Alaska | 92-0175752 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
TITLE OF EACH CLASS | TRADING SYMBOL | NAME OF EXCHANGE |
TABLE OF CONTENTS | ||
Part I | FINANCIAL INFORMATION | |
Item 1. | Financial Statements (unaudited) | |
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, 2019 | December 31, 2018 | ||||||
(In Thousands, Except Share Data) | |||||||
ASSETS | |||||||
Cash and due from banks | $25,377 | $26,771 | |||||
Interest bearing deposits in other banks | 45,454 | 50,767 | |||||
Investment securities available for sale, at fair value | 249,986 | 271,610 | |||||
Marketable equity securities | 7,916 | 7,265 | |||||
Investment in Federal Home Loan Bank stock | 2,069 | 2,101 | |||||
Loans held for sale | 61,531 | 34,710 | |||||
Loans | 1,015,704 | 984,346 | |||||
Allowance for loan losses | (20,518 | ) | (19,519 | ) | |||
Net loans | 995,186 | 964,827 | |||||
Purchased receivables, net | 13,114 | 14,406 | |||||
Mortgage servicing rights, at fair value | 10,836 | 10,821 | |||||
Other real estate owned, net | 7,043 | 7,962 | |||||
Premises and equipment, net | 39,155 | 39,090 | |||||
Operating lease right-of-use asset | 14,924 | — | |||||
Goodwill | 15,017 | 15,017 | |||||
Other intangible assets, net | 1,107 | 1,137 | |||||
Other assets | 64,055 | 56,504 | |||||
Total assets | $1,552,770 | $1,502,988 | |||||
LIABILITIES | |||||||
Deposits: | |||||||
Demand | $435,425 | $420,988 | |||||
Interest-bearing demand | 285,664 | 248,056 | |||||
Savings | 232,190 | 239,054 | |||||
Money market | 204,151 | 206,717 | |||||
Certificates of deposit less than $250,000 | 83,210 | 75,318 | |||||
Certificates of deposit $250,000 and greater | 47,538 | 37,955 | |||||
Total deposits | 1,288,178 | 1,228,088 | |||||
Securities sold under repurchase agreements | 864 | 34,278 | |||||
Borrowings | 7,158 | 7,241 | |||||
Junior subordinated debentures | 10,310 | 10,310 | |||||
Operating lease liability | 14,807 | — | |||||
Other liabilities | 25,115 | 17,124 | |||||
Total liabilities | 1,346,432 | 1,297,041 | |||||
SHAREHOLDERS' EQUITY | |||||||
Preferred stock, $1 par value, 2,500,000 shares authorized, none issued or outstanding | — | — | |||||
Common stock, $1 par value, 10,000,000 shares authorized, 6,729,456 and 6,883,216 issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 6,729 | 6,883 | |||||
Additional paid-in capital | 57,234 | 62,132 | |||||
Retained earnings | 141,878 | 137,452 | |||||
Accumulated other comprehensive income (loss), net of tax | 497 | (520 | ) | ||||
Total shareholders' equity | 206,338 | 205,947 | |||||
Total liabilities and shareholders' equity | $1,552,770 | $1,502,988 |
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
(In Thousands, Except Per Share Data) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Interest Income | ||||||||||||||
Interest and fees on loans and loans held for sale | $15,353 | $14,036 | $30,330 | $27,299 | ||||||||||
Interest on investment securities available for sale | 1,690 | 1,302 | 3,322 | 2,556 | ||||||||||
Dividends on marketable equity securities | 109 | 84 | 216 | 166 | ||||||||||
Dividends on Federal Home Loan Bank stock | 19 | 14 | 38 | 26 | ||||||||||
Interest on deposits in other banks | 135 | 159 | 278 | 343 | ||||||||||
Total Interest Income | 17,306 | 15,595 | 34,184 | 30,390 | ||||||||||
Interest Expense | ||||||||||||||
Interest expense on deposits | 1,174 | 446 | 2,112 | 818 | ||||||||||
Interest expense on securities sold under agreements to repurchase | 18 | 8 | 40 | 17 | ||||||||||
Interest expense on borrowings | 62 | 57 | 119 | 115 | ||||||||||
Interest expense on junior subordinated debentures | 95 | 95 | 187 | 188 | ||||||||||
Total Interest Expense | 1,349 | 606 | 2,458 | 1,138 | ||||||||||
Net Interest Income | 15,957 | 14,989 | 31,726 | 29,252 | ||||||||||
Provision (benefit) for loan losses | 300 | (300 | ) | 1,050 | (300 | ) | ||||||||
Net Interest Income After Provision (Benefit) for Loan Losses | 15,657 | 15,289 | 30,676 | 29,552 | ||||||||||
Other Operating Income | ||||||||||||||
Mortgage banking income | 5,950 | 5,478 | 10,248 | 10,422 | ||||||||||
Purchased receivable income | 837 | 867 | 1,646 | 1,707 | ||||||||||
Interest rate swap income | 734 | — | 734 | — | ||||||||||
Bankcard fees | 744 | 707 | 1,394 | 1,332 | ||||||||||
Service charges on deposit accounts | 413 | 376 | 826 | 730 | ||||||||||
Gain (loss) on marketable equity securities | 118 | (173 | ) | 652 | (173 | ) | ||||||||
Gain on sale of securities, net | — | — | 23 | — | ||||||||||
Other income | 773 | 1,059 | 1,579 | 1,758 | ||||||||||
Total Other Operating Income | 9,569 | 8,314 | 17,102 | 15,776 | ||||||||||
Other Operating Expense | ||||||||||||||
Salaries and other personnel expense | 12,945 | 11,362 | 24,247 | 21,947 | ||||||||||
Data processing expense | 1,796 | 1,323 | 3,475 | 2,871 | ||||||||||
Occupancy expense | 1,642 | 1,020 | 3,413 | 2,720 | ||||||||||
Marketing expense | 833 | 462 | 1,252 | 1,094 | ||||||||||
Professional and outside services | 684 | 554 | 1,240 | 1,053 | ||||||||||
Insurance expense | 232 | 178 | 490 | 474 | ||||||||||
OREO (income) expense, net rental income and gains on sale | 165 | 11 | (155 | ) | 114 | |||||||||
Intangible asset amortization expense | 15 | 17 | 30 | 35 | ||||||||||
Other operating expense | 1,507 | 1,679 | 2,907 | 3,093 | ||||||||||
Total Other Operating Expense | 19,819 | 16,606 | 36,899 | 33,401 | ||||||||||
Income Before Provision for Income Taxes | 5,407 | 6,997 | 10,879 | 11,927 | ||||||||||
Provision for income taxes | 1,146 | 1,167 | 2,306 | 2,035 | ||||||||||
Net Income | $4,261 | $5,830 | $8,573 | $9,892 | ||||||||||
Earnings Per Share, Basic | $0.62 | $0.85 | $1.25 | $1.44 | ||||||||||
Earnings Per Share, Diluted | $0.62 | $0.84 | $1.24 | $1.42 | ||||||||||
Weighted Average Shares Outstanding, Basic | 6,798,352 | 6,872,371 | 6,838,986 | 6,872,167 | ||||||||||
Weighted Average Shares Outstanding, Diluted | 6,896,687 | 6,976,985 | 6,939,338 | 6,972,744 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
(In Thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||
Net income | $4,261 | $5,830 | $8,573 | $9,892 | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Securities available for sale: | ||||||||||||
Unrealized gains (losses) arising during the period | $1,300 | ($119 | ) | $2,733 | ($1,107 | ) | ||||||
Reclassification of net (gains) losses included in net income (net of tax | ||||||||||||
(benefit) expense) of $0 for the second quarters of 2019 and 2018, and $7 | ||||||||||||
and $0 for the six months ended June 30, 2019 and 2018, respectively) | — | — | (16 | ) | — | |||||||
Derivatives and hedging activities: | ||||||||||||
Unrealized (losses) gains arising during the period | (588 | ) | 154 | (981 | ) | 621 | ||||||
Income tax (expense) benefit related to unrealized gains and losses | (370 | ) | 143 | (719 | ) | 246 | ||||||
Other comprehensive income (loss), net of tax | 342 | 178 | 1,017 | (240 | ) | |||||||
Comprehensive income | $4,603 | $6,008 | $9,590 | $9,652 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Balance as of January 1, 2018 | 6,872 | $6,872 | $61,793 | $124,407 | ($270 | ) | $192,802 | |||||||||||||||
Cash dividend declared | — | — | — | (1,664 | ) | — | (1,664 | ) | ||||||||||||||
Stock-based compensation expense | — | — | 253 | — | — | 253 | ||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (418 | ) | (418 | ) | ||||||||||||||
Cumulative effect of adoption of accounting principles related to premium amortization of investment securities | — | — | — | (62 | ) | — | (62 | ) | ||||||||||||||
Reclassification for cumulative effect of adoption of accounting principles related to fair value measurement of equity securities | — | — | — | 191 | (191 | ) | — | |||||||||||||||
Net income | — | — | — | 4,062 | — | 4,062 | ||||||||||||||||
Balance as of March 31, 2018 | 6,872 | $6,872 | $62,046 | $126,934 | ($879 | ) | $194,973 | |||||||||||||||
Cash dividend declared | — | — | — | (1,667 | ) | — | (1,667 | ) | ||||||||||||||
Stock-based compensation expense | — | — | 159 | — | — | 159 | ||||||||||||||||
Exercise of stock options and vesting of restricted stock units, net | 1 | 1 | (18 | ) | — | — | (17 | ) | ||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 178 | 178 | ||||||||||||||||
Net income | — | — | — | 5,830 | — | 5,830 | ||||||||||||||||
Balance as of June 30, 2018 | 6,873 | $6,873 | $62,187 | $131,097 | ($701 | ) | $199,456 | |||||||||||||||
Cash dividend declared | — | — | — | (1,874 | ) | — | (1,874 | ) | ||||||||||||||
Stock-based compensation expense | — | — | 159 | — | — | 159 | ||||||||||||||||
Exercise of stock options and vesting of restricted stock units, net | 11 | 11 | 166 | — | — | 177 | ||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 60 | 60 | ||||||||||||||||
Net income | — | — | — | 5,264 | — | 5,264 | ||||||||||||||||
Balance as of September 30, 2018 | 6,884 | $6,884 | $62,512 | $134,487 | ($641 | ) | $203,242 | |||||||||||||||
Cash dividend declared | — | — | — | (1,883 | ) | — | (1,883 | ) | ||||||||||||||
Stock-based compensation expense | — | — | 245 | — | — | 245 | ||||||||||||||||
Exercise of stock options and vesting of restricted stock units, net | 15 | 15 | (147 | ) | — | — | (132 | ) | ||||||||||||||
Repurchase of common stock | (16 | ) | (16 | ) | (478 | ) | — | — | (494 | ) | ||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 121 | 121 | ||||||||||||||||
Net income | — | — | — | 4,848 | — | 4,848 | ||||||||||||||||
Balance as of December 31, 2018 | 6,883 | $6,883 | $62,132 | $137,452 | ($520 | ) | $205,947 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Balance as of January 1, 2019 | 6,883 | $6,883 | $62,132 | $137,452 | ($520 | ) | $205,947 | |||||||||||||||
Cash dividend declared | — | — | — | (2,087 | ) | — | (2,087 | ) | ||||||||||||||
Stock-based compensation expense | — | — | 196 | — | — | 196 | ||||||||||||||||
Exercise of stock options and vesting of restricted stock units, net | 2 | 2 | (2 | ) | — | — | — | |||||||||||||||
Repurchase of common stock | (6 | ) | (6 | ) | (199 | ) | — | — | (205 | ) | ||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 675 | 675 | ||||||||||||||||
Net income | — | — | — | 4,312 | — | 4,312 | ||||||||||||||||
Balance as of March 31, 2019 | 6,879 | $6,879 | $62,127 | $139,677 | $155 | $208,838 | ||||||||||||||||
Cash dividend declared | — | — | — | (2,060 | ) | — | (2,060 | ) | ||||||||||||||
Stock-based compensation expense | — | — | 155 | — | — | 155 | ||||||||||||||||
Repurchase of common stock | (150 | ) | (150 | ) | (5,048 | ) | — | — | (5,198 | ) | ||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 342 | 342 | ||||||||||||||||
Net income | — | — | — | 4,261 | — | 4,261 | ||||||||||||||||
Balance as of June 30, 2019 | 6,729 | $6,729 | $57,234 | $141,878 | $497 | $206,338 |
Six Months Ended June 30, | |||||||
(In Thousands) | 2019 | 2018 | |||||
Operating Activities: | |||||||
Net income | $8,573 | $9,892 | |||||
Adjustments to Reconcile Net Income to Net Cash Used by Operating Activities: | |||||||
Gain on sale of securities, net | (23 | ) | — | ||||
Loss on disposal of premises and equipment | — | 3 | |||||
Depreciation and amortization of premises and equipment | 1,444 | 768 | |||||
Amortization of software | 496 | 431 | |||||
Intangible asset amortization | 30 | 35 | |||||
Amortization of investment security premium, net of discount accretion | 25 | 106 | |||||
(Gain) loss of marketable equity securities | (652 | ) | 173 | ||||
Deferred tax expense (benefit) | 735 | (156 | ) | ||||
Stock-based compensation | 351 | 412 | |||||
Deferral of loan fees and (costs), net | (169 | ) | 51 | ||||
Provision for loan losses | 1,050 | (300 | ) | ||||
(Benefit) reserve for purchased receivables | (92 | ) | 1 | ||||
Additions to home mortgage servicing rights carried at fair value | (1,639 | ) | (1,572 | ) | |||
Change in fair value of home mortgage servicing rights carried at fair value | 1,624 | 144 | |||||
Change in fair value of commercial servicing rights carried at fair value | 98 | — | |||||
Gain on sale of loans | (7,830 | ) | (7,398 | ) | |||
Proceeds from the sale of loans held for sale | 242,409 | 254,323 | |||||
Origination of loans held for sale | (261,400 | ) | (257,252 | ) | |||
Gain on sale of other real estate owned | (316 | ) | (49 | ) | |||
Net changes in assets and liabilities: | |||||||
Decrease (increase) in accrued interest receivable | 25 | (104 | ) | ||||
Increase in other assets | (3,162 | ) | (10,614 | ) | |||
Increase (decrease) in other liabilities | 668 | (1,996 | ) | ||||
Net Cash Used by Operating Activities | (17,755 | ) | (13,102 | ) | |||
Investing Activities: | |||||||
Investment in securities: | |||||||
Purchases of investment securities available for sale | (15,373 | ) | (25,731 | ) | |||
Purchases of marketable equity securities | — | (998 | ) | ||||
Purchases of FHLB stock | (806 | ) | — | ||||
Proceeds from sales/calls/maturities of securities available for sale | 39,729 | 67,401 | |||||
Proceeds from calls/sales of marketable equity securities | — | 500 | |||||
Proceeds from redemption of FHLB stock | 838 | 11 | |||||
Decrease in purchased receivables, net | 1,384 | 1,908 | |||||
Increase in loans, net | (31,090 | ) | (14,388 | ) | |||
Proceeds from sale of other real estate owned | 1,085 | 276 | |||||
Purchases of software | (294 | ) | (409 | ) | |||
Proceeds from sale of premises and equipment | — | 3 | |||||
Purchases of premises and equipment | (1,509 | ) | (1,020 | ) | |||
Net Cash (Used) Provided by Investing Activities | (6,036 | ) | 27,553 | ||||
Financing Activities: | |||||||
(Decrease) increase in deposits | 60,090 | (52,762 | ) | ||||
Decrease in securities sold under repurchase agreements | (33,414 | ) | (51 | ) | |||
Decrease in borrowings | (83 | ) | (50 | ) | |||
Repurchase of common stock | (5,403 | ) | — | ||||
Cash dividends paid | (4,106 | ) | (3,299 | ) |
Net Cash Provided (Used) by Financing Activities | 17,084 | (56,162 | ) | ||||
Net Change in Cash and Cash Equivalents | (6,707 | ) | (41,711 | ) | |||
Cash and Cash Equivalents at Beginning of Period | 77,538 | 77,841 | |||||
Cash and Cash Equivalents at End of Period | $70,831 | $36,130 | |||||
Supplemental Information: | |||||||
Income taxes paid | $— | $324 | |||||
Interest paid | $2,483 | $1,070 | |||||
Noncash commitments to invest in Low Income Housing Tax Credit Partnerships | $7,282 | $— | |||||
Transfer of loans to other real estate owned | $— | $535 | |||||
Non-cash lease liability arising from obtaining right of use assets | $528 | $— | |||||
Cash dividends declared but not paid | $41 | $32 |
(In Thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||
2019 | 2019 | ||||||
Lease Cost | |||||||
Operating lease cost(1) | $677 | $1,355 | |||||
Short term lease cost(1) | 8 | 17 | |||||
Total lease cost | $685 | $1,372 | |||||
Other information | |||||||
Operating leases - operating cash flows | $1,348 | ||||||
Weighted average lease term - operating leases, in years | 11.26 | ||||||
Weighted average discount rate - operating leases | 3.32 | % | |||||
(1) | Expenses are classified within occupancy expense on the Consolidated Statements of Income. |
(In Thousands) | Operating Leases | ||
2019 (Six months) | $1,332 | ||
2020 | 2,532 | ||
2021 | 2,439 | ||
2022 | 1,998 | ||
2023 | 1,775 | ||
Thereafter | 8,131 | ||
Total minimum lease payments | $18,207 | ||
Less: amount of lease payment representing interest | (3,400 | ) | |
Present value of future minimum lease payments | $14,807 |
(In Thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
Other operating income | 2019 | 2018 | 2019 | 2018 | ||||||||||
In-scope of Topic 606: | ||||||||||||||
Bankcard fees | $744 | $707 | $1,394 | $1,332 | ||||||||||
Service charges on deposit accounts | 413 | 376 | 826 | 730 | ||||||||||
Other | 451 | 436 | 816 | 799 | ||||||||||
Other operating income (in-scope of Topic 606) | $1,608 | $1,519 | $3,036 | $2,861 | ||||||||||
Other operating income (out-of-scope of Topic 606) | 7,961 | 6,795 | 14,066 | 12,915 | ||||||||||
Total other operating income | $9,569 | $8,314 | $17,102 | $15,776 |
(In Thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
June 30, 2019 | |||||||||||||||
Securities available for sale | |||||||||||||||
U.S. Treasury and government sponsored entities | $181,760 | $1,123 | $117 | $182,766 | |||||||||||
Municipal securities | 3,896 | 9 | 16 | 3,889 | |||||||||||
Corporate bonds | 40,135 | 277 | 12 | 40,400 | |||||||||||
Collateralized loan obligations | 22,979 | 6 | 54 | 22,931 | |||||||||||
Total securities available for sale | $248,770 | $1,415 | $199 | $249,986 | |||||||||||
December 31, 2018 | |||||||||||||||
Securities available for sale | |||||||||||||||
U.S. Treasury and government sponsored entities | $209,908 | $391 | $1,439 | $208,860 | |||||||||||
Municipal securities | 9,089 | 17 | 22 | 9,084 | |||||||||||
Corporate bonds | 40,139 | 38 | 397 | 39,780 | |||||||||||
Collateralized loan obligations | 13,990 | — | 104 | 13,886 | |||||||||||
Total securities available for sale | $273,126 | $446 | $1,962 | $271,610 |
Less Than 12 Months | More Than 12 Months | Total | ||||||||||||||||
(In Thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||
June 30, 2019: | ||||||||||||||||||
Securities available for sale | ||||||||||||||||||
U.S. Treasury and government sponsored entities | $— | $— | $67,393 | $117 | $67,393 | $117 | ||||||||||||
Corporate bonds | 2,982 | 12 | — | — | 2,982 | 12 | ||||||||||||
Collateralized loan obligations | 10,936 | 54 | — | — | 10,936 | 54 | ||||||||||||
Municipal securities | — | — | 651 | 16 | 651 | 16 | ||||||||||||
Total | $13,918 | $66 | $68,044 | $133 | $81,962 | $199 | ||||||||||||
December 31, 2018: | ||||||||||||||||||
Securities available for sale | ||||||||||||||||||
U.S. Treasury and government sponsored entities | $5,030 | $6 | $135,807 | $1,433 | $140,837 | $1,439 | ||||||||||||
Corporate bonds | 22,285 | 397 | — | — | 22,285 | 397 | ||||||||||||
Collateralized loan obligations | 13,886 | 104 | — | — | 13,886 | 104 | ||||||||||||
Municipal securities | — | — | 1,673 | 22 | 1,673 | 22 | ||||||||||||
Total | $41,201 | $507 | $137,480 | $1,455 | $178,681 | $1,962 |
(In Thousands) | Amortized Cost | Fair Value | Weighted Average Yield | |||||||
US Treasury and government sponsored entities | ||||||||||
