[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2019. | |
[ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ | |
Commission file number 001-15373 |
Large accelerated filer [X] | Accelerated filer [ ] | |||
Non-accelerated filer [ ] | Smaller reporting company [ ] | |||
Emerging growth company [ ] |
Page | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. Financial Statements | ||
Condensed Consolidated Balance Sheets (Unaudited) | ||
Condensed Consolidated Statements of Operations (Unaudited) | ||
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) | ||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
Notes to Condensed Consolidated Financial Statements (Unaudited) | ||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | ||
Item 4. Controls and Procedures | ||
PART II - OTHER INFORMATION | ||
Item 1. Legal Proceedings | ||
Item 1A. Risk Factors | ||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 3. Defaults Upon Senior Securities | ||
Item 4. Mine Safety Disclosures | ||
Item 5. Other Information | ||
Item 6. Exhibits | ||
Signatures | ||
(in thousands, except share and per share data) | March 31, 2019 | December 31, 2018 | |||||
Assets | |||||||
Cash and due from banks | $ | 85,578 | $ | 91,511 | |||
Federal funds sold | 1,934 | 1,714 | |||||
Interest-earning deposits (including $6,665 and $1,305 pledged as collateral, respectively) | 133,970 | 103,327 | |||||
Total cash and cash equivalents | 221,482 | 196,552 | |||||
Interest-earning deposits greater than 90 days | 3,485 | 3,185 | |||||
Securities available for sale | 1,099,185 | 721,369 | |||||
Securities held to maturity, at cost | 64,368 | 65,679 | |||||
Loans held for sale | 654 | 392 | |||||
Loans | 5,017,077 | 4,350,001 | |||||
Less: Allowance for loan losses | 43,095 | 43,476 | |||||
Loans, net | 4,973,982 | 4,306,525 | |||||
Other real estate | 6,804 | 469 | |||||
Other investments, at cost | 34,860 | 26,654 | |||||
Fixed assets, net | 60,301 | 32,109 | |||||
Operating lease right-of-use asset | 14,858 | — | |||||
Accrued interest receivable | 26,276 | 16,069 | |||||
State tax credits held for sale, at cost | 37,215 | 37,587 | |||||
Goodwill | 207,632 | 117,345 | |||||
Intangible assets, net | 31,048 | 8,553 | |||||
Other assets | 150,607 | 113,174 | |||||
Total assets | $ | 6,932,757 | $ | 5,645,662 | |||
Liabilities and Shareholders' Equity | |||||||
Demand deposits | $ | 1,186,508 | $ | 1,100,718 | |||
Interest-bearing transaction accounts | 1,389,826 | 1,037,684 | |||||
Money market accounts | 1,580,291 | 1,565,729 | |||||
Savings | 575,740 | 199,425 | |||||
Certificates of deposit: | |||||||
Brokered | 180,788 | 198,981 | |||||
Other | 623,960 | 485,448 | |||||
Total deposits | 5,537,113 | 4,587,985 | |||||
Subordinated debentures and notes (net of debt issuance cost of $972 and $1,005, respectively) | 140,668 | 118,156 | |||||
Federal Home Loan Bank advances | 180,466 | 70,000 | |||||
Other borrowings | 172,171 | 221,450 | |||||
Notes payable | 40,000 | 2,000 | |||||
Operating lease liability | 15,462 | — | |||||
Accrued interest payable | 3,231 | 1,977 | |||||
Other liabilities | 45,811 | 40,290 | |||||
Total liabilities | 6,134,922 | 5,041,858 | |||||
Shareholders' equity: | |||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 0 shares issued and outstanding | — | — | |||||
Common stock, $0.01 par value; 30,000,000 shares authorized; 28,004,905 and 23,938,994 shares issued, respectively | 280 | 239 | |||||
Treasury stock, at cost; 1,127,105 shares | (42,655 | ) | (42,655 | ) | |||
Additional paid in capital | 521,761 | 350,936 | |||||
Retained earnings | 316,959 | 304,566 | |||||
Accumulated other comprehensive income (loss) | 1,490 | (9,282 | ) | ||||
Total shareholders' equity | 797,835 | 603,804 | |||||
Total liabilities and shareholders' equity | $ | 6,932,757 | $ | 5,645,662 |
