Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Entity Registrant Name | REPUBLIC BANCORP INC /KY/ | ||
Entity Central Index Key | 0000921557 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 491,574,486 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 18,742,970 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 2,205,051 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 385,303 | $ 351,474 |
Available-for-sale debt securities | 471,355 | 475,738 |
Held-to-maturity debt securities (fair value of $63,156 in 2019 and $64,858 in 2018) | 62,531 | 65,227 |
Equity securities with readily determinable fair value | 3,188 | 2,806 |
Mortgage loans held for sale, at fair value | 19,224 | 8,971 |
Consumer loans held for sale, at fair value | 598 | |
Consumer loans held for sale, at the lower of cost or fair value | 11,646 | 12,838 |
Loans (loans carried at fair value of $998 in 2019 and $1,922 in 2018) | 4,433,151 | 4,148,227 |
Allowance for loan and lease losses | (43,351) | (44,675) |
Loans, net | 4,389,800 | 4,103,552 |
Federal Home Loan Bank stock, at cost | 30,831 | 32,067 |
Premises and equipment, net | 45,360 | 43,126 |
Premises, held for sale | 836 | 1,694 |
Right-of-use assets | 35,206 | |
Goodwill | 16,300 | 16,300 |
Other real estate owned | 113 | 160 |
Bank owned life insurance | 66,433 | 64,883 |
Other assets and accrued interest receivable | 81,595 | 61,568 |
TOTAL ASSETS | 5,620,319 | 5,240,404 |
Deposits: | ||
Noninterest-bearing | 1,033,379 | 1,003,969 |
Interest-bearing | 2,752,629 | 2,452,176 |
Total deposits | 3,786,008 | 3,456,145 |
Securities sold under agreements to repurchase and other short-term borrowings | 167,617 | 182,990 |
Operating lease liabilities | 36,530 | |
Federal Home Loan Bank advances | 750,000 | 810,000 |
Subordinated note | 41,240 | 41,240 |
Other liabilities and accrued interest payable | 74,680 | 60,095 |
Total liabilities | 4,856,075 | 4,550,470 |
Commitments and contingent liabilities (Footnote 13) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, no par value | ||
Class A Common Stock, no par value, 30,000,000 shares authorized, 18,736,445 shares (2019) and 18,675,262 shares (2018) issued and outstanding; Class B Common Stock, no par value, 5,000,000 shares authorized, 2,206,412 shares (2019) and 2,212,487 shares (2018) issued and outstanding | 4,907 | 4,900 |
Additional paid in capital | 142,068 | 141,018 |
Retained earnings | 614,171 | 545,013 |
Accumulated other comprehensive income (loss) | 3,098 | (997) |
Total stockholders’ equity | 764,244 | 689,934 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 5,620,319 | $ 5,240,404 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Held-to-maturity debt securities | $ 63,156 | $ 64,858 |
Loans held for investment fair value | $ 998 | $ 1,922 |
Preferred stock, no par value | $ 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 | 18,736,445 | 18,675,262 |
Common Stock, outstanding | 18,736,445 | 18,675,262 |
Class B Common Stock | ||
Common Stock, no par value | $ 0 | $ 0 |
Common Stock, shares authorized | 5,000,000 | 5,000,000 |
Common Stock, issued | 2,206,412 | 2,212,487 |
Common Stock, outstanding | 2,206,412 | 2,212,487 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INTEREST INCOME: | |||
Loans, including fees | $ 260,064 | $ 237,621 | $ 205,582 |
Taxable investment securities | 13,546 | 11,830 | 9,404 |
Federal Home Loan Bank stock and other | 7,273 | 6,730 | 3,792 |
Total interest income | 280,883 | 256,181 | 218,778 |
INTEREST EXPENSE: | |||
Deposits | 29,135 | 17,017 | 9,802 |
Securities sold under agreements to repurchase and other short-term borrowings | 1,211 | 1,125 | 502 |
Federal Home Loan Bank advances | 12,791 | 10,473 | 8,860 |
Subordinated note | 1,620 | 1,508 | 1,094 |
Total interest expense | 44,757 | 30,123 | 20,258 |
NET INTEREST INCOME | 236,126 | 226,058 | 198,520 |
Provision for loan and lease losses | 25,758 | 31,368 | 27,704 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | 210,368 | 194,690 | 170,816 |
NONINTEREST INCOME: | |||
Service charges on deposit accounts | 14,197 | 14,273 | 13,357 |
Net refund transfer fees | 21,158 | 20,029 | 18,500 |
Mortgage banking income | 9,499 | 4,825 | 4,642 |
Interchange fee income | 11,859 | 11,159 | 9,881 |
Program fees | 4,712 | 6,225 | 5,824 |
Increase in cash surrender value of bank owned life insurance | 1,550 | 1,527 | 1,562 |
Net losses on debt securities | (136) | ||
Net gains on other real estate owned | 540 | 729 | 676 |
Net gain on branch divestiture | 7,829 | ||
Other | 3,664 | 4,658 | 4,108 |
Total noninterest income | 75,008 | 63,425 | 58,414 |
NONINTEREST EXPENSE: | |||
Salaries and employee benefits | 99,181 | 91,189 | 82,233 |
Occupancy and equipment, net | 25,868 | 24,883 | 24,019 |
Communication and transportation | 4,447 | 4,785 | 4,711 |
Marketing and development | 5,023 | 4,432 | 5,188 |
FDIC insurance expense | 743 | 1,494 | 1,378 |
Bank franchise tax expense | 5,293 | 4,951 | 4,626 |
Data processing | 9,189 | 9,613 | 7,748 |
Interchange related expense | 4,870 | 4,480 | 3,988 |
Supplies | 1,693 | 1,444 | 1,594 |
Other real estate owned and other repossession expense | 326 | 94 | 388 |
Legal and professional fees | 3,357 | 3,459 | 2,410 |
Impairment of premises held for sale | 256 | 482 | 1,175 |
Other | 11,937 | 12,546 | 11,386 |
Total noninterest expense | 172,183 | 163,852 | 150,844 |
INCOME BEFORE INCOME TAX EXPENSE | 113,193 | 94,263 | 78,386 |
INCOME TAX EXPENSE | 21,494 | 16,411 | 32,754 |
NET INCOME | $ 91,699 | $ 77,852 | $ 45,632 |
Class A Common Stock | |||
BASIC EARNINGS PER SHARE: | |||
Basic earnings per share (in dollars per share) | $ 4.41 | $ 3.76 | $ 2.21 |
DILUTED EARNINGS PER SHARE: | |||
Diluted earnings per share (in dollars per share) | 4.39 | 3.74 | 2.20 |
Class B Common Stock | |||
BASIC EARNINGS PER SHARE: | |||
Basic earnings per share (in dollars per share) | 4.01 | 3.41 | 2.01 |
DILUTED EARNINGS PER SHARE: | |||
Diluted earnings per share (in dollars per share) | $ 3.99 | $ 3.40 | $ 2 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 91,699 | $ 77,852 | $ 45,632 |
OTHER COMPREHENSIVE INCOME | |||
Change in fair value of derivatives used for cash flow hedges | (199) | 178 | 83 |
Reclassification amount for net derivative losses realized in income | (20) | 28 | 219 |
Change in unrealized (loss) gain on AFS debt securities | 5,689 | (1,548) | (1,265) |
Adjustment for adoption of ASU 2016-01 | (428) | ||
Reclassification adjustment for net (gain) loss on AFS debt securities recognized in earnings | 136 | ||
Change in unrealized gain on AFS debt security for which a portion of OTTI has been recognized in earnings | (79) | (20) | 298 |
Total other comprehensive income (loss) before income tax | 5,391 | (1,790) | (529) |
Tax effect | (1,296) | 377 | 258 |
Total other comprehensive income (loss), net of tax | 4,095 | (1,413) | (271) |
COMPREHENSIVE INCOME | $ 95,794 | $ 76,439 | $ 45,361 |
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 beginning of period at Dec. 31, 2016 | $ 4,906 | $ 138,192 | $ 460,621 | $ 687 | $ 604,406 | ||||||
Balance (in shares) at Dec. 31, 2016 | 18,615 | 2,245 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 45,632 | 45,632 | |||||||||
Net change in accumulated other comprehensive income | (271) | (271) | |||||||||
Dividends declared on Common Stock: | |||||||||||
Dividends declared on Common Stock | $ (16,158) | $ (1,773) | $ (16,158) | $ (1,773) | |||||||
Stock options exercised, net of shares withheld | 68 | 68 | |||||||||
Stock options exercised, net of shares withheld (in shares) | 4 | ||||||||||
Conversion of Class B Common Stock to Class A Common Stock (in shares) | 2 | (2) | |||||||||
Repurchase of Class A Common Stock | (4) | (422) | (622) | (1,048) | |||||||
Repurchase of Class A Common Stock (in shares) | (26) | ||||||||||
Net change in notes receivable on Class A Common Stock | 235 | 235 | |||||||||
Deferred director compensation expense - Class A Common Stock | 191 | 191 | |||||||||
Deferred director compensation expense - Class A Common Stock (in shares) | 5 | ||||||||||
Stock-based awards, Performance stock units | 491 | 491 | |||||||||
Stock-based awards, Performance stock units (in shares) | 7 | ||||||||||
Stock-based awards, Restricted stock | 424 | 424 | |||||||||
Stock-based awards, Stock options | 227 | 227 | |||||||||
Balance at end of period at Dec. 31, 2017 | 4,902 | 139,406 | 487,700 | 416 | 632,424 | ||||||
Balance (in shares) at Dec. 31, 2017 | 18,607 | 2,243 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Adjustment for adoption | (35) | (338) | (373) | ||||||||
Net income | 77,852 | 77,852 | |||||||||
Net change in accumulated other comprehensive income | (1,075) | (1,075) | |||||||||
Dividends declared on Common Stock: | |||||||||||
Dividends declared on Common Stock | (18,076) | (1,955) | (18,076) | (1,955) | |||||||
Stock options exercised, net of shares withheld | 83 | 83 | |||||||||
Stock options exercised, net of shares withheld (in shares) | 3 | ||||||||||
Conversion of Class B Common Stock to Class A Common Stock (in shares) | 30 | (30) | |||||||||
Repurchase of Class A Common Stock | (5) | (349) | (473) | (827) | |||||||
Repurchase of Class A Common Stock (in shares) | (14) | ||||||||||
Net change in notes receivable on Class A Common Stock | 5 | 5 | |||||||||
Deferred director compensation expense - Class A Common Stock | 1 | 214 | 215 | ||||||||
Deferred director compensation expense - Class A Common Stock (in shares) | 5 | ||||||||||
Deferred designed key employee compensation expense - Class A Common Stock | 430 | 430 | |||||||||
Employee stock purchase plan - Class A Common Stock | 2 | 228 | 230 | ||||||||
Employee stock purchase plan - Class A Common Stock (in shares) | 6 | ||||||||||
Stock-based awards, Performance stock units | 106 | 106 | |||||||||
Stock-based awards, Restricted stock | 630 | 630 | |||||||||
Stock-based awards, Restricted stock (in shares) | 38 | ||||||||||
Stock-based awards, Stock options | 265 | 265 | |||||||||
Balance at end of period at Dec. 31, 2018 | 4,900 | 141,018 | 545,013 | (997) | 689,934 | ||||||
Balance (in shares) at Dec. 31, 2018 | 18,675 | 2,213 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Adjustment for adoption | 126 | 126 | |||||||||
Net income | 91,699 | 91,699 | |||||||||
Net change in accumulated other comprehensive income | 4,095 | 4,095 | |||||||||
Dividends declared on Common Stock: | |||||||||||
Dividends declared on Common Stock | $ (19,771) | $ (2,121) | $ (19,771) | $ (2,121) | |||||||
Stock options exercised, net of shares withheld | 11 | (202) | (191) | ||||||||
Stock options exercised, net of shares withheld (in shares) | 44 | ||||||||||
Conversion of Class B Common Stock to Class A Common Stock (in shares) | 7 | (7) | |||||||||
Repurchase of Class A Common Stock | (6) | (637) | (775) | (1,418) | |||||||
Repurchase of Class A Common Stock (in shares) | (32) | ||||||||||
Net change in notes receivable on Class A Common Stock | (222) | (222) | |||||||||
Deferred director compensation expense - Class A Common Stock | 213 | 213 | |||||||||
Deferred director compensation expense - Class A Common Stock (in shares) | 6 | ||||||||||
Deferred designed key employee compensation expense - Class A Common Stock | 371 | 371 | |||||||||
Employee stock purchase plan - Class A Common Stock | 2 | 492 | 494 | ||||||||
Employee stock purchase plan - Class A Common Stock (in shares) | 11 | ||||||||||
Stock-based awards, Performance stock units | (57) | (57) | |||||||||
Stock-based awards, Performance stock units (in shares) | 23 | ||||||||||
Stock-based awards, Restricted stock | 728 | 728 | |||||||||
Stock-based awards, Restricted stock (in shares) | 3 | ||||||||||
Stock-based awards, Stock options | 364 | 364 | |||||||||
Balance at end of period at Dec. 31, 2019 | $ 4,907 | $ 142,068 | $ 614,171 | $ 3,098 | $ 764,244 | ||||||
Balance (in shares) at Dec. 31, 2019 | 18,737 | 2,206 |
CONSOLIDATED STATEMENT OF STO_2
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class A Common Stock | |||||||||||
Dividend declared common stock, per share (in dollars per share) | $ 0.264 | $ 0.264 | $ 0.264 | $ 0.264 | $ 0.242 | $ 0.242 | $ 0.242 | $ 0.242 | $ 1.056 | $ 0.968 | $ 0.869 |
Class B Common Stock | |||||||||||
Dividend declared common stock, per share (in dollars per share) | $ 0.240 | $ 0.240 | $ 0.240 | $ 0.240 | $ 0.220 | $ 0.220 | $ 0.220 | $ 0.220 | $ 0.96 | $ 0.88 | $ 0.79 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES: | |||
Net income | $ 91,699 | $ 77,852 | $ 45,632 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net amortization on investment securities | (120) | 97 | 245 |
Net accretion on loans and amortization of core deposit intangible and operating lease components | (3,655) | (3,540) | (6,373) |
Unrealized (gains) losses on equity securities with readily determinable fair value | (382) | 122 | |
Depreciation of premises and equipment | 9,230 | 9,347 | 8,472 |
Amortization of mortgage servicing rights | 1,823 | 1,432 | 1,504 |
Provision for loan and lease losses | 25,758 | 31,368 | 27,704 |
Net gain on sale of mortgage loans held for sale | (8,816) | (3,839) | (3,977) |
Origination of mortgage loans held for sale | (356,097) | (176,916) | (160,091) |
Proceeds from sale of mortgage loans held for sale | 354,660 | 177,545 | 169,969 |
Net gain on sale of consumer loans held for sale | (5,102) | (5,930) | (5,647) |
Origination of consumer loans held for sale | (710,640) | (778,476) | (663,171) |
Proceeds from sale of consumer loans held for sale | 716,336 | 781,951 | 661,098 |
Net realized losses on debt securities | 136 | ||
Net gain realized on sale of other real estate owned | (540) | (729) | (831) |
Writedowns of other real estate owned | 155 | ||
Impairment of premises held for sale | 256 | 482 | 1,175 |
Deferred compensation expense - Class A Common Stock | 584 | 645 | 191 |
Stock-based awards expense - Class A Common Stock | 1,035 | 1,001 | 1,142 |
Net gain on sale of banking center | (7,829) | ||
Net gain on sale of bank premises and equipment | (339) | 14 | |
Increase in cash surrender value of bank owned life insurance | (1,550) | (1,527) | (1,562) |
Net change in other assets and liabilities: | |||
Accrued interest receivable | 1,031 | (1,860) | (1,726) |
Accrued interest payable | 1,718 | (16) | 152 |
Other assets | (8,677) | 2,822 | 730 |
Other liabilities | (3,138) | 7,368 | 2,850 |
Net cash provided by operating activities | 97,245 | 119,213 | 77,777 |
INVESTING ACTIVITIES: | |||
Net cash provided from branch divestiture | 6,071 | ||
Purchases of available-for-sale debt securities | (445,681) | (173,875) | (225,212) |
Purchases of held-to-maturity debt securities | (4,934) | (15,595) | |
Proceeds from calls, maturities and paydowns of available-for-sale debt securities | 455,823 | 220,798 | 158,056 |
Proceeds from calls, maturities and paydowns of held-to-maturity debt securities | 2,667 | 3,911 | 4,207 |
Proceeds from sales of available-for-sale debt securities | 0 | 0 | 20,012 |
Net change in outstanding warehouse lines of credit | (248,763) | 56,877 | 59,867 |
Purchase of non-business-acquisition loans, including premiums paid | (6,160) | ||
Net change in other loans | (188,708) | (216,600) | (268,839) |
Proceeds from redemption of Federal Home Loan Bank stock | 3,513 | ||
Purchase of Federal Home Loan Bank stock | (2,277) | (3,859) | |
Proceeds from sales of other real estate owned | 2,063 | 1,346 | 2,793 |
Proceeds from sale of bank premises and equipment | 909 | 764 | |
Net purchases of premises and equipment | (12,883) | (9,822) | (12,383) |
Net cash used in investing activities | (427,266) | (121,535) | (287,113) |
FINANCING ACTIVITIES: | |||
Net change in deposits | 461,715 | 22,987 | 272,466 |
Net change in securities sold under agreements to repurchase and other short-term borrowings | (15,373) | (21,031) | 30,548 |
Payments of Federal Home Loan Bank advances | (820,000) | (457,500) | (490,000) |
Proceeds from Federal Home Loan Bank advances | 760,000 | 530,000 | 425,000 |
Repurchase of Class A Common Stock | (1,418) | (827) | (1,048) |
Net proceeds from Class A Common Stock purchased through employee stock purchase plan | 494 | 230 | |
Net proceeds from Class A Common Stock options exercised | (191) | 83 | 68 |
Cash dividends paid | (21,377) | (19,497) | (17,656) |
Net cash provided by financing activities | 363,850 | 54,445 | 219,378 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 33,829 | 52,123 | 10,042 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 351,474 | 299,351 | 289,309 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 385,303 | 351,474 | 299,351 |
Cash paid during the period for: | |||
Interest | 43,039 | 30,139 | 20,106 |
Income taxes | 17,383 | 11,119 | 28,779 |
SUPPLEMENTAL NONCASH DISCLOSURES: | |||
Transfers from loans to real estate acquired in settlement of loans | 1,527 | 662 | 841 |
Transfers from loans held for sale to held for investment | 2,237 | ||
Loans provided for sales of other real estate owned | 51 | ||
Transfers from loans held for investment to held for sale | 131,881 | 1,392 | |
Unfunded commitments in low-income-housing investments | 11,500 | $ 14,029 | $ 9,736 |
Right-of-use assets recorded | $ 41,726 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. 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 and Republic Insurance Services, Inc. As used in this filing, the terms “Republic,” the “Company,” “we,” “our,” and “us” refer to Republic Bancorp, Inc., and, where the context requires, Republic Bancorp, Inc. and its subsidiaries. The term “Bank” refers to the Company’s subsidiary bank: Republic Bank & Trust Company. The term “Captive” refers to the Company’s insurance subsidiary: Republic Insurance Services, Inc. All significant intercompany balances and transactions are eliminated in consolidation. Republic is a financial holding company headquartered in Louisville, Kentucky. The Bank is a Kentucky-based, state-chartered non-member financial institution that provides both traditional and non-traditional banking products through five reportable segments using a multitude of delivery channels. While the Bank operates primarily in its market footprint, its non-brick-and-mortar delivery channels allow it to reach clients across the United States. The Captive is a Nevada-based, wholly-owned insurance subsidiary of the Company. The Captive provides property and casualty insurance coverage to the Company and the Bank as well as a group of third-party insurance captives for which insurance may not be available or economically feasible. Republic Bancorp Capital Trust is a Delaware statutory business trust that is a wholly-owned unconsolidated finance subsidiary of Republic Bancorp, Inc. As of December 31, 2019, the Company was divided into five reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS and RCS. Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments collectively constitute RPG operations. The Company’s national branchless banking platform, MemoryBank ® , is considered part of the Traditional Banking segment. Core Bank Traditional Banking segment — The Traditional Banking segment provides traditional banking products primarily to customers in the Company’s market footprint. As of December 31, 2019, Republic had 41 full-service banking centers and two LPOs with locations as follows:  Kentucky — 28  Metropolitan Louisville — 18  Central Kentucky — 7  Georgetown — 1  Lexington — 5  Shelbyville — 1  Northern Kentucky — 3  Covington — 1  Crestview Hills — 1  Florence — 1  Southern Indiana — 3  Floyds Knobs — 1  Jeffersonville — 1  New Albany — 1  Metropolitan Tampa, Florida — 8*  Metropolitan Cincinnati, Ohio — 1  Metropolitan Nashville, Tennessee — 3* *Includes one LPO Republic’s headquarters are in Louisville, which is the largest city in Kentucky based on population. Traditional 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 Traditional 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 Traditional 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, and increases in the cash surrender value of BOLI. Traditional 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 other general and administrative costs. Traditional 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. Warehouse Lending segment — Through its Warehouse segment, the Core Bank provides short-term, revolving credit facilities to mortgage bankers across the United States through mortgage warehouse lines of credit. These credit facilities are primarily secured by single-family, first-lien residential real estate loans. The credit facility enables the mortgage banking clients to close single-family, first-lien residential real estate loans in their own name and temporarily fund their inventory of these closed loans until the loans are sold to investors approved by the Bank. Individual loans are expected to remain on the warehouse line for an average of 15 to 30 days. Reverse mortgage loans typically remain on the line longer than conventional mortgage loans. Interest income and loan fees are accrued for each individual loan during the time the loan remains on the warehouse line and collected when the loan is sold. The Core Bank receives the sale proceeds of each loan directly from the investor and applies the funds to pay off the warehouse advance and related accrued interest and fees. The remaining proceeds are credited to the mortgage-banking client. Mortgage Banking segment — Mortgage Banking activities primarily include 15-, 20- and 30-year fixed-term single-family, first-lien residential real estate loans that are originated and sold into the secondary market, primarily to the FHLMC and the FNMA. The Bank typically retains servicing on loans sold into the secondary market. Administration of loans with servicing retained by the Bank includes collecting principal and interest payments, escrowing funds for property taxes and property insurance, and remitting payments to secondary market investors. The Bank receives fees for performing these standard servicing functions. Republic Processing Group Tax Refund Solutions segment — Through the TRS segment, the Bank is one of a limited number of financial institutions that facilitates the receipt and payment of federal and state tax refund products and offers a credit product through third-party tax preparers located throughout the United States, as well as tax-preparation software providers (collectively, the “Tax Providers”). Substantially all of the business generated by the TRS segment occurs in the first half of the year. The TRS segment traditionally operates at a loss during the second half of the year, during which time the segment incurs costs preparing for the upcoming year’s tax season. RTs are fee-based 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 by the Company on RTs, net of revenue share, are reported as noninterest income under the line item “Net refund transfer fees.” The EA tax credit product is a loan that allows a taxpayer to borrow funds as an advance of a portion of their tax refund. For the 2018 and 2019 fiscal years, the EA product had the following features: EA features consistent during 2018 and 2019: · Offered only during the first two months of each year; · No requirement that the taxpayer pays for another bank product, such as an RT; · Multiple funds disbursement methods, including direct deposit, prepaid card, check, or Walmart Direct2Cash ® , based on the taxpayer-customer’s election; · Repayment of the EA to the Bank is deducted from the taxpayer’s tax refund proceeds; and · If an insufficient refund to repay the EA occurs: o there is no recourse to the taxpayer, o no negative credit reporting on the taxpayer, and o no collection efforts against the taxpayer. EA features modified from 2018 to 2019: · During 2019, the taxpayer was given the option to choose from multiple loan-amount tiers, subject to underwriting, up to a maximum advance amount of $6,250. This compares to a maximum loan amount of $3,500 during 2018; and · During 2018, EA fees were charged only to the Tax Providers. In 2019, the fee charged to the Tax Providers was lowered; and a direct fee to the taxpayer was charged. The APR to the taxpayer for his or her portion of the total fee equated to less than 36% for all offering tiers. The Company reports fees paid for the EA product as interest income on loans. EAs are generally repaid within three weeks after the taxpayer’s tax return is submitted to the applicable taxing authority. EAs do not have a contractual due date but the Company considers an EA delinquent if it remains unpaid three weeks after the taxpayer’s tax return is submitted to the applicable taxing authority. Provisions for loan losses on EAs are estimated when advances are made, with provisions for all probable EA losses made in the first quarter of each year. Unpaid EAs are charged off by June 30 th of each year, with EAs collected during the second half of each year recorded as recoveries of previously charged off loans. Related to the overall credit losses on EAs, the Bank’s ability to control losses is highly dependent upon its ability to predict the taxpayer’s likelihood to receive the tax refund as claimed on the taxpayer’s tax return. Each year, the Bank’s EA approval model is based primarily on the prior-year’s tax refund payment patterns. Because the substantial majority of the EA volume occurs each year before that year’s tax refund payment patterns can be analyzed and subsequent underwriting changes made, credit losses during a current year could be higher than management’s predictions if tax refund payment patterns change materially between years. In response to changes in the legal, regulatory and competitive environment, management annually reviews and revises the EA’s product parameters. Further changes in EA product parameters do not ensure positive results and could have an overall material negative impact on the performance of the EA and therefore on the Company’s financial condition and results of operations. For the first quarter 2020 tax season, the Company modified the EA product’s pricing structure. The annual percentage rate to the taxpayer for his or her portion of the EA fee is not greater than 36% for all EA offering amounts. Republic Payment Solutions — RPS is managed and operated within the TRS segment. The RPS division is an issuing bank offering general-purpose reloadable prepaid cards through third-party service providers. For the projected near-term, as the prepaid card program matures, the operating results of the RPS division are expected to be immaterial to the Company’s overall results of operations and will be reported as part of the TRS segment. The RPS division will not be considered a separate reportable segment until such time, if any, that it meets quantitative reporting thresholds. The Company reports fees related to RPS programs under Program fees. Additionally, the Company’s portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under “Interchange fee income.” Republic Credit Solutions segment — Through the RCS segment, the Bank offers consumer credit products. In general, the credit products are unsecured, small-dollar consumer loans and are dependent on various factors including the consumer’s ability to repay. RCS loans typically earn a higher yield but also have higher credit risk compared to loans originated through the Traditional Banking segment, with a significant portion of RCS clients considered subprime or near-prime borrowers. The Bank uses third-party service providers for certain services such as marketing and loan servicing of RCS loans. Additional information regarding consumer loan products offered through RCS follows: · RCS line-of-credit product – The Bank originates a line-of-credit product to generally subprime borrowers in multiple states. Elevate Credit, Inc., a third-party service provider subject to the Bank’s oversight and supervision, provides the Bank with certain marketing and support services for the RCS line-of-credit program, while a separate third party provides loan servicing for the RCS line-of-credit product on the Bank’s behalf. The Bank is the lender for the RCS line-of-credit product and is marketed as such. Further, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of the RCS line-of-credit product. The Bank sells participation interests in the RCS line-of-credit product. These participation interests are a 90% interest in advances made to borrowers under the borrower’s line-of-credit account, and the participation interests are generally sold three business days following the Bank’s funding of the associated advances. Although the Bank retains a 10% participation interest in each advance, it maintains 100% ownership of the underlying RCS line-of-credit account with each borrower. The RCS line-of-credit product represents the substantial majority of RCS activity. Loan balances held for sale through this program are carried at the lower of cost or fair value. · RCS healthcare receivables products – The Bank originates healthcare-receivables products across the United States through two different third-party service providers. In one program, the Bank retains 100% of the receivables originated. In the other program, the Bank retains 100% of the receivables originated in some instances, and in other instances, sells 100% of the receivables within one month of origination. Loan balances held for sale through this program are carried at the lower of cost or fair value. · RCS installment loan products – From the first quarter of 2016 through the first quarter of 2018, the Bank piloted a consumer installment loan product across the United States using a third-party service provider. As part of the program, the Bank sold 100% of the balances generated through the program back to its third-party service provider approximately 21 days after origination. During the second quarter of 2018, the Bank and its third-party service provider suspended the origination of new loans and the sale of unsold loans through this program. Since program suspension in 2018, the Bank has carried all unsold loans under this program as “held for investment” on its balance sheet and has continued to wind down those balances. Additionally, loans under this program are carried at fair value under a fair value option on the Bank’s balance sheet with the portfolio marked to market monthly. Approximately $998,000 of balances remained held for investment under this program as of December 31, 2019. Through a new program launched in December 2019, the Bank began offering RCS installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. A third-party service provider subject to the Bank’s oversight and supervision provides the Bank with marketing services and loan servicing for these RCS installment loans. The Bank is the lender for these RCS installment loans, and is marketed as such. Further, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of this RCS installment loan product. Currently, all loan balances originated under this RCS installment loan program are carried as “held for sale” on the Bank’s balance sheet, with the intention to sell these loans to its third-party service provider sixteen days following the Bank’s origination of the loans. Loans originated under this RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly. The Company reports interest income and loan origination fees earned on RCS loans under “Loans, including fees,” while any gains or losses on sale and mark-to-market adjustments of RCS loans are reported as noninterest income under “Program fees.” Use of Estimates — Financial statements prepared in conformity with 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 limited exception, 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. The Bank’s warehouse lines of credit are secured by single family, first lien residential real estate loans originated by the Bank’s mortgage clients across the United States. As of December 31, 2019, 29% of collateral securing warehouse lines were located in California. Earnings Concentration — For 2019, 2018, and 2017, approximately 25%, 27% and 25% of total Company net revenues (net interest income plus noninterest income) were derived from the RPG operations. Within RPG, the TRS segment accounted for 14%, 14% and 13%, while the RCS segment accounting for 11%, 13% and 12% of total Company net revenues. For 2019, 2018, and 2017, approximately 5%, 5% and 7% of total Company net revenues (net interest income plus noninterest 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. Debt Securities — 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. Available-for-sale debt securities are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premiums and accretion of discounts. Premiums on callable securities are amortized to the earliest call date. Other 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 OTTI at least quarterly 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 OCI. 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. 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. Equity Securities — On January 1, 2018, the Company adopted ASU 2016-01, Financial Instruments . Among other things, ASU 2016-01 requires the Company recognize changes in the fair value of equity investments with a readily determinable fair value in net income unless those investments are accounted for under the equity method of accounting. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment. Accounting for Business Acquisitions — 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 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 Measurement . 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 valuations, 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 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, 2019 and 2018, 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 $2.5 million, $2.4 million and $2.2 million for the years ended December 31, 2019, 2018 and 2017. Late fees and ancillary fees related to loan servicing are considered nominal. Loans — The Bank’s financing receivables consist primarily of loans and 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 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 loan 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 nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual 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 nonaccrual 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 nonaccrual status but are reviewed periodically and charged off when the loan is deemed uncollectible, generally no more than 120 days. Loans purchased in a business 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 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. Additionally, the difference between contractual cash flows and expected cash flows of PCI loans is referred to as the “non-accretable discount.” 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, and net present value of cash flows expected to be received. The Bank typically 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 insi |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2019 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | 2. Available-for-Sale Debt Securities The gross amortized cost and fair value of AFS debt securities and the related gross unrealized gains and losses recognized in AOCI were as follows: Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ 134,765 $ 59 $ (184) $ 134,640 Private label mortgage backed security 2,210 1,285 — 3,495 Mortgage backed securities - residential 253,288 2,916 (357) 255,847 Collateralized mortgage obligations 63,284 258 (171) 63,371 Corporate bonds 10,000 2 — 10,002 Trust preferred security 3,575 425 — 4,000 Total available-for-sale debt securities $ 467,122 $ 4,945 $ (712) $ 471,355 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ 218,502 $ 25 $ (1,654) $ 216,873 Private label mortgage backed security 2,348 1,364 — 3,712 Mortgage backed securities - residential 168,992 1,470 (1,253) 169,209 Collateralized mortgage obligations 73,740 222 (1,151) 72,811 Corporate bonds 10,000 — (942) 9,058 Trust preferred security 3,533 542 — 4,075 Total available-for-sale debt securities $ 477,115 $ 3,623 $ (5,000) $ 475,738 Held-to-Maturity Debt Securities The carrying value, gross unrecognized gains and losses, and fair value of HTM debt securities were as follows: Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2019 (in thousands) Value Gains Losses Value Mortgage backed securities - residential $ 104 $ 6 $ — $ 110 Collateralized mortgage obligations 16,970 94 (21) 17,043 Corporate bonds 44,995 544 — 45,539 Obligations of state and political subdivisions 462 2 — 464 Total held-to-maturity debt securities $ 62,531 $ 646 $ (21) $ 63,156 Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2018 (in thousands) Value Gains Losses Value Mortgage backed securities - residential $ 132 $ 8 $ — $ 140 Collateralized mortgage obligations 19,544 178 (46) 19,676 Corporate bonds 45,088 16 (514) 44,590 Obligations of state and political subdivisions 463 — (11) 452 Total held-to-maturity debt securities $ 65,227 $ 202 $ (571) $ 64,858 At December 31, 2019 and 2018, there were no holdings of debt 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 Available-for-Sale Debt Securities During 2017, the Bank recognized a gross loss of $136,000 on the sale of two AFS debt securities. The tax benefit related to the Bank’s realized losses totaled $48,000 for the year ended December 31, 2017. During 2019 and 2018, there were no sales of AFS debt securities. Debt Securities by Contractual Maturity The following table presents the amortized cost and fair value of debt securities by contractual maturity at December 31, 2019. 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. Available-for-Sale Held-to-Maturity Debt Securities Debt Securities Amortized Fair Carrying Fair December 31, 2019 (in thousands) Cost Value Value Value Due in one year or less $ 34,495 $ 34,493 $ 5,105 $ 5,119 Due from one year to five years 110,270 110,149 35,405 35,887 Due from five years to ten years — — 4,947 4,997 Due beyond ten years 3,575 4,000 — — Private label mortgage backed security 2,210 3,495 — — Mortgage backed securities - residential 253,288 255,847 104 110 Collateralized mortgage obligations 63,284 63,371 16,970 17,043 Total debt securities $ 467,122 $ 471,355 $ 62,531 $ 63,156 Market Loss Analysis Securities with unrealized losses at December 31, 2019 and 2018, aggregated by investment category and length of time that individual debt 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, 2019 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ 40,165 $ (176) $ 14,992 $ (8) $ 55,157 $ (184) Mortgage backed securities - residential 65,630 (269) 16,633 (88) 82,263 (357) Collateralized mortgage obligations 12,444 (36) 10,738 (135) 23,182 (171) Total available-for-sale debt securities $ 118,239 $ (481) $ 42,363 $ (231) $ 160,602 $ (712) Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2018 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ 71,627 $ (598) $ 106,136 $ (1,056) $ 177,763 $ (1,654) Mortgage backed securities - residential 43,691 (484) 32,003 (769) 75,694 (1,253) Collateralized mortgage obligations 16,487 (473) 31,071 (678) 47,558 (1,151) Corporate bonds 9,058 (942) — — 9,058 (942) Total available-for-sale debt securities $ 140,863 $ (2,497) $ 169,210 $ (2,503) $ 310,073 $ (5,000) Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2019 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Held-to-maturity debt securities: Collateralized mortgage obligations $ 4 $ (2) $ 4,827 $ (19) $ 4,831 $ (21) Total held-to-maturity debt securities: $ 4 $ (2) $ 4,827 $ (19) $ 4,831 $ (21) Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2018 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Held-to-maturity debt securities: Collateralized mortgage obligations $ — $ — $ 5,539 $ (46) $ 5,539 $ (46) Corporate bonds 39,499 (514) — — 39,499 (514) Obligations of state and political subdivisions 105 (1) 347 (10) 452 (11) Total held-to-maturity debt securities: $ 39,604 $ (515) $ 5,886 $ (56) $ 45,490 $ (571) At December 31, 2019, the Bank’s portfolio consisted of 173 securities, 34 of which were in an unrealized loss position. At December 31, 2018, the Bank’s portfolio consisted of 182 securities, 65 of which were in an unrealized loss position. Corporate Bonds From 2013 to 2018, the Bank purchased various floating-rate corporate bonds. These bonds 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 10% and 10% of the Bank’s investment portfolio as of December 31, 2019 and 2018. During 2018, one of these bonds was downgraded to BBB+ (S&P/Fitch), driving a significant decrease in the bond’s market value. As of December 31, 2019, this bond had fully recovered its lost value and reflected an unrealized gain of $2,000. Mortgage Backed Securities and Collateralized Mortgage Obligations At December 31, 2019, with the exception of the $3.5 million private label mortgage backed security, all other mortgage backed securities and CMOs held by the Bank were issued by U.S. government-sponsored entities and agencies, primarily the FNMA. At December 31, 2019 and 2018, there were gross unrealized losses of $528,000 and $2.4 million related to available for sale mortgage backed securities and CMOs. 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 the securities before their anticipated recovery, management does not consider these securities to have OTTI. 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. The Company performed an initial analysis prior to acquisition and performs ongoing analysis of the credit risk of the underlying borrower in relation to its TRUP. 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 following: · 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 $3.5 million at December 31, 2019. This security 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 Measurement. 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 15 “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) 2019 2018 2017 Balance, beginning of period $ 1,613 $ 1,765 $ 1,765 Recovery of losses previously recorded (151) (152) — Balance, end of period $ 1,462 $ 1,613 $ 1,765 Further deterioration in economic conditions could cause the Bank to record an additional impairment charge related to credit losses of up to $2.2 million, which is the current gross amortized cost of the Bank’s remaining private label mortgage backed security. Pledged Debt Securities Debt 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) 2019 2018 Carrying amount $ 229,700 $ 240,590 Fair value 229,706 240,700 Equity Securities The following tables present the carrying value, gross unrealized gains and losses, and fair value of equity securities with readily determinable fair values: Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019 (in thousands) Cost Gains Losses Value Freddie Mac preferred stock $ — $ 714 $ — $ 714 Community Reinvestment Act mutual fund 2,500 — (26) 2,474 Total equity securities with readily determinable fair values $ 2,500 $ 714 $ (26) $ 3,188 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018 (in thousands) Cost Gains Losses Value Freddie Mac preferred stock $ — $ 410 $ — $ 410 Community Reinvestment Act mutual fund 2,500 — (104) 2,396 Total equity securities with readily determinable fair values $ 2,500 $ 410 $ (104) $ 2,806 For equity securities with readily determinable fair values, the gross realized and unrealized gains and losses recognized in the Company’s consolidated statements of income were as follows: Gains (Losses) Recognized on Equity Securities Year Ended December 31, 2019 Year Ended December 31, 2018 (in thousands) Realized Unrealized Total Realized Unrealized Total Freddie Mac preferred stock $ — $ 304 $ 304 $ — $ (63) $ (63) Community Reinvestment Act mutual fund — 78 78 — (59) (59) Total equity securities with readily determinable fair value $ — $ 382 $ 382 $ — $ (122) $ (122) Freddie Mac Preferred Stock During 2008, the U.S. Treasury, the FRB, and the 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 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, 2019, the Company’s unrealized gain for its Freddie Mac preferred stock totaled $714,000. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 12 Months Ended |
Dec. 31, 2019 | |
LOANS HELD FOR SALE. | |
LOANS HELD FOR SALE | 3. In the ordinary course of business, the Bank originates for sale mortgage loans and consumer loans. Mortgage loans originated for sale are primarily originated and sold into the secondary market through the Bank’s Mortgage Banking segment, while consumer loans originated for sale are originated and sold through the RCS segment. Mortgage Loans Held for Sale, at Fair Value See additional detail regarding mortgage loans originated for sale, at fair value under Footnote 16 “Mortgage Banking Activities” of this section of the filing. Consumer Loans Held for Sale, at Fair Value In December 2019, the Bank began offering RCS installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. Balances originated under this RCS installment loan program are carried as “held for sale” on the Bank’s balance sheet, with the intent to sell sixteen days following the Bank’s origination of the loans. Loans originated under this RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly. Due to its initiation in December 2019, activity for this RCS installment loan program was considered immaterial for the year ended December 31, 2019, with $598,000 in balances held for sale as of December 31, 2019. Consumer Loans Held for Sale, at Lower of Cost or Fair Value RCS originates for sale 90% of the balances from its line-of-credit product and a portion of its hospital receivables product. Ordinary gains or losses on the sale of these RCS products are reported as a component of “Program fees.” Activity for consumer loans held for sale and carried at the lower of cost or market value was as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 12,838 $ 8,551 $ 1,310 Origination of consumer loans held for sale 709,768 761,491 603,704 Loans transferred to held for investment — 1,392 — Proceeds from the sale of consumer loans held for sale (716,062) (764,929) (601,718) Net gain on sale of consumer loans held for sale 5,102 6,333 5,255 Balance, end of period $ 11,646 $ 12,838 $ 8,551 |
LOANS AND ALLOWANCE FOR LOAN AN
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | 12 Months Ended |
Dec. 31, 2019 | |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | 4. Ending loan balances at December 31, 2019 and 2018 were as follows: December 31, (in thousands) 2019 2018 Traditional Banking: Residential real estate: Owner occupied $ 949,568 $ 1,001,832 Nonowner occupied 258,803 242,846 Commercial real estate 1,303,000 1,248,940 Construction & land development 159,702 175,178 Commercial & industrial 477,236 430,355 Lease financing receivables 14,040 15,031 Home equity 293,186 332,548 Consumer: Credit cards 17,836 19,095 Overdrafts 1,522 1,102 Automobile loans 52,923 63,475 Other consumer 68,115 46,642 Total Traditional Banking 3,595,931 3,577,044 Warehouse lines of credit* 717,458 468,695 Total Core Banking 4,313,389 4,045,739 Republic Processing Group*: Tax Refund Solutions: Easy Advances — — Other TRS loans 14,365 13,744 Republic Credit Solutions 105,397 88,744 Total Republic Processing Group 119,762 102,488 Total loans** 4,433,151 4,148,227 Allowance for loan and lease losses (43,351) (44,675) Total loans, net $ 4,389,800 $ 4,103,552 * 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 following table reconciles the contractually receivable and carrying amounts of loans at December 31, 2019 and 2018: December 31, (in thousands) 2019 2018 Contractually receivable $ 4,432,351 $ 4,147,249 Unearned income(1) (1,139) (1,038) Unamortized premiums(2) 366 588 Unaccreted discounts(3) (2,534) (3,174) Net unamortized deferred origination fees and costs(4) 4,107 4,602 Carrying value of loans $ 4,433,151 $ 4,148,227 (1) Unearned income relates to lease financing receivables. (2) Unamortized premiums predominately relate to loans acquired through the Bank’s Correspondent Lending channel. (3) Unaccreted discounts include accretable and non-accretable discounts and relate to loans acquired in the Bank’s 2016 Cornerstone acquisition and its 2012 FDIC-assisted transactions. (4) Primarily attributable to the Traditional Banking segment. Purchased-Credit-Impaired Loans The following table reconciles the contractually required and carrying amounts of all PCI loans at December 31, 2019 and 2018: December 31, (in thousands) 2019 2018 Contractually required principal $ 3,420 $ 4,251 Non-accretable amount (1,303) (1,521) Accretable amount (31) (50) Carrying value of loans $ 2,086 $ 2,680 The following table presents a rollforward of the accretable amount on all PCI loans for years ended December 31, 2019, 2018 and 2017: Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ (50) $ (140) $ (3,600) Transfers between non-accretable and accretable* (279) (573) (28) Net accretion into interest income on loans, including loan fees 298 663 3,488 Balance, end of period $ (31) $ (50) $ (140) * Transfers are primarily attributable to changes in estimated cash flows of the underlying loans. 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 follow: · For new and renewed C&I, CRE and C&D loans, the Bank’s CCAD assigns the credit quality grade to the loan. · Commercial loan officers are responsible for monitoring their respective loan portfolios and reporting any adverse material changes to senior management. When circumstances warrant a review and possible change in the credit quality grade, loan officers are required to notify the Bank’s CCAD. · 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, CCAD, Accounting, Special Assets and Retail Collections attend a Special Asset Committee meeting. The SAC reviews all C&I and CRE, classified, and impaired loans and discusses the relative trends and current status of these assets. In addition, the SAC reviews all classified and impaired retail residential real estate loans and all classified and impaired home equity loans. 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 Executive Loan Committee. The CCAD assigns the initial credit quality grade to warehouse facilities. Monthly, members of senior management review warehouse lending activity including data associated with the underlying collateral to the warehouse facilities, i.e., the mortgage loans associated with the balances drawn. Key performance indicators monitored include average days outstanding for each draw, average FICO credit report score for the underlying collateral, average LTV for the underlying collateral and other factors deemed relevant. 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, on an annual basis, the Bank analyzes a sample of “Pass” rated loans. 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: 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 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: 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-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, including small-dollar RPG loans, which do not meet the scope above, the Bank uses a grading system based on delinquency and nonaccrual status. Loans that are 90 days or more past due or on nonaccrual 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 no less than quarterly 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. The following tables include loans by risk category based on the Bank’s internal analysis performed: December 31, 2019 Special Doubtful / PCI Loans - PCI Loans - Total Rated (in thousands) Pass Mention Substandard Loss Group 1 Substandard Loans* Traditional Banking: Residential real estate: Owner occupied $ — $ 12,153 $ 14,441 $ — $ 140 $ 1,281 $ 28,015 Nonowner occupied — 487 1,285 — — — 1,772 Commercial real estate 1,286,623 4,623 11,123 — 631 — 1,303,000 Construction & land development 157,165 2,339 198 — — — 159,702 Commercial & industrial 473,094 2,152 1,968 — 22 — 477,236 Lease financing receivables 14,040 — — — — — 14,040 Home equity — — 3,276 — 4 6 3,286 Consumer: Credit cards — — — — — — — Overdrafts — — — — — — — Automobile loans — — 247 — — — 247 Other consumer — — 351 — — 2 353 Total Traditional Banking 1,930,922 21,754 32,889 — 797 1,289 1,987,651 Warehouse lines of credit 717,458 — — — — — 717,458 Total Core Banking 2,648,380 21,754 32,889 — 797 1,289 2,705,109 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — Other TRS loans — — 53 — — — 53 Republic Credit Solutions — — 355 — — — 355 Total Republic Processing Group — — 408 — — — 408 Total rated loans $ 2,648,380 $ 21,754 $ 33,297 $ — $ 797 $ 1,289 $ 2,705,517 December 31, 2018 Special Doubtful / PCI Loans - PCI Loans - Total Rated (in thousands) Pass Mention Substandard Loss Group 1 Substandard Loans* Traditional Banking: Residential real estate: Owner occupied $ — $ 14,536 $ 12,072 $ — $ 170 $ 1,476 $ 28,254 Nonowner occupied — 575 1,889 — — — 2,464 Commercial real estate 1,239,576 5,281 3,162 — 921 — 1,248,940 Construction & land development 175,113 — 65 — — — 175,178 Commercial & industrial 428,897 813 620 — 25 — 430,355 Lease financing receivables 15,031 — — — — — 15,031 Home equity — — 1,361 — 5 81 1,447 Consumer: Credit cards — — — — — — — Overdrafts — — — — — — — Automobile loans — — 91 — — — 91 Other consumer — — 462 — — 2 464 Total Traditional Banking 1,858,617 21,205 19,722 — 1,121 1,559 1,902,224 Warehouse lines of credit 468,695 — — — — — 468,695 Total Core Banking 2,327,312 21,205 19,722 — 1,121 1,559 2,370,919 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — Other TRS loans — — — — — — — Republic Credit Solutions — — 138 — — — 138 Total Republic Processing Group — — 138 — — — 138 Total rated loans $ 2,327,312 $ 21,205 $ 19,860 $ — $ 1,121 $ 1,559 $ 2,371,057 * The above tables exclude all non-classified or non-rated residential real estate, home equity and consumer loans at the respective period ends. Subprime Lending Both the Traditional Banking segment and the RCS segment of the Company have certain classes of loans that are considered to be “subprime” strictly due to the credit score of the borrower at the time of origination. Traditional Bank loans considered subprime totaled approximately $52 million and $49 million at December 31, 2019 and 2018. Approximately $23 million and $18 million of the outstanding Traditional Bank subprime loan portfolio at December 31, 2019 and 2018 were originated for CRA purposes. Management does not consider these loans to possess significantly higher credit risk due to other underwriting qualifications. The RCS segment originates a short-term line-of-credit product. The Bank has traditionally sold 90% of the balances maintained through this product within three days of loan origination and retained a 10% interest. This product is unsecured and made to borrowers with subprime or near prime credit scores. The aggregate outstanding balance held-for-investment for this portfolio totaled $28 million and $32 million at December 31, 2019 and 2018. Allowance for Loan and Lease Losses The following tables present the activity in the Allowance by portfolio class for the years ended December 31, 2019, 2018, and 2017: Allowance Rollforward Years Ended December 31, 2019 2018 Beginning Charge- Ending Beginning Charge- Ending (in thousands) Balance Provision offs Recoveries Balance Balance Provision offs Recoveries Balance Traditional Banking: Residential real estate: Owner occupied $ 6,035 $ (1,087) $ (610) $ 391 $ 4,729 $ 6,474 $ 170 $ (855) $ 246 $ 6,035 Nonowner occupied 1,662 125 (73) 23 1,737 1,396 559 (332) 39 1,662 Commercial real estate 10,030 1,859 (1,407) 4 10,486 9,043 863 (7) 131 10,030 Construction & land development 2,555 (403) — — 2,152 2,364 161 — 30 2,555 Commercial & industrial 2,873 1,505 (1,505) 9 2,882 2,198 824 (200) 51 2,873 Lease financing receivables 158 (11) — — 147 174 (16) — — 158 Home equity 3,477 (764) (64) 72 2,721 3,754 (473) (115) 311 3,477 Consumer: Credit cards 1,140 226 (402) 56 1,020 607 906 (416) 43 1,140 Overdrafts 1,102 1,155 (1,310) 222 1,169 974 1,082 (1,215) 261 1,102 Automobile loans 724 (42) (79) 9 612 687 57 (24) 4 724 Other consumer 591 (119) (263) 341 550 1,162 (423) (444) 296 591 Total Traditional Banking 30,347 2,444 (5,713) 1,127 28,205 28,833 3,710 (3,608) 1,412 30,347 Warehouse lines of credit 1,172 622 — — 1,794 1,314 (142) — — 1,172 Total Core Banking 31,519 3,066 (5,713) 1,127 29,999 30,147 3,568 (3,608) 1,412 31,519 Republic Processing Group: Tax Refund Solutions: Easy Advances — 10,643 (13,425) 2,782 — — 10,760 (12,478) 1,718 — Other TRS loans 107 606 (692) 213 234 12 159 (74) 10 107 Republic Credit Solutions 13,049 11,443 (12,566) 1,192 13,118 12,610 16,881 (17,692) 1,250 13,049 Total Republic Processing Group 13,156 22,692 (26,683) 4,187 13,352 12,622 27,800 (30,244) 2,978 13,156 Total $ 44,675 $ 25,758 $ (32,396) $ 5,314 $ 43,351 $ 42,769 $ 31,368 $ (33,852) $ 4,390 $ 44,675 Allowance Rollforward Year Ended December 31, 2017 Beginning Charge- Ending (in thousands) Balance Provision offs Recoveries Balance Traditional Banking: Residential real estate: Owner occupied $ 7,531 $ (1,014) $ (300) $ 257 $ 6,474 Nonowner occupied 1,139 272 (30) 15 1,396 Commercial real estate 8,078 826 — 139 9,043 Construction & land development 1,850 508 — 6 2,364 Commercial & industrial 1,511 842 (189) 34 2,198 Lease financing receivables 136 38 — — 174 Home equity 3,757 37 (222) 182 3,754 Consumer: Credit cards 490 247 (168) 38 607 Overdrafts 675 1,031 (960) 228 974 Automobile loans 526 188 (30) 3 687 Other consumer 771 948 (884) 327 1,162 Total Traditional Banking 26,464 3,923 (2,783) 1,229 28,833 Warehouse lines of credit 1,464 (150) — — 1,314 Total Core Banking 27,928 3,773 (2,783) 1,229 30,147 Republic Processing Group: Tax Refund Solutions: Easy Advances — 6,789 (8,121) 1,332 — Other TRS loans 25 (254) — 241 12 Republic Credit Solutions 4,967 17,396 (10,659) 906 12,610 Total Republic Processing Group 4,992 23,931 (18,780) 2,479 12,622 Total $ 32,920 $ 27,704 $ (21,563) $ 3,708 $ 42,769 Nonperforming Loans and Nonperforming Assets Detail of nonperforming loans and nonperforming assets and select credit quality ratios follows: December 31, (dollars in thousands) 2019 2018 Loans on nonaccrual status* $ 23,332 $ 15,993 Loans past due 90-days-or-more and still on accrual** 157 145 Total nonperforming loans 23,489 16,138 Other real estate owned 113 160 Total nonperforming assets $ 23,602 $ 16,298 Credit Quality Ratios - Total Company: Nonperforming loans to total loans 0.53 % 0.39 % Nonperforming assets to total loans (including OREO) 0.53 0.39 Nonperforming assets to total assets 0.42 0.31 Credit Quality Ratios - Core Bank: Nonperforming loans to total loans 0.54 % 0.40 % Nonperforming assets to total loans (including OREO) 0.54 0.40 Nonperforming assets to total assets 0.43 0.32 *Loans on nonaccrual status include impaired loans. **Loans past due 90-days-or-more and still accruing consist of smaller balance consumer 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) 2019 2018 2019 2018 Traditional Banking: Residential real estate: Owner occupied $ 12,220 $ 11,182 $ — $ — Nonowner occupied 623 669 — — Commercial real estate 6,865 2,318 — — Construction & land development 143 — — — Commercial & industrial 1,424 630 — — Lease financing receivables — — — — Home equity 1,865 1,095 — — Consumer: Credit cards — — — — Overdrafts — — — — Automobile loans 179 75 — — Other consumer 13 24 — 13 Total Traditional Banking 23,332 15,993 — 13 Warehouse lines of credit — — — — Total Core Banking 23,332 15,993 — 13 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — Other TRS loans — — 53 4 Republic Credit Solutions — — 104 128 Total Republic Processing Group — — 157 132 Total $ 23,332 $ 15,993 $ 157 $ 145 * Loans past due 90-days-or-more and still accruing consist of smaller balance consumer 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 collectively evaluated for impairment and individually 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, 2019 and 2018: Residential Real Estate Consumer Republic Owner Nonowner Home Credit Automobile Other Credit December 31, 2019 (in thousands) Occupied Occupied Equity Cards Overdrafts Loans Consumer Solutions Performing $ 937,348 $ 258,180 $ 291,321 $ 17,836 $ 1,522 $ 52,744 $ 68,102 $ 105,293 Nonperforming 12,220 623 1,865 — — 179 13 104 Total $ 949,568 $ 258,803 $ 293,186 $ 17,836 $ 1,522 $ 52,923 $ 68,115 $ 105,397 Residential Real Estate Consumer Republic Owner Nonowner Home Credit Automobile Other Credit December 31, 2018 (in thousands) Occupied Occupied Equity Cards Overdrafts Loans Consumer Solutions Performing $ 990,650 $ 242,177 $ 331,453 $ 19,095 $ 1,102 $ 63,400 $ 46,605 $ 88,616 Nonperforming 11,182 669 1,095 — — 75 37 128 Total $ 1,001,832 $ 242,846 $ 332,548 $ 19,095 $ 1,102 $ 63,475 $ 46,642 $ 88,744 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, 2019 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Traditional Banking: Residential real estate: Owner occupied $ 1,460 $ 1,153 $ 1,821 $ 4,434 $ 945,134 $ 949,568 Nonowner occupied — — 539 539 258,264 258,803 Commercial real estate 155 — 3,145 3,300 1,299,700 1,303,000 Construction & land development — — — — 159,702 159,702 Commercial & industrial 200 128 1,027 1,355 475,881 477,236 Lease financing receivables — — — — 14,040 14,040 Home equity 1,810 166 942 2,918 290,268 293,186 Consumer: Credit cards 80 75 — 155 17,681 17,836 Overdrafts 278 4 1 283 1,239 1,522 Automobile loans 16 15 18 49 52,874 52,923 Other consumer 2 6 1 9 68,106 68,115 Total Traditional Banking 4,001 1,547 7,494 13,042 3,582,889 3,595,931 Warehouse lines of credit — — — — 717,458 717,458 Total Core Banking 4,001 1,547 7,494 13,042 4,300,347 4,313,389 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — Other TRS loans 35 31 53 119 14,246 14,365 Republic Credit Solutions 6,054 1,485 104 7,643 97,754 105,397 Total Republic Processing Group 6,089 1,516 157 7,762 112,000 119,762 Total $ 10,090 $ 3,063 $ 7,651 $ 20,804 $ 4,412,347 $ 4,433,151 Delinquency ratio*** 0.23 % 0.07 % 0.17 % 0.47 % * All loans past due 90-days-or-more, excluding small balance consumer 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 by aging category divided by total loans. 