Within 1 year | $70,013 | $69,995 | 1.70 | % | ||||||
1-5 years | 111,747 | 112,771 | 2.33 | % | ||||||
Total | $181,760 | $182,766 | 2.09 | % | ||||||
Corporate bonds | ||||||||||
Within 1 year | $14,450 | $14,505 | 3.44 | % | ||||||
1-5 years | 20,689 | 20,887 | 3.54 | % | ||||||
5-10 years | 4,996 | 5,008 | 3.52 | % | ||||||
Total | $40,135 | $40,400 | 3.50 | % | ||||||
Collateralized loan obligations | ||||||||||
5-10 years | $3,000 | $2,999 | 4.06 | % | ||||||
Over 10 years | 19,979 | 19,932 | 4.01 | % | ||||||
Total | $22,979 | $22,931 | 4.02 | % | ||||||
Municipal securities | ||||||||||
Within 1 year | $1,905 | $1,909 | 1.80 | % | ||||||
1-5 years | 1,991 | 1,980 | 4.30 | % | ||||||
Total | $3,896 | $3,889 | 3.08 | % |
(In Thousands) | Proceeds | Gross Gains | Gross Losses | ||||||||
Three Months Ended June 30, 2019 | |||||||||||
Available for sale securities | $— | $— | $— | ||||||||
Three Months Ended June 30, 2018 | |||||||||||
Available for sale securities | $— | $— | $— | ||||||||
Six Months Ended June 30, 2019 | |||||||||||
Available for sale securities | $4,219 | $23 | $— | ||||||||
Six Months Ended June 30, 2018 | |||||||||||
Available for sale securities | $— | $— | $— |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In Thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||
US Treasury and government sponsored entities | $1,071 | $895 | $2,142 | $1,785 | ||||||||||
Other | 589 | 343 | 1,098 | 621 | ||||||||||
Total taxable interest income | $1,660 | $1,238 | $3,240 | $2,406 | ||||||||||
Municipal securities | $30 | $64 | $82 | $150 | ||||||||||
Total tax-exempt interest income | $30 | $64 | $82 | $150 | ||||||||||
Total | $1,690 | $1,302 | $3,322 | $2,556 |
(In Thousands) | Commercial | Real estate construction one-to-four family | Real estate construction other | Real estate term owner occupied | Real estate term non-owner occupied | Real estate term other | Consumer secured by 1st deeds of trust | Consumer other | Total | ||||||||||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||||||||||||||||
AQR Pass | $365,705 | $37,521 | $58,824 | $117,492 | $307,931 | $40,767 | $16,544 | $23,235 | $968,019 | ||||||||||||||||||||||||||
AQR Special Mention | 4,149 | — | — | 3,786 | 17,807 | — | — | — | 25,742 | ||||||||||||||||||||||||||
AQR Substandard | 17,403 | 1,492 | — | 5,713 | — | 1,198 | 304 | 151 | 26,261 | ||||||||||||||||||||||||||
AQR Doubtful | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Subtotal | $387,257 | $39,013 | $58,824 | $126,991 | $325,738 | $41,965 | $16,848 | $23,386 | $1,020,022 | ||||||||||||||||||||||||||
Less: Unearned origination fees, net of origination costs | (4,318 | ) | |||||||||||||||||||||||||||||||||
Total loans | $1,015,704 | ||||||||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
AQR Pass | $315,112 | $33,729 | $72,256 | $117,174 | $307,126 | $40,792 | $18,768 | $23,595 | $928,552 | ||||||||||||||||||||||||||
AQR Special Mention | 5,116 | 3,382 | — | 3,987 | 18,129 | 670 | 140 | 2 | 31,426 | ||||||||||||||||||||||||||
AQR Substandard | 22,192 | — | — | 5,253 | 465 | 577 | 320 | 47 | 28,854 | ||||||||||||||||||||||||||
AQR Doubtful | — | — | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||
Subtotal | $342,420 | $37,111 | $72,256 | $126,414 | $325,720 | $42,039 | $19,228 | $23,645 | $988,833 | ||||||||||||||||||||||||||
Less: Unearned origination fees, net of origination costs | (4,487 | ) | |||||||||||||||||||||||||||||||||
Total loans | $984,346 |
(In Thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days Past Due | Current | Total | ||||||||||||||
June 30, 2019 | |||||||||||||||||||
Commercial | $385 | $— | $3,745 | $7,077 | $11,207 | ||||||||||||||
Real estate construction one-to-four family | — | — | — | 1,492 | 1,492 | ||||||||||||||
Real estate term owner occupied | 1,087 | — | 2,568 | 189 | 3,844 | ||||||||||||||
Real estate term other | 621 | — | 577 | — | 1,198 | ||||||||||||||
Consumer secured by 1st deeds of trust | — | — | — | 210 | 210 | ||||||||||||||
Consumer other | — | — | 93 | 36 | 129 | ||||||||||||||
Total nonperforming loans | 2,093 | — | 6,983 | 9,004 | 18,080 | ||||||||||||||
Government guarantees on nonaccrual loans | — | — | (102 | ) | (1,037 | ) | (1,139 | ) | |||||||||||
Net nonaccrual loans | $2,093 | $— | $6,881 | $7,967 | $16,941 | ||||||||||||||
December 31, 2018 | |||||||||||||||||||
Commercial | $1,329 | $324 | $1,287 | $9,731 | $12,671 | ||||||||||||||
Real estate term owner occupied | — | — | 1,694 | — | 1,694 | ||||||||||||||
Real estate term other | — | — | 577 | — | 577 | ||||||||||||||
Consumer secured by 1st deeds of trust | — | — | — | 220 | 220 | ||||||||||||||
Consumer other | — | — | 39 | 9 | 48 | ||||||||||||||
Total nonperforming loans | 1,329 | 324 | 3,597 | 9,960 | 15,210 | ||||||||||||||
Government guarantees on nonaccrual loans | (269 | ) | — | — | (247 | ) | (516 | ) | |||||||||||
Net nonaccrual loans | $1,060 | $324 | $3,597 | $9,713 | $14,694 |
(In Thousands) | 30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 Days Still Accruing | Total Past Due | Nonaccrual | Current | Total | ||||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||||||||
Commercial | $4,800 | $1,473 | $— | $6,273 | $11,207 | $369,777 | $387,257 | ||||||||||||||||||||
Real estate construction one-to-four family | — | — | — | — | 1,492 | 37,521 | 39,013 | ||||||||||||||||||||
Real estate construction other | — | — | — | — | — | 58,824 | 58,824 | ||||||||||||||||||||
Real estate term owner occupied | 987 | — | — | 987 | 3,844 | 122,160 | 126,991 | ||||||||||||||||||||
Real estate term non-owner occupied | — | — | — | — | — | 325,738 | 325,738 | ||||||||||||||||||||
Real estate term other | — | — | — | — | 1,198 | 40,767 | 41,965 | ||||||||||||||||||||
Consumer secured by 1st deed of trust | 29 | 180 | — | 209 | 210 | 16,429 | 16,848 | ||||||||||||||||||||
Consumer other | 233 | — | — | 233 | 129 | 23,024 | 23,386 | ||||||||||||||||||||
Subtotal | $6,049 | $1,653 | $— | $7,702 | $18,080 | $994,240 | $1,020,022 | ||||||||||||||||||||
Less: Unearned origination fees, net of origination costs | (4,318 | ) | |||||||||||||||||||||||||
Total | $1,015,704 | ||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||
Commercial | $872 | $857 | $— | $1,729 | $12,671 | $328,020 | $342,420 | ||||||||||||||||||||
Real estate construction one-to-four family | — | — | — | — | — | 37,111 | 37,111 | ||||||||||||||||||||
Real estate construction other | — | — | — | — | — | 72,256 | 72,256 | ||||||||||||||||||||
Real estate term owner occupied | 1,197 | — | — | 1,197 | 1,694 | 123,523 | 126,414 | ||||||||||||||||||||
Real estate term non-owner occupied | — | — | — | — | — | 325,720 | 325,720 | ||||||||||||||||||||
Real estate term other | — | — | — | — | 577 | 41,462 | 42,039 | ||||||||||||||||||||
Consumer secured by 1st deed of trust | 224 | 100 | — | 324 | 220 | 18,684 | 19,228 | ||||||||||||||||||||
Consumer other | 190 | — | — | 190 | 48 | 23,407 | 23,645 | ||||||||||||||||||||
Subtotal | $2,483 | $957 | $— | $3,440 | $15,210 | $970,183 | $988,833 | ||||||||||||||||||||
Less: Unearned origination fees, net of origination costs | (4,487 | ) | |||||||||||||||||||||||||
Total | $984,346 |
(In Thousands) | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||
June 30, 2019 | |||||||||||
With no related allowance recorded | |||||||||||
Commercial - AQR pass | $72 | $72 | $— | ||||||||
Commercial - AQR substandard | 16,367 | 18,005 | — | ||||||||
Real estate construction one-to-four family - AQR substandard | 1,492 | 1,492 | — | ||||||||
Real estate term owner occupied - AQR substandard | 5,714 | 5,714 | — | ||||||||
Real estate term non-owner occupied - AQR pass | 269 | 269 | — | ||||||||
Real estate term other - AQR pass | 447 | 447 | — | ||||||||
Real estate term other - AQR substandard | 1,198 | 1,198 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR pass | 126 | 126 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 304 | 304 | — | ||||||||
Consumer other - AQR substandard | 93 | 97 | — | ||||||||
Subtotal | $26,082 | $27,724 | $— |
With an allowance recorded | |||||||||||
Commercial - AQR substandard | $914 | $914 | $6 | ||||||||
Subtotal | $914 | $914 | $6 |
Total | |||||||||||
Commercial - AQR pass | $72 | $72 | $— | ||||||||
Commercial - AQR substandard | 17,281 | 18,919 | 6 | ||||||||
Real estate construction one-to-four family - AQR substandard | 1,492 | 1,492 | — | ||||||||
Real estate term owner-occupied - AQR substandard | 5,714 | 5,714 | — | ||||||||
Real estate term non-owner occupied - AQR pass | 269 | 269 | — | ||||||||
Real estate term other - AQR pass | 447 | 447 | — | ||||||||
Real estate term other - AQR substandard | 1,198 | 1,198 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR pass | 126 | 126 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 304 | 304 | — | ||||||||
Consumer other - AQR substandard | 93 | 97 | — | ||||||||
Total | $26,996 | $28,638 | $6 |
(In Thousands) | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||
December 31, 2018 | |||||||||||
With no related allowance recorded | |||||||||||
Commercial - AQR pass | $80 | $80 | $— | ||||||||
Commercial - AQR special mention | 2,009 | 2,009 | — | ||||||||
Commercial - AQR substandard | 21,252 | 22,303 | — | ||||||||
Real estate term owner occupied - AQR substandard | 5,253 | 5,253 | — | ||||||||
Real estate term non-owner occupied - AQR pass | 295 | 295 | — | ||||||||
Real estate term non-owner occupied - AQR substandard | 465 | 465 | — | ||||||||
Real estate term other - AQR pass | 486 | 486 | — | ||||||||
Real estate term other - AQR substandard | 577 | 577 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR pass | 129 | 129 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 320 | 320 | — | ||||||||
Subtotal | $30,866 | $31,917 | $— |
With an allowance recorded | |||||||||||
Commercial - AQR substandard | $848 | $1,352 | $14 | ||||||||
Subtotal | $848 | $1,352 | $14 |
Total | |||||||||||
Commercial - AQR pass | $80 | $80 | $— | ||||||||
Commercial - AQR special mention | 2,009 | 2,009 | — | ||||||||
Commercial - AQR substandard | 22,100 | 23,655 | 14 | ||||||||
Real estate term owner occupied - AQR substandard | 5,253 | 5,253 | — | ||||||||
Real estate term non-owner occupied - AQR pass | 295 | 295 | — | ||||||||
Real estate term non-owner occupied - AQR substandard | 465 | 465 | — | ||||||||
Real estate term other - AQR pass | 486 | 486 | — | ||||||||
Real estate term other - AQR special mention | 577 | 577 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR pass | 129 | 129 | — | ||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 320 | 320 | — | ||||||||
Total | $31,714 | $33,269 | $14 |
Three Months Ended June 30, | 2019 | 2018 | |||||||||||||
(In Thousands) | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||
With no related allowance recorded | |||||||||||||||
Commercial - AQR pass | $75 | $1 | $— | $— | |||||||||||
Commercial - AQR special mention | — | — | 2,223 | 34 | |||||||||||
Commercial - AQR substandard | 17,192 | 95 | 30,657 | 172 | |||||||||||
Real estate construction one-to-four family - AQR substandard | 1,958 | — | — | — | |||||||||||
Real estate term owner occupied- AQR substandard | 5,877 | 14 | 4,575 | 53 | |||||||||||
Real estate term non-owner occupied- AQR pass | 276 | 5 | 378 | 6 | |||||||||||
Real estate term non-owner occupied- AQR substandard | — | — | 475 | 8 | |||||||||||
Real estate term other - AQR pass | 457 | 8 | 527 | 7 | |||||||||||
Real estate term other - AQR substandard | 1,213 | — | — | — | |||||||||||
Consumer secured by 1st deeds of trust - AQR pass | 127 | 3 | 141 | 4 | |||||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 309 | 2 | 103 | 1 | |||||||||||
Consumer other - AQR substandard | 95 | — | — | — | |||||||||||
Subtotal | $27,579 | $128 | $39,079 | $285 |
With an allowance recorded | |||||||||||||||
Commercial - AQR substandard | $917 | $— | $378 | $7 | |||||||||||
Subtotal | $917 | $— | $378 | $7 |
Total | |||||||||||||||
Commercial - AQR pass | $75 | $1 | $— | $— | |||||||||||
Commercial - AQR special mention | — | — | 2,223 | 34 | |||||||||||
Commercial - AQR substandard | 18,109 | 95 | 31,035 | 179 | |||||||||||
Real estate construction one-to-four family - AQR substandard | 1,958 | — | — | — | |||||||||||
Real estate term owner-occupied - AQR substandard | 5,877 | 14 | 4,575 | 53 | |||||||||||
Real estate term non-owner occupied - AQR pass | 276 | 5 | 378 | 6 | |||||||||||
Real estate term non-owner occupied - AQR substandard | — | — | 475 | 8 | |||||||||||
Real estate term other - AQR pass | 457 | 8 | 527 | 7 | |||||||||||
Real estate term other - AQR substandard | 1,213 | — | — | — | |||||||||||
Consumer secured by 1st deeds of trust - AQR pass | 127 | 3 | 141 | 4 | |||||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 309 | 2 | 103 | 1 | |||||||||||
Consumer other - AQR substandard | 95 | — | — | — | |||||||||||
Total Impaired Loans | $28,496 | $128 | $39,457 | $292 |
Six Months Ended June 30, | 2019 | 2018 | |||||||||||||
(In Thousands) | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||
With no related allowance recorded | |||||||||||||||
Commercial - AQR pass | $1,073 | $35 | $— | $— | |||||||||||
Commercial - AQR special mention | — | — | 2,232 | 65 | |||||||||||
Commercial - AQR substandard | 16,995 | 185 | 24,637 | 257 | |||||||||||
Real estate construction one-to-four family - AQR substandard | 2,427 | — | — | — | |||||||||||
Real estate term owner occupied- AQR substandard | 5,895 | 48 | 4,583 | 77 | |||||||||||
Real estate term non-owner occupied- AQR pass | 283 | 10 | 339 | 11 | |||||||||||
Real estate term non-owner occupied- AQR special mention | — | 2 | 44 | 2 | |||||||||||
Real estate term non-owner occupied- AQR substandard | 463 | — | 477 | 15 | |||||||||||
Real estate term other - AQR pass | 467 | 16 | 539 | 16 | |||||||||||
Real estate term other - AQR substandard | 897 | — | — | — | |||||||||||
Consumer secured by 1st deeds of trust - AQR pass | 128 | 6 | 139 | 7 | |||||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 278 | 3 | 175 | 6 | |||||||||||
Consumer other - AQR substandard | 48 | — | — | — | |||||||||||
Subtotal | $28,954 | $305 | $33,165 | $456 |
With an allowance recorded | |||||||||||||||
Commercial - AQR substandard | $881 | $— | $3,773 | $7 | |||||||||||
Commercial - AQR doubtful | — | — | 27 | — | |||||||||||
Real estate term other - AQR substandard | 328 | — | — | — | |||||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 108 | — | 120 | — | |||||||||||
Subtotal | $1,317 | $— | $3,920 | $7 |
Total | |||||||||||||||
Commercial - AQR pass | $1,073 | $35 | $— | $— | |||||||||||
Commercial - AQR special mention | — | — | 2,232 | 65 | |||||||||||
Commercial - AQR substandard | 17,876 | 185 | 28,410 | 264 | |||||||||||
Commercial - AQR doubtful | — | — | 27 | — | |||||||||||
Real estate construction one-to-four family - AQR substandard | 2,427 | — | — | — | |||||||||||
Real estate term owner-occupied - AQR substandard | 5,895 | 48 | 4,583 | 77 | |||||||||||
Real estate term non-owner occupied - AQR pass | 283 | 10 | 339 | 11 | |||||||||||
Real estate term non-owner occupied - AQR special mention | — | 2 | 44 | 2 | |||||||||||
Real estate term non-owner occupied - AQR substandard | 463 | — | 477 | 15 | |||||||||||
Real estate term other - AQR pass | 467 | 16 | 539 | 16 | |||||||||||
Real estate term other - AQR substandard | 1,225 | — | — | — | |||||||||||
Consumer secured by 1st deeds of trust - AQR pass | 128 | 6 | 139 | 7 | |||||||||||
Consumer secured by 1st deeds of trust - AQR substandard | 386 | 3 | 295 | 6 | |||||||||||
Consumer other - AQR substandard | 48 | — | — | — | |||||||||||
Total Impaired Loans | $30,271 | $305 | $37,085 | $463 |
Accrual Status | Nonaccrual Status | Total Modifications | |||||||||
(In Thousands) | |||||||||||
New Troubled Debt Restructurings | |||||||||||
Commercial - AQR substandard | $318 | $1,461 | $1,779 | ||||||||
Real estate term owner occupied - AQR substandard | — | 189 | 189 | ||||||||
Subtotal | $318 | $1,650 | $1,968 | ||||||||
Existing Troubled Debt Restructurings | $1,327 | $8,000 | $9,327 | ||||||||
Total | $1,645 | $9,650 | $11,295 |
June 30, 2019 | |||||||||||||||||||||
Number of Contracts | Rate Modification | Term Modification | Payment Modification | Combination Modification | Total Modifications | ||||||||||||||||
(In Thousands) | |||||||||||||||||||||
Pre-Modification Outstanding Recorded Investment: | |||||||||||||||||||||
Commercial - AQR substandard | 5 | $— | $— | $509 | $1,350 | $1,859 | |||||||||||||||
Real estate term owner occupied- AQR substandard | 1 | — | — | 192 | — | 192 | |||||||||||||||
Total | 6 | $— | $— | $701 | $1,350 | $2,051 | |||||||||||||||
Post-Modification Outstanding Recorded Investment: | |||||||||||||||||||||
Commercial - AQR substandard | 5 | $— | $— | $433 | $1,346 | $1,779 | |||||||||||||||
Real estate term owner occupied- AQR substandard | 1 | — | — | 189 | — | 189 | |||||||||||||||
Total | 6 | $— | $— | $622 | $1,346 | $1,968 |
June 30, 2018 | |||||||||||||||||||||
Number of Contracts | Rate Modification | Term Modification | Payment Modification | Combination Modification | Total Modifications | ||||||||||||||||
(In Thousands) | |||||||||||||||||||||
Pre-Modification Outstanding Recorded Investment: | |||||||||||||||||||||
Commercial - AQR substandard | 4 | $— | $— | $2,704 | $— | $2,704 | |||||||||||||||
Real estate term owner occupied- AQR substandard | 2 | — | — | 1,694 | — | 1,694 | |||||||||||||||
Total | 6 | $— | $— | $4,398 | $— | $4,398 | |||||||||||||||
Post-Modification Outstanding Recorded Investment: | |||||||||||||||||||||
Commercial - AQR substandard | 4 | $— | $— | $1,738 | $— | $1,738 | |||||||||||||||
Real estate term owner occupied- AQR substandard | 2 | — | — | 1,694 | — | 1,694 | |||||||||||||||
Total | 6 | $— | $— | $3,432 | $— | $3,432 |
June 30, 2019 | June 30, 2018 | |||||||||
Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||
(In Thousands) | ||||||||||
Troubled Debt Restructurings that Subsequently Defaulted: | ||||||||||
Commercial - AQR substandard | — | $— | 2 | $559 | ||||||
Total | — | $— | 2 | $559 |
Three Months Ended June 30, | Commercial | Real estate construction one-to-four family | Real estate construction other | Real estate term owner occupied | Real estate term non-owner occupied | Real estate term other | Consumer secured by 1st deed of trust | Consumer other | Unallocated | Total | ||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||
