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 |
(State or Other Jurisdiction of | (IRS Employer ID No.) | ||||||||||
Incorporation or Organization) | |||||||||||
(Address of Principal Executive Office) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Classes of Common Stock | Shares outstanding as of July 29 2020 | |||||||
$0.01 per share |
PART I. FINANCIAL INFORMATION - UNAUDITED | ||||||||
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, | ||||||||||
2020 | 2019 | ||||||||||
ASSETS: | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Securities available for sale, at estimated fair value | |||||||||||
Securities held to maturity (“HTM”), (net of allowance for credit losses of $ | |||||||||||
Loans held for sale | |||||||||||
Portfolio loans | |||||||||||
Allowance for credit losses - loans | ( | ( | |||||||||
Portfolio loans, net | |||||||||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock, at cost | |||||||||||
Accrued interest receivable | |||||||||||
Premises and equipment, net | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Bank owned life insurance (“BOLI”) | |||||||||||
Other real estate owned | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
LIABILITIES: | |||||||||||
Deposits | $ | $ | |||||||||
FHLB and other borrowings | |||||||||||
Paycheck Protection Program Lending Facility | |||||||||||
Repurchase agreements | |||||||||||
Senior Notes | |||||||||||
Subordinated Notes - Bank | |||||||||||
Subordinated Notes - Company | |||||||||||
Mortgage escrow funds | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingent liabilities (See Note 15. “Commitments and Contingencies”) | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock (par value $ | |||||||||||
Common stock (par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock, at cost ( | ( | ( | |||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income, net of tax expense of $ | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three months ended | Six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Interest and dividend income: | |||||||||||||||||||||||
Loans and loan fees | $ | $ | $ | $ | |||||||||||||||||||
Securities taxable | |||||||||||||||||||||||
Securities non-taxable | |||||||||||||||||||||||
Other earning assets | |||||||||||||||||||||||
Total interest and dividend income | |||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Borrowings | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for credit losses - loans | |||||||||||||||||||||||
Provision for credit losses - held to maturity securities | |||||||||||||||||||||||
Net interest income after provision for credit losses | |||||||||||||||||||||||
Non-interest income: | |||||||||||||||||||||||
Deposit fees and service charges | |||||||||||||||||||||||
Accounts receivable management / factoring commissions and other fees | |||||||||||||||||||||||
Bank owned life insurance | |||||||||||||||||||||||
Loan commissions and fees | |||||||||||||||||||||||
Investment management fees | |||||||||||||||||||||||
Net gain (loss) on sale of securities | ( | ( | |||||||||||||||||||||
Net gain on called securities | |||||||||||||||||||||||
Gain on sale of residential mortgage loans | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total non-interest income | |||||||||||||||||||||||
Non-interest expense: | |||||||||||||||||||||||
Compensation and benefits | |||||||||||||||||||||||
Stock-based compensation plans | |||||||||||||||||||||||
Occupancy and office operations | |||||||||||||||||||||||
Information technology | |||||||||||||||||||||||
Amortization of intangible assets | |||||||||||||||||||||||
FDIC insurance and regulatory assessments | |||||||||||||||||||||||
Other real estate owned expense, net | |||||||||||||||||||||||
Charge for asset write-downs, retention and severance | |||||||||||||||||||||||
Impairment related to financial centers and real estate consolidation strategy | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total non-interest expense | |||||||||||||||||||||||
Income before income tax expense | |||||||||||||||||||||||
Income tax expense (benefit) | ( | ||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Preferred stock dividend | |||||||||||||||||||||||
Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted |
Three months ended | Six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income, before tax: | |||||||||||||||||||||||
Change in unrealized holding gains on securities available for sale | |||||||||||||||||||||||
Unrealized (loss) on transfer of securities held to maturity to available for sale | ( | ||||||||||||||||||||||
Reclassification adjustment for net realized (gains) losses included in net income | ( | ( | |||||||||||||||||||||
Accretion of net unrealized loss on securities transferred to held to maturity | |||||||||||||||||||||||
Change in the actuarial loss of defined benefit plan and post-retirement benefit plans | ( | ||||||||||||||||||||||
Total other comprehensive income, before tax | |||||||||||||||||||||||
Deferred tax (expense) related to other comprehensive income | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Number of common shares | Preferred stock | Common stock | Additional paid-in capital | Treasury stock | Retained earnings | Accumulated other comprehensive (loss) income | Total stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock options & other stock transactions, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock awards, net | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock options & other stock transactions, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock awards, net | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Number of common shares | Preferred stock | Common stock | Additional paid-in capital | Treasury stock | Retained earnings | Accumulated other comprehensive income | Total stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Cumulative effect of change in accounting principle (see Note 1. “Basis of Financial Statement Presentation”) | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 (as adjusted for change in accounting principle) | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock options & other stock transactions, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock awards, net | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock options & other stock transactions, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock awards, net | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Six months ended | |||||||||||
June 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Provisions for credit losses - loans | |||||||||||
Provision for credit losses - held to maturity securities | |||||||||||
Net loss (gain) from write-downs and sales of other real estate owned | ( | ||||||||||
Net (gain) on extinguishment of Senior Notes | ( | ||||||||||
Depreciation of premises and equipment | |||||||||||
Loss on extinguishment of FHLB borrowings | |||||||||||
Impairment on fixed assets | |||||||||||
Impairment of early termination of leases | |||||||||||
Asset write-downs, retention and severance compensation and other restructuring charges | |||||||||||
Amortization of intangible assets | |||||||||||
Amortization of low income housing tax credits | |||||||||||
Net (gain) loss on sale of securities | ( | ||||||||||
(Gain) on security calls available for sale | ( | ||||||||||
Loss on security calls held to maturity | |||||||||||
Net (gain) on loans held for sale | ( | ( | |||||||||
Net amortization of premiums on securities | |||||||||||
Amortization of premium on certificates of deposit | ( | ( | |||||||||
Net accretion of purchase discount and amortization of net deferred loan costs | ( | ( | |||||||||
Net accretion of debt issuance costs and amortization of premium on borrowings | ( | ( | |||||||||
Restricted stock compensation expense | |||||||||||
Originations of loans held for sale | ( | ( | |||||||||
Proceeds from sales of loans held for sale | |||||||||||
Increase in cash surrender value of bank owned life insurance | ( | ( | |||||||||
Deferred income tax (benefit) expense | ( | ||||||||||
Other adjustments (principally net changes in other assets and other liabilities) | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of securities: | |||||||||||
Available for sale | ( | ( | |||||||||
Held to maturity | ( | ( | |||||||||
Proceeds from maturities and other principal payments on securities: | |||||||||||
Available for sale | |||||||||||
Held to maturity | |||||||||||
Proceeds from sales of securities available for sale | |||||||||||
Proceeds from calls of securities available for sale | |||||||||||
Proceeds from calls of securities held to maturity | |||||||||||
Portfolio loan originations, net | ( | ( | |||||||||
Proceeds from sale of commercial loans | |||||||||||
Proceeds from sale of residential mortgage loans |
Six months ended | |||||||||||
June 30, | |||||||||||
2020 | 2019 | ||||||||||
Redemptions of FHLB and FRB stock, net | |||||||||||
Proceeds from sales of other real estate owned | |||||||||||
Purchases of premises and equipment | ( | ( | |||||||||
Proceeds from bank owned life insurance | |||||||||||
Proceeds from sale of premises and equipment | |||||||||||
Purchases of low income housing tax credits | ( | ( | |||||||||
Cash paid for acquisition, net | ( | ||||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Net increase (decrease) in transaction, savings and money market deposits | ( | ||||||||||
Net (decrease) increase in certificates of deposit | ( | ||||||||||
Net (decrease) in short-term FHLB borrowings | ( | ( | |||||||||
Advances of term FHLB borrowings | |||||||||||
Repayments of term FHLB borrowings | ( | ( | |||||||||
Advances under the Paycheck Protection Program Liquidity Facility | |||||||||||
Repayment of Senior Notes | ( | ( | |||||||||
Net increase (decrease) in other borrowings | ( | ||||||||||
Net increase in mortgage escrow funds | |||||||||||
Proceeds from stock option exercises | |||||||||||
Treasury shares repurchased | ( | ( | |||||||||
Cash dividends paid - common stock | ( | ( | |||||||||
Cash dividends paid - preferred stock | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Net (decrease) in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Interest payments | $ | $ | |||||||||
Income tax payments | |||||||||||
Real estate acquired in settlement of loans | |||||||||||
Residential mortgage loans transferred from held for sale to portfolio | |||||||||||
Loans transferred from held for investment to held for sale | |||||||||||
Redemption of bank owned life insurance, pending settlement | |||||||||||
Securities held to maturity transferred to available for sale | |||||||||||
Operating cash flows from operating leases | |||||||||||
Right-of-use assets obtained in exchange for lease liabilities | |||||||||||
Acquisitions: | |||||||||||
Non-cash assets acquired: | |||||||||||
Total loans, net | $ | $ | |||||||||
Accrued interest receivable | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Total non-cash assets acquired | |||||||||||
Liabilities assumed: | |||||||||||
Other liabilities | |||||||||||
Total liabilities assumed | |||||||||||
Net non-cash assets acquired | |||||||||||
Total consideration paid | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Change in consolidated balance sheet | Tax effect | Change to retained earnings from adoption of new accounting principle | |||||||||||||||
Allowance for credit losses (“ACL”) - loans | $ | $ | $ | ||||||||||||||
ACL - loans - (adjustment related to purchase credit impaired loan mark)1 | |||||||||||||||||
Total ACL - loans | |||||||||||||||||
ACL - HTM securities | |||||||||||||||||
ACL - off balance sheet credit exposure (recorded in other liabilities) | |||||||||||||||||
Total impact of CECL adoption | $ | $ | $ |
As reported under CECL | Prior to CECL Standard adoption | Impact of CECL adoption | ||||||||||||||||||
Assets: | ||||||||||||||||||||
ACL - HTM securities: | ||||||||||||||||||||
Corporate and other | $ | $ | $ | |||||||||||||||||
State and municipal | ||||||||||||||||||||
Total ACL - HTM securities | ||||||||||||||||||||
ACL - loans | $ | $ | $ | |||||||||||||||||
Liabilities: | ||||||||||||||||||||
ACL - off-balance sheet credit exposures (recorded in other liabilities) | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
At December 31, 2019 | December 31, 2019 | ||||||||||||||||||||||
Originated | Acquired | Total | ALLL | ||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
Commercial mortgage(1) | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
ALLL as of December 31, 2019 | Adjustments recorded as of January 1, 2020 | ACL as of January 1, 2020 | |||||||||||||||||||||
CECL Day 1 | PCD gross-up | ||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
Commercial mortgage | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Portfolio segment | ACL Methodology | Risk characteristics | Portfolio composition | |||||||||||||||||
Traditional Commercial and Industrial | Loss rate | Actual cash flow varies from amounts estimated, changes in collateral value, business not successful | Various types of secured and unsecured traditional C&I loans to small and medium-sized businesses in our market area, including loans collateralized by assets, such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. | |||||||||||||||||
Asset-based lending (“ABL”) | Loss rate | Actual cash flow varies from amounts estimated, borrower unable to collect accounts receivable or convert inventory, uncertain value of collateral | Loans to mid-size businesses on a national basis. ABL loans are secured with a blanket lien on all business assets and will include direct control and supervision of accounts receivable, inventory, machinery and equipment and real estate collateral. |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Portfolio segment | ACL Methodology | Risk characteristics | Portfolio composition | |||||||||||||||||
Payroll finance | Loss rate | Inability to collect on accounts receivable, delays in accounts receivable turnover | Financing and business process outsourcing, including full back-office, technology and tax accounting services, to independently-owned temporary staffing companies nationwide. Loans typically are structured as an advance used by our clients to fund their employee payroll and are outstanding on average for 40 to 45 days. | |||||||||||||||||
Warehouse lending | No historical losses, qualitative overlay | Inability to sell underlying mortgage loan collateral into the secondary market | Residential mortgage warehouse funding facilities to non-bank mortgage companies. These loans consist of a line of credit used as temporary financing during the period between the closing of a mortgage loan until its sale into the secondary market, which on average occurs 20 days of the original loan closing. | |||||||||||||||||
Factored receivables | Loss rate | Inability to collect on accounts receivable, delays in accounts receivable turnover | The purchase of a client’s accounts receivable is traditionally known as “factoring” and results in payment by the client of a factoring fee, which is generally a percentage of the factored receivables or sales volume, which is designed to compensate the Bank for the bookkeeping and collection services provided and, if applicable, its credit review of the client’s customer and assumption of customer credit risk. | |||||||||||||||||
Equipment financing | Loss rate | Actual cash flow varies from amounts estimated, changes in collateral value | Equipment financing loans are offered through direct lending programs, third-party sources and vendor programs nationally. Our equipment finance lending mainly includes full payout term loans and secured loans for various types of business equipment. | |||||||||||||||||
Public sector finance | DCF | Municipal tax / revenue receipts insufficient to service debt; loss of access to capital markets | Loans to state, municipal and local government entities nationally. Loans are either secured by equipment, or are obligations that are backed by the ability to levy taxes, either generally or associated with a specific project. | |||||||||||||||||
Commercial real estate/ multi-family (“CRE”) | PD/LGD for non-owner occupied and loss rate for owner occupied | Actual cash flow varies from amounts estimated, changes in collateral value | CRE loans secured mainly by first liens on properties, including retail properties, office buildings, nursing homes, hotels, motels or restaurants, warehouses, schools and industrial complexes. To a lesser extent, we originate CRE loans for recreation, medical use, land, gas stations, not for profit and other categories. These loans are generally secured by properties located in our primary market area. | |||||||||||||||||
Acquisition, development and construction | PD/LGD | Construction costs are greater than anticipated, changes in estimated collateral value, project completion | Construction loans are made in accordance with a schedule reflecting the cost of construction. Repayment of construction loans on residential subdivisions is normally expected from the sale of units to individual purchasers, except in cases of owner occupied construction loans. In the case of income-producing property, repayment is usually expected from permanent financing upon completion of construction. We provide permanent mortgage financing on most of our construction loans on income-producing property. | |||||||||||||||||
Residential mortgage and home equity lines of credit | PD/LGD | Product type, conforming vs. non-conforming, interest only, converted interest only, amortizing, FICO score, LTV | Residential mortgage conforming and non-conforming, fixed-rate and adjustable rate mortgage (“ARM”) loans with maturities up to 30 years. Also includes home equity lines of credit. | |||||||||||||||||
Other consumer loans | 8 quarter historical loss | FICO, LTV, product type | Other consumer loans consist of loans for personal use. |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Allowance for credit losses | |||||||||||||||||||||||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency-backed | $ | $ | $ | ( | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
CMOs/Other MBS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total residential MBS | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal agencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
State and municipal | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total securities | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
CMOs/Other MBS | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Total residential MBS | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Federal agencies | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Corporate | ( | ||||||||||||||||||||||||||||||||||||||||||||||
State and municipal | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Total other securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total securities | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ |
June 30, 2020 | |||||||||||||||||||||||
Available for sale | Held to maturity | ||||||||||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | ||||||||||||||||||||
Remaining period to contractual maturity: | |||||||||||||||||||||||
One year or less | $ | $ | $ | $ | |||||||||||||||||||
One to five years | |||||||||||||||||||||||
Five to ten years | |||||||||||||||||||||||
Greater than ten years | |||||||||||||||||||||||
Total securities with a stated maturity date | |||||||||||||||||||||||
Residential MBS | |||||||||||||||||||||||
Total securities | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||
Proceeds from sales | $ | $ | $ | $ | |||||||||||||||||||
Gross realized gains | |||||||||||||||||||||||
Gross realized losses | ( | ( | ( | ||||||||||||||||||||
Income tax expense (benefit) on realized net gains / (losses) | ( | ( | |||||||||||||||||||||
Proceeds from calls | $ | $ | $ | $ | |||||||||||||||||||
Gross realized gains | |||||||||||||||||||||||
Gross realized (losses) | ( | ||||||||||||||||||||||
Income tax expense on realized net gains |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, 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 | ||||||||||||||||||||||||||||||
AFS | |||||||||||||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||||||
Agency-backed | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||||||
Corporate | ( | ( | ( | ||||||||||||||||||||||||||||||||
State and municipal | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total other securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||||||
Agency-backed | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
CMOs/Other MBS | ( | ( | |||||||||||||||||||||||||||||||||
Total residential MBS | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||||||
Federal agencies | ( | ( | |||||||||||||||||||||||||||||||||
Corporate | ( | ( | |||||||||||||||||||||||||||||||||
State and municipal | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total other securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, 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 | ||||||||||||||||||||||||||||||
HTM | |||||||||||||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||||||
Corporate | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
State and municipal | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
Total securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||||||
Agency-backed | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||||||
State and municipal | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
Total other securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Type of security | |||||||||||
Corporate and Other | State and municipal | ||||||||||
ACL - HTM: | |||||||||||
Balance at December 31, 2019 | $ | $ | |||||||||
Impact of adoption on January 1, 2020 | |||||||||||
Provision for credit loss expense recorded in the six months ended June 30, 2020 | |||||||||||
Total ACL - HTM at June 30, 2020 | $ | $ | |||||||||
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Credit Rating: | Corporate and other | State and municipal | |||||||||
AAA | $ | $ | |||||||||
AA | |||||||||||
A | |||||||||||
Non-rated | |||||||||||
Total | $ | $ |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
AFS securities pledged for borrowings, at fair value | $ | $ | |||||||||
AFS securities pledged for municipal deposits, at fair value | |||||||||||
HTM securities pledged for borrowings, at amortized cost | |||||||||||
HTM securities pledged for municipal deposits, at amortized cost | |||||||||||
Total securities pledged | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, 2020 | December 31, 2019 | ||||||||||
Commercial: | |||||||||||
Commercial & Industrial (“C&I”): | |||||||||||
Traditional C&I | $ | $ | |||||||||
Asset-based lending | |||||||||||
Payroll finance | |||||||||||
Warehouse lending | |||||||||||
Factored receivables | |||||||||||
Equipment financing | |||||||||||
Public sector finance | |||||||||||
Total C&I | |||||||||||
Commercial mortgage: | |||||||||||
Commercial real estate (“CRE”) | |||||||||||
Multi-family | |||||||||||
Acquisition, development and construction (“ADC”) | |||||||||||
Total commercial mortgage | |||||||||||
Total commercial | |||||||||||
Residential mortgage | |||||||||||
Consumer | |||||||||||
Total portfolio loans | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Total portfolio loans, net | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, 2020 | ||||||||||||||||||||||||||||||||
Current | 30-59 days past due | 60-89 days past due | 90+ days past due | Total | ||||||||||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Asset-based lending | ||||||||||||||||||||||||||||||||
Payroll finance | ||||||||||||||||||||||||||||||||
