x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 80-0091851 | |
(State or Other Jurisdiction of | (IRS Employer ID No.) | |
Incorporation or Organization) | ||
400 Rella Boulevard, Montebello, New York | 10901 | |
(Address of Principal Executive Office) | (Zip Code) |
Large Accelerated Filer | x | Accelerated Filer | o | |||
Non-Accelerated Filer | o | Smaller Reporting Company | o |
Classes of Common Stock | Shares Outstanding as of August 4, 2016 | |
$0.01 per share | 130,655,998 |
PART I. FINANCIAL INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
ASSETS: | |||||||
Cash and due from banks | $ | 258,326 | $ | 229,513 | |||
Securities: | |||||||
Available for sale, at fair value | 1,613,013 | 1,921,032 | |||||
Held to maturity, at amortized cost (fair value of $1,413,618 and $734,079 at June 30, 2016 and December 31, 2015, respectively) | 1,367,046 | 722,791 | |||||
Total securities | 2,980,059 | 2,643,823 | |||||
Loans held for sale | 57,249 | 34,110 | |||||
Portfolio loans | 8,594,295 | 7,859,360 | |||||
Allowance for loan losses | (55,865 | ) | (50,145 | ) | |||
Portfolio loans, net | 8,538,430 | 7,809,215 | |||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock, at cost | 102,855 | 116,758 | |||||
Accrued interest receivable | 35,106 | 31,531 | |||||
Premises and equipment, net | 60,797 | 63,362 | |||||
Goodwill | 696,600 | 670,699 | |||||
Other intangible assets, net | 72,525 | 77,367 | |||||
Bank owned life insurance | 196,665 | 196,288 | |||||
Other real estate owned | 16,590 | 14,614 | |||||
Other assets | 50,046 | 68,672 | |||||
Total assets | $ | 13,065,248 | $ | 11,955,952 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
LIABILITIES: | |||||||
Deposits | $ | 9,785,556 | $ | 8,580,007 | |||
FHLB borrowings | 1,074,492 | 1,409,885 | |||||
Other borrowings (repurchase agreements) | 28,202 | 16,566 | |||||
Senior notes | 99,099 | 98,893 | |||||
Subordinated notes | 108,161 | — | |||||
Mortgage escrow funds | 14,283 | 13,778 | |||||
Other liabilities | 219,461 | 171,750 | |||||
Total liabilities | 11,329,254 | 10,290,879 | |||||
Commitments and Contingent liabilities (See Note 16. Commitments and Contingencies) | — | — | |||||
STOCKHOLDERS’ EQUITY: | |||||||
Preferred stock (par value $0.01 per share; 10,000,000 shares authorized; none issued or outstanding) | — | — | |||||
Common stock (par value $0.01 per share; 190,000,000 shares authorized; 136,673,149 shares issued at June 30, 2016 and December 31, 2015; 130,620,463 and 130,006,926 shares outstanding at June 30, 2016 and December 31, 2015, respectively) | 1,367 | 1,367 | |||||
Additional paid-in capital | 1,503,027 | 1,506,612 | |||||
Treasury stock, at cost (6,052,686 shares at June 30, 2016 and 6,666,223 at December 31, 2015) | (69,355 | ) | (76,190 | ) | |||
Retained earnings | 290,025 | 245,408 | |||||
Accumulated other comprehensive income (loss), net of tax expense (benefit) of $7,136 at June 30, 2016 and $(8,961) at December 31, 2015 | 10,930 | (12,124 | ) | ||||
Total stockholders’ equity | 1,735,994 | 1,665,073 | |||||
Total liabilities and stockholders’ equity | $ | 13,065,248 | $ | 11,955,952 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Interest and dividend income: | |||||||||||||||
Loans and loan fees | $ | 96,658 | $ | 59,744 | $ | 185,692 | $ | 115,015 | |||||||
Securities taxable | 10,662 | 8,423 | 22,678 | 16,054 | |||||||||||
Securities non-taxable | 5,871 | 2,900 | 9,750 | 5,768 | |||||||||||
Other earning assets | 1,118 | 880 | 2,195 | 1,782 | |||||||||||
Total interest and dividend income | 114,309 | 71,947 | 220,315 | 138,619 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 8,328 | 3,359 | 14,737 | 6,452 | |||||||||||
Borrowings | 5,601 | 5,014 | 11,688 | 9,728 | |||||||||||
Total interest expense | 13,929 | 8,373 | 26,425 | 16,180 | |||||||||||
Net interest income | 100,380 | 63,574 | 193,890 | 122,439 | |||||||||||
Provision for loan losses | 5,000 | 3,100 | 9,000 | 5,200 | |||||||||||
Net interest income after provision for loan losses | 95,380 | 60,474 | 184,890 | 117,239 | |||||||||||
Non-interest income: | |||||||||||||||
Accounts receivable management / factoring commissions and other fees | 4,156 | 4,435 | 8,650 | 7,937 | |||||||||||
Mortgage banking income | 2,367 | 2,530 | 4,369 | 5,687 | |||||||||||
Deposit fees and service charges | 4,084 | 3,639 | 8,574 | 7,181 | |||||||||||
Net gain on sale of securities | 4,474 | 697 | 4,191 | 2,231 | |||||||||||
Bank owned life insurance | 1,281 | 1,074 | 2,608 | 2,150 | |||||||||||
Investment management fees | 934 | 316 | 2,058 | 676 | |||||||||||
Other | 3,146 | 1,166 | 5,422 | 2,008 | |||||||||||
Total non-interest income | 20,442 | 13,857 | 35,872 | 27,870 | |||||||||||
Non-interest expense: | |||||||||||||||
Compensation and benefits | 31,336 | 22,667 | 61,356 | 45,833 | |||||||||||
Stock-based compensation plans | 1,747 | 1,128 | 3,287 | 2,236 | |||||||||||
Occupancy and office operations | 8,810 | 7,453 | 18,092 | 14,033 | |||||||||||
Amortization of intangible assets | 3,241 | 1,780 | 6,294 | 3,180 | |||||||||||
FDIC insurance and regulatory assessments | 2,300 | 1,384 | 4,558 | 2,812 | |||||||||||
Other real estate owned expense, net | 541 | 40 | 1,123 | 4 | |||||||||||
Merger-related expense | — | 14,625 | 266 | 17,080 | |||||||||||
Loss on extinguishment of FHLB borrowings | — | — | 8,716 | — | |||||||||||
Other | 11,665 | 36,582 | 24,879 | 46,405 | |||||||||||
Total non-interest expense | 59,640 | 85,659 | 128,571 | 131,583 | |||||||||||
Income (loss) before income tax expense (benefit) | 56,182 | (11,328 | ) | 92,191 | 13,526 | ||||||||||
Income tax expense (benefit) | 18,412 | (3,682 | ) | 30,655 | 4,396 | ||||||||||
Net income (loss) | $ | 37,770 | $ | (7,646 | ) | $ | 61,536 | $ | 9,130 | ||||||
Weighted average common shares: | |||||||||||||||
Basic | 130,081,465 | 91,565,972 | 129,953,397 | 89,712,796 | |||||||||||
Diluted | 130,688,729 | 91,950,776 | 130,522,021 | 90,099,788 | |||||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.29 | $ | (0.08 | ) | $ | 0.47 | $ | 0.10 | ||||||
Diluted | 0.29 | (0.08 | ) | 0.47 | 0.10 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | 37,770 | $ | (7,646 | ) | $ | 61,536 | $ | 9,130 | ||||||
Other comprehensive income (loss), before tax: | |||||||||||||||
Change in unrealized holding gains on securities available for sale | 14,849 | (14,473 | ) | 41,199 | (4,095 | ) | |||||||||
Accretion of net unrealized loss on securities transferred to held to maturity | 775 | 285 | 701 | 824 | |||||||||||
Reclassification adjustment for net realized (gains) included in net income | (4,474 | ) | (697 | ) | (4,191 | ) | (2,231 | ) | |||||||
Change in the actuarial gain of defined benefit plan and post-retirement benefit plans | 43 | 169 | 397 | 372 | |||||||||||
Total other comprehensive income (loss), before tax | 11,193 | (14,716 | ) | 38,106 | (5,130 | ) | |||||||||
Deferred tax (expense) benefit related to other comprehensive income | (4,422 | ) | 6,254 | (15,052 | ) | 2,180 | |||||||||
Other comprehensive income (loss), net of tax | 6,771 | (8,462 | ) | 23,054 | (2,950 | ) | |||||||||
Comprehensive income (loss) | $ | 44,541 | $ | (16,108 | ) | $ | 84,590 | $ | 6,180 |
Number of shares | Common stock | Additional paid-in capital | Treasury stock | Retained earnings | Accumulated other comprehensive (loss) income | Total stockholders’ equity | ||||||||||||||||||||
Balance at January 1, 2015 | 83,927,572 | $ | 912 | $ | 858,489 | $ | (82,908 | ) | $ | 208,958 | $ | (10,251 | ) | $ | 975,200 | |||||||||||
Net income | — | — | — | — | 9,130 | — | 9,130 | |||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | — | (2,950 | ) | (2,950 | ) | |||||||||||||||||
Common stock issued in HVB Merger | 38,525,154 | 386 | 563,238 | — | — | — | 563,624 | |||||||||||||||||||
Stock option & other stock transactions, net | 250,890 | — | 560 | 2,754 | (30 | ) | — | 3,284 | ||||||||||||||||||
Restricted stock awards, net | 106,218 | — | 560 | 1,182 | 262 | — | 2,004 | |||||||||||||||||||
Common equity issued, net of costs of issuance | 6,900,000 | 69 | 84,990 | — | — | — | 85,059 | |||||||||||||||||||
Cash dividends declared ($0.14 per common share) | — | — | — | — | (12,241 | ) | — | (12,241 | ) | |||||||||||||||||
Balance at June 30, 2015 | 129,709,834 | $ | 1,367 | $ | 1,507,837 | $ | (78,972 | ) | $ | 206,079 | $ | (13,201 | ) | $ | 1,623,110 | |||||||||||
Balance at January 1, 2016 | 130,006,926 | $ | 1,367 | $ | 1,506,612 | $ | (76,190 | ) | $ | 245,408 | $ | (12,124 | ) | $ | 1,665,073 | |||||||||||
Net income | — | — | — | — | 61,536 | — | 61,536 | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 23,054 | 23,054 | |||||||||||||||||||
Stock option & other stock transactions, net | 160,821 | — | 327 | 1,575 | (123 | ) | — | 1,779 | ||||||||||||||||||
Restricted stock awards, net | 452,716 | — | (3,912 | ) | 5,260 | 1,385 | — | 2,733 | ||||||||||||||||||
Cash dividends declared ($0.14 per common share) | — | — | — | — | (18,181 | ) | — | (18,181 | ) | |||||||||||||||||
Balance at June 30, 2016 | 130,620,463 | $ | 1,367 | $ | 1,503,027 | $ | (69,355 | ) | $ | 290,025 | $ | 10,930 | $ | 1,735,994 |
Six months ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 61,536 | $ | 9,130 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provisions for loan losses | 9,000 | 5,200 | |||||
Net loss (gain) from write-downs and sales of other real estate owned | 313 | (533 | ) | ||||
Depreciation of premises and equipment | 4,188 | 3,222 | |||||
Asset write-downs, severance and retention compensation and other restructuring charges | 2,485 | 40,350 | |||||
Amortization of intangibles | 6,294 | 3,180 | |||||
Amortization of low income housing tax credit | 260 | 98 | |||||
Net gain on sale of securities | (4,191 | ) | (2,231 | ) | |||
Net gain on loans held for sale | (5,075 | ) | (5,687 | ) | |||
Loss on disposition of premises and equipment | — | 116 | |||||
Net amortization of premiums on securities | 6,822 | 2,310 | |||||
Net accretion of purchase discount and amortization of net deferred loan costs | (9,209 | ) | (1,580 | ) | |||
Net accretion of debt issuance costs and amortization of premium on borrowings | 260 | 153 | |||||
Restricted stock compensation expense | 3,036 | 1,697 | |||||
Stock option compensation expense | 251 | 539 | |||||
Originations of loans held for sale | (240,988 | ) | (311,948 | ) | |||
Proceeds from sales of loans held for sale | 222,924 | 334,731 | |||||
Increase in cash surrender value of bank owned life insurance | (2,608 | ) | (2,150 | ) | |||
Deferred income tax expense | 2,986 | (567 | ) | ||||
Other adjustments (principally net changes in other assets and other liabilities) | 41,135 | (58,325 | ) | ||||
Net cash provided by operating activities | 99,419 | 17,705 | |||||
Cash flows from investing activities: | |||||||
Purchases of securities: | |||||||
Available for sale | (325,647 | ) | (541,938 | ) | |||
Held to maturity | (663,291 | ) | (44,813 | ) | |||
Proceeds from maturities, calls and other principal payments on securities: | |||||||
Available for sale | 112,637 | 52,583 | |||||
Held to maturity | 16,561 | 19,626 | |||||
Proceeds from sales of securities available for sale | 558,484 | 202,433 | |||||
Loan originations, net | (489,547 | ) | (679,008 | ) | |||
Proceeds from sale of loans held for investment | 77,048 | 44,020 | |||||
Redemption of FHLB and FRB stock, net | 13,903 | 7,034 | |||||
Proceeds from sales of other real estate owned | 1,651 | 1,129 | |||||
Purchases of premises and equipment | (1,447 | ) | (3,558 | ) | |||
Redemption of bank owned life insurance | 2,230 | — | |||||
Cash paid for acquisitions, net of cash received | (346,690 | ) | 854,318 | ||||
Net cash (used in) investing activities | (1,044,108 | ) | (88,174 | ) |
Six months ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from financing activities: | |||||||
Net increase in transaction, savings and money market deposits | 1,222,952 | 464,947 | |||||
Net decrease in certificates of deposit | (17,403 | ) | (1,857 | ) | |||
Net decrease in short-term FHLB borrowings | (138,000 | ) | (26,000 | ) | |||
Advances of term FHLB borrowings | 475,000 | 80,000 | |||||
Repayments of term FHLB borrowings | (672,396 | ) | (280,120 | ) | |||
Repayment of debt assumed in acquisition | — | (4,485 | ) | ||||
Net increase in other borrowings | 11,636 | 3,969 | |||||
Issuance of Bank subordinated notes | 108,124 | — | |||||
Net increase in mortgage escrow funds | 505 | 3,359 | |||||
Proceeds from stock option exercises | 1,265 | 2,745 | |||||
Equity capital raise, net of costs of issuance | — | 85,059 | |||||
Cash dividends paid | (18,181 | ) | (12,241 | ) | |||
Net cash provided by financing activities | 973,502 | 315,376 | |||||
Net increase in cash and cash equivalents | 28,813 | 244,907 | |||||
Cash and cash equivalents at beginning of period | 229,513 | 121,520 | |||||
Cash and cash equivalents at end of period | $ | 258,326 | $ | 366,427 | |||
Supplemental cash flow information: | |||||||
Interest payments | $ | 25,654 | $ | 16,745 | |||
Income tax payments | 18,109 | 30,990 | |||||
Real estate acquired in settlement of loans | 3,940 | 4,304 | |||||
Unsettled securities transactions | 43,226 | 39,777 | |||||
Loans transferred from held for investment to held for sale | 77,048 | 44,020 | |||||
Acquisitions: | |||||||
Non-cash assets acquired: | |||||||
Securities available for sale | $ | — | $ | 710,230 | |||
Securities held to maturity | — | 3,611 | |||||
Total loans, net | 320,447 | 1,814,826 | |||||
FHLB stock | — | 5,830 | |||||
Accrued interest receivable | 1,443 | 7,392 | |||||
Goodwill | 25,698 | 280,579 | |||||
Customer list | 1,500 | 8,950 | |||||
Other intangible assets | — | 33,839 | |||||
Bank owned life insurance | — | 44,231 | |||||
Premises and equipment, net | 176 | 17,063 | |||||
Other real estate owned | — | 222 | |||||
Other assets | 2,265 | 25,871 | |||||
Total non-cash assets acquired | 351,529 | 2,952,644 |
Six months ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
Liabilities assumed: | |||||||
Deposits | — | 3,160,746 | |||||
Escrow deposits | — | 4,616 | |||||
Other borrowings | — | 25,366 | |||||
Other liabilities | 4,839 | 50,181 | |||||
Total liabilities assumed | 4,839 | 3,240,909 | |||||
Net non-cash assets acquired | 346,690 | (288,265 | ) | ||||
Cash and cash equivalents received in acquisitions | 4,762 | 879,240 | |||||
Total consideration paid | $ | 351,452 | $ | 590,975 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
• | Legacy Sterling merged with and into Legacy Provident. |
• | Legacy Provident was the accounting acquirer and the surviving entity. |
• | Legacy Provident changed its legal entity name to Sterling Bancorp. |
• | Sterling National Bank merged into Provident Bank. |
• | Provident Bank changed its legal entity name to Sterling National Bank. |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Consideration paid through Sterling Bancorp common stock issued to HVHC shareholders | $ | 566,307 |
HVHC net book value | Fair value adjustments | As recorded at acquisition | |||||||||
Cash and cash equivalents | $ | 878,988 | $ | — | $ | 878,988 | |||||
Investment securities | 713,625 | 217 | (a) | 713,842 | |||||||
Loans | 1,816,767 | (24,248 | ) | (b) | 1,792,519 | ||||||
Federal Reserve Bank stock | 5,830 | — | 5,830 | ||||||||
Bank owned life insurance | 44,231 | — | 44,231 | ||||||||
Premises and equipment | 11,918 | 4,925 | (c) | 16,843 | |||||||
Accrued interest receivable | 7,392 | — | 7,392 | ||||||||
Other intangible assets | — | 33,839 | (d) | 33,839 | |||||||
Other real estate owned | 222 | — | 222 | ||||||||
Other assets | 32,639 | (7,931 | ) | (e) | 24,708 | ||||||
Deposits | (3,160,746 | ) | — | (3,160,746 | ) | ||||||
Other borrowings | (25,366 | ) | — | (25,366 | ) | ||||||
Other liabilities | (37,292 | ) | 1,540 | (f) | (35,752 | ) | |||||
Total identifiable net assets | $ | 288,208 | $ | 8,342 | $ | 296,550 | |||||
Goodwill recorded in the HVB Merger | $ | 269,757 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
(a) | Represents the fair value adjustment on investment securities held to maturity. |
(b) | Represents the elimination of HVHC’s allowance for loan losses and an adjustment of the net book value of loans to estimated fair value, which includes an interest rate mark and credit mark adjustment. |
(c) | Represents an adjustment to reflect the fair value of HVHC-owned real estate as determined by independent appraisals, which will be amortized on a straight-line basis over the estimated useful lives of the individual assets. |
(d) | Represents intangible assets recorded to reflect the fair value of core deposits. The core deposit asset was recorded as an identifiable intangible asset and will be amortized on an accelerated basis over the estimated average life of the deposit base. |
(e) | Represents an adjustment in net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangibles recorded. |
(f) | Represents the elimination of HVHC’s deferred rent liability. |
Fair value of acquired loans at acquisition date | Gross contractual amounts receivable at acquisition date | Best estimate at acquisition date of contractual cash flows not expected to be collected | |||||||||
Acquired loans with evidence of deterioration since origination | $ | 96,973 | $ | 122,104 | $ | 19,024 | |||||
Acquired loans with no evidence of deterioration since origination | 1,695,546 | 1,974,740 | 37,520 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | |||||||||||||||||||||||||||||||
Available for Sale | Held to Maturity | ||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrecognized gains | Gross unrecognized losses | Fair value | ||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||
Agency-backed | $ | 1,193,350 | $ | 22,637 | $ | (12 | ) | $ | 1,215,975 | $ | 300,324 | $ | 8,348 | $ | (91 | ) | $ | 308,581 | |||||||||||||
CMO/Other MBS | 68,706 | 689 | (228 | ) | 69,167 | 45,290 | 727 | — | 46,017 | ||||||||||||||||||||||
Total residential MBS | 1,262,056 | 23,326 | (240 | ) | 1,285,142 | 345,614 | 9,075 | (91 | ) | 354,598 | |||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||
Federal agencies | 83,829 | 158 | — | 83,987 | 72,663 | 4,449 | — | 77,112 | |||||||||||||||||||||||
Corporate | 71,254 | 920 | (2,391 | ) | 69,783 | 35,144 | 238 | (149 | ) | 35,233 | |||||||||||||||||||||
State and municipal | 161,654 | 3,755 | (99 | ) | 165,310 | 907,875 | 32,842 | (113 | ) | 940,604 | |||||||||||||||||||||
Other | 8,781 | 10 | — | 8,791 | 5,750 | 321 | — | 6,071 | |||||||||||||||||||||||
Total other securities | 325,518 | 4,843 | (2,490 | ) | 327,871 | 1,021,432 | 37,850 | (262 | ) | 1,059,020 | |||||||||||||||||||||
Total securities | $ | 1,587,574 | $ | 28,169 | $ | (2,730 | ) | $ | 1,613,013 | $ | 1,367,046 | $ | 46,925 | $ | (353 | ) | $ | 1,413,618 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2015 | |||||||||||||||||||||||||||||||
Available for Sale | Held to Maturity | ||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrecognized gains | Gross unrecognized losses | Fair value | ||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||
Agency-backed | $ | 1,222,912 | $ | 2,039 | $ | (7,089 | ) | $ | 1,217,862 | $ | 252,760 | $ | 1,857 | $ | (1,214 | ) | $ | 253,403 | |||||||||||||
CMO/Other MBS | 79,430 | 76 | (1,133 | ) | 78,373 | 49,842 | 87 | (619 | ) | 49,310 | |||||||||||||||||||||
Total residential MBS | 1,302,342 | 2,115 | (8,222 | ) | 1,296,235 | 302,602 | 1,944 | (1,833 | ) | 302,713 | |||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||
Federal agencies | 85,124 | 7 | (864 | ) | 84,267 | 104,135 | 2,458 | (635 | ) | 105,958 | |||||||||||||||||||||
Corporate | 321,630 | 522 | (7,964 | ) | 314,188 | 25,241 | 11 | (200 | ) | 25,052 | |||||||||||||||||||||
State and municipal | 187,399 | 2,187 | (551 | ) | 189,035 | 285,813 | 9,327 | (134 | ) | 295,006 | |||||||||||||||||||||
Trust preferred | 27,928 | 589 | — | 28,517 | — | — | — | — | |||||||||||||||||||||||
Other | 8,781 | 9 | — | 8,790 | 5,000 | 350 | — | 5,350 | |||||||||||||||||||||||
Total other securities | 630,862 | 3,314 | (9,379 | ) | 624,797 | 420,189 | 12,146 | (969 | ) | 431,366 | |||||||||||||||||||||
Total securities | $ | 1,933,204 | $ | 5,429 | $ | (17,601 | ) | $ | 1,921,032 | $ | 722,791 | $ | 14,090 | $ | (2,802 | ) | $ | 734,079 |
June 30, 2016 | |||||||||||||||
Available for sale | Held to maturity | ||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | ||||||||||||
Remaining period to contractual maturity: | |||||||||||||||
One year or less | $ | 11,793 | $ | 11,850 | $ | 19,891 | $ | 19,936 | |||||||
One to five years | 161,460 | 161,593 | 62,847 | 65,776 | |||||||||||
Five to ten years | 143,484 | 145,638 | 500,632 | 520,914 | |||||||||||
Greater than ten years | 8,781 | 8,790 | 438,062 | 452,394 | |||||||||||
Total securities with a stated maturity date | 325,518 | 327,871 | 1,021,432 | 1,059,020 | |||||||||||
Residential MBS | 1,262,056 | 1,285,142 | 345,614 | 354,598 | |||||||||||
Total securities | $ | 1,587,574 | $ | 1,613,013 | $ | 1,367,046 | $ | 1,413,618 |
For the three months ended | For the six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Available for sale: | |||||||||||||||
Proceeds from sales | $ | 283,126 | $ | 86,889 | $ | 558,484 | $ | 202,433 | |||||||
Gross realized gains | 4,834 | 959 | 6,395 | 2,623 | |||||||||||
Gross realized losses | (360 | ) | (262 | ) | (2,204 | ) | (392 | ) | |||||||
Income tax expense on realized net gains | 1,466 | 227 | 1,394 | 725 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Continuous unrealized loss position | |||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Available for sale | |||||||||||||||||||||||
June 30, 2016 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | 1,312 | $ | (6 | ) | $ | 6,675 | $ | (6 | ) | $ | 7,987 | $ | (12 | ) | ||||||||
CMO/Other MBS | 825 | (4 | ) | 20,086 | (224 | ) | 20,911 | (228 | ) | ||||||||||||||
Total residential MBS | 2,137 | (10 | ) | 26,761 | (230 | ) | 28,898 | (240 | ) | ||||||||||||||
Other securities: | |||||||||||||||||||||||
Corporate | 9,111 | (454 | ) | 24,126 | (1,937 | ) | 33,237 | (2,391 | ) | ||||||||||||||
State and municipal | 5,613 | (32 | ) | 4,187 | (67 | ) | 9,800 | (99 | ) | ||||||||||||||
Total other securities | 14,724 | (486 | ) | 28,313 | (2,004 | ) | 43,037 | (2,490 | ) | ||||||||||||||
Total | $ | 16,861 | $ | (496 | ) | $ | 55,074 | $ | (2,234 | ) | $ | 71,935 | $ | (2,730 | ) | ||||||||
December 31, 2015 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | 18,983 | $ | (528 | ) | $ | 854,491 | $ | (6,561 | ) | $ | 873,474 | $ | (7,089 | ) | ||||||||
CMO/Other MBS | 23,682 | (717 | ) | 41,946 | (416 | ) | 65,628 | (1,133 | ) | ||||||||||||||
Total residential MBS | 42,665 | (1,245 | ) | 896,437 | (6,977 | ) | 939,102 | (8,222 | ) | ||||||||||||||
Other securities: | |||||||||||||||||||||||
Federal agencies | 14,933 | (260 | ) | 57,886 | (604 | ) | 72,819 | (864 | ) | ||||||||||||||
Corporate | 19,257 | (715 | ) | 236,048 | (7,249 | ) | 255,305 | (7,964 | ) | ||||||||||||||
State and municipal | 3,439 | (27 | ) | 42,924 | (524 | ) | 46,363 | (551 | ) | ||||||||||||||
Total other securities | 37,629 | (1,002 | ) | 336,858 | (8,377 | ) | 374,487 | (9,379 | ) | ||||||||||||||
Total | $ | 80,294 | $ | (2,247 | ) | $ | 1,233,295 | $ | (15,354 | ) | $ | 1,313,589 | $ | (17,601 | ) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Continuous unrecognized loss position | |||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Fair value | Unrecognized losses | Fair value | Unrecognized losses | Fair value | Unrecognized losses | ||||||||||||||||||
Held to maturity | |||||||||||||||||||||||
June 30, 2016 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | 5,637 | $ | (84 | ) | $ | 6,624 | $ | (7 | ) | $ | 12,261 | $ | (91 | ) | ||||||||
