Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ¨ | þ | Non-accelerated filer | ¨ | Smaller reporting company | Emerging growth company |
March 31, 2022 | December 31, 2021 | |||||||||||||
(Unaudited) | ||||||||||||||
(In Thousands, Except Share Data) | ||||||||||||||
Assets | ||||||||||||||
Cash and due from banks | $ | $ | ||||||||||||
Short-term investments | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Securities available-for-sale, at fair value | ||||||||||||||
Securities held-to-maturity, at amortized cost | ||||||||||||||
Loans held for sale | ||||||||||||||
Loans and leases receivable, net of allowance for loan and lease losses of $ | ||||||||||||||
Premises and equipment, net | ||||||||||||||
Foreclosed properties | ||||||||||||||
Right-of-use assets, net | ||||||||||||||
Bank-owned life insurance | ||||||||||||||
Federal Home Loan Bank stock, at cost | ||||||||||||||
Goodwill and other intangible assets | ||||||||||||||
Derivatives | ||||||||||||||
Accrued interest receivable and other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||
Deposits | $ | $ | ||||||||||||
Federal Home Loan Bank advances and other borrowings | ||||||||||||||
Junior subordinated notes | ||||||||||||||
Lease liabilities | ||||||||||||||
Derivatives | ||||||||||||||
Accrued interest payable and other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
Preferred stock, Series A; $ | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Treasury stock, | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In Thousands, Except Per Share Data) | ||||||||||||||
Interest income | ||||||||||||||
Loans and leases | $ | $ | ||||||||||||
Securities | ||||||||||||||
Short-term investments | ||||||||||||||
Total interest income | ||||||||||||||
Interest expense | ||||||||||||||
Deposits | ||||||||||||||
Federal Home Loan Bank advances and other borrowings | ||||||||||||||
Junior subordinated notes | ||||||||||||||
Total interest expense | ||||||||||||||
Net interest income | ||||||||||||||
Provision for loan and lease losses | ( | ( | ||||||||||||
Net interest income after provision for loan and lease losses | ||||||||||||||
Non-interest income | ||||||||||||||
Private wealth management service fees | ||||||||||||||
Gain on sale of Small Business Administration loans | ||||||||||||||
Service charges on deposits | ||||||||||||||
Loan fees | ||||||||||||||
Increase in cash surrender value of bank-owned life insurance | ||||||||||||||
Swap fees | ||||||||||||||
Other non-interest income | ||||||||||||||
Total non-interest income | ||||||||||||||
Non-interest expense | ||||||||||||||
Compensation | ||||||||||||||
Occupancy | ||||||||||||||
Professional fees | ||||||||||||||
Data processing | ||||||||||||||
Marketing | ||||||||||||||
Equipment | ||||||||||||||
Computer software | ||||||||||||||
FDIC insurance | ||||||||||||||
Collateral liquidation costs | ||||||||||||||
Net loss on foreclosed properties | ||||||||||||||
Other non-interest expense | ||||||||||||||
Total non-interest expense | ||||||||||||||
Income before income tax expense | ||||||||||||||
Income tax expense | ||||||||||||||
Net income | $ | $ | ||||||||||||
Earnings per common share | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | ||||||||||||||
Dividends declared per share |
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive loss | ||||||||||||||
Securities available-for-sale: | ||||||||||||||
Unrealized securities losses arising during the period | ( | ( | ||||||||||||
Securities held-to-maturity: | ||||||||||||||
Amortization of net unrealized losses transferred from available-for-sale | ||||||||||||||
Interest rate swaps: | ||||||||||||||
Unrealized gains on interest rate swaps arising during the period | ||||||||||||||
Income tax benefit | ||||||||||||||
Total other comprehensive loss | ( | ( | ||||||||||||
Comprehensive income | $ | $ |
Common Shares Outstanding | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Share Data) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation - restricted shares and employee stock purchase plan | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under the employee stock purchase plan | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Treasury stock purchased | ( | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
Common Shares Outstanding | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Share Data) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Issuance of preferred stock, net of issuance costs | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation - restricted shares and employee stock purchase plan | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under the employee stock purchase plan | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Treasury stock re-issued | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Treasury stock purchased | ( | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Deferred income taxes, net | ( | ( | ||||||||||||
Provision for loan and lease losses | ( | ( | ||||||||||||
Derivative credit valuation adjustment | ( | |||||||||||||
Depreciation, amortization and accretion, net | ||||||||||||||
Share-based compensation | ||||||||||||||
Increase in bank-owned life insurance policies | ( | ( | ||||||||||||
Origination of loans for sale | ( | ( | ||||||||||||
Sale of SBA loans originated for sale | ||||||||||||||
Gain on sale of loans originated for sale | ( | ( | ||||||||||||
Net loss on foreclosed properties, including impairment valuation | ||||||||||||||
Excess tax benefit (expense) from share-based compensation | ( | |||||||||||||
Returns on investments in limited partnerships | ||||||||||||||
Payments on operating lease liabilities | ( | ( | ||||||||||||
Payments received on operating leases | ||||||||||||||
Net decrease (increase) in accrued interest receivable and other assets | ( | |||||||||||||
Net (decrease) increase in accrued interest payable and other liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Investing activities | ||||||||||||||
Proceeds from maturities, redemptions, and paydowns of available-for-sale securities | ||||||||||||||
Proceeds from maturities, redemptions, and paydowns of held-to-maturity securities | ||||||||||||||
Purchases of available-for-sale securities | ( | ( | ||||||||||||
Proceeds from sale of foreclosed properties | ||||||||||||||
Net increase in loans and leases | ( | ( | ||||||||||||
Investments in limited partnerships | ( | |||||||||||||
Returns of investments in limited partnerships | ||||||||||||||
Distribution from historic development entities | ||||||||||||||
Investment in low-income housing entities | ( | ( | ||||||||||||
Investment in Federal Home Loan Bank stock | ( | ( | ||||||||||||
Proceeds from the sale of Federal Home Loan Bank stock | ||||||||||||||
Purchases of leasehold improvements and equipment, net | ( | ( | ||||||||||||
Purchases of bank-owned life insurance policies | ( | |||||||||||||
Proceeds from redemption of Trust II stock | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing activities | ||||||||||||||
Net increase in deposits | ||||||||||||||
Proceeds from Federal Home Loan Bank advances | ||||||||||||||
Repayment of Federal Home Loan Bank advances | ( | ( | ||||||||||||
Proceeds from issuance of subordinated notes payable | ||||||||||||||
Repayment of junior subordinated notes payable | ( | |||||||||||||
Net (decrease) increase in long-term borrowed funds | ( | |||||||||||||
Cash dividends paid | ( | ( | ||||||||||||
Proceeds from issuance of common stock under ESPP | ||||||||||||||
Proceeds from issuance of preferred stock | ||||||||||||||
Purchase of treasury stock | ( | ( | ||||||||||||
Net cash provided by financing activities | ||||||||||||||
Net increase in cash and cash equivalents | ||||||||||||||
Cash and cash equivalents at the beginning of the period | ||||||||||||||
Cash and cash equivalents at the end of the period | $ | $ | ||||||||||||
Supplementary cash flow information | ||||||||||||||
Cash paid during the period for: | ||||||||||||||
Interest paid on deposits and borrowings | $ | $ | ||||||||||||
Income taxes paid | ||||||||||||||
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(Dollars in Thousands, Except Share Data) | ||||||||||||||
Basic earnings per common share | ||||||||||||||
Net income | $ | $ | ||||||||||||
Less: earnings allocated to participating securities | ||||||||||||||
Basic earnings allocated to common shareholders | $ | $ | ||||||||||||
Weighted-average common shares outstanding, excluding participating securities | ||||||||||||||
Basic earnings per common share | $ | $ | ||||||||||||
Diluted earnings per common share | ||||||||||||||
Earnings allocated to common shareholders, diluted | $ | $ | ||||||||||||
Weighted-average diluted common shares outstanding, excluding participating securities | ||||||||||||||
Diluted earnings per common share | $ | $ |
RSA | Weighted Average Grant Price | PRSU | Weighted Average Grant Price | RSU | Weighted Average Grant Price | Total | Weighted Average Grant Price | |||||||||||||||||||||||||||||||||||||||||||
Nonvested balance as of January 1, 2021 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Granted (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vested | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested balance as of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Granted (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vested | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested balance as of March 31, 2022 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Unrecognized compensation cost (in thousands) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Weighted average remaining recognition period (in years) |
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Share-based compensation expense | $ | $ |
As of March 31, 2022 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||
U.S. treasuries | $ | $ | $ | ( | ||||||||||||||||||||||
U.S. government agency securities - government-sponsored enterprises | ( | |||||||||||||||||||||||||
Municipal securities | ( | |||||||||||||||||||||||||
Residential mortgage-backed securities - government issued | ( | |||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ( | |||||||||||||||||||||||||
Commercial mortgage-backed securities - government issued | ( | |||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ( | |||||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
$ | $ | $ | ( | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||
U.S. treasuries | $ | $ | $ | ( | $ | |||||||||||||||||||||
U.S. government agency securities - government-sponsored enterprises | ( | |||||||||||||||||||||||||
Municipal securities | ( | |||||||||||||||||||||||||
Residential mortgage-backed securities - government issued | ( | |||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ( | |||||||||||||||||||||||||
Commercial mortgage-backed securities - government issued | ( | |||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ( | |||||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
$ | $ | $ | ( | $ |
As of March 31, 2022 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||
Municipal securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Residential mortgage-backed securities - government issued | ( | |||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ( | |||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||
$ | $ | $ | ( | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||
Municipal securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Residential mortgage-backed securities - government issued | ||||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||
$ | $ | $ | ( | $ |
Available-for-Sale | Held-to-Maturity | |||||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Due in one year or less | $ | $ | $ | $ | ||||||||||||||||||||||
Due in one year through five years | ||||||||||||||||||||||||||
Due in five through ten years | ||||||||||||||||||||||||||
Due in over ten years | ||||||||||||||||||||||||||
$ | $ | $ | $ |
As of March 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||||||||
U.S. treasuries | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
U.S. government agency securities - government-sponsored enterprises | ||||||||||||||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities - government issued | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities - government issued | ||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||||||||
U.S. treasuries | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
U.S. government agency securities - government-sponsored enterprises | ||||||||||||||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities - government issued | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities - government issued | ||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
As of March 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||||||||||||||
Municipal securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities - government issued | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||||||||||||||