Warehouse lending | ||||||||||||||||||||||||||||||||
Factored receivables | ||||||||||||||||||||||||||||||||
Equipment financing | ||||||||||||||||||||||||||||||||
Public sector finance | ||||||||||||||||||||||||||||||||
CRE | ||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||
ADC | ||||||||||||||||||||||||||||||||
Residential mortgage | ||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total TDRs included above | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Non-performing loans: | ||||||||||||||||||||||||||||||||
Loans 90+ days past due and still accruing | $ | |||||||||||||||||||||||||||||||
Non-accrual loans | ||||||||||||||||||||||||||||||||
Total non-performing loans | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Current | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||||||||||||||
Payroll finance | |||||||||||||||||||||||||||||||||||
Warehouse lending | |||||||||||||||||||||||||||||||||||
Factored receivables | |||||||||||||||||||||||||||||||||||
Equipment financing | |||||||||||||||||||||||||||||||||||
Public sector finance | |||||||||||||||||||||||||||||||||||
CRE | |||||||||||||||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||||||||||||||
ADC | |||||||||||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total TDRs included above | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Non-performing loans: | |||||||||||||||||||||||||||||||||||
Loans 90+ days past due and still accruing | $ | ||||||||||||||||||||||||||||||||||
Non-accrual loans | |||||||||||||||||||||||||||||||||||
Total non-performing loans | $ |
Collateral type | |||||||||||||||||||||||||||||
Real estate | Business assets | Equipment | Taxi medallions | Total | |||||||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||||||||
Factored receivables | |||||||||||||||||||||||||||||
Equipment finance | |||||||||||||||||||||||||||||
CRE | |||||||||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||||||||
ADC | |||||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, 2020 | ||||||||||||||||||||
Total Non-accrual Loans | Non-accrual loans with no ACL | Loans 90 days or more past due still accruing interest | ||||||||||||||||||
Traditional C&I | $ | $ | $ | |||||||||||||||||
Asset-based lending | ||||||||||||||||||||
Payroll finance | ||||||||||||||||||||
Factored receivables | ||||||||||||||||||||
Equipment financing | ||||||||||||||||||||
CRE | ||||||||||||||||||||
Multi-family | ||||||||||||||||||||
ADC | ||||||||||||||||||||
Residential mortgage | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
Total | $ | $ | $ |
Interest reversed | ||||||||||||||
For the three months ended | For the six months ended | |||||||||||||
June 30, 2020 | June 30, 2020 | |||||||||||||
Traditional C&I | $ | $ | ||||||||||||
Asset-based lending | ||||||||||||||
CRE | ||||||||||||||
Multi-family | ||||||||||||||
ADC | ||||||||||||||
Residential mortgage | ||||||||||||||
Consumer | ||||||||||||||
Total interest reversed | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, 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 | |||||||||||||||||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||||||||||||||||||||
Payroll finance | |||||||||||||||||||||||||||||||||||||||||
Warehouse lending | |||||||||||||||||||||||||||||||||||||||||
Factored receivables | |||||||||||||||||||||||||||||||||||||||||
Equipment financing | |||||||||||||||||||||||||||||||||||||||||
Public sector finance | |||||||||||||||||||||||||||||||||||||||||
CRE | |||||||||||||||||||||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||||||||||||||||||||
ADC | |||||||||||||||||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Total portfolio loans | $ | $ | $ | $ | $ | $ | $ |
December 31, 2019 | ||||||||||||||
Unpaid principal balance | Recorded investment | |||||||||||||
Loans with no related allowance recorded: | ||||||||||||||
Traditional C&I | $ | $ | ||||||||||||
Asset-based lending | ||||||||||||||
Payroll finance | ||||||||||||||
Equipment financing | ||||||||||||||
CRE | ||||||||||||||
Multi-family | ||||||||||||||
Residential mortgage | ||||||||||||||
Consumer | ||||||||||||||
Total | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Non-pass rated loans | |||||||||||||||||||||||||||||
Loan balance outstanding | Deferral of principal and interest | % | Special mention | Substandard | |||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||||
Traditional C&I | $ | $ | % | $ | $ | ||||||||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||||||||
Payroll finance | |||||||||||||||||||||||||||||
Warehouse lending | |||||||||||||||||||||||||||||
Factored receivables | |||||||||||||||||||||||||||||
Equipment finance | |||||||||||||||||||||||||||||
Public sector finance | |||||||||||||||||||||||||||||
Total C&I | |||||||||||||||||||||||||||||
Commercial mortgage: | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||||||||
ADC | |||||||||||||||||||||||||||||
Total commercial mortgage | |||||||||||||||||||||||||||||
Total commercial | |||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total Portfolio loans | $ | $ | % | $ | $ |
June 30, 2020 | June 30, 2019 | ||||||||||||||||||||||||||||||||||
Recorded investment | Recorded investment | ||||||||||||||||||||||||||||||||||
Number | Pre- modification | Post- modification | Number | Pre- modification | Post- modification | ||||||||||||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||||||||||||||
Equipment financing | |||||||||||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||||||||||
Total TDRs | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
For the three months ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision / (credit) | Ending balance | ||||||||||||||||||||||||||||||
Traditional C&I | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Asset-based lending | ( | ( | |||||||||||||||||||||||||||||||||
Payroll finance | ( | ( | ( | ||||||||||||||||||||||||||||||||
Warehouse lending | |||||||||||||||||||||||||||||||||||
Factored receivables | ( | ( | |||||||||||||||||||||||||||||||||
Equipment financing | ( | ( | |||||||||||||||||||||||||||||||||
Public sector finance | |||||||||||||||||||||||||||||||||||
CRE | ( | ||||||||||||||||||||||||||||||||||
Multi-family | ( | ( | ( | ||||||||||||||||||||||||||||||||
ADC | ( | ( | |||||||||||||||||||||||||||||||||
Residential mortgage | ( | ( | |||||||||||||||||||||||||||||||||
Consumer | ( | ( | |||||||||||||||||||||||||||||||||
Total ACL - loans | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Annualized net charge-offs to average loans outstanding: | % |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
For the three months ended June 30, 2019 | |||||||||||||||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision / (credit) | Ending balance | ||||||||||||||||||||||||||||||
Traditional C&I | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Asset-based lending | ( | ( | |||||||||||||||||||||||||||||||||
Payroll finance | ( | ( | ( | ||||||||||||||||||||||||||||||||
Warehouse lending | |||||||||||||||||||||||||||||||||||
Factored receivables | ( | ( | |||||||||||||||||||||||||||||||||
Equipment financing | ( | ( | |||||||||||||||||||||||||||||||||
Public sector finance | |||||||||||||||||||||||||||||||||||
CRE | ( | ||||||||||||||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||||||||||||||
ADC | |||||||||||||||||||||||||||||||||||
Residential mortgage | ( | ( | |||||||||||||||||||||||||||||||||
Consumer | ( | ( | |||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Annualized net charge-offs to average loans outstanding: | % |
For the six months ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
Beginning balance | CECL Day 1 | Charge-offs | Recoveries | Net charge-offs | Provision/ (credit) | Ending balance | |||||||||||||||||||||||||||||||||||
Traditional C&I | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Asset-based lending | ( | ( | |||||||||||||||||||||||||||||||||||||||
Payroll finance | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Warehouse lending | ( | ||||||||||||||||||||||||||||||||||||||||
Factored receivables | ( | ( | |||||||||||||||||||||||||||||||||||||||
Equipment financing | ( | ( | |||||||||||||||||||||||||||||||||||||||
Public sector finance | ( | ||||||||||||||||||||||||||||||||||||||||
CRE | ( | ( | |||||||||||||||||||||||||||||||||||||||
Multi-family | ( | ( | |||||||||||||||||||||||||||||||||||||||
ADC | ( | ( | |||||||||||||||||||||||||||||||||||||||
Residential mortgage | ( | ( | |||||||||||||||||||||||||||||||||||||||
Consumer | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total ACL - loans | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Annualized net charge-offs to average loans outstanding: | % |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
For the six months ended June 30, 2019 | |||||||||||||||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision/ (credit) | Ending balance | ||||||||||||||||||||||||||||||
Traditional C&I | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Asset-based lending | ( | ( | |||||||||||||||||||||||||||||||||
Payroll finance | ( | ( | ( | ||||||||||||||||||||||||||||||||
Warehouse lending | ( | ||||||||||||||||||||||||||||||||||
Factored receivables | ( | ||||||||||||||||||||||||||||||||||
Equipment financing | ( | ( | |||||||||||||||||||||||||||||||||
Public sector finance | ( | ||||||||||||||||||||||||||||||||||
CRE | ( | ||||||||||||||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||||||||||||||
ADC | |||||||||||||||||||||||||||||||||||
Residential mortgage | ( | ( | |||||||||||||||||||||||||||||||||
Consumer | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Annualized net charge-offs to average loans outstanding: | % |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Special Mention | Substandard | Special Mention | Substandard | ||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | |||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||
Payroll finance | |||||||||||||||||||||||
Factored receivables | |||||||||||||||||||||||
Equipment financing | |||||||||||||||||||||||
CRE | |||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||
ADC | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Term loans amortized cost basis by origination year | Revolving loans converted to term | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||
Traditional C&I | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total traditional C&I | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-Based Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total asset-based lending | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Payroll Finance | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total payroll finance | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Warehouse Lending | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total warehouse lending | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Factored Receivables | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total factored receivables | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment Financing | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total equipment financing | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Public Sector Finance | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total public sector finance | |||||||||||||||||||||||||||||||||||||||||||||||||||||
CRE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total CRE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total multi-family | |||||||||||||||||||||||||||||||||||||||||||||||||||||
ADC | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total ADC | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Loans | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Goodwill | $ | $ | |||||||||
Other intangible assets: | |||||||||||
Core deposits | $ | $ | |||||||||
Customer lists | |||||||||||
Trade name | |||||||||||
Total | $ | $ |
Amortization expense | |||||
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total | $ |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Non-interest bearing demand | $ | $ | |||||||||
Interest bearing demand | |||||||||||
Savings | |||||||||||
Money market | |||||||||||
Certificates of deposit | |||||||||||
Total deposits | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Interest bearing demand | $ | $ | |||||||||
Money market | |||||||||||
Certificates of deposit | |||||||||||
Total brokered deposits | $ | $ |
June 30, | December 31, | ||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Amount | Rate | Amount | Rate | ||||||||||||||||||||
By type of borrowing: | |||||||||||||||||||||||
FHLB borrowings | $ | % | $ | % | |||||||||||||||||||
Paycheck Protection Program Liquidity Facility | — | — | |||||||||||||||||||||
Repurchase agreements | |||||||||||||||||||||||
Subordinated Notes - Company | |||||||||||||||||||||||
Subordinated Notes - Bank | |||||||||||||||||||||||
Total borrowings | $ | % | $ | % | |||||||||||||||||||
By remaining period to maturity: | |||||||||||||||||||||||
Less than one year | $ | % | $ | % | |||||||||||||||||||
One to two years | |||||||||||||||||||||||
Two to three years | |||||||||||||||||||||||
Greater than five years | |||||||||||||||||||||||
Total borrowings | $ | % | $ | % |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Notional amount | Average maturity (in years) | Weighted average fixed rate | Weighted average variable rate | Fair value | |||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||||||||
Included in other assets: | |||||||||||||||||||||||||||||
Third-party interest rate swap | $ | $ | |||||||||||||||||||||||||||
Customer interest rate swap | |||||||||||||||||||||||||||||
Total | $ | % | 1 m Libor + | $ | |||||||||||||||||||||||||
Included in other liabilities: | |||||||||||||||||||||||||||||
Third-party interest rate swap | $ | $ | |||||||||||||||||||||||||||
Customer interest rate swap | |||||||||||||||||||||||||||||
Total | $ | % | 1 m Libor + | $ | |||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||
Included in other assets: | |||||||||||||||||||||||||||||
Third-party interest rate swap | $ | $ | |||||||||||||||||||||||||||
Customer interest rate swap | |||||||||||||||||||||||||||||
Total | $ | % | 1 m Libor + | $ | |||||||||||||||||||||||||
Included in other liabilities: | |||||||||||||||||||||||||||||
Third-party interest rate swap | $ | $ | |||||||||||||||||||||||||||
Customer interest rate swap | |||||||||||||||||||||||||||||
Total | $ | % | 1 m Libor + | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Income before income tax expense | $ | $ | $ | $ | |||||||||||||||||||
Tax at federal statutory rate of 21% | |||||||||||||||||||||||
State and local income taxes, net of federal tax benefit | |||||||||||||||||||||||
Tax exempt interest, net of disallowed interest | ( | ( | ( | ( | |||||||||||||||||||
BOLI income | ( | ( | ( | ( | |||||||||||||||||||
Low income housing tax credits and other benefits | ( | ( | ( | ( | |||||||||||||||||||
Low income housing investment amortization expense | |||||||||||||||||||||||
Tax rate adjustment benefit due to CARES Act NOL carryback | ( | ||||||||||||||||||||||
Uncertain tax position reserve | |||||||||||||||||||||||
Annual effective tax rate adjustment | |||||||||||||||||||||||
Equity-based stock compensation benefit | ( | ||||||||||||||||||||||
FDIC insurance premium limitation | |||||||||||||||||||||||
Other, net | ( | ( | ( | ||||||||||||||||||||
Actual income tax expense (benefit) | $ | $ | $ | ( | $ | ||||||||||||||||||
Effective income tax rate | % | % | ( | % | % |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Uncertain tax positions beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Additions for tax positions related to prior tax years | |||||||||||||||||||||||
Interest expense in tax positions | |||||||||||||||||||||||
Uncertain tax positions at June 30, 2020 | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, 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, 2020 | $ | $ | |||||||||||||||||||||||||||
Granted | ( | ||||||||||||||||||||||||||||
Stock awards vested (1) | ( | ( | |||||||||||||||||||||||||||
Exercised | — | — | ( | ||||||||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||||||||
Canceled/expired | ( | ||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | |||||||||||||||||||||||||||
Exercisable at June 30, 2020 | $ |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Non-vested stock awards/performance units | $ | $ | $ | $ | |||||||||||||||||||
Income tax benefit | $ | $ | $ | $ | |||||||||||||||||||
Proceeds from stock option exercises | $ | $ | $ | $ |
June 30, 2020 | |||||
Stock options | $ | ||||
Non-vested stock awards/performance units | |||||
Total | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Other non-interest expense: | |||||||||||||||||||||||
Professional fees | $ | $ | $ | $ | |||||||||||||||||||
Depreciation expense on operating leases | |||||||||||||||||||||||
Advertising and promotion | |||||||||||||||||||||||
Communications | |||||||||||||||||||||||
Residential mortgage loans servicing | |||||||||||||||||||||||
Insurance & surety bond premium | |||||||||||||||||||||||
Operational losses | |||||||||||||||||||||||
Loss on prepayment of FHLB borrowings | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total other non-interest expense | $ | $ | $ | $ |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Other assets: | |||||||||||
Low income housing tax credit investments | $ | $ | |||||||||
Right of use asset for operating leases (see Note 15) | |||||||||||
Fair value of swaps (see Note 9) | |||||||||||
Cash on deposit as swap collateral / net of settlement | |||||||||||
Operating leases - equipment and vehicles leased to others | |||||||||||
Other asset balances | |||||||||||
Total other assets | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Other liabilities: | |||||||||||
Commitment to fund low income housing tax credit investments | $ | $ | |||||||||
Lease liability (see Note 15) | |||||||||||
Payroll finance and factoring liabilities | |||||||||||
Swap liabilities (see Note 9) | |||||||||||
Other liability balances | |||||||||||
Total other liabilities | $ | $ |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding for computation of basic EPS | |||||||||||||||||||||||
Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants(1) | |||||||||||||||||||||||
Weighted average common shares for computation of diluted EPS | |||||||||||||||||||||||
EPS(2): | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | |||||||||||||||||||||||
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Actual | Minimum capital required - Basel III | Required to be considered well- capitalized | |||||||||||||||||||||||||||||||||
Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | ||||||||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||||||||||||||
Common equity tier 1 to RWA: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A | |||||||||||||||||||||||||||||||||
Tier 1 capital to RWA: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | % | % | % | ||||||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A | |||||||||||||||||||||||||||||||||
Total capital to RWA: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | % | % | % | ||||||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A | |||||||||||||||||||||||||||||||||
Tier 1 leverage ratio: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | % | % | % | ||||||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Actual | Minimum capital required - Basel III fully phased-in | Required to be considered well- capitalized | |||||||||||||||||||||||||||||||||
Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | ||||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Common equity tier 1 to RWA: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A | |||||||||||||||||||||||||||||||||
Tier 1 capital to RWA: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | % | % | % | ||||||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A | |||||||||||||||||||||||||||||||||
Total capital to RWA: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | % | % | % | ||||||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A | |||||||||||||||||||||||||||||||||
Tier 1 leverage ratio: | |||||||||||||||||||||||||||||||||||
Sterling National Bank | % | % | % | ||||||||||||||||||||||||||||||||
Sterling Bancorp | N/A | N/A |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Loan origination commitments | $ | $ | |||||||||
Unused lines of credit | |||||||||||
Letters of credit |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 and thereafter | |||||
Total lease payments | |||||
Interest | |||||
Present value of lease liabilities | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
June 30, 2020 | |||||||||||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | $ | $ | $ | |||||||||||||||||||
CMOs/Other MBS | |||||||||||||||||||||||
Total residential MBS | |||||||||||||||||||||||
Other securities: | |||||||||||||||||||||||
Federal agencies | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
State and municipal | |||||||||||||||||||||||
Total other securities | |||||||||||||||||||||||
Total AFS | |||||||||||||||||||||||
Swaps | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Swaps | $ | $ | $ | $ | |||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
December 31, 2019 | |||||||||||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | $ | $ | $ | |||||||||||||||||||
CMOs/Other MBS | |||||||||||||||||||||||
Total residential MBS | |||||||||||||||||||||||
Federal agencies | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
State and municipal | |||||||||||||||||||||||
Total other securities | |||||||||||||||||||||||
Total AFS | |||||||||||||||||||||||
Swaps | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Swaps | $ | $ | $ | $ | |||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
June 30, 2020 | |||||||||||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | |||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||
Factored receivables | |||||||||||||||||||||||
Equipment financing | |||||||||||||||||||||||
CRE | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total collateral dependent loans measured at fair value | $ | $ | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
December 31, 2019 | |||||||||||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||||||||||
Traditional C&I | $ | $ | $ | $ | |||||||||||||||||||
Asset-based lending | |||||||||||||||||||||||
Equipment financing | |||||||||||||||||||||||
CRE | |||||||||||||||||||||||
Multi-family | |||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total impaired loans measured at fair value | $ | $ | $ | $ |
June 30, 2020 | |||||||||||||||||||||||
Carrying amount | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Securities AFS | |||||||||||||||||||||||
Securities HTM | |||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||
Portfolio loans, net | |||||||||||||||||||||||
Accrued interest receivable on securities | |||||||||||||||||||||||
Accrued interest receivable on loans | |||||||||||||||||||||||
FHLB stock and FRB stock | |||||||||||||||||||||||
Swaps | |||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Non-maturity deposits | |||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
FHLB borrowings | |||||||||||||||||||||||
Paycheck Protection Program Lending Facility | |||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||
Subordinated Notes - Company | |||||||||||||||||||||||
Subordinated Notes - Bank | |||||||||||||||||||||||
Mortgage escrow funds | |||||||||||||||||||||||
Accrued interest payable on deposits | |||||||||||||||||||||||
Accrued interest payable on borrowings | |||||||||||||||||||||||
Swaps |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
December 31, 2019 | |||||||||||||||||||||||