Other securities: | |||||||||||||||||||||||
Corporate | 19,995 | (149 | ) | — | — | 19,995 | (149 | ) | |||||||||||||||
State and municipal | 10,026 | (68 | ) | 2,548 | (45 | ) | 12,574 | (113 | ) | ||||||||||||||
Total other securities | 30,021 | (217 | ) | 2,548 | (45 | ) | 32,569 | (262 | ) | ||||||||||||||
Total | $ | 35,658 | $ | (301 | ) | $ | 9,172 | $ | (52 | ) | $ | 44,830 | $ | (353 | ) | ||||||||
December 31, 2015 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | — | $ | — | $ | 132,585 | $ | (1,214 | ) | $ | 132,585 | $ | (1,214 | ) | |||||||||
CMO/Other MBS | 5,960 | (156 | ) | 40,033 | (463 | ) | 45,993 | (619 | ) | ||||||||||||||
Total residential MBS | 5,960 | (156 | ) | 172,618 | (1,677 | ) | 178,578 | (1,833 | ) | ||||||||||||||
Other securities: | |||||||||||||||||||||||
Federal agencies | 14,642 | (358 | ) | 9,723 | (277 | ) | 24,365 | (635 | ) | ||||||||||||||
Corporate | — | — | 20,039 | (200 | ) | 20,039 | (200 | ) | |||||||||||||||
State and municipal | 2,562 | (48 | ) | 12,989 | (86 | ) | 15,551 | (134 | ) | ||||||||||||||
Total other securities | 17,204 | (406 | ) | 42,751 | (563 | ) | 59,955 | (969 | ) | ||||||||||||||
Total | $ | 23,164 | $ | (562 | ) | $ | 215,369 | $ | (2,240 | ) | $ | 238,533 | $ | (2,802 | ) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Available for sale securities pledged for borrowings, at fair value | $ | 88,006 | $ | 101,994 | |||
Available for sale securities pledged for municipal deposits, at fair value | 827,070 | 849,186 | |||||
Available for sale securities pledged for customer back-to-back swaps, at fair value | 5,973 | 1,839 | |||||
Held to maturity securities pledged for borrowings, at amortized cost | 102,500 | 206,337 | |||||
Held to maturity securities pledged for municipal deposits, at amortized cost | 454,747 | 327,589 | |||||
Total securities pledged | $ | 1,478,296 | $ | 1,486,945 |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Commercial: | |||||||
Commercial and industrial: | |||||||
Traditional commercial & industrial (“C&I”) | $ | 2,161,389 | $ | 1,681,704 | |||
Payroll finance | 211,471 | 221,831 | |||||
Warehouse lending | 429,506 | 387,808 | |||||
Factored receivables | 200,523 | 208,382 | |||||
Equipment financing | 636,280 | 631,303 | |||||
Total C&I | 3,639,169 | 3,131,028 | |||||
Commercial mortgage: | |||||||
Commercial real estate | 2,868,545 | 2,733,351 | |||||
Multi-family | 914,114 | 796,030 | |||||
Acquisition, development & construction (“ADC”) | 207,868 | 186,398 | |||||
Total commercial mortgage | 3,990,527 | 3,715,779 | |||||
Total commercial | 7,629,696 | 6,846,807 | |||||
Residential mortgage | 673,208 | 713,036 | |||||
Consumer | 291,391 | 299,517 | |||||
Total portfolio loans | 8,594,295 | 7,859,360 | |||||
Allowance for loan losses | (55,865 | ) | (50,145 | ) | |||
Total portfolio loans, net | $ | 8,538,430 | $ | 7,809,215 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | |||||||||||||||||||||||
Current | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
C&I | $ | 2,130,639 | $ | 843 | $ | 1,706 | $ | 351 | $ | 27,850 | $ | 2,161,389 | |||||||||||
Payroll finance | 211,231 | 20 | — | 172 | 48 | 211,471 | |||||||||||||||||
Warehouse lending | 429,506 | — | — | — | — | 429,506 | |||||||||||||||||
Factored receivables | 199,791 | — | — | — | 732 | 200,523 | |||||||||||||||||
Equipment financing | 631,136 | 1,909 | 891 | — | 2,344 | 636,280 | |||||||||||||||||
Commercial real estate | 2,840,922 | 1,984 | 2,126 | — | 23,513 | 2,868,545 | |||||||||||||||||
Multi-family | 913,089 | 167 | — | — | 858 | 914,114 | |||||||||||||||||
ADC | 203,935 | — | — | — | 3,933 | 207,868 | |||||||||||||||||
Residential mortgage | 653,949 | 4,390 | 1,936 | — | 12,933 | 673,208 | |||||||||||||||||
Consumer | 281,880 | 2,031 | 650 | 5 | 6,825 | 291,391 | |||||||||||||||||
Total portfolio loans | $ | 8,496,078 | $ | 11,344 | $ | 7,309 | $ | 528 | $ | 79,036 | $ | 8,594,295 | |||||||||||
Total TDRs included above | $ | 13,867 | $ | 470 | $ | 557 | $ | — | $ | 6,321 | $ | 21,215 | |||||||||||
Non-performing loans: | |||||||||||||||||||||||
Loans 90+ days past due and still accruing | $ | 528 | |||||||||||||||||||||
Non-accrual loans | 79,036 | ||||||||||||||||||||||
Total non-performing loans | $ | 79,564 |
December 31, 2015 | |||||||||||||||||||||||
Current | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
C&I | $ | 1,630,635 | $ | 9,380 | $ | 31,060 | $ | 487 | $ | 10,142 | $ | 1,681,704 | |||||||||||
Payroll finance | 221,394 | — | 349 | 88 | — | 221,831 | |||||||||||||||||
Warehouse lending | 387,808 | — | — | — | — | 387,808 | |||||||||||||||||
Factored receivables | 208,162 | — | — | — | 220 | 208,382 | |||||||||||||||||
Equipment financing | 627,056 | 1,088 | 1,515 | — | 1,644 | 631,303 | |||||||||||||||||
Commercial real estate | 2,702,671 | 7,417 | 2,521 | — | 20,742 | 2,733,351 | |||||||||||||||||
Multi-family | 791,828 | 2,485 | — | — | 1,717 | 796,030 | |||||||||||||||||
ADC | 182,615 | — | — | 83 | 3,700 | 186,398 | |||||||||||||||||
Residential mortgage | 686,445 | 6,014 | 897 | — | 19,680 | 713,036 | |||||||||||||||||
Consumer | 286,339 | 4,950 | 320 | 16 | 7,892 | 299,517 | |||||||||||||||||
Total portfolio loans | $ | 7,724,953 | $ | 31,334 | $ | 36,662 | $ | 674 | $ | 65,737 | $ | 7,859,360 | |||||||||||
Total TDRs included above | $ | 13,047 | $ | 654 | $ | — | $ | — | $ | 8,591 | $ | 22,292 | |||||||||||
Non-performing loans: | |||||||||||||||||||||||
Loans 90+ days past due and still accruing | $ | 674 | |||||||||||||||||||||
Non-accrual loans | 65,737 | ||||||||||||||||||||||
Total non-performing loans | $ | 66,411 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
Recorded investment Non-accrual loans | Recorded investment PCI(1) non-accrual loans | Recorded investment total non-accrual loans | Unpaid principal balance non-accrual loans | Recorded investment Non-accrual loans | Recorded investment PCI non-accrual loans | Recorded investment total non-accrual loans | Unpaid principal balance non-accrual loans | ||||||||||||||||||||||||
C&I | $ | 23,126 | $ | 4,724 | $ | 27,850 | $ | 28,018 | $ | 4,314 | $ | 5,828 | $ | 10,142 | $ | 10,503 | |||||||||||||||
Payroll finance | 48 | — | 48 | 48 | — | — | — | — | |||||||||||||||||||||||
Factored receivables | 732 | — | 732 | 732 | 220 | — | 220 | 220 | |||||||||||||||||||||||
Equipment financing | 2,344 | — | 2,344 | 2,344 | 1,644 | — | 1,644 | 1,644 | |||||||||||||||||||||||
Commercial real estate | 17,605 | 5,908 | 23,513 | 27,849 | 13,119 | 7,623 | 20,742 | 23,678 | |||||||||||||||||||||||
Multi-family | 858 | — | 858 | 975 | 1,717 | — | 1,717 | 1,837 | |||||||||||||||||||||||
ADC | 3,933 | — | 3,933 | 4,062 | 3,700 | — | 3,700 | 3,829 | |||||||||||||||||||||||
Residential mortgage | 11,383 | 1,550 | 12,933 | 16,132 | 13,683 | 5,997 | 19,680 | 24,386 | |||||||||||||||||||||||
Consumer | 5,991 | 834 | 6,825 | 8,435 | 7,315 | 577 | 7,892 | 9,404 | |||||||||||||||||||||||
Total | $ | 66,020 | $ | 13,016 | $ | 79,036 | $ | 88,595 | $ | 45,712 | $ | 20,025 | $ | 65,737 | $ | 75,501 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Loans evaluated by segment | Allowance evaluated by segment | ||||||||||||||||||||||||||
Individually evaluated for impairment | Collectively evaluated for impairment | PCI loans | Total loans | Individually evaluated for impairment | Collectively evaluated for impairment | Total allowance for loan losses | |||||||||||||||||||||
C&I | $ | 26,941 | $ | 2,081,434 | $ | 53,014 | $ | 2,161,389 | $ | — | $ | 15,231 | $ | 15,231 | |||||||||||||
Payroll finance | — | 211,471 | — | 211,471 | — | 1,165 | 1,165 | ||||||||||||||||||||
Warehouse lending | — | 429,506 | — | 429,506 | — | 652 | 652 | ||||||||||||||||||||
Factored receivables | 527 | 199,996 | — | 200,523 | — | 1,585 | 1,585 | ||||||||||||||||||||
Equipment financing | 1,976 | 634,304 | — | 636,280 | — | 5,346 | 5,346 | ||||||||||||||||||||
Commercial real estate | 16,126 | 2,811,180 | 41,239 | 2,868,545 | — | 17,523 | 17,523 | ||||||||||||||||||||
Multi-family | 851 | 908,820 | 4,443 | 914,114 | — | 3,463 | 3,463 | ||||||||||||||||||||
ADC | 8,521 | 194,549 | 4,798 | 207,868 | — | 2,042 | 2,042 | ||||||||||||||||||||
Residential mortgage | 515 | 669,989 | 2,704 | 673,208 | — | 4,875 | 4,875 | ||||||||||||||||||||
Consumer | 1,497 | 288,517 | 1,377 | 291,391 | — | 3,983 | 3,983 | ||||||||||||||||||||
Total portfolio loans | $ | 56,954 | $ | 8,429,766 | $ | 107,575 | $ | 8,594,295 | $ | — | $ | 55,865 | $ | 55,865 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Loans evaluated by segment | Allowance evaluated by segment | ||||||||||||||||||||||||||
Individually evaluated for impairment | Collectively evaluated for impairment | PCI loans | Total loans | Individually evaluated for impairment | Collectively evaluated for impairment | Total allowance for loan losses | |||||||||||||||||||||
C&I | $ | 3,138 | $ | 1,661,163 | $ | 17,403 | $ | 1,681,704 | $ | — | $ | 13,262 | $ | 13,262 | |||||||||||||
Payroll finance | — | 221,831 | — | 221,831 | — | 1,936 | 1,936 | ||||||||||||||||||||
Warehouse lending | — | 387,808 | — | 387,808 | — | 589 | 589 | ||||||||||||||||||||
Factored receivables | — | 208,382 | — | 208,382 | — | 1,457 | 1,457 | ||||||||||||||||||||
Equipment financing | 1,017 | 630,286 | — | 631,303 | — | 4,925 | 4,925 | ||||||||||||||||||||
Commercial real estate | 13,492 | 2,669,673 | 50,186 | 2,733,351 | — | 13,861 | 13,861 | ||||||||||||||||||||
Multi-family | 1,541 | 790,017 | 4,472 | 796,030 | — | 2,741 | 2,741 | ||||||||||||||||||||
ADC | 8,669 | 173,065 | 4,664 | 186,398 | — | 2,009 | 2,009 | ||||||||||||||||||||
Residential mortgage | 515 | 705,245 | 7,276 | 713,036 | — | 5,007 | 5,007 | ||||||||||||||||||||
Consumer | — | 298,225 | 1,292 | 299,517 | — | 4,358 | 4,358 | ||||||||||||||||||||
Total portfolio loans | $ | 28,372 | $ | 7,745,695 | $ | 85,293 | $ | 7,859,360 | $ | — | $ | 50,145 | $ | 50,145 |
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Balance at beginning of period | $ | 12,522 | $ | 724 | $ | 11,211 | $ | 724 | |||||||
Balances acquired in the NSBC Acquisition | — | — | 2,200 | — | |||||||||||
Accretion of income | (1,124 | ) | — | (2,279 | ) | — | |||||||||
Disposals | — | (50 | ) | — | (50 | ) | |||||||||
Reclassification from non-accretable difference | (91 | ) | — | 175 | — | ||||||||||
Balance at end of period | $ | 11,307 | $ | 674 | $ | 11,307 | $ | 674 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | December 31, 2015 | ||||||||||||||
Unpaid principal balance | Recorded investment | Unpaid principal balance | Recorded investment | ||||||||||||
Loans with no related allowance recorded: | |||||||||||||||
C&I | $ | 26,941 | $ | 26,941 | $ | 3,145 | $ | 3,138 | |||||||
Factored receivables | 527 | 527 | — | — | |||||||||||
Equipment financing | 1,976 | 1,976 | 1,017 | 1,017 | |||||||||||
Commercial real estate | 17,336 | 16,126 | 15,092 | 13,492 | |||||||||||
Multi-family | 851 | 851 | 1,541 | 1,541 | |||||||||||
ADC | 8,521 | 8,521 | 8,669 | 8,669 | |||||||||||
Residential mortgage | 515 | 515 | 515 | 515 | |||||||||||
Consumer | 1,497 | 1,497 | — | — | |||||||||||
Total | $ | 58,164 | $ | 56,954 | $ | 29,979 | $ | 28,372 |
For the three months ended | |||||||||||||||||||||||
June 30, 2016 | June 30, 2015 | ||||||||||||||||||||||
QTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | QTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | ||||||||||||||||||
Loans with no related allowance recorded: | |||||||||||||||||||||||
C&I | $ | 27,033 | $ | 6 | $ | — | $ | 4,244 | $ | — | $ | — | |||||||||||
Factored receivables | 264 | — | — | — | — | — | |||||||||||||||||
Equipment financing | 1,528 | — | — | — | — | — | |||||||||||||||||
Commercial real estate | 14,536 | 34 | — | 13,848 | 41 | — | |||||||||||||||||
Multi-family | 867 | — | — | — | — | — | |||||||||||||||||
ADC | 8,558 | 56 | — | 11,548 | 57 | — | |||||||||||||||||
Residential mortgage | 515 | — | — | 515 | — | — | |||||||||||||||||
Consumer | 1,497 | — | — | — | — | — | |||||||||||||||||
Total | $ | 54,798 | $ | 96 | $ | — | $ | 30,155 | $ | 98 | $ | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
For the six months ended | |||||||||||||||||||||||
June 30, 2016 | June 30, 2015 | ||||||||||||||||||||||
YTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | YTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | ||||||||||||||||||
Loans with no related allowance recorded: | |||||||||||||||||||||||
C&I | $ | 20,779 | $ | 15 | $ | — | 4,217 | $ | — | $ | — | ||||||||||||
Factored receivables | 132 | — | — | — | — | — | |||||||||||||||||
Equipment financing | 1,195 | — | — | — | — | — | |||||||||||||||||
Commercial real estate | 13,456 | 104 | — | 13,820 | 83 | — | |||||||||||||||||
Multi-family | 875 | 19 | — | — | — | — | |||||||||||||||||
ADC | 8,595 | 115 | — | 11,573 | 114 | — | |||||||||||||||||
Residential mortgage | 515 | — | — | 515 | — | — | |||||||||||||||||
Consumer | 1,123 | — | — | — | — | — | |||||||||||||||||
Total | $ | 46,670 | $ | 253 | $ | — | $ | 30,125 | $ | 197 | $ | — |
June 30, 2016 | |||||||||||||||||||||||
Current loans | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
C&I | $ | 1,564 | $ | — | $ | — | $ | — | $ | 129 | $ | 1,693 | |||||||||||
Equipment financing | 44 | — | — | — | — | 44 | |||||||||||||||||
Commercial real estate | 2,719 | — | — | — | — | 2,719 | |||||||||||||||||
ADC | 4,958 | — | — | — | 3,700 | 8,658 | |||||||||||||||||
Residential mortgage | 4,582 | 470 | 557 | — | 2,492 | 8,101 | |||||||||||||||||
Total | $ | 13,867 | $ | 470 | $ | 557 | $ | — | $ | 6,321 | $ | 21,215 |
December 31, 2015 | |||||||||||||||||||||||
Current loans | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
C&I | $ | 154 | $ | — | $ | — | $ | — | $ | 2,052 | $ | 2,206 | |||||||||||
Equipment financing | 338 | — | — | — | — | 338 | |||||||||||||||||
Commercial real estate | 2,787 | — | — | — | — | 2,787 | |||||||||||||||||
ADC | 5,107 | — | — | — | 3,700 | 8,807 | |||||||||||||||||
Residential mortgage | 4,661 | 654 | — | — | 2,839 | 8,154 | |||||||||||||||||
Total | $ | 13,047 | $ | 654 | $ | — | $ | — | $ | 8,591 | $ | 22,292 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | June 30, 2015 | |||||||||||||||||
Recorded investment | Recorded investment | |||||||||||||||||
Number | Pre- modification | Post- modification | Number | Pre- modification | Post- modification | |||||||||||||
Residential mortgage | 1 | $ | 469 | $ | 469 | — | — | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
For the three months ended June 30, 2016 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision / (reversal of) | Ending balance | ||||||||||||||||||
C&I | $ | 14,269 | $ | (429 | ) | $ | 199 | $ | (230 | ) | $ | 1,192 | $ | 15,231 | |||||||||
Payroll finance | 1,546 | (28 | ) | 28 | — | (381 | ) | 1,165 | |||||||||||||||
Warehouse lending | 520 | — | — | — | 132 | 652 | |||||||||||||||||
Factored receivables | 1,407 | (792 | ) | 17 | (775 | ) | 953 | 1,585 | |||||||||||||||
Equipment financing | 5,393 | (572 | ) | 102 | (470 | ) | 423 | 5,346 | |||||||||||||||
Commercial real estate | 15,770 | (100 | ) | 53 | (47 | ) | 1,800 | 17,523 | |||||||||||||||
Multi-family | 2,996 | (18 | ) | — | (18 | ) | 485 | 3,463 | |||||||||||||||
ADC | 2,157 | — | 104 | 104 | (219 | ) | 2,042 | ||||||||||||||||
Residential mortgage | 4,850 | (209 | ) | 1 | (208 | ) | 233 | 4,875 | |||||||||||||||
Consumer | 4,106 | (532 | ) | 27 | (505 | ) | 382 | 3,983 | |||||||||||||||
Total allowance for loan losses | $ | 53,014 | $ | (2,680 | ) | $ | 531 | $ | (2,149 | ) | $ | 5,000 | $ | 55,865 | |||||||||
Annualized net charge-offs to average loans outstanding | 0.10 | % |
For the three months ended June 30, 2015 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision / (reversal of) | Ending balance | ||||||||||||||||||
C&I | $ | 10,686 | $ | (228 | ) | $ | 163 | $ | (65 | ) | $ | 729 | $ | 11,350 | |||||||||
Payroll finance | 1,900 | (59 | ) | — | (59 | ) | (191 | ) | 1,650 | ||||||||||||||
Warehouse lending | 859 | — | — | — | 404 | 1,263 | |||||||||||||||||
Factored receivables | 1,172 | (146 | ) | 9 | (137 | ) | 461 | 1,496 | |||||||||||||||
Equipment financing | 2,691 | (438 | ) | 96 | (342 | ) | 896 | 3,245 | |||||||||||||||
Commercial real estate | 11,093 | (276 | ) | — | (276 | ) | 283 | 11,100 | |||||||||||||||
Multi-family | 2,290 | — | — | — | 115 | 2,405 | |||||||||||||||||
ADC | 2,716 | — | — | — | (291 | ) | 2,425 | ||||||||||||||||
Residential mortgage | 5,127 | — | 9 | 9 | (199 | ) | 4,937 | ||||||||||||||||
Consumer | 4,350 | (821 | ) | 24 | (797 | ) | 893 | 4,446 | |||||||||||||||
Total allowance for loan losses | $ | 42,884 | $ | (1,968 | ) | $ | 301 | $ | (1,667 | ) | $ | 3,100 | $ | 44,317 | |||||||||
Annualized net charge-offs to average loans outstanding | 0.13 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
For the six months ended June 30, 2016 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision/ (reversal of) | Ending balance | ||||||||||||||||||
C&I | $ | 13,262 | $ | (918 | ) | $ | 528 | $ | (390 | ) | $ | 2,359 | $ | 15,231 | |||||||||
Payroll finance | 1,936 | (28 | ) | 32 | 4 | (775 | ) | 1,165 | |||||||||||||||
Warehouse lending | 589 | — | — | — | 63 | 652 | |||||||||||||||||
Factored receivables | 1,457 | (873 | ) | 41 | (832 | ) | 960 | 1,585 | |||||||||||||||
Equipment financing | 4,925 | (1,029 | ) | 210 | (819 | ) | 1,240 | 5,346 | |||||||||||||||
Commercial real estate | 13,861 | (104 | ) | 74 | (30 | ) | 3,692 | 17,523 | |||||||||||||||
Multi-family | 2,741 | (18 | ) | 2 | (16 | ) | 738 | 3,463 | |||||||||||||||
ADC | 2,009 | — | 104 | 104 | (71 | ) | 2,042 | ||||||||||||||||
Residential mortgage | 5,007 | (433 | ) | 29 | (404 | ) | 272 | 4,875 | |||||||||||||||
Consumer | 4,358 | (1,043 | ) | 146 | (897 | ) | 522 | 3,983 | |||||||||||||||
Total allowance for loan losses | $ | 50,145 | $ | (4,446 | ) | $ | 1,166 | $ | (3,280 | ) | $ | 9,000 | $ | 55,865 | |||||||||
Annualized net charge-offs to average loans outstanding | 0.08 | % |
For the six months ended June 30, 2015 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision/ (reversal of) | Ending balance | ||||||||||||||||||
C&I | $ | 11,027 | $ | (1,070 | ) | $ | 264 | $ | (806 | ) | $ | 1,129 | $ | 11,350 | |||||||||
Payroll finance | 1,506 | (362 | ) | 11 | (351 | ) | 495 | 1,650 | |||||||||||||||
Warehouse lending | 608 | — | — | — | 655 | 1,263 | |||||||||||||||||
Factored receivables | 1,205 | (218 | ) | 28 | (190 | ) | 481 | 1,496 | |||||||||||||||
Equipment financing | 2,569 | (591 | ) | 268 | (323 | ) | 999 | 3,245 | |||||||||||||||
Commercial real estate | 10,121 | (338 | ) | 16 | (322 | ) | 1,301 | 11,100 | |||||||||||||||
Multi-family | 2,111 | (17 | ) | — | (17 | ) | 311 | 2,405 | |||||||||||||||
ADC | 2,987 | — | 9 | 9 | (571 | ) | 2,425 | ||||||||||||||||
Residential mortgage | 5,843 | (181 | ) | 11 | (170 | ) | (736 | ) | 4,937 | ||||||||||||||
Consumer | 4,397 | (1,163 | ) | 76 | (1,087 | ) | 1,136 | 4,446 | |||||||||||||||
Total allowance for loan losses | $ | 42,374 | $ | (3,940 | ) | $ | 683 | $ | (3,257 | ) | $ | 5,200 | $ | 44,317 | |||||||||
Annualized net charge-offs to average loans outstanding | 0.13 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | |||||||||||||||||||||||
Originated: | Pass | Special mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
C&I | $ | 1,569,233 | $ | 10,702 | $ | 32,475 | $ | 323 | $ | — | $ | 1,612,733 | |||||||||||
Payroll finance | 211,251 | 165 | 55 | — | — | 211,471 | |||||||||||||||||
Warehouse lending | 429,506 | — | — | — | — | 429,506 | |||||||||||||||||
Factored receivables | 199,791 | — | 732 | — | — | 200,523 | |||||||||||||||||
Equipment financing | 564,506 | 1,232 | 2,713 | — | — | 568,451 | |||||||||||||||||
Commercial real estate | 2,350,612 | 11,687 | 26,793 | — | — | 2,389,092 | |||||||||||||||||
Multi-family | 733,637 | 1,921 | 857 | — | — | 736,415 | |||||||||||||||||
ADC | 174,606 | 1,654 | 7,198 | — | — | 183,458 | |||||||||||||||||
Residential mortgage | 445,155 | 1,936 | 12,065 | — | — | 459,156 | |||||||||||||||||
Consumer | 194,419 | 432 | 7,252 | 7 | — | 202,110 | |||||||||||||||||
Total originated loans | $ | 6,872,716 | $ | 29,729 | $ | 90,140 | $ | 330 | $ | — | $ | 6,992,915 | |||||||||||
Allowance for loan losses | $ | 50,252 | $ | 907 | $ | 4,458 | $ | 248 | $ | — | $ | 55,865 | |||||||||||
As a % of originated loans | 0.73 | % | 3.05 | % | 4.95 | % | 75.15 | % | — | % | 0.80 | % |
June 30, 2016 | |||||||||||||||||||||||
Acquired loans: | Pass | Special mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
C&I | $ | 498,979 | $ | 42,785 | $ | 6,892 | $ | — | $ | — | $ | 548,656 | |||||||||||
Equipment financing | 67,829 | — | — | — | — | 67,829 | |||||||||||||||||
Commercial real estate | 433,597 | 19,903 | 25,953 | — | — | 479,453 | |||||||||||||||||
Multi-family | 172,067 | 5,632 | — | — | — | 177,699 | |||||||||||||||||
ADC | 18,112 | 5,500 | 798 | — | — | 24,410 | |||||||||||||||||
Residential mortgage | 212,264 | — | 1,788 | — | — | 214,052 | |||||||||||||||||
Consumer | 89,120 | 161 | — | — | — | 89,281 | |||||||||||||||||
Total loans subject to purchase accounting marks | $ | 1,491,968 | $ | 73,981 | $ | 35,431 | $ | — | $ | — | $ | 1,601,380 | |||||||||||
Remaining purchase accounting mark | $ | 35,432 | $ | 2,600 | $ | 1,725 | $ | — | $ | — | $ | 39,757 | |||||||||||
As a % of acquired loans | 2.37 | % | 3.51 | % | 4.87 | % | — | % | — | % | 2.48 | % | |||||||||||
Total portfolio loans | $ | 8,364,684 | $ | 103,710 | $ | 125,571 | $ | 330 | $ | — | $ | 8,594,295 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2015 | |||||||||||||||||||||||
Originated: | Pass | Special mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
C&I | $ | 1,356,685 | $ | 11,041 | $ | 29,621 | $ | 445 | $ | — | $ | 1,397,792 | |||||||||||
Payroll finance | 221,735 | — | 96 | — | — | 221,831 | |||||||||||||||||
Warehouse lending | 387,808 | — | — | — | — | 387,808 | |||||||||||||||||
Factored receivables | 206,814 | — | 1,568 | — | — | 208,382 | |||||||||||||||||
Equipment financing | 512,314 | 460 | 1,644 | — | — | 514,418 | |||||||||||||||||
Commercial real estate | 2,002,638 | 9,361 | 24,104 | — | — | 2,036,103 | |||||||||||||||||
Multi-family | 550,438 | — | 1,717 | — | — | 552,155 | |||||||||||||||||
ADC | 118,552 | 1,575 | 7,236 | — | — | 127,363 | |||||||||||||||||
Residential mortgage | 419,534 | 897 | 13,497 | — | — | 433,928 | |||||||||||||||||
Consumer | 195,684 | 407 | 7,167 | 268 | — | 203,526 | |||||||||||||||||
Total originated loans | $ | 5,972,202 | $ | 23,741 | $ | 86,650 | $ | 713 | $ | — | $ | 6,083,306 | |||||||||||
Allowance for loan losses | $ | 43,925 | $ | 884 | $ | 4,801 | $ | 535 | $ | — | $ | 50,145 | |||||||||||
As a % of originated loans | 0.74 | % | 3.72 | % | 5.54 | % | 75.04 | % | — | % | 0.82 | % |
December 31, 2015 | |||||||||||||||||||||||
Acquired loans: | Pass | Special mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
C&I | $ | 267,541 | $ | 9,724 | $ | 6,647 | $ | — | $ | — | $ | 283,912 | |||||||||||
Equipment financing | 116,885 | — | — | — | — | 116,885 | |||||||||||||||||
Commercial real estate | 645,951 | 23,111 | 28,186 | — | — | 697,248 | |||||||||||||||||
Multi-family | 237,948 | 5,927 | — | — | — | 243,875 | |||||||||||||||||
ADC | 52,775 | 5,500 | 760 | — | — | 59,035 | |||||||||||||||||
Residential mortgage | 272,336 | — | 6,772 | — | — | 279,108 | |||||||||||||||||
Consumer | 95,341 | — | 650 | — | — | 95,991 | |||||||||||||||||
Total loans subject to purchase accounting marks | $ | 1,688,777 | $ | 44,262 | $ | 43,015 | $ | — | $ | — | $ | 1,776,054 | |||||||||||
Remaining purchase accounting mark | $ | 37,351 | $ | 1,649 | $ | 2,383 | $ | — | $ | — | $ | 41,383 | |||||||||||