Balance, beginning of period | $6,478 | $659 | $1,367 | $2,320 | $6,122 | $844 | $396 | $501 | $1,522 | $20,209 | ||||||||||||||||||||
Charge-Offs | (64 | ) | — | — | — | — | — | — | (4 | ) | — | (68 | ) | |||||||||||||||||
Recoveries | 48 | — | — | — | — | 25 | — | 4 | — | 77 | ||||||||||||||||||||
Provision (benefit) | 661 | 80 | (255 | ) | (39 | ) | 109 | (108 | ) | (74 | ) | (15 | ) | (59 | ) | 300 | ||||||||||||||
Balance, end of period | $7,123 | $739 | $1,112 | $2,281 | $6,231 | $761 | $322 | $486 | $1,463 | $20,518 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Individually evaluated | ||||||||||||||||||||||||||||||
for impairment | $6 | $— | $— | $— | $— | $— | $— | $— | $— | $6 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Collectively evaluated | ||||||||||||||||||||||||||||||
for impairment | $7,117 | $739 | $1,112 | $2,281 | $6,231 | $761 | $322 | $486 | $1,463 | $20,512 | ||||||||||||||||||||
2018 | ||||||||||||||||||||||||||||||
Balance, beginning of period | $5,684 | $608 | $1,069 | $2,174 | $6,379 | $1,025 | $305 | $315 | $2,890 | $20,449 | ||||||||||||||||||||
Charge-Offs | (77 | ) | — | — | — | — | — | (2 | ) | (21 | ) | — | (100 | ) | ||||||||||||||||
Recoveries | 54 | — | — | — | — | 1 | — | 4 | — | 59 | ||||||||||||||||||||
Provision (benefit) | (35 | ) | (12 | ) | 17 | (4 | ) | (160 | ) | (25 | ) | 49 | 98 | (228 | ) | (300 | ) | |||||||||||||
Balance, end of period | $5,626 | $596 | $1,086 | $2,170 | $6,219 | $1,001 | $352 | $396 | $2,662 | $20,108 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Individually evaluated | ||||||||||||||||||||||||||||||
for impairment | $73 | $— | $— | $— | $— | $— | $— | $— | $— | $73 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Collectively evaluated | ||||||||||||||||||||||||||||||
for impairment | $5,553 | $596 | $1,086 | $2,170 | $6,219 | $1,001 | $352 | $396 | $2,662 | $20,035 |
Six Months Ended June 30, | Commercial | Real estate construction one-to-four family | Real estate construction other | Real estate term owner occupied | Real estate term non-owner occupied | Real estate term other | Consumer secured by 1st deed of trust | Consumer other | Unallocated | Total | ||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||
Balance, beginning of period | $5,660 | $675 | $1,275 | $2,027 | $5,799 | $716 | $306 | $426 | $2,635 | $19,519 | ||||||||||||||||||||
Charge-Offs | (173 | ) | — | — | — | — | — | — | (4 | ) | — | (177 | ) | |||||||||||||||||
Recoveries | 92 | — | — | — | — | 27 | — | 7 | — | 126 | ||||||||||||||||||||
Provision (benefit) | 1,544 | 64 | (163 | ) | 254 | 432 | 18 | 16 | 57 | (1,172 | ) | 1,050 | ||||||||||||||||||
Balance, end of period | $7,123 | $739 | $1,112 | $2,281 | $6,231 | $761 | $322 | $486 | $1,463 | $20,518 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Individually evaluated | ||||||||||||||||||||||||||||||
for impairment | $6 | $— | $— | $— | $— | $— | $— | $— | $— | $6 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Collectively evaluated | ||||||||||||||||||||||||||||||
for impairment | $7,117 | $739 | $1,112 | $2,281 | $6,231 | $761 | $322 | $486 | $1,463 | $20,512 | ||||||||||||||||||||
2018 | ||||||||||||||||||||||||||||||
Balance, beginning of period | $6,172 | $629 | $1,566 | $2,194 | $6,043 | $725 | $315 | $307 | $3,510 | $21,461 | ||||||||||||||||||||
Charge-Offs | (1,042 | ) | — | — | — | — | — | (91 | ) | (71 | ) | — | (1,204 | ) | ||||||||||||||||
Recoveries | 143 | — | — | — | — | 2 | 1 | 5 | — | 151 | ||||||||||||||||||||
Provision (benefit) | 353 | (33 | ) | (480 | ) | (24 | ) | 176 | 274 | 127 | 155 | (848 | ) | (300 | ) | |||||||||||||||
Balance, end of period | $5,626 | $596 | $1,086 | $2,170 | $6,219 | $1,001 | $352 | $396 | $2,662 | $20,108 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Individually evaluated | ||||||||||||||||||||||||||||||
for impairment | $73 | $— | $— | $— | $— | $— | $— | $— | $— | $73 | ||||||||||||||||||||
Balance, end of period: | ||||||||||||||||||||||||||||||
Collectively evaluated | ||||||||||||||||||||||||||||||
for impairment | $5,553 | $596 | $1,086 | $2,170 | $6,219 | $1,001 | $352 | $396 | $2,662 | $20,035 |
(In Thousands) | Commercial | Real estate construction one-to-four family | Real estate construction other | Real estate term owner occupied | Real estate term non-owner occupied | Real estate term other | Consumer secured by 1st deed of trust | Consumer other | Total | ||||||||||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||||||||||||||||
Balance, end of period | $385,953 | $38,851 | $58,380 | $126,360 | $324,104 | $41,658 | $16,848 | $23,550 | $1,015,704 | ||||||||||||||||||||||||||
Balance, end of period: | |||||||||||||||||||||||||||||||||||
Individually evaluated | |||||||||||||||||||||||||||||||||||
for impairment | $17,354 | $1,492 | $— | $5,713 | $269 | $1,645 | $430 | $93 | $26,996 | ||||||||||||||||||||||||||
Balance, end of period: | |||||||||||||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||||||||
for impairment | $368,599 | $37,359 | $58,380 | $120,647 | $323,835 | $40,013 | $16,418 | $23,457 | $988,708 | ||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
Balance, end of period | $341,091 | $36,828 | $71,658 | $125,795 | $324,198 | $41,746 | $19,234 | $23,796 | $984,346 | ||||||||||||||||||||||||||
Balance, end of period: | |||||||||||||||||||||||||||||||||||
Individually evaluated | |||||||||||||||||||||||||||||||||||
for impairment | $24,189 | $— | $— | $5,253 | $760 | $1,063 | $449 | $— | $31,714 | ||||||||||||||||||||||||||
Balance, end of period: | |||||||||||||||||||||||||||||||||||
Collectively evaluated | |||||||||||||||||||||||||||||||||||
for impairment | $316,902 | $36,828 | $71,658 | $120,542 | $323,438 | $40,683 | $18,785 | $23,796 | $952,632 |
(In Thousands) | Commercial | Real estate construction one-to-four family | Real estate construction other | Real estate term owner occupied | Real estate term non-owner occupied | Real estate term other | Consumer secured by 1st deeds of trust | Consumer other | Unallocated | Total | ||||||||||||||||||||
June 30, 2019 | ||||||||||||||||||||||||||||||
Individually evaluated for impairment: | ||||||||||||||||||||||||||||||
AQR Substandard | $6 | $— | $— | $— | $— | $— | $— | $— | $— | $6 | ||||||||||||||||||||
Collectively evaluated for impairment: | ||||||||||||||||||||||||||||||
AQR Pass | 6,990 | 739 | 1,112 | 2,210 | 5,785 | 761 | 322 | 471 | — | 18,390 | ||||||||||||||||||||
AQR Special Mention | 121 | — | — | 71 | 446 | — | — | — | — | 638 | ||||||||||||||||||||
AQR Substandard | 6 | — | — | — | — | — | — | 15 | — | 21 | ||||||||||||||||||||
Unallocated | — | — | — | — | — | — | — | — | 1,463 | 1,463 | ||||||||||||||||||||
$7,123 | $739 | $1,112 | $2,281 | $6,231 | $761 | $322 | $486 | $1,463 | $20,518 | |||||||||||||||||||||
December 31, 2018 | ||||||||||||||||||||||||||||||
Individually evaluated for impairment: | ||||||||||||||||||||||||||||||
AQR Substandard | $14 | $— | $— | $— | $— | $— | $— | $— | $— | $14 | ||||||||||||||||||||
Collectively evaluated for impairment: | ||||||||||||||||||||||||||||||
AQR Pass | 5,522 | 615 | 1,275 | 1,958 | 5,236 | 683 | 303 | 413 | — | 16,005 | ||||||||||||||||||||
AQR Special Mention | 121 | 60 | — | 69 | 563 | 12 | 3 | — | — | 828 | ||||||||||||||||||||
AQR Substandard | 3 | — | — | — | — | 21 | — | 13 | — | 37 | ||||||||||||||||||||
Unallocated | — | — | — | — | — | — | — | — | 2,635 | 2,635 | ||||||||||||||||||||
$5,660 | $675 | $1,275 | $2,027 | $5,799 | $716 | $306 | $426 | $2,635 | $19,519 |
(In Thousands) | June 30, 2019 | December 31, 2018 | ||||
Purchased receivables | $13,212 | $14,596 | ||||
Reserve for purchased receivable losses | (98 | ) | (190 | ) | ||
Total | $13,114 | $14,406 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
(In Thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||
Balance, beginning of period | $141 | $209 | $190 | $200 | ||||||||
Charge-offs | — | — | — | — | ||||||||
Recoveries | — | — | — | — | ||||||||
Charge-offs net of recoveries | — | — | — | — | ||||||||
(Benefit) reserve for purchased receivables | (43 | ) | (8 | ) | (92 | ) | 1 | |||||
Balance, end of period | $98 | $201 | $98 | $201 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
(In Thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||
Balance, beginning of period | $11,254 | $8,039 | $10,821 | $7,305 | ||||||||
Additions for new MSR capitalized | 532 | 812 | 1,639 | 1,572 | ||||||||
Changes in fair value: | ||||||||||||
Due to changes in model inputs of assumptions (1) | (630 | ) | 110 | (1,007 | ) | 365 | ||||||
Other (2) | (320 | ) | (228 | ) | (617 | ) | (509 | ) | ||||
Balance, end of period | $10,836 | $8,733 | $10,836 | $8,733 |
(In Thousands) | June 30, 2019 | December 31, 2018 | ||||
Balance of mortgage loans serviced for others | $598,415 | $557,583 | ||||
MSR as a percentage of serviced loans | 1.81 | % | 1.94 | % |
2019 | 2018 | |||
Constant prepayment rate | 9.75 | % | 7.70 | % |
Discount rate | 9.60 | % | 9.94 | % |
(In Thousands) | June 30, 2019 | December 31, 2018 | |||||||
Aggregate portfolio principal balance | $598,415 | $557,583 | |||||||
Weighted average rate of note | 3.96 | % | 3.91 | % | |||||
June 30, 2019 | Base | 1.0% Adverse Rate Change | 2.0% Adverse Rate Change | ||||||
Constant prepayment rate | 9.75 | % | 23.69 | % | 25.40 | % | |||
Discount rate | 9.60 | % | 8.60 | % | 7.60 | % | |||
Fair value MSR | $10,836 | $6,828 | $6,536 | ||||||
Percentage of MSR | 1.81 | % | 1.14 | % | 1.09 | % | |||
December 31, 2018 | |||||||||
Constant prepayment rate | 7.70 | % | 19.35 | % | 20.95 | % | |||
Discount rate | 9.94 | % | 8.94 | % | 7.94 | % | |||
Fair value MSR | $10,821 | $7,115 | $6,829 | ||||||
Percentage of MSR | 1.94 | % | 1.28 | % | 1.22 | % |
(In Thousands) | Asset Derivatives | ||||||
June 30, 2019 | December 31, 2018 | ||||||
Balance Sheet Location | Fair Value | Fair Value | |||||
Interest rate swaps | Other assets | $2,504 | $246 | ||||
Interest rate lock commitments | Other assets | 2,072 | 978 | ||||
Total | $4,576 | $1,224 |
(In Thousands) | Liability Derivatives | ||||||
June 30, 2019 | December 31, 2018 | ||||||
Balance Sheet Location | Fair Value | Fair Value | |||||
Interest rate swaps | Other liabilities | $2,504 | $246 | ||||
Retail interest rate contracts | Other liabilities | 257 | 262 | ||||
Total | $2,761 | $508 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(In Thousands) | Income Statement Location | 2019 | 2018 | 2019 | 2018 | ||||||||
Retail interest rate contracts | Mortgage banking income | ($524 | ) | $15 | ($692 | ) | $373 | ||||||
Interest rate lock commitments | Mortgage banking income | 781 | 62 | 1,005 | 484 | ||||||||
Total | $257 | $77 | $313 | $857 |
June 30, 2019 | Gross amounts not offset in the Statement of Financial Position | ||||||||||||||
(In Thousands) | Gross amounts of recognized assets and liabilities | Gross amounts offset in the Statement of Financial Position | Net amounts of assets and liabilities presented in the Statement of Financial Position | Financial Instruments | Collateral Posted | Net Amount | |||||||||
Asset Derivatives | |||||||||||||||
Interest rate swaps | $2,504 | $— | $2,504 | $— | $— | $2,504 | |||||||||
Liability Derivatives | |||||||||||||||
Interest rate swaps | $2,504 | $— | $2,504 | $— | $1,709 | $795 | |||||||||
Retail interest rate contracts | 257 | — | 257 | — | — | 257 | |||||||||
December 31, 2018 | Gross amounts not offset in the Statement of Financial Position | ||||||||||||||
(In Thousands) | Gross amounts of recognized assets and liabilities | Gross amounts offset in the Statement of Financial Position | Net amounts of assets and liabilities presented in the Statement of Financial Position | Financial Instruments | Collateral Posted | Net Amount | |||||||||
Asset Derivatives | |||||||||||||||
Interest rate swaps | $246 | $— | $246 | $— | $— | $246 | |||||||||
Liability Derivatives | |||||||||||||||
Interest rate swaps | $246 | $— | $246 | $— | $246 | $— | |||||||||
Retail interest rate contracts | 262 | — | 262 | — | — | 262 |
• | Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. A quoted market price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available. A contractually binding sales price also provides reliable evidence of fair value. |
• | Level 2: Valuation is based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. |
• | Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market, or inputs that require significant management judgment or estimation, some of which may be internally developed. |
June 30, 2019 | December 31, 2018 | ||||||||||||||
(In Thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||
Financial assets: | |||||||||||||||
Level 1 inputs: | |||||||||||||||
Cash, due from banks and deposits in other banks | $70,831 | $70,831 | $77,538 | $77,538 | |||||||||||
Investment securities available for sale | 75,229 | 75,229 | 74,549 | 74,549 | |||||||||||
Marketable equity securities | 7,916 | 7,916 | 7,265 | 7,265 | |||||||||||
Level 2 inputs: | |||||||||||||||
Investment securities available for sale | 174,757 | 174,757 | 197,061 | 197,061 | |||||||||||
Investment in Federal Home Loan Bank stock | 2,069 | 2,069 | 2,101 | 2,101 | |||||||||||
Accrued interest receivable | 4,792 | 4,792 | 4,817 | 4,817 | |||||||||||
Interest rate swaps | 2,504 | 2,504 | 853 | 853 | |||||||||||
Level 3 inputs: | |||||||||||||||
Loans and loans held for sale | 1,077,235 | $1,055,390 | 1,019,056 | 995,115 | |||||||||||
Purchased receivables, net | 13,114 | 13,114 | 14,406 | 14,406 | |||||||||||
Interest rate lock commitments | 2,072 | 2,072 | 978 | 978 | |||||||||||
Mortgage servicing rights | 10,836 | 10,836 | 10,821 | 10,821 | |||||||||||
Commercial servicing rights | 999 | 999 | 1,030 | 1,030 | |||||||||||
Financial liabilities: | |||||||||||||||
Level 2 inputs: | |||||||||||||||
Deposits | $1,288,178 | $1,288,521 | $1,228,088 | $1,227,086 | |||||||||||
Securities sold under repurchase agreements | 864 | 864 | 34,278 | 34,278 | |||||||||||
Borrowings | 7,158 | 7,293 | 7,241 | 6,965 | |||||||||||
Accrued interest payable | 88 | 88 | 22 | 22 | |||||||||||
Interest rate swaps | 2,878 | 2,878 | 246 | 246 | |||||||||||
Retail interest rate contracts | 257 | 257 | 262 | 262 | |||||||||||
Level 3 inputs: | |||||||||||||||
Junior subordinated debentures | 10,310 | 11,415 | 10,310 | 10,809 |
(In Thousands) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
June 30, 2019 | |||||||||||||||
Assets: | |||||||||||||||
Available for sale securities | |||||||||||||||
U.S. Treasury and government sponsored entities | $182,766 | $55,348 | $127,418 | $— | |||||||||||
Municipal securities | 3,889 | — | 3,889 | — | |||||||||||
Corporate bonds | 40,400 | 19,881 | 20,519 | — | |||||||||||
Collateralized loan obligations | 22,931 | — | 22,931 | — | |||||||||||
Total available for sale securities | $249,986 | $75,229 | $174,757 | $— | |||||||||||
Marketable equity securities | $7,916 | $7,916 | $— | $— | |||||||||||
Total marketable equity securities | $7,916 | $7,916 | $— | $— | |||||||||||
Interest rate swaps | $2,504 | $— | $2,504 | $— | |||||||||||
Interest rate lock commitments | 2,072 | — | — | 2,072 | |||||||||||
Mortgage servicing rights | 10,836 | — | — | 10,836 | |||||||||||
Commercial servicing rights | 999 | — | — | 999 | |||||||||||
Total other assets | $16,411 | $— | $2,504 | $13,907 | |||||||||||
Liabilities: | |||||||||||||||
Interest rate swaps | $2,878 | $— | $2,878 | $— | |||||||||||
Retail interest rate contracts | 257 | — | 257 | — | |||||||||||
Total other liabilities | $3,135 | $— | $3,135 | $— | |||||||||||
December 31, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Available for sale securities | |||||||||||||||
U.S. Treasury and government sponsored entities | $208,860 | $54,863 | $153,997 | $— | |||||||||||
Municipal securities | 9,084 | — | 9,084 | — | |||||||||||
Corporate bonds | 39,780 | 19,686 | 20,094 | — | |||||||||||
Collateralized loan obligations | 13,886 | — | 13,886 | — | |||||||||||
Total available for sale securities | $271,610 | $74,549 | $197,061 | $— | |||||||||||
Marketable equity securities | $7,265 | $7,265 | $— | $— | |||||||||||
Total marketable securities | $7,265 | $7,265 | $— | $— | |||||||||||
Interest rate swaps | $853 | $— | $853 | $— | |||||||||||
Interest rate lock commitments | 978 | — | — | 978 | |||||||||||
Mortgage servicing rights | 10,821 | — | — | 10,821 | |||||||||||
Commercial servicing rights | 1,030 | — | — | 1,030 | |||||||||||
Total other assets | $13,682 | $— | $853 | $12,829 | |||||||||||
Liabilities: | |||||||||||||||
Interest rate swaps | $246 | $— | $246 | $— | |||||||||||
Retail interest rate contracts | 262 | — | 262 | — | |||||||||||
Total other liabilities | $508 | $— | $508 | $— |
(In Thousands) | Beginning balance | Change included in earnings | Purchases and issuances | Sales and settlements | Ending balance | Net change in unrealized gains (losses) relating to items held at end of period | ||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||
Interest rate lock commitments | $1,237 | ($549 | ) | $5,094 | ($3,710 | ) | $2,072 | $2,072 | ||||||||||
Mortgage servicing rights | 11,254 | (950 | ) | 532 | — | 10,836 | — | |||||||||||
Commercial servicing rights | 1,047 | (75 | ) | 27 | — | 999 | — | |||||||||||
Total | $13,538 | ($1,574 | ) | $5,653 | ($3,710 | ) | $13,907 | $2,072 | ||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||
Interest rate lock commitments | $1,323 | ($602 | ) | $5,800 | ($5,104 | ) | $1,417 | $1,417 | ||||||||||
Mortgage servicing rights | 8,039 | (118 | ) | 812 | — | 8,733 | — | |||||||||||
Total | $9,362 | ($720 | ) | $6,612 | ($5,104 | ) | $10,150 | $1,417 |
(In Thousands) | Beginning balance | Change included in earnings | Purchases and issuances | Sales and settlements | Ending balance | Net change in unrealized gains (losses) relating to items held at end of period | ||||||||||||
Six Months Ended June 30, 2019 | ||||||||||||||||||
Interest rate lock commitments | $978 | ($878 | ) | $8,190 | ($6,218 | ) | $2,072 | $2,072 | ||||||||||
Mortgage servicing rights | 10,821 | (1,624 | ) | 1,639 | — | 10,836 | — | |||||||||||