30 - 59 60 - 89 90 or More December 31, 2018 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Traditional Banking: Residential real estate: Owner occupied $ 1,137 $ 748 $ 3,640 $ 5,525 $ 996,307 $ 1,001,832 Nonowner occupied 349 — 659 1,008 241,838 242,846 Commercial real estate 511 — 588 1,099 1,247,841 1,248,940 Construction & land development — — — — 175,178 175,178 Commercial & industrial — — 25 25 430,330 430,355 Lease financing receivables — — — — 15,031 15,031 Home equity 558 — 226 784 331,764 332,548 Consumer: Credit cards 82 46 1 129 18,966 19,095 Overdrafts 223 5 2 230 872 1,102 Automobile loans — 28 — 28 63,447 63,475 Other consumer 27 7 13 47 46,595 46,642 Total Traditional Banking 2,887 834 5,154 8,875 3,568,169 3,577,044 Warehouse lines of credit — — — — 468,695 468,695 Total Core Banking 2,887 834 5,154 8,875 4,036,864 4,045,739 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — Other TRS loans 2 4 4 10 13,734 13,744 Republic Credit Solutions 5,734 1,215 128 7,077 81,667 88,744 Total Republic Processing Group 5,736 1,219 132 7,087 95,401 102,488 Total $ 8,623 $ 2,053 $ 5,286 $ 15,962 $ 4,132,265 $ 4,148,227 Delinquency ratio*** 0.21 % 0.05 % 0.13 % 0.38 % *All loans past due 90 days-or-more, excluding small-dollar consumer 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: Years Ended December 31, (in thousands) 2019 2018 2017 Loans with no allocated Allowance $ 33,061 $ 19,555 $ 18,540 Loans with allocated Allowance 17,289 21,880 27,076 Total recorded investment in impaired loans $ 50,350 $ 41,435 $ 45,616 Amount of the allocated Allowance $ 2,512 $ 3,764 $ 4,685 Average of individually impaired loans during the year 45,400 45,620 47,361 Interest income recognized during impairment 1,342 1,245 1,392 Cash basis interest income recognized — — — Approximately $2 million and $3 million of impaired loans at December 31, 2019 and 2018 were PCI loans. 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, 2019 and 2018: Allowance for Loan and Lease Losses Loans Individually PCI with Individually PCI with PCI without December 31, 2019 Evaluated Collectively Post-Acquisition Total Evaluated Collectively Post-Acquisition Post-Acquisition Total Allowance to (dollars in thousands) Excluding PCI Evaluated Impairment Allowance Excluding PCI Evaluated Impairment Impairment Loans Total Loans Traditional Banking: Residential real estate: Owner occupied $ 1,207 $ 3,337 $ 185 $ 4,729 $ 25,384 $ 922,764 $ 1,420 $ — $ 949,568 0.50 % Nonowner occupied — 1,737 — 1,737 1,448 257,355 — — 258,803 0.67 Commercial real estate 426 10,054 6 10,486 15,144 1,287,225 631 — 1,303,000 0.80 Construction & land development — 2,152 — 2,152 198 159,504 — — 159,702 1.35 Commercial & industrial 22 2,860 — 2,882 1,989 475,225 — 22 477,236 0.60 Lease financing receivables — 147 — 147 — 14,040 — — 14,040 1.05 Home equity 174 2,547 — 2,721 3,276 289,900 10 — 293,186 0.93 Consumer: Credit cards — 1,020 — 1,020 — 17,836 — — 17,836 5.72 Overdrafts — 1,169 — 1,169 — 1,522 — — 1,522 76.81 Automobile loans 43 569 — 612 247 52,676 — — 52,923 1.16 Other consumer 333 217 — 550 350 67,762 2 1 68,115 0.81 Total Traditional Banking 2,205 25,809 191 28,205 48,036 3,545,809 2,063 23 3,595,931 0.78 Warehouse lines of credit — 1,794 — 1,794 — 717,458 — — 717,458 0.25 Total Core Banking 2,205 27,603 191 29,999 48,036 4,263,267 2,063 23 4,313,389 0.70 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — — — — Other TRS loans — 234 — 234 — 14,365 — — 14,365 1.63 Republic Credit Solutions 116 13,002 — 13,118 251 105,146 — — 105,397 12.45 Total Republic Processing Group 116 13,236 — 13,352 251 119,511 — — 119,762 11.15 Total $ 2,321 $ 40,839 $ 191 $ 43,351 $ 48,287 $ 4,382,778 $ 2,063 $ 23 $ 4,433,151 0.98 % Allowance for Loan and Lease Losses Loans Individually PCI with Individually PCI with PCI without December 31, 2018 Evaluated Collectively Post-Acquisition Total Evaluated Collectively Post-Acquisition Post-Acquisition Total Allowance to (dollars in thousands) Excluding PCI Evaluated Impairment Allowance Excluding PCI Evaluated Impairment Impairment Loans Total Loans Traditional Banking: Residential real estate: Owner occupied $ 2,052 $ 3,602 $ 381 $ 6,035 $ 25,242 $ 974,945 $ 1,645 $ — $ 1,001,832 0.60 % Nonowner occupied 4 1,658 — 1,662 2,406 240,440 — — 242,846 0.68 Commercial real estate 294 9,727 9 10,030 8,104 1,239,915 919 2 1,248,940 0.80 Construction & land development 4 2,551 — 2,555 65 175,113 — — 175,178 1.46 Commercial & industrial 130 2,743 — 2,873 1,020 429,310 — 25 430,355 0.67 Lease financing receivables — 158 — 158 — 15,031 — — 15,031 1.05 Home equity 286 3,117 74 3,477 1,361 331,101 86 — 332,548 1.05 Consumer: Credit cards — 1,140 — 1,140 — 19,095 — — 19,095 5.97 Overdrafts — 1,102 — 1,102 — 1,102 — — 1,102 100.00 Automobile loans 91 633 — 724 91 63,384 — — 63,475 1.14 Other consumer 421 170 — 591 449 46,190 3 — 46,642 1.27 Total Traditional Banking 3,282 26,601 464 30,347 38,738 3,535,626 2,653 27 3,577,044 0.85 Warehouse lines of credit — 1,172 — 1,172 — 468,695 — — 468,695 0.25 Total Core Banking 3,282 27,773 464 31,519 38,738 4,004,321 2,653 27 4,045,739 0.78 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — — — — Ot |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | 5. A summary of the cost and accumulated depreciation of premises and equipment follows: December 31, (in thousands) 2019 2018 Land $ 3,818 $ 4,185 Buildings and improvements 33,819 35,264 Furniture, fixtures and equipment 48,782 43,245 Leasehold improvements 20,649 19,638 Construction in progress 2,232 — Total premises and equipment 109,300 102,332 Less: Accumulated depreciation and amortization 63,940 59,206 Premises and equipment, net $ 45,360 $ 43,126 The Company held three former banking centers for sale as of December 31, 2018 and sold one of these properties during 2019. Banking centers held for sale as of December 31, 2019 included two Florida-based former banking centers. The Company carried the two remaining former banking centers at a value of $836,000, inclusive of accumulated depreciation, at December 31, 2019. The Company sold its former East Bay, Florida banking center in December 2019 for a $339,000 net gain. The Company sold its former Port Richey, Florida banking center in 2018 and recognized a $14,000 loss. Depreciation expense related to premises and equipment follows: Years Ended December 31, (in thousands) 2019 2018 2017 Depreciation expense $ 9,230 $ 9,347 $ 8,472 |
RIGHT-OF-USE ASSETS AND OPERATI
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | |
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | 6. Upon adoption of ASU 2016-02 on January 1, 2019, the Company was under 50 separate and distinct operating lease contracts to lease the land and/or buildings for 38 of its offices, with 15 such operating leases contracted with a related party of the Company. As of January 1, 2019, the Company recorded total operating lease liabilities of $42 million and total right-of-use assets of $40 million, primarily reflecting the present value of its expected remaining lease payments plus any residual guarantees under its operating lease contracts. In order to discount these remaining lease payments and guarantees, the Company made assumptions concerning the expected remaining lease term and the discount rate. The Company’s assumption regarding the expected remaining lease term included the fixed noncancelable term, plus all periods for which failure to renew the lease imposed a penalty on the Company, plus all periods for which the Company was reasonably certain to exercise a lease renewal option, plus all periods for which the Company was reasonably certain not to exercise a lease termination option. In determining whether it was reasonably certain to exercise a lease renewal or termination option, the Company considered its overall strategic plan and all economic and environmental circumstances connected to the leased property. Expected remaining lease terms upon adoption of ASU 2016-02 ranged from 0.75 to 18.51 years, with a weighted average remaining term of 8.60 years. The Company employed the interest rate curve published by the FHLB of Cincinnati for the FHLB’s collateralized term borrowings as of January 1, 2019 to discount its operating lease payments and guarantees, matching expected lease term to borrowing term. Discount rates employed upon adoption of ASU 2016-02 ranged from 2.94% to 3.70%, with a weighted average rate of 3.48%. As of December 31, 2019, payments on 25 of the Company’s operating leases were considered variable because such payments were adjustable based on periodic changes in the Consumer Price Index. Prior to the release of these financial statements, the Company had executed two lease contracts that had not commenced for two of its banking centers. The estimated operating lease liabilities and offsetting right-of-use assets to be recorded for these leases totaled approximately $623,000 . The following table presents information concerning the Company’s operating lease expense recorded as a noninterest expense within the category “Occupancy and equipment, net” for the year ended December 31, 2019: Year Ended December 31, (in thousands) 2019 Operating lease expense: Related Party: Variable lease expense $ 4,690 Fixed lease expense 37 Third Party: Variable lease expense 883 Fixed lease expense 1,505 Short-term lease expense 62 Total operating lease expense $ 7,177 Other information concerning operating leases: Cash paid for amounts included in the measurement of operating lease liabilities $ 7,175 Short-term lease payments not included in the measurement of lease liabilities 62 The following table presents the weighted average remaining term and weighted average discount rate for the Company’s non-short-term operating leases as of December 31, 2019: December 31, 2019 Weighted average remaining term in years 8.02 Weighted average discount rate 3.46 % The following table presents a maturity schedule of the Company’s operating lease liabilities based on undiscounted cash flows, and a reconciliation of those undiscounted cash flows to the operating lease liabilities recognized on the Company’s balance sheet as of December 31, 2019: Year (in thousands) Related Party Third Party Total 2020 $ 4,608 $ 2,590 $ 7,198 2021 4,194 2,371 6,565 2022 3,332 1,966 5,298 2023 3,332 1,441 4,773 2024 3,205 1,017 4,222 Thereafter 12,718 1,950 14,668 Total undiscounted cash flows $ 31,389 $ 11,335 $ 42,724 Discount applied to cash flows (4,554) (1,640) (6,194) Total discounted cash flows reported as operating lease liabilities $ 26,835 $ 9,695 $ 36,530 |
GOODWILL AND CORE DEPOSIT INTAN
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | |
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | 7. A progression of the balance for goodwill follows: Years Ended December 31, (in thousands) 2019 2018 2017 Beginning of period $ 16,300 $ 16,300 $ 16,300 Acquired goodwill — — — Impairment — — — End of period $ 16,300 $ 16,300 $ 16,300 The goodwill balance relates entirely to the Company’s Traditional Banking operations. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2019 and 2018, the Company’s Traditional 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 impairment test as of December 31, 2019, 2018, and 2017. The Company recorded a $1 million core deposit intangible asset in association with its May 17, 2016 Cornerstone acquisition. For the years ending December 31, 2019, 2018 and 2017, aggregate CDI amortization expense was immaterial to the Company’s financial statements. |
INTEREST RATE SWAPS
INTEREST RATE SWAPS | 12 Months Ended |
Dec. 31, 2019 | |
INTEREST RATE SWAPS | |
INTEREST RATE SWAPS | 8. 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 cash flow 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 OCI. 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 3-month LIBOR or the overall changes in cash flows on certain money market deposit accounts tied to 1-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, 2019 and 2018: December 31, 2019 December 31, 2018 Unrealized Unrealized Notional Pay Receive Assets / Gain (Loss) Assets / Gain (Loss) (dollars in thousands) Amount Rate Rate Term (Liabilities) in AOCI (Liabilities) in AOCI Interest rate swap on money market deposits $ 10,000 2.17 % 1M LIBOR 12/2013 - 12/2020 $ (46) $ (34) $ 58 $ 45 Interest rate swap on FHLB advance 10,000 2.33 % 3M LIBOR 12/2013 - 12/2020 (58) (43) 57 45 Total $ 20,000 $ (104) $ (77) $ 115 $ 90 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, 2019, 2018, and 2017: Years Ended December 31, (in thousands) 2019 2018 2017 Interest rate swap on money market deposits $ (10) $ 18 $ 109 Interest rate swap on FHLB advance (10) 10 110 Total interest (benefit) expense on swap transactions $ (20) $ 28 $ 219 The following table presents the net gains (losses) recorded in accumulated OCI and the consolidated statements of income relating to the swaps for the years ended December 31, 2019, 2018, and 2017: Years Ended December 31, (in thousands) 2019 2018 2017 (Gains) losses recognized in OCI on derivative (effective portion) $ (199) $ 178 $ 83 Gains (losses) reclassified from OCI on derivative (effective portion) 20 (28) (219) Gains (losses) recognized in income on derivative (ineffective portion) — — — The estimated net amount of the existing losses reported in AOCI at December 31, 2019 expected to be reclassified into earnings within the next 12 months is considered immaterial . 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 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 has no credit risk. A summary of the Bank’s interest rate swaps related to clients as of December 31, 2019 and 2018 is included in the following table: 2019 2018 Notional Notional December 31, (in thousands) Bank Position Amount Fair Value Amount Fair Value Interest rate swaps with Bank clients - Assets Pay variable/receive fixed $ 95,411 $ 5,062 $ 26,398 $ 1,264 Interest rate swaps with Bank clients - Liabilities Pay variable/receive fixed 6,640 (55) 54,718 (908) Interest rate swaps with Bank clients - Total Pay variable/receive fixed $ 102,051 $ 5,007 $ 81,116 $ 356 Offsetting interest rate swaps with institutional swap dealer Pay fixed/receive variable 102,051 (5,007) 81,116 (356) Total $ 204,102 $ — $ 162,232 $ — The Bank is required to pledge securities as collateral when the Bank is in a net loss position for all swaps with dealer counterparties when such net loss positions exceed $250,000. The fair value of cash or investment securities pledged as collateral by the Bank to cover such net loss positions totaled $7.5 million and $0 million at December 31, 2019 and 2018. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2019 | |
DEPOSITS | |
DEPOSITS | 9. Ending deposit balances at December 31, 2019 and 2018 were as follows: December 31, (in thousands) 2019 2018 Core Bank: Demand $ 922,972 $ 937,402 Money market accounts 793,950 717,954 Savings 175,588 187,868 Individual retirement accounts (1) 51,548 53,524 Time deposits, $250 and over (1) 104,412 84,104 Other certificates of deposit (1) 248,161 239,324 Reciprocal money market and time deposits (1) 189,774 217,153 Brokered deposits (1) 200,072 9,394 Total Core Bank interest-bearing deposits 2,686,477 2,446,723 Total Core Bank noninterest-bearing deposits 981,164 971,422 Total Core Bank deposits 3,667,641 3,418,145 Republic Processing Group: Money market accounts 66,152 5,453 Total RPG interest-bearing deposits 66,152 5,453 Brokered prepaid card deposits 9,128 4,350 Other noninterest-bearing deposits 43,087 28,197 Total RPG noninterest-bearing deposits 52,215 32,547 Total RPG deposits 118,367 38,000 Total deposits $ 3,786,008 $ 3,456,145 (1) Includes time deposits. Time deposits at or above the FDIC insured limit of $250,000 are presented in the table below: December 31, (in thousands) 2019 2018 Time deposits of $250 or more $ 104,412 $ 84,104 At December 31, 2019, the scheduled maturities and weighted average rate of all time deposits, including brokered and reciprocal certificates of deposit, were as follows: Weighted Average Years (dollars in thousands) Principal Rate 2020 $ 541,352 1.90 % 2021 88,628 2.14 2022 37,947 2.19 2023 55,179 2.92 2024 10,836 2.41 Thereafter — — Total $ 733,942 2.03 |
SECURITIES SOLD UNDER AGREEMENT
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | 12 Months Ended |
Dec. 31, 2019 | |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | 10. 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, 2019 and 2018, all securities sold under agreements to repurchase had overnight maturities. Additional information regarding securities sold under agreements to repurchase follows: December 31, (dollars in thousands) 2019 2018 Outstanding balance at end of period $ 167,617 $ 182,990 Weighted average interest rate at end of period 0.32 % 0.83 % Fair value of securities pledged: U.S. Treasury securities and U.S. Government agencies $ 70,015 $ 110,854 Mortgage backed securities - residential 134,265 84,657 Collateralized mortgage obligations 17,030 10,136 Total securities pledged $ 221,310 $ 205,647 Additional information regarding securities sold under agreements to repurchase for the years ended December 31, 2019, 2018 and 2017 follows: Years Ended December 31, (in thousands) 2019 2018 2017 Average outstanding balance during the period $ 236,883 $ 225,145 $ 219,515 Average interest rate during the period % 0.50 % 0.23 % Maximum outstanding at any month end during the period $ 276,927 $ 260,147 $ 293,944 |
FEDERAL HOME LOAN BANK ADVANCES
FEDERAL HOME LOAN BANK ADVANCES | 12 Months Ended |
Dec. 31, 2019 | |
FEDERAL HOME LOAN BANK ADVANCES | |
FEDERAL HOME LOAN BANK ADVANCES | 11. At December 31, 2019 and 2018, FHLB advances were as follows: December 31, (dollars in thousands) 2019 2018 Overnight advances $ 200,000 $ 510,000 Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% 10,000 10,000 Fixed interest rate advances 540,000 290,000 Total FHLB advances $ 750,000 $ 810,000 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, 2019 and 2018, Republic had available borrowing capacity of $259 million and $254 million, respectively, from the FHLB. In addition to its borrowing capacity with the FHLB, Republic also had unsecured lines of credit totaling $125 million and $125 million available through various other financial institutions as of December 31, 2019 and 2018. Aggregate future principal payments on FHLB advances based on contractual maturity and the weighted average cost of such advances are detailed below: Weighted Average Year (dollars in thousands) Principal Rate 2020 (Overnight) $ 200,000 1.63 % 2020 (Term) 480,000 1.71 2021 30,000 1.93 2022 20,000 2.12 2023 20,000 2.56 2024 — — Thereafter — — Total $ 750,000 1.73 % 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 overnight FHLB advances follows: December 31, (dollars in thousands) 2019 2018 Outstanding balance at end of period $ 200,000 $ 510,000 Weighted average interest rate at end of period 1.63 % 2.45 % Years Ended December 31, (dollars in thousands) 2019 2018 2017 Average outstanding balance during the period $ 270,992 $ 202,830 $ 141,918 Average interest rate during the period 2.43 % 1.98 % 1.09 % Maximum outstanding at any month end during the period $ 785,000 $ 560,000 $ 625,000 The following table illustrates real estate loans pledged to collateralize advances and letters of credit with the FHLB: December 31, (in thousands) 2019 2018 First lien, single family residential real estate $ 1,099,941 $ 1,129,588 Home equity lines of credit 274,990 311,419 |
SUBORDINATED NOTE
SUBORDINATED NOTE | 12 Months Ended |
Dec. 31, 2019 | |
SUBORDINATED NOTE | |
SUBORDINATED NOTE | 12. In 2005, RBCT, an unconsolidated trust subsidiary of Republic, was formed and issued $40 million in 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 3-month 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 January 1, 2020, and carried the note at a cost of 3-month LIBOR + 1.42%, or 3.38%, at December 31, 2019. |
OFF BALANCE SHEET RISKS, COMMIT
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | |
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | 13. 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 clients, as well as personal property and real estate of individual clients or guarantors. The Company also extends binding commitments to clients and prospective clients. Such commitments assure a borrower of financing for a specified period of time at a specified rate. 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 following table presents the Company’s commitments, exclusive of Mortgage Banking loan commitments for each year ended: December 31, (in thousands) 2019 2018 Unused warehouse lines of credit $ 436,541 $ 591,305 Unused home equity lines of credit 363,195 377,277 Unused loan commitments - other 757,657 720,645 Standby letters of credit 11,252 10,642 FHLB letter of credit 2,485 10,000 Total commitments $ 1,571,130 $ 1,709,869 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. |
STOCKHOLDERS' EQUITY AND REGULA
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | 12 Months Ended |
Dec. 31, 2019 | |
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | |
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS | 14. Common Stock — The Company’s 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, 2019, the Bank could, without prior approval, declare dividends of approximately $151 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, 2019 and 2018, 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. For prompt corrective action, the regulations in accordance with Basel III define “well capitalized” as a 10.0% Total Risk-Based Capital ratio, a 6.5% Common Equity Tier 1 Risk-Based Capital ratio, an 8.0% Tier 1 Risk-Based Capital ratio, and a 5.0% Tier 1 Leverage ratio. Additionally, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, the Company and Bank must hold a capital conservation buffer of 2.5% composed of Common Equity Tier 1 Risk-Based Capital above their minimum risk-based 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, 2019 Total capital to risk-weighted assets Republic Bancorp, Inc. $ 825,987 17.01 % $ 388,526 8.00 % NA NA Republic Bank & Trust Company 723,248 14.91 388,143 8.00 $ 485,179 10.00 % Common equity tier 1 capital to risk-weighted assets Republic Bancorp, Inc. 742,636 15.29 218,546 4.50 NA NA Republic Bank & Trust Company 679,897 14.01 218,331 4.50 315,366 6.50 Tier 1 (core) capital to risk-weighted assets Republic Bancorp, Inc. 782,636 16.11 291,394 6.00 NA NA Republic Bank & Trust Company 679,897 14.01 291,107 6.00 388,143 8.00 Tier 1 leverage capital to average assets Republic Bancorp, Inc. 782,636 13.93 224,799 4.00 NA NA Republic Bank & Trust Company 679,897 12.11 224,515 4.00 280,644 5.00 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, 2018 Total capital to risk-weighted assets Republic Bancorp, Inc. $ 757,726 16.80 % $ 360,911 8.00 % NA NA Republic Bank & Trust Company 654,258 14.52 360,359 8.00 $ 450,449 10.00 % Common equity tier 1 capital to risk-weighted assets Republic Bancorp, Inc. 673,051 14.92 203,012 4.50 NA NA Republic Bank & Trust Company 609,583 13.53 202,702 4.50 292,792 6.50 Tier 1 (core) capital to risk-weighted assets Republic Bancorp, Inc. 713,051 15.81 270,683 6.00 NA NA Republic Bank & Trust Company 609,583 13.53 270,269 6.00 360,359 8.00 Tier 1 leverage capital to average assets Republic Bancorp, Inc. 713,051 14.11 202,119 4.00 NA NA Republic Bank & Trust Company 609,583 12.06 202,126 4.00 252,658 5.00 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE | |
FAIR VALUE | 15. 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: Available-for-sale debt securities: Except for the Bank’s private label mortgage backed security and its TRUP investment, the fair value of AFS debt securities 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 Measurement . 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 2 “Investment Securities” for additional discussion regarding the Bank’s private label mortgage backed security. The Company acquired its TRUP investment in 2015 and considered the most recent bid price for the same instrument to approximate market value at December 31, 2019. The Company’s TRUP investment is considered highly illiquid and also valued using Level 3 inputs, as the most recent bid price for this instrument is not always considered generally observable. Equity securities with readily determinable fair value: Quoted market prices in an active market are available for the Bank’s CRA mutual fund investment and fall within Level 1 of the fair value hierarchy. The fair value of the Company’s Freddie Mac preferred stock is determined by matrix pricing, as described above (Level 2 inputs). Mortgage loans held for sale, at fair value: 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. Consumer loans held for sale, at fair value: In December 2019, the Bank began offering RCS installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. Balances originated under this RCS installment loan program are carried as “held for sale” on the Bank’s balance sheet, with the intent to sell sixteen days following the Bank’s origination of the loans. Loans originated under this RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly. Fair value for these loans is based on contractual sales terms, Level 3 inputs. Due to its restart in December 2019, activity for this RCS installment loan program was considered immaterial for the year ended December 31, 2019, with $598,000 in balances held for sale as of December 31, 2019. Consumer loans held for investment, at fair value: The Bank held $998,000 in consumer loans at fair value through a consumer loan program the Company is currently unwinding. The fair value of these loans was based on the discounted cash flows of the underlying loans, Level 3 inputs. 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: Interest rate swaps are recorded at fair value on a recurring basis. The Company values its interest rate swaps using a third-party valuation service and classifies such valuations as Level 2. Valuations of these interest rate swaps are also received from the relevant dealer counterparty and validated against the Company’s 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 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 quarterly for additional impairment and adjusted accordingly. Premises carried at fair value: Premises and equipment are accounted for at the lower of cost less accumulated depreciation or fair value less estimated costs to sell. The fair value of Bank premises 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 collateral-dependent impaired loans, impaired premises 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 CCAD 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: At least quarterly, 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 tranche exceeds fair value, impairment is recorded, and the respective individual tranche is carried at fair value. If the carrying amount of an individual tranche 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 can generally be validated against available market data (Level 2). There were no MSR tranches carried at fair value at December 31, 2019 and 2018. 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, 2019 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: Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ — $ 134,640 $ — $ 134,640 Private label mortgage backed security — — 3,495 3,495 Mortgage backed securities - residential — 255,847 — 255,847 Collateralized mortgage obligations — 63,371 — 63,371 Corporate bonds — 10,002 — 10,002 Trust preferred security — — 4,000 4,000 Total available-for-sale debt securities $ — $ 463,860 $ 7,495 $ 471,355 Equity securities with readily determinable fair value: Freddie Mac preferred stock $ — $ 714 $ — $ 714 Community Reinvestment Act mutual fund 2,474 — — 2,474 Total equity securities with readily determinable fair value $ 2,474 $ 714 $ — $ 3,188 Mortgage loans held for sale $ — $ 19,224 $ — $ 19,224 Consumer loans held for sale — — 598 598 Consumer loans held for investment — — 998 998 Rate lock loan commitments — 789 — 789 Interest rate swap agreements — 5,062 — 5,062 Financial liabilities: Mandatory forward contracts $ — $ 131 $ — $ 131 Interest rate swap agreements — 5,166 — 5,166 Fair Value Measurements at December 31, 2018 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: Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ — $ 216,873 $ — $ 216,873 Private label mortgage backed security — — 3,712 3,712 Mortgage backed securities - residential — 169,209 — 169,209 Collateralized mortgage obligations — 72,811 — 72,811 Corporate bonds — 9,058 — 9,058 Trust preferred security — — 4,075 4,075 Total available-for-sale debt securities $ — $ 467,951 $ 7,787 $ 475,738 Equity securities with readily determinable fair value: Freddie Mac preferred stock $ — $ 410 $ — $ 410 Community Reinvestment Act mutual fund 2,396 — — 2,396 Total equity securities with readily determinable fair value $ 2,396 $ 410 $ — $ 2,806 Mortgage loans held for sale $ — $ 8,971 $ — $ 8,971 Consumer loans held for investment — — 1,922 1,922 Rate lock loan commitments — 356 — 356 Interest rate swap agreements — 1,264 — 1,264 Financial liabilities: Mandatory forward contracts $ — $ 262 $ — $ 262 Interest rate swap agreements — 1,149 — 1,149 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, 2019 and 2018. The following table 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, 2019, 2018, and 2017: Private Label Mortgage Backed Security Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 3,712 $ 4,449 $ 4,777 Total gains or losses included in earnings: Net change in unrealized gain (79) (20) 298 Recovery of actual losses previously recorded 151 152 — Principal paydowns (289) (869) (626) Balance, end of period $ 3,495 $ 3,712 $ 4,449 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, 2019 and 2018: Fair Valuation December 31, 2019 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ 3,495 Discounted cash flow (1) Constant prepayment rate 2.3% - 5.0% (2) Probability of default 1.8% - 6.3% (3) Loss severity 50% - 75% Fair Valuation December 31, 2018 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ 3,712 Discounted cash flow (1) Constant prepayment rate 6.5% - 8.9% (2) Probability of default 1.8% - 4.7% (3) Loss severity 50% - 75% Trust Preferred Security The Company invested in its TRUP in November 2015. The following table presents a reconciliation of the Company’s TRUP measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ending December 31, 2019, 2018, and 2017: Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 4,075 $ 3,600 $ 3,200 Total gains or losses included in earnings: Discount accretion 42 40 44 Net change in unrealized gain (117) 435 356 Balance, end of period $ 4,000 $ 4,075 $ 3,600 The fair value of the Company’s TRUP investment is based on the most recent bid price for this instrument, as provided by a third-party broker. 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, 2019 and 2018. As of December 31, 2019 and 2018, the aggregate fair value, contractual balance (including accrued interest), and unrealized gain was as follows: December 31, (in thousands) 2019 2018 Aggregate fair value $ 19,224 $ 8,971 Contractual balance 18,690 8,676 Unrealized gain 534 295 The total amount of gains and losses from changes in fair value of mortgage loans held for sale included in earnings for 2019, 2018, and 2017 are presented in the following table: Years Ended December 31, (in thousands) 2019 2018 2017 Interest income $ 697 $ 402 $ 346 Change in fair value 239 203 (1) Total included in earnings $ 936 $ 605 $ 345 Consumer Loans Held for Sale The Company initiated its RCS installment loan program in December 2019 and held $598,000 of these loans for sale at December 31, 2019. Disclosure of fair value inputs has been omitted for this immaterial level of loan volume. Consumer Loans Held for Investment The Company held $998,000 and $1.9 million in RCS installment loans for investment at December 31, 2019 and 2018 through a program the Company is in the process of unwinding. Disclosure of fair value inputs has been omitted for this immaterial level of loan volume. Assets measured at fair value on a non-recurring basis are summarized below: Fair Value Measurements at December 31, 2019 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 $ — $ — $ 3,598 $ 3,598 Nonowner occupied — — 14 14 Commercial real estate — — 3,276 3,276 Commercial & industrial — — 1,562 1,562 Home equity — — 470 470 Total impaired loans* $ — $ — $ 8,920 $ 8,920 Premises $ — $ — $ 836 $ 836 Fair Value Measurements at December 31, 2018 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 Consumer loans held for sale $ — $ — $ 1,249 $ 1,249 Impaired loans: Residential real estate: Owner occupied $ — $ — $ 4,708 $ 4,708 Nonowner occupied — — 1,007 1,007 Commercial real estate — — 1,255 1,255 Commercial & industrial — — 609 609 Home equity — — 356 356 Total impaired loans* $ — $ — $ 7,935 $ 7,935 Premises $ — $ — $ 1,694 $ 1,694 * 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, 2019 and 2018: Range Fair Valuation Unobservable (Weighted December 31, 2019 (dollars in thousands) Value Technique Inputs Average) Impaired loans - residential real estate owner occupied $ 3,598 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 58% (12%) Impaired loans - residential real estate nonowner occupied $ 14 Sales comparison approach Adjustments determined for differences between comparable sales 5% (5%) Impaired loans - commercial real estate $ 3,276 Sales comparison approach Adjustments determined for differences between comparable sales 1% - 10% (4%) Impaired loans - commercial & industrial $ 1,562 Sales comparison approach Adjustments determined for differences between comparable sales 3% - 50% (37%) Impaired loans - home equity $ 470 Sales comparison approach Adjustments determined for differences between comparable sales 2% (2%) Premises $ 836 Sales comparison approach Adjustments determined for differences between comparable sales 39% - 77% (55%) Range Fair Valuation Unobservable (Weighted December 31, 2018 (dollars in thousands) Value Technique Inputs Average) Consumer loans held for sale $ 1,249 Sales comparison approach Adjustments determined for differences between comparable sales 6% (6%) Impaired loans - residential real estate owner occupied $ 4,708 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 67% (9%) Impaired loans - residential real estate nonowner occupied $ 1,007 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 27% (15%) Impaired loans - commercial real estate $ 123 Sales comparison approach Adjustments determined for differences between comparable sales 21% (21%) Impaired loans - commercial real estate $ 1,132 Income approach Adjustments for differences between net operating income expectations 17% (17%) Impaired loans - commercial & industrial $ 609 Sales comparison approach Adjustments determined for differences between comparable sales 3% (3%) Impaired loans - home equity $ 356 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 22% (8%) Premises $ 1,694 Sales comparison approach Adjustments determined for differences between comparable sales 27% - 72% (40%) 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) 2019 2018 Carrying amount of loans measured at fair value $ 7,729 $ 7,380 Estimated selling costs considered in carrying amount 1,193 913 Valuation allowance (2) (358) Total fair value $ 8,920 $ 7,935 Years Ended December 31, (in thousands) 2019 2018 2017 Provisions on collateral-dependent, impaired loans $ 3,039 $ 1,629 $ 169 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. Details of other real estate owned carrying value and write downs follow: December 31, (in thousands) 2019 2018 2017 Other real estate owned carried at fair value $ — $ — $ 83 Other real estate owned carried at cost 113 160 32 Total carrying value of other real estate owned $ 113 $ 160 $ 115 Other real estate owned write-downs during the years ended $ — $ — $ 155 Premises The Company’s Traditional Banking segment classified two of its former banking centers as held for sale as of December 31, 2019, with one additional banking center classified as held for sale as of December 31, 2018 and sold during 2019. Impairment charges are recorded when the value of a piece of property is reappraised or reassessed below the property’s then-carrying value. Impairment charges related to these properties were as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Impairment charges on premises $ 256 $ 482 $ 1,175 The carrying amounts and estimated fair values of financial instruments, at December 31, 2019 and 2018 are as follows: Fair Value Measurements at December 31, 2019: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ 385,303 $ 385,303 $ — $ — $ 385,303 Available-for-sale debt securities 471,355 — 463,860 7,495 471,355 Held-to-maturity debt securities 62,531 — 63,156 — 63,156 Equity securities with readily determinable fair values 3,188 2,474 714 — 3,188 Mortgage loans held for sale, at fair value 19,224 — 19,224 — 19,224 Consumer loans held for sale, at fair value 598 — — 598 598 Consumer loans held for sale, at the lower of cost or fair value 11,646 — — 11,646 11,646 Loans, net 4,389,800 — — 4,381,396 4,381,396 Federal Home Loan Bank stock 30,831 — — — NA Accrued interest receivable 12,937 — 12,937 — 12,937 Rate lock loan commitments 789 — 789 — 789 Interest rate swap agreements 5,062 — 5,062 — 5,062 Liabilities: Noninterest-bearing deposits $ 1,033,379 — $ 1,033,379 — $ 1,033,379 Transaction deposits 2,018,687 — 2,018,687 — 2,018,687 Time deposits 733,942 — 737,733 — 737,733 Securities sold under agreements to repurchase and other short-term borrowings 167,617 — 167,617 — 167,617 Federal Home Loan Bank advances 750,000 — 749,667 — 749,667 Subordinated note 41,240 — 32,587 — 32,587 Accrued interest payable 2,802 — 2,802 — 2,802 Mandatory forward contracts 131 — 131 — 131 Interest rate swap agreements 5,166 — 5,166 — 5,166 NA - Not applicable Fair Value Measurements at December 31, 2018: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ 351,474 $ 351,474 $ — $ — $ 351,474 Available-for-sale debt securities 475,738 — 467,951 7,787 475,738 Held-to-maturity debt securities 65,227 — 64,858 — 64,858 Equity securities with readily determinable fair values 2,806 2,396 410 — 2,806 Mortgage loans held for sale, at fair value 8,971 — 8,971 — 8,971 Consumer loans held for sale, at the lower of cost or fair value 12,838 — — 12,838 12,838 Loans, net 4,103,552 — — 4,062,457 4,062,457 Federal Home Loan Bank stock 32,067 — — — NA Accrued interest receivable 13,942 — 13,942 — 13,942 Rate lock loan commitments 356 — 356 — 356 Interest rate swap agreements 1,264 — 1,264 — 1,264 Liabilities: Noninterest-bearing deposits $ 1,003,969 — $ 1,003,969 — $ 1,003,969 Transaction deposits 2,035,701 — 2,035,701 — 2,035,701 Time deposits 416,475 — 412,477 — 412,477 Securities sold under agreements to repurchase and other short-term borrowings 182,990 — 182,990 — 182,990 Federal Home Loan Bank advances 810,000 — 804,251 — 804,251 Subordinated note 41,240 — 33,724 — 33,724 Accrued interest payable 1,084 — 1,084 — 1,084 Mandatory forward contracts 262 — 262 — 262 Interest rate swap agreements 1,149 — 1,149 — 1,149 NA - Not applicable |
MORTGAGE BANKING ACTIVITIES
MORTGAGE BANKING ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
MORTGAGE BANKING ACTIVITIES | |
MORTGAGE BANKING ACTIVITIES | 16. 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) 2019 2018 2017 Balance, beginning of period $ 8,971 $ 5,761 $ 11,662 Origination of mortgage loans held for sale 356,097 176,916 160,091 Proceeds from the sale of mortgage loans held for sale (354,660) (177,545) (169,969) Net gain on sale of mortgage loans held for sale 8,816 3,839 3,977 Balance, end of period $ 19,224 $ 8,971 $ 5,761 Mortgage loans serviced for others are not reported as assets. The Bank serviced loans for others, primarily the FHLMC, totaling $1.1 billion and $972 million at December 31, 2019 and 2018. 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 $11 million and $10 million at December 31, 2019 and 2018. The following table presents the components of Mortgage Banking income: Years Ended December 31, (in thousands) 2019 2018 2017 Net gain realized on sale of mortgage loans held for sale $ 8,013 $ 3,843 $ 4,180 Net change in fair value recognized on loans held for sale 239 203 (1) Net change in fair value recognized on rate lock loan commitments 433 46 11 Net change in fair value recognized on forward contracts 131 (253) (213) Net gain recognized 8,816 3,839 3,977 Loan servicing income 2,506 2,418 2,169 Amortization of mortgage servicing rights (1,823) (1,432) (1,504) Net servicing income recognized 683 986 665 Total Mortgage Banking income $ 9,499 $ 4,825 $ 4,642 Activity for capitalized mortgage servicing rights was as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 4,919 $ 5,044 $ 5,180 Additions 2,792 1,307 1,368 Amortized to expense (1,823) (1,432) (1,504) Balance, end of period $ 5,888 $ 4,919 $ 5,044 There was no balance or activity in the valuation allowance for capitalized mortgage servicing rights for the years ended December 31, 2019, 2018, and 2017. Other information relating to mortgage servicing rights follows: December 31, (in thousands) 2019 2018 Fair value of mortgage servicing rights portfolio $ 9,068 $ 9,357 Monthly weighted average prepayment rate of unpaid principal balance* 202 % 160 % Discount rate 10.00 % 10.00 % Weighted average foreclosure rate % 0.14 % Weighted average life in years * Rates are applied to individual tranches with similar characteristics. Estimated future amortization expense of the MSR portfolio (net of any applicable 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) 2020 $ 1,057 2021 1,054 2022 1,044 2023 889 2024 654 2025 446 2026 744 Total $ 5,888 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: 2019 2018 Notional Notional December 31, (in thousands) Amount Fair Value Amount Fair Value Included in Mortgage loans held for sale: Mortgage loans held for sale, at fair value $ 18,690 $ 19,224 $ 8,676 $ 8,971 Included in other assets: Rate lock loan commitments $ 32,776 $ 789 $ 14,788 $ 356 Included in other liabilities: Mandatory forward contracts $ 44,919 $ 131 $ 20,063 $ 262 |
STOCK PLANS AND STOCK BASED COM
STOCK PLANS AND STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
STOCK PLANS AND STOCK BASED COMPENSATION | 17. STOCK PLANS AND STOCK BASED COMPENSATION In January 2015, the Company’s Board of Directors adopted the Republic Bancorp, Inc. 2015 Stock Incentive Plan (the “2015 Plan”), which replaced the 2005 Stock Incentive Plan. The number of authorized shares under the 2015 Plan is 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 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 their grant date. All shares issued under the 2015 Plan 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. Stock Options 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, 2019 2018 2017 Risk-free interest rate 1.85 % 3.00 % 2.07 % Expected dividend yield 2.25 % 2.01 % 2.41 % Expected stock price volatility 20.11 % 18.59 % 20.36 % Expected life of options (in years) 5 5 5 Estimated fair value per share $ 7.12 $ 8.09 $ 5.46 The following table summarizes stock option activity from January 1, 2018 through December 31, 2019: Weighted Weighted Average Options Average Remaining Aggregate Class A Exercise Contractual Intrinsic Shares Price Term Value Outstanding, January 1, 2018 295,000 $ 24.68 Granted 165,000 48.08 Exercised (3,500) 24.10 Forfeited or expired (23,300) 26.51 Outstanding, December 31, 2018 433,200 $ 33.50 3.15 $ 3,786,820 Outstanding, January 1, 2019 433,200 $ 33.50 Granted 5,500 47.02 Exercised (100,600) 24.50 Forfeited or expired (26,650) 36.00 Outstanding, December 31, 2019 311,450 $ 36.43 2.73 $ 3,449,454 Unvested 255,650 $ 38.91 3.15 $ 2,235,562 Exercisable (vested) at December 31, 2019 55,800 $ 25.08 0.77 $ 1,213,892 Information related to the stock options during each year follows: Years Ended December 31, 2019 2018 2017 Intrinsic value of options exercised $ 2,249 $ 79 $ 71 Cash received from options exercised, net of shares redeemed (191) 83 68 Loan balances of non-executive officer employees that were originated solely to fund stock option exercises were as follows: December 31, (in thousands) 2019 2018 Outstanding loans $ 355 $ 133 Restricted Stock Awards Restricted stock awards generally vest within six years after issue, with accelerated vesting due to “change in control” or “death or disability of a participant” as defined and outlined in the 2015 Plan. The following table summarizes restricted stock activity from January 1, 2018 through December 31, 2019: Restricted Stock Awards Weighted-Average Class A Shares Grant Date Fair Value Outstanding, January 1, 2018 41,610 $ 21.18 Granted 48,323 40.16 Forfeited (1,500) 19.85 Earned and issued (37,323) 21.33 Outstanding, December 31, 2018 51,110 $ 39.06 Outstanding, January 1, 2019 51,110 $ 39.06 Granted 2,336 49.34 Forfeited — — Earned and issued (12,336) 46.63 Outstanding, December 31, 2019 41,110 $ 37.37 Unvested 41,110 $ 37.37 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. Performance Stock Units The Company first granted PSUs under the 2015 Plan in January 2016. Shares of stock underlying the PSUs may be earned over a four-year performance period commencing on January 1, 2017 and ending on December 31, 2020 as follows: · If the Company achieves a ROA, as defined in the award agreement, of 1.25% for a calendar year in the performance period, then between March 1 st and March 15 th of the following year, provided that the recipient is still employed in good standing on the payment date, the Company will issue shares of fully vested stock to the participant equal to 50% of the number of the PSUs initially granted to the participant; and · If the ROA of 1.25% is met again at the end of another calendar year during the remaining term of the performance period, the Company will similarly issue fully vested stock in an amount equal to the remaining 50% of the initial PSUs granted to the participant. · The Compensation Committee (the “Committee”) makes all determinations regarding the achievement of ROA based on the Company’s audited financial statements and average assets as reported in the Company's Annual Report on Form 10- K with the Securities and Exchange Commission, and the determination of the Committee is final and binding on all parties. The Committee reserves the right, in its sole discretion, to adjust the calculation of ROA downward for income or expense items that it considers to be infrequent or nonrecurring in nature. The following table summarizes PSU activity from January 1, 2018 through December 31, 2019: Performance Stock Units Weighted-Average Class A Shares Grant Date Fair Value Outstanding, January 1, 2018 48,500 $ 23.08 Granted — — Forfeited (2,500) 23.08 Earned and issued — — Outstanding, December 31, 2018 46,000 $ 23.08 Outstanding, January 1, 2019 46,000 $ 23.08 Granted — — Forfeited — — Earned and issued (23,000) 23.08 Outstanding, December 31, 2019 23,000 $ 23.08 Vested at December 31, 2019 23,000 $ 23.08 Expense Related to Stock Incentive Plans The Company recorded expense related to stock incentive plans for the years ended December 31, 2019, 2018, and 2017 as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Stock option expense $ 364 $ 265 $ 227 Restricted stock award expense 728 630 424 Performance stock unit expense (57) 106 491 Total expense $ 1,035 $ 1,001 $ 1,142 Unrecognized expenses related to unvested awards under stock incentive plans are estimated as follows: Stock Restricted Year (in thousands) Options Stock Awards Total 2020 $ 304 $ 261 $ 565 2021 277 261 538 2022 240 237 477 2023 106 119 225 2024 5 16 21 2025 and beyond — — — Total $ 932 $ 894 $ 1,826 Deferred Compensation On April 19, 2018, the shareholders of Republic approved an amendment and restatement of the Non-Employee Director and Key Employee Deferred Compensation Plan (the “Plan”). Prior to the Plan’s 2018 amendment and restatement, only directors participated in the plan, with the 2018 amendment and restatement initiating key-employee participation. The Plan provides non-employee directors and designated key employees the ability to defer compensation and have those deferred amounts paid later in the form of Company Class A Common shares based on the shares that could have been acquired as the deferrals were made. The Company maintains a bookkeeping account for each director or key-employee participant, and at the end of each fiscal quarter, deferred compensation is converted to “stock units” equal to the amount of compensation deferred during the quarter divided by the quarter-end fair market value of the Company’s Class A Common stock. Stock units for each participant’s account are also credited with an amount equal to the cash dividends that would have been paid on the number of stock units in the account if the stock units were deemed to be outstanding shares of stock. Any dividends credited are converted into additional stock units at the end of the fiscal quarter in which the dividends were paid. DIRECTORS Members of the Board of Directors may defer board and committee fees from two to five years, with each director participant retaining a nonforfeitable interest in his or her deferred compensation account. The following table presents information on director deferred compensation under the Plan for the periods presented: Outstanding Weighted-Average Stock Market Price Units at Date of Deferral Outstanding, January 1, 2018 63,898 $ 24.08 Deferred fees and dividend equivalents converted to stock units 5,081 41.82 Stock units converted to Class A Common Shares (2,835) 23.94 Outstanding, December 31, 2018 66,144 $ 25.45 Outstanding, January 1, 2019 66,144 $ 25.45 Deferred fees and dividend equivalents converted to stock units 6,397 46.76 Stock units converted to Class A Common Shares (5,178) 23.18 Outstanding, December 31, 2019 67,363 $ 27.65 Vested 67,363 $ 27.65 Director deferred compensation has been expensed as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Director deferred compensation expense $ 213 $ 215 $ 191 KEY EMPLOYEES Designated key employees may defer a portion of their base salaries on a pre-tax basis under the Plan, with the Company matching employee deferrals up to a prescribed limit. With limited exception, the Company match amount remains unvested until December 31 st of the year that is five years from the beginning of the year that the Company match is made. The following table presents information on key-employee deferred compensation under the Plan for the periods presented: Outstanding Weighted-Average Stock Market Price Units at Date of Deferral Outstanding, January 1, 2018 — $ — Deferred base salaries and dividend equivalents converted to stock units 4,630 43.09 Matching stock units credited 4,992 43.09 Matching stock units forfeited (362) 42.99 Stock units converted to Class A Common Shares — — Outstanding, December 31, 2018 9,260 $ 43.09 Outstanding, January 1, 2019 9,260 $ 43.09 Deferred base salaries and dividend equivalents converted to stock units 7,059 45.84 Matching stock units credited 7,059 45.84 Matching stock units forfeited — — Stock units converted to Class A Common Shares — — Outstanding, December 31, 2019 23,378 $ 41.75 Vested 14,953 $ 41.75 Unvested 8,425 $ 41.75 The following presents key-employee deferred compensation expense for the period presented: Years Ended December 31, (in thousands) 2019 2018 2017 Key-employee - base salary $ 319 $ 215 $ — Key-employee - employer match 49 215 — Total $ 368 $ 430 $ — Employee Stock Purchase Plan On April 19, 2018, the shareholders of Republic approved the ESPP. Under the ESPP, participating employees may purchase shares of the Company Class A Common Stock through payroll withholdings at a purchase price that cannot be less than 85% of the lower of the fair market value of the Company’s Class A Common Stock on the first trading day of each offering period or on the last trading day of each offering period. Participating employees were able purchase the Company’s Class A Common Stock through the ESPP at 90% of its fair market value on the last day of the three-month offering periods ended September 30, 2018, December 31, 2018, March 31, 2019, June 30, 2019, September 30, 2019, and December 31, 2019. The following presents expense under the ESPP for the period presented: Years Ended December 31, (in thousands) 2019 2018 2017 ESPP expense $ 49 $ 23 $ — |
BENEFIT PLANS
BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2019 | |
BENEFIT PLANS | |
