by the Bank. Forward contracts and rate lock loan commitments are classified as Level 2 in the fair value hierarchy. Interest rate swap agreements used for interest rate risk management: Interest rate swaps are recorded at fair value on a recurring basis. The Company utilizes interest rate swap agreements as part of the management of interest rate risk to modify the repricing characteristics of certain portions of the Company’s interest-bearing liabilities. The Company values its interest rate swaps using Bloomberg Valuation Service’s derivative pricing functions and therefore classifies such valuations as Level 2. Valuations of these interest rate swaps are also received from the relevant counterparty and validated against internal calculations. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities. Impaired loans: Collateral dependent impaired loans generally reflect partial charge-downs to their respective fair value, which is commonly based on recent real estate appraisals or broker price opinions (“BPOs”). These appraisals or BPOs may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the process by the independent experts to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Collateral dependent loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Premises, held for sale: Premises held for sale are accounted for at the lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments may be significant and typically result in a Level 3 classification of the inputs for determining fair value. Other real estate owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals or BPOs. These appraisals or BPOs may utilize a single approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the process by the independent experts to adjust for differences between the comparable sales and income data available. Such adjustments may be significant and typically result in a Level 3 classification of the inputs for determining fair value. 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 the Bank. Once the appraisal is received, a member of the Bank’s Credit Administration Department 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. On at least an annual basis, the Bank performs a back test of collateral appraisals by comparing actual selling prices on recent collateral sales to the most recent appraisal of such collateral. Back tests are performed for each collateral class, e.g. residential real estate or commercial real estate, and may lead to additional adjustments to the value of unliquidated collateral of similar class. Mortgage servicing rights: On at least a quarterly basis, MSRs are evaluated for impairment based upon the fair value of the MSRs as compared to carrying amount. If the carrying amount of an individual grouping exceeds fair value, impairment is recorded and the respective individual tranche is carried at fair value. If the carrying amount of an individual grouping does not exceed fair value, impairment is reversed if previously recognized and the carrying value of the individual tranche is based on the amortization method. The valuation model utilizes assumptions that market participants would use in estimating future net servicing income and that can generally be validated against available market data (Level 2). There were no MSR tranches carried at fair value at December 31, 2015 and 2014. Assets and liabilities measured at fair value on a recurring basis , including financial assets and liabilities for which the Bank has elected the fair value option, are summarized below: Fair Value Measurements at December 31, 2015 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Financial assets: Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ — $ $ — $ Private label mortgage backed security — — Mortgage backed securities - residential — — Collateralized mortgage obligations — — Freddie Mac preferred stock — — Mutual fund — — Corporate bonds — — Trust preferred security — — Total securities available for sale $ $ $ $ Mortgage loans held for sale $ — $ $ — $ Rate lock commitments — — Interest rate swap agreements — — Financial liabilities: Mandatory forward contracts — — Interest rate swap agreements — — Fair Value Measurements at December 31, 2014 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Financial assets: Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ — $ $ — $ Private label mortgage backed security — — Mortgage backed securities - residential — — Collateralized mortgage obligations — — Freddie Mac preferred stock — — Mutual fund — — Corporate bonds — — Total securities available for sale $ $ $ $ Mortgage loans held for sale $ — $ $ — $ Rate lock commitments — — Financial liabilities: Mandatory forward contracts — — Interest rate swap agreements — — All transfers between levels are generally recognized at the end of each quarter. There were no transfers into or out of Level 1, 2 or 3 assets during the years ended December 31, 2015 and 2014. The table below presents a reconciliation of the Bank’s Private Label Mortgage Backed Security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods ended December 31, 2015, 2014 and 2013: Private Label Mortgage Backed Security Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Total gains or losses included in earnings: Net change in unrealized gain (loss) Recovery of actual losses previously recorded Principal paydowns Balance, end of year $ $ $ The fair value of the Bank’s single private label mortgage backed security is supported by analysis prepared by an independent third party. The third party’s approach to determining fair value involved several steps: 1) detailed collateral analysis of the underlying mortgages, including consideration of geographic location, original loan-to-value and the weighted average FICO score of the borrowers; 2) collateral performance projections for each pool of mortgages underlying the security (probability of default, severity of default, and prepayment probabilities) and 3) discounted cash flow modeling. The significant unobservable inputs in the fair value measurement of the Bank’s single private label mortgage backed security are prepayment rates, probability of default and loss severity in the event of default. Significant fluctuations in any of those inputs in isolation would result in a significantly different fair value measurement. The following tables present quantitative information about recurring Level 3 fair value measurements at December 31, 2015 and 2014: Fair Valuation December 31, 2015 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ Discounted cash flow (1) Constant prepayment rate 0.0% - 6.5% (2) Probability of default 3.0% - 9.0% (2) Loss severity 60% - 90% Fair Valuation December 31, 2014 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ Discounted cash flow (1) Constant prepayment rate 0.5% - 6.5% (2) Probability of default 3.0% - 6.2% (2) Loss severity 60% - 75% Trust Preferred Security The Company invested in its Trust Preferred Security during 2015. The table below presents a reconciliation of the Company’s Trust Preferred Security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period ended December 31, 2015: Year Ended December 31, (in thousands) 2015 Balance, beginning of year $ — Purchases, net of accretion recognized Balance, end of year $ Mortgage Loans Held for Sale The Bank has elected the fair value option for mortgage loans held for sale. These loans are intended for sale and the Bank believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with Bank policy for such instruments. None of these loans were past due 90-days-or-more nor on nonaccrual as of December 31, 2015 and 2014. As of December 31, 2015 and 2014, the aggregate fair value, contractual balance (including accrued interest), and unrealized gain was as follows: December 31, (in thousands) 2015 2014 Aggregate fair value $ $ Contractual balance Unrealized gain The total amount of gains and losses from changes in fair value of mortgage loans held for sale included in earnings for 2015, 2014 and 2013 are presented in the following table: Years Ended December 31, (in thousands) 2015 2014 2013 Interest income $ $ $ Change in fair value Total included in earnings $ $ $ Assets measured at fair value on a non-recurring basis are summarized below: Fair Value Measurements at December 31, 2015 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Impaired loans: Residential real estate: Owner occupied $ — $ — $ $ Non owner occupied — — Commercial real estate — — Home equity — — Total impaired loans* $ — $ — $ $ Other real estate owned: Residential real estate $ — $ — $ $ Commercial real estate — — Construction & land development — — Total other real estate owned $ — $ — $ $ Premises, held for sale $ — $ — $ $ Fair Value Measurements at December 31, 2014 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Impaired loans: Residential real estate: Owner occupied $ — $ — $ $ Non owner occupied — — Commercial real estate — — Home equity — — Total impaired loans* $ — $ — $ $ Other real estate owned: Residential real estate $ — $ — $ $ Commercial real estate — — Construction & land development — — Total other real estate owned $ — $ — $ $ Premises, held for sale $ — $ — $ $ * The difference between the carrying value and the fair value of impaired loans measured at fair value is reconciled in a subsequent table of this Footnote. The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2015 and 2014: Range Fair Valuation Unobservable (Weighted December 31, 2015 (dollars in thousands) Value Technique Inputs Average) Impaired loans - residential real estate owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 53% (7%) Impaired loans - residential real estate non owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 1% (1%) Impaired loans - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 58% (19%) Impaired loans - commercial real estate $ Income approach Adjustments for differences between net operating income expectations 17% (17%) Impaired loans - home equity $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 29% (20%) Other real estate owned - residential real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 18% (18%) Other real estate owned - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 12% - 23% (13%) Other real estate owned - construction & land development $ Sales comparison approach Adjustments determined for differences between comparable sales 49% (49%) Premises, held for sale $ Sales comparison approach Adjustments determined for differences between comparable sales 5% (5%) Range Fair Valuation Unobservable (Weighted December 31, 2014 (dollars in thousands) Value Technique Inputs Average) Impaired loans - residential real estate owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 33% (7%) Impaired loans - residential real estate non owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 33% (18%) Impaired loans - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 9% (2%) Impaired loans - commercial real estate $ Income approach Adjustments for differences between net operating income expectations 3% - 37% (22%) Impaired loans - home equity $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 35% (12%) Other real estate owned - residential real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 9% - 23% (19%) Other real estate owned - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 11% - 14% (13%) Other real estate owned - commercial real estate $ Income approach Adjustments for differences between net operating income expectations 19% (19%) Other real estate owned - construction & land development $ Sales comparison approach Adjustments determined for differences between comparable sales 13% - 70% (38%) Other real estate owned - construction & land development $ Income approach Adjustments for differences between net operating income expectations 8% - 9% (8%) Premises, held for sale $ Sales comparison approach Adjustments determined for differences between comparable sales 5% (5%) Impaired Loans Collateral dependent impaired loans are generally measured for impairment using the fair value for reasonable disposition of the underlying collateral. The Bank’s practice is to obtain new or updated appraisals or BPOs on the loans subject to the initial impairment review and then to evaluate the need for an update to this value on an as necessary or possibly annual basis thereafter (depending on the market conditions impacting the value of the collateral). The Bank may discount the valuation amount as necessary for selling costs and past due real estate taxes. If a new or updated appraisal or BPO is not available at the time of a loan’s impairment review, the Bank may apply a discount to the existing value of an old valuation to reflect the property’s current estimated value if it is believed to have deteriorated in either: (i) the physical or economic aspects of the subject property or (ii) material changes in market conditions. The impairment review generally results in a partial charge-off of the loan if fair value less selling costs are below the loan’s carrying value. Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method. Impaired collateral dependent loans are as follows: December 31, (in thousands) 2015 2014 Carrying amount of loans measured at fair value $ $ Estimated selling costs considered in carrying amount Valuation allowance — Total fair value $ $ Years Ended December 31, (in thousands) 2015 2014 2013 Provisions for loss on collateral dependent impaired loans $ $ $ Other Real Estate Owned Other real estate owned, which is carried at the lower of cost or fair value, is periodically assessed for impairment based on fair value at the reporting date. Fair value is determined from external appraisals or BPOs using judgments and estimates of external professionals. Many of these inputs are not observable and, accordingly, these measurements are classified as Level 3. All of the Bank’s individual other real estate owned properties were carried at the lower of their fair value or cost at December 31, 2015 and 2014. Details of other real estate owned carrying value and write downs follow: December 31, (in thousands) 2015 2014 2013 Other real estate carried at fair value $ $ $ Other real estate carried at cost Total carrying value of other real estate owned $ $ $ Other real estate owned write-downs during the year $ $ $ Premises, Held for Sale The Company closed its Hudson, Florida banking center in January 2015. The Hudson premises were held for sale at December 31, 2015 and 2014 and carried at $1 million, its fair value less estimated selling costs. The Hudson premises were written down $132,000 during 2015, with no similar write-downs for 2014. Fair value was determined from an external appraisal using judgments and estimates. Many of these inputs are not observable and, accordingly, these measurements are classified as Level 3. Mortgage Servicing Rights MSRs are carried at lower of cost or fair value with fair value determined by MSR tranche. There were no tranches carried at fair value at December 31, 2015, 2014 and 2013. The carrying amounts and estimated fair values of financial instruments, at December 31, 2015 and 2014 are as follows: Fair Value Measurements at December 31, 2015: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available for sale Securities held to maturity — — Mortgage loans held for sale — — Other loans held for sale — — Loans, net — — Federal Home Loan Bank stock — — — NA Accrued interest receivable — — Liabilities: Non interest-bearing deposits — — Transaction deposits — — Time deposits — — Securities sold under agreements to repurchase and other short-term borrowings — — Federal Home Loan Bank advances — — Subordinated note — — Accrued interest payable — — Fair Value Measurements at December 31, 2014: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available for sale Securities held to maturity — — Mortgage loans held for sale — — Loans, net — — Federal Home Loan Bank stock — — — NA Accrued interest receivable — — Liabilities: Non interest-bearing deposits — — Transaction deposits — — Time deposits — — Securities sold under agreements to repurchase and other short-term borrowings — — Federal Home Loan Bank advances — — Subordinated note — — Accrued interest payable — — Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the Bank’s estimates. The assumptions used in the estimation of the fair value of the Company’s financial instruments are explained below. Where quoted market prices are not available, fair values are based on estimates using discounted cash flow and other valuation techniques. Discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The following fair value estimates cannot be substantiated by comparison to independent markets and should not be considered representative of the liquidation value of the Company’s financial instruments, but rather a good-faith estimate of the fair value of financial instruments held by the Company. In addition to those previously disclosed, the following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents — The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1. Other loans held for sale – Other loans held for sale constitute short-term consumer loans generally sold within two business days of origination. The carrying amounts of these loans, due to their short-term nature, approximate fair value and result in a Level 2 classification. Loans, net of Allowance — The fair value of loans is calculated using discounted cash flows by loan type resulting in a Level 3 classification. The discount rate used to determine the present value of the loan portfolio is an estimated market rate that reflects the credit and interest rate risk inherent in the loan portfolio without considering widening credit spreads due to market illiquidity. The estimated maturity is based on the Bank’s historical experience with repayments adjusted to estimate the effect of current market conditions. The Allowance is considered a reasonable discount for credit risk. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. Federal Home Loan Bank stock — It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability. Accrued interest receivable/payable — The carrying amounts of accrued interest, due to their short-term nature, approximate fair value resulting in a Level 2 classification. Deposits — Fair values for certificates of deposit have been determined using discounted cash flows. The discount rate used is based on estimated market rates for deposits of similar remaining maturities and are classified as Level 2. The carrying amounts of all other deposits, due to their short-term nature, approximate their fair values and are also classified as Level 2. Securities sold under agreements to repurchase — The carrying amount for securities sold under agreements to repurchase generally maturing within ninety days approximates its fair value resulting in a Level 2 classification. Federal Home Loan Bank advances — The fair value of the FHLB advances is obtained from the FHLB and is calculated by discounting contractual cash flows using an estimated interest rate based on the current rates available to the Company for debt of similar remaining maturities and collateral terms resulting in a Level 2 classification. Subordinated note — The fair value for the subordinated note is calculated using discounted cash flows based upon current market spreads to London Interbank Borrowing Rate (“LIBOR”) for debt of similar remaining maturities and collateral terms resulting in a Level 2 classification. The fair value estimates presented herein are based on pertinent information available to management as of the respective period ends. Although management is not aware of any factors that would dramatically affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and, therefore, estimates of fair value may differ significantly from the amounts presented. |
MORTGAGE BANKING ACTIVITIES
MORTGAGE BANKING ACTIVITIES | 12 Months Ended |
Dec. 31, 2015 | |
MORTGAGE BANKING ACTIVITIES | |
MORTGAGE BANKING ACTIVITIES | 6. MORTGAGE BANKING ACTIVITIES Mortgage Banking activities primarily include residential mortgage originations and servicing. Activity for mortgage loans held for sale was as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Origination of mortgage loans held for sale Proceeds from the sale of mortgage loans held for sale Net gain on sale of mortgage loans held for sale Balance, end of year $ $ $ Mortgage loans serviced for others are not reported as assets. The Bank serviced loans for others, primarily FHLMC, totaling $8 83 million and $ 875 million at December 31, 2015 and 2014. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and processing foreclosures. Custodial escrow account balances maintained in connection with serviced loans were approximately $ 6 million and $ 7 million at December 31, 2015 and 2014. The following table presents the components of Mortgage Banking income: Years Ended December 31, (in thousands) 2015 2014 2013 Net gain realized on sale of mortgage loans held for sale $ $ $ Net change in fair value recognized on loans held for sale Net change in fair value recognized on rate lock commitments Net change in fair value recognized on forward contracts Net gain recognized Loan servicing income Amortization of mortgage servicing rights Change in mortgage servicing rights valuation allowance — — Net servicing income recognized Total Mortgage Banking income $ $ $ Activity for capitalized mortgage servicing rights was as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Additions Amortized to expense Change in valuation allowance — — Balance, end of year $ $ $ Activity for the valuation allowance for capitalized mortgage servicing rights was as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ — $ — $ Additions — — — Reductions credited to operations — — Balance, end of year $ — $ — $ — Other information relating to mortgage servicing rights follows: December 31, (dollars in thousands) 2015 2014 Fair value of mortgage servicing rights portfolio $ $ Monthly prepayment rate of unpaid principal balance* 105% - 369% 95% - 462% Discount rate Weighted average default rate Weighted average life in years * Rates are applied to individual tranches with similar characteristics. Estimated future amortization expense of the MSR portfolio (net of the impairment charge) follows; however, actual amortization expense will be impacted by loan payoffs and changes in estimated lives that occur during each respective year: Year (in thousands) 2016 $ 2017 2018 2019 2020 2021 2022 Total $ Mortgage Banking derivatives used in the ordinary course of business primarily consist of mandatory forward sales contracts and interest rate lock loan commitments. Mandatory forward contracts represent future commitments to deliver loans at a specified price and date and are used to manage interest rate risk on loan commitments and mortgage loans held for sale. Interest rate lock loan commitments represent commitments to fund loans at a specific rate. These derivatives involve underlying items, such as interest rates, and are designed to transfer risk. Substantially all of these instruments expire within 90 days from the date of issuance. Notional amounts are amounts on which calculations and payments are based, but which do not represent credit exposure, as credit exposure is limited to the amounts required to be received or paid. Mandatory forward contracts also contain an element of risk in that the counterparties may be unable to meet the terms of such agreements. In the event the counterparties fail to deliver commitments or are unable to fulfill their obligations, the Bank could potentially incur significant additional costs by replacing the positions at then current market rates. The Bank manages its risk of exposure by limiting counterparties to those banks and institutions deemed appropriate by management and the Board of Directors. The Bank does not expect any counterparty to default on their obligations and therefore, the Bank does not expect to incur any cost related to counterparty default. The Bank is exposed to interest rate risk on loans held for sale and rate lock loan commitments. As market interest rates fluctuate, the fair value of mortgage loans held for sale and rate lock commitments will decline or increase. To offset this interest rate risk the Bank enters into derivatives, such as mandatory forward contracts to sell loans. The fair value of these mandatory forward contracts will fluctuate as market interest rates fluctuate, and the change in the value of these instruments is expected to largely, though not entirely, offset the change in fair value of loans held for sale and rate lock commitments. The objective of this activity is to minimize the exposure to losses on rate loan lock commitments and loans held for sale due to market interest rate fluctuations. The net effect of derivatives on earnings will depend on risk management activities and a variety of other factors, including: market interest rate volatility; the amount of rate lock commitments that close; the ability to fill the forward contracts before expiration; and the time period required to close and sell loans. The following table includes the notional amounts and fair values of mortgage loans held for sale and mortgage banking derivatives as of the period ends presented: 2015 2014 December 31, (in thousands) Amount Fair Value Amount Fair Value Included in Mortgage loans held for sale: Mortgage loans held for sale $ $ $ $ Included in other assets: Rate lock loan commitments $ $ $ $ Included in other liabilities: Mandatory forward contracts $ $ $ $ |
INTEREST RATE SWAPS
INTEREST RATE SWAPS | 12 Months Ended |
Dec. 31, 2015 | |
INTEREST RATE SWAPS | |
INTEREST RATE SWAPS | 7. INTEREST RATE SWAPS Interest rate swap derivatives are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For a derivative designated as a cash flow hedge, the effective portion of the derivative’s unrealized gain or loss is recorded as a component of other comprehensive income (loss). For derivatives not designated as hedges, the gain or loss is recognized in current period earnings. Interest Rate Swaps Used as Cash Flow Hedges The Bank entered into two interest rate swap agreements (“swaps”) during 2013 as part of its interest rate risk management strategy. The Bank designated the swaps as cash flow hedges intended to reduce the variability in cash flows attributable to either FHLB advances tied to the three-month LIBOR or the overall changes in cash flows on certain money market deposit accounts tied to one-month LIBOR. The counterparty for both swaps met the Bank’s credit standards and the Bank believes that the credit risk inherent in the swap contracts is not significant. The swaps were determined to be fully effective during all periods presented; therefore, no amount of ineffectiveness was included in net income. The aggregate fair value of the swaps is recorded in other liabilities with changes in fair value recorded in OCI. The amount included in AOCI would be reclassified to current earnings should the hedge no longer be considered effective. The Bank expects the hedges to remain fully effective during the remaining term of the swaps. The following table reflects information about swaps designated as cash flow hedges as of December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Unrealized Unrealized Notional Pay Receive Assets / Gain (Loss) Assets / Gain (Loss) (dollars in thousands) Amount Rate Rate Term (Liabilities) AOCI (Liabilities) in AOCI Interest rate swap on money market deposits $ % 1M LIBOR 12/2013 - 12/2020 $ $ $ $ Interest rate swap on FHLB advance % 3M LIBOR 12/2013 - 12/2020 $ $ $ $ $ The following table reflects the total interest expense recorded on these swap transactions in the consolidated statements of income during the years ended December 31, 2015 and 2014: Years Ended December 31, (in thousands) 2015 2014 2013 Interest rate swap on money market deposits $ $ $ Interest rate swap on FHLB advance Total interest expense on swap transactions $ $ $ The following tables present the net gains (losses) recorded in accumulated OCI and the consolidated statements of income relating to the swaps for the years ended December 31, 2015 and 2014: Years Ended December 31, (in thousands) 2015 2014 2013 Gains (losses) recognized in OCI on derivative (effective portion) $ (514) $ (1,082) $ 147 Losses reclassified from OCI on derivative (effective portion) $ (402) $ (424) $ (23) Gains (losses) recognized in income on derivative (ineffective portion) $ — $ — $ — The estimated net amount of the existing losses that are reported in accumulated OCI at December 31, 2015 that is expected to be reclassified into earnings within the next twelve months is $308,000 . Non-hedge Interest Rate Swaps The Bank enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Bank enters into offsetting positions with institutional swap dealers in order to minimize the Bank’s interest rate risk. These swaps are derivatives, but are not designated as hedging instruments, and therefore changes in fair value are reported in current year earnings. Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counter party or client owes the Bank, and results in credit risk to the Bank. When the fair value of a derivative instrument contract is negative, the Bank owes the client or counterparty and therefore, has no credit risk. A summary of the Bank’s interest rate swaps related to clients as of December 31, 2015 and 2014 is included in the following table: 2015 2014 Notional Notional December 31, (in thousands) Bank Position Amount Fair Value Amount Fair Value Interest rate swaps with Bank clients Pay variable/receive fixed $ $ $ — $ — Offsetting interest rate swaps with institutional swap dealer Pay fixed/ receive variable — — Total $ — $ — $ — The Bank is required to pledge securities as collateral when the Bank is in a net loss position for all swaps with non-client counterparties when such net loss positions exceed $250,000. The fair value of investment securities pledged as collateral by the Bank to cover such net loss positions totaled $1.5 million and $734,000 at December 31, 2015 and 2014. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | 8. PREMISES AND EQUIPMENT A summary of the cost and accumulated depreciation of premises and equipment follows: December 31, (in thousands) 2015 2014 Land $ $ Buildings and improvements Furniture, fixtures and equipment Leasehold improvements Construction in progress — Total premises and equipment Less: Accumulated depreciation and amortization Premises and equipment, net $ $ The Company cl osed its Hudson, Florida banking center in January 2015. As of December 31, 2015, the Hudson banking center was held for sale at fair value, or $1 million . In July 2015, the Company sold its banking center in Elizabethtown, Kentucky and recognized a $28,000 gain on the transaction. The premises of the banking center were carried at approximately $1 million, which equated to the total cost of the premises less accumulated depreciation. Depreciation expense related to premises and equipment follows: Years Ended December 31, (in thousands) 2015 2014 2013 Depreciation expense $ $ $ |
GOODWILL AND CORE DEPOSIT INTAN
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | |
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | 9 . GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS A progression of the balance for goodwill follows: Years Ended December 31, (in thousands) 2015 2014 2013 Beginning of year $ $ $ Acquired goodwill — — — Impairment — — — End of year $ $ $ The goodwill balance relates entirely to the Co mpany’s Core Banking operations . The Bank did not record any goodwill associated with its 2012 FDIC-assisted acquisitions. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2015 and 2014 , the Company’s Core Banking reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting unit exceeded its fair value. Therefore, the Company did not complete the two-step impairmen t test as of December 31, 2015, 201 4 and 2013 . All of the Company’s core deposit intangibles were fully amortized as of December 31, 2013 . Aggregate core deposit intangible amortization expense follows: Years Ended December 31, (in thousands) 2015 2014 2013 Core deposit amortization expense $ — $ — $ |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2015 | |
DEPOSITS | |
DEPOSITS | 10. DEPOSITS Ending deposit balances at December 31, 2015 and 2014 were as follows: December 31, (in thousands) 2015 2014 Demand $ $ Money market accounts Brokered money market accounts Savings Individual retirement accounts* Time deposits, $250 and over* Other certificates of deposit* Brokered certificates of deposit* Total interest-bearing deposits Total non interest-bearing deposits Total deposits $ $ *Represents a time deposit. Time deposits at or above the FDIC insured limit of $250,000 are presented in the table below: December 31, (in thousands) 2015 2014 Time deposits of $250 or more $ $ At December 31, 2015, the scheduled maturities and weight average rate of all time deposits, including brokered certificates of deposit, were as follows: Weighted Average Year (dollars in thousands) Principal Rate 2016 $ % 2017 % 2018 % 2019 % 2020 % Thereafter — — % Total $ % |
SECURITIES SOLD UNDER AGREEMENT
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | 12 Months Ended |
Dec. 31, 2015 | |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | 1 1 . SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE Securities sold under agreements to repurchase consist of short-term excess funds from correspondent banks, repurchase agreements and overnight liabilities to deposit clients arising from the Bank’s treasury management program. While comparable to deposits in their transactional nature, these overnight liabilities to clients are in the form of repurchase agreements. Repurchase agreements collateralized by securities are treated as financings; accordingly, the securities involved with the agreements are recorded as assets and are held by a safekeeping agent and the obligations to repurchase the securities are reflected as liabilities. Should the fair value of currently pledged securities fall below the associated repurchase agreements, the Bank would be required to pledge additional securities. To mitigate the risk of under collateralization, the Bank typically pledges at least two percent more in securities than the associated repurchase agreements. All such securities are under the Bank’s control. At December 31, 201 5 and 2014 , all securities sold under agreements to repurchase had overnight maturities. Additional i nformation regarding securities sold under agreements to repurchase follows : December 31, (dollars in thousands) 2015 2014 Outstanding balance at end of year $ $ Weighted average interest rate at year end % % Fair value of securities pledged: U.S. Treasury securities and U.S. Government agencies $ $ Mortgage backed securities - residential Collateralized mortgage obligations Total securities pledged $ $ Years Ended December 31, (dollars in thousands) 2015 2014 2013 Average outstanding balance during the year $ $ $ Average interest rate during the year % % % Maximum outstanding at any month end during the year $ $ $ |
FEDERAL HOME LOAN BANK ADVANCES
FEDERAL HOME LOAN BANK ADVANCES | 12 Months Ended |
Dec. 31, 2015 | |
FEDERAL HOME LOAN BANK ADVANCES | |
FEDERAL HOME LOAN BANK ADVANCES | 12. FEDERAL HOME LOAN BANK ADVANCES At December 31, 2015 and 2014, FHLB advances were as follows: December 31, (in thousands) 2015 2014 Overnight advances $ $ Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% due on December 20, 2016 Fixed interest rate advances with a weighted average interest rate of 1.68% due through 2023 Putable fixed interest rate advances with a weighted average interest rate of 4.39% due through 2017(1) Total FHLB advances $ $ (1) Represents putable advances with the FHLB. These advances have original fixed rate periods ranging from one to five years with original maturities ranging from three to ten years if not put back to the Bank earlier by the FHLB. At the end of their respective fixed rate periods and on a quarterly basis thereafter, the FHLB has the right to require payoff of the advances by the Bank at no penalty. Each FHLB advance is payable at its maturity date, with a prepayment penalty for fixed rate advances that are paid off earlier than maturity. FHLB advances are collateralized by a blanket pledge of eligible real estate loans. At December 31, 2015 and 2014, Republic had available collateral to borrow an additional $567 million and $452 million, respectively, from the FHLB. In addition to its borrowing line with the FHLB, Republic also had unsecured lines of credit totaling $1 70 million available through various other financial institutions as of December 31, 2015 and 2014. Aggregate future principal payments on FHLB advances, based on contractual maturity dates are detailed below: Weighted Average Year (dollars in thousands) Rate 2016 (Overnight) $ % 2016 % 2017 % 2018 % 2019 % 2020 % 2021 % Thereafter % Total $ % Due to their nature, the Bank considers average balance information more meaningful than period end balances for its overnight borrowings from the FHLB. Information regarding short-term overnight FHLB advances follows: December 31, (dollars in thousands) 2015 2014 Outstanding balance at end of year $ $ Weighted average interest rate at end of year % % Years Ended December 31, (dollars in thousands) 2015 2014 2013 Average outstanding balance during the year $ $ $ — Average interest rate during the year % % — % Maximum outstanding at any month end during the year $ $ $ — The following table illustrates real estate loans pledged to collateralize advances and letters of credit with the FHLB: December 31, (dollars in thousands) 2015 2014 First lien, single family residential real estate $ $ Home equity lines of credit Multi-family commercial real estate |
SUBORDINATED NOTE
SUBORDINATED NOTE | 12 Months Ended |
Dec. 31, 2015 | |
SUBORDINATED NOTE | |
SUBORDINATED NOTE | 1 3 . SUBORDINATED NOTE In 2005, Republic Bancorp Capital Trust (“RBCT”), an unconsolidated trust subsidiary of Republic, was formed and issued $40 million in Trust Preferred Securities (“TPS”). The sole asset of RBCT represents the proceeds of the offering loaned to Republic in exchange for a subordinated note with similar terms to the TPS. The TPS are treated as part of Republic’s Tier I Capital. The subordinated note and related interest expense are included in Republic’s consolidated financial statements. The subordinated note paid a fixed interest rate of 6.015% through September 30, 2015 and adjusted to LIBOR + 1.42% thereafter. The subordinated note matures on December 31, 2035 and is now redeemable at the Company’s option on a quarterly basis. The Company chose not to redeem the subordinated note on October 1, 2015 or January 1, 2016, and carried the note at a cost of LIBOR + 1.42% at December 31, 2015. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