As a % of acquired loans | 2.21 | % | 3.73 | % | 5.54 | % | — | % | — | % | 2.33 | % | |||||||||||
Total portfolio loans | $ | 7,661,198 | $ | 68,003 | $ | 129,665 | $ | 713 | $ | — | $ | 7,859,579 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Special mention | Substandard | Doubtful | Special mention | Substandard | Doubtful | ||||||||||||||||||
C&I | $ | 53,487 | $ | 39,367 | $ | 323 | $ | 20,765 | $ | 36,268 | $ | 445 | |||||||||||
Payroll finance | 165 | 55 | — | — | 96 | — | |||||||||||||||||
Factored receivables | — | 732 | — | — | 1,568 | — | |||||||||||||||||
Equipment financing | 1,232 | 2,713 | — | 460 | 1,644 | — | |||||||||||||||||
Commercial real estate | 31,590 | 52,746 | — | 32,472 | 52,290 | — | |||||||||||||||||
Multi-family | 7,553 | 857 | — | 5,927 | 1,717 | — | |||||||||||||||||
ADC | 7,154 | 7,996 | — | 7,075 | 7,996 | — | |||||||||||||||||
Residential mortgage | 1,936 | 13,853 | — | 897 | 20,269 | — | |||||||||||||||||
Consumer | 593 | 7,252 | 7 | 407 | 7,817 | 268 | |||||||||||||||||
Total | $ | 103,710 | $ | 125,571 | $ | 330 | $ | 68,003 | $ | 129,665 | $ | 713 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Goodwill | $ | 696,600 | $ | 670,699 | |||
Other intangible assets: | |||||||
Core deposits | $ | 41,624 | $ | 45,794 | |||
Customer lists | 8,665 | 7,959 | |||||
Non-compete agreements | 1,595 | 2,925 | |||||
Trade name | 20,500 | 20,500 | |||||
Fair value of below market leases | 141 | 189 | |||||
Total | $ | 72,525 | $ | 77,367 |
Amortization expense | |||
Remainder of 2016 | $ | 6,172 | |
2017 | 8,838 | ||
2018 | 7,285 | ||
2019 | 6,074 | ||
2020 | 5,428 | ||
2021 | 5,022 | ||
Thereafter | 13,206 | ||
Total | $ | 52,025 |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Non-interest bearing demand | $ | 3,146,504 | $ | 2,936,980 | |||
Interest bearing demand | 2,269,787 | 1,274,417 | |||||
Savings | 783,187 | 943,632 | |||||
Money market | 2,998,291 | 2,819,788 | |||||
Certificates of deposit | 587,787 | 605,190 | |||||
Total deposits | $ | 9,785,556 | $ | 8,580,007 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Interest bearing | $ | 216,939 | $ | — | |||
Money market | 171,588 | 152,180 | |||||
Reciprocal brokered deposits | 178,799 | 169,958 | |||||
CDARs1 one way | — | 106,647 | |||||
Total brokered deposits | $ | 567,326 | $ | 428,785 |
June 30, | December 31, | ||||||||||||
2016 | 2015 | ||||||||||||
Amount | Rate | Amount | Rate | ||||||||||
By type of borrowing: | |||||||||||||
FHLB borrowings | $ | 1,074,492 | 1.00 | % | $ | 1,409,885 | 1.32 | % | |||||
Other borrowings (repurchase agreements) | 28,202 | 0.98 | 16,566 | 0.55 | |||||||||
Senior notes | 99,099 | 5.98 | 98,893 | 5.98 | |||||||||
Subordinated notes | 108,161 | 5.47 | — | — | |||||||||
Total borrowings | $ | 1,309,954 | 1.74 | % | $ | 1,525,344 | 1.61 | % | |||||
By remaining period to maturity: | |||||||||||||
Less than one year | $ | 697,694 | 0.79 | % | $ | 999,222 | 0.69 | % | |||||
One to two years | 145,000 | 1.13 | 295,000 | 3.19 | |||||||||
Two to three years | 259,099 | 0.91 | 228,893 | 3.57 | |||||||||
Three to four years | 50,000 | 1.38 | — | — | |||||||||
Four to five years | 50,000 | 1.68 | — | — | |||||||||
Greater than five years | 108,161 | 5.47 | 2,229 | 4.92 | |||||||||
Total borrowings | $ | 1,309,954 | 1.74 | % | $ | 1,525,344 | 1.61 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Notional amount | Average maturity (in years) | Weighted average fixed rate | Weighted average variable rate | Fair value | |||||||||
June 30, 2016 | |||||||||||||
3rd party interest rate swap | $ | 185,342 | 5.70 | 3.91 | 1 m Libor + 2.27 | $ | 7,498 | ||||||
Customer interest rate swap | (185,342 | ) | 5.70 | 3.91 | 1 m Libor + 2.27 | (7,498 | ) | ||||||
December 31, 2015 | |||||||||||||
3rd party interest rate swap | 87,094 | 5.44 | 4.09 | 1 m Libor + 2.15 | 1,839 | ||||||||
Customer interest rate swap | (87,094 | ) | 5.44 | 4.09 | 1 m Libor + 2.15 | (1,839 | ) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
For the three months ended | For the six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income (loss) before income tax expense | $ | 56,182 | $ | (11,328 | ) | $ | 92,191 | $ | 13,526 | ||||||
Tax at Federal statutory rate of 35% | 19,664 | (3,965 | ) | 32,267 | 4,735 | ||||||||||
State and local income taxes, net of Federal tax benefit | 2,992 | (220 | ) | 4,985 | 655 | ||||||||||
Tax-exempt interest, net of disallowed interest | (1,958 | ) | (1,190 | ) | (3,792 | ) | (2,174 | ) | |||||||
Bank owned life insurance income | (430 | ) | (440 | ) | (875 | ) | (691 | ) | |||||||
Non-deductible acquisition related costs | — | 560 | — | 700 | |||||||||||
Low income housing tax credits | (180 | ) | (54 | ) | (234 | ) | (108 | ) | |||||||
Other, net | (1,676 | ) | 1,627 | (1,696 | ) | 1,279 | |||||||||
Actual income tax expense (benefit) | $ | 18,412 | $ | (3,682 | ) | $ | 30,655 | $ | 4,396 | ||||||
Effective income tax rate | 32.8 | % | 32.5 | % | 33.3 | % | 32.5 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Non-vested stock awards/stock units outstanding | Stock options outstanding | |||||||||||||||
Shares available for grant | Number of shares | Weighted average grant date fair value | Number of shares | Weighted average exercise price | ||||||||||||
Balance at January 1, 2016 | 4,125,665 | 726,800 | $ | 13.36 | 1,586,572 | $ | 10.95 | |||||||||
Granted | (492,731 | ) | 492,731 | 14.21 | — | — | ||||||||||
Stock awards vested | — | (46,167 | ) | — | — | — | ||||||||||
Exercised | — | — | — | (165,055 | ) | 10.76 | ||||||||||
Forfeited | 57,678 | (5,531 | ) | 10.93 | (38,261 | ) | 13.23 | |||||||||
Canceled/expired | (57,678 | ) | — | — | — | — | ||||||||||
Balance at June 30, 2016 | 3,632,934 | 1,167,833 | $ | 14.26 | 1,383,256 | $ | 10.91 | |||||||||
Exercisable at June 30, 2016 | 1,013,767 | $ | 10.20 |
For the six months | ||
ended June 30, | ||
2015 | ||
Risk-free interest rate | 1.9 | % |
Expected stock price volatility | 20.9 | |
Dividend yield (1) | 3.1 | |
Expected term in years | 5.76 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
For the three months | For the six months | ||||||||||||||
ended June 30, | ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Stock options | $ | 125 | $ | 258 | $ | 251 | $ | 539 | |||||||
Non-vested stock awards/performance units | 1,622 | 869 | 3,036 | 1,697 | |||||||||||
Total | $ | 1,747 | $ | 1,127 | $ | 3,287 | $ | 2,236 | |||||||
Income tax benefit | 573 | 366 | 1,095 | 727 | |||||||||||
Proceeds from stock option exercises | 755 | 269 | 1,265 | 2,745 |
June 30, 2016 | |||
Stock options | $ | 401 | |
Non-vested stock awards/performance units | 11,363 | ||
Total | $ | 11,764 |
Pension plan | Other post retirement plans | ||||||||||||||
For the three months ended | For the three months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | 1 | |||||||
Interest cost | — | 589 | 105 | 120 | |||||||||||
Expected return on plan assets | — | (729 | ) | — | — | ||||||||||
Net amortization and deferral | — | 91 | 20 | 40 | |||||||||||
Total pension (benefit) expense and other post-retirement expense | $ | — | $ | (49 | ) | $ | 125 | $ | 161 |
Pension plan | Other post retirement plans | ||||||||||||||
For the six months ended | For the six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | — | $ | — | $ | — | $ | 3 | |||||||
Interest cost | — | 1,177 | 209 | 239 | |||||||||||
Expected return on plan assets | — | (1,458 | ) | — | — | ||||||||||
Net amortization and deferral | — | 182 | 32 | 77 | |||||||||||
Total pension (benefit) expense and other post-retirement expense | $ | — | $ | (99 | ) | $ | 241 | $ | 319 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
For the three months ended | For the six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Other non-interest expense: | |||||||||||||||
Advertising and promotion | $ | 985 | $ | 596 | $ | 1,536 | $ | 1,072 | |||||||
Professional fees | 2,607 | 2,096 | 5,080 | 4,013 | |||||||||||
Data and check processing | 2,261 | 1,568 | 4,015 | 3,716 | |||||||||||
Insurance & surety bond premium | 897 | 481 | 1,682 | 1,129 | |||||||||||
Charge for asset write-downs | 2,485 | 28,055 | 2,485 | 29,026 | |||||||||||
Other | 2,430 | 3,786 | 10,081 | 7,449 | |||||||||||
Total other non-interest expense | $ | 11,665 | $ | 36,582 | $ | 24,879 | $ | 46,405 |
For the three months ended | For the six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | 37,770 | $ | (7,646 | ) | $ | 61,536 | $ | 9,130 | ||||||
Weighted average common shares outstanding for computation of basic EPS | 130,081,465 | 91,565,972 | 129,953,397 | 89,712,796 | |||||||||||
Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants(1) | 607,264 | 384,804 | 568,624 | 386,992 | |||||||||||
Weighted average common shares for computation of diluted EPS | 130,688,729 | 91,950,776 | 130,522,021 | 90,099,788 | |||||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.29 | $ | (0.08 | ) | $ | 0.47 | $ | 0.10 | ||||||
Diluted | 0.29 | (0.08 | ) | 0.47 | 0.10 | ||||||||||
Weighted average common shares that could be exercised that were anti-dilutive for the period(2) | — | 117,537 | — | 115,227 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Actual | Minimum capital required - Basel III phase-in schedule | Minimum capital required - Basel III fully phased-in | Required to be considered well- capitalized | ||||||||||||||||||||||||
Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | ||||||||||||||||||||
June 30, 2016 | |||||||||||||||||||||||||||
Common equity tier 1 to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | $ | 1,057,550 | 10.70 | % | $ | 506,928 | 5.125 | % | $ | 691,715 | 7.00 | % | $ | 642,307 | 6.50 | % | |||||||||||
Sterling Bancorp | 1,001,414 | 10.13 | 507,051 | 5.125 | 691,882 | 7.00 | N/A | N/A | |||||||||||||||||||
Tier 1 capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 1,057,550 | 10.70 | % | 655,153 | 6.625 | % | 839,940 | 8.50 | % | 790,532 | 8.00 | % | |||||||||||||||
Sterling Bancorp | 1,001,414 | 10.13 | 655,311 | 6.625 | 840,143 | 8.50 | N/A | N/A | |||||||||||||||||||
Total capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 1,222,125 | 12.37 | % | 852,786 | 8.625 | % | 1,037,573 | 10.50 | % | 988,164 | 10.00 | % | |||||||||||||||
Sterling Bancorp | 1,157,169 | 11.71 | 852,992 | 8.625 | 1,037,823 | 10.50 | N/A | N/A | |||||||||||||||||||
Tier 1 leverage ratio: | |||||||||||||||||||||||||||
Sterling National Bank | 1,057,550 | 8.84 | 478,660 | 4.000 | 478,660 | 4.00 | 598,325 | 5.00 | % | ||||||||||||||||||
Sterling Bancorp | 1,001,414 | 8.36 | 479,348 | 4.000 | 479,348 | 4.00 | N/A | N/A |
Actual | Minimum capital required - Basel III phase-in schedule | Minimum capital required - Basel III fully phased-in | Required to be considered well- capitalized | ||||||||||||||||||||||||
Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | ||||||||||||||||||||
December 31, 2015 | |||||||||||||||||||||||||||
Common equity tier 1 to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | $ | 1,053,527 | 11.45 | % | $ | 413,951 | 4.50 | % | $ | 643,923 | 7.00 | % | $ | 597,929 | 6.50 | % | |||||||||||
Sterling Bancorp | 988,174 | 10.74 | 414,047 | 4.50 | 644,073 | 7.00 | N/A | N/A | |||||||||||||||||||
Tier 1 capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 1,053,527 | 11.45 | % | 551,934 | 6.00 | % | 781,907 | 8.50 | % | 735,912 | 8.00 | % | |||||||||||||||
Sterling Bancorp | 988,174 | 10.74 | 552,063 | 6.00 | 782,089 | 8.50 | N/A | N/A | |||||||||||||||||||
Total capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 1,104,221 | 12.00 | % | 735,912 | 8.00 | % | 965,885 | 10.50 | % | 919,891 | 10.00 | % | |||||||||||||||
Sterling Bancorp | 1,038,868 | 11.29 | 736,084 | 8.00 | 966,110 | 10.50 | N/A | N/A | |||||||||||||||||||
Tier 1 leverage ratio: | |||||||||||||||||||||||||||
Sterling National Bank | 1,053,527 | 9.65 | % | 436,678 | 4.00 | % | 436,678 | 4.00 | % | 545,848 | 5.00 | % | |||||||||||||||
Sterling Bancorp | 988,174 | 9.03 | 437,629 | 4.00 | 437,629 | 4.00 | N/A | N/A |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Loan origination commitments | $ | 228,421 | $ | 269,636 | |||
Unused lines of credit | 857,008 | 660,915 | |||||
Letters of credit | 111,787 | 102,930 |
Remainder of 2016 | $ | 5,541 | |
2017 | 10,326 | ||
2018 | 9,407 | ||
2019 | 6,848 | ||
2020 | 5,405 | ||
2021 | 5,001 | ||
2022 and thereafter | 20,319 | ||
$ | 62,847 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Assets: | |||||||||||||||
Investment securities available for sale: | |||||||||||||||
Residential MBS(1): | |||||||||||||||
Agency-backed | $ | 1,215,975 | $ | — | $ | 1,215,975 | $ | — | |||||||
CMO(2)/Other MBS | 69,167 | — | 69,167 | — | |||||||||||
Total residential MBS | 1,285,142 | — | 1,285,142 | — | |||||||||||
Other securities: | |||||||||||||||
Federal agencies | 83,987 | — | 83,987 | — | |||||||||||
Corporate | 69,783 | — | 69,783 | — | |||||||||||
State and municipal | 165,310 | — | 165,310 | — | |||||||||||
Other | 8,791 | — | 8,791 | — | |||||||||||
Total other securities | 327,871 | — | 327,871 | — | |||||||||||
Total available for sale securities | 1,613,013 | — | 1,613,013 | — | |||||||||||
Swaps | 7,498 | — | 7,498 | — | |||||||||||
Total assets | $ | 1,620,511 | $ | — | $ | 1,620,511 | $ | — | |||||||
Liabilities: | |||||||||||||||
Swaps | $ | 7,498 | $ | — | $ | 7,498 | $ | — | |||||||
Total liabilities | $ | 7,498 | $ | — | $ | 7,498 | $ | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2015 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Assets: | |||||||||||||||
Investment securities available for sale: | |||||||||||||||
Residential MBS: | |||||||||||||||
Agency-backed | $ | 1,217,862 | $ | — | $ | 1,217,862 | $ | — | |||||||
CMO/Other MBS | 78,373 | — | 78,373 | — | |||||||||||
Total residential MBS | 1,296,235 | — | 1,296,235 | — | |||||||||||
Federal agencies | 84,267 | — | 84,267 | — | |||||||||||
Corporate bonds | 314,188 | — | 314,188 | — | |||||||||||
State and municipal | 189,035 | — | 189,035 | — | |||||||||||
Trust preferred | 28,517 | — | 28,517 | — | |||||||||||
Other | 8,790 | — | 8,790 | — | |||||||||||
Total investment securities available for sale | 624,797 | — | 624,797 | — | |||||||||||
Total available for sale securities | 1,921,032 | — | 1,921,032 | — | |||||||||||
Swaps | 1,839 | — | 1,839 | — | |||||||||||
Total assets | $ | 1,922,871 | $ | — | $ | 1,922,871 | $ | — | |||||||
Liabilities: | |||||||||||||||
Swaps | $ | 1,839 | $ | — | $ | 1,839 | $ | — | |||||||
Total liabilities | $ | 1,839 | $ | — | $ | 1,839 | $ | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Commercial real estate | 5,065 | — | — | 5,065 | |||||||||||
Total impaired loans measured at fair value | $ | 5,065 | $ | — | $ | — | $ | 5,065 |
December 31, 2015 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Commercial real estate | $ | 3,218 | $ | — | $ | — | $ | 3,218 | |||||||
Total impaired loans measured at fair value | $ | 3,218 | $ | — | $ | — | $ | 3,218 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Non-recurring fair value measurements | Fair value | Valuation technique | Unobservable input / assumptions | Range (1) (weighted average) | |||||
Impaired loans: | |||||||||
Commercial real estate | 5,065 | Appraisal | Adjustments for comparable properties | 22.0% (22.0%) | |||||
Assets taken in foreclosure: | |||||||||
Residential mortgage | 5,227 | Appraisal | Adjustments by management to reflect current conditions/selling costs | 10.0% - 22.0% (21.6%) | |||||
Commercial real estate(2) | 6,564 | Appraisal | Adjustments by management to reflect current conditions/selling costs | 10.0% - 22.0% (22.0%) | |||||
ADC | 4,312 | Appraisal | Adjustments by management to reflect current conditions/selling costs | 10.0% - 22.0% (22.0%) | |||||
Mortgage servicing rights | 1,064 | Discounted cash flow | Discount rates | 8.5% - 11.5% (9.7%) | |||||
Discounted cash flow | Prepayment speeds | 100 - 2086 (203) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, 2016 | |||||||||||||||
Carrying amount | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 258,326 | $ | 258,326 | $ | — | $ | — | |||||||
Securities available for sale | 1,613,013 | — | 1,613,013 | — | |||||||||||
Securities held to maturity | 1,367,046 | — | 1,413,618 | — | |||||||||||
Portfolio loans, net | 8,538,430 | — | — | 8,595,755 | |||||||||||
Loans held for sale | 57,249 | — | 57,249 | — | |||||||||||
Accrued interest receivable on securities | 13,493 | — | 13,493 | — | |||||||||||
Accrued interest receivable on loans | 21,613 | — | — | 21,613 | |||||||||||
FHLB stock and FRB stock | 102,855 | — | — | — | |||||||||||
Swaps | 7,498 | — | 7,498 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Non-maturity deposits | (9,197,769 | ) | (9,197,769 | ) | — | — | |||||||||
Certificates of deposit | (587,787 | ) | — | (588,713 | ) | — | |||||||||
FHLB borrowings | (1,074,492 | ) | — | (1,077,180 | ) | — | |||||||||
Other borrowings | (28,202 | ) | — | (28,196 | ) | — | |||||||||
Senior notes | (99,099 | ) | — | (103,826 | ) | — | |||||||||
Subordinated notes | (108,161 | ) | — | (111,562 | ) | — | |||||||||
Mortgage escrow funds | (14,283 | ) | — | (14,279 | ) | — | |||||||||
Accrued interest payable on deposits | (595 | ) | — | (595 | ) | — | |||||||||
Accrued interest payable on borrowings | (5,149 | ) | — | (5,149 | ) | — | |||||||||
Swaps | (7,498 | ) | — | (7,498 | ) | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2015 | |||||||||||||||
Carrying amount | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 229,513 | $ | 229,513 | $ | — | $ | — | |||||||
Securities available for sale | 1,921,032 | — | 1,921,032 | — | |||||||||||
Securities held to maturity | 722,791 | — | 734,079 | — | |||||||||||
Portfolio loans, net | 7,809,215 | — | — | 7,876,064 | |||||||||||
Loans held for sale | 34,110 | — | 34,110 | — | |||||||||||
Accrued interest receivable on securities | 11,329 | — | 11,329 | — | |||||||||||
Accrued interest receivable on loans | 20,202 | — | — | 20,202 | |||||||||||
FHLB stock and FRB stock | 116,758 | — | — | — | |||||||||||
Swaps | 1,839 | — | 1,839 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Non-maturity deposits | (7,974,817 | ) | (7,974,817 | ) | — | — | |||||||||
Certificates of deposit | (605,190 | ) | — | (603,634 | ) | — | |||||||||
FHLB borrowings | (1,409,885 | ) | — | (1,418,155 | ) | — | |||||||||
Other borrowings | (16,566 | ) | — | (16,430 | ) | — | |||||||||
Senior notes | (98,893 | ) | — | (105,088 | ) | — | |||||||||
Mortgage escrow funds | (13,778 | ) | — | (13,775 | ) | — | |||||||||
Accrued interest payable on deposits | (783 | ) | — | (783 | ) | — | |||||||||
Accrued interest payable on borrowings | (4,490 | ) | — | (4,490 | ) | — | |||||||||
Swaps | (1,839 | ) | — | (1,839 | ) | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Net unrealized holding gain (loss) on available for sale securities | $ | 25,439 | $ | (12,172 | ) | ||
Related income tax (expense) benefit | (10,048 | ) | 5,173 | ||||
Available for sale securities AOCI, net of tax | 15,391 | (6,999 | ) | ||||
Net unrealized holding loss on securities transferred to held to maturity | (6,167 | ) | (7,226 | ) | |||
Related income tax benefit | 2,436 | 3,071 | |||||
Securities transferred to held to maturity AOCI, net of tax | (3,731 | ) | (4,155 | ) | |||
Net unrealized holding loss on retirement plans | (1,207 | ) | (1,687 | ) | |||
Related income tax benefit | 477 | 717 | |||||
Retirement plans AOCI, net of tax | (730 | ) | (970 | ) | |||
AOCI | $ | 10,930 | $ | (12,124 | ) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (Dollars in thousands, except share and per share data) |
Net unrealized holding gain (loss) on available for sale securities | Net unrealized holding gain (loss) on securities transferred to held to maturity | Net unrealized holding (loss) gain on retirement plans | Total | ||||||||||||
For the three months ended June 30, 2016 | |||||||||||||||
Balance beginning of the period | $ | 9,115 | $ | (4,200 | ) | $ | (756 | ) | $ | 4,159 | |||||
Other comprehensive gain before reclassification | 8,984 | — | — | 8,984 | |||||||||||
Amounts reclassified from AOCI | (2,708 | ) | 469 | 26 | (2,213 | ) | |||||||||
Total other comprehensive income | 6,276 | 469 | 26 | 6,771 | |||||||||||
Balance at end of period | $ | 15,391 | $ | (3,731 | ) | $ | (730 | ) | $ | 10,930 | |||||
For the three months ended June 30, 2015 | |||||||||||||||
Balance beginning of the period | $ | 6,382 | $ | (4,657 | ) | $ | (6,464 | ) | $ | (4,739 | ) | ||||
Other comprehensive gain before reclassification | (9,124 | ) | — | — | (9,124 | ) | |||||||||
Amounts reclassified from AOCI | 401 | 164 | 97 | 662 | |||||||||||
Total other comprehensive (loss) income | (8,723 | ) | 164 | 97 | (8,462 | ) | |||||||||
Balance at end of period | $ | (2,341 | ) | $ | (4,493 | ) | $ | (6,367 | ) | $ | (13,201 | ) | |||
Location in statement of operations where reclassification from AOCI is included | Net gain on sale of securities | Interest income on securities | Compensation and benefits expense |
Net unrealized holding (loss) gain on available for sale securities | Net unrealized holding (loss)gain on securities transferred to held to maturity | Net unrealized holding (loss) gain on retirement plans | Total | ||||||||||||
Six months ended June 30, 2016 | |||||||||||||||
Balance beginning of the period | $ | (6,999 | ) | $ | (4,155 | ) | $ | (970 | ) | $ | (12,124 | ) | |||
Other comprehensive gain before reclassification | 24,800 | — | — | 24,800 | |||||||||||
Amounts reclassified from AOCI | (2,410 | ) | 424 | 240 | (1,746 | ) | |||||||||
Total other comprehensive income | 22,390 | 424 | 240 | 23,054 | |||||||||||
Balance at end of period | $ | 15,391 | $ | (3,731 | ) | $ | (730 | ) | $ | 10,930 | |||||
Six months ended June 30, 2015 | |||||||||||||||
Balance beginning of the period | $ | 1,297 | $ | (4,967 | ) | $ | (6,581 | ) | $ | (10,251 | ) | ||||
Other comprehensive gain before reclassification | (4,921 | ) | — | — | (4,921 | ) | |||||||||
Amounts reclassified from AOCI | 1,283 | 474 | 214 | 1,971 | |||||||||||
Total other comprehensive (loss) income | (3,638 | ) | 474 | 214 | (2,950 | ) | |||||||||
Balance at end of period | $ | (2,341 | ) | $ | (4,493 | ) | $ | (6,367 | ) | $ | (13,201 | ) | |||
Location in statement of operations where reclassification from AOCI is included | Net gain on sale of securities | Interest income on securities | Compensation and benefits expense |
• | our ability to successfully implement strategic initiatives, to increase revenues faster than we grow expenses, and to integrate and fully realize cost savings and other benefits we estimate in connection with acquisitions; |
• | a deterioration in general economic conditions, either nationally, internationally, or in our market areas, including extended declines in the real estate market and constrained financial markets; |
• | as a result of the HVB Merger, the Bank’s total assets exceed $10 billion, which makes the Bank subject to regulatory oversight by the Consumer Financial Protection Bureau, and the Bank became subject to provisions of the Durbin Amendment as of June 30, 2016, which will impact the Bank’s debit card interchange fees; |
• | our ability to make accurate assumptions and judgments about an appropriate level of allowance for loan losses and the collectability of our loan portfolio, including changes in the level and trend of loan delinquencies and write-offs that may lead to increased losses and non-performing assets in our loan portfolio, result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our reserves; |
• | our ability to manage changes in market interest rates, which could adversely affect our financial condition and results of operations; |