BENEFIT PLANS | 18. 401(k) Plan Republic maintains a 401(k) plan for eligible employees. All eligible employees are automatically enrolled at 6% of their eligible compensation within 30 days of their date of hire, unless the eligible employee elects to enroll sooner. 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 may also contribute discretionary matching contributions in addition to the matching contributions if the Company achieves certain operating goals. Normal and discretionary contributions for each of the periods ended were as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Employer matching contributions $ 3,185 $ 2,890 $ 2,190 Discretionary employer bonus matching contributions 207 392 335 Supplemental Executive Retirement Plan In association with its May 17, 2016 Cornerstone acquisition, the Company inherited a SERP. The SERP requires the Company to pay monthly benefits following retirement of the SERP’s four participants. The Company accrues the present value of such benefits monthly. The SERP liability was approximately $2 million and $2 million at December 31, 2019 and 2018. Expense under the SERP was $97,000, $102,000 and $93,000 for the years ended December 31, 2019, 2018, and 2017. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 19. Allocation of federal income tax between current and deferred portion is as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Current expense: Federal $ 18,906 $ 10,638 $ 26,983 State 1,751 1,532 486 Deferred expense: SAB 118 related discrete items — (2,762) — Deferred tax asset devaluation upon enactment of TCJA — — 6,326 Federal 1,880 6,815 (965) State (1,043) 188 (76) Total $ 21,494 $ 16,411 $ 32,754 Effective tax rates differ from federal statutory rate applied to income before income taxes due to the following: Years Ended December 31, 2019 2018 2017 Federal corporate tax rate 21.00 % 21.00 % 35.00 % Effect of: SAB 118 related discrete items* — (2.93) — Deferred tax asset devaluation upon enactment of TCJA — — 8.07 State taxes, net of federal benefit 1.43 1.44 0.34 General business tax credits (1.14) (1.44) — Nontaxable income (0.85) (0.99) (1.90) Reversal of valuation allowance on net operating loss carryforward (0.74) — — Tax benefit of vesting employee benefits (0.42) (0.20) (0.31) Establishment of deferred tax asset due to KY HB354 (0.20) — — Other, net (0.09) 0.53 0.59 Effective tax rate 18.99 17.41 41.79 *Discrete items include the impact of a cost-segregation study, a research and development tax-credit study, and a tax-accounting-method change related to the immediate recognition of loan origination costs. The TCJA was enacted on December 22, 2017 and reduced the federal corporate tax rate from 35% to 21%, effective January 1, 2018. The Company incurred a charge of $6.3 million to income tax expense during 2017 representing the decrease in value of its net DTA upon enactment of the TCJA. At December 31, 2017, except for a planned cost-segregation study, based on facts and circumstances known at that time, the Company believed it had substantially completed its accounting for the tax effects of the TCJA. The following items provided $2.8 million in federal income tax benefits during 2018 and primarily drove the Total Company’s effective tax rate for that period lower than the federal corporate tax rate of 21%: · During the third quarter of 2018 the Company completed a cost-segregation study and assigned revised tax lives to select fixed assets resulting from a detailed engineering-based analysis. The more detailed classification of fixed assets allowed the Company a large one-time recognition of additional depreciation expense for its 2017 federal tax return at a 35% income tax rate, as opposed to the TCJA rate of 21% it previously expected to receive for these deductions in the future. Tax benefits related to the cost-segregation study were primarily attributed to the Company’s Traditional Banking segment. · The Company adopted an automatic tax-accounting-method change related to loan origination costs during the third quarter of 2018, as it was preparing its 2017 federal tax return. This tax-accounting-method change related to the immediate recognition of loan origination costs for income tax purposes, as opposed to the amortization of those costs over the life of the loan. The change in tax-accounting-method resulted in a further impact from the TCJA, as it affected the Company’s 2017 federal tax return due October 15, 2018. Tax benefits related to the tax-accounting-method change were 100% attributed to the Company’s Traditional Banking segment. · The Company completed an R&D tax-credit study during the third quarter of 2018, which resulted in the recognition of R&D credits dating back to 2014. Tax benefits related to the R&D tax-credit study were attributed to the Company’s Traditional Banking, TRS, and RCS segments. The following items provided $2.8 million in federal income tax benefits during 2019 and drove the Total Company’s effective tax rate for that period lower than the federal corporate tax rate of 21%: · As a financial institution doing business in Kentucky, the Bank is subject to a capital-based Kentucky bank franchise tax and exempt from Kentucky corporate income tax. In March 2019, however, Kentucky enacted HB354, which will transition the Bank from the bank franchise tax to a corporate income tax beginning January 1, 2021. The current Kentucky corporate income tax rate is 5%. As of December 31, 2019, the Company recorded a deferred tax asset, net of the federal benefit, of $224,000 due to the enactment of HB354, with the majority of this benefit attributed to the Company’s Traditional Banking segment. · In April 2019, Kentucky enacted HB458, which allows for sharing of certain tax attributes between Republic Bancorp and the Bank, including net operating losses. Republic Bancorp had previously filed a separate company income tax return for Kentucky and generated net operating losses, for which it had maintained a valuation allowance against the related deferred tax asset. HB458 also allows for certain net operating losses to be utilized on a combined return. Republic Bancorp expects to file a combined return beginning in 2021 and to utilize these previously generated net operating losses. The tax benefit to reverse the valuation allowance and record the deferred tax asset for these losses is approximately $8 40 ,000 and is fully attributed to the Company’s Traditional Banking segment. · T he Company re cognized $ 480 ,000 in income tax benefit s associated with equity compensation during 2019 . Substantially all of this benefit was attributed to the Company’s Traditional Banking segment. · The Company recognized $1.3 million in income tax benefits for low-income-housing investments and R&D credits during 2019. The low-income-housing investments were attributable to the Company’s Traditional Banking segment, while the R&D credits were attributed to the Traditional Banking, TRS, and RCS segments. Year-end DTAs and DTLs were due to the following: December 31, (in thousands) 2019 2018 Deferred tax assets: Allowance for loan and lease losses $ 9,672 $ 9,746 Operating lease liabilities 8,186 — Accrued expenses 3,332 3,802 Net operating loss carryforward(1) 2,705 2,858 Acquisition fair value adjustments 443 580 Other-than-temporary impairment 397 478 Unrealized investment security losses — 289 Fair value of cash flow hedges 26 — Other 1,741 1,644 Total deferred tax assets 26,502 19,397 Deferred tax liabilities: Right of use assets - operating leases (7,889) — Depreciation and amortization (4,018) (3,970) Federal Home Loan Bank dividends (2,667) (2,676) Deferred loan fees (2,068) (1,921) Lease Financing Receivables (2,245) (1,839) Mortgage servicing rights (1,319) (1,106) Unrealized investment securities gains (1,058) — Bargain purchase gain (648) (553) Fair value of cash flow hedges — (24) Other (246) (11) Total deferred tax liabilities (22,158) (12,100) Less: Valuation allowance — (819) Net deferred tax asset $ 4,344 $ 6,478 (1) The Company has federal and state net operating loss carryforwards (acquired in its 2016 Cornerstone acquisition) of $8.0 million (federal) and $5.1 million (state). These carryforwards begin to expire in 2030 for both federal and state purposes. The use of these federal and state carryforwards is each limited under IRC Section 382 to $722,000 annually for federal and $634,000 annually for state. The Company also has a Kentucky net operating loss carryforward of $21.2 million, which the Company expects to begin utilizing in 2021 due to the passage of Kentucky HB354 and HB458. The Company expects to file a combined Kentucky income tax return beginning in 2021 and to utilize these previously generated net operating losses. The Company previously maintained a valuation allowance as it did not anticipate generating taxable income in Kentucky to utilize this carryforward prior to expiration. Finally, the Company has AMT credit carryforwards of $87,000 with no expiration date. Unrecognized Tax Benefits The following table shows a reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 1,327 $ 912 $ 1,495 Additions based on tax related to the current period 364 306 259 Additions for tax positions of prior periods 55 339 — Reductions for tax positions of prior periods — (34) (42) Reductions due to the statute of limitations (39) (196) (800) Settlements — — — Balance, end of period $ 1,707 $ 1,327 $ 912 Of the 2019 total, $1.5 million represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. It is the Company’s policy to recognize interest and penalties as a component of income tax expense related to its unrecognized tax benefits. Amounts related to interest and penalties recorded in the income statements for the years ended December 31, 2019, 2018, and 2017 and accrued on the balance sheets as of December 31, 2019, 2018, and 2017 are presented below: Years Ended December 31, (in thousands) 2019 2018 2017 Interest and penalties recorded in the income statement as a component of income tax expense $ 173 $ 42 $ (258) Interest and penalties accrued on balance sheet 514 341 299 The Company files income tax returns in the U.S. federal jurisdiction. The Company is no longer subject to U.S. federal income tax examinations by taxing authorities for all years prior to and including 2013. Low Income Housing Tax Credits The Company is a limited partner in several low-income housing partnerships whose purpose is to invest in qualified affordable housing. The Company expects to recover its remaining investments in these partnerships through the use of tax credits that are generated by the investments. The following table summarizes information related to the Company’s qualified low-income housing investments and commitments: December 31, (in thousands) 2019 2018 Unfunded Unfunded Investment Accounting Method Investment Commitment Investment Commitment Low income housing tax credit investments - Gross Proportional amortization $ 11,912 $ 24,888 $ 3,971 $ 14,029 Life-to-date amortization (1,218) NA (347) NA Low income housing tax credit investments - Net $ 10,694 $ 24,888 $ 3,624 $ 14,029 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 20. The Company calculates earnings per share under the two-class method. Under the two-class method, earnings available to common shareholders for the period are allocated between Class A Common Stock and Class B Common Stock according to dividends declared (or accumulated) and participation rights in undistributed earnings. The difference in earnings per share between the two classes of common stock results from the 10% per share cash dividend premium paid on Class A Common Stock over that paid on Class B Common Stock. See Footnote 14, “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) 2019 2018 2017 Net income $ 91,699 $ 77,852 $ 45,632 Dividends declared on Common Stock: Class A Shares (19,771) (18,076) (16,158) Class B Shares (2,121) (1,955) (1,773) Undistributed net income for basic earnings per share 69,807 57,821 27,701 Weighted average potential dividends on Class A shares upon exercise of dilutive options (118) (102) (75) Undistributed net income for diluted earnings per share $ 69,689 $ 57,719 $ 27,626 Weighted average shares outstanding: Class A Shares 18,813 18,736 18,678 Class B Shares 2,210 2,224 2,243 Effect of dilutive securities on Class A Shares outstanding 112 105 86 Weighted average shares outstanding including dilutive securities 21,135 21,065 21,007 Basic earnings per share: Class A Common Stock: Per share dividends distributed $ 1.06 $ 0.97 $ 0.87 Undistributed earnings per share* 3.35 2.79 1.34 Total basic earnings per share - Class A Common Stock $ 4.41 $ 3.76 $ 2.21 Class B Common Stock: Per share dividends distributed $ 0.96 $ 0.88 $ 0.79 Undistributed earnings per share* 3.05 2.53 1.22 Total basic earnings per share - Class B Common Stock $ 4.01 $ 3.41 $ 2.01 Diluted earnings per share: Class A Common Stock: Per share dividends distributed $ 1.06 $ 0.97 $ 0.87 Undistributed earnings per share* 3.33 2.77 1.33 Total diluted earnings per share - Class A Common Stock $ 4.39 $ 3.74 $ 2.20 Class B Common Stock: Per share dividends distributed $ 0.96 $ 0.88 $ 0.79 Undistributed earnings per share* 3.03 2.52 1.21 Total diluted earnings per share - Class B Common Stock $ 3.99 $ 3.40 $ 2.00 *To arrive at undistributed earnings per share, undistributed net income is first pro rated between Class A and Class B Common Shares, with Class A Common Shares receiving a 10% premium. The resulting pro-rated, undistributed net income for each class is then divided by the weighted average shares for each class. Stock options excluded from the detailed earnings per share calculation because their impact was antidilutive are as follows: December 31, 2019 2018 2017 Antidilutive stock options 154,750 165,000 4,500 Average antidilutive stock options 151,260 47,712 2,375 |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | 12 Months Ended |
Dec. 31, 2019 | |
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | |
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | 21. Republic leases office facilities under operating leases from limited liability companies in which Republic’s Chairman/Chief Executive Officer and Vice Chair are partners. Rent expense and obligations under these leases are presented in Footnote 6 in this section of the filing. Loans made to executive officers and directors of Republic and their related interests during 2019 were as follows: (in thousands) Beginning balance $ 38,370 Effect of changes in composition of related parties (184) New loans 2,385 Repayments 2,827 Ending balance $ 43,398 Deposits from executive officers, directors, and their affiliates totaled $97 million and $102 million at December 31, 2019 and 2018. 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 million and $2 million as of December 31, 2019 and 2018. Pursuant to the terms of the trust, the beneficiaries of the trust will each receive the proceeds of the policies after the repayment of any unreimbursed portion of the $690,000 annual premiums paid by the Company. The unreimbursed portion constitutes indebtedness from the trust to the Company and is secured by a collateral assignment of the policies. As of December 31, 2019 and 2018, the unreimbursed portion was $540,000 and $640,000, and the net death benefit under the policies was approximately $3 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. |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2019 | |
OTHER COMPREHENSIVE INCOME | |
OTHER COMPREHENSIVE INCOME | 22. OCI components and related tax effects were as follows: Years Ended December 31, (in thousands) 2019 2018 2017 Available-for-Sale Debt Securities: Change in unrealized (loss) gain on AFS debt securities $ 5,689 $ (1,548) $ (1,265) Adjustment for adoption of ASU 2016-01 — (428) — Reclassification adjustment for net (gain) loss on AFS debt securities recognized in earnings — — 136 Change in unrealized gain on AFS debt security for which a portion of OTTI has been recognized in earnings (79) (20) 298 Net unrealized (losses) gains 5,610 (1,996) (831) Tax effect (1,348) 420 377 Net of tax 4,262 (1,576) (454) Cash Flow Hedges: Change in fair value of derivatives used for cash flow hedges (199) 178 83 Reclassification amount for net derivative losses realized in income (20) 28 219 Net unrealized gains (219) 206 302 Tax effect 52 (43) (119) Net of tax (167) 163 183 Total other comprehensive (loss) income components, net of tax $ 4,095 $ (1,413) $ (271) Amounts reclassified out of each component of accumulated OCI for the years ended December 31, 2019, 2018, and 2017: Amounts Reclassified From Affected Line Items Accumulated Other in the Consolidated Comprehensive Income Years Ended December 31, (in thousands) Statements of Income 2019 2018 2017 Available for Sale Debt Securities: Net losses on debt securities Noninterest income $ — $ — $ (136) Tax effect Income tax expense — — 48 Net of tax Net income — — (88) Cash Flow Hedges: Interest rate swap on money market deposits Interest benefit (expense) on deposits 10 (18) (109) Interest rate swap on FHLB advance Interest benefit (expense) on FHLB advances 10 (10) (110) Total derivative gains (losses) on cash flow hedges Total interest benefit (expense) 20 (28) (219) Tax effect Income tax (benefit) expense (5) 6 77 Net of tax Net income 15 (22) (142) Net of tax, total all reclassification amounts Net income $ 15 $ (22) $ (230) The following is a summary of the accumulated OCI balances, net of tax: 2019 (in thousands) December 31, 2018 Change December 31, 2019 Unrealized gain (loss) on AFS debt securities $ (2,165) $ 4,376 $ 2,211 Unrealized gain (loss) on AFS debt security for which a portion of OTTI has been recognized in earnings 1,078 (114) 964 Unrealized gain (loss) on cash flow hedges 90 (167) (77) Total unrealized (loss) gain $ (997) $ 4,095 $ 3,098 2018 (in thousands) December 31, 2017 Change December 31, 2018 Unrealized loss on AFS debt securities $ (604) $ (1,561) $ (2,165) Unrealized gain (loss) on AFS debt security for which a portion of OTTI has been recognized in earnings 1,093 (15) 1,078 Unrealized gain (loss) on cash flow hedges (73) 163 90 Total unrealized gain (loss) $ 416 $ (1,413) $ (997) |
PARENT COMPANY CONDENSED FINANC
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | 23. BALANCE SHEETS December 31, (in thousands) 2019 2018 Assets: Cash and cash equivalents $ 101,003 $ 99,440 Security available for sale 4,000 4,075 Investment in bank subsidiary 699,906 625,814 Investment in non-bank subsidiaries 3,631 3,343 Other assets 4,749 4,854 Total assets $ 813,289 $ 737,526 Liabilities and Stockholders’ Equity: Subordinated note $ 41,240 $ 41,240 Other liabilities 7,805 6,352 Stockholders’ equity 764,244 689,934 Total liabilities and stockholders’ equity $ 813,289 $ 737,526 STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Years Ended December 31, (in thousands) 2019 2018 2017 Income and expenses: Dividends from subsidiary $ 24,249 $ 22,385 $ 20,063 Interest income 250 231 186 Other income 54 45 45 Less: Interest expense 1,620 1,508 1,094 Less: Other expenses 511 469 394 Income before income tax benefit 22,422 20,684 18,806 Income tax benefit 1,213 348 116 Income before equity in undistributed net income of subsidiaries 23,635 21,032 18,922 Equity in undistributed net income of subsidiaries 68,064 56,820 26,710 Net income $ 91,699 $ 77,852 $ 45,632 Comprehensive income $ 95,794 $ 76,439 $ 45,361 STATEMENTS OF CASH FLOWS Years Ended December 31, (in thousands) 2019 2018 2017 Operating activities: Net income $ 91,699 $ 77,852 $ 45,632 Adjustments to reconcile net income to net cash provided by operating activities: Accretion of investment security (42) (40) (44) Equity in undistributed net income of subsidiaries (68,064) (56,820) (26,710) Director deferred compensation - Parent Company 139 117 108 Change in other assets (25) 605 1,215 Change in other liabilities 842 (976) 1,623 Net cash provided by operating activities 24,549 20,738 21,824 Investing activities: Investment in subsidiary bank (494) (230) — Net cash used in investing activities (494) (230) — Financing activities: Common Stock repurchases (1,418) (827) (1,048) Net proceeds from Class A Common Stock purchased through employee stock purchase plan 494 230 — Net proceeds from Common Stock options exercised (191) 83 68 Cash dividends paid (21,377) (19,497) (17,656) Net cash used in financing activities (22,492) (20,011) (18,636) Net change in cash and cash equivalents 1,563 497 3,188 Cash and cash equivalents at beginning of period 99,440 98,943 95,755 Cash and cash equivalents at end of period $ 101,003 $ 99,440 $ 98,943 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 24. REVENUE FROM CONTRACTS WITH CUSTOMERS The following tables present the Company’s net revenue by reportable segment for the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income(1) $ 168,076 $ 15,801 $ 697 $ 184,574 $ 21,626 $ 29,926 $ 51,552 $ 236,126 Noninterest income: Service charges on deposit accounts 14,153 44 — 14,197 — — — 14,197 Net refund transfer fees — — — — 21,158 — 21,158 21,158 Mortgage banking income(1) — — 9,499 9,499 — — — 9,499 Interchange fee income 11,600 — — 11,600 259 — 259 11,859 Program fees(1) — — — — 437 4,275 4,712 4,712 Increase in cash surrender value of BOLI(1) 1,550 — — 1,550 — — — 1,550 Net gains (losses) on OREO 540 — — 540 — — — 540 Net gain on branch divestiture(1) 7,829 — — 7,829 — — — 7,829 Other 2,881 (90) 213 3,004 1 659 660 3,664 Total noninterest income 38,553 (46) 9,712 48,219 21,855 4,934 26,789 75,008 Total net revenue $ 206,629 $ 15,755 $ 10,409 $ 232,793 $ 43,481 $ 34,860 $ 78,341 $ 311,134 Net-revenue concentration(2) 67 % 5 % 3 % 75 % 14 % 11 % 25 % 100 % (1) This revenue is not subject to ASU 2014-09, Revenue from Contracts with Customers. (2) Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue. Year Ended December 31, 2018 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income(1) $ 160,398 $ 15,726 $ 402 $ 176,526 $ 19,203 $ 30,329 $ 49,532 $ 226,058 Noninterest income: Service charges on deposit accounts 14,233 40 — 14,273 — — — 14,273 Net refund transfer fees — — — — 20,029 — 20,029 20,029 Mortgage banking income(1) — — 4,825 4,825 — — — 4,825 Interchange fee income 10,868 — — 10,868 226 65 291 11,159 Program fees(1) — — — — 295 5,930 6,225 6,225 Increase in cash surrender value of BOLI(1) 1,527 — — 1,527 — — — 1,527 Net gains (losses) on OREO 729 — — 729 — — — 729 Other 2,608 — 550 3,158 1,003 497 1,500 4,658 Total noninterest income 29,965 40 5,375 35,380 21,553 6,492 28,045 63,425 Total net revenue $ 190,363 $ 15,766 $ 5,777 $ 211,906 $ 40,756 $ 36,821 $ 77,577 $ 289,483 Net-revenue concentration(2) 66 % 5 % 2 % 73 % 14 % 13 % 27 % 100 % (1) This revenue is not subject to ASU 2014-09, Revenue from Contracts with Customers. (2) Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue. The following represents information for significant revenue streams subject to ASC 606: Service charges on deposits – The Company earns revenue for account-based and event-driven services on its retail and commercial deposit accounts. Contracts for these services are generally in the form of deposit agreements, which disclose fees for deposit services. Revenue for event-driven services is recognized in close proximity or simultaneously with service performance. Revenue for certain account-based services may be recognized at a point in time or over the period the service is rendered, typically no longer than a month. Examples of account-based and event-driven service charges on deposits include per item fees, paper-statement fees, check-cashing fees, and analysis fees. Net refund transfer fees – An RT is a fee-based product offered by the Bank through third-party tax preparers located throughout the United States, as well as tax-preparation software providers (collectively, the “Tax Providers”), with the Bank acting as an independent contractor of the Tax Providers. An RT allows a taxpayer to pay any applicable tax preparation and filing related fees directly from his federal or state government tax refund, with the remainder of the tax refund disbursed directly to the taxpayer. RT fees and all applicable tax preparation, transmitter, audit, and any other taxpayer authorized amounts are deducted from the tax refund by either the Bank or the Bank’s service provider and automatically forwarded to the appropriate party as authorized by the taxpayer. RT fees generally receive first priority when applying fees against the taxpayer’s refund, with the Bank’s share of RT fees generally superior to the claims of other third-party service providers, including the Tax Providers. The remainder of the refund is disbursed to the taxpayer by a Bank check printed at a tax office, direct deposit to the taxpayer’s personal bank account, loaded to a Net Spend Visa® Prepaid Card or Walmart Direct2Cash. The Company executes contracts with individual Tax Providers to offer RTs to their taxpayer customers. RT revenue is recognized by the Bank immediately after the taxpayer’s refund is disbursed in accordance with the RT contract with the taxpayer customer. The fee paid by the taxpayer for the RT is shared between the Bank and the Tax Providers based on contracts executed between the parties. The Company presents RT revenue net of any amounts shared with the Tax Providers. The Bank’s share of RT revenue is generally based on the obligations undertaken by the Tax Provider for each individual RT program, with more obligations generally corresponding to higher RT revenue share. The significant majority of net RT revenue is recognized and obligations under RT contracts fulfilled by the Bank during the first half of each year. Incremental expenses associated with the fulfilment of RT contracts are generally expensed during the first half of the year. Interchange fee income – As an “issuing bank” for card transactions, the Company earns interchange fee income on transactions executed by its cardholders with various third-party merchants. Through third-party intermediaries, merchants compensate the Company for each transaction for the ability to efficiently settle the transaction and for the Company’s willingness to accept certain risks inherent in the transaction. There is no written contract between the merchant and the Company, but a contract is implied between the two parties by customary business practices. Interchange fee income is recognized almost simultaneously by the Company upon the completion of a related card transaction. The Company compensates its cardholders by way of cash or other “rewards” for generating card transactions. These rewards are disclosed in cardholder agreements between the Company and its cardholders. Reward costs are accrued over time based on card transactions generated by the cardholder. Interchange fee income is presented net of reward costs within noninterest income. Net gains/(losses) on other real estate – The Company routinely sells OREO it has acquired through loan foreclosure. Net gains/(losses) on OREO reflect both 1) the gain or loss recognized upon an executed deed and 2) mark-to-market write-downs the Company takes on its OREO inventory. The Company generally recognizes gains or losses on OREO at the time of an executed deed, although gains may be recognized over a financing period if the Company finances the sale. For financed OREO sales, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on sale, the Company adjusts the transaction price and related gain/(loss) on sale if a significant financing component is present. Mark-to-market write-downs taken by the Company during the property’s holding period are generally at least 10% per year but may be higher based on updated real estate appraisals or BPOs. Incremental expenditures to bring OREO to salable condition are generally expensed as-incurred. Capital commitment fee (within other income) – The Company received and recorded a $1.0 million nonrefundable capital commitment fee during the first quarter of 2018. The fee was paid by a third party upon the Company’s completion of its contractual obligations to build the infrastructure and disburse funds for a new collaborative credit product offered to the third party’s customers through the Bank. The completion of the infrastructure and the first disbursement of funds were made for this new credit product during the first quarter of 2018. Incremental expenses incurred by the Company to fulfil its obligation under this contract were expensed as-incurred. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 25. 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, 2019, the Company was divided into five reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS and RCS. Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments collectively constitute RPG operations. The Company’s national branchless banking platform, MemoryBank, is considered part of the Traditional Banking segment. The nature of segment operations and the primary drivers of net revenues by reportable segment are provided below: Reportable Segment: Nature of Operations: Primary Drivers of Net Revenue: Core Banking: Traditional Banking Provides traditional banking products to clients in its market footprint primarily via its network of banking centers and to clients outside of its market footprint primarily via its digital delivery channels. Loans, investments, and deposits. Warehouse Lending Provides short-term, revolving credit facilities to mortgage bankers across the United States. 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 the Bank's market footprint. Loan sales and servicing. Republic Processing Group: Tax Refund Solutions TRS offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds through Refund Transfer products. The RPS division of TRS offers general-purpose reloadable cards. TRS and RPS products are primarily provided to clients outside of the Bank’s market footprint. Loans, refund transfers, and prepaid cards. Republic Credit Solutions Offers consumer credit products. RCS products are primarily provided to clients outside of the Bank’s market footprint, with a substantial portion of RCS clients considered subprime or near-prime borrowers. Unsecured, consumer loans. 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 allocated to the Traditional Banking segment. 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, 2019, 2018, and 2017 is as follows: Year Ended December 31, 2019 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income $ 168,076 $ 15,801 $ 697 $ 184,574 $ 21,626 $ 29,926 $ 51,552 $ 236,126 Provision for loan and lease losses 2,444 622 — 3,066 11,249 11,443 22,692 25,758 Net refund transfer fees — — — — 21,158 — 21,158 21,158 Mortgage banking income — — 9,499 9,499 — — — 9,499 Program fees — — — — 437 4,275 4,712 4,712 Net gain on branch divestiture 7,829 — — 7,829 — — — 7,829 Other noninterest income 30,724 (46) 213 30,891 260 659 919 31,810 Total noninterest income 38,553 (46) 9,712 48,219 21,855 4,934 26,789 75,008 Total noninterest expense 143,671 3,268 6,112 153,051 16,539 2,593 19,132 172,183 Income before income tax expense 60,514 11,865 4,297 76,676 15,693 20,824 36,517 113,193 Income tax expense 9,651 2,670 902 13,223 3,454 4,817 8,271 21,494 Net income $ 50,863 $ 9,195 $ 3,395 $ 63,453 $ 12,239 $ 16,007 $ 28,246 $ 91,699 Period-end assets $ 4,684,116 $ 717,994 $ 26,469 $ 5,428,579 $ 86,849 $ 104,891 $ 191,740 $ 5,620,319 Net interest margin 3.76 % 2.42 % NM 3.61 % NM NM NM 4.46 % Net-revenue concentration* 67 % 5 % 3 % 75 % 14 % 11 % 25 % 100 % Year Ended December 31, 2018 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income $ 160,398 $ 15,726 $ 402 $ 176,526 $ 19,203 $ 30,329 $ 49,532 $ 226,058 Provision for loan and lease losses 3,710 (142) — 3,568 10,919 16,881 27,800 31,368 Net refund transfer fees — — — — 20,029 — 20,029 20,029 Mortgage banking income — — 4,825 4,825 — — — 4,825 Program fees — — — — 295 5,930 6,225 6,225 Other noninterest income 29,965 40 550 30,555 1,229 562 1,791 32,346 Total noninterest income 29,965 40 5,375 35,380 21,553 6,492 28,045 63,425 Total noninterest expense 136,439 3,367 4,356 144,162 14,686 5,004 19,690 163,852 Income before income tax expense 50,214 12,541 1,421 64,176 15,151 14,936 30,087 94,263 Income tax expense 6,819 2,869 298 9,986 3,033 3,392 6,425 16,411 Net income $ 43,395 $ 9,672 $ 1,123 $ 54,190 $ 12,118 $ 11,544 $ 23,662 $ 77,852 Period-end assets $ 4,647,037 $ 470,126 $ 14,246 $ 5,131,409 $ 20,288 $ 88,707 $ 108,995 $ 5,240,404 Net interest margin 3.76 % 3.18 % NM 3.70 % NM NM NM 4.62 % Net-revenue concentration* 66 % 5 % 2 % 73 % 14 % 13 % 27 % 100 % Year Ended December 31, 2017 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income $ 142,823 $ 17,533 $ 346 $ 160,702 $ 15,197 $ 22,621 $ 37,818 $ 198,520 Provision for loan and lease losses 3,923 (150) — 3,773 6,535 17,396 23,931 27,704 Net refund transfer fees — — — — 18,500 — 18,500 18,500 Mortgage banking income — — 4,642 4,642 — — — 4,642 Program fees — — — — 176 5,648 5,824 5,824 Other noninterest income 27,452 37 279 27,768 164 1,516 1,680 29,448 Total noninterest income 27,452 37 4,921 32,410 18,840 7,164 26,004 58,414 Total noninterest expense 124,637 3,392 4,765 132,794 14,491 3,559 18,050 150,844 Income before income tax expense 41,715 14,328 502 56,545 13,011 8,830 21,841 78,386 Income tax expense (benefit) 18,202 5,421 (526) 23,097 4,721 4,936 9,657 32,754 Net income $ 23,513 $ 8,907 $ 1,028 $ 33,448 $ 8,290 $ 3,894 $ 12,184 $ 45,632 Period-end assets $ 4,470,932 $ 525,246 $ 11,115 $ 5,007,293 $ 12,450 $ 65,619 $ 78,069 $ 5,085,362 Net interest margin 3.55 % 3.53 % NM 3.55 % NM NM NM 4.32 % Net-revenue concentration* 66 % 7 % 2 % 75 % 13 % 12 % 25 % 100 % *Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue. NM - Not Meaningful |
BRANCH DIVESTITURE
BRANCH DIVESTITURE | 12 Months Ended |
Dec. 31, 2019 | |
BRANCH DIVESTITURE | |
BRANCH DIVESTITURE | 26. In July 2019, the Bank entered into a definitive agreement to sell its four banking centers located in the Kentucky cities of Owensboro, Elizabethtown, and Frankfort to Limestone Bank (“Limestone”), a subsidiary of Limestone Bancorp, Inc. The agreement provided that Limestone acquire loans with balances of approximately $128 million as of November 15, 2019 (the “Closing Date”) and assume deposits with balances of approximately $132 million as of the Closing Date, associated with the four banking centers. In addition to the sale of loans and assumption of deposits, Limestone also acquired substantially all of the fixed assets of these locations, which had a book value of $1.3 million as of the Closing Date. Based on the Closing Date deposits, the all-in blended premium for the transaction was 6.1% of the total deposits transferred. The final calculated premium was based on the trailing 10-day average amount of the deposits as of the Closing Date, as well as the branch location for the deposits. The Company operated its divested branches for 10.5, 12, and 12 months, respectively during 2019, 2018, and 2017. |
SUMMARY OF QUARTERLY FINANCIAL
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | 27. Presented below is a summary of the consolidated quarterly financial data for the years ended December 31, 2019 and 2018. 2019 Fourth Third Second First (dollars in thousands, except per share data) Quarter Quarter Quarter Quarter (1) Interest income $ 64,527 $ 68,059 $ 65,664 $ 82,633 Interest expense 10,132 12,573 11,718 10,334 Net interest income 54,395 55,486 53,946 72,299 Provision for loan and lease losses (2) 914 3,153 4,460 17,231 Net interest income after provision 53,481 52,333 49,486 55,068 Noninterest income (3) 19,655 12,811 15,125 27,417 Noninterest expense (4) 40,835 42,411 43,428 45,509 Income before income taxes 32,301 22,733 21,183 36,976 Income tax expense (5) 6,533 4,325 3,176 7,460 Net income $ 25,768 $ 18,408 $ 18,007 $ 29,516 Basic earnings per share: Class A Common Stock $ 1.23 $ 0.88 $ 0.86 $ 1.42 Class B Common Stock 1.13 0.80 0.79 1.29 Diluted earnings per share: Class A Common Stock $ 1.23 $ 0.88 $ 0.86 $ 1.41 Class B Common Stock 1.12 0.80 0.78 1.28 Dividends declared per common share: Class A Common Stock $ 0.264 $ 0.264 $ 0.264 $ 0.264 Class B Common Stock 0.240 0.240 0.240 0.240 2018 Fourth Third Second First (dollars in thousands, except per share data) Quarter Quarter Quarter Quarter(1) Interest income $ 62,902 $ 61,090 $ 58,356 $ 73,833 Interest expense 8,626 8,057 7,272 6,168 Net interest income 54,276 53,033 51,084 67,665 Provision for loan and lease losses(2) 5,104 4,077 4,932 17,255 Net interest income after provision 49,172 48,956 46,152 50,410 Noninterest income 10,119 11,465 14,296 27,545 Noninterest expense (4) 38,963 41,212 40,632 43,045 Income before income taxes 20,328 19,209 19,816 34,910 Income tax expense (5) 3,022 1,798 4,150 7,441 Net income $ 17,306 $ 17,411 $ 15,666 $ 27,469 Basic earnings per share: Class A Common Stock $ 0.83 $ 0.84 $ 0.75 $ 1.32 Class B Common Stock 0.76 0.76 0.68 1.21 Diluted earnings per share: Class A Common Stock $ 0.83 $ 0.83 $ 0.74 $ 1.32 Class B Common Stock 0.75 0.76 0.68 1.20 Dividends declared per common share: Class A Common Stock $ 0.242 $ 0.242 $ 0.242 $ 0.242 Class B Common Stock 0.220 0.220 0.220 0.220 (1) The first quarters of 2019 and 2018 were significantly impacted by the TRS segment of RPG. (2) Provision expense: The relatively low Provision expense during the fourth quarter of 2019 is partially attributable to the release of $900,000 in reserves associated with divested loans upon final settlement of the Bank’s branch divestiture. See Footnote 26 in this section of the filing for additional information on the Company’s branch divestiture. The relatively higher levels of Provision expense during the first quarters of 2019 and 2018 were driven by the TRS segment’s EA product. Provision expense for EAs during the first quarters of 2019 and 2018 was $13.4 million and $13.2 million. (3) Noninterest income: The fourth quarter of 2019 included a $7.9 million net gain on the final settlement of the Bank’s branch divestiture. See Footnote 26 in this section of the filing for additional information on the Company’s branch divestiture. (4) Noninterest expense: During the fourth quarters of 2019 and 2018, the Company reversed $1.2 million and $2.8 million of incentive compensation accruals based on revised payout estimates. (5) See Footnote 19 in this section of the filing for more information on the Company’s income taxes for 2019 and 2018. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 and Republic Insurance Services, Inc. As used in this filing, the terms “Republic,” the “Company,” “we,” “our,” and “us” refer to Republic Bancorp, Inc., and, where the context requires, Republic Bancorp, Inc. and its subsidiaries. The term “Bank” refers to the Company’s subsidiary bank: Republic Bank & Trust Company. The term “Captive” refers to the Company’s insurance subsidiary: Republic Insurance Services, Inc. All significant intercompany balances and transactions are eliminated in consolidation. Republic is a financial holding company headquartered in Louisville, Kentucky. The Bank is a Kentucky-based, state-chartered non-member financial institution that provides both traditional and non-traditional banking products through five reportable segments using a multitude of delivery channels. While the Bank operates primarily in its market footprint, its non-brick-and-mortar delivery channels allow it to reach clients across the United States. The Captive is a Nevada-based, wholly-owned insurance subsidiary of the Company. The Captive provides property and casualty insurance coverage to the Company and the Bank as well as a group of third-party insurance captives for which insurance may not be available or economically feasible. Republic Bancorp Capital Trust is a Delaware statutory business trust that is a wholly-owned unconsolidated finance subsidiary of Republic Bancorp, Inc. As of December 31, 2019, the Company was divided into five reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS and RCS. Management considers the first three segments to collectively constitute “Core Bank” or “Core Banking” operations, while the last two segments collectively constitute RPG operations. The Company’s national branchless banking platform, MemoryBank ® , is considered part of the Traditional Banking segment. Core Bank Traditional Banking segment — The Traditional Banking segment provides traditional banking products primarily to customers in the Company’s market footprint. As of December 31, 2019, Republic had 41 full-service banking centers and two LPOs with locations as follows:  Kentucky — 28  Metropolitan Louisville — 18  Central Kentucky — 7  Georgetown — 1  Lexington — 5  Shelbyville — 1  Northern Kentucky — 3  Covington — 1  Crestview Hills — 1  Florence — 1  Southern Indiana — 3  Floyds Knobs — 1  Jeffersonville — 1  New Albany — 1  Metropolitan Tampa, Florida — 8*  Metropolitan Cincinnati, Ohio — 1  Metropolitan Nashville, Tennessee — 3* *Includes one LPO Republic’s headquarters are in Louisville, which is the largest city in Kentucky based on population. Traditional 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 Traditional 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 Traditional 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, and increases in the cash surrender value of BOLI. Traditional 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 other general and administrative costs. Traditional 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. Warehouse Lending segment — Through its Warehouse segment, the Core Bank provides short-term, revolving credit facilities to mortgage bankers across the United States through mortgage warehouse lines of credit. These credit facilities are primarily secured by single-family, first-lien residential real estate loans. The credit facility enables the mortgage banking clients to close single-family, first-lien residential real estate loans in their own name and temporarily fund their inventory of these closed loans until the loans are sold to investors approved by the Bank. Individual loans are expected to remain on the warehouse line for an average of 15 to 30 days. Reverse mortgage loans typically remain on the line longer than conventional mortgage loans. Interest income and loan fees are accrued for each individual loan during the time the loan remains on the warehouse line and collected when the loan is sold. The Core Bank receives the sale proceeds of each loan directly from the investor and applies the funds to pay off the warehouse advance and related accrued interest and fees. The remaining proceeds are credited to the mortgage-banking client. Mortgage Banking segment — Mortgage Banking activities primarily include 15-, 20- and 30-year fixed-term single-family, first-lien residential real estate loans that are originated and sold into the secondary market, primarily to the FHLMC and the FNMA. The Bank typically retains servicing on loans sold into the secondary market. Administration of loans with servicing retained by the Bank includes collecting principal and interest payments, escrowing funds for property taxes and property insurance, and remitting payments to secondary market investors. The Bank receives fees for performing these standard servicing functions. Republic Processing Group Tax Refund Solutions segment — Through the TRS segment, the Bank is one of a limited number of financial institutions that facilitates the receipt and payment of federal and state tax refund products and offers a credit product through third-party tax preparers located throughout the United States, as well as tax-preparation software providers (collectively, the “Tax Providers”). Substantially all of the business generated by the TRS segment occurs in the first half of the year. The TRS segment traditionally operates at a loss during the second half of the year, during which time the segment incurs costs preparing for the upcoming year’s tax season. RTs are fee-based 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 by the Company on RTs, net of revenue share, are reported as noninterest income under the line item “Net refund transfer fees.” The EA tax credit product is a loan that allows a taxpayer to borrow funds as an advance of a portion of their tax refund. For the 2018 and 2019 fiscal years, the EA product had the following features: EA features consistent during 2018 and 2019: · Offered only during the first two months of each year; · No requirement that the taxpayer pays for another bank product, such as an RT; · Multiple funds disbursement methods, including direct deposit, prepaid card, check, or Walmart Direct2Cash ® , based on the taxpayer-customer’s election; · Repayment of the EA to the Bank is deducted from the taxpayer’s tax refund proceeds; and · If an insufficient refund to repay the EA occurs: o there is no recourse to the taxpayer, o no negative credit reporting on the taxpayer, and o no collection efforts against the taxpayer. EA features modified from 2018 to 2019: · During 2019, the taxpayer was given the option to choose from multiple loan-amount tiers, subject to underwriting, up to a maximum advance amount of $6,250. This compares to a maximum loan amount of $3,500 during 2018; and · During 2018, EA fees were charged only to the Tax Providers. In 2019, the fee charged to the Tax Providers was lowered; and a direct fee to the taxpayer was charged. The APR to the taxpayer for his or her portion of the total fee equated to less than 36% for all offering tiers. The Company reports fees paid for the EA product as interest income on loans. EAs are generally repaid within three weeks after the taxpayer’s tax return is submitted to the applicable taxing authority. EAs do not have a contractual due date but the Company considers an EA delinquent if it remains unpaid three weeks after the taxpayer’s tax return is submitted to the applicable taxing authority. Provisions for loan losses on EAs are estimated when advances are made, with provisions for all probable EA losses made in the first quarter of each year. Unpaid EAs are charged off by June 30 th of each year, with EAs collected during the second half of each year recorded as recoveries of previously charged off loans. Related to the overall credit losses on EAs, the Bank’s ability to control losses is highly dependent upon its ability to predict the taxpayer’s likelihood to receive the tax refund as claimed on the taxpayer’s tax return. Each year, the Bank’s EA approval model is based primarily on the prior-year’s tax refund payment patterns. Because the substantial majority of the EA volume occurs each year before that year’s tax refund payment patterns can be analyzed and subsequent underwriting changes made, credit losses during a current year could be higher than management’s predictions if tax refund payment patterns change materially between years. In response to changes in the legal, regulatory and competitive environment, management annually reviews and revises the EA’s product parameters. Further changes in EA product parameters do not ensure positive results and could have an overall material negative impact on the performance of the EA and therefore on the Company’s financial condition and results of operations. For the first quarter 2020 tax season, the Company modified the EA product’s pricing structure. The annual percentage rate to the taxpayer for his or her portion of the EA fee is not greater than 36% for all EA offering amounts. Republic Payment Solutions — RPS is managed and operated within the TRS segment. The RPS division is an issuing bank offering general-purpose reloadable prepaid cards through third-party service providers. For the projected near-term, as the prepaid card program matures, the operating results of the RPS division are expected to be immaterial to the Company’s overall results of operations and will be reported as part of the TRS segment. The RPS division will not be considered a separate reportable segment until such time, if any, that it meets quantitative reporting thresholds. The Company reports fees related to RPS programs under Program fees. Additionally, the Company’s portion of interchange revenue generated by prepaid card transactions is reported as noninterest income under “Interchange fee income.” Republic Credit Solutions segment — Through the RCS segment, the Bank offers consumer credit products. In general, the credit products are unsecured, small-dollar consumer loans and are dependent on various factors including the consumer’s ability to repay. RCS loans typically earn a higher yield but also have higher credit risk compared to loans originated through the Traditional Banking segment, with a significant portion of RCS clients considered subprime or near-prime borrowers. The Bank uses third-party service providers for certain services such as marketing and loan servicing of RCS loans. Additional information regarding consumer loan products offered through RCS follows: · RCS line-of-credit product – The Bank originates a line-of-credit product to generally subprime borrowers in multiple states. Elevate Credit, Inc., a third-party service provider subject to the Bank’s oversight and supervision, provides the Bank with certain marketing and support services for the RCS line-of-credit program, while a separate third party provides loan servicing for the RCS line-of-credit product on the Bank’s behalf. The Bank is the lender for the RCS line-of-credit product and is marketed as such. Further, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of the RCS line-of-credit product. The Bank sells participation interests in the RCS line-of-credit product. These participation interests are a 90% interest in advances made to borrowers under the borrower’s line-of-credit account, and the participation interests are generally sold three business days following the Bank’s funding of the associated advances. Although the Bank retains a 10% participation interest in each advance, it maintains 100% ownership of the underlying RCS line-of-credit account with each borrower. The RCS line-of-credit product represents the substantial majority of RCS activity. Loan balances held for sale through this program are carried at the lower of cost or fair value. · RCS healthcare receivables products – The Bank originates healthcare-receivables products across the United States through two different third-party service providers. In one program, the Bank retains 100% of the receivables originated. In the other program, the Bank retains 100% of the receivables originated in some instances, and in other instances, sells 100% of the receivables within one month of origination. Loan balances held for sale through this program are carried at the lower of cost or fair value. · RCS installment loan products – From the first quarter of 2016 through the first quarter of 2018, the Bank piloted a consumer installment loan product across the United States using a third-party service provider. As part of the program, the Bank sold 100% of the balances generated through the program back to its third-party service provider approximately 21 days after origination. During the second quarter of 2018, the Bank and its third-party service provider suspended the origination of new loans and the sale of unsold loans through this program. Since program suspension in 2018, the Bank has carried all unsold loans under this program as “held for investment” on its balance sheet and has continued to wind down those balances. Additionally, loans under this program are carried at fair value under a fair value option on the Bank’s balance sheet with the portfolio marked to market monthly. Approximately $998,000 of balances remained held for investment under this program as of December 31, 2019. Through a new program launched in December 2019, the Bank began offering RCS installment loans with terms ranging from 12 to 60 months to borrowers in multiple states. A third-party service provider subject to the Bank’s oversight and supervision provides the Bank with marketing services and loan servicing for these RCS installment loans. The Bank is the lender for these RCS installment loans, and is marketed as such. Further, the Bank controls the loan terms and underwriting guidelines, and the Bank exercises consumer compliance oversight of this RCS installment loan product. Currently, all loan balances originated under this RCS installment loan program are carried as “held for sale” on the Bank’s balance sheet, with the intention to sell these loans to its third-party service provider sixteen days following the Bank’s origination of the loans. Loans originated under this RCS installment loan program are carried at fair value under a fair-value option, with the portfolio marked to market monthly. The Company reports interest income and loan origination fees earned on RCS loans under “Loans, including fees,” while any gains or losses on sale and mark-to-market adjustments of RCS loans are reported as noninterest income under “Program fees.” |
Use of Estimates | Use of Estimates — Financial statements prepared in conformity with 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 limited exception, 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. The Bank’s warehouse lines of credit are secured by single family, first lien residential real estate loans originated by the Bank’s mortgage clients across the United States. As of December 31, 2019, 29% of collateral securing warehouse lines were located in California. |
Earnings Concentration | Earnings Concentration — For 2019, 2018, and 2017, approximately 25%, 27% and 25% of total Company net revenues (net interest income plus noninterest income) were derived from the RPG operations. Within RPG, the TRS segment accounted for 14%, 14% and 13%, while the RCS segment accounting for 11%, 13% and 12% of total Company net revenues. For 2019, 2018, and 2017, approximately 5%, 5% and 7% of total Company net revenues (net interest income plus noninterest 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. |
Debt and Equity Securities | Debt Securities — 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. Available-for-sale debt securities are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premiums and accretion of discounts. Premiums on callable securities are amortized to the earliest call date. Other 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 OTTI at least quarterly 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 OCI. 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. 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. Equity Securities — On January 1, 2018, the Company adopted ASU 2016-01, Financial Instruments . Among other things, ASU 2016-01 requires the Company recognize changes in the fair value of equity investments with a readily determinable fair value in net income unless those investments are accounted for under the equity method of accounting. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment. |
Accounting for Business Acquisitions | Accounting for Business Acquisitions — 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 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 Measurement . 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 valuations, 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 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, 2019 and 2018, 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 $2.5 million, $2.4 million and $2.2 million for the years ended December 31, 2019, 2018 and 2017. Late fees and ancillary fees related to loan servicing are considered nominal. |
Loans | Loans — The Bank’s financing receivables consist primarily of loans and 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 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 loan 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 nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual 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 nonaccrual 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 nonaccrual status but are reviewed periodically and charged off when the loan is deemed uncollectible, generally no more than 120 days. Loans purchased in a business 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 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. Additionally, the difference between contractual cash flows and expected cash flows of PCI loans is referred to as the “non-accretable discount.” 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, and net present value of cash flows expected to be received. The Bank typically 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 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 for loan losses 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 discount established as part of its initial day-one evaluation, such loan would be classified 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 nonaccrual if management cannot reasonably estimate future cash flows on such loans. If a TDR 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. |