INCOME TAXES | 14. INCOME TAXES Allocation of federal income tax between current and deferred portion is as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Current expense: Federal $ $ $ State Deferred expense: Federal State Total $ $ $ Effective tax rates differ from federal statutory rate of 35% applied to income before income taxes due to the following: Years Ended December 31, 2015 2014 2013 Federal statutory rate times financial statement income % % % Effect of: State taxes, net of federal benefit % % % General business tax credits % % % Nontaxable income % % % Other, net % % % Effective tax rate % % % Year-end deferred tax assets and liabilities were due to the following: December 31, (in thousands) 2015 2014 Deferred tax assets: Allowance for loan and lease losses $ $ Accrued expenses Net operating loss carryforward* Depreciation Other-than-temporary impairment Partnership losses OREO writedowns Fair value of cash flow hedges Other Total deferred tax assets Deferred tax liabilities: Unrealized investment securities gains Federal Home Loan Bank dividends Deferred loan fees Mortgage servicing rights Bargain purchase gain New market tax credits Other Total deferred tax liabilities Less: Valuation allowance Net deferred tax asset $ $ *The Company has a Kentucky net operating loss carry forward of $25 million which began to expire in 2012. The Company maintains a valuation allowance, as it does not anticipate generating taxable income in Kentucky to utilize these carryforwards prior to expiration. Unrecognized Tax Benefits The Company has not filed tax returns in certain jurisdictions where it has conducted limited lending activity but had no offices; therefore, the Company is open to examination for all years in which the lending activity has occurred. The Company adopted the provisions of ASC 740-10 , Accounting for Uncertainty in Income Taxes , on January 1, 2007 and recognized a liability for the amount of tax which would be due to those jurisdictions should it be determined that income tax filings were required. It is the Company’s policy to recognize interest and penalties as a component of income tax expense related to its unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Additions based on tax related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years — — — Reductions due to the statute of limitations Settlements — — — Balance, end of year $ $ $ Of the 2015 total, $1.2 million represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. Amounts related to interest and penalties recorded in the income statements for the years ended December 31, 2015 and 2014 and accrued on the balance sheets as of December 31, 2015 and 2014 are presented below: Years Ended December 31, (in thousands) 2015 2014 2013 Interest and penalties recorded in the income statement $ $ $ Interest and penalties accrued on balance sheet The Company files income tax returns in the U.S. federal jurisdiction. The Company is currently under IRS examination of its 2013 corporate income tax return. Management does not expect that the results of the examination will have a material effect on the Company's financial condition. While management believes tax positions are appropriate, the IRS could challenge the Company's positions as a part of this examination. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for all years prior to and including 2011. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 1 5 . EARNINGS PER SHARE Class A and Class B shares participate equally in undistributed earnings. The difference in earnings per share between the two classes of common stock results solely from the 10% per share cash dividend premium paid on Class A Common Stock over that paid on Class B Common Stock. See Footnote 1 6 , “Stockholders’ Equity and Regulatory Capital Matters” of this section of the filing. A reconciliation of the combined Class A and Class B Common Stock numerators and denominators of the earnings per share and diluted earnings per share computations is presented below: Years Ended December 31, (in thousands, except per share data) 2015 2014 2013 Net income $ $ $ Weighted average shares outstanding Effect of dilutive securities Average shares outstanding including dilutive securities Basic earnings per share: Class A Common Stock $ $ $ Class B Common Stock $ $ $ Diluted earnings per share: Class A Common Stock $ $ $ Class B Common Stock $ $ $ Stock options excluded from the detailed earnings per share calculation because their impact was antidilutive are as follows: December 31, 2015 2014 2013 Antidilutive stock options Average antidilutive stock options |
STOCKHOLDERS' EQUITY AND REGULA
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | 12 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | |
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | 16. STOCKHOLDERS’ EQUITY AND REGULATORY CAPITAL MATTERS Common Stock — The Class A Common shares are entitled to cash dividends equal to 110% of the cash dividend paid per share on Class B Common Stock. Class A Common shares have one vote per share and Class B Common shares have ten votes per share. Class B Common shares may be converted, at the option of the holder, to Class A Common shares on a share for share basis. The Class A Common shares are not convertible into any other class of Republic’s capital stock. Dividend Restrictions — The Parent Company’s principal source of funds for dividend payments are dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid to the Parent Company by the Bank without prior approval of the respective states’ banking regulators. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years. At December 31, 2015, the Bank could, without prior approval, declare dividends of approximately $ 43 million. Regulatory Capital Requirements — The Parent Company and the Bank are subject to various regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Republic’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Parent Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off balance sheet items, as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action regulations provide five classifications: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At December 31, 2015 and 2014, the most recent regulatory notifications categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category. New Capital Rules — Effective January 1, 2015 the Company and the Bank became subject to the new capital regulations in accordance with Basel III. The new regulations establish higher minimum risk-based capital ratio requirements, a new common equity Tier 1 risk-based capital ratio and a new capital conservation buffer. The new regulations also include revisions to the definition of capital and changes in the risk-weighting of certain assets. For prompt corrective action, the new regulations establish definitions of “well capitalized” as a 6.5% common equity Tier 1 risk-based capital ratio, an 8.0% Tier 1 risk-based capital ratio, a 10.0% total risk-based capital ratio and a 5.0% Tier 1 leverage ratio. Minimum Requirement to be Well Capitalized Minimum Requirement Under Prompt for Capital Adequacy Corrective Action Actual Purposes Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2015 Total capital to risk weighted assets Republic Bancorp, Inc. $ % $ % NA NA Republic Bank & Trust Company $ % Common equity tier 1 capital to risk weighted assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Tier 1 (core) capital to risk weighted assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Tier 1 leverage capital to average assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Minimum Requirement to be Well Capitalized Minimum Requirement Under Prompt for Capital Adequacy Corrective Action Actual Purposes Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2014 Total capital to risk weighted assets Republic Bancorp, Inc. $ % $ % NA NA Republic Bank & Trust Company $ % Tier 1 (core) capital to risk weighted assets Republic Bancorp, Inc. NA NA NA NA NA NA Republic Bank & Trust Company NA NA NA NA NA NA Tier 1 (core) capital to risk weighted assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Tier 1 leverage capital to average assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company |
STOCK PLANS AND STOCK BASED COM
STOCK PLANS AND STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
STOCK PLANS AND STOCK BASED COMPENSATION | 17. STOCK PLANS AND STOCK BASED COMPENSATION On January 15, 2015, the Company’s Board of Directors adopted the Republic Bancorp, Inc. 2015 Stock Incentive Plan (the “2015 Plan”), which became effective April 23, 2015 when the Company’s shareholders approved the 2015 Plan. The 2015 Plan replaced the Company’s 2005 Stock Incentive Plan, which expired on March 15, 2015. The number of authorized shares under the 2015 Plan was fixed at 3,000,000, with such number subject to adjustment in the event of certain events, such as stock dividends, stock splits or the like. There is a minimum three-year vesting period for awards granted to employees under the 2015 Plan that vest based solely on the completion of a specified period of service, with options and restricted stock awards generally exercisable five to six years after the issue date. Stock options generally must be exercised within one year from the date the options become exercisable and have an exercise price that is at least equal to the fair market value of the Company’s stock on the date the options were granted. All shares issued under the above mentioned plans through December 31, 2015 were from authorized and reserved unissued shares. The Company has a sufficient number of authorized and reserved unissued shares to satisfy all anticipated option exercises. There are no Class B stock options outstanding or available for exercise under the Company’s plans. The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes based stock option valuation model. This model requires the input of subjective assumptions that will usually have a significant impact on the fair value estimate. Expected volatilities are based on historical volatility of Republic’s stock and other factors. Expected dividends are based on dividend trends and the market price of Republic’s stock price at grant. Republic uses historical data to estimate option exercises and employee terminations within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve at the time of grant. All share-based payments to employees, including grants of employee stock options, are recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements based on their fair values. The fair value of stock options granted was determined using the following weighted average assumptions as of grant date: Years Ended December 31, 2015 2014 2013 Risk-free interest rate % % % Expected dividend yield % % % Expected stock price volatility % % % Expected life of options (in years) Estimated fair value per share $ $ $ The following table summarizes stock option activity from January 1, 2014 through December 31, 2015: Weighted Weighted Average Options Average Remaining Aggregate Class A Exercise Contractual Intrinsic Shares Price Term Value Outstanding, January 1, 2014 $ Granted Exercised Forfeited or expired Outstanding, December 31, 2014 $ $ Outstanding, January 1, 2015 $ Granted Exercised Forfeited or expired Outstanding, December 31, 2015 $ Fully vested and expected to vest $ $ Exercisable (vested) at December 31, 2015 $ $ Information related to the stock option plan during each year follows: Years Ended December 31, (in thousands) 2015 2014 2013 Intrinsic value of options exercised $ $ $ Cash received from options exercised, net of shares redeemed Total fair value of options granted Loan balances of non-executive officer employees that were originated solely to fund stock option exercises were as follows: December 31, (in thousands) 2015 2014 Outstanding loans $ $ Restricted stock awards generally become fully vested at the end of five to six years of continued employment. The following table summarizes restricted stock activity from January 1, 2014 through December 31, 2015: Weighted-average Restricted grant date fair Stock Awards value per share Outstanding, January 1, 2014 $ Granted — — Forfeited Earned and issued Outstanding, December 31, 2014 $ Outstanding, January 1, 2015 $ Granted Forfeited Earned and issued — — Outstanding, December 31, 2015 $ The fair value of the restricted stock awards is based on the closing stock price on the date of grant with the associated expense amortized to compensation expense over the vesting period, generally five to six years. The Company recorded expense related to stock options and restricted stock awards for years ended December 31, 2015, 2014 and 2013 as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Stock option expense $ $ $ Restricted stock award expense $ $ $ Unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) are estimated as follows: Restricted (in thousands) Stock Awards Options Total 2016 $ $ $ 2017 2018 2019 2020 2021 — Total $ $ $ Director Deferred Compensation In November 2004, the Company’s Board of Directors approved a Non-Qualified Deferred Compensation Plan (the “Plan”). The Plan governs the deferral of board and committee fees of non-employee members of the Board of Directors. Members of the Board of Directors may defer up to 100% of their board and committee fees for a specified period ranging from two to five years. The value of the deferred director compensation account is deemed “invested” in Company stock and is immediately vested. On a quarterly basis, the Company reserves shares of Republic’s stock within the Company’s stock option plan for ultimate distribution to Directors at the end of the deferral period. The following table presents information on director deferred compensation shares reserved for the periods shown: 2015 2014 2013 Weighted Weighted Weighted Average Market Average Market Average Market Shares Price at Date of Shares Price at Date of Shares Price at Date of Years ended December 31, Deferred Deferral Deferred Deferral Deferred Deferral Balance, beginning of year $ $ $ $ Awarded Released Balance, end of year Director deferred compensation has been expensed as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Director deferred compensation expense $ $ $ |
BENEFIT PLANS
BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
BENEFIT PLANS | |
BENEFIT PLANS | 1 8 . BENEFIT PLANS 401 (k) Plan Republic maintain s a 401(k) plan for eligible employees . All employees become eligible for the plan as soon as administratively feasible following t heir date of hire. Participants in the plan have the option to contribute from 1% to 75% of their annual eligible compensation , up to the maximum allowed by the IRS . The Company matches 100% of participant contributions up to 1% and an additional 75% for participant contributions between 2% and 5% of each participant’s annual eligible compensation. Participants are fully vested after two years of employment. Republic also contributes bonus contributions in addition to the aforementioned matching contributions if the Company achieves certain operating goals. Normal and bonus contributions for each of the periods ended were as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Employer matching contributions $ $ $ Discretionary employer bonus matching contributions $ — $ — $ — |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | 12 Months Ended |
Dec. 31, 2015 | |
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | |
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | 19. TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES Republic leases office facilities under operating leases from limited liability companies in which Republic’s Chairman/Chief Executive Officer and President are partners. Rent expense under these leases was as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Rent expense under leases from related parties $ $ $ Total minimum lease commitments under non-cancelable operating leases are as follows: (in thousands) Affiliate Other Total 2016 $ 2017 2018 2019 2020 Thereafter Total $ $ $ A director of Republic Bancorp, Inc. is the President and Chief Executive Officer of a company that leases space to the Company. Fees paid by the Company totaled $15,000, $16,000 and $14,000 for years ended December 31, 2015, 2014 and 2013. A director of Republic Bancorp, Inc. is designated as a staff attorney with a local law firm. While this director has an arrangement where a percentage of revenues paid to the law firm by certain clients is remitted to him, fees paid to the law firm by the Company are not included in this arrangement. Fees paid by the Company to this law firm totaled $183,000, $160,000 and $1 million in 2015, 2014 and 2013. A director of the Bank is an executive of two consulting firms and a local chamber of commerce. Fees paid by the Company to these entities totaled $101,000, $66,000 and $101,000 in 2015, 2014 and 2013. A director of the Bank is a partner of an accounting firm that received fees from the Company of $2,000, $9,000 and $9,000 in 2015, 2014 and 2013. Loans made to executive officers and directors of Republic and their related interests during 2015 were as follows: (in thousands) Beginning balance $ Effect of changes in composition of related parties New loans Repayments Ending balance $ Deposits from executive officers, directors, and their affiliates totaled $82 million and $74 million at December 31, 2015 and 2014. By an agreement dated December 14, 1989, as amended August 8, 1994, the Company entered into a split-dollar insurance agreement with a trust established by the Company’s deceased former Chairman, Bernard M. Trager. Pursuant to the agreement, from 1989 through 2002 the Company paid $690,000 in total annual premiums on the insurance policies held in the trust. The policies are joint-life policies payable upon the death of Mrs. Jean Trager, as the survivor of her husband Bernard M. Trager. The cash surrender value of the policies was approximately $2.1 million and $1.9 million as of December 31, 2015 and 2014. Pursuant to the terms of the trust, the beneficiaries of the trust will each receive the proceeds of the policies after the repayment of the $690,000 of indebtedness to the Company. The aggregate amount of such unreimbursed premiums constitutes indebtedness from the trust to the Company and is secured by a collateral assignment of the policies. As of December 31, 2015 and 2014, the net death benefit under the policies was approximately $3.5 million. Upon the termination of the agreement, whether by the death of Mrs. Trager or earlier cancellation, the Company is entitled to be repaid by the trust the amount of indebtedness outstanding at that time. |
OFF BALANCE SHEET RISKS, COMMIT
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | |
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | 20 . OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES The Company , in the normal course of business, is party to financial instruments with off balance sheet risk. These financial instruments primarily include commitments to extend credit and standby letters of credit. The contract or notional amounts of these instruments reflect the potential future obligations of the Company pursuant to those financial instruments. Creditworthiness for all instruments is evaluated on a case by case basis in accordance with the Company ’s credit policies. Collateral from the client may be required based on the Company ’s credit evaluation of the client and may include business assets of commercial client s , as well as personal property and real estate of individual client s or guarantors. The Company also extends binding commitments to client s and prospective clien ts . Such commitments assure a borrower of financing for a specified period of time at a specified rate. Additionally, the Company makes binding purchase commitments to third party loan correspondent originators. These commitments assure that the Company will purchase a loan from such correspondent originators at a specific price for a specific period of time. The risk to the Company under such loan commitments is limited by the terms of the contracts. For example, the Company may not be obligated to advance funds if the client ’s financial condition deteriorates or if the client fails to meet specific covenants. An approved but unfunded loan commitment represents a potential credit risk and a liquidity risk, since the Company ’s client (s) may demand immediate cash that would require funding. In addition, unfunded loan commitments represent interest rate risk as market interest rates may rise above the rate committed to the Company ’s client . Since a portion of these loan commitments normally expire unused, the total amount of outstanding commitments at any point in time may not require future funding. The table below presents the Company ’s commitments, exclusive of Mortgage Banking loan commitments for each year ended: December 31, (in thousands) 2015 2014 Unused warehouse lines of credit $ $ Unused home equity lines of credit Unused loan commitments - other Commitments to purchase loans* Standby letters of credit FHLB letters of credit — Total commitments $ $ * Commitments are made through the Company’s Correspondent Lending channel. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third party. The terms and risk of loss involved in issuing standby letters of credit are similar to those involved in issuing loan commitments and extending credit. In addition to credit risk, the Company also has liquidity risk associated with standby letters of credit because funding for these obligations could be required immediately. The Company does not deem this risk to be material. |
PARENT COMPANY CONDENSED FINANC
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | 21. PARENT COMPANY CONDENSED FINANCIAL INFORMATION BALANCE SHEETS December 31, (in thousands) 2015 2014 Assets: Cash and cash equivalents $ $ Security available for sale — Investment in bank subsidiary Investment in non-bank subsidiaries Other assets Total assets $ $ Liabilities and Stockholders’ Equity: Subordinated note $ $ Other liabilities Stockholders’ equity Total liabilities and stockholders’ equity $ $ STATEMENTS OF INCOME Years Ended December 31, (in thousands) 2015 2014 2013 Income and expenses: Dividends from subsidiary $ $ $ Interest income Other income Less: Interest expense Less: Other expenses Income before income tax benefit Income tax benefit Income before equity in undistributed net income of subsidiaries Equity in undistributed net income of subsidiaries Net income $ $ $ STATEMENTS OF CASH FLOWS Years Ended December 31, (in thousands) 2015 2014 2013 Operating activities: Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Accretion of investment security — — Equity in undistributed net income of subsidiaries Director deferred compensation - Parent Company Change in other assets Change in other liabilities Net cash provided by operating activities Investing activities: Investment in Republic Insurance Services, Inc. — — Purchases of security available for sale — — Redemption of Republic Investment Company common stock — — Net cash provided by (used in) investing activities Financing activities: Common Stock repurchases Net proceeds from Common Stock options exercised Cash dividends paid Net cash used in financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ $ |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2015 | |
OTHER COMPREHENSIVE INCOME | |
OTHER COMPREHENSIVE INCOME | 22. OTHER COMPREHENSIVE INCOME OCI components and related tax effects were as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Available for Sale Securities: Change in unrealized gain (loss) on securities available for sale $ $ $ Reclassification adjustment for gain on security available for sale recognized in earnings — — Change in unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings Net unrealized gains Tax effect Net of tax Cash Flow Hedges: Change in fair value of derivatives used for cash flow hedges Reclassification amount for derivative losses realized in income Net unrealized gains losses Tax effect Net of tax Total other comprehensive income components, net of tax $ $ $ Significant amounts reclassified out of each component of accumulated OCI for the years ended December 31, 2015, 2014 and 2013: Amounts Reclassified From Accumulated Other Affected Line Items in the Consolidated Comprehensive Income Years Ended December 31, (in thousands) Statements of Income 2015 2014 2013 Available for Sale Securities: Gain on call of security available for sale Non interest income $ $ — $ — Tax effect Income tax expense — — Net of tax Net income — — Cash Flow Hedges: Interest rate swap on money market deposits Interest expense on deposits Interest rate swap on FHLB advance Interest expense on FHLB advances Total derivative losses on cash flow hedges Total interest expense Tax effect Income tax expense Net of tax Net income Net of tax, total all reclassification amounts Net income $ $ $ The following is a summary of the accumulated OCI balances, net of tax: 2015 (in thousands) December 31, 2014 Change December 31, 2015 Unrealized gain on securities available for sale $ $ $ Unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings Unrealized loss on cash flow hedge Total unrealized gain $ $ $ 2014 (in thousands) December 31, 2013 Change December 31, 2014 Unrealized gain on securities available for sale $ $ $ Unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings Unrealized gain (loss) on cash flow hedge Total unrealized gain $ $ $ |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 23. SEGMENT INFORMATION Reportable segments are determined by the type of products and services offered and the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business (such as banking centers and business units), which are then aggregated if operating performance, products/services, and clients are similar. As of December 31, 2015, the Company was divided into four distinct business operating segments: Traditional Banking, Warehouse, Mortgage Banking and RPG. Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” activities. Correspondent Lending operations are considered part of Traditional Banking operations. The RPG segment includes the following divisions: TRS, RPS and RCS. TRS generates the majority of RPG’s income, with the relatively smaller divisions of RPG, RPS and RCS, considered immaterial for separate and independent segment reporting. All divisions of the RPG segment operate through the Bank. The nature of segment operations and the primary drivers of net revenues by reportable segment are provided below: Segment: Nature of Operations: Primary Drivers of Net Revenues: Traditional Banking Provides traditional banking products to clients primarily in its market footprint via its network of banking centers and primarily to clients outside of its market footprint via its Internet and Correspondent Lending delivery channels. Loans, investments and deposits Core Banking Warehouse Lending Provides short-term, revolving credit facilities to mortgage bankers across the Nation. Mortgage warehouse lines of credit Mortgage Banking Primarily originates, sells and services long-term, single family, first lien residential real estate loans primarily to clients in its market footprint. Gain on sale of loans and servicing fees Republic Processing Group The TRS division facilitates the receipt and payment of federal and state tax refund products. The RPS division offers general purpose reloadable cards. The RCS division offers short-term credit products. RPG products are primarily provided to clients outside of the Bank’s market footprint. Net refund transfer fees The accounting policies used for Republic’s reportable segments are the same as those described in the summary of significant accounting policies. Segment performance is evaluated using operating income. Goodwill is not allocated. Income taxes are generally allocated based on income before income tax expense unless specific segment allocations can be reasonably made. Transactions among reportable segments are made at carrying value. Segment information for the years ended December 31, 2015, 2014 and 2013 is as follows: Year Ended December 31, 2015 Core Banking Total Republic Traditional Warehouse Mortgage Core Processing Total (dollars in thousands) Banking Lending Banking Banking Group Company Net interest income $ $ $ $ $ $ Provision for loan and lease losses — Net refund transfer fees — — — — Mortgage banking income — — — Gain on call of security available for sale — — — Other non-interest income Total non-interest income Total non-interest expenses Income (loss) before income tax expense Income tax expense (benefit) Net income (loss) $ $ $ $ $ $ Segment end of year assets $ $ $ $ $ $ Net interest margin % % NM % NM % Year Ended December 31, 2014 Core Banking Total Republic Traditional Warehouse Mortgage Core Processing Total (dollars in thousands) Banking Lending Banking Banking Group Company Net interest income $ $ $ $ $ $ Provision for loan and lease losses — Net refund transfer fees — — — — Mortgage banking income — — — Other non-interest income Total non-interest income Total non-interest expenses Income (loss) before income tax expense Income tax expense (benefit) Net income (loss) $ $ $ $ $ $ Segment end of year assets $ $ $ $ $ $ Net interest margin % % NM % NM % Year Ended December 31, 2013 Core Banking Total Republic Traditional Warehouse Mortgage Core Processing Total (dollars in thousands) Banking Lending Banking Banking Group Company Net interest income $ $ $ $ $ $ Provision for loan and lease losses — Net refund transfer fees — — — — Mortgage banking income — — — Bargain purchase gains — — — Other non-interest income Total non-interest income Total non-interest expenses Income (loss) before income tax expense Income tax expense (benefit) Net income (loss) $ $ $ $ $ $ Segment end of year assets $ $ $ $ $ $ Net interest margin % % NM % NM Segment assets are reported as of the respective period ends while income and margin data are reported for the respective periods. NM — Not Meaningful |
SUMMARY OF QUARTERLY FINANCIAL
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | 24. SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) Presented below is a summary of the consolidated quarterly financial data for the years ended December 31, 2015, 2014 and 2013. 2015 Fourth Third Second First ($ in thousands, except per share data) Quarter Quarter Quarter(1) Interest income $ $ $ $ Interest expense Net interest income Provision for loan and lease losses Net interest income after provision Non interest income Non interest expenses(2) Income before income taxes Income tax expense Net income Basic earnings per share: Class A Common Stock Class B Common Stock Diluted earnings per share: Class A Common Stock Class B Common Stock Dividends declared per common share: Class A Common Stock Class B Common Stock 2014 Fourth Third Second First ($ in thousands, except per share data) Quarter Quarter Quarter Quarter(1) Interest income $ $ $ $ Interest expense Net interest income Provision for loan and lease losses Net interest income after provision Non interest income Non interest expenses(2) Income before income tax expense Income tax expense Net income Basic earnings per share: Class A Common Stock Class B Common Stock Diluted earnings per share: Class A Common Stock Class B Common Stock Dividends declared per common share: Class A Common Stock Class B Common Stock 2013 Fourth Third Second First ($ in thousands, except per share data) Quarter Quarter Quarter Quarter(1) Interest income $ $ $ $ Interest expense Net interest income Provision for loan and lease losses Net interest income after provision Non interest income Non interest expenses (2) Income before income tax expense Income tax expense Net income Basic earnings per share: Class A Common Stock Class B Common Stock Diluted earnings per share: Class A Common Stock Class B Common Stock Dividends declared per common share: Class A Common Stock Class B Common Stock (1) The first quarters of 2015, 2014 and 2013 were significantly impacted by the TRS operating division. (2) Non interest expenses: During the fourth quarters of 2015, 2014 and 2013, the Company reversed $2.3 million, $950,000 and $1.1 million of incentive compensation accruals based on revised payout estimates. During the third quarters of 2015, 2014 and 2013, the Company reversed $450,000, $1.8 million and $3.3 million of incentive compensation accruals based on revised payout estimates. During the fourth quarter of 2013, the TRS division of the RPG segment incurred $1.4 million in legal related expenses associated with the conclusions of RPG’s previously reported contract disputes. |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations and Principles of Consolidation | Nature of Operations and Principles of Consolidation — The consolidated financial statements include the accounts of Republic Bancorp, Inc. (the “Parent Company”) and its wholly-owned subsidiaries, Republic Bank & Trust Company (“RB&T” or the “Bank”) and Republic Insurance Services, Inc. (the “Captive”). The Bank is a Kentucky-based, state chartered non-member financial institution. The Captive, which was formed during the third quarter of 2014, is a wholly-owned insurance subsidiary of the Company. The Captive provides property and casualty insurance coverage to the Company and the Bank as well as eight other third-party insurance captives for which insurance may not be available or economically feasible. Republic Bancorp Capital Trust (“RBCT”) is a Delaware statutory business trust that is a wholly-owned unconsolidated finance subsidiary of Republic Bancorp, Inc. All companies are collectively referred to as “Republic” or the “Company.” All significant intercompany balances and transactions are eliminated in consolidation. As of December 31, 2015, the Company was divided into four distinct operating segments: Traditional Banking, Warehouse Lending (“Warehouse”), Mortgage Banking and Republic Processing Group (“RPG”). Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” activities. Correspondent Lending operations are considered part of the Traditional Banking segment. The RPG segment includes the following divisions: Tax Refund Solutions (“TRS”), Republic Payment Solutions (“RPS”) and Republic Credit Solutions (“RCS”). TRS generates the majority of RPG’s income, with the relatively smaller divisions of RPG, RPS and RCS, considered immaterial for separate and independent segment reporting. All divisions of the RPG segment operate through the Bank. |
Use of Estimates | Use of Estimates — Financial statements prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates and assumptions impact the amounts reported in the financial statements and the disclosures provided. Actual amounts could differ from these estimates. |
Concentration of Credit Risk | Concentration of Credit Risk — With the exception of loans originated through its Correspondent Lending channel, most of the Company’s Traditional Banking business activity is with clients located in Kentucky, Indiana, Florida, and Tennessee. The Company’s Traditional Banking exposure to credit risk is significantly affected by changes in the economy in these specific areas. Loans originated through the Traditional Bank’s Correspondent Lending channel are primarily secured by single family, first lien residences located outside the Company’s market footprint, with 78% of such loans secured by collateral located in the state of California as of December 31, 2015. Furthermore, warehouse lines of credit are secured by single family, first lien residential real estate loans originated by the Bank’s mortgage clients across the Nation. As of December 31, 2015, 35% of collateral securing warehouse lines were located in California. |
Earnings Concentration | Earnings Concentration — For 2015, 2014 and 2013, approximately 1 3 %, 12% and 9% of total Company net revenues (net interest income plus non interest income) were derived from the RPG segment. For 2015, 2014 and 2013, approximately 7 %, 5% and 4% of total Company net revenues (net interest income plus non interest income) were derived from the Company’s Warehouse segment. |
Cash Flows | Cash Flows — Cash and cash equivalents include cash, deposits with other financial institutions with original maturities less than 90 days and federal funds sold. Net cash flows are reported for client loan and deposit transactions, interest-bearing deposits in other financial institutions, repurchase agreements and income taxes. |
Interest-Bearing Deposits in Other Financial Institutions | Interest-Bearing Deposits in Other Financial Institutions — Interest-bearing deposits in other financial institutions mature within one year and are carried at cost. |
Trust Assets | Trust Assets — Property held for clients in fiduciary or agency capacities, other than trust cash on deposit at the Bank, is not included in the consolidated financial statements since such items are not assets of the Bank. |
Securities | Securities — Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Interest income includes amortization of purchase premiums and accretion of discounts. Premiums and discounts on securities are amortized and accreted on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more-likely-than-not that it would be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. OTTI related to credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings. In order to determine OTTI for purchased beneficial interests that, on the purchase date, were not highly rated, the Bank compares the present value of the remaining cash flows as estimated at the preceding evaluation date to the current expected remaining cash flows. OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows. |
Acquisition Accounting | Acquisition Accounting — The Bank maintains an acquisition strategy to selectively grow its franchise as a complement to its internal growth strategies. The Bank accounts for acquisitions in accordance with the acquisition method as outlined in Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . The acquisition method requires: a) identification of the entity that obtains control of the acquiree; b) determination of the acquisition date; c) recognition and measurement of the identifiable assets acquired and liabilities assumed, and any noncontrolling interest in the acquiree; and d) recognition and measurement of goodwill or bargain purchase gain. Identifiable assets acquired, liabilities assumed, and any noncontrolling interest in acquirees are generally recognized at their acquisition date (“day-one”) fair values based on the requirements of ASC Topic 820, Fair Value Measurements and Disclosures. The measurement period for day-one fair values begins on the acquisition date and ends the earlier of: (a) the day management believes it has all the information necessary to determine day-one fair values; or (b) one year following the acquisition date. In many cases, the determination of day-one fair values requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly complex and subjective in nature and subject to recast adjustments, which are retrospective adjustments to reflect new information existing at the acquisition date affecting day-one fair values. More specifically, these recast adjustments for loans and other real estate owned may be made, as market value data, such as appraisals, are received by the bank. Increases or decreases to day-one fair values are reflected with a corresponding increase or decrease to bargain purchase gain or goodwill. Acquisition related costs are expensed as incurred unless those costs are related to issuing debt or equity securities used to finance the acquisition. |