Three months ended March 31, | |||||||
(in thousands, except per share data) | 2019 | 2018 | |||||
Interest income: | |||||||
Interest and fees on loans | $ | 61,025 | $ | 50,450 | |||
Interest on debt securities: | |||||||
Taxable | 5,475 | 3,987 | |||||
Nontaxable | 447 | 282 | |||||
Interest on interest-bearing deposits | 447 | 240 | |||||
Dividends on equity securities | 223 | 205 | |||||
Total interest income | 67,617 | 55,164 | |||||
Interest expense: | |||||||
Interest-bearing transaction accounts | 1,790 | 806 | |||||
Money market accounts | 6,515 | 3,353 | |||||
Savings accounts | 183 | 125 | |||||
Certificates of deposit | 3,332 | 1,899 | |||||
Subordinated debentures and notes | 1,648 | 1,368 | |||||
Federal Home Loan Bank advances | 1,398 | 1,258 | |||||
Notes payable and other borrowings | 408 | 184 | |||||
Total interest expense | 15,274 | 8,993 | |||||
Net interest income | 52,343 | 46,171 | |||||
Provision for loan losses | 1,476 | 1,871 | |||||
Net interest income after provision for loan losses | 50,867 | 44,300 | |||||
Noninterest income: | |||||||
Service charges on deposit accounts | 2,935 | 2,851 | |||||
Wealth management revenue | 1,992 | 2,114 | |||||
Card services revenue | 1,790 | 1,516 | |||||
Gain on sale of other real estate | 66 | — | |||||
Tax credit activity, net | 158 | 252 | |||||
Miscellaneous income | 2,289 | 2,809 | |||||
Total noninterest income | 9,230 | 9,542 | |||||
Noninterest expense: | |||||||
Employee compensation and benefits | 19,352 | 16,491 | |||||
Occupancy | 2,637 | 2,406 | |||||
Data processing | 1,906 | 1,467 | |||||
Professional fees | 746 | 849 | |||||
FDIC and other insurance | 848 | 917 | |||||
Loan legal and other real estate expense | 482 | 299 | |||||
Merger related expenses | 7,270 | — | |||||
Other | 6,597 | 6,714 | |||||
Total noninterest expense | 39,838 | 29,143 | |||||
Income before income tax expense | 20,259 | 24,699 | |||||
Income tax expense | 4,103 | 3,778 | |||||
Net income | $ | 16,156 | $ | 20,921 | |||
Earnings per common share | |||||||
Basic | $ | 0.68 | $ | 0.91 | |||
Diluted | 0.67 | 0.90 |
Three months ended March 31, | |||||||
(in thousands) | 2019 | 2018 | |||||
Net income | $ | 16,156 | $ | 20,921 | |||
Other comprehensive income (loss), net of tax: | |||||||
Unrealized gains (losses) on investment securities arising during the period, net of income tax expense (benefit) for three months of $3,774 and $(2,265), respectively | 11,504 | (6,904 | ) | ||||
Less: Reclassification adjustment for realized gains (losses) on sale of securities available for sale included in net income, net of income tax expense (benefit) for three months of ($72) and $2, respectively | 220 | (7 | ) | ||||
Unrealized loss on cash flow hedges arising during the period, net of income tax benefit of $312 | (952 | ) | — | ||||
Total other comprehensive income (loss) | 10,772 | (6,911 | ) | ||||
Total comprehensive income | $ | 26,928 | $ | 14,010 |
(in thousands, except per share data) | Common Stock | Treasury Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total shareholders’ equity | |||||||||||||||||
Balance at December 31, 2018 | $ | 239 | $ | (42,655 | ) | $ | 350,936 | $ | 304,566 | $ | (9,282 | ) | $ | 603,804 | |||||||||
Net income | — | — | — | 16,156 | — | 16,156 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 10,772 | 10,772 | |||||||||||||||||
Total comprehensive income | — | — | — | 16,156 | 10,772 | 26,928 | |||||||||||||||||
Cash dividends paid on common shares, $0.14 per share | — | — | — | (3,763 | ) | — | (3,763 | ) | |||||||||||||||
Issuance under equity compensation plans, 75,089 shares, net | 1 | — | (1,941 | ) | — | — | (1,940 | ) | |||||||||||||||
Share-based compensation | — | — | 921 | — | — | 921 | |||||||||||||||||