Municipal securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
March 31, 2022 | December 31, 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Commercial real estate: | ||||||||||||||
Commercial real estate — owner occupied | $ | $ | ||||||||||||
Commercial real estate — non-owner occupied | ||||||||||||||
Land development | ||||||||||||||
Construction | ||||||||||||||
Multi-family | ||||||||||||||
1-4 family | ||||||||||||||
Total commercial real estate | ||||||||||||||
Commercial and industrial | ||||||||||||||
Direct financing leases, net | ||||||||||||||
Consumer and other: | ||||||||||||||
Home equity and second mortgages | ||||||||||||||
Other | ||||||||||||||
Total consumer and other | ||||||||||||||
Total gross loans and leases receivable | ||||||||||||||
Less: | ||||||||||||||
Allowance for loan and lease losses | ||||||||||||||
Deferred loan fees | ||||||||||||||
Loans and leases receivable, net | $ | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
SBA 7(a) loans | $ | $ | ||||||||||||
SBA 504 loans | ||||||||||||||
SBA Express loans and lines of credit | ||||||||||||||
SBA PPP loans | ||||||||||||||
Total SBA loans | $ | $ |
March 31, 2022 | ||||||||||||||||||||||||||||||||
Category | ||||||||||||||||||||||||||||||||
I | II | III | IV | Total | ||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Commercial real estate — owner occupied | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Commercial real estate — non-owner occupied | ||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||
Total commercial real estate | ||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Total consumer and other | ||||||||||||||||||||||||||||||||
Total gross loans and leases receivable | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Category as a % of total portfolio | % | % | % | % | % |
December 31, 2021 | ||||||||||||||||||||||||||||||||
Category | ||||||||||||||||||||||||||||||||
I | II | III | IV | Total | ||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||
Commercial real estate — owner occupied | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Commercial real estate — non-owner occupied | ||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||
Total commercial real estate | ||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Total consumer and other | ||||||||||||||||||||||||||||||||
Total gross loans and leases receivable | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Category as a % of total portfolio | % | % | % | % | % |
March 31, 2022 | ||||||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Current | Total Loans and Leases | |||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||
Accruing loans and leases | ||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner occupied | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||
Non-accruing loans and leases | ||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||
Total loans and leases | ||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Percent of portfolio | % | % | % | % | % | % |
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Current | Total Loans and Leases | |||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||
Accruing loans and leases | ||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner occupied | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||
Non-accruing loans and leases | ||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||
Total loans and leases | ||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Percent of portfolio | % | % | % | % | % | % |
March 31, 2022 | December 31, 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Non-accrual loans and leases | ||||||||||||||
Commercial real estate: | ||||||||||||||
Commercial real estate — owner occupied | $ | $ | ||||||||||||
Commercial real estate — non-owner occupied | ||||||||||||||
Land development | ||||||||||||||
Construction | ||||||||||||||
Multi-family | ||||||||||||||
1-4 family | ||||||||||||||
Total non-accrual commercial real estate | ||||||||||||||
Commercial and industrial | ||||||||||||||
Direct financing leases, net | ||||||||||||||
Consumer and other: | ||||||||||||||
Home equity and second mortgages | ||||||||||||||
Other | ||||||||||||||
Total non-accrual consumer and other loans | ||||||||||||||
Total non-accrual loans and leases | ||||||||||||||
Foreclosed properties, net | ||||||||||||||
Total non-performing assets | ||||||||||||||
Performing troubled debt restructurings | ||||||||||||||
Total impaired assets | $ | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
Total non-accrual loans and leases to gross loans and leases | % | % | ||||||||||||
Total non-performing assets to total gross loans and leases plus foreclosed properties, net | ||||||||||||||
Total non-performing assets to total assets | ||||||||||||||
Allowance for loan and lease losses to gross loans and leases | ||||||||||||||
Allowance for loan and lease losses to non-accrual loans and leases |
For the Three Months Ended March 31, | ||||||||||||||||||||
2021 | ||||||||||||||||||||
Number of Loans | Pre-Modification Recorded Investment | Post-Modification Recorded Investment | ||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
Commercial and industrial | $ | $ | ||||||||||||||||||
As of and for the Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Recorded Investment(1) | Unpaid Principal Balance | Impairment Reserve | Average Recorded Investment(2) | Foregone Interest Income | Interest Income Recognized | Net Foregone Interest Income | ||||||||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||||||||
With no impairment reserve recorded: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | $ | $ | $ | — | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
Non-owner occupied | — | |||||||||||||||||||||||||||||||||||||||||||
Land development | — | |||||||||||||||||||||||||||||||||||||||||||
Construction | — | |||||||||||||||||||||||||||||||||||||||||||
Multi-family | — | |||||||||||||||||||||||||||||||||||||||||||
1-4 family | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | — | |||||||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | — | |||||||||||||||||||||||||||||||||||||||||||
Other | — | |||||||||||||||||||||||||||||||||||||||||||
Total | — | |||||||||||||||||||||||||||||||||||||||||||
With impairment reserve recorded: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||
Total: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||||||||
1-4 family | ( | |||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||
Grand total | $ | $ | $ | $ | $ | $ | $ |
As of and for the Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Recorded Investment(1) | Unpaid Principal Balance | Impairment Reserve | Average Recorded Investment(2) | Foregone Interest Income | Interest Income Recognized | Net Foregone Interest Income | ||||||||||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||||||||
With no impairment reserve recorded: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | $ | $ | $ | — | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||
Non-owner occupied | — | |||||||||||||||||||||||||||||||||||||||||||
Land development | — | |||||||||||||||||||||||||||||||||||||||||||
Construction | — | |||||||||||||||||||||||||||||||||||||||||||
Multi-family | — | |||||||||||||||||||||||||||||||||||||||||||
1-4 family | — | |||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | — | |||||||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | — | |||||||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other | — | |||||||||||||||||||||||||||||||||||||||||||
Total | — | |||||||||||||||||||||||||||||||||||||||||||
With impairment reserve recorded: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | ||||||||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||
Total: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Owner occupied | ( | |||||||||||||||||||||||||||||||||||||||||||
Non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||
Land development | ||||||||||||||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||||||||||
Multi-family | ||||||||||||||||||||||||||||||||||||||||||||
1-4 family | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||
Direct financing leases, net | ||||||||||||||||||||||||||||||||||||||||||||
Consumer and other: | ||||||||||||||||||||||||||||||||||||||||||||
Home equity and second mortgages | ( | |||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||
Grand total | $ | $ | $ | $ | $ | $ | $ |
As of and for the Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||
Commercial Real Estate | Commercial and Industrial | Consumer and Other | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Charge-offs | ( | ( | ||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||
Net recoveries (charge-offs) | ||||||||||||||||||||||||||
Provision for loan and lease losses | ( | ( | ||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ |
As of and for the Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||
Commercial Real Estate | Commercial and Industrial | Consumer and Other | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Charge-offs | ( | ( | ||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||
Net (charge-offs) recoveries | ||||||||||||||||||||||||||
Provision for loan and lease losses | ( | ( | ( | |||||||||||||||||||||||
Ending balance | $ | $ | $ | $ |
As of March 31, 2022 | ||||||||||||||||||||||||||
Commercial Real Estate | Commercial and Industrial | Consumer and Other | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||
Collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Loans and lease receivables: | ||||||||||||||||||||||||||
Collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
As of December 31, 2021 | ||||||||||||||||||||||||||
Commercial Real Estate | Commercial and Industrial | Consumer and Other | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||
Collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Loans and lease receivables: | ||||||||||||||||||||||||||
Collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Individually evaluated for impairment | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Operating lease cost | $ | $ | ||||||||||||
Short-term lease cost | ||||||||||||||
Variable lease cost | ||||||||||||||
Less: sublease income | ( | ( | ||||||||||||
Total lease cost, net | $ | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
Weighted-average remaining lease term (in years) | ||||||||||||||
Weighted-average discount rate | % | % |
(In Thousands) | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total undiscounted cash flows | |||||
Discount on cash flows | ( | ||||
Total lease liability | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Accrued interest receivable | $ | $ | ||||||||||||
Net deferred tax asset | ||||||||||||||
Investment in historic development entities | ||||||||||||||
Investment in low-income housing development entity | ||||||||||||||
Investment in limited partnerships | ||||||||||||||
Investment in Trust II | ||||||||||||||
Prepaid expenses | ||||||||||||||
Other assets | ||||||||||||||
Total accrued interest receivable and other assets | $ | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
Balance | Average Balance | Average Rate | Balance | Average Balance | Average Rate | |||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||
Non-interest-bearing transaction accounts | $ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||||
Interest-bearing transaction accounts | ||||||||||||||||||||||||||||||||||||||
Money market accounts | ||||||||||||||||||||||||||||||||||||||
Certificates of deposit | ||||||||||||||||||||||||||||||||||||||
Wholesale deposits | ||||||||||||||||||||||||||||||||||||||
Total deposits | $ | $ | $ | $ |
(In Thousands) | ||||||||
Maturities during the year ended December 31, | ||||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
$ |
March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
Balance | Weighted Average Balance | Weighted Average Rate | Balance | Weighted Average Balance | Weighted Average Rate | |||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||
FHLB advances | $ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||||
Line of credit | ||||||||||||||||||||||||||||||||||||||
Other borrowings | ||||||||||||||||||||||||||||||||||||||
Subordinated notes payable | ||||||||||||||||||||||||||||||||||||||
Junior subordinated notes(1) | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ |
(In Thousands) | ||||||||
Maturities during the year ended December 31, | ||||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
$ |
As of and for the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Balance at the beginning of the period | $ | $ | ||||||||||||
SBA recourse benefit | ( | ( | ||||||||||||
Balance at the end of the period | $ | $ |
March 31, 2022 | ||||||||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||