Mortgage Banking Activities | Mortgage Banking Activities — Mortgage loans originated and intended for sale in the secondary market are carried at fair value, as determined by outstanding commitments from investors. Net gains on mortgage loans held for sale are recorded as a component of Mortgage Banking income and represent the difference between the selling price and the carrying value of the loans sold. Substantially all of the gains or losses on the sale of loans are reported in earnings when the interest rates on loans are locked. Commitments to fund mortgage loans (“interest rate lock commitments”) to be sold into the secondary market and non-exchange traded mandatory forward sales contracts (“forward contracts”) for the future delivery of these mortgage loans are accounted for as free standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the Bank enters into the derivative. Generally, the Bank enters into forward contracts for the future delivery of mortgage loans when interest rate lock commitments are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these mortgage derivatives are included in net gains on sales of loans, which is a component of Mortgage Banking income on the income statement. Mortgage loans held for sale are generally sold with the mortgage servicing rights (“MSRs”) retained. When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded as a component of net servicing income within Mortgage Banking income. Fair value is based on market prices for comparable mortgage servicing contracts, when available or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into Mortgage Banking income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Amortization of MSRs are initially set at seven years and subsequently adjusted on a quarterly basis based on the weighted average remaining life of the underlying loans. MSRs are evaluated for impairment quarterly based upon the fair value of the MSRs as compared to carrying amount. Impairment is determined by stratifying MSRs into groupings based on predominant risk characteristics, such as interest rate, loan type, loan terms and investor type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Bank later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the valuation allowance is recorded as an increase to income. Changes in valuation allowances are reported within Mortgage Banking income on the income statement. The fair value of the MSR portfolios is subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates. A primary factor influencing the fair value is the estimated life of the underlying serviced loans. The estimated life of the serviced loans is significantly influenced by market interest rates. During a period of declining interest rates, the fair value of the MSRs generally will decline due to higher expected prepayments within the portfolio. Alternatively, during a period of rising interest rates the fair value of MSRs generally will increase as prepayments on the underlying loans would be expected to decline. Based on the estimated fair value at December 31, 2015 and 2014, management determined there was no impairment within the MSR portfolio. Loan servicing income is reported on the income statement as a component of Mortgage Banking income. Loan servicing income is recorded as loan payments are collected and includes servicing fees from investors and certain charges collected from borrowers. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan and are recorded as income when earned. Loan servicing income totaled $1.9 million, $1.8 million and $2.1 million for the years ended December 31, 2015, 2014 and 2013. Late fees and ancillary fees related to loan servicing are considered nominal. |
Loans | Loans — The Bank’s financing receivables consist primarily of loans and a minimal amount of lease financing receivables (together referred to as “loans”). Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, inclusive of purchase premiums or discounts, deferred loan fees and costs and the Allowance. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method. Premiums on loans held for investment acquired though the Correspondent Lending channel are amortized into interest income on the level-yield method over the expected life of the loan. Lease financing receivables, all of which are direct financing leases, are reported at their principal balance outstanding net of any unearned income, deferred fees and costs and applicable Allowance. Leasing income is recognized on a basis that achieves a constant periodic rate of return on the outstanding lease financing balances over the lease terms. Interest income on mortgage and commercial loans is typically discontinued at the time the loan is 80 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan, which may define past due status by the number of days or the number of payments past due. In most cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Non-accrual loans and loans past due 80 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Interest accrued but not received for all classes of loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured, typically a minimum of six months of performance. Consumer and credit card loans, are not placed on non-accrual status, but are reviewed periodically and charged off when the loans reach 90 days past due or at any point the loan is deemed uncollectible. Loans purchased in an acquisition are accounted for using one of the following accounting standards: · ASC Topic 310-20, Non Refundable Fees and Other Costs , is used to value loans that have not demonstrated post origination credit quality deterioration and the acquirer expects to collect all contractually required payments from the borrower. For these loans, the difference between the loan’s day-one fair value and amortized cost would be amortized or accreted into income using the interest method. · ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality , is used to value purchase credit impaired (“PCI”) loans. For these loans, it is probable the acquirer will be unable to collect all contractually required payments from the borrower. Under ASC Topic 310-30, the expected cash flows that exceed the initial investment in the loan, or fair value, represent the “accretable yield,” which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. |
Purchased Loans (ASC Topic 310-20) | Purchased loans accounted for under ASC Topic 310-20 are accounted for as any other Bank-originated loan, potentially becoming nonaccrual or impaired, as well as being risk rated under the Bank’s standard practices and procedures. In addition, these loans are considered in the determination of the Allowance once day-one fair values are final. |
Purchased Credit Impaired ("PCI") Loans (ASC Topic 310-30) | In determining the day-one fair values of PCI loans, management considers a number of factors including, among other things, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, estimated holding periods and net present value of cash flows expected to be received. The Bank generally accounts for PCI loans individually, as opposed to aggregating the loans into pools based on common risk characteristics such as loan type. Management separately monitors the PCI portfolio and on a quarterly basis reviews the loans contained within this portfolio against the factors and assumptions used in determining the day-one fair values. In addition to its quarterly evaluation, a loan is typically reviewed when it is modified or extended, or when material information becomes available to the Bank that provides additional insight regarding the loan’s performance, estimated life, the status of the borrower, or the quality or value of the underlying collateral. To the extent that a PCI loan’s performance does not reflect an increased risk of loss of contractual principal beyond the non-accretable yield established as part of its initial day-one evaluation, such loan would be classified in the Purchased Credit Impaired - Group 1 (“PCI-1”) category, whose credit risk is considered by management equivalent to a non-PCI Special Mention loan within the Bank’s credit rating matrix. PCI-1 loans are considered impaired if, based on current information and events, it is probable that the future estimated cash flows of the loan have deteriorated from management’s initial acquisition day estimate. Provisions are made for impaired PCI-1 loans to further discount the loan and allow its yield to conform to at least management’s initial expectations. Any improvement in the expected performance of a PCI-1 loan would result in a reversal of the Provision to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income. If during the Bank’s periodic evaluations of its PCI loan portfolio, management deems a PCI-1 loan to have an increased risk of loss of contractual principal beyond the non-accretable yield established as part of its initial day-one evaluation, such loan would be classified PCI-Substandard (“PCI-Sub”) within the Bank’s credit risk matrix. Management deems the risk of default and overall credit risk of a PCI-Sub loan to be greater than a PCI-1 loan and more analogous to a non-PCI Substandard loan. PCI-Sub loans are considered to be impaired. Any improvement in the expected performance of a PCI-Sub loan would result in a reversal of the Provision to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income. PCI loans are placed on non-accrual if management cannot reasonably estimate future cash flows on such loans. If a troubled debt restructuring is performed on a PCI loan, the loan is considered impaired under the applicable troubled debt restructurings (“TDRs”) accounting standards and transferred out of the PCI population. The loan may require an additional Provision if its restructured cash flows are less than management’s initial day-one expectations. PCI loans for which the Bank simply chooses to extend the maturity date are generally not considered TDRs and remain in the PCI population. |
Allowance for Loan Losses | Allowance for Loan and Lease Losses (“Allowance”) — The Allowance is a valuation allowance for probable incurred credit losses and includes overdrawn deposit accounts. Loan losses are charged against the Allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the Allowance. Management estimates the Allowance required using historical loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors. Allocations of the Allowance may be made for specific classes, but the entire Allowance is available for any loan that, in management’s judgment, should be charged off. Management evaluates the adequacy of the Allowance on a monthly basis and presents and discusses the analysis with the Audit Committee and the Board of Directors on a quarterly basis. The Allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component is based on historical loss experience adjusted for qualitative factors. A non-PCI loan is impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. A PCI loan is considered impaired when, based on current information and events, it is probable that the future estimated cash flows of the loan have deteriorated from management’s initial acquisition day estimate. The Bank defines impaired loans as follows: · All loans internally rated as “Substandard,” “Doubtful” or “Loss”; · All loans on non-accrual status and non-PCI loans past due 90 days-or-more still on accrual; · All retail and commercial TDRs; · All loans internally rated in a PCI category with cash flows that have deteriorated from management’s initial acquisition day estimate; and · Any other situation where the full collection of the total amount due for a loan is improbable or otherwise meets the definition of impaired. Generally, loans are designated as classified or Special Mention to ensure more frequent monitoring. These loans are reviewed to ensure proper earning status and management strategy. If it is determined that there is serious doubt as to performance in accordance with original or modified contractual terms, then the loan is generally downgraded and often placed on non-accrual status. GAAP recognizes three methods to measure specific loan impairment, including: · Cash Flow Method — The recorded investment in the loan is measured against the present value of expected future cash flows discounted at the effective interest rate. The Bank employs this method for a significant portion of its impaired TDRs. Impairment amounts under this method are reflected in the Bank’s Allowance as specific reserves on the respective impaired loan. These specific reserves are adjusted quarterly based upon reevaluation of the expected future cash flows and changes in the recorded investment. · Collateral Method — The recorded investment in the loan is measured against the fair value of the collateral value less applicable selling costs. The Bank employs the fair value of collateral method for its impaired loans when repayment is based solely on the sale of or the operations of the underlying collateral. Collateral fair value is typically based on the most recent real estate valuation on file. Measured impairment under this method is generally charged off unless the loan is a smaller balance, homogeneous mortgage loan. The Bank’s selling costs for its collateral dependent loans typically range from 10-13% of the fair value of the underlying collateral, depending on the asset class. Selling costs are not applicable for collateral dependent loans whose repayment is based solely on the operations of the underlying collateral. · Market Value Method — The recorded investment in the loan is measured against the loan’s obtainable market value. The Bank does not currently employ this technique, as it is typically found impractical. In addition to obtaining appraisals at the time of origination, the Bank typically updates appraisals and/or broker price opinions for loans with potential impairment. Updated valuations for commercial related credits exhibiting an increased risk of loss are typically obtained within one year of the previous valuation. Collateral values for past due residential mortgage loans and home equity loans are generally updated prior to a loan becoming 90 days delinquent, but no more than 180 days past due. When measuring impairment, to the extent updated collateral values cannot be obtained due to the lack of recent comparable sales or for other reasons, the Bank discounts the valuation of the collateral primarily based on the age of the appraisal and the real estate market conditions of the location of the underlying collateral. The general component of the Allowance covers loans collectively evaluated for impairment and is based on historical loss experience, with potential adjustments for current relevant qualitative factors. Historical loss experience is determined by loan performance and class and is based on the actual loss history experienced by the Bank. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are included in the general component unless the loans are classified as TDRs or on non-accrual. In determining the historical loss rates for each respective loan class, management evaluates the following historical loss rate scenarios: · Rolling four quarter average · Rolling eight quarter average · Rolling twelve quarter average · Rolling sixteen quarter average · Rolling twenty quarter average · Rolling twenty-four quarter average · Rolling twenty-eight quarter average · Current year to date historical loss factor average · Peer group loss factors In order to take account of periods of economic growth and economic downturn, management generally uses the highest of the rolling four, eight, twelve, sixteen, twenty, twenty-four, or twenty-eight quarter averages for each loan class when determining its historical loss factors for its “Pass” rated and nonrated credits. Loan classes are also evaluated utilizing subjective factors in addition to the historical loss calculations to determine a loss allocation for each class. Management assigns risk multiples to certain classes to account for qualitative factors such as: · Changes in nature, volume and seasoning of the portfolio; · Changes in experience, ability and depth of lending management and other relevant staff; · Changes in the quality of the Bank’s credit review system; · Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; · Changes in the volume and severity of past due, non-performing and classified loans; · Changes in the value of underlying collateral for collateral-dependent loans; · Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of portfolios, including the condition of various market segments; · The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and · The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio. As this analysis, or any similar analysis, is an imprecise measure of loss, the Allowance is subject to ongoing adjustments. Therefore, management will often take into account other significant factors that may be necessary or prudent in order to reflect probable incurred losses in the total loan portfolio. A “portfolio segment” is defined as the level at which an entity develops and documents a systematic methodology to determine its Allowance. A “class” of loans represents further disaggregation of a portfolio segment based on risk characteristics and the entity’s method for monitoring and assessing credit risk. In developing its Allowance methodology, the Company has identified the following Traditional Banking portfolio segments: Portfolio Segment 1 — Loans where the Allowance methodology is determined based on a loan review and grading system (primarily commercial related loans and retail TDRs). For this portfolio, the Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, public information, and current economic trends. The Bank also considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s). The Bank analyzes loans individually, and based on this analysis, establishes a credit risk rating consistent with its credit risk matrix. Portfolio Segment 2 — Loans where the Allowance methodology is driven by delinquency and non-accrual data (primarily small dollar, retail mortgage or consumer related). For this portfolio, the Bank analyzes risk classes based on delinquency and/or non-accrual status. |
Republic Credit Solutions | Republic Credit Solutions During the third quarter of 2015, one of RCS’ small dollar consumer loan programs exited the program’s pilot phase. Under the operation of this program, the Company retains a 10% ownership in the loans originated and sells a 90% participation interest. During 2015, RPG sold approximately $137 million of loans from this program to a third party compared to $636,000 during 2014. As of December 31, 2015, RCS carried approximately $7 million of such loans on its balance sheet, representing its 10% retained ownership. For RCS loans, management conducts an analysis of historical losses and delinquencies by month of loan origination when determining the Allowance. Due to their small-dollar, short-term nature, such loans are expected to experience higher loss rates than Core Bank consumer products. See Footnote 4 “Loans and Allowance for Loan and Lease Losses” in this section of the filing for additional discussion regarding the Company’s Allowance. |
Transfers of Financial Assets | Transfers of Financial Assets — Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Other Real Estate Owned | Other Real Estate Owned (“OREO”) — Assets acquired through loan foreclosures are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. The Bank’s selling costs for OREO typically range from 10 - 13 % of each property’s fair value, depending on property class. Fair value is commonly based on recent real estate appraisals or broker price opinions. 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 the Bank. Appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Once the appraisal is received, a member of the Bank’s Credit Administration Department (“CAD”) 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. On at least an annual basis, the Bank performs a back test of collateral appraisals by comparing actual selling prices on recent collateral sales to the most recent appraisal of such collateral. Back tests are performed for each collateral class, e.g. residential real estate or commercial real estate, and may lead to additional adjustments to the value of unliquidated collateral of similar class. |
Premises and Equipment, Net | Premises and Equipment, Net — Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets on the straight-line method. Estimated lives typically range from 25 to 39 years for buildings and improvements, three to ten years for furniture, fixtures and equipment and three to five years for leasehold improvements. |
Federal Home Loan Bank Stock ("FHLB") | Federal Home Loan Bank Stock (“FHLB”) — The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security and annually evaluated for impairment. Because this stock is viewed as a long-term investment, impairment is based on ultimate recovery of par value. Both cash and stock dividends are recorded as interest income. |
Bank Owned Life Insurance ("BOLI") | Bank Owned Life Insurance (“BOLI”) — The Bank maintains BOLI policies on certain employees. BOLI is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Bank recognizes tax-free income from the periodic increases in cash surrender value of these policies and from death benefits in non interest income. Credit ratings for the Bank’s BOLI carriers are reviewed at least annually. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets — Goodwill resulting from business combinations prior to January 1, 2009 represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill resulting from business combinations after January 1, 2009 represents the future economic benefits arising from other assets acquired that are individually identified and separately recognized. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected September 30 th as the date to perform its annual goodwill impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the Bank’s balance sheet. Based on its assessment, the Company believes its goodwill of $10 million was not impaired and is properly recorded in the consolidated financial statements as of December 31, 2015 and 2014. Other intangible assets consist of core deposit and acquired client relationship intangible assets arising from bank acquisitions. They are initially measured at fair value and then are amortized on an accelerated method over their estimated useful lives, which can range from two to ten years. During 2013, the Company amortized all $510,000 in other intangible assets held as of December 31, 2012. |
Off Balance Sheet Financial Instruments | Off Balance Sheet Financial Instruments — Financial instruments include off balance sheet credit instruments, such as commitments to fund loans and standby letters of credit. The face amount for these items represents the exposure to loss, before considering client collateral or ability to repay. Such financial instruments are recorded upon funding. Instruments such as standby letters of credit are considered financial guarantees and are recorded at fair value. |
Derivatives | Derivatives —Derivatives are reported at fair value in other assets or other liabilities. The Company’s derivatives include interest rate swap agreements. For asset/liability management purposes, the Bank uses interest rate swap agreements to hedge the exposure or to modify the interest rate characteristic of certain immediately repricing liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For a derivative designated as a cash flow hedge, the effective portion of the derivative’s unrealized gain or loss is recorded as a component of other comprehensive income (loss). For derivatives not designated as hedges, the gain or loss is recognized in current period earnings. Net cash settlements on interest rate swaps are recorded in interest expense and cash flows related to the swaps are classified in the cash flow statement the same as the interest expense and cash flows from the liabilities being hedged. The Bank formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet. The Bank also formally assesses, both at the hedge’s inception and on an ongoing basis, whether a swap is highly effective in offsetting changes in cash flows of the hedged items. The Bank discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in cash flows of the hedged item, the derivative is settled or terminates, or treatment of the derivative as a hedge is no longer appropriate or intended. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transactions will affect earnings. The Bank enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Bank enters into offsetting positions in order to minimize the Bank’s interest rate risk. These swaps are derivatives, but are not designated as hedging instruments, and therefore changes in fair value are reported in current year earnings. Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or client owes the Bank, and results in credit risk to the Bank. When the fair value of a derivative instrument contract is negative, the Bank owes the client or counterparty and therefore, has no credit risk. |
Stock Based Compensation | Stock Based Compensation — For stock options and restricted stock awards issued to employees, compensation cost is recognized based on the fair value of these awards at the date of grant. The Company utilizes a Black-Scholes model to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation expense is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. |
Income Taxes | Income Taxes — Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized 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. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded. |
Retirement Plans | Retirement Plans — 401(k) plan expense is recorded as a component of salaries and employee benefits and represents the amount of Company matching contributions. |
Earnings Per Common Share | Earnings Per Common Share — Basic earnings per share is based on net income (in the case of Class B Common Stock, less the dividend preference on Class A Common Stock), divided by the weighted average number of shares outstanding during the period. Diluted earnings per share include the dilutive effect of additional potential Class A common shares issuable under stock options. Earnings and dividends per share are restated for all stock dividends through the date of issuance of the financial statements. |
Comprehensive Income | Comprehensive Income — Comprehensive income consists of net income and other comprehensive income (“OCI”). OCI includes, net of tax, unrealized gains and losses on securities available for sale and unrealized gains and losses on cash flow hedges, which are also recognized as a separate component of equity. |
Loss Contingencies | Loss Contingencies — Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any outstanding matters that would have a material effect on the financial statements. |
Restrictions on Cash and Cash Equivalents | Restrictions on Cash and Cash Equivalents — Republic is required by the Federal Reserve Bank (“FRB”) to maintain average reserve balances. Cash and due from banks on the consolidated balance sheet included no required reserve balances at December 31, 2015 and 2014. The Company’s Captive maintains cash reserves to cover insurable claims. Reserves totaled $2 million and $1 million as of December 31, 2015 and 2014. |
Equity | Equity — Stock dividends in excess of 20% are reported by transferring the par value of the stock issued from retained earnings to common stock. Stock dividends for 20% or less are reported by transferring the fair value, as of the ex-dividend date, of the stock issued from retained earnings to common stock and additional paid in capital. Fractional share amounts are paid in cash with a reduction in retained earnings. |
Dividend Restrictions | Dividend Restrictions — Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to Republic or by Republic to shareholders. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments — Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Footnote 5 “ Fair Value” in this section of the filing. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. |
Segment Information | Segment Information — Segments represent parts of the Company evaluated by management with separate financial information. Republic’s internal information is primarily reported and evaluated in four lines of business – Traditional Banking, Warehouse, Mortgage Banking and RPG. |
Reclassifications | Reclassifications — Certain amounts presented in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported prior periods’ net income. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INVESTMENT SECURITIES | |
Gross Amortized Cost and Fair Value of Securities Available for Sale and Related Gross Unrealized Gains and Losses Recognized in Accumulated Other Comprehensive Income (Loss) | Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ $ Private label mortgage backed security — Mortgage backed securities - residential Collateralized mortgage obligations Freddie Mac preferred stock — — Mutual fund — Corporate bonds Trust preferred security — — Total securities available for sale $ $ $ $ Gross Gross Amortized Unrealized Unrealized Fair December 31, 2014 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ $ Private label mortgage backed security — Mortgage backed securities - residential Collateralized mortgage obligations Freddie Mac preferred stock — — Mutual fund — Corporate bonds — Total securities available for sale $ $ $ $ |
Carrying Value, Gross Unrecognized Gains and Losses, and Fair Value of Securities to be Held to Maturity | Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2015 (in thousands) Value Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ — $ Mortgage backed securities - residential — Collateralized mortgage obligations — Corporate bonds — Total securities held to maturity $ $ $ $ Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2014 (in thousands) Value Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ $ $ $ Mortgage backed securities - residential — Collateralized mortgage obligations Corporate bonds — Total securities held to maturity $ $ $ $ |
Amortized Cost and Fair Value of Investment Securities Portfolio by Contractual Maturity | Securities Securities Available for Sale Held to Maturity Amortized Fair Carrying Fair December 31, 2015 (in thousands) Cost Value Value Value Due in one year or less $ $ $ — $ — Due from one year to five years Due from five years to ten years — — Due beyond ten years — — Private label mortgage backed security — — Mortgage backed securities - residential Collateralized mortgage obligations Freddie Mac preferred stock — — — Mutual fund — — Total securities $ $ $ $ |
Securities with Unrealized Losses, Aggregated by Investment Category with Continuous Unrealized Loss Position | Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2015 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ $ $ $ $ $ Mortgage backed securities - residential — — Collateralized mortgage obligations Corporate bonds — — Total securities available for sale $ $ $ $ $ $ Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2014 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ $ $ — $ — $ $ Mortgage backed securities - residential — — Collateralized mortgage obligations Total securities available for sale $ $ $ $ $ $ Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2015 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities held to maturity: Corporate bonds $ $ $ — — $ $ Total securities held to maturity $ $ $ — $ — $ $ Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2014 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Securities held to maturity: U.S. Treasury securities and U.S. Government agencies $ $ $ — $ — $ $ Collateralized mortgage obligations — — Corporate bonds — — Total securities held to maturity $ $ $ — $ — $ $ |
Rollforward of the private label mortgage backed security credit losses | Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Recovery of losses previously recorded Realized pass through of actual losses — — — Balance, end of year $ $ $ |
Pledged Investment Securities | December 31, (in thousands) 2015 2014 Carrying amount $ $ Fair value |
LOANS AND ALLOWANCE FOR LOAN 34
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | |
Schedule of composition of loan portfolio | December 31, (in thousands) 2015 2014 Residential real estate: Owner occupied $ $ Owner occupied - correspondent* Non owner occupied Commercial real estate Commercial real estate - purchased whole loans* Construction & land development Commercial & industrial Lease financing receivables Warehouse lines of credit Home equity Consumer: RPG loans* Credit cards Overdrafts Purchased whole loans* Other consumer Total loans** Allowance for loan and lease losses Total loans, net $ $ * Identifies loans to borrowers located primarily outside of the Bank’s market footprint. ** Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs. See table directly below for expanded detail. |
Schedule that reconciles the contractually receivable and carrying amounts of loans | December 31, (in thousands) 2015 2014 Contractually receivable $ $ Unearned income(1) Unamortized premiums(2) Unaccreted discounts(3) Net unamortized deferred origination fees and costs Carrying value of loans $ $ (1) Unearned income relates to lease financing receivables. (2) Premiums predominately relate to loans acquired through the Bank’s Correspondent Lending channel. (3) Unaccreted discounts includes both accretable and non-accretable discounts and predominately relates to loans acquired in the Bank’s 2012 FDIC-assisted transactions. |
Schedule of loans purchased by class | Years Ended December 31, (in thousands) 2015 2014 Residential real estate: Owner occupied - correspondent* $ $ Consumer: Purchased whole loans* Total purchased loans $ $ *Represents origination amount, inclusive of applicable purchase premiums. |
Reconciliation of contractually-required and carrying amounts of PCI loans | December 31, (in thousands) 2015 2014 Contractually-required principal $ $ Non-accretable amount Accretable amount Carrying value of loans $ $ |
Rollforward of the accretable amount on PCI loans | Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Transfers between non-accretable and accretable Net accretion into interest income on loans, including loan fees Other changes — — — Balance, end of year $ $ $ |
Schedule of the risk category of loans by class of loans based on the bank's internal analysis performed | Purchased Purchased Credit Credit Impaired Impaired Total December 31, 2015 Special Doubtful / Loans - Loans - Rated (in thousands) Pass Mention* Substandard* Loss Group 1 Substandard Loans** Residential real estate: Owner occupied $ — $ $ $ — $ $ — $ Owner occupied - correspondent — — — — — — — Non owner occupied — — — Commercial real estate — — Commercial real estate - purchased whole loans — — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — — Warehouse lines of credit — — — — — Home equity — — — — Consumer: RPG loans — — — — — — — Credit cards — — — — — — — Overdrafts — — — — — — — Purchased whole loans — — — — — — — Other consumer — — — — Total rated loans $ $ $ $ — $ $ — $ *Special Mention and Substandard loans included $180,000 and $ 1 million, respectively, which were removed from PCI accounting in accordance with ASC 310-30-35-13 due to a post-acquisition troubled debt restructuring. **The above table excludes all non-classified residential real estate and consumer loans at the respective period ends. Purchased Purchased Credit Credit Impaired Impaired Total December 31, 2014 Special Doubtful / Loans - Loans - Rated (in thousands) Pass Mention* Substandard* Loss Group 1 Substandard Loans** Residential real estate: Owner occupied $ — $ $ $ — $ $ — $ Owner occupied - correspondent — — — — — — — Non owner occupied — — — Commercial real estate — — Commercial real estate - Purchased whole loans — — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — — Warehouse lines of credit — — — — — Home equity — — — — — Consumer: RPG loans — — — — — — — Credit cards — — — — — — — Overdrafts — — — — — — — Purchased whole loans — — — — — — — Other consumer — — — Total rated loans $ $ $ $ — $ $ — $ * Special Mention and Substandard loans included $443,000 and $6 million, respectively, which were removed from PCI accounting in accordance with ASC 310-30-35-13 due to a post-acquisition troubled debt restructuring. ** The above table excludes all non-classified residential real estate and consumer loans at the respective period ends. |
Schedule of activity in the Allowance | Years Ended December 31, (in thousands) 2015 2014 2013 Allowance, beginning of year $ $ $ Charge-offs - Core Banking Charge-offs - RPG — Total charge-offs Recoveries - Core Banking Recoveries - RPG Total recoveries Net (charge-offs) recoveries - Core Banking Net (charge-offs) recoveries - RPG Net (charge-offs) recoveries Provision - Core Banking Provision - RPG Total provision Allowance, end of year $ $ $ |
Schedule of activity in the Allowance by portfolio class | Residential Real Estate Commercial Owner Real Estate - Lease Year Ended Owner Occupied Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2015 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Beginning balance $ $ $ $ $ $ $ $ Provision Charge-offs — — — — Recoveries — — — — Ending balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Beginning balance $ $ $ $ $ $ $ $ Provision Charge-offs — Recoveries — Ending balance $ $ $ $ $ $ $ $ Residential Real Estate Commercial Owner Real Estate - Lease Year Ended Owner Occupied Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2014 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Beginning balance $ $ — $ $ $ $ $ $ — Provision — Charge-offs — — — Recoveries — — — Ending balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Beginning balance $ $ $ — $ $ $ — $ $ Provision Charge-offs — — Recoveries — — Ending balance $ $ $ $ $ $ $ $ Commercial Residential Real Estate Real Estate - Lease Year Ended Owner Owner Occupied - Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2013 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Beginning balance $ NA $ $ $ $ $ NA Provision NA — NA Charge-offs NA — NA Recoveries NA — NA Ending balance $ NA $ $ $ $ $ NA Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Beginning balance $ $ $ — $ $ NA $ $ Provision NA Charge-offs — — NA Recoveries — NA Ending balance $ $ $ — $ $ NA $ $ NA - Not applicable. |
Schedule of non-performing loans and non-performing assets and select credit quality ratios | December 31, (dollars in thousands) 2015 2014 Loans on nonaccrual status* $ $ Loans past due 90-days-or-more and still on accrual** Total nonperforming loans Other real estate owned Total nonperforming assets $ $ Credit Quality Ratios: Nonperforming loans to total loans % % Nonperforming assets to total loans (including OREO) % % Nonperforming assets to total assets % % *Loans on nonaccrual status include impaired loans. ** For all periods presented, loans past due 90-days-or-more and still on accrual consist entirely of PCI loans. |
Schedule of recorded investment in non-accrual loans and loans past due over 90-days-or-more and still on accrual by class of loans | Past Due 90-Days-or-More Nonaccrual and Still Accruing Interest* December 31, (in thousands) 2015 2014 2015 2014 Residential real estate: Owner occupied $ $ $ — $ Owner occupied - correspondent — — — — Non owner occupied — — Commercial real estate — Commercial real estate - purchased whole loans — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — Warehouse lines of credit — — — — Home equity — — Consumer: RPG loans — — — — Credit cards — — — — Overdrafts — — — — Purchased whole loans — — — — Other consumer — — Total $ $ $ $ * For all periods presented, loans past due 90-days-or-more and still on accrual consist entirely of PCI loans. |
Schedule of recorded investment in loans | Residential Real Estate Consumer Owner Purchased December 31, 2015 Owner Occupied - Non Owner Home RPG Credit Whole Other (in thousands) Occupied Correspondent Occupied Equity Loans Cards Overdrafts Loans Consumer Performing $ $ $ $ $ $ $ $ $ Nonperforming — — — — — Total $ $ $ $ $ $ $ $ $ Residential Real Estate Consumer Owner Purchased December 31, 2014 Owner Occupied - Non Owner Home RPG Credit Whole Other (in thousands) Occupied Correspondent Occupied Equity Loans Cards Overdrafts Loans Consumer Performing $ $ $ $ $ $ $ $ $ Nonperforming — — — — — Total $ $ $ $ $ $ $ $ $ |