Carrying amount | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||
Securities held to maturity | |||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||
Portfolio loans, net | |||||||||||||||||||||||
Accrued interest receivable on securities | |||||||||||||||||||||||
Accrued interest receivable on loans | |||||||||||||||||||||||
FHLB stock and FRB stock | |||||||||||||||||||||||
Swaps | |||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Non-maturity deposits | |||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
FHLB borrowings | |||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||
Senior Notes | |||||||||||||||||||||||
Subordinated Notes | |||||||||||||||||||||||
Mortgage escrow funds | |||||||||||||||||||||||
Accrued interest payable on deposits | |||||||||||||||||||||||
Accrued interest payable on borrowings | |||||||||||||||||||||||
Swaps |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Net unrealized holding gain on available for sale securities | $ | $ | |||||||||
Related income tax (expense) | ( | ( | |||||||||
Available for sale securities, net of tax | |||||||||||
Net unrealized holding loss on securities transferred to held to maturity | ( | ( | |||||||||
Related income tax benefit | |||||||||||
Securities transferred to held to maturity, net of tax | ( | ( | |||||||||
Net unrealized holding gain on retirement plans | |||||||||||
Related income tax expense | ( | ( | |||||||||
Retirement plans, net of tax | |||||||||||
Accumulated other comprehensive income | $ | $ |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
Net unrealized holding gain (loss) on available for sale securities | Net unrealized holding (loss) gain on securities transferred to held to maturity | Net unrealized holding gain on retirement plans | Total | ||||||||||||||||||||
For the three months ended June 30, 2020 | |||||||||||||||||||||||
Balance beginning of the period | $ | $ | ( | $ | $ | ||||||||||||||||||
Other comprehensive income before reclassification | |||||||||||||||||||||||
Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||
Total other comprehensive income | |||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | $ | ||||||||||||||||||
For the three months ended June 30, 2019 | |||||||||||||||||||||||
Balance beginning of the period | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other comprehensive income before reclassification | |||||||||||||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||||||||
Total other comprehensive income | |||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | $ | ||||||||||||||||||
Location in consolidated income statements where reclassification from accumulated other comprehensive loss is included | Net gain (loss) on sale of securities | Interest income on securities | Other non-interest expense |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
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 gain (loss) on retirement plans | Total | ||||||||||||||||||||
For the six months ended June 30, 2020 | |||||||||||||||||||||||
Balance beginning of the period | $ | $ | ( | $ | $ | ||||||||||||||||||
Other comprehensive income before reclassification | |||||||||||||||||||||||
Amounts reclassified from AOCI | ( | ( | ( | ||||||||||||||||||||
Total other comprehensive income (loss) | ( | ||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | $ | ||||||||||||||||||
For the six months ended June 30, 2019 | |||||||||||||||||||||||
Balance beginning of the period | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other comprehensive income before reclassification | |||||||||||||||||||||||
Securities reclassified from held to maturity to available for sale | ( | ( | |||||||||||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||||||||
Total other comprehensive income | |||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | $ | ||||||||||||||||||
Location in consolidated income statements where reclassification from AOCI is included | Net loss on sale of securities | Interest income on securities | Other non-interest expense |
Table of Contents | STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands within tabular disclosure, except share and per share data) |
At or for the three months ended June 30, | At or for the six months ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
End of period balances: | |||||||||||||||||||||||
Total securities | $ | 4,548,078 | $ | 5,858,865 | $ | 4,548,078 | $ | 5,858,865 | |||||||||||||||
Portfolio loans | 22,295,267 | 20,370,306 | 22,295,267 | 20,370,306 | |||||||||||||||||||
Total assets | 30,839,893 | 30,237,545 | 30,839,893 | 30,237,545 | |||||||||||||||||||
Non-interest bearing deposits | 5,407,728 | 4,494,802 | 5,407,728 | 4,494,802 | |||||||||||||||||||
Interest bearing deposits | 18,192,893 | 16,453,662 | 18,192,893 | 16,453,662 | |||||||||||||||||||
Total deposits | 23,600,621 | 20,948,464 | 23,600,621 | 20,948,464 | |||||||||||||||||||
Borrowings | 2,014,259 | 4,133,986 | 2,014,259 | 4,133,986 | |||||||||||||||||||
Stockholders’ equity | 4,484,187 | 4,459,158 | 4,484,187 | 4,459,158 | |||||||||||||||||||
Tangible common stockholders’ equity (“TCE”)1 | 2,561,599 | 2,543,399 | 2,561,599 | 2,543,399 | |||||||||||||||||||
Average balances: | |||||||||||||||||||||||
Total securities | $ | 4,630,056 | $ | 5,883,269 | $ | 4,838,315 | $ | 6,107,734 | |||||||||||||||
Total loans2 | 21,940,636 | 19,912,839 | 21,573,406 | 20,161,178 | |||||||||||||||||||
Total assets | 30,732,914 | 29,666,951 | 30,608,673 | 30,201,974 | |||||||||||||||||||
Non-interest bearing deposits | 5,004,907 | 4,218,000 | 4,675,713 | 4,232,613 | |||||||||||||||||||
Interest bearing deposits | 18,459,030 | 16,930,872 | 18,402,541 | 16,999,424 | |||||||||||||||||||
Total deposits and mortgage escrow | 23,463,937 | 21,148,872 | 23,078,254 | 21,232,037 | |||||||||||||||||||
Borrowings | 2,101,016 | 3,544,661 | 2,340,969 | 4,002,872 | |||||||||||||||||||
Stockholders’ equity | 4,464,403 | 4,423,910 | 4,485,470 | 4,419,703 | |||||||||||||||||||
TCE1 | 2,538,842 | 2,504,883 | 2,557,700 | 2,512,695 | |||||||||||||||||||
Selected operating data: | |||||||||||||||||||||||
Total interest and dividend income | $ | 253,226 | $ | 302,457 | $ | 526,753 | $ | 611,857 | |||||||||||||||
Total interest expense | 39,927 | 70,618 | 101,682 | 144,512 | |||||||||||||||||||
Net interest income | 213,299 | 231,839 | 425,071 | 467,345 | |||||||||||||||||||
Provision for credit losses | 56,606 | 11,500 | 194,886 | 21,700 | |||||||||||||||||||
Net interest income after provision for credit losses | 156,693 | 220,339 | 230,185 | 445,645 | |||||||||||||||||||
Total non-interest income | 26,090 | 27,058 | 73,416 | 46,655 | |||||||||||||||||||
Total non-interest expense | 124,881 | 126,940 | 239,594 | 241,932 | |||||||||||||||||||
Income before income tax expense | 57,902 | 120,457 | 64,007 | 250,368 | |||||||||||||||||||
Income tax (benefit) expense | 7,110 | 23,997 | (932) | 52,471 | |||||||||||||||||||
Net income | 50,792 | 96,460 | 64,939 | 197,897 | |||||||||||||||||||
Preferred stock dividend | 1,972 | 1,987 | 3,948 | 3,976 | |||||||||||||||||||
Net income available to common stockholders | $ | 48,820 | $ | 94,473 | $ | 60,991 | $ | 193,921 | |||||||||||||||
Per share data: | |||||||||||||||||||||||
Reported basic EPS (GAAP) | $ | 0.25 | $ | 0.46 | $ | 0.31 | $ | 0.92 | |||||||||||||||
Reported diluted EPS (GAAP) | 0.25 | 0.46 | 0.31 | 0.92 | |||||||||||||||||||
Adjusted diluted EPS1 (non-GAAP) | 0.29 | 0.51 | 0.28 | 1.01 | |||||||||||||||||||
Dividends declared per common share | 0.07 | 0.07 | 0.14 | 0.14 | |||||||||||||||||||
Book value per share | 22.35 | 21.06 | 22.35 | 21.06 | |||||||||||||||||||
Tangible book value per common share1 | 13.17 | 12.40 | 13.17 | 12.40 |
At or for the three months ended June 30, | At or for the six months ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Common shares outstanding: | |||||||||||||||||||||||
Shares outstanding at period end | 194,458,805 | 205,187,243 | 194,458,805 | 205,187,243 | |||||||||||||||||||
Weighted average shares basic | 193,479,757 | 206,932,114 | 194,909,498 | 210,022,967 | |||||||||||||||||||
Weighted average shares diluted | 193,604,431 | 207,376,239 | 195,168,557 | 210,419,425 | |||||||||||||||||||
Other data: | |||||||||||||||||||||||
Full time equivalent employees at period end | 1,617 | 1,820 | 1,617 | 1,820 | |||||||||||||||||||
Financial centers at period end | 78 | 97 | 78 | 97 | |||||||||||||||||||
Performance ratios: | |||||||||||||||||||||||
Return on average assets | 0.64 | % | 1.28 | % | 0.40 | % | 1.29 | % | |||||||||||||||
Return on average equity | 4.40 | 8.57 | 2.73 | 8.85 | |||||||||||||||||||
Reported return on average tangible assets1 | 0.68 | 1.36 | 0.42 | 1.38 | |||||||||||||||||||
Adjusted return on average tangible assets1 | 0.79 | 1.51 | 0.38 | 1.51 | |||||||||||||||||||
Reported return on average TCE1 | 7.73 | 15.13 | 4.78 | 15.56 | |||||||||||||||||||
Adjusted return on average TCE1 | 9.02 | 16.83 | 4.21 | 17.05 | |||||||||||||||||||
Reported operating efficiency1 | 52.2 | 49.0 | 48.1 | 47.1 | |||||||||||||||||||
Adjusted operating efficiency1 | 45.1 | 40.9 | 43.7 | 40.7 | |||||||||||||||||||
Net interest margin-GAAP | 3.15 | 3.53 | 3.15 | 3.50 | |||||||||||||||||||
Net interest margin-tax equivalent3 | 3.20 | 3.58 | 3.20 | 3.56 | |||||||||||||||||||
Capital ratios (Company)4: | |||||||||||||||||||||||
Tier 1 leverage ratio | 9.51 | % | 9.57 | % | 9.51 | % | 9.57 | % | |||||||||||||||
Common equity Tier 1 capital ratio | 11.00 | 11.52 | 11.00 | 11.52 | |||||||||||||||||||
Tier 1 risk-based capital ratio | 11.57 | 12.15 | 11.57 | 12.15 | |||||||||||||||||||
Total risk-based capital ratio | 14.20 | 13.30 | 14.20 | 13.30 | |||||||||||||||||||
Tangible equity to tangible assets | 9.29 | 9.42 | 9.29 | 9.42 | |||||||||||||||||||
Tangible common equity to tangible assets1 | 8.82 | 8.94 | 8.82 | 8.94 | |||||||||||||||||||
Regulatory capital ratios (Bank)4: | |||||||||||||||||||||||
Tier 1 leverage ratio | 10.09 | % | 9.98 | % | 10.09 | % | 9.98 | % | |||||||||||||||
Tier 1 risk-based capital ratio | 12.24 | 12.67 | 12.24 | 12.67 | |||||||||||||||||||
Total risk-based capital ratio | 13.85 | 13.94 | 13.85 | 13.94 | |||||||||||||||||||
Asset quality data and ratios: | |||||||||||||||||||||||
Allowance for credit losses | $ | 365,489 | $ | 104,664 | $ | 365,489 | $ | 104,664 | |||||||||||||||
Non-performing loans (“NPLs”) | 260,605 | 192,647 | 260,605 | 192,647 | |||||||||||||||||||
Non-performing assets (“NPAs”) | 269,270 | 206,275 | 269,270 | 206,275 | |||||||||||||||||||
Net charge-offs | 17,561 | 5,796 | 24,516 | 12,713 | |||||||||||||||||||
NPAs to total assets | 0.87 | % | 0.68 | % | 0.87 | % | 0.68 | % | |||||||||||||||
NPLs to total loans5 | 1.17 | 0.95 | 1.17 | 0.95 | |||||||||||||||||||
Allowance for loan losses to non-performing loans | 140.25 | 54.33 | 140.25 | 54.33 | |||||||||||||||||||
Allowance for loan losses to total loans4 | 1.64 | 0.51 | 1.64 | 0.51 | |||||||||||||||||||
Annualized net charge-offs to average loans | 0.32 | 0.12 | 0.24 | 0.13 |
For the three months ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||||||||||||||||
Traditional C&I and commercial finance loans | $ | 8,791,024 | $ | 84,192 | 3.85 | % | $ | 7,203,215 | $ | 97,260 | 5.42 | % | |||||||||||||||||||||||
CRE (includes multi-family) | 10,404,643 | 106,408 | 4.11 | 9,486,333 | 115,759 | 4.89 | |||||||||||||||||||||||||||||
ADC | 519,517 | 5,762 | 4.46 | 307,290 | 4,664 | 6.09 | |||||||||||||||||||||||||||||
Commercial loans | 19,715,184 | 196,362 | 4.01 | 16,996,838 | 217,683 | 5.14 | |||||||||||||||||||||||||||||
Consumer loans | 219,052 | 2,233 | 4.10 | 280,098 | 4,013 | 5.75 | |||||||||||||||||||||||||||||
Residential mortgage loans | 2,006,400 | 21,309 | 4.25 | 2,635,903 | 36,587 | 5.55 | |||||||||||||||||||||||||||||
Total gross loans1 | 21,940,636 | 219,904 | 4.03 | 19,912,839 | 258,283 | 5.20 | |||||||||||||||||||||||||||||
Securities taxable | 2,507,384 | 18,855 | 3.02 | 3,453,858 | 24,632 | 2.86 | |||||||||||||||||||||||||||||
Securities non-taxable | 2,122,672 | 16,242 | 3.06 | 2,429,411 | 18,257 | 3.01 | |||||||||||||||||||||||||||||
Interest earning deposits | 455,626 | 146 | 0.13 | 289,208 | 1,295 | 1.80 | |||||||||||||||||||||||||||||
FRB and FHLB stock | 213,796 | 1,490 | 2.80 | 291,737 | 3,824 | 5.26 | |||||||||||||||||||||||||||||
Total securities and other earning assets | 5,299,478 | 36,733 | 2.79 | 6,464,214 | 48,008 | 2.98 | |||||||||||||||||||||||||||||
Total interest earning assets | 27,240,114 | 256,637 | 3.79 | 26,377,053 | 306,291 | 4.66 | |||||||||||||||||||||||||||||
Non-interest earning assets | 3,492,800 | 3,289,898 | |||||||||||||||||||||||||||||||||
Total assets | $ | 30,732,914 | $ | 29,666,951 | |||||||||||||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 4,766,298 | $ | 4,806 | 0.41 | % | $ | 4,399,296 | $ | 11,884 | 1.08 | % | |||||||||||||||||||||||
Savings deposits2 | 2,890,402 | 2,418 | 0.34 | 2,448,132 | 1,883 | 0.31 | |||||||||||||||||||||||||||||
Money market deposits | 8,035,750 | 11,711 | 0.59 | 7,538,890 | 23,020 | 1.22 | |||||||||||||||||||||||||||||
Certificates of deposit | 2,766,580 | 9,175 | 1.33 | 2,544,554 | 11,342 | 1.79 | |||||||||||||||||||||||||||||
Total interest bearing deposits | 18,459,030 | 28,110 | 0.61 | 16,930,872 | 48,129 | 1.14 | |||||||||||||||||||||||||||||
Senior Notes | 127,862 | 944 | 2.95 | 173,901 | 1,365 | 3.14 | |||||||||||||||||||||||||||||
Other borrowings | 1,528,844 | 5,684 | 1.50 | 3,197,738 | 18,768 | 2.35 | |||||||||||||||||||||||||||||
Subordinated Notes - Bank | 173,265 | 2,361 | 5.45 | 173,022 | 2,356 | 5.45 | |||||||||||||||||||||||||||||
Subordinated Notes - Company | 271,045 | 2,828 | 4.17 | — | — | — | |||||||||||||||||||||||||||||
Total borrowings | 2,101,016 | 11,817 | 2.26 | 3,544,661 | 22,489 | 2.54 | |||||||||||||||||||||||||||||
Total interest bearing liabilities | 20,560,046 | 39,927 | 0.78 | 20,475,533 | 70,618 | 1.38 | |||||||||||||||||||||||||||||
Non-interest bearing deposits | 5,004,907 | 4,218,000 | |||||||||||||||||||||||||||||||||
Other non-interest bearing liabilities | 703,558 | 549,508 | |||||||||||||||||||||||||||||||||
Total liabilities | 26,268,511 | 25,243,041 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 4,464,403 | 4,423,910 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 30,732,914 | $ | 29,666,951 | |||||||||||||||||||||||||||||||
Net interest rate spread3 | 3.01 | % | 3.28 | % | |||||||||||||||||||||||||||||||
Net interest earning assets4 | $ | 6,680,068 | $ | 5,901,520 | |||||||||||||||||||||||||||||||
Net interest margin - tax equivalent | 216,710 | 3.20 | % | 235,673 | 3.58 | % | |||||||||||||||||||||||||||||
Less tax equivalent adjustment | (3,411) | (3,834) | |||||||||||||||||||||||||||||||||
Net interest income | 213,299 | 231,839 | |||||||||||||||||||||||||||||||||
Accretion income on acquired loans | 10,086 | 23,745 | |||||||||||||||||||||||||||||||||
Tax equivalent net interest margin excluding accretion income on acquired loans | $ | 206,624 | 3.05 | % | $ | 211,928 | 3.22 | % | |||||||||||||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 132.5 | % | 128.8 | % |
For the six months ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||||||||||||||||
Traditional C&I and commercial finance loans | $ | 8,412,567 | $ | 173,342 | 4.14 | % | $ | 6,887,429 | $ | 186,171 | 5.45 | % | |||||||||||||||||||||||
CRE (includes multi-family) | 10,346,810 | 217,147 | 4.22 | 9,436,156 | 230,610 | 4.93 | |||||||||||||||||||||||||||||
ADC | 508,263 | 12,083 | 4.78 | 295,858 | 9,004 | 6.14 | |||||||||||||||||||||||||||||
Commercial loans | 19,267,640 | 402,572 | 4.20 | 16,619,443 | 425,785 | 5.17 | |||||||||||||||||||||||||||||
Consumer loans | 226,347 | 5,173 | 4.60 | 287,721 | 8,110 | 5.68 | |||||||||||||||||||||||||||||
Residential mortgage loans | 2,079,419 | 47,598 | 4.58 | 3,254,014 | 84,683 | 5.20 | |||||||||||||||||||||||||||||
Total net loans1 | 21,573,406 | 455,343 | 4.24 | 20,161,178 | 518,578 | 5.19 | |||||||||||||||||||||||||||||
Securities taxable | 2,695,376 | 39,484 | 2.95 | 3,642,724 | 52,479 | 2.91 | |||||||||||||||||||||||||||||
Securities tax exempt | 2,142,939 | 32,693 | 3.05 | 2,465,010 | 37,063 | 3.01 | |||||||||||||||||||||||||||||
Interest earning deposits | 472,659 | 1,978 | 0.84 | 310,463 | 2,796 | 1.82 | |||||||||||||||||||||||||||||
FRB and FHLB stock | 225,808 | 4,120 | 3.67 | 313,399 | 8,724 | 5.61 | |||||||||||||||||||||||||||||
Total securities and other earning assets | 5,536,782 | 78,275 | 2.84 | 6,731,596 | 101,062 | 3.03 | |||||||||||||||||||||||||||||
Total interest earning assets | 27,110,188 | 533,618 | 3.96 | 26,892,774 | 619,640 | 4.65 | |||||||||||||||||||||||||||||
Non-interest earning assets | 3,498,485 | 3,309,200 | |||||||||||||||||||||||||||||||||
Total assets | $ | 30,608,673 | $ | 30,201,974 | |||||||||||||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 4,691,478 | $ | 14,364 | 0.62 | % | $ | 4,366,961 | $ | 23,528 | 1.09 | % | |||||||||||||||||||||||
Savings deposits2 | 2,845,212 | 5,924 | 0.42 | 2,454,156 | 3,666 | 0.30 | |||||||||||||||||||||||||||||
Money market deposits | 7,863,566 | 30,107 | 0.77 | 7,657,039 | 45,635 | 1.20 | |||||||||||||||||||||||||||||
Certificates of deposit | 3,002,285 | 23,496 | 1.57 | 2,521,268 | 21,294 | 1.70 | |||||||||||||||||||||||||||||
Total interest bearing deposits | 18,402,541 | 73,891 | 0.81 | 16,999,424 | 94,123 | 1.12 | |||||||||||||||||||||||||||||
Senior Notes | 150,592 | 2,378 | 3.18 | 176,655 | 2,777 | 3.17 | |||||||||||||||||||||||||||||
Other borrowings | 1,746,136 | 15,040 | 1.73 | 3,653,224 | 42,900 | 2.37 | |||||||||||||||||||||||||||||
Subordinated Notes - Bank | 173,234 | 4,718 | 5.45 | 172,993 | 4,712 | 5.45 | |||||||||||||||||||||||||||||
Subordinated Notes - Company | 271,007 | 5,655 | 4.17 | — | — | — | |||||||||||||||||||||||||||||
Total borrowings | 2,340,969 | 27,791 | 2.39 | 4,002,872 | 50,389 | 2.54 | |||||||||||||||||||||||||||||
Total interest bearing liabilities | 20,743,510 | 101,682 | 0.99 | 21,002,296 | 144,512 | 1.39 | |||||||||||||||||||||||||||||
Non-interest bearing deposits | 4,675,713 | 4,232,613 | |||||||||||||||||||||||||||||||||
Other non-interest bearing liabilities | 703,980 | 547,362 | |||||||||||||||||||||||||||||||||
Total liabilities | 26,123,203 | 25,782,271 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 4,485,470 | 4,419,703 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 30,608,673 | $ | 30,201,974 | |||||||||||||||||||||||||||||||
Net interest rate spread3 | 2.97 | % | 3.26 | % | |||||||||||||||||||||||||||||||
Net interest earning assets4 | $ | 6,366,678 | $ | 5,890,478 | |||||||||||||||||||||||||||||||
Net interest margin - tax equivalent | 431,936 | 3.20 | % | 475,128 | 3.56 | % | |||||||||||||||||||||||||||||
Less tax equivalent adjustment | (6,865) | (7,783) | |||||||||||||||||||||||||||||||||
Net interest income | 425,071 | 467,345 | |||||||||||||||||||||||||||||||||
Accretion income on acquired loans | 20,772 | 49,325 | |||||||||||||||||||||||||||||||||
Tax equivalent net interest margin excluding accretion income on acquired loans | $ | 411,164 | 3.05 | % | $ | 425,803 | 3.19 | % | |||||||||||||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 130.7 | % | 128.0 | % |
For the three months ended June 30, | |||||||||||||||||
2020 vs. 2019 | |||||||||||||||||
Increase / (Decrease) due to | Total increase / | ||||||||||||||||
Volume | Rate | (decrease) | |||||||||||||||
Interest earning assets: | |||||||||||||||||
Traditional C&I and commercial finance loans | $ | 18,654 | $ | (31,722) | $ | (13,068) | |||||||||||
CRE (includes multi-family) | 10,365 | (19,716) | (9,351) | ||||||||||||||
ADC | 2,586 | (1,488) | 1,098 | ||||||||||||||
Commercial loans | 31,605 | (52,926) | (21,321) | ||||||||||||||
Consumer loans | (769) | (1,011) | (1,780) | ||||||||||||||
Residential mortgage loans | (7,713) | (7,565) | (15,278) | ||||||||||||||
Total loans | 23,123 | (61,502) | (38,379) | ||||||||||||||
Securities taxable | (7,080) | 1,303 | (5,777) | ||||||||||||||
Securities tax exempt | (2,315) | 300 | (2,015) | ||||||||||||||
Interest earning deposits | 480 | (1,629) | (1,149) | ||||||||||||||
FRB and FHLB stock | (849) | (1,485) | (2,334) | ||||||||||||||
Total interest earning assets | 13,359 | (63,013) | (49,654) | ||||||||||||||
Interest bearing liabilities: | |||||||||||||||||
Interest bearing demand deposits | 898 | (7,976) | (7,078) | ||||||||||||||
Savings deposits1 | 348 | 187 | 535 | ||||||||||||||
Money market deposits | 1,393 | (12,702) | (11,309) | ||||||||||||||
Certificates of deposit | 926 | (3,093) | (2,167) | ||||||||||||||
Total interest bearing deposits | 3,565 | (23,584) | (20,019) | ||||||||||||||
Senior Notes | (343) | (78) | (421) | ||||||||||||||
Other borrowings | (7,734) | (5,350) | (13,084) | ||||||||||||||
Subordinated Notes - Bank | 5 | — | 5 | ||||||||||||||
Subordinated Notes - Company | — | 2,828 | 2,828 | ||||||||||||||
Total borrowings | (8,072) | (2,600) | (10,672) | ||||||||||||||
Total interest bearing liabilities | (4,507) | (26,184) | (30,691) | ||||||||||||||
Change in tax equivalent net interest income | 17,866 | (36,829) | (18,963) | ||||||||||||||
Less tax equivalent adjustment | (423) | — | (423) | ||||||||||||||
Change in net interest income | $ | 18,289 | $ | (36,829) | $ | (18,540) |
For the six months ended June 30, | |||||||||||||||||
2020 vs. 2019 | |||||||||||||||||
Increase / (Decrease) due to | Total increase / | ||||||||||||||||
Volume | Rate | (decrease) | |||||||||||||||
Interest earning assets: | |||||||||||||||||
Traditional C&I and commercial finance loans | $ | 36,874 | $ | (49,703) | $ | (12,829) | |||||||||||
CRE (includes multi-family) | 21,333 | (34,796) | (13,463) | ||||||||||||||
ADC | 5,411 | (2,332) | 3,079 | ||||||||||||||
Commercial loans | 63,618 | (86,831) | (23,213) | ||||||||||||||
Consumer loans | (1,553) | (1,384) | (2,937) | ||||||||||||||
Residential mortgage loans | (27,877) | (9,208) | (37,085) | ||||||||||||||
Total loans | 34,188 | (97,423) | (63,235) | ||||||||||||||
Securities taxable | (13,719) | 724 | (12,995) | ||||||||||||||
Securities tax exempt | (4,428) | 58 | (4,370) | ||||||||||||||
Interest earning deposits | 1,087 | (1,905) | (818) | ||||||||||||||
FRB and FHLB stock | (2,058) | (2,546) | (4,604) | ||||||||||||||
Total interest earning assets | 15,070 | (101,092) | (86,022) | ||||||||||||||
Interest bearing liabilities: | |||||||||||||||||
Interest bearing demand deposits | 1,653 | (10,818) | (9,165) | ||||||||||||||
Savings deposits1 | 643 | 1,615 | 2,258 | ||||||||||||||
Money market deposits | 1,204 | (16,732) | (15,528) | ||||||||||||||
Certificates of deposit | 3,899 | (1,697) | 2,202 | ||||||||||||||
Total interest bearing deposits | 7,399 | (27,632) | (20,233) | ||||||||||||||
Senior Notes | (417) | 18 | (399) | ||||||||||||||
Other borrowings | (18,432) | (9,427) | (27,859) | ||||||||||||||
Subordinated Notes - Bank | 6 | — | 6 | ||||||||||||||
Subordinated Notes - Company | — | 5,655 | 5,655 | ||||||||||||||
Total borrowings | (18,843) | (3,754) | (22,597) | ||||||||||||||
Total interest bearing liabilities | (11,444) | (31,386) | (42,830) | ||||||||||||||
Change in tax equivalent net interest income | 26,514 | (69,706) | (43,192) | ||||||||||||||
Less tax equivalent adjustment | (917) | — | (917) | ||||||||||||||
Change in net interest income | $ | 27,431 | $ | (69,706) | $ | (42,275) |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Deposit fees and service charges | $ | 5,345 | $ | 7,098 | $ | 11,968 | $ | 13,310 | |||||||||||||||
Accounts receivable management / factoring commissions and other fees | 4,419 | 5,794 | 9,956 | 11,217 | |||||||||||||||||||
Bank owned life insurance | 4,950 | 4,192 | 9,967 | 7,833 | |||||||||||||||||||