Shares issued in connection with acquisition of Trinity Capital Corporation, 3,990,822 shares | 40 | — | 171,845 | — | — | 171,885 | |||||||||||||||||
Balance at March 31, 2019 | $ | 280 | $ | (42,655 | ) | $ | 521,761 | $ | 316,959 | $ | 1,490 | $ | 797,835 | ||||||||||
(in thousands, except per share data) | Common Stock | Treasury Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total shareholders’ equity | |||||||||||||||||
Balance at December 31, 2017 | $ | 238 | $ | (23,268 | ) | $ | 350,061 | $ | 225,360 | $ | (3,818 | ) | $ | 548,573 | |||||||||
Net income | — | — | — | 20,921 | — | 20,921 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (6,911 | ) | (6,911 | ) | |||||||||||||||
Total comprehensive income (loss) | — | — | — | 20,921 | (6,911 | ) | 14,010 | ||||||||||||||||
Cash dividends paid on common shares, $0.11 per share | — | — | — | (2,542 | ) | — | (2,542 | ) | |||||||||||||||
Repurchase of common shares | — | (3,058 | ) | — | — | — | (3,058 | ) | |||||||||||||||
Issuance under equity compensation plans, 86,598 shares, net | 1 | — | (2,687 | ) | — | — | (2,686 | ) | |||||||||||||||
Share-based compensation | — | — | 718 | — | — | 718 | |||||||||||||||||
Reclassification adjustment for change in accounting policies | — | — | — | 834 | (834 | ) | — | ||||||||||||||||
Balance at March 31, 2018 | $ | 239 | $ | (26,326 | ) | $ | 348,092 | $ | 244,573 | $ | (11,563 | ) | $ | 555,015 |
Three months ended March 31, | |||||||
(in thousands, except share data) | 2019 | 2018 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 16,156 | $ | 20,921 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 1,162 | 849 | |||||
Provision for loan losses | 1,476 | 1,870 | |||||
Deferred income taxes | 2,727 | 2,290 | |||||
Net amortization of debt securities | 407 | 533 | |||||
Amortization of intangible assets | 838 | 656 | |||||
Loss (gain) on sale of investment securities | 292 | (9 | ) | ||||
Mortgage loans originated for sale | (4,087 | ) | (12,389 | ) | |||
Proceeds from mortgage loans sold | 3,825 | 13,917 | |||||
Gain on sale of other real estate | (66 | ) | — | ||||
Gain on state tax credits, net | (158 | ) | (252 | ) | |||
Share-based compensation | 921 | 718 | |||||
Net accretion of loan discount | (596 | ) | (467 | ) | |||
Changes in: | |||||||
Accrued interest receivable | (6,210 | ) | (3,209 | ) | |||
Accrued interest payable | 884 | 315 | |||||
Other assets | (104 | ) | (888 | ) | |||
Other liabilities | (1,755 | ) | (2,640 | ) | |||
Net cash provided by operating activities | 15,712 | 22,215 | |||||
Cash flows from investing activities: | |||||||
Acquisition cash purchase price, net of cash and cash equivalents acquired | (23,376 | ) | — | ||||
Net decrease (increase) in loans | 13,855 | (93,125 | ) | ||||
Proceeds from the sale of securities, available for sale | 259,420 | 1,451 | |||||
Proceeds from the paydown or maturity of securities, available for sale | 27,684 | 19,683 | |||||
Proceeds from the paydown or maturity of securities, held to maturity | 1,269 | 1,639 | |||||
Proceeds from the redemption of other investments | 11,744 | 13,514 | |||||
Proceeds from the sale of state tax credits held for sale | 2,381 | 1,356 | |||||
Proceeds from the sale of other real estate | 66 | — | |||||
Payments for the purchase/origination of: | |||||||
Available for sale debt securities | (221,711 | ) | (40,313 | ) | |||
Other investments | (14,977 | ) | (17,864 | ) | |||
State tax credits held for sale | (1,852 | ) | — | ||||
Fixed assets, net | (1,268 | ) | (370 | ) | |||
Net cash provided by (used in) investing activities | 53,235 | (114,029 | ) | ||||
Cash flows from financing activities: | |||||||
Net decrease in noninterest-bearing deposit accounts | (83,290 | ) | (22,202 | ) | |||
Net (increase) decrease in interest-bearing deposit accounts | (48,770 | ) | 147,165 | ||||