U.S. treasuries | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. government agency securities - government-sponsored enterprises | ||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Residential mortgage-backed securities - government issued | ||||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||
Commercial mortgage-backed securities - government issued | ||||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Interest rate swaps |
December 31, 2021 | ||||||||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||
U.S. treasuries | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. government agency securities - government-sponsored enterprises | ||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Residential mortgage-backed securities - government issued | ||||||||||||||||||||||||||
Residential mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||
Commercial mortgage-backed securities - government issued | ||||||||||||||||||||||||||
Commercial mortgage-backed securities - government-sponsored enterprises | ||||||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Interest rate swaps |
March 31, 2022 | ||||||||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Impaired loans | $ | $ | $ | $ | ||||||||||||||||||||||
Foreclosed properties | ||||||||||||||||||||||||||
Loan servicing rights |
December 31, 2021 | ||||||||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||
Impaired loans | $ | $ | $ | $ | ||||||||||||||||||||||
Foreclosed properties | ||||||||||||||||||||||||||
Loan servicing rights |
March 31, 2022 | ||||||||||||||||||||||||||||||||
Carrying Amount | Fair Value | |||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Securities available-for-sale | ||||||||||||||||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||||||||||||||
Loans and lease receivables, net | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank stock | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||
Accrued interest receivable | ||||||||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances and other borrowings | ||||||||||||||||||||||||||||||||
Accrued interest payable | ||||||||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||||||||
Off-balance sheet items: | ||||||||||||||||||||||||||||||||
Standby letters of credit | ||||||||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||
Carrying Amount | Fair Value | |||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Securities available-for-sale | ||||||||||||||||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||||||||||||||
Loans and lease receivables, net | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank stock | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||
Accrued interest receivable | ||||||||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances and other borrowings | ||||||||||||||||||||||||||||||||
Junior subordinated notes | ||||||||||||||||||||||||||||||||
Accrued interest payable | ||||||||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||||||||
Off-balance sheet items: | ||||||||||||||||||||||||||||||||
Standby letters of credit | ||||||||||||||||||||||||||||||||
As of March 31, 2022 | ||||||||||||||||||||||||||
Number of Instruments | Notional Amount | Weighted Average Maturity (In Years) | Fair Value | |||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Included in Derivative assets | ||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||||
Interest rate swap agreements on loans with commercial loan customers | $ | $ | ||||||||||||||||||||||||
Interest rate swap agreements on loans with third-party counter parties | ||||||||||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||||
Interest rate swap related to FHLB borrowings | $ | $ | ||||||||||||||||||||||||
Included in Derivative liabilities | ||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||||
Interest rate swap agreements on loans with commercial loan customers | $ | $ | ||||||||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||||
Interest rate swap related to AFS securities | $ | $ | ||||||||||||||||||||||||
As of December 31, 2021 | ||||||||||||||||||||||||||
Number of Instruments | Notional Amount | Weighted Average Maturity (In Years) | Fair Value | |||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Included in Derivative assets | ||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||||
Interest rate swap agreements on loans with commercial loan customers | $ | $ | ||||||||||||||||||||||||
Included in Derivative liabilities | ||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||||
Interest rate swap agreements on loans with commercial loan customers | $ | $ | ||||||||||||||||||||||||
Interest rate swap agreements on loans with third-party counter parties | ||||||||||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||||
Interest rate swap related to FHLB borrowings | $ | $ |
As of March 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Actual | Minimum Required for Capital Adequacy Purposes | For Capital Adequacy Purposes Plus Capital Conservation Buffer | Minimum Required to Be Well Capitalized Under Prompt Corrective Action Requirements | |||||||||||||||||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 leverage capital (to adjusted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % |
As of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Actual | Minimum Required for Capital Adequacy Purposes | For Capital Adequacy Purposes Plus Capital Conservation Buffer | Minimum Required to Be Well Capitalized Under Prompt Corrective Action Requirements | |||||||||||||||||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Tier 1 leverage capital (to adjusted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
First Business Bank | $ | % |
For the Three Months Ended March 31, | ||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Net interest income | $ | 21,426 | $ | 20,863 | $ | 563 | 2.7 | % | ||||||||||||||||||
Non-interest income | 7,386 | 7,195 | 191 | 2.7 | ||||||||||||||||||||||
Top line revenue | $ | 28,812 | $ | 28,058 | $ | 754 | 2.7 |
For the Three Months Ended March 31, | ||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Total non-interest expense | $ | 18,823 | $ | 17,330 | $ | 1,493 | 8.6 | % | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Net loss on foreclosed properties | 12 | 3 | 9 | NM | ||||||||||||||||||||||
Amortization of other intangible assets | — | 8 | (8) | (100.0) | ||||||||||||||||||||||
SBA recourse benefit | (76) | (130) | 54 | (41.5) | ||||||||||||||||||||||
Total operating expense | $ | 18,887 | $ | 17,449 | $ | 1,438 | 8.2 | |||||||||||||||||||
Net interest income | $ | 21,426 | $ | 20,863 | $ | 563 | 2.7 | |||||||||||||||||||
Total non-interest income | 7,386 | 7,195 | 191 | 2.7 | ||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Net gain (loss) on sale of securities | — | — | — | NM | ||||||||||||||||||||||
Adjusted non-interest income | 7,386 | 7,195 | 191 | 2.7 | ||||||||||||||||||||||
Total operating revenue | $ | 28,812 | $ | 28,058 | $ | 754 | 2.7 | |||||||||||||||||||
Efficiency ratio | 65.55 | % | 62.19 | % | ||||||||||||||||||||||
Pre-tax, pre-provision adjusted earnings | $ | 9,925 | $ | 10,609 | $ | (684) | (6.4) | |||||||||||||||||||
Average total assets | $ | 2,666,241 | $ | 2,577,164 | $ | 89,077 | 3.5 | |||||||||||||||||||
Pre-tax, pre-provision adjusted return on average assets | 1.49 | % | 1.65 | % |
For the Three Months Ended March 31, | ||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Total non-interest expense | $ | 18,823 | $ | 17,330 | $ | 1,493 | 8.6 | % | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Net loss on foreclosed properties | 12 | 3 | 9 | NM | ||||||||||||||||||||||
Amortization of other intangible assets | — | 8 | (8) | (100.0) | ||||||||||||||||||||||
SBA recourse benefit | (76) | (130) | 54 | (41.5) | ||||||||||||||||||||||
Total operating expense | $ | 18,887 | $ | 17,449 | $ | 1,438 | 8.2 | |||||||||||||||||||
Net interest income | $ | 21,426 | $ | 20,863 | $ | 563 | 2.7 | |||||||||||||||||||
Less: | ||||||||||||||||||||||||||
PPP interest income | 52 | 603 | (551) | (91.4) | ||||||||||||||||||||||
PPP loan fee amortization | 249 | 2,212 | (1,963) | (88.7) | ||||||||||||||||||||||
Adjusted net interest income | 21,125 | 18,048 | 3,077 | 17.0 | ||||||||||||||||||||||
Total non-interest income | 7,386 | 7,195 | 191 | 2.7 | ||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Net gain (loss) on sale of securities | — | — | — | NM | ||||||||||||||||||||||
Adjusted non-interest income | 7,386 | 7,195 | 191 | 2.7 | ||||||||||||||||||||||
Adjusted operating revenue | $ | 28,511 | $ | 25,243 | $ | 3,268 | 12.9 | |||||||||||||||||||
Efficiency ratio | 66.24 | % | 69.12 | % | ||||||||||||||||||||||
Pre-tax, pre-provision adjusted earnings | $ | 9,624 | $ | 7,794 | $ | 1,830 | 23.5 | |||||||||||||||||||
Average total assets | $ | 2,666,241 | $ | 2,577,164 | $ | 89,077 | 3.5 | |||||||||||||||||||
Average PPP loans, net | 20,935 | 242,242 | (221,307) | (91.4) | ||||||||||||||||||||||
Adjusted average total assets | $ | 2,645,306 | $ | 2,334,922 | $ | 310,384 | 13.3 | |||||||||||||||||||
Pre-tax, pre-provision adjusted return on average assets | 1.46 | % | 1.34 | % |
Increase (Decrease) for the Three Months Ended March 31, | ||||||||||||||||||||
2022 Compared to 2021 | ||||||||||||||||||||
Rate | Volume | Net | ||||||||||||||||||
(In Thousands) | ||||||||||||||||||||
Interest-earning assets | ||||||||||||||||||||
Commercial real estate and other mortgage loans(1) | $ | (122) | $ | 940 | $ | 818 | ||||||||||||||
Commercial and industrial loans(1) | (23) | (501) | (524) | |||||||||||||||||
Direct financing leases(1) | 10 | (65) | (55) | |||||||||||||||||
Consumer and other loans(1) | 1 | 37 | 38 | |||||||||||||||||
Total loans and leases receivable | (134) | 411 | 277 | |||||||||||||||||
Mortgage-related securities | 5 | 89 | 94 | |||||||||||||||||
Other investment securities | (8) | 36 | 28 | |||||||||||||||||
FHLB and FRB Stock | 1 | 19 | 20 | |||||||||||||||||
Short-term investments | 8 | 2 | 10 | |||||||||||||||||
Total net change in income on interest-earning assets | (128) | 557 | 429 | |||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||
Transaction accounts | (1) | 6 | 5 | |||||||||||||||||
Money market accounts | 9 | 55 | 64 | |||||||||||||||||
Certificates of deposit | (108) | (14) | (122) | |||||||||||||||||
Wholesale deposits | 283 | (483) | (200) | |||||||||||||||||
Total deposits | 183 | (436) | (253) | |||||||||||||||||
FHLB advances | (573) | 360 | (213) | |||||||||||||||||
Other borrowings | (67) | 169 | 102 | |||||||||||||||||
Junior subordinated notes(2) | 236 | (6) | 230 | |||||||||||||||||
Total net change in expense on interest-bearing liabilities | (221) | 87 | (134) | |||||||||||||||||
Net change in net interest income | $ | 93 | $ | 470 | $ | 563 |
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Average Balance | Interest | Average Yield/Rate(4) | Average Balance | Interest | Average Yield/Rate(4) | |||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||
Interest-earning assets | ||||||||||||||||||||||||||||||||||||||
Commercial real estate and other mortgage loans(1) | $ | 1,459,891 | $ | 13,346 | 3.66 | % | $ | 1,357,141 | $ | 12,528 | 3.69 | % | ||||||||||||||||||||||||||
Commercial and industrial loans(1) | 718,364 | 9,101 | 5.07 | 757,898 | 9,625 | 5.08 | ||||||||||||||||||||||||||||||||
Direct financing leases(1) | 16,540 | 189 | 4.57 | 22,271 | 244 | 4.38 | ||||||||||||||||||||||||||||||||
Consumer and other loans(1) | 49,847 | 436 | 3.50 | 45,648 | 398 | 3.49 | ||||||||||||||||||||||||||||||||
Total loans and leases receivable(1) | 2,244,642 | 23,072 | 4.11 | 2,182,958 | 22,795 | 4.18 | ||||||||||||||||||||||||||||||||
Mortgage-related securities(2) | 184,962 | 760 | 1.64 | 163,324 | 666 | 1.63 | ||||||||||||||||||||||||||||||||
Other investment securities(3) | 50,555 | 215 | 1.70 | 42,177 | 187 | 1.77 | ||||||||||||||||||||||||||||||||
FHLB and FRB stock | 14,002 | 172 | 4.91 | 12,465 | 152 | 4.88 | ||||||||||||||||||||||||||||||||
Short-term investments | 31,111 | 16 | 0.21 | 24,823 | 6 | 0.10 | ||||||||||||||||||||||||||||||||
Total interest-earning assets | 2,525,272 | 24,235 | 3.84 | 2,425,747 | 23,806 | 3.93 | ||||||||||||||||||||||||||||||||
Non-interest-earning assets | 140,969 | 151,417 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,666,241 | $ | 2,577,164 | ||||||||||||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||
Transaction accounts | $ | 533,251 | 255 | 0.19 | $ | 521,130 | 250 | 0.19 | ||||||||||||||||||||||||||||||
Money market accounts | 784,276 | 338 | 0.17 | 657,690 | 274 | 0.17 | ||||||||||||||||||||||||||||||||
Certificates of deposit | 52,519 | 55 | 0.42 | 57,424 | 177 | 1.23 | ||||||||||||||||||||||||||||||||
Wholesale deposits | 16,236 | 118 | 2.91 | 166,752 | 318 | 0.76 | ||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,386,282 | 766 | 0.22 | 1,402,996 | 1,019 | 0.29 | ||||||||||||||||||||||||||||||||