Allowance for Loan and Lease Losses | Allowance for Loan and Lease Losses — The Bank maintains an allowance for probable incurred credit losses inherent in the Bank’s loan portfolio, which 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 monthly and presents and discusses the analysis with the Audit Committee and the Board of Directors quarterly. 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. Specific Component –Loans Individually Classified as Impaired The Bank defines impaired loans as follows: · All loans internally rated as “Substandard,” “Doubtful” or “Loss”; · All loans on nonaccrual status; · All 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 nonaccrual status. Under GAAP, the Bank uses the following 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 loan’s effective interest rate. The Bank employs this method for a significant portion of its 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 less applicable estimated selling costs. The Bank employs the fair value of collateral method for its impaired loans when repayment is based solely on the sale or 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 estimated 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. In addition to obtaining appraisals at the time of origination, the Bank typically updates appraisals and/or BPOs 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 such stale valuations primarily based on age and market conditions of the underlying collateral. General Component – Pooled Loans Collectively Evaluated The general component of the Allowance covers loans collectively evaluated for impairment by loan class 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 typically included in the general component but may be individually evaluated if classified as a TDR, on nonaccrual, or a case where the full collection of the total amount due for a such loan is improbable or otherwise meets the definition of impaired. In determining the historical loss rates for each respective loan class, management evaluates the following historical loss rate scenarios: · Current year to date historical loss factor average · 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 · Rolling thirty-two quarter average · Rolling thirty-six quarter average · Rolling forty quarter average In order to take account of periods of economic growth and economic downturn, management generally uses the highest of the evaluated averages above for each loan class when determining its historical loss factors. 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, nonperforming 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 Bank’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 consider 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 nonaccrual data (primarily small dollar, retail mortgage or consumer related). For this portfolio, the Bank analyzes risk classes based on delinquency and/or nonaccrual status. Allowance for Loans Originated Through the Republic Processing Group The RPG Allowance at December 31, 2019 and 2018 primarily related to loans originated and held for investment through the RCS segment. RCS generally originates small-dollar, consumer credit products. In some instances, the Bank originates these products, sells 90% of the balances within three days of loan origination, and retains a 10% interest. RCS loans typically earn a higher yield but also have higher credit risk compared to loans originated through the Traditional Banking segment, with a significant portion of RCS clients considered subprime or near-prime borrowers. For RCS products, the Allowance is estimated using a method similar to that employed for pooled loans collectively evaluated, as described above. RPG’s TRS segment offered its EA tax-credit product during the first two months of 2017, 2018, and 2019. An Allowance for losses on EAs is estimated during the limited, short-term period the product is offered. EAs are generally repaid within three weeks of origination. Provisions for loan losses on EAs are estimated when advances are made, with all provisions made in the first quarter of each year. No Allowance for EAs existed as of December 31, 2019 and 2018, as all EAs originated during the first two months of each year had either been paid off or charged-off by June 30 th of each year. 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 — 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 mortgage 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. Operating costs after acquisition are expensed. Appraisals for both collateral-dependent impaired loans and OREO 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 CCAD 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. |
Right of Use Asset and Operating Lease Liabilities | Right of Use Asset and Operating Lease Liabilities — The Company adopted ASU 2016-02 Leases (Topic 842), effective January 1, 2019. The adoption of this ASU did not have a meaningful impact on the Company’s net income, earnings per share, return on average assets, or return on average equity for 2019. ASU 2016-02 requires the Company to record on its balance sheet the assets and liabilities that arise from leases. The Company is therefore required to record as operating lease liabilities the present value of its required minimum lease payments plus any amounts probable of being owed under a residual value guarantee. Offsetting these operating lease liabilities, the Company records right-of-use assets for the underlying leased property. Prior to January 1, 2019, operating leases were not recorded on a lessee’s balance sheet in this manner. As permitted by ASU 2018-11, the Company adopted ASU 2016-02 with a cumulative-effect adjustment as of January 1, 2019. Additionally, the Company elected the following list of practical expedients upon adoption of and as permitted by ASU 2016-02: · Concerning lease classification, the Company elected not to reassess the lease classification for any expired or existing leases accounted for in accordance with ASC Topic 840. · Concerning lease identification, the Company elected not to reassess whether any expired or existing contracts, not previously classified as a lease, are, or contain, leases. · Concerning initial direct costs, the Company elected not to reassess initial direct costs for any existing leases. · The Company elected to use hindsight in determining the lease term, whether or not to purchase the underlying leased asset, and in assessing impairment in right-of-use assets. · The Company elected that all short-term leases will not be placed on the balance sheet. Short-term leases include leases that have a lease term of 12 months or less at their commencement date and do not include a purchase option that the Company is reasonably certain to exercise. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock — 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 | Bank Owned Life Insurance — 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 noninterest 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 acquisitions represents the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase combination and determined to have an indefinite useful life are not amortized, but tested annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company has selected September 30th 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. All goodwill is attributable to the Company’s Traditional Banking segment and is not expected to be deductible for tax purposes. Based on its assessment, the Company believes its goodwill of $16 million at December 31, 2019 and 2018 was not impaired and is properly recorded in the consolidated financial. Other intangible assets consist of CDI assets arising from business acquisitions. CDI assets are initially measured at fair value and then amortized on an accelerated method over their estimated useful lives. |
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 that 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 with dealer counterparties in order to minimize the Bank’s interest rate risk. These swaps are derivatives but are not designated as hedging instruments; 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 does not have 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. Forfeitures of stock-based awards are accounted for when incurred in lieu of using forfeiture estimates. |
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. DTAs and DTLs 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 DTAs 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. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. |
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. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. 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 OCI. OCI includes, net of tax, unrealized gains and losses on available-for-sale debt securities and unrealized gains and losses on cash flow hedges, which are also recognized as separate components 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 FRB to maintain average reserve balances. Cash and due from banks on the consolidated balance sheet included no required reserve balances at December 31, 2019 and 2018. The Company’s Captive maintains cash reserves to cover insurable claims. Reserves totaled $3 million and $3 million as of December 31, 2019 and 2018. |
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 15 “ 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. |
Revenue from contracts with Customers | Revenue from contracts with Customers - On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”). While this update modified guidance for recognizing revenue, it did not have a material impact on the timing or presentation of the Company’s revenue. The majority of the Company’s revenue comes from interest income and other sources, including loans, leases, securities, and derivatives, which are not subject to ASC 606. The Company’s services that fall within the scope of ASC 606 are presented within noninterest income and are recognized as revenue as the Company satisfies its obligation to its client. The Company did elect a practical expedient permitted under this guidance which allows it to expense as-incurred incremental costs of obtaining a contract when the amortization period of those costs would be less than one year. |
Segment Information | Segment Information — Reportable segments represent parts of the Company evaluated by management with separate financial information. Republic’s internal information is primarily reported and evaluated in five reportable segments – Traditional Banking, Warehouse, Mortgage Banking, TRS and RCS. |
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 or shareholders’ equity. |
Accounting Standards Updates | Accounting Standards Updates The following ASUs were issued prior to December 31, 2019 and are considered relevant to the Company’s financial statements. Generally, if an issued-but-not-yet-effective ASU with an expected immaterial impact to the Company has been disclosed in prior Company financial statements, it will not be included below. ASU. No. Topic Nature of Update Date Adoption Required Permitted Adoption Methods Expected Financial Statement Impact 2016-13 Financial Instruments – Credit Losses (Topic 326) This ASU amends guidance on reporting credit losses for assets held at amortized-cost basis and available-for-sale debt securities. January 1, 2020 Modified-retrospective approach. The Company adopted this ASU, which introduces the current expected credit loss ("CECL") method, on January 1, 2020. In accord with this adoption, the Company expects to record by the end of the first quarter of 2020 between a $6.5 million to $8.0 million, or 15%-20%, increase in its Allowance for Credit Losses ("ACL") for its loans, a $51,000 ACL for its investment debt securities, and an approximate $500,000 ACL for its off-balance sheet exposures. The Company awaits the finalization of a model validation on its CECL method prior to finalizing its CECL adoption entries. The Company’s CECL method is a “static pool” method that analyzes historical closed pools of loans over their expected lives to attain a loss rate that is then applied to the current balance of such pools. The expected increase in ACL due to CECL adoption primarily reflects additional ACL for longer duration loan portfolios, such as the Company's residential real estate and consumer loan portfolios. No additional segmentation of the Bank's loan portfolios was deemed necessary upon adoption. Additionally, the CECL method requires reasonable and supportable forecasts incorporated into the Company's ACL model. Due to its reasonably strong correlation to the Company's historical net loan losses, the Company has chosen to use the seasonally adjusted national civilian unemployment rate as its primary forecasting tool. Finally, upon adoption, the Company modified its policies, procedures and internal controls to ensure compliance with this ASU. 2019-05 Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief This ASU provides the fair value option for certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses. January 1, 2020 Modified-retrospective approach. Immaterial 2019-11 Codification Improvements to Topic 326, Financial Instruments—Credit Losses This ASU primarily clarifies guidance on how to report expected recoveries, permits organizations to record expected recoveries on PCD assets, and in addition to other narrow technical improvements, reinforces existing guidance that prohibits organizations from recording negative allowances for available-for-sale debt securities. January 1, 2020 Modified-retrospective approach. Immaterial 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU removes specific exceptions to the general principles in Topic 740. January 1, 2021 Modified-retrospective approach. Immaterial 2020-01 Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 This ASU primarily clarifies how a company should consider observable transactions when applying Topics 323 and 321. The ASU also clarifies the accounting for certain forward contracts and purchased options. January 1, 2021 Modified-retrospective approach. Immaterial The following ASUs were adopted by the Company during the year ended December 31, 2019: ASU. No. Topic Nature of Update Date Adopted Method of Adoption Financial Statement Impact 2016-02 Leases (Topic 842) Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet. January 1, 2019 Modified-retrospective approach, which includes a number of optional practical expedients. The Company adopted this ASU on January 1, 2019 and upon adoption recorded $40 million of right-of-use lease assets and $42 million of operating lease liabilities on its balance sheet. The adoption of this ASU did not have a meaningful impact on the Company's performance metrics, including regulatory capital ratios and return on average assets. Additionally, the Company does not believe that the adoption of this ASU by its clients will have a significant impact on the Company's ability to underwrite credit when client financial statements are presented inclusive of the requirements of this ASU. See Notes 1 and 6 in this section of the filing regarding disclosures by the Company to comply with this ASU. 2018-10 Codification Improvements to Topic 842, Leases This ASU affects narrow aspects of the guidance issued in the amendments in ASU 2016-02. January 1, 2019 Adoption should conform to the adoption of ASU 2016-02 above. See Notes 1 and 6 in this section of the filing regarding disclosures by the Company to comply with this ASU. 2018-11 Leases (Topic 842): Targeted Improvements This ASU provides the Company with an additional (and optional) transition method to adopt ASU 2016-02. This ASU also provides the Company with a practical expedient to not separate non-lease components from the associated lease component under certain circumstances. January 1, 2019 Adoption should conform to the adoption of ASU 2016-02 above. The Company elected the optional transition method permitted by this ASU, allowing the Company to adopt ASU 2016-02, effective January 1, 2019 with a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019. 2017-12 Derivatives and Hedging (Topic 815) The amendments in this ASU make certain targeted improvements to simplify the application of hedge accounting. January 1, 2019 Prospectively. Immaterial |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedules of Accounting Standards Updates | ASU. No. Topic Nature of Update Date Adoption Required Permitted Adoption Methods Expected Financial Statement Impact 2016-13 Financial Instruments – Credit Losses (Topic 326) This ASU amends guidance on reporting credit losses for assets held at amortized-cost basis and available-for-sale debt securities. January 1, 2020 Modified-retrospective approach. The Company adopted this ASU, which introduces the current expected credit loss ("CECL") method, on January 1, 2020. In accord with this adoption, the Company expects to record by the end of the first quarter of 2020 between a $6.5 million to $8.0 million, or 15%-20%, increase in its Allowance for Credit Losses ("ACL") for its loans, a $51,000 ACL for its investment debt securities, and an approximate $500,000 ACL for its off-balance sheet exposures. The Company awaits the finalization of a model validation on its CECL method prior to finalizing its CECL adoption entries. The Company’s CECL method is a “static pool” method that analyzes historical closed pools of loans over their expected lives to attain a loss rate that is then applied to the current balance of such pools. The expected increase in ACL due to CECL adoption primarily reflects additional ACL for longer duration loan portfolios, such as the Company's residential real estate and consumer loan portfolios. No additional segmentation of the Bank's loan portfolios was deemed necessary upon adoption. Additionally, the CECL method requires reasonable and supportable forecasts incorporated into the Company's ACL model. Due to its reasonably strong correlation to the Company's historical net loan losses, the Company has chosen to use the seasonally adjusted national civilian unemployment rate as its primary forecasting tool. Finally, upon adoption, the Company modified its policies, procedures and internal controls to ensure compliance with this ASU. 2019-05 Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief This ASU provides the fair value option for certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses. January 1, 2020 Modified-retrospective approach. Immaterial 2019-11 Codification Improvements to Topic 326, Financial Instruments—Credit Losses This ASU primarily clarifies guidance on how to report expected recoveries, permits organizations to record expected recoveries on PCD assets, and in addition to other narrow technical improvements, reinforces existing guidance that prohibits organizations from recording negative allowances for available-for-sale debt securities. January 1, 2020 Modified-retrospective approach. Immaterial 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU removes specific exceptions to the general principles in Topic 740. January 1, 2021 Modified-retrospective approach. Immaterial 2020-01 Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 This ASU primarily clarifies how a company should consider observable transactions when applying Topics 323 and 321. The ASU also clarifies the accounting for certain forward contracts and purchased options. January 1, 2021 Modified-retrospective approach. Immaterial The following ASUs were adopted by the Company during the year ended December 31, 2019: ASU. No. Topic Nature of Update Date Adopted Method of Adoption Financial Statement Impact 2016-02 Leases (Topic 842) Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet. January 1, 2019 Modified-retrospective approach, which includes a number of optional practical expedients. The Company adopted this ASU on January 1, 2019 and upon adoption recorded $40 million of right-of-use lease assets and $42 million of operating lease liabilities on its balance sheet. The adoption of this ASU did not have a meaningful impact on the Company's performance metrics, including regulatory capital ratios and return on average assets. Additionally, the Company does not believe that the adoption of this ASU by its clients will have a significant impact on the Company's ability to underwrite credit when client financial statements are presented inclusive of the requirements of this ASU. See Notes 1 and 6 in this section of the filing regarding disclosures by the Company to comply with this ASU. 2018-10 Codification Improvements to Topic 842, Leases This ASU affects narrow aspects of the guidance issued in the amendments in ASU 2016-02. January 1, 2019 Adoption should conform to the adoption of ASU 2016-02 above. See Notes 1 and 6 in this section of the filing regarding disclosures by the Company to comply with this ASU. 2018-11 Leases (Topic 842): Targeted Improvements This ASU provides the Company with an additional (and optional) transition method to adopt ASU 2016-02. This ASU also provides the Company with a practical expedient to not separate non-lease components from the associated lease component under certain circumstances. January 1, 2019 Adoption should conform to the adoption of ASU 2016-02 above. The Company elected the optional transition method permitted by this ASU, allowing the Company to adopt ASU 2016-02, effective January 1, 2019 with a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019. 2017-12 Derivatives and Hedging (Topic 815) The amendments in this ASU make certain targeted improvements to simplify the application of hedge accounting. January 1, 2019 Prospectively. Immaterial |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVESTMENT SECURITIES | |
Schedule of gross amortized cost and fair value of available-for-sale debt securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income | Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ 134,765 $ 59 $ (184) $ 134,640 Private label mortgage backed security 2,210 1,285 — 3,495 Mortgage backed securities - residential 253,288 2,916 (357) 255,847 Collateralized mortgage obligations 63,284 258 (171) 63,371 Corporate bonds 10,000 2 — 10,002 Trust preferred security 3,575 425 — 4,000 Total available-for-sale debt securities $ 467,122 $ 4,945 $ (712) $ 471,355 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018 (in thousands) Cost Gains Losses Value U.S. Treasury securities and U.S. Government agencies $ 218,502 $ 25 $ (1,654) $ 216,873 Private label mortgage backed security 2,348 1,364 — 3,712 Mortgage backed securities - residential 168,992 1,470 (1,253) 169,209 Collateralized mortgage obligations 73,740 222 (1,151) 72,811 Corporate bonds 10,000 — (942) 9,058 Trust preferred security 3,533 542 — 4,075 Total available-for-sale debt securities $ 477,115 $ 3,623 $ (5,000) $ 475,738 |
Schedule of carrying value, gross unrecognized gains and losses, and fair value of held-to-maturity debt securities | Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2019 (in thousands) Value Gains Losses Value Mortgage backed securities - residential $ 104 $ 6 $ — $ 110 Collateralized mortgage obligations 16,970 94 (21) 17,043 Corporate bonds 44,995 544 — 45,539 Obligations of state and political subdivisions 462 2 — 464 Total held-to-maturity debt securities $ 62,531 $ 646 $ (21) $ 63,156 Gross Gross Carrying Unrecognized Unrecognized Fair December 31, 2018 (in thousands) Value Gains Losses Value Mortgage backed securities - residential $ 132 $ 8 $ — $ 140 Collateralized mortgage obligations 19,544 178 (46) 19,676 Corporate bonds 45,088 16 (514) 44,590 Obligations of state and political subdivisions 463 — (11) 452 Total held-to-maturity debt securities $ 65,227 $ 202 $ (571) $ 64,858 |
Schedule of amortized cost and fair value of debt securities by contractual maturity | Available-for-Sale Held-to-Maturity Debt Securities Debt Securities Amortized Fair Carrying Fair December 31, 2019 (in thousands) Cost Value Value Value Due in one year or less $ 34,495 $ 34,493 $ 5,105 $ 5,119 Due from one year to five years 110,270 110,149 35,405 35,887 Due from five years to ten years — — 4,947 4,997 Due beyond ten years 3,575 4,000 — — Private label mortgage backed security 2,210 3,495 — — Mortgage backed securities - residential 253,288 255,847 104 110 Collateralized mortgage obligations 63,284 63,371 16,970 17,043 Total debt securities $ 467,122 $ 471,355 $ 62,531 $ 63,156 |
Schedule of debt securities with unrealized losses | Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2019 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ 40,165 $ (176) $ 14,992 $ (8) $ 55,157 $ (184) Mortgage backed securities - residential 65,630 (269) 16,633 (88) 82,263 (357) Collateralized mortgage obligations 12,444 (36) 10,738 (135) 23,182 (171) Total available-for-sale debt securities $ 118,239 $ (481) $ 42,363 $ (231) $ 160,602 $ (712) Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2018 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ 71,627 $ (598) $ 106,136 $ (1,056) $ 177,763 $ (1,654) Mortgage backed securities - residential 43,691 (484) 32,003 (769) 75,694 (1,253) Collateralized mortgage obligations 16,487 (473) 31,071 (678) 47,558 (1,151) Corporate bonds 9,058 (942) — — 9,058 (942) Total available-for-sale debt securities $ 140,863 $ (2,497) $ 169,210 $ (2,503) $ 310,073 $ (5,000) Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2019 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Held-to-maturity debt securities: Collateralized mortgage obligations $ 4 $ (2) $ 4,827 $ (19) $ 4,831 $ (21) Total held-to-maturity debt securities: $ 4 $ (2) $ 4,827 $ (19) $ 4,831 $ (21) Less than 12 months 12 months or more Total Unrealized Unrealized Unrealized December 31, 2018 (in thousands) Fair Value Losses Fair Value Losses Fair Value Losses Held-to-maturity debt securities: Collateralized mortgage obligations $ — $ — $ 5,539 $ (46) $ 5,539 $ (46) Corporate bonds 39,499 (514) — — 39,499 (514) Obligations of state and political subdivisions 105 (1) 347 (10) 452 (11) Total held-to-maturity debt securities: $ 39,604 $ (515) $ 5,886 $ (56) $ 45,490 $ (571) |
Rollforward of the private label mortgage backed security credit losses | Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 1,613 $ 1,765 $ 1,765 Recovery of losses previously recorded (151) (152) — Balance, end of period $ 1,462 $ 1,613 $ 1,765 |
Schedule of pledged investment securities | December 31, (in thousands) 2019 2018 Carrying amount $ 229,700 $ 240,590 Fair value 229,706 240,700 |
Schedule of carrying value, gross unrealized gains and losses, and fair value of equity securities with readily determinable fair values | Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019 (in thousands) Cost Gains Losses Value Freddie Mac preferred stock $ — $ 714 $ — $ 714 Community Reinvestment Act mutual fund 2,500 — (26) 2,474 Total equity securities with readily determinable fair values $ 2,500 $ 714 $ (26) $ 3,188 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018 (in thousands) Cost Gains Losses Value Freddie Mac preferred stock $ — $ 410 $ — $ 410 Community Reinvestment Act mutual fund 2,500 — (104) 2,396 Total equity securities with readily determinable fair values $ 2,500 $ 410 $ (104) $ 2,806 |
Schedule of equity securities with readily determinable fair values, the gross realized and unrealized gains and losses recognized in the Company’s consolidated statements of income | Gains (Losses) Recognized on Equity Securities Year Ended December 31, 2019 Year Ended December 31, 2018 (in thousands) Realized Unrealized Total Realized Unrealized Total Freddie Mac preferred stock $ — $ 304 $ 304 $ — $ (63) $ (63) Community Reinvestment Act mutual fund — 78 78 — (59) (59) Total equity securities with readily determinable fair value $ — $ 382 $ 382 $ — $ (122) $ (122) |
LOANS HELD FOR SALE (Tables)
LOANS HELD FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOANS HELD FOR SALE. | |
Schedule of activity of consumer loans held for sale and carried at lower of cost or fair value | Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 12,838 $ 8,551 $ 1,310 Origination of consumer loans held for sale 709,768 761,491 603,704 Loans transferred to held for investment — 1,392 — Proceeds from the sale of consumer loans held for sale (716,062) (764,929) (601,718) Net gain on sale of consumer loans held for sale 5,102 6,333 5,255 Balance, end of period $ 11,646 $ 12,838 $ 8,551 |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | |
Schedule of composition of loan portfolio | December 31, (in thousands) 2019 2018 Traditional Banking: Residential real estate: Owner occupied $ 949,568 $ 1,001,832 Nonowner occupied 258,803 242,846 Commercial real estate 1,303,000 1,248,940 Construction & land development 159,702 175,178 Commercial & industrial 477,236 430,355 Lease financing receivables 14,040 15,031 Home equity 293,186 332,548 Consumer: Credit cards 17,836 19,095 Overdrafts 1,522 1,102 Automobile loans 52,923 63,475 Other consumer 68,115 46,642 Total Traditional Banking 3,595,931 3,577,044 Warehouse lines of credit* 717,458 468,695 Total Core Banking 4,313,389 4,045,739 Republic Processing Group*: Tax Refund Solutions: Easy Advances — — Other TRS loans 14,365 13,744 Republic Credit Solutions 105,397 88,744 Total Republic Processing Group 119,762 102,488 Total loans** 4,433,151 4,148,227 Allowance for loan and lease losses (43,351) (44,675) Total loans, net $ 4,389,800 $ 4,103,552 * 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) 2019 2018 Contractually receivable $ 4,432,351 $ 4,147,249 Unearned income(1) (1,139) (1,038) Unamortized premiums(2) 366 588 Unaccreted discounts(3) (2,534) (3,174) Net unamortized deferred origination fees and costs(4) 4,107 4,602 Carrying value of loans $ 4,433,151 $ 4,148,227 (1) Unearned income relates to lease financing receivables. (2) Unamortized premiums predominately relate to loans acquired through the Bank’s Correspondent Lending channel. (3) Unaccreted discounts include accretable and non-accretable discounts and relate to loans acquired in the Bank’s 2016 Cornerstone acquisition and its 2012 FDIC-assisted transactions. (4) Primarily attributable to the Traditional Banking segment. |
Reconciliation of contractually-required and carrying amounts of PCI loans | December 31, (in thousands) 2019 2018 Contractually required principal $ 3,420 $ 4,251 Non-accretable amount (1,303) (1,521) Accretable amount (31) (50) Carrying value of loans $ 2,086 $ 2,680 |
Rollforward of the accretable amount on PCI loans | Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ (50) $ (140) $ (3,600) Transfers between non-accretable and accretable* (279) (573) (28) Net accretion into interest income on loans, including loan fees 298 663 3,488 Balance, end of period $ (31) $ (50) $ (140) * Transfers are primarily attributable to changes in estimated cash flows of the underlying loans. |
Schedule of the risk category of loans by class of loans based on the bank's internal analysis performed | December 31, 2019 Special Doubtful / PCI Loans - PCI Loans - Total Rated (in thousands) Pass Mention Substandard Loss Group 1 Substandard Loans* Traditional Banking: Residential real estate: Owner occupied $ — $ 12,153 $ 14,441 $ — $ 140 $ 1,281 $ 28,015 Nonowner occupied — 487 1,285 — — — 1,772 Commercial real estate 1,286,623 4,623 11,123 — 631 — 1,303,000 Construction & land development 157,165 2,339 198 — — — 159,702 Commercial & industrial 473,094 2,152 1,968 — 22 — 477,236 Lease financing receivables 14,040 — — — — — 14,040 Home equity — — 3,276 — 4 6 3,286 Consumer: Credit cards — — — — — — — Overdrafts — — — — — — — Automobile loans — — 247 — — — 247 Other consumer — — 351 — — 2 353 Total Traditional Banking 1,930,922 21,754 32,889 — 797 1,289 1,987,651 Warehouse lines of credit 717,458 — — — — — 717,458 Total Core Banking 2,648,380 21,754 32,889 — 797 1,289 2,705,109 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — Other TRS loans — — 53 — — — 53 Republic Credit Solutions — — 355 — — — 355 Total Republic Processing Group — — 408 — — — 408 Total rated loans $ 2,648,380 $ 21,754 $ 33,297 $ — $ 797 $ 1,289 $ 2,705,517 December 31, 2018 Special Doubtful / PCI Loans - PCI Loans - Total Rated (in thousands) Pass Mention Substandard Loss Group 1 Substandard Loans* Traditional Banking: Residential real estate: Owner occupied $ — $ 14,536 $ 12,072 $ — $ 170 $ 1,476 $ 28,254 Nonowner occupied — 575 1,889 — — — 2,464 Commercial real estate 1,239,576 5,281 3,162 — 921 — 1,248,940 Construction & land development 175,113 — 65 — — — 175,178 Commercial & industrial 428,897 813 620 — 25 — 430,355 Lease financing receivables 15,031 — — — — — 15,031 Home equity — — 1,361 — 5 81 1,447 Consumer: Credit cards — — — — — — — Overdrafts — — — — — — — Automobile loans — — 91 — — — 91 Other consumer — — 462 — — 2 464 Total Traditional Banking 1,858,617 21,205 19,722 — 1,121 1,559 1,902,224 Warehouse lines of credit 468,695 — — — — — 468,695 Total Core Banking 2,327,312 21,205 19,722 — 1,121 1,559 2,370,919 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — Other TRS loans — — — — — — — Republic Credit Solutions — — 138 — — — 138 Total Republic Processing Group — — 138 — — — 138 Total rated loans $ 2,327,312 $ 21,205 $ 19,860 $ — $ 1,121 $ 1,559 $ 2,371,057 * The above tables exclude all non-classified or non-rated residential real estate, home equity and consumer loans at the respective period ends. |
Schedule of activity in the allowance for loan and lease losses | Allowance Rollforward Years Ended December 31, 2019 2018 Beginning Charge- Ending Beginning Charge- Ending (in thousands) Balance Provision offs Recoveries Balance Balance Provision offs Recoveries Balance Traditional Banking: Residential real estate: Owner occupied $ 6,035 $ (1,087) $ (610) $ 391 $ 4,729 $ 6,474 $ 170 $ (855) $ 246 $ 6,035 Nonowner occupied 1,662 125 (73) 23 1,737 1,396 559 (332) 39 1,662 Commercial real estate 10,030 1,859 (1,407) 4 10,486 9,043 863 (7) 131 10,030 Construction & land development 2,555 (403) — — 2,152 2,364 161 — 30 2,555 Commercial & industrial 2,873 1,505 (1,505) 9 2,882 2,198 824 (200) 51 2,873 Lease financing receivables 158 (11) — — 147 174 (16) — — 158 Home equity 3,477 (764) (64) 72 2,721 3,754 (473) (115) 311 3,477 Consumer: Credit cards 1,140 226 (402) 56 1,020 607 906 (416) 43 1,140 Overdrafts 1,102 1,155 (1,310) 222 1,169 974 1,082 (1,215) 261 1,102 Automobile loans 724 (42) (79) 9 612 687 57 (24) 4 724 Other consumer 591 (119) (263) 341 550 1,162 (423) (444) 296 591 Total Traditional Banking 30,347 2,444 (5,713) 1,127 28,205 28,833 3,710 (3,608) 1,412 30,347 Warehouse lines of credit 1,172 622 — — 1,794 1,314 (142) — — 1,172 Total Core Banking 31,519 3,066 (5,713) 1,127 29,999 30,147 3,568 (3,608) 1,412 31,519 Republic Processing Group: Tax Refund Solutions: Easy Advances — 10,643 (13,425) 2,782 — — 10,760 (12,478) 1,718 — Other TRS loans 107 606 (692) 213 234 12 159 (74) 10 107 Republic Credit Solutions 13,049 11,443 (12,566) 1,192 13,118 12,610 16,881 (17,692) 1,250 13,049 Total Republic Processing Group 13,156 22,692 (26,683) 4,187 13,352 12,622 27,800 (30,244) 2,978 13,156 Total $ 44,675 $ 25,758 $ (32,396) $ 5,314 $ 43,351 $ 42,769 $ 31,368 $ (33,852) $ 4,390 $ 44,675 Allowance Rollforward Year Ended December 31, 2017 Beginning Charge- Ending (in thousands) Balance Provision offs Recoveries Balance Traditional Banking: Residential real estate: Owner occupied $ 7,531 $ (1,014) $ (300) $ 257 $ 6,474 Nonowner occupied 1,139 272 (30) 15 1,396 Commercial real estate 8,078 826 — 139 9,043 Construction & land development 1,850 508 — 6 2,364 Commercial & industrial 1,511 842 (189) 34 2,198 Lease financing receivables 136 38 — — 174 Home equity 3,757 37 (222) 182 3,754 Consumer: Credit cards 490 247 (168) 38 607 Overdrafts 675 1,031 (960) 228 974 Automobile loans 526 188 (30) 3 687 Other consumer 771 948 (884) 327 1,162 Total Traditional Banking 26,464 3,923 (2,783) 1,229 28,833 Warehouse lines of credit 1,464 (150) — — 1,314 Total Core Banking 27,928 3,773 (2,783) 1,229 30,147 Republic Processing Group: Tax Refund Solutions: Easy Advances — 6,789 (8,121) 1,332 — Other TRS loans 25 (254) — 241 12 Republic Credit Solutions 4,967 17,396 (10,659) 906 12,610 Total Republic Processing Group 4,992 23,931 (18,780) 2,479 12,622 Total $ 32,920 $ 27,704 $ (21,563) $ 3,708 $ 42,769 |
Schedule of non-performing loans and non-performing assets and select credit quality ratios | December 31, (dollars in thousands) 2019 2018 Loans on nonaccrual status* $ 23,332 $ 15,993 Loans past due 90-days-or-more and still on accrual** 157 145 Total nonperforming loans 23,489 16,138 Other real estate owned 113 160 Total nonperforming assets $ 23,602 $ 16,298 Credit Quality Ratios - Total Company: Nonperforming loans to total loans 0.53 % 0.39 % Nonperforming assets to total loans (including OREO) 0.53 0.39 Nonperforming assets to total assets 0.42 0.31 Credit Quality Ratios - Core Bank: Nonperforming loans to total loans 0.54 % 0.40 % Nonperforming assets to total loans (including OREO) 0.54 0.40 Nonperforming assets to total assets 0.43 0.32 *Loans on nonaccrual status include impaired loans. **Loans past due 90-days-or-more and still accruing consist of smaller balance consumer 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) 2019 2018 2019 2018 Traditional Banking: Residential real estate: Owner occupied $ 12,220 $ 11,182 $ — $ — Nonowner occupied 623 669 — — Commercial real estate 6,865 2,318 — — Construction & land development 143 — — — Commercial & industrial 1,424 630 — — Lease financing receivables — — — — Home equity 1,865 1,095 — — Consumer: Credit cards — — — — Overdrafts — — — — Automobile loans 179 75 — — Other consumer 13 24 — 13 Total Traditional Banking 23,332 15,993 — 13 Warehouse lines of credit — — — — Total Core Banking 23,332 15,993 — 13 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — Other TRS loans — — 53 4 Republic Credit Solutions — — 104 128 Total Republic Processing Group — — 157 132 Total $ 23,332 $ 15,993 $ 157 $ 145 * Loans past due 90-days-or-more and still accruing consist of smaller balance consumer loans. |
Schedule of recorded investment in loans | Residential Real Estate Consumer Republic Owner Nonowner Home Credit Automobile Other Credit December 31, 2019 (in thousands) Occupied Occupied Equity Cards Overdrafts Loans Consumer Solutions Performing $ 937,348 $ 258,180 $ 291,321 $ 17,836 $ 1,522 $ 52,744 $ 68,102 $ 105,293 Nonperforming 12,220 623 1,865 — — 179 13 104 Total $ 949,568 $ 258,803 $ 293,186 $ 17,836 $ 1,522 $ 52,923 $ 68,115 $ 105,397 Residential Real Estate Consumer Republic Owner Nonowner Home Credit Automobile Other Credit December 31, 2018 (in thousands) Occupied Occupied Equity Cards Overdrafts Loans Consumer Solutions Performing $ 990,650 $ 242,177 $ 331,453 $ 19,095 $ 1,102 $ 63,400 $ 46,605 $ 88,616 Nonperforming 11,182 669 1,095 — — 75 37 128 Total $ 1,001,832 $ 242,846 $ 332,548 $ 19,095 $ 1,102 $ 63,475 $ 46,642 $ 88,744 |
Schedule of aging of the recorded investment in loans by class of loans | 30 - 59 60 - 89 90 or More December 31, 2019 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Traditional Banking: Residential real estate: Owner occupied $ 1,460 $ 1,153 $ 1,821 $ 4,434 $ 945,134 $ 949,568 Nonowner occupied — — 539 539 258,264 258,803 Commercial real estate 155 — 3,145 3,300 1,299,700 1,303,000 Construction & land development — — — — 159,702 159,702 Commercial & industrial 200 128 1,027 1,355 475,881 477,236 Lease financing receivables — — — — 14,040 14,040 Home equity 1,810 166 942 2,918 290,268 293,186 Consumer: Credit cards 80 75 — 155 17,681 17,836 Overdrafts 278 4 1 283 1,239 1,522 Automobile loans 16 15 18 49 52,874 52,923 Other consumer 2 6 1 9 68,106 68,115 Total Traditional Banking 4,001 1,547 7,494 13,042 3,582,889 3,595,931 Warehouse lines of credit — — — — 717,458 717,458 Total Core Banking 4,001 1,547 7,494 13,042 4,300,347 4,313,389 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — Other TRS loans 35 31 53 119 14,246 14,365 Republic Credit Solutions 6,054 1,485 104 7,643 97,754 105,397 Total Republic Processing Group 6,089 1,516 157 7,762 112,000 119,762 Total $ 10,090 $ 3,063 $ 7,651 $ 20,804 $ 4,412,347 $ 4,433,151 Delinquency ratio*** 0.23 % 0.07 % 0.17 % 0.47 % * All loans past due 90-days-or-more, excluding small balance consumer 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 by aging category divided by total loans. 30 - 59 60 - 89 90 or More December 31, 2018 Days Days Days Total Total (dollars in thousands) Delinquent Delinquent Delinquent* Delinquent** Current Total Traditional Banking: Residential real estate: Owner occupied $ 1,137 $ 748 $ 3,640 $ 5,525 $ 996,307 $ 1,001,832 Nonowner occupied 349 — 659 1,008 241,838 242,846 Commercial real estate 511 — 588 1,099 1,247,841 1,248,940 Construction & land development — — — — 175,178 175,178 Commercial & industrial — — 25 25 430,330 430,355 Lease financing receivables — — — — 15,031 15,031 Home equity 558 — 226 784 331,764 332,548 Consumer: Credit cards 82 46 1 129 18,966 19,095 Overdrafts 223 5 2 230 872 1,102 Automobile loans — 28 — 28 63,447 63,475 Other consumer 27 7 13 47 46,595 46,642 Total Traditional Banking 2,887 834 5,154 8,875 3,568,169 3,577,044 Warehouse lines of credit — — — — 468,695 468,695 Total Core Banking 2,887 834 5,154 8,875 4,036,864 4,045,739 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — Other TRS loans 2 4 4 10 13,734 13,744 Republic Credit Solutions 5,734 1,215 128 7,077 81,667 88,744 Total Republic Processing Group 5,736 1,219 132 7,087 95,401 102,488 Total $ 8,623 $ 2,053 $ 5,286 $ 15,962 $ 4,132,265 $ 4,148,227 Delinquency ratio*** 0.21 % 0.05 % 0.13 % 0.38 % *All loans past due 90 days-or-more, excluding small-dollar consumer 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 | Years Ended December 31, (in thousands) 2019 2018 2017 Loans with no allocated Allowance $ 33,061 $ 19,555 $ 18,540 Loans with allocated Allowance 17,289 21,880 27,076 Total recorded investment in impaired loans $ 50,350 $ 41,435 $ 45,616 Amount of the allocated Allowance $ 2,512 $ 3,764 $ 4,685 Average of individually impaired loans during the year 45,400 45,620 47,361 Interest income recognized during impairment 1,342 1,245 1,392 Cash basis interest income recognized — — — |
Schedule of balance in the Allowance and the recorded investment in loans by portfolio class based on impairment method | Allowance for Loan and Lease Losses Loans Individually PCI with Individually PCI with PCI without December 31, 2019 Evaluated Collectively Post-Acquisition Total Evaluated Collectively Post-Acquisition Post-Acquisition Total Allowance to (dollars in thousands) Excluding PCI Evaluated Impairment Allowance Excluding PCI Evaluated Impairment Impairment Loans Total Loans Traditional Banking: Residential real estate: Owner occupied $ 1,207 $ 3,337 $ 185 $ 4,729 $ 25,384 $ 922,764 $ 1,420 $ — $ 949,568 0.50 % Nonowner occupied — 1,737 — 1,737 1,448 257,355 — — 258,803 0.67 Commercial real estate 426 10,054 6 10,486 15,144 1,287,225 631 — 1,303,000 0.80 Construction & land development — 2,152 — 2,152 198 159,504 — — 159,702 1.35 Commercial & industrial 22 2,860 — 2,882 1,989 475,225 — 22 477,236 0.60 Lease financing receivables — 147 — 147 — 14,040 — — 14,040 1.05 Home equity 174 2,547 — 2,721 3,276 289,900 10 — 293,186 0.93 Consumer: Credit cards — 1,020 — 1,020 — 17,836 — — 17,836 5.72 Overdrafts — 1,169 — 1,169 — 1,522 — — 1,522 76.81 Automobile loans 43 569 — 612 247 52,676 — — 52,923 1.16 Other consumer 333 217 — 550 350 67,762 2 1 68,115 0.81 Total Traditional Banking 2,205 25,809 191 28,205 48,036 3,545,809 2,063 23 3,595,931 0.78 Warehouse lines of credit — 1,794 — 1,794 — 717,458 — — 717,458 0.25 Total Core Banking 2,205 27,603 191 29,999 48,036 4,263,267 2,063 23 4,313,389 0.70 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — — — — Other TRS loans — 234 — 234 — 14,365 — — 14,365 1.63 Republic Credit Solutions 116 13,002 — 13,118 251 105,146 — — 105,397 12.45 Total Republic Processing Group 116 13,236 — 13,352 251 119,511 — — 119,762 11.15 Total $ 2,321 $ 40,839 $ 191 $ 43,351 $ 48,287 $ 4,382,778 $ 2,063 $ 23 $ 4,433,151 0.98 % Allowance for Loan and Lease Losses Loans Individually PCI with Individually PCI with PCI without December 31, 2018 Evaluated Collectively Post-Acquisition Total Evaluated Collectively Post-Acquisition Post-Acquisition Total Allowance to (dollars in thousands) Excluding PCI Evaluated Impairment Allowance Excluding PCI Evaluated Impairment Impairment Loans Total Loans Traditional Banking: Residential real estate: Owner occupied $ 2,052 $ 3,602 $ 381 $ 6,035 $ 25,242 $ 974,945 $ 1,645 $ — $ 1,001,832 0.60 % Nonowner occupied 4 1,658 — 1,662 2,406 240,440 — — 242,846 0.68 Commercial real estate 294 9,727 9 10,030 8,104 1,239,915 919 2 1,248,940 0.80 Construction & land development 4 2,551 — 2,555 65 175,113 — — 175,178 1.46 Commercial & industrial 130 2,743 — 2,873 1,020 429,310 — 25 430,355 0.67 Lease financing receivables — 158 — 158 — 15,031 — — 15,031 1.05 Home equity 286 3,117 74 3,477 1,361 331,101 86 — 332,548 1.05 Consumer: Credit cards — 1,140 — 1,140 — 19,095 — — 19,095 5.97 Overdrafts — 1,102 — 1,102 — 1,102 — — 1,102 100.00 Automobile loans 91 633 — 724 91 63,384 — — 63,475 1.14 Other consumer 421 170 — 591 449 46,190 3 — 46,642 1.27 Total Traditional Banking 3,282 26,601 464 30,347 38,738 3,535,626 2,653 27 3,577,044 0.85 Warehouse lines of credit — 1,172 — 1,172 — 468,695 — — 468,695 0.25 Total Core Banking 3,282 27,773 464 31,519 38,738 4,004,321 2,653 27 4,045,739 0.78 Republic Processing Group: Tax Refund Solutions: Easy Advances — — — — — — — — — — Other TRS loans — 107 — 107 — 13,744 — — 13,744 0.78 Republic Credit Solutions 18 13,031 — 13,049 44 88,700 — — 88,744 14.70 Total Republic Processing Group 18 13,138 — 13,156 44 102,444 — — 102,488 12.84 Total $ 3,300 $ 40,911 $ 464 $ 44,675 $ 38,782 $ 4,106,765 $ 2,653 $ 27 $ 4,148,227 1.08 % |
Schedule of loans individually evaluated for impairment by class of loans | As of Year Ended December 31, 2019 December 31, 2019 Cash Basis Unpaid Average Interest Interest Principal Recorded Allocated Recorded Income Income (in thousands) Balance Investment Allowance Investment Recognized Recognized Impaired loans with no allocated Allowance: Residential real estate: Owner occupied $ 14,768 $ 13,893 $ — $ 12,655 $ 191 $ — Nonowner occupied 1,515 1,448 — 1,425 57 — Commercial real estate 15,028 12,547 — 7,514 298 — Construction & land development 198 198 — 65 2 — Commercial & industrial 3,308 1,792 — 913 35 — Lease financing receivables — — — — — — Home equity 3,107 3,023 — 2,140 75 — Consumer 206 160 — 76 4 — Impaired loans with allocated Allowance: Residential real estate: Owner occupied 12,954 12,911 1,392 13,824 502 — Nonowner occupied — — — 108 — — Commercial real estate 3,228 3,228 432 3,624 151 — Construction & land development — — — 30 — — Commercial & industrial 197 197 22 2,054 3 — Lease financing receivables — — — — — — Home equity 263 263 174 417 8 — Consumer 701 690 492 555 16 — Total impaired loans $ 55,473 $ 50,350 $ 2,512 $ 45,400 $ 1,342 $ — As of Year Ended December 31, 2018 December 31, 2018 Cash Basis Unpaid Average Interest Interest Principal Recorded Allocated Recorded Income Income (in thousands) Balance Investment Allowance Investment Recognized Recognized Impaired loans with no allocated Allowance: Residential real estate: Owner occupied $ 12,058 $ 11,085 $ — $ 11,202 $ 198 $ — Nonowner occupied 2,729 2,350 — 2,561 87 — Commercial real estate 5,688 4,607 — 5,040 151 — Construction & land development — — — 119 — — Commercial & industrial 712 604 — 755 3 — Lease financing receivables — — — — — — Home equity 919 876 — 682 17 — Consumer 33 33 — 49 2 — Impaired loans with allocated Allowance: Residential real estate: Owner occupied 16,215 15,802 2,433 17,754 528 — Nonowner occupied 78 56 4 136 — — Commercial real estate 4,416 4,416 303 5,495 206 — Construction & land development 65 65 4 113 3 — Commercial & industrial 416 416 130 158 19 — Lease financing receivables — — — — — — Home equity 572 571 360 925 9 — Consumer 554 554 530 631 22 — Total impaired loans $ 44,455 $ 41,435 $ 3,764 $ 45,620 $ 1,245 $ — As of Year Ended December 31, 2017 December 31, 2017 Cash Basis Unpaid Average Interest Interest Principal Recorded Allocated Recorded Income Income (in thousands) Balance Investment Allowance Investment Recognized Recognized Impaired loans with no allocated Allowance: Residential real estate: Owner occupied $ 11,664 $ 10,789 $ — $ 11,253 $ 179 $ — Non owner occupied 1,784 1,704 — 1,526 86 — Commercial real estate 5,504 4,430 — 4,863 71 — Construction & land development 591 591 — 565 29 — Commercial & industrial 20 20 — 116 4 — Lease financing receivables — — — — — — Home equity 1,071 981 — 1,205 11 — Consumer 25 25 — 62 1 — Impaired loans with allocated Allowance: Residential real estate: Owner occupied 18,676 18,654 2,681 20,212 655 — Non owner occupied 361 358 6 416 14 — Commercial real estate 6,124 6,124 455 5,501 294 — Construction & land development 142 142 107 209 3 — Commercial & industrial 288 288 288 225 8 — Lease financing receivables — — — — — — Home equity 743 743 536 820 17 — Consumer 767 767 612 388 20 — Total impaired loans $ 47,760 $ 45,616 $ 4,685 $ 47,361 $ 1,392 $ — |
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, 2019 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate 53 $ 4,402 141 $ 15,368 194 $ 19,770 Commercial real estate 4 4,040 9 4,885 13 8,925 Construction & land development — — 1 54 1 54 Commercial & industrial 4 1,424 3 22 7 1,446 Consumer — — 1,613 586 1,613 586 Total troubled debt restructurings 61 $ 9,866 1,767 $ 20,915 1,828 $ 30,781 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, 2018 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate 60 $ 6,378 156 $ 17,232 216 $ 23,610 Commercial real estate 3 1,203 14 6,571 17 7,774 Construction & land development — — 1 65 1 65 Commercial & industrial 2 571 3 408 5 979 Consumer — — 256 435 256 435 Total troubled debt restructurings 65 $ 8,152 430 $ 24,711 495 $ 32,863 |
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, 2019 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments 1 $ 904 — $ — 1 $ 904 Rate reduction 118 13,847 5 352 123 14,199 Principal deferral 8 845 2 179 10 1,024 Legal modification 54 3,200 6 443 60 3,643 Total residential TDRs 181 18,796 13 974 194 19,770 Commercial related and construction/land development loans: Interest only payments 3 1,568 — — 3 1,568 Rate reduction 3 1,207 1 45 4 1,252 Principal deferral 11 5,981 1 597 12 6,578 Legal modification — — 2 1,027 2 1,027 Total commercial TDRs 17 8,756 4 1,669 21 10,425 Consumer loans: Principal deferral 1,612 577 — — 1,612 577 Legal modification 1 9 — — 1 9 Total consumer TDRs 1,613 586 — — 1,613 586 Total troubled debt restructurings 1,811 $ 28,138 17 $ 2,643 1,828 $ 30,781 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, 2018 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments — $ — 1 $ 970 1 $ 970 Rate reduction 145 16,892 12 978 157 17,870 Principal deferral 11 1,171 4 1,871 15 3,042 Legal modification 35 1,500 8 228 43 1,728 Total residential TDRs 191 19,563 25 4,047 216 23,610 Commercial related and construction/land development loans: Interest only payments 2 752 — — 2 752 Rate reduction 8 2,962 — — 8 2,962 Principal deferral 12 5,076 — — 12 5,076 Legal modification — — 1 28 1 28 Total commercial TDRs 22 8,790 1 28 23 8,818 Consumer loans: Rate reduction 1 16 — — 1 16 Principal deferral 255 419 — — 255 419 Total consumer TDRs 256 435 — — 256 435 Total troubled debt restructurings 469 $ 28,788 26 $ 4,075 495 $ 32,863 |
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, 2019 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Rate reduction 1 $ 365 — $ — 1 $ 365 Principal deferral — — — — — — Legal modification 26 1,958 5 417 31 2,375 Total residential TDRs 27 2,323 5 417 32 2,740 Commercial related and construction/land development loans: Interest only payments 2 1,423 — — 2 1,423 Principal deferral 4 3,199 — — 4 3,199 Legal modification — — 2 1,027 2 1,027 Total commercial TDRs 6 4,622 2 1,027 8 5,649 Consumer loans: Principal deferral 1,279 201 — — 1,279 201 Legal modification 1 9 — — 1 9 Total consumer TDRs 1,280 210 — — 1,280 210 Total troubled debt restructurings 1,313 $ 7,155 7 $ 1,444 1,320 $ 8,599 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, 2018 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments — $ — 1 $ 970 1 $ 970 Rate reduction 2 465 — — 2 465 Principal deferral 3 43 3 1,849 6 1,892 Legal modification 7 121 1 18 8 139 Total residential TDRs 12 629 5 2,837 17 3,466 Commercial related and construction/land development loans: Principal deferral 6 1,402 — — 6 1,402 Legal modification — — 1 28 1 28 Total commercial TDRs 6 1,402 1 28 7 1,430 Consumer loans: Principal deferral 1 52 — — 1 52 Total consumer TDRs 1 52 — — 1 52 Total troubled debt restructurings 19 $ 2,083 6 $ 2,865 25 $ 4,948 The tables above are inclusive of loans that were TDRs at the end of previous years and were re-modified, e.g., a maturity date extension during the current year. 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, 2017 (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate loans (including home equity loans): Interest only payments 1 $ 219 — $ — 1 $ 219 Rate reduction 4 1,013 — — 4 1,013 Legal modification 6 351 2 197 8 548 Total residential TDRs 11 1,583 2 197 13 1,780 Commercial related and construction/land development loans: Principal deferral 2 266 — — 2 266 Total commercial TDRs 2 266 — — 2 266 Consumer loans: Principal deferral 830 637 — — 830 637 Total consumer TDRs 830 637 — — 830 637 Total troubled debt restructurings 843 $ 2,486 2 $ 197 845 $ 2,683 The table above is inclusive of loans that 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 | 2019 2018 2017 Number of Recorded Number of Recorded Number of Recorded Years Ended December 31, (dollars in thousands) Loans Investment Loans Investment Loans Investment Residential real estate: Owner occupied 4 $ 248 6 $ 2,920 2 $ 197 Commercial real estate 1 541 1 28 — — Commercial & industrial 2 1,027 — — — — Consumer 1,279 201 — — 823 129 Total 1,286 $ 2,017 7 $ 2,948 825 $ 326 |
Schedule of carrying amount of foreclosed properties held | December 31, (in thousands) 2019 2018 Residential real estate $ 113 $ 160 Total other real estate owned $ 113 $ 160 |
Schedule of recorded investment in consumer mortgage loans secured by residential real estate properties | December 31, (in thousands) 2019 2018 Recorded investment in consumer residential real estate mortgage loans in the process of foreclosure $ 2,201 $ 3,293 |
Schedule of Easy Advances | Years Ended December 31, (dollars in thousands) 2019 2018 2017 Easy Advances originated $ 388,970 $ 430,210 $ 328,523 Net charge to the Provision for Easy Advances 10,643 10,760 6,789 Provision to total Easy Advances originated 2.74 % 2.50 % 2.07 % Easy Advances net charge-offs $ 10,643 $ 10,760 $ 6,789 Easy Advances net charge-offs to total Easy Advances originated 2.74 % 2.50 % 2.07 % |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PREMISES AND EQUIPMENT | |
Summary of the cost and accumulated depreciation of premises and equipment | December 31, (in thousands) 2019 2018 Land $ 3,818 $ 4,185 Buildings and improvements 33,819 35,264 Furniture, fixtures and equipment 48,782 43,245 Leasehold improvements 20,649 19,638 Construction in progress 2,232 — Total premises and equipment 109,300 102,332 Less: Accumulated depreciation and amortization 63,940 59,206 Premises and equipment, net $ 45,360 $ 43,126 |
Schedule of depreciation expense related to premises and equipment | Years Ended December 31, (in thousands) 2019 2018 2017 Depreciation expense $ 9,230 $ 9,347 $ 8,472 |
RIGHT-OF-USE ASSETS AND OPERA_2
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | |
Summary of operating lease expense | Year Ended December 31, (in thousands) 2019 Operating lease expense: Related Party: Variable lease expense $ 4,690 Fixed lease expense 37 Third Party: Variable lease expense 883 Fixed lease expense 1,505 Short-term lease expense 62 Total operating lease expense $ 7,177 Other information concerning operating leases: Cash paid for amounts included in the measurement of operating lease liabilities $ 7,175 Short-term lease payments not included in the measurement of lease liabilities 62 |
Schedule of weighted average remaining term and weighted average discount rate for operating leases | December 31, 2019 Weighted average remaining term in years 8.02 Weighted average discount rate 3.46 % |
Schedule of operating lease liabilities | Year (in thousands) Related Party Third Party Total 2020 $ 4,608 $ 2,590 $ 7,198 2021 4,194 2,371 6,565 2022 3,332 1,966 5,298 2023 3,332 1,441 4,773 2024 3,205 1,017 4,222 Thereafter 12,718 1,950 14,668 Total undiscounted cash flows $ 31,389 $ 11,335 $ 42,724 Discount applied to cash flows (4,554) (1,640) (6,194) Total discounted cash flows reported as operating lease liabilities $ 26,835 $ 9,695 $ 36,530 |
GOODWILL AND CORE DEPOSIT INT_2
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS | |
Schedule of progression of the balance for goodwill | Years Ended December 31, (in thousands) 2019 2018 2017 Beginning of period $ 16,300 $ 16,300 $ 16,300 Acquired goodwill — — — Impairment — — — End of period $ 16,300 $ 16,300 $ 16,300 |
INTEREST RATE SWAPS (Tables)
INTEREST RATE SWAPS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INTEREST RATE SWAPS | |
Summary of swaps designated as cash flow hedges | December 31, 2019 December 31, 2018 Unrealized Unrealized Notional Pay Receive Assets / Gain (Loss) Assets / Gain (Loss) (dollars in thousands) Amount Rate Rate Term (Liabilities) in AOCI (Liabilities) in AOCI Interest rate swap on money market deposits $ 10,000 2.17 % 1M LIBOR 12/2013 - 12/2020 $ (46) $ (34) $ 58 $ 45 Interest rate swap on FHLB advance 10,000 2.33 % 3M LIBOR 12/2013 - 12/2020 (58) (43) 57 45 Total $ 20,000 $ (104) $ (77) $ 115 $ 90 |
Schedule of interest expense recorded on swap transactions in the consolidated statements of income | Years Ended December 31, (in thousands) 2019 2018 2017 Interest rate swap on money market deposits $ (10) $ 18 $ 109 Interest rate swap on FHLB advance (10) 10 110 Total interest (benefit) expense on swap transactions $ (20) $ 28 $ 219 |
Summary of net gains recorded in AOCI and the consolidated statements of income relating to the swaps | Years Ended December 31, (in thousands) 2019 2018 2017 (Gains) losses recognized in OCI on derivative (effective portion) $ (199) $ 178 $ 83 Gains (losses) reclassified from OCI on derivative (effective portion) 20 (28) (219) Gains (losses) recognized in income on derivative (ineffective portion) — — — |
Summary of interest rate swaps related to clients | 2019 2018 Notional Notional December 31, (in thousands) Bank Position Amount Fair Value Amount Fair Value Interest rate swaps with Bank clients - Assets Pay variable/receive fixed $ 95,411 $ 5,062 $ 26,398 $ 1,264 Interest rate swaps with Bank clients - Liabilities Pay variable/receive fixed 6,640 (55) 54,718 (908) Interest rate swaps with Bank clients - Total Pay variable/receive fixed $ 102,051 $ 5,007 $ 81,116 $ 356 Offsetting interest rate swaps with institutional swap dealer Pay fixed/receive variable 102,051 (5,007) 81,116 (356) Total $ 204,102 $ — $ 162,232 $ — |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DEPOSITS | |