Proceeds from Federal Home Loan Bank advances | 364,525 | 484,500 | |||||
Repayments of Federal Home Loan Bank advances | (259,500 | ) | (432,500 | ) | |||
Proceeds from notes payable | 40,000 | — | |||||
Repayments of notes payable | (2,000 | ) | — | ||||
Net decrease in other borrowings | (49,279 | ) | (87,085 | ) | |||
Cash dividends paid on common stock | (3,763 | ) | (2,542 | ) | |||
Payments for the repurchase of common stock | — | (3,058 | ) | ||||
Payments for the issuance of equity instruments, net | (1,940 | ) | (2,686 | ) | |||
Net cash (used in) provided by financing activities | (44,017 | ) | 81,592 | ||||
Net increase (decrease) in cash and cash equivalents | 24,930 | (10,222 | ) | ||||
Cash and cash equivalents, beginning of period | 196,552 | 153,323 | |||||
Cash and cash equivalents, end of period | $ | 221,482 | $ | 143,101 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 14,020 | $ | 8,677 | |||
Income taxes | — | 685 | |||||
Noncash transactions: | |||||||
Transfer to other real estate owned in settlement of loans | $ | 1,372 | $ | — | |||
Common shares issued in connection with acquisition | 171,885 | — |
• | Service charges on deposit accounts - represents fees generated from a variety of deposit products and services provided to customers under a day-to-day contract. These fees are recognized on a daily or monthly basis. |
• | Wealth management revenue - represents monthly fees earned from directing, holding, and managing customers’ assets. Revenue is recognized over regular intervals, either monthly or quarterly. |
• | Card services revenue - represents revenue earned from merchant, debit and credit cards as incurred and includes a contra revenue account for rebates. |
• | Gain on sale of other real estate - represents income recognized at delivery of control of a property at the time of a real estate closing. |
(in thousands) | As Recorded by TCC | Adjustments | As Recorded by EFSC | ||||||||
Assets acquired: | |||||||||||
Cash and cash equivalents | $ | 13,899 | $ | — | $ | 13,899 | |||||
Interest-earning deposits greater than 90 days | 100 | — | 100 | ||||||||
Securities | 428,715 | (414 | ) | (a) | 428,301 | ||||||
Loans, net | 705,057 | (21,493 | ) | (b) | 683,564 | ||||||
Other real estate | 5,284 | (321 | ) | (c) | 4,963 | ||||||
Other investments | 6,673 | — | 6,673 | ||||||||
Fixed assets, net | 27,586 | 500 | (d) | 28,086 | |||||||
Accrued interest receivable | 3,997 | — | 3,997 | ||||||||
Intangible assets | — | 23,333 | (e) | 23,333 | |||||||
Deferred tax assets | 10,708 | 2 | (f) | 10,710 | |||||||
Other assets | 35,045 | (2,947 | ) | (g) | 32,098 | ||||||
Total assets acquired | $ | 1,237,064 | $ | (1,340 | ) | $ | 1,235,724 | ||||
Liabilities assumed: | |||||||||||
Deposits | $ | 1,081,151 | $ | 36 | (h) | $ | 1,081,187 | ||||
Subordinated debentures | 26,806 | (4,325 | ) | (i) | 22,481 | ||||||
Federal Home Loan Bank advances | 6,800 | 171 | (j) | 6,971 | |||||||
Accrued interest payable | 370 | — | 370 | ||||||||
Other liabilities | 5,842 | — | 5,842 | ||||||||
Total liabilities assumed | $ | 1,120,969 | $ | (4,118 | ) | $ | 1,116,851 | ||||
Net assets acquired | $ | 116,095 | $ | 2,778 | $ | 118,873 | |||||
Consideration paid: | |||||||||||
Cash | $ | 37,276 | |||||||||
Common stock | 171,884 | ||||||||||
Total consideration paid | $ | 209,160 | |||||||||
Goodwill | $ | 90,287 |
(a) | Fair value adjustments of the securities portfolio as of the acquisition date. |
(b) | Fair value adjustments based on the Company’s evaluation of the acquired loan portfolio, write-off of net deferred loan costs and elimination of the allowance for loan losses recorded by Trinity. |
(c) | Fair value adjustment based on the Company’s evaluation of the acquired OREO portfolio. |
(d) | Fair value adjustments based on the Company’s evaluation of the acquired premises and equipment. |