FHLB advances | 385,080 | 1,036 | 1.08 | 366,670 | 1,249 | 1.36 | ||||||||||||||||||||||||||||||||
Other borrowings | 40,311 | 503 | 4.99 | 27,296 | 401 | 5.88 | ||||||||||||||||||||||||||||||||
Junior subordinated notes(5) | 9,850 | 504 | 20.47 | 10,063 | 274 | 10.89 | ||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,821,523 | 2,809 | 0.62 | 1,807,025 | 2,943 | 0.65 | ||||||||||||||||||||||||||||||||
Non-interest-bearing demand deposit accounts | 562,530 | 485,863 | ||||||||||||||||||||||||||||||||||||
Other non-interest-bearing liabilities | 42,537 | 73,695 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 2,426,590 | 2,366,583 | ||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 239,651 | 210,581 | ||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,666,241 | $ | 2,577,164 | ||||||||||||||||||||||||||||||||||
Net interest income | $ | 21,426 | $ | 20,863 | ||||||||||||||||||||||||||||||||||
Interest rate spread | 3.22 | % | 3.27 | % | ||||||||||||||||||||||||||||||||||
Net interest-earning assets | $ | 703,749 | $ | 618,722 | ||||||||||||||||||||||||||||||||||
Net interest margin | 3.39 | % | 3.44 | % | ||||||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 138.64 | % | 134.24 | % | ||||||||||||||||||||||||||||||||||
Return on average assets(4) | 1.30 | 1.51 | ||||||||||||||||||||||||||||||||||||
Return on average equity(4) | 14.47 | 18.48 | ||||||||||||||||||||||||||||||||||||
Average equity to average assets | 8.99 | 8.17 | ||||||||||||||||||||||||||||||||||||
Non-interest expense to average assets(4) | 2.82 | 2.69 |
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In Thousands) | ||||||||||||||
Change in general reserve due to subjective factor changes | $ | (416) | $ | 1,082 | ||||||||||
Change in general reserve due to historical loss factor changes | (206) | (984) | ||||||||||||
Charge-offs | 22 | 144 | ||||||||||||
Recoveries | (210) | (2,673) | ||||||||||||
Change in specific reserves on impaired loans, net | (280) | (194) | ||||||||||||
Change due to loan growth, net | 235 | 557 | ||||||||||||
Total provision for loan and lease losses | $ | (855) | $ | (2,068) |
For the Three Months Ended March 31, | ||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Private wealth management services fee income | $ | 2,841 | $ | 2,407 | $ | 434 | 18.0 | % | ||||||||||||||||||
Gain on sale of SBA loans | 585 | 1,078 | (493) | (45.7) | ||||||||||||||||||||||
Service charges on deposits | 999 | 917 | 82 | 8.9 | ||||||||||||||||||||||
Loan fees | 652 | 545 | 107 | 19.6 | ||||||||||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 349 | 350 | (1) | (0.3) | ||||||||||||||||||||||
Swap fees | 225 | 684 | (459) | (67.1) | ||||||||||||||||||||||
Other non-interest income | 1,735 | 1,214 | 521 | 42.9 | ||||||||||||||||||||||
Total non-interest income | $ | 7,386 | $ | 7,195 | $ | 191 | 2.7 | |||||||||||||||||||
Fee income ratio(1) | 25.6 | % | 25.6 | % |
For the Three Months Ended March 31, | ||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Compensation | $ | 13,638 | $ | 12,657 | $ | 981 | 7.8 | % | ||||||||||||||||||
Occupancy | 555 | 552 | 3 | 0.5 | ||||||||||||||||||||||
Professional fees | 1,170 | 866 | 304 | 35.1 | ||||||||||||||||||||||
Data processing | 780 | 770 | 10 | 1.3 | ||||||||||||||||||||||
Marketing | 500 | 391 | 109 | 27.9 | ||||||||||||||||||||||
Equipment | 244 | 246 | (2) | (0.8) | ||||||||||||||||||||||
Computer software | 1,082 | 1,115 | (33) | (3.0) | ||||||||||||||||||||||
FDIC insurance | 313 | 362 | (49) | (13.5) | ||||||||||||||||||||||
Collateral liquidation costs | 16 | 94 | (78) | (83.0) | ||||||||||||||||||||||
Net loss on foreclosed properties | 12 | 3 | 9 | NM | ||||||||||||||||||||||
Other non-interest expense | 513 | 274 | 239 | 87.2 | ||||||||||||||||||||||
Total non-interest expense | $ | 18,823 | $ | 17,330 | $ | 1,493 | 8.6 | |||||||||||||||||||
Total operating expense(1) | $ | 18,887 | $ | 17,449 | $ | 1,438 | 8.2 | |||||||||||||||||||
Full-time equivalent employees | 313 | 306 |
March 31, 2022 | December 31, 2021 | |||||||||||||
(Dollars in Thousands) | ||||||||||||||
Non-accrual loans and leases | ||||||||||||||
Commercial real estate: | ||||||||||||||
Commercial real estate - owner occupied | $ | 344 | $ | 348 | ||||||||||
Commercial real estate - non-owner occupied | — | — | ||||||||||||
Land development | — | — | ||||||||||||
Construction | — | — | ||||||||||||
Multi-family | — | — | ||||||||||||
1-4 family | 331 | 339 | ||||||||||||
Total non-accrual commercial real estate | 675 | 687 | ||||||||||||
Commercial and industrial | 4,858 | 5,572 | ||||||||||||
Direct financing leases, net | 84 | 99 | ||||||||||||
Consumer and other: | ||||||||||||||
Home equity and second mortgages | — | — | ||||||||||||
Other | — | — | ||||||||||||
Total non-accrual consumer and other loans | — | — | ||||||||||||
Total non-accrual loans and leases | 5,617 | 6,358 | ||||||||||||
Foreclosed properties, net | 117 | 164 | ||||||||||||
Total non-performing assets | 5,734 | 6,522 | ||||||||||||
Performing troubled debt restructurings | 203 | 217 | ||||||||||||
Total impaired assets | $ | 5,937 | $ | 6,739 | ||||||||||
Total non-accrual loans and leases to gross loans and leases | 0.25 | % | 0.28 | % | ||||||||||
Total non-performing assets to gross loans and leases plus foreclosed properties, net | 0.25 | 0.29 | ||||||||||||
Total non-performing assets to total assets | 0.21 | 0.25 | ||||||||||||
Allowance for loan and lease losses to gross loans and leases | 1.05 | 1.09 | ||||||||||||
Allowance for loan and lease losses to non-accrual loans and leases | 421.38 | 382.76 |
March 31, 2022 | December 31, 2021 | |||||||||||||
Total non-accrual loans and leases to gross loans and leases | 0.25 | % | 0.29 | % | ||||||||||
Total non-performing assets to gross loans and leases plus foreclosed properties, net | 0.26 | 0.29 | ||||||||||||
Total non-performing assets to total assets | 0.21 | 0.25 | ||||||||||||
Allowance for loan and lease losses to gross loans and leases | 1.06 | 1.10 |
As of and for the Three Months Ended March 31, | As of and for the Year Ended December 31, | |||||||||||||||||||
2022 | 2021 | 2021 | ||||||||||||||||||
(In Thousands) | ||||||||||||||||||||
Impaired loans and leases with no impairment reserves required | $ | 4,284 | $ | 10,391 | $ | 4,419 | ||||||||||||||
Impaired loans and leases with impairment reserves required | 1,536 | 8,660 | 2,156 | |||||||||||||||||
Total impaired loans and leases | 5,820 | 19,051 | 6,575 | |||||||||||||||||
Less: Impairment reserve (included in allowance for loan and lease losses) | 1,225 | 3,487 | 1,505 | |||||||||||||||||
Net impaired loans and leases | $ | 4,595 | $ | 15,564 | $ | 5,070 | ||||||||||||||
Average impaired loans and leases | $ | 6,400 | $ | 22,091 | $ | 14,260 | ||||||||||||||
Foregone interest income attributable to impaired loans and leases | $ | 105 | $ | 603 | $ | 1,104 | ||||||||||||||
Less: Interest income recognized on impaired loans and leases | 28 | 68 | 454 | |||||||||||||||||
Net foregone interest income on impaired loans and leases | $ | 77 | $ | 535 | $ | 650 |
As of and for the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(Dollars in Thousands) | ||||||||||||||
Allowance at beginning of period | $ | 24,336 | $ | 28,521 | ||||||||||
Charge-offs: | ||||||||||||||
Commercial real estate: | ||||||||||||||
Commercial real estate — owner occupied | — | — | ||||||||||||
Commercial real estate — non-owner occupied | — | — | ||||||||||||
Construction and land development | — | — | ||||||||||||
Multi-family | — | — | ||||||||||||
1-4 family | — | — | ||||||||||||
Commercial and industrial | (22) | (144) | ||||||||||||
Direct financing leases | — | — | ||||||||||||
Consumer and other: | ||||||||||||||
Home equity and second mortgages | — | — | ||||||||||||
Other | — | — | ||||||||||||
Total charge-offs | (22) | (144) | ||||||||||||
Recoveries: | ||||||||||||||
Commercial real estate: | ||||||||||||||
Commercial real estate — owner occupied | 115 | 140 | ||||||||||||
Commercial real estate — non-owner occupied | 1 | — | ||||||||||||
Construction and land development | — | 2,078 | ||||||||||||
Multi-family | — | — | ||||||||||||
1-4 family | — | 1 | ||||||||||||
Commercial and industrial | 84 | 453 | ||||||||||||
Direct financing leases | — | — | ||||||||||||
Consumer and other: | ||||||||||||||
Home equity and second mortgages | — | 1 | ||||||||||||
Other | 10 | — | ||||||||||||
Total recoveries | 210 | 2,673 | ||||||||||||
Net recoveries | 188 | 2,529 | ||||||||||||
Provision for loan and lease losses | (855) | (2,068) | ||||||||||||
Allowance at end of period | $ | 23,669 | $ | 28,982 | ||||||||||
Annualized net (recoveries) charge-offs as a percent of average gross loans and leases | (0.03) | % | (0.46) | % | ||||||||||
Annualized net (recoveries) charge-offs as a percent of average gross loans and leases, excluding average net PPP loans | (0.03) | % | (0.52) | % |
Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Total Number of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
January 1, 2022 - January 31, 2022 | — | $ | — | — | — | |||||||||||||||||||||
February 1, 2022 - February 28, 2022 | 13,721 | 33.60 | — | — | ||||||||||||||||||||||
March 1, 2022 - March 31, 2022 | 4,502 | 32.87 | 4,502 | — | ||||||||||||||||||||||
Total | 18,223 | 33.42 | 4,502 | 138,622 |
3.1 | ||||||||
4.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32 | ||||||||
101 | The following financial information from First Business Financial Services, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, (ii) Consolidated Statements of Income for the three months ended March 31, 2022 and 2021, (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021, (iv) Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2022 and 2021, (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021, and (vi) the Notes to Unaudited Consolidated Financial Statements | |||||||
104 | The cover page from First Business Financial Services, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 has been formatted in Inline XBRL and contained in Exhibit 101. |
FIRST BUSINESS FINANCIAL SERVICES, INC. | |||||
April 29, 2022 | /s/ Corey A. Chambas | ||||
Corey A. Chambas | |||||
Chief Executive Officer | |||||
April 29, 2022 | /s/ Edward G. Sloane, Jr. | ||||
Edward G. Sloane, Jr. | |||||
Chief Financial Officer | |||||
(principal financial officer) |
/s/ Corey A. Chambas | |||||
Corey A. Chambas | |||||
Chief Executive Officer | |||||
April 29, 2022 |
/s/ Edward G. Sloane, Jr. | |||||
Edward G. Sloane, Jr. | |||||
Chief Financial Officer | |||||
April 29, 2022 |
/s/ Corey A. Chambas | |||||
Corey A. Chambas | |||||
Chief Executive Officer | |||||
April 29, 2022 | |||||
/s/ Edward G. Sloane, Jr. | |||||
Edward G. Sloane, Jr. | |||||
Chief Financial Officer | |||||
April 29, 2022 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Financial Position [Abstract] | ||
Allowance for loan and lease losses | $ 23,669 | $ 24,336 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Dividend Rate, Percentage | 7.00% | 7.00% |
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | $ 1,000 |
Preferred Stock, Shares Authorized | 2,500,000 | 2,500,000 |
Preferred Stock, Shares Issued | 12,500 | 0 |
Preferred Stock, Shares Outstanding | 12,500 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 25,000,000 | 25,000,000 |
Common Stock, Shares, Issued | 9,340,223 | 9,326,361 |
Common Stock, Shares, Outstanding | 8,488,585 | 8,457,564 |
Treasury Stock, Shares | 851,638 | 868,797 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 8,672 | $ 9,731 |
Other comprehensive loss | ||
Unrealized securities losses arising during the period | (12,481) | (2,238) |
Amortization of net unrealized losses transferred from available-for-sale | 5 | 8 |
Unrealized gains on interest rate swaps | 3,869 | 2,089 |
Income tax benefit | 2,201 | 36 |
Total other comprehensive loss | (6,406) | (105) |
Comprehensive income | $ 2,266 | $ 9,626 |
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share | $ 0.1975 | $ 0.18 |