Ending deposit balances | December 31, (in thousands) 2019 2018 Core Bank: Demand $ 922,972 $ 937,402 Money market accounts 793,950 717,954 Savings 175,588 187,868 Individual retirement accounts (1) 51,548 53,524 Time deposits, $250 and over (1) 104,412 84,104 Other certificates of deposit (1) 248,161 239,324 Reciprocal money market and time deposits (1) 189,774 217,153 Brokered deposits (1) 200,072 9,394 Total Core Bank interest-bearing deposits 2,686,477 2,446,723 Total Core Bank noninterest-bearing deposits 981,164 971,422 Total Core Bank deposits 3,667,641 3,418,145 Republic Processing Group: Money market accounts 66,152 5,453 Total RPG interest-bearing deposits 66,152 5,453 Brokered prepaid card deposits 9,128 4,350 Other noninterest-bearing deposits 43,087 28,197 Total RPG noninterest-bearing deposits 52,215 32,547 Total RPG deposits 118,367 38,000 Total deposits $ 3,786,008 $ 3,456,145 (1) Includes time deposits. |
Schedule of time deposits of $250,000 or more | December 31, (in thousands) 2019 2018 Time deposits of $250 or more $ 104,412 $ 84,104 |
Schedule of maturities of all time deposits, including brokered certificates of deposit | Weighted Average Years (dollars in thousands) Principal Rate 2020 $ 541,352 1.90 % 2021 88,628 2.14 2022 37,947 2.19 2023 55,179 2.92 2024 10,836 2.41 Thereafter — — Total $ 733,942 2.03 |
SECURITIES SOLD UNDER AGREEME_2
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | |
Schedule of securities sold under agreements to repurchase | December 31, (dollars in thousands) 2019 2018 Outstanding balance at end of period $ 167,617 $ 182,990 Weighted average interest rate at end of period 0.32 % 0.83 % Fair value of securities pledged: U.S. Treasury securities and U.S. Government agencies $ 70,015 $ 110,854 Mortgage backed securities - residential 134,265 84,657 Collateralized mortgage obligations 17,030 10,136 Total securities pledged $ 221,310 $ 205,647 Additional information regarding securities sold under agreements to repurchase for the years ended December 31, 2019, 2018 and 2017 follows: Years Ended December 31, (in thousands) 2019 2018 2017 Average outstanding balance during the period $ 236,883 $ 225,145 $ 219,515 Average interest rate during the period % 0.50 % 0.23 % Maximum outstanding at any month end during the period $ 276,927 $ 260,147 $ 293,944 |
FEDERAL HOME LOAN BANK ADVANC_2
FEDERAL HOME LOAN BANK ADVANCES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FEDERAL HOME LOAN BANK ADVANCES | |
Federal Home Loan Bank Advances | December 31, (dollars in thousands) 2019 2018 Overnight advances $ 200,000 $ 510,000 Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% 10,000 10,000 Fixed interest rate advances 540,000 290,000 Total FHLB advances $ 750,000 $ 810,000 |
Aggregate Future Principal Payments on FHLB Advances | Weighted Average Year (dollars in thousands) Principal Rate 2020 (Overnight) $ 200,000 1.63 % 2020 (Term) 480,000 1.71 2021 30,000 1.93 2022 20,000 2.12 2023 20,000 2.56 2024 — — Thereafter — — Total $ 750,000 1.73 % |
Information Regarding Overnight FHLB Advances | December 31, (dollars in thousands) 2019 2018 Outstanding balance at end of period $ 200,000 $ 510,000 Weighted average interest rate at end of period 1.63 % 2.45 % Years Ended December 31, (dollars in thousands) 2019 2018 2017 Average outstanding balance during the period $ 270,992 $ 202,830 $ 141,918 Average interest rate during the period 2.43 % 1.98 % 1.09 % Maximum outstanding at any month end during the period $ 785,000 $ 560,000 $ 625,000 |
Real Estate Loans Pledged | December 31, (in thousands) 2019 2018 First lien, single family residential real estate $ 1,099,941 $ 1,129,588 Home equity lines of credit 274,990 311,419 |
OFF BALANCE SHEET RISKS, COMM_2
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES | |
Bank Commitment Exclusive of Mortgage Bank Loan Commitments | December 31, (in thousands) 2019 2018 Unused warehouse lines of credit $ 436,541 $ 591,305 Unused home equity lines of credit 363,195 377,277 Unused loan commitments - other 757,657 720,645 Standby letters of credit 11,252 10,642 FHLB letter of credit 2,485 10,000 Total commitments $ 1,571,130 $ 1,709,869 |
STOCKHOLDERS' EQUITY AND REGU_2
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Total capital to risk-weighted assets Republic Bancorp, Inc. $ 825,987 17.01 % $ 388,526 8.00 % NA NA Republic Bank & Trust Company 723,248 14.91 388,143 8.00 $ 485,179 10.00 % Common equity tier 1 capital to risk-weighted assets Republic Bancorp, Inc. 742,636 15.29 218,546 4.50 NA NA Republic Bank & Trust Company 679,897 14.01 218,331 4.50 315,366 6.50 Tier 1 (core) capital to risk-weighted assets Republic Bancorp, Inc. 782,636 16.11 291,394 6.00 NA NA Republic Bank & Trust Company 679,897 14.01 291,107 6.00 388,143 8.00 Tier 1 leverage capital to average assets Republic Bancorp, Inc. 782,636 13.93 224,799 4.00 NA NA Republic Bank & Trust Company 679,897 12.11 224,515 4.00 280,644 5.00 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, 2018 Total capital to risk-weighted assets Republic Bancorp, Inc. $ 757,726 16.80 % $ 360,911 8.00 % NA NA Republic Bank & Trust Company 654,258 14.52 360,359 8.00 $ 450,449 10.00 % Common equity tier 1 capital to risk-weighted assets Republic Bancorp, Inc. 673,051 14.92 203,012 4.50 NA NA Republic Bank & Trust Company 609,583 13.53 202,702 4.50 292,792 6.50 Tier 1 (core) capital to risk-weighted assets Republic Bancorp, Inc. 713,051 15.81 270,683 6.00 NA NA Republic Bank & Trust Company 609,583 13.53 270,269 6.00 360,359 8.00 Tier 1 leverage capital to average assets Republic Bancorp, Inc. 713,051 14.11 202,119 4.00 NA NA Republic Bank & Trust Company 609,583 12.06 202,126 4.00 252,658 5.00 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value Measurements at December 31, 2019 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: Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ — $ 134,640 $ — $ 134,640 Private label mortgage backed security — — 3,495 3,495 Mortgage backed securities - residential — 255,847 — 255,847 Collateralized mortgage obligations — 63,371 — 63,371 Corporate bonds — 10,002 — 10,002 Trust preferred security — — 4,000 4,000 Total available-for-sale debt securities $ — $ 463,860 $ 7,495 $ 471,355 Equity securities with readily determinable fair value: Freddie Mac preferred stock $ — $ 714 $ — $ 714 Community Reinvestment Act mutual fund 2,474 — — 2,474 Total equity securities with readily determinable fair value $ 2,474 $ 714 $ — $ 3,188 Mortgage loans held for sale $ — $ 19,224 $ — $ 19,224 Consumer loans held for sale — — 598 598 Consumer loans held for investment — — 998 998 Rate lock loan commitments — 789 — 789 Interest rate swap agreements — 5,062 — 5,062 Financial liabilities: Mandatory forward contracts $ — $ 131 $ — $ 131 Interest rate swap agreements — 5,166 — 5,166 Fair Value Measurements at December 31, 2018 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: Available-for-sale debt securities: U.S. Treasury securities and U.S. Government agencies $ — $ 216,873 $ — $ 216,873 Private label mortgage backed security — — 3,712 3,712 Mortgage backed securities - residential — 169,209 — 169,209 Collateralized mortgage obligations — 72,811 — 72,811 Corporate bonds — 9,058 — 9,058 Trust preferred security — — 4,075 4,075 Total available-for-sale debt securities $ — $ 467,951 $ 7,787 $ 475,738 Equity securities with readily determinable fair value: Freddie Mac preferred stock $ — $ 410 $ — $ 410 Community Reinvestment Act mutual fund 2,396 — — 2,396 Total equity securities with readily determinable fair value $ 2,396 $ 410 $ — $ 2,806 Mortgage loans held for sale $ — $ 8,971 $ — $ 8,971 Consumer loans held for investment — — 1,922 1,922 Rate lock loan commitments — 356 — 356 Interest rate swap agreements — 1,264 — 1,264 Financial liabilities: Mandatory forward contracts $ — $ 262 $ — $ 262 Interest rate swap agreements — 1,149 — 1,149 |
Assets Measured at Fair Value on a Non-Recurring Basis | Fair Value Measurements at December 31, 2019 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 $ — $ — $ 3,598 $ 3,598 Nonowner occupied — — 14 14 Commercial real estate — — 3,276 3,276 Commercial & industrial — — 1,562 1,562 Home equity — — 470 470 Total impaired loans* $ — $ — $ 8,920 $ 8,920 Premises $ — $ — $ 836 $ 836 Fair Value Measurements at December 31, 2018 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 Consumer loans held for sale $ — $ — $ 1,249 $ 1,249 Impaired loans: Residential real estate: Owner occupied $ — $ — $ 4,708 $ 4,708 Nonowner occupied — — 1,007 1,007 Commercial real estate — — 1,255 1,255 Commercial & industrial — — 609 609 Home equity — — 356 356 Total impaired loans* $ — $ — $ 7,935 $ 7,935 Premises $ — $ — $ 1,694 $ 1,694 * 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. |
Impaired collateral dependent loans classified with Level 3 fair value hierarchy | December 31, (in thousands) 2019 2018 Carrying amount of loans measured at fair value $ 7,729 $ 7,380 Estimated selling costs considered in carrying amount 1,193 913 Valuation allowance (2) (358) Total fair value $ 8,920 $ 7,935 |
Provisions for loss on collateral dependent impaired loans | Years Ended December 31, (in thousands) 2019 2018 2017 Provisions on collateral-dependent, impaired loans $ 3,039 $ 1,629 $ 169 |
Other Real Estate Owned | December 31, (in thousands) 2019 2018 2017 Other real estate owned carried at fair value $ — $ — $ 83 Other real estate owned carried at cost 113 160 32 Total carrying value of other real estate owned $ 113 $ 160 $ 115 Other real estate owned write-downs during the years ended $ — $ — $ 155 |
Schedule of Impairment charges on premises and equipment | Years Ended December 31, (in thousands) 2019 2018 2017 Impairment charges on premises $ 256 $ 482 $ 1,175 |
Carrying amount and estimated fair values of financial instruments | Fair Value Measurements at December 31, 2019: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ 385,303 $ 385,303 $ — $ — $ 385,303 Available-for-sale debt securities 471,355 — 463,860 7,495 471,355 Held-to-maturity debt securities 62,531 — 63,156 — 63,156 Equity securities with readily determinable fair values 3,188 2,474 714 — 3,188 Mortgage loans held for sale, at fair value 19,224 — 19,224 — 19,224 Consumer loans held for sale, at fair value 598 — — 598 598 Consumer loans held for sale, at the lower of cost or fair value 11,646 — — 11,646 11,646 Loans, net 4,389,800 — — 4,381,396 4,381,396 Federal Home Loan Bank stock 30,831 — — — NA Accrued interest receivable 12,937 — 12,937 — 12,937 Rate lock loan commitments 789 — 789 — 789 Interest rate swap agreements 5,062 — 5,062 — 5,062 Liabilities: Noninterest-bearing deposits $ 1,033,379 — $ 1,033,379 — $ 1,033,379 Transaction deposits 2,018,687 — 2,018,687 — 2,018,687 Time deposits 733,942 — 737,733 — 737,733 Securities sold under agreements to repurchase and other short-term borrowings 167,617 — 167,617 — 167,617 Federal Home Loan Bank advances 750,000 — 749,667 — 749,667 Subordinated note 41,240 — 32,587 — 32,587 Accrued interest payable 2,802 — 2,802 — 2,802 Mandatory forward contracts 131 — 131 — 131 Interest rate swap agreements 5,166 — 5,166 — 5,166 NA - Not applicable Fair Value Measurements at December 31, 2018: Total Carrying Fair (in thousands) Value Level 1 Level 2 Level 3 Value Assets: Cash and cash equivalents $ 351,474 $ 351,474 $ — $ — $ 351,474 Available-for-sale debt securities 475,738 — 467,951 7,787 475,738 Held-to-maturity debt securities 65,227 — 64,858 — 64,858 Equity securities with readily determinable fair values 2,806 2,396 410 — 2,806 Mortgage loans held for sale, at fair value 8,971 — 8,971 — 8,971 Consumer loans held for sale, at the lower of cost or fair value 12,838 — — 12,838 12,838 Loans, net 4,103,552 — — 4,062,457 4,062,457 Federal Home Loan Bank stock 32,067 — — — NA Accrued interest receivable 13,942 — 13,942 — 13,942 Rate lock loan commitments 356 — 356 — 356 Interest rate swap agreements 1,264 — 1,264 — 1,264 Liabilities: Noninterest-bearing deposits $ 1,003,969 — $ 1,003,969 — $ 1,003,969 Transaction deposits 2,035,701 — 2,035,701 — 2,035,701 Time deposits 416,475 — 412,477 — 412,477 Securities sold under agreements to repurchase and other short-term borrowings 182,990 — 182,990 — 182,990 Federal Home Loan Bank advances 810,000 — 804,251 — 804,251 Subordinated note 41,240 — 33,724 — 33,724 Accrued interest payable 1,084 — 1,084 — 1,084 Mandatory forward contracts 262 — 262 — 262 Interest rate swap agreements 1,149 — 1,149 — 1,149 NA - Not applicable |
Nonrecurring basis | |
Fair Value Disclosures | |
Fair value inputs quantitative information | Range Fair Valuation Unobservable (Weighted December 31, 2019 (dollars in thousands) Value Technique Inputs Average) Impaired loans - residential real estate owner occupied $ 3,598 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 58% (12%) Impaired loans - residential real estate nonowner occupied $ 14 Sales comparison approach Adjustments determined for differences between comparable sales 5% (5%) Impaired loans - commercial real estate $ 3,276 Sales comparison approach Adjustments determined for differences between comparable sales 1% - 10% (4%) Impaired loans - commercial & industrial $ 1,562 Sales comparison approach Adjustments determined for differences between comparable sales 3% - 50% (37%) Impaired loans - home equity $ 470 Sales comparison approach Adjustments determined for differences between comparable sales 2% (2%) Premises $ 836 Sales comparison approach Adjustments determined for differences between comparable sales 39% - 77% (55%) Range Fair Valuation Unobservable (Weighted December 31, 2018 (dollars in thousands) Value Technique Inputs Average) Consumer loans held for sale $ 1,249 Sales comparison approach Adjustments determined for differences between comparable sales 6% (6%) Impaired loans - residential real estate owner occupied $ 4,708 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 67% (9%) Impaired loans - residential real estate nonowner occupied $ 1,007 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 27% (15%) Impaired loans - commercial real estate $ 123 Sales comparison approach Adjustments determined for differences between comparable sales 21% (21%) Impaired loans - commercial real estate $ 1,132 Income approach Adjustments for differences between net operating income expectations 17% (17%) Impaired loans - commercial & industrial $ 609 Sales comparison approach Adjustments determined for differences between comparable sales 3% (3%) Impaired loans - home equity $ 356 Sales comparison approach Adjustments determined for differences between comparable sales 0% - 22% (8%) Premises $ 1,694 Sales comparison approach Adjustments determined for differences between comparable sales 27% - 72% (40%) |
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) 2019 2018 2017 Balance, beginning of period $ 3,712 $ 4,449 $ 4,777 Total gains or losses included in earnings: Net change in unrealized gain (79) (20) 298 Recovery of actual losses previously recorded 151 152 — Principal paydowns (289) (869) (626) Balance, end of period $ 3,495 $ 3,712 $ 4,449 |
Private label mortgage backed security | Recurring basis | |
Fair Value Disclosures | |
Fair value inputs quantitative information | Fair Valuation December 31, 2019 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ 3,495 Discounted cash flow (1) Constant prepayment rate 2.3% - 5.0% (2) Probability of default 1.8% - 6.3% (3) Loss severity 50% - 75% Fair Valuation December 31, 2018 (dollars in thousands) Value Technique Unobservable Inputs Range Private label mortgage backed security $ 3,712 Discounted cash flow (1) Constant prepayment rate 6.5% - 8.9% (2) Probability of default 1.8% - 4.7% (3) Loss severity 50% - 75% |
Trust preferred 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) 2019 2018 2017 Balance, beginning of period $ 4,075 $ 3,600 $ 3,200 Total gains or losses included in earnings: Discount accretion 42 40 44 Net change in unrealized gain (117) 435 356 Balance, end of period $ 4,000 $ 4,075 $ 3,600 |
Mortgage loans held for sale | |
Fair Value Disclosures | |
Schedule of aggregate fair value, contractual balance and unrealized gain | December 31, (in thousands) 2019 2018 Aggregate fair value $ 19,224 $ 8,971 Contractual balance 18,690 8,676 Unrealized gain 534 295 |
Schedule of gains and losses from changes in fair value included in earnings | Years Ended December 31, (in thousands) 2019 2018 2017 Interest income $ 697 $ 402 $ 346 Change in fair value 239 203 (1) Total included in earnings $ 936 $ 605 $ 345 |
MORTGAGE BANKING ACTIVITIES (Ta
MORTGAGE BANKING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
MORTGAGE BANKING ACTIVITIES | |
Activity for Mortgage Loans Held for Sale, at fair value | Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 8,971 $ 5,761 $ 11,662 Origination of mortgage loans held for sale 356,097 176,916 160,091 Proceeds from the sale of mortgage loans held for sale (354,660) (177,545) (169,969) Net gain on sale of mortgage loans held for sale 8,816 3,839 3,977 Balance, end of period $ 19,224 $ 8,971 $ 5,761 |
Components of Mortgage Banking Income | Years Ended December 31, (in thousands) 2019 2018 2017 Net gain realized on sale of mortgage loans held for sale $ 8,013 $ 3,843 $ 4,180 Net change in fair value recognized on loans held for sale 239 203 (1) Net change in fair value recognized on rate lock loan commitments 433 46 11 Net change in fair value recognized on forward contracts 131 (253) (213) Net gain recognized 8,816 3,839 3,977 Loan servicing income 2,506 2,418 2,169 Amortization of mortgage servicing rights (1,823) (1,432) (1,504) Net servicing income recognized 683 986 665 Total Mortgage Banking income $ 9,499 $ 4,825 $ 4,642 |
Activity for capitalized mortgage servicing rights | Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 4,919 $ 5,044 $ 5,180 Additions 2,792 1,307 1,368 Amortized to expense (1,823) (1,432) (1,504) Balance, end of period $ 5,888 $ 4,919 $ 5,044 |
Other information relating to mortgage servicing rights | December 31, (in thousands) 2019 2018 Fair value of mortgage servicing rights portfolio $ 9,068 $ 9,357 Monthly weighted average prepayment rate of unpaid principal balance* 202 % 160 % Discount rate 10.00 % 10.00 % Weighted average foreclosure rate % 0.14 % 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) 2020 $ 1,057 2021 1,054 2022 1,044 2023 889 2024 654 2025 446 2026 744 Total $ 5,888 |
Schedule of notional amounts and fair values of mortgage loans held for sale at fair value and mortgage banking derivatives | 2019 2018 Notional Notional December 31, (in thousands) Amount Fair Value Amount Fair Value Included in Mortgage loans held for sale: Mortgage loans held for sale, at fair value $ 18,690 $ 19,224 $ 8,676 $ 8,971 Included in other assets: Rate lock loan commitments $ 32,776 $ 789 $ 14,788 $ 356 Included in other liabilities: Mandatory forward contracts $ 44,919 $ 131 $ 20,063 $ 262 |
STOCK PLANS AND STOCK BASED C_2
STOCK PLANS AND STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 Risk-free interest rate 1.85 % 3.00 % 2.07 % Expected dividend yield 2.25 % 2.01 % 2.41 % Expected stock price volatility 20.11 % 18.59 % 20.36 % Expected life of options (in years) 5 5 5 Estimated fair value per share $ 7.12 $ 8.09 $ 5.46 |
Summary of stock option activity | Weighted Weighted Average Options Average Remaining Aggregate Class A Exercise Contractual Intrinsic Shares Price Term Value Outstanding, January 1, 2018 295,000 $ 24.68 Granted 165,000 48.08 Exercised (3,500) 24.10 Forfeited or expired (23,300) 26.51 Outstanding, December 31, 2018 433,200 $ 33.50 3.15 $ 3,786,820 Outstanding, January 1, 2019 433,200 $ 33.50 Granted 5,500 47.02 Exercised (100,600) 24.50 Forfeited or expired (26,650) 36.00 Outstanding, December 31, 2019 311,450 $ 36.43 2.73 $ 3,449,454 Unvested 255,650 $ 38.91 3.15 $ 2,235,562 Exercisable (vested) at December 31, 2019 55,800 $ 25.08 0.77 $ 1,213,892 |
Schedule of intrinsic value and cash received from options exercised and weighted average fair value of options granted | Years Ended December 31, 2019 2018 2017 Intrinsic value of options exercised $ 2,249 $ 79 $ 71 Cash received from options exercised, net of shares redeemed (191) 83 68 |
Schedule of loan balances of non-executive officer employees that were originated to fund stock option exercises | December 31, (in thousands) 2019 2018 Outstanding loans $ 355 $ 133 |
Summary of activity for non-vested restricted stock awards | Restricted Stock Awards Weighted-Average Class A Shares Grant Date Fair Value Outstanding, January 1, 2018 41,610 $ 21.18 Granted 48,323 40.16 Forfeited (1,500) 19.85 Earned and issued (37,323) 21.33 Outstanding, December 31, 2018 51,110 $ 39.06 Outstanding, January 1, 2019 51,110 $ 39.06 Granted 2,336 49.34 Forfeited — — Earned and issued (12,336) 46.63 Outstanding, December 31, 2019 41,110 $ 37.37 Unvested 41,110 $ 37.37 |
Summary of PSU activity | Performance Stock Units Weighted-Average Class A Shares Grant Date Fair Value Outstanding, January 1, 2018 48,500 $ 23.08 Granted — — Forfeited (2,500) 23.08 Earned and issued — — Outstanding, December 31, 2018 46,000 $ 23.08 Outstanding, January 1, 2019 46,000 $ 23.08 Granted — — Forfeited — — Earned and issued (23,000) 23.08 Outstanding, December 31, 2019 23,000 $ 23.08 Vested at December 31, 2019 23,000 $ 23.08 |
Schedule of expenses recorded related to stock options and restricted stock awards | Years Ended December 31, (in thousands) 2019 2018 2017 Stock option expense $ 364 $ 265 $ 227 Restricted stock award expense 728 630 424 Performance stock unit expense (57) 106 491 Total expense $ 1,035 $ 1,001 $ 1,142 |
Schedule of estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | Stock Restricted Year (in thousands) Options Stock Awards Total 2020 $ 304 $ 261 $ 565 2021 277 261 538 2022 240 237 477 2023 106 119 225 2024 5 16 21 2025 and beyond — — — Total $ 932 $ 894 $ 1,826 |
Schedule of employee stock purchase plan | Years Ended December 31, (in thousands) 2019 2018 2017 ESPP expense $ 49 $ 23 $ — |
Director | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Schedule of information on deferred compensation shares reserved for the periods | Outstanding Weighted-Average Stock Market Price Units at Date of Deferral Outstanding, January 1, 2018 63,898 $ 24.08 Deferred fees and dividend equivalents converted to stock units 5,081 41.82 Stock units converted to Class A Common Shares (2,835) 23.94 Outstanding, December 31, 2018 66,144 $ 25.45 Outstanding, January 1, 2019 66,144 $ 25.45 Deferred fees and dividend equivalents converted to stock units 6,397 46.76 Stock units converted to Class A Common Shares (5,178) 23.18 Outstanding, December 31, 2019 67,363 $ 27.65 Vested 67,363 $ 27.65 |
Schedule of deferred compensation expenses | Years Ended December 31, (in thousands) 2019 2018 2017 Director deferred compensation expense $ 213 $ 215 $ 191 |
Key Employees | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Schedule of information on deferred compensation shares reserved for the periods | Outstanding Weighted-Average Stock Market Price Units at Date of Deferral Outstanding, January 1, 2018 — $ — Deferred base salaries and dividend equivalents converted to stock units 4,630 43.09 Matching stock units credited 4,992 43.09 Matching stock units forfeited (362) 42.99 Stock units converted to Class A Common Shares — — Outstanding, December 31, 2018 9,260 $ 43.09 Outstanding, January 1, 2019 9,260 $ 43.09 Deferred base salaries and dividend equivalents converted to stock units 7,059 45.84 Matching stock units credited 7,059 45.84 Matching stock units forfeited — — Stock units converted to Class A Common Shares — — Outstanding, December 31, 2019 23,378 $ 41.75 Vested 14,953 $ 41.75 Unvested 8,425 $ 41.75 |
Schedule of deferred compensation expenses | Years Ended December 31, (in thousands) 2019 2018 2017 Key-employee - base salary $ 319 $ 215 $ — Key-employee - employer match 49 215 — Total $ 368 $ 430 $ — |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BENEFIT PLANS | |
Schedule of normal and bonus contributions | Years Ended December 31, (in thousands) 2019 2018 2017 Employer matching contributions $ 3,185 $ 2,890 $ 2,190 Discretionary employer bonus matching contributions 207 392 335 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of allocation of federal income tax between current and deferred portion | Years Ended December 31, (in thousands) 2019 2018 2017 Current expense: Federal $ 18,906 $ 10,638 $ 26,983 State 1,751 1,532 486 Deferred expense: SAB 118 related discrete items — (2,762) — Deferred tax asset devaluation upon enactment of TCJA — — 6,326 Federal 1,880 6,815 (965) State (1,043) 188 (76) Total $ 21,494 $ 16,411 $ 32,754 |
Schedule of effective tax rate that differs from that computed at the federal statutory rate | Years Ended December 31, 2019 2018 2017 Federal corporate tax rate 21.00 % 21.00 % 35.00 % Effect of: SAB 118 related discrete items* — (2.93) — Deferred tax asset devaluation upon enactment of TCJA — — 8.07 State taxes, net of federal benefit 1.43 1.44 0.34 General business tax credits (1.14) (1.44) — Nontaxable income (0.85) (0.99) (1.90) Reversal of valuation allowance on net operating loss carryforward (0.74) — — Tax benefit of vesting employee benefits (0.42) (0.20) (0.31) Establishment of deferred tax asset due to KY HB354 (0.20) — — Other, net (0.09) 0.53 0.59 Effective tax rate 18.99 17.41 41.79 *Discrete items include the impact of a cost-segregation study, a research and development tax-credit study, and a tax-accounting-method change related to the immediate recognition of loan origination costs. |
Schedule of deferred tax assets and liabilities | December 31, (in thousands) 2019 2018 Deferred tax assets: Allowance for loan and lease losses $ 9,672 $ 9,746 Operating lease liabilities 8,186 — Accrued expenses 3,332 3,802 Net operating loss carryforward(1) 2,705 2,858 Acquisition fair value adjustments 443 580 Other-than-temporary impairment 397 478 Unrealized investment security losses — 289 Fair value of cash flow hedges 26 — Other 1,741 1,644 Total deferred tax assets 26,502 19,397 Deferred tax liabilities: Right of use assets - operating leases (7,889) — Depreciation and amortization (4,018) (3,970) Federal Home Loan Bank dividends (2,667) (2,676) Deferred loan fees (2,068) (1,921) Lease Financing Receivables (2,245) (1,839) Mortgage servicing rights (1,319) (1,106) Unrealized investment securities gains (1,058) — Bargain purchase gain (648) (553) Fair value of cash flow hedges — (24) Other (246) (11) Total deferred tax liabilities (22,158) (12,100) Less: Valuation allowance — (819) Net deferred tax asset $ 4,344 $ 6,478 (1) The Company has federal and state net operating loss carryforwards (acquired in its 2016 Cornerstone acquisition) of $8.0 million (federal) and $5.1 million (state). These carryforwards begin to expire in 2030 for both federal and state purposes. The use of these federal and state carryforwards is each limited under IRC Section 382 to $722,000 annually for federal and $634,000 annually for state. The Company also has a Kentucky net operating loss carryforward of $21.2 million, which the Company expects to begin utilizing in 2021 due to the passage of Kentucky HB354 and HB458. The Company expects to file a combined Kentucky income tax return beginning in 2021 and to utilize these previously generated net operating losses. The Company previously maintained a valuation allowance as it did not anticipate generating taxable income in Kentucky to utilize this carryforward prior to expiration. Finally, the Company has AMT credit carryforwards of $87,000 with no expiration date. |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | Years Ended December 31, (in thousands) 2019 2018 2017 Balance, beginning of period $ 1,327 $ 912 $ 1,495 Additions based on tax related to the current period 364 306 259 Additions for tax positions of prior periods 55 339 — Reductions for tax positions of prior periods — (34) (42) Reductions due to the statute of limitations (39) (196) (800) Settlements — — — Balance, end of period $ 1,707 $ 1,327 $ 912 |
Schedule of amount of interest and penalties | Years Ended December 31, (in thousands) 2019 2018 2017 Interest and penalties recorded in the income statement as a component of income tax expense $ 173 $ 42 $ (258) Interest and penalties accrued on balance sheet 514 341 299 |
Schedule of low income housing tax credits | December 31, (in thousands) 2019 2018 Unfunded Unfunded Investment Accounting Method Investment Commitment Investment Commitment Low income housing tax credit investments - Gross Proportional amortization $ 11,912 $ 24,888 $ 3,971 $ 14,029 Life-to-date amortization (1,218) NA (347) NA Low income housing tax credit investments - Net $ 10,694 $ 24,888 $ 3,624 $ 14,029 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
Earnings Per Share and Diluted Earnings Per Share | Years Ended December 31, (in thousands, except per share data) 2019 2018 2017 Net income $ 91,699 $ 77,852 $ 45,632 Dividends declared on Common Stock: Class A Shares (19,771) (18,076) (16,158) Class B Shares (2,121) (1,955) (1,773) Undistributed net income for basic earnings per share 69,807 57,821 27,701 Weighted average potential dividends on Class A shares upon exercise of dilutive options (118) (102) (75) Undistributed net income for diluted earnings per share $ 69,689 $ 57,719 $ 27,626 Weighted average shares outstanding: Class A Shares 18,813 18,736 18,678 Class B Shares 2,210 2,224 2,243 Effect of dilutive securities on Class A Shares outstanding 112 105 86 Weighted average shares outstanding including dilutive securities 21,135 21,065 21,007 Basic earnings per share: Class A Common Stock: Per share dividends distributed $ 1.06 $ 0.97 $ 0.87 Undistributed earnings per share* 3.35 2.79 1.34 Total basic earnings per share - Class A Common Stock $ 4.41 $ 3.76 $ 2.21 Class B Common Stock: Per share dividends distributed $ 0.96 $ 0.88 $ 0.79 Undistributed earnings per share* 3.05 2.53 1.22 Total basic earnings per share - Class B Common Stock $ 4.01 $ 3.41 $ 2.01 Diluted earnings per share: Class A Common Stock: Per share dividends distributed $ 1.06 $ 0.97 $ 0.87 Undistributed earnings per share* 3.33 2.77 1.33 Total diluted earnings per share - Class A Common Stock $ 4.39 $ 3.74 $ 2.20 Class B Common Stock: Per share dividends distributed $ 0.96 $ 0.88 $ 0.79 Undistributed earnings per share* 3.03 2.52 1.21 Total diluted earnings per share - Class B Common Stock $ 3.99 $ 3.40 $ 2.00 *To arrive at undistributed earnings per share, undistributed net income is first pro rated between Class A and Class B Common Shares, with Class A Common Shares receiving a 10% premium. The resulting pro-rated, undistributed net income for each class is then divided by the weighted average shares for each class. |
Antidilutive Stock Options | December 31, 2019 2018 2017 Antidilutive stock options 154,750 165,000 4,500 Average antidilutive stock options 151,260 47,712 2,375 |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES | |
Schedule of loans made to executive officers and directors of the company and their related interests | (in thousands) Beginning balance $ 38,370 Effect of changes in composition of related parties (184) New loans 2,385 Repayments 2,827 Ending balance $ 43,398 |
OTHER COMPREHENSIVE INCOME (Tab
OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER COMPREHENSIVE INCOME | |
Summary of OCI components and related tax effects | Years Ended December 31, (in thousands) 2019 2018 2017 Available-for-Sale Debt Securities: Change in unrealized (loss) gain on AFS debt securities $ 5,689 $ (1,548) $ (1,265) Adjustment for adoption of ASU 2016-01 — (428) — Reclassification adjustment for net (gain) loss on AFS debt securities recognized in earnings — — 136 Change in unrealized gain on AFS debt security for which a portion of OTTI has been recognized in earnings (79) (20) 298 Net unrealized (losses) gains 5,610 (1,996) (831) Tax effect (1,348) 420 377 Net of tax 4,262 (1,576) (454) Cash Flow Hedges: Change in fair value of derivatives used for cash flow hedges (199) 178 83 Reclassification amount for net derivative losses realized in income (20) 28 219 Net unrealized gains (219) 206 302 Tax effect 52 (43) (119) Net of tax (167) 163 183 Total other comprehensive (loss) income components, net of tax $ 4,095 $ (1,413) $ (271) |
Summary of amounts reclassified out of each component of AOCI | Amounts Reclassified From Affected Line Items Accumulated Other in the Consolidated Comprehensive Income Years Ended December 31, (in thousands) Statements of Income 2019 2018 2017 Available for Sale Debt Securities: Net losses on debt securities Noninterest income $ — $ — $ (136) Tax effect Income tax expense — — 48 Net of tax Net income — — (88) Cash Flow Hedges: Interest rate swap on money market deposits Interest benefit (expense) on deposits 10 (18) (109) Interest rate swap on FHLB advance Interest benefit (expense) on FHLB advances 10 (10) (110) Total derivative gains (losses) on cash flow hedges Total interest benefit (expense) 20 (28) (219) Tax effect Income tax (benefit) expense (5) 6 77 Net of tax Net income 15 (22) (142) Net of tax, total all reclassification amounts Net income $ 15 $ (22) $ (230) |
Summary of the AOCI balances, net of tax | 2019 (in thousands) December 31, 2018 Change December 31, 2019 Unrealized gain (loss) on AFS debt securities $ (2,165) $ 4,376 $ 2,211 Unrealized gain (loss) on AFS debt security for which a portion of OTTI has been recognized in earnings 1,078 (114) 964 Unrealized gain (loss) on cash flow hedges 90 (167) (77) Total unrealized (loss) gain $ (997) $ 4,095 $ 3,098 2018 (in thousands) December 31, 2017 Change December 31, 2018 Unrealized loss on AFS debt securities $ (604) $ (1,561) $ (2,165) Unrealized gain (loss) on AFS debt security for which a portion of OTTI has been recognized in earnings 1,093 (15) 1,078 Unrealized gain (loss) on cash flow hedges (73) 163 90 Total unrealized gain (loss) $ 416 $ (1,413) $ (997) |
PARENT COMPANY CONDENSED FINA_2
PARENT COMPANY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PARENT COMPANY CONDENSED FINANCIAL INFORMATION | |
Schedule of balance sheets | December 31, (in thousands) 2019 2018 Assets: Cash and cash equivalents $ 101,003 $ 99,440 Security available for sale 4,000 4,075 Investment in bank subsidiary 699,906 625,814 Investment in non-bank subsidiaries 3,631 3,343 Other assets 4,749 4,854 Total assets $ 813,289 $ 737,526 Liabilities and Stockholders’ Equity: Subordinated note $ 41,240 $ 41,240 Other liabilities 7,805 6,352 Stockholders’ equity 764,244 689,934 Total liabilities and stockholders’ equity $ 813,289 $ 737,526 |
Schedule of statements of income | Years Ended December 31, (in thousands) 2019 2018 2017 Income and expenses: Dividends from subsidiary $ 24,249 $ 22,385 $ 20,063 Interest income 250 231 186 Other income 54 45 45 Less: Interest expense 1,620 1,508 1,094 Less: Other expenses 511 469 394 Income before income tax benefit 22,422 20,684 18,806 Income tax benefit 1,213 348 116 Income before equity in undistributed net income of subsidiaries 23,635 21,032 18,922 Equity in undistributed net income of subsidiaries 68,064 56,820 26,710 Net income $ 91,699 $ 77,852 $ 45,632 Comprehensive income $ 95,794 $ 76,439 $ 45,361 |
Schedule of statements of cash flows | Years Ended December 31, (in thousands) 2019 2018 2017 Operating activities: Net income $ 91,699 $ 77,852 $ 45,632 Adjustments to reconcile net income to net cash provided by operating activities: Accretion of investment security (42) (40) (44) Equity in undistributed net income of subsidiaries (68,064) (56,820) (26,710) Director deferred compensation - Parent Company 139 117 108 Change in other assets (25) 605 1,215 Change in other liabilities 842 (976) 1,623 Net cash provided by operating activities 24,549 20,738 21,824 Investing activities: Investment in subsidiary bank (494) (230) — Net cash used in investing activities (494) (230) — Financing activities: Common Stock repurchases (1,418) (827) (1,048) Net proceeds from Class A Common Stock purchased through employee stock purchase plan 494 230 — Net proceeds from Common Stock options exercised (191) 83 68 Cash dividends paid (21,377) (19,497) (17,656) Net cash used in financing activities (22,492) (20,011) (18,636) Net change in cash and cash equivalents 1,563 497 3,188 Cash and cash equivalents at beginning of period 99,440 98,943 95,755 Cash and cash equivalents at end of period $ 101,003 $ 99,440 $ 98,943 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Schedule of net revenues by reportable segments | Year Ended December 31, 2019 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income(1) $ 168,076 $ 15,801 $ 697 $ 184,574 $ 21,626 $ 29,926 $ 51,552 $ 236,126 Noninterest income: Service charges on deposit accounts 14,153 44 — 14,197 — — — 14,197 Net refund transfer fees — — — — 21,158 — 21,158 21,158 Mortgage banking income(1) — — 9,499 9,499 — — — 9,499 Interchange fee income 11,600 — — 11,600 259 — 259 11,859 Program fees(1) — — — — 437 4,275 4,712 4,712 Increase in cash surrender value of BOLI(1) 1,550 — — 1,550 — — — 1,550 Net gains (losses) on OREO 540 — — 540 — — — 540 Net gain on branch divestiture(1) 7,829 — — 7,829 — — — 7,829 Other 2,881 (90) 213 3,004 1 659 660 3,664 Total noninterest income 38,553 (46) 9,712 48,219 21,855 4,934 26,789 75,008 Total net revenue $ 206,629 $ 15,755 $ 10,409 $ 232,793 $ 43,481 $ 34,860 $ 78,341 $ 311,134 Net-revenue concentration(2) 67 % 5 % 3 % 75 % 14 % 11 % 25 % 100 % (1) This revenue is not subject to ASU 2014-09, Revenue from Contracts with Customers. (2) Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue. Year Ended December 31, 2018 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income(1) $ 160,398 $ 15,726 $ 402 $ 176,526 $ 19,203 $ 30,329 $ 49,532 $ 226,058 Noninterest income: Service charges on deposit accounts 14,233 40 — 14,273 — — — 14,273 Net refund transfer fees — — — — 20,029 — 20,029 20,029 Mortgage banking income(1) — — 4,825 4,825 — — — 4,825 Interchange fee income 10,868 — — 10,868 226 65 291 11,159 Program fees(1) — — — — 295 5,930 6,225 6,225 Increase in cash surrender value of BOLI(1) 1,527 — — 1,527 — — — 1,527 Net gains (losses) on OREO 729 — — 729 — — — 729 Other 2,608 — 550 3,158 1,003 497 1,500 4,658 Total noninterest income 29,965 40 5,375 35,380 21,553 6,492 28,045 63,425 Total net revenue $ 190,363 $ 15,766 $ 5,777 $ 211,906 $ 40,756 $ 36,821 $ 77,577 $ 289,483 Net-revenue concentration(2) 66 % 5 % 2 % 73 % 14 % 13 % 27 % 100 % (1) This revenue is not subject to ASU 2014-09, Revenue from Contracts with Customers. (2) Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
Segment Information | Year Ended December 31, 2019 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income $ 168,076 $ 15,801 $ 697 $ 184,574 $ 21,626 $ 29,926 $ 51,552 $ 236,126 Provision for loan and lease losses 2,444 622 — 3,066 11,249 11,443 22,692 25,758 Net refund transfer fees — — — — 21,158 — 21,158 21,158 Mortgage banking income — — 9,499 9,499 — — — 9,499 Program fees — — — — 437 4,275 4,712 4,712 Net gain on branch divestiture 7,829 — — 7,829 — — — 7,829 Other noninterest income 30,724 (46) 213 30,891 260 659 919 31,810 Total noninterest income 38,553 (46) 9,712 48,219 21,855 4,934 26,789 75,008 Total noninterest expense 143,671 3,268 6,112 153,051 16,539 2,593 19,132 172,183 Income before income tax expense 60,514 11,865 4,297 76,676 15,693 20,824 36,517 113,193 Income tax expense 9,651 2,670 902 13,223 3,454 4,817 8,271 21,494 Net income $ 50,863 $ 9,195 $ 3,395 $ 63,453 $ 12,239 $ 16,007 $ 28,246 $ 91,699 Period-end assets $ 4,684,116 $ 717,994 $ 26,469 $ 5,428,579 $ 86,849 $ 104,891 $ 191,740 $ 5,620,319 Net interest margin 3.76 % 2.42 % NM 3.61 % NM NM NM 4.46 % Net-revenue concentration* 67 % 5 % 3 % 75 % 14 % 11 % 25 % 100 % Year Ended December 31, 2018 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income $ 160,398 $ 15,726 $ 402 $ 176,526 $ 19,203 $ 30,329 $ 49,532 $ 226,058 Provision for loan and lease losses 3,710 (142) — 3,568 10,919 16,881 27,800 31,368 Net refund transfer fees — — — — 20,029 — 20,029 20,029 Mortgage banking income — — 4,825 4,825 — — — 4,825 Program fees — — — — 295 5,930 6,225 6,225 Other noninterest income 29,965 40 550 30,555 1,229 562 1,791 32,346 Total noninterest income 29,965 40 5,375 35,380 21,553 6,492 28,045 63,425 Total noninterest expense 136,439 3,367 4,356 144,162 14,686 5,004 19,690 163,852 Income before income tax expense 50,214 12,541 1,421 64,176 15,151 14,936 30,087 94,263 Income tax expense 6,819 2,869 298 9,986 3,033 3,392 6,425 16,411 Net income $ 43,395 $ 9,672 $ 1,123 $ 54,190 $ 12,118 $ 11,544 $ 23,662 $ 77,852 Period-end assets $ 4,647,037 $ 470,126 $ 14,246 $ 5,131,409 $ 20,288 $ 88,707 $ 108,995 $ 5,240,404 Net interest margin 3.76 % 3.18 % NM 3.70 % NM NM NM 4.62 % Net-revenue concentration* 66 % 5 % 2 % 73 % 14 % 13 % 27 % 100 % Year Ended December 31, 2017 Core Banking Republic Processing Group Total Tax Republic Traditional Warehouse Mortgage Core Refund Credit Total Total (dollars in thousands) Banking Lending Banking Banking Solutions Solutions RPG Company Net interest income $ 142,823 $ 17,533 $ 346 $ 160,702 $ 15,197 $ 22,621 $ 37,818 $ 198,520 Provision for loan and lease losses 3,923 (150) — 3,773 6,535 17,396 23,931 27,704 Net refund transfer fees — — — — 18,500 — 18,500 18,500 Mortgage banking income — — 4,642 4,642 — — — 4,642 Program fees — — — — 176 5,648 5,824 5,824 Other noninterest income 27,452 37 279 27,768 164 1,516 1,680 29,448 Total noninterest income 27,452 37 4,921 32,410 18,840 7,164 26,004 58,414 Total noninterest expense 124,637 3,392 4,765 132,794 14,491 3,559 18,050 150,844 Income before income tax expense 41,715 14,328 502 56,545 13,011 8,830 21,841 78,386 Income tax expense (benefit) 18,202 5,421 (526) 23,097 4,721 4,936 9,657 32,754 Net income $ 23,513 $ 8,907 $ 1,028 $ 33,448 $ 8,290 $ 3,894 $ 12,184 $ 45,632 Period-end assets $ 4,470,932 $ 525,246 $ 11,115 $ 5,007,293 $ 12,450 $ 65,619 $ 78,069 $ 5,085,362 Net interest margin 3.55 % 3.53 % NM 3.55 % NM NM NM 4.32 % Net-revenue concentration* 66 % 7 % 2 % 75 % 13 % 12 % 25 % 100 % *Net revenue represents net interest income plus total noninterest income. Net-revenue concentration equals segment-level net revenue divided by total Company net revenue. |
SUMMARY OF QUARTERLY FINANCIA_2
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Summary of consolidated quarterly financial data | 2019 Fourth Third Second First (dollars in thousands, except per share data) Quarter Quarter Quarter Quarter (1) Interest income $ 64,527 $ 68,059 $ 65,664 $ 82,633 Interest expense 10,132 12,573 11,718 10,334 Net interest income 54,395 55,486 53,946 72,299 Provision for loan and lease losses (2) 914 3,153 4,460 17,231 Net interest income after provision 53,481 52,333 49,486 55,068 Noninterest income (3) 19,655 12,811 15,125 27,417 Noninterest expense (4) 40,835 42,411 43,428 45,509 Income before income taxes 32,301 22,733 21,183 36,976 Income tax expense (5) 6,533 4,325 3,176 7,460 Net income $ 25,768 $ 18,408 $ 18,007 $ 29,516 Basic earnings per share: Class A Common Stock $ 1.23 $ 0.88 $ 0.86 $ 1.42 Class B Common Stock 1.13 0.80 0.79 1.29 Diluted earnings per share: Class A Common Stock $ 1.23 $ 0.88 $ 0.86 $ 1.41 Class B Common Stock 1.12 0.80 0.78 1.28 Dividends declared per common share: Class A Common Stock $ 0.264 $ 0.264 $ 0.264 $ 0.264 Class B Common Stock 0.240 0.240 0.240 0.240 2018 Fourth Third Second First (dollars in thousands, except per share data) Quarter Quarter Quarter Quarter(1) Interest income $ 62,902 $ 61,090 $ 58,356 $ 73,833 Interest expense 8,626 8,057 7,272 6,168 Net interest income 54,276 53,033 51,084 67,665 Provision for loan and lease losses(2) 5,104 4,077 4,932 17,255 Net interest income after provision 49,172 48,956 46,152 50,410 Noninterest income 10,119 11,465 14,296 27,545 Noninterest expense (4) 38,963 41,212 40,632 43,045 Income before income taxes 20,328 19,209 19,816 34,910 Income tax expense (5) 3,022 1,798 4,150 7,441 Net income $ 17,306 $ 17,411 $ 15,666 $ 27,469 Basic earnings per share: Class A Common Stock $ 0.83 $ 0.84 $ 0.75 $ 1.32 Class B Common Stock 0.76 0.76 0.68 1.21 Diluted earnings per share: Class A Common Stock $ 0.83 $ 0.83 $ 0.74 $ 1.32 Class B Common Stock 0.75 0.76 0.68 1.20 Dividends declared per common share: Class A Common Stock $ 0.242 $ 0.242 $ 0.242 $ 0.242 Class B Common Stock 0.220 0.220 0.220 0.220 (1) The first quarters of 2019 and 2018 were significantly impacted by the TRS segment of RPG. (2) Provision expense: The relatively low Provision expense during the fourth quarter of 2019 is partially attributable to the release of $900,000 in reserves associated with divested loans upon final settlement of the Bank’s branch divestiture. See Footnote 26 in this section of the filing for additional information on the Company’s branch divestiture. The relatively higher levels of Provision expense during the first quarters of 2019 and 2018 were driven by the TRS segment’s EA product. Provision expense for EAs during the first quarters of 2019 and 2018 was $13.4 million and $13.2 million. (3) Noninterest income: The fourth quarter of 2019 included a $7.9 million net gain on the final settlement of the Bank’s branch divestiture. See Footnote 26 in this section of the filing for additional information on the Company’s branch divestiture. (4) Noninterest expense: During the fourth quarters of 2019 and 2018, the Company reversed $1.2 million and $2.8 million of incentive compensation accruals based on revised payout estimates. (5) See Footnote 19 in this section of the filing for more information on the Company’s income taxes for 2019 and 2018. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2019segmentitem | |
Basis of Presentation | |
Number of reportable segments | segment | 5 |
Number of banking centers | 41 |
Number of loan production offices | 2 |
Kentucky | |
Basis of Presentation | |
Number of banking centers | 28 |
Metropolitan Louisville | |
Basis of Presentation | |
Number of banking centers | 18 |
Central Kentucky | |
Basis of Presentation | |
Number of banking centers | 7 |
Georgetown | |
Basis of Presentation | |
Number of banking centers | 1 |
Lexington | |
Basis of Presentation | |
Number of banking centers | 5 |
Shelbyville | |
Basis of Presentation | |
Number of banking centers | 1 |
Northern Kentucky | |
Basis of Presentation | |
Number of banking centers | 3 |
Covington | |
Basis of Presentation | |
Number of banking centers | 1 |
Crestview Hills | |
Basis of Presentation | |
Number of banking centers | 1 |
Florence | |
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 | 8 |
Number of loan production offices | 1 |
Metropolitan Cincinnati, Ohio | |
Basis of Presentation | |
Number of banking centers | 1 |
Metropolitan Nashville, Tennessee | |
Basis of Presentation | |
Number of banking centers | 3 |
Number of loan production offices | 1 |
Core Banking Activities | |
Basis of Presentation | |
Number of reportable segments | segment | 3 |
Core Banking Activities | Minimum | |
Basis of Presentation | |
Period of loan expected to remain in warehouse line | 15 days |
Core Banking Activities | Maximum | |
Basis of Presentation | |
Period of loan expected to remain in warehouse line | 30 days |
Republic Processing Group | |
Basis of Presentation | |
Number of reportable segments | segment | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SEGMENTS (Details) | 1 Months Ended | 2 Months Ended | 12 Months Ended | 27 Months Ended | |||
Dec. 31, 2019USD ($) | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Mar. 31, 2018 | |
Basis of Presentation | |||||||
Consumer loans receivable held for investment | $ 998,000 | $ 998,000 | $ 1,922,000 | ||||
Tax Refund Solutions | Easy Advances | |||||||
Basis of Presentation | |||||||
Amount of credit risk associated with refund transfers | 0 | 0 | |||||
Period Easy Advance tax credit product offered | 2 months | 2 months | 2 months | ||||
Fee charged | 0 | 0 | |||||
Multiple loan-amount tiers, maximum advance amount | 6,250 | $ 6,250 | 3,500 | ||||
APR to the taxpayer for his or her portion of the total fee for all offering tiers (as a percent) | 36.00% | ||||||
EA's repayment term | 21 days | ||||||
Maximum repayment period before Easy Advances considered delinquent | 21 days | ||||||
Duration of unpaid EA's write off | 111 days | ||||||
Republic Credit Solutions | |||||||
Basis of Presentation | |||||||
Percentage of loan receivable held for sale (as a percent) | 90.00% | ||||||
Interest retained (as a percent) | 10.00% | ||||||
Consumer loans held for sale period | 3 days | ||||||
Republic Credit Solutions | Line of credit | |||||||
Basis of Presentation | |||||||
Percentage of loan receivable held for sale (as a percent) | 90.00% | ||||||
Percentage of ownership maintained with each borrower | 100.00% | ||||||
Interest retained (as a percent) | 10.00% | ||||||
Consumer loans held for sale period | 3 days | ||||||
Republic Credit Solutions | Installment loan | |||||||
Basis of Presentation | |||||||
Consumer loans receivable held for investment | $ 998,000 | $ 998,000 | $ 1,900,000 | ||||
Term for intent to sell loans | 16 days | 21 days | |||||
Percentage of loan originated under restarted program, held for sale | 100.00% | ||||||
Republic Credit Solutions | Installment loan | Minimum | |||||||
Basis of Presentation | |||||||
Loan held-for-sale term | 12 months | 12 months | |||||
Republic Credit Solutions | Installment loan | Maximum | |||||||
Basis of Presentation | |||||||
Loan held-for-sale term | 60 months | 60 months | |||||
Republic Credit Solutions | Healthcare receivables | |||||||
Basis of Presentation | |||||||
Number of third party relationship | item | 2 | ||||||
Interest retained - Third party relationship one (as a percent) | 100.00% | ||||||
Interest retained - Third party relationship two (as a percent) | 100.00% | ||||||
Percentage of loan receivable held for sale - Third party relationship two (as a percent) | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONCENTRATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Mortgage Banking Activities | |||
Initial amortization period of MSRs | 7 years | ||
Impairment in MSR portfolio | $ 0 | $ 0 | |
Loan Servicing Income | $ 2,506 | $ 2,418 | $ 2,169 |
Warehouse lines of credit | Geographic concentration risk | California | |||
Mortgage Banking Activities | |||
Concentration Risk, Percentage | 29.00% | ||
Net income | Geographic concentration risk | Republic Processing Group | |||
Mortgage Banking Activities | |||
Concentration Risk, Percentage | 25.00% | 27.00% | 25.00% |
Net income | Geographic concentration risk | Tax Refund Solutions | |||
Mortgage Banking Activities | |||
Concentration Risk, Percentage | 14.00% | 14.00% | 13.00% |
Net income | Geographic concentration risk | Republic Credit Solutions | |||
Mortgage Banking Activities | |||
Concentration Risk, Percentage | 11.00% | 13.00% | 12.00% |
Net income | Geographic concentration risk | Warehouse Lending | |||
Mortgage Banking Activities | |||
Concentration Risk, Percentage | 5.00% | 5.00% | 7.00% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LOANS (Details) | 12 Months Ended |
Dec. 31, 2019 | |
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 |
Period for valuation of commercial-related credits | 1 year |
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 | Maximum | |
Loans disclosures | |
Period for past due loans for updating collateral values | 120 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 ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CREDIT SOLUTIONS AND OREO (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Republic Credit Solutions | |||||
Republic Credit Solutions | |||||
Percentage of loan receivable held for sale (as a percent) | 90.00% | ||||
Interest retained (as a percent) | 10.00% | ||||
Consumer loans held for sale period | 3 days | ||||
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% | ||||
Easy Advances | Tax Refund Solutions | |||||
Republic Credit Solutions | |||||
Period Easy Advance tax credit product offered | 2 months | 2 months | 2 months | ||
EA's repayment term | 21 days | ||||
Allowance for EAs | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PREMISES AND EQUIPMENT (Details) | 12 Months Ended |
Dec. 31, 2019 | |
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 ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INTANGIBLES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Goodwill | $ 16,300 | $ 16,300 | $ 16,300 | $ 16,300 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADDITIONAL DISCLOSURES (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | |
Restrictions on Cash and Cash Equivalents | ||
Required reserve balances by the Federal Reserve Bank | $ 0 | $ 0 |
Cash reserve to cover insurable claims | $ 3,000,000 | $ 3,000,000 |
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 reportable segments | segment | 5 | |
Revenue, Practical Expedient | ||
Practical expedient allows incremental costs of obtaining contract when amortization period less than one year | true |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ASUs (Details) - USD ($) | Jan. 01, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Pronouncements | ||||||
Right-of-use assets | $ 35,206,000 | |||||
Operating lease liabilities | 36,530,000 | |||||
Allowance for loan losses | $ 43,351,000 | $ 44,675,000 | $ 42,769,000 | $ 32,920,000 | ||
ASU 2016-02 | Restatement | ||||||
Accounting Pronouncements | ||||||
Right-of-use assets | $ 40,000,000 | |||||
Operating lease liabilities | $ 42,000,000 | |||||
ASU 2016-13 | Scenario Forecast Adjustment | ||||||
Accounting Pronouncements | ||||||
Investment debt ACL | $ 51,000 | |||||
Off-balance sheet exposures ACL | 500,000 | |||||
ASU 2016-13 | Scenario Forecast Adjustment | Minimum | ||||||
Accounting Pronouncements | ||||||
Allowance for loan losses | $ 6,500,000 | |||||
Allowance for credit losses | 15.00% | |||||
ASU 2016-13 | Scenario Forecast Adjustment | Maximum | ||||||
Accounting Pronouncements | ||||||
Allowance for loan losses | $ 8,000,000 | |||||
Allowance for credit losses | 20.00% |
INVESTMENT SECURITIES - AFS (De
INVESTMENT SECURITIES - AFS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-Sale Debt Securities | ||
Amortized Cost | $ 467,122 | $ 477,115 |
Gross Unrealized Gains | 4,945 | 3,623 |
Gross Unrealized Losses | (712) | (5,000) |
Fair Value | 471,355 | 475,738 |
U.S. Treasury securities and U.S. Government agencies | ||
Available-for-Sale Debt Securities | ||
Amortized Cost | 134,765 | 218,502 |
Gross Unrealized Gains | 59 | 25 |
Gross Unrealized Losses | (184) | (1,654) |
Fair Value | 134,640 | 216,873 |
Private label mortgage backed security | ||
Available-for-Sale Debt Securities | ||
Amortized Cost | 2,210 | 2,348 |
Gross Unrealized Gains | 1,285 | 1,364 |
Fair Value | 3,495 | 3,712 |
Mortgage backed securities - residential | ||
Available-for-Sale Debt Securities | ||
Amortized Cost | 253,288 | 168,992 |
Gross Unrealized Gains | 2,916 | 1,470 |
Gross Unrealized Losses | (357) | (1,253) |
Fair Value | 255,847 | 169,209 |
Collateralized mortgage obligations | ||
Available-for-Sale Debt Securities | ||
Amortized Cost | 63,284 | 73,740 |
Gross Unrealized Gains | 258 | 222 |
Gross Unrealized Losses | (171) | (1,151) |
Fair Value | 63,371 | 72,811 |
Corporate bonds | ||
Available-for-Sale Debt Securities | ||
Amortized Cost | 10,000 | 10,000 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (942) | |
Fair Value | 10,002 | 9,058 |
Trust preferred security | ||
Available-for-Sale Debt Securities | ||
Amortized Cost | 3,575 | 3,533 |
Gross Unrealized Gains | 425 | 542 |
Fair Value | $ 4,000 | $ 4,075 |
INVESTMENT SECURITIES - HTM (De
INVESTMENT SECURITIES - HTM (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Held-to-Maturity Debt Securities | ||
Carrying Value | $ 62,531 | $ 65,227 |
Gross Unrecognized Gains | 646 | 202 |
Gross Unrecognized Losses | (21) | (571) |
Fair Value | $ 63,156 | $ 64,858 |
Maximum percentage of holdings of securities of any one issuer, other than the U.S. Government and its agencies | 10.00% | 10.00% |
Mortgage backed securities - residential | ||
Held-to-Maturity Debt Securities | ||
Carrying Value | $ 104 | $ 132 |
Gross Unrecognized Gains | 6 | 8 |
Fair Value | 110 | 140 |
Collateralized mortgage obligations | ||
Held-to-Maturity Debt Securities | ||
Carrying Value | 16,970 | 19,544 |
Gross Unrecognized Gains | 94 | 178 |
Gross Unrecognized Losses | (21) | (46) |
Fair Value | 17,043 | 19,676 |
Corporate bonds | ||
Held-to-Maturity Debt Securities | ||
Carrying Value | 44,995 | 45,088 |
Gross Unrecognized Gains | 544 | 16 |
Gross Unrecognized Losses | (514) | |
Fair Value | 45,539 | 44,590 |
Obligations of state and political subdivisions | ||
Held-to-Maturity Debt Securities | ||
Carrying Value | 462 | 463 |
Gross Unrecognized Gains | 2 | |
Gross Unrecognized Losses | (11) | |
Fair Value | $ 464 | $ 452 |
INVESTMENT SECURITIES - SALES O
INVESTMENT SECURITIES - SALES OF AFS (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)item | |
INVESTMENT SECURITIES | |||
Gross loss on securities available for sale | $ 136,000 | ||
Number of securities sold | item | 2 | ||
Tax benefit related to Bank's realized losses | $ 48,000 | ||
Sales of available for sale | $ 0 | $ 0 | $ 20,012,000 |
INVESTMENT SECURITIES - AMORTIZ
INVESTMENT SECURITIES - AMORTIZED COST AND FV (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Securities available for Sale - Amortized Cost | ||
Due in one year or less | $ 34,495 | |
Due from one year to five years | 110,270 | |
Due beyond ten years | 3,575 | |
Amortized Cost | 467,122 | $ 477,115 |
Securities available for Sale - Fair Value | ||
Due in one year or less | 34,493 | |
Due from one year to five years | 110,149 | |
Due beyond ten years | 4,000 | |
Total securities | 471,355 | 475,738 |
Securities held to maturity - Carrying Value | ||
Due in one year or less | 5,105 | |
Due from one year to five years | 35,405 | |
Due from five years to ten years | 4,947 | |
Total securities | 62,531 | 65,227 |
Securities held to maturity - Fair Value | ||
Due in one year or less | 5,119 | |