• | our use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; |
• | the effects of and changes in laws and regulations (including laws and regulations concerning banking and taxes) with which we and the Bank must comply; and |
• | our success at managing the risks involved in the foregoing and managing our business. |
At or for the three months ended June 30, | At or for the six months ended June 30, | ||||||||||||||
Selected financial condition data | 2016 | 2015 | 2016 | 2015 | |||||||||||
End of Period Balances: | |||||||||||||||
Total assets | $ | 13,065,248 | $ | 11,566,382 | $ | 13,065,248 | $ | 11,566,382 | |||||||
Tangible assets1 | 12,296,123 | 10,812,483 | 12,296,123 | 10,812,483 | |||||||||||
Securities available for sale | 1,613,013 | 2,081,414 | 1,613,013 | 2,081,414 | |||||||||||
Securities held to maturity | 1,367,046 | 585,196 | 1,367,046 | 585,196 | |||||||||||
Portfolio loans | 8,594,295 | 7,235,587 | 8,594,295 | 7,235,587 | |||||||||||
Goodwill | 696,600 | 669,590 | 696,600 | 669,590 | |||||||||||
Other intangibles | 72,525 | 84,309 | 72,525 | 84,309 | |||||||||||
Deposits | 9,785,556 | 8,836,161 | 9,785,556 | 8,836,161 | |||||||||||
Municipal deposits (included in the line above) | 1,184,231 | 1,212,624 | 1,184,231 | 1,212,624 | |||||||||||
Borrowings | 1,309,954 | 914,921 | 1,309,954 | 914,921 | |||||||||||
Stockholders’ equity | 1,735,994 | 1,623,110 | 1,735,994 | 1,623,110 | |||||||||||
Tangible equity1 | 966,869 | 869,211 | 966,869 | 869,211 | |||||||||||
Average Balances: | |||||||||||||||
Total assets | 12,700,038 | 8,049,220 | 12,350,704 | 7,745,454 | |||||||||||
Tangible assets1 | 11,929,107 | 7,593,900 | 11,591,532 | 7,298,264 | |||||||||||
Loans, gross: | |||||||||||||||
Residential mortgage | 729,685 | 539,569 | 742,624 | 535,518 | |||||||||||
Commercial real estate | 3,694,162 | 2,040,094 | 3,640,751 | 1,974,701 | |||||||||||
Traditional commercial and industrial (“C&I”) | 1,456,402 | 966,411 | 1,418,754 | 932,811 | |||||||||||
Asset based lending | 636,383 | 297,846 | 470,581 | 297,131 | |||||||||||
Payroll finance | 187,887 | 170,905 | 190,158 | 164,733 | |||||||||||
Warehouse lending | 301,882 | 263,802 | 275,356 | 210,715 | |||||||||||
Factored receivables | 183,051 | 150,569 | 182,513 | 142,383 | |||||||||||
Equipment financing | 630,922 | 477,369 | 623,958 | 450,589 | |||||||||||
Total C&I | 3,396,527 | 2,326,902 | 3,161,320 | 2,198,362 | |||||||||||
Acquisition, development & construction (“ADC”) | 197,489 | 97,197 | 188,454 | 97,529 | |||||||||||
Consumer | 295,666 | 202,044 | 296,346 | 201,278 | |||||||||||
Loans, total2 | 8,313,529 | 5,205,806 | 8,029,495 | 5,007,388 | |||||||||||
Interest earning deposits | 272,426 | 114,128 | 284,547 | 113,643 | |||||||||||
Securities (taxable) | 2,032,518 | 1,527,872 | 2,086,032 | 1,454,275 | |||||||||||
Securities (non-taxable) | 837,133 | 380,544 | 715,455 | 374,469 | |||||||||||
Total earning assets | 11,558,424 | 7,309,667 | 11,219,386 | 7,024,628 | |||||||||||
Deposits: | |||||||||||||||
Non-interest bearing demand | 3,059,562 | 1,548,844 | 3,034,324 | 1,526,392 | |||||||||||
Interest bearing demand | 2,016,365 | 823,471 | 1,811,796 | 799,724 | |||||||||||
Savings (including mortgage escrow funds) | 809,123 | 802,956 | 811,804 | 784,803 | |||||||||||
Money market | 3,056,188 | 1,922,805 | 2,961,427 | 1,887,518 | |||||||||||
Certificates of deposit | 620,759 | 536,394 | 619,957 | 494,661 | |||||||||||
Total deposits and mortgage escrow | 9,561,997 | 5,634,470 | 9,239,308 | 5,493,098 | |||||||||||
Borrowings | 1,304,442 | 1,234,958 | 1,289,523 | 1,096,153 | |||||||||||
Stockholders’ equity | 1,711,902 | 1,100,897 | 1,699,088 | 1,066,544 | |||||||||||
Tangible equity1 | 940,971 | 645,577 | 939,916 | 619,354 |
At or for the three months ended June 30, | At or for the six months ended June 30, | ||||||||||||||
Per Share Data: | 2016 | 2015 | 2016 | 2015 | |||||||||||
Reported basic earnings (loss) per share (GAAP) | $ | 0.29 | $ | (0.08 | ) | $ | 0.47 | $ | 0.10 | ||||||
Reported diluted earnings (loss) per share (GAAP) | 0.29 | (0.08 | ) | 0.47 | 0.10 | ||||||||||
Adjusted diluted earnings per share1 (non-GAAP) | 0.27 | 0.23 | 0.52 | 0.44 | |||||||||||
Dividends declared per share | 0.07 | 0.07 | 0.14 | 0.14 | |||||||||||
Tangible book value per share1 | 7.40 | 6.70 | 7.40 | 6.70 | |||||||||||
Shares of common stock outstanding | 130,620,463 | 129,709,834 | 130,620,463 | 129,709,834 | |||||||||||
Basic weighted average common shares outstanding | 130,081,465 | 91,565,972 | 129,953,397 | 89,712,796 | |||||||||||
Diluted weighted average common shares outstanding | 130,688,729 | 91,950,776 | 130,522,021 | 90,099,788 | |||||||||||
Performance Ratios (annualized): | |||||||||||||||
Return on average assets | 1.20 | % | (0.38 | )% | 1.07 | % | 0.24 | % | |||||||
Return on average equity | 8.87 | (2.79 | ) | 7.28 | 1.73 | ||||||||||
Reported return on average tangible assets1 | 1.27 | (0.40 | ) | 1.07 | 0.24 | ||||||||||
Adjusted return on average tangible assets1 | 1.19 | 1.13 | 1.11 | 1.10 | |||||||||||
Reported return on average tangible equity1 | 16.14 | (4.75 | ) | 13.17 | 2.82 | ||||||||||
Adjusted return on average tangible equity1 | 15.14 | 13.27 | 14.48 | 12.98 | |||||||||||
Reported operating efficiency1 | 49.36 | 110.63 | 55.96 | 87.54 | |||||||||||
Adjusted operating efficiency1 | 47.19 | 52.62 | 48.01 | 54.44 | |||||||||||
Analysis of Net Interest Income: | |||||||||||||||
Yield on loans | 4.68 | % | 4.60 | % | 4.65 | % | 4.63 | % | |||||||
Yield on investment securities (tax equivalent)3 | 2.76 | 2.71 | 2.70 | 2.75 | |||||||||||
Yield on interest earning assets (tax equivalent)3 | 4.09 | 4.03 | 4.04 | 4.07 | |||||||||||
Cost of total deposits | 0.35 | 0.24 | 0.32 | 0.24 | |||||||||||
Cost of borrowings | 1.73 | 1.63 | 1.82 | 1.79 | |||||||||||
Cost of interest bearing liabilities | 0.72 | 0.63 | 0.71 | 0.64 | |||||||||||
Net interest rate spread (tax equivalent)3 | 3.37 | 3.40 | 3.33 | 3.43 | |||||||||||
Net interest margin (GAAP) | 3.50 | 3.49 | 3.49 | 3.51 | |||||||||||
Net interest margin (tax equivalent)3 | 3.60 | 3.57 | 3.57 | 3.60 | |||||||||||
Capital Ratios: | |||||||||||||||
Tier 1 leverage ratio - Company | 8.37 | % | 12.92 | % | 8.37 | % | 12.92 | % | |||||||
Tier 1 leverage ratio - Bank only | 8.84 | 13.82 | 8.84 | 13.82 | |||||||||||
Tier 1 risk-based capital ratio - Company | 10.13 | 10.74 | 10.13 | 10.74 | |||||||||||
Tier 1 risk-based capital ratio - Bank only | 10.70 | 11.98 | 10.70 | 11.98 | |||||||||||
Total risk-based capital ratio - Company | 11.71 | 11.29 | 11.71 | 11.29 | |||||||||||
Total risk-based capital ratio - Bank only | 12.37 | 12.51 | 12.37 | 12.51 | |||||||||||
Tangible equity to tangible assets - Company1 | 7.86 | 8.04 | 7.86 | 8.04 |
1 | See a reconciliation of non-GAAP financial measures beginning on page 72. |
2 | Includes loans held for sale but excludes the allowance for loan losses. |
For the three months ended June 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Commercial loans | $ | 7,288,178 | $ | 86,206 | 4.76 | % | $ | 4,464,193 | $ | 51,805 | 4.65 | % | |||||||||
Consumer loans | 295,666 | 3,391 | 4.61 | 202,044 | 1,975 | 3.92 | |||||||||||||||
Residential mortgage loans | 729,685 | 7,061 | 3.87 | 539,569 | 5,964 | 4.43 | |||||||||||||||
Total net loans1 | 8,313,529 | 96,658 | 4.68 | 5,205,806 | 59,744 | 4.60 | |||||||||||||||
Securities taxable | 2,032,518 | 10,662 | 2.11 | 1,527,872 | 8,423 | 2.21 | |||||||||||||||
Securities non-taxable | 837,133 | 9,032 | 4.34 | 380,544 | 4,462 | 4.70 | |||||||||||||||
Interest earning deposits | 272,426 | 258 | 0.38 | 114,128 | 48 | 0.17 | |||||||||||||||
FRB and FHLB stock | 102,818 | 860 | 3.36 | 81,317 | 832 | 4.10 | |||||||||||||||
Total securities and other earning assets | 3,244,895 | 20,812 | 2.58 | 2,103,861 | 13,765 | 2.62 | |||||||||||||||
Total interest earning assets | 11,558,424 | 117,470 | 4.09 | 7,309,667 | 73,509 | 4.03 | |||||||||||||||
Non-interest earning assets | 1,141,614 | 739,553 | |||||||||||||||||||
Total assets | $ | 12,700,038 | $ | 8,049,220 | |||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Demand deposits | $ | 2,016,365 | $ | 1,994 | 0.40 | % | $ | 823,471 | $ | 207 | 0.10 | % | |||||||||
Savings deposits2 | 809,123 | 841 | 0.42 | 802,956 | 482 | 0.24 | |||||||||||||||
Money market deposits | 3,056,188 | 4,152 | 0.55 | 1,922,805 | 1,931 | 0.40 | |||||||||||||||
Certificates of deposit | 620,759 | 1,341 | 0.87 | 536,394 | 739 | 0.55 | |||||||||||||||
Total interest bearing deposits | 6,502,435 | 8,328 | 0.52 | 4,085,626 | 3,359 | 0.33 | |||||||||||||||
Senior notes | 99,032 | 1,478 | 6.00 | 98,629 | 1,473 | 5.99 | |||||||||||||||
Other borrowings | 1,097,270 | 2,642 | 0.97 | 1,136,329 | 3,541 | 1.25 | |||||||||||||||
Subordinated notes | 108,140 | 1,481 | 5.51 | — | — | — | |||||||||||||||
Total borrowings | 1,304,442 | 5,601 | 1.73 | 1,234,958 | 5,014 | 1.63 | |||||||||||||||
Total interest bearing liabilities | 7,806,877 | 13,929 | 0.72 | 5,320,584 | 8,373 | 0.63 | |||||||||||||||
Non-interest bearing deposits | 3,059,562 | 1,548,844 | |||||||||||||||||||
Other non-interest bearing liabilities | 121,697 | 78,895 | |||||||||||||||||||
Total liabilities | 10,988,136 | 6,948,323 | |||||||||||||||||||
Stockholders’ equity | 1,711,902 | 1,100,897 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 12,700,038 | $ | 8,049,220 | |||||||||||||||||
Net interest rate spread3 | 3.37 | % | 3.40 | % | |||||||||||||||||
Net interest earning assets4 | $ | 3,751,547 | $ | 1,989,083 | |||||||||||||||||
Net interest margin - tax equivalent | 103,541 | 3.60 | % | 65,136 | 3.57 | % | |||||||||||||||
Less tax equivalent adjustment | (3,161 | ) | (1,562 | ) | |||||||||||||||||
Net interest income | $ | 100,380 | $ | 63,574 | |||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 148.1 | % | 137.4 | % |
For the six months ended June 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Commercial loans | $ | 6,990,525 | $ | 164,345 | 4.73 | % | $ | 4,270,592 | $ | 99,560 | 4.70 | % | |||||||||
Consumer loans | 296,346 | 6,685 | 4.54 | 201,278 | 4,086 | 4.09 | |||||||||||||||
Residential mortgage loans | 742,624 | 14,662 | 3.97 | 535,518 | 11,369 | 4.28 | |||||||||||||||
Total net loans1 | 8,029,495 | 185,692 | 4.65 | 5,007,388 | 115,015 | 4.63 | |||||||||||||||
Securities taxable | 2,086,032 | 22,678 | 2.19 | 1,454,275 | 16,055 | 2.23 | |||||||||||||||
Securities tax exempt | 715,455 | 14,998 | 4.22 | 374,469 | 8,873 | 4.78 | |||||||||||||||
Interest earning deposits | 284,547 | 568 | 0.40 | 113,643 | 88 | 0.16 | |||||||||||||||
FRB and FHLB stock | 103,857 | 1,627 | 3.15 | 74,853 | 1,694 | 4.56 | |||||||||||||||
Total securities and other earning assets | 3,189,891 | 39,871 | 2.51 | 2,017,240 | 26,710 | 1.77 | |||||||||||||||
Total interest earning assets | 11,219,386 | 225,563 | 4.04 | 7,024,628 | 141,725 | 4.07 | |||||||||||||||
Non-interest earning assets | 1,131,318 | 720,826 | |||||||||||||||||||
Total assets | $ | 12,350,704 | $ | 7,745,454 | |||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Demand deposits | $ | 1,811,796 | $ | 2,158 | 0.24 | % | $ | 799,724 | $ | 347 | 0.09 | % | |||||||||
Savings deposits2 | 811,804 | 2,287 | 0.57 | 784,803 | 1,135 | 0.29 | |||||||||||||||
Money market deposits | 2,961,427 | 7,824 | 0.53 | 1,887,518 | 3,601 | 0.38 | |||||||||||||||
Certificates of deposit | 619,957 | 2,468 | 0.80 | 494,661 | 1,369 | 0.56 | |||||||||||||||
Total interest bearing deposits | 6,204,984 | 14,737 | 0.48 | 3,966,706 | 6,452 | 0.33 | |||||||||||||||
Senior notes | 98,980 | 2,957 | 6.01 | 98,580 | 2,945 | 6.02 | |||||||||||||||
Other borrowings | 1,134,691 | 7,219 | 1.28 | 997,573 | 6,783 | 1.37 | |||||||||||||||
Subordinated debentures | 55,852 | 1,512 | 5.44 | — | — | — | |||||||||||||||
Total interest bearing liabilities | 7,494,507 | 26,425 | 0.71 | 5,062,859 | 16,180 | 0.64 | |||||||||||||||
Non-interest bearing deposits | 3,034,324 | 1,526,392 | |||||||||||||||||||
Other non-interest bearing liabilities | 122,785 | 89,659 | |||||||||||||||||||
Total liabilities | 10,651,616 | 6,678,910 | |||||||||||||||||||
Stockholders’ equity | 1,699,088 | 1,066,544 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 12,350,704 | $ | 7,745,454 | |||||||||||||||||
Net interest rate spread3 | 3.33 | % | 3.43 | % | |||||||||||||||||
Net interest earning assets4 | $ | 3,724,879 | $ | 1,961,769 | |||||||||||||||||
Net interest margin - tax equivalent | 199,138 | 3.57 | % | 125,545 | 3.60 | % | |||||||||||||||
Less tax equivalent adjustment | (5,248 | ) | (3,106 | ) | |||||||||||||||||
Net interest income | $ | 193,890 | $ | 122,439 | |||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 149.7 | % | 138.7 | % |
For the three months ended June 30, | |||||||||||
2016 vs. 2015 | |||||||||||
Increase (Decrease) due to | Total increase | ||||||||||
Volume | Rate | (decrease) | |||||||||
Interest earning assets: | |||||||||||
Commercial loans | $ | 33,277 | $ | 1,124 | $ | 34,401 | |||||
Consumer loans | 1,026 | 390 | 1,416 | ||||||||
Residential mortgage loans | 1,832 | (735 | ) | 1,097 | |||||||
Securities taxable | 2,638 | (399 | ) | 2,239 | |||||||
Securities non-taxable | 4,937 | (366 | ) | 4,571 | |||||||
Interest earning deposits | 111 | 99 | 210 | ||||||||
FRB and FHLB stock | 195 | (167 | ) | 28 | |||||||
Total interest earning assets | 44,016 | (54 | ) | 43,962 | |||||||
Interest bearing liabilities: | |||||||||||
Demand deposits | 583 | 1,204 | 1,787 | ||||||||
Savings deposits1 | 4 | 355 | 359 | ||||||||
Money market deposits | 1,357 | 864 | 2,221 | ||||||||
Certificates of deposit | 128 | 474 | 602 | ||||||||
Senior notes | 5 | — | 5 | ||||||||
Other borrowings | (193 | ) | (706 | ) | (899 | ) | |||||
Subordinated notes | 1,481 | — | 1,481 | ||||||||
Total interest bearing liabilities | 3,365 | 2,191 | 5,556 | ||||||||
Less tax equivalent adjustment | 1,733 | (132 | ) | 1,601 | |||||||
Change in net interest income | $ | 38,918 | $ | (2,113 | ) | $ | 36,805 |
For the six months ended June 30, | |||||||||||
2016 vs. 2015 | |||||||||||
Increase (Decrease) due to | Total increase | ||||||||||
Volume | Rate | (decrease) | |||||||||
Interest earning assets: | |||||||||||
Commercial loans | $ | 64,143 | $ | 642 | $ | 64,785 | |||||
Consumer loans | 2,108 | 491 | 2,599 | ||||||||
Residential mortgage loans | 4,061 | (768 | ) | 3,293 | |||||||
Securities taxable | 6,916 | (293 | ) | 6,623 | |||||||
Securities tax exempt | 7,275 | (1,150 | ) | 6,125 | |||||||
Interest earning deposits | 240 | 240 | 480 | ||||||||
FRB and FHLB stock | 547 | (614 | ) | (67 | ) | ||||||
Total interest earning assets | 85,290 | (1,452 | ) | 83,838 | |||||||
Interest bearing liabilities: | |||||||||||
Interest bearing demand deposits | 781 | 1,030 | 1,811 | ||||||||
Savings deposits1 | 40 | 1,112 | 1,152 | ||||||||
Money market deposits | 2,493 | 1,730 | 4,223 | ||||||||
Certificates of deposit | 408 | 691 | 1,099 | ||||||||
Senior notes | 12 | — | 12 | ||||||||
Other borrowings | 746 | (310 | ) | 436 | |||||||
Subordinated debentures | 1,512 | — | 1,512 | ||||||||
Total interest bearing liabilities | 5,992 | 4,253 | 10,245 | ||||||||
Less tax equivalent adjustment | 2,533 | (391 | ) | 2,142 | |||||||
Change in net interest income | $ | 76,765 | $ | (5,314 | ) | $ | 71,451 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Accounts receivable management / factoring commissions and other related fees | $ | 4,156 | $ | 4,435 | $ | 8,650 | $ | 7,937 | |||||||
Mortgage banking income | 2,367 | 2,530 | 4,369 | 5,687 | |||||||||||
Deposit fees and service charges | 4,084 | 3,639 | 8,574 | 7,181 | |||||||||||
Net gain on sale of securities | 4,474 | 697 | 4,191 | 2,231 | |||||||||||
Bank owned life insurance | 1,281 | 1,074 | 2,608 | 2,150 | |||||||||||
Investment management fees | 934 | 316 | 2,058 | 676 | |||||||||||
Other | 3,146 | 1,166 | 5,422 | 2,008 | |||||||||||
Total non-interest income | $ | 20,442 | $ | 13,857 | $ | 35,872 | $ | 27,870 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Compensation and employee benefits expense | $ | 31,336 | $ | 22,667 | $ | 61,356 | $ | 45,833 | |||||||
Stock-based compensation plan expense | 1,747 | 1,128 | 3,287 | 2,236 | |||||||||||
Occupancy and office operations expense | 8,810 | 7,453 | 18,092 | 14,033 | |||||||||||
Amortization of intangible assets | 3,241 | 1,780 | 6,294 | 3,180 | |||||||||||
FDIC insurance and regulatory assessments expense | 2,300 | 1,384 | 4,558 | 2,812 | |||||||||||
Other real estate owned expense | 541 | 40 | 1,123 | 4 | |||||||||||
Merger-related expense | — | 14,625 | 266 | 17,080 | |||||||||||
Loss on extinguishment of FHLB borrowings | — | — | 8,716 | — | |||||||||||
Charge for asset write-downs, banking systems conversion, retention and severance | — | 28,055 | 2,485 | 29,026 | |||||||||||
Other non-interest expense | 11,665 | 8,527 | 22,394 | 17,379 | |||||||||||
Total non-interest expense | $ | 59,640 | $ | 85,659 | $ | 128,571 | $ | 131,583 |
June 30, 2016 | December 31, 2015 | ||||||||||||
Amount | % | Amount | % | ||||||||||
Commercial: | |||||||||||||
Commercial & industrial (“C&I”): | |||||||||||||
Traditional C&I | $ | 2,161,389 | 25.2 | % | $ | 1,681,704 | 21.4 | % | |||||
Payroll finance | 211,471 | 2.5 | 221,831 | 2.8 | |||||||||
Warehouse lending | 429,506 | 5.0 | 387,808 | 4.9 | |||||||||
Factored receivables | 200,523 | 2.3 | 208,382 | 2.7 | |||||||||
Equipment financing | 636,280 | 7.4 | 631,303 | 8.0 | |||||||||
Total C&I | 3,639,169 | 42.4 | 3,131,028 | 39.8 | |||||||||
Commercial mortgage: | |||||||||||||
Commercial real estate | 2,868,545 | 33.4 | 2,733,351 | 34.8 | |||||||||
Multi-family | 914,114 | 10.6 | 796,030 | 10.1 | |||||||||
Acquisition, development & construction (“ADC”) | 207,868 | 2.4 | 186,398 | 2.4 | |||||||||
Total commercial mortgage | 3,990,527 | 46.4 | 3,715,779 | 47.3 | |||||||||
Total commercial | 7,629,696 | 88.8 | 6,846,807 | 87.1 | |||||||||
Residential mortgage | 673,208 | 7.8 | 713,036 | 9.1 | |||||||||
Consumer | 291,391 | 3.4 | 299,517 | 3.8 | |||||||||
Total portfolio loans | 8,594,295 | 100.0 | % | 7,859,360 | 100.0 | % | |||||||
Allowance for loan losses | (55,865 | ) | (50,145 | ) | |||||||||
Total portfolio loans, net | $ | 8,538,430 | $ | 7,809,215 |
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Non-accrual loans: | |||||||
C&I | $ | 27,850 | $ | 10,142 | |||
Payroll finance | 48 | — | |||||
Factored receivables | 732 | 220 | |||||
Equipment financing | 2,344 | 1,644 | |||||
Commercial real estate | 23,513 | 20,742 | |||||
Multi-family | 858 | 1,717 | |||||
ADC | 3,933 | 3,700 | |||||
Residential mortgage | 12,933 | 19,680 | |||||
Consumer | 6,825 | 7,892 | |||||
Total non-accrual loans | 79,036 | 65,737 | |||||
Accruing loans past due 90 days or more | 528 | 674 | |||||
Total non-performing loans | 79,564 | 66,411 | |||||
OREO | 16,590 | 14,614 | |||||
Total non-performing assets | $ | 96,154 | $ | 81,025 | |||
Troubled debt restructurings (“TDRs”) accruing and not included above | $ | 14,894 | $ | 13,701 | |||
Ratios: | |||||||
Non-performing loans (“NPLs”) to total loans | 0.93 | % | 0.84 | % | |||
NPAs to total assets | 0.74 | 0.68 |
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||
Allowance for loan losses | Loan balance | % of total loans | Allowance for loan losses | Loan balance | % of total loans | ||||||||||||||||
C&I | $ | 15,231 | $ | 2,161,389 | 25.2 | % | $ | 13,262 | $ | 1,681,704 | 21.4 | % | |||||||||
Payroll finance | 1,165 | 211,471 | 2.5 | 1,936 | 221,831 | 2.8 | |||||||||||||||
Warehouse lending | 652 | 429,506 | 5.0 | 589 | 387,808 | 4.9 | |||||||||||||||
Factored receivables | 1,585 | 200,523 | 2.3 | 1,457 | 208,382 | 2.7 | |||||||||||||||
Equipment financing | 5,346 | 636,280 | 7.4 | 4,925 | 631,303 | 8.0 | |||||||||||||||
Commercial real estate | 17,523 | 2,868,545 | 33.4 | 13,861 | 2,733,351 | 34.8 | |||||||||||||||
Multi-family | 3,463 | 914,114 | 10.6 | 2,741 | 796,030 | 10.1 | |||||||||||||||
ADC | 2,042 | 207,868 | 2.4 | 2,009 | 186,398 | 2.4 | |||||||||||||||
Residential mortgage | 4,875 | 673,208 | 7.8 | 5,007 | 713,036 | 9.1 | |||||||||||||||
Consumer | 3,983 | 291,391 | 3.4 | 4,358 | 299,517 | 3.8 | |||||||||||||||
Total | $ | 55,865 | $ | 8,594,295 | 100.0 | % | $ | 50,145 | $ | 7,859,360 | 100.0 | % |
• | Total portfolio loans increased by $734,935, or 9.4%, to $8,594,295 at June 30, 2016, compared to $7,859,360 at December 31, 2015. In addition to organic growth, portfolio loans increased by $320,447 as a result of loans acquired in the NSBC Acquisition. We also acquired and recorded $35,844 of additional assets in the NSBC Acquisition. |
• | Total investment securities increased by $336,236, or 12.7%, to $2,980,059 at June 30, 2016, compared to $2,643,823 at December 31, 2015. We mainly acquired high investment grade tax-exempt securities issued by New York State, New York City, other municipal entities in New York, and securities issued by other states. Investment securities were 22.8% of total assets at June 30, 2016, compared to 22.1% at December 31, 2015. |
• | Cash and cash equivalents increased by $28,813 to $258,326 at June 30, 2016, compared to $229,513 at December 31, 2015. |
• | Total deposits increased $1,205,549, or 14.1%, to $9,785,556 at June 30, 2016, compared to $8,580,007 at December 31, 2015. Our core retail, commercial and municipal transaction, money market and savings accounts were $8,809,242, which represented 90.0% of our total deposit balances. The increase in deposits was driven by our commercial banking teams, as several of our recent commercial banking hires are more deposit gathering focused. |
• | FHLB borrowings declined $335,393, to $1,074,492 at June 30, 2016, compared to $1,409,885 at December 31, 2015. The decline in borrowings was mainly the result of our successful deposit gathering efforts in the first half of 2016. |
• | The Bank issued $110,000 in subordinated notes on March 29, 2016, which are discussed in more detail in “Recent Developments” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and in Note 8. “Borrowings” to the consolidated financial statements included elsewhere in this report. |
June 30, | |||||||
2016 | 2015 | ||||||
The following table shows the reconciliation of stockholders’ equity to tangible equity and the tangible equity ratio 1: | |||||||
Total assets | $ | 13,065,248 | $ | 11,566,382 | |||
Goodwill and other intangibles | (769,125 | ) | (753,899 | ) | |||
Tangible assets | 12,296,123 | 10,812,483 | |||||
Stockholders’ equity | 1,735,994 | 1,623,110 | |||||
Goodwill and other intangibles | (769,125 | ) | (753,899 | ) | |||
Tangible stockholders’ equity | $ | 966,869 | $ | 869,211 | |||
Common stock outstanding at period end | 130,620,463 | 129,709,834 | |||||
Stockholders’ equity as a % of total assets | 13.29 | % | 14.03 | % | |||
Book value per share | $ | 13.29 | 12.51 | ||||
Tangible equity as a % of tangible assets | 7.86 | % | 8.04 | % | |||
Tangible book value per share | $ | 7.40 | $ | 6.70 |
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
The following table shows the reconciliation of reported net income (GAAP) and adjusted net income (non-GAAP) and adjusted diluted earnings per share 2: | |||||||||||||||
Income (loss) before income tax expense | $ | 56,182 | $ | (11,328 | ) | $ | 92,191 | $ | 13,526 | ||||||
Income tax expense (benefit) | 18,412 | (3,682 | ) | 30,655 | 4,396 | ||||||||||
Net income (loss) | 37,770 | (7,646 | ) | 61,536 | 9,130 | ||||||||||
Adjustments: | |||||||||||||||
Net (gain) loss on sale of securities | (4,474 | ) | (697 | ) | (4,191 | ) | (2,231 | ) | |||||||
Merger-related expense | — | 14,625 | 266 | 17,080 | |||||||||||
Charge for asset write-downs, banking systems conversion, retention and severance | — | 28,055 | 2,485 | 29,026 | |||||||||||