Loan commissions and fees | 8,003 | 5,308 | 19,028 | 9,146 | |||||||||||||||||||
Investment management fees | 1,379 | 2,050 | 3,225 | 3,950 | |||||||||||||||||||
Net gain (loss) on sale of securities | 485 | (528) | 8,896 | (13,712) | |||||||||||||||||||
Net gain on called securities | — | — | 4,880 | — | |||||||||||||||||||
Gain on sale of residential mortgage loans | — | — | — | 8,313 | |||||||||||||||||||
Other | 1,509 | 3,144 | 5,496 | 6,598 | |||||||||||||||||||
Total non-interest income | $ | 26,090 | $ | 27,058 | $ | 73,416 | $ | 46,655 |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Compensation and benefits | $ | 54,668 | $ | 54,473 | $ | 109,544 | $ | 110,463 | |||||||||||||||
Stock-based compensation plans | 5,913 | 4,605 | 11,919 | 9,728 | |||||||||||||||||||
Occupancy and office operations | 14,695 | 16,106 | 29,894 | 32,641 | |||||||||||||||||||
Information technology | 7,312 | 9,047 | 15,330 | 17,722 | |||||||||||||||||||
Amortization of intangible assets | 4,200 | 4,785 | 8,400 | 9,611 | |||||||||||||||||||
FDIC insurance and regulatory assessments | 3,638 | 2,994 | 6,844 | 6,332 | |||||||||||||||||||
OREO, net | 1,233 | 458 | 1,285 | 675 | |||||||||||||||||||
Charge for asset write-downs, retention and severance | — | — | — | 3,344 | |||||||||||||||||||
Impairment related to financial centers and real estate consolidation strategy | — | 14,398 | — | 14,398 | |||||||||||||||||||
Other non-interest expense | 33,222 | 20,074 | 56,378 | 37,018 | |||||||||||||||||||
Total non-interest expense | $ | 124,881 | $ | 126,940 | $ | 239,594 | $ | 241,932 |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Amount | % | Amount | % | ||||||||||||||||||||
Commercial: | |||||||||||||||||||||||
C&I: | |||||||||||||||||||||||
Traditional C&I | $ | 3,361,655 | 15.1 | % | $ | 2,355,031 | 11.0 | % | |||||||||||||||
Asset-based lending | 856,020 | 3.8 | 1,082,618 | 5.0 | |||||||||||||||||||
Payroll finance | 124,354 | 0.6 | 226,866 | 1.1 | |||||||||||||||||||
Warehouse lending | 1,567,186 | 7.0 | 1,330,884 | 6.2 | |||||||||||||||||||
Factored receivables | 158,509 | 0.7 | 223,638 | 1.0 | |||||||||||||||||||
Equipment financing | 1,699,805 | 7.6 | 1,800,564 | 8.4 | |||||||||||||||||||
Public sector finance | 1,399,215 | 6.3 | 1,213,118 | 5.7 | |||||||||||||||||||
Total C&I | 9,166,744 | 41.1 | 8,232,719 | 38.4 | |||||||||||||||||||
Commercial mortgage: | |||||||||||||||||||||||
CRE | 5,817,958 | 26.0 | 5,418,648 | 25.3 | |||||||||||||||||||
Multi-family | 4,584,939 | 20.6 | 4,876,870 | 22.7 | |||||||||||||||||||
ADC | 572,558 | 2.6 | 467,331 | 2.2 | |||||||||||||||||||
Total commercial mortgage | 10,975,455 | 49.2 | 10,762,849 | 50.2 | |||||||||||||||||||
Total commercial | 20,142,199 | 90.3 | 18,995,568 | 88.6 | |||||||||||||||||||
Residential mortgage | 1,938,212 | 8.7 | 2,210,112 | 10.3 | |||||||||||||||||||
Consumer | 214,856 | 1.0 | 234,532 | 1.1 | |||||||||||||||||||
Total portfolio loans | 22,295,267 | 100.0 | % | 21,440,212 | 100.0 | % | |||||||||||||||||
Allowance for credit losses | (365,489) | (106,238) | |||||||||||||||||||||
Total portfolio loans, net | $ | 21,929,778 | $ | 21,333,974 |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Non-accrual loans: | |||||||||||
Traditional C&I | $ | 27,962 | $ | 27,148 | |||||||
Asset-based lending | 23,188 | 4,966 | |||||||||
Payroll finance | 882 | 9,396 | |||||||||
Factored receivables | 6,320 | — | |||||||||
Equipment financing | 53,083 | 33,050 | |||||||||
Commercial real estate | 37,394 | 26,213 | |||||||||
Multi-family | 9,884 | 3,400 | |||||||||
ADC | 30,434 | 434 | |||||||||
Residential mortgage | 60,308 | 62,275 | |||||||||
Consumer | 10,878 | 12,169 | |||||||||
Total non-accrual loans | 260,333 | 179,051 | |||||||||
Accruing loans past due 90 days or more | 272 | 110 | |||||||||
Total NPLs | 260,605 | 179,161 | |||||||||
OREO | 8,665 | 12,189 | |||||||||
Total NPAs | $ | 269,270 | $ | 191,350 | |||||||
TDRs accruing and not included above | $ | 40,708 | $ | 49,807 | |||||||
Ratios: | |||||||||||
NPLs to total loans | 1.17 | % | 0.84 | % | |||||||
NPAs to total assets | 0.87 | 0.63 |
Loan balance outstanding | Deferral of principal and interest | % | |||||||||||||||
Commercial | |||||||||||||||||
C&I: | |||||||||||||||||
Traditional C&I | $ | 3,361,655 | $ | 212,878 | 6.3 | % | |||||||||||
Asset-based lending | 856,020 | — | — | ||||||||||||||
Payroll finance | 124,354 | 295 | 0.2 | ||||||||||||||
Warehouse lending | 1,567,186 | — | — | ||||||||||||||
Factored receivables | 158,509 | — | — | ||||||||||||||
Equipment finance | 1,699,805 | 236,207 | 13.9 | ||||||||||||||
Public sector finance | 1,399,215 | — | — | ||||||||||||||
Total C&I | 9,166,744 | 449,380 | 4.9 | ||||||||||||||
Commercial mortgage: | |||||||||||||||||
Commercial real estate | 5,817,958 | 749,318 | 12.9 | ||||||||||||||
Multi-family | 4,584,939 | 197,758 | 4.3 | ||||||||||||||
ADC | 572,558 | 17,353 | 3.0 | ||||||||||||||
Total commercial mortgage | 10,975,455 | 964,429 | 8.8 | ||||||||||||||
Total commercial | 20,142,199 | 1,413,809 | 7.0 | ||||||||||||||
Residential | 1,938,212 | 293,389 | 15.1 | ||||||||||||||
Consumer | 214,856 | 19,320 | 9.0 | ||||||||||||||
Total Portfolio loans | $ | 22,295,267 | $ | 1,726,518 | 7.7 | % |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Allowance for credit losses | Loan balance | % of ACL to loan balance | Allowance for loan losses | Loan balance | % of ALLL to loan balance | ||||||||||||||||||||||||||||||
Traditional C&I | $ | 44,514 | $ | 3,361,655 | 1.32 | % | $ | 15,951 | $ | 2,355,031 | 0.68 | % | |||||||||||||||||||||||
Asset-based lending | 30,853 | 856,020 | 3.60 | 14,272 | 1,082,618 | 1.32 | |||||||||||||||||||||||||||||
Payroll finance | 1,931 | 124,354 | 1.55 | 2,064 | 226,866 | 0.91 | |||||||||||||||||||||||||||||
Warehouse lending | 668 | 1,567,186 | 0.04 | 917 | 1,330,884 | 0.07 | |||||||||||||||||||||||||||||
Factored receivables | 10,586 | 158,509 | 6.68 | 654 | 223,638 | 0.29 | |||||||||||||||||||||||||||||
Equipment financing | 78,172 | 1,699,805 | 4.60 | 16,723 | 1,800,564 | 0.93 | |||||||||||||||||||||||||||||
Public sector finance | 3,765 | 1,399,215 | 0.27 | 1,967 | 1,213,118 | 0.16 | |||||||||||||||||||||||||||||
CRE | 98,905 | 5,817,958 | 1.70 | 27,965 | 5,418,648 | 0.52 | |||||||||||||||||||||||||||||
Multi-family | 36,652 | 4,584,939 | 0.80 | 11,440 | 4,876,870 | 0.23 | |||||||||||||||||||||||||||||
ADC | 18,195 | 572,558 | 3.18 | 4,732 | 467,331 | 1.01 | |||||||||||||||||||||||||||||
Residential mortgage | 33,955 | 1,938,212 | 1.75 | 7,598 | 2,210,112 | 0.34 | |||||||||||||||||||||||||||||
Consumer | 7,293 | 214,856 | 3.39 | 1,955 | 234,532 | 0.83 | |||||||||||||||||||||||||||||
Total | $ | 365,489 | $ | 22,295,267 | 1.64 | $ | 106,238 | $ | 21,440,212 | 0.50 |
June 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Low income housing tax credit investments | $ | 399,336 | $ | 386,824 | |||||||
Right of use asset for operating leases | 102,379 | 112,226 | |||||||||
Fair value of swaps (see Note 9) | 174,553 | 67,318 | |||||||||
Cash on deposit as swap collateral net of settlement | 95,510 | 93,606 | |||||||||
Operating leases - equipment and vehicles leased to others | 61,497 | 72,291 | |||||||||
Other assets | 225,386 | 108,603 | |||||||||
$ | 1,058,661 | $ | 840,868 |
June 30, | |||||||||||
2020 | 2019 | ||||||||||
The following table shows the reconciliation of pretax pre-provision net revenue to adjusted pretax pre-provision net revenue(1): | |||||||||||
Net interest income | $ | 213,299 | $ | 231,839 | |||||||
Non-interest income | 26,090 | 27,058 | |||||||||
Total net interest income and non-interest income | 239,389 | 258,897 | |||||||||
Non-interest expense | 124,881 | 126,940 | |||||||||
Pretax pre-provision net revenue | 114,508 | 131,957 | |||||||||
Adjustments: | |||||||||||
Net (gain) loss on sale of securities | (485) | 528 | |||||||||
Loss on extinguishment of debt | 9,723 | — | |||||||||
Impairment related to financial centers and real estate consolidation strategy | — | 14,398 | |||||||||
Amortization of non-compete agreements and acquired customer list intangible assets | 172 | 200 | |||||||||
Adjusted pretax pre-provision net revenue including accretion income | 123,918 | 147,083 | |||||||||
Accretion income | (10,086) | (23,745) | |||||||||
Adjusted pretax pre-provision net revenue excluding accretion income | $ | 113,832 | $ | 123,338 |
June 30, | |||||||||||
2020 | 2019 | ||||||||||
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio 2: | |||||||||||
Total assets | $ | 30,839,893 | $ | 30,237,545 | |||||||
Goodwill and other intangibles | (1,785,446) | (1,777,748) | |||||||||
Tangible assets | 29,054,447 | 28,459,797 | |||||||||
Stockholders’ equity | 4,484,187 | 4,459,158 | |||||||||
Preferred stock | (137,142) | (138,011) | |||||||||
Goodwill and other intangibles | (1,785,446) | (1,777,748) | |||||||||
Tangible common stockholders’ equity | 2,561,599 | 2,543,399 | |||||||||
Common stock outstanding at period end | 194,458,805 | 205,187,243 | |||||||||
Common stockholders’ equity as a % of total assets | 14.10 | % | 14.29 | % | |||||||
Book value per common share | $ | 22.35 | $ | 21.06 | |||||||
Tangible common equity as a % of tangible assets | 8.82 | % | 8.94 | % | |||||||
Tangible book value per common share | $ | 13.17 | $ | 12.40 | |||||||
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets 3: | |||||||||||||||||||||||
Average assets | $ | 30,732,914 | $ | 29,666,951 | $ | 30,608,673 | $ | 30,201,974 | |||||||||||||||
Average goodwill and other intangibles | (1,788,200) | (1,780,885) | (1,790,300) | (1,768,763) | |||||||||||||||||||
Average tangible assets | 28,944,714 | 27,886,066 | 28,818,373 | 28,433,211 | |||||||||||||||||||
Net income available to common stockholders | 48,820 | 94,473 | 60,991 | 193,921 | |||||||||||||||||||
Net income, if annualized | 196,353 | 378,930 | 122,317 | 391,056 | |||||||||||||||||||
Reported return on average tangible assets | 0.68 | % | 1.36 | % | 0.42 | % | 1.38 | % | |||||||||||||||
Adjusted net income (non-GAAP) | $ | 56,926 | $ | 105,124 | $ | 53,733 | $ | 212,408 | |||||||||||||||
Annualized adjusted net income | 228,955 | 421,651 | 107,761 | 428,337 | |||||||||||||||||||
Adjusted return on average tangible assets (non-GAAP) | 0.79 | % | 1.51 | % | 0.38 | % | 1.51 | % | |||||||||||||||
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
The following table shows the reconciliation of reported net income and reported EPS (GAAP) to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted EPS (non-GAAP)4: | |||||||||||||||||||||||
Income before income tax expense | $ | 57,902 | $ | 120,457 | $ | 64,007 | $ | 250,368 | |||||||||||||||
Income tax (benefit) expense | 7,110 | 23,997 | (932) | 52,471 | |||||||||||||||||||
Net income (GAAP) | 50,792 | 96,460 | 64,939 | 197,897 | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Net (gain) loss on sale of securities | (485) | 528 | (8,896) | 13,712 | |||||||||||||||||||
Impairment related to financial centers and real estate consolidation strategy | — | 14,398 | — | 14,398 | |||||||||||||||||||
Net (gain) on sale of residential mortgage loans | — | — | — | (8,313) | |||||||||||||||||||
Charge for asset write-downs, retention and severance | — | — | — | 3,344 | |||||||||||||||||||
Net loss (gain) on extinguishment of borrowings | 9,723 | — | 10,467 | (46) | |||||||||||||||||||
Amortization of non-compete agreements and acquired customer lists | 172 | 200 | 343 | 441 | |||||||||||||||||||
Total pre-tax adjustments | 9,410 | 15,126 | 1,914 | 23,536 | |||||||||||||||||||
Adjusted pre-tax income | 67,312 | 135,583 | 65,921 | 273,904 | |||||||||||||||||||
Adjusted income tax expense | 8,414 | 28,472 | 8,240 | 57,520 | |||||||||||||||||||
Adjusted net income (non-GAAP) | 58,898 | 107,111 | 57,681 | 216,384 | |||||||||||||||||||
Preferred stock dividend | 1,972 | 1,987 | 3,948 | 3,976 | |||||||||||||||||||
Adjusted net income available to common stockholders (non-GAAP) | $ | 56,926 | $ | 105,124 | $ | 53,733 | $ | 212,408 | |||||||||||||||
Weighted average diluted shares | 193,604,431 | 207,376,239 | 195,168,557 | 210,419,425 | |||||||||||||||||||
Diluted EPS as reported (GAAP) | $ | 0.25 | $ | 0.46 | $ | 0.31 | $ | 0.92 | |||||||||||||||
Adjusted diluted EPS (non-GAAP) | 0.29 | 0.51 | 0.28 | 1.01 | |||||||||||||||||||
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
The following table shows the reconciliation of reported return on average tangible common stockholders’ equity and adjusted return on average tangible common stockholders’ equity 5: | |||||||||||||||||||||||
Average stockholders’ equity | $ | 4,464,403 | $ | 4,423,910 | $ | 4,485,470 | $ | 4,419,703 | |||||||||||||||
Average preferred stock | (137,361) | (138,142) | (137,470) | (138,245) | |||||||||||||||||||
Average goodwill and other intangibles | (1,788,200) | (1,780,885) | (1,790,300) | (1,768,763) | |||||||||||||||||||
Average tangible common stockholders’ equity | 2,538,842 | 2,504,883 | 2,557,700 | 2,512,695 | |||||||||||||||||||
Net income available to common stockholders | 48,820 | 94,473 | 60,991 | 193,921 | |||||||||||||||||||
Net income, if annualized | 196,353 | 378,930 | 122,317 | 391,056 | |||||||||||||||||||
Reported return on average tangible common stockholders’ equity | 7.73 | % | 15.13 | % | 4.78 | % | 15.56 | % | |||||||||||||||
Adjusted net income (non-GAAP) | $ | 56,926 | $ | 105,124 | $ | 53,733 | $ | 212,408 | |||||||||||||||
Annualized adjusted net income | 228,955 | 421,651 | 107,761 | 428,337 | |||||||||||||||||||
Adjusted return on average tangible common stockholders’ equity (non-GAAP) | 9.02 | % | 16.83 | % | 4.21 | % | 17.05 | % | |||||||||||||||
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio6: | |||||||||||||||||||||||
Net interest income | $ | 213,299 | $ | 231,839 | $ | 425,071 | $ | 467,345 | |||||||||||||||
Non-interest income | 26,090 | 27,058 | 73,416 | 46,655 | |||||||||||||||||||
Total revenue | 239,389 | 258,897 | 498,487 | 514,000 | |||||||||||||||||||
Tax equivalent adjustment on securities | 3,411 | 3,834 | 6,865 | 7,781 | |||||||||||||||||||
Loss on termination of pension plan | — | — | — | — | |||||||||||||||||||
Net (gain) loss on sale of securities | (485) | 528 | (8,896) | 13,712 | |||||||||||||||||||
Net (gain) on sale of residential mortgage loans | — | — | — | (8,313) | |||||||||||||||||||
Depreciation of operating leases | (3,136) | — | (6,628) | — | |||||||||||||||||||
Adjusted total revenue (non-GAAP) | 239,179 | 263,259 | 489,828 | 527,180 | |||||||||||||||||||
Non-interest expense | 124,881 | 126,940 | 239,594 | 241,932 | |||||||||||||||||||
Impairment related to financial centers and real estate consolidation strategy | — | (14,398) | — | (14,398) | |||||||||||||||||||
Charge for asset write-downs, systems integration, retention and severance | — | — | — | (3,344) | |||||||||||||||||||
Net (loss) gain on extinguishment of borrowings | (9,723) | — | (10,467) | 46 | |||||||||||||||||||
Depreciation of operating leases | (3,136) | — | (6,628) | — | |||||||||||||||||||
Amortization of intangible assets | (4,200) | (4,785) | (8,400) | (9,611) | |||||||||||||||||||
Adjusted non-interest expense (non-GAAP) | $ | 107,822 | $ | 107,757 | $ | 214,099 | $ | 214,625 | |||||||||||||||
Reported operating efficiency ratio (non-GAAP) | 52.2 | % | 49.0 | % | 48.1 | % | 47.1 | % | |||||||||||||||
Adjusted operating efficiency ratio (non-GAAP) | 45.1 | 40.9 | 43.7 | 40.7 | |||||||||||||||||||
_______________ | |||||||||||||||||||||||
See legend beginning below. |
Interest rates | Estimated | Estimated change in EVE | Estimated | Estimated change in NII | ||||||||||||||||||||||||||||||||||
(basis points) | EVE | Amount | Percent | NII | Amount | Percent | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
+300 | $ | 4,291,331 | $ | 645,843 | 17.7 | % | $ | 1,069,074 | $ | 173,526 | 19.4 | % | ||||||||||||||||||||||||||
+200 | 4,215,246 | 569,758 | 15.6 | 1,011,437 | 115,889 | 12.9 | ||||||||||||||||||||||||||||||||
+100 | 3,997,167 | 351,679 | 9.6 | 953,093 | 57,545 | 6.4 | ||||||||||||||||||||||||||||||||
0 | 3,645,488 | — | — | 895,548 | — | — | ||||||||||||||||||||||||||||||||
-100 | 3,106,298 | (539,190) | (14.8) | 838,521 | (57,027) | (6.4) | ||||||||||||||||||||||||||||||||
Total Number of shares (or units) purchased | Average price paid per share (or unit) | Total number of shares (or units) purchased as part of publicly announced plans or programs (1) | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (1) | ||||||||||||||||||||
Period (2020) | |||||||||||||||||||||||
April 1 — April 30 | — | $ | — | — | |||||||||||||||||||
May 1— May 30 | — | — | — | ||||||||||||||||||||
June 1 — June 30 | — | — | — | ||||||||||||||||||||
Total | — | — | — | 6,671,776 |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
4.4 | ||||||||
4.5 | ||||||||
4.6 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.0 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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: | July 30, 2020 | By: | /s/ Jack Kopnisky | |||||||||||
Jack Kopnisky | ||||||||||||||
President, Chief Executive Officer and Director | ||||||||||||||
(Principal Executive Officer) | ||||||||||||||
Date: | July 30, 2020 | By: | /s/ Luis Massiani | |||||||||||
Luis Massiani | ||||||||||||||
Senior Executive Vice President and Chief Financial Officer | ||||||||||||||
(Principal Financial Officer and Principal Accounting Officer) | ||||||||||||||
Date: | July 30, 2020 | By: | /s/ Jack Kopnisky | |||||||||||
Jack Kopnisky | ||||||||||||||
President, Chief Executive Officer and Director | ||||||||||||||
(Principal Executive Officer) |
Date: | July 30, 2020 | By: | /s/ Luis Massiani | |||||||||||
Luis Massiani | ||||||||||||||
Senior Executive Vice President | ||||||||||||||
Chief Financial Officer | ||||||||||||||
Principal Accounting Officer | ||||||||||||||
(Principal Financial Officer) |
Date: | July 30, 2020 | By: | /s/ Jack Kopnisky | |||||||||||||||||||||||
Jack Kopnisky | ||||||||||||||||||||||||||
Chief Executive Officer, President, and Director | ||||||||||||||||||||||||||
(Principal Executive Officer) |
Date: | July 30, 2020 | By: | /s/ Luis Massiani | |||||||||||||||||||||||
Luis Massiani | ||||||||||||||||||||||||||
Senior Executive Vice President | ||||||||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||||
Principal Accounting Officer | ||||||||||||||||||||||||||
(Principal Financial Officer) |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Debt securities, held-to-maturity, allowance for credit loss | $ 2,499 | $ 0 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 135,000 | 135,000 |
Preferred stock, shares outstanding (in shares) | 135,000 | 135,000 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 310,000,000 | 310,000,000 |
Common stock, shares issued (in shares) | 229,872,925 | 229,872,925 |
Common stock, shares outstanding (in shares) | 194,458,805 | 198,455,324 |
Treasury stock, shares (in shares) | 35,414,120 | 31,417,601 |
Accumulated other comprehensive loss, tax expense (benefit) | $ 33,847 | $ 15,361 |
Consolidated Statement of Changes In Stockholders' Equity (Unaudited) - USD ($) $ in Thousands |
Total |
Cumulative Effect, Period of Adoption, Adjustment |
Cumulative Effect, Period of Adoption, Adjusted Balance |
Common stock |
Common stock
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Preferred stock |
Preferred stock
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Additional paid-in capital |
Additional paid-in capital
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Treasury stock |
Treasury stock
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Retained earnings |
Retained earnings
Cumulative Effect, Period of Adoption, Adjustment
|
Retained earnings
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Accumulated other comprehensive (loss) income |
Accumulated other comprehensive (loss) income
Cumulative Effect, Period of Adoption, Adjusted Balance
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance (in shares) at Dec. 31, 2018 | 216,227,852 | |||||||||||||||
Balance, beginning at Dec. 31, 2018 | $ 4,428,853 | $ 2,299 | $ 138,423 | $ 3,776,461 | $ (213,935) | $ 791,550 | $ (65,945) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 101,437 | 101,437 | ||||||||||||||
Other comprehensive income | 59,335 | 59,335 | ||||||||||||||
Stock options & other stock transactions, net (in shares) | 3,893 | |||||||||||||||
Stock options & other stock transactions, net | 55 | 49 | 6 | |||||||||||||
Restricted stock awards, net (in shares) | 1,331,674 | |||||||||||||||
Restricted stock awards, net | 1,105 | (24,626) | 12,818 | 12,913 | ||||||||||||
Cash dividends declared, common | (15,079) | (15,079) | ||||||||||||||
Cash dividends declared, preferred | (2,194) | (205) | (1,989) | |||||||||||||
Purchase of treasury stock (in shares) | (8,002,595) | |||||||||||||||
Purchase of treasury stock | (154,289) | (154,289) | ||||||||||||||
Balance (in shares) at Mar. 31, 2019 | 209,560,824 | |||||||||||||||
Balance, ending at Mar. 31, 2019 | 4,419,223 | $ 2,299 | 138,218 | 3,751,835 | (355,357) | 888,838 | (6,610) | |||||||||
Balance (in shares) at Dec. 31, 2018 | 216,227,852 | |||||||||||||||
Balance, beginning at Dec. 31, 2018 | 4,428,853 | $ 2,299 | 138,423 | 3,776,461 | (213,935) | 791,550 | (65,945) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 197,897 | |||||||||||||||
Other comprehensive income | 106,291 | |||||||||||||||
Balance (in shares) at Jun. 30, 2019 | 205,187,243 | |||||||||||||||
Balance, ending at Jun. 30, 2019 | 4,459,158 | $ 2,299 | 138,011 | 3,757,126 | (447,748) | 969,124 | 40,346 | |||||||||
Balance (in shares) at Mar. 31, 2019 | 209,560,824 | |||||||||||||||
Balance, beginning at Mar. 31, 2019 | 4,419,223 | $ 2,299 | 138,218 | 3,751,835 | (355,357) | 888,838 | (6,610) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 96,460 | 96,460 | ||||||||||||||
Other comprehensive income | 46,956 | 46,956 | ||||||||||||||
Stock options & other stock transactions, net (in shares) | 168,169 | |||||||||||||||
Stock options & other stock transactions, net | 1,834 | 1,410 | 424 | |||||||||||||
Restricted stock awards, net (in shares) | (39,697) | |||||||||||||||
Restricted stock awards, net | 4,404 | 5,291 | (887) | 0 | ||||||||||||
Cash dividends declared, common | (14,611) | (14,611) | ||||||||||||||
Cash dividends declared, preferred | (2,194) | (207) | (1,987) | |||||||||||||
Purchase of treasury stock (in shares) | (4,502,053) | |||||||||||||||
Purchase of treasury stock | (92,914) | (92,914) | ||||||||||||||
Balance (in shares) at Jun. 30, 2019 | 205,187,243 | |||||||||||||||
Balance, ending at Jun. 30, 2019 | 4,459,158 | $ 2,299 | 138,011 | 3,757,126 | (447,748) | 969,124 | 40,346 | |||||||||
Balance (in shares) at Dec. 31, 2019 | 198,455,324 | |||||||||||||||
Balance, beginning at Dec. 31, 2019 | 4,530,113 | $ (54,254) | $ 4,475,859 | $ 2,299 | $ 2,299 | 137,581 | $ 137,581 | 3,766,716 | $ 3,766,716 | (583,408) | $ (583,408) | 1,166,709 | $ (54,254) | $ 1,112,455 | 40,216 | $ 40,216 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 14,147 | 14,147 | ||||||||||||||
Other comprehensive income | 27,405 | 27,405 | ||||||||||||||
Stock options & other stock transactions, net (in shares) | 41,000 | |||||||||||||||
Stock options & other stock transactions, net | 414 | 346 | 68 | |||||||||||||
Restricted stock awards, net (in shares) | 865,091 | |||||||||||||||
Restricted stock awards, net | 1,593 | (17,208) | 4,025 | 14,776 | ||||||||||||
Cash dividends declared, common | (13,768) | (13,768) | ||||||||||||||
Cash dividends declared, preferred | (2,194) | (218) | (1,976) | |||||||||||||
Purchase of treasury stock (in shares) | (4,900,759) | |||||||||||||||
Purchase of treasury stock | (81,032) | (81,032) | ||||||||||||||
Balance (in shares) at Mar. 31, 2020 | 194,460,656 | |||||||||||||||