Due from one year to five years | 35,887 | |
Due from five years to ten years | 4,997 | |
Fair Value | 63,156 | 64,858 |
Private label mortgage backed security | ||
Securities available for Sale - Amortized Cost | ||
Securities not due at a single maturity date | 2,210 | |
Amortized Cost | 2,210 | 2,348 |
Securities available for Sale - Fair Value | ||
Securities not due at a single maturity date | 3,495 | |
Total securities | 3,495 | 3,712 |
Mortgage backed securities - residential | ||
Securities available for Sale - Amortized Cost | ||
Securities not due at a single maturity date | 253,288 | |
Amortized Cost | 253,288 | 168,992 |
Securities available for Sale - Fair Value | ||
Securities not due at a single maturity date | 255,847 | |
Total securities | 255,847 | 169,209 |
Securities held to maturity - Carrying Value | ||
Securities not due at a single maturity date | 104 | |
Total securities | 104 | 132 |
Securities held to maturity - Fair Value | ||
Securities not due at a single maturity date | 110 | |
Fair Value | 110 | 140 |
Collateralized mortgage obligations | ||
Securities available for Sale - Amortized Cost | ||
Securities not due at a single maturity date | 63,284 | |
Amortized Cost | 63,284 | 73,740 |
Securities available for Sale - Fair Value | ||
Securities not due at a single maturity date | 63,371 | |
Total securities | 63,371 | 72,811 |
Securities held to maturity - Carrying Value | ||
Securities not due at a single maturity date | 16,970 | |
Total securities | 16,970 | 19,544 |
Securities held to maturity - Fair Value | ||
Securities not due at a single maturity date | 17,043 | |
Fair Value | $ 17,043 | $ 19,676 |
INVESTMENT SECURITIES - INVESTM
INVESTMENT SECURITIES - INVESTMENT CATEGORY (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-sale debt securities | ||
Less than 12 months Fair Value | $ 118,239 | $ 140,863 |
Less than 12 months Unrealized Losses | (481) | (2,497) |
12 months or more Fair Value | 42,363 | 169,210 |
12 months or more Unrealized Losses | (231) | (2,503) |
Total Fair Value | 160,602 | 310,073 |
Total Unrealized Losses | $ (712) | $ (5,000) |
Number of securities held | 173 | 182 |
Number of securities held in an unrealized loss position | 34 | 65 |
Held-to-maturity debt securities | ||
Less than 12 months Fair Value | $ 4 | $ 39,604 |
Less than 12 months Unrealized Losses | (2) | (515) |
12 months or more Fair Value | 4,827 | 5,886 |
12 months or more Unrealized Losses | (19) | (56) |
Total Fair Value | 4,831 | 45,490 |
Total Unrealized Losses | (21) | (571) |
U.S. Treasury securities and U.S. Government agencies | ||
Available-for-sale debt securities | ||
Less than 12 months Fair Value | 40,165 | 71,627 |
Less than 12 months Unrealized Losses | (176) | (598) |
12 months or more Fair Value | 14,992 | 106,136 |
12 months or more Unrealized Losses | (8) | (1,056) |
Total Fair Value | 55,157 | 177,763 |
Total Unrealized Losses | (184) | (1,654) |
Mortgage backed securities - residential | ||
Available-for-sale debt securities | ||
Less than 12 months Fair Value | 65,630 | 43,691 |
Less than 12 months Unrealized Losses | (269) | (484) |
12 months or more Fair Value | 16,633 | 32,003 |
12 months or more Unrealized Losses | (88) | (769) |
Total Fair Value | 82,263 | 75,694 |
Total Unrealized Losses | (357) | (1,253) |
Collateralized mortgage obligations | ||
Available-for-sale debt securities | ||
Less than 12 months Fair Value | 12,444 | 16,487 |
Less than 12 months Unrealized Losses | (36) | (473) |
12 months or more Fair Value | 10,738 | 31,071 |
12 months or more Unrealized Losses | (135) | (678) |
Total Fair Value | 23,182 | 47,558 |
Total Unrealized Losses | (171) | (1,151) |
Held-to-maturity debt securities | ||
Less than 12 months Fair Value | 4 | |
Less than 12 months Unrealized Losses | (2) | |
12 months or more Fair Value | 4,827 | 5,539 |
12 months or more Unrealized Losses | (19) | (46) |
Total Fair Value | 4,831 | 5,539 |
Total Unrealized Losses | $ (21) | (46) |
Corporate bonds | ||
Available-for-sale debt securities | ||
Less than 12 months Fair Value | 9,058 | |
Less than 12 months Unrealized Losses | (942) | |
Total Fair Value | 9,058 | |
Total Unrealized Losses | (942) | |
Held-to-maturity debt securities | ||
Less than 12 months Fair Value | 39,499 | |
Less than 12 months Unrealized Losses | (514) | |
Total Fair Value | 39,499 | |
Total Unrealized Losses | (514) | |
Obligations of state and political subdivisions | ||
Held-to-maturity debt securities | ||
Less than 12 months Fair Value | 105 | |
Less than 12 months Unrealized Losses | (1) | |
12 months or more Fair Value | 347 | |
12 months or more Unrealized Losses | (10) | |
Total Fair Value | 452 | |
Total Unrealized Losses | $ (11) |
INVESTMENT SECURITIES - CORPORA
INVESTMENT SECURITIES - CORPORATE BONDS AND MORTGAGE BACKED SECURITIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Corporate bonds | ||
Amortized cost and fair value of the investment securities portfolio by contractual maturity | ||
Percentage of concentration risk | 10.00% | 10.00% |
Gross unrealized gain on available for sale securities | $ 2,000 | |
Private label mortgage backed security | ||
Amortized cost and fair value of the investment securities portfolio by contractual maturity | ||
Securities | 3,495,000 | |
Mortgage backed securities and CMOs | ||
Amortized cost and fair value of the investment securities portfolio by contractual maturity | ||
Gross unrealized losses on available for sale securities | $ 528,000 | $ 2,400,000 |
INVESTMENT SECURITIES - TRUST P
INVESTMENT SECURITIES - TRUST PREFERRED SECURITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortized cost and fair value of the investment securities portfolio by contractual maturity | ||||
Amount of floating rate purchased | $ 445,681 | $ 173,875 | $ 225,212 | |
Trust preferred security | ||||
Amortized cost and fair value of the investment securities portfolio by contractual maturity | ||||
Amount of floating rate purchased | $ 3,000 | |||
Price as percentage of face value | 68.00% | |||
3 Month London Interbank Offered Rate (LIBOR) | Trust preferred security | ||||
Amortized cost and fair value of the investment securities portfolio by contractual maturity | ||||
Interest rate - Basis Spread | 1.59% |
INVESTMENT SECURITIES - OTHER T
INVESTMENT SECURITIES - OTHER THAN TEMPORARY IMPAIRMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Bank's private label mortgage backed security credit losses recognized in earnings | |||
Number of securities held | 173 | 182 | |
Available-for-sale debt securities | $ 471,355 | $ 475,738 | |
Private label mortgage backed security | |||
Bank's private label mortgage backed security credit losses recognized in earnings | |||
Number of securities held | 1 | ||
Available-for-sale debt securities | $ 3,495 | 3,712 | |
Rollforward of the Bank's private label mortgage backed security credit losses recognized in earnings | |||
Balance, beginning of period | 1,613 | 1,765 | $ 1,765 |
Recovery of losses previously recorded | (151) | (152) | 0 |
Balance, end of period | 1,462 | $ 1,613 | $ 1,765 |
Additional impairment charge that may be recognized | $ 2,200 |
INVESTMENT SECURITIES - PLEDGED
INVESTMENT SECURITIES - PLEDGED DEBT SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
INVESTMENT SECURITIES | ||
Carrying amount | $ 229,700 | $ 240,590 |
Fair value | $ 229,706 | $ 240,700 |
INVESTMENT SECURITIES - EQUITY
INVESTMENT SECURITIES - EQUITY SECURITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity securities | ||
Amortized Cost | $ 2,500 | $ 2,500 |
Gross Unrealized Gains | 714 | 410 |
Gross Unrealized Losses | (26) | (104) |
Fair Value | 3,188 | 2,806 |
Gains (Losses) Recognized on Equity securities, Unrealized | 382 | (122) |
Gains (Losses) Recognized on Equity securities, Total | 382 | (122) |
Freddie Mac preferred stock | ||
Equity securities | ||
Gross Unrealized Gains | 714 | 410 |
Fair Value | 714 | 410 |
Gains (Losses) Recognized on Equity securities, Unrealized | 304 | (63) |
Gains (Losses) Recognized on Equity securities, Total | 304 | (63) |
Community Reinvestment Act mutual fund | ||
Equity securities | ||
Amortized Cost | 2,500 | 2,500 |
Gross Unrealized Losses | (26) | (104) |
Fair Value | 2,474 | 2,396 |
Gains (Losses) Recognized on Equity securities, Unrealized | 78 | (59) |
Gains (Losses) Recognized on Equity securities, Total | $ 78 | $ (59) |
INVESTMENT SECURITIES - FREDDIE
INVESTMENT SECURITIES - FREDDIE MAC PREFERRED STOCK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2008 | Dec. 31, 2018 | |
Investment securities | |||
Number of securities held | 173 | 182 | |
Available-for-sale debt securities | $ 471,355,000 | $ 475,738,000 | |
Freddie Mac preferred stock | |||
Investment securities | |||
Number of securities held | 40,000 | ||
Other Than Temporary Impairment ("OTTI") charge | $ 2,100,000 | ||
Available-for-sale debt securities | $ 0 | ||
Total unrealized gain | $ 714,000 |
LOANS HELD FOR SALE - CONSUMER
LOANS HELD FOR SALE - CONSUMER LOANS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 27 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Loans held for sale | |||||
Consumer loans held for sale, at fair value | $ 598,000 | $ 598,000 | |||
Carried at lower of cost or fair value | |||||
Balance, beginning of period | 12,838,000 | $ 8,551,000 | $ 1,310,000 | ||
Origination of consumer loans held for sale | 709,768,000 | 761,491,000 | 603,704,000 | ||
Loans transferred to held for investment | 1,392,000 | ||||
Proceeds from the sale of consumer loans held for sale | (716,062,000) | (764,929,000) | (601,718,000) | ||
Net gain on sale of consumer loans held for sale | 5,102,000 | 6,333,000 | 5,255,000 | ||
Balance, end of period | 11,646,000 | $ 11,646,000 | $ 12,838,000 | $ 8,551,000 | |
Republic Credit Solutions | |||||
Loans held for sale | |||||
Percentage of loan receivable held for sale (as a percent) | 90.00% | ||||
Republic Credit Solutions | Line of Credit and Healthcare Receivables | |||||
Loans held for sale | |||||
Percentage of loan receivable held for sale (as a percent) | 90.00% | ||||
Republic Credit Solutions | Installment loan | |||||
Loans held for sale | |||||
Consumer loans held for sale, at fair value | $ 598,000 | $ 598,000 | |||
Term for intent to sell loans | 16 days | 21 days | |||
Republic Credit Solutions | Installment loan | Minimum | |||||
Loans held for sale | |||||
Loan held-for-sale term | 12 months | 12 months | |||
Republic Credit Solutions | Installment loan | Maximum | |||||
Loans held for sale | |||||
Loan held-for-sale term | 60 months | 60 months |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - COMPOSITION OF LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loans disclosures | ||||
Total loans | $ 4,433,151 | $ 4,148,227 | ||
Allowance for loan and lease losses | (43,351) | (44,675) | $ (42,769) | $ (32,920) |
Loans, net | 4,389,800 | 4,103,552 | ||
Core Banking Activities | ||||
Loans disclosures | ||||
Total loans | 4,313,389 | 4,045,739 | ||
Allowance for loan and lease losses | (29,999) | (31,519) | (30,147) | (27,928) |
Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 3,595,931 | 3,577,044 | ||
Allowance for loan and lease losses | (28,205) | (30,347) | (28,833) | (26,464) |
Republic Processing Group | ||||
Loans disclosures | ||||
Total loans | 119,762 | 102,488 | ||
Allowance for loan and lease losses | (13,352) | (13,156) | (12,622) | (4,992) |
Residential Real Estate - Owner Occupied | ||||
Loans disclosures | ||||
Total loans | 949,568 | 1,001,832 | ||
Residential Real Estate - Owner Occupied | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 949,568 | 1,001,832 | ||
Allowance for loan and lease losses | (4,729) | (6,035) | (6,474) | (7,531) |
Residential Real Estate - Non Owner Occupied | ||||
Loans disclosures | ||||
Total loans | 258,803 | 242,846 | ||
Residential Real Estate - Non Owner Occupied | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 258,803 | 242,846 | ||
Allowance for loan and lease losses | (1,737) | (1,662) | (1,396) | (1,139) |
Commercial Real Estate | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 1,303,000 | 1,248,940 | ||
Allowance for loan and lease losses | (10,486) | (10,030) | (9,043) | (8,078) |
Construction & land development | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 159,702 | 175,178 | ||
Allowance for loan and lease losses | (2,152) | (2,555) | (2,364) | (1,850) |
Commercial & industrial | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 477,236 | 430,355 | ||
Allowance for loan and lease losses | (2,882) | (2,873) | (2,198) | (1,511) |
Lease Financing Receivables | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 14,040 | 15,031 | ||
Allowance for loan and lease losses | (147) | (158) | (174) | (136) |
Home equity lines of credit | ||||
Loans disclosures | ||||
Total loans | 293,186 | 332,548 | ||
Home equity lines of credit | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 293,186 | 332,548 | ||
Allowance for loan and lease losses | (2,721) | (3,477) | (3,754) | (3,757) |
Consumer: Credit cards | ||||
Loans disclosures | ||||
Total loans | 17,836 | 19,095 | ||
Consumer: Credit cards | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 17,836 | 19,095 | ||
Allowance for loan and lease losses | (1,020) | (1,140) | (607) | (490) |
Consumer: Overdrafts | ||||
Loans disclosures | ||||
Total loans | 1,522 | 1,102 | ||
Consumer: Overdrafts | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 1,522 | 1,102 | ||
Allowance for loan and lease losses | (1,169) | (1,102) | (974) | (675) |
Consumer: Automobile loan | ||||
Loans disclosures | ||||
Total loans | 52,923 | 63,475 | ||
Consumer: Automobile loan | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 52,923 | 63,475 | ||
Allowance for loan and lease losses | (612) | (724) | (687) | (526) |
Other consumer | ||||
Loans disclosures | ||||
Total loans | 68,115 | 46,642 | ||
Other consumer | Traditional Banking | ||||
Loans disclosures | ||||
Total loans | 68,115 | 46,642 | ||
Allowance for loan and lease losses | (550) | (591) | (1,162) | (771) |
Warehouse lines of credit | Warehouse Lending | ||||
Loans disclosures | ||||
Total loans | 717,458 | 468,695 | ||
Allowance for loan and lease losses | (1,794) | (1,172) | (1,314) | (1,464) |
Other TRS loans | Republic Processing Group | ||||
Loans disclosures | ||||
Total loans | 14,365 | 13,744 | ||
Allowance for loan and lease losses | (234) | (107) | (12) | (25) |
Republic Credit Solutions | ||||
Loans disclosures | ||||
Total loans | 105,397 | 88,744 | ||
Republic Credit Solutions | Republic Processing Group | ||||
Loans disclosures | ||||
Total loans | 105,397 | 88,744 | ||
Allowance for loan and lease losses | $ (13,118) | $ (13,049) | $ (12,610) | $ (4,967) |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - RECONCILIATION OF LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES | ||
Contractually receivable | $ 4,432,351 | $ 4,147,249 |
Unearned income | (1,139) | (1,038) |
Unamortized premiums | 366 | 588 |
Unaccreted discounts | (2,534) | (3,174) |
Net unamortized deferred origination fees and costs | 4,107 | 4,602 |
Carrying value of loans | $ 4,433,151 | $ 4,148,227 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - PCI RECONCILIATION OF LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosures on loans acquired | |||||
Contractually receivable | $ 4,432,351 | $ 4,147,249 | |||
Carrying value of loans | 4,433,151 | 4,148,227 | |||
PCI loan | |||||
Disclosures on loans acquired | |||||
Contractually receivable | 3,420 | 4,251 | |||
Non-accretable amount | (1,303) | (1,521) | |||
Accretable amount | $ (31) | $ (50) | $ (140) | (31) | (50) |
Carrying value of loans | $ 2,086 | $ 2,680 | |||
Rollforward of the accretable discount on PCI loans | |||||
Balance at the beginning of the period | (50) | (140) | (3,600) | ||
Transfers between non-accretable and accretable | (279) | (573) | (28) | ||
Net accretion into interest income on loans, including loan fees | 298 | 663 | 3,488 | ||
Balance at the end of the period | $ (31) | $ (50) | $ (140) |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - RISK CATEGORY (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Risk category of rated loans | ||
Maximum number of days past due for loans to be non rated | 90 days | |
Loans | $ 4,433,151 | $ 4,148,227 |
Consumer loans receivable held for investment | 998 | 1,922 |
Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 949,568 | 1,001,832 |
Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 258,803 | 242,846 |
Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 293,186 | 332,548 |
Consumer: Credit cards | ||
Risk category of rated loans | ||
Loans | 17,836 | 19,095 |
Consumer: Overdrafts | ||
Risk category of rated loans | ||
Loans | 1,522 | 1,102 |
Consumer: Automobile loan | ||
Risk category of rated loans | ||
Loans | 52,923 | 63,475 |
Other consumer | ||
Risk category of rated loans | ||
Loans | 68,115 | 46,642 |
Republic Credit Solutions | ||
Risk category of rated loans | ||
Loans | 105,397 | 88,744 |
Pass | ||
Risk category of rated loans | ||
Loans | 2,648,380 | 2,327,312 |
Special Mention | ||
Risk category of rated loans | ||
Minimum outstanding lending relationships, above which loans are analyzed by the Bank's internal loan review department | 1,000 | |
Loans | 21,754 | 21,205 |
Substandard | ||
Risk category of rated loans | ||
Minimum outstanding lending relationships, above which loans are analyzed by the Bank's internal loan review department | 1,000 | |
Loans | 33,297 | 19,860 |
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 | |
PCI Loans - Group 1 | ||
Risk category of rated loans | ||
Loans | 797 | 1,121 |
PCI Loans - Substandard | ||
Risk category of rated loans | ||
Loans | 1,289 | 1,559 |
Rated Loans | ||
Risk category of rated loans | ||
Loans | 2,705,517 | 2,371,057 |
Core Banking Activities | ||
Risk category of rated loans | ||
Loans | 4,313,389 | 4,045,739 |
Core Banking Activities | Pass | ||
Risk category of rated loans | ||
Loans | 2,648,380 | 2,327,312 |
Core Banking Activities | Special Mention | ||
Risk category of rated loans | ||
Loans | 21,754 | 21,205 |
Core Banking Activities | Substandard | ||
Risk category of rated loans | ||
Loans | 32,889 | 19,722 |
Core Banking Activities | PCI Loans - Group 1 | ||
Risk category of rated loans | ||
Loans | 797 | 1,121 |
Core Banking Activities | PCI Loans - Substandard | ||
Risk category of rated loans | ||
Loans | 1,289 | 1,559 |
Core Banking Activities | Rated Loans | ||
Risk category of rated loans | ||
Loans | 2,705,109 | 2,370,919 |
Traditional Banking | ||
Risk category of rated loans | ||
Loans | 3,595,931 | 3,577,044 |
Traditional Banking | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 949,568 | 1,001,832 |
Traditional Banking | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 258,803 | 242,846 |
Traditional Banking | Commercial Real Estate | ||
Risk category of rated loans | ||
Loans | 1,303,000 | 1,248,940 |
Traditional Banking | Construction & land development | ||
Risk category of rated loans | ||
Loans | 159,702 | 175,178 |
Traditional Banking | Commercial & industrial | ||
Risk category of rated loans | ||
Loans | 477,236 | 430,355 |
Traditional Banking | Lease Financing Receivables | ||
Risk category of rated loans | ||
Loans | 14,040 | 15,031 |
Traditional Banking | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 293,186 | 332,548 |
Traditional Banking | Consumer: Credit cards | ||
Risk category of rated loans | ||
Loans | 17,836 | 19,095 |
Traditional Banking | Consumer: Overdrafts | ||
Risk category of rated loans | ||
Loans | 1,522 | 1,102 |
Traditional Banking | Consumer: Automobile loan | ||
Risk category of rated loans | ||
Loans | 52,923 | 63,475 |
Traditional Banking | Other consumer | ||
Risk category of rated loans | ||
Loans | 68,115 | 46,642 |
Traditional Banking | Pass | ||
Risk category of rated loans | ||
Loans | 1,930,922 | 1,858,617 |
Traditional Banking | Pass | Commercial Real Estate | ||
Risk category of rated loans | ||
Loans | 1,286,623 | 1,239,576 |
Traditional Banking | Pass | Construction & land development | ||
Risk category of rated loans | ||
Loans | 157,165 | 175,113 |
Traditional Banking | Pass | Commercial & industrial | ||
Risk category of rated loans | ||
Loans | 473,094 | 428,897 |
Traditional Banking | Pass | Lease Financing Receivables | ||
Risk category of rated loans | ||
Loans | 14,040 | 15,031 |
Traditional Banking | Special Mention | ||
Risk category of rated loans | ||
Loans | 21,754 | 21,205 |
Traditional Banking | Special Mention | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 12,153 | 14,536 |
Traditional Banking | Special Mention | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 487 | 575 |
Traditional Banking | Special Mention | Commercial Real Estate | ||
Risk category of rated loans | ||
Loans | 4,623 | 5,281 |
Traditional Banking | Special Mention | Construction & land development | ||
Risk category of rated loans | ||
Loans | 2,339 | |
Traditional Banking | Special Mention | Commercial & industrial | ||
Risk category of rated loans | ||
Loans | 2,152 | 813 |
Traditional Banking | Substandard | ||
Risk category of rated loans | ||
Loans | 32,889 | 19,722 |
Traditional Banking | Substandard | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 14,441 | 12,072 |
Traditional Banking | Substandard | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 1,285 | 1,889 |
Traditional Banking | Substandard | Commercial Real Estate | ||
Risk category of rated loans | ||
Loans | 11,123 | 3,162 |
Traditional Banking | Substandard | Construction & land development | ||
Risk category of rated loans | ||
Loans | 198 | 65 |
Traditional Banking | Substandard | Commercial & industrial | ||
Risk category of rated loans | ||
Loans | 1,968 | 620 |
Traditional Banking | Substandard | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 3,276 | 1,361 |
Traditional Banking | Substandard | Consumer: Automobile loan | ||
Risk category of rated loans | ||
Loans | 247 | 91 |
Traditional Banking | Substandard | Other consumer | ||
Risk category of rated loans | ||
Loans | 351 | 462 |
Traditional Banking | PCI Loans - Group 1 | ||
Risk category of rated loans | ||
Loans | 797 | 1,121 |
Traditional Banking | PCI Loans - Group 1 | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 140 | 170 |
Traditional Banking | PCI Loans - Group 1 | Commercial Real Estate | ||
Risk category of rated loans | ||
Loans | 631 | 921 |
Traditional Banking | PCI Loans - Group 1 | Commercial & industrial | ||
Risk category of rated loans | ||
Loans | 22 | 25 |
Traditional Banking | PCI Loans - Group 1 | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 4 | 5 |
Traditional Banking | PCI Loans - Substandard | ||
Risk category of rated loans | ||
Loans | 1,289 | 1,559 |
Traditional Banking | PCI Loans - Substandard | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 1,281 | 1,476 |
Traditional Banking | PCI Loans - Substandard | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 6 | 81 |
Traditional Banking | PCI Loans - Substandard | Other consumer | ||
Risk category of rated loans | ||
Loans | 2 | 2 |
Traditional Banking | Subprime | ||
Risk category of rated loans | ||
Loans | 52,000 | 49,000 |
Loans originated for Community Reinvestment Act ("CRA") purposes | 23,000 | 18,000 |
Traditional Banking | Rated Loans | ||
Risk category of rated loans | ||
Loans | 1,987,651 | 1,902,224 |
Traditional Banking | Rated Loans | Residential Real Estate - Owner Occupied | ||
Risk category of rated loans | ||
Loans | 28,015 | 28,254 |
Traditional Banking | Rated Loans | Residential Real Estate - Non Owner Occupied | ||
Risk category of rated loans | ||
Loans | 1,772 | 2,464 |
Traditional Banking | Rated Loans | Commercial Real Estate | ||
Risk category of rated loans | ||
Loans | 1,303,000 | 1,248,940 |
Traditional Banking | Rated Loans | Construction & land development | ||
Risk category of rated loans | ||
Loans | 159,702 | 175,178 |
Traditional Banking | Rated Loans | Commercial & industrial | ||
Risk category of rated loans | ||
Loans | 477,236 | 430,355 |
Traditional Banking | Rated Loans | Lease Financing Receivables | ||
Risk category of rated loans | ||
Loans | 14,040 | 15,031 |
Traditional Banking | Rated Loans | Home equity lines of credit | ||
Risk category of rated loans | ||
Loans | 3,286 | 1,447 |
Traditional Banking | Rated Loans | Consumer: Automobile loan | ||
Risk category of rated loans | ||
Loans | 247 | 91 |
Traditional Banking | Rated Loans | Other consumer | ||
Risk category of rated loans | ||
Loans | 353 | 464 |
Warehouse Lending | Warehouse lines of credit | ||
Risk category of rated loans | ||
Loans | 717,458 | 468,695 |
Warehouse Lending | Pass | Warehouse lines of credit | ||
Risk category of rated loans | ||
Loans | 717,458 | 468,695 |
Warehouse Lending | Rated Loans | Warehouse lines of credit | ||
Risk category of rated loans | ||
Loans | 717,458 | 468,695 |
Republic Processing Group | ||
Risk category of rated loans | ||
Loans | 119,762 | 102,488 |
Republic Processing Group | Other TRS loans | ||
Risk category of rated loans | ||
Loans | 14,365 | 13,744 |
Republic Processing Group | Republic Credit Solutions | ||
Risk category of rated loans | ||
Loans | 105,397 | 88,744 |
Republic Processing Group | Substandard | ||
Risk category of rated loans | ||
Loans | 408 | 138 |
Republic Processing Group | Substandard | Other TRS loans | ||
Risk category of rated loans | ||
Loans | 53 | |
Republic Processing Group | Substandard | Republic Credit Solutions | ||
Risk category of rated loans | ||
Loans | 355 | 138 |
Republic Processing Group | Rated Loans | ||
Risk category of rated loans | ||
Loans | 408 | 138 |
Republic Processing Group | Rated Loans | Other TRS loans | ||
Risk category of rated loans | ||
Loans | 53 | |
Republic Processing Group | Rated Loans | Republic Credit Solutions | ||
Risk category of rated loans | ||
Loans | $ 355 | 138 |
Republic Credit Solutions | ||
Risk category of rated loans | ||
Percentage of loan receivable held for sale (as a percent) | 90.00% | |
Consumer loans held for sale period | 3 days | |
Interest retained (as a percent) | 10.00% | |
Line of credit and credit card | Republic Credit Solutions | ||
Risk category of rated loans | ||
Percentage of loan receivable held for sale (as a percent) | 90.00% | |
Consumer loans held for sale period | 3 days | |
Interest retained (as a percent) | 10.00% | |
Consumer loans receivable held for investment | $ 28,000 | $ 32,000 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - ALLOWANCE ACTIVITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | $ 44,675 | $ 42,769 | $ 44,675 | $ 42,769 | $ 32,920 | ||||||
Provision for loan and lease losses | $ 914 | $ 3,153 | $ 4,460 | 17,231 | $ 5,104 | $ 4,077 | $ 4,932 | 17,255 | 25,758 | 31,368 | 27,704 |
Charged-off | (32,396) | (33,852) | (21,563) | ||||||||
Recoveries | 5,314 | 4,390 | 3,708 | ||||||||
Ending Balance | 43,351 | 44,675 | 43,351 | 44,675 | 42,769 | ||||||
Core Banking Activities | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 31,519 | 30,147 | 31,519 | 30,147 | 27,928 | ||||||
Provision for loan and lease losses | 3,066 | 3,568 | 3,773 | ||||||||
Charged-off | (5,713) | (3,608) | (2,783) | ||||||||
Recoveries | 1,127 | 1,412 | 1,229 | ||||||||
Ending Balance | 29,999 | 31,519 | 29,999 | 31,519 | 30,147 | ||||||
Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 30,347 | 28,833 | 30,347 | 28,833 | 26,464 | ||||||
Provision for loan and lease losses | 2,444 | 3,710 | 3,923 | ||||||||
Charged-off | (5,713) | (3,608) | (2,783) | ||||||||
Recoveries | 1,127 | 1,412 | 1,229 | ||||||||
Ending Balance | 28,205 | 30,347 | 28,205 | 30,347 | 28,833 | ||||||
Warehouse Lending | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Provision for loan and lease losses | 622 | (142) | (150) | ||||||||
Republic Processing Group | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 13,156 | 12,622 | 13,156 | 12,622 | 4,992 | ||||||
Provision for loan and lease losses | 22,692 | 27,800 | 23,931 | ||||||||
Charged-off | (26,683) | (30,244) | (18,780) | ||||||||
Recoveries | 4,187 | 2,978 | 2,479 | ||||||||
Ending Balance | 13,352 | 13,156 | 13,352 | 13,156 | 12,622 | ||||||
Residential Real Estate - Owner Occupied | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 6,035 | 6,474 | 6,035 | 6,474 | 7,531 | ||||||
Provision for loan and lease losses | (1,087) | 170 | (1,014) | ||||||||
Charged-off | (610) | (855) | (300) | ||||||||
Recoveries | 391 | 246 | 257 | ||||||||
Ending Balance | 4,729 | 6,035 | 4,729 | 6,035 | 6,474 | ||||||
Residential Real Estate - Non Owner Occupied | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 1,662 | 1,396 | 1,662 | 1,396 | 1,139 | ||||||
Provision for loan and lease losses | 125 | 559 | 272 | ||||||||
Charged-off | (73) | (332) | (30) | ||||||||
Recoveries | 23 | 39 | 15 | ||||||||
Ending Balance | 1,737 | 1,662 | 1,737 | 1,662 | 1,396 | ||||||
Commercial Real Estate | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 10,030 | 9,043 | 10,030 | 9,043 | 8,078 | ||||||
Provision for loan and lease losses | 1,859 | 863 | 826 | ||||||||
Charged-off | (1,407) | (7) | |||||||||
Recoveries | 4 | 131 | 139 | ||||||||
Ending Balance | 10,486 | 10,030 | 10,486 | 10,030 | 9,043 | ||||||
Construction & land development | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 2,555 | 2,364 | 2,555 | 2,364 | 1,850 | ||||||
Provision for loan and lease losses | (403) | 161 | 508 | ||||||||
Recoveries | 30 | 6 | |||||||||
Ending Balance | 2,152 | 2,555 | 2,152 | 2,555 | 2,364 | ||||||
Commercial & industrial | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 2,873 | 2,198 | 2,873 | 2,198 | 1,511 | ||||||
Provision for loan and lease losses | 1,505 | 824 | 842 | ||||||||
Charged-off | (1,505) | (200) | (189) | ||||||||
Recoveries | 9 | 51 | 34 | ||||||||
Ending Balance | 2,882 | 2,873 | 2,882 | 2,873 | 2,198 | ||||||
Lease Financing Receivables | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 158 | 174 | 158 | 174 | 136 | ||||||
Provision for loan and lease losses | (11) | (16) | 38 | ||||||||
Ending Balance | 147 | 158 | 147 | 158 | 174 | ||||||
Home equity lines of credit | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 3,477 | 3,754 | 3,477 | 3,754 | 3,757 | ||||||
Provision for loan and lease losses | (764) | (473) | 37 | ||||||||
Charged-off | (64) | (115) | (222) | ||||||||
Recoveries | 72 | 311 | 182 | ||||||||
Ending Balance | 2,721 | 3,477 | 2,721 | 3,477 | 3,754 | ||||||
Consumer: Credit cards | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 1,140 | 607 | 1,140 | 607 | 490 | ||||||
Provision for loan and lease losses | 226 | 906 | 247 | ||||||||
Charged-off | (402) | (416) | (168) | ||||||||
Recoveries | 56 | 43 | 38 | ||||||||
Ending Balance | 1,020 | 1,140 | 1,020 | 1,140 | 607 | ||||||
Consumer: Overdrafts | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 1,102 | 974 | 1,102 | 974 | 675 | ||||||
Provision for loan and lease losses | 1,155 | 1,082 | 1,031 | ||||||||
Charged-off | (1,310) | (1,215) | (960) | ||||||||
Recoveries | 222 | 261 | 228 | ||||||||
Ending Balance | 1,169 | 1,102 | 1,169 | 1,102 | 974 | ||||||
Consumer: Automobile loan | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 724 | 687 | 724 | 687 | 526 | ||||||
Provision for loan and lease losses | (42) | 57 | 188 | ||||||||
Charged-off | (79) | (24) | (30) | ||||||||
Recoveries | 9 | 4 | 3 | ||||||||
Ending Balance | 612 | 724 | 612 | 724 | 687 | ||||||
Other consumer | Traditional Banking | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 591 | 1,162 | 591 | 1,162 | 771 | ||||||
Provision for loan and lease losses | (119) | (423) | 948 | ||||||||
Charged-off | (263) | (444) | (884) | ||||||||
Recoveries | 341 | 296 | 327 | ||||||||
Ending Balance | 550 | 591 | 550 | 591 | 1,162 | ||||||
Warehouse lines of credit | Warehouse Lending | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 1,172 | 1,314 | 1,172 | 1,314 | 1,464 | ||||||
Provision for loan and lease losses | 622 | (142) | (150) | ||||||||
Ending Balance | 1,794 | 1,172 | 1,794 | 1,172 | 1,314 | ||||||
Easy Advances | Republic Processing Group | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Provision for loan and lease losses | 10,643 | 10,760 | 6,789 | ||||||||
Charged-off | (13,425) | (12,478) | (8,121) | ||||||||
Recoveries | 2,782 | 1,718 | 1,332 | ||||||||
Other TRS loans | Republic Processing Group | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | 107 | 12 | 107 | 12 | 25 | ||||||
Provision for loan and lease losses | 606 | 159 | (254) | ||||||||
Charged-off | (692) | (74) | |||||||||
Recoveries | 213 | 10 | 241 | ||||||||
Ending Balance | 234 | 107 | 234 | 107 | 12 | ||||||
Republic Credit Solutions | Republic Processing Group | |||||||||||
Allowance for loan losses rollforward | |||||||||||
Beginning Balance | $ 13,049 | $ 12,610 | 13,049 | 12,610 | 4,967 | ||||||
Provision for loan and lease losses | 11,443 | 16,881 | 17,396 | ||||||||
Charged-off | (12,566) | (17,692) | (10,659) | ||||||||
Recoveries | 1,192 | 1,250 | 906 | ||||||||
Ending Balance | $ 13,118 | $ 13,049 | $ 13,118 | $ 13,049 | $ 12,610 |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - NON-PERFORMING LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Non-performing loans and non-performing assets disclosures | ||
Loans on nonaccrual status | $ 23,332 | $ 15,993 |
Loans past due 90 days or more and still on accrual | 157 | 145 |
Total nonperforming loans | 23,489 | 16,138 |
Other real estate owned | 113 | 160 |
Total nonperforming assets | $ 23,602 | $ 16,298 |
Credit Quality Ratios - Total Company: | ||
Nonperforming loans to total loans (as percent) | 0.53% | 0.39% |
Nonperforming assets to total loans (including OREO) (as percent) | 0.53% | 0.39% |
Nonperforming assets to total assets (as percent) | 0.42% | 0.31% |
Core Banking Activities | ||
Non-performing loans and non-performing assets disclosures | ||
Loans on nonaccrual status | $ 23,332 | $ 15,993 |
Loans past due 90 days or more and still on accrual | $ 13 | |
Credit Quality Ratios - Total Company: | ||
Nonperforming loans to total loans (as percent) | 0.54% | 0.40% |
Nonperforming assets to total loans (including OREO) (as percent) | 0.54% | 0.40% |
Nonperforming assets to total assets (as percent) | 0.43% | 0.32% |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - AGING (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Aging or recorded investments in loans | ||
Nonaccrual Loan | $ 23,332 | $ 15,993 |
Loans Past Due 90 Days or More and Still Accruing Interest | $ 157 | 145 |
Number of consecutive months payments received before non-accrual loans returned to accrual status (in months) | item | 6 | |
Core Banking Activities | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | $ 23,332 | 15,993 |
Loans Past Due 90 Days or More and Still Accruing Interest | 13 | |
Traditional Banking | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 23,332 | 15,993 |
Loans Past Due 90 Days or More and Still Accruing Interest | 13 | |
Traditional Banking | Residential Real Estate - Owner Occupied | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 12,220 | 11,182 |
Traditional Banking | Residential Real Estate - Non Owner Occupied | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 623 | 669 |
Traditional Banking | Commercial Real Estate | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 6,865 | 2,318 |
Traditional Banking | Construction & land development | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 143 | |
Traditional Banking | Commercial & industrial | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 1,424 | 630 |
Traditional Banking | Home equity lines of credit | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 1,865 | 1,095 |
Traditional Banking | Consumer: Automobile loan | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 179 | 75 |
Traditional Banking | Other consumer | ||
Aging or recorded investments in loans | ||
Nonaccrual Loan | 13 | 24 |
Loans Past Due 90 Days or More and Still Accruing Interest | 13 | |
Republic Processing Group | ||
Aging or recorded investments in loans | ||
Loans Past Due 90 Days or More and Still Accruing Interest | 157 | 132 |
Republic Processing Group | Other TRS loans | ||
Aging or recorded investments in loans | ||
Loans Past Due 90 Days or More and Still Accruing Interest | 53 | 4 |
Republic Processing Group | Republic Credit Solutions | ||
Aging or recorded investments in loans | ||
Loans Past Due 90 Days or More and Still Accruing Interest | $ 104 | $ 128 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - RECORDED INVESTMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Aging or recorded investments in loans | ||
Recorded investment | $ 4,433,151 | $ 4,148,227 |
Residential Real Estate - Owner Occupied | ||
Aging or recorded investments in loans | ||
Recorded investment | 949,568 | 1,001,832 |
Residential Real Estate - Owner Occupied | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 937,348 | 990,650 |
Residential Real Estate - Owner Occupied | Nonperforming Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 12,220 | 11,182 |
Residential Real Estate - Non Owner Occupied | ||
Aging or recorded investments in loans | ||
Recorded investment | 258,803 | 242,846 |
Residential Real Estate - Non Owner Occupied | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 258,180 | 242,177 |
Residential Real Estate - Non Owner Occupied | Nonperforming Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 623 | 669 |
Home equity lines of credit | ||
Aging or recorded investments in loans | ||
Recorded investment | 293,186 | 332,548 |
Home equity lines of credit | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 291,321 | 331,453 |
Home equity lines of credit | Nonperforming Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 1,865 | 1,095 |
Consumer: Credit cards | ||
Aging or recorded investments in loans | ||
Recorded investment | 17,836 | 19,095 |
Consumer: Credit cards | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 17,836 | 19,095 |
Consumer: Overdrafts | ||
Aging or recorded investments in loans | ||
Recorded investment | 1,522 | 1,102 |
Consumer: Overdrafts | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 1,522 | 1,102 |
Consumer: Automobile loan | ||
Aging or recorded investments in loans | ||
Recorded investment | 52,923 | 63,475 |
Consumer: Automobile loan | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 52,744 | 63,400 |
Consumer: Automobile loan | Nonperforming Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 179 | 75 |
Other consumer | ||
Aging or recorded investments in loans | ||
Recorded investment | 68,115 | 46,642 |
Other consumer | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 68,102 | 46,605 |
Other consumer | Nonperforming Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 13 | 37 |
Republic Credit Solutions | ||
Aging or recorded investments in loans | ||
Recorded investment | 105,397 | 88,744 |
Republic Credit Solutions | Performing Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | 105,293 | 88,616 |
Republic Credit Solutions | Nonperforming Financing Receivable | ||
Aging or recorded investments in loans | ||
Recorded investment | $ 104 | $ 128 |
LOANS AND ALLOWANCE FOR LOAN_11
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - DELINQUENT LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Aging or recorded investments in loans | ||
Total Loans Delinquent | $ 20,804 | $ 15,962 |
Total Loans Not Delinquent | 4,412,347 | 4,132,265 |
Carrying value of loans | $ 4,433,151 | $ 4,148,227 |
Delinquent acquired bank loans to total acquired bank loans (as a percent) | 0.47% | 0.38% |
30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | $ 10,090 | $ 8,623 |
Delinquent acquired bank loans to total acquired bank loans (as a percent) | 0.23% | 0.21% |
60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | $ 3,063 | $ 2,053 |
Delinquent acquired bank loans to total acquired bank loans (as a percent) | 0.07% | 0.05% |
90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | $ 7,651 | $ 5,286 |
Delinquent acquired bank loans to total acquired bank loans (as a percent) | 0.17% | 0.13% |
Core Banking Activities | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | $ 13,042 | $ 8,875 |
Total Loans Not Delinquent | 4,300,347 | 4,036,864 |
Carrying value of loans | 4,313,389 | 4,045,739 |
Core Banking Activities | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 4,001 | 2,887 |
Core Banking Activities | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,547 | 834 |
Core Banking Activities | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 7,494 | 5,154 |
Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 13,042 | 8,875 |
Total Loans Not Delinquent | 3,582,889 | 3,568,169 |
Carrying value of loans | 3,595,931 | 3,577,044 |
Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 4,001 | 2,887 |
Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,547 | 834 |
Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 7,494 | 5,154 |
Republic Processing Group | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 7,762 | 7,087 |
Total Loans Not Delinquent | 112,000 | 95,401 |
Carrying value of loans | 119,762 | 102,488 |
Republic Processing Group | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 6,089 | 5,736 |
Republic Processing Group | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,516 | 1,219 |
Republic Processing Group | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 157 | 132 |
Residential Real Estate - Owner Occupied | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 949,568 | 1,001,832 |
Residential Real Estate - Owner Occupied | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 4,434 | 5,525 |
Total Loans Not Delinquent | 945,134 | 996,307 |
Carrying value of loans | 949,568 | 1,001,832 |
Residential Real Estate - Owner Occupied | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,460 | 1,137 |
Residential Real Estate - Owner Occupied | Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,153 | 748 |
Residential Real Estate - Owner Occupied | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,821 | 3,640 |
Residential Real Estate - Non Owner Occupied | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 258,803 | 242,846 |
Residential Real Estate - Non Owner Occupied | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 539 | 1,008 |
Total Loans Not Delinquent | 258,264 | 241,838 |
Carrying value of loans | 258,803 | 242,846 |
Residential Real Estate - Non Owner Occupied | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 349 | |
Residential Real Estate - Non Owner Occupied | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 539 | 659 |
Commercial Real Estate | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 3,300 | 1,099 |
Total Loans Not Delinquent | 1,299,700 | 1,247,841 |
Carrying value of loans | 1,303,000 | 1,248,940 |
Commercial Real Estate | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 155 | 511 |
Commercial Real Estate | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 3,145 | 588 |
Construction & land development | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Not Delinquent | 159,702 | 175,178 |
Carrying value of loans | 159,702 | 175,178 |
Commercial & industrial | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,355 | 25 |
Total Loans Not Delinquent | 475,881 | 430,330 |
Carrying value of loans | 477,236 | 430,355 |
Commercial & industrial | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 200 | |
Commercial & industrial | Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 128 | |
Commercial & industrial | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,027 | 25 |
Lease Financing Receivables | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Not Delinquent | 14,040 | 15,031 |
Carrying value of loans | 14,040 | 15,031 |
Home equity lines of credit | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 293,186 | 332,548 |
Home equity lines of credit | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 2,918 | 784 |
Total Loans Not Delinquent | 290,268 | 331,764 |
Carrying value of loans | 293,186 | 332,548 |
Home equity lines of credit | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,810 | 558 |
Home equity lines of credit | Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 166 | |
Home equity lines of credit | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 942 | 226 |
Consumer: Credit cards | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 17,836 | 19,095 |
Consumer: Credit cards | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 155 | 129 |
Total Loans Not Delinquent | 17,681 | 18,966 |
Carrying value of loans | 17,836 | 19,095 |
Consumer: Credit cards | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 80 | 82 |
Consumer: Credit cards | Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 75 | 46 |
Consumer: Credit cards | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1 | |
Consumer: Overdrafts | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 1,522 | 1,102 |
Consumer: Overdrafts | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 283 | 230 |
Total Loans Not Delinquent | 1,239 | 872 |
Carrying value of loans | 1,522 | 1,102 |
Consumer: Overdrafts | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 278 | 223 |
Consumer: Overdrafts | Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 4 | 5 |
Consumer: Overdrafts | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1 | 2 |
Consumer: Automobile loan | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 52,923 | 63,475 |
Consumer: Automobile loan | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 49 | 28 |
Total Loans Not Delinquent | 52,874 | 63,447 |
Carrying value of loans | 52,923 | 63,475 |
Consumer: Automobile loan | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 16 | |
Consumer: Automobile loan | Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 15 | 28 |
Consumer: Automobile loan | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 18 | |
Other consumer | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 68,115 | 46,642 |
Other consumer | Traditional Banking | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 9 | 47 |
Total Loans Not Delinquent | 68,106 | 46,595 |
Carrying value of loans | 68,115 | 46,642 |
Other consumer | Traditional Banking | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 2 | 27 |
Other consumer | Traditional Banking | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 6 | 7 |
Other consumer | Traditional Banking | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1 | 13 |
Warehouse lines of credit | Warehouse Lending | ||
Aging or recorded investments in loans | ||
Total Loans Not Delinquent | 717,458 | 468,695 |
Carrying value of loans | 717,458 | 468,695 |
Other TRS loans | Republic Processing Group | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 119 | 10 |
Total Loans Not Delinquent | 14,246 | 13,734 |
Carrying value of loans | 14,365 | 13,744 |
Other TRS loans | Republic Processing Group | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 35 | 2 |
Other TRS loans | Republic Processing Group | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 31 | 4 |
Other TRS loans | Republic Processing Group | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 53 | 4 |
Republic Credit Solutions | ||
Aging or recorded investments in loans | ||
Carrying value of loans | 105,397 | 88,744 |
Republic Credit Solutions | Republic Processing Group | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 7,643 | 7,077 |
Total Loans Not Delinquent | 97,754 | 81,667 |
Carrying value of loans | 105,397 | 88,744 |
Republic Credit Solutions | Republic Processing Group | 30 - 59 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 6,054 | 5,734 |
Republic Credit Solutions | Republic Processing Group | 60 - 89 Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | 1,485 | 1,215 |
Republic Credit Solutions | Republic Processing Group | 90 + Days Delinquent | ||
Aging or recorded investments in loans | ||
Total Loans Delinquent | $ 104 | $ 128 |
LOANS AND ALLOWANCE FOR LOAN_12
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - IMPAIRED LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Impaired loans | |||
Loans with no allocated Allowance | $ 33,061 | $ 19,555 | $ 18,540 |
Loans with allocated Allowance | 17,289 | 21,880 | 27,076 |
Total recorded investment in impaired loans | 50,350 | 41,435 | 45,616 |
Amount of the allocated Allowance | 2,512 | 3,764 | 4,685 |
Average Recorded Investment | 45,400 | 45,620 | 47,361 |
Interest Income Recognized | 1,342 | 1,245 | $ 1,392 |
PCI loan | |||
Impaired loans | |||
Total recorded investment in impaired loans | $ 2,000 | $ 3,000 |
LOANS AND ALLOWANCE FOR LOAN_13
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - PORTFOLIO CLASS (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 2,321 | $ 3,300 | ||
Collectively evaluated for impairment | 40,839 | 40,911 | ||
PCI loans with post acquisition impairment | 191 | 464 | ||
Total ending allowance for loan losses | 43,351 | 44,675 | $ 42,769 | $ 32,920 |
Impaired loans individually evaluated, excluding PCI loans | 48,287 | 38,782 | ||
Loans collectively evaluated for impairment | 4,382,778 | 4,106,765 | ||
PCI loans with post acquisition impairment | 2,063 | 2,653 | ||
PCI loans without post acquisition impairment | 23 | 27 | ||
Carrying value of loans | $ 4,433,151 | $ 4,148,227 | ||
Allowance to Total Loans | 0.98 | 1.08 | ||
Residential Real Estate - Owner Occupied | ||||
Allowance for loans losses | ||||
Carrying value of loans | $ 949,568 | $ 1,001,832 | ||
Residential Real Estate - Non Owner Occupied | ||||
Allowance for loans losses | ||||
Carrying value of loans | 258,803 | 242,846 | ||
Home equity lines of credit | ||||
Allowance for loans losses | ||||
Carrying value of loans | 293,186 | 332,548 | ||
Consumer: Credit cards | ||||
Allowance for loans losses | ||||
Carrying value of loans | 17,836 | 19,095 | ||
Consumer: Overdrafts | ||||
Allowance for loans losses | ||||
Carrying value of loans | 1,522 | 1,102 | ||
Consumer: Automobile loan | ||||
Allowance for loans losses | ||||
Carrying value of loans | 52,923 | 63,475 | ||
Other consumer | ||||
Allowance for loans losses | ||||
Carrying value of loans | 68,115 | 46,642 | ||
Republic Credit Solutions | ||||
Allowance for loans losses | ||||
Carrying value of loans | 105,397 | 88,744 | ||
Core Banking Activities | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | 2,205 | 3,282 | ||
Collectively evaluated for impairment | 27,603 | 27,773 | ||
PCI loans with post acquisition impairment | 191 | 464 | ||
Total ending allowance for loan losses | 29,999 | 31,519 | 30,147 | 27,928 |
Impaired loans individually evaluated, excluding PCI loans | 48,036 | 38,738 | ||
Loans collectively evaluated for impairment | 4,263,267 | 4,004,321 | ||
PCI loans with post acquisition impairment | 2,063 | 2,653 | ||
PCI loans without post acquisition impairment | 23 | 27 | ||
Carrying value of loans | $ 4,313,389 | $ 4,045,739 | ||
Allowance to Total Loans | 0.70 | 0.78 | ||
Traditional Banking | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 2,205 | $ 3,282 | ||
Collectively evaluated for impairment | 25,809 | 26,601 | ||
PCI loans with post acquisition impairment | 191 | 464 | ||
Total ending allowance for loan losses | 28,205 | 30,347 | 28,833 | 26,464 |
Impaired loans individually evaluated, excluding PCI loans | 48,036 | 38,738 | ||
Loans collectively evaluated for impairment | 3,545,809 | 3,535,626 | ||
PCI loans with post acquisition impairment | 2,063 | 2,653 | ||
PCI loans without post acquisition impairment | 23 | 27 | ||
Carrying value of loans | $ 3,595,931 | $ 3,577,044 | ||
Allowance to Total Loans | 0.78 | 0.85 | ||
Traditional Banking | Residential Real Estate - Owner Occupied | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 1,207 | $ 2,052 | ||
Collectively evaluated for impairment | 3,337 | 3,602 | ||
PCI loans with post acquisition impairment | 185 | 381 | ||
Total ending allowance for loan losses | 4,729 | 6,035 | 6,474 | 7,531 |
Impaired loans individually evaluated, excluding PCI loans | 25,384 | 25,242 | ||
Loans collectively evaluated for impairment | 922,764 | 974,945 | ||
PCI loans with post acquisition impairment | 1,420 | 1,645 | ||
Carrying value of loans | $ 949,568 | $ 1,001,832 | ||
Allowance to Total Loans | 0.50 | 0.60 | ||
Traditional Banking | Residential Real Estate - Non Owner Occupied | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 4 | |||
Collectively evaluated for impairment | $ 1,737 | 1,658 | ||
Total ending allowance for loan losses | 1,737 | 1,662 | 1,396 | 1,139 |
Impaired loans individually evaluated, excluding PCI loans | 1,448 | 2,406 | ||
Loans collectively evaluated for impairment | 257,355 | 240,440 | ||
Carrying value of loans | $ 258,803 | $ 242,846 | ||
Allowance to Total Loans | 0.67 | 0.68 | ||
Traditional Banking | Commercial Real Estate | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 426 | $ 294 | ||
Collectively evaluated for impairment | 10,054 | 9,727 | ||
PCI loans with post acquisition impairment | 6 | 9 | ||
Total ending allowance for loan losses | 10,486 | 10,030 | 9,043 | 8,078 |
Impaired loans individually evaluated, excluding PCI loans | 15,144 | 8,104 | ||
Loans collectively evaluated for impairment | 1,287,225 | 1,239,915 | ||
PCI loans with post acquisition impairment | 631 | 919 | ||
PCI loans without post acquisition impairment | 2 | |||
Carrying value of loans | $ 1,303,000 | $ 1,248,940 | ||
Allowance to Total Loans | 0.80 | 0.80 | ||
Traditional Banking | Construction & land development | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 4 | |||
Collectively evaluated for impairment | $ 2,152 | 2,551 | ||
Total ending allowance for loan losses | 2,152 | 2,555 | 2,364 | 1,850 |
Impaired loans individually evaluated, excluding PCI loans | 198 | 65 | ||
Loans collectively evaluated for impairment | 159,504 | 175,113 | ||
Carrying value of loans | $ 159,702 | $ 175,178 | ||
Allowance to Total Loans | 1.35 | 1.46 | ||
Traditional Banking | Commercial & industrial | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 22 | $ 130 | ||
Collectively evaluated for impairment | 2,860 | 2,743 | ||
Total ending allowance for loan losses | 2,882 | 2,873 | 2,198 | 1,511 |
Impaired loans individually evaluated, excluding PCI loans | 1,989 | 1,020 | ||
Loans collectively evaluated for impairment | 475,225 | 429,310 | ||
PCI loans without post acquisition impairment | 22 | 25 | ||
Carrying value of loans | $ 477,236 | $ 430,355 | ||
Allowance to Total Loans | 0.60 | 0.67 | ||
Traditional Banking | Lease Financing Receivables | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | $ 147 | $ 158 | ||
Total ending allowance for loan losses | 147 | 158 | 174 | 136 |
Loans collectively evaluated for impairment | 14,040 | 15,031 | ||
Carrying value of loans | $ 14,040 | $ 15,031 | ||
Allowance to Total Loans | 1.05 | 1.05 | ||
Traditional Banking | Home equity lines of credit | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 174 | $ 286 | ||
Collectively evaluated for impairment | 2,547 | 3,117 | ||
PCI loans with post acquisition impairment | 74 | |||
Total ending allowance for loan losses | 2,721 | 3,477 | 3,754 | 3,757 |
Impaired loans individually evaluated, excluding PCI loans | 3,276 | 1,361 | ||
Loans collectively evaluated for impairment | 289,900 | 331,101 | ||
PCI loans with post acquisition impairment | 10 | 86 | ||
Carrying value of loans | $ 293,186 | $ 332,548 | ||
Allowance to Total Loans | 0.93 | 1.05 | ||
Traditional Banking | Consumer: Credit cards | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | $ 1,020 | $ 1,140 | ||
Total ending allowance for loan losses | 1,020 | 1,140 | 607 | 490 |
Loans collectively evaluated for impairment | 17,836 | 19,095 | ||
Carrying value of loans | $ 17,836 | $ 19,095 | ||
Allowance to Total Loans | 5.72 | 5.97 | ||
Traditional Banking | Consumer: Overdrafts | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | $ 1,169 | $ 1,102 | ||
Total ending allowance for loan losses | 1,169 | 1,102 | 974 | 675 |
Loans collectively evaluated for impairment | 1,522 | 1,102 | ||
Carrying value of loans | $ 1,522 | $ 1,102 | ||
Allowance to Total Loans | 76.81 | 100 | ||
Traditional Banking | Consumer: Automobile loan | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 43 | $ 91 | ||
Collectively evaluated for impairment | 569 | 633 | ||
Total ending allowance for loan losses | 612 | 724 | 687 | 526 |
Impaired loans individually evaluated, excluding PCI loans | 247 | 91 | ||
Loans collectively evaluated for impairment | 52,676 | 63,384 | ||
Carrying value of loans | $ 52,923 | $ 63,475 | ||
Allowance to Total Loans | 1.16 | 1.14 | ||
Traditional Banking | Other consumer | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 333 | $ 421 | ||
Collectively evaluated for impairment | 217 | 170 | ||
Total ending allowance for loan losses | 550 | 591 | 1,162 | 771 |
Impaired loans individually evaluated, excluding PCI loans | 350 | 449 | ||
Loans collectively evaluated for impairment | 67,762 | 46,190 | ||
PCI loans with post acquisition impairment | 2 | 3 | ||
PCI loans without post acquisition impairment | 1 | |||
Carrying value of loans | $ 68,115 | $ 46,642 | ||
Allowance to Total Loans | 0.81 | 1.27 | ||
Warehouse Lending | Warehouse lines of credit | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | $ 1,794 | $ 1,172 | ||
Total ending allowance for loan losses | 1,794 | 1,172 | 1,314 | 1,464 |
Loans collectively evaluated for impairment | 717,458 | 468,695 | ||
Carrying value of loans | $ 717,458 | $ 468,695 | ||
Allowance to Total Loans | 0.25 | 0.25 | ||
Republic Processing Group | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 116 | $ 18 | ||
Collectively evaluated for impairment | 13,236 | 13,138 | ||
Total ending allowance for loan losses | 13,352 | 13,156 | 12,622 | 4,992 |
Impaired loans individually evaluated, excluding PCI loans | 251 | 44 | ||
Loans collectively evaluated for impairment | 119,511 | 102,444 | ||