Schedule of aging of the recorded investment in loans by class of loans | 30 - 59 60 - 89 90 or More December 31, 2015 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Residential real estate: Owner occupied $ $ $ $ $ $ Owner occupied - correspondent — — — — Non owner occupied — Commercial real estate — Commercial real estate - purchased whole loans — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — Warehouse lines of credit — — — — Home equity Consumer: RPG loans — — Credit cards — Overdrafts — — Purchased whole loans — Other consumer — Total $ $ $ $ $ $ Delinquency ratio*** % % % % *All loans past due 90 days-or-more, excluding PCI loans, were on nonaccrual status. **Delinquent status may be determined by either the number of days past due or number of payments past due. ***Represents total loans 30-days-or-more past due divided by total loans. 30 - 59 60 - 89 90 or More December 31, 2014 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Residential real estate: Owner occupied $ $ $ $ $ $ Owner occupied - correspondent — — — — Non owner occupied Commercial real estate — Commercial real estate - purchased whole loans — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — Warehouse lines of credit — — — — Home equity Consumer: RPG loans — Credit cards — Overdrafts — — Purchased whole loans — — Other consumer — Total $ $ $ $ $ $ Delinquency ratio*** % % % % *All loans past due 90 days-or-more, excluding PCI loans, were on nonaccrual status. **Delinquent status may be determined by either the number of days past due or number of payments past due. ***Represents total loans 30-days-or-more past due divided by total loans. |
Schedule of Bank's impaired loans | December 31, (in thousands) 2015 2014 2013 Loans with no allocated allowance for loan losses $ $ $ Loans with allocated allowance for loan losses Total impaired loans $ $ $ Amount of the allowance for loan losses allocated $ $ $ Average of individually impaired loans during the year Interest income recognized during impairment Cash basis interest income recognized — — — |
Schedule of balance in the Allowance and the recorded investment in loans by portfolio class based on impairment method | Residential Real Estate Commercial Owner Real Estate - Lease Owner Occupied - Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2015 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ $ — $ $ $ — $ $ $ — Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ $ — $ $ $ — $ $ $ — Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — — Total ending loan balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — — PCI loans without post acquisition impairment — — — — — — — Total ending loan balance $ $ $ $ $ $ $ $ Residential Real Estate Commercial Owner Real Estate - Lease Owner Occupied - Non Owner Commercial Purchased Construction & Commercial & Financing December 31, 2014 (in thousands) Occupied Correspondent Occupied Real Estate Whole Loans Land Development Industrial Receivables Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ $ — $ $ $ — $ $ $ — Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ $ — $ $ $ — $ $ $ — Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — PCI loans without post acquisition impairment — — — Total ending loan balance $ $ $ $ $ $ $ $ Warehouse Consumer Lines of Home RPG Credit Purchased Other (continued) Credit Equity Loans Cards Overdrafts Whole Loans Consumer Total Allowance: Ending Allowance balance: Individually evaluated for impairment, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — PCI loans without post acquisition impairment — — — — — — — — Total ending Allowance: $ $ $ $ $ $ $ $ Loans: Impaired loans individually evaluated, excluding PCI loans $ — $ $ — $ — $ — $ — $ $ Loans collectively evaluated for impairment PCI loans with post acquisition impairment — — — — — — PCI loans without post acquisition impairment — — — — — — Total ending loan balance $ $ $ $ $ $ $ $ |
Schedule of loans individually evaluated for impairment by class of loans | As of Twelve Months Ended December 31, 2015 December 31, 2015 Cash Basis Unpaid Average Interest Interest Principal Recorded Allowance Recorded Income Income (in thousands) Balance Investment Allocated Investment Recognized Recognized Impaired loans with no related allowance recorded: Residential real estate: Owner occupied $ $ $ — $ $ $ — Owner occupied - correspondent — — — — — — Non owner occupied — — Commercial real estate — — Commercial real estate - purchased whole loans — — — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — — — Warehouse lines of credit — — — — — — Home equity — — Consumer: RPG loans — — — — — — Credit cards — — — — — — Overdrafts — — — — — — Purchased whole loans — — — — — — Other consumer — — — Impaired loans with an allowance recorded: Residential real estate: Owner occupied — Owner occupied - correspondent — — — — — — Non owner occupied — Commercial real estate — Commercial real estate - purchased whole loans — — — — — — Construction & land development — Commercial & industrial — Lease financing receivables — — — — — — Warehouse lines of credit — — — — — — Home equity — Consumer: RPG loans — — — — — — Credit cards — — — — — — Overdrafts — — — — — — Purchased whole loans — — — — — — Other consumer — Total impaired loans $ $ $ $ $ $ — As of Twelve Months Ended December 31, 2014 December 31, 2014 Cash Basis Unpaid Average Interest Interest Principal Recorded Allowance Recorded Income Income (in thousands) Balance Investment Allocated Investment Recognized Recognized Impaired loans with no related allowance recorded: Residential real estate: Owner occupied $ $ $ — $ $ $ — Owner occupied - correspondent — — — — — — Non owner occupied — — Commercial real estate — — Commercial real estate - purchased whole loans — — — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables — — — — — — Warehouse lines of credit — — — — — — Home equity — — Consumer: RPG loans — — — — — — Credit cards — — — — — — Overdrafts — — — — — — Purchased whole loans — — — — — — Other consumer — — — — — — Impaired loans with an allowance recorded: Residential real estate: Owner occupied — Owner occupied - correspondent — — — — — — Non owner occupied — Commercial real estate — Commercial real estate - purchased whole loans — — — — — — Construction & land development — Commercial & industrial — Lease financing receivables — — — — — — Warehouse lines of credit — — — — — — Home equity — Consumer: RPG loans — — — — — — Credit cards — — — — — — Overdrafts — — — — — — Purchased whole loans — — — — — — Other consumer — Total impaired loans $ $ $ $ $ $ — As of Twelve Months Ended December 31, 2013 December 31, 2013 Cash Basis Unpaid Average Interest Interest Principal Recorded Allowance Recorded Income Income (in thousands) Balance Investment Allocated Investment Recognized Recognized Impaired loans with no related allowance recorded: Residential real estate: Owner occupied $ $ $ — $ $ $ — Owner occupied - correspondent NA NA NA NA NA NA Non owner occupied — — Commercial real estate — — Commercial real estate - purchased whole loans — — — — — — Construction & land development — — Commercial & industrial — — Lease financing receivables NA NA NA NA NA NA Warehouse lines of credit — — — — — — Home equity — — Consumer: RPG loans — — — — — — Credit cards — — — — — — Overdrafts — — — — — — Purchased whole loans NA NA NA NA NA NA Other consumer — — Impaired loans with an allowance recorded: Residential real estate: Owner occupied — Owner occupied - correspondent NA NA NA NA NA NA Non owner occupied — Commercial real estate — Commercial real estate - purchased whole loans — — — — — — Construction & land development — Commercial & industrial — Lease financing receivables NA NA NA NA NA NA Warehouse lines of credit — — — — — — Home equity — Consumer: RPG loans — — — — — — Credit cards — — — — — — Overdrafts — — — — — — Purchased whole loans NA NA NA NA NA NA Other consumer — — $ $ $ $ $ $ — NA - Not applicable |
Schedule of TDRs differentiated by loan type and accrual status | Troubled Debt Troubled Debt Total Restructurings on Restructurings on Troubled Debt Nonaccrual Status Accrual Status Restructurings Number of Recorded Number of Recorded Number of Recorded December 31, 2015 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate $ $ $ Commercial real estate Construction & land development Commercial & industrial Total troubled debt restructurings $ $ $ Troubled Debt Troubled Debt Total Restructurings on Restructurings on Troubled Debt Nonaccrual Status Accrual Status Restructurings Number of Recorded Number of Recorded Number of Recorded December 31, 2014 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate $ $ $ Commercial real estate Construction & land development Commercial & industrial — — Total troubled debt restructurings $ $ $ |
Schedule of categories of TDR loan modifications outstanding and respective performance under modified terms | Troubled Debt Troubled Debt Restructurings Restructurings Total Performing to Not Performing to Troubled Debt Modified Terms Modified Terms Restructurings Number of Recorded Number of Recorded Number of Recorded December 31, 2015 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments $ — $ — $ Rate reduction Principal deferral Legal modification Total residential TDRs Commercial related and construction/land development loans: Interest only payments Rate reduction Principal deferral Total commercial TDRs Total troubled debt restructurings $ $ $ Troubled Debt Troubled Debt Restructurings Restructurings Total Performing to Not Performing to Troubled Debt Modified Terms Modified Terms Restructurings Number of Recorded Number of Recorded Number of Recorded December 31, 2014 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments $ $ $ Rate reduction Principal deferral Legal modification Total residential TDRs Commercial related and construction/land development loans: Interest only payments Rate reduction Principal deferral Legal modification Total commercial TDRs Total troubled debt restructurings $ $ $ |
Summary of categories of TDR loan modifications that occurred during the period | Troubled Debt Troubled Debt Restructurings Restructurings Total Performing to Not Performing to Troubled Debt Modified Terms Modified Terms Restructurings Number of Recorded Number of Recorded Number of Recorded December 31, 2015 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments $ — $ — $ Rate reduction Principal deferral — — Legal modification Total residential TDRs Commercial related and construction/land development loans: Interest only payments — — Rate reduction — — Principal deferral Total commercial TDRs Total troubled debt restructurings $ $ $ Troubled Debt Troubled Debt Restructurings Restructurings Total Performing to Not Performing to Troubled Debt Modified Terms Modified Terms Restructurings Number of Recorded Number of Recorded Number of Recorded December 31, 2014 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments — $ — $ $ Rate reduction Principal deferral Legal modification Total residential TDRs Commercial related and construction/land development loans: Interest only payments Rate reduction Principal deferral Total commercial TDRs Total troubled debt restructurings $ $ $ The tables above are inclusive of loans which were TDRs at the end of previous years and were re-modified, e.g., a maturity date extension during the current year. Performing to Not Performing to Troubled Debt Modified Terms Modified Terms Restructurings Number of Recorded Number of Recorded Number of Recorded December 31, 2013 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments — $ — $ $ Rate reduction Principal deferral Legal modification Total residential TDRs Commercial related and construction/land development loans: Interest only payments Rate reduction Principal deferral — Legal modification — — — — Total commercial TDRs Total troubled debt restructurings $ $ $ The table above is inclusive of loans which were TDRs at the end of previous years and were re-modified, e.g., a maturity date extension during the current year. |
Schedule of loans by class modified as troubled debt restructurings within the previous twelve months for which there was a payment default | 2015 2014 2013 Number of Recorded Number of Recorded Number of Recorded December 31, (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate: Owner occupied $ $ $ Owner occupied - correspondent — — — — NA NA Non owner occupied — — — — Commercial real estate Commercial real estate - purchased whole loans — — — — — — Construction & land development — — — — Commercial & industrial Lease financing receivables — — — — NA NA Warehouse lines of credit — — — — — — Home equity — — — — Consumer: RPG loans — — — — — — Credit cards — — — — — — Overdrafts — — — — — — Purchased whole loans — — — — — — Other consumer — — — — — — Total $ $ $ |
Schedule of carrying amount of foreclosed properties held | December 31, (in thousands) 2015 2014 Residential real estate $ $ Commercial real estate Construction & land development Total other real estate owned $ $ |
Schedule of recorded investment in consumer mortgage loans secured by residential real estate properties | December 31, (in thousands) 2015 2014 Recorded investment in consumer residential real estate mortgage loans in the process of foreclosure $ $ |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures | |
Schedule of aggregate fair value, contractual balance and gain | December 31, (in thousands) 2015 2014 Aggregate fair value $ $ Contractual balance Unrealized gain |
Schedule of gains and losses from changes in fair value included in earnings | Years Ended December 31, (in thousands) 2015 2014 2013 Interest income $ $ $ Change in fair value Total included in earnings $ $ $ |
Impaired collateral dependent loans classified with Level 3 fair value hierarchy | December 31, (in thousands) 2015 2014 Carrying amount of loans measured at fair value $ $ Estimated selling costs considered in carrying amount Valuation allowance — Total fair value $ $ |
Provisions for loss on collateral dependent impaired loans | Years Ended December 31, (in thousands) 2015 2014 2013 Provisions for loss on collateral dependent impaired loans $ $ $ |
Other Real Estate Owned | December 31, (in thousands) 2015 2014 2013 Other real estate carried at fair value $ $ $ Other real estate carried at cost Total carrying value of other real estate owned $ $ $ Other real estate owned write-downs during the year $ $ $ |
Carrying Amount and Estimated Fair Values of Financial Instruments | Fair Value Measurements at December 31, 2015: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available for sale Securities held to maturity — — Mortgage loans held for sale — — Other loans held for sale — — Loans, net — — Federal Home Loan Bank stock — — — NA Accrued interest receivable — — Liabilities: Non interest-bearing deposits — — Transaction deposits — — Time deposits — — Securities sold under agreements to repurchase and other short-term borrowings — — Federal Home Loan Bank advances — — Subordinated note — — Accrued interest payable — — Fair Value Measurements at December 31, 2014: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available for sale Securities held to maturity — — Mortgage loans held for sale — — Loans, net — — Federal Home Loan Bank stock — — — NA Accrued interest receivable — — Liabilities: Non interest-bearing deposits — — Transaction deposits — — Time deposits — — Securities sold under agreements to repurchase and other short-term borrowings — — Federal Home Loan Bank advances — — Subordinated note — — Accrued interest payable — — |
Recurring basis | |
Fair Value Disclosures | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value Measurements at December 31, 2015 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Financial assets: Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ — $ $ — $ Private label mortgage backed security — — Mortgage backed securities - residential — — Collateralized mortgage obligations — — Freddie Mac preferred stock — — Mutual fund — — Corporate bonds — — Trust preferred security — — Total securities available for sale $ $ $ $ Mortgage loans held for sale $ — $ $ — $ Rate lock commitments — — Interest rate swap agreements — — Financial liabilities: Mandatory forward contracts — — Interest rate swap agreements — — Fair Value Measurements at December 31, 2014 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Financial assets: Securities available for sale: U.S. Treasury securities and U.S. Government agencies $ — $ $ — $ Private label mortgage backed security — — Mortgage backed securities - residential — — Collateralized mortgage obligations — — Freddie Mac preferred stock — — Mutual fund — — Corporate bonds — — Total securities available for sale $ $ $ $ Mortgage loans held for sale $ — $ $ — $ Rate lock commitments — — Financial liabilities: Mandatory forward contracts — — Interest rate swap agreements — — |
Fair value inputs quantitative information | Fair Valuation December 31, 2015 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ Discounted cash flow (1) Constant prepayment rate 0.0% - 6.5% (2) Probability of default 3.0% - 9.0% (2) Loss severity 60% - 90% Fair Valuation December 31, 2014 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ Discounted cash flow (1) Constant prepayment rate 0.5% - 6.5% (2) Probability of default 3.0% - 6.2% (2) Loss severity 60% - 75% |
Nonrecurring basis | |
Fair Value Disclosures | |
Fair value inputs quantitative information | Range Fair Valuation Unobservable (Weighted December 31, 2015 (dollars in thousands) Value Technique Inputs Average) Impaired loans - residential real estate owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 53% (7%) Impaired loans - residential real estate non owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 1% (1%) Impaired loans - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 58% (19%) Impaired loans - commercial real estate $ Income approach Adjustments for differences between net operating income expectations 17% (17%) Impaired loans - home equity $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 29% (20%) Other real estate owned - residential real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 18% (18%) Other real estate owned - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 12% - 23% (13%) Other real estate owned - construction & land development $ Sales comparison approach Adjustments determined for differences between comparable sales 49% (49%) Premises, held for sale $ Sales comparison approach Adjustments determined for differences between comparable sales 5% (5%) Range Fair Valuation Unobservable (Weighted December 31, 2014 (dollars in thousands) Value Technique Inputs Average) Impaired loans - residential real estate owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 33% (7%) Impaired loans - residential real estate non owner occupied $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 33% (18%) Impaired loans - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 9% (2%) Impaired loans - commercial real estate $ Income approach Adjustments for differences between net operating income expectations 3% - 37% (22%) Impaired loans - home equity $ Sales comparison approach Adjustments determined for differences between comparable sales 0% - 35% (12%) Other real estate owned - residential real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 9% - 23% (19%) Other real estate owned - commercial real estate $ Sales comparison approach Adjustments determined for differences between comparable sales 11% - 14% (13%) Other real estate owned - commercial real estate $ Income approach Adjustments for differences between net operating income expectations 19% (19%) Other real estate owned - construction & land development $ Sales comparison approach Adjustments determined for differences between comparable sales 13% - 70% (38%) Other real estate owned - construction & land development $ Income approach Adjustments for differences between net operating income expectations 8% - 9% (8%) Premises, held for sale $ Sales comparison approach Adjustments determined for differences between comparable sales 5% (5%) |
Assets Measured at Fair Value on a Non-Recurring Basis | Fair Value Measurements at December 31, 2015 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Impaired loans: Residential real estate: Owner occupied $ — $ — $ $ Non owner occupied — — Commercial real estate — — Home equity — — Total impaired loans* $ — $ — $ $ Other real estate owned: Residential real estate $ — $ — $ $ Commercial real estate — — Construction & land development — — Total other real estate owned $ — $ — $ $ Premises, held for sale $ — $ — $ $ Fair Value Measurements at December 31, 2014 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Total Assets Inputs Inputs Fair (in thousands) (Level 1) (Level 2) (Level 3) Value Impaired loans: Residential real estate: Owner occupied $ — $ — $ $ Non owner occupied — — Commercial real estate — — Home equity — — Total impaired loans* $ — $ — $ $ Other real estate owned: Residential real estate $ — $ — $ $ Commercial real estate — — Construction & land development — — Total other real estate owned $ — $ — $ $ Premises, held for sale $ — $ — $ $ * The difference between the carrying value and the fair value of impaired loans measured at fair value is reconciled in a subsequent table of this Footnote. |
Private label mortgage backed security | |
Fair Value Disclosures | |
Reconciliation of the Bank's investments measured at fair value on a recurring basis using significant unobservable inputs | Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Total gains or losses included in earnings: Net change in unrealized gain (loss) Recovery of actual losses previously recorded Principal paydowns Balance, end of year $ $ $ |
Trust preferred security | |
Fair Value Disclosures | |
Reconciliation of the Bank's investments measured at fair value on a recurring basis using significant unobservable inputs | Year Ended December 31, (in thousands) 2015 Balance, beginning of year $ — Purchases, net of accretion recognized Balance, end of year $ |
MORTGAGE BANKING ACTIVITIES (Ta
MORTGAGE BANKING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
MORTGAGE BANKING ACTIVITIES | |
Activity for Mortgage Loans Held for Sale | Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Origination of mortgage loans held for sale Proceeds from the sale of mortgage loans held for sale Net gain on sale of mortgage loans held for sale Balance, end of year $ $ $ |
Components of Mortgage Banking Income | Years Ended December 31, (in thousands) 2015 2014 2013 Net gain realized on sale of mortgage loans held for sale $ $ $ Net change in fair value recognized on loans held for sale Net change in fair value recognized on rate lock commitments Net change in fair value recognized on forward contracts Net gain recognized Loan servicing income Amortization of mortgage servicing rights Change in mortgage servicing rights valuation allowance — — Net servicing income recognized Total Mortgage Banking income $ $ $ |
Activity for capitalized mortgage servicing rights | Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Additions Amortized to expense Change in valuation allowance — — Balance, end of year $ $ $ |
Valuation Allowance For Capitalized Mortgage Servicing Rights | Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ — $ — $ Additions — — — Reductions credited to operations — — Balance, end of year $ — $ — $ — |
Other information relating to mortgage servicing rights | December 31, (dollars in thousands) 2015 2014 Fair value of mortgage servicing rights portfolio $ $ Monthly prepayment rate of unpaid principal balance* 105% - 369% 95% - 462% Discount rate Weighted average default rate Weighted average life in years * Rates are applied to individual tranches with similar characteristics. |
Schedule of estimated future amortization expense of the MSR portfolio (net of the impairment charge) | Year (in thousands) 2016 $ 2017 2018 2019 2020 2021 2022 Total $ |
Schedule of notional amounts and fair values of mortgage banking derivatives | 2015 2014 December 31, (in thousands) Amount Fair Value Amount Fair Value Included in Mortgage loans held for sale: Mortgage loans held for sale $ $ $ $ Included in other assets: Rate lock loan commitments $ $ $ $ Included in other liabilities: Mandatory forward contracts $ $ $ $ |
INTEREST RATE SWAPS (Tables)
INTEREST RATE SWAPS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INTEREST RATE SWAPS | |
Summary of swaps designated as cash flow hedges | December 31, 2015 December 31, 2014 Unrealized Unrealized Notional Pay Receive Assets / Gain (Loss) Assets / Gain (Loss) (dollars in thousands) Amount Rate Rate Term (Liabilities) AOCI (Liabilities) in AOCI Interest rate swap on money market deposits $ % 1M LIBOR 12/2013 - 12/2020 $ $ $ $ Interest rate swap on FHLB advance % 3M LIBOR 12/2013 - 12/2020 $ $ $ $ $ |
Schedule of interest expense recorded on swap transactions in the consolidated statements of income | Years Ended December 31, (in thousands) 2015 2014 2013 Interest rate swap on money market deposits $ $ $ Interest rate swap on FHLB advance Total interest expense on swap transactions $ $ $ |
Summary of net gains recorded in accumulated OCI and the consolidated statements of income relating to the swaps | Years Ended December 31, (in thousands) 2015 2014 2013 Gains (losses) recognized in OCI on derivative (effective portion) $ (514) $ (1,082) $ 147 Losses reclassified from OCI on derivative (effective portion) $ (402) $ (424) $ (23) Gains (losses) recognized in income on derivative (ineffective portion) $ — $ — $ — |
Summary of interest rate swaps related to clients | 2015 2014 Notional Notional December 31, (in thousands) Bank Position Amount Fair Value Amount Fair Value Interest rate swaps with Bank clients Pay variable/receive fixed $ $ $ — $ — Offsetting interest rate swaps with institutional swap dealer Pay fixed/ receive variable — — Total $ — $ — $ — |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PREMISES AND EQUIPMENT | |
Summary of the cost and accumulated depreciation of premises and equipment | December 31, (in thousands) 2015 2014 Land $ $ Buildings and improvements Furniture, fixtures and equipment Leasehold improvements Construction in progress — Total premises and equipment Less: Accumulated depreciation and amortization Premises and equipment, net $ $ |
Schedule of depreciation expense related to premises and equipment | Years Ended December 31, (in thousands) 2015 2014 2013 Depreciation expense $ $ $ |
GOODWILL AND CORE DEPOSIT INT39
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | |
Schedule of progression of the balance for goodwill | Years Ended December 31, (in thousands) 2015 2014 2013 Beginning of year $ $ $ Acquired goodwill — — — Impairment — — — End of year $ $ $ |
Schedule of aggregate core deposit intangible amortization expense | Years Ended December 31, (in thousands) 2015 2014 2013 Core deposit amortization expense $ — $ — $ |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DEPOSITS | |
Ending Deposit Balances | December 31, (in thousands) 2015 2014 Demand $ $ Money market accounts Brokered money market accounts Savings Individual retirement accounts* Time deposits, $250 and over* Other certificates of deposit* Brokered certificates of deposit* Total interest-bearing deposits Total non interest-bearing deposits Total deposits $ $ *Represents a time deposit. |
Schedule of time deposits of $250,000 or more | Time deposits at or above the FDIC insured limit of $250,000 are presented in the table below: December 31, (in thousands) 2015 2014 Time deposits of $250 or more $ $ |
Schedule of maturities of all time deposits, including brokered certificates of deposit | Weighted Average Year (dollars in thousands) Principal Rate 2016 $ % 2017 % 2018 % 2019 % 2020 % Thereafter — — % Total $ % |
SECURITIES SOLD UNDER AGREEME41
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | |
Schedule of securities sold under agreements to repurchase | December 31, (dollars in thousands) 2015 2014 Outstanding balance at end of year $ $ Weighted average interest rate at year end % % Fair value of securities pledged: U.S. Treasury securities and U.S. Government agencies $ $ Mortgage backed securities - residential Collateralized mortgage obligations Total securities pledged $ $ Years Ended December 31, (dollars in thousands) 2015 2014 2013 Average outstanding balance during the year $ $ $ Average interest rate during the year % % % Maximum outstanding at any month end during the year $ $ $ |
FEDERAL HOME LOAN BANK ADVANC42
FEDERAL HOME LOAN BANK ADVANCES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
FEDERAL HOME LOAN BANK ADVANCES | |
Federal Home Loan Bank Advances | December 31, (in thousands) 2015 2014 Overnight advances $ $ Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% due on December 20, 2016 Fixed interest rate advances with a weighted average interest rate of 1.68% due through 2023 Putable fixed interest rate advances with a weighted average interest rate of 4.39% due through 2017(1) Total FHLB advances $ $ (1) Represents putable advances with the FHLB. These advances have original fixed rate periods ranging from one to five years with original maturities ranging from three to ten years if not put back to the Bank earlier by the FHLB. At the end of their respective fixed rate periods and on a quarterly basis thereafter, the FHLB has the right to require payoff of the advances by the Bank at no penalty. |
Aggregate Future Principal Payments on FHLB Advances | Weighted Average Year (dollars in thousands) Rate 2016 (Overnight) $ % 2016 % 2017 % 2018 % 2019 % 2020 % 2021 % Thereafter % Total $ % |
Information Regarding Short Term Overnight FHLB Advances | December 31, (dollars in thousands) 2015 2014 Outstanding balance at end of year $ $ Weighted average interest rate at end of year % % Years Ended December 31, (dollars in thousands) 2015 2014 2013 Average outstanding balance during the year $ $ $ — Average interest rate during the year % % — % Maximum outstanding at any month end during the year $ $ $ — |
Investment Securities Pledged | December 31, (dollars in thousands) 2015 2014 First lien, single family residential real estate $ $ Home equity lines of credit Multi-family commercial real estate |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
Schedule of allocation of federal income tax between current and deferred portion | Years Ended December 31, (in thousands) 2015 2014 2013 Current expense: Federal $ $ $ State Deferred expense: Federal State Total $ $ $ |
Schedule of effective tax rate that differs from that computed at the federal statutory rate | Years Ended December 31, 2015 2014 2013 Federal statutory rate times financial statement income % % % Effect of: State taxes, net of federal benefit % % % General business tax credits % % % Nontaxable income % % % Other, net % % % Effective tax rate % % % |
Schedule of deferred tax assets and liabilities | December 31, (in thousands) 2015 2014 Deferred tax assets: Allowance for loan and lease losses $ $ Accrued expenses Net operating loss carryforward* Depreciation Other-than-temporary impairment Partnership losses OREO writedowns Fair value of cash flow hedges Other Total deferred tax assets Deferred tax liabilities: Unrealized investment securities gains Federal Home Loan Bank dividends Deferred loan fees Mortgage servicing rights Bargain purchase gain New market tax credits Other Total deferred tax liabilities Less: Valuation allowance Net deferred tax asset $ $ *The Company has a Kentucky net operating loss carry forward of $25 million which began to expire in 2012. The Company maintains a valuation allowance, as it does not anticipate generating taxable income in Kentucky to utilize these carryforwards prior to expiration. |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | Years Ended December 31, (in thousands) 2015 2014 2013 Balance, beginning of year $ $ $ Additions based on tax related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years — — — Reductions due to the statute of limitations Settlements — — — Balance, end of year $ $ $ |
Schedule of amount of interest and penalties | Years Ended December 31, (in thousands) 2015 2014 2013 Interest and penalties recorded in the income statement $ $ $ Interest and penalties accrued on balance sheet |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE | |
Earnings Per Share and Diluted Earnings Per Share | Years Ended December 31, (in thousands, except per share data) 2015 2014 2013 Net income $ $ $ Weighted average shares outstanding Effect of dilutive securities Average shares outstanding including dilutive securities Basic earnings per share: Class A Common Stock $ $ $ Class B Common Stock $ $ $ Diluted earnings per share: Class A Common Stock $ $ $ Class B Common Stock $ $ $ |
Stock Option | December 31, 2015 2014 2013 Antidilutive stock options Average antidilutive stock options |
STOCKHOLDERS' EQUITY AND REGU45
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | |
Schedule of compliance with regulatory capital requirements | Minimum Requirement to be Well Capitalized Minimum Requirement Under Prompt for Capital Adequacy Corrective Action Actual Purposes Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2015 Total capital to risk weighted assets Republic Bancorp, Inc. $ % $ % NA NA Republic Bank & Trust Company $ % Common equity tier 1 capital to risk weighted assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Tier 1 (core) capital to risk weighted assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Tier 1 leverage capital to average assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Minimum Requirement to be Well Capitalized Minimum Requirement Under Prompt for Capital Adequacy Corrective Action Actual Purposes Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2014 Total capital to risk weighted assets Republic Bancorp, Inc. $ % $ % NA NA Republic Bank & Trust Company $ % Tier 1 (core) capital to risk weighted assets Republic Bancorp, Inc. NA NA NA NA NA NA Republic Bank & Trust Company NA NA NA NA NA NA Tier 1 (core) capital to risk weighted assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company Tier 1 leverage capital to average assets Republic Bancorp, Inc. NA NA Republic Bank & Trust Company |
STOCK PLANS AND STOCK BASED C46
STOCK PLANS AND STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Schedule of weighted average assumptions used to determine the fair value of stock options granted | Years Ended December 31, 2015 2014 2013 Risk-free interest rate % % % Expected dividend yield % % % Expected stock price volatility % % % Expected life of options (in years) Estimated fair value per share $ $ $ |
Summary of stock option activity | Weighted Weighted Average Options Average Remaining Aggregate Class A Exercise Contractual Intrinsic Shares Price Term Value Outstanding, January 1, 2014 $ Granted Exercised Forfeited or expired Outstanding, December 31, 2014 $ $ Outstanding, January 1, 2015 $ Granted Exercised Forfeited or expired Outstanding, December 31, 2015 $ Fully vested and expected to vest $ $ Exercisable (vested) at December 31, 2015 $ $ |
Schedule of intrinsic value and cash received from options exercised and weighted average fair value of options granted | Years Ended December 31, (in thousands) 2015 2014 2013 Intrinsic value of options exercised $ $ $ Cash received from options exercised, net of shares redeemed Total fair value of options granted |
Schedule of loan balances of non-executive officer employees that were originated to fund stock option exercises | December 31, (in thousands) 2015 2014 Outstanding loans $ $ |
Summary of activity for non-vested restricted stock awards | Weighted-average Restricted grant date fair Stock Awards value per share Outstanding, January 1, 2014 $ Granted — — Forfeited Earned and issued Outstanding, December 31, 2014 $ Outstanding, January 1, 2015 $ Granted Forfeited Earned and issued — — Outstanding, December 31, 2015 $ |
Schedule of expenses recorded related to stock options and restricted stock awards | Years Ended December 31, (in thousands) 2015 2014 2013 Stock option expense $ $ $ Restricted stock award expense $ $ $ |
Schedule of estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | Restricted (in thousands) Stock Awards Options Total 2016 $ $ $ 2017 2018 2019 2020 2021 — Total $ $ $ |
Schedule of information on director deferred compensation shares reserved for the periods | 2015 2014 2013 Weighted Weighted Weighted Average Market Average Market Average Market Shares Price at Date of Shares Price at Date of Shares Price at Date of Years ended December 31, Deferred Deferral Deferred Deferral Deferred Deferral Balance, beginning of year $ $ $ $ Awarded Released Balance, end of year |
Schedule of director deferred compensation expenses | Years Ended December 31, (in thousands) 2015 2014 2013 Director deferred compensation expense $ $ $ |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
BENEFIT PLANS | |
Schedule of normal and bonus contributions | Years Ended December 31, (in thousands) 2015 2014 2013 Employer matching contributions $ $ $ Discretionary employer bonus matching contributions $ — $ — $ — |
TRANSACTIONS WITH RELATED PAR48
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | |
Schedule of rent expense under the leases | Years Ended December 31, (in thousands) 2015 2014 2013 Rent expense under leases from related parties $ $ $ |
Schedule of total minimum lease commitments under non-cancelable operating leases | (in thousands) Affiliate Other Total 2016 $ 2017 2018 2019 2020 Thereafter Total $ $ $ |
Schedule of loans made to executive officers and directors of the company and their related interests | (in thousands) Beginning balance $ Effect of changes in composition of related parties New loans Repayments Ending balance $ |
OFF BALANCE SHEET RISKS, COMM49
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | |
Bank Commitment Exclusive of Mortgage Bank Loan Commitments | December 31, (in thousands) 2015 2014 Unused warehouse lines of credit $ $ Unused home equity lines of credit Unused loan commitments - other Commitments to purchase loans* Standby letters of credit FHLB letters of credit — Total commitments $ $ * Commitments are made through the Company’s Correspondent Lending channel. |
PARENT COMPANY CONDENSED FINA50
PARENT COMPANY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | |
Schedule of balance sheets | December 31, (in thousands) 2015 2014 Assets: Cash and cash equivalents $ $ Security available for sale — Investment in bank subsidiary Investment in non-bank subsidiaries Other assets Total assets $ $ Liabilities and Stockholders’ Equity: Subordinated note $ $ Other liabilities Stockholders’ equity Total liabilities and stockholders’ equity $ $ |
Schedule of statements of income | Years Ended December 31, (in thousands) 2015 2014 2013 Income and expenses: Dividends from subsidiary $ $ $ Interest income Other income Less: Interest expense Less: Other expenses Income before income tax benefit Income tax benefit Income before equity in undistributed net income of subsidiaries Equity in undistributed net income of subsidiaries Net income $ $ $ |
Schedule of statements of cash flows | Years Ended December 31, (in thousands) 2015 2014 2013 Operating activities: Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Accretion of investment security — — Equity in undistributed net income of subsidiaries Director deferred compensation - Parent Company Change in other assets Change in other liabilities Net cash provided by operating activities Investing activities: Investment in Republic Insurance Services, Inc. — — Purchases of security available for sale — — Redemption of Republic Investment Company common stock — — Net cash provided by (used in) investing activities Financing activities: Common Stock repurchases Net proceeds from Common Stock options exercised Cash dividends paid Net cash used in financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ $ |
OTHER COMPREHENSIVE INCOME (Tab
OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
OTHER COMPREHENSIVE INCOME | |