Commercial servicing rights | 1,030 | (98 | ) | 67 | — | 999 | — | |||||||||||
Total | $12,829 | ($2,600 | ) | $9,896 | ($6,218 | ) | $13,907 | $2,072 | ||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||||
Interest rate lock commitments | $873 | ($1,002 | ) | $9,484 | ($7,938 | ) | $1,417 | $1,417 | ||||||||||
Mortgage servicing rights | 7,305 | (144 | ) | 1,572 | — | 8,733 | — | |||||||||||
Total | $8,178 | ($1,146 | ) | $11,056 | ($7,938 | ) | $10,150 | $1,417 |
(In Thousands) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
June 30, 2019 | |||||||||||||||
Loans measured for impairment | $914 | $— | $— | $914 | |||||||||||
Total | $914 | $— | $— | $914 | |||||||||||
December 31, 2018 | |||||||||||||||
Loans measured for impairment | $848 | $— | $— | $848 | |||||||||||
Other assets - equity method investment | 709 | — | — | 709 | |||||||||||
Total | $1,557 | $— | $— | $1,557 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In Thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Loans measured for impairment | ($299 | ) | ($299 | ) | ($7 | ) | ($893 | ) | ||||||
Total loss from nonrecurring measurements | ($299 | ) | ($299 | ) | ($7 | ) | ($893 | ) |
Financial Instrument | Valuation Technique | Unobservable Input | Weighted Average Rate Range | |
June 30, 2019 | ||||
Loans measured for impairment | In-house valuation of collateral | Discount rate | 15% - 75% | |
Interest rate lock commitment | External pricing model | Pull through rate | 91.62 | % |
Mortgage servicing rights | Discounted cash flow | Constant prepayment rate | 6.69% - 9.78% | |
Discount rate | 9.60% - 10.00% | |||
Commercial servicing rights | Discounted cash flow | Constant prepayment rate | 7.64% - 15.67% | |
Discount rate | 11.49 | % | ||
December 31, 2018 | ||||
Loans measured for impairment | In-house valuation of collateral | Discount rate | 65 | % |
Discounted cash flow | Discount rate | 8.25% - 8.50% | ||
Interest rate lock commitment | External pricing model | Pull through rate | 91.66 | % |
Mortgage servicing rights | Discounted cash flow | Constant prepayment rate | 7.62 % - 9.87% | |
Discount rate | 9.93% - 10.47% | |||
Commercial servicing rights | Discounted cash flow | Constant prepayment rate | 7.64% - 15.67% | |
Discount rate | 11.49 | % |
Three Months Ended June 30, 2019 | |||||||||||
(In Thousands) | Community Banking | Home Mortgage Lending | Consolidated | ||||||||
Interest income | $16,758 | $548 | $17,306 | ||||||||
Interest expense | 1,125 | 224 | 1,349 | ||||||||
Net interest income | 15,633 | 324 | 15,957 | ||||||||
Provision for loan losses | 300 | — | 300 | ||||||||
Other operating income | 3,619 | 5,950 | 9,569 | ||||||||
Other operating expense | 14,111 | 5,708 | 19,819 | ||||||||
Income before provision for income taxes | 4,841 | 566 | 5,407 | ||||||||
Provision for income taxes | 984 | 162 | 1,146 | ||||||||
Net income | $3,857 | $404 | $4,261 |
Three Months Ended June 30, 2018 | |||||||||||
(In Thousands) | Community Banking | Home Mortgage Lending | Consolidated | ||||||||
Interest income | $15,057 | $538 | $15,595 | ||||||||
Interest expense | 443 | 163 | 606 | ||||||||
Net interest income | 14,614 | 375 | 14,989 | ||||||||
Benefit for loan losses | (300 | ) | — | (300 | ) | ||||||
Other operating income | 2,836 | 5,478 | 8,314 | ||||||||
Other operating expense | 11,748 | 4,858 | 16,606 | ||||||||
Income before provision for income taxes | 6,002 | 995 | 6,997 | ||||||||
Provision for income taxes | 882 | 285 | 1,167 | ||||||||
Net income | $5,120 | $710 | $5,830 |
Six Months Ended June 30, 2019 | |||||||||||
(In Thousands) | Community Banking | Home Mortgage Lending | Consolidated | ||||||||
Interest income | $33,269 | $915 | $34,184 | ||||||||
Interest expense | 2,148 | 310 | 2,458 | ||||||||
Net interest income | 31,121 | 605 | 31,726 | ||||||||
Provision for loan losses | 1,050 | — | 1,050 | ||||||||
Other operating income | 6,854 | 10,248 | 17,102 | ||||||||
Other operating expense | 26,629 | 10,270 | 36,899 | ||||||||
Income before provision for income taxes | 10,296 | 583 | 10,879 | ||||||||
Provision for income taxes | 2,139 | 167 | 2,306 | ||||||||
Net income | $8,157 | $416 | $8,573 |
Six Months Ended June 30, 2018 | |||||||||||
(In Thousands) | Community Banking | Home Mortgage Lending | Consolidated | ||||||||
Interest income | $29,520 | $870 | $30,390 | ||||||||
Interest expense | 870 | 268 | 1,138 | ||||||||
Net interest income | 28,650 | 602 | 29,252 | ||||||||
Benefit for loan losses | (300 | ) | — | (300 | ) | ||||||
Other operating income | 5,354 | 10,422 | 15,776 | ||||||||
Other operating expense | 24,115 | 9,286 | 33,401 | ||||||||
Income before provision for income taxes | 10,189 | 1,738 | 11,927 | ||||||||
Provision for income taxes | 1,541 | 494 | 2,035 | ||||||||
Net income | $8,648 | $1,244 | $9,892 |
June 30, 2019 | |||||||||||
(In Thousands) | Community Banking | Home Mortgage Lending | Consolidated | ||||||||
Total assets | $1,458,014 | $94,756 | $1,552,770 | ||||||||
Loans held for sale | $— | $61,531 | $61,531 |
December 31, 2018 | |||||||||||
(In Thousands) | Community Banking | Home Mortgage Lending | Consolidated | ||||||||
Total assets | $1,443,745 | $59,243 | $1,502,988 | ||||||||
Loans held for sale | $— | $34,710 | $34,710 |
• | Total revenue in the second quarter of 2019, which includes net interest income plus other operating income, increased 10% to $25.5 million from $23.3 million in the second quarter a year ago. |
• | Net interest income increased 6% in the second quarter of 2019 and increased 9% in the first half of 2019 compared to the same periods in 2018 mainly due to an increase in average loan balances as well as higher yields on the loan and investment portfolios. |
• | Net interest margin increased to 4.71% in the second quarter of 2019 as compared to 4.50% in the second quarter a year ago. |
• | The Company repurchased 149,373 shares of its common stock in the second quarter of 2019 at an average price of $34.79, leaving 192,193 shares available under the previously announced repurchase authorization. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2019 | 2018 | 2019 | 2018 | |||||
Return on average assets | 1.12 | % | 1.58 | % | 1.15 | % | 1.34 | % |
Return on average shareholders' equity | 8.13 | % | 11.79 | % | 8.24 | % | 10.13 | % |
Dividend payout ratio | 48.35 | % | 28.56 | % | 48.38 | % | 33.67 | % |
Writedowns | Transfers to | |||||||||||||||||||||||
(In Thousands) | Balance at March 31, 2019 | Additions this quarter | Payments this quarter | /Charge-offs this quarter | Transfers to OREO | Performing Status this quarter | Sales this quarter | Balance at June 30, 2019 | ||||||||||||||||
Commercial loans | $12,457 | $405 | ($1,591 | ) | ($64 | ) | $— | $— | $— | $11,207 | ||||||||||||||
Commercial real estate | 4,230 | 1,087 | (276 | ) | — | — | — | — | 5,041 | |||||||||||||||
Construction loans | 2,423 | — | (931 | ) | — | — | — | — | 1,492 | |||||||||||||||
Consumer loans | 406 | 97 | (159 | ) | (4 | ) | — | — | — | 340 | ||||||||||||||
Nonperforming loans guaranteed by government | (1,038 | ) | (101 | ) | — | — | — | — | — | (1,139 | ) | |||||||||||||
Total nonperforming loans | 18,478 | 1,488 | (2,957 | ) | (68 | ) | — | — | — | 16,941 | ||||||||||||||
Other real estate owned | 7,043 | — | — | — | — | — | — | 7,043 | ||||||||||||||||
Repossessed assets | 1,242 | — | — | — | — | — | (60 | ) | 1,182 | |||||||||||||||
Other real estate owned guaranteed | ||||||||||||||||||||||||
by government | (1,279 | ) | — | — | — | — | — | — | (1,279 | ) | ||||||||||||||
Total nonperforming assets, | ||||||||||||||||||||||||
net of government guarantees | $25,484 | $1,488 | ($2,957 | ) | ($68 | ) | $— | $— | ($60 | ) | $23,887 |
Writedowns | Transfers to | |||||||||||||||||||||||
(In Thousands) | Balance at March 31, 2018 | Additions this quarter | Payments this quarter | /Charge-offs this quarter | Transfers to OREO | Performing Status this quarter | Sales this quarter | Balance at June 30, 2018 | ||||||||||||||||
Commercial loans | $17,268 | $— | ($1,890 | ) | ($77 | ) | $— | ($67 | ) | $— | $15,234 | |||||||||||||
Commercial real estate | 1,331 | — | — | — | — | — | — | 1,331 | ||||||||||||||||
Construction loans | — | — | — | — | — | — | — | — | ||||||||||||||||
Consumer loans | 380 | 80 | (85 | ) | (22 | ) | (283 | ) | — | — | 70 | |||||||||||||
Nonperforming loans guaranteed by government | (412 | ) | — | 85 | — | — | — | — | (327 | ) | ||||||||||||||
Total nonperforming loans | 18,567 | 80 | (1,890 | ) | (99 | ) | (283 | ) | (67 | ) | — | 16,308 | ||||||||||||
Other real estate owned | 8,815 | 300 | — | — | — | — | (156 | ) | 8,959 | |||||||||||||||
Other real estate owned guaranteed | ||||||||||||||||||||||||
by government | (1,280 | ) | — | — | — | — | — | — | (1,280 | ) | ||||||||||||||
Total nonperforming assets, | ||||||||||||||||||||||||
net of government guarantees | $26,102 | $380 | ($1,890 | ) | ($99 | ) | ($283 | ) | ($67 | ) | ($156 | ) | $23,987 |
Three Months Ended June 30, 2019 vs. June 30, 2018 | ||
Nonaccrual interest adjustments | (0.01 | )% |
Interest rates and loan fees | 0.15 | % |
Volume and mix of interest-earning assets | 0.07 | % |
Change in net interest margin | 0.21 | % |
Six Months Ended June 30, 2019 vs. June 30, 2018 | ||
Nonaccrual interest adjustments | (0.01 | )% |
Interest rates and loan fees | 0.29 | % |
Volume and mix of interest-earning assets | 0.10 | % |
Change in net interest margin | 0.38 | % |
(Dollars in Thousands) | Three Months Ended June 30, | |||||||||||||||||||||||||||
Interest income/ | Average Yields/Costs | |||||||||||||||||||||||||||
Average Balances | Change | expense | Change | Tax Equivalent | ||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | 2019 | 2018 | Change | ||||||||||||||||||
Loans1,2 | $1,003,019 | $963,724 | $39,295 | 4 | % | $14,825 | $13,513 | $1,312 | 10 | % | 5.96 | % | 5.65 | % | 0.31 | % | ||||||||||||
Loans held for sale | 51,280 | 48,608 | 2,672 | 5 | % | 528 | 523 | 5 | 1 | % | 4.13 | % | 4.32 | % | (0.19 | )% | ||||||||||||
Short-term investments3 | 22,850 | 35,846 | (12,996 | ) | (36 | )% | 135 | 159 | (24 | ) | (15 | )% | 2.34 | % | 1.75 | % | 0.59 | % | ||||||||||
Long-term investments4 | 281,450 | 287,003 | (5,553 | ) | (2 | )% | 1,818 | 1,400 | 418 | 30 | % | 2.71 | % | 2.09 | % | 0.62 | % | |||||||||||
Total investments | 304,300 | 322,849 | (18,549 | ) | (6 | )% | 1,953 | 1,559 | 394 | 25 | % | 2.68 | % | 2.06 | % | 0.62 | % | |||||||||||
Interest-earning assets | 1,358,599 | 1,335,181 | 23,418 | 2 | % | 17,306 | 15,595 | 1,711 | 11 | % | 5.17 | % | 4.74 | % | 0.43 | % | ||||||||||||
Nonearning assets | 167,414 | 145,520 | 21,894 | 15 | % | |||||||||||||||||||||||
Total | $1,526,013 | $1,480,701 | $45,312 | 3 | % | |||||||||||||||||||||||
Interest-bearing demand | $253,553 | $247,283 | $6,270 | 3 | % | $92 | $34 | $58 | 171 | % | 0.15 | % | 0.06 | % | 0.09 | % | ||||||||||||
Savings deposits | 232,675 | 243,611 | (10,936 | ) | (4 | )% | 289 | 127 | 162 | 128 | % | 0.50 | % | 0.21 | % | 0.29 | % | |||||||||||
Money market deposits | 205,364 | 231,734 | (26,370 | ) | (11 | )% | 295 | 154 | 141 | 92 | % | 0.58 | % | 0.27 | % | 0.31 | % | |||||||||||
Time deposits | 126,530 | 95,964 | 30,566 | 32 | % | 498 | 131 | 367 | 280 | % | 1.58 | % | 0.55 | % | 1.03 | % | ||||||||||||
Total interest-bearing deposits | 818,122 | 818,592 | (470 | ) | — | % | 1,174 | 446 | 728 | 163 | % | 0.58 | % | 0.22 | % | 0.36 | % | |||||||||||
Borrowings | 44,938 | 44,897 | 41 | — | % | 175 | 160 | 15 | 9 | % | 1.53 | % | 1.40 | % | 0.13 | % | ||||||||||||
Total interest-bearing liabilities | 863,060 | 863,489 | (429 | ) | — | % | 1,349 | 606 | 743 | 123 | % | 0.63 | % | 0.28 | % | 0.35 | % | |||||||||||
Demand deposits and other noninterest-bearing liabilities | 452,623 | 418,937 | 33,686 | 8 | % | |||||||||||||||||||||||
Equity | 210,330 | 198,275 | 12,055 | 6 | % | |||||||||||||||||||||||
Total | $1,526,013 | $1,480,701 | $45,312 | 3 | % | |||||||||||||||||||||||
Net interest income | $15,957 | $14,989 | $968 | 6 | % | |||||||||||||||||||||||
Net interest margin | 4.71 | % | 4.50 | % | 0.21 | % | ||||||||||||||||||||||
Average loans to average interest-earning assets | 73.83 | % | 72.18 | % | ||||||||||||||||||||||||
Average loans to average total deposits | 80.93 | % | 79.13 | % | ||||||||||||||||||||||||
Average non-interest deposits to average total deposits | 33.99 | % | 32.79 | % | ||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 157.42 | % | 154.63 | % |
(In Thousands) | Three Months Ended June 30, 2019 vs. 2018 | ||||||||
Increase (decrease) due to | |||||||||
Volume | Rate | Total | |||||||
Interest Income: | |||||||||
Loans | $580 | $732 | $1,312 | ||||||
Loans held for sale | 28 | (23 | ) | 5 | |||||
Short-term investments | (87 | ) | 63 | (24 | ) | ||||
Long-term investments | (29 | ) | 447 | 418 | |||||
Total interest income | $492 | $1,219 | $1,711 | ||||||
Interest Expense: | |||||||||
Interest-bearing deposits | $— | $728 | $728 | ||||||
Borrowings | — | 15 | 15 | ||||||
Total interest expense | $— | $743 | $743 |
(Dollars in Thousands) | Six Months Ended June 30, | |||||||||||||||||||||||||||
Interest income/ | Average Yields/Costs | |||||||||||||||||||||||||||
Average Balances | Change | expense | Change | Tax Equivalent | ||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | 2019 | 2018 | Change | ||||||||||||||||||
Loans1,2 | $996,009 | $959,743 | $36,266 | 4 | % | $29,454 | $26,459 | $2,995 | 11 | % | 6.00 | % | 5.59 | % | 0.41 | % | ||||||||||||
Loans held for sale | 41,297 | 41,594 | (297 | ) | (1 | )% | 876 | 840 | 36 | 4 | % | 4.28 | % | 4.07 | % | 0.21 | % | |||||||||||
Short-term investments3 | 23,521 | 41,977 | (18,456 | ) | (44 | )% | 278 | 343 | (65 | ) | (19 | )% | 2.35 | % | 1.63 | % | 0.72 | % | ||||||||||
Long-term investments4 | 280,937 | 300,476 | (19,539 | ) | (7 | )% | 3,576 | 2,748 | 828 | 30 | % | 2.68 | % | 1.96 | % | 0.72 | % | |||||||||||
Total investments | 304,458 | 342,453 | (37,995 | ) | (11 | )% | 3,854 | 3,091 | 763 | 25 | % | 2.65 | % | 1.94 | % | 0.71 | % | |||||||||||
Interest-earning assets | 1,341,764 | 1,343,790 | (2,026 | ) | 0 | % | 34,184 | 30,390 | 3,794 | 12 | % | 5.20 | % | 4.61 | % | 0.59 | % | |||||||||||
Nonearning assets | 164,841 | 143,565 | 21,276 | 15 | % | |||||||||||||||||||||||
Total | $1,506,605 | $1,487,355 | $19,250 | 1 | % | |||||||||||||||||||||||
Interest-bearing demand | $247,324 | $242,961 | $4,363 | 2 | % | $145 | $58 | $87 | 150 | % | 0.12 | % | 0.05 | % | 0.07 | % | ||||||||||||
Savings deposits | 234,201 | 245,381 | (11,180 | ) | (5 | )% | 544 | 249 | 295 | 118 | % | 0.47 | % | 0.20 | % | 0.27 | % | |||||||||||
Money market deposits | 206,436 | 238,186 | (31,750 | ) | (13 | )% | 544 | 260 | 284 | 109 | % | 0.53 | % | 0.22 | % | 0.31 | % | |||||||||||
Time deposits | 121,393 | 97,510 | 23,883 | 24 | % | 879 | 251 | 628 | 250 | % | 1.46 | % | 0.52 | % | 0.94 | % | ||||||||||||
Total interest-bearing deposits | 809,354 | 824,038 | (14,684 | ) | (2 | )% | 2,112 | 818 | 1,294 | 158 | % | 0.53 | % | 0.20 | % | 0.33 | % | |||||||||||
Borrowings | 48,208 | 45,577 | 2,631 | 6 | % | 346 | 320 | 26 | 8 | % | 1.42 | % | 1.39 | % | 0.03 | % | ||||||||||||
Total interest-bearing liabilities | 857,562 | 869,615 | (12,053 | ) | (1 | )% | 2,458 | 1,138 | 1,320 | 116 | % | 0.58 | % | 0.26 | % | 0.32 | % | |||||||||||
Demand deposits and other noninterest-bearing liabilities | 439,253 | 420,847 | 18,406 | 4 | % | |||||||||||||||||||||||
Equity | 209,790 | 196,893 | 12,897 | 7 | % | |||||||||||||||||||||||
Total | $1,506,605 | $1,487,355 | $19,250 | 1 | % | |||||||||||||||||||||||
Net interest income | $31,726 | $29,252 | $2,474 | 8 | % | |||||||||||||||||||||||
Net interest margin | 4.77 | % | 4.39 | % | 0.38 | % | ||||||||||||||||||||||
Average loans to average interest-earning assets | 74.23 | % | 71.42 | % | ||||||||||||||||||||||||
Average loans to average total deposits | 81.84 | % | 78.30 | % | ||||||||||||||||||||||||
Average non-interest deposits to average total deposits | 33.50 | % | 32.77 | % | ||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 156.46 | % | 154.53 | % |
(In Thousands) | Six Months Ended June 30, 2019 vs. 2018 | ||||||||
Increase (decrease) due to | |||||||||
Volume | Rate | Total | |||||||
Interest Income: | |||||||||
Loans | $992 | $2,003 | $2,995 | ||||||
Loans held for sale | (6 | ) | 42 | 36 | |||||
Short-term investments | (171 | ) | 106 | (65 | ) | ||||
Long-term investments | (177 | ) | 1,005 | 828 | |||||
Total interest income | $638 | $3,156 | $3,794 | ||||||
Interest Expense: | |||||||||
Interest-bearing deposits | ($15 | ) | $1,309 | $1,294 | |||||
Borrowings | 19 | 7 | 26 | ||||||
Total interest expense | $4 | $1,316 | $1,320 |
June 30, 2019 | December 31, 2018 | |||||||||
Dollar Amount | Percent of Total | Dollar Amount | Percent of Total | |||||||
(In Thousands) | ||||||||||
Balance | % of total | Balance | % of total | |||||||
U.S. Treasury and government sponsored entities | $182,766 | 70.8 | % | $208,860 | 74.8 | % | ||||
Municipal securities | 3,889 | 1.5 | % | 9,084 | 3.3 | % | ||||
Corporate bonds | 40,400 | 15.7 | % | 39,780 | 14.3 | % | ||||
Collateralized loan obligations | 22,931 | 8.9 | % | 13,886 | 5.0 | % | ||||
Preferred stock | 7,916 | 3.1 | % | 7,265 | 2.6 | % | ||||
Total portfolio investments | $257,902 | $278,875 |
June 30, 2019 | December 31, 2018 | |||||||||
Dollar Amount | Percent of Total | Dollar Amount | Percent of Total | |||||||
(In Thousands) | ||||||||||
Commercial | $387,257 | 38.1 | % | $342,420 | 34.8 | % | ||||
Real estate construction one-to-four family | 39,013 | 3.8 | % | 37,111 | 3.8 | % | ||||
Real estate construction other | 58,824 | 5.8 | % | 72,256 | 7.3 | % | ||||
Real estate term owner occupied | 126,991 | 12.5 | % | 126,414 | 12.8 | % | ||||
Real estate term non-owner occupied | 325,738 | 32.1 | % | 325,720 | 33.1 | % | ||||
Real estate term other | 41,965 | 4.1 | % | 42,039 | 4.3 | % | ||||
Consumer secured by 1st deeds of trust | 16,848 | 1.7 | % | 19,228 | 2.0 | % | ||||
Consumer other | 23,386 | 2.3 | % | 23,645 | 2.4 | % | ||||
Subtotal | $1,020,022 | $988,833 | ||||||||
Less: Unearned origination fee, | ||||||||||
net of origination costs | (4,318 | ) | (0.4 | )% | (4,487 | ) | (0.5 | )% | ||
Total loans | $1,015,704 | $984,346 |