(e) | Recording of the core deposit intangible asset on the acquired core deposit accounts. Amount to be amortized using a sum of years digits method over a useful life of 10 years. |
(f) | Adjustment for deferred taxes at the acquisition date. |
(g) | Fair value adjustment of other assets at the acquisition date. |
(h) | Fair value adjustment to time deposits. |
(i) | Fair value adjustment to the trust preferred securities at the acquisition date. |
(j) | Fair value adjustment to the Federal Home Loan Bank borrowings. |
Pro Forma | |||||||
Three months ended March 31, | |||||||
(in thousands, except per share data) | 2019 | 2018 | |||||
Total revenues (net interest income plus noninterest income) | $ | 71,983 | $ | 68,874 | |||
Net income | 23,100 | 15,009 | |||||
Diluted earnings per common share | 0.82 | 0.55 |
Three months ended March 31, | |||||||
(in thousands, except per share data) | 2019 | 2018 | |||||
Net income as reported | $ | 16,156 | $ | 20,921 | |||
Weighted average common shares outstanding | 23,927 | 23,115 | |||||
Additional dilutive common stock equivalents | 156 | 172 | |||||
Weighted average diluted common shares outstanding | 24,083 | 23,287 | |||||
Basic earnings per common share: | $ | 0.68 | $ | 0.91 | |||
Diluted earnings per common share: | 0.67 | 0.90 |
March 31, 2019 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available for sale securities: | |||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 54,128 | $ | — | $ | (347 | ) | $ | 53,781 | ||||||
Obligations of states and political subdivisions | 114,770 | 2,218 | (3 | ) | 116,985 | ||||||||||
Agency mortgage-backed securities | 895,899 | 6,461 | (4,816 | ) | 897,544 | ||||||||||
U.S. Treasury bills | 9,964 | 113 | — | 10,077 | |||||||||||
Corporate debt securities | 20,768 | 30 | — | 20,798 | |||||||||||
Total securities available for sale | $ | 1,095,529 | $ | 8,822 | $ | (5,166 | ) | $ | 1,099,185 | ||||||
Held to maturity securities: | |||||||||||||||
Obligations of states and political subdivisions | $ | 12,490 | $ | 91 | $ | (20 | ) | $ | 12,561 | ||||||
Agency mortgage-backed securities | 51,878 | 11 | (303 | ) | 51,586 | ||||||||||
Total securities held to maturity | $ | 64,368 | $ | 102 | $ | (323 | ) | $ | 64,147 |
December 31, 2018 | |||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available for sale securities: | |||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 99,926 | $ | — | $ | (1,428 | ) | $ | 98,498 | ||||||
Obligations of states and political subdivisions | 26,566 | 327 | (83 | ) | 26,810 | ||||||||||
Agency mortgage-backed securities | 596,825 | 1,160 | (11,849 | ) | 586,136 | ||||||||||
U.S. Treasury Bills | $ | 9,962 | $ | — | $ | (37 | ) | $ | 9,925 | ||||||
Total securities available for sale | $ | 733,279 | $ | 1,487 | $ | (13,397 | ) | $ | 721,369 | ||||||
Held to maturity securities: | |||||||||||||||
Obligations of states and political subdivisions | $ | 12,506 | $ | 16 | $ | (114 | ) | $ | 12,408 | ||||||
Agency mortgage-backed securities | 53,173 | — | (1,647 | ) | 51,526 | ||||||||||
Total securities held to maturity | $ | 65,679 | $ | 16 | $ | (1,761 | ) | $ | 63,934 |
Available for sale | Held to maturity | ||||||||||||||
(in thousands) | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||
Due in one year or less | $ | 1,876 | $ | 1,888 | $ | — | $ | — | |||||||
Due after one year through five years | 67,451 | 67,377 | 2,534 | 2,546 | |||||||||||
Due after five years through ten years | 31,819 | 32,135 | 9,957 | 10,015 | |||||||||||
Due after ten years | 98,484 | 100,241 | — | — | |||||||||||
Agency mortgage-backed securities | 895,899 | 897,544 | 51,877 | 51,586 | |||||||||||
$ | 1,095,529 | $ | 1,099,185 | $ | 64,368 | $ | 64,147 |