Balance, ending at Mar. 31, 2020 | 4,422,424 | $ 2,299 | 137,363 | 3,749,508 | (660,069) | 1,125,702 | 67,621 | |||||||||
Balance (in shares) at Dec. 31, 2019 | 198,455,324 | |||||||||||||||
Balance, beginning at Dec. 31, 2019 | 4,530,113 | $ (54,254) | $ 4,475,859 | $ 2,299 | $ 2,299 | 137,581 | $ 137,581 | 3,766,716 | $ 3,766,716 | (583,408) | $ (583,408) | 1,166,709 | $ (54,254) | $ 1,112,455 | 40,216 | $ 40,216 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 64,939 | |||||||||||||||
Other comprehensive income | 48,394 | |||||||||||||||
Balance (in shares) at Jun. 30, 2020 | 194,458,805 | |||||||||||||||
Balance, ending at Jun. 30, 2020 | 4,484,187 | $ 2,299 | 137,142 | 3,755,474 | (660,223) | 1,160,885 | 88,610 | |||||||||
Balance (in shares) at Mar. 31, 2020 | 194,460,656 | |||||||||||||||
Balance, beginning at Mar. 31, 2020 | 4,422,424 | $ 2,299 | 137,363 | 3,749,508 | (660,069) | 1,125,702 | 67,621 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net income | 50,792 | 50,792 | ||||||||||||||
Other comprehensive income | 20,989 | 20,989 | ||||||||||||||
Stock options & other stock transactions, net (in shares) | 10,000 | |||||||||||||||
Stock options & other stock transactions, net | 101 | 95 | 6 | |||||||||||||
Restricted stock awards, net (in shares) | (11,851) | |||||||||||||||
Restricted stock awards, net | 5,722 | 5,966 | (249) | 5 | ||||||||||||
Cash dividends declared, common | (13,648) | (13,648) | ||||||||||||||
Cash dividends declared, preferred | (2,193) | (221) | (1,972) | |||||||||||||
Balance (in shares) at Jun. 30, 2020 | 194,458,805 | |||||||||||||||
Balance, ending at Jun. 30, 2020 | $ 4,484,187 | $ 2,299 | $ 137,142 | $ 3,755,474 | $ (660,223) | $ 1,160,885 | $ 88,610 |
Consolidated Statement of Changes In Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends paid, common (usd per share) | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.07 |
Cash dividends paid, preferred (usd per share) | $ 16.25 | $ 16.25 | $ 16.25 | $ 16.25 |
Basis of Financial Statement Presentation and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Financial Statement Presentation and Summary of Significant Accounting Policies | Basis of Financial Statement Presentation and Summary of Significant Accounting Policies (a) Nature of Operations Sterling Bancorp (the “Company,” “we,” “us” and “our” ) 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 we follow conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which include 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 our 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, 2019, included in our Annual Report on Form 10-K, as filed with the SEC on February 28, 2020 (the “2019 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. These reclassifications had no impact on previously reported net income. (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, particularly the allowance for credit losses and the status of contingencies, and are subject to change. (d) Risks and Uncertainties - COVID-19 The global pandemic resulting from the outbreak of the novel strain of coronavirus (“COVID-19”) has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, and increased unemployment levels. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing and sheltering in place requirements in many states and communities. In particular, COVID-19 has disrupted our normal course of providing services to our clients and adversely impacted our clients. We have approved CARES Act conforming loan payment deferrals on outstanding loans totaling $1.7 billion at June 30, 2020. Continuation of economic and business disruption for an extended period could impair our client’s ability to fulfill their obligations to the Bank. In the six months ended June 30, 2020, we have successfully managed through the impacts of the pandemic to our colleagues and business operations. However, COVID-19 could negatively impact our business continuity plans in the future. We are dependent on the willingness and ability of our colleagues and clients to conduct banking and other financial transactions. If the United States response to COVID-19 is unsuccessful, or results in additional impacts, it is reasonably possible that we could experience a material adverse effect on our business, financial condition, results of operations, and cash flows, including material changes to our significant estimates. While it is not possible to know the full extent that COVID-19, and resulting measures in response thereto will have on our operations, we are disclosing potentially material items of which we are aware as of the date of this report. In particular, we have continued to review our loan and securities portfolios to identify specific exposures and sectors that may be more at risk or impacted by COVID-19. The majority of our loan payment deferrals highlighted above consist mainly of commercial real estate loans and equipment finance loans to borrowers in the hotel and lodging, retail and transportation industry sectors, and residential mortgage loans. Please see Note 4. “Loans” for details on loan payment deferrals by asset class. If the COVID-19 impact continues to for an extended period, we may need to establish a valuation allowance for deferred tax assets. (e) Accounting Principle Change Effective January 1, 2020, we adopted Accounting Standards Update (“ASU”) 2016-13 “ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the prior incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL” or the “CECL Standard”). The measurement of expected credit losses under the CECL Standard is applicable to financial assets measured at amortized cost, including portfolio loans and investment securities classified as held-to-maturity (“HTM”). It also applies to off-balance sheet credit exposures including loan commitments, standby letters of credit, financial guarantees and other similar instruments. In addition, the CECL Standard changes the accounting for investment securities classified as available-for-sale (“AFS”), including a requirement that estimated credit losses on AFS securities be presented as an allowance rather than as a direct write-down of the carrying balance of securities which we do not intend to sell, or believe that it is more likely than not, that we will be required to sell. We adopted the CECL Standard using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. As discussed further below, purchase credit deteriorated assets were measured on a prospective basis in accordance with the CECL Standard and all purchase credit impaired loans at December 31, 2019 were considered purchase credit deteriorated loans upon adoption. Results for reporting periods beginning after January 1, 2020 are presented under the CECL Standard while prior period amounts continue to be reported in accordance with previously applicable accounting guidance. The adoption of the CECL Standard resulted in the following adjustments to our financial statements:
1This amount represents gross-up of the balance of the amortized cost of purchase credit impaired loans that were considered purchase credit deteriorated loans on adoption of the CECL Standard. The table below presents additional details on the impact of the adoption of the CECL Standard on HTM securities, portfolio loans and off-balance sheet credit exposures as of January 1, 2020:
Under prior GAAP, our allowance for loan and lease losses (“ALLL”) was determined under the incurred loss model, using an average of actual losses incurred over the most recent three-year period and the application of qualitative factors to arrive at an allowance that represented our best estimate of probable credit losses inherent in our loan portfolio. Under the CECL Standard, our ACL is based on an estimate of all amounts that are not expected to be collected over the contractual life of the portfolio loans, which is comprised of quantitative and qualitative factors. As of December 31, 2019, a significant portion of our loans were acquired in business combination transactions that were subject to purchase accounting adjustments, which incorporated life of loan losses estimates at the date of acquisition into the estimate of the fair value of the loan. To the extent the loan continued to perform as expected since the date of acquisition, we generally did not apply amounts from our allowance for loan losses methodology to such loans. At December 31, 2019, our allowance for loan losses of $106.2 million was recorded as a valuation account against $15.4 billion of our portfolio loans. Acquired loans of $6.0 billion did not have an allowance for loan loss allocation as those loans had remaining purchase accounting adjustments. The composition of our portfolio loans at December 31, 2019 was the following:
(1) Commercial mortgage includes commercial real estate, multi-family and ADC loans. The increase in the ACL - loans from the adoption of the CECL Standard included the following adjustments:
Loans designated as purchased credit impaired (“PCI”) loans and accounted for under Accounting Standards Codification (“ASC”) 310-30 were designated as purchased with credit deterioration (“PCD”) loans. In accordance with the CECL Standard, we did not reassess whether PCI loans met the criteria of PCD loans as of the date of adoption, and determined all PCI loans were PCD loans. On January 1, 2020, the amortized cost basis of PCD loans totaled $116.3 million. We recorded an increase to the balance of PCD loans and an increase to the ACL - loans of $22.5 million, which represented the expected credit losses for PCD loans. The remaining non-credit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2020 over the remaining estimated life of the loans. Also, in accordance with the CECL Standard, we did not reassess whether modifications to individual acquired financial assets were troubled debt restructurings (“TDRs”) as of the date of adoption. Investment Securities: Investment securities are classified as HTM and carried at amortized cost when management has the intent and ability to hold them to maturity. Investment securities not classified as HTM or trading are classified as AFS. Securities AFS are carried at fair value, with unrealized holding gains and losses reported in comprehensive income, net of tax. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are generally amortized using the level-yield method without estimating prepayments, except for mortgage-backed securities, where prepayment rates are estimated. Premiums on callable investment securities are amortized to their earliest call date. Gains and losses on sales of securities are recorded on the trade date and determined using the specific identification method. An investment security is placed on non-accrual status when management concludes it will not receive all principal and interest in a timely fashion in accordance with the terms of the security. Interest accrued but not received for a security placed on non-accrual is reversed against interest income. At June 30, 2020 and December 31, 2019, there were no securities placed on non-accrual. ACL - HTM securities: HTM securities include residential mortgage-backed securities issued by government agencies, federal agency securities, corporate securities, state and municipal securities and other securities. We estimate expected credit losses on HTM securities individually using a discounted cash flow methodology. Our expected loss model estimates the probability of default and loss given default based on the security rating, historical loss rates by security ratings, whether the issuer continues to make timely principal and interest payments in accordance with the contractual terms of the security, and reasonable and supportable forecasts. For unrated state and municipal securities, we perform an internal credit evaluation and assign a rating to the security for ACL - HTM securities modeling purposes. The loss given default is estimated by security, and the aggregate amount results in the estimated ACL - HTM securities balance. Included in state and municipal securities at June 30, 2020 were non-rated securities of $108.4 million, which consisted mainly of short-term general obligation securities and bond anticipation notes and tax anticipation notes issued by jurisdictions in New York state. At June 30, 2020 and December 31, 2019, all of our residential mortgage-backed and federal agency securities were issued by U.S. government entities or agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by a nationally recognized statistical rating organization and have had no historical credit defaults. We expect these securities are fully collectible, as these securities are backed by the full faith and credit of, or directly guaranteed by, the U.S. Government. Accordingly, we established no ACL for such securities. Accrued interest receivable on HTM investment securities totaled $16.5 million at both June 30, 2020 and December 31, 2019, and is excluded from the estimate of ACL. Accrued interest receivable on HTM investment securities is included in accrued interest receivable on the consolidated balance sheets. ACL - on investment securities classified as AFS: For AFS investment securities which are in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of the amortized cost basis. If either of the criteria is met, the amortized cost basis of the security is written down to fair value through income. For AFS investment securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from an actual or estimated credit loss event or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, changes to the rating of the security, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss is likely, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, an ACL is recorded for the estimated credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income. Changes in the ACL are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when we believe the uncollectibility of an AFS security has been confirmed or if either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on AFS investment securities totaled $12.1 million and $12.8 million at June 30, 2020 and December 31, 2019, respectively, and is excluded from the estimate of credit losses. Accrued interest receivable on AFS investment securities is included in accrued interest receivable on the consolidated balance sheets. Portfolio loans: Portfolio loans are loans we have the intent and ability to hold for the foreseeable future, or until maturity or payoff, and are reported at amortized cost. The amortized cost is the principal balance outstanding, net of purchase premiums and discounts, including purchase accounting adjustments from prior merger transactions, deferred loan fees and costs. Accrued interest receivable on portfolio loans totaled $72.7 million and $71.0 million at June 30, 2020 and December 31, 2019, respectively, and was reported in accrued interest receivable on the consolidated balance sheets. Interest income is accrued on the unpaid principal balance. For portfolio loans with a term of one year or more, loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Generally, interest income is discontinued on portfolio loans and loans are placed on non-accrual status at the earlier of: (i) when we determine the borrower may likely be unable to meet contractual principal or interest obligations; or (ii) when the loan is 90 days delinquent unless the loan is well secured and in process of collection. Consumer loans are generally charged-off no later than 120 days past due unless the loan is in the process of collection. For other portfolio loans, when we conclude the collateral and/or debt service capacity of the borrower are insufficient to repay the loan, we charge-off the amount that is deemed uncollectible. Past due status is based on the contractual terms of the loan. All interest accrued but not received on loans placed on non-accrual is reversed against interest income. Interest received on such loans is generally accounted for under the cost-recovery method, until the loan qualifies to be returned to accrual status. Under the cost-recovery method, interest income is not recognized until the loan balances is reduced to zero. We may elect to account for interest receipts on non-accrual loans on a cash-basis when we have determined we are in a well-secured position. Under the cash basis method, interest income is recorded when cash payments are received. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. PCD Loans: We have acquired loans through direct purchase and, more often, in merger transactions, some of which have experienced more than an insignificant credit deterioration since origination. Criteria we consider to determine whether a loan should be designated PCD includes, but is not limited to, the following: (i) loans delinquent over 60 days as of the date of acquisition; (ii) loans downgraded and rated special mention or worse as of the date of acquisition; (iii) loans on non-accrual; and (iv) loans deemed collateral dependent as of the date of acquisition. PCD loans are recorded at the purchase price paid. An ACL is determined using the same methodology as for other portfolio loans and the sum of the purchase price and ACL represents the initial amortized cost basis of the loan. The difference between the initial amortized cost basis and the par value of the loan represents either a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the ACL are recorded through provision expense. The only loans classified as PCD as of June 30, 2020 are loans that were formerly classified as PCI loans under the incurred loss model at adoption of the CECL Standard. ACL - Loans: The ACL - loans is a valuation account that is deducted from the amortized cost basis of portfolio loans to present the net amount expected to be collected on portfolio loans over their contractual life. Loans are charged-off against the allowance when we believe the uncollectibility of a loan balance has been confirmed, and the expected recoveries do not exceed the aggregate of amounts previously charged-off or expected to be charged-off. We estimate the balance of the ACL - loans using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The methodologies for estimating the ACL - loans apply historical loss information, adjusted for current loan-specific risk characteristics such as differences in underwriting standards, portfolio composition, delinquency levels, loan terms, changes in environmental conditions such as changes in GDP, unemployment rates, credit spreads, property values, and other relevant factors, that are reasonable and supportable, to the identified financial assets for which the historical loss experience was observed. Our methodologies revert back to historical loss information at the individual macro variable level, which begins in two to three years and converges to its long-run equilibrium, when we can no longer develop reasonable and supportable forecasts. The ACL - loans is measured on a collective (pool) basis when similar risk characteristics exist. We measure our warehouse lending portfolio and certain consumer loans at the loan level. Generally, for all other loan types, the estimated expected credit loss is also calculated at the loan level and pool assignments are only utilized for aggregating the allowance estimates of similar loan types for financial statement disclosure purposes. We have identified the following portfolio segments and estimate our ACL - loans using the following methods:
Under the loss rate method, expected credit losses are estimated using a loss rate that is multiplied by the amortized cost of the asset at the balance sheet date. For each loan segment identified above, we apply an expected historical loss trend based on third-party loss estimates, correlate them to observed economic metrics and reasonable and supportable forecasts of economic conditions and overlay qualitative factors as determined by management. Under the discounted cash flow method, expected credit losses are determined by comparing the amortized cost of the asset at the balance sheet date to the present value of estimated future principal and interest payments expected to be collected over the remaining life of the asset. Our loss model generates cash flow projections at the loan level based on reasonable and supportable projections, from which we estimate payment collections adjusted for curtailments, recovery time, probability of default and loss given default. Under the probability of default and loss given default method, expected credit losses are calculated by multiplying the probability that the asset will default within a given time frame (“PD”) by the percentage of the asset that is not expected to be collected due to default (“LGD”), and multiplying this factor by the amortized cost of the asset at the balance sheet date. The PD and LGD are calculated based on third party historical information of loan performance, real estate prices and other factors, adjusted for current conditions and reasonable and supportable forecasts. Qualitative loss factors are based on our judgement of company, market, industry or business specific data, loan trends, changes in portfolio segment composition, delinquency and loan rating. When a foreclosure is deemed probable, we estimate the fair value of the collateral at the reporting date to record the net carrying amount of the asset and determine the ACL. When repayment is dependent upon the sale of the collateral, the fair value of the collateral is adjusted for estimated costs to sell. If repayment depends on the operation, rather than the sale, of the collateral, an estimate for cost to sell is not included in the fair value of the collateral. Determining the Contractual Term: Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayment rates when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: we have a reasonable expectation at the reporting date that a TDR will be executed with an individual borrower, or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by us. TDRs: A loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, is considered to be a TDR. The ACL on a TDR is measured using the same method as all other portfolio loans, except when the value of a concession cannot be measured using a method other than the discounted cash flow method. When the value of a concession is measured using the discounted cash flow method, the ACL is determined by discounting the expected future cash flows at the original interest rate of the loan. ACL on Off-Balance Sheet Credit Exposures: We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation, unless that obligation is unconditionally cancellable by us. The ACL on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Generally, expected credit losses on commitments is based on historical losses on similar portfolio segments, economic conditions, and qualitative factors. Our off-balance sheet credit exposures include mainly loan origination commitments on construction loans, unused committed lines on traditional commercial and industrial loans, asset-based lending loans, equipment finance loans, warehouse lending loans, and standby and performance-based letters of credit. See Note 15 “Commitments and Contingencies” for additional information. Macroeconomic Assumptions: We rely on economic models and forecast assumptions developed by Moody’s Analytics, Inc. (“Moody’s”), our principal CECL vendor, in measuring our estimate of the ACL. The key forecast assumptions that drive the economic models are presented for approval to our CECL committee, which is comprised of representatives from finance, credit and risk and then incorporated into the expected loss models. The macroeconomic model scenarios are updated on a quarterly basis.