(In Thousands) | Commercial | Real estate construction one-to-four family | Real estate construction other | Real estate term owner occupied | Real estate term non-owner occupied | Real estate term other | Consumer secured by 1st deeds of trust | Consumer other | Total | ||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||||||||
AQR Pass | $45,568 | $— | $— | $5,121 | $— | $— | $— | $380 | $51,069 | ||||||||||||||||||
AQR Special Mention | 1,345 | — | — | 2,073 | 7,143 | — | — | — | 10,561 | ||||||||||||||||||
AQR Substandard | 2,739 | — | — | — | — | — | — | — | 2,739 | ||||||||||||||||||
Total | $49,652 | $— | $— | $7,194 | $7,143 | $— | $— | $380 | $64,369 | ||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||
AQR Pass | $44,512 | $— | $— | $5,216 | $— | $— | $— | $399 | $50,127 | ||||||||||||||||||
AQR Special Mention | 857 | — | — | 2,242 | 7,364 | — | — | — | 10,463 | ||||||||||||||||||
AQR Substandard | 1,723 | — | — | — | — | — | — | — | 1,723 | ||||||||||||||||||
Total | $47,092 | $— | $— | $7,458 | $7,364 | $— | $— | $399 | $62,313 |
• | A specific allocation for impaired loans. Management determines the fair value of the majority of these loans based on the underlying collateral values. This analysis is based upon a specific analysis for each impaired loan, including external appraisals on loans secured by real property, management’s assessment of the current market, recent payment history, and an evaluation of other sources of repayment. In-house evaluations of fair value are used in the impairment analysis in some situations. Inputs to the in-house evaluation process include information about sales of comparable properties in the appropriate markets and changes in tax assessed values. The Company obtains appraisals on real and personal property that secure its loans during the loan origination process in accordance with regulatory guidance and its loan policy. The Company obtains updated appraisals on loans secured by real or personal property based upon its assessment of changes in the current market or particular projects or properties, information from other current appraisals, and other sources of information. Appraisals may be adjusted downward by the Company based on its evaluation of the facts and circumstances on a case by case basis. External appraisals may be discounted when management believes that the absorption period used in the appraisal is unrealistic, when expected liquidation costs exceed those included in the appraisal, or when management’s evaluation of deteriorating market conditions warrants an adjustment. Additionally, the Company may also adjust appraisals in the above circumstances between appraisal dates. The Company uses the information provided in these updated appraisals along with its evaluation of all other information available on a particular property as it assesses the collateral coverage on its performing and nonperforming loans and the impact that may have on the adequacy of its Allowance. The specific allowance for impaired loans, as well as the overall Allowance, may |
• | A general allocation. The Company has identified segments and classes of loans not considered impaired for purposes of establishing the general allocation allowance. The Company disaggregates the loan portfolio into segments and classes based on its assessment of how different pools of loans with like characteristics in the portfolio behave over time. This determination is based on historical experience and management’s assessment of how current facts and circumstances are expected to affect the loan portfolio. |
• | An unallocated reserve. The unallocated portion of the Allowance provides for other credit losses inherent in our loan portfolio that may not have been contemplated in the specific and general components of the Allowance, and it acknowledges the inherent imprecision of all loss prediction models. The unallocated component is reviewed periodically based on trends in credit losses and overall economic conditions. At June 30, 2019 and December 31, 2018, the unallocated allowance as a percentage of the total Allowance was 7% and 13%, respectively. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In Thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Balance at beginning of period | $20,209 | $20,449 | $19,519 | $21,461 | ||||||||||
Charge-offs: | ||||||||||||||
Commercial | 64 | 77 | 173 | 1,042 | ||||||||||
Consumer secured by 1st deeds of trust | — | 2 | — | 91 | ||||||||||
Consumer other | 4 | 21 | 4 | 71 | ||||||||||
Total charge-offs | 68 | 100 | 177 | 1,204 | ||||||||||
Recoveries: | ||||||||||||||
Commercial | 48 | 54 | 92 | 143 | ||||||||||
Real estate term other | 25 | 1 | 27 | 2 | ||||||||||
Consumer secured by 1st deeds of trust | — | — | — | 1 | ||||||||||
Consumer other | 4 | 4 | 7 | 5 | ||||||||||
Total recoveries | 77 | 59 | 126 | 151 | ||||||||||
Net, (recoveries) charge-offs | (9 | ) | 41 | 51 | 1,053 | |||||||||
(Benefit) provision for loan losses | 300 | (300 | ) | 1,050 | (300 | ) | ||||||||
Balance at end of period | $20,518 | $20,108 | $20,518 | $20,108 |
June 30, 2019 | December 31, 2018 | |||||||||
(In thousands) | Balance | % of total | Balance | % of total | ||||||
Demand deposits | $435,425 | 34 | % | $420,988 | 34 | % | ||||
Interest-bearing demand | 285,664 | 22 | % | 248,056 | 20 | % | ||||
Savings deposits | 232,190 | 18 | % | 239,054 | 19 | % | ||||
Money market deposits | 204,151 | 16 | % | 206,717 | 17 | % | ||||
Time deposits | 130,748 | 10 | % | 113,273 | 9 | % | ||||
Total deposits | $1,288,178 | $1,228,088 |
Time Certificates of Deposit | |||||
of $100,000 or More | |||||
Percent of Total Deposits | |||||
(In Thousands) | Amount | ||||
Amounts maturing in: | |||||
Three months or less | $10,570 | 12 | % | ||
Over 3 through 6 months | 7,691 | 9 | % | ||
Over 6 through 12 months | 17,902 | 21 | % | ||
Over 12 months | 50,905 | 58 | % | ||
Total | $87,068 | 100 | % |
Minimum Required Capital | Well-Capitalized | Actual Ratio Company | Actual Ratio Bank | ||||
June 30, 2019 | |||||||
Total risk-based capital | 8.00% | 10.00% | 16.28% | 13.94% | |||
Tier 1 risk-based capital | 6.00% | 8.00% | 15.03% | 12.69% | |||
Common equity tier 1 capital | 4.50% | 6.50% | 14.30% | 12.69% | |||
Leverage ratio | 4.00% | 5.00% | 13.22% | 11.16% | |||
December 31, 2018 | |||||||
Total risk-based capital | 8.00% | 10.00% | 16.73% | 14.30% | |||
Tier 1 risk-based capital | 6.00% | 8.00% | 15.47% | 13.05% | |||
Common equity tier 1 capital | 4.50% | 6.50% | 14.73% | 13.05% | |||
Leverage ratio | 4.00% | 5.00% | 13.40% | 11.28% |
Total Number of Shares (or Units) Purchased | Average Price Paid per Shares (or Unit) | Total Number of Shares (or Units) Purchased as Part of the Publicly Announced Plans or Programs | Maximum Number (1) (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||
Period | (a) | (b) | (c) | (d) | |||||
Month No. 4 | |||||||||
April 1, 2019 - April 30, 2019 | 1,566 | $34.00 | 1,566 | 340,000 | |||||
Month No. 5 | |||||||||
May 1, 2019 - May 31, 2019 | 95,188 | $35.18 | 95,188 | 244,812 | |||||
Month No. 6 | |||||||||
June 1, 2019 - June 30, 2019 | 52,619 | $34.11 | 52,619 | 192,193 | |||||
Total | 149,373 | $34.79 | 149,373 | 192,193 |
101.INS | XBRL Instance Document |
101.SCH | XBRL Schema Document |
101.CAL | XBRL Calculation Linkbase Document |
101.LAB | XBRL Labels Linkbase Document |
101.PRE | XBRL Presentation Linkbase Document |
101.DEF | XBRL Definition Linkbase Document |
August 6, 2019 | By | /s/ Joseph M. Schierhorn |
Joseph M. Schierhorn | ||
Chairman, President, Chief Executive Officer and Chief Operating Officer | ||
(Principal Executive Officer) |
August 6, 2019 | By | /s/ Jed W. Ballard |
Jed W. Ballard | ||
Executive Vice President, Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
1. | I have reviewed this report on Form 10-Q of Northrim BanCorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Joseph M. Schierhorn | |
Joseph M. Schierhorn | |
Chief Executive Officer |
1. | I have reviewed this Quarterly report on Form 10-Q of Northrim BanCorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jed W. Ballard | |
Jed W. Ballard | |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Joseph M. Schierhorn | |
Joseph M. Schierhorn | |
Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jed W. Ballard | |
Jed W. Ballard | |
Chief Financial Officer |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Aug. 06, 2019 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Entity Registrant Name | NORTHRIM BANCORP INC | |
Entity Central Index Key | 0001163370 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Common Stock, Shares Outstanding | 6,673,140 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 2,500,000 | 2,500,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 6,729,456 | 6,883,216 |
Common stock, shares outstanding (in shares) | 6,729,456 | 6,883,216 |
Consolidated Statements of Income - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Interest Income | ||||
Interest and fees on loans and loans held for sale | $ 15,353,000 | $ 14,036,000 | $ 30,330,000 | $ 27,299,000 |
Interest on investment securities available for sale | 1,690,000 | 1,302,000 | 3,322,000 | 2,556,000 |
Dividends on marketable equity securities | 109,000 | 84,000 | 216,000 | 166,000 |
Dividends on Federal Home Loan Bank stock | 19,000 | 14,000 | 38,000 | 26,000 |
Interest on deposits in other banks | 135,000 | 159,000 | 278,000 | 343,000 |
Total Interest Income | 17,306,000 | 15,595,000 | 34,184,000 | 30,390,000 |
Interest Expense | ||||
Interest expense on deposits | 1,174,000 | 446,000 | 2,112,000 | 818,000 |
Interest expense on securities sold under agreements to repurchase | 18,000 | 8,000 | 40,000 | 17,000 |
Interest expense on borrowings | 62,000 | 57,000 | 119,000 | 115,000 |
Interest expense on junior subordinated debentures | 95,000 | 95,000 | 187,000 | 188,000 |
Total Interest Expense | 1,349,000 | 606,000 | 2,458,000 | 1,138,000 |
Net Interest Income | 15,957,000 | 14,989,000 | 31,726,000 | 29,252,000 |
Provision (benefit) for loan losses | 300,000 | (300,000) | 1,050,000 | (300,000) |
Net Interest Income After Provision (Benefit) for Loan Losses | 15,657,000 | 15,289,000 | 30,676,000 | 29,552,000 |
Other Operating Income | ||||
Revenue from contracts with customers | 1,608,000 | 1,519,000 | 3,036,000 | 2,861,000 |
Purchased receivable income | 837,000 | 867,000 | 1,646,000 | 1,707,000 |
Interest rate swap income | 734,000 | 0 | 734,000 | 0 |
Gain (loss) on marketable equity securities | 118,000 | (173,000) | 652,000 | (173,000) |
Gain on sale of securities, net | 0 | 0 | 23,000 | 0 |
Other income | 773,000 | 1,059,000 | 1,579,000 | 1,758,000 |
Total Other Operating Income | 9,569,000 | 8,314,000 | 17,102,000 | 15,776,000 |
Other Operating Expense | ||||
Salaries and other personnel expense | 12,945,000 | 11,362,000 | 24,247,000 | 21,947,000 |
Data processing expense | 1,796,000 | 1,323,000 | 3,475,000 | 2,871,000 |
Occupancy expense | 1,642,000 | 1,020,000 | 3,413,000 | 2,720,000 |
Marketing expense | 833,000 | 462,000 | 1,252,000 | 1,094,000 |
Professional and outside services | 684,000 | 554,000 | 1,240,000 | 1,053,000 |
Insurance expense | 232,000 | 178,000 | 490,000 | 474,000 |
OREO (income) expense, net rental income and gains on sale | 165,000 | 11,000 | (155,000) | 114,000 |
Intangible asset amortization expense | 15,000 | 17,000 | 30,000 | 35,000 |
Other operating expense | 1,507,000 | 1,679,000 | 2,907,000 | 3,093,000 |
Total Other Operating Expense | 19,819,000 | 16,606,000 | 36,899,000 | 33,401,000 |
Income Before Provision for Income Taxes | 5,407,000 | 6,997,000 | 10,879,000 | 11,927,000 |
Provision for income taxes | 1,146,000 | 1,167,000 | 2,306,000 | 2,035,000 |
Net Income | $ 4,261,000 | $ 5,830,000 | $ 8,573,000 | $ 9,892,000 |
Earnings Per Share, Basic (in USD per share) | $ 0.62 | $ 0.85 | $ 1.25 | $ 1.44 |
Earnings Per Share, Diluted (in USD per share) | $ 0.62 | $ 0.84 | $ 1.24 | $ 1.42 |
Weighted Average Shares Outstanding, Basic (in shares) | 6,798,352 | 6,872,371 | 6,838,986 | 6,872,167 |
Weighted Average Shares Outstanding, Diluted (in shares) | 6,896,687 | 6,976,985 | 6,939,338 | 6,972,744 |
Mortgage banking income | ||||
Other Operating Income | ||||
Revenue from contracts with customers | $ 5,950,000 | $ 5,478,000 | $ 10,248,000 | $ 10,422,000 |
Bankcard fees | ||||
Other Operating Income | ||||
Revenue from contracts with customers | 744,000 | 707,000 | 1,394,000 | 1,332,000 |
Service charges on deposit accounts | ||||
Other Operating Income | ||||
Revenue from contracts with customers | $ 413,000 | $ 376,000 | $ 826,000 | $ 730,000 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,261 | $ 5,830 | $ 8,573 | $ 9,892 |
Securities available for sale: | ||||
Unrealized gains (losses) arising during the period | 1,300 | (119) | 2,733 | (1,107) |
Reclassification of net (gains) losses included in net income (net of tax (benefit) expense) of $0 for the second quarters of 2019 and 2018, and $0 and $7 for the six months ended June 30, 2019 and 2018, respectively) | 0 | 0 | (16) | 0 |
Derivatives and hedging activities: | ||||
Unrealized (losses) gains arising during the period | (588) | 154 | (981) | 621 |
Income tax (expense) benefit related to unrealized gains and losses | (370) | 143 | (719) | 246 |
Other comprehensive income (loss), net of tax | 342 | 178 | 1,017 | (240) |
Comprehensive income | $ 4,603 | $ 6,008 | $ 9,590 | $ 9,652 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Reclassification of net (gains) losses, tax (benefit) expense | $ 0 | $ 0 | $ 7 | $ 0 |
Basis of Presentation and Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The accompanying unaudited consolidated financial statements and corresponding footnotes have been prepared by Northrim BanCorp, Inc. (the “Company”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The year-end Consolidated Balance Sheet data was derived from the Company's audited financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company owns a 100% interest in Residential Mortgage Holding Company, LLC, the parent company of Residential Mortgage, LLC (collectively "RML") and consolidates their balance sheets and income statement into its financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company determined that it operates in two primary operating segments: Community Banking and Home Mortgage Lending. The Company has evaluated subsequent events and transactions for potential recognition or disclosure. Operating results for the interim period ended June 30, 2019 are not necessarily indicative of the results anticipated for the year ending December 31, 2019. These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company’s significant accounting policies are discussed in Note 1 to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or total shareholders' equity. Recent Accounting Pronouncements Accounting pronouncements implemented in 2019 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements ("ASU 2018-11") to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02. Specifically, under the amendments in ASU 2018-11: (1) entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and (2) lessors may elect not to separate lease and non-lease components when certain conditions are met. The Company adopted ASU 2016-02 on January 1, 2019, utilizing the modified retrospective approach provided under the transition option in ASU 2018-11 for leases that exist on, or are entered into, after the adoption date. Accordingly, ASU 2016-02 has not been applied to comparative periods included in the Company's financial statements. The Company also elected certain relief options offered in ASU 2016-02 and ASU 2018-11, including the practical expedient on not separating lease components from nonlease components for all operating leases and instead to account for them as a single lease component and the option not to recognize right-of-use assets and lease liabilities that arise from short-term leases (i.e., leases with terms of twelve months or less). The Company did not elect the hindsight practical expedient, which allows entities to use hindsight when determining lease term and impairment of right-of-use assets. The Company has several lease agreements, such as branch locations, which were considered operating leases prior to the adoption of ASU 2016-02, and therefore, were not recognized on the Company’s consolidated statements of condition. The Company recognized these lease agreements on the consolidated balance sheets as a $15.9 million right-of-use asset and a $15.9 million lease liability upon adoption of ASU 2016-02 on January 1, 2019. The adoption of ASU 2016-02 did not have an impact on the Company’s consolidated statements of income. Accounting pronouncements to be implemented in future periods In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The standard requires the measurement of all expected credit losses for certain financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates, but will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. ASU 2016-13 requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization's portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, ASU 2016-03 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-03 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2019. Early application will be permitted for specified periods. ASU 2016-13 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019, and must be applied prospectively. The Company is in the process of implementing this new standard. A cross-functional team is evaluating data elements, modeling options, and the application of reasonable and supportable forecasts that are expected to be critical to the new process for estimating credit losses and has engaged external consulting services related to this effort. An estimate of the impact of this standard on the Company's consolidated financial position and results of operations has not yet been determined; however, the impact on the Company's process for calculating the allowance for loan losses ("Allowance") is expected to be significant. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (“ASU 2017-04”). ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019, and must be applied on a prospective basis. The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial position or results of operations. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019. The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial position or results of operations. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company's next annual reporting period; early adoption is permitted. The Company previously adopted both ASU 2017-12 and ASU 2016-01 and does not expect that the amendments of ASU 2019-04 will have a material impact on the Company’s consolidated financial position or results of operations. The Company is continuing to evaluate the impact of ASU 2016-13 and will consider the amendments of ASU 2019-04 as part of that process. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326) (“ASU 2019-05”). ASU 2019-05 provides entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments. ASU 2019-05 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019. The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial position or results of operations. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We adopted ASU 2016-02 using the modified retrospective approach with an effective date as of January 1, 2019. Prior year financial statements were not recast under the new standard and, therefore, those amounts are not presented below. We elected the package of transition provisions available for expired or existing contracts, which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company also elected the practical expedient on not separating lease components from nonlease components for all operating leases. Additionally, the Company has elected to not apply ASU 2016-02 to short-term leases. Short-term leases are those leases that, at the lease commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company has lease agreements for land and office facilities that it occupies to operate several of its retail branch locations, as well as one storage facility, that are classified as operating leases and are recognized on the balance sheet as right-of-use ("ROU") assets and lease liabilities. Most of these leases contain options to extend the duration of the leases at management's discretion. Management has recognized these renewal options as part of its ROU asset and lease liabilities when management is reasonably certain to exercise these options. Whether or not management is reasonably certain to exercise such an option is determined based on facts and circumstances for each individual lease. However, if a renewal option is offered at below market terms, management considers the exercise of that option to be reasonably certain for the purposes of calculating its ROU assets and lease liabilities. None of the Company's leases include residual value guarantees, and there are no restrictions or covenants imposed by these leases that impose significant additional financial obligations on the Company. The Company uses the rate implicit in each lease as the discount rate to determine the lease liability, which is the present value of lease payments not yet paid at the lease commencement date. If the rate implicit in each lease is not readily determinable, which is often the case, the Company uses its incremental borrowing rate as the discount rate. The incremental borrowing rate is the rate that the Company would have incurred to borrow the funds necessary to purchase the leased asset over a similar term. As of June 30, 2019, the Company has operating lease ROU assets of $14.9 million and operating lease liabilities of $14.8 million. The Company does not have any agreements that are classified as finance leases. The following table presents additional information about the Company's operating leases:
The table below reconciles the remaining undiscounted cash flows for the next five years for each twelve-month period presented (unless otherwise indicated) and the total of the subsequent remaining years to the operating lease liabilities recorded on the balance sheet:
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Revenue |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue The Company's revenue is included in net interest income and other operating income on its Consolidated Statements of Income. ASU 2014-09, which amends Topic 606 in the Accounting Standards Codification ("ASC"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our ongoing revenue-generating transactions are not subject to Topic 606, including revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, purchased receivable income, financial guarantees, and derivatives are also not in scope of the guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant services income, and commissions from the sales of mutual funds and other investments. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s non-interest revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Bankcard fees Bankcard fees are primarily comprised of debit card income and ATM fees. Debit card income is primarily comprised of interchange fees earned whenever the Company’s debit cards are processed through card payment networks such as Visa or MasterCard. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. The Company’s performance obligation for bankcard fees are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payments are typically received immediately or in the following month. Service charges on deposit accounts Service charges on deposit accounts consist of general service fees for monthly account maintenance, activity- or transaction-based fees, and account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), and other deposit account related fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed. Payments for service charges on deposit accounts are primarily received immediately or in the following month through a direct charge to customers’ accounts. Other Other operating income consists of other recurring revenue streams such as merchant services income, commissions from sales of mutual funds and other investments, safety deposit box rental fees, bank check and other check fees, unrealized gains and losses on marketable securities, and other miscellaneous revenue streams. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for merchant services income is largely satisfied, and related revenue recognized, when the transactions have been completed. Payment is typically received immediately or in the following month. The Company earns commissions from the sale of mutual funds as periodic service fees (i.e., trailers) from Elliott Cove Capital Management typically based on a percentage of net asset value. Trailer revenue is recorded over time, quarterly, as net asset value is determined. The Company also earns commission income from the sale of annuity products. The Company acts as an intermediary between the Company's customer and Elliott Cove Investment Advisors for these transactions, and commissions from annuity product sales are recorded when the Company’s performance obligation is satisfied, which is generally upon the issuance of the annuity policy. The Company does not earn trailer fees on annuity sales. Payment for commissions from sales of mutual funds and other investments and annuity sales is typically received in the following quarter. Other service charges include revenue from safety deposit box rental fees, processing wire transfers, bank check and other check fees, and other services. The Company’s performance obligations for these other revenue streams are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payments are typically received immediately or in the following month. The following presents other operating income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six-month periods ended June 30, 2019 and 2018:
Gains on the sale of OREO are also within the scope of Topic 606 and are recorded within other operating expense on the Company's Consolidated Statements of Income. Gains on the sale of OREO properties were $0 and $49,000 for the three months ended June 30, 2019 and 2018, respectively, and $316,000 and $49,000 for the six months ended June 30, 2019 and 2018, respectively. Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s other operating revenue streams are largely based on transactional activity, or standard month-end revenue accruals. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of June 30, 2019 and December 31, 2018, the Company did not have any significant contract balances. Contract Acquisition Costs An entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606 on January 1, 2018, the Company did not capitalize any contract acquisition costs. |
Cash and Cash Equivalents |
6 Months Ended |
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Jun. 30, 2019 | |
Cash and Due from Banks [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company is required to maintain a $1.0 million minimum average daily balance with the Federal Reserve Bank of San Francisco ("Federal Reserve Bank") for purposes of settling financial transactions and charges for Federal Reserve Bank services. The Company is also required to maintain cash balances or deposits with the Federal Reserve Bank sufficient to meet its statutory reserve requirements. The average reserve requirement for the maintenance period which included June 30, 2019, was $0. The Company is required to maintain a $500,000 balance with a correspondent bank for outsourced servicing of ATMs. The Company is required to maintain a $100,000 and $300,000 balance with a correspondent bank to collateralize the initial margin and the fair value exposure of its interest rate swap, respectively. |
Investment Securities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The carrying values and estimated fair values of investment securities at the periods indicated are presented below:
Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2019 and December 31, 2018 were as follows:
The unrealized losses on investments in U.S. treasury and government sponsored entities, corporate bonds, collateralized loan obligations, and municipal securities in both periods were caused by changes in interest rates. At June 30, 2019 and December 31, 2018, there were 4 and 14 available-for-sale securities with unrealized losses that have been in a loss position for less than twelve months, respectively. There were 11 and 23 securities as of June 30, 2019 and December 31, 2018 that have been in an unrealized loss position for more than twelve months, respectively. The contractual terms of the investments in a loss position do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because it is more likely than not that the Company will hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired. At June 30, 2019 and December 31, 2018, $37.9 million and $58.4 million in securities were pledged for deposits and borrowings, respectively. The amortized cost and estimated fair values of debt securities at June 30, 2019, are distributed by contractual maturity as shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
The proceeds and resulting gains and losses, computed using specific identification, from sales of investment securities for the three and six-month periods ending June 30, 2019 and 2018, are as follows:
A summary of interest income for the three and six-month periods ending June 30, 2019 and 2018, on available for sale investment securities are as follows:
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Loans and Credit Quality |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Credit Quality | Loans and Credit Quality The following table presents total portfolio loans by portfolio segment and class of financing receivable, based on the Company's asset quality rating ("AQR") criteria:
Loans are carried at their principal amount outstanding, net of charge-offs, unamortized fees and direct loan origination costs. Loan balances are charged-off to the Allowance when management believes that collection of principal is unlikely. Interest income on loans is accrued and recognized on the principal amount outstanding except for loans in a nonaccrual status. All classes of loans are placed on nonaccrual and considered impaired when management believes doubt exists as to the collectability of the interest or principal. Cash payments received on nonaccrual loans are directly applied to the principal balance. Generally, a loan may be returned to accrual status when the delinquent principal and interest is brought current in accordance with the terms of the loan agreement. Additionally, certain ongoing performance criteria, which generally includes a performance period of six months, must be met in order for a loan to be returned to accrual status. Loans are reported as past due when installment payments, interest payments, or maturity payments are past due based on contractual terms. Nonaccrual loans: Nonaccrual loans net of government guarantees totaled $16.9 million and $14.7 million at June 30, 2019 and December 31, 2018, respectively. Nonaccrual loans at the periods indicated are presented below by segment:
Past Due Loans: Past due loans and nonaccrual loans at the periods indicated are presented below by segment:
Impaired Loans: The Company considers a loan to be impaired when it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows discounted at the loan’s effective interest rate, except that if the loan is collateral dependent, the impairment is measured by using the fair value of the loan’s collateral. Nonperforming loans with an outstanding balance of $50,000 or greater are individually evaluated for impairment based upon the borrower’s overall financial condition, resources, and payment record, and the prospects for support from any financially responsible guarantors. At June 30, 2019 and December 31, 2018, the recorded investment in loans that are considered to be impaired was $27.0 million and $31.7 million, respectively. The following table presents information about impaired loans by class as of the periods indicated:
The unpaid principal balance included in the tables above represents the recorded investment at the dates indicated, plus amounts charged off for book purposes. The following tables summarize our average recorded investment and interest income recognized on impaired loans for the three and six-month periods ended June 30, 2019 and 2018:
Troubled Debt Restructurings: Loans classified as troubled debt restructurings (“TDR”) totaled $11.3 million and $14.8 million at June 30, 2019 and December 31, 2018, respectively. A TDR is a loan to a borrower that is experiencing financial difficulty that has been modified from its original terms and conditions in such a way that the Company is granting the borrower a concession that it would not grant otherwise. The Company has granted a variety of concessions to borrowers in the form of loan modifications. The modifications granted can generally be described in the following categories: Rate Modification: A modification in which the interest rate is changed. Term Modification: A modification in which the maturity date, timing of payments, or frequency of payments is changed. Payment Modification: A modification in which the dollar amount of the payment is changed, or in which a loan is converted to interest only payments for a period of time is included in this category. Combination Modification: Any other type of modification, including the use of multiple categories above. AQR pass graded loans included above in the impaired loan data are loans classified as TDRs. By definition, TDRs are considered impaired loans. All of the Company's TDRs are included in impaired loans. The following table presents the breakout between newly restructured loans that occurred during the six months ended June 30, 2019 and restructured loans that occurred prior to 2019 that are still included in portfolio loans:
The following tables present newly restructured loans that occurred during the six months ended June 30, 2019 and 2018, by concession (terms modified):
The Company had no commitments to extend additional credit to borrowers whose terms have been modified in TDRs. There were $64,000 in charge-offs in the six months ended June 30, 2019 on loans that were newly classified as TDRs during the same period. All TDRs are also classified as impaired loans and are included in the loans individually evaluated for impairment in the calculation of the Allowance. There were two TDRs with specific impairment at June 30, 2019 and one at December 31, 2018. The following table presents TDRs that defaulted within twelve months of restructure and defaulted during the six months ended June 30, 2019 and 2018:
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Allowance for Loan Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Allowance for Loan Losses The following tables detail activity in the Allowance for the periods indicated:
The following is a detail of the recorded investment, including unearned origination fees, net of origination costs, in the loan portfolio, segregated by amounts evaluated individually or collectively in the Allowance at the periods indicated:
The following represents the balance of the Allowance for the periods indicated segregated by segment and class:
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Purchased Receivables |
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Purchased Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchased Receivables | Purchased Receivables Purchased receivables are carried at their principal amount outstanding, net of a reserve for anticipated losses that have not yet been identified, and have a maturity of less than one year. Purchased receivable balances are charged against this reserve when management believes that collection of principal is unlikely. Management evaluates the adequacy of the reserve for purchased receivable losses based on historical loss experience by class of receivable and its assessment of current economic conditions. As of June 30, 2019, the Company has one class of purchased receivables. There were no purchased receivables past due at June 30, 2019 or December 31, 2018, and there were no restructured purchased receivables at June 30, 2019 or December 31, 2018. Income on purchased receivables is accrued and recognized on the principal amount outstanding using an effective interest method except when management believes doubt exists as to the collectability of the income or principal. As of June 30, 2019, the Company is accruing income on all purchased receivable balances outstanding. The following table summarizes the components of net purchased receivables for the periods indicated:
The following table sets forth information regarding changes in the purchased receivable reserve for the three and six-month periods ending June 30, 2019 and 2018, respectively:
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Servicing Rights |
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Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Servicing Rights | Servicing Rights Mortgage servicing rights The following table details the activity in the Company's mortgage servicing rights ("MSR") for the three-month periods ended June 30, 2019 and 2018:
(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates. (2) Represents changes due to collection/realization of expected cash flows over time. The following table details information related to our serviced mortgage loan portfolio as of June 30, 2019 and December 31, 2018:
The Company recognized servicing fees of $588,000 and $443,000 during the three-month periods ending June 30, 2019 and 2018, respectively and $1.1 million and $866,000 during the six-month periods ending June 30, 2019 and 2018, respectively, which includes contractually specified servicing fees, late fees, and ancillary fees as a component of other noninterest income in the Company's Consolidated Statements of Income. The following table outlines the key assumptions used in measuring the fair value of MSR as of June 30, 2019 and December 31, 2018:
Key economic assumptions and the sensitivity of the current fair value for MSR to immediate adverse changes in those assumptions at June 30, 2019 and December 31, 2018 were as follows:
The above tables show the sensitivity to market rate changes for the par rate coupon for a conventional one-to-four family Alaska Housing Finance Corporation/FNMA/FHLMC serviced home loan. The above tables reference a 100 basis point and 200 basis point decrease in note rates. These sensitivities are hypothetical and should be used with caution as the tables above demonstrate the Company’s methodology for estimating the fair value of MSR is highly sensitive to changes in key assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on MSR fair value. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear. Also, in these tables, the effects of a variation in a particular assumption on the fair value of the MSR is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may provide an incentive to refinance; however, this may also indicate a slowing economy and an increase in the unemployment rate, which reduces the number of borrowers who qualify for refinancing), which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made at a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time. Commercial servicing rights The commercial servicing right asset ("CSR") has a carrying value $1.0 million at June 30, 2019 and December 31, 2018, and is included in other assets and carried at fair value on the Company's Consolidated Balance Sheets. Total commercial loans serviced for others were $232.4 million and $239.5 million at June 30, 2019 and December 31, 2018, respectively. Key assumptions used in measuring the fair value of the CSR as of June 30, 2019 and December 31, 2018 include a constant prepayment rate of 12.72% and a discount rate of 11.49%. |
Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives Interest rates swaps related to community banking activities The Company enters into commercial loan interest rate swap agreements with commercial banking customers which are offset with a corresponding swap agreement with a third party financial institution ("counterparty"). The Company has agreements with its counterparties that contain provisions that provide that if the Company fails to maintain its status as a well-capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. These agreements also require that the Company and the counterparty collateralize any fair value shortfalls that exceed $250,000 with eligible collateral, which includes cash and securities backed with the full faith and credit of the federal government. Similarly, the Company could be required to settle its obligations under the agreement if specific regulatory events occur, such as if the Company were issued a prompt corrective action directive or a cease and desist order, or if certain regulatory ratios fall below specified levels. The Company pledged $1.7 million as of June 30, 2019 and $296,000 as of December 31, 2018 in available for sale securities to collateralize fair value shortfalls on interest rate swap agreements. The Company had interest rate swaps related to commercial loans with an aggregate notional amount of $64.4 million and $16.0 million at June 30, 2019 and December 31, 2018, respectively. At June 30, 2019, the notional amount of interest rate swaps is made up of six variable to fixed rate swaps to commercial loan customers totaling $32.2 million, and six fixed to variable rate swaps with a counterparty totaling $32.2 million. Changes in fair value from these six interest rate swaps offset each other in the first six months of 2019. The Company recognized $734,000 in fee income related to interest rate swaps in the three and six-month periods ending June 30, 2019 and no fee income related to interest rate swaps in the three and six-month periods ending June 30, 2018, respectively. Interest rate swap income is recorded in Other operating income on the Consolidated Statements of Income. None of these interest rate swaps are designated as hedging instruments. The Company entered into an interest rate swap in the third quarter of 2017 to hedge the variability in cash flows arising out of its junior subordinated debentures, which is floating rate debt, by swapping the cash flows with an interest rate swap which receives floating and pays fixed. The Company has designated this interest rate swap as a hedging instrument. The interest rate swap effectively fixes the Company's interest payments on the $10.0 million of junior subordinated debentures held under Northrim Statutory Trust 2 at 3.72% through its maturity date. The floating rate that the dealer pays is equal to the three month LIBOR plus 1.37% which reprices quarterly on the payment date. This rate was 3.78% as of June 30, 2019. The Company pledged $400,000 in cash to collateralize initial margin and fair value exposure of our counterparty on this interest rate swap as of June 30, 2019 and December 31, 2018. Changes in the fair value of this interest rate swap are reported in other comprehensive income. The unrealized loss on this interest rate swap was $374,000 as of June 30, 2019 and the unrealized gain was $607,000 as of December 31, 2018. Interest rates swaps related to home mortgage banking activities The Company also uses derivatives to hedge the risk of changes in the fair values of interest rate lock commitments. The Company enters into commitments to originate residential mortgage loans at specific rates; the value of these commitments are detailed in the table below as "interest rate lock commitments". The Company also hedges the interest rate risk associated with its residential mortgage loan commitments, which are referred to as "retail interest rate contracts" in the table below. Market risk with respect to commitments to originate loans arises from changes in the value of contractual positions due to changes in interest rates. RML had commitments to originate mortgage loans held for sale totaling $107.3 million and $45.0 million at June 30, 2019 and December 31, 2018, respectively. Changes in the value of RML's interest rate derivatives are recorded in mortgage banking income on the Consolidated Statements of Income. None of these derivatives are designated as hedging instruments. The following table presents the fair value of derivatives not designated as hedging instruments at June 30, 2019 and December 31, 2018:
The following table presents the net gains (losses) of derivatives not designated as hedging instruments for the three and six-month periods ending June 30, 2019 and 2018:
Our derivative transactions with counterparties under International Swaps and Derivative Association master agreements include "right of set-off" provisions. "Right of set-off" provisions are legally enforceable rights to offset recognized amounts and there may be an intention to settle such amounts on a net basis. We do not offset such financial instruments for financial reporting purposes. The following table summarizes the derivatives that have a right of offset as of June 30, 2019 and December 31, 2018:
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Stock Incentive Plan |
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Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plan | Stock Incentive Plan The Company adopted the 2017 Stock Option Plan (“2017 Plan”) following shareholder approval of the 2017 Plan at the 2017 Annual Meeting. Subsequent to the adoption of the 2017 Plan, no additional grants may be issued under the prior plans. The 2017 Plan provides for grants of up to 350,000 shares of common stock. Stock Options: Under the 2017 Plan and previous plans, certain key employees have been granted the option to purchase set amounts of common stock at the market price on the day the option was granted. Optionees, at their own discretion, may cover the cost of exercise through the exchange at the then fair value of already owned shares of the Company’s stock. Options are granted for a 10-year period and vest on a pro-rata basis over the initial three years from grant. The Company measures the fair value of each stock option at the date of grant using the Black-Scholes option pricing model. For the quarters ended June 30, 2019 and 2018, the Company recognized $33,000 and $32,000, respectively, in stock option compensation expense as a component of salaries and other personnel expense. For the six months ended June 30, 2019 and 2018, the Company recognized $65,000 and $108,000, respectively, in stock option compensation expense as a component of salaries and other personnel expense. The Company allows stock options to be exercised through cash or cashless transactions. Cashless stock option exercises require a portion of the options exercised to be net settled in satisfaction of the exercise price and applicable tax withholding requirements. The Company issued zero and 1,723 shares from the exercise of stock options for the three and six-month periods ended June 30, 2019, respectively. In the three and six-month periods ended June 30, 2019, the Company net settled zero and $66,000 for cashless stock option exercises, respectively. The Company withheld zero and $49,000 to pay for stock option exercises or income taxes that resulted from the exercise of stock options in the three and six-month periods ended June 30, 2019, respectively. The Company issued 996 shares from the exercises of stock options in the three and six-month periods ended June 30, 2018. The Company received zero cash for the stock option exercises in the three and six-month periods ended June 30, 2018. In the three and six-month periods ended June 30, 2018, the Company net settled $56,000 for cashless stock option exercises. The Company withheld $73,000 to pay for stock option exercises or income taxes the resulted from the exercise of stock options in the three and six-month periods ended June 30, 2018. There were no stock options granted in the three or six-month periods ended June 30, 2019 or 2018. Restricted Stock Units: The Company grants restricted stock units to certain key employees periodically. Recipients of restricted stock units do not pay any cash consideration to the Company for the shares and receive all dividends with respect to such shares when the shares vest. Restricted stock units cliff vest at the end of a three-year time period. For the three months ended June 30, 2019 and 2018, the Company recognized $122,000 and $126,000, respectively, in restricted stock unit compensation expense as a component of salaries and other personnel expense. For the six months ended June 30, 2019 and 2018, the Company recognized $286,000 and $304,000, respectively, in restricted stock unit compensation expense as a component of salaries and other personnel expense. There were no restricted stock units granted in the three or six-month periods ended June 30, 2019 or 2018. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair Value Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. GAAP established a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies. In accordance with GAAP, the Company groups its assets and liabilities measured at fair value into the following three levels:
Assets and Liabilities Measured at Fair Value on a Recurring Basis Investment securities available for sale and marketable securities: Fair values are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments. Loans held for sale: Due to the short term nature of these instruments, the carrying amounts reported in the consolidated balance sheets represent their fair values. Servicing rights: MSR and CSR are measured at fair value on a recurring basis. These assets are classified as Level 3 as quoted prices are not available. In order to determine the fair value of MSR and CSR, the present value of net expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, escrow calculations, delinquency rates, and ancillary fee income net of servicing costs. The model assumptions are also compared to publicly filed information from several large MSR holders, as available. Derivative instruments: The fair value of the interest rate lock commitments are estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. The pull-through rate assumptions are considered Level 3 valuation inputs and are significant to the interest rate lock commitment valuation; as such, the interest rate lock commitment derivatives are classified as Level 3. Interest rate contracts are valued in a model, which uses as its basis a discounted cash flow technique incorporating credit valuation adjustments to reflect nonperformance risk in the measurement of fair value. Although the Company has determined that the majority of inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2019, the Company has assessed the significance of the impact of these adjustments on the overall valuation of its interest rate positions and has determined that they are not significant to the overall valuation of its interest rate derivatives. As a result, the Company has classified its interest rate derivative valuations in Level 2 of the fair value hierarchy. Commitments to extend credit and standby letters of credit: The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligation with the counterparties at the reporting date. Assets Subject to Nonrecurring Adjustment to Fair Value: The Company is also required to measure certain assets such as equity method investments, goodwill, intangible assets, impaired loans, and other real estate owned (“OREO”) at fair value on a nonrecurring basis in accordance with GAAP. Any nonrecurring adjustments to fair value usually result from the writedown of individual assets. The Company uses either in-house evaluations or external appraisals to estimate the fair value of OREO and impaired loans as of each reporting date. In-house appraisals are considered Level 3 inputs and external appraisals are considered Level 2 inputs. The Company’s determination of which method to use is based upon several factors. The Company takes into account compliance with legal and regulatory guidelines, the amount of the loan, the size of the assets, the location and type of property to be valued and how critical the timing of completion of the analysis is to the assessment of value. Those factors are balanced with the level of internal expertise, internal experience and market information available, versus external expertise available such as qualified appraisers, brokers, auctioneers and equipment specialists. The Company uses external sources to estimate fair value for projects that are not fully constructed as of the date of valuation. These projects are generally valued as if complete, with an appropriate allowance for cost of completion, including contingencies developed from external sources such as vendors, engineers and contractors. The Company believes that recording OREO that is not fully constructed based on as if complete values is more appropriate than recording OREO that is not fully constructed using as is values. We concluded that as-is-complete values are appropriate for these types of projects based on the accounting guidance for capitalization of project costs and subsequent measurement of the value of real estate. GAAP specifically states that estimates and cost allocations must be reviewed at the end of each reporting period and reallocated based on revised estimates. The Company adjusts the carrying value of OREO in accordance with this guidance for increases in estimated cost to complete that exceed the fair value of the real estate at the end of each reporting period. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Estimated fair values as of the periods indicated are as follows:
The following table sets forth the balances as of the periods indicated of assets measured at fair value on a recurring basis:
The following table provides a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six-month periods ended June 30, 2019 and 2018:
As of and for the periods ending June 30, 2019 and December 31, 2018, except for certain assets as shown in the following table, no impairment or valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis. For loans measured for impairment, the Company classifies fair value measurements using observable inputs, such as external appraisals, as Level 2 valuations in the fair value hierarchy, and unobservable inputs, such as in-house evaluations, as Level 3 valuations in the fair value hierarchy.