March 31, 2019 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 19,854 | $ | 95 | $ | 29,796 | $ | 252 | $ | 49,650 | $ | 347 | |||||||||||
Obligations of states and political subdivisions | 680 | 10 | 2,949 | 13 | 3,629 | 23 | |||||||||||||||||
Agency mortgage-backed securities | 47,506 | 685 | 326,319 | 4,434 | 373,825 | 5,119 | |||||||||||||||||
$ | 68,040 | $ | 790 | $ | 359,064 | $ | 4,699 | $ | 427,104 | $ | 5,489 | ||||||||||||
December 31, 2018 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
(in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
Obligations of U.S. Government-sponsored enterprises | $ | 19,622 | $ | 322 | $ | 78,876 | $ | 1,106 | $ | 98,498 | $ | 1,428 | |||||||||||
Obligations of states and political subdivisions | 3,102 | 15 | 14,156 | 182 | 17,258 | 197 | |||||||||||||||||
Agency mortgage-backed securities | 87,357 | 2,211 | 389,770 | 11,285 | 477,127 | 13,496 | |||||||||||||||||
U.S. Treasury bills | — | — | 9,925 | 37 | 9,925 | 37 | |||||||||||||||||
$ | 110,081 | $ | 2,548 | $ | 492,727 | $ | 12,610 | $ | 602,808 | $ | 15,158 |
(in thousands) | March 31, 2019 | December 31, 2018 | |||||
Loans accounted for at amortized cost | $ | 4,894,574 | $ | 4,303,600 | |||
Loans accounted for as PCI | 122,503 | 46,401 | |||||
Total loans | $ | 5,017,077 | $ | 4,350,001 |
(in thousands) | March 31, 2019 | December 31, 2018 | |||||
Allowance for loans accounted for at amortized cost | $ | 41,945 | $ | 42,295 | |||
Allowance for loans accounted for as PCI | 1,150 | 1,181 | |||||
Total allowance for loan losses | $ | 43,095 | $ | 43,476 |
(in thousands) | March 31, 2019 | December 31, 2018 | |||||
Commercial and industrial | $ | 2,209,437 | $ | 2,121,008 | |||
Real estate: | |||||||
Commercial - investor owned | 1,144,868 | 843,728 | |||||
Commercial - owner occupied | 647,198 | 604,498 | |||||
Construction and land development | 358,884 | 330,097 | |||||
Residential | 416,731 | 298,944 | |||||
Total real estate loans | 2,567,681 | 2,077,267 | |||||
Consumer and other | 119,368 | 107,351 | |||||
Loans, before unearned loan fees | 4,896,486 | 4,305,626 | |||||
Unearned loan fees, net | (1,912 | ) | (2,026 | ) | |||
Loans, including unearned loan fees | $ | 4,894,574 | $ | 4,303,600 |
(in thousands) | Commercial and industrial | CRE - investor owned | CRE - owner occupied | Construction and land development | Residential real estate | Consumer and other | Total | ||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | 29,039 | $ | 4,683 | $ | 4,239 | $ | 1,987 | $ | 1,616 | $ | 731 | $ | 42,295 | |||||||||||||
Provision (provision reversal) for loan losses | 1,445 | 769 | (431 | ) | (252 | ) | (288 | ) | 233 | 1,476 | |||||||||||||||||
Losses charged off | (1,853 | ) | (120 | ) | (36 | ) | (45 | ) | (67 | ) | (129 | ) | (2,250 | ) | |||||||||||||
Recoveries | 29 | 7 | 2 | 9 | 364 | 13 | 424 | ||||||||||||||||||||
Balance at March 31, 2019 | $ | 28,660 | $ | 5,339 | $ | 3,774 | $ | 1,699 | $ | 1,625 | $ | 848 | $ | 41,945 |
(in thousands) | Commercial and industrial | CRE - investor owned | CRE - owner occupied | Construction and land development | Residential real estate | Consumer and other | Total | ||||||||||||||||||||
Balance March 31, 2019 | |||||||||||||||||||||||||||
Allowance for loan losses - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 2,199 | $ | 596 | $ | 119 | $ | — | $ | — | $ | — | $ | 2,914 | |||||||||||||
Collectively evaluated for impairment | 26,461 | 4,743 | 3,655 | 1,699 | 1,625 | 848 | 39,031 | ||||||||||||||||||||
Total | $ | 28,660 | $ | 5,339 | $ | 3,774 | $ | 1,699 | $ | 1,625 | $ | 848 | $ | 41,945 | |||||||||||||
Loans - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 7,205 | $ | 1,527 | $ | 2,296 | $ | — | $ | 408 | $ | — | $ | 11,436 | |||||||||||||
Collectively evaluated for impairment | 2,202,232 | 1,143,341 | 644,902 | 358,884 | 416,323 | 117,456 | 4,883,138 | ||||||||||||||||||||