Summary of OCI components and related tax effects | Years Ended December 31, (in thousands) 2015 2014 2013 Available for Sale Securities: Change in unrealized gain (loss) on securities available for sale $ $ $ Reclassification adjustment for gain on security available for sale recognized in earnings — — Change in unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings Net unrealized gains Tax effect Net of tax Cash Flow Hedges: Change in fair value of derivatives used for cash flow hedges Reclassification amount for derivative losses realized in income Net unrealized gains losses Tax effect Net of tax Total other comprehensive income components, net of tax $ $ $ |
Summary of amounts reclassified out of each component of OCI | Amounts Reclassified From Accumulated Other Affected Line Items in the Consolidated Comprehensive Income Years Ended December 31, (in thousands) Statements of Income 2015 2014 2013 Available for Sale Securities: Gain on call of security available for sale Non interest income $ $ — $ — Tax effect Income tax expense — — Net of tax Net income — — Cash Flow Hedges: Interest rate swap on money market deposits Interest expense on deposits Interest rate swap on FHLB advance Interest expense on FHLB advances Total derivative losses on cash flow hedges Total interest expense Tax effect Income tax expense Net of tax Net income Net of tax, total all reclassification amounts Net income $ $ $ |
Summary of the accumulated OCI balances, net of tax | 2015 (in thousands) December 31, 2014 Change December 31, 2015 Unrealized gain on securities available for sale $ $ $ Unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings Unrealized loss on cash flow hedge Total unrealized gain $ $ $ 2014 (in thousands) December 31, 2013 Change December 31, 2014 Unrealized gain on securities available for sale $ $ $ Unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings Unrealized gain (loss) on cash flow hedge Total unrealized gain $ $ $ |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SEGMENT INFORMATION | |
Segment Information | Year Ended December 31, 2015 Core Banking Total Republic Traditional Warehouse Mortgage Core Processing Total (dollars in thousands) Banking Lending Banking Banking Group Company Net interest income $ $ $ $ $ $ Provision for loan and lease losses — Net refund transfer fees — — — — Mortgage banking income — — — Gain on call of security available for sale — — — Other non-interest income Total non-interest income Total non-interest expenses Income (loss) before income tax expense Income tax expense (benefit) Net income (loss) $ $ $ $ $ $ Segment end of year assets $ $ $ $ $ $ Net interest margin % % NM % NM % Year Ended December 31, 2014 Core Banking Total Republic Traditional Warehouse Mortgage Core Processing Total (dollars in thousands) Banking Lending Banking Banking Group Company Net interest income $ $ $ $ $ $ Provision for loan and lease losses — Net refund transfer fees — — — — Mortgage banking income — — — Other non-interest income Total non-interest income Total non-interest expenses Income (loss) before income tax expense Income tax expense (benefit) Net income (loss) $ $ $ $ $ $ Segment end of year assets $ $ $ $ $ $ Net interest margin % % NM % NM % Year Ended December 31, 2013 Core Banking Total Republic Traditional Warehouse Mortgage Core Processing Total (dollars in thousands) Banking Lending Banking Banking Group Company Net interest income $ $ $ $ $ $ Provision for loan and lease losses — Net refund transfer fees — — — — Mortgage banking income — — — Bargain purchase gains — — — Other non-interest income Total non-interest income Total non-interest expenses Income (loss) before income tax expense Income tax expense (benefit) Net income (loss) $ $ $ $ $ $ Segment end of year assets $ $ $ $ $ $ Net interest margin % % NM % NM Segment assets are reported as of the respective period ends while income and margin data are reported for the respective periods. NM — Not Meaningful |
SUMMARY OF QUARTERLY FINANCIA53
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Summary of consolidated quarterly financial data | 2015 Fourth Third Second First ($ in thousands, except per share data) Quarter Quarter Quarter(1) Interest income $ $ $ $ Interest expense Net interest income Provision for loan and lease losses Net interest income after provision Non interest income Non interest expenses(2) Income before income taxes Income tax expense Net income Basic earnings per share: Class A Common Stock Class B Common Stock Diluted earnings per share: Class A Common Stock Class B Common Stock Dividends declared per common share: Class A Common Stock Class B Common Stock 2014 Fourth Third Second First ($ in thousands, except per share data) Quarter Quarter Quarter Quarter(1) Interest income $ $ $ $ Interest expense Net interest income Provision for loan and lease losses Net interest income after provision Non interest income Non interest expenses(2) Income before income tax expense Income tax expense Net income Basic earnings per share: Class A Common Stock Class B Common Stock Diluted earnings per share: Class A Common Stock Class B Common Stock Dividends declared per common share: Class A Common Stock Class B Common Stock 2013 Fourth Third Second First ($ in thousands, except per share data) Quarter Quarter Quarter Quarter(1) Interest income $ $ $ $ Interest expense Net interest income Provision for loan and lease losses Net interest income after provision Non interest income Non interest expenses (2) Income before income tax expense Income tax expense Net income Basic earnings per share: Class A Common Stock Class B Common Stock Diluted earnings per share: Class A Common Stock Class B Common Stock Dividends declared per common share: Class A Common Stock Class B Common Stock (1) The first quarters of 2015, 2014 and 2013 were significantly impacted by the TRS operating division. (2) Non interest expenses: During the fourth quarters of 2015, 2014 and 2013, the Company reversed $2.3 million, $950,000 and $1.1 million of incentive compensation accruals based on revised payout estimates. During the third quarters of 2015, 2014 and 2013, the Company reversed $450,000, $1.8 million and $3.3 million of incentive compensation accruals based on revised payout estimates. During the fourth quarter of 2013, the TRS division of the RPG segment incurred $1.4 million in legal related expenses associated with the conclusions of RPG’s previously reported contract disputes. |
SUMMARY OF SIGNIFICANT ACCOUN54
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2015segmentitem | |
Basis of Presentation | |
Number of third-party insurance captives | 8 |
Number of operating segments | segment | 4 |
Number of banking centers | 40 |
Kentucky | |
Basis of Presentation | |
Number of banking centers | 32 |
Metropolitan Louisville | |
Basis of Presentation | |
Number of banking centers | 19 |
Central Kentucky | |
Basis of Presentation | |
Number of banking centers | 8 |
Elizabethtown | |
Basis of Presentation | |
Number of banking centers | 1 |
Frankfort | |
Basis of Presentation | |
Number of banking centers | 1 |
Georgetown | |
Basis of Presentation | |
Number of banking centers | 1 |
Lexington | |
Basis of Presentation | |
Number of banking centers | 4 |
Shelbyville | |
Basis of Presentation | |
Number of banking centers | 1 |
Western Kentucky | |
Basis of Presentation | |
Number of banking centers | 2 |
Owensboro | |
Basis of Presentation | |
Number of banking centers | 2 |
Northern Kentucky | |
Basis of Presentation | |
Number of banking centers | 3 |
Covington | |
Basis of Presentation | |
Number of banking centers | 1 |
Florence | |
Basis of Presentation | |
Number of banking centers | 1 |
Independence | |
Basis of Presentation | |
Number of banking centers | 1 |
Southern Indiana | |
Basis of Presentation | |
Number of banking centers | 3 |
Floyds Knobs | |
Basis of Presentation | |
Number of banking centers | 1 |
Jeffersonville | |
Basis of Presentation | |
Number of banking centers | 1 |
New Albany | |
Basis of Presentation | |
Number of banking centers | 1 |
Metropolitan Tampa, Florida | |
Basis of Presentation | |
Number of banking centers | 2 |
Metropolitan Cincinnati, Ohio | |
Basis of Presentation | |
Number of banking centers | 1 |
Metropolitan Nashville, Tennessee | |
Basis of Presentation | |
Number of banking centers | 2 |
Core Banking Activities | |
Basis of Presentation | |
Number of operating segments | segment | 3 |
SUMMARY OF SIGNIFICANT ACCOUN55
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONCENTRATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Mortgage Banking Activities | |||
Impairment in MSR portfolio | $ 0 | $ 0 | |
Loan servicing income | $ 1,896 | $ 1,752 | $ 2,107 |
Geographic concentration risk | California | |||
Concentration of credit risk | |||
Percentage of concentration risk | 78.00% | ||
Warehouse lines of credit | Geographic concentration risk | California | |||
Concentration of credit risk | |||
Percentage of concentration risk | 35.00% | ||
Net income | Geographic concentration risk | RPG | TRS division | |||
Concentration of credit risk | |||
Percentage of concentration risk | 13.00% | 12.00% | 9.00% |
Net income | Geographic concentration risk | Warehouse Lending | |||
Concentration of credit risk | |||
Percentage of concentration risk | 7.00% | 5.00% | 4.00% |
SUMMARY OF SIGNIFICANT ACCOUN56
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LOANS (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Loans disclosures | |
Delinquency period for interest income on mortgage and commercial loans to be discontinued | 80 days |
Period for non-accrual loans and loans past due still on accrual evaluated for impairment | 80 days |
Minimum performance period for loans to be returned to accrual status | 6 months |
Minimum | |
Loans disclosures | |
Selling cost for collateral dependent loans expressed as a percentage of fair value of the underlying collateral | 10.00% |
Maximum | |
Loans disclosures | |
Selling cost for collateral dependent loans expressed as a percentage of fair value of the underlying collateral | 13.00% |
Consumer: Credit cards | |
Loans disclosures | |
Minimum period for charging off outstanding loan | 90 days |
Residential mortgage loans and home equity loans | Minimum | |
Loans disclosures | |
Period for past due loans for updating collateral values | 90 days |
Residential mortgage loans and home equity loans | Maximum | |
Loans disclosures | |
Period for past due loans for updating collateral values | 180 days |
SUMMARY OF SIGNIFICANT ACCOUN57
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CREDIT SOLUTIONS AND OREO (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Republic Credit Solutions | ||
Number of small dollar loan programs exited program's pilot phase | item | 1 | |
Ownership interest in loans originated (as a percent) | 10.00% | |
Participation interest (as a percent) | 90.00% | |
Value of small dollar consumer loans sold to third party | $ 137,000,000 | $ 636,000 |
Retained ownership value of loans on the balance sheet | $ 7,000,000 | |
Minimum | ||
Other Real Estate Owned | ||
Selling cost for OREO expressed as a percentage of each property's fair value | 10.00% | |
Maximum | ||
Other Real Estate Owned | ||
Selling cost for OREO expressed as a percentage of each property's fair value | 13.00% |
SUMMARY OF SIGNIFICANT ACCOUN58
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PREMISES AND EQUIPMENT (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Buildings and improvements | Minimum | |
Premises and equipment, net | |
Estimated useful lives | 25 years |
Buildings and improvements | Maximum | |
Premises and equipment, net | |
Estimated useful lives | 39 years |
Furniture, fixtures and equipment | Minimum | |
Premises and equipment, net | |
Estimated useful lives | 3 years |
Furniture, fixtures and equipment | Maximum | |
Premises and equipment, net | |
Estimated useful lives | 10 years |
Leasehold improvements | Minimum | |
Premises and equipment, net | |
Estimated useful lives | 3 years |
Leasehold improvements | Maximum | |
Premises and equipment, net | |
Estimated useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN59
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INTANGIBLES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2014 | |
Goodwill and other intangible assets | |||
Goodwill | $ 10,168,000 | $ 10,168,000 | $ 10,168,000 |
Amortization expense of other intangible assets held | $ 510,000 | ||
Core deposit intangibles | Minimum | |||
Goodwill and other intangible assets | |||
Estimated useful lives | 2 years | ||
Core deposit intangibles | Maximum | |||
Goodwill and other intangible assets | |||
Estimated useful lives | 10 years | ||
Acquired customer relationship intangible assets | Minimum | |||
Goodwill and other intangible assets | |||
Estimated useful lives | 2 years | ||
Acquired customer relationship intangible assets | Maximum | |||
Goodwill and other intangible assets | |||
Estimated useful lives | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN60
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADDITIONAL DISCLOSURES (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | |
Restrictions on Cash and Cash Equivalents | ||
Required reserve balances by the Federal Reserve Bank | $ | $ 0 | $ 0 |
Equity | ||
Percentage of stock dividend in excess of which are reported by transferring the par value of the stock issued from retained earnings to common stock | 20.00% | |
Minimum percentage of stock dividend which are reported by transferring the par value of the stock issued from retained earnings to common stock and additional paid in capital | 20.00% | |
Segment Information | ||
Number of Operating Segments | segment | 4 |
ACQUISITION (SUBSEQUENT EVENT)
ACQUISITION (SUBSEQUENT EVENT) (Details) $ in Thousands | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Acquisition | |||
Number of Banks | item | 40 | ||
Assets | $ 4,230,289 | $ 3,747,013 | $ 3,371,904 |
Loans | 3,299,119 | 3,016,085 | |
Deposits | $ 2,487,477 | $ 2,058,182 | |
Cornerstone | |||
Acquisition | |||
Number of Banks | item | 4 | ||
Assets | $ 250,000 | ||
Loans | 190,000 | ||
Deposits | $ 200,000 |
INVESTMENT SECURITIES - AFS (De
INVESTMENT SECURITIES - AFS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2008 | |
Securities available for sale: | |||||
Gross Amortized Cost | $ 513,305,000 | $ 513,305,000 | |||
Gross Unrealized Gains | 5,497,000 | 5,497,000 | |||
Gross Unrealized Losses | (1,744,000) | (1,744,000) | |||
Fair Value | 517,058,000 | 517,058,000 | $ 435,911,000 | ||
Amount of floating rate | 1,512,809,000 | 876,854,000 | $ 194,527,000 | ||
U.S. Treasury securities and U.S. Government agencies | |||||
Securities available for sale: | |||||
Gross Amortized Cost | 286,914,000 | 286,914,000 | 146,625,000 | ||
Gross Unrealized Gains | 59,000 | 59,000 | 312,000 | ||
Gross Unrealized Losses | (494,000) | (494,000) | (15,000) | ||
Fair Value | 286,479,000 | 286,479,000 | 146,922,000 | ||
Private label mortgage backed security | |||||
Securities available for sale: | |||||
Gross Amortized Cost | 4,037,000 | 4,037,000 | 4,030,000 | ||
Gross Unrealized Gains | 1,095,000 | 1,095,000 | 1,220,000 | ||
Fair Value | 5,132,000 | 5,132,000 | 5,250,000 | ||
Mortgage backed securities - residential | |||||
Securities available for sale: | |||||
Gross Amortized Cost | 88,968,000 | 88,968,000 | 118,836,000 | ||
Gross Unrealized Gains | 3,395,000 | 3,395,000 | 5,511,000 | ||
Gross Unrealized Losses | (95,000) | (95,000) | (91,000) | ||
Fair Value | 92,268,000 | 92,268,000 | 124,256,000 | ||
Collateralized mortgage obligations | |||||
Securities available for sale: | |||||
Gross Amortized Cost | 113,972,000 | 113,972,000 | 143,283,000 | ||
Gross Unrealized Gains | 748,000 | 748,000 | 1,034,000 | ||
Gross Unrealized Losses | (1,052,000) | (1,052,000) | (1,146,000) | ||
Fair Value | 113,668,000 | 113,668,000 | 143,171,000 | ||
Freddie Mac preferred stock | |||||
Securities available for sale: | |||||
Gross Unrealized Gains | 173,000 | 173,000 | 231,000 | ||
Fair Value | 173,000 | 173,000 | 231,000 | $ 0 | |
Mutual fund | |||||
Securities available for sale: | |||||
Gross Amortized Cost | 1,000,000 | 1,000,000 | 1,000,000 | ||
Gross Unrealized Gains | 11,000 | 11,000 | 18,000 | ||
Fair Value | 1,011,000 | 1,011,000 | 1,018,000 | ||
Corporate bonds | |||||
Securities available for sale: | |||||
Gross Amortized Cost | 15,009,000 | 15,009,000 | 15,011,000 | ||
Gross Unrealized Gains | 16,000 | 16,000 | 52,000 | ||
Gross Unrealized Losses | (103,000) | (103,000) | |||
Fair Value | $ 14,922,000 | $ 14,922,000 | $ 15,063,000 | ||
Amount of floating rate | $ 20,000,000 | ||||
Weighted average yield (as a percent) | 1.36% | ||||
Weighted average life | 7 years | ||||
Corporate bonds as a percentage of bank's investment portfolio | 4.00% | 4.00% | 4.00% | ||
Mortgage-backed securities | |||||
Securities available for sale: | |||||
Gross Amortized Cost | $ 428,785,000 | ||||
Gross Unrealized Gains | 8,378,000 | ||||
Gross Unrealized Losses | (1,252,000) | ||||
Fair Value | $ 435,911,000 | ||||
Trust preferred security | |||||
Securities available for sale: | |||||
Gross Amortized Cost | $ 3,405,000 | $ 3,405,000 | |||
Fair Value | 3,405,000 | $ 3,405,000 | |||
Amount of floating rate | $ 3,000,000 | ||||
Weighted average yield (as a percent) | 4.27% | 4.27% | |||
Price as percentage of face value | 68.00% | ||||
Trust preferred security | 3 Month London Interbank Offered Rate (LIBOR) [Member] | |||||
Securities available for sale: | |||||
Interest rate - Basis Spread | 1.59% | 1.59% |
INVESTMENT SECURITIES - HTM (De
INVESTMENT SECURITIES - HTM (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Securities held to maturity: | ||
Carrying Value | $ 38,727 | $ 45,437 |
Gross Unrecognized Gains | 471 | 444 |
Gross Unrecognized Losses | (2) | (74) |
Total securities | $ 39,196 | $ 45,807 |
Maximum percentage of holdings of securities of any one issuer, other than the U.S. Government and its agencies | 10.00% | 10.00% |
U.S. Treasury securities and U.S. Government agencies | ||
Securities held to maturity: | ||
Carrying Value | $ 515 | $ 1,747 |
Gross Unrecognized Gains | 1 | 1 |
Gross Unrecognized Losses | (7) | |
Total securities | 516 | 1,741 |
Mortgage backed securities - residential | ||
Securities held to maturity: | ||
Carrying Value | 53 | 147 |
Gross Unrecognized Gains | 6 | 20 |
Total securities | 59 | 167 |
Collateralized mortgage obligations | ||
Securities held to maturity: | ||
Carrying Value | 33,159 | 38,543 |
Gross Unrecognized Gains | 464 | 423 |
Gross Unrecognized Losses | (4) | |
Total securities | 33,623 | 38,962 |
Corporate bonds | ||
Securities held to maturity: | ||
Carrying Value | 5,000 | 5,000 |
Gross Unrecognized Losses | (2) | (63) |
Total securities | $ 4,998 | $ 4,937 |
INVESTMENT SECURITIES - SALES O
INVESTMENT SECURITIES - SALES OF AFS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
INVESTMENT SECURITIES | |||
Gain on the call of available for sale securities | $ 88,000 | ||
Tax provision related to Bank's realized gains | 31,000 | ||
Sales of available for sale securities | $ 0 | $ 0 | $ 0 |
INVESTMENT SECURITIES - AMORTIZ
INVESTMENT SECURITIES - AMORTIZED COST AND FV (Details) | 12 Months Ended | |||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | Dec. 31, 2008USD ($)item | |
Securities available for Sale - Amortized Cost | ||||
Due in one year or less | $ 49,998,000 | |||
Due from one year to five years | 241,925,000 | |||
Due from five years to ten years | 10,000,000 | |||
Due beyond ten years | 3,405,000 | |||
Total securities | 513,305,000 | |||
Securities available for Sale - Fair Value | ||||
Due in one year or less | 49,979,000 | |||
Due from one year to five years | 241,525,000 | |||
Due from five years to ten years | 9,897,000 | |||
Due beyond ten years | 3,405,000 | |||
Total securities | 517,058,000 | |||
Securities held to maturity - Carrying Value | ||||
Due from one year to five years | 5,515,000 | |||
Total securities | 38,727,000 | $ 45,437,000 | ||
Securities held to maturity - Fair Value | ||||
Due from one year to five years | 5,514,000 | |||
Total securities | $ 39,196,000 | $ 45,807,000 | ||
Number of Securities Held | item | 162 | 157 | ||
Securities available for sale | $ 517,058,000 | $ 435,911,000 | ||
Total unrealized gain | (3,160,000) | 2,021,000 | $ (4,747,000) | |
Private label mortgage backed security | ||||
Securities available for Sale - Amortized Cost | ||||
Securities not due at a single maturity date | 4,037,000 | |||
Securities available for Sale - Fair Value | ||||
Securities not due at a single maturity date | 5,132,000 | |||
Securities held to maturity - Fair Value | ||||
Securities available for sale | 5,132,000 | 5,250,000 | ||
Mortgage backed securities - residential | ||||
Securities available for Sale - Amortized Cost | ||||
Securities not due at a single maturity date | 88,968,000 | |||
Securities available for Sale - Fair Value | ||||
Securities not due at a single maturity date | 92,268,000 | |||
Securities held to maturity - Carrying Value | ||||
Securities not due at a single maturity date | 53,000 | |||
Total securities | 53,000 | 147,000 | ||
Securities held to maturity - Fair Value | ||||
Securities not due at a single maturity date | 59,000 | |||
Total securities | 59,000 | 167,000 | ||
Securities available for sale | 92,268,000 | 124,256,000 | ||
Collateralized mortgage obligations | ||||
Securities available for Sale - Amortized Cost | ||||
Securities not due at a single maturity date | 113,972,000 | |||
Securities available for Sale - Fair Value | ||||
Securities not due at a single maturity date | 113,668,000 | |||
Securities held to maturity - Carrying Value | ||||
Securities not due at a single maturity date | 33,159,000 | |||
Total securities | 33,159,000 | 38,543,000 | ||
Securities held to maturity - Fair Value | ||||
Securities not due at a single maturity date | 33,623,000 | |||
Total securities | 33,623,000 | 38,962,000 | ||
Securities available for sale | 113,668,000 | 143,171,000 | ||
Freddie Mac preferred stock | ||||
Securities available for Sale - Fair Value | ||||
Securities not due at a single maturity date | 173,000 | |||
Securities held to maturity - Fair Value | ||||
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net | $ 2,100,000 | |||
Number of Securities Held | item | 40,000 | |||
Securities available for sale | 173,000 | 231,000 | $ 0 | |
Total unrealized gain | 173,000 | |||
Mutual fund | ||||
Securities available for Sale - Amortized Cost | ||||
Securities not due at a single maturity date | 1,000,000 | |||
Securities available for Sale - Fair Value | ||||
Securities not due at a single maturity date | 1,011,000 | |||
Securities held to maturity - Fair Value | ||||
Securities available for sale | 1,011,000 | $ 1,018,000 | ||
Republic Bancorp, Inc. | ||||
Securities held to maturity - Fair Value | ||||
Securities available for sale | $ 3,405,000 |
INVESTMENT SECURITIES - INVESTM
INVESTMENT SECURITIES - INVESTMENT CATEGORY (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | |
Available for sale | ||
Less than 12 months Fair Value | $ 214,038 | $ 55,682 |
Less than 12 months Unrealized Losses | (843) | (987) |
12 months or more Fair Value | 45,783 | 12,534 |
12 months or more Unrealized Losses | (901) | (265) |
Total Fair Value | 259,821 | 68,216 |
Total Unrealized Losses | (1,744) | (1,252) |
Held to maturity | ||
Less than 12 months Fair Value | 4,998 | 14,498 |
Less than 12 months Unrealized Losses | (2) | (74) |
Total Fair Value | 4,998 | 14,498 |
Gross Unrecognized Losses | $ (2) | $ (74) |
Number of securities held | item | 162 | 157 |
Number of securities held in an unrealized loss position | item | 34 | 17 |
Carrying amount | $ 489,598 | $ 409,868 |
U.S. Treasury securities and U.S. Government agencies | ||
Available for sale | ||
Less than 12 months Fair Value | 191,584 | 2,089 |
Less than 12 months Unrealized Losses | (433) | (15) |
12 months or more Fair Value | 9,914 | |
12 months or more Unrealized Losses | (61) | |
Total Fair Value | 201,498 | 2,089 |
Total Unrealized Losses | (494) | (15) |
Held to maturity | ||
Less than 12 months Fair Value | 517 | |
Less than 12 months Unrealized Losses | (7) | |
Total Fair Value | 517 | |
Gross Unrecognized Losses | (7) | |
Mortgage backed securities - residential | ||
Available for sale | ||
Less than 12 months Fair Value | 5,727 | 7,535 |
Less than 12 months Unrealized Losses | (95) | (91) |
Total Fair Value | 5,727 | 7,535 |
Total Unrealized Losses | (95) | (91) |
Collateralized mortgage obligations | ||
Available for sale | ||
Less than 12 months Fair Value | 6,831 | 46,058 |
Less than 12 months Unrealized Losses | (212) | (881) |
12 months or more Fair Value | 35,869 | 12,534 |
12 months or more Unrealized Losses | (840) | (265) |
Total Fair Value | 42,700 | 58,592 |
Total Unrealized Losses | (1,052) | (1,146) |
Held to maturity | ||
Less than 12 months Fair Value | 9,045 | |
Less than 12 months Unrealized Losses | (4) | |
Total Fair Value | 9,045 | |
Gross Unrecognized Losses | (4) | |
Corporate bonds | ||
Available for sale | ||
Less than 12 months Fair Value | 9,896 | |
Less than 12 months Unrealized Losses | (103) | |
Total Fair Value | 9,896 | |
Total Unrealized Losses | (103) | |
Held to maturity | ||
Less than 12 months Fair Value | 4,998 | 4,936 |
Less than 12 months Unrealized Losses | (2) | (63) |
Total Fair Value | 4,998 | 4,936 |
Gross Unrecognized Losses | (2) | $ (63) |
Private label mortgage backed security | ||
Held to maturity | ||
Carrying amount | $ 5,100 | |
Estimated average life | 5 years |
INVESTMENT SECURITIES - ROLLFOR
INVESTMENT SECURITIES - ROLLFORWARD OF CREDIT LOSSES (Details) - Private label mortgage backed security - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Rollforward of the Bank's private label mortgage backed security credit losses recognized in earnings | |||
Balance, beginning of year | $ 1,800 | $ 1,941 | $ 2,142 |
Recovery of losses previously recorded | (35) | (141) | (201) |
Balance, end of year | 1,765 | $ 1,800 | $ 1,941 |
Additional impairment charge that may be recognized | $ 4,000 |
INVESTMENT SECURITIES - PLEDGED
INVESTMENT SECURITIES - PLEDGED INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
INVESTMENT SECURITIES | ||
Carrying amount | $ 489,598 | $ 409,868 |
Fair value | $ 490,074 | $ 410,307 |
LOANS AND ALLOWANCE FOR LOAN 69
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - COMPOSITION OF LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Loans disclosures | ||||
Total loans | $ 3,326,610 | $ 3,040,495 | ||
Less: Allowance for loan losses | (27,491) | (24,410) | $ (23,026) | $ (23,729) |
Loans, net | 3,299,119 | 3,016,085 | ||
Residential Real Estate - Owner Occupied | ||||
Loans disclosures | ||||
Total loans | 1,081,934 | 1,118,341 | ||
Less: Allowance for loan losses | (8,301) | (8,565) | (7,816) | (7,006) |
Owner Occupied - Correspondent | ||||
Loans disclosures | ||||
Total loans | 249,344 | 226,628 | ||
Less: Allowance for loan losses | (623) | (567) | ||
Residential Real Estate - Non Owner Occupied | ||||
Loans disclosures | ||||
Total loans | 116,294 | 96,492 | ||
Less: Allowance for loan losses | (1,052) | (837) | (1,023) | (1,049) |
Commercial real estate | ||||
Loans disclosures | ||||
Total loans | 824,887 | 772,309 | ||
Less: Allowance for loan losses | (7,636) | (7,740) | (8,309) | (8,843) |
Commercial real estate - purchased whole loans | ||||
Loans disclosures | ||||
Total loans | 35,674 | 34,898 | ||
Less: Allowance for loan losses | (36) | (34) | (34) | (34) |
Construction & land development | ||||
Loans disclosures | ||||
Total loans | 66,500 | 38,480 | ||
Less: Allowance for loan losses | (1,303) | (926) | (1,296) | (2,769) |
Commercial & Industrial | ||||
Loans disclosures | ||||
Total loans | 229,721 | 157,339 | ||
Less: Allowance for loan losses | (1,455) | (1,167) | (1,089) | (580) |
Lease Financing Receivables | ||||
Loans disclosures | ||||
Total loans | 8,905 | 2,530 | ||
Less: Allowance for loan losses | (89) | (25) | ||
Warehouse lines of credit | ||||
Loans disclosures | ||||
Total loans | 386,729 | 319,431 | ||
Less: Allowance for loan losses | (967) | (799) | (449) | (541) |
Home equity lines of credit | ||||
Loans disclosures | ||||
Total loans | 289,194 | 245,679 | ||
Less: Allowance for loan losses | (2,996) | (2,730) | (2,396) | (2,348) |
Consumer: Republic Processing Group Loans | ||||
Loans disclosures | ||||
Total loans | 7,204 | 4,095 | ||
Less: Allowance for loan losses | (1,699) | (44) | ||
Consumer: Credit cards | ||||
Loans disclosures | ||||
Total loans | 11,068 | 9,573 | ||
Less: Allowance for loan losses | (448) | (285) | (289) | (210) |
Consumer: Overdrafts | ||||
Loans disclosures | ||||
Total loans | 685 | 1,180 | ||
Less: Allowance for loan losses | (351) | (382) | (199) | (198) |
Consumer: Purchased Whole Loans | ||||
Loans disclosures | ||||
Total loans | 5,892 | 4,626 | ||
Less: Allowance for loan losses | (392) | (185) | ||
Consumer: Other consumer | ||||
Loans disclosures | ||||
Total loans | 12,579 | 8,894 | ||
Less: Allowance for loan losses | $ (143) | $ (124) | $ (126) | $ (151) |
LOANS AND ALLOWANCE FOR LOAN 70
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - RECONCILIATION OF LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosures on loans acquired | ||
Carrying value of loans | $ 3,326,610 | $ 3,040,495 |
Loans | ||
Disclosures on loans acquired | ||
Contractually-required principal | 3,329,741 | 3,050,599 |
Unearned income | (741) | (174) |
Unamortized premiums | 3,792 | 4,490 |
Unaccreted discounts | (7,860) | (15,675) |
Net unamortized deferred origination fees and costs | 1,678 | 1,255 |
Carrying value of loans | $ 3,326,610 | $ 3,040,495 |
LOANS AND ALLOWANCE FOR LOAN 71
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - LOAN PURCHASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loans disclosures | |||
Percentage of collateral in California | 78.00% | ||
Total loans | $ 117,516 | $ 235,824 | |
Loans | 3,299,119 | 3,016,085 | |
Purchased Loan | |||
Loans disclosures | |||
Total loans | $ 0 | ||
Owner Occupied - Correspondent | |||
Loans disclosures | |||
Total loans | 113,232 | 230,340 | |
Consumer: Purchased Whole Loans | |||
Loans disclosures | |||
Total loans | 4,284 | 5,484 | |
Subprime | |||
Loans disclosures | |||
Loans | 51,000 | 53,000 | |
Loans originated for Community Reinvestment Act ("CRA") purposes | $ 14,000 | $ 15,000 |
LOANS AND ALLOWANCE FOR LOAN 72
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - PCI RECONCILIATION OF LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosures on loans acquired | |||||
Carrying value of loans | $ 3,326,610 | $ 3,040,495 | |||
PCI loan | |||||
Disclosures on loans acquired | |||||
Contractually-required principal | 18,250 | 26,571 | |||
Non-accretable amount | (1,582) | (6,784) | |||
Accretable amount | $ (2,297) | $ (3,457) | $ (3,095) | (4,125) | (2,297) |
Carrying value of loans | $ 12,543 | $ 17,490 | |||
Rollforward of the accretable discount on purchased loans within the scope of ASC Topic 310-30 | |||||
Balance at the beginning of the period | (2,297) | (3,457) | (3,095) | ||
Transfers between non-accretable and accretable | (4,055) | (3,783) | (6,455) | ||
Net accretion into interest income on loans, including loan fees | 2,227 | 4,943 | 6,093 | ||
Balance at the end of the period | $ (4,125) | $ (2,297) | $ (3,457) |
LOANS AND ALLOWANCE FOR LOAN 73
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - RISK CATEGORY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Risk category of rated loans | ||
Loans | $ 3,326,610,000 | $ 3,040,495,000 |
Maximum loan value for non rated loans | $ 100,000 | |
Maximum number of days past due for loans to be non rated | 80 days | |
Minimum value above which loans are validated by SLC | $ 2,000,000 | |
Residential Real Estate | ||
Risk category of rated loans | ||
Minimum value above which loans are reviewed by SAC | 750,000 | |
Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 1,081,934,000 | 1,118,341,000 |
Owner Occupied - Correspondent | ||
Risk category of rated loans | ||
Loans | 249,344,000 | 226,628,000 |
Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 116,294,000 | 96,492,000 |
Commercial real estate | ||
Risk category of rated loans | ||
Loans | 824,887,000 | 772,309,000 |
Commercial real estate - purchased whole loans | ||
Risk category of rated loans | ||
Loans | 35,674,000 | 34,898,000 |
Construction & land development | ||
Risk category of rated loans | ||
Loans | 66,500,000 | 38,480,000 |
Commercial & Industrial | ||
Risk category of rated loans | ||
Loans | 229,721,000 | 157,339,000 |
Lease Financing Receivables | ||
Risk category of rated loans | ||
Loans | 8,905,000 | 2,530,000 |
Warehouse lines of credit | ||
Risk category of rated loans | ||
Loans | 386,729,000 | 319,431,000 |
Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 289,194,000 | 245,679,000 |
Minimum value above which loans are reviewed by SAC | $ 100,000 | |
Minimum number of days past due, for loans to be reviewed by SAC | 80 days | |
Consumer: Republic Processing Group Loans | ||
Risk category of rated loans | ||
Loans | $ 7,204,000 | 4,095,000 |
Consumer: Credit cards | ||
Risk category of rated loans | ||
Loans | 11,068,000 | 9,573,000 |
Consumer: Overdrafts | ||
Risk category of rated loans | ||
Loans | 685,000 | 1,180,000 |
Consumer: Purchased Whole Loans | ||
Risk category of rated loans | ||
Loans | 5,892,000 | 4,626,000 |
Consumer: Other consumer | ||
Risk category of rated loans | ||
Loans | 12,579,000 | 8,894,000 |
Pass | ||
Risk category of rated loans | ||
Minimum outstanding lending relationships, above which loans are analyzed by the Bank's internal loan review department | 4,000,000 | |
Special Mention | ||
Risk category of rated loans | ||
Loans modified by troubled debt restructurings during the period | 180,000 | 443,000 |
Minimum outstanding lending relationships, above which loans are analyzed by the Bank's internal loan review department | 1,000,000 | |
Substandard | ||
Risk category of rated loans | ||
Loans modified by troubled debt restructurings during the period | 1,000,000 | 6,000,000 |
Minimum outstanding lending relationships, above which loans are analyzed by the Bank's internal loan review department | 1,000,000 | |
Doubtful / Loss | ||
Risk category of rated loans | ||
Minimum outstanding lending relationships, above which loans are analyzed by the Bank's internal loan review department | 1,000,000 | |
Rated Loans | ||
Risk category of rated loans | ||
Loans | 1,597,459,000 | 1,375,329,000 |
Rated Loans | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 39,438,000 | 42,619,000 |
Rated Loans | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 3,202,000 | 5,439,000 |
Rated Loans | Commercial real estate | ||
Risk category of rated loans | ||
Loans | 824,887,000 | 772,309,000 |
Rated Loans | Commercial real estate - purchased whole loans | ||
Risk category of rated loans | ||
Loans | 35,674,000 | 34,898,000 |
Rated Loans | Construction & land development | ||
Risk category of rated loans | ||
Loans | 66,500,000 | 38,480,000 |
Rated Loans | Commercial & Industrial | ||
Risk category of rated loans | ||
Loans | 229,721,000 | 157,339,000 |
Rated Loans | Lease Financing Receivables | ||
Risk category of rated loans | ||
Loans | 8,905,000 | 2,530,000 |
Rated Loans | Warehouse lines of credit | ||
Risk category of rated loans | ||
Loans | 386,729,000 | 319,431,000 |
Rated Loans | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 2,317,000 | 2,220,000 |
Rated Loans | Consumer: Other consumer | ||
Risk category of rated loans | ||
Loans | 86,000 | 64,000 |
Rated Loans | Pass | ||
Risk category of rated loans | ||
Loans | 1,525,771,000 | 1,281,572,000 |
Rated Loans | Pass | Commercial real estate | ||
Risk category of rated loans | ||
Loans | 803,369,000 | 736,012,000 |
Rated Loans | Pass | Commercial real estate - purchased whole loans | ||
Risk category of rated loans | ||
Loans | 35,674,000 | 34,898,000 |
Rated Loans | Pass | Construction & land development | ||
Risk category of rated loans | ||
Loans | 63,750,000 | 35,339,000 |
Rated Loans | Pass | Commercial & Industrial | ||
Risk category of rated loans | ||
Loans | 227,344,000 | 153,362,000 |
Rated Loans | Pass | Lease Financing Receivables | ||
Risk category of rated loans | ||
Loans | 8,905,000 | 2,530,000 |
Rated Loans | Pass | Warehouse lines of credit | ||
Risk category of rated loans | ||
Loans | 386,729,000 | 319,431,000 |
Rated Loans | Special Mention | ||
Risk category of rated loans | ||
Loans | 31,312,000 | 36,268,000 |
Rated Loans | Special Mention | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 24,301,000 | 26,828,000 |
Rated Loans | Special Mention | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 860,000 | 844,000 |
Rated Loans | Special Mention | Commercial real estate | ||
Risk category of rated loans | ||
Loans | 5,070,000 | 7,838,000 |
Rated Loans | Special Mention | Construction & land development | ||
Risk category of rated loans | ||
Loans | 96,000 | 120,000 |
Rated Loans | Special Mention | Commercial & Industrial | ||
Risk category of rated loans | ||
Loans | 936,000 | 625,000 |
Rated Loans | Special Mention | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 21,000 | |
Rated Loans | Special Mention | Consumer: Other consumer | ||
Risk category of rated loans | ||
Loans | 28,000 | 13,000 |
Rated Loans | Substandard | ||
Risk category of rated loans | ||
Loans | 27,833,000 | 39,999,000 |
Rated Loans | Substandard | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 14,577,000 | 14,586,000 |
Rated Loans | Substandard | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 1,557,000 | 2,886,000 |
Rated Loans | Substandard | Commercial real estate | ||
Risk category of rated loans | ||
Loans | 6,530,000 | 15,636,000 |
Rated Loans | Substandard | Construction & land development | ||
Risk category of rated loans | ||
Loans | 2,621,000 | 2,525,000 |
Rated Loans | Substandard | Commercial & Industrial | ||
Risk category of rated loans | ||
Loans | 194,000 | 2,108,000 |
Rated Loans | Substandard | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 2,296,000 | 2,220,000 |
Rated Loans | Substandard | Consumer: Other consumer | ||
Risk category of rated loans | ||
Loans | 58,000 | 38,000 |
Rated Loans | Purchased Credit Impaired Loans - Group 1 | ||
Risk category of rated loans | ||
Loans | 12,543,000 | 17,490,000 |
Rated Loans | Purchased Credit Impaired Loans - Group 1 | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 560,000 | 1,205,000 |
Rated Loans | Purchased Credit Impaired Loans - Group 1 | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 785,000 | 1,709,000 |
Rated Loans | Purchased Credit Impaired Loans - Group 1 | Commercial real estate | ||
Risk category of rated loans | ||
Loans | 9,918,000 | 12,823,000 |
Rated Loans | Purchased Credit Impaired Loans - Group 1 | Construction & land development | ||
Risk category of rated loans | ||
Loans | 33,000 | 496,000 |
Rated Loans | Purchased Credit Impaired Loans - Group 1 | Commercial & Industrial | ||
Risk category of rated loans | ||
Loans | $ 1,247,000 | 1,244,000 |
Rated Loans | Purchased Credit Impaired Loans - Group 1 | Consumer: Other consumer | ||
Risk category of rated loans | ||
Loans | $ 13,000 |
LOANS AND ALLOWANCE FOR LOAN 74
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | $ 24,410 | $ 23,026 | $ 23,729 | $ 24,410 | $ 23,026 | $ 23,729 | |||||||||
Charge-offs | (3,972) | (3,563) | (6,185) | ||||||||||||
Recoveries | 1,657 | 2,088 | 2,499 | ||||||||||||
Net loan (charge-offs) recoveries | (2,315) | (1,475) | (3,686) | ||||||||||||
Provision for loan and lease losses | $ 2,074 | $ 2,233 | $ 904 | 185 | $ 1,359 | $ 1,510 | $ 693 | $ (703) | $ 503 | $ 2,200 | $ 905 | $ (625) | 5,396 | 2,859 | 2,983 |
Allowance for loan losses at end of year | 27,491 | 24,410 | $ 23,026 | 27,491 | 24,410 | 23,026 | |||||||||
Consumer: Republic Processing Group Loans | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | $ 44 | 44 | |||||||||||||
Charge-offs | (971) | (5) | |||||||||||||
Recoveries | 295 | 582 | 845 | ||||||||||||
Net loan (charge-offs) recoveries | (676) | 577 | 845 | ||||||||||||
Provision for loan and lease losses | 2,331 | (533) | (845) | ||||||||||||