Nature of Operations and Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies Nature of Operations The accounting and reporting practices of First Business Financial Services, Inc. (“FBFS” or the “Corporation”), through our wholly-owned subsidiary, First Business Bank (“FBB” or the “Bank”), have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). FBB operates as a commercial banking institution primarily in Wisconsin and the greater Kansas City metropolitan area. The Bank provides a full range of financial services to businesses, business owners, executives, professionals, and high net worth individuals. FBB also offers private wealth management services and bank consulting services. The Bank is subject to competition from other financial institutions and service providers, and is also subject to state and federal regulations. As of March 31, 2022, FBB had the following wholly-owned subsidiaries: First Business Specialty Finance (“FBSF”), First Madison Investment Corp. (“FMIC”), ABKC Real Estate, LLC (“ABKC”), FBB Real Estate 2, LLC (“FBB RE 2”), BOC Investment, LLC (“BOC”), Mitchell Street Apartments Investment, LLC (“Mitchell Street”), and FBB Tax Credit Investment, LLC (“FBB Tax Credit”). Basis of Presentation The accompanying unaudited Consolidated Financial Statements were prepared in accordance with GAAP and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s Consolidated Financial Statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021. The unaudited Consolidated Financial Statements include the accounts of the Corporation and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 810, the Corporation’s ownership interest in FBFS Statutory Trust II (“Trust II”) was not consolidated into the financial statements. Management of the Corporation is required to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Material estimates that could significantly change in the near-term include the value of securities and interest rate swaps, level of the allowance for loan and lease losses, lease residuals, property under operating leases, goodwill, and income taxes. The results of operations for the three months ended March 31, 2022, are not necessarily indicative of results that may be expected for any other interim period or the entire fiscal year ending December 31, 2022. Certain amounts in prior periods may have been reclassified to conform to the current presentation. Subsequent events have been evaluated through the date of the issuance of the unaudited Consolidated Financial Statements. No significant subsequent events have occurred through this date requiring adjustment to the financial statements or disclosures. The Corporation has not changed its significant accounting and reporting policies from those disclosed in the Corporation’s Form 10-K for the year ended December 31, 2021. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-13, “Financial Instruments- Credit Losses (Topic 326),” which is often referred to as Current Expected Credit Losses (“CECL”). The ASU replaces the incurred loss impairment methodology for recognizing credit losses with a methodology that reflects all expected credit losses. The ASU also requires consideration of a broader range of information to inform credit loss estimates, including such factors as past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, and any other financial asset not excluded from the scope under which the Corporation has the contractual right to receive cash. Entities will apply the amendments in the ASU through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. In November 2019, the FASB issued ASU No. 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842).” The ASU delays the effective date for the credit losses standard from January 1, 2020 to January 1, 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a smaller reporting company, the Corporation is eligible for the delay and will be deferring adoption. The Corporation has established a cross-functional committee and has implemented a third-party software solution to assist with the adoption of the standard. Management has gathered all necessary data and reviewed potential methods to calculate the expected credit losses. Management is currently calculating sample expected loss computations and developing the allowance methodology and assumptions that will be used under the new standard. Management will continue to progress on its implementation project plan and improve the Corporation’s approach throughout the deferral period. In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Corporation continues to implement its transition plan toward cessation of LIBOR and the modification of its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Corporation expects to utilize the LIBOR transition relief allowed under ASU 2020-04 and ASU 2020-01, as applicable, and does not expect such adoption to have a material impact on its accounting and disclosures. The Corporation expects to adopt the LIBOR transition relief allowed under this standard, and does not expect such adoption to have a material impact on the consolidated financial statements. In August 2021, the FASB issued ASU No. 2021-06 “Presentation of Financial Statements (Topic 205), Financial Services-Depository and Lending (Topic 942), and Financial Services-Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.” This ASU amends the SEC sections of the Codification related to Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update to Statistical Disclosures for Bank and Savings and Loan Registrants. The guidance is effective upon its addition to the FASB codification. The Corporation is assessing the impact of ASU 2021-06 and its impact on its disclosures. In March 2022, the FASB issued ASU 2022-02 "Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." The amendments in this update eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. Additionally, for public business entities, the amendments in this Update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost in the vintage disclosures required by paragraph 326-20-50-6. The guidance is effective for the Corporation upon the adoption of ASU 2016-13, January 1, 2023. The Corporation is currently assessing the impact of ASU 2022-02 on its disclosures and control structure; however, the Corporation does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
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Earnings Per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings per Common Share Earnings per common share are computed using the two-class method. Basic earnings per common share are computed by dividing net income allocated to common shares by the weighted-average number of shares outstanding during the applicable period, excluding outstanding participating securities. Participating securities include unvested restricted shares. Unvested restricted shares are considered participating securities because holders of these securities receive non-forfeitable dividends, or dividend equivalents, at the same rate as holders of the Corporation’s common stock. Diluted earnings per share are computed by dividing net income allocated to common shares adjusted for reallocation of undistributed earnings of unvested restricted shares by the weighted average number of shares determined for the basic earnings per common share computation plus the dilutive effect of common stock equivalents using the treasury stock method.
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Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation The Corporation adopted the 2019 Equity Incentive Plan (the “Plan”) during the quarter ended June 30, 2019. The Plan is administered by the Compensation Committee of the Board of Directors (the “Board”) of the Corporation and provides for the grant of equity ownership opportunities through incentive stock options and nonqualified stock options (“Stock Options”), restricted stock, restricted stock units, dividend equivalent units, and any other type of award permitted by the Plan. As of March 31, 2022, 159,606 shares were available for future grants under the Plan. Shares covered by awards that expire, terminate, or lapse will again be available for the grant of awards under the Plan. Restricted Stock Under the Plan, the Corporation may grant restricted stock awards (“RSA”), restricted stock units (“RSU”), and other stock-based awards to plan participants, subject to forfeiture upon the occurrence of certain events until the dates specified in the participant’s award agreement. While restricted stock is subject to forfeiture, restricted stock award participants may exercise full voting rights and will receive all dividends and other distributions paid with respect to the restricted shares. Restricted stock units do not have voting rights and are provided dividend equivalents. The restricted stock granted under the Plan is typically subject to a vesting period. Compensation expense for restricted stock is recognized over the requisite service period of generally three or four years for the entire award on a straight-line basis. Upon vesting of restricted stock, the benefit of tax deductions in excess of recognized compensation expense is reflected as an income tax benefit in the unaudited Consolidated Statements of Income. The Corporation may issue a combination of performance-based restricted stock units (“PRSU”) and time-based restricted stock awards to its plan participants. Vesting of the performance based restricted stock units will be measured on the relative Total Shareholder Return (“TSR”) and relative Return on Equity (“ROE”) and will cliff-vest after a three-year measurement period based on the Corporation’s TSR performance and ROE performance compared to a broad peer group of over 100 banks. At the end of the performance period, the number of actual shares to be awarded varies between 0% and 200% of target amounts. The restricted stock awards issued to executive officers will vest ratably over a three-year period. Compensation expense is recognized for PRSU over the requisite service and performance period of generally three years for the entire expected award on a straight-line basis. The compensation expense for the awards expected to vest for the percentage of performance-based restricted stock units subject to the ROE metric will be adjusted if there is a change in the expectation of ROE. The compensation expense for the awards expected to vest for the percentage of performance based restricted stock units subject to the TSR metric are never adjusted, and are amortized utilizing the accounting fair value provided using a Monte Carlo pricing model. Restricted stock activity for the year ended December 31, 2021 and the three months ended March 31, 2022 was as follows:
(1)The number of restricted shares/units shown includes the shares that would be granted if the target level of performance is achieved related to the performance based restricted stock units. The number of shares actually issued may vary. Employee Stock Purchase Plan During 2020, an employee stock purchase plan ("ESPP") was approved by the Corporation’s shareholders and is offered to all qualifying employees. The Corporation is authorized to issue up to 250,000 shares of common stock under the ESPP. The plan qualifies as an employee stock purchase plan under section 423 of the Internal Revenue Code of 1986. Under the ESPP, eligible employees may enroll in a three month offer period that begins January, April, July, and October of each year. Employees may elect to purchase a limited number of shares on the Corporation's common stock at 90% of the fair market value on the last day of the offering period. The ESPP is treated as a compensatory item for purposes of share-based compensation expense. During the three months ended March 31, 2022, the Corporation issued 1,380 shares of common stock under the ESPP. As of March 31, 2022, 238,122 shares remained available for issuance under the ESPP. Share-based compensation expense related to restricted stock and ESPP included in the unaudited Consolidated Statements of Income was as follows:
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Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The amortized cost and fair value of securities available-for-sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:
The amortized cost and fair value of securities held-to-maturity and the corresponding amounts of gross unrealized gains and losses were as follows:
U.S. Treasuries contains treasury bonds issued by the United States Treasury. U.S. government agency securities - government-sponsored enterprises represent securities issued by Federal National Mortgage Association (“FNMA”) and the SBA. Municipal securities include securities issued by various municipalities located primarily within Wisconsin and are primarily general obligation bonds that are tax-exempt in nature. Residential and commercial mortgage-backed securities - government issued represent securities guaranteed by the Government National Mortgage Association. Residential and commercial mortgage-backed securities - government-sponsored enterprises include securities guaranteed by the Federal Home Loan Mortgage Corporation, FNMA, and the FHLB. Other securities represent certificates of deposit of insured banks and savings institutions with an original maturity greater than three months. There were no sales of available-for-sale securities that occurred during the three months ended March 31, 2022 and 2021. At March 31, 2022 and December 31, 2021, securities with a fair value of $38.7 million and $70.3 million, respectively, were pledged to secure various obligations, including interest rate swap contracts and municipal deposits. The amortized cost and fair value of securities by contractual maturity at March 31, 2022 are shown below. Actual maturities may differ from contractual maturities because issuers have the right to call or prepay certain obligations with or without call or prepayment penalties.