Total | $ | 2,209,437 | $ | 1,144,868 | $ | 647,198 | $ | 358,884 | $ | 416,731 | $ | 117,456 | $ | 4,894,574 | |||||||||||||
Balance December 31, 2018 | |||||||||||||||||||||||||||
Allowance for loan losses - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 4,266 | $ | — | $ | 109 | $ | — | $ | 52 | $ | 26 | $ | 4,453 | |||||||||||||
Collectively evaluated for impairment | 24,773 | 4,683 | 4,130 | 1,987 | 1,564 | 705 | 37,842 | ||||||||||||||||||||
Total | $ | 29,039 | $ | 4,683 | $ | 4,239 | $ | 1,987 | $ | 1,616 | $ | 731 | $ | 42,295 | |||||||||||||
Loans - Ending balance: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 12,950 | $ | 398 | $ | 2,135 | $ | — | $ | 2,277 | $ | 311 | $ | 18,071 | |||||||||||||
Collectively evaluated for impairment | 2,108,058 | 843,330 | 602,363 | 330,097 | 296,667 | 105,014 | 4,285,529 | ||||||||||||||||||||
Total | $ | 2,121,008 | $ | 843,728 | $ | 604,498 | $ | 330,097 | $ | 298,944 | $ | 105,325 | $ | 4,303,600 |
March 31, 2019 | |||||||||||||||||||||||
(in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | Average Recorded Investment | |||||||||||||||||
Commercial and industrial | $ | 9,515 | $ | 2,168 | $ | 5,037 | $ | 7,205 | $ | 2,199 | $ | 7,855 | |||||||||||
Real estate: | |||||||||||||||||||||||
Commercial - investor owned | 1,555 | 271 | 1,256 | 1,527 | 596 | 1,527 | |||||||||||||||||
Commercial - owner occupied | 484 | 467 | — | 467 | — | 471 | |||||||||||||||||
Construction and land development | — | — | — | — | — | — | |||||||||||||||||
Residential | 409 | 408 | — | 408 | — | 408 | |||||||||||||||||
Consumer and other | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 11,963 | $ | 3,314 | $ | 6,293 | $ | 9,607 | $ | 2,795 | $ | 10,261 |
December 31, 2018 | |||||||||||||||||||||||
(in thousands) | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | Average Recorded Investment | |||||||||||||||||
Commercial and industrial | $ | 21,893 | $ | 3,294 | $ | 9,656 | $ | 12,950 | $ | 4,266 | $ | 13,827 | |||||||||||
Real estate: | |||||||||||||||||||||||
Commercial - investor owned | 553 | 398 | — | 398 | — | 277 | |||||||||||||||||
Commercial - owner occupied | 847 | 472 | 336 | 808 | 109 | 691 | |||||||||||||||||
Construction and land development | — | — | — | — | — | — | |||||||||||||||||
Residential | 2,425 | 1,659 | 618 | 2,277 | 52 | 778 | |||||||||||||||||
Consumer and other | 329 | — | 312 | 312 | 26 | — | |||||||||||||||||
Total | $ | 26,047 | $ | 5,823 | $ | 10,922 | $ | 16,745 | $ | 4,453 | $ | 15,573 |
Three months ended March 31, | |||||||
(in thousands) | 2019 | 2018 | |||||
Total interest income that would have been recognized under original terms | $ | 436 | $ | 534 | |||
Total cash received and recognized as interest income on non-accrual loans | 62 | 11 | |||||
Total interest income recognized on accruing, impaired loans | 3 | 11 |
March 31, 2019 | |||||||||||
(in thousands) | Non-accrual | Restructured, not on non-accrual | Total | ||||||||
Commercial and industrial | $ | 7,094 | $ | 111 | $ | 7,205 | |||||
Real estate: | |||||||||||
Commercial - investor owned | 1,527 | — | 1,527 | ||||||||
Commercial - owner occupied | 467 | — | 467 | ||||||||
Construction and land development | — | — | — | ||||||||
Residential | 328 | 80 | 408 | ||||||||
Consumer and other | — | — | — | ||||||||
Total | $ | 9,416 | $ | 191 | $ | 9,607 |
December 31, 2018 | |||||||||||
(in thousands) | Non-accrual | Restructured, not on non-accrual | Total | ||||||||
Commercial and industrial | $ | 12,805 | $ | 145 | $ | 12,950 | |||||
Real estate: | |||||||||||
Commercial - investor owned | 398 | — | 398 | ||||||||
Commercial - owner occupied | 808 | — | 808 | ||||||||
Construction and land development | — | — | — | ||||||||
Residential | 2,197 | 80 | 2,277 | ||||||||