Loss on extinguishment of FHLB borrowings | — | — | 8,716 | — | |||||||||||
Amortization of non-compete agreements and acquired customer lists | 969 | 991 | 1,937 | 1,651 | |||||||||||
Total adjustments | (3,505 | ) | 42,974 | 9,212 | 45,526 | ||||||||||
Income tax expense (benefit) | 1,149 | (13,967 | ) | (3,175 | ) | (14,796 | ) | ||||||||
Total adjustments net of tax | (2,356 | ) | 29,007 | 6,037 | 30,730 | ||||||||||
Adjusted net income | $ | 35,414 | $ | 21,361 | $ | 67,573 | $ | 39,860 | |||||||
Weighted average diluted shares | 130,688,729 | 91,950,776 | 130,522,021 | 90,099,788 | |||||||||||
Diluted EPS as reported (GAAP) | $ | 0.29 | $ | (0.08 | ) | $ | 0.47 | $ | 0.10 | ||||||
Adjusted diluted EPS (non-GAAP) | 0.27 | 0.23 | 0.52 | 0.44 |
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio 3: | |||||||||||||||
Net interest income | $ | 100,380 | $ | 63,574 | $ | 193,890 | $ | 122,439 | |||||||
Non-interest income | 20,442 | 13,857 | 35,872 | 27,870 | |||||||||||
Total net revenue | 120,822 | 77,431 | 229,764 | 150,308 | |||||||||||
Tax equivalent adjustment on securities interest income | 3,161 | 1,562 | 5,248 | 3,106 | |||||||||||
Net (gain) on sale of securities | (4,474 | ) | (697 | ) | (4,191 | ) | (2,231 | ) | |||||||
Adjusted total revenue | 119,509 | 78,296 | 230,821 | 151,183 | |||||||||||
Non-interest expense | 59,640 | 85,659 | 128,571 | 131,583 | |||||||||||
Merger-related expense | — | (14,625 | ) | (266 | ) | (17,080 | ) | ||||||||
Charge for asset write-downs, banking systems conversion, retention and severance | — | (28,055 | ) | (2,485 | ) | (29,026 | ) | ||||||||
Loss on extinguishment of FHLB borrowings | — | — | (8,716 | ) | — | ||||||||||
Amortization of intangible assets | (3,241 | ) | (1,780 | ) | (6,294 | ) | (3,180 | ) | |||||||
Adjusted non-interest expense | $ | 56,399 | $ | 41,199 | $ | 110,810 | $ | 82,297 | |||||||
Reported operating efficiency ratio | 49.4 | % | 110.6 | % | 56.0 | % | 87.5 | % | |||||||
Adjusted operating efficiency ratio | 47.2 | 52.6 | 48.0 | 54.4 |
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
The following table shows the reconciliation of return on tangible assets and adjusted return on tangible assets 4: | |||||||||||||||
Average assets | $ | 12,700,038 | $ | 8,049,220 | $ | 12,350,704 | $ | 7,745,454 | |||||||
Average goodwill and other intangibles | (770,931 | ) | (455,320 | ) | (759,172 | ) | (447,190 | ) | |||||||
Average tangible assets | $ | 11,929,107 | $ | 7,593,900 | $ | 11,591,532 | $ | 7,298,264 | |||||||
Net income (loss) | 37,770 | (7,646 | ) | 61,536 | 9,130 | ||||||||||
Net income (loss), if annualized | 151,910 | (30,668 | ) | 123,748 | 17,447 | ||||||||||
Return on average tangible assets | 1.27 | % | (0.40 | )% | 1.07 | % | 0.24 | % | |||||||
Adjusted net income | $ | 35,414 | $ | 21,361 | $ | 67,686 | $ | 39,860 | |||||||
Annualized adjusted net income | 142,434 | 85,679 | 129,026 | 80,381 | |||||||||||
Adjusted return on average tangible assets | 1.19 | % | 1.13 | % | 1.11 | % | 1.10 | % |
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
The following table shows the reconciliation of return on average tangible equity and adjusted return on average tangible equity 5: | |||||||||||||||
Average stockholders’ equity | $ | 1,711,902 | $ | 1,100,897 | $ | 1,699,088 | $ | 1,066,544 | |||||||
Average goodwill and other intangibles | (770,931 | ) | (455,320 | ) | (759,172 | ) | (447,190 | ) | |||||||
Average tangible stockholders’ equity | $ | 940,971 | $ | 645,577 | $ | 939,916 | $ | 619,354 | |||||||
Net income (loss) | 37,770 | (7,646 | ) | 61,536 | 9,130 | ||||||||||
Net income (loss), if annualized | 151,910 | (30,668 | ) | 123,748 | 17,447 | ||||||||||
Reported return on average tangible equity | 16.14 | % | (4.75 | )% | 13.17 | % | 2.82 | % | |||||||
Adjusted net income | $ | 35,414 | $ | 21,361 | $ | 67,686 | $ | 39,860 | |||||||
Annualized adjusted net income | 142,434 | 85,679 | 136,116 | 80,381 | |||||||||||
Adjusted return on average tangible equity | 15.14 | % | 13.27 | % | 14.48 | % | 12.98 | % |
As of | |||||||
June 30, 2016 | December 31, 2015 | ||||||
The following table shows a reconciliation of the allowance for loan losses and remaining purchase accounting adjustments to portfolio loans6: | |||||||
Allowance for loan losses | $ | 55,865 | $ | 50,145 | |||
Remaining purchase accounting adjustments: | |||||||
Acquired performing loans | 23,802 | 24,766 | |||||
Purchased credit impaired loans | 15,955 | 16,617 | |||||
Total remaining purchase accounting adjustments | 39,757 | 41,383 | |||||
Total valuation balances recorded against portfolio loans | $ | 95,622 | $ | 91,528 | |||
Total portfolio loans, gross | $ | 8,594,295 | $ | 7,859,360 | |||
Remaining purchase accounting adjustments: | |||||||
Acquired performing loans | 23,802 | 24,766 | |||||
Purchased credit impaired loans | 15,955 | 16,617 | |||||
Adjusted portfolio loans, gross | $ | 8,634,052 | $ | 7,900,743 | |||
Allowance for loan losses to total portfolio loans, gross | 0.65 | % | 0.64 | % | |||
Total valuation balances recorded against portfolio loans to adjusted gross portfolio loans | 1.11 | % | 1.16 | % |
Interest rates | Estimated | Estimated change in EVE | Estimated | Estimated change in NII | ||||||||||||||||||
(basis points) | EVE | Amount | Percent | NII | Amount | Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
+300 | $ | 1,608,957 | $ | (34,967 | ) | (2.1 | )% | $ | 461,591 | $ | 58,882 | 14.6 | % | |||||||||
+200 | 1,633,532 | (10,392 | ) | (0.6 | ) | 441,414 | 38,705 | 9.6 | ||||||||||||||
+100 | 1,655,709 | 11,785 | 0.7 | 422,748 | 20,039 | 5.0 | ||||||||||||||||
0 | 1,643,924 | — | — | 402,709 | — | — | ||||||||||||||||
-100 | 1,575,972 | (67,952 | ) | (4.1 | ) | 370,076 | (32,633 | ) | (8.1 | ) |
Exhibit Number | Description | |
31.1 | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
Date: | August 5, 2016 | By: | /s/ Jack Kopnisky | |
Jack Kopnisky | ||||
President, Chief Executive Officer and Director | ||||
(Principal Executive Officer) | ||||
Date: | August 5, 2016 | By: | /s/ Luis Massiani | |
Luis Massiani | ||||
Senior Executive Vice President and Chief Financial Officer | ||||
(Principal Financial Officer and Principal Accounting Officer) | ||||
1. | I have reviewed this Quarterly Report on Form 10-Q of Sterling Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 5, 2016 | By: | /s/ Jack Kopnisky |
Jack Kopnisky | |||
President, Chief Executive Officer and Director | |||
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Sterling Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 5, 2016 | By: | /s/ Luis Massiani | |
Luis Massiani | ||||
Senior Executive Vice President | ||||
Chief Financial Officer | ||||
Principal Accounting Officer | ||||
(Principal Financial Officer) |
(1) | the report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 5, 2016 | By: | /s/ Jack Kopnisky | |||||
Jack Kopnisky | ||||||||
President, Chief Executive Officer and Director | ||||||||
(Principal Executive Officer) |
Date: | August 5, 2016 | By: | /s/ Luis Massiani | |||||
Luis Massiani | ||||||||
Senior Executive Vice President | ||||||||
Chief Financial Officer | ||||||||
Principal Accounting Officer | ||||||||
(Principal Financial Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Aug. 04, 2016 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | STERLING BANCORP | |
Entity Central Index Key | 0001070154 | |
Document Period End Date | Jun. 30, 2016 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 130,655,998 |
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Securities held to maturity | $ 1,413,618 | $ 734,079 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 190,000,000 | 190,000,000 |
Common stock, shares issued | 136,673,149 | 136,673,149 |
Common stock, shares outstanding | 130,620,463 | 130,006,926 |
Treasury stock, shares | 6,052,686 | 6,666,223 |
Accumulated other comprehensive income, tax | $ 7,136 | $ (8,961) |
Consolidated Income Statements (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Interest and dividend income: | ||||
Loans and loan fees | $ 96,658 | $ 59,744 | $ 185,692 | $ 115,015 |
Securities taxable | 10,662 | 8,423 | 22,678 | 16,054 |
Securities non-taxable | 5,871 | 2,900 | 9,750 | 5,768 |
Other earning assets | 1,118 | 880 | 2,195 | 1,782 |
Total interest and dividend income | 114,309 | 71,947 | 220,315 | 138,619 |
Interest expense: | ||||
Deposits | 8,328 | 3,359 | 14,737 | 6,452 |
Borrowings | 5,601 | 5,014 | 11,688 | 9,728 |
Total interest expense | 13,929 | 8,373 | 26,425 | 16,180 |
Net interest income | 100,380 | 63,574 | 193,890 | 122,439 |
Provisions for loan losses | 5,000 | 3,100 | 9,000 | 5,200 |
Net interest income after provision for loan losses | 95,380 | 60,474 | 184,890 | 117,239 |
Non-interest income: | ||||
Accounts receivable management / factoring commissions and other fees | 4,156 | 4,435 | 8,650 | 7,937 |
Mortgage banking income | 2,367 | 2,530 | 4,369 | 5,687 |
Deposit fees and service charges | 4,084 | 3,639 | 8,574 | 7,181 |
Net gain on sale of securities | 4,474 | 697 | 4,191 | 2,231 |
Bank owned life insurance | 1,281 | 1,074 | 2,608 | 2,150 |
Investment management fees | 934 | 316 | 2,058 | 676 |
Other | 3,146 | 1,166 | 5,422 | 2,008 |
Total non-interest income | 20,442 | 13,857 | 35,872 | 27,870 |
Non-interest expense: | ||||
Compensation and benefits | 31,336 | 22,667 | 61,356 | 45,833 |
Stock-based compensation plans | 1,747 | 1,128 | 3,287 | 2,236 |
Occupancy and office operations | 8,810 | 7,453 | 18,092 | 14,033 |
Amortization of intangible assets | 3,241 | 1,780 | 6,294 | 3,180 |
FDIC insurance and regulatory assessments | 2,300 | 1,384 | 4,558 | 2,812 |
Other real estate owned expense, net | 541 | 40 | 1,123 | 4 |
Merger-related expense | 0 | 14,625 | 266 | 17,080 |
Loss on extinguishment of FHLB borrowings | 0 | 0 | 8,716 | 0 |
Other | 11,665 | 36,582 | 24,879 | 46,405 |
Total non-interest expense | 59,640 | 85,659 | 128,571 | 131,583 |
Income (loss) before income tax expense (benefit) | 56,182 | (11,328) | 92,191 | 13,526 |
Income tax expense (benefit) | 18,412 | (3,682) | 30,655 | 4,396 |
Net income (loss) | $ 37,770 | $ (7,646) | $ 61,536 | $ 9,130 |
Weighted average common shares: | ||||
Basic (in shares) | 130,081,465 | 91,565,972 | 129,953,397 | 89,712,796 |
Diluted (in shares) | 130,688,729 | 91,950,776 | 130,522,021 | 90,099,788 |
Earnings per common share: | ||||
Basic (USD per share) | $ 0.29 | $ (0.08) | $ 0.47 | $ 0.10 |
Diluted (USD per share) | $ 0.29 | $ (0.08) | $ 0.47 | $ 0.10 |
Consolidated Statement of Changes In Stockholders' Equity (Parenthetical) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends paid (USD per share) | $ 0.14 | $ 0.14 |
Basis of Financial Statement Presentation |
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation (a) Nature of Operations Sterling Bancorp (the “Company”) is a Delaware corporation, a bank holding company and a financial holding company headquartered in Montebello, New York, that owns all of the outstanding shares of common stock of Sterling National Bank (the “Bank”), its principal subsidiary. The Bank is a full-service regional bank specializing in the delivery of services and solutions to business owners, their families and consumers within the communities it serves through teams of dedicated and experienced relationship managers. (b) Basis of Presentation The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of the Company and all other entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies the Company follows conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which includes regulatory reporting instructions. The consolidated financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (the “SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the SEC on February 29, 2016 (the “2015 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. Certain items in prior financial statements have been reclassified to conform to the current presentation. (c) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and contingencies at the date of the financial statements. Actual results could differ significantly from these estimates. The allowance for loan losses and the status of contingencies are particularly subject to change. (d) Merger with Hudson Valley Holding Corp. On June 30, 2015, Hudson Valley Holding Corp. (“HVHC”) merged with and into the Company (the “HVB Merger”). In connection with the HVB Merger, Hudson Valley Bank, the principal subsidiary of HVHC, merged with and into the Bank. (e) Merger with Sterling Bancorp On October 31, 2013, Provident New York Bancorp (“Legacy Provident”) merged with legacy Sterling Bancorp (“Legacy Sterling”). In connection with the merger, the following corporate actions occurred:
We refer to the merger with Legacy Sterling as the “Provident Merger.” |
Acquisitions |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions NSBC Acquisition On March 31, 2016, the Bank acquired 100% of the outstanding equity interests of NewStar Business Credit LLC, a Delaware limited liability company (“NSBC” and, its acquisition, the “NSBC Acquisition”). NSBC is a provider of asset-based lending solutions to middle market commercial clients. NSBC’s loans were $320,447 on the acquisition date and consisted of 100% floating-rate assets. The Bank paid a premium on the balance of gross loans receivable acquired of 5.90%, or $18,906. The Bank assumed $4,839 of liabilities, which consisted mainly of cash collateral on loans outstanding. The Bank recognized a customer list intangible asset of $1,500 that is being amortized over its 24-month estimated life and $25,698 of goodwill. The Bank recorded a $1,500 restructuring charge consisting mainly of retention and severance compensation, IT contract terminations and professional fees. HVB Merger On June 30, 2015, the Company completed the HVB Merger. Under the terms of the HVB Merger agreement, HVHC shareholders received 1.92 shares of the Company’s common stock for each share of HVHC common stock, which resulted in the issuance of 38,525,154 shares. Based on the Company’s closing stock price of $14.63 per share on June 29, 2015, the aggregate consideration paid to HVHC shareholders was $566,307, which, in accordance with the HVB Merger agreement, also included the in-the-money cash value of outstanding HVHC stock options, the fair value of outstanding HVHC restricted stock awards and cash in lieu of fractional shares. Consistent with the Company’s strategy, the primary reason for the HVB Merger was the expansion of the Company’s geographic footprint in the greater New York metropolitan region and beyond. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of June 30, 2015, based on management’s best estimate and using the information available as of the HVB Merger date. The application of the acquisition method of accounting resulted in the recognition of goodwill of $269,757 and a core deposit intangible of $33,839. As of June 30, 2015, HVHC had assets with a net book value of approximately $288,208, including loans with a net book value of approximately $1,816,767, and deposits with a net book value of approximately $3,160,746. The table below summarizes the amounts recognized as of the HVB Merger date for each major class of assets acquired and liabilities assumed, the estimated fair value adjustments and the amounts recorded in the Company’s financial statements at fair value at the HVB Merger date:
Explanation of certain fair value related adjustments:
The fair values for loans acquired from HVHC were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted by estimating future credit losses and the rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. For collateral dependent loans with deteriorated credit quality, fair value was estimated by analyzing the value of the underlying collateral, assuming the fair values of the loans were derived from the eventual sale of the collateral. These values were discounted using market derived rates of return, with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of HVHC’s allowance for loan losses associated with the loans that were acquired, as the loans were initially recorded at fair value on the date of the HVB Merger. Acquired loan portfolio data in the HVB Merger is presented below:
The core deposit intangible asset recognized is being amortized over its estimated useful life of approximately 10 years utilizing the sum-of-the-years digits method. Other intangibles consist of below market rents, which are amortized over the remaining life of each lease using the straight-line method. Goodwill is not amortized for book purposes; however, it is reviewed at least annually for impairment and is not deductible for tax purposes. The fair value of land, buildings and equipment was estimated using appraisals. Buildings will be amortized over their estimated useful lives of approximately 30 years. Improvements and equipment will be amortized or depreciated over their estimated useful lives ranging from one to five years. The fair value of retail demand and interest bearing deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits was estimated by discounting the contractual future cash flows using market rates offered for time deposits of similar remaining maturities. Management concluded the carrying value was an appropriate estimate of fair value for these deposits. Direct acquisition and other charges incurred in connection with the HVB Merger were expensed as incurred and totaled $14,625 for the three and six months ended June 30, 2015. These expenses were mainly for financial advisory fees, legal and accounting fees, severance and retention compensation, management change-in-control payments, public relations and communications expense, and were recorded in “Merger-related expenses” on the consolidated statement of operations. Other integration costs of the HVB Merger for the three months and six months ended June 30, 2015 included a charge for asset write-downs, information technology services and other contract terminations, employee retention and severance compensation and impairment of leases and facilities which totaled $28,055, which was recorded in “Other non-interest expense” in the consolidated statement of operations. There were no merger-related expenses or other integration costs incurred in connection with the HVB Merger in 2016. FCC Acquisition On May 7, 2015, the Bank acquired a factoring portfolio from FCC, LLC, a subsidiary of First Capital Holdings, Inc. (“FCC”), with an outstanding factoring receivables balance of approximately $44,500. The total consideration included a premium of $1,000 in addition to the outstanding receivables balance. Damian Acquisition On February 27, 2015, the Bank acquired 100% of the outstanding common stock of Damian Services Corporation (“Damian”) a payroll services provider located in Chicago, Illinois, for total consideration of $24,670 in cash. In connection with the acquisition, the Bank acquired $22,307 of outstanding payroll finance loans and assumed $14,560 of liabilities. The Bank recognized a customer list intangible asset of $8,950 that is being amortized over its 16 year estimated life, and $11,930 of goodwill. The Bank also recognized a $1,500 restructuring charge consisting mainly of retention and severance compensation and asset write-downs related to the consolidation of Damian’s operations, and approximately $300 of legal fees. |
Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities A summary of amortized cost and estimated fair value of securities as of June 30, 2016 and December 31, 2015 is presented below. The term “Residential MBS” refers to residential mortgage-backed securities and the term “CMO” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.
The Company sold all of the trust preferred securities it held at December 31, 2015 during the six months ended June 30, 2016. The amortized cost and estimated fair value of securities at June 30, 2016 are presented below by contractual maturity. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential MBS are shown separately since they are not due at a single maturity date.
Sales of securities for the periods indicated below were as follows:
At June 30, 2016 and December 31, 2015, there were no holdings of securities of any one issuer in an amount greater than 10% of stockholders’ equity, other than the U.S. federal government and its agencies. The following table summarizes securities available for sale with unrealized losses, segregated by the length of time in a continuous unrealized loss position for the periods presented below:
The following table summarizes securities held to maturity with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
At June 30, 2016, a total of 34 available for sale securities were in a continuous unrealized loss position for less than 12 months and 40 securities were in a continuous unrealized loss position for 12 months or longer. Declines in the fair value of held to maturity and available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income. In estimating other than temporary impairment (“OTTI”) losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost; (ii) the financial condition and near-term prospects of the issuer; and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in cost. Management has the ability and intent to hold the securities classified as held to maturity in the table above until they mature, at which time the Company anticipates it will receive full value for the securities. Furthermore, as of June 30, 2016, management did not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. As of June 30, 2016, management believes the impairments detailed in the table above are temporary. Securities pledged for borrowings at the FHLB and other institutions, and securities pledged for municipal deposits and other purposes, were as follows for the periods presented below:
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Portfolio Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio Loans | Portfolio Loans The composition of the Company’s loan portfolio, excluding loans held for sale, was the following for the periods presented below:
Total portfolio loans include net deferred loan origination fees of $740 at June 30, 2016, and costs of $2,029 at December 31, 2015. At June 30, 2016 and December 31, 2015, the Company pledged loans with an unpaid principal balance of $2,957,554 and $2,776,572, respectively, to the FHLB as collateral for certain borrowing arrangements. See Note 8. “Borrowings”. The following tables set forth the amounts and status of the Company’s loans, troubled debt restructurings (“TDRs”) and non-performing loans at June 30, 2016 and December 31, 2015:
The following table provides additional analysis of the Company’s non-accrual loans at June 30, 2016 and December 31, 2015:
(1) The Company acquired loans for which there was, at acquisition, both evidence of deterioration of credit quality since origination and probability, at acquisition, that all contractually required payments would not be collected. These loans are classified as purchased credit impaired loans (“PCI loans”). There were no non-accrual warehouse lending loans at June 30, 2016 or December 31, 2015. When the ultimate collectibility of the total principal of an impaired loan is in doubt and the loan is on non-accrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectibility of the total principal of an impaired loan is not in doubt and the loan is on non-accrual status, contractual interest is credited to interest income when received, under the cash basis method. At June 30, 2016 and December 31, 2015, the recorded investment of residential mortgage loans that were formally in the process of foreclosure was $10,086 and $9,638, respectively, which are included in non-accrual residential mortgage loans above. The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at June 30, 2016:
The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2015:
Management considers a loan to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Evaluation of impairment is treated the same across all classes of loans on a loan-by-loan basis, except residential mortgage loans and home equity lines of credit with an outstanding balance of $500 or less, which are evaluated for impairment on a homogeneous pool basis. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole remaining source of repayment of the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs when foreclosure or liquidation is probable, instead of discounted cash flows. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is generally recognized through a charge-off to the allowance for loan losses. The carrying amount of PCI loans is presented in the tables above. At June 30, 2016, the net recorded amount of PCI loans was $107,575, which included $36,976 of C&I loans acquired in the NSBC Acquisition. There was $472 and $272 included in the allowance for loan losses associated with PCI loans at June 30, 2016 and December 31, 2015, respectively. The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three and six months ended June 30, 2016 and 2015:
Income is not recognized on PCI loans unless the Company can reasonably estimate the cash flows that are expected to be collected over the life of the loan. The balance of PCI loans that were treated under the cost recovery method were $13,016 and $20,025 at June 30, 2016 and December 31, 2015, respectively. The following table presents loans individually evaluated for impairment, excluding purchased credit impaired loans, by segment of loans at June 30, 2016 and December 31, 2015:
At June 30, 2016 and December 31, 2015 there were no payroll finance or warehouse lending loans that were individually evaluated for impairment. The following tables present the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended June 30, 2016 and June 30, 2015:
There were no impaired loans with an allowance recorded at June 30, 2016 or December 31, 2015. For the three months ended June 30, 2016 and 2015, there were no payroll finance or warehouse lending loans that were impaired. The following tables present the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the six months ended June 30, 2106 and June 30, 2015.
For the six months ended June 30, 2016 and 2015, there were no payroll finance or warehouse lending loans that were impaired. Troubled Debt Restructuring “TDRs”: The following tables set forth the amounts and past due status of the Company’s TDRs at June 30, 2016 and December 31, 2015:
There were no payroll finance, warehouse lending, factored receivables, multi-family or consumer loans that were TDRs for either period presented above. The Company did not have outstanding commitments to lend additional amounts to customers with loans classified as TDRs as of June 30, 2016 or December 31, 2015. There was one loan modified as a TDR in the six months ended June 30, 2016. This TDR did not increase the allowance for loan losses and did not result in charge-offs in the six months ended June 30, 2016. There were no loans modified as a TDR during the six months ended June 30, 2015. The following table presents loans by segment modified as TDRs that occurred during the first six months of 2016 and 2015:
There were no TDRs that were modified during the six months ended June 30, 2016 and 2015 that subsequently defaulted (which is defined as missing three consecutive monthly payments or being over 90 days past due on a scheduled payment). |
Allowance for Loan Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Allowance for Loan Losses Activity in the allowance for loan losses for the three and six months ended June 30, 2016 and 2015 is summarized below:
The following analysis presents the allowance for loan losses to originated loans as of June 30, 2016 and December 31, 2015.
In purchase accounting, the prior allowance for loan losses is not carried over, and in place, the Company is required to estimate the fair value of loans acquired, which is included as a purchase discount within the acquired loan discount. The following analysis presents the remaining purchase accounting marks to acquire loan portfolios as of June 30, 2016 and December 31, 2015.
Credit Quality Indicators As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators, including trends related to (i) the weighted-average risk grade of commercial loans; (ii) the level of classified commercial loans; (iii) the delinquency status of residential mortgage and consumer loans (home equity lines of credit (“HELOC”) and other consumer loans); (iv) net charge-offs; (v) non-performing loans (see details above); and (vi) the general economic conditions in the greater New York metropolitan region. The Bank analyzes loans individually by classifying the loans by credit risk, except residential mortgage loans, HELOC and other consumer loans, which are evaluated on a homogeneous pool basis unless the loan balance is greater than $500. This analysis is performed at least quarterly on all criticized/classified loans. The Bank uses the following definitions of risk ratings: 1 and 2 - These grades include loans that are secured by cash, marketable securities or cash surrender value of life insurance policies. 3 - This grade includes loans to borrowers with strong earnings and cash flow and that have the ability to service debt. The borrower’s assets and liabilities are generally well matched and are above average quality. The borrower has ready access to multiple sources of funding, including alternatives such as term loans, private equity placements or trade credit. 4 - This grade includes loans to borrowers with above average cash flow, adequate earnings and debt service coverage ratios. The borrower generates discretionary cash flow, assets and liabilities are reasonably matched, and the borrower has access to other sources of debt funding or additional trade credit at market rates. 5 - This grade includes loans to borrowers with adequate earnings and cash flow and reasonable debt service coverage ratios. Overall leverage is acceptable and there is average reliance upon trade credit. Management has a reasonable amount of experience and depth, and owners are willing to invest available outside capital as necessary. 6 - This grade includes loans to borrowers where there is evidence of some strain, earnings are inconsistent and volatile, and the borrowers’ outlook is uncertain. Generally, such borrowers have higher leverage than those with a better risk rating. These borrowers typically have limited access to alternative sources of bank debt and may be dependent upon debt funding for working capital support. 7 - Special Mention (OCC definition) - Other Assets Especially Mentioned (“OAEM”) are loans that have potential weaknesses which may, if not reversed or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date. Such assets constitute an undue and unwarranted credit risk but not to the point of justifying a classification of “Substandard.” The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances surrounding a specific asset. 8 - Substandard (OCC definition) - These loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some losses if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified as substandard. 9 - Doubtful (OCC definition) - These loans have all the weakness inherent in one classified as “Substandard” with the added characteristics that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but, because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger, acquisition, or liquidating procedures, capital injection, perfecting liens or additional collateral and refinancing plans. 10 - Loss (OCC definition) - These loans are charged-off because they are determined to be uncollectible and unbankable assets. This classification does not indicate that the asset has no absolute recovery or salvage value, but rather it is not practical or desirable to defer writing-off this asset even though partial recovery may be affected in the future. Losses should be taken in the period in which they are determined to be uncollectible. Loans that are risk-rated 1 through 6 as defined above are considered to be pass-rated loans. As of June 30, 2016 and December 31, 2015, the risk category of gross loans by segment was as follows:
There were no criticized or classified warehouse lending loans for the periods presented. There were no loans rated “loss” at June 30, 2016 and December 31, 2015. Included in C&I loans rated special mention at June 30, 2016 were $34,182 of loans acquired in the NSBC Acquisition. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The balance of goodwill and other intangible assets for the periods presented were as follows:
The increase in goodwill at June 30, 2016 compared to December 31, 2015 was due to the NSBC Acquisition. See Note 2. “Acquisitions” for additional information. The estimated aggregate future amortization expense for intangible assets remaining as of June 30, 2016 was as follows:
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits Deposit balances at June 30, 2016 and December 31, 2015 were summarized as follows:
Municipal deposits totaled $1,184,231 and $1,140,206 at June 30, 2016 and December 31, 2015, respectively. See Note 3. “Securities” for the amount of securities that were pledged as collateral for municipal deposits and other purposes. Brokered deposits at June 30, 2016 and December 31, 2015 were summarized as follows:
1 CDARs (Certificate of deposit account registry service) |
Borrowings |
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Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings The Company’s borrowings and weighted average interest rates were summarized as follows for the periods presented:
FHLB borrowings. As a member of the FHLB, the Bank may borrow up to a discounted percentage of the amount of eligible mortgages and securities that have been pledged as collateral under a blanket security agreement. As of June 30, 2016 and December 31, 2015, the Bank had total residential mortgage and commercial real estate loans pledged after discount of $2,237,263 and $2,050,982, respectively. In addition to the pledged mortgages, the Bank had also pledged securities to secure borrowings, which are disclosed in Note 3. “Securities.” As of June 30, 2016, the Bank had unused borrowing capacity at the FHLB of $1,346,347 and may increase its borrowing capacity by pledging securities not required to be pledged for other purposes with a collateral value of approximately $1,360,789. FHLB borrowings included $200,000 at December 31, 2015 that were putable quarterly at the discretion of the FHLB. These borrowings had a weighted average remaining term to the contractual maturity dates of approximately 1.31 years at December 31, 2015 and a weighted average interest rate of 4.23%. The Company redeemed these borrowings on March 31, 2016, together with $20,000 of other borrowings with an interest rate of 3.57%. The Company incurred a loss on extinguishment of debt associated with these repayments of $8,716, which is included in non-interest expense in the consolidated statements of operations. Other borrowings (repurchase agreements). The Bank enters into sales of securities under agreements to repurchase. These repurchase agreements facilitate the needs of our customers and a portion of our secured short-term funding needs. Securities sold under agreements to repurchase at June 30, 2016 and December 31, 2015 are secured short-term borrowings that mature in one to 45 days and are generally renewed on a continuous basis. Repurchase agreements are stated at the amount of cash received in connection with these transactions. The securities pledged under these repurchase agreements fluctuate in value due to market conditions. The Bank is obligated to promptly transfer additional securities if the market value of the securities falls below the repurchase agreement price. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. Senior Notes. On July 2, 2013, the Company issued $100,000 principal amount of 5.50% fixed rate senior notes (the “Senior Notes”) through a private placement at a discount of 1.75%. The cost of issuance was $303, and at June 30, 2016 and December 31, 2015 the unamortized discount was $901 and $1,107, respectively, which will be accreted to interest expense over the life of the Senior Notes, resulting in an effective yield of 5.98%. Interest is due semi-annually in arrears on January 2 and July 2 until maturity on July 2, 2018. Subordinated Notes. On March 29, 2016, the Bank issued $110,000 principal amount of 5.25% fixed-to-floating rate subordinated notes (the “Subordinated Notes”) through a private placement at a discount of 1.25%. The cost of issuance was $500, and at June 30, 2016 the unamortized discount was $1,839, which will be accreted to interest expense over the life of the subordinated notes, resulting in an effective yield of 5.47%. Interest is due semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2016, until April 1, 2021. From and including April 1, 2021, the Subordinated Notes will bear interest at a floating rate per annum equal to three-month LIBOR plus 3.937%, payable quarterly on January 1, April 1, July 1 and October 1 of each year, beginning on July 1, 2021, through maturity on April 1, 2026 or earlier redemption. The Subordinated Notes are redeemable by the Bank, in whole or in part, on April 1, 2021 and each interest payment date thereafter. The Subordinated Notes are redeemable in whole at any time upon certain specified events. The Subordinated Notes are unsecured, subordinated obligations of the Bank and are subordinated in right of payment to all of the Bank’s existing and future senior indebtedness, including claims of depositors and general creditors. The Subordinated Notes qualify as Tier 2 capital for regulatory purposes, see Note 15. “Stockholders’ Equity,” for additional information. Revolving line of credit. On June 28, 2016, the Company amended its revolving line of credit facility (the “Credit Facility”), and increased the maximum amount available from $15,000 to $25,000. The Credit Facility, which is with another financial institution, matures on September 5, 2016. The balance was zero at June 30, 2016 and December 31, 2015. The use of proceeds are for general corporate purposes. The Credit Facility and accrued interest is payable at maturity, and the Company is required to maintain a zero balance for at least 30 days during its term. Loans under the Credit Facility bear interest at one-month LIBOR plus 1.25%. Under the terms of the Credit Facility, the Company and the Bank must maintain certain ratios related to capital, non-performing assets to capital, reserves to non-performing loans and debt service coverage. The Company and the Bank were in compliance with all requirements of the Credit Facility at June 30, 2016. |
Derivatives |
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Derivative Instruments and Hedges, Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives The Company has entered into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Company enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Company’s customers to effectively convert a variable rate loan to a fixed rate. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company’s results of operations. The Company pledged cash of $1,525 and investment securities with a fair value of $5,973 as of June 30, 2016 as collateral for the swaps with another financial institution. The Company may need to post additional collateral to swap counterparties in the future in proportion to potential increases in unrealized loss positions. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back swaps. However, certain language is written into the International Swaps and Derivatives Association agreement and loan documents where, in default situations, the Company is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. Summary information as of June 30, 2016 and December 31, 2015 regarding these derivatives is presented below:
The Company enters into various commitments to sell real estate loans into the secondary market. Such commitments are considered to be derivative financial instruments; however, the fair value of these commitments is not material. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory Federal tax rate for the following reasons:
Net deferred tax assets totaled $12,189 at June 30, 2016 and $31,079 at December 31, 2015. No valuation allowance was recorded against deferred tax assets at June 30, 2016, as management believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years. There were no unrecognized tax benefits during any of the reported periods. Interest and/or penalties related to income taxes are reported as a component of other non-interest expense. Such amounts were not material during the reported periods. The Company is generally no longer subject to examination by Federal, state and local taxing authorities for fiscal years prior to September 30, 2012. |
Stock-Based Compensation |
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company has active stock-based compensation plans, as described below. The Company’s stockholders approved the 2015 Omnibus Equity and Incentive Plan (the “2015 Plan”) on May 28, 2015. The 2015 Plan permits the grant of stock options, stock appreciation rights, restricted stock (both time-based and performance-based), restricted stock units, deferred stock and other stock-based awards. The total number of shares that may be awarded under the 2015 Plan is 2,800,000 shares plus the remaining shares available for grant under the stockholder approved 2014 Stock Incentive Plan (the “2014 Plan”) as of the adoption of the 2015 Plan. At June 30, 2016, there were in aggregate 3,632,934 shares available for future grant under the 2015 Plan. The approval of the 2015 Plan resulted in the termination of the 2014 Plan. Awards granted under the 2014 Plan that were outstanding as of May 28, 2015 will continue to be governed by the 2014 Plan document; however, no future grants will be made under the 2014 Plan. Under the 2015 Plan, one share is deducted from the 2015 Plan for every share that is awarded and delivered under the 2015 Plan. Restricted stock awards are granted with a fair value equal to the market price of the Company’s common stock at the date of grant. Stock option awards are granted with a strike price that is equal to the market price of the Company’s stock at the date of grant. The awards generally vest in equal installments annually on the anniversary date and have total vesting periods ranging from 1 to 5 years and stock options having 10-year contractual terms. In addition to the 2015 Plan and the 2014 Plan, the Company previously granted awards under its 2011 Employment Inducement Stock Program, which included options to purchase 107,526 shares of common stock and restricted stock awards covering 29,550 shares of common stock, both of which vested in four equal installments through July 2015. In connection with the Provident Merger, the Company granted 104,152 options at an exercise price of $14.25 per share pursuant to a Registration Statement on Form S-8 under which the Company assumed all outstanding fully-vested Legacy Sterling stock options, which expire March 15, 2017. The Company also granted 95,991 shares under the Sterling Bancorp 2013 Employment Inducement Award Plan to certain executive officers of Legacy Sterling. In addition, the Company issued 255,973 shares of restricted stock from shares available under a prior plan to certain executives of Legacy Sterling. The weighted average grant date fair value under both of these plans was $11.72 per share, and the restricted stock awards vest in equal annual installments on the anniversary date over a three-year period. The following table summarizes the activity in the Company’s active stock-based compensation plans for the six months ended June 30, 2016:
The total intrinsic value of outstanding in-the-money stock options and outstanding in-the-money exercisable stock options was $6,629 and $5,574, respectively, at June 30, 2016. The Company uses an option pricing model to estimate the grant date fair value of stock options granted. There were no stock options granted during the six months ended June 30, 2016. There were 15,000 stock options granted during the six months ended June 30, 2015. The weighted average estimated value per option granted was $2.08 for the six months ended June 30, 2015. The fair value of options granted during the second quarter of 2015 was determined using the following weighted average assumptions as of the grant date. There were no options granted during the six months ended June 30, 2016:
(1) Represents the approximate annualized cash dividend rate paid with respect to a share of common stock at or near the grant date. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. Stock-based compensation expense associated with stock options and non-vested stock awards and the related income tax benefit are presented below:
Unrecognized stock-based compensation expense as of June 30, 2016 was as follows:
The weighted average period over which unrecognized stock options expense is expected to be recognized is 1.09 years. The weighted average period over which unrecognized non-vested stock awards/performance units expense is expected to be recognized is 2.05 years. |
Pension and Other Post Retirement Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Post Retirement Plans | Pension and Other Post Retirement Plans Net pension (benefit) expense and other post-retirement expense is comprised of the following for the periods presented below:
Net pension (benefit) expense and other post-retirement expense is included as a component of compensation and benefits in the consolidated statements of operations. The Company incurred no pension plan expense in the three or six months ended June 30, 2016, as the Company terminated the Sterling National Bank / Sterling Bancorp Defined Benefit Pension Plan (the “Plan”) in October 2015. After settlement of all Plan obligations, a pension reversion asset of $10,972 and $11,442 (recorded in other assets in the consolidated balance sheets) at June 30, 2016 and December 31, 2015, respectively, is held in custody by the Company’s 401(k) plan custodian and will be charged to earnings over the next five to seven years as it is distributed to employees under qualified compensation and benefit programs. The Company’s other post retirement plans include a non-qualified Supplemental Executive Retirement Plan (“SERP”) that provides certain officers and executives with supplemental retirement benefits. The Company contributed $53 to fund SERP benefits during the six months ended June 30, 2016 and 2015. Total post retirement plan liabilities were $11,897 and $11,733 at June 30, 2016 and December 31, 2015, respectively, and are included in other liabilities in the consolidated balance sheets. |
Other Non-Interest Expense |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Non-interest Expense | Other Non-interest Expense Other non-interest expense items for the three and six months ended June 30, 2016 and 2015, respectively, are presented in the following table. Components exceeding 1% of the aggregate of total net interest income and total non-interest income are presented separately.