The tables below show the Corporation’s gross unrealized losses and fair value of available-for-sale investments aggregated by investment category and length of time that individual investments were in a continuous loss position at March 31, 2022 and December 31, 2021. At March 31, 2022, the Corporation held 149 available-for-sale securities that were in an unrealized loss position. Such securities have not experienced credit rating downgrades; however, they have primarily declined in value due to the current interest rate environment. At March 31, 2022, the Corporation held 10 available-for-sale securities that have been in a continuous unrealized loss position for twelve months or greater. The Corporation also has not specifically identified available-for-sale securities in a loss position that it intends to sell in the near term and does not believe that it will be required to sell any such securities. The Corporation reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment. Consideration is given to such factors as the length of time and extent to which the security has been in an unrealized loss position, changes in security ratings, and an evaluation of the present value of expected future cash flows, if necessary. Based on the Corporation’s evaluation, it is expected that the Corporation will recover the entire amortized cost basis of each security. Accordingly, no other-than-temporary impairment was recorded in the unaudited Consolidated Statements of Income for the three months ended March 31, 2022 and 2021. A summary of unrealized loss information for securities available-for-sale, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:
The tables below show the Corporation’s gross unrealized losses and fair value of held-to-maturity investments, aggregated by investment category and length of time that individual investments were in a continuous loss position at March 31, 2022 and December 31, 2021. At March 31, 2022, the Corporation held 17 held-to-maturity securities that were in an unrealized loss position. Such securities have not experienced credit rating downgrades; however, they have primarily declined in value due to the current interest rate environment. At March 31, 2022, the Corporation held one held-to-maturity security that had been in a continuous unrealized loss position for twelve months or greater. It is expected that the Corporation will recover the entire amortized cost basis of each held-to-maturity security based upon an evaluation of aforementioned factors. Accordingly, no other-than-temporary impairment was recorded in the unaudited Consolidated Statements of Income for the three months ended March 31, 2022 and 2021. A summary of unrealized loss information for securities held-to-maturity, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:
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Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses | Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses Loan and lease receivables consist of the following:
As of March 31, 2022 and December 31, 2021, the Corporation had $18.5 million and $27.9 million, respectively, in gross PPP loans outstanding included in the commercial and industrial loan category and deferred processing fees outstanding of $308,000 and $557,000, respectively, included in deferred loan fees. The processing fees are deferred and recognized over the contractual life of the loan, or accelerated at forgiveness, as an adjustment of yield using the interest method. The SBA provides a guaranty to the lender of 100% of principal and interest, unless the lender violated an obligation under the agreement. As loan losses are expected to be immaterial, if any at all, due to the guaranty, management excluded the PPP loans from the allowance for loan and lease losses calculation. Management funded these short-term loans primarily through a combination of excess cash held at the Federal Reserve and from an increase in in-market deposits. The total amount of the Corporation’s ownership of SBA loans on-balance sheet is comprised of the following:
As of March 31, 2022 and December 31, 2021, $1.2 million and $1.7 million of SBA loans were considered impaired, respectively. Loans transferred to third parties consist of the guaranteed portions of SBA loans which the Corporation sold in the secondary market and participation interests in other, non-SBA originated loans. The total principal amount of the guaranteed portions of SBA loans sold during the three months ended March 31, 2022, and 2021, was $5.6 million and $10.6 million, respectively. Each of the transfers of these financial assets met the qualifications for sale accounting, and therefore all of the loans transferred during the three months ended March 31, 2022, and 2021, have been derecognized in the unaudited Consolidated Financial Statements. The guaranteed portions of SBA loans were transferred at their fair value and the related gain was recognized upon the transfer as non-interest income in the unaudited Consolidated Financial Statements. The total outstanding balance of sold SBA loans at March 31, 2022, and December 31, 2021, was $90.2 million and $93.0 million, respectively. The total principal amount of transferred participation interests in other, non-SBA originated loans during the three months ended March 31, 2022, and 2021, was $22.1 million and $5.2 million, respectively, all of which were treated as sales and derecognized under the applicable accounting guidance at the time of transfer. No gain or loss was recognized on participation interests in other, non-SBA originated loans as they were transferred at or near the date of loan origination and the payments received for servicing the portion of the loans participated represents adequate compensation. The total outstanding balance of these transferred loans at March 31, 2022, and December 31, 2021, was $186.3 million and $195.2 million, respectively. As of March 31, 2022, and December 31, 2021, the total amount of the Corporation’s partial ownership of these transferred loans on the unaudited Consolidated Balance Sheets was $323.1 million and $314.5 million, respectively. As of March 31, 2022 and December 31, 2021, the non-SBA originated participation portfolio contained no impaired loans. The Corporation does not share in the participant’s portion of any potential charge-offs. There were no loan participations purchased on the unaudited Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021. The following tables illustrate ending balances of the Corporation’s loan and lease portfolio, including impaired loans by class of receivable, and considering certain credit quality indicators:
Each credit is evaluated for proper risk rating upon origination, at the time of each subsequent renewal, upon receipt and evaluation of updated financial information from the Corporation’s borrowers, or as other circumstances dictate. The Corporation primarily uses a nine grade risk rating system to monitor the ongoing credit quality of its loans and leases. The risk rating grades follow a consistent definition and are then applied to specific loan types based on the nature of the loan. Each risk rating is subjective and, depending on the size and nature of the credit, subject to various levels of review and concurrence on the stated risk rating. In addition to its nine grade risk rating system, the Corporation groups loans into four loan and related risk categories which determine the level and nature of review by management. Category I — Loans and leases in this category are performing in accordance with the terms of the contract and generally exhibit no immediate concerns regarding the security and viability of the underlying collateral, financial stability of the borrower, integrity or strength of the borrowers’ management team, or the industry in which the borrower operates. The Corporation monitors Category I loans and leases through payment performance, continued maintenance of its personal relationships with such borrowers, and continued review of such borrowers’ compliance with the terms of their respective agreements. Category II — Loans and leases in this category are beginning to show signs of deterioration in one or more of the Corporation’s core underwriting criteria such as financial stability, management strength, industry trends, or collateral values. Management will place credits in this category to allow for proactive monitoring and resolution with the borrower to possibly mitigate the area of concern and prevent further deterioration or risk of loss to the Corporation. Category II loans are considered performing but are monitored frequently by the assigned business development officer and by asset quality review committees. Category III — Loans and leases in this category are identified by management as warranting special attention. However, the balance in this category is not intended to represent the amount of adversely classified assets held by the Bank. Category III loans and leases generally exhibit undesirable characteristics, such as evidence of adverse financial trends and conditions, managerial problems, deteriorating economic conditions within the related industry, or evidence of adverse public filings and may exhibit collateral shortfall positions. Management continues to believe that it will collect all contractual principal and interest in accordance with the original terms of the contracts relating to the loans and leases in this category, and therefore Category III loans are considered performing with no specific reserves established for this category. Category III loans are monitored by management and asset quality review committees on a monthly basis. Category IV — Loans and leases in this category are considered to be impaired. Impaired loans and leases, with the exception of performing TDRs, have been placed on non-accrual as management has determined that it is unlikely that the Bank will receive the contractual principal and interest in accordance with the original terms of the agreement. Impaired loans are individually evaluated to assess the need for the establishment of specific reserves or charge-offs. When analyzing the adequacy of collateral, the Corporation obtains external appraisals at least annually for impaired loans and leases. External appraisals are obtained from the Corporation’s approved appraiser listing and are independently reviewed to monitor the quality of such appraisals. To the extent a collateral shortfall position is present, a specific reserve or charge-off will be recorded to reflect the magnitude of the impairment. Loans and leases in this category are monitored by management and asset quality review committees on a monthly basis. The delinquency aging of the loan and lease portfolio by class of receivable was as follows:
The Corporation’s total impaired assets consisted of the following:
As of March 31, 2022 and December 31, 2021, $621,000 and $627,000 of the non-accrual loans and leases were considered TDRs, respectively. The Corporation has allocated $138,000 and $134,000 of specific reserves to TDRs as of March 31, 2022 and December 31, 2021, respectively. There were no unfunded commitments associated with TDR loans and leases as of March 31, 2022. All loans and leases modified as TDRs are measured for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a default, is considered in the determination of an appropriate level of the allowance for loan and lease losses. The following table provides the number of loans modified as a TDR and the pre- and post-modification recorded investment by class of receivable:
During the three months ended March 31, 2022, no loans were modified to TDR. Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, principal reduction, or some combination of these concessions. During the three months ended March 31, 2021, the modification of terms primarily consisted of payment schedule modifications or principal reductions. There were no loans modified as a TDR during the previous 12 months which subsequently defaulted during the three months ended March 31, 2022 and 2021, respectively. Additionally, the Corporation continues to work with borrowers impacted by COVID-19 and has provided modifications to include interest only deferrals and principal and interest deferrals. These modifications are excluded from TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. As of March 31, 2022, the Corporation had no deferrals outstanding. As of December 31, 2021, the Corporation had three deferrals outstanding, representing $293,000 in total loans. The following represents additional information regarding the Corporation’s impaired loans and leases, including performing TDRs, by class:
(1)The recorded investment represents the unpaid principal balance net of any partial charge-offs. (2)Average recorded investment is calculated primarily using daily average balances.
(1)The recorded investment represents the unpaid principal balance net of any partial charge-offs. (2)Average recorded investment is calculated primarily using daily average balances. The difference between the recorded investment of loans and leases and the unpaid principal balance of $143,000 and $145,000 as of March 31, 2022, and December 31, 2021, respectively, represents partial charge-offs of loans and leases resulting from losses due to the appraised value of the collateral securing the loans and leases being below the carrying values of the loans and leases. Impaired loans and leases also included $203,000 and $217,000 of loans as of March 31, 2022, and December 31, 2021, respectively, that were performing TDRs, and although not on non-accrual, were reported as impaired due to the concession in terms. When a loan is placed on non-accrual, interest accrual is discontinued and previously accrued but uncollected interest is deducted from interest income. Cash payments collected on non-accrual loans are first applied to such loan’s principal. Foregone interest represents the interest that was contractually due on the loan but not received or recorded. To the extent the amount of principal on a non-accrual loan is fully collected and additional cash is received, the Corporation will recognize interest income. To determine the level and composition of the allowance for loan and lease losses, the Corporation categorizes the portfolio into segments with similar risk characteristics. First, the Corporation evaluates loans and leases for potential impairment classification. The Corporation analyzes each loan and lease determined to be impaired on an individual basis to determine a specific reserve based upon the estimated value of the underlying collateral for collateral-dependent loans, or alternatively, the present value of expected cash flows. The Corporation applies historical trends from established risk factors to each category of loans and leases that has not been individually evaluated for the purpose of establishing the general portion of the allowance. A summary of the activity in the allowance for loan and lease losses by portfolio segment is as follows:
The following tables provide information regarding the allowance for loan and lease losses and balances by type of allowance methodology.