Allowance for loan losses at end of year | $ 1,699 | $ 44 | 1,699 | 44 | |||||||||||
Core Banking Activities | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Charge-offs | (3,001) | (3,558) | (6,185) | ||||||||||||
Recoveries | 1,362 | 1,506 | 1,654 | ||||||||||||
Net loan (charge-offs) recoveries | (1,639) | (2,052) | (4,531) | ||||||||||||
Provision for loan and lease losses | $ 3,065 | $ 3,392 | $ 3,828 |
LOANS AND ALLOWANCE FOR LOAN 75
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - ALLOWANCE ACTIVITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | $ 24,410 | $ 23,026 | $ 23,729 | $ 24,410 | $ 23,026 | $ 23,729 | |||||||||
Provision for loan and lease losses | $ 2,074 | $ 2,233 | $ 904 | 185 | $ 1,359 | $ 1,510 | $ 693 | (703) | $ 503 | $ 2,200 | $ 905 | (625) | 5,396 | 2,859 | 2,983 |
Loans charged-off | (3,972) | (3,563) | (6,185) | ||||||||||||
Recoveries | 1,657 | 2,088 | |||||||||||||
Allowance for loan losses at end of year | 27,491 | 24,410 | 23,026 | 27,491 | 24,410 | 23,026 | |||||||||
Loans | 3,299,119 | 3,016,085 | 3,299,119 | 3,016,085 | |||||||||||
Residential Real Estate - Owner Occupied | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 8,565 | 7,816 | 7,006 | 8,565 | 7,816 | 7,006 | |||||||||
Provision for loan and lease losses | 50 | 1,448 | 2,411 | ||||||||||||
Loans charged-off | (622) | (836) | (1,886) | ||||||||||||
Recoveries | 308 | 137 | 285 | ||||||||||||
Allowance for loan losses at end of year | 8,301 | 8,565 | 7,816 | 8,301 | 8,565 | 7,816 | |||||||||
Owner Occupied - Correspondent | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 567 | 567 | |||||||||||||
Provision for loan and lease losses | 56 | 567 | |||||||||||||
Allowance for loan losses at end of year | 623 | 567 | 623 | 567 | |||||||||||
Residential Real Estate - Non Owner Occupied | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 837 | 1,023 | 1,049 | 837 | 1,023 | 1,049 | |||||||||
Provision for loan and lease losses | 331 | (28) | 43 | ||||||||||||
Loans charged-off | (126) | (185) | (241) | ||||||||||||
Recoveries | 10 | 27 | 172 | ||||||||||||
Allowance for loan losses at end of year | 1,052 | 837 | 1,023 | 1,052 | 837 | 1,023 | |||||||||
Commercial real estate | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 7,740 | 8,309 | 8,843 | 7,740 | 8,309 | 8,843 | |||||||||
Provision for loan and lease losses | 344 | 144 | 539 | ||||||||||||
Loans charged-off | (546) | (868) | (1,190) | ||||||||||||
Recoveries | 98 | 155 | 117 | ||||||||||||
Allowance for loan losses at end of year | 7,636 | 7,740 | 8,309 | 7,636 | 7,740 | 8,309 | |||||||||
Commercial real estate - purchased whole loans | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 34 | 34 | 34 | 34 | 34 | 34 | |||||||||
Provision for loan and lease losses | 2 | ||||||||||||||
Allowance for loan losses at end of year | 36 | 34 | 34 | 36 | 34 | 34 | |||||||||
Construction & land development | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 926 | 1,296 | 2,769 | 926 | 1,296 | 2,769 | |||||||||
Provision for loan and lease losses | 377 | (441) | (902) | ||||||||||||
Loans charged-off | (18) | (619) | |||||||||||||
Recoveries | 89 | 48 | |||||||||||||
Allowance for loan losses at end of year | 1,303 | 926 | 1,296 | 1,303 | 926 | 1,296 | |||||||||
Commercial & Industrial | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 1,167 | 1,089 | 580 | 1,167 | 1,089 | 580 | |||||||||
Provision for loan and lease losses | 282 | (16) | 876 | ||||||||||||
Loans charged-off | (56) | (20) | (466) | ||||||||||||
Recoveries | 62 | 114 | 99 | ||||||||||||
Allowance for loan losses at end of year | 1,455 | 1,167 | 1,089 | 1,455 | 1,167 | 1,089 | |||||||||
Lease Financing Receivables | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 25 | 25 | |||||||||||||
Provision for loan and lease losses | 64 | 25 | |||||||||||||
Allowance for loan losses at end of year | 89 | 25 | 89 | 25 | |||||||||||
Warehouse lines of credit | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 799 | 449 | 541 | 799 | 449 | 541 | |||||||||
Provision for loan and lease losses | 168 | 350 | (92) | ||||||||||||
Allowance for loan losses at end of year | 967 | 799 | 449 | 967 | 799 | 449 | |||||||||
Home equity lines of credit | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 2,730 | 2,396 | 2,348 | 2,730 | 2,396 | 2,348 | |||||||||
Provision for loan and lease losses | 584 | 699 | 515 | ||||||||||||
Loans charged-off | (466) | (548) | (632) | ||||||||||||
Recoveries | 148 | 183 | 165 | ||||||||||||
Allowance for loan losses at end of year | 2,996 | 2,730 | 2,396 | 2,996 | 2,730 | 2,396 | |||||||||
Consumer: Republic Processing Group Loans | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 44 | 44 | |||||||||||||
Provision for loan and lease losses | 2,331 | (533) | (845) | ||||||||||||
Loans charged-off | (971) | (5) | |||||||||||||
Recoveries | 295 | 582 | 845 | ||||||||||||
Allowance for loan losses at end of year | 1,699 | 44 | 1,699 | 44 | |||||||||||
Consumer: Credit cards | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 285 | 289 | 210 | 285 | 289 | 210 | |||||||||
Provision for loan and lease losses | 256 | 49 | 202 | ||||||||||||
Loans charged-off | (146) | (88) | (142) | ||||||||||||
Recoveries | 53 | 35 | 19 | ||||||||||||
Allowance for loan losses at end of year | 448 | 285 | 289 | 448 | 285 | 289 | |||||||||
Consumer: Overdrafts | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 382 | 199 | 198 | 382 | 199 | 198 | |||||||||
Provision for loan and lease losses | 255 | 383 | 191 | ||||||||||||
Loans charged-off | (598) | (591) | (601) | ||||||||||||
Recoveries | 312 | 391 | 411 | ||||||||||||
Allowance for loan losses at end of year | 351 | 382 | 199 | 351 | 382 | 199 | |||||||||
Consumer: Purchased Whole Loans | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | 185 | 185 | |||||||||||||
Provision for loan and lease losses | 322 | 185 | |||||||||||||
Loans charged-off | (123) | ||||||||||||||
Recoveries | 8 | ||||||||||||||
Allowance for loan losses at end of year | 392 | 185 | 392 | 185 | |||||||||||
Consumer: Other consumer | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | $ 124 | 126 | 151 | 124 | 126 | 151 | |||||||||
Provision for loan and lease losses | (26) | 27 | 45 | ||||||||||||
Loans charged-off | (318) | (404) | (408) | ||||||||||||
Recoveries | 363 | 375 | 338 | ||||||||||||
Allowance for loan losses at end of year | $ 143 | $ 124 | 126 | $ 143 | 124 | 126 | |||||||||
Unallocated | |||||||||||||||
Allowance for loan losses rollforward | |||||||||||||||
Allowance for loan losses at beginning year | $ 23,026 | $ 23,729 | $ 23,026 | 23,729 | |||||||||||
Provision for loan and lease losses | 2,983 | ||||||||||||||
Loans charged-off | (6,185) | ||||||||||||||
Recoveries | 2,499 | ||||||||||||||
Allowance for loan losses at end of year | $ 23,026 | $ 23,026 |
LOANS AND ALLOWANCE FOR LOAN 76
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - NON-PERFORMING LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | |||
Loans on nonaccrual status | $ 21,712 | $ 23,337 | |
Loans past due 90 days or more and still on accrual | 224 | 322 | |
Total nonperforming loans | 21,936 | 23,659 | |
Other real estate owned | 1,220 | 11,243 | $ 17,102 |
Total nonperforming assets | $ 23,156 | $ 34,902 | |
Credit Quality Ratios - Total Company: | |||
Nonperforming loans to total loans (as percent) | 0.66% | 0.78% | |
Nonperforming assets to total loans (including OREO) (as percent) | 0.70% | 1.14% | |
Nonperforming assets to total assets (as percent) | 0.55% | 0.93% |
LOANS AND ALLOWANCE FOR LOAN 77
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - AGING (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Aging or recorded investments in loans | ||
Nonacccrual Loan | $ 21,712 | $ 23,337 |
Loans Past Due 90 Days or More and Still Accruing Interest | $ 224 | 322 |
Number of consecutive months payments received before non-accrual loans returned to accrual status (in months) | item | 6 | |
Residential Real Estate - Owner Occupied | ||
Aging or recorded investments in loans | ||
Nonacccrual Loan | $ 13,197 | 10,903 |
Loans Past Due 90 Days or More and Still Accruing Interest | 322 | |
Residential Real Estate - Non Owner Occupied | ||
Aging or recorded investments in loans | ||
Nonacccrual Loan | 935 | 2,352 |
Commercial real estate | ||
Aging or recorded investments in loans | ||
Nonacccrual Loan | 3,941 | 6,151 |
Loans Past Due 90 Days or More and Still Accruing Interest | 224 | |
Construction & land development | ||
Aging or recorded investments in loans | ||
Nonacccrual Loan | 1,589 | 1,990 |
Commercial & Industrial | ||
Aging or recorded investments in loans | ||
Nonacccrual Loan | 194 | 169 |
Home equity lines of credit | ||
Aging or recorded investments in loans | ||
Nonacccrual Loan | 1,793 | 1,678 |
Consumer: Other consumer | ||
Aging or recorded investments in loans | ||
Nonacccrual Loan | $ 63 | $ 94 |
LOANS AND ALLOWANCE FOR LOAN 78
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - RECORDED INVESTMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | $ 3,326,610 | $ 3,040,495 |
Residential Real Estate - Owner Occupied | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 1,081,934 | 1,118,341 |
Residential Real Estate - Owner Occupied | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 1,068,737 | 1,107,116 |
Residential Real Estate - Owner Occupied | Nonperforming Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 13,197 | 11,225 |
Owner Occupied - Correspondent | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 249,344 | 226,628 |
Owner Occupied - Correspondent | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 249,344 | 226,628 |
Residential Real Estate - Non Owner Occupied | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 116,294 | 96,492 |
Residential Real Estate - Non Owner Occupied | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 115,359 | 94,140 |
Residential Real Estate - Non Owner Occupied | Nonperforming Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 935 | 2,352 |
Commercial real estate | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 824,887 | 772,309 |
Commercial real estate - purchased whole loans | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 35,674 | 34,898 |
Construction & land development | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 66,500 | 38,480 |
Commercial & Industrial | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 229,721 | 157,339 |
Lease Financing Receivables | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 8,905 | 2,530 |
Warehouse lines of credit | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 386,729 | 319,431 |
Home equity lines of credit | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 289,194 | 245,679 |
Home equity lines of credit | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 287,401 | 244,001 |
Home equity lines of credit | Nonperforming Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 1,793 | 1,678 |
Consumer: Republic Processing Group Loans | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 7,204 | 4,095 |
Consumer: Republic Processing Group Loans | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 7,204 | 4,095 |
Consumer: Credit cards | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 11,068 | 9,573 |
Consumer: Credit cards | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 11,068 | 9,573 |
Consumer: Overdrafts | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 685 | 1,180 |
Consumer: Overdrafts | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 685 | 1,180 |
Consumer: Purchased Whole Loans | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 5,892 | 4,626 |
Consumer: Purchased Whole Loans | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 5,892 | 4,626 |
Consumer: Other consumer | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 12,579 | 8,894 |
Consumer: Other consumer | Performing Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 12,516 | 8,800 |
Consumer: Other consumer | Nonperforming Financing Receivable | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | $ 63 | $ 94 |
LOANS AND ALLOWANCE FOR LOAN 79
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - DELINQUENT LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | $ 3,088 | $ 5,036 |
60 - 89 Days Delinquent | 1,107 | 2,195 |
90 + Days Delinquent | 7,536 | 8,620 |
Total Loans Delinquent | 11,731 | 15,851 |
Total Loans Not Delinquent | 3,314,879 | 3,024,644 |
Carrying value of loans | $ 3,326,610 | $ 3,040,495 |
30 - 59 days delinquent to total loans (as a percent) | 0.09% | 0.17% |
60 - 89 days delinquent to total loans (as a percent) | 0.03% | 0.07% |
Greater than 90 days delinquent to total loans (as a percent) | 0.23% | 0.28% |
Delinquent acquired bank loans to total acquired bank loans (as a percent) | 0.35% | 0.52% |
Residential Real Estate - Owner Occupied | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | $ 1,960 | $ 3,039 |
60 - 89 Days Delinquent | 1,044 | 1,329 |
90 + Days Delinquent | 3,878 | 3,640 |
Total Loans Delinquent | 6,882 | 8,008 |
Total Loans Not Delinquent | 1,075,052 | 1,110,333 |
Carrying value of loans | 1,081,934 | 1,118,341 |
Owner Occupied - Correspondent | ||
Aging or recorded investments in loans | ||
Total Loans Not Delinquent | 249,344 | 226,628 |
Carrying value of loans | 249,344 | 226,628 |
Residential Real Estate - Non Owner Occupied | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 14 | 36 |
60 - 89 Days Delinquent | 635 | |
90 + Days Delinquent | 39 | 105 |
Total Loans Delinquent | 53 | 776 |
Total Loans Not Delinquent | 116,241 | 95,716 |
Carrying value of loans | 116,294 | 96,492 |
Commercial real estate | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 178 | 585 |
90 + Days Delinquent | 933 | 2,387 |
Total Loans Delinquent | 1,111 | 2,972 |
Total Loans Not Delinquent | 823,776 | 769,337 |
Carrying value of loans | 824,887 | 772,309 |
Commercial real estate - purchased whole loans | ||
Aging or recorded investments in loans | ||
Total Loans Not Delinquent | 35,674 | 34,898 |
Carrying value of loans | 35,674 | 34,898 |
Construction & land development | ||
Aging or recorded investments in loans | ||
90 + Days Delinquent | 1,500 | 1,990 |
Total Loans Delinquent | 1,500 | 1,990 |
Total Loans Not Delinquent | 65,000 | 36,490 |
Carrying value of loans | 66,500 | 38,480 |
Commercial & Industrial | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 299 | 211 |
Total Loans Delinquent | 299 | 211 |
Total Loans Not Delinquent | 229,422 | 157,128 |
Carrying value of loans | 229,721 | 157,339 |
Lease Financing Receivables | ||
Aging or recorded investments in loans | ||
Total Loans Not Delinquent | 8,905 | 2,530 |
Carrying value of loans | 8,905 | 2,530 |
Warehouse lines of credit | ||
Aging or recorded investments in loans | ||
Total Loans Not Delinquent | 386,729 | 319,431 |
Carrying value of loans | 386,729 | 319,431 |
Home equity lines of credit | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 206 | 706 |
60 - 89 Days Delinquent | 1 | 158 |
90 + Days Delinquent | 1,186 | 498 |
Total Loans Delinquent | 1,393 | 1,362 |
Total Loans Not Delinquent | 287,801 | 244,317 |
Carrying value of loans | 289,194 | 245,679 |
Consumer: Republic Processing Group Loans | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 246 | 107 |
60 - 89 Days Delinquent | 34 | |
Total Loans Delinquent | 246 | 141 |
Total Loans Not Delinquent | 6,958 | 3,954 |
Carrying value of loans | 7,204 | 4,095 |
Consumer: Credit cards | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 10 | 124 |
60 - 89 Days Delinquent | 2 | 10 |
Total Loans Delinquent | 12 | 134 |
Total Loans Not Delinquent | 11,056 | 9,439 |
Carrying value of loans | 11,068 | 9,573 |
Consumer: Overdrafts | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 133 | 178 |
Total Loans Delinquent | 133 | 178 |
Total Loans Not Delinquent | 552 | 1,002 |
Carrying value of loans | 685 | 1,180 |
Consumer: Purchased Whole Loans | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 5 | 12 |
60 - 89 Days Delinquent | 42 | |
Total Loans Delinquent | 47 | 12 |
Total Loans Not Delinquent | 5,845 | 4,614 |
Carrying value of loans | 5,892 | 4,626 |
Consumer: Other consumer | ||
Aging or recorded investments in loans | ||
30 - 59 Days Delinquent | 37 | 38 |
60 - 89 Days Delinquent | 18 | 29 |
Total Loans Delinquent | 55 | 67 |
Total Loans Not Delinquent | 12,524 | 8,827 |
Carrying value of loans | $ 12,579 | $ 8,894 |
LOANS AND ALLOWANCE FOR LOAN 80
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - IMPAIRED LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Impaired loans | |||
Loans with no allocated allowance for loan losses | $ 26,143 | $ 32,560 | $ 36,721 |
Loans with allocated allowance for loan losses | 39,980 | 53,620 | 71,273 |
Total impaired loans | 66,123 | 86,180 | 107,994 |
Amount of the allowance for loan losses allocated | 5,427 | 5,564 | 6,674 |
Average of individually impaired loans during the year | 74,482 | 92,428 | 110,272 |
Interest income recognized during impairment | 1,882 | 4,279 | $ 3,489 |
PCI loan | |||
Impaired loans | |||
Total impaired loans | 7,000 | 10,000 | |
Impaired Loans | |||
Impaired loans | |||
Total impaired loans | $ 1,000 | $ 6,000 |
LOANS AND ALLOWANCE FOR LOAN 81
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - PORTFOLIO CLASS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 4,708 | $ 5,019 | ||
Collectively evaluated for impairment | 22,064 | 18,846 | ||
PCI loans with post acquisition impairment | 719 | 545 | ||
Total ending allowance for loan losses | 27,491 | 24,410 | $ 23,026 | $ 23,729 |
Impaired loans individually evaluated, excluding PCI loans | 59,274 | 76,392 | ||
Loans collectively evaluated for impairment | 3,254,793 | 2,946,613 | ||
PCI loans with post acquisition impairment | 6,849 | 9,788 | ||
PCI loans without post acquisition impairment | 5,694 | 7,702 | ||
Carrying value of loans | 3,326,610 | 3,040,495 | ||
Residential Real Estate - Owner Occupied | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 3,820 | 3,251 | ||
Collectively evaluated for impairment | 4,471 | 5,264 | ||
PCI loans with post acquisition impairment | 10 | 50 | ||
Total ending allowance for loan losses | 8,301 | 8,565 | 7,816 | 7,006 |
Impaired loans individually evaluated, excluding PCI loans | 39,041 | 41,265 | ||
Loans collectively evaluated for impairment | 1,042,334 | 1,075,871 | ||
PCI loans with post acquisition impairment | 65 | 725 | ||
PCI loans without post acquisition impairment | 494 | 480 | ||
Carrying value of loans | 1,081,934 | 1,118,341 | ||
Owner Occupied - Correspondent | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 623 | 567 | ||
Total ending allowance for loan losses | 623 | 567 | ||
Loans collectively evaluated for impairment | 249,344 | 226,628 | ||
Carrying value of loans | 249,344 | 226,628 | ||
Residential Real Estate - Non Owner Occupied | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 78 | 101 | ||
Collectively evaluated for impairment | 878 | 672 | ||
PCI loans with post acquisition impairment | 96 | 64 | ||
Total ending allowance for loan losses | 1,052 | 837 | 1,023 | 1,049 |
Impaired loans individually evaluated, excluding PCI loans | 2,351 | 3,388 | ||
Loans collectively evaluated for impairment | 113,158 | 91,395 | ||
PCI loans with post acquisition impairment | 785 | 1,554 | ||
PCI loans without post acquisition impairment | 155 | |||
Carrying value of loans | 116,294 | 96,492 | ||
Commercial real estate | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 339 | 913 | ||
Collectively evaluated for impairment | 6,806 | 6,462 | ||
PCI loans with post acquisition impairment | 491 | 365 | ||
Total ending allowance for loan losses | 7,636 | 7,740 | 8,309 | 8,843 |
Impaired loans individually evaluated, excluding PCI loans | 12,441 | 22,521 | ||
Loans collectively evaluated for impairment | 802,528 | 736,965 | ||
PCI loans with post acquisition impairment | 4,806 | 6,341 | ||
PCI loans without post acquisition impairment | 5,112 | 6,482 | ||
Carrying value of loans | 824,887 | 772,309 | ||
Commercial real estate - purchased whole loans | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 36 | 34 | ||
Total ending allowance for loan losses | 36 | 34 | 34 | 34 |
Loans collectively evaluated for impairment | 35,674 | 34,898 | ||
Carrying value of loans | 35,674 | 34,898 | ||
Construction & land development | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 159 | 187 | ||
Collectively evaluated for impairment | 1,144 | 739 | ||
Total ending allowance for loan losses | 1,303 | 926 | 1,296 | 2,769 |
Impaired loans individually evaluated, excluding PCI loans | 2,717 | 2,627 | ||
Loans collectively evaluated for impairment | 63,750 | 35,357 | ||
PCI loans without post acquisition impairment | 33 | 496 | ||
Carrying value of loans | 66,500 | 38,480 | ||
Commercial & Industrial | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 196 | 302 | ||
Collectively evaluated for impairment | 1,137 | 800 | ||
PCI loans with post acquisition impairment | 122 | 65 | ||
Total ending allowance for loan losses | 1,455 | 1,167 | 1,089 | 580 |
Impaired loans individually evaluated, excluding PCI loans | 322 | 4,319 | ||
Loans collectively evaluated for impairment | 228,151 | 151,776 | ||
PCI loans with post acquisition impairment | 1,193 | 1,158 | ||
PCI loans without post acquisition impairment | 55 | 86 | ||
Carrying value of loans | 229,721 | 157,339 | ||
Lease Financing Receivables | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 89 | 25 | ||
Total ending allowance for loan losses | 89 | 25 | ||
Loans collectively evaluated for impairment | 8,905 | 2,530 | ||
Carrying value of loans | 8,905 | 2,530 | ||
Warehouse lines of credit | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 967 | 799 | ||
Total ending allowance for loan losses | 967 | 799 | 449 | 541 |
Loans collectively evaluated for impairment | 386,729 | 319,431 | ||
Carrying value of loans | 386,729 | 319,431 | ||
Home equity lines of credit | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 100 | 225 | ||
Collectively evaluated for impairment | 2,896 | 2,505 | ||
Total ending allowance for loan losses | 2,996 | 2,730 | 2,396 | 2,348 |
Impaired loans individually evaluated, excluding PCI loans | 2,316 | 2,220 | ||
Loans collectively evaluated for impairment | 286,878 | 243,459 | ||
Carrying value of loans | 289,194 | 245,679 | ||
Consumer: Republic Processing Group Loans | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 1,699 | 44 | ||
Total ending allowance for loan losses | 1,699 | 44 | ||
Loans collectively evaluated for impairment | 7,204 | 4,095 | ||
Carrying value of loans | 7,204 | 4,095 | ||
Consumer: Credit cards | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 448 | 285 | ||
Total ending allowance for loan losses | 448 | 285 | 289 | 210 |
Loans collectively evaluated for impairment | 11,068 | 9,573 | ||
Carrying value of loans | 11,068 | 9,573 | ||
Consumer: Overdrafts | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 351 | 382 | ||
Total ending allowance for loan losses | 351 | 382 | 199 | 198 |
Loans collectively evaluated for impairment | 685 | 1,180 | ||
Carrying value of loans | 685 | 1,180 | ||
Consumer: Purchased Whole Loans | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | 392 | 185 | ||
Total ending allowance for loan losses | 392 | 185 | ||
Loans collectively evaluated for impairment | 5,892 | 4,626 | ||
Carrying value of loans | 5,892 | 4,626 | ||
Consumer: Other consumer | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 16 | 40 | ||
Collectively evaluated for impairment | 127 | 83 | ||
PCI loans with post acquisition impairment | 1 | |||
Total ending allowance for loan losses | 143 | 124 | $ 126 | $ 151 |
Impaired loans individually evaluated, excluding PCI loans | 86 | 52 | ||
Loans collectively evaluated for impairment | 12,493 | 8,829 | ||
PCI loans with post acquisition impairment | 10 | |||
PCI loans without post acquisition impairment | 3 | |||
Carrying value of loans | $ 12,579 | $ 8,894 |
LOANS AND ALLOWANCE FOR LOAN 82
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - LOANS EVALUATED FOR IMPAIRMENT BY CLASS OF LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Impaired loans with no related allowance recorded: | |||
Recorded Investment | $ 26,143 | $ 32,560 | $ 36,721 |
Average Recorded Investment | 110,272 | ||
Interest Income Recognized | 3,489 | ||
Impaired loans with allowance recorded: | |||
Recorded Investment | 39,980 | 53,620 | 71,273 |
Allowance for Loan Losses Allocated | 5,427 | 5,564 | 6,674 |
Total impaired loans | |||
Unpaid Principal Balance | 68,183 | 88,604 | 110,262 |
Recorded Investment | 66,123 | 86,180 | 107,994 |
Allowance for Loan Losses Allocated | 5,427 | 5,564 | 6,674 |
Average Recorded Investment | 74,482 | 92,428 | 110,272 |
Interest Income Recognized | 1,882 | 4,279 | 3,489 |
Residential Real Estate - Owner Occupied | |||
Impaired loans with no related allowance recorded: | |||
Unpaid Principal Balance | 14,287 | 6,598 | 7,136 |
Recorded Investment | 13,256 | 6,196 | 6,569 |
Average Recorded Investment | 10,907 | 6,745 | 8,977 |
Interest Income Recognized | 100 | 351 | 120 |
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 25,896 | 36,361 | 34,393 |
Recorded Investment | 25,850 | 35,794 | 34,097 |
Allowance for Loan Losses Allocated | 3,830 | 3,301 | 3,657 |
Average Recorded Investment | 28,917 | 35,121 | 34,154 |
Interest Income Recognized | 885 | 1,350 | 939 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 3,830 | 3,301 | 3,657 |
Owner Occupied - Correspondent | |||
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 6,789 | ||
Recorded Investment | 6,789 | ||
Allowance for Loan Losses Allocated | 351 | ||
Average Recorded Investment | 5,104 | ||
Interest Income Recognized | 248 | ||
Total impaired loans | |||
Allowance for Loan Losses Allocated | 351 | ||
Residential Real Estate - Non Owner Occupied | |||
Impaired loans with no related allowance recorded: | |||
Unpaid Principal Balance | 1,978 | 2,368 | 1,498 |
Recorded Investment | 1,928 | 2,215 | 1,256 |
Average Recorded Investment | 2,234 | 1,758 | 1,520 |
Interest Income Recognized | 31 | 130 | 13 |
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 1,231 | 2,755 | 27,080 |
Recorded Investment | 1,208 | 2,727 | 27,078 |
Allowance for Loan Losses Allocated | 174 | 165 | 1,835 |
Average Recorded Investment | 2,004 | 4,685 | 25,724 |
Interest Income Recognized | 60 | 172 | 1,017 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 174 | 165 | 1,835 |
Commercial real estate | |||
Impaired loans with no related allowance recorded: | |||
Unpaid Principal Balance | 7,406 | 17,282 | 21,886 |
Recorded Investment | 6,743 | 16,248 | 20,953 |
Average Recorded Investment | 9,653 | 16,809 | 21,218 |
Interest Income Recognized | 170 | 912 | 693 |
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 10,546 | 12,653 | |
Recorded Investment | 10,504 | 12,614 | |
Allowance for Loan Losses Allocated | 830 | 1,278 | |
Average Recorded Investment | 11,378 | 16,722 | |
Interest Income Recognized | 469 | 672 | |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 830 | 1,278 | |
Commercial real estate - purchased whole loans | |||
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 674 | ||
Recorded Investment | 674 | ||
Allowance for Loan Losses Allocated | 156 | ||
Average Recorded Investment | 2,048 | ||
Interest Income Recognized | 38 | ||
Total impaired loans | |||
Allowance for Loan Losses Allocated | 156 | ||
Construction & land development | |||
Impaired loans with no related allowance recorded: | |||
Unpaid Principal Balance | 2,067 | 2,144 | 2,087 |
Recorded Investment | 2,067 | 2,144 | 2,087 |
Average Recorded Investment | 2,096 | 2,118 | 2,150 |
Interest Income Recognized | 19 | 165 | 103 |
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 650 | 483 | 1,872 |
Recorded Investment | 650 | 483 | 1,872 |
Allowance for Loan Losses Allocated | 159 | 187 | 428 |
Average Recorded Investment | 664 | 498 | 2,593 |
Interest Income Recognized | 36 | 26 | 11 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 159 | 187 | 428 |
Commercial & Industrial | |||
Impaired loans with no related allowance recorded: | |||
Unpaid Principal Balance | 18 | 3,943 | 4,367 |
Recorded Investment | 18 | 3,943 | 4,258 |
Average Recorded Investment | 1,682 | 4,047 | 3,577 |
Interest Income Recognized | 3 | 252 | 258 |
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 1,497 | 1,534 | |
Recorded Investment | 1,497 | 1,534 | |
Allowance for Loan Losses Allocated | 318 | 367 | |
Average Recorded Investment | 2,351 | 1,495 | |
Interest Income Recognized | 81 | 115 | |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 318 | 367 | |
Warehouse lines of credit | |||
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 688 | ||
Recorded Investment | 687 | ||
Allowance for Loan Losses Allocated | 203 | ||
Average Recorded Investment | 999 | ||
Interest Income Recognized | 5 | ||
Total impaired loans | |||
Allowance for Loan Losses Allocated | 203 | ||
Home equity lines of credit | |||
Impaired loans with no related allowance recorded: | |||
Unpaid Principal Balance | 2,263 | 1,969 | 1,695 |
Recorded Investment | 2,087 | 1,814 | 1,577 |
Average Recorded Investment | 2,222 | 1,839 | 1,982 |
Interest Income Recognized | 23 | 105 | 43 |
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 258 | 452 | |
Recorded Investment | 229 | 406 | |
Allowance for Loan Losses Allocated | 100 | 225 | |
Average Recorded Investment | 292 | 518 | |
Interest Income Recognized | 4 | 25 | |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 100 | 225 | |
Consumer: Purchased Whole Loans | |||
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 79 | ||
Recorded Investment | 79 | ||
Allowance for Loan Losses Allocated | 44 | ||
Average Recorded Investment | 88 | ||
Total impaired loans | |||
Allowance for Loan Losses Allocated | 44 | ||
Consumer: Other consumer | |||
Impaired loans with no related allowance recorded: | |||
Unpaid Principal Balance | 44 | 18 | |
Recorded Investment | 44 | 18 | |
Average Recorded Investment | 32 | 138 | |
Interest Income Recognized | $ 1 | ||
Impaired loans with allowance recorded: | |||
Unpaid Principal Balance | 42 | 62 | |
Recorded Investment | 42 | 62 | |
Allowance for Loan Losses Allocated | 16 | 41 | |
Average Recorded Investment | 50 | 73 | |
Interest Income Recognized | 1 | 4 | |
Total impaired loans | |||
Allowance for Loan Losses Allocated | $ 16 | $ 41 |
LOANS AND ALLOWANCE FOR LOAN 83
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - TDR ACCRUAL STATUS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)loan | Dec. 31, 2014USD ($)loan | Dec. 31, 2013USD ($)loan | |
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 347 | 378 | 378 |
Recorded Investment | $ | $ 49,580 | $ 65,266 | $ 65,266 |
Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 307 | 324 | |
Recorded Investment | $ | $ 35,209 | $ 39,132 | |
Commercial real estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 26 | 38 | |
Recorded Investment | $ | $ 11,332 | $ 19,532 | |
Construction & land development | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 8 | 8 | |
Recorded Investment | $ | $ 2,717 | $ 2,627 | |
Commercial & Industrial | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | 8 | |
Recorded Investment | $ | $ 322 | $ 3,975 | |
Loans on nonaccrual status | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 86 | 84 | |
Recorded Investment | $ | $ 12,472 | $ 14,186 | |
Minimum period for which TDRs continue to be reported as non-performing loans | 6 months | ||
Loans on nonaccrual status | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 74 | 74 | |
Recorded Investment | $ | $ 7,365 | $ 7,166 | |
Loans on nonaccrual status | Commercial real estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 9 | 8 | |
Recorded Investment | $ | $ 3,324 | $ 5,030 | |
Loans on nonaccrual status | Construction & land development | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 2 | |
Recorded Investment | $ | $ 1,589 | $ 1,990 | |
Loans on nonaccrual status | Commercial & Industrial | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ | $ 194 | ||
Accrual Loans | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 261 | 294 | |
Recorded Investment | $ | $ 37,108 | $ 51,080 | |
Accrual Loans | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 233 | 250 | |
Recorded Investment | $ | $ 27,844 | $ 31,966 | |
Accrual Loans | Commercial real estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 17 | 30 | |
Recorded Investment | $ | $ 8,008 | $ 14,502 | |
Accrual Loans | Construction & land development | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | 6 | |
Recorded Investment | $ | $ 1,128 | $ 637 | |
Accrual Loans | Commercial & Industrial | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 5 | 8 | |
Recorded Investment | $ | $ 128 | $ 3,975 |
LOANS AND ALLOWANCE FOR LOAN 84
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - TDR MODIFICATIONS (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)loan | Dec. 31, 2014USD ($)loan | Dec. 31, 2013USD ($)loan | |
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 347 | 378 | 378 |
Recorded Investment | $ 49,580,000 | $ 65,266,000 | $ 65,266,000 |
Specific reserve allocations made to customers | 5,000,000 | 4,000,000 | |
Commitments to lend any additional material amounts to existing TDR relationships | 0 | 0 | |
Specific reserve allocations made to customers whose loan terms were modified in TDRs during period | 300,000 | 1,000,000 | 1,000,000 |
Change between the pre and post modification loan | $ 0 | $ 0 | $ 0 |
Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 307 | 324 | |
Recorded Investment | $ 35,209,000 | $ 39,132,000 | |
Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 6 | |
Recorded Investment | $ 631,000 | $ 607,000 | |
Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 229 | 234 | |
Recorded Investment | $ 30,384,000 | $ 32,456,000 | |
Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 16 | 17 | |
Recorded Investment | $ 1,560,000 | $ 1,757,000 | |
Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 60 | 67 | |
Recorded Investment | $ 2,634,000 | $ 4,312,000 | |
Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 40 | 54 | |
Recorded Investment | $ 14,371,000 | $ 26,134,000 | |
Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 7 | ||
Recorded Investment | $ 1,998,000 | ||
Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 13 | 12 | |
Recorded Investment | $ 5,748,000 | $ 5,096,000 | |
Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 20 | 22 | |
Recorded Investment | $ 6,625,000 | $ 10,958,000 | |
Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 20 | ||
Recorded Investment | $ 10,080,000 | ||
Modified During The Period | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 44 | 103 | 111 |
Recorded Investment | $ 7,536,000 | $ 17,082,000 | $ 17,041,000 |
Modified During The Period | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 32 | 77 | 92 |
Recorded Investment | $ 3,642,000 | $ 7,689,000 | $ 9,699,000 |
Modified During The Period | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 4 | 1 |
Recorded Investment | $ 617,000 | $ 389,000 | $ 164,000 |
Modified During The Period | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 22 | 32 | 43 |
Recorded Investment | $ 2,667,000 | $ 4,047,000 | $ 7,540,000 |
Modified During The Period | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 6 | 8 |
Recorded Investment | $ 43,000 | $ 848,000 | $ 252,000 |
Modified During The Period | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 7 | 35 | 40 |
Recorded Investment | $ 315,000 | $ 2,405,000 | $ 1,743,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 12 | 26 | 19 |
Recorded Investment | $ 3,894,000 | $ 9,393,000 | $ 7,342,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | 6 | 7 |
Recorded Investment | $ 465,000 | $ 1,570,000 | $ 3,238,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 11 | 4 |
Recorded Investment | $ 815,000 | $ 4,995,000 | $ 621,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 8 | 9 | 8 |
Recorded Investment | $ 2,614,000 | $ 2,828,000 | $ 3,315,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Recorded Investment | $ 168,000 | ||
Performing Financing Receivable | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 252 | 263 | |
Recorded Investment | $ 36,644,000 | $ 48,414,000 | |
Percentage of troubled debt restructurings performing as per terms of modifications during the period. | 74.00% | 74.00% | |
Percentage of Bank's TDRs that occurred during period, which were performing according to their modified terms | 65.00% | 68.00% | 84.00% |
Performing Financing Receivable | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 224 | 220 | |
Recorded Investment | $ 27,380,000 | $ 29,381,000 | |
Performing Financing Receivable | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 2 | |
Recorded Investment | $ 631,000 | $ 218,000 | |
Performing Financing Receivable | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 183 | 173 | |
Recorded Investment | $ 24,734,000 | $ 25,080,000 | |
Performing Financing Receivable | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 9 | 12 | |
Recorded Investment | $ 789,000 | $ 1,408,000 | |
Performing Financing Receivable | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 30 | 33 | |
Recorded Investment | $ 1,226,000 | $ 2,675,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 28 | 43 | |
Recorded Investment | $ 9,264,000 | $ 19,033,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | ||
Recorded Investment | $ 1,517,000 | ||
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 10 | 10 | |
Recorded Investment | $ 5,021,000 | $ 4,170,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 12 | 19 | |
Recorded Investment | $ 2,726,000 | $ 9,043,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 14 | ||
Recorded Investment | $ 5,820,000 | ||
Performing Financing Receivable | Modified During The Period | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 29 | 66 | 78 |
Recorded Investment | $ 4,914,000 | $ 11,638,000 | $ 14,340,000 |
Performing Financing Receivable | Modified During The Period | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 21 | 46 | 62 |
Recorded Investment | $ 2,918,000 | $ 4,940,000 | $ 7,493,000 |
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 617,000 | ||
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 17 | 21 | 37 |
Recorded Investment | $ 2,148,000 | $ 2,274,000 | $ 6,605,000 |
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 5 | 6 | |
Recorded Investment | $ 820,000 | $ 95,000 | |
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | 20 | 19 |
Recorded Investment | $ 153,000 | $ 1,846,000 | $ 793,000 |
Performing Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 8 | 20 | 16 |
Recorded Investment | $ 1,996,000 | $ 6,698,000 | $ 6,847,000 |
Performing Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | 4 | 6 |
Recorded Investment | $ 465,000 | $ 1,185,000 | $ 3,095,000 |
Performing Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 9 | 3 |
Recorded Investment | $ 815,000 | $ 4,411,000 | $ 437,000 |
Performing Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 7 | 7 |
Recorded Investment | $ 716,000 | $ 1,102,000 | $ 3,315,000 |
Nonperforming Financing Receivable | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 95 | 115 | |
Recorded Investment | $ 12,936,000 | $ 16,852,000 | |
Nonperforming Financing Receivable | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 83 | 104 | |
Recorded Investment | $ 7,829,000 | $ 9,751,000 | |
Nonperforming Financing Receivable | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | ||
Recorded Investment | $ 389,000 | ||
Nonperforming Financing Receivable | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 46 | 61 | |
Recorded Investment | $ 5,650,000 | $ 7,376,000 | |
Nonperforming Financing Receivable | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 7 | 5 | |
Recorded Investment | $ 771,000 | $ 349,000 | |