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Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share The following is a summary of the calculation of earnings per share (“EPS”):
(1) Represents incremental shares computed using the treasury stock method. (2) Anti-dilutive shares are not included in determining diluted earnings per share; there were no anti-dilutive shares in the three months or six months ended June 30, 2016. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity (a) Regulatory Capital Requirements Banks and bank holding companies are subject to various regulatory capital requirements administered by the Federal banking agencies. Capital adequacy guidelines, and additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk-weighting, and other factors. The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015 (subject to a phase-in period for certain provisions). Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1 capital (as defined in the regulations), Tier 1 capital (as defined in the regulations) and Total capital (as defined in the regulations) to risk-weighted assets (as defined, “RWA”), and of Tier 1 capital to adjusted quarterly average assets (as defined in the regulations) (the “Tier 1 leverage ratio”). The Company’s and the Bank’s Common Equity Tier 1 capital consists of common stock and related paid-in capital, net of treasury stock, and retained earnings. In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1 capital. Common Equity Tier 1 capital for both the Company and the Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions. Tier 1 capital includes Common Equity Tier 1 capital and additional Tier 1 capital. Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital (as defined in the regulations) for both the Bank and the Company includes a permissible portion of the allowance for loan losses and $108,161 and $99,342 of the Subordinated Notes, respectively. During the final five years of the term of the Subordinated Notes the permissible portion eligible for inclusion in Tier 2 capital decreases by 20% annually. See Note 8. “Borrowings.” The Common Equity Tier 1, Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by RWA. RWA is calculated based on regulatory requirements and includes total assets, excluding goodwill and other intangible assets, allocated by risk weight category, and certain off-balance-sheet items, among other things. The Tier 1 leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets, among other things. When fully phased-in on January 1, 2019, the Basel III Capital Rules will require the Company and the Bank to maintain: (i) a minimum ratio of Common Equity Tier 1 capital to RWA of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to RWA of at least 7.0% upon full implementation); (ii) a minimum ratio of Tier 1 capital to RWA of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation); (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to RWA of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation); and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to adjusted quarterly average assets. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and is being phased-in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank. The aforementioned capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier 1 capital to RWA above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The following tables present actual and required capital ratios as of June 30, 2016 and December 31, 2015 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of June 30, 2016 and December 31, 2015 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well-capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
The Bank and the Company are subject to the regulatory capital requirements administered by the Federal Reserve, and, for the Bank, the Office of the Comptroller of the Currency. Regulatory authorities can initiate certain mandatory actions if the Bank or the Company fail to meet the minimum capital requirements, which could have a direct material effect on our financial statements. As of June 30, 2016, management believes that the Bank and the Company meet all capital adequacy requirements to which they are subject. (b) Dividend Restrictions The Company is mainly dependent upon dividends from the Bank to provide funds for the payment of dividends to stockholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that fiscal year combined with the retained net profits for the preceding two fiscal years. Under the foregoing dividend restrictions and while maintaining its “well-capitalized” status, at June 30, 2016, the Bank had capacity to pay aggregate dividends of up to $90,054 to the Company without prior regulatory approval. (c) Capital Raise On February 11, 2015, the Company completed a public offering of 6.9 million shares of common stock at an offering price of $13.00 per share for gross proceeds of approximately $89,700, and net proceeds, after underwriting discounts, commissions and other costs of issuance, of $85,059. (d) Stock Repurchase Plans From time to time, the Company’s Board of Directors has authorized stock repurchase plans. The Company has 776,713 shares that are available to be purchased under a previously announced stock repurchase program. There were no shares repurchased under the repurchase program during the six months ended June 30, 2016 or June 30, 2015. (e) Liquidation Rights Upon completion of a second-step conversion in January 2004, the Bank established a special “liquidation account” in accordance with Office of the Comptroller of the Currency regulations. The account was established for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders (as defined in the plan of conversion) in an amount equal to the greater of (i) the Mutual Holding Company’s (as defined in the plan of conversion) ownership interest in the retained earnings of the Bank as of the date of its latest balance sheet contained in the prospectus; or (ii) the retained earnings of the Bank at the time that the Bank reorganized into the Mutual Holding Company in 1999. Each Eligible Account Holder and Supplemental Eligible Account Holder that continues to maintain his or her deposit account at the Bank would be entitled, in the event of a complete liquidation of the Bank, to a pro rata interest in the liquidation account prior to any payment to the stockholders of the Company. The liquidation account is reduced annually on September 30 to the extent that Eligible Account Holders and Supplemental Eligible Account Holders have reduced their qualifying deposits as of each anniversary date. At June 30, 2016, the liquidation account had a balance of $13,300. Subsequent increases in deposits do not restore such account holder’s interest in the liquidation account. The Bank may not pay cash dividends or make other capital distributions if the effect thereof would reduce its stockholders’ equity below the amount of the liquidation account. (f) Impact of the HVB Merger On June 30, 2015, the Company completed the HVB Merger. In connection with the HVB Merger, the Company issued 38.5 million common shares to HVHC shareholders, which resulted in an increase of $563,613 in stockholders’ equity. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies (a) Off-Balance Sheet Financial Instruments In the normal course of business, the Company enters into various transactions, which in accordance with GAAP are not included in its consolidated balance sheet. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company minimizes its exposure to losses under these commitments by subjecting them to credit approval and monitoring procedures. The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Standby letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third-party. In the event the customer does not perform in accordance with the terms of the agreement with the third-party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment were funded, the Company would be entitled to seek recovery from the customer. Based on the Company’s credit risk exposure assessment of its standby letter of credit arrangements, the arrangements contain security and debt covenants similar to those contained in loan agreements. The contractual or notional amounts of these instruments, which reflect the extent of the Company’s involvement in particular classes of off-balance sheet financial instruments, are summarized as follows:
(b) Lease Commitments The Company leases certain premises and equipment under operating leases with terms expiring through January 2034. Included in occupancy and office operations expense was net rent expense of $2,422 and $1,728 during the three months ended June 30, 2016 and 2015, respectively, and net rent expense of $5,721 and $3,305 for the six months ended June 30, 2016 and 2015, respectively. Future minimum lease payments due under non-cancelable operating leases at June 30, 2016 were as follows:
(c) Litigation The Company and the Bank are involved in a number of judicial proceedings concerning matters arising from conducting their business activities. These include routine legal proceedings arising in the ordinary course of business. These proceedings also include actions brought against the Company and the Bank with respect to corporate matters and transactions in which the Company and the Bank are or were involved. In addition, the Company and the Bank may be requested to provide information or otherwise cooperate with government authorities in the conduct of investigations of other persons or industry groups. There can be no assurance as to the ultimate outcome of a legal proceeding; however, the Company and the Bank have generally denied liability in all significant litigation pending against them and intend to defend vigorously each case, other than matters that are determined appropriate to be settled. The Company and the Bank accrue a liability for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements Fair value is 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 Inputs – Unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risk, etc.) or inputs that are derived principally from, or corroborated by, market data by correlation or other means. Level 3 Inputs – Unobservable inputs for determining the fair value of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. In general, fair value is based on quoted market prices, when available. If quoted market prices in active markets are not available, fair value is based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates; therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincide with the Company’s monthly and/or quarterly valuation process. Investment Securities Available for Sale The majority of the Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things. The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment securities that have a complicated structure. The Company’s entire portfolio consists of traditional investments, nearly all of which are mortgage pass-through securities, state and municipal general obligation or revenue bonds, U.S. agency bullet and callable securities and corporate bonds. Pricing for such instruments is fairly generic and is easily obtained. From time to time, the Company validates, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models. As of June 30, 2016, we do not believe any of our securities are OTTI; however, we review all of our securities on at least a quarterly basis to assess whether impairment, if any, is OTTI. Derivatives The fair values of derivatives are based on valuation models using current market terms (including interest rates and fees), the remaining terms of the agreements and the creditworthiness of the counterparty as of the measurement date (Level 2 inputs). The Company’s derivatives consist of interest rate swaps. See Note 9. “Derivatives” for additional information. Commitments to Sell Real Estate Loans The Company enters into various commitments to sell real estate loans in the secondary market. Such commitments are considered to be derivative financial instruments and if material, are carried at estimated fair value on the consolidated balance sheets. The estimated fair values of these commitments were generally calculated by reference to quoted prices in secondary markets for commitments to sell to certain government sponsored agencies. The fair values of these commitments generally result in a Level 2 classification and are not material. A summary of assets and liabilities at June 30, 2016 measured at estimated fair value on a recurring basis was as follows:
(1) Residential mortgage-backed securities (“MBS”) are debt securities whose cash flows come from residential loans, such as mortgages and home-equity loans. A residential MBS is comprised of a pool of mortgage loans created by financial institutions including governmental agencies. The cash flows from each of the mortgage loans included in the pool are structured through a special purpose entity into various classes and tranches, which then issue securities backed by those cash flows to investors. (2) Collateralized Mortgage Obligations (“CMOs”) are debt securities that are collateralized by a specific pool of residential mortgage loans, in which the issuer of the CMOs can direct the payments of principal and interest received on the underlying collateral to achieve specific investor cash flow objectives. The Bank generally acquires planned-amortization class securities and CMOs with a sequential pay structure in order to manage the duration and extension risk inherent in these securities. A summary of assets and liabilities at December 31, 2015 measured at estimated fair value on a recurring basis was as follows:
The following categories of financial assets are not measured at fair value on a recurring basis, but are subject to fair value adjustments in certain circumstances. Loans Held for Sale and Impaired Loans Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value as determined by outstanding commitments from investors. Fair value of loans held for sale is determined using quoted prices for similar assets (Level 2 inputs). When mortgage loans held for sale are sold with servicing rights retained, the carrying value of mortgage loans sold is reduced by the amount allocated to the value of the servicing rights, which is equal to its fair value. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold. The Company may record adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of these loans. These adjustments also include certain impairment amounts for collateral dependent loans calculated in accordance with FASB ASC Topic 310 – Receivables when establishing the allowance for loan losses. Impairment amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated impairment amount applicable to that loan does not necessarily represent the fair value of the loan. Real estate collateral is valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable by market participants. However, due to the substantial judgment applied and limited volume of activity as compared to other assets, fair value of the underlying collateral is based on Level 3 inputs. Estimates of fair value used for collateral supporting commercial loans generally are based on assumptions not observable in the market place and are also based on Level 3 inputs. Impaired loans are evaluated on at least a quarterly basis for additional impairment and their carrying values are adjusted as needed. Loans subject to non-recurring fair value measurements were $56,954 and $28,372 at June 30, 2016 and December 31, 2015, respectively. Changes in fair value recognized as a charge-off on loans held by the Company were $0 and $280 for the six months ended June 30, 2016 and 2015, respectively. When valuing impaired loans that are collateral dependent, the Company charges-off the difference between the recorded investment in the loan and the appraised value, which is generally less than 12 months old. A discount for estimated costs to dispose of the asset is used when evaluating the impaired loans. A summary of the two classes with impaired loans at June 30, 2016 measured at estimated fair value on a non-recurring basis was the following:
A summary of the class of impaired loans at December 31, 2015 measured at estimated fair value on a non-recurring basis was the following:
Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in net gain on sales of loans. 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. The Company utilizes the amortization method to subsequently measure the carrying value of its servicing rights. In accordance with FASB ASC Topic 860 - Transfers and Servicing, the Company must record impairment charges on a non-recurring basis, when the carrying value exceeds the estimated fair value. To estimate the fair value of servicing rights, the Company utilizes a third-party valuation provider which, on a quarterly basis, considers the market prices for similar assets and the present value of expected future cash flows associated with the servicing rights. Assumptions utilized include estimates of the cost of servicing, loan default rates, an appropriate discount rate and prepayment speeds. The determination of fair value of servicing rights relies upon Level 3 inputs. The fair value of mortgage servicing rights at June 30, 2016 and December 31, 2015 were $1,064 and $1,204, respectively. Assets Taken in Foreclosure of Defaulted Loans Assets taken in foreclosure of defaulted loans are initially recorded at fair value less costs to sell when acquired, which establishes a new cost basis. These assets are subsequently accounted for at the lower of cost or fair value less costs to sell and are primarily comprised of commercial and residential real estate property and, upon initial recognition, are re-measured and reported at fair value through a charge-off to the allowance for loan losses based on the fair value of the foreclosed asset. The fair value is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between comparable sales and income data available. The fair value is derived using Level 3 inputs. Appraisals are reviewed by the Company’s credit department, external loan review consultant and verified by officers in the Company’s credit administration area. Assets taken in foreclosure of defaulted loans and facilities held for sale subject to non-recurring fair value measurement were $16,590 and $14,614 at June 30, 2016 and December 31, 2015, respectively. There were $582 and $0 of write-downs related to changes in fair value for those foreclosed assets held by the Company during the six months ended June 30, 2016 and June 30, 2015, respectively. Significant Unobservable Inputs to Level 3 Measurements The following table presents quantitative information about significant unobservable inputs used in the fair value measurements for Level 3 assets at June 30, 2016:
(1) Represents range of discount factors applied to the appraisal to determine fair value. The amounts used for mortgage servicing rights are discounts applied by a third-party valuation provider, which the Company believes are appropriate. (2) Excludes $487 of commercial properties that are former financial centers that were closed and are now held for sale. These assets were not taken in foreclosure and their fair value is determined by third-party appraisals and our internal assessment of the market for this type of real estate. Fair Values of Financial Instruments FASB Codification Topic 825 - Financial Instruments requires disclosure of fair value information for those financial instruments for which it is practicable to estimate fair value, whether or not such financial instruments are recognized in the consolidated financial statements for interim and annual periods. Fair value is the amount for which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Quoted market prices are used to estimate fair values when those prices are available, although active markets do not exist for many types of financial instruments. Fair values for these instruments must be estimated by management using techniques such as discounted cash flow analysis and comparison to similar instruments. These estimates are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows and the selection of discount rates that appropriately reflect market and credit risks. Changes in these judgments often have a material effect on the fair value estimates. Since these estimates are made as of a specific point in time, they are susceptible to material near-term changes. Fair values disclosed in accordance with FASB Topic 825 do not reflect any premium or discount that could result from the sale of a large volume of a particular financial instrument, nor do they reflect possible tax ramifications or estimated transaction costs. The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of June 30, 2016:
The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of December 31, 2015:
The following paragraphs summarize the principal methods and assumptions used by the Company to estimate the fair value of the Company’s financial instruments: Loans The estimated fair value approximates the carrying value for variable-rate loans that reprice frequently and with no significant change in credit risk. The fair value of fixed-rate loans and variable-rate loans which reprice on an infrequent basis is estimated by discounting future cash flows using the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality. An overall valuation adjustment is made for specific credit risks, as well as general portfolio credit risk. FHLB Stock and FRB Stock The redeemable carrying amount of these securities with limited marketability approximates their fair value. Deposits and Mortgage Escrow Funds In accordance with FASB Codification Topic 825 - Financial Instruments, deposits with no stated maturity (such as demand, money market and savings deposits) are assigned fair values equal to the carrying amounts payable on demand. Certificates of deposit and mortgage escrow funds are segregated by account type and original term, and fair values are estimated by discounting the contractual cash flows. The discount rate for each account grouping is equivalent to the current market rates for deposits of similar type and maturity. These fair values do not include the value of core deposit relationships that comprise a significant portion of the Company’s deposits. We believe that the Company’s core deposit relationships provide a relatively stable, low-cost funding source that has a substantial value separate from the deposit balances. FHLB Borrowings, Other borrowings, Senior notes and Subordinated notes The estimated fair value approximates the carrying value for short-term borrowings. The fair value of long-term fixed-rate borrowings is estimated using quoted market prices, if available, or by discounting future cash flows using current interest rates for similar financial instruments. Other Financial Instruments Other financial assets and liabilities listed in the table above have estimated fair values that approximate their respective carrying amounts because the instruments are payable on demand or have short-term maturities and present relatively low credit risk and interest rate risk. The fair values of the Company’s off-balance sheet financial instruments described in the “Off-Balance Sheet Financial Instruments” section of Note 16. “Commitments and Contingencies” were estimated based on current market terms (including interest rates and fees), considering the remaining terms of the agreements and the creditworthiness of the counterparties. At June 30, 2016 and December 31, 2015, the estimated fair value of these instruments approximated the related carrying amounts, which were not material. Accrued Interest Receivable/Payable The carrying amounts of accrued interest approximate fair value and are classified in accordance with the related instrument. |
Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Components of accumulated other comprehensive income (loss) (“AOCI”) were as follows as of the dates shown below:
The following table presents the changes in each component of AOCI for the three months ended June 30, 2016 and 2015:
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Recent Accounting Standards, Not Yet Adopted |
6 Months Ended |
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Jun. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 implements a revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was originally going to be effective for the Company on January 1, 2017; however, the FASB subsequently issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date,” which deferred the effective date of ASU 2014-09 by one year to January 1, 2018. The Company is currently evaluating the potential impact of ASU 2014-09 on its consolidated financial statements. ASU 2016-1, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. ASU 2016-1 will be effective for the Company on January 1, 2018 and is not expected to have a significant impact on its financial statements. ASU 2016-02,“Leases (Topic 842).” ASU 2016-02 will, among other things, require lessees to recognize a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-2 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of ASU 2016-02 on its financial statements and its regulatory capital ratios. ASU 2016-05, “Derivatives and Hedging (Topic 815) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 will be effective for the Company on January 1, 2017 and is not expected to have a significant impact on its financial statements. ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” ASU 2016-07 impacts all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 simplifies the transition to the equity method of accounting by eliminating retroactive adjustment of the investment when an investment qualifies for use of the equity method, among other things. ASU 2016-07 will be effective for the Company on January 1, 2017 and is not expected to have a significant impact on its financial statements. ASU 2016-08, ”Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” ASU 2016-08 was issued to clarify certain principal versus agent considerations within the implementation guidance of ASC Topic 606, “Revenue from Contracts with Customers.” The effective date and transition of ASU 2016-08 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),”as discussed above. The Company is currently evaluating the potential impact of ASU 2016-08 on its financial statements. ASU 2016-09, ”Compensation - Stock compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09, all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified, along with other income tax cash flows, as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 2016-09 will be effective on January 1, 2017 and is not expected to have a significant impact on the Company’s financial statements. ASU No. 2016-10, ”Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.”ASU 2016-10 was issued to clarify ASC Topic 606, “Revenue from Contracts with Customers” related to (i) identifying performance obligations; and (ii) the licensing implementation guidance. The effective date and transition of ASU 2016-10 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” as discussed above. The Company is currently evaluating the potential impact of ASU 2016-10 on its financial statements. ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective on January 1, 2020. The Company is currently evaluating the potential impact of ASU 2016-13 on its financial statements. |
Basis of Financial Statement Presentation (Policies) |
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Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of the Company and all other entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies the Company follows conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which includes regulatory reporting instructions. The consolidated financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (the “SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the SEC on February 29, 2016 (the “2015 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. Certain items in prior financial statements have been reclassified to conform to the current presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and contingencies at the date of the financial statements. Actual results could differ significantly from these estimates. The allowance for loan losses and the status of contingencies are particularly subject to change. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 implements a revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was originally going to be effective for the Company on January 1, 2017; however, the FASB subsequently issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date,” which deferred the effective date of ASU 2014-09 by one year to January 1, 2018. The Company is currently evaluating the potential impact of ASU 2014-09 on its consolidated financial statements. ASU 2016-1, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. ASU 2016-1 will be effective for the Company on January 1, 2018 and is not expected to have a significant impact on its financial statements. ASU 2016-02,“Leases (Topic 842).” ASU 2016-02 will, among other things, require lessees to recognize a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-2 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of ASU 2016-02 on its financial statements and its regulatory capital ratios. ASU 2016-05, “Derivatives and Hedging (Topic 815) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 will be effective for the Company on January 1, 2017 and is not expected to have a significant impact on its financial statements. ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” ASU 2016-07 impacts all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 simplifies the transition to the equity method of accounting by eliminating retroactive adjustment of the investment when an investment qualifies for use of the equity method, among other things. ASU 2016-07 will be effective for the Company on January 1, 2017 and is not expected to have a significant impact on its financial statements. ASU 2016-08, ”Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” ASU 2016-08 was issued to clarify certain principal versus agent considerations within the implementation guidance of ASC Topic 606, “Revenue from Contracts with Customers.” The effective date and transition of ASU 2016-08 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),”as discussed above. The Company is currently evaluating the potential impact of ASU 2016-08 on its financial statements. ASU 2016-09, ”Compensation - Stock compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09, all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified, along with other income tax cash flows, as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 2016-09 will be effective on January 1, 2017 and is not expected to have a significant impact on the Company’s financial statements. ASU No. 2016-10, ”Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.”ASU 2016-10 was issued to clarify ASC Topic 606, “Revenue from Contracts with Customers” related to (i) identifying performance obligations; and (ii) the licensing implementation guidance. The effective date and transition of ASU 2016-10 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” as discussed above. The Company is currently evaluating the potential impact of ASU 2016-10 on its financial statements. ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective on January 1, 2020. The Company is currently evaluating the potential impact of ASU 2016-13 on its financial statements. |
Acquisitions (Tables) |
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Acquired loan portfolio data in the HVB Merger is presented below:
The table below summarizes the amounts recognized as of the HVB Merger date for each major class of assets acquired and liabilities assumed, the estimated fair value adjustments and the amounts recorded in the Company’s financial statements at fair value at the HVB Merger date:
Explanation of certain fair value related adjustments:
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Securities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of securities available for sale | A summary of amortized cost and estimated fair value of securities as of June 30, 2016 and December 31, 2015 is presented below. The term “Residential MBS” refers to residential mortgage-backed securities and the term “CMO” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.