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Leases |
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Lessee, Operating Leases | Leases The Corporation leases various office spaces and specialized lending production offices under non-cancellable operating leases which expire on various dates through 2033. The Corporation also leases office equipment. The Corporation recognizes a right-of-use asset and an operating lease liability for all leases, with the exception of short-term leases. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. During 2022, the Corporation entered into a new lease in the Southeast Wisconsin market resulting in a $1.6 million right-of-use asset. In addition, the Corporation received a $991,000 tenant improvement allowance which is recognized as a lease incentive and deducted from the right-of-use asset. In 2019, the Corporation entered into a sublease for office space it vacated in its Kansas City metropolitan area which expires in 2023. During the first quarter 2022, the Corporation amended the sublease agreement, the amendment did not result in any impairment. The components of total lease expense were as follows:
Quantitative information regarding the Corporation’s operating leases was as follows:
The following maturity analysis shows the undiscounted cash flows due on the Corporation’s operating lease liabilities:
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Other Assets | Note 7 — Other Assets A summary of accrued interest receivable and other assets was as follows:
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Deposits |
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Deposits | Deposits The composition of deposits is shown below. Average balances represent year to date averages.
A summary of annual maturities of in-market and wholesale certificates of deposit at March 31, 2022 is as follows:
Wholesale deposits include $12.3 million of wholesale certificates of deposit and no non-reciprocal interest-bearing transaction accounts at March 31, 2022, compared to $19.6 million and $10.0 million of wholesale certificates of deposit and non-reciprocal interest-bearing transaction accounts, respectively, at December 31, 2021. Deposits include $20.9 million and $7.9 million of certificates of deposit and wholesale deposits which are denominated in amounts greater than $250,000 at March 31, 2022 and December 31, 2021, respectively.
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FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable | FHLB Advances, Other Borrowings and Junior Subordinated Notes The composition of borrowed funds is shown below. Average balances represent year to date averages.
(1)Weighted average rate of junior subordinated notes reflects the accelerated amortization of subordinated debt issuance costs as a result of the early redemption of the junior subordinated notes during the first quarter of 2022. A summary of annual maturities of borrowings at March 31, 2022 is as follows:
In September 2008, Trust II completed the sale of $10.0 million of 10.50% fixed rate trust preferred securities (“Trust Preferred Securities”). Trust II also issued common securities of $315,000. Trust II used the proceeds from the offering to purchase $10.3 million of 10.50% junior subordinated notes of the Corporation. The Trust Preferred Securities are mandatorily redeemable upon the maturity of the junior subordinated notes on September 26, 2038. As of March 30, 2022 the junior subordinated notes were redeemed and the remaining unamortized debt issuance cost was accelerated due to the early redemption. As of December 31, 2021 the unamortized debt issuance cost included in junior subordinated notes on the Consolidated Balance Sheets was $239,000. The Corporation issued a new subordinated note payable as of March 4, 2022. The principal amount of the newly issued subordinated note payable was $20.0 million which qualified as Tier 2 capital. The subordinated note bears a fixed interest rate of 3.50% with a maturity date of March 15, 2032. The subordinated note payable has certain performance debt covenants of which the Corporation was in compliance. The Corporation may, at its option, redeem the note, in whole or part, at any time after the fifth anniversary of issuance. As of March 31, 2022, $771,000 of debt issuance costs remain in the subordinated note payable balance, of which $480,000 is related to the recently issued subordinated note. As of March 31, 2022, the Corporation had other borrowings of $9.7 million, which consisted of sold loans accounted for as secured borrowings because they did not qualify for true sale accounting. During 2021, the Corporation paid in full the borrowings associated with our investment in a community development entity. As of March 31, 2022 and December 31, 2021, the Corporation was in compliance with its debt covenants under its third-party secured senior line of credit. Per the promissory note dated February 19, 2022, the Corporation pays a fee on this line of credit. During both the three months ended March 31, 2022 and 2021, the Corporation incurred interest expense of $3,000 due to this fee.
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Equity |
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Mar. 31, 2022 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock On March 4, 2022, the Corporation issued 12,500 shares, or $12.5 million in aggregate liquidation preference, of 7.0% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share, with a liquidation preference of $1,000 per share (the “Series A Preferred Stock”) in a private placement to institutional investors. The net proceeds received from the issuance of the Series A Preferred Stock were $12.0 million. The Corporation expects to pay dividends on the Series A Preferred Stock when and if declared by the Board, at a fixed rate of 7.0% per annum, payable quarterly, in arrears, on March 15, June 15, September 15 and December 15 of each year up to, but excluding, March 15, 2027. For each dividend period from and including March 15, 2027, dividends will be paid at a floating rate of Three-Month Term Secured Overnight Financing Rate (“SOFR”) plus a spread of 539 basis points per annum. The Series A Preferred Stock is perpetual and has no stated maturity. The Corporation may redeem the Series A Preferred Stock at its option at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends (without regard to any undeclared dividends), subject to regulatory approval, on or after March 15, 2027 or within 90 days following a regulatory capital treatment event, in accordance with the terms of the Series A Preferred Stock.
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Commitments and Contingencies |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, various legal proceedings involving the Corporation are pending. Management, based upon advice from legal counsel, does not anticipate any significant losses as a result of these actions. Management believes that any liability arising from any such proceedings currently existing or threatened will not have a material adverse effect on the Corporation’s financial position, results of operations, and cash flows. The Corporation sells the guaranteed portions of SBA 7(a) loans, as well as participation interests in other, non-SBA originated, loans to third parties. The Corporation has a continuing involvement in each of the transferred lending arrangements by way of relationship management and servicing the loans, as well as being subject to normal and customary requirements of the SBA loan program and standard representations and warranties related to sold amounts. In the event of a loss resulting from default and a determination by the SBA that there is a deficiency in the manner in which the loan was originated, funded, or serviced by the Corporation, the SBA may require the Corporation to repurchase the loan, deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of the principal loss related to the deficiency from the Corporation. The Corporation must comply with applicable SBA regulations in order to maintain the guaranty. In addition, the Corporation retains the option to repurchase the sold guaranteed portion of an SBA loan if the loan defaults. Management has assessed estimated losses inherent in the outstanding guaranteed portions of SBA loans sold in accordance with ASC 450, Contingencies, and determined a recourse reserve based on the probability of future losses for these loans to be $559,000 at March 31, 2022, which is reported in accrued interest payable and other liabilities on the unaudited Consolidated Balance Sheets. The summary of the activity in the SBA recourse reserve is as follows:
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Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | Fair Value Disclosures The Corporation determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date and is based on exit prices. Fair value includes assumptions about risk, such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. The standard describes three levels of inputs that may be used to measure fair value. Level 1 — Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Corporation has the ability to access at the measurement date. Level 2 — Level 2 inputs are inputs, other than quoted prices included with Level 1, that are observable for the asset or liability either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Level 3 inputs are supported by little or no market activity and are significant to the fair value of the assets or liabilities. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Corporation’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Assets and liabilities measured at fair value on a recurring basis, segregated by fair value hierarchy level, are summarized below:
For assets and liabilities measured at fair value on a recurring basis, there were no transfers between the levels during the three months ended March 31, 2022 or the year ended December 31, 2021 related to the above measurements. Assets and liabilities measured at fair value on a non-recurring basis, segregated by fair value hierarchy are summarized below:
Impaired loans were written down to the fair value of their underlying collateral less costs to sell of $659,000 and $1.0 million at March 31, 2022 and December 31, 2021, respectively, through the establishment of specific reserves or by recording charge-offs when the carrying value exceeded the fair value of the underlying collateral of impaired loans. Valuation techniques consistent with the market approach, income approach, or cost approach were used to measure fair value. These techniques included observable inputs for the individual impaired loans being evaluated, such as current appraisals, recent sales of similar assets, or other observable market data, and unobservable inputs, typically when discounts are applied to appraisal values to adjust such values to current market conditions or to reflect net realizable values. The quantification of unobservable inputs for Level 3 impaired loan values range from 13% - 100% as of the measurement date of March 31, 2022. The weighted average of those unobservable inputs was 30%. The majority of the impaired loans are considered collateral dependent loans or are supported by an SBA guaranty. Foreclosed properties, upon initial recognition, are remeasured and reported at fair value through a charge-off to the allowance for loan and lease losses, if deemed necessary, based upon the fair value of the foreclosed property. The fair value of a foreclosed property, upon initial recognition, is estimated using a market approach or based on observable market data, typically a current appraisal, or based upon assumptions specific to the individual property or equipment, such as management applied discounts used to further reduce values to a net realizable value when observable inputs become stale. Loan servicing rights represent the asset retained upon sale of the guaranteed portion of certain SBA loans. When SBA loans are sold, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. The servicing rights are subsequently measured using the amortization method, which requires amortization into interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. The Corporation periodically reviews this portfolio for impairment and engages a third-party valuation firm to assess the fair value of the overall servicing rights portfolio. Loan servicing rights do not trade in an active, open market with readily observable prices. While sales of loan servicing rights do occur, the precise terms and conditions typically are not readily available to allow for a “quoted price for similar assets” comparison. Accordingly, the Corporation utilizes an independent valuation from a third party which uses a discounted cash flow model to estimate the fair value of its loan servicing rights. The valuation model incorporates prepayment assumptions to project loan servicing rights cash flows based on the current interest rate scenario, which is then discounted to estimate an expected fair value of the loan servicing rights. The valuation model considers portfolio characteristics of the underlying serviced portion of the SBA loans and uses the following significant unobservable inputs: (1) constant prepayment rate (“CPR”) assumptions based on the SBA sold pools historical CPR as quoted in Bloomberg and (2) a discount rate. Due to the nature of the valuation inputs, loan servicing rights are classified in Level 3 of the fair value hierarchy. Fair Value of Financial Instruments The Corporation is required to disclose estimated fair values for its financial instruments. Fair value estimates, methods, and assumptions, consistent with exit price concepts for fair value measurements, are set forth below:
N/A = The fair value is not applicable due to restrictions placed on transferability