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Acquisitions |
6 Months Ended |
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Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Equipment finance loan and lease portfolio and origination platform acquired from Santander Bank (“Santander”) On November 29, 2019, the Bank acquired an equipment finance loan and lease portfolio consisting of equipment finance loans, sales-type leases and operating leases from Santander (the “Santander Portfolio Acquisition”). In addition, the Bank obtained relationship management and business development personnel who will continue to manage the acquired loan and lease portfolio and originate new loans and leases. The total consideration paid in cash at closing was $846.1 million. We acquired $764.0 million of equipment finance loans and leases (classified as portfolio loans on the consolidated balance sheet), and $74.8 million of operating leases (classified as other assets on the consolidated balance sheet). The fair value of these loans and leases was $820.1 million at the time of acquisition. The Bank paid a premium of 0.75% on the unpaid principal balance of the loans or $6.3 million. The transaction was accounted for as a business combination. We recorded a $5.1 million restructuring charge consisting mainly of severance, retention, systems integration expense and facilities consolidation, which is included in charge for asset write-downs, retention and severance on the consolidated income statement. The acquired loans and origination platform have been fully integrated into our equipment finance business. Commercial loan portfolio and origination platform acquired from Woodforest National Bank (“Woodforest”) On February 28, 2019, the Bank acquired a commercial loan portfolio consisting of equipment finance loans and leases and asset-based lending loans from Woodforest (the “Woodforest Acquisition”). In addition, the Bank obtained sales and relationship management and business development personnel based in Novi, Michigan, who will continue to originate new loans and leases. The total consideration paid in cash at closing was $515.7 million. We acquired $166.1 million of equipment finance loans, and $331.8 million of asset-based lending loans, which are mainly variable rate loans. The fair value of these loans and leases was $471.9 million at the time of acquisition. The Bank paid a premium of 3.75% on the unpaid principal balance of the loans or $18.7 million. The transaction was accounted for as a business combination. We recorded a $3.3 million restructuring charge consisting mainly of severance, retention, systems integration expense and facilities consolidation, which is included in charge for asset write-downs, retention and severance on the consolidated income statements. The acquired loans and origination platform have been fully integrated into our asset-based lending and equipment finance business lines.
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Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The following table summarizes the amortized cost, fair value, and ACL related to HTM securities, the amortized cost and fair value related to AFS securities and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income and gross unrecognized gains and losses at June 30, 2020. The terms “MBS” refers to mortgage-backed securities and the term “CMOs” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 16. “Fair Value Measurements”:
A summary of amortized cost and estimated fair value of securities as of December 31, 2019 is presented below:
The amortized cost and estimated fair value of securities at June 30, 2020 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 and calls of securities for the periods indicated below were as follows:
We adopted ASU 2017-12, “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities,” as of January 1, 2019, which allowed us to reclassify a debt security from HTM to AFS if the debt security is eligible to be hedged under the last-of-layer method in accordance with ASU 2017-12. Generally, this included debt securities that are pre-payable, including MBS, and debt securities that are callable by the issuer, which are applicable to many of our state and municipal debt securities. We transferred HTM securities with a book value of $720.4 million and a fair value of $708.6 million at December 31, 2018 to AFS effective January 1, 2019. In the first quarter of 2019, we sold securities with a book value of $751.9 million to raise liquidity for the Woodforest Acquisition, and to reduce lower yielding securities as a percentage of total assets. At June 30, 2020 and December 31, 2019, 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 AFS securities with unrealized losses, in an unrealized loss position for which an ACL has not been recorded at June 30, 2020 and December 31, 2019 aggregated by major security type and length of time in a continuous unrealized loss position:
The adoption of CECL did not have an impact on our accounting for AFS securities. We regularly review AFS securities for impairment resulting from credit losses using both qualitative and quantitative criteria based on the composition of the portfolio at each reporting period. Unrealized losses on corporate and state and municipal securities have not been recognized into income because the issuers are of high credit quality, and we do not intend to sell and it is likely that we will not be required to sell the securities prior to their anticipated recovery. The decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the securities. The fair value is expected to recover as the securities approach maturity. At June 30, 2020, a total of 40 AFS securities were in a continuous unrealized loss position for less than 12 months and 76 AFS securities were in a continuous unrealized loss position for 12 months or longer. The following table summarizes securities HTM with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
The following table presents the activity in the ACL - HTM securities by type of security for the six month period ended June 30, 2020:
The ACL - HTM securities was estimated using a discounted cash flow approach. We discounted the expected cash flows using the effective interest rate inherent in the security. For floating rate securities, we projected interest rates using forward interest rate curves. We review the term structures for probability of default, probability of prepayment and loss given default. We estimate a reasonable and supportable term of three years, which was supported by our back testing process. Credit Quality Indicators We monitor the credit quality of HTM investment securities through the use of credit ratings, internal reviews and analysis of financial information and other data, and external reviews from a third-party vendor. We monitor credit quality indicators at least quarterly, and all credit ratings were updated and reviewed as of June 30, 2020. At June 30, 2020, a total of seven HTM securities were in a continuous unrealized loss position for less than 12 months and 41 HTM securities were in a continuous unrealized loss position for 12 months or longer. The following table summarizes the amortized cost of HTM securities at June 30, 2020 aggregated by credit quality indicator:
The majority of state and municipal securities had a rating of A or greater at June 30, 2020. State and municipal securities consist mainly of securities issued by jurisdictions located in the state of New York and securities issued by other states. The non-rated state and municipal securities consist of general obligation securities and short-term bond anticipation notes and tax anticipation notes issued by municipalities in the state of New York. A security is considered to be delinquent once it is 30 days past due under the terms of the agreement. There were no past due securities and there were no securities on non-accrual at June 30, 2020. 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 At and prior to December 31, 2019, portfolio loans were accounted for under the incurred loss model. On January 1, 2020, portfolio loans began to be accounted for under the expected loss model. Accordingly, some of the information presented below is not comparable from period to period. See Note 1. “Basis of Financial Statement Presentation and Summary of Significant Accounting Policies - (e) Accounting Principle Change” for additional information. The composition of our total portfolio loans, which excludes loans held for sale, was the following for the periods presented below:
Portfolio loans are shown at amortized cost, which includes deferred fees, deferred costs and purchase accounting adjustments, which were $35.8 million at June 30, 2020 and $79.6 million at December 31, 2019. The balance of portfolio loans excludes accrued interest receivable. Included in traditional C&I loans at June 30, 2020, were $649.4 million principal balance of loans originated under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”). The CARES Act authorized the SBA to temporarily guarantee loans under a new 7(a) loan program, the PPP. These loans are 100% guaranteed by the SBA and the full principal amount of the loan may qualify for forgiveness. The loans we originated have a maturity of two years, an interest rate of 1.00% and loan payments are deferred for the initial six months. The majority of these loans have been pledged as collateral on borrowings under the FRB Paycheck Protection Program Lending Facility. See Note 8. “Borrowings” for additional information. At June 30, 2020 and December 31, 2019, the Bank pledged residential mortgage and CRE loans of $7.1 billion and $7.7 billion, respectively, to the FHLB as collateral for certain borrowing arrangements. See Note 8. “Borrowings”. Portfolio loans: An analysis of the aging of portfolio loans, segregated by loan type as of June 30, 2020, is presented below:
The following table represents an analysis of the aging of portfolio loans, segregated by loan type as of December 31, 2019:
The following table presents the amortized cost basis of collateral-dependent loans by loan type and collateral as of June 30, 2020:
There were no warehouse lending, payroll finance, or public sector finance loans that were collateral-dependent at June 30, 2020. Collateral-dependent loans include all loans that were TDRs at June 30, 2020. In the table above, $130.4 million of the total loans were on non-accrual at June 30, 2020. Business assets that secure traditional C&I and asset-based lending loans generally include accounts receivable, inventory, machinery and equipment. The following table provides additional information on our non-accrual loans and loans 90 days past due at June 30, 2020:
When the ultimate collectability of the total principal of a 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 collectability of the total principal of a 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, 2020 and December 31, 2019, the recorded investment of residential mortgage loans that were in the process of foreclosure was $38.2 million and $38.0 million, respectively, which is included in non-accrual residential mortgage loans above. The following table provides information on accrued interest receivable that was reversed against interest income for the three and six months ended June 30, 2020:
The following table sets forth loans evaluated for impairment by segment and the allowance for loan losses evaluated by segment at December 31, 2019:
The following table presents loans individually evaluated for impairment, excluding PCI loans, by segment of loans at December 31, 2019:
Our policy generally requires a charge-off of the difference between the present value of the cash flows or the net value of the collateral securing the loan and our recorded investment. As a result, there were no impaired loans with an allowance recorded at December 31, 2019. Short-term Loan Deferrals Under the CARES Act, financial institutions are permitted to not classify loan modifications that were related to the impact of COVID-19 if: •The modifications were made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the public health emergency, and •The underlying loans were not more than 30 days past due as of December 31, 2019. We implemented a loan modification program in accordance with the CARES Act to provide temporary relief to borrowers that meet the requirements. The program allows for deferral of payments for up to 90 days, which we may extend for an additional 90 days at our option. The deferred payments and accrued interest during the deferral period are due and payable on or before the maturity of the loan. At June 30, 2020, we granted temporary deferrals on 2,567 loans with an outstanding balance of $1.7 billion. There is $7.8 million of accrued interest associated with these loans. Under the provisions of the CARES Act, none of these loans were considered a troubled debt restructuring (“TDR”) at June 30, 2020. The table below reflects the balance of deferrals by portfolio:
TDRs At June 30, 2020 and December 31, 2019, TDRs were $75.8 million and $75.7 million, respectively. ACL - loans of $1.9 million at June 30, 2020 and an allowance for loan losses of $2.3 million at December 31, 2019 were related to TDRs. We did not have any outstanding commitments to lend additional amounts to customers with loans classified as TDRs as of June 30, 2020 or December 31, 2019. The modification of the terms of loans that were subject to a TDR in the six months ended June 30, 2020 and June 30, 2019 consisted mainly of an extension of loan maturity date, converting a loan to interest only for a defined period of time, deferral of interest payments, waiver of certain covenants, or reducing collateral requirements or interest rates. The following table presents loans by segment modified as TDRs that occurred during the first six months of 2020 and 2019:
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Allowance for Credit Losses - Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses - Loans | Allowance for Credit Losses - Loans Activity in our ACL - loans for the three months ended June 30, 2020 is summarized in the table below:
The table below presents the allowance for loan losses roll forward for the three months ended June 30, 2019 under the former incurred loss methodology.
The table below presents the allowance for credit losses roll forward for the six months ended June 30, 2020. The CECL Day 1 column presents adjustments recorded through retained earnings to adopt the CECL standard and the increase to ACL - loans associated with purchase accounting marks on loans that were classified as PCI at December 31, 2019.
On January 1, 2020, we adopted CECL, which replaced the incurred loss method we used in prior periods for determining the provision for credit losses and the ACL. Under CECL, we record at the inception of the loan an expected loss of all cash flows we do not expect to collect over the life of the loan. The adoption of CECL resulted in an increase in our ACL of $90.6 million, which did not impact our consolidated income statement. We recorded provision for credit losses of $193.2 million for the six months ended June 30, 2020. The table below presents the allowance for loan losses roll forward for the six months ended June 30, 2019 under the former incurred loss methodology.
Credit Quality Indicators As part of the ongoing monitoring of the credit quality of our 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, including 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. We analyze 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 $750 thousand. This analysis is performed at least quarterly on all graded 7-Special Mention and lower loans. We use 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 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 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, 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 effected 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, 2020 and December 31, 2019, the risk category of non-pass rated loans by segment was as follows:
At June 30, 2020 and December 31, 2019, there were no loans rated doubtful or loss. We evaluate whether a modification, extension or renewal of a loan is a current period origination in accordance with GAAP. Generally, loans up for renewal are subject to a full credit evaluation before the renewal is granted and such loans are considered current period originations for purposes of the table below. At June 30, 2020, our loans based on year of origination and risk designation is as follows:
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Goodwill and Other Intangible Assets |
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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:
Impairment of goodwill and other intangible assets may exist when the carrying value of goodwill exceeds its fair value. During the quarter ended June 30, 2020, due to macroeconomic and other factors, we concluded a quantitative evaluation of goodwill was required to determine if it was more likely than not that goodwill and other intangible assets were impaired. If the carrying amount of the goodwill exceeds the fair value of goodwill, an impairment loss is recognized in an amount equal to that excess. We engaged an independent third-party to perform a quantitative goodwill impairment test. The third-party relied mainly on a discounted cash flow analysis to estimate fair value, which was approximately 10% greater than carrying value. If we deem our intangible assets to be impaired, in the future, a non-cash charge for the amount of such impairment would be recorded to earnings and would have no impact on tangible capital or our regulatory capital ratios. The decrease in other intangible assets at June 30, 2020 compared to December 31, 2019 was due to amortization of intangibles. The estimated aggregate future amortization expense for intangible assets remaining as of June 30, 2020 was as follows:
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits Deposit balances at June 30, 2020 and December 31, 2019 were as follows:
Total municipal deposits, which are included in the deposit balances above, were $1.7 billion and $2.0 billion at June 30, 2020 and December 31, 2019, respectively. See Note 3. “Securities” for the aggregate amount of securities that were pledged as collateral for municipal deposits and other purposes. Brokered deposits at June 30, 2020 and December 31, 2019 were as follows:
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Borrowings |
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Borrowings | Borrowings Our borrowings and weighted average interest rates were 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, 2020 and December 31, 2019, the Bank had total residential mortgage and CRE loans pledged after discount of $7.1 billion and $7.7 billion, 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, 2020, the Bank had unused borrowing capacity at the FHLB of $5.9 billion and may increase such borrowing capacity by pledging securities not required to be pledged for other purposes with a collateral value of approximately $2.8 billion. In the six months ended June 30, 2020, the Bank redeemed $650.0 million of FHLB borrowings with a weighted average interest rate of 2.22% and incurred a loss of $10.5 million. Paycheck Protection Program (“PPP”) Liquidity Facility. As a participant in the SBA PPP, the Bank may pledge originated PPP loans as collateral at face value to the FRB of New York for term financings. As of June 30, 2020, the Bank has pledged PPP loans equal to the amount borrowed.
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Derivatives |
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Derivative Instruments and Hedges, Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | DerivativesWe have entered into interest rate swap contracts that are both over-the-counter, or OTC, and those that are exchanged on futures markets such as the Chicago Mercantile Exchange (“CME”) and London Clearing House (“LCH”). At June 30, 2020 and December 31, 2019, the OTC derivatives are included in our consolidated financial statements at the gross fair value amount of the asset (included in other assets) and liability (included in other liabilities), which represents the change in the fair value of the contract since inception. The CME legally characterizes variation margin payments (a payment made based on changes in the fair value of the interest rate swap contracts) as a settlement, referred to as settled-to-market (“STM”). As a result, at June 30, 2020 and December 31, 2019, we posted cash collateral under STMs in the amounts of $105.2 million and $43.0 million, respectively, for the net fair value of our CME and LCH interest rate swap contracts with another financial institution. The increase was mainly due to an increase in swap contracts and changes in the fair value of the underlying interest rate swap contracts, which may change daily, positively or negatively, mainly due to changes in interest rates. We do not typically require our commercial customers to post cash or securities as collateral on our 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, we are 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, 2020 and December 31, 2019 regarding these derivatives is presented below:
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Income Taxes |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 liabilities were $56.1 million at June 30, 2020, compared to $67.6 million at December 31, 2019. The change was mainly due to provision for credit loss expense recorded under CECL, which was offset by the removal of the deferred tax asset for the federal net operating loss which is being carried back under the provisions of the CARES Act. No valuation allowance was recorded against any deferred tax assets as of those dates, based upon management’s consideration of historical and anticipated future pre-tax income, and the reversal periods for the items resulting in deferred tax assets and liabilities. As of June 30, 2020, the accrual for unrecognized gross tax benefits was as follows:
Significant tax filings that remain open for examination include the following: •Federal for tax years 2016 through present; •New York State tax filings for tax years 2015 through present; •New York City tax filings for tax years 2015 through present; and •New Jersey State tax filings for tax years 2016 through present. We are generally no longer subject to examination by federal, state or local taxing authorities for tax years prior to December 31, 2015. Interest and/or penalties related to income taxes are reported as a component of other non-interest expense.
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Stock-Based Compensation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The following table summarizes the activity in our stock-based compensation plan for the six months ended June 30, 2020:
(1) The 39,504 shares vested represents performance shares that were granted in February 2017 to certain executives with a -year measurement period. These shares vested in the first quarter of 2020 at 150.0% of the target amount granted, which resulted in these additional shares being awarded and additional expense of $960 thousand which was recorded in the first quarter of 2020. The total intrinsic value of outstanding in-the-money stock options and outstanding in-the-money exercisable stock options was $398 thousand at June 30, 2020. We use 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, 2020 or June 30, 2019. We incurred no stock option expense during the three and six month periods ended June 30, 2020 and 2019. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. Stock-based compensation expense associated with non-vested stock awards and the related income tax benefit, and proceeds from stock option exercises are presented below:
Unrecognized stock-based compensation expense as of June 30, 2020 was as follows:
The weighted average period over which unrecognized non-vested stock awards/performance units expense is expected to be recognized is 1.94 years.