Consumer and other | 312 | — | 312 | ||||||||
Total | $ | 16,520 | $ | 225 | $ | 16,745 |
March 31, 2019 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial and industrial | $ | 22,062 | $ | 5,816 | $ | 27,878 | $ | 2,181,559 | $ | 2,209,437 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | — | 1,527 | 1,527 | 1,143,341 | 1,144,868 | ||||||||||||||
Commercial - owner occupied | 708 | 229 | 937 | 646,261 | 647,198 | ||||||||||||||
Construction and land development | 98 | — | 98 | 358,786 | 358,884 | ||||||||||||||
Residential | 4,945 | 328 | 5,273 | 411,458 | 416,731 | ||||||||||||||
Consumer and other | 69 | — | 69 | 117,387 | 117,456 | ||||||||||||||
Total | $ | 27,882 | $ | 7,900 | $ | 35,782 | $ | 4,858,792 | $ | 4,894,574 |
December 31, 2018 | |||||||||||||||||||
(in thousands) | 30-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total | ||||||||||||||
Commercial and industrial | $ | 66 | $ | 10,257 | $ | 10,323 | $ | 2,110,685 | $ | 2,121,008 | |||||||||
Real estate: | |||||||||||||||||||
Commercial - investor owned | 529 | 127 | 656 | 843,072 | 843,728 | ||||||||||||||
Commercial - owner occupied | 292 | 565 | 857 | 603,641 | 604,498 | ||||||||||||||
Construction and land development | 6 | — | 6 | 330,091 | 330,097 | ||||||||||||||
Residential | 709 | 897 | 1,606 | 297,338 | 298,944 | ||||||||||||||
Consumer and other | — | 312 | 312 | 105,013 | 105,325 | ||||||||||||||
Total | $ | 1,602 | $ | 12,158 | $ | 13,760 | $ | 4,289,840 | $ | 4,303,600 |
• | Grades 1, 2, and 3 – Includes loans to borrowers with a continuous record of strong earnings, sound balance sheet condition and capitalization, ample liquidity with solid cash flow, and whose management team has experience and depth within their industry. |
• | Grade 4 – Includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow. |
• | Grade 5 – Includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow. |
• | Grade 6 – Includes loans to borrowers where an adverse change or perceived weakness has occurred, but may be correctable in the near future. Alternatively, this rating category may also include circumstances where the |
• | Grade 7 – Watch credits are borrowers that have experienced financial setback of a nature that is not determined to be severe or influence ‘ongoing concern’ expectations. Although possible, no loss is anticipated, due to strong collateral and/or guarantor support. |
• | Grade 8 – Substandard credits include those borrowers characterized by significant losses and sustained downward trends in balance sheet condition, liquidity, and cash flow. Repayment reliance may have shifted to secondary sources. Collateral exposure may exist and additional reserves may be warranted. |
• | Grade 9 – Doubtful credits include borrowers that may show deteriorating trends that are unlikely to be corrected. Collateral values may appear insufficient for full recovery, therefore requiring a partial charge-off, or debt renegotiation with the borrower. The borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on non-accrual. |
March 31, 2019 | |||||||||||||||
(in thousands) | Pass (1-6) | Watch (7) | Classified (8 & 9) | Total | |||||||||||
Commercial and industrial | $ | 1,991,293 | $ | 157,408 | $ | 60,736 | $ | 2,209,437 | |||||||
Real estate: | |||||||||||||||
Commercial - investor owned | 1,124,030 | 17,088 | 3,750 | 1,144,868 | |||||||||||
Commercial - owner occupied | 608,773 | 36,052 | 2,373 | 647,198 | |||||||||||
Construction and land development | 354,835 | 3,984 | 65 | 358,884 | |||||||||||
Residential | 409,032 | 1,996 | 5,703 | 416,731 | |||||||||||
Consumer and other | 117,451 | 5 | — | 117,456 | |||||||||||
Total | $ | 4,605,414 | $ | 216,533 | $ | 72,627 | $ | 4,894,574 |
December 31, 2018 | |||||||||||||||
(in thousands) | Pass (1-6) | Watch (7) | Classified (8 & 9) |