Nonperforming Financing Receivable | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 30 | 34 | |
Recorded Investment | $ 1,408,000 | $ 1,637,000 | |
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 12 | 11 | |
Recorded Investment | $ 5,107,000 | $ 7,101,000 | |
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 481,000 | ||
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | 2 | |
Recorded Investment | $ 727,000 | $ 926,000 | |
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 8 | 3 | |
Recorded Investment | $ 3,899,000 | $ 1,915,000 | |
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | ||
Recorded Investment | $ 4,260,000 | ||
Nonperforming Financing Receivable | Modified During The Period | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 15 | 37 | 33 |
Recorded Investment | $ 2,622,000 | $ 5,444,000 | $ 2,701,000 |
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 11 | 31 | 30 |
Recorded Investment | $ 724,000 | $ 2,749,000 | $ 2,206,000 |
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 1 | |
Recorded Investment | $ 389,000 | $ 164,000 | |
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 5 | 11 | 6 |
Recorded Investment | $ 519,000 | $ 1,773,000 | $ 935,000 |
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 1 | 2 |
Recorded Investment | $ 43,000 | $ 28,000 | $ 157,000 |
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 15 | 21 |
Recorded Investment | $ 162,000 | $ 559,000 | $ 950,000 |
Nonperforming Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 6 | 3 |
Recorded Investment | $ 1,898,000 | $ 2,695,000 | $ 495,000 |
Nonperforming Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 1 | |
Recorded Investment | $ 385,000 | $ 143,000 | |
Nonperforming Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 1 | |
Recorded Investment | $ 584,000 | $ 184,000 | |
Nonperforming Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 2 | 1 |
Recorded Investment | $ 1,898,000 | $ 1,726,000 | |
Nonperforming Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Recorded Investment | $ 168,000 |
LOANS AND ALLOWANCE FOR LOAN 85
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - TDR MODIFIED CLASS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)loan | Dec. 31, 2014USD ($)loan | Dec. 31, 2013USD ($)loan | |
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 347 | 378 | 378 |
Recorded Investment | $ | $ 49,580 | $ 65,266 | $ 65,266 |
Loans on nonaccrual status | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 86 | 84 | |
Recorded Investment | $ | $ 12,472 | $ 14,186 | |
Accrual Loans | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 261 | 294 | |
Recorded Investment | $ | $ 37,108 | $ 51,080 | |
Payment Default | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 15 | 25 | 33 |
Recorded Investment | $ | $ 2,622 | $ 6,211 | $ 2,757 |
Payment Default | Residential Real Estate - Owner Occupied | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 12 | 10 | 29 |
Recorded Investment | $ | $ 724 | $ 1,894 | $ 2,252 |
Payment Default | Residential Real Estate - Non Owner Occupied | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | ||
Recorded Investment | $ | $ 580 | ||
Payment Default | Commercial real estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 7 | 2 |
Recorded Investment | $ | $ 1,704 | $ 3,429 | $ 352 |
Payment Default | Construction & land development | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ | $ 101 | ||
Payment Default | Commercial & Industrial | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 1 | 1 |
Recorded Investment | $ | $ 194 | $ 207 | $ 143 |
Payment Default | Home equity lines of credit | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ | $ 10 |
LOANS AND ALLOWANCE FOR LOAN 86
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - FORECLOSED PROPERTIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Troubled Debt Restructurings disclosures | ||
Carrying Amount of Foreclosed Properties | $ 1,220 | $ 11,243 |
Residential Real Estate - Owner Occupied | ||
Troubled Debt Restructurings disclosures | ||
Carrying Amount of Foreclosed Properties | 478 | 3,209 |
Commercial real estate | ||
Troubled Debt Restructurings disclosures | ||
Carrying Amount of Foreclosed Properties | 442 | 3,324 |
Construction & land development | ||
Troubled Debt Restructurings disclosures | ||
Carrying Amount of Foreclosed Properties | $ 300 | $ 4,710 |
LOANS AND ALLOWANCE FOR LOAN 87
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - FORECLOSURE RECORDED INVESTMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | $ 3,326,610 | $ 3,040,495 |
Residential Real Estate - Owner Occupied | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | 1,081,934 | 1,118,341 |
Residential Real Estate - Owner Occupied | Foreclosure Proceedings In Process | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Recorded Investment | $ 4,602 | $ 2,466 |
FAIR VALUE - RECURRING BASIS (D
FAIR VALUE - RECURRING BASIS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2008 | |
Financial assets: | |||
Securities available for sale | $ 517,058,000 | $ 435,911,000 | |
U.S. Treasury securities and U.S. Government agencies | |||
Financial assets: | |||
Securities available for sale | 286,479,000 | 146,922,000 | |
Private label mortgage backed security | |||
Financial assets: | |||
Securities available for sale | 5,132,000 | 5,250,000 | |
Mortgage backed securities - residential | |||
Financial assets: | |||
Securities available for sale | 92,268,000 | 124,256,000 | |
Collateralized mortgage obligations | |||
Financial assets: | |||
Securities available for sale | 113,668,000 | 143,171,000 | |
Freddie Mac preferred stock | |||
Financial assets: | |||
Securities available for sale | 173,000 | 231,000 | $ 0 |
Mutual fund | |||
Financial assets: | |||
Securities available for sale | 1,011,000 | 1,018,000 | |
Corporate bonds | |||
Financial assets: | |||
Securities available for sale | 14,922,000 | 15,063,000 | |
Trust preferred security | |||
Financial assets: | |||
Securities available for sale | 3,405,000 | ||
Recurring basis | |||
Financial assets: | |||
Securities available for sale | 517,058,000 | 435,911,000 | |
Mortgage loans held for sale | 4,083,000 | 6,388,000 | |
Rate lock commitments | 306,000 | 250,000 | |
Interest rate swap agreements | 400,000 | ||
Financial Liabilities: | |||
Mandatory forward contracts | 25,000 | 33,000 | |
Interest rate swap agreements | 1,000,000 | 488,000 | |
Transfers between Level 1, 2 or 3 | 0 | 0 | |
Recurring basis | U.S. Treasury securities and U.S. Government agencies | |||
Financial assets: | |||
Securities available for sale | 286,479,000 | 146,922,000 | |
Recurring basis | Private label mortgage backed security | |||
Financial assets: | |||
Securities available for sale | 5,132,000 | 5,250,000 | |
Recurring basis | Mortgage backed securities - residential | |||
Financial assets: | |||
Securities available for sale | 92,268,000 | 124,256,000 | |
Recurring basis | Collateralized mortgage obligations | |||
Financial assets: | |||
Securities available for sale | 113,668,000 | 143,171,000 | |
Recurring basis | Freddie Mac preferred stock | |||
Financial assets: | |||
Securities available for sale | 173,000 | 231,000 | |
Recurring basis | Mutual fund | |||
Financial assets: | |||
Securities available for sale | 1,011,000 | 1,018,000 | |
Recurring basis | Corporate bonds | |||
Financial assets: | |||
Securities available for sale | 14,922,000 | 15,063,000 | |
Recurring basis | Trust preferred security | |||
Financial assets: | |||
Securities available for sale | 3,405,000 | ||
Recurring basis | Fair Value, Inputs, Level 1 | |||
Financial assets: | |||
Securities available for sale | 1,011,000 | 1,018,000 | |
Recurring basis | Fair Value, Inputs, Level 1 | Mutual fund | |||
Financial assets: | |||
Securities available for sale | 1,011,000 | 1,018,000 | |
Recurring basis | Fair Value, Inputs, Level 2 | |||
Financial assets: | |||
Securities available for sale | 507,510,000 | 429,643,000 | |
Mortgage loans held for sale | 4,083,000 | 6,388,000 | |
Rate lock commitments | 306,000 | 250,000 | |
Interest rate swap agreements | 400,000 | ||
Financial Liabilities: | |||
Mandatory forward contracts | 25,000 | 33,000 | |
Interest rate swap agreements | 1,000,000 | 488,000 | |
Recurring basis | Fair Value, Inputs, Level 2 | U.S. Treasury securities and U.S. Government agencies | |||
Financial assets: | |||
Securities available for sale | 286,479,000 | 146,922,000 | |
Recurring basis | Fair Value, Inputs, Level 2 | Mortgage backed securities - residential | |||
Financial assets: | |||
Securities available for sale | 92,268,000 | 124,256,000 | |
Recurring basis | Fair Value, Inputs, Level 2 | Collateralized mortgage obligations | |||
Financial assets: | |||
Securities available for sale | 113,668,000 | 143,171,000 | |
Recurring basis | Fair Value, Inputs, Level 2 | Freddie Mac preferred stock | |||
Financial assets: | |||
Securities available for sale | 173,000 | 231,000 | |
Recurring basis | Fair Value, Inputs, Level 2 | Corporate bonds | |||
Financial assets: | |||
Securities available for sale | 14,922,000 | 15,063,000 | |
Recurring basis | Fair Value, Inputs, Level 3 | |||
Financial assets: | |||
Securities available for sale | 8,537,000 | 5,250,000 | |
Recurring basis | Fair Value, Inputs, Level 3 | Private label mortgage backed security | |||
Financial assets: | |||
Securities available for sale | 5,132,000 | $ 5,250,000 | |
Recurring basis | Fair Value, Inputs, Level 3 | Trust preferred security | |||
Financial assets: | |||
Securities available for sale | $ 3,405,000 |
FAIR VALUE - RECONCILIATION OF
FAIR VALUE - RECONCILIATION OF PRIVATE LABEL MBS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Private label mortgage backed security | |||
Assets measured on recurring basis, unobservable input reconciliation | |||
Balance, beginning of year | $ 5,250 | $ 5,485 | $ 5,687 |
Net change in unrealized gain (loss) | (125) | 475 | 742 |
Recovery of actual losses previously recorded | 35 | 141 | 201 |
Principal paydowns | (28) | (851) | (1,145) |
Balance, end of year | 5,132 | $ 5,250 | $ 5,485 |
Trust preferred security | |||
Assets measured on recurring basis, unobservable input reconciliation | |||
Purchases, net of accretion recognized | 3,405 | ||
Balance, end of year | $ 3,405 |
FAIR VALUE - RECURRING LEVEL 3
FAIR VALUE - RECURRING LEVEL 3 MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair value inputs quantitative information | ||
Mortgage backed security fair value | $ 5,132 | $ 5,250 |
Private label mortgage backed security | Discounted cash flow | Minimum | Recurring basis | Fair Value, Inputs, Level 3 | ||
Fair value inputs quantitative information | ||
Constant prepayment rate (as a percent) | 0.00% | 0.50% |
Probability of default (as a percent) | 3.00% | 3.00% |
Loss severity (as a percent) | 60.00% | 60.00% |
Private label mortgage backed security | Discounted cash flow | Maximum | Recurring basis | Fair Value, Inputs, Level 3 | ||
Fair value inputs quantitative information | ||
Constant prepayment rate (as a percent) | 6.50% | 6.50% |
Probability of default (as a percent) | 9.00% | 6.20% |
Loss severity (as a percent) | 90.00% | 75.00% |
FAIR VALUE - GAINS AND LOSSES (
FAIR VALUE - GAINS AND LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Fair value gain loss change in fair value | ||||||||||||||||
Aggregate fair value | $ 4,083 | $ 6,388 | $ 3,506 | $ 4,083 | $ 6,388 | $ 3,506 | $ 10,614 | |||||||||
Unrealized gain | 3,915 | 2,440 | 6,979 | |||||||||||||
Interest income | 32,466 | $ 31,424 | $ 31,058 | $ 29,022 | 29,477 | $ 28,442 | $ 27,550 | $ 27,304 | $ 26,739 | $ 28,539 | $ 28,767 | $ 29,130 | 123,970 | 112,773 | 113,175 | |
Mortgage loans held for sale | ||||||||||||||||
Fair value gain loss change in fair value | ||||||||||||||||
Aggregate fair value | 4,083 | 6,388 | 4,083 | 6,388 | ||||||||||||
Contractual balance | $ 3,993 | $ 6,265 | 3,993 | 6,265 | ||||||||||||
Unrealized gain | 90 | 123 | ||||||||||||||
Interest income | 219 | 183 | 471 | |||||||||||||
Change in fair value | (33) | 34 | (488) | |||||||||||||
Total included in earnings | $ 186 | $ 217 | $ (17) |
FAIR VALUE - ASSETS MEASURED ON
FAIR VALUE - ASSETS MEASURED ON NON-RECURRING BASIS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value Disclosures | |||
Other real estate owned | $ 870 | $ 9,188 | $ 8,418 |
Nonrecurring basis | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 9,008 | 9,848 | |
Other real estate owned | 870 | 9,188 | |
Nonrecurring basis | Residential Real Estate | |||
Fair Value Disclosures | |||
Other real estate owned | 128 | 1,916 | |
Nonrecurring basis | Residential Real Estate - Owner Occupied | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 3,631 | 1,678 | |
Nonrecurring basis | Residential Real Estate - Non Owner Occupied | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 689 | 702 | |
Nonrecurring basis | Commercial real estate | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 3,443 | 6,122 | |
Other real estate owned | 442 | 2,845 | |
Nonrecurring basis | Construction & land development | |||
Fair Value Disclosures | |||
Other real estate owned | 300 | 4,427 | |
Nonrecurring basis | Home equity lines of credit | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 1,245 | 1,346 | |
Nonrecurring basis | Premises, held for sale | |||
Fair Value Disclosures | |||
Other real estate owned | 1,185 | 1,317 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 9,008 | 9,848 | |
Other real estate owned | 870 | 9,188 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | Residential Real Estate | |||
Fair Value Disclosures | |||
Other real estate owned | 128 | 1,916 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | Residential Real Estate - Owner Occupied | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 3,631 | 1,678 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | Residential Real Estate - Non Owner Occupied | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 689 | 702 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | Commercial real estate | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 3,443 | 6,122 | |
Other real estate owned | 442 | 2,845 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | Construction & land development | |||
Fair Value Disclosures | |||
Other real estate owned | 300 | 4,427 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | Home equity lines of credit | |||
Fair Value Disclosures | |||
Impaired loan on non-recurring basis | 1,245 | 1,346 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | Premises, held for sale | |||
Fair Value Disclosures | |||
Other real estate owned | $ 1,185 | $ 1,317 |
FAIR VALUE - NON-RECURRING LEVE
FAIR VALUE - NON-RECURRING LEVEL 3 MEASUREMENTS (Details) - Fair Value, Inputs, Level 3 - Nonrecurring basis - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Premises, held for sale | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,185 | $ 1,317 |
Adjustments determined by management for differences (as a percent) | 5.00% | 5.00% |
Premises, held for sale | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 5.00% | 5.00% |
Impaired Loans | Commercial real estate | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,839 | $ 2,615 |
Impaired Loans | Commercial real estate | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 0.00% | 0.00% |
Impaired Loans | Commercial real estate | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 58.00% | 9.00% |
Impaired Loans | Commercial real estate | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 19.00% | 2.00% |
Impaired Loans | Commercial real estate | Income approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,604 | $ 3,507 |
Adjustments determined by management for differences (as a percent) | 17.00% | |
Impaired Loans | Commercial real estate | Income approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 3.00% | |
Impaired Loans | Commercial real estate | Income approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 37.00% | |
Impaired Loans | Commercial real estate | Income approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 17.00% | 22.00% |
Impaired Loans | Residential Real Estate - Owner Occupied | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 3,631 | $ 1,678 |
Impaired Loans | Residential Real Estate - Owner Occupied | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 0.00% | 0.00% |
Impaired Loans | Residential Real Estate - Owner Occupied | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 53.00% | 33.00% |
Impaired Loans | Residential Real Estate - Owner Occupied | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 7.00% | 7.00% |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 689 | $ 702 |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 0.00% | 0.00% |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 1.00% | 33.00% |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 1.00% | 18.00% |
Impaired Loans | Home equity lines of credit | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,245 | $ 1,346 |
Impaired Loans | Home equity lines of credit | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 0.00% | 0.00% |
Impaired Loans | Home equity lines of credit | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 29.00% | 35.00% |
Impaired Loans | Home equity lines of credit | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 20.00% | 12.00% |
Other Real Estate Owned | Commercial real estate | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 19.00% | |
Other Real Estate Owned | Commercial real estate | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 442 | $ 1,378 |
Other Real Estate Owned | Commercial real estate | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 12.00% | 11.00% |
Other Real Estate Owned | Commercial real estate | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 23.00% | 14.00% |
Other Real Estate Owned | Commercial real estate | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 13.00% | 13.00% |
Other Real Estate Owned | Commercial real estate | Income approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,467 | |
Other Real Estate Owned | Commercial real estate | Income approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 19.00% | |
Other Real Estate Owned | Construction & land development | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 300 | $ 2,000 |
Adjustments determined by management for differences (as a percent) | 49.00% | |
Other Real Estate Owned | Construction & land development | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 13.00% | |
Other Real Estate Owned | Construction & land development | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 70.00% | |
Other Real Estate Owned | Construction & land development | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 49.00% | 38.00% |
Other Real Estate Owned | Construction & land development | Income approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 2,427 | |
Other Real Estate Owned | Construction & land development | Income approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 8.00% | |
Other Real Estate Owned | Construction & land development | Income approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 9.00% | |
Other Real Estate Owned | Construction & land development | Income approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 8.00% | |
Other Real Estate Owned | Residential Real Estate | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 128 | $ 1,916 |
Adjustments determined by management for differences (as a percent) | 18.00% | |
Other Real Estate Owned | Residential Real Estate | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 9.00% | |
Other Real Estate Owned | Residential Real Estate | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 23.00% | |
Other Real Estate Owned | Residential Real Estate | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for differences (as a percent) | 18.00% | 19.00% |
FAIR VALUE - IMPAIRED LOANS (De
FAIR VALUE - IMPAIRED LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Impaired loans | |||
Carrying amount of loans measured at fair value | $ 39,980 | $ 53,620 | $ 71,273 |
Valuation allowance | (5,427) | (5,564) | (6,674) |
Provision for Loan, Lease, and Other Losses [Abstract] | |||
Provision for Impaired Loans Collateral Dependent | 88 | 729 | $ 1,295 |
Nonrecurring basis | |||
Impaired loans | |||
Total fair value | 9,008 | 9,848 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | |||
Impaired loans | |||
Carrying amount of loans measured at fair value | 8,162 | 8,343 | |
Estimated selling costs considered in carrying amount | 946 | 1,505 | |
Valuation allowance | (100) | ||
Total fair value | $ 9,008 | $ 9,848 |
FAIR VALUE - OTHER REAL ESTATE
FAIR VALUE - OTHER REAL ESTATE OWNED (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($)item | |
Real Estate, Write-down or Reserve | |||
Other real estate carried at fair value | $ 870 | $ 9,188 | $ 8,418 |
Other real estate carried at cost | 350 | 2,055 | 8,684 |
Total Carrying value of other real estate owned | 1,220 | 11,243 | 17,102 |
Other real estate owned write-downs during the year | $ 1,257 | $ 3,101 | $ 1,824 |
Premises, Held for Sale | |||
Number of tranches carried at fair value | item | 0 | 0 | 0 |
Hudson, Florida banking center | |||
Premises, Held for Sale | |||
Fair value of assets held for sale | $ 1,000 | $ 1,000 | |
Write down of held for sale assets | $ 132 | $ 0 |
FAIR VALUE - CARRYING AMOUNTS A
FAIR VALUE - CARRYING AMOUNTS AND FV OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||
Securities available for sale | $ 517,058 | $ 435,911 |
Securities to be held to maturity | 39,196 | 45,807 |
Carrying Value | ||
Assets: | ||
Cash and cash equivalents | 210,082 | 72,878 |
Securities available for sale | 517,058 | 435,911 |
Securities to be held to maturity | 38,727 | 45,437 |
Mortgage loans held for sale | 4,083 | 6,388 |
Other loans held for sale | 514 | |
Loans, net | 3,299,119 | 3,016,085 |
Federal Home Loan Bank stock | 28,208 | 28,208 |
Accrued interest receivable | 9,233 | 8,807 |
Liabilities: | ||
Securities sold under agreements to repurchase and other short-term borrowings | 395,433 | 356,108 |
Federal Home Loan Bank advances | 699,500 | 707,500 |
Subordinated note | 41,240 | 41,240 |
Accrued interest payable | 1,229 | 1,262 |
Carrying Value | Non Interest Bearing Deposits | ||
Liabilities: | ||
Deposit liabilities, fair value | 634,863 | 502,569 |
Carrying Value | Transaction deposits | ||
Liabilities: | ||
Deposit liabilities, fair value | 1,601,647 | 1,290,400 |
Carrying Value | Time deposits. | ||
Liabilities: | ||
Deposit liabilities, fair value | 250,967 | 265,213 |
Total Fair Value | ||
Assets: | ||
Cash and cash equivalents | 210,082 | 72,878 |
Securities available for sale | 517,058 | 435,911 |
Securities to be held to maturity | 39,196 | 45,807 |
Mortgage loans held for sale | 4,083 | 6,388 |
Other loans held for sale | 514 | |
Loans, net | 3,332,608 | 3,045,443 |
Accrued interest receivable | 9,233 | 8,807 |
Liabilities: | ||
Securities sold under agreements to repurchase and other short-term borrowings | 395,433 | 356,108 |
Federal Home Loan Bank advances | 708,722 | 721,346 |
Subordinated note | 33,358 | 41,198 |
Accrued interest payable | 1,229 | 1,262 |
Total Fair Value | Non Interest Bearing Deposits | ||
Liabilities: | ||
Deposit liabilities, fair value | 634,863 | 502,569 |
Total Fair Value | Transaction deposits | ||
Liabilities: | ||
Deposit liabilities, fair value | 1,601,647 | 1,290,400 |
Total Fair Value | Time deposits. | ||
Liabilities: | ||
Deposit liabilities, fair value | 250,882 | 265,858 |
Total Fair Value | Fair Value, Inputs, Level 1 | ||
Assets: | ||
Cash and cash equivalents | 210,082 | 72,878 |
Securities available for sale | 1,011 | 1,018 |
Total Fair Value | Fair Value, Inputs, Level 2 | ||
Assets: | ||
Securities available for sale | 507,510 | 429,643 |
Securities to be held to maturity | 39,196 | 45,807 |
Mortgage loans held for sale | 4,083 | 6,388 |
Other loans held for sale | 514 | |
Accrued interest receivable | 9,233 | 8,807 |
Liabilities: | ||
Securities sold under agreements to repurchase and other short-term borrowings | 395,433 | 356,108 |
Federal Home Loan Bank advances | 708,722 | 721,346 |
Subordinated note | 33,358 | 41,198 |
Accrued interest payable | 1,229 | 1,262 |
Total Fair Value | Fair Value, Inputs, Level 2 | Non Interest Bearing Deposits | ||
Liabilities: | ||
Deposit liabilities, fair value | 634,863 | 502,569 |
Total Fair Value | Fair Value, Inputs, Level 2 | Transaction deposits | ||
Liabilities: | ||
Deposit liabilities, fair value | 1,601,647 | 1,290,400 |
Total Fair Value | Fair Value, Inputs, Level 2 | Time deposits. | ||
Liabilities: | ||
Deposit liabilities, fair value | 250,882 | 265,858 |
Total Fair Value | Fair Value, Inputs, Level 3 | ||
Assets: | ||
Securities available for sale | 8,537 | 5,250 |
Loans, net | $ 3,332,608 | $ 3,045,443 |
MORTGAGE BANKING ACTIVITIES - M
MORTGAGE BANKING ACTIVITIES - MORTGAGE LOANS HELD FOR SALE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Activity for mortgage loans held for sale | |||
Balance, beginning of year | $ 6,388 | $ 3,506 | $ 10,614 |
Origination of mortgage loans held for sale | 160,989 | 82,457 | 291,155 |
Proceeds from the sale of mortgage loans held for sale | (167,209) | (82,015) | (305,242) |
Net gain on sale of mortgage loans held for sale | 3,915 | 2,440 | 6,979 |
Balance, end of year | 4,083 | 6,388 | $ 3,506 |
FHLMC | |||
Activity for mortgage loans held for sale | |||
Custodial escrow account balances maintained in connection with serviced loans | 6,000 | 7,000 | |
Balance, beginning of year | 875,000 | ||
Balance, end of year | $ 883,000 | $ 875,000 |
MORTGAGE BANKING ACTIVITIES - C
MORTGAGE BANKING ACTIVITIES - COMPONENTS OF INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Mortgage servicing rights | |||
Net gain realized on sale of mortgage loans held for sale | $ 3,882 | $ 2,278 | $ 8,258 |
Net gain recognized | 3,915 | 2,440 | 6,979 |
Loan servicing income | 1,896 | 1,752 | 2,107 |
Amortization of mortgage servicing rights | (1,400) | (1,330) | (2,173) |
Change in mortgage servicing rights valuation allowance | 345 | ||
Net servicing income recognized | 496 | 422 | 279 |
Total Mortgage Banking income | 4,411 | 2,862 | 7,258 |
Mortgage loans held for sale | |||
Mortgage servicing rights | |||
Net change in fair value | (33) | 34 | (488) |
Rate lock loan commitments | |||
Mortgage servicing rights | |||
Net change in fair value | 57 | 173 | (756) |
Mandatory forward contracts | |||
Mortgage servicing rights | |||
Net change in fair value | $ 9 | $ (45) | $ (35) |
MORTGAGE BANKING ACTIVITIES -99
MORTGAGE BANKING ACTIVITIES - CAPITALIZED MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
MORTGAGE BANKING ACTIVITIES | |||
Balance, beginning of year | $ 4,813 | $ 5,409 | $ 4,777 |
Additions | 1,499 | 734 | 2,460 |
Amortized to expense | (1,400) | (1,330) | (2,173) |
Change in valuation allowance | 345 | ||
Balance, end of year | $ 4,912 | $ 4,813 | $ 5,409 |
MORTGAGE BANKING ACTIVITIES - V
MORTGAGE BANKING ACTIVITIES - VALUATION ALLOWANCE FOR CAPITALIZED MSRS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Activity for the valuation allowance for capitalized mortgage servicing rights | |
Balance, beginning of year | $ (345) |
Reductions credited to operations | $ 345 |
MORTGAGE BANKING ACTIVITIES - O
MORTGAGE BANKING ACTIVITIES - OTHER INFORMATION RELATING TO MSRS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Mortgage Servicing Rights | ||
Fair value of mortgage servicing rights portfolio | $ 7,242 | $ 6,651 |
Discount rate (as percent) | 10.00% | 10.00% |
Weighted average default rate (as percent) | 1.50% | 1.50% |
Weighted average life in years | 6 years 4 months 17 days | 5 years 8 months 12 days |
Minimum | ||
Mortgage Servicing Rights | ||
Monthly prepayment rate of unpaid principle balance (as percent) | 105.00% | 95.00% |
Maximum | ||
Mortgage Servicing Rights | ||
Monthly prepayment rate of unpaid principle balance (as percent) | 369.00% | 462.00% |
MORTGAGE BANKING ACTIVITIES - A
MORTGAGE BANKING ACTIVITIES - AMORTIZATION EXPENSE OF MSR PORTFOLIO (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Estimated future amortization expense of the MSR portfolio (net of the impairment charge) | |
2,016 | $ 938 |
2,017 | 933 |
2,018 | 922 |
2,019 | 832 |
2,020 | 570 |
2,021 | 487 |
2,022 | 230 |
Total | $ 4,912 |
MORTGAGE BANKING ACTIVITIES - N
MORTGAGE BANKING ACTIVITIES - NOTIONAL AMOUNTS AND FV (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | ||
Derivative instruments expiration period | 90 days | |
Mortgage loans held for sale | ||
Information about derivatives and swaps | ||
Notional Amount, Assets | $ 3,993 | $ 6,265 |
Fair Value, Assets | 4,083 | 6,388 |
Rate lock loan commitments | ||
Information about derivatives and swaps | ||
Notional Amount, Assets | 21,580 | 12,866 |
Fair Value, Assets | 306 | 250 |
Mandatory forward contracts | ||
Information about derivatives and swaps | ||
Notional Amount, Liabilities | 19,232 | 13,181 |
Fair Value, Liabilities | $ 25 | $ 33 |
INTEREST RATE SWAPS - CASH FLOW
INTEREST RATE SWAPS - CASH FLOW HEDGES (Details) - Interest rate swap - Cash flow hedge $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013item | |
Derivative [Line Items] | |||
Number of derivative agreements | item | 2 | ||
Summary information about interest rate swaps | |||
Notional amount | $ 20,000 | ||
Assets / (Liabilities) | (600) | $ (488) | |
Unrealized gain (loss) in accumulated OCI | (390) | (316) | |
1-month LIBOR | |||
Summary information about interest rate swaps | |||
Notional amount | $ 10,000 | ||
Pay rate (as a percent) | 2.17% | ||
Assets / (Liabilities) | $ (289) | (232) | |
Unrealized gain (loss) in accumulated OCI | (188) | (150) | |
3-month LIBOR | |||
Summary information about interest rate swaps | |||
Notional amount | $ 10,000 | ||
Pay rate (as a percent) | 2.33% | ||
Assets / (Liabilities) | $ (311) | (256) | |
Unrealized gain (loss) in accumulated OCI | $ (202) | $ (166) |
INTEREST RATE SWAPS - INTEREST
INTEREST RATE SWAPS - INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
INTEREST RATE SWAPS | |||
Interest expense on deposits related to money market swap transaction | $ 198 | $ 201 | $ 16 |
Interest expense on FHLB Advances related to FHLB swap transaction | 204 | 223 | 7 |
Total interest expense on swap transaction | $ 402 | $ 424 | $ 23 |
INTEREST RATE SWAPS - GAINS (LO
INTEREST RATE SWAPS - GAINS (LOSSES) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
INTEREST RATE SWAPS | |||
Gains (Losses) Recognized in OCI on derivative (effective portion) | $ (514,000) | $ (1,082,000) | $ 147,000 |
Losses reclassified from OCI on derivative (effective portion) | (402,000) | $ (424,000) | $ (23,000) |
Expected reclassification amount for derivative losses realized in income | $ 308,000 |
INTEREST RATE SWAPS - NON-HEDGE
INTEREST RATE SWAPS - NON-HEDGE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Information about derivatives and swaps | ||
Fair value of investment securities pledged as collateral | $ 490,074,000 | $ 410,307,000 |
Counterparty | ||
Information about derivatives and swaps | ||
Fair value of investment securities pledged as collateral | 1,500,000 | $ 734,000 |
Counterparty | Minimum | ||
Information about derivatives and swaps | ||
Unrealized Gain (Loss) on Derivatives | 250,000 | |
Interest rate swap | Non-Hedge | ||
Information about derivatives and swaps | ||
Notional amount | 51,854,000 | |
Interest rate swap | Non-Hedge | Bank Clients | ||
Information about derivatives and swaps | ||
Notional amount | 25,927,000 | |
Fair Value | 400,000 | |
Interest rate swap | Non-Hedge | Counterparty | ||
Information about derivatives and swaps | ||
Notional amount | 25,927,000 | |
Fair Value | $ (400,000) |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
PREMISES AND EQUIPMENT | ||||
Total premises and equipment | $ 77,213,000 | $ 82,925,000 | ||
Less: Accumulated depreciation and amortization | 47,292,000 | 49,938,000 | ||
Premises and equipment, net | 29,921,000 | 32,987,000 | ||
Real Estate Held-for-sale | 1,185,000 | 1,317,000 | ||
Depreciation expense | 6,742,000 | 6,363,000 | $ 5,311,000 | |
Land | ||||
PREMISES AND EQUIPMENT | ||||
Total premises and equipment | 3,055,000 | 3,477,000 | ||
Buildings and improvements | ||||
PREMISES AND EQUIPMENT | ||||
Total premises and equipment | 24,262,000 | 27,112,000 | ||
Furniture, fixtures and equipment | ||||
PREMISES AND EQUIPMENT | ||||
Total premises and equipment | 34,066,000 | 36,478,000 | ||
Leasehold improvements | ||||
PREMISES AND EQUIPMENT | ||||
Total premises and equipment | 15,830,000 | 15,586,000 | ||
Construction in progress | ||||
PREMISES AND EQUIPMENT | ||||
Total premises and equipment | $ 272,000 | |||
Florida | ||||
PREMISES AND EQUIPMENT | ||||
Real Estate Held-for-sale | $ 1,000,000 | |||
Kentucky | Premises | ||||
PREMISES AND EQUIPMENT | ||||
Premises and equipment, net | $ 1,000,000 | |||
Gain on the transaction | $ 28,000 |
GOODWILL AND CORE DEPOSIT IN109
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS - GOODWILL (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Balance for goodwill | ||
Beginning of year | $ 10,168 | $ 10,168 |
End of year | $ 10,168 | $ 10,168 |
GOODWILL AND CORE DEPOSIT IN110
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS - INTANGIBLES (Details) | 12 Months Ended |
Dec. 31, 2013USD ($) | |
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | |
Aggregate core deposit intangible amortization expense | $ 510,000 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deposit Liabilities | ||
Demand | $ 783,054 | $ 691,787 |
Savings | 117,408 | 91,625 |
Time deposits, $250 and over | 42,775 | 56,556 |
Total interest-bearing deposits | 1,852,614 | 1,555,613 |
Total non interest-bearing deposits | 634,863 | 502,569 |
Total deposits | 2,487,477 | 2,058,182 |
Scheduled maturities of all time deposits, including brokered certificates of deposit | ||
2,016 | 119,302 | |
2,017 | 27,097 | |
2,018 | 30,108 | |
2,019 | 35,728 | |
2,020 | 38,732 | |
Time Deposits, Total | $ 250,967 | |
Weighted Average Rate | ||
2,016 | 0.54% | |
2,017 | 0.77% | |
2,018 | 1.44% | |
2,019 | 1.92% | |
2,020 | 1.86% | |
Total | 1.07% | |
Brokered Deposits | ||
Deposit Liabilities | ||
Money market accounts | $ 200,126 | 35,649 |
Certificates of deposit | 44,298 | 75,876 |
Individual Deposits | ||
Deposit Liabilities | ||
Money market accounts | 501,059 | 471,339 |
Individual retirement accounts | 36,016 | 28,771 |
Time deposits, $250 and over | 42,775 | 56,556 |
Other certificates of deposit | $ 127,878 | $ 104,010 |
SECURITIES SOLD UNDER AGREEM112
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Securities sold under agreements to repurchase | |||
Securities pledged more than repurchase agreements (as a percent) | 2.00% | ||
Outstanding balance at end of year | $ 395,433 | $ 356,108 | |
Weighted average interest rate at end of period (as a percent) | 0.02% | 0.04% | |
Fair Value of securities pledged | $ 458,194 | $ 378,478 | |
Average outstanding balance during the period | $ 379,477 | $ 296,196 | $ 170,386 |
Average interest rate during the period (as a percent) | 0.02% | 0.04% | 0.04% |
Maximum outstanding at any month end during the period | $ 442,981 | $ 408,891 | $ 242,721 |
U.S. Treasury securities and U.S. Government agencies | |||
Securities sold under agreements to repurchase | |||
Fair Value of securities pledged | 244,707 | 121,378 | |
Mortgage backed securities - residential | |||
Securities sold under agreements to repurchase | |||
Fair Value of securities pledged | 82,666 | 105,144 | |
Collateralized mortgage obligations | |||
Securities sold under agreements to repurchase | |||
Fair Value of securities pledged | $ 130,821 | $ 151,956 |
FEDERAL HOME LOAN BANK ADVAN113
FEDERAL HOME LOAN BANK ADVANCES - FHLB ADVANCES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
FHLB advances | ||
Total FHLB advances | $ 699,500 | $ 707,500 |
Weighted average interest rate (as percent) | 1.77% | |
Additional collateralized advances available | $ 567,000 | 452,000 |
Overnight advance | ||
FHLB advances | ||
Total FHLB advances | 150,000 | 198,000 |
Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% due on December 20, 2016 | ||
FHLB advances | ||
Total FHLB advances | $ 10,000 | 10,000 |
Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% due on December 20, 2016 | London Interbank Offered Rate (LIBOR) | ||
FHLB advances | ||
Interest rate (as percent) | 0.14% | |
Fixed interest rate advances with a weighted average interest rate of 1.68% due through 2023 | ||
FHLB advances | ||
Total FHLB advances | $ 439,500 | 399,500 |
Interest rate (as percent) | 1.68% | |
Putable fixed interest rate advances with a weighted average interest rate of 4.39% due through 2017 | ||
FHLB advances | ||
Total FHLB advances | $ 100,000 | $ 100,000 |
Interest rate (as percent) | 4.39% | |
Putable fixed interest rate advances with a weighted average interest rate of 4.39% due through 2017 | Minimum | ||
FHLB advances | ||
Original fixed rate periods | 1 year | |
Original maturities | 3 years | |
Putable fixed interest rate advances with a weighted average interest rate of 4.39% due through 2017 | Maximum | ||
FHLB advances | ||
Original fixed rate periods | 5 years | |
Original maturities | 10 years | |
Various other unsecured lines of credit | ||
FHLB advances | ||
Unsecured lines of credit | $ 170,000 |
FEDERAL HOME LOAN BANK ADVAN114
FEDERAL HOME LOAN BANK ADVANCES - MATURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
FEDERAL HOME LOAN BANK ADVANCES | ||
2016 (Overnight) | $ 150,000 | |
2,016 | 92,000 | |
2,017 | 145,000 | |
2,018 | 117,500 | |
2,019 | 100,000 | |
2,020 | 65,000 | |
2,021 | 20,000 | |
Thereafter | 10,000 | |
Total | $ 699,500 | $ 707,500 |
Weighted Average Rate | ||
2016 (Overnight) | 0.35% | |
2,016 | 1.64% | |
2,017 | 3.44% | |
2,018 | 1.53% | |
2,019 | 1.80% | |
2,020 | 1.78% | |
2,021 | 1.86% | |
Thereafter | 2.14% | |
Total | 1.77% |
FEDERAL HOME LOAN BANK ADVAN115
FEDERAL HOME LOAN BANK ADVANCES - SHORT-TERM FHLB ADVANCES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
FHLB advances | ||
Federal Home Loan Bank advances | $ 699,500 | $ 707,500 |
Weighted average interest rate (as percent) | 1.77% | |
Federal Home Loan Bank overnight advances | ||
FHLB advances | ||
Federal Home Loan Bank advances | $ 150,000 | $ 198,000 |
Weighted average interest rate (as percent) | 0.35% | 0.14% |
Average outstanding balance during the period | $ 63,327 | $ 15,756 |
Average interest rate during the period (as percent) | 0.17% | 0.20% |
Maximum outstanding at any month end during the period | $ 387,000 | $ 198,000 |
FEDERAL HOME LOAN BANK ADVAN116
FEDERAL HOME LOAN BANK ADVANCES - LOANS PLEDGED (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
First lien, single family residential real estate | ||
Real estate loans pledged to collateralize advances and letters of credit with the FHLB | ||
Real estate loans pledged to collateralize advances and letters of credit with FHLB | $ 1,346,663 | $ 1,333,811 |
Home equity lines of credit | ||
Real estate loans pledged to collateralize advances and letters of credit with the FHLB | ||
Real estate loans pledged to collateralize advances and letters of credit with FHLB | 272,863 | 103,064 |
Multi-family commercial real estate | ||
Real estate loans pledged to collateralize advances and letters of credit with the FHLB | ||
Real estate loans pledged to collateralize advances and letters of credit with FHLB | $ 10,227 | $ 12,682 |
SUBORDINATED NOTE (Details)
SUBORDINATED NOTE (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | |
Trust preferred security | |||
Subordinated note | |||
Proceeds from issuance of trust preferred securities | $ 40 | ||
Subordinated debentures | |||
Subordinated note | |||
Interest rate on subordinate note (as a percent) | 6.015% | ||
Subordinated debentures | London Interbank Offered Rate (LIBOR) | |||
Subordinated note | |||