Carrying value of loans | $ 119,762 | $ 102,488 | ||
Allowance to Total Loans | 11.15 | 12.84 | ||
Republic Processing Group | Other TRS loans | ||||
Allowance for loans losses | ||||
Collectively evaluated for impairment | $ 234 | $ 107 | ||
Total ending allowance for loan losses | 234 | 107 | 12 | 25 |
Loans collectively evaluated for impairment | 14,365 | 13,744 | ||
Carrying value of loans | $ 14,365 | $ 13,744 | ||
Allowance to Total Loans | 1.63 | 0.78 | ||
Republic Processing Group | Republic Credit Solutions | ||||
Allowance for loans losses | ||||
Individually evaluated for impairment, excluding PCI loans | $ 116 | $ 18 | ||
Collectively evaluated for impairment | 13,002 | 13,031 | ||
Total ending allowance for loan losses | 13,118 | 13,049 | $ 12,610 | $ 4,967 |
Impaired loans individually evaluated, excluding PCI loans | 251 | 44 | ||
Loans collectively evaluated for impairment | 105,146 | 88,700 | ||
Carrying value of loans | $ 105,397 | $ 88,744 | ||
Allowance to Total Loans | 12.45 | 14.70 |
LOANS AND ALLOWANCE FOR LOAN_14
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Impaired loans with no allocated Allowance: | |||
Recorded Investment | $ 33,061 | $ 19,555 | $ 18,540 |
Average Recorded Investment | 45,400 | 45,620 | 47,361 |
Interest Income Recognized | 1,342 | 1,245 | 1,392 |
Impaired loans with allocated Allowance: | |||
Recorded Investment | 17,289 | 21,880 | 27,076 |
Allowance for Loan Losses Allocated | 2,512 | 3,764 | 4,685 |
Total impaired loans | |||
Unpaid Principal Balance | 55,473 | 44,455 | 47,760 |
Recorded Investment | 50,350 | 41,435 | 45,616 |
Allowance for Loan Losses Allocated | 2,512 | 3,764 | 4,685 |
Average Recorded Investment | 45,400 | 45,620 | 47,361 |
Interest Income Recognized | 1,342 | 1,245 | 1,392 |
Residential Real Estate - Owner Occupied | |||
Impaired loans with no allocated Allowance: | |||
Unpaid Principal Balance | 14,768 | 12,058 | 11,664 |
Recorded Investment | 13,893 | 11,085 | 10,789 |
Average Recorded Investment | 12,655 | 11,202 | 11,253 |
Interest Income Recognized | 191 | 198 | 179 |
Impaired loans with allocated Allowance: | |||
Unpaid Principal Balance | 12,954 | 16,215 | 18,676 |
Recorded Investment | 12,911 | 15,802 | 18,654 |
Allowance for Loan Losses Allocated | 1,392 | 2,433 | 2,681 |
Average Recorded Investment | 13,824 | 17,754 | 20,212 |
Interest Income Recognized | 502 | 528 | 655 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 1,392 | 2,433 | 2,681 |
Residential Real Estate - Non Owner Occupied | |||
Impaired loans with no allocated Allowance: | |||
Unpaid Principal Balance | 1,515 | 2,729 | 1,784 |
Recorded Investment | 1,448 | 2,350 | 1,704 |
Average Recorded Investment | 1,425 | 2,561 | 1,526 |
Interest Income Recognized | 57 | 87 | 86 |
Impaired loans with allocated Allowance: | |||
Unpaid Principal Balance | 78 | 361 | |
Recorded Investment | 56 | 358 | |
Allowance for Loan Losses Allocated | 4 | 6 | |
Average Recorded Investment | 108 | 136 | 416 |
Interest Income Recognized | 14 | ||
Total impaired loans | |||
Allowance for Loan Losses Allocated | 4 | 6 | |
Commercial Real Estate | |||
Impaired loans with no allocated Allowance: | |||
Unpaid Principal Balance | 15,028 | 5,688 | 5,504 |
Recorded Investment | 12,547 | 4,607 | 4,430 |
Average Recorded Investment | 7,514 | 5,040 | 4,863 |
Interest Income Recognized | 298 | 151 | 71 |
Impaired loans with allocated Allowance: | |||
Unpaid Principal Balance | 3,228 | 4,416 | 6,124 |
Recorded Investment | 3,228 | 4,416 | 6,124 |
Allowance for Loan Losses Allocated | 432 | 303 | 455 |
Average Recorded Investment | 3,624 | 5,495 | 5,501 |
Interest Income Recognized | 151 | 206 | 294 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 432 | 303 | 455 |
Construction & land development | |||
Impaired loans with no allocated Allowance: | |||
Unpaid Principal Balance | 198 | 591 | |
Recorded Investment | 198 | 591 | |
Average Recorded Investment | 65 | 119 | 565 |
Interest Income Recognized | 2 | 29 | |
Impaired loans with allocated Allowance: | |||
Unpaid Principal Balance | 65 | 142 | |
Recorded Investment | 65 | 142 | |
Allowance for Loan Losses Allocated | 4 | 107 | |
Average Recorded Investment | 30 | 113 | 209 |
Interest Income Recognized | 3 | 3 | |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 4 | 107 | |
Commercial & industrial | |||
Impaired loans with no allocated Allowance: | |||
Unpaid Principal Balance | 3,308 | 712 | 20 |
Recorded Investment | 1,792 | 604 | 20 |
Average Recorded Investment | 913 | 755 | 116 |
Interest Income Recognized | 35 | 3 | 4 |
Impaired loans with allocated Allowance: | |||
Unpaid Principal Balance | 197 | 416 | 288 |
Recorded Investment | 197 | 416 | 288 |
Allowance for Loan Losses Allocated | 22 | 130 | 288 |
Average Recorded Investment | 2,054 | 158 | 225 |
Interest Income Recognized | 3 | 19 | 8 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 22 | 130 | 288 |
Home equity lines of credit | |||
Impaired loans with no allocated Allowance: | |||
Unpaid Principal Balance | 3,107 | 919 | 1,071 |
Recorded Investment | 3,023 | 876 | 981 |
Average Recorded Investment | 2,140 | 682 | 1,205 |
Interest Income Recognized | 75 | 17 | 11 |
Impaired loans with allocated Allowance: | |||
Unpaid Principal Balance | 263 | 572 | 743 |
Recorded Investment | 263 | 571 | 743 |
Allowance for Loan Losses Allocated | 174 | 360 | 536 |
Average Recorded Investment | 417 | 925 | 820 |
Interest Income Recognized | 8 | 9 | 17 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | 174 | 360 | 536 |
Consumer | |||
Impaired loans with no allocated Allowance: | |||
Unpaid Principal Balance | 206 | 33 | 25 |
Recorded Investment | 160 | 33 | 25 |
Average Recorded Investment | 76 | 49 | 62 |
Interest Income Recognized | 4 | 2 | 1 |
Impaired loans with allocated Allowance: | |||
Unpaid Principal Balance | 701 | 554 | 767 |
Recorded Investment | 690 | 554 | 767 |
Allowance for Loan Losses Allocated | 492 | 530 | 612 |
Average Recorded Investment | 555 | 631 | 388 |
Interest Income Recognized | 16 | 22 | 20 |
Total impaired loans | |||
Allowance for Loan Losses Allocated | $ 492 | $ 530 | $ 612 |
LOANS AND ALLOWANCE FOR LOAN_15
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - TDR ACCRUAL STATUS (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 1,828 | 495 |
Recorded Investment | $ | $ 30,781 | $ 32,863 |
Residential Real Estate | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 194 | 216 |
Recorded Investment | $ | $ 19,770 | $ 23,610 |
Commercial Real Estate | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 13 | 17 |
Recorded Investment | $ | $ 8,925 | $ 7,774 |
Construction & land development | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 1 | 1 |
Recorded Investment | $ | $ 54 | $ 65 |
Commercial & industrial | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 7 | 5 |
Recorded Investment | $ | $ 1,446 | $ 979 |
Consumer | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 1,613 | 256 |
Recorded Investment | $ | $ 586 | $ 435 |
Loans on nonaccrual status | ||
Troubled Debt Restructurings disclosures | ||
Minimum period for which TDRs continue to be reported as non-performing loans | 6 months | |
Number of Loans | loan | 61 | 65 |
Recorded Investment | $ | $ 9,866 | $ 8,152 |
Loans on nonaccrual status | Residential Real Estate | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 53 | 60 |
Recorded Investment | $ | $ 4,402 | $ 6,378 |
Loans on nonaccrual status | Commercial Real Estate | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 4 | 3 |
Recorded Investment | $ | $ 4,040 | $ 1,203 |
Loans on nonaccrual status | Commercial & industrial | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 4 | 2 |
Recorded Investment | $ | $ 1,424 | $ 571 |
Accrual Loans | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 1,767 | 430 |
Recorded Investment | $ | $ 20,915 | $ 24,711 |
Accrual Loans | Residential Real Estate | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 141 | 156 |
Recorded Investment | $ | $ 15,368 | $ 17,232 |
Accrual Loans | Commercial Real Estate | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 9 | 14 |
Recorded Investment | $ | $ 4,885 | $ 6,571 |
Accrual Loans | Construction & land development | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 1 | 1 |
Recorded Investment | $ | $ 54 | $ 65 |
Accrual Loans | Commercial & industrial | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 3 | 3 |
Recorded Investment | $ | $ 22 | $ 408 |
Accrual Loans | Consumer | ||
Troubled Debt Restructurings disclosures | ||
Number of Loans | loan | 1,613 | 256 |
Recorded Investment | $ | $ 586 | $ 435 |
LOANS AND ALLOWANCE FOR LOAN_16
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - TDR MODIFICATIONS (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Troubled Debt Restructurings disclosures | |||
Period of time loans are not past due in which TDR loans are performing | 30 days | ||
Number of Loans | loan | 1,828 | 495 | |
Recorded Investment | $ 30,781,000 | $ 32,863,000 | |
Commitments to lend any additional material amounts to existing TDR relationships | 0 | 0 | |
Change between the pre and post modification loan | $ 0 | $ 0 | $ 0 |
Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 194 | 216 | |
Recorded Investment | $ 19,770,000 | $ 23,610,000 | |
Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 1 | |
Recorded Investment | $ 904,000 | $ 970,000 | |
Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 123 | 157 | |
Recorded Investment | $ 14,199,000 | $ 17,870,000 | |
Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 10 | 15 | |
Recorded Investment | $ 1,024,000 | $ 3,042,000 | |
Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 60 | 43 | |
Recorded Investment | $ 3,643,000 | $ 1,728,000 | |
Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 21 | 23 | |
Recorded Investment | $ 10,425,000 | $ 8,818,000 | |
Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | 2 | |
Recorded Investment | $ 1,568,000 | $ 752,000 | |
Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 8 | |
Recorded Investment | $ 1,252,000 | $ 2,962,000 | |
Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 12 | 12 | |
Recorded Investment | $ 6,578,000 | $ 5,076,000 | |
Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 1 | |
Recorded Investment | $ 1,027,000 | $ 28,000 | |
Consumer and other | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,613 | 256 | |
Recorded Investment | $ 586,000 | $ 435,000 | |
Consumer and other | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 16,000 | ||
Consumer and other | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,612 | 255 | |
Recorded Investment | $ 577,000 | $ 419,000 | |
Consumer and other | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 9,000 | ||
Consumer | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,613 | 256 | |
Recorded Investment | $ 586,000 | $ 435,000 | |
Modified During The Period | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,320 | 25 | 845 |
Recorded Investment | $ 8,599,000 | $ 4,948,000 | $ 2,683,000 |
Modified During The Period | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 32 | 17 | 13 |
Recorded Investment | $ 2,740,000 | $ 3,466,000 | $ 1,780,000 |
Modified During The Period | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 1 | |
Recorded Investment | $ 970,000 | $ 219,000 | |
Modified During The Period | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 2 | 4 |
Recorded Investment | $ 365,000 | $ 465,000 | $ 1,013,000 |
Modified During The Period | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | ||
Recorded Investment | $ 1,892,000 | ||
Modified During The Period | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 31 | 8 | 8 |
Recorded Investment | $ 2,375,000 | $ 139,000 | $ 548,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 8 | 7 | 2 |
Recorded Investment | $ 5,649,000 | $ 1,430,000 | $ 266,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | ||
Recorded Investment | $ 1,423,000 | ||
Modified During The Period | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 6 | 2 |
Recorded Investment | $ 3,199,000 | $ 1,402,000 | $ 266,000 |
Modified During The Period | Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 1 | |
Recorded Investment | $ 1,027,000 | $ 28,000 | |
Modified During The Period | Consumer and other | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,280 | 1 | 830 |
Recorded Investment | $ 210,000 | $ 52,000 | $ 637,000 |
Modified During The Period | Consumer and other | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,279 | 1 | 830 |
Recorded Investment | $ 201,000 | $ 52,000 | $ 637,000 |
Modified During The Period | Consumer and other | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 9,000 | ||
Performing Financing Receivable | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,811 | 469 | |
Recorded Investment | $ 28,138,000 | $ 28,788,000 | |
Percentage of troubled debt restructurings performing as per terms of modifications | 91.00% | 88.00% | |
Specific reserve allocations made to customers | $ 2,000,000 | $ 3,000,000 | |
Percentage of Bank's TDRs that occurred during period, which were performing according to their modified terms | 83.00% | 42.00% | 93.00% |
Specific reserve allocations made to customers whose loan terms were modified in TDRs during period | $ 220,000 | $ 472,000 | $ 885,000 |
Performing Financing Receivable | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 181 | 191 | |
Recorded Investment | $ 18,796,000 | $ 19,563,000 | |
Performing Financing Receivable | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 904,000 | ||
Performing Financing Receivable | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 118 | 145 | |
Recorded Investment | $ 13,847,000 | $ 16,892,000 | |
Performing Financing Receivable | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 8 | 11 | |
Recorded Investment | $ 845,000 | $ 1,171,000 | |
Performing Financing Receivable | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 54 | 35 | |
Recorded Investment | $ 3,200,000 | $ 1,500,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 17 | 22 | |
Recorded Investment | $ 8,756,000 | $ 8,790,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | 2 | |
Recorded Investment | $ 1,568,000 | $ 752,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | 8 | |
Recorded Investment | $ 1,207,000 | $ 2,962,000 | |
Performing Financing Receivable | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 11 | 12 | |
Recorded Investment | $ 5,981,000 | $ 5,076,000 | |
Performing Financing Receivable | Consumer and other | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,613 | 256 | |
Recorded Investment | $ 586,000 | $ 435,000 | |
Performing Financing Receivable | Consumer and other | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 16,000 | ||
Performing Financing Receivable | Consumer and other | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,612 | 255 | |
Recorded Investment | $ 577,000 | $ 419,000 | |
Performing Financing Receivable | Consumer and other | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 9,000 | ||
Performing Financing Receivable | Modified During The Period | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,313 | 19 | 843 |
Recorded Investment | $ 7,155,000 | $ 2,083,000 | $ 2,486,000 |
Performing Financing Receivable | Modified During The Period | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 27 | 12 | 11 |
Recorded Investment | $ 2,323,000 | $ 629,000 | $ 1,583,000 |
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 219,000 | ||
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | 2 | 4 |
Recorded Investment | $ 365,000 | $ 465,000 | $ 1,013,000 |
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | ||
Recorded Investment | $ 43,000 | ||
Performing Financing Receivable | Modified During The Period | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 26 | 7 | 6 |
Recorded Investment | $ 1,958,000 | $ 121,000 | $ 351,000 |
Performing Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | 6 | 2 |
Recorded Investment | $ 4,622,000 | $ 1,402,000 | $ 266,000 |
Performing Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | ||
Recorded Investment | $ 1,423,000 | ||
Performing Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 6 | 2 |
Recorded Investment | $ 3,199,000 | $ 1,402,000 | $ 266,000 |
Performing Financing Receivable | Modified During The Period | Consumer and other | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,280 | 1 | 830 |
Recorded Investment | $ 210,000 | $ 52,000 | $ 637,000 |
Performing Financing Receivable | Modified During The Period | Consumer and other | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1,279 | 1 | 830 |
Recorded Investment | $ 201,000 | $ 52,000 | $ 637,000 |
Performing Financing Receivable | Modified During The Period | Consumer and other | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 9,000 | ||
Nonperforming Financing Receivable | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 17 | 26 | |
Recorded Investment | $ 2,643,000 | $ 4,075,000 | |
Nonperforming Financing Receivable | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 13 | 25 | |
Recorded Investment | $ 974,000 | $ 4,047,000 | |
Nonperforming Financing Receivable | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 970,000 | ||
Nonperforming Financing Receivable | Residential Real Estate | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 5 | 12 | |
Recorded Investment | $ 352,000 | $ 978,000 | |
Nonperforming Financing Receivable | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 4 | |
Recorded Investment | $ 179,000 | $ 1,871,000 | |
Nonperforming Financing Receivable | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 6 | 8 | |
Recorded Investment | $ 443,000 | $ 228,000 | |
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 4 | 1 | |
Recorded Investment | $ 1,669,000 | $ 28,000 | |
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | Rate reduction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 45,000 | ||
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 597,000 | ||
Nonperforming Financing Receivable | Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 2 | 1 | |
Recorded Investment | $ 1,027,000 | $ 28,000 | |
Nonperforming Financing Receivable | Modified During The Period | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | 7 | 6 | 2 |
Recorded Investment | $ 1,444,000 | $ 2,865,000 | $ 197,000 |
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | 5 | 5 | 2 |
Recorded Investment | $ 417,000 | $ 2,837,000 | $ 197,000 |
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | Interest only payments | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 1 | ||
Recorded Investment | $ 970,000 | ||
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | Principal deferral | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | loan | 3 | ||
Recorded Investment | $ 1,849,000 | ||
Nonperforming Financing Receivable | Modified During The Period | Residential Real Estate | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | 5 | 1 | 2 |
Recorded Investment | $ 417,000 | $ 18,000 | $ 197,000 |
Nonperforming Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | 2 | 1 | |
Recorded Investment | $ 1,027,000 | $ 28,000 | |
Nonperforming Financing Receivable | Modified During The Period | Commercial Real Estate and Commercial Construction | Legal modifications | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans | 2 | 1 | |
Recorded Investment | $ 1,027,000 | $ 28,000 |
LOANS AND ALLOWANCE FOR LOAN_17
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - TDR MODIFIED CLASS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Troubled Debt Restructurings disclosures | |||
Number of Loans with payment default | loan | 1,286 | 7 | 825 |
Recorded Investment with payment default | $ | $ 2,017 | $ 2,948 | $ 326 |
Residential Real Estate - Owner Occupied | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans with payment default | loan | 4 | 6 | 2 |
Recorded Investment with payment default | $ | $ 248 | $ 2,920 | $ 197 |
Commercial Real Estate | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans with payment default | loan | 1 | 1 | |
Recorded Investment with payment default | $ | $ 541 | $ 28 | |
Commercial & industrial | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans with payment default | loan | 2 | ||
Recorded Investment with payment default | $ | $ 1,027 | ||
Consumer | |||
Troubled Debt Restructurings disclosures | |||
Number of Loans with payment default | loan | 1,279 | 823 | |
Recorded Investment with payment default | $ | $ 201 | $ 129 |
LOANS AND ALLOWANCE FOR LOAN_18
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - FORECLOSED PROPERTIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Troubled Debt Restructurings disclosures | ||
Carrying amount of foreclosed properties | $ 113 | $ 160 |
Residential Real Estate - Owner Occupied | ||
Troubled Debt Restructurings disclosures | ||
Carrying amount of foreclosed properties | $ 113 | $ 160 |
LOANS AND ALLOWANCE FOR LOAN_19
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - FORECLOSURE RECORDED INVESTMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Recorded investment in residential and consumer loans based on payment activity | ||
Loans and Leases Receivable Gross Carrying Amount | $ 4,433,151 | $ 4,148,227 |
Residential Real Estate - Owner Occupied | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Loans and Leases Receivable Gross Carrying Amount | 949,568 | 1,001,832 |
Residential Real Estate - Owner Occupied | Foreclosure Proceedings In Process | ||
Recorded investment in residential and consumer loans based on payment activity | ||
Loans and Leases Receivable Gross Carrying Amount | $ 2,201 | $ 3,293 |
LOANS AND ALLOWANCE FOR LOAN_20
LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES - EASY ADVANCES (Details) - Tax Refund Solutions - Easy Advances - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Period Easy Advance tax credit product offered | 2 months | 2 months | 2 months | |||
Easy Advances originated | $ 388,970 | $ 430,210 | $ 328,523 | |||
Net Charge (credit) to the Provision for Easy Advances | $ 10,643 | $ 10,760 | $ 6,789 | |||
Provision to total Easy Advances originated | 2.74% | 2.50% | 2.07% | |||
Easy Advances net charge-offs | $ 10,643 | $ 10,760 | $ 6,789 | |||
Percentage of Easy Advances net charge-offs to Total Easy Advances Originated | 2.74% | 2.50% | 2.07% |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
PREMISES AND EQUIPMENT | |||
Total premises and equipment | $ 109,300,000 | $ 102,332,000 | |
Less: Accumulated depreciation and amortization | 63,940,000 | 59,206,000 | |
Premises and equipment, net | $ 45,360,000 | 43,126,000 | |
Number of banking centers sold | item | 1 | ||
Gain (loss) from disposal of bank premises and equipment | $ 339,000 | (14,000) | |
Depreciation expense | 9,230,000 | 9,347,000 | $ 8,472,000 |
Land | |||
PREMISES AND EQUIPMENT | |||
Total premises and equipment | 3,818,000 | 4,185,000 | |
Buildings and improvements | |||
PREMISES AND EQUIPMENT | |||
Total premises and equipment | 33,819,000 | 35,264,000 | |
Furniture, fixtures and equipment | |||
PREMISES AND EQUIPMENT | |||
Total premises and equipment | 48,782,000 | 43,245,000 | |
Leasehold improvements | |||
PREMISES AND EQUIPMENT | |||
Total premises and equipment | 20,649,000 | $ 19,638,000 | |
Construction in progress | |||
PREMISES AND EQUIPMENT | |||
Total premises and equipment | 2,232,000 | ||
Banking Centers Held for Sale | |||
PREMISES AND EQUIPMENT | |||
Premises and equipment, net | $ 836,000 | ||
Number of banking centers held for sale | item | 2 | 3 | |
Florida | |||
PREMISES AND EQUIPMENT | |||
Gain (loss) from disposal of bank premises and equipment | $ 339,000 | $ (14,000) | |
Florida | Banking Centers Held for Sale | |||
PREMISES AND EQUIPMENT | |||
Number of banking centers held for sale | item | 2 |
RIGHT-OF-USE ASSETS AND OPERA_3
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES (Details) | Jan. 01, 2019USD ($)contractitem | Dec. 31, 2019USD ($)leaseitem |
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | ||
Number of separate and distinct operating lease contracts to lease the land and/or buildings | contract | 50 | |
Number of offices where separate and distinct operating lease contracts to lease the land and/or buildings is held | item | 38 | |
Number of operating leases contracted with a related party of the Company | contract | 15 | |
Total operating lease liabilities | $ 36,530,000 | |
Total right-of-use assets | $ 35,206,000 | |
Number of operating leases considered variable | item | 25 | |
Number of lease contracts which had not commenced | lease | 2 | |
Number of banking centers where lease had not commenced | item | 2 | |
Estimated operating lease liabilities for leases not yet commenced | $ 623,000 | |
Estimated right-of-use assets for leases not yet commenced | $ 623,000 | |
ASU 2016-02 | Restatement | ||
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | ||
Total operating lease liabilities | $ 42,000,000 | |
Total right-of-use assets | $ 40,000,000 | |
Minimum | ||
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | ||
Expected remaining lease terms | 9 months | |
Discounts rates | 2.94% | |
Maximum | ||
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | ||
Expected remaining lease terms | 18 years 6 months 4 days | |
Discounts rates | 3.70% | |
Weighted Average | ||
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | ||
Expected remaining lease terms | 8 years 7 months 6 days | |
Discounts rates | 3.48% |
RIGHT-OF-USE ASSETS AND OPERA_4
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES - OPERATING LEASE EXPENSE (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating lease expense: | |
Total operating lease expense | $ 7,177 |
Cash paid for amounts included in the measurement of operating lease liabilities | 7,175 |
Short-term lease payments not included in the measurement of lease liabilities | $ 62 |
Weighted average remaining term in years | 8 years 7 days |
Weighted average discount rate | 3.46% |
Related Party | |
Operating lease expense: | |
Variable lease expense | $ 4,690 |
Fixed lease expense | 37 |
Third Party | |
Operating lease expense: | |
Variable lease expense | 883 |
Fixed lease expense | 1,505 |
Short-term lease expense | $ 62 |
RIGHT-OF-USE ASSETS AND OPERA_5
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES - OPERATING LEASE LIABILITIES (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating lease liabilities | |
2020 | $ 7,198 |
2021 | 6,565 |
2022 | 5,298 |
2023 | 4,773 |
2024 | 4,222 |
Thereafter | 14,668 |
Total undiscounted cash flows | 42,724 |
Discount applied to cash flows | (6,194) |
Total discounted cash flows reported as operating lease liabilities | 36,530 |
Related Party | |
Operating lease liabilities | |
2020 | 4,608 |
2021 | 4,194 |
2022 | 3,332 |
2023 | 3,332 |
2024 | 3,205 |
Thereafter | 12,718 |
Total undiscounted cash flows | 31,389 |
Discount applied to cash flows | (4,554) |
Total discounted cash flows reported as operating lease liabilities | 26,835 |
Third Party | |
Operating lease liabilities | |
2020 | 2,590 |
2021 | 2,371 |
2022 | 1,966 |
2023 | 1,441 |
2024 | 1,017 |
Thereafter | 1,950 |
Total undiscounted cash flows | 11,335 |
Discount applied to cash flows | (1,640) |
Total discounted cash flows reported as operating lease liabilities | $ 9,695 |
GOODWILL AND CORE DEPOSIT INT_3
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS - GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Balance for goodwill | |||
Beginning of period | $ 16,300 | $ 16,300 | $ 16,300 |
Acquired goodwill | 0 | 0 | 0 |
Impairment | 0 | 0 | 0 |
End of period | $ 16,300 | $ 16,300 | $ 16,300 |
GOODWILL AND CORE DEPOSIT INT_4
GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS - INTANGIBLES (Details) $ in Millions | May 17, 2016USD ($) |
Core deposit intangibles | |
Detail of core deposit intangibles | |
Amount of intangibles initially recorded | $ 1 |
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, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2013DerivativeInstrument | |
Information about derivatives and swaps | |||
Number of derivative agreements | DerivativeInstrument | 2 | ||
Summary information about interest rate swaps | |||
Notional amount | $ 20,000 | ||
Assets / (Liabilities) | (104) | $ 115 | |
Unrealized Gain (Loss) in AOCI | (77) | 90 | |
1-month LIBOR | |||
Summary information about interest rate swaps | |||
Notional amount | $ 10,000 | ||
Pay rate (as a percent) | 2.17% | ||
Assets / (Liabilities) | $ (46) | 58 | |
Unrealized Gain (Loss) in AOCI | (34) | 45 | |
3-month LIBOR | |||
Summary information about interest rate swaps | |||
Notional amount | $ 10,000 | ||
Pay rate (as a percent) | 2.33% | ||
Assets / (Liabilities) | $ (58) | 57 | |
Unrealized Gain (Loss) in AOCI | $ (43) | $ 45 |
INTEREST RATE SWAPS - INTEREST
INTEREST RATE SWAPS - INTEREST EXPENSE (Details) - Interest rate swap - Cash flow hedge - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Information about derivatives and swaps | |||
Interest expense swap on money market deposits | $ (10) | $ 18 | $ 109 |
Interest expense swap on FHLB Advance | (10) | 10 | 110 |
Total interest (benefit) expense on swap transactions | $ (20) | $ 28 | $ 219 |
INTEREST RATE SWAPS - GAINS (LO
INTEREST RATE SWAPS - GAINS (LOSSES) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Information about derivatives and swaps | |||
(Gains) losses recognized in OCI on derivative (effective portion) | $ (199) | $ 178 | $ 83 |
Interest rate swap | Cash flow hedge | |||
Information about derivatives and swaps | |||
(Gains) losses recognized in OCI on derivative (effective portion) | (199) | 178 | 83 |
Gains (losses) reclassified from OCI on derivative (effective portion) | 20 | (28) | (219) |
Gains (losses) recognized in income on derivative (ineffective portion) | $ 0 | $ 0 | $ 0 |
INTEREST RATE SWAPS - NON-HEDGE
INTEREST RATE SWAPS - NON-HEDGE (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Information about derivatives and swaps | ||
Fair value of securities pledged as collateral | $ 229,706 | $ 240,700 |
Counterparty | ||
Information about derivatives and swaps | ||
Fair value of securities pledged as collateral | 7,500 | 0 |
Counterparty | Minimum | ||
Information about derivatives and swaps | ||
Net loss position in which pledged securities as collateral are required | 250,000 | |
Interest rate swap | Non-Hedge | ||
Information about derivatives and swaps | ||
Interest rate swaps with Bank clients - Total, Notional Amount | 204,102 | 162,232 |
Interest rate swap | Non-Hedge | Bank Clients | ||
Information about derivatives and swaps | ||
Interest rate swaps with Bank clients - Assets, Notional Amount | 95,411 | 26,398 |
Interest rate swaps with Bank clients - Liabilities, Notional Amount | 6,640 | 54,718 |
Interest rate swaps with Bank clients - Total, Notional Amount | 102,051 | 81,116 |
Interest rate swaps with Bank clients - Assets, Fair Value | 5,062 | 1,264 |
Interest rate swaps with Bank clients - Liabilities, Fair Value | (55) | (908) |
Interest rate swaps with Bank clients - Total, Fair Value | 5,007 | 356 |
Interest rate swap | Non-Hedge | Counterparty | ||
Information about derivatives and swaps | ||
Interest rate swaps with Bank clients - Total, Notional Amount | 102,051 | 81,116 |
Interest rate swaps with Bank clients - Total, Fair Value | $ (5,007) | $ (356) |
DEPOSITS - Balances (Details)
DEPOSITS - Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deposit Liabilities | ||
Time deposits, $250 and over | $ 104,412 | $ 84,104 |
Total interest-bearing deposits | 2,752,629 | 2,452,176 |
Total non interest-bearing deposits | 1,033,379 | 1,003,969 |
Total deposits | 3,786,008 | 3,456,145 |
Core Banking Activities | ||
Deposit Liabilities | ||
Demand | 922,972 | 937,402 |
Money market accounts | 793,950 | 717,954 |
Savings | 175,588 | 187,868 |
Individual retirement accounts | 51,548 | 53,524 |
Time deposits, $250 and over | 104,412 | 84,104 |
Other certificates of deposit | 248,161 | 239,324 |
Reciprocal money market and time deposits | 189,774 | 217,153 |
Total interest-bearing deposits | 2,686,477 | 2,446,723 |
Total non interest-bearing deposits | 981,164 | 971,422 |
Total deposits | 3,667,641 | 3,418,145 |
Core Banking Activities | Brokered Deposits | ||
Deposit Liabilities | ||
Brokered deposits | 200,072 | 9,394 |
Republic Processing Group | ||
Deposit Liabilities | ||
Money market accounts | 66,152 | 5,453 |
Total interest-bearing deposits | 66,152 | 5,453 |
Other noninterest-bearing deposits | 43,087 | 28,197 |
Total non interest-bearing deposits | 52,215 | 32,547 |
Total deposits | 118,367 | 38,000 |
Republic Processing Group | Brokered Deposits | ||
Deposit Liabilities | ||
Brokered prepaid cards deposits | $ 9,128 | $ 4,350 |
DEPOSITS - Maturities (Details)
DEPOSITS - Maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Scheduled maturities of all time deposits, including brokered certificates of deposit | |
2020 | $ 541,352 |
2021 | 88,628 |
2022 | 37,947 |
2023 | 55,179 |
2024 | 10,836 |
Time Deposits, Total | $ 733,942 |
Weighted Average Rate | |
2020 | 1.90% |
2021 | 2.14% |
2022 | 2.19% |
2023 | 2.92% |
2024 | 2.41% |
Total | 2.03% |
SECURITIES SOLD UNDER AGREEME_3
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Securities sold under agreements to repurchase | |||
Outstanding balance at end of period | $ 167,617 | $ 182,990 | |
Securities sold under agreements to repurchase | |||
Securities sold under agreements to repurchase | |||
Securities pledged more than repurchase agreements (as a percent) | 2.00% | ||
Outstanding balance at end of period | $ 167,617 | $ 182,990 | |
Weighted average interest rate at end of period (as a percent) | 0.32% | 0.83% | |
Fair Value of securities pledged | $ 221,310 | $ 205,647 | |
Average outstanding balance during the period | $ 236,883 | $ 225,145 | $ 219,515 |
Average interest rate during the period (as a percent) | 0.51% | 0.50% | 0.23% |
Maximum outstanding at any month end during the period | $ 276,927 | $ 260,147 | $ 293,944 |
Securities sold under agreements to repurchase | U.S. Treasury securities and U.S. Government agencies | |||
Securities sold under agreements to repurchase | |||
Fair Value of securities pledged | 70,015 | 110,854 | |
Securities sold under agreements to repurchase | Mortgage backed securities - residential | |||
Securities sold under agreements to repurchase | |||
Fair Value of securities pledged | 134,265 | 84,657 | |
Securities sold under agreements to repurchase | Collateralized mortgage obligations | |||
Securities sold under agreements to repurchase | |||
Fair Value of securities pledged | $ 17,030 | $ 10,136 |
FEDERAL HOME LOAN BANK ADVANC_3
FEDERAL HOME LOAN BANK ADVANCES - FHLB ADVANCES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
FHLB advances | ||
Total FHLB advances | $ 750,000 | $ 810,000 |
Additional collateralized advances available | 259,000 | 254,000 |
Overnight advance | ||
FHLB advances | ||
Total FHLB advances | 200,000 | 510,000 |
Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% | ||
FHLB advances | ||
Total FHLB advances | $ 10,000 | $ 10,000 |
Variable interest rate advance indexed to 3-Month LIBOR plus 0.14% | London Interbank Offered Rate (LIBOR) | ||
FHLB advances | ||
Applicable margin (as a percent) | 0.14% | 0.14% |
Fixed interest rate advances | ||
FHLB advances | ||
Total FHLB advances | $ 540,000 | $ 290,000 |
Various other unsecured lines of credit | ||
FHLB advances | ||
Unsecured lines of credit | $ 125,000 | $ 125,000 |
FEDERAL HOME LOAN BANK ADVANC_4
FEDERAL HOME LOAN BANK ADVANCES - MATURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
FEDERAL HOME LOAN BANK ADVANCES | ||
2020 (Overnight) | $ 200,000 | |
2020 (Term) | 480,000 | |
2021 | 30,000 | |
2022 | 20,000 | |
2023 | 20,000 | |
Total | $ 750,000 | $ 810,000 |
Weighted Average Rate | ||
2020 (Overnight) | 1.63% | |
2020 (Term) | 1.71% | |
2021 | 1.93% | |
2022 | 2.12% | |
2023 | 2.56% | |
Total | 1.73% |
FEDERAL HOME LOAN BANK ADVANC_5
FEDERAL HOME LOAN BANK ADVANCES - SHORT-TERM FHLB ADVANCES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
FHLB advances | |||
Federal Home Loan Bank advances | $ 750,000 | $ 810,000 | |
Interest rate (as percent) | 1.73% | ||
Federal Home Loan Bank overnight advances | |||
FHLB advances | |||
Federal Home Loan Bank advances | $ 200,000 | 510,000 | |
Average outstanding balance during the period | $ 270,992 | $ 202,830 | $ 141,918 |
Average interest rate during the period (as percent) | 2.43% | 1.98% | 1.09% |
Maximum outstanding at any month end during the period | $ 785,000 | $ 560,000 | $ 625,000 |
Federal Home Loan Bank overnight advances | Weighted Average | |||
FHLB advances | |||
Interest rate (as percent) | 1.63% | 2.45% |
FEDERAL HOME LOAN BANK ADVANC_6
FEDERAL HOME LOAN BANK ADVANCES - LOANS PLEDGED (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
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 | $ 1,099,941 | $ 1,129,588 |
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 | $ 274,990 | $ 311,419 |
SUBORDINATED NOTE (Details)
SUBORDINATED NOTE (Details) - Republic Bancorp Capital Trust - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2005 | Sep. 30, 2015 | |
Trust preferred security | |||
Subordinated note | |||
Proceeds from issuance of trust preferred securities | $ 40 | ||
Subordinated debentures | |||
Subordinated note | |||
Stated interest rate (as a percent) | 6.015% | ||
Interest rate on subordinate note (as a percent) | 3.38% | ||
Subordinated debentures | 3-month LIBOR | |||
Subordinated note | |||
Variable spread on debt security (as a percent) | 1.42% |
OFF BALANCE SHEET RISKS, COMM_3
OFF BALANCE SHEET RISKS, COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments and letters of credit | ||
Loan commitment, line credit | $ 1,571,130 | $ 1,709,869 |
Unused warehouse lines of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 436,541 | 591,305 |
Unused home equity lines of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 363,195 | 377,277 |
Unused loan commitments - other | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 757,657 | 720,645 |
Standby letters of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | 11,252 | 10,642 |
FHLB letters of credit | ||
Commitments and letters of credit | ||
Loan commitment, line credit | $ 2,485 | $ 10,000 |
STOCKHOLDERS' EQUITY AND REGU_3
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS - EQUITY (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)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 | $ | $ 151 |
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 REGU_4
STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL MATTERS - REGULATORY (Details) $ in Thousands | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) |
REGULATORY CAPITAL MATTERS | ||
Number of classifications | item | 5 | |
Capital Conversion Buffer | 2.50% | |
Republic Bancorp, Inc. | ||
Actual Amount | ||
Total capital to risk weighted assets | $ 825,987 | $ 757,726 |
Common equity tier 1 capital to risk weighted assets | 742,636 | 673,051 |
Tier 1 (core) capital to risk weighted assets | 782,636 | 713,051 |
Tier 1 leverage capital to average assets | $ 782,636 | $ 713,051 |
Actual Ratio | ||
Total capital to risk weighted assets (as a percent) | 17.01% | 16.80% |
Common equity tier 1 capital to risk weighted assets (as a percent) | 15.29% | 14.92% |
Tier 1 (core) capital to risk weighted assets (as a percent) | 16.11% | 15.81% |
Tier 1 leverage capital to average assets (as a percent) | 13.93% | 14.11% |
Minimum Requirement for Capital Adequacy Purposes Amount | ||
Total capital to risk weighted assets | $ 388,526 | $ 360,911 |
Common equity Tier 1 capital to risk weighted assets | 218,546 | 203,012 |
Tier 1 (core) capital to risk weighted assets | 291,394 | 270,683 |
Tier 1 leverage capital to average assets | $ 224,799 | $ 202,119 |
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% | 4.50% |
Tier 1 (core) capital to risk weighted assets (as a percent) | 6.00% | 6.00% |
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 | $ 723,248 | $ 654,258 |
Common equity tier 1 capital to risk weighted assets | 679,897 | 609,583 |
Tier 1 (core) capital to risk weighted assets | 679,897 | 609,583 |
Tier 1 leverage capital to average assets | $ 679,897 | $ 609,583 |
Actual Ratio | ||
Total capital to risk weighted assets (as a percent) | 14.91% | 14.52% |
Common equity tier 1 capital to risk weighted assets (as a percent) | 14.01% | 13.53% |
Tier 1 (core) capital to risk weighted assets (as a percent) | 14.01% | 13.53% |
Tier 1 leverage capital to average assets (as a percent) | 12.11% | 12.06% |
Minimum Requirement for Capital Adequacy Purposes Amount | ||
Total capital to risk weighted assets | $ 388,143 | $ 360,359 |
Common equity Tier 1 capital to risk weighted assets | 218,331 | 202,702 |
Tier 1 (core) capital to risk weighted assets | 291,107 | 270,269 |
Tier 1 leverage capital to average assets | $ 224,515 | $ 202,126 |
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% | 4.50% |
Tier 1 (core) capital to risk weighted assets (as a percent) | 6.00% | 6.00% |
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 | $ 485,179 | $ 450,449 |
Common equity Tier 1 capital to risk weighted assets | 315,366 | 292,792 |
Tier 1 (core) capital to risk weighted assets | 388,143 | 360,359 |
Tier 1 leverage capital to average assets | $ 280,644 | $ 252,658 |
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% | 6.50% |
Tier 1 (core) capital to risk weighted assets (as a percent) | 8.00% | 8.00% |
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% |
FAIR VALUE - POLICIES (Details)
FAIR VALUE - POLICIES (Details) | 1 Months Ended | 27 Months Ended | |
Dec. 31, 2019USD ($)item | Mar. 31, 2018 | Dec. 31, 2018USD ($)item | |
Assets and Liabilities Measured on Recurring Basis | |||
Consumer loans held for sale, at fair value | $ 598,000 | ||
Consumer loans receivable held for investment | 998,000 | $ 1,922,000 | |
Republic Credit Solutions | Installment loan | |||
Assets and Liabilities Measured on Recurring Basis | |||
Consumer loans held for sale, at fair value | 598,000 | ||
Consumer loans receivable held for investment | $ 998,000 | $ 1,900,000 | |
Term for intent to sell loans | 16 days | 21 days | |
Republic Credit Solutions | Installment loan | Minimum | |||
Assets and Liabilities Measured on Recurring Basis | |||
Loan held-for-sale term | 12 months | ||
Republic Credit Solutions | Installment loan | Maximum | |||
Assets and Liabilities Measured on Recurring Basis | |||
Loan held-for-sale term | 60 months | ||
Mortgage Servicing Rights | |||
Assets and Liabilities Measured on Recurring Basis | |||
Number of tranches carried at fair value | item | 0 | 0 |
FAIR VALUE - RECURRING BASIS (D
FAIR VALUE - RECURRING BASIS (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2008 | |
Financial assets: | |||||
Available-for-sale debt securities | $ 471,355,000 | $ 475,738,000 | |||
Mortgage loans held for sale, at fair value | 19,224,000 | 8,971,000 | $ 5,761,000 | $ 11,662,000 | |
Consumer loans held for sale | 598,000 | ||||
Consumer loans receivable held for investment | 998,000 | 1,922,000 | |||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 3,188,000 | 2,806,000 | |||
U.S. Treasury securities and U.S. Government agencies | |||||
Financial assets: | |||||
Available-for-sale debt securities | 134,640,000 | 216,873,000 | |||
Private label mortgage backed security | |||||
Financial assets: | |||||
Available-for-sale debt securities | 3,495,000 | 3,712,000 | |||
Mortgage backed securities - residential | |||||
Financial assets: | |||||
Available-for-sale debt securities | 255,847,000 | 169,209,000 | |||
Collateralized mortgage obligations | |||||
Financial assets: | |||||
Available-for-sale debt securities | 63,371,000 | 72,811,000 | |||
Corporate bonds | |||||
Financial assets: | |||||
Available-for-sale debt securities | 10,002,000 | 9,058,000 | |||
Trust preferred security | |||||
Financial assets: | |||||
Available-for-sale debt securities | 4,000,000 | 4,075,000 | |||
Freddie Mac preferred stock | |||||
Financial assets: | |||||
Available-for-sale debt securities | $ 0 | ||||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 714,000 | 410,000 | |||
Community Reinvestment Act mutual fund | |||||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 2,474,000 | 2,396,000 | |||
Recurring basis | |||||
Financial assets: | |||||
Available-for-sale debt securities | 471,355,000 | 475,738,000 | |||
Mortgage loans held for sale, at fair value | 19,224,000 | 8,971,000 | |||
Consumer loans held for sale | 598,000 | ||||
Consumer loans receivable held for investment | 998,000 | 1,922,000 | |||
Rate lock loan commitments | 789,000 | 356,000 | |||
Interest rate swap agreements | 5,062,000 | 1,264,000 | |||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 3,188,000 | 2,806,000 | |||
Financial Liabilities: | |||||
Mandatory forward contracts | 131,000 | 262,000 | |||
Interest rate swap agreements | 5,166,000 | 1,149,000 | |||
Transfers between Level 1, 2 or 3 | 0 | 0 | |||
Recurring basis | U.S. Treasury securities and U.S. Government agencies | |||||
Financial assets: | |||||
Available-for-sale debt securities | 134,640,000 | 216,873,000 | |||
Recurring basis | Private label mortgage backed security | |||||
Financial assets: | |||||
Available-for-sale debt securities | 3,495,000 | 3,712,000 | |||
Recurring basis | Mortgage backed securities - residential | |||||
Financial assets: | |||||
Available-for-sale debt securities | 255,847,000 | 169,209,000 | |||
Recurring basis | Collateralized mortgage obligations | |||||
Financial assets: | |||||
Available-for-sale debt securities | 63,371,000 | 72,811,000 | |||
Recurring basis | Corporate bonds | |||||
Financial assets: | |||||
Available-for-sale debt securities | 10,002,000 | 9,058,000 | |||
Recurring basis | Trust preferred security | |||||
Financial assets: | |||||
Available-for-sale debt securities | 4,000,000 | 4,075,000 | |||
Recurring basis | Freddie Mac preferred stock | |||||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 714,000 | 410,000 | |||
Recurring basis | Community Reinvestment Act mutual fund | |||||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 2,474,000 | 2,396,000 | |||
Recurring basis | Fair Value, Inputs, Level 1 | |||||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 2,474,000 | 2,396,000 | |||
Recurring basis | Fair Value, Inputs, Level 1 | Community Reinvestment Act mutual fund | |||||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 2,474,000 | 2,396,000 | |||
Recurring basis | Fair Value, Inputs, Level 2 | |||||
Financial assets: | |||||
Available-for-sale debt securities | 463,860,000 | 467,951,000 | |||
Mortgage loans held for sale, at fair value | 19,224,000 | 8,971,000 | |||
Rate lock loan commitments | 789,000 | 356,000 | |||
Interest rate swap agreements | 5,062,000 | 1,264,000 | |||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 714,000 | 410,000 | |||
Financial Liabilities: | |||||
Mandatory forward contracts | 131,000 | 262,000 | |||
Interest rate swap agreements | 5,166,000 | 1,149,000 | |||
Recurring basis | Fair Value, Inputs, Level 2 | U.S. Treasury securities and U.S. Government agencies | |||||
Financial assets: | |||||
Available-for-sale debt securities | 134,640,000 | 216,873,000 | |||
Recurring basis | Fair Value, Inputs, Level 2 | Mortgage backed securities - residential | |||||
Financial assets: | |||||
Available-for-sale debt securities | 255,847,000 | 169,209,000 | |||
Recurring basis | Fair Value, Inputs, Level 2 | Collateralized mortgage obligations | |||||
Financial assets: | |||||
Available-for-sale debt securities | 63,371,000 | 72,811,000 | |||
Recurring basis | Fair Value, Inputs, Level 2 | Corporate bonds | |||||
Financial assets: | |||||
Available-for-sale debt securities | 10,002,000 | 9,058,000 | |||
Recurring basis | Fair Value, Inputs, Level 2 | Freddie Mac preferred stock | |||||
Equity securities with readily determinable fair value: | |||||
Equity securities with readily determinable fair value | 714,000 | 410,000 | |||
Recurring basis | Fair Value, Inputs, Level 3 | |||||
Financial assets: | |||||
Available-for-sale debt securities | 7,495,000 | 7,787,000 | |||
Consumer loans held for sale | 598,000 | ||||
Consumer loans receivable held for investment | 998,000 | 1,922,000 | |||
Recurring basis | Fair Value, Inputs, Level 3 | Private label mortgage backed security | |||||
Financial assets: | |||||
Available-for-sale debt securities | 3,495,000 | 3,712,000 | |||
Recurring basis | Fair Value, Inputs, Level 3 | Trust preferred security | |||||
Financial assets: | |||||
Available-for-sale debt securities | $ 4,000,000 | $ 4,075,000 |
FAIR VALUE - RECONCILIATION USI
FAIR VALUE - RECONCILIATION USING SIGNIFICANT UNOBSERVABLE INPUTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Private label mortgage backed security | |||
Assets measured on recurring basis, unobservable input reconciliation | |||
Balance, beginning of period | $ 3,712 | $ 4,449 | $ 4,777 |
Net change in unrealized gain | (79) | (20) | 298 |
Recovery of actual losses previously recorded | 151 | 152 | |
Principal paydowns | (289) | (869) | (626) |
Balance, end of period | 3,495 | 3,712 | 4,449 |
Trust preferred security | |||
Assets measured on recurring basis, unobservable input reconciliation | |||
Balance, beginning of period | 4,075 | 3,600 | 3,200 |
Discount accretion | 42 | 40 | 44 |
Net change in unrealized gain | (117) | 435 | 356 |
Balance, end of period | $ 4,000 | $ 4,075 | $ 3,600 |
FAIR VALUE - RECURRING LEVEL 3
FAIR VALUE - RECURRING LEVEL 3 MEASUREMENTS (Details) - Private label mortgage backed security - Recurring basis - Fair Value, Inputs, Level 3 $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Fair value inputs quantitative information | ||
Mortgage backed security fair value | $ 3,495 | $ 3,712 |
Valuation technique | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Minimum | Constant Prepayment Rate | ||
Fair value inputs quantitative information | ||
Measurable input | 0.023 | 0.065 |
Minimum | Probability of default | ||
Fair value inputs quantitative information | ||
Measurable input | 0.018 | 0.018 |
Minimum | Loss Severity | ||
Fair value inputs quantitative information | ||
Measurable input | 0.50 | 0.50 |
Maximum | Constant Prepayment Rate | ||
Fair value inputs quantitative information | ||
Measurable input | 0.050 | 0.089 |
Maximum | Probability of default | ||
Fair value inputs quantitative information | ||
Measurable input | 0.063 | 0.047 |
Maximum | Loss Severity | ||
Fair value inputs quantitative information | ||
Measurable input | 0.75 | 0.75 |
FAIR VALUE - GAINS AND LOSSES (
FAIR VALUE - GAINS AND LOSSES (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Fair Value, Option | ||||
Aggregate fair value of mortgage loan | $ 19,224 | $ 8,971 | $ 5,761 | $ 11,662 |
Contractual balance | $ 4,432,351 | $ 4,147,249 | ||
Mortgage loans held for sale | ||||
Fair Value, Option | ||||
Number of loans past due 90 days or more or on nonaccrual | loan | 0 | 0 | ||
Aggregate fair value of mortgage loan | $ 19,224 | $ 8,971 | ||
Contractual balance | 18,690 | 8,676 | ||
Unrealized (loss) gain | 534 | 295 | ||
Gains (losses) from changes in fair value included in earnings | 936 | 605 | 345 | |
Mortgage loans held for sale | Interest Income | ||||
Fair Value, Option | ||||
Gains (losses) from changes in fair value included in earnings | 697 | 402 | 346 | |
Mortgage loans held for sale | Change In Fair Value | ||||
Fair Value, Option | ||||
Gains (losses) from changes in fair value included in earnings | $ 239 | $ 203 | $ (1) |
FAIR VALUE - CONSUMER LOANS HEL
FAIR VALUE - CONSUMER LOANS HELD FOR SALE (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Loans held for sale | ||
Consumer loans held for sale, at fair value | $ 598,000 | |
Consumer loans receivable held for investment | 998,000 | $ 1,922,000 |
Republic Credit Solutions | Installment loan | ||
Loans held for sale | ||
Consumer loans held for sale, at fair value | 598,000 | |
Consumer loans receivable held for investment | $ 998,000 | $ 1,900,000 |
FAIR VALUE - ASSETS MEASURED ON
FAIR VALUE - ASSETS MEASURED ON NON-RECURRING BASIS (Details) - Nonrecurring basis - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures | ||
Consumer loans held for sale | $ 1,249 | |
Impaired loan on non-recurring basis | $ 8,920 | 7,935 |
Residential Real Estate - Owner Occupied | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 3,598 | 4,708 |
Residential Real Estate - Non Owner Occupied | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 14 | 1,007 |
Commercial Real Estate | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 3,276 | 1,255 |
Commercial & industrial | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 1,562 | 609 |
Home equity lines of credit | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 470 | 356 |
Premises | ||
Fair Value Disclosures | ||
Premises | 836 | 1,694 |
Fair Value, Inputs, Level 3 | ||
Fair Value Disclosures | ||
Consumer loans held for sale | 1,249 | |
Impaired loan on non-recurring basis | 8,920 | 7,935 |
Fair Value, Inputs, Level 3 | Residential Real Estate - Owner Occupied | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 3,598 | 4,708 |
Fair Value, Inputs, Level 3 | Residential Real Estate - Non Owner Occupied | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 14 | 1,007 |
Fair Value, Inputs, Level 3 | Commercial Real Estate | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 3,276 | 1,255 |
Fair Value, Inputs, Level 3 | Commercial & industrial | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 1,562 | 609 |
Fair Value, Inputs, Level 3 | Home equity lines of credit | ||
Fair Value Disclosures | ||
Impaired loan on non-recurring basis | 470 | 356 |
Fair Value, Inputs, Level 3 | Premises | ||
Fair Value Disclosures | ||
Premises | $ 836 | $ 1,694 |
FAIR VALUE - NON-RECURRING LEVE
FAIR VALUE - NON-RECURRING LEVEL 3 MEASUREMENTS (Details) - Fair Value, Inputs, Level 3 - Nonrecurring basis $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Consumer Loans Held For Sale | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,249 | |
Consumer Loans Held For Sale | Comparability Adjustment | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.06 | |
Consumer Loans Held For Sale | Comparability Adjustment | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.06 | |
Impaired Loans | Residential Real Estate - Owner Occupied | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 3,598 | $ 4,708 |
Impaired Loans | Residential Real Estate - Owner Occupied | Comparability Adjustment | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0 | 0 |
Impaired Loans | Residential Real Estate - Owner Occupied | Comparability Adjustment | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.58 | 0.67 |
Impaired Loans | Residential Real Estate - Owner Occupied | Comparability Adjustment | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.12 | 0.09 |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 14 | $ 1,007 |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Comparability Adjustment | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.05 | |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Comparability Adjustment | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0 | |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Comparability Adjustment | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.27 | |
Impaired Loans | Residential Real Estate - Non Owner Occupied | Comparability Adjustment | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.05 | 0.15 |
Impaired Loans | Commercial Real Estate | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 3,276 | $ 123 |
Impaired Loans | Commercial Real Estate | Income approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,132 | |
Impaired Loans | Commercial Real Estate | Comparability Adjustment | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.21 | |
Impaired Loans | Commercial Real Estate | Comparability Adjustment | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.01 | |
Impaired Loans | Commercial Real Estate | Comparability Adjustment | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.10 | |
Impaired Loans | Commercial Real Estate | Comparability Adjustment | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.04 | 0.21 |
Impaired Loans | Commercial Real Estate | Comparability Adjustment | Income approach | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.17 | |
Impaired Loans | Commercial Real Estate | Comparability Adjustment | Income approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.17 | |
Impaired Loans | Commercial & industrial | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 1,562 | $ 609 |
Impaired Loans | Commercial & industrial | Comparability Adjustment | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.03 | |
Impaired Loans | Commercial & industrial | Comparability Adjustment | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.03 | |
Impaired Loans | Commercial & industrial | Comparability Adjustment | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.50 | |
Impaired Loans | Commercial & industrial | Comparability Adjustment | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.37 | 0.03 |
Impaired Loans | Home equity lines of credit | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 470 | $ 356 |
Impaired Loans | Home equity lines of credit | Comparability Adjustment | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.02 | |
Impaired Loans | Home equity lines of credit | Comparability Adjustment | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0 | |
Impaired Loans | Home equity lines of credit | Comparability Adjustment | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.22 | |
Impaired Loans | Home equity lines of credit | Comparability Adjustment | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.02 | 0.08 |