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Other Non-Interest Expense, Other Assets and Other Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Interest Income and Other Non-Interest Expense | Other Non-Interest Expense, Other Assets and Other Liabilities (a) Other Non-Interest Expense Other non-interest expense items for the six months ended June 30, 2020 and 2019, respectively, are presented in the following table:
(b) Other Assets Other assets are presented in the following table. Significant components of the aggregate of other assets are presented separately.
Other asset items include cash on deposit as collateral for swaps, current income tax balances, prepaid insurance, prepaid property taxes, prepaid maintenance, accounts receivable and other miscellaneous assets. (c) Other Liabilities Other liabilities are presented in the following table. Significant components of the aggregate of other liabilities are presented separately.
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Earnings Per Common Share |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share The following is a summary of the calculation of earnings per common share (“EPS”):
(1) Represents incremental shares computed using the treasury stock method. (2) Anti-dilutive shares are not included in determining diluted EPS. Anti-dilutive shares were 305,014 and 79,589 for the three and six months ended June 30, 2020, respectively. There were no anti-dilutive shares in the three and six months ending June 30, 2019.
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Stockholders' Equity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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 us includes a permissible portion of the ACL and $173.3 million and $145.5 million of the Subordinated Notes, respectively. Tier 2 capital at the Company includes $271.1 million of the Subordinated Notes - Company. 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. The Common Equity Tier 1, Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets (“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 items. As permitted by the interim final rule issued on March 27, 2020 by our federal regulatory agency, we elected the option to delay the estimated impact of the adoption of the CECL Standard in our regulatory capital for two years. This two-year delay is in addition to the three-year transition period the agency had already made available. The adoption will delay the effects of CECL on our regulatory capital for the next two years, after which the effects will be phased-in over a three-year period from January 1, 2022 through December 31, 2024. Under the interim final rule, the amount of adjustments to regulatory capital deferred until the phase-in period include both the initial impact of adoption of the CECL Standard at January 1, 2020 and 25% of subsequent changes in our ACL during each quarter of the two-year period ending December 31, 2021. The following tables present actual and required capital ratios as of June 30, 2020 and December 31, 2019 for us and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented as of June 30, 2020 and December 31, 2019 are based on the fully phased-in provisions of the Basel III Capital Rules. 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 FRB, 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 fails to meet the minimum capital requirements, which could have a direct material effect on our financial statements. As of June 30, 2020, and December 31, 2019, the most recent regulatory notifications categorized the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the classification.
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Commitments and Contingencies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies (a) Off-Balance Sheet Financial Instruments The contractual or notional amounts of these instruments, which reflect the extent of our involvement in particular classes of off-balance sheet financial instruments, are summarized as follows:
We record ACL - off-balance sheet financial instrument exposures through a charge to other non-interest expense on our consolidated income statements. At June 30, 2020 and December 31, 2019, the ACL - off-balance sheet credit exposures was $6.7 million and $654 thousand, respectively, and was included in other liabilities in our consolidated balance sheets. For the six months ended June 30, 2020 and 2019, credit loss expense for off balance sheet financial instrument exposures was zero. In connection with the adoption of the CECL Standard, we increased the ACL - off-balance sheet credit exposures by $6.1 million. We did not adjust this amount during the three and six months ended June 30, 2020 based on our review of quantitative and qualitative factors applicable to these financial instrument exposures. (b) Leases Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2020 were as follows:
(c) Litigation We and the Bank are involved in a number of judicial proceedings concerning matters arising from our and its business activities. These include routine legal proceedings arising in the ordinary course of business. These proceedings also include actions brought against us and the Bank with respect to corporate matters and transactions in which we and the Bank are or were involved. There can be no assurance as to the ultimate outcome of a legal proceeding; however, we and the Bank have generally denied liability in all significant litigation pending against us and intend to defend vigorously each case, other than matters that are determined appropriate to be settled. We 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. At June 30, 2020 and December 31, 2019, we had no significant amounts accrued for litigation.
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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 an orderly transaction occurring in the principal or most advantageous market for such asset or liability between market participants on the measurement date. In estimating fair value, we use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. GAAP establishes a fair value hierarchy comprised of 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 our creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Our 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 its 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, and 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 our monthly and/or quarterly valuation process. Investment Securities AFS The majority of our available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, we obtain 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. We review 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, we do not purchase investment securities that have a complicated structure. Our 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, we validate, 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, 2020, management did not believe any of our securities are other-than-temporarily-impaired; however, management reviews all of our securities on at least a quarterly basis to assess whether impairment, if any, is other-than-temporarily-impaired. Derivatives The fair values of derivatives are based on valuation models using current observable market data (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counterparty as of the measurement date, which are considered Level 2 inputs. Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Our derivatives at June 30, 2020 and December 31, 2019 consisted of interest rate swaps. See Note 9. “Derivatives” for additional information. A summary of assets and liabilities at June 30, 2020 and December 31, 2019, respectively, measured at estimated fair value on a recurring basis, is 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. Collateral Dependent Loans For collateral dependent loans where we determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and we expect repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. For real estate loans, the fair value of the loan’s collateral is determined by third party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. The unobservable inputs may vary depending on the individual assets. We review third party appraisals for appropriateness and adjust the value downward to consider selling and closing costs, which generally range from 4% to 10% of the appraised value. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.
Impaired Loans Impaired loans subject to non-recurring fair value measurements were $38.1 million at December 31, 2019.
Fair Value of Financial Instruments 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, 2020:
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, 2019:
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Accumulated Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Components of accumulated other comprehensive income were as follows as of the dates shown below:
The following table presents the changes in each component of accumulated other comprehensive income (loss) (“AOCI”) for the three and six months ended June 30, 2020 and 2019:
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Recently Issued Accounting Standards Not Yet Adopted |
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Jun. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted ASU 2019-12, “Income Taxes (Topic 740)” (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and improves the consistent application of GAAP by clarifying and amending other existing guidance. ASU 2019-012 will be effective for us on January 1, 2021, and is not expected to have a material impact on our consolidated financial statements. ASU 2020-01 “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” (“ASU 2020-01”) clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 will be effective for us on January 1, 2021, and is not expected to have a material impact on our consolidated financial statements. ASU 2020-04, “Reference Rate Reform (Topic 848)” (“ASU 2020-04”) provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of reference rate reform and that meet certain scope guidance (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered “minor” so that any existing unamortized origination fees/costs would carry forward and continue to be amortized and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for derivative accounting. ASU 2020-04 is effective March 12, 2020 through December 31, 2022. We may elect to apply ASU 2020-04 for contract modifications as of January 1, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic within the Codification, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. We anticipate this ASU will simplify any modifications we execute between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. We are evaluating the impacts of this ASU and have not yet determined whether LIBOR transition and this ASU will have a material effect on our business operations and consolidated financial statements.
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Basis of Financial Statement Presentation and Summary of Significant Accounting Policies - (Policies) |
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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 we follow conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which include 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 our 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, 2019, included in our Annual Report on Form 10-K, as filed with the SEC on February 28, 2020 (the “2019 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. These reclassifications had no impact on previously reported net income.
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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, particularly the allowance for credit losses and the status of contingencies, and are subject to change. (d) Risks and Uncertainties - COVID-19 The global pandemic resulting from the outbreak of the novel strain of coronavirus (“COVID-19”) has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, and increased unemployment levels. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing and sheltering in place requirements in many states and communities. In particular, COVID-19 has disrupted our normal course of providing services to our clients and adversely impacted our clients. We have approved CARES Act conforming loan payment deferrals on outstanding loans totaling $1.7 billion at June 30, 2020. Continuation of economic and business disruption for an extended period could impair our client’s ability to fulfill their obligations to the Bank. In the six months ended June 30, 2020, we have successfully managed through the impacts of the pandemic to our colleagues and business operations. However, COVID-19 could negatively impact our business continuity plans in the future. We are dependent on the willingness and ability of our colleagues and clients to conduct banking and other financial transactions. If the United States response to COVID-19 is unsuccessful, or results in additional impacts, it is reasonably possible that we could experience a material adverse effect on our business, financial condition, results of operations, and cash flows, including material changes to our significant estimates. While it is not possible to know the full extent that COVID-19, and resulting measures in response thereto will have on our operations, we are disclosing potentially material items of which we are aware as of the date of this report. In particular, we have continued to review our loan and securities portfolios to identify specific exposures and sectors that may be more at risk or impacted by COVID-19. The majority of our loan payment deferrals highlighted above consist mainly of commercial real estate loans and equipment finance loans to borrowers in the hotel and lodging, retail and transportation industry sectors, and residential mortgage loans. Please see Note 4. “Loans” for details on loan payment deferrals by asset class. If the COVID-19 impact continues to for an extended period, we may need to establish a valuation allowance for deferred tax assets.
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Adoption of New Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted | Effective January 1, 2020, we adopted Accounting Standards Update (“ASU”) 2016-13 “ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the prior incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL” or the “CECL Standard”). The measurement of expected credit losses under the CECL Standard is applicable to financial assets measured at amortized cost, including portfolio loans and investment securities classified as held-to-maturity (“HTM”). It also applies to off-balance sheet credit exposures including loan commitments, standby letters of credit, financial guarantees and other similar instruments. In addition, the CECL Standard changes the accounting for investment securities classified as available-for-sale (“AFS”), including a requirement that estimated credit losses on AFS securities be presented as an allowance rather than as a direct write-down of the carrying balance of securities which we do not intend to sell, or believe that it is more likely than not, that we will be required to sell.Recently Issued Accounting Standards Not Yet Adopted ASU 2019-12, “Income Taxes (Topic 740)” (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and improves the consistent application of GAAP by clarifying and amending other existing guidance. ASU 2019-012 will be effective for us on January 1, 2021, and is not expected to have a material impact on our consolidated financial statements. ASU 2020-01 “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” (“ASU 2020-01”) clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 will be effective for us on January 1, 2021, and is not expected to have a material impact on our consolidated financial statements. ASU 2020-04, “Reference Rate Reform (Topic 848)” (“ASU 2020-04”) provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of reference rate reform and that meet certain scope guidance (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered “minor” so that any existing unamortized origination fees/costs would carry forward and continue to be amortized and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for derivative accounting. ASU 2020-04 is effective March 12, 2020 through December 31, 2022. We may elect to apply ASU 2020-04 for contract modifications as of January 1, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic within the Codification, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. We anticipate this ASU will simplify any modifications we execute between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. We are evaluating the impacts of this ASU and have not yet determined whether LIBOR transition and this ASU will have a material effect on our business operations and consolidated financial statements.
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Allowance for Credit Loss | Under prior GAAP, our allowance for loan and lease losses (“ALLL”) was determined under the incurred loss model, using an average of actual losses incurred over the most recent three-year period and the application of qualitative factors to arrive at an allowance that represented our best estimate of probable credit losses inherent in our loan portfolio. Under the CECL Standard, our ACL is based on an estimate of all amounts that are not expected to be collected over the contractual life of the portfolio loans, which is comprised of quantitative and qualitative factors. Loans designated as purchased credit impaired (“PCI”) loans and accounted for under Accounting Standards Codification (“ASC”) 310-30 were designated as purchased with credit deterioration (“PCD”) loans. In accordance with the CECL Standard, we did not reassess whether PCI loans met the criteria of PCD loans as of the date of adoption, and determined all PCI loans were PCD loans. On January 1, 2020, the amortized cost basis of PCD loans totaled $116.3 million. We recorded an increase to the balance of PCD loans and an increase to the ACL - loans of $22.5 million, which represented the expected credit losses for PCD loans. The remaining non-credit discount (based on the adjusted amortized cost basis) will be accreted into interest income at the effective interest rate as of January 1, 2020 over the remaining estimated life of the loans. Also, in accordance with the CECL Standard, we did not reassess whether modifications to individual acquired financial assets were troubled debt restructurings (“TDRs”) as of the date of adoption. Investment Securities: Investment securities are classified as HTM and carried at amortized cost when management has the intent and ability to hold them to maturity. Investment securities not classified as HTM or trading are classified as AFS. Securities AFS are carried at fair value, with unrealized holding gains and losses reported in comprehensive income, net of tax. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are generally amortized using the level-yield method without estimating prepayments, except for mortgage-backed securities, where prepayment rates are estimated. Premiums on callable investment securities are amortized to their earliest call date. Gains and losses on sales of securities are recorded on the trade date and determined using the specific identification method. An investment security is placed on non-accrual status when management concludes it will not receive all principal and interest in a timely fashion in accordance with the terms of the security. Interest accrued but not received for a security placed on non-accrual is reversed against interest income. At June 30, 2020 and December 31, 2019, there were no securities placed on non-accrual. ACL - HTM securities: HTM securities include residential mortgage-backed securities issued by government agencies, federal agency securities, corporate securities, state and municipal securities and other securities. We estimate expected credit losses on HTM securities individually using a discounted cash flow methodology. Our expected loss model estimates the probability of default and loss given default based on the security rating, historical loss rates by security ratings, whether the issuer continues to make timely principal and interest payments in accordance with the contractual terms of the security, and reasonable and supportable forecasts. For unrated state and municipal securities, we perform an internal credit evaluation and assign a rating to the security for ACL - HTM securities modeling purposes. The loss given default is estimated by security, and the aggregate amount results in the estimated ACL - HTM securities balance. Included in state and municipal securities at June 30, 2020 were non-rated securities of $108.4 million, which consisted mainly of short-term general obligation securities and bond anticipation notes and tax anticipation notes issued by jurisdictions in New York state. ACL - on investment securities classified as AFS: For AFS investment securities which are in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of the amortized cost basis. If either of the criteria is met, the amortized cost basis of the security is written down to fair value through income. For AFS investment securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from an actual or estimated credit loss event or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, changes to the rating of the security, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss is likely, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, an ACL is recorded for the estimated credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income. Changes in the ACL are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when we believe the uncollectibility of an AFS security has been confirmed or if either of the criteria regarding intent or requirement to sell is met. Portfolio loans: Portfolio loans are loans we have the intent and ability to hold for the foreseeable future, or until maturity or payoff, and are reported at amortized cost. The amortized cost is the principal balance outstanding, net of purchase premiums and discounts, including purchase accounting adjustments from prior merger transactions, deferred loan fees and costs. Accrued interest receivable on portfolio loans totaled $72.7 million and $71.0 million at June 30, 2020 and December 31, 2019, respectively, and was reported in accrued interest receivable on the consolidated balance sheets. Interest income is accrued on the unpaid principal balance. For portfolio loans with a term of one year or more, loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Generally, interest income is discontinued on portfolio loans and loans are placed on non-accrual status at the earlier of: (i) when we determine the borrower may likely be unable to meet contractual principal or interest obligations; or (ii) when the loan is 90 days delinquent unless the loan is well secured and in process of collection. Consumer loans are generally charged-off no later than 120 days past due unless the loan is in the process of collection. For other portfolio loans, when we conclude the collateral and/or debt service capacity of the borrower are insufficient to repay the loan, we charge-off the amount that is deemed uncollectible. Past due status is based on the contractual terms of the loan. All interest accrued but not received on loans placed on non-accrual is reversed against interest income. Interest received on such loans is generally accounted for under the cost-recovery method, until the loan qualifies to be returned to accrual status. Under the cost-recovery method, interest income is not recognized until the loan balances is reduced to zero. We may elect to account for interest receipts on non-accrual loans on a cash-basis when we have determined we are in a well-secured position. Under the cash basis method, interest income is recorded when cash payments are received. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. PCD Loans: We have acquired loans through direct purchase and, more often, in merger transactions, some of which have experienced more than an insignificant credit deterioration since origination. Criteria we consider to determine whether a loan should be designated PCD includes, but is not limited to, the following: (i) loans delinquent over 60 days as of the date of acquisition; (ii) loans downgraded and rated special mention or worse as of the date of acquisition; (iii) loans on non-accrual; and (iv) loans deemed collateral dependent as of the date of acquisition. PCD loans are recorded at the purchase price paid. An ACL is determined using the same methodology as for other portfolio loans and the sum of the purchase price and ACL represents the initial amortized cost basis of the loan. The difference between the initial amortized cost basis and the par value of the loan represents either a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the ACL are recorded through provision expense. The only loans classified as PCD as of June 30, 2020 are loans that were formerly classified as PCI loans under the incurred loss model at adoption of the CECL Standard. ACL - Loans: The ACL - loans is a valuation account that is deducted from the amortized cost basis of portfolio loans to present the net amount expected to be collected on portfolio loans over their contractual life. Loans are charged-off against the allowance when we believe the uncollectibility of a loan balance has been confirmed, and the expected recoveries do not exceed the aggregate of amounts previously charged-off or expected to be charged-off. We estimate the balance of the ACL - loans using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The methodologies for estimating the ACL - loans apply historical loss information, adjusted for current loan-specific risk characteristics such as differences in underwriting standards, portfolio composition, delinquency levels, loan terms, changes in environmental conditions such as changes in GDP, unemployment rates, credit spreads, property values, and other relevant factors, that are reasonable and supportable, to the identified financial assets for which the historical loss experience was observed. Our methodologies revert back to historical loss information at the individual macro variable level, which begins in two to three years and converges to its long-run equilibrium, when we can no longer develop reasonable and supportable forecasts. The ACL - loans is measured on a collective (pool) basis when similar risk characteristics exist. We measure our warehouse lending portfolio and certain consumer loans at the loan level. Generally, for all other loan types, the estimated expected credit loss is also calculated at the loan level and pool assignments are only utilized for aggregating the allowance estimates of similar loan types for financial statement disclosure purposes. We have identified the following portfolio segments and estimate our ACL - loans using the following methods:
Under the loss rate method, expected credit losses are estimated using a loss rate that is multiplied by the amortized cost of the asset at the balance sheet date. For each loan segment identified above, we apply an expected historical loss trend based on third-party loss estimates, correlate them to observed economic metrics and reasonable and supportable forecasts of economic conditions and overlay qualitative factors as determined by management. Under the discounted cash flow method, expected credit losses are determined by comparing the amortized cost of the asset at the balance sheet date to the present value of estimated future principal and interest payments expected to be collected over the remaining life of the asset. Our loss model generates cash flow projections at the loan level based on reasonable and supportable projections, from which we estimate payment collections adjusted for curtailments, recovery time, probability of default and loss given default. Under the probability of default and loss given default method, expected credit losses are calculated by multiplying the probability that the asset will default within a given time frame (“PD”) by the percentage of the asset that is not expected to be collected due to default (“LGD”), and multiplying this factor by the amortized cost of the asset at the balance sheet date. The PD and LGD are calculated based on third party historical information of loan performance, real estate prices and other factors, adjusted for current conditions and reasonable and supportable forecasts. Qualitative loss factors are based on our judgement of company, market, industry or business specific data, loan trends, changes in portfolio segment composition, delinquency and loan rating. When a foreclosure is deemed probable, we estimate the fair value of the collateral at the reporting date to record the net carrying amount of the asset and determine the ACL. When repayment is dependent upon the sale of the collateral, the fair value of the collateral is adjusted for estimated costs to sell. If repayment depends on the operation, rather than the sale, of the collateral, an estimate for cost to sell is not included in the fair value of the collateral. Determining the Contractual Term: Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayment rates when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: we have a reasonable expectation at the reporting date that a TDR will be executed with an individual borrower, or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by us. TDRs: A loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, is considered to be a TDR. The ACL on a TDR is measured using the same method as all other portfolio loans, except when the value of a concession cannot be measured using a method other than the discounted cash flow method. When the value of a concession is measured using the discounted cash flow method, the ACL is determined by discounting the expected future cash flows at the original interest rate of the loan. ACL on Off-Balance Sheet Credit Exposures: We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation, unless that obligation is unconditionally cancellable by us. The ACL on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Generally, expected credit losses on commitments is based on historical losses on similar portfolio segments, economic conditions, and qualitative factors. Our off-balance sheet credit exposures include mainly loan origination commitments on construction loans, unused committed lines on traditional commercial and industrial loans, asset-based lending loans, equipment finance loans, warehouse lending loans, and standby and performance-based letters of credit. See Note 15 “Commitments and Contingencies” for additional information. Macroeconomic Assumptions: We rely on economic models and forecast assumptions developed by Moody’s Analytics, Inc. (“Moody’s”), our principal CECL vendor, in measuring our estimate of the ACL. The key forecast assumptions that drive the economic models are presented for approval to our CECL committee, which is comprised of representatives from finance, credit and risk and then incorporated into the expected loss models. The macroeconomic model scenarios are updated on a quarterly basis.