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Summary of securities held-to-maturity | A summary of amortized cost and estimated fair value of securities as of June 30, 2016 and December 31, 2015 is presented below. The term “Residential MBS” refers to residential mortgage-backed securities and the term “CMO” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.
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Summary of amortized cost and fair value of investment securities available for sale by remaining period to contractual maturity | The amortized cost and estimated fair value of securities at June 30, 2016 are presented below by contractual maturity. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential MBS are shown separately since they are not due at a single maturity date.
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Sale of securities | Sales of securities for the periods indicated below were as follows:
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Securities available for sale with unrealized losses, by length of time in continuous unrealized loss position | The following table summarizes securities available for sale with unrealized losses, segregated by the length of time in a continuous unrealized loss position for the periods presented below:
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Securities held to maturity with unrealized losses, by length of time in continuous unrealized loss position | The following table summarizes securities held to maturity with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
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Securities pledged for borrowings at FHLB and other institutions, and securities pledged for municipal deposits and other purposes | Securities pledged for borrowings at the FHLB and other institutions, and securities pledged for municipal deposits and other purposes, were as follows for the periods presented below:
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Portfolio Loans (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of loan portfolio excluding loans held for sale | The composition of the Company’s loan portfolio, excluding loans held for sale, was the following for the periods presented below:
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Schedule of amounts and status of loans and TDRs | The following tables set forth the amounts and status of the Company’s loans, troubled debt restructurings (“TDRs”) and non-performing loans at June 30, 2016 and December 31, 2015:
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Schedule of additional analysis of non-accrual loans | The following table provides additional analysis of the Company’s non-accrual loans at June 30, 2016 and December 31, 2015:
(1) The Company acquired loans for which there was, at acquisition, both evidence of deterioration of credit quality since origination and probability, at acquisition, that all contractually required payments would not be collected. These loans are classified as purchased credit impaired loans (“PCI loans”). |
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Impaired financing receivables | The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at June 30, 2016:
The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2015:
The following table presents loans individually evaluated for impairment, excluding purchased credit impaired loans, by segment of loans at June 30, 2016 and December 31, 2015:
At June 30, 2016 and December 31, 2015 there were no payroll finance or warehouse lending loans that were individually evaluated for impairment. The following tables present the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended June 30, 2016 and June 30, 2015:
There were no impaired loans with an allowance recorded at June 30, 2016 or December 31, 2015. For the three months ended June 30, 2016 and 2015, there were no payroll finance or warehouse lending loans that were impaired. The following tables present the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the six months ended June 30, 2106 and June 30, 2015.
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Schedule of changes in the balance of accretable yield discount for PCI loans | The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three and six months ended June 30, 2016 and 2015:
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Troubled debt restructurings | The following tables set forth the amounts and past due status of the Company’s TDRs at June 30, 2016 and December 31, 2015:
The following table presents loans by segment modified as TDRs that occurred during the first six months of 2016 and 2015:
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Allowance for Loan Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses activity | Activity in the allowance for loan losses for the three and six months ended June 30, 2016 and 2015 is summarized below:
The following analysis presents the allowance for loan losses to originated loans as of June 30, 2016 and December 31, 2015.
In purchase accounting, the prior allowance for loan losses is not carried over, and in place, the Company is required to estimate the fair value of loans acquired, which is included as a purchase discount within the acquired loan discount. The following analysis presents the remaining purchase accounting marks to acquire loan portfolios as of June 30, 2016 and December 31, 2015.
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Financing receivable credit quality indicators | Loans that are risk-rated 1 through 6 as defined above are considered to be pass-rated loans. As of June 30, 2016 and December 31, 2015, the risk category of gross loans by segment was as follows:
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Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill and intangible assets | The balance of goodwill and other intangible assets for the periods presented were as follows:
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Future amortization expense | The estimated aggregate future amortization expense for intangible assets remaining as of June 30, 2016 was as follows:
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Deposits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of major classification of deposits | Deposit balances at June 30, 2016 and December 31, 2015 were summarized as follows:
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List of Company's Brokered deposits | rokered deposits at June 30, 2016 and December 31, 2015 were summarized as follows:
1 CDARs (Certificate of deposit account registry service |
Borrowings (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | The Company’s borrowings and weighted average interest rates were summarized as follows for the periods presented:
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Derivatives (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedges, Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of derivatives | Summary information as of June 30, 2016 and December 31, 2015 regarding these derivatives is presented below:
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory Federal tax rate for the following reasons:
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's stock option activity | The following table summarizes the activity in the Company’s active stock-based compensation plans for the six months ended June 30, 2016:
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Schedule of valuation assumptions | The fair value of options granted during the second quarter of 2015 was determined using the following weighted average assumptions as of the grant date. There were no options granted during the six months ended June 30, 2016:
(1) Represents the approximate annualized cash dividend rate paid with respect to a share of common stock at or near the grant date. |
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Schedule of stock-based compensation expense associated with stock options and non-vested stock awards | Stock-based compensation expense associated with stock options and non-vested stock awards and the related income tax benefit are presented below:
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Unrecognized stock-based compensation expense | Unrecognized stock-based compensation expense as of June 30, 2016 was as follows:
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Pension and Other Post Retirement Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net pension (benefit) expense and post-retirement expense | Net pension (benefit) expense and other post-retirement expense is comprised of the following for the periods presented below:
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Other Non-interest Expense (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Non-interest Expense | Other non-interest expense items for the three and six months ended June 30, 2016 and 2015, respectively, are presented in the following table. Components exceeding 1% of the aggregate of total net interest income and total non-interest income are presented separately.
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Earnings Per Common Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following is a summary of the calculation of earnings per share (“EPS”):
(1) Represents incremental shares computed using the treasury stock method. (2) Anti-dilutive shares are not included in determining diluted earnings per share; there were no anti-dilutive shares in the three months or six months ended June 30, 2016. |
Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following tables present actual and required capital ratios as of June 30, 2016 and December 31, 2015 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of June 30, 2016 and December 31, 2015 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well-capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of off-balance-sheet financial instruments | The contractual or notional amounts of these instruments, which reflect the extent of the Company’s involvement in particular classes of off-balance sheet financial instruments, are summarized as follows:
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Schedule of future minimum lease payments due | Future minimum lease payments due under non-cancelable operating leases at June 30, 2016 were as follows:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value on a recurring basis | A summary of assets and liabilities at June 30, 2016 measured at estimated fair value on a recurring basis was as follows:
(1) Residential mortgage-backed securities (“MBS”) are debt securities whose cash flows come from residential loans, such as mortgages and home-equity loans. A residential MBS is comprised of a pool of mortgage loans created by financial institutions including governmental agencies. The cash flows from each of the mortgage loans included in the pool are structured through a special purpose entity into various classes and tranches, which then issue securities backed by those cash flows to investors. (2) Collateralized Mortgage Obligations (“CMOs”) are debt securities that are collateralized by a specific pool of residential mortgage loans, in which the issuer of the CMOs can direct the payments of principal and interest received on the underlying collateral to achieve specific investor cash flow objectives. The Bank generally acquires planned-amortization class securities and CMOs with a sequential pay structure in order to manage the duration and extension risk inherent in these securities. A summary of assets and liabilities at December 31, 2015 measured at estimated fair value on a recurring basis was as follows:
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Impaired loans measured at estimated fair value on nonrecurring basis | A summary of the two classes with impaired loans at June 30, 2016 measured at estimated fair value on a non-recurring basis was the following:
A summary of the class of impaired loans at December 31, 2015 measured at estimated fair value on a non-recurring basis was the following:
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Quantitative information of Level 3 assets | The following table presents quantitative information about significant unobservable inputs used in the fair value measurements for Level 3 assets at June 30, 2016:
(1) Represents range of discount factors applied to the appraisal to determine fair value. The amounts used for mortgage servicing rights are discounts applied by a third-party valuation provider, which the Company believes are appropriate. (2) Excludes $487 of commercial properties that are former financial centers that were closed and are now held for sale. These assets were not taken in foreclosure and their fair value is determined by third-party appraisals and our internal assessment of the market for this type of real estate. |
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Carrying amounts and estimated fair value of financial assets and liabilities | The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of June 30, 2016:
The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of December 31, 2015:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Components of accumulated other comprehensive income (loss) (“AOCI”) were as follows as of the dates shown below:
The following table presents the changes in each component of AOCI for the three months ended June 30, 2016 and 2015:
|
Securities - Sale of Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales | $ 283,126 | $ 86,889 | $ 558,484 | $ 202,433 |
Gross realized gains | 4,834 | 959 | 6,395 | 2,623 |
Gross realized losses | (360) | (262) | (2,204) | (392) |
Income tax expense on realized net gains | $ 1,466 | $ 227 | $ 1,394 | $ 725 |
Securities - Securities Pledged for Borrowings (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Total securities pledged | $ 1,478,296 | $ 1,486,945 |
Federal Home Loan Bank Borrowings | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale securities pledged as collateral | 88,006 | 101,994 |
Held-to-maturity securities pledged as collateral | 102,500 | 206,337 |
Municipal Deposits | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale securities pledged as collateral | 827,070 | 849,186 |
Held-to-maturity securities pledged as collateral | 454,747 | 327,589 |
Interest Rate Swap | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale securities pledged as collateral | $ 5,973 | $ 1,839 |
Securities - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2016
security
| |
Investments, Debt and Equity Securities [Abstract] | |
Number of securities which were in continuous unrealized loss position for less than 12 months | 34 |
Number of securities which were in continuous unrealized loss position for 12 months or more | 40 |
Portfolio Loans - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|---|---|
Components of loan portfolio, excluding loans held for sale | ||||||
Traditional commercial & industrial (“C&I”) | $ 2,161,389 | $ 1,681,704 | ||||
Payroll finance | 211,471 | 221,831 | ||||
Warehouse lending | 429,506 | 387,808 | ||||
Factored receivables | 200,523 | 208,382 | ||||
Equipment financing | 636,280 | 631,303 | ||||
Total C&I | 3,639,169 | 3,131,028 | ||||
Commercial real estate | 2,868,545 | 2,733,351 | ||||
Multi-family | 914,114 | 796,030 | ||||
Acquisition, development & construction (“ADC”) | 207,868 | 186,398 | ||||
Total commercial mortgage | 3,990,527 | 3,715,779 | ||||
Total commercial | 7,629,696 | 6,846,807 | ||||
Residential mortgage | 673,208 | 713,036 | ||||
Consumer | 291,391 | 299,517 | ||||
Portfolio loans | 8,594,295 | 7,859,360 | ||||
Allowance for loan losses | (55,865) | $ (53,014) | (50,145) | $ (44,317) | $ (42,884) | $ (42,374) |
Portfolio loans, net | $ 8,538,430 | $ 7,809,215 |
Portfolio Loans - Accretable Yield Discount for PCI Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||||
Balance at beginning of period | $ 12,522 | $ 724 | $ 11,211 | $ 724 |
Balances acquired in the NSBC Acquisition | 0 | 0 | 2,200 | 0 |
Accretion of income | (1,124) | 0 | (2,279) | 0 |
Disposals | 0 | (50) | 0 | (50) |
Reclassification from non-accretable difference | (91) | 0 | 175 | 0 |
Balance at end of period | $ 11,307 | $ 674 | $ 11,307 | $ 674 |
Portfolio Loans - Loans Modified as TDRs (Details ) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2016
loan
|
Jun. 30, 2015
USD ($)
loan
|
Sep. 30, 2014
USD ($)
loan
|
|
Financing Receivable, Modifications [Line Items] | |||
Number | loan | 1 | 0 | |
Residential mortgage | |||
Financing Receivable, Modifications [Line Items] | |||
Number | loan | 1 | 0 | |
Recorded investment, Pre-modification | $ | $ 469 | $ 0 | |
Recorded investment, Post-modification | $ | $ 469 | $ 0 |
Allowance for Loan Losses - Additional Information (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Receivables [Abstract] | ||
Maximum loan balance for credit risk to be evaluated on a homogeneous basis | $ 500,000 | |
Loss | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Gross loans by segment | 0 | $ 0 |
Special mention | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Gross loans by segment | 103,710,000 | 68,003,000 |
Special mention | C&I | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Gross loans by segment | 53,487,000 | $ 20,765,000 |
Special mention | C&I | NSBC | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Gross loans by segment | $ 34,182,000 |
Goodwill and Other Intangible Assets - Balance of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 696,600 | $ 670,699 |
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 72,525 | 77,367 |
Core deposits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 41,624 | 45,794 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 8,665 | 7,959 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 1,595 | 2,925 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 20,500 | 20,500 |
Fair value of below market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $ 141 | $ 189 |
Goodwill and Other Intangible Assets - Future Amortization Expense (Details) $ in Thousands |
Jun. 30, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2016 | $ 6,172 |
2017 | 8,838 |
2018 | 7,285 |
2019 | 6,074 |
2020 | 5,428 |
2021 | 5,022 |
Thereafter | 13,206 |
Total | $ 52,025 |
Deposits - Deposit Balances (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Deposits [Abstract] | ||
Non-interest bearing demand | $ 3,146,504 | $ 2,936,980 |
Interest bearing demand | 2,269,787 | 1,274,417 |
Savings | 783,187 | 943,632 |
Money market | 2,998,291 | 2,819,788 |
Certificates of deposit | 587,787 | 605,190 |
Total deposits | $ 9,785,556 | $ 8,580,007 |
Deposits - Brokered Deposits (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
List of Company's Brokered deposits | ||
Brokered deposits | $ 567,326 | $ 428,785 |
Interest bearing | ||
List of Company's Brokered deposits | ||
Brokered deposits | 216,939 | 0 |
Money market | ||
List of Company's Brokered deposits | ||
Brokered deposits | 171,588 | 152,180 |
Reciprocal brokered deposits | ||
List of Company's Brokered deposits | ||
Brokered deposits | 178,799 | 169,958 |
CDARs one way | ||
List of Company's Brokered deposits | ||
Brokered deposits | $ 0 | $ 106,647 |
Deposits - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Deposits [Abstract] | ||
Municipal deposits | $ 1,184,231 | $ 1,140,206 |
Derivatives - Derivative Information (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
3rd party interest rate swap | ||
Summary of derivatives | ||
Notional amount | $ 185,342 | $ 87,094 |
Average maturity (in years) | 5 years 8 months 12 days | 5 years 5 months 8 days |
Weighted average fixed rate | 3.91% | 4.09% |
Fair value | $ 7,498 | $ 1,839 |
3rd party interest rate swap | One Month Libor | ||
Summary of derivatives | ||
Basis spread | 2.27% | 2.15% |
Customer interest rate swap | ||
Summary of derivatives | ||
Notional amount | $ 185,342 | $ 87,094 |
Average maturity (in years) | 5 years 8 months 12 days | 5 years 5 months 8 days |
Weighted average fixed rate | 3.91% | 4.09% |
Fair value | $ (7,498) | $ (1,839) |
Customer interest rate swap | One Month Libor | ||
Summary of derivatives | ||
Basis spread | 2.27% | 2.15% |
Derivatives - Narrative (Details) $ in Thousands |
Jun. 30, 2016
USD ($)
|
---|---|
Derivative Instruments and Hedges, Assets [Abstract] | |
Cash pledged as collateral for swaps | $ 1,525 |
Fair value of investment securities pledged as collateral | $ 5,973 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Efftective tax rate reconciliation: | |||||
Income (loss) before income tax expense | $ 56,182,000 | $ (11,328,000) | $ 92,191,000 | $ 13,526,000 | |
Federal statutory rate | 35.00% | 35.00% | |||
Tax at Federal statutory rate of 35% | $ 19,664,000 | $ (3,965,000) | 32,267,000 | 4,735,000 | |
State and local income taxes, net of Federal tax benefit | 2,992,000 | (220,000) | 4,985,000 | 655,000 | |
Tax-exempt interest, net of disallowed interest | (1,958,000) | (1,190,000) | (3,792,000) | (2,174,000) | |
Bank owned life insurance income | (430,000) | (440,000) | (875,000) | (691,000) | |
Non-deductible acquisition related costs | 0 | 560,000 | 0 | 700,000 | |
Low income housing tax credits | (180,000) | (54,000) | (234,000) | (108,000) | |
Other, net | (1,676,000) | 1,627,000 | (1,696,000) | 1,279,000 | |
Actual income tax expense (benefit) | $ 18,412,000 | $ (3,682,000) | $ 30,655,000 | $ 4,396,000 | |
Effective income tax rate | 32.80% | 32.50% | 33.30% | 32.50% | |
Components of deferred tax assets and liabilities: | |||||
Net deferred tax asset | $ 12,189,000 | $ 12,189,000 | $ 31,079,000 | ||
Valuation allowance | $ 0 | $ 0 |
Stock-Based Compensation - Assumptions (Details) - Stock options - 2011 Employment Inducement Stock Program |
6 Months Ended |
---|---|
Jun. 30, 2015 | |
Fair value of options granted determined using weighted-average assumptions as grant date | |
Risk-free interest rate | 1.90% |
Expected stock price volatility | 20.90% |
Dividend yield | 3.10% |
Expected term in years | 5 years 9 months 3 days |
Pension and Other Post Retirement Plans - Net Pension and Post-retirement Expense (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 0 | 589,000 | 0 | 1,177,000 |
Expected return on plan assets | 0 | (729,000) | 0 | (1,458,000) |
Net amortization and deferral | 0 | 91,000 | 0 | 182,000 |
Total pension (benefit) expense and other post-retirement expense | 0 | (49,000) | 0 | (99,000) |
Other Post retirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 1,000 | 0 | 3,000 |
Interest cost | 105,000 | 120,000 | 209,000 | 239,000 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Net amortization and deferral | 20,000 | 40,000 | 32,000 | 77,000 |
Total pension (benefit) expense and other post-retirement expense | $ 125,000 | $ 161,000 | $ 241,000 | $ 319,000 |
Other Non-interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Other Income and Expenses [Abstract] | ||||
Advertising and promotion | $ 985 | $ 596 | $ 1,536 | $ 1,072 |
Professional fees | 2,607 | 2,096 | 5,080 | 4,013 |
Data and check processing | 2,261 | 1,568 | 4,015 | 3,716 |
Insurance & surety bond premium | 897 | 481 | 1,682 | 1,129 |
Charge for asset write-downs | 2,485 | 28,055 | 2,485 | 29,026 |
Other | 2,430 | 3,786 | 10,081 | 7,449 |
Total other non-interest expense | $ 11,665 | $ 36,582 | $ 24,879 | $ 46,405 |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Computation of basic and diluted earnings per share: | ||||
Net income | $ 37,770 | $ (7,646) | $ 61,536 | $ 9,130 |
Weighted average common shares outstanding for computation of basic EPS | 130,081,465 | 91,565,972 | 129,953,397 | 89,712,796 |
Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants | 607,264 | 384,804 | 568,624 | 386,992 |
Weighted average common shares for computation of diluted EPS | 130,688,729 | 91,950,776 | 130,522,021 | 90,099,788 |
Basic (loss) earnings per common share (USD per share) | $ 0.29 | $ (0.08) | $ 0.47 | $ 0.10 |
Diluted (loss) earnings per common share (USD per share) | $ 0.29 | $ (0.08) | $ 0.47 | $ 0.10 |
Weighted average common shares that could be exercised that were anti-dilutive for the period | 0 | 117,537 | 0 | 115,227 |
- Narrative (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Changes in fair value recognized on provisions on loans held by the Company | $ 0 | $ 280,000 | |
Mortgage servicing rights | 1,064,000 | $ 1,204,000 | |
Assets taken in foreclosure, defaulted loans and facilities held for sale | 16,590,000 | 14,614,000 | |
Changes in fair value recognized through income for foreclosed assets held by the Company | (582,000) | $ 0 | |
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Portfolio loans, net | $ 56,954,000 | $ 28,372,000 |
Accumulated Other Comprehensive Income (Loss) - Components of AOCI (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|---|---|
Equity [Abstract] | ||||||
Net unrealized holding gain (loss) on available for sale securities | $ 25,439 | $ (12,172) | ||||
Related income tax (expense) benefit | (10,048) | 5,173 | ||||
Available for sale securities AOCI, net of tax | 15,391 | (6,999) | ||||
Net unrealized holding loss on securities transferred to held to maturity | (6,167) | (7,226) | ||||
Related income tax benefit | 2,436 | 3,071 | ||||
Securities transferred to held to maturity AOCI, net of tax | (3,731) | (4,155) | ||||
Net unrealized holding loss on retirement plans | (1,207) | (1,687) | ||||
Related income tax benefit | 477 | 717 | ||||
Retirement plans AOCI, net of tax | (730) | (970) | ||||
AOCI | $ 10,930 | $ 4,159 | $ (12,124) | $ (13,201) | $ (4,739) | $ (10,251) |
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