Premises | Sale comparison approach | ||
Fair value inputs quantitative information | ||
Fair Value | $ 836 | $ 1,694 |
Premises | Comparability Adjustment | Sale comparison approach | Minimum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.39 | 0.27 |
Premises | Comparability Adjustment | Sale comparison approach | Maximum | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.77 | 0.72 |
Premises | Comparability Adjustment | Sale comparison approach | Weighted Average | ||
Fair value inputs quantitative information | ||
Adjustments determined by management for difference percentage | 0.55 | 0.40 |
FAIR VALUE - IMPAIRED LOANS (De
FAIR VALUE - IMPAIRED LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Impaired loans | |||
Carrying amount of loans measured at fair value | $ 17,289 | $ 21,880 | $ 27,076 |
Valuation allowance | (2,512) | (3,764) | (4,685) |
Nonrecurring basis | |||
Impaired loans | |||
Total fair value | 8,920 | 7,935 | |
Fair Value, Inputs, Level 3 | Nonrecurring basis | |||
Impaired loans | |||
Carrying amount of loans measured at fair value | 7,729 | 7,380 | |
Estimated selling costs considered in carrying amount | 1,193 | 913 | |
Valuation allowance | (2) | (358) | |
Total fair value | 8,920 | 7,935 | |
Provision for impairment on loan, lease and other losses | |||
Provisions on collateral-dependent, impaired loans | $ 3,039 | $ 1,629 | $ 169 |
FAIR VALUE - OTHER REAL ESTATE
FAIR VALUE - OTHER REAL ESTATE OWNED (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures | |||
Total Carrying value of other real estate owned | $ 113 | $ 160 | |
Other real estate owned write-downs during the years ended | $ 155 | ||
Nonrecurring basis | Fair Value, Inputs, Level 3 | Other Real Estate Owned | |||
Fair Value Disclosures | |||
Other real estate owned carried at fair value | 83 | ||
Other real estate owned carried at cost | 32 | 113 | 160 |
Total Carrying value of other real estate owned | 115 | $ 113 | $ 160 |
Other real estate owned write-downs during the years ended | $ 155 |
FAIR VALUE - PREMISES AND EQUIP
FAIR VALUE - PREMISES AND EQUIPMENT (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Premises, Held for Sale | |||
Number of former banking centers classified as held for sale | 2 | ||
Number of former banking centers classified as held for sale and sold during the year | 1 | ||
Impairment of premises held for sale | $ | $ 256 | $ 482 | $ 1,175 |
FAIR VALUE - CARRYING AMOUNTS A
FAIR VALUE - CARRYING AMOUNTS AND FV OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||||
Available-for-sale debt securities | $ 471,355 | $ 475,738 | ||
Held-to-maturity debt securities | 63,156 | 64,858 | ||
Equity securities with readily determinable fair value | 3,188 | 2,806 | ||
Mortgage loans held for sale, at fair value | 19,224 | 8,971 | $ 5,761 | $ 11,662 |
Consumer loans held for sale, at fair value | 598 | |||
Consumer loans held for sale, at the lower of cost or fair value | 11,646 | 12,838 | $ 8,551 | $ 1,310 |
Carrying Value | ||||
Assets: | ||||
Cash and cash equivalents | 385,303 | 351,474 | ||
Available-for-sale debt securities | 471,355 | 475,738 | ||
Held-to-maturity debt securities | 62,531 | 65,227 | ||
Equity securities with readily determinable fair value | 3,188 | 2,806 | ||
Mortgage loans held for sale, at fair value | 19,224 | 8,971 | ||
Consumer loans held for sale, at fair value | 598 | |||
Consumer loans held for sale, at the lower of cost or fair value | 11,646 | 12,838 | ||
Loans, net | 4,389,800 | 4,103,552 | ||
Federal Home Loan Bank stock | 30,831 | 32,067 | ||
Accrued interest receivable | 12,937 | 13,942 | ||
Rate lock loan commitments | 789 | 356 | ||
Interest rate swap agreements | 5,062 | 1,264 | ||
Liabilities: | ||||
Securities sold under agreements to repurchase and other short-term borrowings | 167,617 | 182,990 | ||
Federal Home Loan Bank advances | 750,000 | 810,000 | ||
Subordinated note | 41,240 | 41,240 | ||
Accrued interest payable | 2,802 | 1,084 | ||
Mandatory forward contracts | 131 | 262 | ||
Interest rate swap agreements | 5,166 | 1,149 | ||
Carrying Value | Non Interest Bearing Deposits | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 1,033,379 | 1,003,969 | ||
Carrying Value | Transaction deposits | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 2,018,687 | 2,035,701 | ||
Carrying Value | Time deposits. | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 733,942 | 416,475 | ||
Total Fair Value | ||||
Assets: | ||||
Cash and cash equivalents | 385,303 | 351,474 | ||
Available-for-sale debt securities | 471,355 | 475,738 | ||
Held-to-maturity debt securities | 63,156 | 64,858 | ||
Equity securities with readily determinable fair value | 3,188 | 2,806 | ||
Mortgage loans held for sale, at fair value | 19,224 | 8,971 | ||
Consumer loans held for sale, at fair value | 598 | |||
Consumer loans held for sale, at the lower of cost or fair value | 11,646 | 12,838 | ||
Loans, net | 4,381,396 | 4,062,457 | ||
Accrued interest receivable | 12,937 | 13,942 | ||
Rate lock loan commitments | 789 | 356 | ||
Interest rate swap agreements | 5,062 | 1,264 | ||
Liabilities: | ||||
Securities sold under agreements to repurchase and other short-term borrowings | 167,617 | 182,990 | ||
Federal Home Loan Bank advances | 749,667 | 804,251 | ||
Subordinated note | 32,587 | 33,724 | ||
Accrued interest payable | 2,802 | 1,084 | ||
Mandatory forward contracts | 131 | 262 | ||
Interest rate swap agreements | 5,166 | 1,149 | ||
Total Fair Value | Non Interest Bearing Deposits | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 1,033,379 | 1,003,969 | ||
Total Fair Value | Transaction deposits | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 2,018,687 | 2,035,701 | ||
Total Fair Value | Time deposits. | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 737,733 | 412,477 | ||
Total Fair Value | Fair Value, Inputs, Level 1 | ||||
Assets: | ||||
Cash and cash equivalents | 385,303 | 351,474 | ||
Equity securities with readily determinable fair value | 2,474 | 2,396 | ||
Total Fair Value | Fair Value, Inputs, Level 2 | ||||
Assets: | ||||
Available-for-sale debt securities | 463,860 | 467,951 | ||
Held-to-maturity debt securities | 63,156 | 64,858 | ||
Equity securities with readily determinable fair value | 714 | 410 | ||
Mortgage loans held for sale, at fair value | 19,224 | 8,971 | ||
Accrued interest receivable | 12,937 | 13,942 | ||
Rate lock loan commitments | 789 | 356 | ||
Interest rate swap agreements | 5,062 | 1,264 | ||
Liabilities: | ||||
Securities sold under agreements to repurchase and other short-term borrowings | 167,617 | 182,990 | ||
Federal Home Loan Bank advances | 749,667 | 804,251 | ||
Subordinated note | 32,587 | 33,724 | ||
Accrued interest payable | 2,802 | 1,084 | ||
Mandatory forward contracts | 131 | 262 | ||
Interest rate swap agreements | 5,166 | 1,149 | ||
Total Fair Value | Fair Value, Inputs, Level 2 | Non Interest Bearing Deposits | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 1,033,379 | 1,003,969 | ||
Total Fair Value | Fair Value, Inputs, Level 2 | Transaction deposits | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 2,018,687 | 2,035,701 | ||
Total Fair Value | Fair Value, Inputs, Level 2 | Time deposits. | ||||
Liabilities: | ||||
Deposit liabilities, fair value | 737,733 | 412,477 | ||
Total Fair Value | Fair Value, Inputs, Level 3 | ||||
Assets: | ||||
Available-for-sale debt securities | 7,495 | 7,787 | ||
Consumer loans held for sale, at fair value | 598 | |||
Consumer loans held for sale, at the lower of cost or fair value | 11,646 | 12,838 | ||
Loans, net | $ 4,381,396 | $ 4,062,457 |
MORTGAGE BANKING ACTIVITIES - M
MORTGAGE BANKING ACTIVITIES - MORTGAGE LOANS HELD FOR SALE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Activity for mortgage loans held for sale | |||
Balance, beginning of period | $ 8,971 | $ 5,761 | $ 11,662 |
Origination of mortgage loans held for sale | 356,097 | 176,916 | 160,091 |
Proceeds from the sale of mortgage loans held for sale | (354,660) | (177,545) | (169,969) |
Net gain on sale of mortgage loans held for sale | 8,816 | 3,839 | 3,977 |
Balance, end of period | 19,224 | 8,971 | $ 5,761 |
FHLMC | |||
Activity for mortgage loans held for sale | |||
Bank serviced loans | 1,100,000 | 972,000 | |
Custodial escrow account balances maintained in connection with serviced loans | $ 11,000 | $ 10,000 |
MORTGAGE BANKING ACTIVITIES - C
MORTGAGE BANKING ACTIVITIES - COMPONENTS OF INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Mortgage servicing rights | |||
Net gain realized on sale of mortgage loans held for sale | $ 8,013 | $ 3,843 | $ 4,180 |
Net gain recognized | 8,816 | 3,839 | 3,977 |
Loan servicing income | 2,506 | 2,418 | 2,169 |
Amortization of mortgage servicing rights | (1,823) | (1,432) | (1,504) |
Net servicing income recognized | 683 | 986 | 665 |
Total Mortgage banking income | 9,499 | 4,825 | 4,642 |
Mortgage loans held for sale | |||
Mortgage servicing rights | |||
Net change in fair value | 239 | 203 | (1) |
Rate lock loan commitments | |||
Mortgage servicing rights | |||
Net change in fair value | 433 | 46 | 11 |
Mandatory forward contracts | |||
Mortgage servicing rights | |||
Net change in fair value | $ 131 | $ (253) | $ (213) |
MORTGAGE BANKING ACTIVITIES -_2
MORTGAGE BANKING ACTIVITIES - CAPITALIZED MORTGAGE SERVICING RIGHTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
MORTGAGE BANKING ACTIVITIES | |||
Balance, beginning of period | $ 4,919 | $ 5,044 | $ 5,180 |
Additions | 2,792 | 1,307 | 1,368 |
Amortized to expense | (1,823) | (1,432) | (1,504) |
Balance, end of period | 5,888 | 4,919 | 5,044 |
Change in valuation allowance | $ 0 | $ 0 | $ 0 |
MORTGAGE BANKING ACTIVITIES - O
MORTGAGE BANKING ACTIVITIES - OTHER INFORMATION RELATING TO MSRS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
MORTGAGE BANKING ACTIVITIES | ||
Fair value of mortgage servicing rights portfolio | $ 9,068 | $ 9,357 |
Monthly weighted average prepayment rate of unpaid principle balance (as percent) | 202.00% | 160.00% |
Discount rate (as percent) | 10.00% | 10.00% |
Weighted average foreclosure rate | 0.14% | 0.14% |
Weighted average life in years | 5 years 9 months 4 days | 6 years 3 months 26 days |
MORTGAGE BANKING ACTIVITIES - A
MORTGAGE BANKING ACTIVITIES - AMORTIZATION EXPENSE OF MSR PORTFOLIO (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Estimated future amortization expense of the MSR portfolio (net of the impairment charge) | |
2020 | $ 1,057 |
2021 | 1,054 |
2022 | 1,044 |
2023 | 889 |
2024 | 654 |
2025 | 446 |
2026 | 744 |
Total | $ 5,888 |
MORTGAGE BANKING ACTIVITIES - N
MORTGAGE BANKING ACTIVITIES - NOTIONAL AMOUNTS AND FV (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Mortgage servicing rights | ||
Derivative instruments expiration period | 90 days | |
Mortgage loans held for sale | ||
Information about derivatives and swaps | ||
Derivative Assets, Notional Amount | $ 18,690 | $ 8,676 |
Fair Value, Assets | 19,224 | 8,971 |
Rate lock loan commitments | ||
Information about derivatives and swaps | ||
Derivative Assets, Notional Amount | 32,776 | 14,788 |
Fair Value, Assets | 789 | 356 |
Mandatory forward contracts | ||
Information about derivatives and swaps | ||
Derivative Liabilities, Notional Amount | 44,919 | 20,063 |
Fair Value, Liabilities | $ 131 | $ 262 |
STOCK PLANS AND STOCK BASED C_3
STOCK PLANS AND STOCK BASED COMPENSATION - NARRATIVE (Details) | 12 Months Ended |
Dec. 31, 2019shares | |
2015 Plan | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Number of shares available for grant permitted by plan | 3,000,000 |
Minimum | 2015 Plan | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Vesting period | 3 years |
Stock option | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Outstanding or available for exercise | 55,800 |
Stock option | 2015 Plan | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Exercisable period | 1 year |
Stock option | 2015 Plan | Class B Common Stock | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Outstanding or available for exercise | 0 |
Stock option | Minimum | 2015 Plan | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Exercisable period | 5 years |
Stock option | Maximum | 2015 Plan | |
STOCK PLANS AND STOCK BASED COMPENSATION | |
Exercisable period | 6 years |
STOCK PLANS AND STOCK BASED C_4
STOCK PLANS AND STOCK BASED COMPENSATION - ACTIVITY (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Information related to the stock option plan | |||
Cash received from options exercised, net of shares redeemed | $ (191,000) | $ 83,000 | $ 68,000 |
Information related to stock option and restricted stock awards granted | |||
Expenses | 1,035,000 | $ 1,001,000 | $ 1,142,000 |
Estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | |||
2020 | 565,000 | ||
2021 | 538,000 | ||
2022 | 477,000 | ||
2023 | 225,000 | ||
2024 | 21,000 | ||
Total | $ 1,826,000 | ||
Stock option | |||
Weighted average assumptions used to determined fair value of stock options granted | |||
Risk-free interest rate (as a percent) | 1.85% | 3.00% | 2.07% |
Expected dividend yield (as a percent) | 2.25% | 2.01% | 2.41% |
Expected stock price volatility (as a percent) | 20.11% | 18.59% | 20.36% |
Expected life of options | 5 years | 5 years | 5 years |
Estimated fair value per share of options granted (in dollars per share) | $ 7.12 | $ 8.09 | $ 5.46 |
Options | |||
Outstanding, beginning of year (in shares) | 433,200 | 295,000 | |
Granted (in shares) | 5,500 | 165,000 | |
Exercised (in shares) | (100,600) | (3,500) | |
Forfeited or expired (in shares) | (26,650) | (23,300) | |
Outstanding, end of year (in shares) | 311,450 | 433,200 | 295,000 |
Unvested (in shares) | 255,650 | ||
Exercisable (vested) at end of year (in shares) | 55,800 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning of year (in dollars per share) | $ 33.50 | $ 24.68 | |
Granted (in dollars per share) | 47.02 | 48.08 | |
Exercised (in dollars per share) | 24.50 | 24.10 | |
Forfeited or expired (in dollars per share) | 36 | 26.51 | |
Outstanding, end of year (in dollars per share) | 36.43 | $ 33.50 | $ 24.68 |
Unvested (in dollars per share) | 38.91 | ||
Exercisable (vested) at end of year (in dollars per share) | $ 25.08 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding, end of year | 2 years 8 months 23 days | 3 years 1 month 24 days | |
Unvested | 3 years 1 month 24 days | ||
Exercisable (vested) at end of year | 9 months 7 days | ||
Aggregate Intrinsic Value | |||
Outstanding, end of year | $ 3,449,454 | $ 3,786,820 | |
Unvested | 2,235,562 | ||
Exercisable (vested) at end of year | 1,213,892 | ||
Information related to the stock option plan | |||
Intrinsic value of options exercised | 2,249,000 | 79,000 | $ 71,000 |
Cash received from options exercised, net of shares redeemed | (191,000) | 83,000 | 68,000 |
Information related to stock option and restricted stock awards granted | |||
Expenses | 364,000 | 265,000 | $ 227,000 |
Estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | |||
2020 | 304,000 | ||
2021 | 277,000 | ||
2022 | 240,000 | ||
2023 | 106,000 | ||
2024 | 5,000 | ||
Total | 932,000 | ||
Stock option | Non-executive officer employees | |||
Information related to the stock option plan | |||
Outstanding loans | $ 355,000 | $ 133,000 | |
Restricted Stock Awards | |||
Shares | |||
Outstanding, beginning of year (in shares) | 51,110 | 41,610 | |
Granted (in shares) | 2,336 | 48,323 | |
Forfeited (in shares) | (1,500) | ||
Earned and issued (in shares) | (12,336) | (37,323) | |
Outstanding, end of year (in shares) | 41,110 | 51,110 | 41,610 |
Vested (in shares) | 41,110 | ||
Weighted-average grant date fair value | |||
Outstanding, beginning of year (in dollars per share) | $ 39.06 | $ 21.18 | |
Granted (in dollars per share) | 49.34 | 40.16 | |
Forfeited (in dollars per share) | 19.85 | ||
Earned and issued (in dollars per share) | 46.63 | 21.33 | |
Outstanding, end of year (in dollars per share) | 37.37 | $ 39.06 | $ 21.18 |
Unvested and Expected to vest (in dollars per share) | $ 37.37 | ||
Information related to stock option and restricted stock awards granted | |||
Vesting period | 6 years | ||
Expenses | $ 728,000 | $ 630,000 | $ 424,000 |
Estimated unrecognized stock option and restricted stock award expense related to unvested options and awards (net of estimated forfeitures) | |||
2020 | 261,000 | ||
2021 | 261,000 | ||
2022 | 237,000 | ||
2023 | 119,000 | ||
2024 | 16,000 | ||
Total | $ 894,000 | ||
Restricted Stock Awards | Minimum | |||
Shares | |||
Unrecognized compensation expense recognition period | 5 years | ||
Restricted Stock Awards | Maximum | |||
Shares | |||
Unrecognized compensation expense recognition period | 6 years | ||
Performance Stock Units | |||
Shares | |||
Outstanding, beginning of year (in shares) | 46,000 | 48,500 | |
Forfeited (in shares) | (2,500) | ||
Earned and issued (in shares) | (23,000) | ||
Outstanding, end of year (in shares) | 23,000 | 46,000 | 48,500 |
Vested (in shares) | 23,000 | ||
Weighted-average grant date fair value | |||
Outstanding, beginning of year (in dollars per share) | $ 23.08 | $ 23.08 | |
Forfeited (in dollars per share) | 23.08 | ||
Earned and issued (in dollars per share) | 23.08 | ||
Outstanding, end of year (in dollars per share) | 23.08 | $ 23.08 | $ 23.08 |
Unvested and Expected to vest (in dollars per share) | $ 23.08 | ||
Information related to stock option and restricted stock awards granted | |||
Vesting period | 4 years | ||
Expenses | $ (57,000) | $ 106,000 | $ 491,000 |
Performance Stock Units | Tranche One | |||
Information related to stock option and restricted stock awards granted | |||
Return on average assets (as a percent) | 1.25% | ||
Vesting rights (as a percent) | 50.00% | ||
Performance Stock Units | Tranche Two | |||
Information related to stock option and restricted stock awards granted | |||
Return on average assets (as a percent) | 1.25% | ||
Vesting rights (as a percent) | 50.00% |
STOCK PLANS AND STOCK BASED C_5
STOCK PLANS AND STOCK BASED COMPENSATION - DEFERRED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Director | |||
Shares Deferred | |||
Outstanding, beginning of period (in shares) | 66,144 | 63,898 | |
Deferred fees and dividend equivalents converted to stock units | 6,397 | 5,081 | |
Stock units converted to Class A Common Shares | (5,178) | (2,835) | |
Outstanding, end of period (in shares) | 67,363 | 66,144 | 63,898 |
Vested (in shares) | 67,363 | ||
Weighted Average Market Price at Date of Deferral | |||
Outstanding, beginning of period (in dollars per share) | $ 25.45 | $ 24.08 | |
Deferred fees and dividend equivalents converted to stock units (in dollars per share) | 46.76 | 41.82 | |
Stock units converted to Class A Common Shares (in dollars per share) | 23.18 | 23.94 | |
Outstanding, end of period (in dollars per share) | 27.65 | $ 25.45 | $ 24.08 |
Vested (in dollars per share) | $ 27.65 | ||
Deferred compensation expense | $ 213 | $ 215 | $ 191 |
Director | Minimum | |||
Deferred Compensation | |||
Specified period during which board and committee fees may be deferred by participants | 2 years | ||
Director | Maximum | |||
Deferred Compensation | |||
Specified period during which board and committee fees may be deferred by participants | 5 years | ||
Key Employees | |||
Deferred Compensation | |||
Vesting period after Company match | 5 years | ||
Shares Deferred | |||
Outstanding, beginning of period (in shares) | 9,260 | ||
Deferred fees and dividend equivalents converted to stock units | 7,059 | 4,630 | |
Matching stock units credited (in shares) | 7,059 | 4,992 | |
Matching stock units forfeited (in shares) | (362) | ||
Outstanding, end of period (in shares) | 23,378 | 9,260 | |
Vested (in shares) | 14,953 | ||
Unvested (in shares) | 8,425 | ||
Weighted Average Market Price at Date of Deferral | |||
Outstanding, beginning of period (in dollars per share) | $ 43.09 | ||
Deferred fees and dividend equivalents converted to stock units (in dollars per share) | 45.84 | $ 43.09 | |
Matching stock units credited (in dollars per share) | 45.84 | 43.09 | |
Matching stock units forfeited (in dollar per share) | 42.99 | ||
Outstanding, end of period (in dollars per share) | 41.75 | $ 43.09 | |
Vested (in dollars per share) | 41.75 | ||
Unvested (in dollars per share) | $ 41.75 | ||
Deferred compensation expense | $ 319 | $ 215 |
STOCK PLANS AND STOCK BASED C_6
STOCK PLANS AND STOCK BASED COMPENSATION - KEY- EMPLOYEE DEFERRED COMPENSATION EXPENSE (Details) - Key Employees - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Compensation | ||
Key-employee - base salary | $ 319 | $ 215 |
Key-employee - employer match | 49 | 215 |
Total | $ 368 | $ 430 |
STOCK PLANS AND STOCK BASED C_7
STOCK PLANS AND STOCK BASED COMPENSATION - EMPLOYEE STOCK PURCHASE PLAN (Details) - ESPP - USD ($) $ in Thousands | Apr. 19, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
ESPP expense | $ 49 | $ 23 | |||||||
Class A Common Stock | |||||||||
Employee Stock purchase price | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | |||
Minimum | Class A Common Stock | |||||||||
Employee Stock purchase price | 85.00% |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
401 (k) Plan | |||
BENEFIT PLANS | |||
Eligible compensation enrolled within 30-days of their date of hire | 6.00% | ||
Period within which all the eligible employees are automatically enrolled for compensation | 30 days | ||
Minimum percentage of annual eligible compensation by the participants | 1.00% | ||
Maximum percentage of annual eligible compensation by the participants | 75.00% | ||
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 | $ 3,185,000 | $ 2,890,000 | $ 2,190,000 |
Discretionary employer bonus matching contributions | $ 207,000 | 392,000 | 335,000 |
Supplemental Employee Retirement Plan | |||
Normal and bonus contributions | |||
Number of participants under SERP | employee | 4 | ||
SERP liability incurred | $ 2,000,000 | 2,000,000 | |
Employer matching contributions | $ 97,000 | $ 102,000 | $ 93,000 |
Minimum | 401 (k) Plan | |||
BENEFIT PLANS | |||
Percentage of participant contributions up to which employer matches additional 75% contribution | 2.00% | ||
Maximum | 401 (k) Plan | |||
BENEFIT PLANS | |||
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% |
INCOME TAXES - PROVISION (Detai
INCOME TAXES - PROVISION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current expense: | |||||||||||
Federal | $ 18,906 | $ 10,638 | $ 26,983 | ||||||||
State | 1,751 | 1,532 | 486 | ||||||||
Deferred expense: | |||||||||||
SAB 118 related discrete items | (2,762) | ||||||||||
Deferred tax asset devaluation upon enactment of TCJA | 6,326 | ||||||||||
Federal | 1,880 | 6,815 | (965) | ||||||||
State | (1,043) | 188 | (76) | ||||||||
Total income tax expense | $ 6,533 | $ 4,325 | $ 3,176 | $ 7,460 | $ 3,022 | $ 1,798 | $ 4,150 | $ 7,441 | $ 21,494 | $ 16,411 | $ 32,754 |
Effective tax rate that differs from that computed at the federal statutory rate | |||||||||||
Federal corporate tax rate | 21.00% | 21.00% | 35.00% | ||||||||
Effect of: | |||||||||||
SAB 118 related discrete items | (2.93%) | ||||||||||
Deferred tax asset devaluation upon enactment of TCJA | 8.07% | ||||||||||
State taxes, net of federal benefit (as a percent) | 1.43% | 1.44% | 0.34% | ||||||||
General business tax credits (as a percent) | (1.14%) | (1.44%) | |||||||||
Nontaxable income (as a percent) | (0.85%) | (0.99%) | (1.90%) | ||||||||
Reversal of valuation allowance on net operating loss carryforward (as a percent) | (0.74%) | ||||||||||
Tax benefit of vesting employee benefits (as a percent) | (0.42%) | (0.20%) | (0.31%) | ||||||||
Establishment of deferred tax asset due to KY HB354 (as a percent) | (0.20%) | ||||||||||
Other, net (as a percent) | (0.09%) | 0.53% | 0.59% | ||||||||
Effective tax rate (as a percent) | 18.99% | 17.41% | 41.79% |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) | Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income taxes | ||||
Corporate income tax rate | 21.00% | 21.00% | 35.00% | |
Income tax expense as result of reduced tax rate | $ 6,300,000 | |||
Federal tax benefits which reduced the effective tax rate lower than the federal corporate tax rate | $ 2,800,000 | $ 2,800,000 | ||
Traditional Banking | ||||
Income taxes | ||||
Percentage of income tax benefit attributed to segment | 100.00% | |||
Deferred tax asset due to enactment of HB354 | $ 224,000 | |||
Reversal of valuation allowance on the deferred tax asset for losses | 840,000 | |||
Income tax benefit associated with equity compensation | 480,000 | |||
Tax benefits for low-income-housing investments and R&D | $ 1,300,000 | |||
Kentucky | ||||
Income taxes | ||||
Corporate income tax rate | 5.00% |
INCOME TAXES - DEFERRED TAXES A
INCOME TAXES - DEFERRED TAXES AND OPERATING LOSS CARRYFORWARD (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Net operating loss carry forward | ||
AMT credit carryforwards | $ 87,000 | |
Deferred tax assets: | ||
Allowance for loan and leases losses | 9,672,000 | $ 9,746,000 |
Operating lease liabilities | 8,186,000 | |
Accrued expenses | 3,332,000 | 3,802,000 |
Net operating loss carryforward | 2,705,000 | 2,858,000 |
Acquisition fair value adjustments | 443,000 | 580,000 |
Other-than-temporary impairment | 397,000 | 478,000 |
Unrealized investment security losses | 289,000 | |
Fair value of cash flow hedges | 26,000 | |
Other | 1,741,000 | 1,644,000 |
Total deferred tax assets | 26,502,000 | 19,397,000 |
Deferred tax liabilities: | ||
Right of use assets - operating leases | (7,889,000) | |
Depreciation and amortization | (4,018,000) | (3,970,000) |
Federal Home Loan Bank dividends | (2,667,000) | (2,676,000) |
Deferred loan fees | (2,068,000) | (1,921,000) |
Lease Financing Receivables | (2,245,000) | (1,839,000) |
Mortgage servicing rights | (1,319,000) | (1,106,000) |
Unrealized investment securities gains | (1,058,000) | |
Bargain purchase gain | (648,000) | (553,000) |
Fair value of cash flow hedges | (24,000) | |
Other | (246,000) | (11,000) |
Total deferred tax liabilities | (22,158,000) | (12,100,000) |
Less: Valuation allowance | (819,000) | |
Net deferred tax asset | 4,344,000 | $ 6,478,000 |
Federal | ||
Net operating loss carry forward | ||
Net operating loss carry forward, amount | 8,000,000 | |
Annual limit of use of operating loss carryforward | 722,000 | |
State | ||
Net operating loss carry forward | ||
Net operating loss carry forward, amount | 5,100,000 | |
Annual limit of use of operating loss carryforward | 634,000 | |
Kentucky | State | ||
Net operating loss carry forward | ||
Net operating loss carry forward, amount | $ 21,200,000 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance, beginning of period | $ 1,327 | $ 912 | $ 1,495 |
Additions based on tax related to the current period | 364 | 306 | 259 |
Additions for tax positions of prior periods | 55 | 339 | |
Reductions for tax positions of prior periods | (34) | (42) | |
Reductions due to the statute of limitations | (39) | (196) | (800) |
Balance, end of period | 1,707 | 1,327 | 912 |
Amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods | 1,500 | ||
Amount of interest and penalties | |||
Interest and penalties recorded in the income statement as a component of income tax expense | 173 | 42 | (258) |
Interest and penalties accrued on balance sheet | $ 514 | $ 341 | $ 299 |
INCOME TAXES - LOW INCOME HOUSI
INCOME TAXES - LOW INCOME HOUSING TAX CREDITS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investment | ||
Low income housing tax credit investments - Gross | $ 11,912 | $ 3,971 |
Life-to-date amortization | (1,218) | (347) |
Low income housing tax credit investments - Net | 10,694 | 3,624 |
Unfunded Commitment | ||
Low income housing tax credit investments - Gross | 24,888 | 14,029 |
Low income housing tax credit investments - Net | $ 24,888 | $ 14,029 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EARNINGS PER SHARE | |||||||||||
Net income | $ 25,768 | $ 18,408 | $ 18,007 | $ 29,516 | $ 17,306 | $ 17,411 | $ 15,666 | $ 27,469 | $ 91,699 | $ 77,852 | $ 45,632 |
Dividends declared on Common Stock: | |||||||||||
Undistributed net income for basic earnings per share | 69,807 | 57,821 | 27,701 | ||||||||
Weighted average potential dividends on Class A shares upon exercise of dilutive options | (118) | (102) | (75) | ||||||||
Undistributed net income for diluted earnings per share | $ 69,689 | $ 57,719 | $ 27,626 | ||||||||
Weighted average shares outstanding: | |||||||||||
Effect of dilutive securities on Class A Shares outstanding | 112,000 | 105,000 | 86,000 | ||||||||
Weighted average shares outstanding including dilutive securities | 21,135,000 | 21,065,000 | 21,007,000 | ||||||||
Stock option | |||||||||||
Diluted earnings per share: | |||||||||||
Antidilutive stock options (in shares) | 154,750 | 165,000 | 4,500 | ||||||||
Stock option | Weighted Average | |||||||||||
Diluted earnings per share: | |||||||||||
Antidilutive stock options (in shares) | 151,260 | 47,712 | 2,375 | ||||||||
Class A Common Stock | |||||||||||
EARNINGS PER SHARE | |||||||||||
Cash dividend premium per share (as a percent) | 10.00% | ||||||||||
Dividends declared on Common Stock: | |||||||||||
Dividends declared on Common Stock | $ (19,771) | $ (18,076) | $ (16,158) | ||||||||
Weighted average shares outstanding: | |||||||||||
Weighted average shares outstanding | 18,813,000 | 18,736,000 | 18,678,000 | ||||||||
Basic earnings per share: | |||||||||||
Per share dividends distributed | $ 1.06 | $ 0.97 | $ 0.87 | ||||||||
Undistributed earnings per share | 3.35 | 2.79 | 1.34 | ||||||||
Total basic earnings per share | $ 1.23 | $ 0.88 | $ 0.86 | $ 1.42 | $ 0.83 | $ 0.84 | $ 0.75 | $ 1.32 | 4.41 | 3.76 | 2.21 |
Diluted earnings per share: | |||||||||||
Per share dividends distributed | 1.06 | 0.97 | 0.87 | ||||||||
Undistributed earnings per share | 3.33 | 2.77 | 1.33 | ||||||||
Total diluted earnings per share | 1.23 | 0.88 | 0.86 | 1.41 | 0.83 | 0.83 | 0.74 | 1.32 | $ 4.39 | $ 3.74 | $ 2.20 |
Class B Common Stock | |||||||||||
Dividends declared on Common Stock: | |||||||||||
Dividends declared on Common Stock | $ (2,121) | $ (1,955) | $ (1,773) | ||||||||
Weighted average shares outstanding: | |||||||||||
Weighted average shares outstanding | 2,210,000 | 2,224,000 | 2,243,000 | ||||||||
Basic earnings per share: | |||||||||||
Per share dividends distributed | $ 0.96 | $ 0.88 | $ 0.79 | ||||||||
Undistributed earnings per share | 3.05 | 2.53 | 1.22 | ||||||||
Total basic earnings per share | 1.13 | 0.80 | 0.79 | 1.29 | 0.76 | 0.76 | 0.68 | 1.21 | 4.01 | 3.41 | 2.01 |
Diluted earnings per share: | |||||||||||
Per share dividends distributed | 0.96 | 0.88 | 0.79 | ||||||||
Undistributed earnings per share | 3.03 | 2.52 | 1.21 | ||||||||
Total diluted earnings per share | $ 1.12 | $ 0.80 | $ 0.78 | $ 1.28 | $ 0.75 | $ 0.76 | $ 0.68 | $ 1.20 | $ 3.99 | $ 3.40 | $ 2 |
TRANSACTIONS WITH RELATED PAR_3
TRANSACTIONS WITH RELATED PARTIES AND THEIR AFFILIATES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans made to executive officers and directors of Republic and their related interests | ||
Beginning balance | $ 38,370,000 | |
Effect of changes in composition of related parties | (184,000) | |
New loans | 2,385,000 | |
Repayments | 2,827,000 | |
Ending balance | 43,398,000 | |
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 | 97,000,000 | $ 102,000,000 |
Bernard M. Trager | RB&T | ||
Loans made to executive officers and directors of Republic and their related interests | ||
Total aggregate annual premiums paid to date on the insurance policies held in the trust | 690,000 | |
Cash surrender value of the policies | 2,000,000 | 2,000,000 |
Repayments of indebtedness due from beneficiaries, per terms of trust | 540,000 | 640,000 |
Net death benefit | $ 3,000,000 | $ 3,000,000 |
OTHER COMPREHENSIVE INCOME - CO
OTHER COMPREHENSIVE INCOME - COMPONENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Available-for-Sale Debt Securities: | |||
Change in unrealized (loss) gain on AFS debt securities | $ 5,689 | $ (1,548) | $ (1,265) |
Adjustment for adoption of ASU 2016-01 | (428) | ||
Reclassification adjustment for net (gain) loss on AFS debt securities recognized in earnings | 136 | ||
Change in unrealized gain on AFS debt security for which a portion of OTTI has been recognized in earnings | (79) | (20) | 298 |
Net unrealized (losses) gains | 5,610 | (1,996) | (831) |
Tax effect | (1,348) | 420 | 377 |
Net of tax | 4,262 | (1,576) | (454) |
Cash Flow Hedges: | |||
Change in fair value of derivatives used for cash flow hedges | (199) | 178 | 83 |
Reclassification amount for net derivative losses realized in income | (20) | 28 | 219 |
Net unrealized gains | (219) | 206 | 302 |
Tax effect | 52 | (43) | (119) |
Net of tax | (167) | 163 | 183 |
Total other comprehensive income (loss), net of tax | $ 4,095 | $ (1,413) | $ (271) |
OTHER COMPREHENSIVE INCOME - RE
OTHER COMPREHENSIVE INCOME - RECLASSIFICATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Significant amounts reclassified out of each component of AOCI | |||||||||||
Noninterest income | $ 19,655 | $ 12,811 | $ 15,125 | $ 27,417 | $ 10,119 | $ 11,465 | $ 14,296 | $ 27,545 | $ 75,008 | $ 63,425 | $ 58,414 |
Interest benefit (expense) on deposits | (29,135) | (17,017) | (9,802) | ||||||||
Interest benefit (expense) on FHLB advances | (12,791) | (10,473) | (8,860) | ||||||||
Total interest benefit (expense) | (10,132) | (12,573) | (11,718) | (10,334) | (8,626) | (8,057) | (7,272) | (6,168) | (44,757) | (30,123) | (20,258) |
Income tax (benefit) expense | (6,533) | (4,325) | (3,176) | (7,460) | (3,022) | (1,798) | (4,150) | (7,441) | (21,494) | (16,411) | (32,754) |
NET INCOME | $ 25,768 | $ 18,408 | $ 18,007 | $ 29,516 | $ 17,306 | $ 17,411 | $ 15,666 | $ 27,469 | 91,699 | 77,852 | 45,632 |
Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Significant amounts reclassified out of each component of AOCI | |||||||||||
NET INCOME | 15 | (22) | (230) | ||||||||
Unrealized gain (loss) on AFS debt securities | Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Significant amounts reclassified out of each component of AOCI | |||||||||||
Noninterest income | (136) | ||||||||||
Income tax (benefit) expense | 48 | ||||||||||
NET INCOME | (88) | ||||||||||
Unrealized gain (loss) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Significant amounts reclassified out of each component of AOCI | |||||||||||
Interest benefit (expense) on deposits | 10 | (18) | (109) | ||||||||
Interest benefit (expense) on FHLB advances | 10 | (10) | (110) | ||||||||
Total interest benefit (expense) | 20 | (28) | (219) | ||||||||
Income tax (benefit) expense | (5) | 6 | 77 | ||||||||
NET INCOME | $ 15 | $ (22) | $ (142) |
OTHER COMPREHENSIVE INCOME - AO
OTHER COMPREHENSIVE INCOME - AOCI Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of the AOCI balances, net of tax | |||
Balance at beginning of period | $ 689,934 | $ 632,424 | $ 604,406 |
Current Year Change | 4,095 | (1,413) | (271) |
Balance at end of period | 764,244 | 689,934 | 632,424 |
Accumulated Other Comprehensive Income | |||
Summary of the AOCI balances, net of tax | |||
Balance at beginning of period | (997) | 416 | 687 |
Current Year Change | 4,095 | (1,413) | |
Balance at end of period | 3,098 | (997) | 416 |
Unrealized gain (loss) on AFS debt securities | |||
Summary of the AOCI balances, net of tax | |||
Balance at beginning of period | (2,165) | (604) | |
Current Year Change | 4,376 | (1,561) | |
Balance at end of period | 2,211 | (2,165) | (604) |
Unrealized gain (loss) on AFS debt security for which a portion of OTTI has been recognized in earnings | |||
Summary of the AOCI balances, net of tax | |||
Balance at beginning of period | 1,078 | 1,093 | |
Current Year Change | (114) | (15) | |
Balance at end of period | 964 | 1,078 | 1,093 |
Unrealized gain (loss) on cash flow hedges | |||
Summary of the AOCI balances, net of tax | |||
Balance at beginning of period | 90 | (73) | |
Current Year Change | (167) | 163 | |
Balance at end of period | $ (77) | $ 90 | $ (73) |
PARENT COMPANY CONDENSED FINA_3
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||||
Cash and cash equivalents | $ 385,303 | $ 351,474 | ||
Security available for sale | 471,355 | 475,738 | ||
TOTAL ASSETS | 5,620,319 | 5,240,404 | $ 5,085,362 | |
Liabilities and Stockholders' Equity: | ||||
Subordinated note | 41,240 | 41,240 | ||
Other liabilities | 74,680 | 60,095 | ||
Stockholders' equity | 764,244 | 689,934 | $ 632,424 | $ 604,406 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 5,620,319 | 5,240,404 | ||
Republic Bancorp, Inc. | ||||
Assets: | ||||
Cash and cash equivalents | 101,003 | 99,440 | ||
Security available for sale | 4,000 | 4,075 | ||
Investment in bank subsidiary | 699,906 | 625,814 | ||
Investment in non-bank subsidiaries | 3,631 | 3,343 | ||
Other assets | 4,749 | 4,854 | ||
TOTAL ASSETS | 813,289 | 737,526 | ||
Liabilities and Stockholders' Equity: | ||||
Subordinated note | 41,240 | 41,240 | ||
Other liabilities | 7,805 | 6,352 | ||
Stockholders' equity | 764,244 | 689,934 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 813,289 | $ 737,526 |
PARENT COMPANY CONDENSED FINA_4
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - INCOME AND COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income and expenses: | |||||||||||
Interest income | $ 64,527 | $ 68,059 | $ 65,664 | $ 82,633 | $ 62,902 | $ 61,090 | $ 58,356 | $ 73,833 | $ 280,883 | $ 256,181 | $ 218,778 |
Other income | 3,664 | 4,658 | 4,108 | ||||||||
Less: Interest expense | 10,132 | 12,573 | 11,718 | 10,334 | 8,626 | 8,057 | 7,272 | 6,168 | 44,757 | 30,123 | 20,258 |
Less: Other expenses | 11,937 | 12,546 | 11,386 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 32,301 | 22,733 | 21,183 | 36,976 | 20,328 | 19,209 | 19,816 | 34,910 | 113,193 | 94,263 | 78,386 |
Income tax benefit | (6,533) | (4,325) | (3,176) | (7,460) | (3,022) | (1,798) | (4,150) | (7,441) | (21,494) | (16,411) | (32,754) |
NET INCOME | $ 25,768 | $ 18,408 | $ 18,007 | $ 29,516 | $ 17,306 | $ 17,411 | $ 15,666 | $ 27,469 | 91,699 | 77,852 | 45,632 |
COMPREHENSIVE INCOME | 95,794 | 76,439 | 45,361 | ||||||||
Republic Bancorp, Inc. | |||||||||||
Income and expenses: | |||||||||||
Dividends from subsidiary | 24,249 | 22,385 | 20,063 | ||||||||
Interest income | 250 | 231 | 186 | ||||||||
Other income | 54 | 45 | 45 | ||||||||
Less: Interest expense | 1,620 | 1,508 | 1,094 | ||||||||
Less: Other expenses | 511 | 469 | 394 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 22,422 | 20,684 | 18,806 | ||||||||
Income tax benefit | 1,213 | 348 | 116 | ||||||||
Income before equity in undistributed net income of subsidiaries | 23,635 | 21,032 | 18,922 | ||||||||
Equity in undistributed net income of subsidiaries | 68,064 | 56,820 | 26,710 | ||||||||
NET INCOME | 91,699 | 77,852 | 45,632 | ||||||||
COMPREHENSIVE INCOME | $ 95,794 | $ 76,439 | $ 45,361 |
PARENT COMPANY CONDENSED FINA_5
PARENT COMPANY CONDENSED FINANCIAL INFORMATION - CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
STATEMENTS OF CASH FLOWS | |||
Net income | $ 91,699 | $ 77,852 | $ 45,632 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Accretion of investment security | (120) | 97 | 245 |
Change in other assets | (8,677) | 2,822 | 730 |
Change in other liabilities | (3,138) | 7,368 | 2,850 |
Net cash provided by operating activities | 97,245 | 119,213 | 77,777 |
Investing activities: | |||
Net cash used in investing activities | (427,266) | (121,535) | (287,113) |
Financing activities: | |||
Common Stock repurchases | (1,418) | (827) | (1,048) |
Net proceeds from Class A Common Stock purchased through employee stock purchase plan | 494 | 230 | |
Net proceeds from Class A Common Stock options exercised | (191) | 83 | 68 |
Cash dividends paid | (21,377) | (19,497) | (17,656) |
Net cash provided by financing activities | 363,850 | 54,445 | 219,378 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 33,829 | 52,123 | 10,042 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 351,474 | 299,351 | 289,309 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 385,303 | 351,474 | 299,351 |
Republic Bancorp, Inc. | |||
STATEMENTS OF CASH FLOWS | |||
Net income | 91,699 | 77,852 | 45,632 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Accretion of investment security | (42) | (40) | (44) |
Equity in undistributed net income of subsidiaries | (68,064) | (56,820) | (26,710) |
Director deferred compensation - Parent Company | 139 | 117 | 108 |
Change in other assets | (25) | 605 | 1,215 |
Change in other liabilities | 842 | (976) | 1,623 |
Net cash provided by operating activities | 24,549 | 20,738 | 21,824 |
Investing activities: | |||
Investment in subsidiary bank | (494) | (230) | |
Net cash used in investing activities | (494) | (230) | |
Financing activities: | |||
Common Stock repurchases | (1,418) | (827) | (1,048) |
Net proceeds from Class A Common Stock purchased through employee stock purchase plan | 494 | 230 | |
Net proceeds from Class A Common Stock options exercised | (191) | 83 | 68 |
Cash dividends paid | (21,377) | (19,497) | (17,656) |
Net cash provided by financing activities | (22,492) | (20,011) | (18,636) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 1,563 | 497 | 3,188 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 99,440 | 98,943 | 95,755 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 101,003 | $ 99,440 | $ 98,943 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue recognition | |||||||||||
Practical expedient allows incremental costs of obtaining contract when amortization period less than one year | true | ||||||||||
Net interest income | $ 54,395 | $ 55,486 | $ 53,946 | $ 72,299 | $ 54,276 | $ 53,033 | $ 51,084 | $ 67,665 | $ 236,126 | $ 226,058 | $ 198,520 |
Noninterest income: | |||||||||||
Service charges on deposit accounts | 14,197 | 14,273 | 13,357 | ||||||||
Net refund transfer fees | 21,158 | 20,029 | 18,500 | ||||||||
Mortgage banking income | 9,499 | 4,825 | 4,642 | ||||||||
Interchange fee income | 11,859 | 11,159 | 9,881 | ||||||||
Program fees | 4,712 | 6,225 | 5,824 | ||||||||
Increase in cash surrender value of bank owned life insurance | 1,550 | 1,527 | 1,562 | ||||||||
Net gains (losses) on OREO | 540 | 729 | 676 | ||||||||
Net gain on branch divestiture | 7,900 | 7,829 | |||||||||
Other | 3,664 | 4,658 | 4,108 | ||||||||
Noninterest income | $ 19,655 | $ 12,811 | $ 15,125 | $ 27,417 | $ 10,119 | $ 11,465 | $ 14,296 | 27,545 | 75,008 | 63,425 | $ 58,414 |
Total net revenue | $ 311,134 | $ 289,483 | |||||||||
Net-revenue concentration (as percent) | 100.00% | 100.00% | 100.00% | ||||||||
Writedowns during entity's holding of property (as a percent) | 10.00% | ||||||||||
Nonrefundable capital commitment fee | $ 1,000 | ||||||||||
Core Banking Activities | |||||||||||
Revenue recognition | |||||||||||
Net interest income | $ 184,574 | $ 176,526 | $ 160,702 | ||||||||
Noninterest income: | |||||||||||
Service charges on deposit accounts | 14,197 | 14,273 | |||||||||
Mortgage banking income | 9,499 | 4,825 | 4,642 | ||||||||
Interchange fee income | 11,600 | 10,868 | |||||||||
Increase in cash surrender value of bank owned life insurance | 1,550 | 1,527 | |||||||||
Net gains (losses) on OREO | 540 | 729 | |||||||||
Net gain on branch divestiture | 7,829 | ||||||||||
Other | 3,004 | 3,158 | |||||||||
Noninterest income | 48,219 | 35,380 | $ 32,410 | ||||||||
Total net revenue | $ 232,793 | $ 211,906 | |||||||||
Net-revenue concentration (as percent) | 75.00% | 73.00% | 75.00% | ||||||||
Traditional Banking | |||||||||||
Revenue recognition | |||||||||||
Net interest income | $ 168,076 | $ 160,398 | $ 142,823 | ||||||||
Noninterest income: | |||||||||||
Service charges on deposit accounts | 14,153 | 14,233 | |||||||||
Interchange fee income | 11,600 | 10,868 | |||||||||
Increase in cash surrender value of bank owned life insurance | 1,550 | 1,527 | |||||||||
Net gains (losses) on OREO | 540 | 729 | |||||||||
Net gain on branch divestiture | 7,829 | ||||||||||
Other | 2,881 | 2,608 | |||||||||
Noninterest income | 38,553 | 29,965 | $ 27,452 | ||||||||
Total net revenue | $ 206,629 | $ 190,363 | |||||||||
Net-revenue concentration (as percent) | 67.00% | 66.00% | 66.00% | ||||||||
Warehouse Lending | |||||||||||
Revenue recognition | |||||||||||
Net interest income | $ 15,801 | $ 15,726 | $ 17,533 | ||||||||
Noninterest income: | |||||||||||
Service charges on deposit accounts | 44 | 40 | |||||||||
Other | (90) | ||||||||||
Noninterest income | (46) | 40 | $ 37 | ||||||||
Total net revenue | $ 15,755 | $ 15,766 | |||||||||
Net-revenue concentration (as percent) | 5.00% | 5.00% | 7.00% | ||||||||
Mortgage Banking | |||||||||||
Revenue recognition | |||||||||||
Net interest income | $ 697 | $ 402 | $ 346 | ||||||||
Noninterest income: | |||||||||||
Mortgage banking income | 9,499 | 4,825 | 4,642 | ||||||||
Other | 213 | 550 | |||||||||
Noninterest income | 9,712 | 5,375 | $ 4,921 | ||||||||
Total net revenue | $ 10,409 | $ 5,777 | |||||||||
Net-revenue concentration (as percent) | 3.00% | 2.00% | 2.00% | ||||||||
Republic Processing Group | |||||||||||
Revenue recognition | |||||||||||
Net interest income | $ 51,552 | $ 49,532 | $ 37,818 | ||||||||
Noninterest income: | |||||||||||
Net refund transfer fees | 21,158 | 20,029 | 18,500 | ||||||||
Interchange fee income | 259 | 291 | |||||||||
Program fees | 4,712 | 6,225 | 5,824 | ||||||||
Other | 660 | 1,500 | |||||||||
Noninterest income | 26,789 | 28,045 | $ 26,004 | ||||||||
Total net revenue | $ 78,341 | $ 77,577 | |||||||||
Net-revenue concentration (as percent) | 25.00% | 27.00% | 25.00% | ||||||||
Tax Refund Solutions | |||||||||||
Revenue recognition | |||||||||||
Net interest income | $ 21,626 | $ 19,203 | $ 15,197 | ||||||||
Noninterest income: | |||||||||||
Net refund transfer fees | 21,158 | 20,029 | 18,500 | ||||||||
Interchange fee income | 259 | 226 | |||||||||
Program fees | 437 | 295 | 176 | ||||||||
Other | 1 | 1,003 | |||||||||
Noninterest income | 21,855 | 21,553 | $ 18,840 | ||||||||
Total net revenue | $ 43,481 | $ 40,756 | |||||||||
Net-revenue concentration (as percent) | 14.00% | 14.00% | 13.00% | ||||||||
Republic Credit Solutions | |||||||||||
Revenue recognition | |||||||||||
Net interest income | $ 29,926 | $ 30,329 | $ 22,621 | ||||||||
Noninterest income: | |||||||||||
Interchange fee income | 65 | ||||||||||
Program fees | 4,275 | 5,930 | 5,648 | ||||||||
Other | 659 | 497 | |||||||||
Noninterest income | 4,934 | 6,492 | $ 7,164 | ||||||||
Total net revenue | $ 34,860 | $ 36,821 | |||||||||
Net-revenue concentration (as percent) | 11.00% | 13.00% | 12.00% |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Disclosure information | |||||||||||
Number of reportable segments | segment | 5 | ||||||||||
Segment information | |||||||||||
Net interest income | $ 54,395 | $ 55,486 | $ 53,946 | $ 72,299 | $ 54,276 | $ 53,033 | $ 51,084 | $ 67,665 | $ 236,126 | $ 226,058 | $ 198,520 |
Provision for loan and lease losses | 914 | 3,153 | 4,460 | 17,231 | 5,104 | 4,077 | 4,932 | 17,255 | 25,758 | 31,368 | 27,704 |
Net refund transfer fees | 21,158 | 20,029 | 18,500 | ||||||||
Mortgage banking income | 9,499 | 4,825 | 4,642 | ||||||||
Program fees | 4,712 | 6,225 | 5,824 | ||||||||
Net gain on branch divestiture | 7,900 | 7,829 | |||||||||
Other noninterest income | 31,810 | 32,346 | 29,448 | ||||||||
Total noninterest income | 19,655 | 12,811 | 15,125 | 27,417 | 10,119 | 11,465 | 14,296 | 27,545 | 75,008 | 63,425 | 58,414 |
Total noninterest expenses | 40,835 | 42,411 | 43,428 | 45,509 | 38,963 | 41,212 | 40,632 | 43,045 | 172,183 | 163,852 | 150,844 |
INCOME BEFORE INCOME TAX EXPENSE | 32,301 | 22,733 | 21,183 | 36,976 | 20,328 | 19,209 | 19,816 | 34,910 | 113,193 | 94,263 | 78,386 |
Income tax expense (benefit) | 6,533 | 4,325 | 3,176 | 7,460 | 3,022 | 1,798 | 4,150 | 7,441 | 21,494 | 16,411 | 32,754 |
Net income | 25,768 | $ 18,408 | $ 18,007 | $ 29,516 | 17,306 | $ 17,411 | $ 15,666 | $ 27,469 | 91,699 | 77,852 | 45,632 |
Period-end assets | 5,620,319 | 5,240,404 | $ 5,620,319 | $ 5,240,404 | $ 5,085,362 | ||||||
Net interest margin (as percent) | 4.46% | 4.62% | 4.32% | ||||||||
Net-revenue concentration (as percent) | 100.00% | 100.00% | 100.00% | ||||||||
Core Banking Activities | |||||||||||
Segment Disclosure information | |||||||||||
Number of reportable segments | segment | 3 | ||||||||||
Segment information | |||||||||||
Net interest income | $ 184,574 | $ 176,526 | $ 160,702 | ||||||||
Provision for loan and lease losses | 3,066 | 3,568 | 3,773 | ||||||||
Mortgage banking income | 9,499 | 4,825 | 4,642 | ||||||||
Net gain on branch divestiture | 7,829 | ||||||||||
Other noninterest income | 30,891 | 30,555 | 27,768 | ||||||||
Total noninterest income | 48,219 | 35,380 | 32,410 | ||||||||
Total noninterest expenses | 153,051 | 144,162 | 132,794 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 76,676 | 64,176 | 56,545 | ||||||||
Income tax expense (benefit) | 13,223 | 9,986 | 23,097 | ||||||||
Net income | 63,453 | 54,190 | 33,448 | ||||||||
Period-end assets | 5,428,579 | 5,131,409 | $ 5,428,579 | $ 5,131,409 | $ 5,007,293 | ||||||
Net interest margin (as percent) | 3.61% | 3.70% | 3.55% | ||||||||
Net-revenue concentration (as percent) | 75.00% | 73.00% | 75.00% | ||||||||
Traditional Banking | |||||||||||
Segment information | |||||||||||
Net interest income | $ 168,076 | $ 160,398 | $ 142,823 | ||||||||
Provision for loan and lease losses | 2,444 | 3,710 | 3,923 | ||||||||
Net gain on branch divestiture | 7,829 | ||||||||||
Other noninterest income | 30,724 | 29,965 | 27,452 | ||||||||
Total noninterest income | 38,553 | 29,965 | 27,452 | ||||||||
Total noninterest expenses | 143,671 | 136,439 | 124,637 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 60,514 | 50,214 | 41,715 | ||||||||
Income tax expense (benefit) | 9,651 | 6,819 | 18,202 | ||||||||
Net income | 50,863 | 43,395 | 23,513 | ||||||||
Period-end assets | 4,684,116 | 4,647,037 | $ 4,684,116 | $ 4,647,037 | $ 4,470,932 | ||||||
Net interest margin (as percent) | 3.76% | 3.76% | 3.55% | ||||||||
Net-revenue concentration (as percent) | 67.00% | 66.00% | 66.00% | ||||||||
Warehouse Lending | |||||||||||
Segment information | |||||||||||
Net interest income | $ 15,801 | $ 15,726 | $ 17,533 | ||||||||
Provision for loan and lease losses | 622 | (142) | (150) | ||||||||
Other noninterest income | (46) | 40 | 37 | ||||||||
Total noninterest income | (46) | 40 | 37 | ||||||||
Total noninterest expenses | 3,268 | 3,367 | 3,392 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 11,865 | 12,541 | 14,328 | ||||||||
Income tax expense (benefit) | 2,670 | 2,869 | 5,421 | ||||||||
Net income | 9,195 | 9,672 | 8,907 | ||||||||
Period-end assets | 717,994 | 470,126 | $ 717,994 | $ 470,126 | $ 525,246 | ||||||
Net interest margin (as percent) | 2.42% | 3.18% | 3.53% | ||||||||
Net-revenue concentration (as percent) | 5.00% | 5.00% | 7.00% | ||||||||
Mortgage Banking | |||||||||||
Segment information | |||||||||||
Net interest income | $ 697 | $ 402 | $ 346 | ||||||||
Mortgage banking income | 9,499 | 4,825 | 4,642 | ||||||||
Other noninterest income | 213 | 550 | 279 | ||||||||
Total noninterest income | 9,712 | 5,375 | 4,921 | ||||||||
Total noninterest expenses | 6,112 | 4,356 | 4,765 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 4,297 | 1,421 | 502 | ||||||||
Income tax expense (benefit) | 902 | 298 | (526) | ||||||||
Net income | 3,395 | 1,123 | 1,028 | ||||||||
Period-end assets | 26,469 | 14,246 | $ 26,469 | $ 14,246 | $ 11,115 | ||||||
Net-revenue concentration (as percent) | 3.00% | 2.00% | 2.00% | ||||||||
Republic Processing Group | |||||||||||
Segment Disclosure information | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Segment information | |||||||||||
Net interest income | $ 51,552 | $ 49,532 | $ 37,818 | ||||||||
Provision for loan and lease losses | 22,692 | 27,800 | 23,931 | ||||||||
Net refund transfer fees | 21,158 | 20,029 | 18,500 | ||||||||
Program fees | 4,712 | 6,225 | 5,824 | ||||||||
Other noninterest income | 919 | 1,791 | 1,680 | ||||||||
Total noninterest income | 26,789 | 28,045 | 26,004 | ||||||||
Total noninterest expenses | 19,132 | 19,690 | 18,050 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 36,517 | 30,087 | 21,841 | ||||||||
Income tax expense (benefit) | 8,271 | 6,425 | 9,657 | ||||||||
Net income | 28,246 | 23,662 | 12,184 | ||||||||
Period-end assets | 191,740 | 108,995 | $ 191,740 | $ 108,995 | $ 78,069 | ||||||
Net-revenue concentration (as percent) | 25.00% | 27.00% | 25.00% | ||||||||
Tax Refund Solutions | |||||||||||
Segment information | |||||||||||
Net interest income | $ 21,626 | $ 19,203 | $ 15,197 | ||||||||
Provision for loan and lease losses | 11,249 | 10,919 | 6,535 | ||||||||
Net refund transfer fees | 21,158 | 20,029 | 18,500 | ||||||||
Program fees | 437 | 295 | 176 | ||||||||
Other noninterest income | 260 | 1,229 | 164 | ||||||||
Total noninterest income | 21,855 | 21,553 | 18,840 | ||||||||
Total noninterest expenses | 16,539 | 14,686 | 14,491 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 15,693 | 15,151 | 13,011 | ||||||||
Income tax expense (benefit) | 3,454 | 3,033 | 4,721 | ||||||||
Net income | 12,239 | 12,118 | 8,290 | ||||||||
Period-end assets | 86,849 | 20,288 | $ 86,849 | $ 20,288 | $ 12,450 | ||||||
Net-revenue concentration (as percent) | 14.00% | 14.00% | 13.00% | ||||||||
Republic Credit Solutions | |||||||||||
Segment information | |||||||||||
Net interest income | $ 29,926 | $ 30,329 | $ 22,621 | ||||||||
Provision for loan and lease losses | 11,443 | 16,881 | 17,396 | ||||||||
Program fees | 4,275 | 5,930 | 5,648 | ||||||||
Other noninterest income | 659 | 562 | 1,516 | ||||||||
Total noninterest income | 4,934 | 6,492 | 7,164 | ||||||||
Total noninterest expenses | 2,593 | 5,004 | 3,559 | ||||||||
INCOME BEFORE INCOME TAX EXPENSE | 20,824 | 14,936 | 8,830 | ||||||||
Income tax expense (benefit) | 4,817 | 3,392 | 4,936 | ||||||||
Net income | 16,007 | 11,544 | 3,894 | ||||||||
Period-end assets | $ 104,891 | $ 88,707 | $ 104,891 | $ 88,707 | $ 65,619 | ||||||
Net-revenue concentration (as percent) | 11.00% | 13.00% | 12.00% |
BRANCH DIVESTITURE - NARRATIVE
BRANCH DIVESTITURE - NARRATIVE (Details) | Nov. 15, 2019USD ($) | Jul. 31, 2019item | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Disposal Group | |||||
Period of operation of divested branches | 10 months 15 days | 12 months | 12 months | ||
Disposal Group, Disposed of by Sale | Four banking centers | |||||
Disposal Group | |||||
Number of banking centers held for sale | item | 4 | ||||
Loans, including credit cards | $ 128,000,000 | ||||
Deposits | 132,000,000 | ||||
Fixed assets | 1,300,000 | ||||
All in blended premium | $ 6.1 | ||||
Trailing day | 10 days |
SUMMARY OF QUARTERLY FINANCIA_3
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated quarterly financial data | |||||||||||
Interest income | $ 64,527 | $ 68,059 | $ 65,664 | $ 82,633 | $ 62,902 | $ 61,090 | $ 58,356 | $ 73,833 | $ 280,883 | $ 256,181 | $ 218,778 |
Interest expense | 10,132 | 12,573 | 11,718 | 10,334 | 8,626 | 8,057 | 7,272 | 6,168 | 44,757 | 30,123 | 20,258 |
NET INTEREST INCOME | 54,395 | 55,486 | 53,946 | 72,299 | 54,276 | 53,033 | 51,084 | 67,665 | 236,126 | 226,058 | 198,520 |
Provision for loan and lease losses | 914 | 3,153 | 4,460 | 17,231 | 5,104 | 4,077 | 4,932 | 17,255 | 25,758 | 31,368 | 27,704 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | 53,481 | 52,333 | 49,486 | 55,068 | 49,172 | 48,956 | 46,152 | 50,410 | 210,368 | 194,690 | 170,816 |
Noninterest income (3) | 19,655 | 12,811 | 15,125 | 27,417 | 10,119 | 11,465 | 14,296 | 27,545 | 75,008 | 63,425 | 58,414 |
Noninterest expense (4) | 40,835 | 42,411 | 43,428 | 45,509 | 38,963 | 41,212 | 40,632 | 43,045 | 172,183 | 163,852 | 150,844 |
INCOME BEFORE INCOME TAX EXPENSE | 32,301 | 22,733 | 21,183 | 36,976 | 20,328 | 19,209 | 19,816 | 34,910 | 113,193 | 94,263 | 78,386 |
Income tax expense (5) | 6,533 | 4,325 | 3,176 | 7,460 | 3,022 | 1,798 | 4,150 | 7,441 | 21,494 | 16,411 | 32,754 |
NET INCOME | $ 25,768 | $ 18,408 | $ 18,007 | $ 29,516 | $ 17,306 | $ 17,411 | $ 15,666 | $ 27,469 | $ 91,699 | $ 77,852 | $ 45,632 |
Class A Common Stock | |||||||||||
Basic earnings per share: | |||||||||||
Basic earnings per share (in dollars per share) | $ 1.23 | $ 0.88 | $ 0.86 | $ 1.42 | $ 0.83 | $ 0.84 | $ 0.75 | $ 1.32 | $ 4.41 | $ 3.76 | $ 2.21 |
Diluted earnings per share: | |||||||||||
Diluted earnings per share (in dollars per share) | 1.23 | 0.88 | 0.86 | 1.41 | 0.83 | 0.83 | 0.74 | 1.32 | 4.39 | 3.74 | 2.20 |
Dividends declared per common share: | |||||||||||
Dividend declared common stock, per share (in dollars per share) | 0.264 | 0.264 | 0.264 | 0.264 | 0.242 | 0.242 | 0.242 | 0.242 | 1.056 | 0.968 | 0.869 |
Class B Common Stock | |||||||||||
Basic earnings per share: | |||||||||||
Basic earnings per share (in dollars per share) | 1.13 | 0.80 | 0.79 | 1.29 | 0.76 | 0.76 | 0.68 | 1.21 | 4.01 | 3.41 | 2.01 |
Diluted earnings per share: | |||||||||||
Diluted earnings per share (in dollars per share) | 1.12 | 0.80 | 0.78 | 1.28 | 0.75 | 0.76 | 0.68 | 1.20 | 3.99 | 3.40 | 2 |
Dividends declared per common share: | |||||||||||
Dividend declared common stock, per share (in dollars per share) | $ 0.240 | $ 0.240 | $ 0.240 | $ 0.240 | $ 0.220 | $ 0.220 | $ 0.220 | $ 0.220 | $ 0.96 | $ 0.88 | $ 0.79 |
SUMMARY OF QUARTERLY FINANCIA_4
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) - ADDITIONAL DISCLOSURES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | |
Consolidated quarterly financial data | |||||
Release in reserves associated with divested loans in branch divestiture | $ 900,000 | ||||
Net gain on branch divestiture | 7,900,000 | $ 7,829,000 | |||
Reversal of incentive compensation accruals based on revised payout estimates | $ 1,200,000 | $ 2,800,000 | |||
Tax Refund Solutions | Easy Advances | |||||
Consolidated quarterly financial data | |||||
Provision expense for EAs | $ 13,400,000 | $ 13,200,000 |