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Fair Value Measurement | 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 our creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Our 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 its 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, and 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 our monthly and/or quarterly valuation process. Investment Securities AFS The majority of our available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, we obtain 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. We review 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, we do not purchase investment securities that have a complicated structure. Our 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, we validate, 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, 2020, management did not believe any of our securities are other-than-temporarily-impaired; however, management reviews all of our securities on at least a quarterly basis to assess whether impairment, if any, is other-than-temporarily-impaired. Derivatives The fair values of derivatives are based on valuation models using current observable market data (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counterparty as of the measurement date, which are considered Level 2 inputs. Our derivatives are traded in an over-the-counter market where quoted market prices are not always available.Fair Value of Financial Instruments
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Basis of Financial Statement Presentation and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of CECL standard adoption impact | The adoption of the CECL Standard resulted in the following adjustments to our financial statements:
1This amount represents gross-up of the balance of the amortized cost of purchase credit impaired loans that were considered purchase credit deteriorated loans on adoption of the CECL Standard. The table below presents additional details on the impact of the adoption of the CECL Standard on HTM securities, portfolio loans and off-balance sheet credit exposures as of January 1, 2020:
(1) Commercial mortgage includes commercial real estate, multi-family and ADC loans. The increase in the ACL - loans from the adoption of the CECL Standard included the following adjustments:
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Securities - (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of securities available for sale | The following table summarizes the amortized cost, fair value, and ACL related to HTM securities, the amortized cost and fair value related to AFS securities and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income and gross unrecognized gains and losses at June 30, 2020. The terms “MBS” refers to mortgage-backed securities and the term “CMOs” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 16. “Fair Value Measurements”:
A summary of amortized cost and estimated fair value of securities as of December 31, 2019 is presented below:
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Summary of securities held-to-maturity | The following table summarizes the amortized cost, fair value, and ACL related to HTM securities, the amortized cost and fair value related to AFS securities and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income and gross unrecognized gains and losses at June 30, 2020. The terms “MBS” refers to mortgage-backed securities and the term “CMOs” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 16. “Fair Value Measurements”:
A summary of amortized cost and estimated fair value of securities as of December 31, 2019 is presented below:
The following table summarizes securities HTM with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
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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, 2020 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 and calls 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 AFS securities with unrealized losses, in an unrealized loss position for which an ACL has not been recorded at June 30, 2020 and December 31, 2019 aggregated by major security type and length of time in a continuous unrealized loss position:
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Schedule of debt securities held-for-sale allowance for credit loss rollforward | The following table presents the activity in the ACL - HTM securities by type of security for the six month period ended June 30, 2020:
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Schedule of debt securities held-for-sale amortized cost by credit quality indicator | The following table summarizes the amortized cost of HTM securities at June 30, 2020 aggregated by credit quality indicator:
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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) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of loan portfolio excluding loans held for sale | The composition of our total portfolio loans, which excludes 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 | Portfolio loans: An analysis of the aging of portfolio loans, segregated by loan type as of June 30, 2020, is presented below:
The following table represents an analysis of the aging of portfolio loans, segregated by loan type as of December 31, 2019:
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Schedule of collateral-dependent financing receivables | The following table presents the amortized cost basis of collateral-dependent loans by loan type and collateral as of June 30, 2020:
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Schedule of additional analysis of non-accrual loans | The following table provides additional information on our non-accrual loans and loans 90 days past due at June 30, 2020:
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Schedule of accrued interest receivable reversed against interest income | The following table provides information on accrued interest receivable that was reversed against interest income for the three and six months ended June 30, 2020:
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Impaired financing receivables | The following table sets forth loans evaluated for impairment by segment and the allowance for loan losses evaluated by segment at December 31, 2019:
The following table presents loans individually evaluated for impairment, excluding PCI loans, by segment of loans at December 31, 2019:
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Schedule of Financing Receivable Payment Deferrals | The table below reflects the balance of deferrals by portfolio:
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Troubled debt restructurings | The following table presents loans by segment modified as TDRs that occurred during the first six months of 2020 and 2019:
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Allowance for Credit Losses - Loans - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses activity | Activity in our ACL - loans for the three months ended June 30, 2020 is summarized in the table below:
The table below presents the allowance for loan losses roll forward for the three months ended June 30, 2019 under the former incurred loss methodology.
The table below presents the allowance for credit losses roll forward for the six months ended June 30, 2020. The CECL Day 1 column presents adjustments recorded through retained earnings to adopt the CECL standard and the increase to ACL - loans associated with purchase accounting marks on loans that were classified as PCI at December 31, 2019.
On January 1, 2020, we adopted CECL, which replaced the incurred loss method we used in prior periods for determining the provision for credit losses and the ACL. Under CECL, we record at the inception of the loan an expected loss of all cash flows we do not expect to collect over the life of the loan. The adoption of CECL resulted in an increase in our ACL of $90.6 million, which did not impact our consolidated income statement. We recorded provision for credit losses of $193.2 million for the six months ended June 30, 2020. The table below presents the allowance for loan losses roll forward for the six months ended June 30, 2019 under the former incurred loss methodology.
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Financing receivable credit quality indicators | As of June 30, 2020 and December 31, 2019, the risk category of non-pass rated 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, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 was as follows:
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Deposits - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of major classification of deposits | Deposit balances at June 30, 2020 and December 31, 2019 were as follows:
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List of company's brokered deposits | Brokered deposits at June 30, 2020 and December 31, 2019 were as follows:
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Borrowings - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | Our borrowings and weighted average interest rates were as follows for the periods presented:
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Derivatives - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedges, Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of derivatives | Summary information as of June 30, 2020 and December 31, 2019 regarding these derivatives is presented below:
|
Income Taxes - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Schedule of unrecognized tax benefits roll forward | As of June 30, 2020, the accrual for unrecognized gross tax benefits was as follows:
|
Stock-Based Compensation - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's stock option activity | The following table summarizes the activity in our stock-based compensation plan for the six months ended June 30, 2020:
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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 non-vested stock awards and the related income tax benefit, and proceeds from stock option exercises are presented below:
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Unrecognized stock-based compensation expense | Unrecognized stock-based compensation expense as of June 30, 2020 was as follows:
|
Other Non-Interest Expense, Other Assets and Other Liabilities - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other non-interest expense | Other non-interest expense items for the six months ended June 30, 2020 and 2019, respectively, are presented in the following table:
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Schedule of other assets | Other assets are presented in the following table. Significant components of the aggregate of other assets are presented separately.
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Schedule of other liabilities | Other liabilities are presented in the following table. Significant components of the aggregate of other liabilities are presented separately.
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Earnings Per Common Share - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following is a summary of the calculation of earnings per common share (“EPS”):
(1) Represents incremental shares computed using the treasury stock method. (2) Anti-dilutive shares are not included in determining diluted EPS. Anti-dilutive shares were 305,014 and 79,589 for the three and six months ended June 30, 2020, respectively. There were no anti-dilutive shares in the three and six months ending June 30, 2019.
|
Stockholders' Equity - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and December 31, 2019 for us and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented as of June 30, 2020 and December 31, 2019 are based on the fully phased-in provisions of the Basel III Capital Rules. 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, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 our involvement in particular classes of off-balance sheet financial instruments, are summarized as follows:
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Schedule of operating lease liability maturities | Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2020 were as follows:
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Fair Value Measurements - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value on a recurring basis | A summary of assets and liabilities at June 30, 2020 and December 31, 2019, respectively, measured at estimated fair value on a recurring basis, is as follows:
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Estimated fair value on nonrecurring basis |
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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, 2020:
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, 2019:
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Accumulated Other Comprehensive Income - (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income | Components of accumulated other comprehensive income were as follows as of the dates shown below:
The following table presents the changes in each component of accumulated other comprehensive income (loss) (“AOCI”) for the three and six months ended June 30, 2020 and 2019:
|
Acquisitions - Santander Bank Narrative (Details) - Santander Bank, N.A $ in Millions |
Nov. 29, 2019
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Consideration paid | $ 846.1 |
Premium paid for loans receivable, percentage of gross loans | 0.75% |
Unpaid principal balance of loans acquired | $ 6.3 |
Restructuring and integration costs | 5.1 |
Estimate of Fair Value Measurement | |
Business Acquisition [Line Items] | |
Outstanding loans and leases held by acquiree at acquisition date | 820.1 |
Equipment financing | |
Business Acquisition [Line Items] | |
Outstanding loans and leases held by acquiree at acquisition date | 764.0 |
Asset-based lending | |
Business Acquisition [Line Items] | |
Outstanding loans and leases held by acquiree at acquisition date | $ 74.8 |
Acquisitions - Woodforest National Bank Narrative (Details) - Woodforest National Bank $ in Millions |
Feb. 28, 2019
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Consideration paid | $ 515.7 |
Premium paid for loans receivable, percentage of gross loans | 3.75% |
Unpaid principal balance of loans acquired | $ 18.7 |
Restructuring and integration costs | 3.3 |
Estimate of Fair Value Measurement | |
Business Acquisition [Line Items] | |
Outstanding loans and leases held by acquiree at acquisition date | 471.9 |
Equipment financing | |
Business Acquisition [Line Items] | |
Outstanding loans and leases held by acquiree at acquisition date | 166.1 |
Asset-based lending | |
Business Acquisition [Line Items] | |
Outstanding loans and leases held by acquiree at acquisition date | $ 331.8 |
Securities - Sale of Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Available for sale: | ||||
Proceeds from sales | $ 52,470 | $ 0 | $ 459,994 | $ 738,751 |
Gross realized gains | 485 | 0 | 8,964 | 4,355 |
Gross realized losses | 0 | (528) | (68) | (18,067) |
Income tax expense (benefit) on realized net gains / (losses) | 61 | (111) | 112 | (2,880) |
Held to Maturity | ||||
Proceeds from calls | 0 | 0 | 139,777 | 0 |
Gross realized gains | 0 | 0 | 4,909 | 0 |
Gross realized (losses) | 0 | 0 | (29) | 0 |
Income tax expense on realized net gains | $ 0 | $ 0 | $ 610 | $ 0 |
Securities - Securities Pledged for Borrowings (Details) - Collateral - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Total securities pledged | $ 1,744,643 | $ 2,322,090 |
Federal Home Loan Bank Borrowings | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale, pledged as collateral | 26,448 | 22,678 |
Held-to-maturity securities pledged as collateral | 0 | 483 |
Municipal Deposits | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale, pledged as collateral | 656,134 | 866,020 |
Held-to-maturity securities pledged as collateral | $ 1,062,061 | $ 1,432,909 |
Allowance for Credit Losses - Loans - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Financing receivable, allowance for credit loss | $ 365,489,000 | $ 104,664,000 | $ 365,489,000 | $ 104,664,000 | $ 326,444,000 | $ 106,238,000 | $ 98,960,000 | $ 95,677,000 |
Provision for credit losses - loans | 56,606,000 | $ 11,500,000 | 193,183,000 | $ 21,700,000 | ||||
Portfolio loans, net | 21,929,778,000 | 21,929,778,000 | 21,333,974,000 | |||||
Impact of CECL adoption | ||||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Financing receivable, allowance for credit loss | 90,584,000 | |||||||
Doubtful | ||||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Portfolio loans, net | 0 | 0 | 0 | |||||
Loss | ||||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Portfolio loans, net | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible Assets - Balance of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 1,683,482 | $ 1,683,482 |
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $ 101,964 | 110,364 |
Estimated fair value greater than carrying value, percent | 10.00% | |
Core deposits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $ 77,865 | 85,922 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 3,599 | 3,942 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $ 20,500 | $ 20,500 |
Goodwill and Other Intangible Assets - Future Amortization Expense (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2020 | $ 8,400 |
2021 | 15,104 |
2022 | 13,703 |
2023 | 12,322 |
2024 | 10,448 |
2025 | 8,722 |
Thereafter | 12,765 |
Total | $ 81,464 |
Deposits - Balances (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Deposits [Abstract] | ||
Non-interest bearing demand | $ 5,407,728 | $ 4,304,943 |
Interest bearing demand | 4,636,702 | 4,427,012 |
Savings | 2,669,982 | 2,652,764 |
Money market | 8,252,091 | 7,585,888 |
Certificates of deposit | 2,634,118 | 3,448,051 |
Total deposits | $ 23,600,621 | $ 22,418,658 |
Deposits - Narrative (Details) - USD ($) $ in Billions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Deposits [Abstract] | ||
Municipal deposits | $ 1.7 | $ 2.0 |
Deposits - Brokered Deposits (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
List of Company's Brokered deposits | ||
Brokered deposits | $ 1,565,044 | $ 1,866,444 |
Interest bearing demand | ||
List of Company's Brokered deposits | ||
Brokered deposits | 151,981 | 149,566 |
Money market | ||
List of Company's Brokered deposits | ||
Brokered deposits | 1,171,910 | 944,627 |
Certificates of deposit | ||
List of Company's Brokered deposits | ||
Brokered deposits | $ 241,153 | $ 772,251 |
Borrowings - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | ||
Bank pledged mortgages | $ 7,100.0 | $ 7,700.0 |
Increased borrowing capacity by pledging securities | 2,800.0 | |
FHLB Borrowings | ||
Debt Instrument [Line Items] | ||
Unused borrowing capacity | 5,900.0 | |
Federal Home Loan Bank advances | $ 650.0 | |
Weighted average interest rate during period | 2.22% | |
Federal Home Loan Bank advances, loss realized | $ 10.5 |
Derivatives - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative Instruments and Hedges, Assets [Abstract] | ||
Cash Paid as STM | $ 105.2 | $ 43.0 |
Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Efftective tax rate reconciliation: | |||||
Income before income tax expense | $ 57,902,000 | $ 120,457,000 | $ 64,007,000 | $ 250,368,000 | |
Tax at federal statutory rate of 21% | 12,159,000 | 25,296,000 | 13,441,000 | 52,577,000 | |
State and local income taxes, net of federal tax benefit | 1,091,000 | 6,188,000 | 1,680,000 | 12,878,000 | |
Tax exempt interest, net of disallowed interest | (7,493,000) | (5,303,000) | (14,902,000) | (10,556,000) | |
BOLI income | (1,034,000) | (893,000) | (2,145,000) | (1,662,000) | |
Low income housing tax credits and other benefits | (10,458,000) | (4,814,000) | (18,920,000) | (9,161,000) | |
Low income housing investment amortization expense | 8,987,000 | 4,073,000 | 16,388,000 | 7,883,000 | |
Tax rate adjustment benefit due to CARES Act NOL carryback | 0 | 0 | (21,313,000) | 0 | |
Uncertain tax position reserve | 0 | 0 | 11,480,000 | 0 | |
Annual effective tax rate adjustment | 3,862,000 | 0 | 12,110,000 | 0 | |
Equity-based stock compensation benefit | 287,000 | 0 | 778,000 | (106,000) | |
FDIC insurance premium limitation | 315,000 | 224,000 | 571,000 | 478,000 | |
Other, net | (606,000) | (774,000) | (100,000) | 140,000 | |
Actual income tax expense (benefit) | $ 7,110,000 | $ 23,997,000 | $ (932,000) | $ 52,471,000 | |
Effective income tax rate | 12.30% | 19.90% | (1.50%) | 21.00% | |
Net deferred tax liability | $ 56,100,000 | $ 56,100,000 | $ 67,600,000 | ||
Valuation allowance | $ 0 | $ 0 | $ 0 |
Income Taxes - Schedule of Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Uncertain Tax Positions [Roll Forward] | ||||
Uncertain tax positions beginning of period | $ 11,480 | $ 0 | $ 0 | $ 0 |
Additions for tax positions related to prior tax years | 0 | 0 | 11,480 | 0 |
Interest expense in tax positions | 123 | 0 | 123 | 0 |
Uncertain tax positions at June 30, 2020 | $ 11,603 | $ 0 | $ 11,603 | $ 0 |
Stock-Based Compensation - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Intrinsic value of options outstanding | $ 398,000 | $ 398,000 | ||
Grant of share options (in shares) | 0 | |||
Stock-based compensation expense | 5,913,000 | $ 4,605,000 | $ 11,919,000 | $ 9,728,000 |
Non-vested stock awards/performance units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average period total unrecognized compensation cost related to non-vested shares granted | 1 year 11 months 8 days | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant of share options (in shares) | 0 | 0 | ||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Retirement Benefits [Abstract] | ||||
Stock-based compensation expense | $ 5,913 | $ 4,605 | $ 11,919 | $ 9,728 |
Stock-based compensation expense, income tax benefit | 739 | 967 | 1,490 | 2,043 |
Proceeds from stock option exercises | 101 | $ 2,268 | 515 | $ 1,889 |
Unrecognized stock-based compensation, stock options | 0 | 0 | ||
Unrecognized stock-based compensation, non-vested stock awards/performance units | 38,979 | 38,979 | ||
Total unrecognized stock-based compensation expense | $ 38,979 | $ 38,979 |
Other Non-Interest Expense, Other Assets and Other Liabilities - Schedule of Other Non-Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Other Income and Expenses [Abstract] | ||||
Professional fees | $ 5,458 | $ 6,380 | $ 11,207 | $ 10,528 |
Depreciation expense on operating leases | 3,136 | 0 | 6,628 | 0 |
Advertising and promotion | 1,140 | 1,384 | 3,123 | 2,375 |
Communications | 1,320 | 1,710 | 2,950 | 3,604 |
Residential mortgage loans servicing | 1,247 | 1,383 | 2,624 | 2,991 |
Insurance & surety bond premium | 1,158 | 1,006 | 2,248 | 2,068 |
Operational losses | 609 | 1,907 | 1,215 | 2,490 |
Loss on prepayment of FHLB borrowings | 9,723 | 0 | 10,476 | 0 |
Other | 9,431 | 6,304 | 15,907 | 12,962 |
Total other non-interest expense | $ 33,222 | $ 20,074 | $ 56,378 | $ 37,018 |
Other Non-Interest Expense, Other Assets and Other Liabilities - Schedule of Other Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Income and Expenses [Abstract] | ||
Low income housing tax credit investments | $ 399,336 | $ 386,824 |
Right of use asset for operating leases (see Note 15) | 102,379 | 112,226 |
Derivative assets, fair value | 174,553 | 67,318 |
Cash on deposit as swap collateral / net of settlement | 95,510 | 93,606 |
Operating leases - equipment and vehicles leased to others | 61,497 | 72,291 |
Other asset balances | 225,386 | 108,603 |
Total other assets | $ 1,058,661 | $ 840,868 |
Other Non-Interest Expense, Other Assets and Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Income and Expenses [Abstract] | ||
Commitment to fund low income housing tax credit investments | $ 228,972 | $ 264,930 |
Present value of lease liabilities | 109,674 | 118,986 |
Payroll finance and factoring liabilities | 92,659 | 105,972 |
Swap liabilities (see Note 9) | 69,344 | 24,314 |
Other liability balances | 170,491 | 179,250 |
Total other liabilities | $ 671,140 | $ 693,452 |
Earnings Per Common Share - (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Net income available to common stockholders | $ 48,820 | $ 94,473 | $ 60,991 | $ 193,921 |
Weighted average common shares outstanding for computation of basic EPS (in shares) | 193,479,757 | 206,932,114 | 194,909,498 | 210,022,967 |
Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants (in shares) | 124,674 | 444,125 | 259,059 | 396,458 |
Weighted average common shares for computation of diluted EPS (in shares) | 193,604,431 | 207,376,239 | 195,168,557 | 210,419,425 |
EPS: | ||||
Basic (USD per share) | $ 0.25 | $ 0.46 | $ 0.31 | $ 0.92 |
Diluted (USD per share) | $ 0.25 | $ 0.46 | $ 0.31 | $ 0.92 |
Weighted average common shares that could be exercised that were anti-dilutive for the period (in shares) | 305,014 | 0 | 79,589 | 0 |
Stockholders' Equity - Narrative (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Class of Stock [Line Items] | ||
Long-term debt | $ 2,014,259 | $ 2,885,958 |
Period of loan term eligible for inclusion in Tier 2 capital decreases | 5 years | |
Sterling National Bank | ||
Class of Stock [Line Items] | ||
Subordinated Notes | $ 173,307 | 173,182 |
Sterling National Bank | Subordinated Notes | ||
Class of Stock [Line Items] | ||
Long-term debt | 173,307 | 173,182 |
Sterling National Bank | Sterling National Bank | ||
Class of Stock [Line Items] | ||
Subordinated Notes | 173,300 | |
Sterling Bancorp | ||
Class of Stock [Line Items] | ||
Subordinated Notes | 271,096 | 270,941 |
Sterling Bancorp | Subordinated Notes | ||
Class of Stock [Line Items] | ||
Long-term debt | 271,096 | $ 270,941 |
Sterling Bancorp | Sterling National Bank | ||
Class of Stock [Line Items] | ||
Subordinated Notes | $ 145,500 |
Commitments and Contingencies - Off-Balance Sheet Financial Information (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Allowance for credit losses - loan commitments | $ 6,700 | $ 654 |
Litigation accrual | 0 | 0 |
Impact of CECL adoption | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Allowance for credit losses - loan commitments | 6,100 | |
Loan origination commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Lending-related instruments | 524,726 | 565,392 |
Unused lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Lending-related instruments | 1,656,854 | 1,532,702 |
Letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Lending-related instruments | $ 260,708 | $ 307,287 |
Commitment and Contingencies - Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2020 | $ 9,541 | |
2021 | 17,967 | |
2022 | 16,195 | |
2023 | 14,693 | |
2024 | 12,894 | |
2025 | 10,261 | |
2026 and thereafter | 45,237 | |
Total lease payments | 126,788 | |
Interest | 17,114 | |
Present value of lease liabilities | $ 109,674 | $ 118,986 |
Fair Value Measurements - Narrative (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Minimum | Measurement Input, Appraised Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement input | 0.04 | |
Maximum | Measurement Input, Appraised Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement input | 0.10 | |
Fair Value Measurements, Nonrecurring | Collateral | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Portfolio loans, net | $ 41,410 | $ 38,103 |
Label | Element | Value |
---|---|---|
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | us-gaap_RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability | $ 0 |
Operating Lease, Payments | us-gaap_OperatingLeasePayments | $ 10,328,000 |
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