The following table presents the gains and (losses) resulting from nonrecurring fair value adjustments for the three and six-month periods ended June 30, 2019 and 2018:
Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) The following table provides a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and nonrecurring basis at June 30, 2019 and December 31, 2018:
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Segment Information |
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Segment Information | Segment Information The Company's operations are managed along two operating segments: Community Banking and Home Mortgage Lending. The Community Banking segment's principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas. As of June 30, 2019, the Community Banking segment operated 16 branches throughout Alaska. The Home Mortgage Lending segment's principal business focus is the origination and sale of mortgage loans for 1-4 family residential properties. Summarized financial information for the Company's reportable segments and the reconciliation to the consolidated financial results is shown in the following tables:
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Basis of Presentation and Significant Accounting Policies (Policies) |
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Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements and corresponding footnotes have been prepared by Northrim BanCorp, Inc. (the “Company”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The year-end Consolidated Balance Sheet data was derived from the Company's audited financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company owns a 100% interest in Residential Mortgage Holding Company, LLC, the parent company of Residential Mortgage, LLC (collectively "RML") and consolidates their balance sheets and income statement into its financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company determined that it operates in two primary operating segments: Community Banking and Home Mortgage Lending. The Company has evaluated subsequent events and transactions for potential recognition or disclosure. Operating results for the interim period ended June 30, 2019 are not necessarily indicative of the results anticipated for the year ending December 31, 2019. These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company’s significant accounting policies are discussed in Note 1 to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting pronouncements implemented in 2019 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements ("ASU 2018-11") to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02. Specifically, under the amendments in ASU 2018-11: (1) entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and (2) lessors may elect not to separate lease and non-lease components when certain conditions are met. The Company adopted ASU 2016-02 on January 1, 2019, utilizing the modified retrospective approach provided under the transition option in ASU 2018-11 for leases that exist on, or are entered into, after the adoption date. Accordingly, ASU 2016-02 has not been applied to comparative periods included in the Company's financial statements. The Company also elected certain relief options offered in ASU 2016-02 and ASU 2018-11, including the practical expedient on not separating lease components from nonlease components for all operating leases and instead to account for them as a single lease component and the option not to recognize right-of-use assets and lease liabilities that arise from short-term leases (i.e., leases with terms of twelve months or less). The Company did not elect the hindsight practical expedient, which allows entities to use hindsight when determining lease term and impairment of right-of-use assets. The Company has several lease agreements, such as branch locations, which were considered operating leases prior to the adoption of ASU 2016-02, and therefore, were not recognized on the Company’s consolidated statements of condition. The Company recognized these lease agreements on the consolidated balance sheets as a $15.9 million right-of-use asset and a $15.9 million lease liability upon adoption of ASU 2016-02 on January 1, 2019. The adoption of ASU 2016-02 did not have an impact on the Company’s consolidated statements of income. Accounting pronouncements to be implemented in future periods In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The standard requires the measurement of all expected credit losses for certain financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates, but will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. ASU 2016-13 requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization's portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, ASU 2016-03 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-03 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2019. Early application will be permitted for specified periods. ASU 2016-13 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019, and must be applied prospectively. The Company is in the process of implementing this new standard. A cross-functional team is evaluating data elements, modeling options, and the application of reasonable and supportable forecasts that are expected to be critical to the new process for estimating credit losses and has engaged external consulting services related to this effort. An estimate of the impact of this standard on the Company's consolidated financial position and results of operations has not yet been determined; however, the impact on the Company's process for calculating the allowance for loan losses ("Allowance") is expected to be significant. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (“ASU 2017-04”). ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019, and must be applied on a prospective basis. The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial position or results of operations. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019. The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial position or results of operations. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company's next annual reporting period; early adoption is permitted. The Company previously adopted both ASU 2017-12 and ASU 2016-01 and does not expect that the amendments of ASU 2019-04 will have a material impact on the Company’s consolidated financial position or results of operations. The Company is continuing to evaluate the impact of ASU 2016-13 and will consider the amendments of ASU 2019-04 as part of that process. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326) (“ASU 2019-05”). ASU 2019-05 provides entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments. ASU 2019-05 is effective for the Company’s financial statements for annual and interim periods beginning on or after December 15, 2019. The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial position or results of operations. |
Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The following table presents additional information about the Company's operating leases:
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Lessee, Operating Lease, Liability, Maturity | The table below reconciles the remaining undiscounted cash flows for the next five years for each twelve-month period presented (unless otherwise indicated) and the total of the subsequent remaining years to the operating lease liabilities recorded on the balance sheet:
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following presents other operating income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six-month periods ended June 30, 2019 and 2018:
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Investment Securities (Tables) |
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investment Security Carrying and Fair Value | The carrying values and estimated fair values of investment securities at the periods indicated are presented below:
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Unrealized Gain (Loss) on Investments | Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2019 and December 31, 2018 were as follows:
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Schedule of Amortized Cost and Fair Value by Contractual Maturity | The amortized cost and estimated fair values of debt securities at June 30, 2019, are distributed by contractual maturity as shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Schedule of Available-For-Sale Securities Proceeds, Gains, and Losses | The proceeds and resulting gains and losses, computed using specific identification, from sales of investment securities for the three and six-month periods ending June 30, 2019 and 2018, are as follows:
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Summary of Interest Income On Available-For-Sale Investment Securities | A summary of interest income for the three and six-month periods ending June 30, 2019 and 2018, on available for sale investment securities are as follows:
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Loans and Credit Quality (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan Portfolio Segmented by Risk Class | The following table presents total portfolio loans by portfolio segment and class of financing receivable, based on the Company's asset quality rating ("AQR") criteria:
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Nonaccrual Loans by Segment | Nonaccrual loans at the periods indicated are presented below by segment:
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Past Due Loans and Nonaccrual Loans | Past due loans and nonaccrual loans at the periods indicated are presented below by segment:
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Impaired Loans | The following tables summarize our average recorded investment and interest income recognized on impaired loans for the three and six-month periods ended June 30, 2019 and 2018:
The following table presents information about impaired loans by class as of the periods indicated:
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Restructured Loans | The following table presents the breakout between newly restructured loans that occurred during the six months ended June 30, 2019 and restructured loans that occurred prior to 2019 that are still included in portfolio loans:
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Newly Restructured Loans by Concession | The following tables present newly restructured loans that occurred during the six months ended June 30, 2019 and 2018, by concession (terms modified):
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Schedule of Trouble Debt Restructurings That Subsequently Defaulted | The following table presents TDRs that defaulted within twelve months of restructure and defaulted during the six months ended June 30, 2019 and 2018:
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Allowance for Loan Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | The following tables detail activity in the Allowance for the periods indicated:
The following table sets forth information regarding changes in the purchased receivable reserve for the three and six-month periods ending June 30, 2019 and 2018, respectively:
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Recorded Investment Segregated by Amounts Individually or Collectively in Allowance for Loan Losses | The following is a detail of the recorded investment, including unearned origination fees, net of origination costs, in the loan portfolio, segregated by amounts evaluated individually or collectively in the Allowance at the periods indicated:
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Balance of the Allowance Segregated by Segment and Class | The following represents the balance of the Allowance for the periods indicated segregated by segment and class:
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Purchased Receivables (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchased Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Net Purchased Receivables | The following table summarizes the components of net purchased receivables for the periods indicated:
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Allowance on Net Purchased Receivables | The following tables detail activity in the Allowance for the periods indicated:
The following table sets forth information regarding changes in the purchased receivable reserve for the three and six-month periods ending June 30, 2019 and 2018, respectively:
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Servicing Rights (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Servicing Assets at Fair Value | The following table outlines the key assumptions used in measuring the fair value of MSR as of June 30, 2019 and December 31, 2018:
The following table details the activity in the Company's mortgage servicing rights ("MSR") for the three-month periods ended June 30, 2019 and 2018:
(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates. (2) Represents changes due to collection/realization of expected cash flows over time. The following table details information related to our serviced mortgage loan portfolio as of June 30, 2019 and December 31, 2018:
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Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets | Key economic assumptions and the sensitivity of the current fair value for MSR to immediate adverse changes in those assumptions at June 30, 2019 and December 31, 2018 were as follows:
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Derivatives (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table presents the fair value of derivatives not designated as hedging instruments at June 30, 2019 and December 31, 2018:
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Derivative Instruments, Gain (Loss) | The following table presents the net gains (losses) of derivatives not designated as hedging instruments for the three and six-month periods ending June 30, 2019 and 2018:
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Offsetting Assets | The following table summarizes the derivatives that have a right of offset as of June 30, 2019 and December 31, 2018:
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Offsetting Liabilities | The following table summarizes the derivatives that have a right of offset as of June 30, 2019 and December 31, 2018:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Fair Values | Estimated fair values as of the periods indicated are as follows:
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Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table sets forth the balances as of the periods indicated of assets measured at fair value on a recurring basis:
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Fair Value, Assets Measured on Recurring Basis | The following table provides a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six-month periods ended June 30, 2019 and 2018:
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Fair Value, Assets Measured on Nonrecurring Basis |
The following table presents the gains and (losses) resulting from nonrecurring fair value adjustments for the three and six-month periods ended June 30, 2019 and 2018:
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Schedule of Valuation Assumptions | The following table provides a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and nonrecurring basis at June 30, 2019 and December 31, 2018:
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Information | Summarized financial information for the Company's reportable segments and the reconciliation to the consolidated financial results is shown in the following tables:
|
Basis of Presentation and Significant Accounting Policies (Details) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2019
USD ($)
segment
|
Jan. 01, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Schedule of Equity Method Investments [Line Items] | |||
Number of segments | segment | 2 | ||
Operating lease right-of-use asset | $ 14,924 | $ 0 | |
Operating lease liability | $ 14,807 | $ 0 | |
Residential Mortgage Holding Company | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 100.00% | ||
Accounting Standards Update 2016-02 | |||
Schedule of Equity Method Investments [Line Items] | |||
Operating lease right-of-use asset | $ 14,900 | $ 15,900 | |
Operating lease liability | $ 14,800 | $ 15,900 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use asset | $ 14,924 | $ 0 | |
Operating lease liability | 14,807 | $ 0 | |
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use asset | 14,900 | $ 15,900 | |
Operating lease liability | $ 14,800 | $ 15,900 |
Leases - Summary of Additional Lease Information (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Lease Cost | ||
Operating lease cost | $ 677 | $ 1,355 |
Short term lease cost | 8 | 17 |
Total lease cost | $ 685 | 1,372 |
Other information | ||
Operating leases - operating cash flows | $ 1,348 | |
Weighted average lease term - operating leases, in years | 11 years 3 months 2 days | 11 years 3 months 2 days |
Weighted average discount rate - operating leases | 3.32% | 3.32% |
Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Leases [Abstract] | ||
2019 (Six months) | $ 1,332 | |
2020 | 2,532 | |
2021 | 2,439 | |
2022 | 1,998 | |
2023 | 1,775 | |
Thereafter | 8,131 | |
Total minimum lease payments | 18,207 | |
Less: amount of lease payment representing interest | (3,400) | |
Present value of future minimum lease payments | $ 14,807 | $ 0 |
Revenue (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Other operating income (in-scope of Topic 606) | $ 1,608,000 | $ 1,519,000 | $ 3,036,000 | $ 2,861,000 |
Other operating income (out-of-scope of Topic 606) | 7,961,000 | 6,795,000 | 14,066,000 | 12,915,000 |
Total Other Operating Income | 9,569,000 | 8,314,000 | 17,102,000 | 15,776,000 |
Bankcard fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Other operating income (in-scope of Topic 606) | 744,000 | 707,000 | 1,394,000 | 1,332,000 |
Service charges on deposit accounts | ||||
Disaggregation of Revenue [Line Items] | ||||
Other operating income (in-scope of Topic 606) | 413,000 | 376,000 | 826,000 | 730,000 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Other operating income (in-scope of Topic 606) | 451,000 | 436,000 | 816,000 | 799,000 |
Gains On Sale Of Other Real Estate Owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Other operating income (in-scope of Topic 606) | $ 0 | $ 49,000 | $ 316,000 | $ 49,000 |
Cash and Cash Equivalents (Details) |
Jun. 30, 2019
USD ($)
|
---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | |
Required daily balance with Federal Reserve | $ 1,000,000 |
Required balance | 500,000 |
Compensating balance, initial margin on interest rate swap | 100,000 |
Compensating balance, fair value exposure on interest rate swap | 300,000 |
Federal Reserve Bank | |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Required balance | $ 0 |
Investment Securities - Narrative (Details) $ in Millions |
Jun. 30, 2019
USD ($)
security
|
Dec. 31, 2018
USD ($)
security
|
---|---|---|
Marketable Securities [Abstract] | ||
Number of securities in unrealized loss positions for less than 12 months | 4 | 14 |
Number of securities in unrealized loss position greater than 12 months | 11 | 23 |
Securities pledged for deposits and borrowings | $ | $ 37.9 | $ 58.4 |
Investment Securities - Schedule of Available-For-Sale Securities Proceeds, Gains, and Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Marketable Securities [Abstract] | ||||
Proceeds | $ 0 | $ 0 | $ 4,219 | $ 0 |
Gross Gains | 0 | 0 | 23 | 0 |
Gross Losses | $ 0 | $ 0 | $ 0 | $ 0 |
Investment Securities - Summary of Interest Income on Available-For-Sale Investment Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Debt Securities, Available-for-sale [Line Items] | ||||
Total taxable interest income | $ 1,660 | $ 1,238 | $ 3,240 | $ 2,406 |
Total tax-exempt interest income | 30 | 64 | 82 | 150 |
Total interest income | 1,690 | 1,302 | 3,322 | 2,556 |
U.S. Treasury and government sponsored entities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Total taxable interest income | 1,071 | 895 | 2,142 | 1,785 |
Other | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Total taxable interest income | 589 | 343 | 1,098 | 621 |
Municipal securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Total tax-exempt interest income | $ 30 | $ 64 | $ 82 | $ 150 |
Loans and Credit Quality - Narrative (Details) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
financing_commitment
contract
|
Dec. 31, 2018
USD ($)
contract
|
|
Receivables [Abstract] | ||
Net nonaccrual loans | $ 16,941,000 | $ 14,694,000 |
Nonperforming loans minimum threshold for individual impairment evaluation | 50,000 | |
Recorded investment in loans considered to be impaired | 26,996,000 | 31,714,000 |
Total loans classified as troubled debt restructurings | $ 11,300,000 | $ 14,800,000 |
Number of commitments on TDR | financing_commitment | 0 | |
Charge offs on loans later classified as TDRs | $ 64,000 | |
TDR with specific impairment | contract | 2 | 1 |
Loans and Credit Quality - Summary of Trouble Debt Restructurings that Subsequently Defaulted (Details) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019
USD ($)
contract
|
Jun. 30, 2018
USD ($)
contract
|
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
TDR that subsequently defaulted, number of contracts | contract | 0 | 2 |
TDRs subsequently defaulted, recorded investment | $ | $ 0 | $ 559 |
AQR Substandard | Commercial | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
TDR that subsequently defaulted, number of contracts | contract | 0 | 2 |
TDRs subsequently defaulted, recorded investment | $ | $ 0 | $ 559 |
Purchased Receivables - Narrative (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2019
USD ($)
segment
purchased_receivable
|
Dec. 31, 2018
USD ($)
purchased_receivable
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Term of purchased receivables (less than) | 1 year | |
Number of classes of purchased receivables | segment | 1 | |
Restructured purchased receivables | $ 11,300,000 | $ 14,800,000 |
Purchased Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of purchased receivables past due | purchased_receivable | 0 | 0 |
Restructured purchased receivables | $ 0 | $ 0 |
Purchased Receivables - Summary of Components of Net Purchased Receivables (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Purchased Receivables [Abstract] | ||
Purchased receivables | $ 13,212 | $ 14,596 |
Reserve for purchased receivable losses | (98) | (190) |
Total | $ 13,114 | $ 14,406 |
Purchased Receivables - Allowance on Net Purchase Receivables (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Purchased Receivable Allowance for Loan Loss Reserve [Roll Forward] | ||||
Balance, beginning of period | $ 190 | |||
Charge-offs | $ (68) | $ (100) | (177) | $ (1,204) |
Balance, end of period | 98 | 98 | ||
Purchased Receivable | ||||
Purchased Receivable Allowance for Loan Loss Reserve [Roll Forward] | ||||
Balance, beginning of period | 141 | 209 | 190 | 200 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Charge-offs net of recoveries | 0 | 0 | 0 | 0 |
(Benefit) reserve for purchased receivables | (43) | (8) | (92) | 1 |
Balance, end of period | $ 98 | $ 201 | $ 98 | $ 201 |
Servicing Rights - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Servicing Assets at Fair Value [Line Items] | |||||
Commercial servicing rights | $ 10,836 | $ 10,836 | $ 10,821 | ||
Other Noninterest Income | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Mortgage servicing fees | 588 | $ 443 | 1,100 | $ 866 | |
Commercial servicing rights | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Commercial servicing rights | 999 | 999 | 1,030 | ||
Commercial loans serviced for a third party | $ 232,400 | $ 232,400 | $ 239,500 | ||
Constant prepayment rate | 12.72% | 12.72% | |||
Discount rate | 11.49% | 11.49% |
Servicing Rights - Value Assumptions (Details) - Mortgage servicing rights |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Servicing Assets at Fair Value [Line Items] | ||
Constant prepayment rate | 9.75% | 7.70% |
Discount rate | 9.60% | 9.94% |
Derivatives - Schedule of Derivative Gain (Loss) (Details) - Not Designated as Hedging Instrument - Mortgage banking income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives not designated as hedging | $ 257 | $ 77 | $ 313 | $ 857 |
Retail interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives not designated as hedging | (524) | 15 | (692) | 373 |
Interest rate lock commitments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives not designated as hedging | $ 781 | $ 62 | $ 1,005 | $ 484 |
Derivatives - Schedule of Offsetting Asset Derivatives (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Interest rate swaps | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized assets and liabilities | $ 2,504 | $ 853 |
Not Designated as Hedging Instrument | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized assets and liabilities | 4,576 | 1,224 |
Not Designated as Hedging Instrument | Interest rate swaps | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized assets and liabilities | 2,504 | 246 |
Gross amounts offset in the Statement of Financial Position | 0 | 0 |
Net amounts of assets and liabilities presented in the Statement of Financial Position | 2,504 | 246 |
Gross amounts not offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross amounts not offset in the Statement of Financial Position, Collateral Posted | 0 | 0 |
Gross amounts not offset in the Statement of Financial Position, Net Amount | $ 2,504 | $ 246 |
Fair Value Measurements - Schedule of Gains and Losses Resulting from Nonrecurring Fair Value Adjustments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total loss from nonrecurring measurements | $ (299) | $ (299) | $ (7) | $ (893) |
Loans measured for impairment | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total loss from nonrecurring measurements | $ (299) | $ (299) | $ (7) | $ (893) |
Segment Information (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
bank
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
segment
bank
|
Jun. 30, 2018
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||||||
Number of segments | segment | 2 | |||||||
Interest income | $ 17,306 | $ 15,595 | $ 34,184 | $ 30,390 | ||||
Interest expense | 1,349 | 606 | 2,458 | 1,138 | ||||
Net interest income | 15,957 | 14,989 | 31,726 | 29,252 | ||||
Provision for loan losses | 300 | (300) | 1,050 | (300) | ||||
Other operating income | 9,569 | 8,314 | 17,102 | 15,776 | ||||
Other operating expense | 19,819 | 16,606 | 36,899 | 33,401 | ||||
Income before provision for income taxes | 5,407 | 6,997 | 10,879 | 11,927 | ||||
Provision for income taxes | 1,146 | 1,167 | 2,306 | 2,035 | ||||
Net income | 4,261 | $ 4,312 | $ 4,848 | $ 5,264 | 5,830 | $ 4,062 | 8,573 | 9,892 |
Total assets | 1,552,770 | 1,502,988 | 1,552,770 | |||||
Loans held for sale | $ 61,531 | 34,710 | $ 61,531 | |||||
Community Banking | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of branches | bank | 16 | 16 | ||||||
Interest income | $ 16,758 | 15,057 | $ 33,269 | 29,520 | ||||
Interest expense | 1,125 | 443 | 2,148 | 870 | ||||
Net interest income | 15,633 | 14,614 | 31,121 | 28,650 | ||||
Provision for loan losses | 300 | (300) | 1,050 | (300) | ||||
Other operating income | 3,619 | 2,836 | 6,854 | 5,354 | ||||
Other operating expense | 14,111 | 11,748 | 26,629 | 24,115 | ||||
Income before provision for income taxes | 4,841 | 6,002 | 10,296 | 10,189 | ||||
Provision for income taxes | 984 | 882 | 2,139 | 1,541 | ||||
Net income | 3,857 | 5,120 | 8,157 | 8,648 | ||||
Total assets | 1,458,014 | 1,443,745 | 1,458,014 | |||||
Loans held for sale | 0 | 0 | 0 | |||||
Home Mortgage Lending | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Interest income | 548 | 538 | 915 | 870 | ||||
Interest expense | 224 | 163 | 310 | 268 | ||||
Net interest income | 324 | 375 | 605 | 602 | ||||
Provision for loan losses | 0 | 0 | 0 | 0 | ||||
Other operating income | 5,950 | 5,478 | 10,248 | 10,422 | ||||
Other operating expense | 5,708 | 4,858 | 10,270 | 9,286 | ||||
Income before provision for income taxes | 566 | 995 | 583 | 1,738 | ||||
Provision for income taxes | 162 | 285 | 167 | 494 | ||||
Net income | 404 | $ 710 | 416 | $ 1,244 | ||||
Total assets | 94,756 | 59,243 | 94,756 | |||||
Loans held for sale | $ 61,531 | $ 34,710 | $ 61,531 |
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