Description of variable rate basis | LIBOR | ||
Variable spread on debt security (as a percent) | 1.42% |
INCOME TAXES - PROVISION AND DE
INCOME TAXES - PROVISION AND DEFERRED TAX (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current expense: | |||||||||||||||
Federal | $ 18,108 | $ 22,143 | $ 20,668 | ||||||||||||
State | 1,125 | 2,469 | 2,167 | ||||||||||||
Deferred expense: | |||||||||||||||
Federal | (1,262) | (8,637) | (7,395) | ||||||||||||
State | 107 | (447) | (365) | ||||||||||||
Total | $ 3,844 | $ 3,119 | $ 4,154 | $ 6,961 | $ 2,649 | $ 3,008 | $ 3,332 | $ 6,539 | $ 1,676 | $ 2,950 | $ 2,827 | $ 7,622 | $ 18,078 | $ 15,528 | $ 15,075 |
Effective tax rate that differs from that computed at the federal statutory rate | |||||||||||||||
Federal statutory rate times financial statement income | 35.00% | 35.00% | 35.00% | ||||||||||||
Effect of: | |||||||||||||||
State taxes, net of federal benefit (as a percent) | 1.50% | 2.96% | 2.89% | ||||||||||||
General business tax credits (as a percent) | (0.43%) | (0.67%) | (0.73%) | ||||||||||||
Nontaxable income | (2.68%) | (2.80%) | (1.63%) | ||||||||||||
Other, net (as a percent) | 0.56% | 0.55% | 1.69% | ||||||||||||
Effective tax rate | 33.95% | 35.04% | 37.22% | ||||||||||||
Deferred tax assets: | |||||||||||||||
Allowance for loan and leases losses | 9,595 | 8,439 | $ 9,595 | $ 8,439 | |||||||||||
Accrued expenses | 3,913 | 3,109 | 3,913 | 3,109 | |||||||||||
Net operating loss carryforward | 1,574 | 1,532 | 1,574 | 1,532 | |||||||||||
Depreciation | 1,289 | 1,342 | 1,289 | 1,342 | |||||||||||
Other-than-temporary impairment | 750 | 754 | 750 | 754 | |||||||||||
Partnership losses | 842 | 602 | 842 | 602 | |||||||||||
OREO Writedowns | 20 | 1,386 | 20 | 1,386 | |||||||||||
Fair value of cash flow hedges | 210 | 170 | 210 | 170 | |||||||||||
Other | 2,061 | 2,051 | 2,061 | 2,051 | |||||||||||
Total deferred tax assets | 20,254 | 19,385 | 20,254 | 19,385 | |||||||||||
Deferred tax liabilities: | |||||||||||||||
Unrealized investment securities gains | (1,314) | (2,494) | (1,314) | (2,494) | |||||||||||
Federal Home Loan Bank dividends | (4,315) | (4,341) | (4,315) | (4,341) | |||||||||||
Deferred loan fees | (317) | (573) | (317) | (573) | |||||||||||
Mortgage servicing rights | (1,781) | (1,755) | (1,781) | (1,755) | |||||||||||
Bargain purchase gain | (552) | (741) | (552) | (741) | |||||||||||
New market tax credits | (707) | (823) | (707) | (823) | |||||||||||
Other | (374) | (288) | (374) | (288) | |||||||||||
Total deferred tax liabilities | (9,360) | (11,015) | (9,360) | (11,015) | |||||||||||
Less: Valuation allowance | (1,564) | (1,415) | (1,564) | (1,415) | |||||||||||
Net deferred tax asset (liability) | $ 9,330 | $ 6,955 | $ 9,330 | $ 6,955 |
INCOME TAXES - OPERATING LOSS C
INCOME TAXES - OPERATING LOSS CARRYFORWARD (Details) $ in Millions | Dec. 31, 2015USD ($) |
Kentucky | |
Net operating loss carry forward | |
Net operating loss carry forward, amount | $ 25 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance, beginning of year | $ 1,977 | $ 1,381 | $ 595 |
Additions based on tax related to the current year | 109 | 81 | 39 |
Additions for tax positions of prior years | 15 | 750 | 783 |
Reductions due to the statute of limitations | (301) | (235) | (36) |
Balance, end of year | 1,800 | 1,977 | 1,381 |
Amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods | 1,200 | ||
Amount of interest and penalties | |||
Interest and penalties recorded in the income statement | 19 | 260 | 401 |
Interest and penalties accrued | $ 847 | $ 827 | $ 567 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
EARNINGS PER SHARE | |||||||||||||||
Net income | $ 7,418 | $ 5,640 | $ 8,320 | $ 13,788 | $ 5,235 | $ 5,246 | $ 6,322 | $ 11,984 | $ 1,345 | $ 4,603 | $ 6,119 | $ 13,356 | $ 35,166 | $ 28,787 | $ 25,423 |
Weighted average shares outstanding | 20,861 | 20,804 | 20,807 | ||||||||||||
Effect of dilutive securities (in shares) | 81 | 95 | 97 | ||||||||||||
Average shares outstanding including dilutive securities | 20,942 | 20,899 | 20,904 | ||||||||||||
Diluted earnings per share: | |||||||||||||||
Antidilutive stock options (in shares) | 318,400 | 16,250 | 18,000 | ||||||||||||
Weighted Average | |||||||||||||||
Diluted earnings per share: | |||||||||||||||
Average antidilutive stock options (in shares) | 216,621 | 15,419 | 15,667 | ||||||||||||
Class A Common Stock | |||||||||||||||
EARNINGS PER SHARE | |||||||||||||||
Cash dividend premium per share (as a percent) | 10.00% | ||||||||||||||
Basic earnings per share: | |||||||||||||||
Basic earnings per share | $ 0.36 | $ 0.27 | $ 0.40 | $ 0.66 | $ 0.25 | $ 0.25 | $ 0.31 | $ 0.58 | $ 0.07 | $ 0.22 | $ 0.30 | $ 0.64 | $ 1.70 | $ 1.39 | $ 1.23 |
Diluted earnings per share: | |||||||||||||||
Diluted earnings per share | 0.36 | 0.27 | 0.40 | 0.66 | 0.25 | 0.25 | 0.30 | 0.58 | 0.07 | 0.22 | 0.30 | 0.64 | 1.70 | 1.38 | 1.22 |
Class B Common Stock | |||||||||||||||
Basic earnings per share: | |||||||||||||||
Basic earnings per share | 0.33 | 0.25 | 0.37 | 0.65 | 0.24 | 0.24 | 0.29 | 0.56 | 0.05 | 0.21 | 0.28 | 0.63 | 1.55 | 1.32 | 1.17 |
Diluted earnings per share: | |||||||||||||||
Diluted earnings per share | $ 0.33 | $ 0.25 | $ 0.36 | $ 0.64 | $ 0.24 | $ 0.24 | $ 0.29 | $ 0.56 | $ 0.05 | $ 0.21 | $ 0.28 | $ 0.62 | $ 1.54 | $ 1.32 | $ 1.16 |
STOCKHOLDERS' EQUITY AND REG122
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS - EQUITY (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($)item | |
Dividend Restrictions | |
Number of previous years retained profit considered for dividend payment | 2 years |
Amount of dividend that can be declared without prior approval | $ | $ 43 |
Class A Common Stock | |
Common Stock | |
Dividends common stock cash as percentage of cash dividend paid on Class B common stock | 110.00% |
Number of votes per share | 1 |
Class B Common Stock | |
Common Stock | |
Number of votes per share | 10 |
STOCKHOLDERS' EQUITY AND REG123
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS - REGULATORY (Details) $ in Thousands | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) |
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | ||
Number of classifications | item | 5 | |
Republic Bancorp, Inc. | ||
Actual Amount | ||
Total capital to risk weighted assets | $ 631,820 | $ 608,658 |
Common equity tier 1 capital to risk weighted assets | 564,329 | |
Tier 1 (core) capital to risk weighted assets | 604,329 | 584,248 |
Tier 1 leverage capital to average assets | $ 604,329 | $ 584,248 |
Actual Ratio | ||
Total capital to risk weighted assets (as a percent) | 20.58% | 22.17% |
Common equity tier 1 capital to risk weighted assets (as a percent) | 18.39% | |
Tier 1 (core) capital to risk weighted assets (as a percent) | 19.69% | 21.28% |
Tier 1 leverage capital to average assets (as a percent) | 14.82% | 15.92% |
Minimum Requirement for Capital Adequacy Purposes Amount | ||
Total capital to risk weighted assets | $ 245,556 | $ 219,654 |
Common equity Tier 1 capital to risk weighted assets | 138,125 | |
Tier 1 (core) capital to risk weighted assets | 184,167 | 109,827 |
Tier 1 leverage capital to average assets | $ 163,114 | $ 146,765 |
Minimum Requirement for Capital Adequacy Purposes Ratio | ||
Total capital to risk weighted assets (as a percent) | 8.00% | 8.00% |
Common equity tier 1 capital to risk weighted assets (as a percent) | 4.50% | |
Tier 1 (core) capital to risk weighted assets (as a percent) | 6.00% | 4.00% |
Tier 1 leverage capital to average assets (as a percent) | 4.00% | 4.00% |
Republic Bank & Trust Co. | ||
Actual Amount | ||
Total capital to risk weighted assets | $ 494,575 | $ 472,357 |
Common equity tier 1 capital to risk weighted assets | 467,084 | |
Tier 1 (core) capital to risk weighted assets | 467,084 | 447,947 |
Tier 1 leverage capital to average assets | $ 467,084 | $ 447,947 |
Actual Ratio | ||
Total capital to risk weighted assets (as a percent) | 16.12% | 17.21% |
Common equity tier 1 capital to risk weighted assets (as a percent) | 15.23% | |
Tier 1 (core) capital to risk weighted assets (as a percent) | 15.23% | 16.32% |
Tier 1 leverage capital to average assets (as a percent) | 11.46% | 12.21% |
Minimum Requirement for Capital Adequacy Purposes Amount | ||
Total capital to risk weighted assets | $ 245,426 | $ 219,526 |
Common equity Tier 1 capital to risk weighted assets | 138,052 | |
Tier 1 (core) capital to risk weighted assets | 184,069 | 109,763 |
Tier 1 leverage capital to average assets | $ 163,018 | $ 146,698 |
Minimum Requirement for Capital Adequacy Purposes Ratio | ||
Total capital to risk weighted assets (as a percent) | 8.00% | 8.00% |
Common equity tier 1 capital to risk weighted assets (as a percent) | 4.50% | |
Tier 1 (core) capital to risk weighted assets (as a percent) | 6.00% | 4.00% |
Tier 1 leverage capital to average assets (as a percent) | 4.00% | 4.00% |
Minimum Requirement to be Well Capitalized Under Prompt Corrective Action Provisions Amount | ||
Total capital to risk weighted assets | $ 306,782 | $ 274,408 |
Common equity Tier 1 capital to risk weighted assets | 199,408 | |
Tier 1 (core) capital to risk weighted assets | 245,426 | 164,645 |
Tier 1 leverage capital to average assets | $ 203,772 | $ 183,372 |
Minimum Requirement to be Well Capitalized Under Prompt Corrective Action Provisions Ratio | ||
Total capital to risk weighted assets (as a percent) | 10.00% | 10.00% |
Common equity tier 1 capital to risk weighted assets (as a percent) | 6.50% | |
Tier 1 (core) capital to risk weighted assets (as a percent) | 8.00% | 6.00% |
Tier 1 leverage capital to average assets (as a percent) | 5.00% | 5.00% |
Implementation of Basel III regulatory capital reforms and changes required by the Dodd-Frank Act | ||
Minimum Requirement to be Well Capitalized Under Prompt Corrective Action Provisions Ratio | ||
Total capital to risk weighted assets (as a percent) | 10.00% | |
Common equity tier 1 capital to risk weighted assets (as a percent) | 6.50% | |
Tier 1 (core) capital to risk weighted assets (as a percent) | 8.00% | |
Tier 1 leverage capital to average assets (as a percent) | 5.00% |
STOCK PLANS AND STOCK BASED 124
STOCK PLANS AND STOCK BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | |
STOCK PLANS AND STOCK BASED COMPENSATION | |||||
Number of shares available for grant permitted by plan | 3,000,000 | ||||
Weighted average assumptions used to determined fair value of stock options granted | |||||
Risk-free interest rate (as a percent) | 1.54% | 2.11% | 0.80% | ||
Expected dividend yield (as a percent) | 3.06% | 3.18% | 2.95% | ||
Expected stock price volatility (as a percent) | 22.66% | 30.20% | 31.95% | ||
Expected life of options | 5 years | 6 years | 6 years | ||
Estimated fair value per share (in dollars per share) | $ 3.58 | $ 5.16 | $ 5.21 | ||
Estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | |||||
2,016 | $ 554,000 | ||||
2,017 | 526,000 | ||||
2,018 | 382,000 | ||||
2,019 | 156,000 | ||||
2,020 | 38,000 | ||||
2,021 | 2,000 | ||||
Total | $ 1,658,000 | ||||
Minimum | |||||
STOCK PLANS AND STOCK BASED COMPENSATION | |||||
Vesting period | 3 years | ||||
Exercisable period | 5 years | ||||
Maximum | |||||
STOCK PLANS AND STOCK BASED COMPENSATION | |||||
Exercisable period | 6 years | ||||
Stock option | |||||
STOCK PLANS AND STOCK BASED COMPENSATION | |||||
Exercisable period | 1 year | ||||
Number of options outstanding (in shares) | 155,000 | 327,500 | 327,500 | 323,400 | 155,000 |
Options | |||||
Outstanding, beginning of year (in shares) | 155,000 | 327,500 | |||
Granted (in shares) | 323,400 | 1,000 | |||
Exercised (in shares) | (97,750) | (90,500) | |||
Forfeited or expired (in shares) | (57,250) | (83,000) | |||
Outstanding, end of year (in shares) | 323,400 | 155,000 | 327,500 | ||
Fully vested and expected to vest (in shares) | 323,400 | ||||
Exercisable (vested) at end of year (in shares) | 4,000 | ||||
Weighted Average Exercise Price | |||||
Outstanding, beginning of year (in dollars per share) | $ 20.15 | $ 20.03 | |||
Granted (in dollars per share) | 24.51 | 23.50 | |||
Exercised (in dollars per share) | 19.77 | 19.78 | |||
Forfeited or expired (in dollars per share) | 21.43 | 20.09 | |||
Outstanding, end of year (in dollars per share) | $ 24.40 | $ 20.15 | $ 20.03 | ||
Fully vested and expected to vest (in dollars per share) | $ 24.40 | ||||
Exercisable (vested) at end of year (in dollars per share) | $ 20.12 | ||||
Weighted Average Remaining Contractual Term | |||||
Outstanding, end of year | 4 years 8 months 12 days | 1 year 1 month 21 days | |||
Fully vested and expected to vest | 4 years 8 months 12 days | ||||
Exercisable (vested) at end of year | 1 month 28 days | ||||
Aggregate Intrinsic Value | |||||
Outstanding, end of year | $ 650,000 | $ 710,000 | |||
Fully vested and expected to vest | 650,000 | ||||
Exercisable (vested) at end of year | 25,000 | ||||
Information related to the stock option plan | |||||
Intrinsic value of options exercised | $ 581,000 | $ 356,000 | $ 131,000 | ||
Cash received from options exercised, net of shares redeemed | 1,136,000 | 1,103,000 | 467,000 | ||
Total fair value of options granted | 1,159,000 | 5,000 | 31,000 | ||
Information related to stock option and restricted stock awards granted | |||||
Expenses | $ 169,000 | $ 53,000 | $ 205,000 | ||
Estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | |||||
2,016 | 264,000 | ||||
2,017 | 261,000 | ||||
2,018 | 259,000 | ||||
2,019 | 144,000 | ||||
2,020 | 30,000 | ||||
Total | 958,000 | ||||
Stock option | Non-executive officer employees | |||||
Information related to the stock option plan | |||||
Outstanding loans | $ 660,000 | $ 471,000 | |||
Stock option | Class B Common Stock | |||||
Options | |||||
Exercisable (vested) at end of year (in shares) | 0 | ||||
Restricted Stock Awards | |||||
Weighted Average Exercise Price | |||||
Outstanding, beginning of year (in dollars per share) | $ 19.85 | $ 19.85 | |||
Granted (in dollars per share) | 25.19 | ||||
Forfeited or expired (in dollars per share) | 19.85 | $ 19.85 | |||
Earned and issued | 19.85 | ||||
Outstanding, end of year (in dollars per share) | $ 20.02 | $ 19.85 | $ 19.85 | ||
Shares | |||||
Outstanding, beginning of year (in shares) | 80,500 | 87,000 | |||
Granted (in shares) | 2,500 | ||||
Forfeited or expired (in shares) | (4,000) | (1,500) | |||
Earned and issued (in shares) | (5,000) | ||||
Outstanding, end of year (in shares) | 79,000 | 80,500 | 87,000 | ||
Information related to stock option and restricted stock awards granted | |||||
Expenses | $ 253,000 | $ 405,000 | $ 298,000 | ||
Estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | |||||
2,016 | $ 290,000 | ||||
2,017 | 265,000 | ||||
2,018 | 123,000 | ||||
2,019 | 12,000 | ||||
2,020 | 8,000 | ||||
2,021 | 2,000 | ||||
Total | $ 700,000 | ||||
Restricted Stock Awards | Minimum | |||||
STOCK PLANS AND STOCK BASED COMPENSATION | |||||
Vesting period | 5 years | ||||
Shares | |||||
Unrecognized compensation expense recognition period | 5 years | ||||
Restricted Stock Awards | Maximum | |||||
STOCK PLANS AND STOCK BASED COMPENSATION | |||||
Vesting period | 6 years | ||||
Shares | |||||
Unrecognized compensation expense recognition period | 6 years |
STOCK PLANS AND STOCK BASED 125
STOCK PLANS AND STOCK BASED COMPENSATION - ADDITIONAL DISCLOSURES (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Shares Deferred | |||
Balance, beginning of period (in shares) | 58,604 | 53,136 | 50,414 |
Awarded (in shares) | 8,586 | 7,783 | 7,768 |
Released (in shares) | (4,937) | (2,315) | (5,046) |
Balance, end of period (in shares) | 62,253 | 58,604 | 53,136 |
Weighted Average Market Price at Date of Deferral | |||
Balance, beginning of period (in dollars per share) | $ 21.56 | $ 21.23 | $ 20.64 |
Awarded (in dollars per share) | 25.24 | 23.61 | 24.32 |
Released (in dollars per share) | 21 | 20.76 | 20.16 |
Balance, end of period (in dollars per share) | $ 22.12 | $ 21.56 | $ 21.23 |
Director deferred compensation expense | $ 223 | $ 187 | $ 193 |
Director | |||
Director Deferred Compensation | |||
Percentage of board and committee fees that may be deferred by participants | 100.00% | ||
Director | Minimum | |||
Director Deferred Compensation | |||
Specified period during which board and committee fees may be deferred by participants | 2 years | ||
Director | Maximum | |||
Director Deferred Compensation | |||
Specified period during which board and committee fees may be deferred by participants | 5 years |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
BENEFIT PLANS | |||
Minimum percentage of annual eligible compensation by the participants | 1.00% | ||
Maximum percentage of annual eligible compensation by the participants | 75.00% | ||
401 (k) plan | |||
Percentage of employers matching contribution for participant contributions up to 1% | 100.00% | ||
Percentage of additional employers matching contribution | 75.00% | ||
Vesting period | 2 years | ||
Normal and bonus contributions | |||
Employer matching contributions | $ 1,517 | $ 1,419 | $ 1,576 |
Minimum | |||
401 (k) plan | |||
Percentage of participant contributions up to which employer matches additional 75% contribution | 2.00% | ||
Maximum | |||
401 (k) plan | |||
Percentage of participant contributions up to which employer matches 100% contribution | 1.00% | ||
Percentage of participant contributions up to which employer matches additional 75% contribution | 5.00% |
TRANSACTIONS WITH RELATED PA127
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Transactions with related parties and their affiliates | |||
Rent expense under leases from related parties | $ 3,706,000 | $ 3,646,000 | $ 3,372,000 |
Total minimum lease commitments under non-cancelable operating leases | |||
2,016 | 5,686,000 | ||
2,017 | 5,637,000 | ||
2,018 | 4,823,000 | ||
2,019 | 3,532,000 | ||
2,020 | 3,085,000 | ||
Thereafter | 6,922,000 | ||
Total | 29,685,000 | ||
Loans made to executive officers and directors of Republic and their related interests | |||
Beginning balance | 36,270,000 | ||
Effect of changes in composition of related parties | 2,739,000 | ||
New loans | 18,354,000 | ||
Repayments | (5,293,000) | ||
Ending balance | 52,070,000 | 36,270,000 | |
Affiliate | |||
Total minimum lease commitments under non-cancelable operating leases | |||
2,016 | 3,465,000 | ||
2,017 | 3,506,000 | ||
2,018 | 2,949,000 | ||
2,019 | 2,165,000 | ||
2,020 | 1,945,000 | ||
Thereafter | 2,630,000 | ||
Total | 16,660,000 | ||
Other | |||
Total minimum lease commitments under non-cancelable operating leases | |||
2,016 | 2,221,000 | ||
2,017 | 2,131,000 | ||
2,018 | 1,874,000 | ||
2,019 | 1,367,000 | ||
2,020 | 1,140,000 | ||
Thereafter | 4,292,000 | ||
Total | 13,025,000 | ||
Office Space Lease Company | |||
Total minimum lease commitments under non-cancelable operating leases | |||
Fees received | 15,000 | 16,000 | 14,000 |
Local law firm | |||
Total minimum lease commitments under non-cancelable operating leases | |||
Fees paid | 183,000 | 160,000 | 1,000,000 |
Consulting Firms and Local Chamber of Commerce | |||
Total minimum lease commitments under non-cancelable operating leases | |||
Fees paid | $ 101,000 | 66,000 | 101,000 |
Number of consulting firms | item | 2 | ||
Executive officers, directors and affiliates | |||
Loans made to executive officers and directors of Republic and their related interests | |||
Deposits from executive officers, directors, and their affiliates | $ 82,000,000 | 74,000,000 | |
Bernard M. Trager | RB&T | |||
Loans made to executive officers and directors of Republic and their related interests | |||
Total annual premiums paid on the insurance policies held in the trust | 690,000 | ||
Cash surrender value of the policies | 2,100,000 | 1,900,000 | |
Repayment of indebtedness | 690,000 | ||
Net death benefit | 3,500,000 | 3,500,000 | |
Accounting firm | |||
Total minimum lease commitments under non-cancelable operating leases | |||
Fees received | $ 2,000 | $ 9,000 | $ 9,000 |
OFF BALANCE SHEET RISKS, COM128
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Commitments and letters of credit | ||
Loan commitment, line credit | $ 950,948 | $ 694,178 |
Unused warehouse lines of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 304,379 | 208,069 |
Unused home equity lines of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 282,007 | 240,372 |
Unused loan commitments - other | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 329,232 | 216,806 |
Commitments to purchase loans | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 22,590 | 15,798 |
Standby letters of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | $ 12,740 | 12,383 |
FHLB letters of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | $ 750 |
PARENT COMPANY CONDENSED FIN129
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Assets: | ||||
Cash and cash equivalents | $ 210,082 | $ 72,878 | $ 170,863 | $ 137,691 |
Securities available for sale | 517,058 | 435,911 | ||
Other assets | 37,187 | 34,976 | ||
TOTAL ASSETS | 4,230,289 | 3,747,013 | 3,371,904 | |
Liabilities and Stockholders' Equity: | ||||
Subordinated note | 41,240 | 41,240 | ||
Other liabilities | 30,092 | 25,252 | ||
Stockholders' equity | 576,547 | 558,731 | 542,793 | 536,702 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 4,230,289 | 3,747,013 | ||
Republic Bancorp, Inc. | ||||
Assets: | ||||
Cash and cash equivalents | 132,711 | 133,554 | $ 130,750 | $ 115,984 |
Securities available for sale | 3,405 | |||
Investment in bank subsidiaries | 479,302 | 462,429 | ||
Investment in non-bank subsidiaries | 2,851 | 1,941 | ||
Other assets | 4,945 | 6,798 | ||
TOTAL ASSETS | 623,214 | 604,722 | ||
Liabilities and Stockholders' Equity: | ||||
Subordinated note | 41,240 | 41,240 | ||
Other liabilities | 5,427 | 4,751 | ||
Stockholders' equity | 576,547 | 558,731 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 623,214 | $ 604,722 |
PARENT COMPANY CONDENSED FIN130
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - INCOME AND EXPENSES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income and expenses: | |||||||||||||||
Interest income | $ 36,842 | $ 36,107 | $ 35,722 | $ 33,761 | $ 34,331 | $ 33,144 | $ 32,405 | $ 32,497 | $ 32,039 | $ 34,009 | $ 34,119 | $ 34,401 | $ 142,432 | $ 132,377 | $ 134,568 |
Other income | 3,638 | 3,592 | 2,451 | ||||||||||||
Less: Interest Expense | 4,376 | 4,683 | 4,664 | 4,739 | 4,854 | 4,702 | 4,855 | 5,193 | 5,300 | 5,470 | 5,352 | 5,271 | 18,462 | 19,604 | 21,393 |
Less: Other expenses | 7,458 | 6,364 | 7,954 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 11,262 | 8,759 | 12,474 | 20,749 | 7,884 | 8,254 | 9,654 | 18,523 | 3,021 | 7,553 | 8,946 | 20,978 | 53,244 | 44,315 | 40,498 |
Income tax benefit | (3,844) | (3,119) | (4,154) | (6,961) | (2,649) | (3,008) | (3,332) | (6,539) | (1,676) | (2,950) | (2,827) | (7,622) | (18,078) | (15,528) | (15,075) |
NET INCOME | $ 7,418 | $ 5,640 | $ 8,320 | $ 13,788 | $ 5,235 | $ 5,246 | $ 6,322 | $ 11,984 | $ 1,345 | $ 4,603 | $ 6,119 | $ 13,356 | 35,166 | 28,787 | 25,423 |
Republic Bancorp, Inc. | |||||||||||||||
Income and expenses: | |||||||||||||||
Dividends from subsidiary | 17,340 | 16,676 | 16,376 | ||||||||||||
Interest income | 17 | 2 | 2 | ||||||||||||
Other income | 45 | 45 | 39 | ||||||||||||
Less: Interest Expense | 2,056 | 2,515 | 2,515 | ||||||||||||
Less: Other expenses | 568 | 392 | 368 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 14,778 | 13,816 | 13,534 | ||||||||||||
Income tax benefit | 876 | 976 | 958 | ||||||||||||
Income before equity in undistributed net income of subsidiaries | 15,654 | 14,792 | 14,492 | ||||||||||||
Equity in undistributed net income of subsidiaries | 19,512 | 13,995 | 10,931 | ||||||||||||
NET INCOME | $ 35,166 | $ 28,787 | $ 25,423 |
PARENT COMPANY CONDENSED FIN131
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - CASH FLOWS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
STATEMENTS OF CASH FLOWS | |||||||||||||||
Net income | $ 7,418 | $ 5,640 | $ 8,320 | $ 13,788 | $ 5,235 | $ 5,246 | $ 6,322 | $ 11,984 | $ 1,345 | $ 4,603 | $ 6,119 | $ 13,356 | $ 35,166 | $ 28,787 | $ 25,423 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Accretion of Investment security | 729 | 424 | 394 | ||||||||||||
Director deferred compensation - Parent Company | 223 | 187 | 193 | ||||||||||||
Other assets | (2,785) | (2,145) | 488 | ||||||||||||
Change in other liabilities | 5,473 | (2,570) | (12,278) | ||||||||||||
Net cash provided by operating activities | 50,046 | 26,705 | 22,257 | ||||||||||||
Investing activities: | |||||||||||||||
Purchases of securities available for sale | (1,512,809) | (876,854) | (194,527) | ||||||||||||
Net cash (used in) provided by investing activities | (358,208) | (470,894) | 43,552 | ||||||||||||
Financing activities: | |||||||||||||||
Common Stock repurchases | (551) | (347) | (4,095) | ||||||||||||
Net proceeds from Common Stock options exercised | 1,136 | 1,103 | 467 | ||||||||||||
Cash dividends paid | (15,839) | (14,930) | (14,009) | ||||||||||||
Net cash provided by (used in) financing activities | 445,366 | 346,204 | (32,637) | ||||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 137,204 | (97,985) | 33,172 | ||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 72,878 | 170,863 | 137,691 | 72,878 | 170,863 | 137,691 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 210,082 | 72,878 | 170,863 | 210,082 | 72,878 | 170,863 | |||||||||
Republic Bancorp, Inc. | |||||||||||||||
STATEMENTS OF CASH FLOWS | |||||||||||||||
Net income | 35,166 | 28,787 | 25,423 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Accretion of Investment security | (4) | ||||||||||||||
Equity in undistributed net income of subsidiaries | (19,512) | (13,995) | (10,931) | ||||||||||||
Director deferred compensation - Parent Company | 108 | 98 | 99 | ||||||||||||
Other assets | 1,853 | 3,834 | (7,895) | ||||||||||||
Change in other liabilities | 201 | (1,500) | 2,086 | ||||||||||||
Net cash provided by operating activities | 17,812 | 17,224 | 8,782 | ||||||||||||
Investing activities: | |||||||||||||||
Investment in Republic Insurance Services, Inc. | (246) | ||||||||||||||
Purchases of securities available for sale | (3,401) | ||||||||||||||
Redemption of Republic Investment Company common stock | 23,621 | ||||||||||||||
Net cash (used in) provided by investing activities | (3,401) | (246) | 23,621 | ||||||||||||
Financing activities: | |||||||||||||||
Common Stock repurchases | (551) | (347) | (4,095) | ||||||||||||
Net proceeds from Common Stock options exercised | 1,136 | 1,103 | 467 | ||||||||||||
Cash dividends paid | (15,839) | (14,930) | (14,009) | ||||||||||||
Net cash provided by (used in) financing activities | (15,254) | (14,174) | (17,637) | ||||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (843) | 2,804 | 14,766 | ||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | $ 133,554 | $ 130,750 | $ 115,984 | 133,554 | 130,750 | 115,984 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 132,711 | $ 133,554 | $ 130,750 | $ 132,711 | $ 133,554 | $ 130,750 |
OTHER COMPREHENSIVE INCOME - CO
OTHER COMPREHENSIVE INCOME - COMPONENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Available for Sale Securities: | |||
Change in unrealized gain (loss) on securities available for sale | $ (3,160) | $ 2,021 | $ (4,747) |
Reclassification adjustment for gain on security available for sale recognized in earnings | (88) | ||
Change in unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings | (125) | 475 | 742 |
Net unrealized gains | (3,373) | 2,496 | (4,005) |
Tax effect | 1,181 | (875) | 1,403 |
Net of tax | (2,192) | 1,621 | (2,602) |
Cash Flow Hedges: | |||
Change in fair value of derivatives used for cash flow hedges | (514) | (1,082) | 147 |
Reclassification adjustment for derivative losses realized in income | 402 | 424 | 23 |
Net unrealized gains | (112) | (658) | 170 |
Tax effect | 38 | 231 | (59) |
Net of tax | (74) | (427) | 111 |
Total other comprehensive income (loss), net of tax | (2,266) | 1,194 | (2,491) |
Beginning balance | 4,315 | 3,121 | |
Current Year Change | (2,266) | 1,194 | (2,491) |
Ending balance | 2,049 | 4,315 | 3,121 |
Unrealized gains (losses) on securities available for sale | |||
Cash Flow Hedges: | |||
Total other comprehensive income (loss), net of tax | (2,112) | 1,313 | |
Beginning balance | 3,839 | 2,526 | |
Current Year Change | (2,112) | 1,313 | |
Ending balance | 1,727 | 3,839 | 2,526 |
Unrealized gain on security available for sale for which a portion of an other-than-temporary impairment has been recognized in earnings | |||
Cash Flow Hedges: | |||
Total other comprehensive income (loss), net of tax | (80) | 308 | |
Beginning balance | 792 | 484 | |
Current Year Change | (80) | 308 | |
Ending balance | 712 | 792 | 484 |
Unrealized gain (loss) on cash flow hedge | |||
Cash Flow Hedges: | |||
Total other comprehensive income (loss), net of tax | (74) | (427) | |
Beginning balance | (316) | 111 | |
Current Year Change | (74) | (427) | |
Ending balance | $ (390) | $ (316) | $ 111 |
OTHER COMPREHENSIVE INCOME - RE
OTHER COMPREHENSIVE INCOME - RECLASSIFICATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Available for Sale Securities: | |||
Change in unrealized gain (loss) on securities available for sale | $ (3,160) | $ 2,021 | $ (4,747) |
Tax effect | 1,181 | (875) | 1,403 |
Net of tax | (2,192) | 1,621 | (2,602) |
Cash Flow Hedges: | |||
Derivative losses | (112) | (658) | 170 |
Tax effect | 38 | 231 | (59) |
Net of tax | (74) | (427) | 111 |
Non interest income | |||
Available for Sale Securities: | |||
Change in unrealized gain (loss) on securities available for sale | 88 | ||
Income tax expense | |||
Available for Sale Securities: | |||
Tax effect | (31) | ||
Cash Flow Hedges: | |||
Tax effect | 141 | 70 | 6 |
Total interest expense | |||
Cash Flow Hedges: | |||
Derivative losses | (402) | (424) | (23) |
Interest expense on deposits | |||
Cash Flow Hedges: | |||
Derivative losses | (198) | (201) | (16) |
Interest expense on Federal Home Loan Bank advances | |||
Cash Flow Hedges: | |||
Derivative losses | (204) | (223) | (7) |
Net income | |||
Net of tax , total all reclassification amounts | (204) | (354) | (17) |
Available for Sale Securities: | |||
Net of tax | 57 | ||
Cash Flow Hedges: | |||
Net of tax | $ (261) | $ (354) | $ (17) |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||
Number of operating segments | segment | 4 | ||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||
Net interest income | $ 32,466 | $ 31,424 | $ 31,058 | $ 29,022 | $ 29,477 | $ 28,442 | $ 27,550 | $ 27,304 | $ 26,739 | $ 28,539 | $ 28,767 | $ 29,130 | $ 123,970 | $ 112,773 | $ 113,175 |
Provision for loan and lease losses | 2,074 | 2,233 | 904 | 185 | 1,359 | 1,510 | 693 | (703) | 503 | 2,200 | 905 | (625) | 5,396 | 2,859 | 2,983 |
Net refund transfer fees | 17,388 | 16,130 | 13,884 | ||||||||||||
Mortgage banking income | 4,411 | 2,862 | 7,258 | ||||||||||||
Bargain purchase gain | 1,324 | ||||||||||||||
Gain on call of securities available for sale | 88 | ||||||||||||||
Other non interest income | 26,107 | 23,527 | 23,764 | ||||||||||||
Total non-interest income | 7,717 | 7,806 | 9,485 | 22,986 | 6,196 | 6,527 | 9,081 | 20,715 | 6,359 | 7,385 | 10,302 | 22,184 | 47,994 | 42,519 | 46,230 |
Total non interest expenses | 26,847 | 28,238 | 27,165 | 31,074 | 26,430 | 25,205 | 26,284 | 30,199 | 29,574 | 26,171 | 29,218 | 30,961 | 113,324 | 108,118 | 115,924 |
INCOME BEFORE INCOME TAX EXPENSE | 11,262 | 8,759 | 12,474 | 20,749 | 7,884 | 8,254 | 9,654 | 18,523 | 3,021 | 7,553 | 8,946 | 20,978 | 53,244 | 44,315 | 40,498 |
Income tax expense (benefit) | 3,844 | 3,119 | 4,154 | 6,961 | 2,649 | 3,008 | 3,332 | 6,539 | 1,676 | 2,950 | 2,827 | 7,622 | 18,078 | 15,528 | 15,075 |
NET INCOME | 7,418 | $ 5,640 | $ 8,320 | $ 13,788 | 5,235 | $ 5,246 | $ 6,322 | $ 11,984 | 1,345 | $ 4,603 | $ 6,119 | $ 13,356 | 35,166 | 28,787 | 25,423 |
Segment end of period total assets | 4,230,289 | 3,747,013 | 3,371,904 | $ 4,230,289 | $ 3,747,013 | $ 3,371,904 | |||||||||
Net interest margin (as percent) | 3.27% | 3.33% | 3.48% | ||||||||||||
Traditional Banking | |||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||
Net interest income | $ 108,303 | $ 104,832 | $ 106,901 | ||||||||||||
Provision for loan and lease losses | 2,897 | 3,042 | 3,920 | ||||||||||||
Bargain purchase gain | 1,324 | ||||||||||||||
Gain on call of securities available for sale | 88 | ||||||||||||||
Other non interest income | 23,670 | 21,489 | 22,752 | ||||||||||||
Total non-interest income | 23,758 | 21,489 | 24,076 | ||||||||||||
Total non interest expenses | 93,740 | 90,713 | 94,668 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 35,424 | 32,566 | 32,389 | ||||||||||||
Income tax expense (benefit) | 11,505 | 11,251 | 11,124 | ||||||||||||
NET INCOME | 23,919 | 21,315 | 21,265 | ||||||||||||
Segment end of period total assets | 3,809,526 | 3,404,323 | 3,205,499 | $ 3,809,526 | $ 3,404,323 | $ 3,205,499 | |||||||||
Net interest margin (as percent) | 3.15% | 3.32% | 3.47% | ||||||||||||
Warehouse Lending | |||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||
Net interest income | $ 12,209 | $ 7,428 | $ 5,655 | ||||||||||||
Provision for loan and lease losses | 168 | 350 | (92) | ||||||||||||
Other non interest income | 24 | 12 | 6 | ||||||||||||
Total non-interest income | 24 | 12 | 6 | ||||||||||||
Total non interest expenses | 2,526 | 1,857 | 1,657 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 9,539 | 5,233 | 4,096 | ||||||||||||
Income tax expense (benefit) | 3,575 | 1,831 | 1,433 | ||||||||||||
NET INCOME | 5,964 | 3,402 | 2,663 | ||||||||||||
Segment end of period total assets | 386,414 | 319,153 | 149,351 | $ 386,414 | $ 319,153 | $ 149,351 | |||||||||
Net interest margin (as percent) | 3.58% | 3.77% | 4.28% | ||||||||||||
Mortgage Banking | |||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||
Net interest income | $ 219 | $ 183 | $ 471 | ||||||||||||
Mortgage banking income | 4,411 | 2,862 | 7,258 | ||||||||||||
Other non interest income | 248 | 244 | 131 | ||||||||||||
Total non-interest income | 4,659 | 3,106 | 7,389 | ||||||||||||
Total non interest expenses | 4,918 | 3,881 | 3,418 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | (40) | (592) | 4,442 | ||||||||||||
Income tax expense (benefit) | (14) | (207) | 1,555 | ||||||||||||
NET INCOME | (26) | (385) | 2,887 | ||||||||||||
Segment end of period total assets | 9,348 | 11,593 | 9,307 | $ 9,348 | 11,593 | 9,307 | |||||||||
Core Banking Activities | |||||||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||
Number of operating segments | segment | 3 | ||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||
Net interest income | $ 120,731 | 112,443 | 113,027 | ||||||||||||
Provision for loan and lease losses | 3,065 | 3,392 | 3,828 | ||||||||||||
Mortgage banking income | 4,411 | 2,862 | 7,258 | ||||||||||||
Bargain purchase gain | 1,324 | ||||||||||||||
Gain on call of securities available for sale | 88 | ||||||||||||||
Other non interest income | 23,942 | 21,745 | 22,889 | ||||||||||||
Total non-interest income | 28,441 | 24,607 | 31,471 | ||||||||||||
Total non interest expenses | 101,184 | 96,451 | 99,743 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 44,923 | 37,207 | 40,927 | ||||||||||||
Income tax expense (benefit) | 15,066 | 12,875 | 14,112 | ||||||||||||
NET INCOME | 29,857 | 24,332 | 26,815 | ||||||||||||
Segment end of period total assets | 4,205,288 | 3,735,069 | 3,364,157 | $ 4,205,288 | $ 3,735,069 | $ 3,364,157 | |||||||||
Net interest margin (as percent) | 3.19% | 3.35% | 3.50% | ||||||||||||
Republic Processing Group | |||||||||||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||||||||||
Net interest income | $ 3,239 | $ 330 | $ 148 | ||||||||||||
Provision for loan and lease losses | 2,331 | (533) | (845) | ||||||||||||
Net refund transfer fees | 17,388 | 16,130 | 13,884 | ||||||||||||
Other non interest income | 2,165 | 1,782 | 875 | ||||||||||||
Total non-interest income | 19,553 | 17,912 | 14,759 | ||||||||||||
Total non interest expenses | 12,140 | 11,667 | 16,181 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 8,321 | 7,108 | (429) | ||||||||||||
Income tax expense (benefit) | 3,012 | 2,653 | 963 | ||||||||||||
NET INCOME | 5,309 | 4,455 | (1,392) | ||||||||||||
Segment end of period total assets | $ 25,001 | $ 11,944 | $ 7,747 | $ 25,001 | $ 11,944 | $ 7,747 |
SUMMARY OF QUARTERLY FINANCI135
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated quarterly financial data | |||||||||||||||
Interest income | $ 36,842 | $ 36,107 | $ 35,722 | $ 33,761 | $ 34,331 | $ 33,144 | $ 32,405 | $ 32,497 | $ 32,039 | $ 34,009 | $ 34,119 | $ 34,401 | $ 142,432 | $ 132,377 | $ 134,568 |
Interest expense | 4,376 | 4,683 | 4,664 | 4,739 | 4,854 | 4,702 | 4,855 | 5,193 | 5,300 | 5,470 | 5,352 | 5,271 | 18,462 | 19,604 | 21,393 |
NET INTEREST INCOME | 32,466 | 31,424 | 31,058 | 29,022 | 29,477 | 28,442 | 27,550 | 27,304 | 26,739 | 28,539 | 28,767 | 29,130 | 123,970 | 112,773 | 113,175 |
Provision for loan and lease losses | 2,074 | 2,233 | 904 | 185 | 1,359 | 1,510 | 693 | (703) | 503 | 2,200 | 905 | (625) | 5,396 | 2,859 | 2,983 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | 30,392 | 29,191 | 30,154 | 28,837 | 28,118 | 26,932 | 26,857 | 28,007 | 26,236 | 26,339 | 27,862 | 29,755 | 118,574 | 109,914 | 110,192 |
Non interest income | 7,717 | 7,806 | 9,485 | 22,986 | 6,196 | 6,527 | 9,081 | 20,715 | 6,359 | 7,385 | 10,302 | 22,184 | 47,994 | 42,519 | 46,230 |
Non interest expenses | 26,847 | 28,238 | 27,165 | 31,074 | 26,430 | 25,205 | 26,284 | 30,199 | 29,574 | 26,171 | 29,218 | 30,961 | 113,324 | 108,118 | 115,924 |
INCOME BEFORE INCOME TAX EXPENSE | 11,262 | 8,759 | 12,474 | 20,749 | 7,884 | 8,254 | 9,654 | 18,523 | 3,021 | 7,553 | 8,946 | 20,978 | 53,244 | 44,315 | 40,498 |
Income tax expense (benefit) | 3,844 | 3,119 | 4,154 | 6,961 | 2,649 | 3,008 | 3,332 | 6,539 | 1,676 | 2,950 | 2,827 | 7,622 | 18,078 | 15,528 | 15,075 |
NET INCOME | $ 7,418 | $ 5,640 | $ 8,320 | $ 13,788 | $ 5,235 | $ 5,246 | $ 6,322 | $ 11,984 | $ 1,345 | $ 4,603 | $ 6,119 | $ 13,356 | $ 35,166 | $ 28,787 | $ 25,423 |
Class A Common Stock | |||||||||||||||
Basic earnings per share: | |||||||||||||||
Basic earnings per share (in dollars per share) | $ 0.36 | $ 0.27 | $ 0.40 | $ 0.66 | $ 0.25 | $ 0.25 | $ 0.31 | $ 0.58 | $ 0.07 | $ 0.22 | $ 0.30 | $ 0.64 | $ 1.70 | $ 1.39 | $ 1.23 |
Diluted earnings per share: | |||||||||||||||
Diluted earnings per share (in dollars per share) | 0.36 | 0.27 | 0.40 | 0.66 | 0.25 | 0.25 | 0.30 | 0.58 | 0.07 | 0.22 | 0.30 | 0.64 | 1.70 | 1.38 | 1.22 |
Dividends declared per common share: | |||||||||||||||
Dividend declared common stock, per share (in dollars per share) | 0.198 | 0.198 | 0.198 | 0.187 | 0.187 | 0.187 | 0.187 | 0.176 | 0.176 | 0.176 | 0.176 | 0.165 | 0.781 | 0.737 | 0.693 |
Class B Common Stock | |||||||||||||||
Basic earnings per share: | |||||||||||||||
Basic earnings per share (in dollars per share) | 0.33 | 0.25 | 0.37 | 0.65 | 0.24 | 0.24 | 0.29 | 0.56 | 0.05 | 0.21 | 0.28 | 0.63 | 1.55 | 1.32 | 1.17 |
Diluted earnings per share: | |||||||||||||||
Diluted earnings per share (in dollars per share) | 0.33 | 0.25 | 0.36 | 0.64 | 0.24 | 0.24 | 0.29 | 0.56 | 0.05 | 0.21 | 0.28 | 0.62 | 1.54 | 1.32 | 1.16 |
Dividends declared per common share: | |||||||||||||||
Dividend declared common stock, per share (in dollars per share) | $ 0.180 | $ 0.180 | $ 0.180 | $ 0.170 | $ 0.170 | $ 0.170 | $ 0.170 | $ 0.160 | $ 0.160 | $ 0.160 | $ 0.160 | $ 0.150 | $ 0.710 | $ 0.670 | $ 0.630 |
SUMMARY OF QUARTERLY FINANCI136
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) - ADDITIONAL DISCLOSURES (Details) - USD ($) | 3 Months Ended | |||||
Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | |
Consolidated quarterly financial data | ||||||
Reversal of incentive compensation accruals based on revised payout estimates | $ 2,300,000 | $ 450,000 | $ 950,000 | $ 1,800,000 | $ 1,100,000 | $ 3,300,000 |
RPG | TRS division | ||||||
Consolidated quarterly financial data | ||||||
Legal expenses | $ 1,400,000 |