N/A = The fair value is not applicable due to restrictions placed on transferability Disclosure of fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the unaudited Consolidated Balance Sheets. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Certain financial instruments and all non-financial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not necessarily represent the underlying value of the Corporation. Securities: The fair value measurements of investment securities are determined by a third-party pricing service which considers observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, trade execution data, market consensus prepayment speeds, credit information, and the securities’ terms and conditions, among other things. The fair value measurements are subject to independent verification by another pricing source on a quarterly basis to review for reasonableness. Any significant differences in pricing are reviewed with appropriate members of management who have the relevant technical expertise to assess the results. The Corporation has determined that these valuations are classified in Level 2 of the fair value hierarchy. When the independent pricing service does not provide a fair value measurement for a particular security, the Corporation will estimate the fair value based on specific information about each security. Fair values derived in this manner are classified in Level 3 of the fair value hierarchy. Loans Held for Sale: Loans held for sale, which consist of the guaranteed portions of SBA 7(a) loans, are carried at the lower of cost or estimated fair value. The estimated fair value is based on what secondary markets are currently offering for portfolios with similar characteristics. Interest Rate Swaps: The carrying amount and fair value of existing derivative financial instruments are based upon independent valuation models, which use widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative contract. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Corporation incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Corporation considers the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Limitations: Fair value estimates are made at a discrete 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 Corporation’s entire holding of a particular financial instrument. Because no market exists for a significant portion of the Corporation’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. Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and are not considered in the estimates.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Corporation offers interest rate swap products directly to qualified commercial borrowers. The Corporation economically hedges client derivative transactions by entering into offsetting interest rate swap contracts executed with a third party. Derivative transactions executed as part of this program are not considered hedging instruments and are marked-to-market through earnings each period. The derivative contracts have mirror-image terms, which results in the positions’ changes in fair value offsetting through earnings each period. The credit risk and risk of non-performance embedded in the fair value calculations is different between the dealer counterparties and the commercial borrowers which may result in a difference in the changes in the fair value of the mirror-image swaps. The Corporation incorporates credit valuation adjustments to appropriately reflect both its own non-performance risk and the counterparty’s risk in the fair value measurements. When evaluating the fair value of its derivative contracts for the effects of non-performance and credit risk, the Corporation considered the impact of netting and any applicable credit enhancements such as collateral postings, thresholds, and guarantees. As of March 31, 2022 and December 31, 2021, the credit valuation allowance was $191,000. The Corporation receives fixed rates and pays floating rates based upon designated benchmark interest rates used on the swaps with commercial borrowers. Commercial borrower swaps are completed independently with each borrower and are not subject to master netting arrangements. The Corporation pays fixed rates and receives floating rates based upon designated benchmark interest rates used on the swaps with dealer counterparties. Dealer counterparty swaps are subject to master netting agreements among the contracts within our Bank and are reported on the unaudited Consolidated Balance Sheet. The gross amount of dealer counterparty swaps, without regard to the enforceable master netting agreement, was a gross derivative liability of $7.7 million and $24.9 million gross derivative asset. No right of offset existed with the dealer counterparty swaps as of March 31, 2022. All changes in the fair value of these instruments are recorded in other non-interest income. Given the mirror-image terms of the outstanding derivative portfolio, the change in fair value for the three months ended March 31, 2022 and 2021 had an insignificant impact on the unaudited Consolidated Statements of Income. The Corporation also enters into interest rate swaps to manage interest rate risk and reduce the cost of match-funding certain long-term fixed rate loans. These derivative contracts involve the receipt of floating rate interest from a counterparty in exchange for the Corporation making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional value. The instruments are designated as cash flow hedges as the receipt of floating rate interest from the counterparty is used to manage interest rate risk associated with forecasted issuances of short-term FHLB advances. The change in the fair value of these hedging instruments is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged transactions affects earnings. A pre-tax unrealized gain of $3.9 million was recognized in other comprehensive income for the three months ended March 31, 2022, and there were no ineffective portions of these hedges. The Corporation also enters into interest rate swaps to mitigate market value volatility on certain long-term fixed securities. The objective of the hedge is to protect the Corporation against changes in fair value due to changes in benchmark interest rates. The instruments are designated as fair value hedges as the changes in the fair value of the interest rate swap are expected to offset changes in the fair value of the hedged item attributable to changes in the SOFR swap rate, the designated benchmark interest rate. These derivative contracts involve the receipt of floating rate interest from a counterparty in exchange for the Corporation making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional value. The change in the fair value of these hedging instruments is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged transactions affects earnings. A pre-tax unrealized loss of $50,000 was recognized in other comprehensive income for the three months ended March 31, 2022 and there was no ineffective portion of these hedges.
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Regulatory Capital |
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital | Regulatory Capital The Corporation and the Bank are subject to various regulatory capital requirements administered by Federal and Wisconsin banking agencies. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions on the part of regulators, that if undertaken, could have a direct material effect on the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory practices. The Corporation’s and the Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The Corporation regularly reviews and updates, when appropriate, its Capital and Liquidity Action Plan, which is designed to help ensure appropriate capital adequacy, to plan for future capital needs, and to ensure that the Corporation serves as a source of financial strength to the Bank. The Corporation’s and the Bank’s Board and management teams adhere to the appropriate regulatory guidelines on decisions which affect their respective capital positions, including but not limited to, decisions relating to the payment of dividends and increasing indebtedness. As a bank holding company, the Corporation’s ability to pay dividends is affected by the policies and enforcement powers of the Board of Governors of the Federal Reserve system (the “Federal Reserve”). Federal Reserve guidance urges financial institutions to strongly consider eliminating, deferring, or significantly reducing dividends if: (i) net income available to common shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividend; (ii) the prospective rate of earnings retention is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital ratios. Management intends, when appropriate under regulatory guidelines, to consult with the Federal Reserve Bank of Chicago and provide it with information on the Corporation’s then-current and prospective earnings and capital position in advance of declaring any cash dividends. As a Wisconsin corporation, the Corporation is subject to the limitations of the Wisconsin Business Corporation Law, which prohibit the Corporation from paying dividends if such payment would: (i) render the Corporation unable to pay its debts as they become due in the usual course of business, or (ii) result in the Corporation’s assets being less than the sum of its total liabilities plus the amount needed to satisfy the preferential rights upon dissolution of any shareholders with preferential rights superior to those shareholders receiving the dividend. The Bank is also subject to certain legal, regulatory, and other restrictions on their ability to pay dividends to the Corporation. As a bank holding company, the payment of dividends by the Bank to the Corporation is one of the sources of funds the Corporation could use to pay dividends, if any, in the future and to make other payments. Future dividend decisions by the Bank and the Corporation will continue to be subject to compliance with various legal, regulatory, and other restrictions as defined from time to time. Quantitative measures established by regulation to ensure capital adequacy require the Corporation and the Bank to maintain minimum amounts and ratios of Total Common Equity Tier 1 and Tier 1 capital to risk-weighted assets and of Tier 1 capital to adjusted total assets. These risk-based capital requirements presently address credit risk related to both recorded and off-balance sheet commitments and obligations. As of March 31, 2022, the Corporation’s capital levels exceeded the regulatory minimums and the Bank’s capital levels remained characterized as well capitalized under the regulatory framework. The following tables summarize both the Corporation’s and the Bank’s capital ratios and the ratios required by their federal regulators:
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Nature of Operations and Summary of Significant Accounting Policies Nature of Operations and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited Consolidated Financial Statements were prepared in accordance with GAAP and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s Consolidated Financial Statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021. |
Principles of Consolidation | The unaudited Consolidated Financial Statements include the accounts of the Corporation and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 810, the Corporation’s ownership interest in FBFS Statutory Trust II (“Trust II”) was not consolidated into the financial statements. |
Use of Estimates | Management of the Corporation is required to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Material estimates that could significantly change in the near-term include the value of securities and interest rate swaps, level of the allowance for loan and lease losses, lease residuals, property under operating leases, goodwill, and income taxes. |
Reclassification | Certain amounts in prior periods may have been reclassified to conform to the current presentation. |
Subsequent Events | Subsequent events have been evaluated through the date of the issuance of the unaudited Consolidated Financial Statements. No significant subsequent events have occurred through this date requiring adjustment to the financial statements or disclosures. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-13, “Financial Instruments- Credit Losses (Topic 326),” which is often referred to as Current Expected Credit Losses (“CECL”). The ASU replaces the incurred loss impairment methodology for recognizing credit losses with a methodology that reflects all expected credit losses. The ASU also requires consideration of a broader range of information to inform credit loss estimates, including such factors as past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, and any other financial asset not excluded from the scope under which the Corporation has the contractual right to receive cash. Entities will apply the amendments in the ASU through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. In November 2019, the FASB issued ASU No. 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842).” The ASU delays the effective date for the credit losses standard from January 1, 2020 to January 1, 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a smaller reporting company, the Corporation is eligible for the delay and will be deferring adoption. The Corporation has established a cross-functional committee and has implemented a third-party software solution to assist with the adoption of the standard. Management has gathered all necessary data and reviewed potential methods to calculate the expected credit losses. Management is currently calculating sample expected loss computations and developing the allowance methodology and assumptions that will be used under the new standard. Management will continue to progress on its implementation project plan and improve the Corporation’s approach throughout the deferral period. In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Corporation continues to implement its transition plan toward cessation of LIBOR and the modification of its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Corporation expects to utilize the LIBOR transition relief allowed under ASU 2020-04 and ASU 2020-01, as applicable, and does not expect such adoption to have a material impact on its accounting and disclosures. The Corporation expects to adopt the LIBOR transition relief allowed under this standard, and does not expect such adoption to have a material impact on the consolidated financial statements. In August 2021, the FASB issued ASU No. 2021-06 “Presentation of Financial Statements (Topic 205), Financial Services-Depository and Lending (Topic 942), and Financial Services-Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.” This ASU amends the SEC sections of the Codification related to Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update to Statistical Disclosures for Bank and Savings and Loan Registrants. The guidance is effective upon its addition to the FASB codification. The Corporation is assessing the impact of ASU 2021-06 and its impact on its disclosures. In March 2022, the FASB issued ASU 2022-02 "Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." The amendments in this update eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. Additionally, for public business entities, the amendments in this Update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost in the vintage disclosures required by paragraph 326-20-50-6. The guidance is effective for the Corporation upon the adoption of ASU 2016-13, January 1, 2023. The Corporation is currently assessing the impact of ASU 2022-02 on its disclosures and control structure; however, the Corporation does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
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Earnings Per Common Share (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per common share are computed using the two-class method. Basic earnings per common share are computed by dividing net income allocated to common shares by the weighted-average number of shares outstanding during the applicable period, excluding outstanding participating securities. Participating securities include unvested restricted shares. Unvested restricted shares are considered participating securities because holders of these securities receive non-forfeitable dividends, or dividend equivalents, at the same rate as holders of the Corporation’s common stock. Diluted earnings per share are computed by dividing net income allocated to common shares adjusted for reallocation of undistributed earnings of unvested restricted shares by the weighted average number of shares determined for the basic earnings per common share computation plus the dilutive effect of common stock equivalents using the treasury stock method. |
Share-Based Compensation (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation, Option and Incentive Plans | The Corporation adopted the 2019 Equity Incentive Plan (the “Plan”) during the quarter ended June 30, 2019. The Plan is administered by the Compensation Committee of the Board of Directors (the “Board”) of the Corporation and provides for the grant of equity ownership opportunities through incentive stock options and nonqualified stock options (“Stock Options”), restricted stock, restricted stock units, dividend equivalent units, and any other type of award permitted by the Plan. As of March 31, 2022, 159,606 shares were available for future grants under the Plan. Shares covered by awards that expire, terminate, or lapse will again be available for the grant of awards under the Plan. Restricted Stock Under the Plan, the Corporation may grant restricted stock awards (“RSA”), restricted stock units (“RSU”), and other stock-based awards to plan participants, subject to forfeiture upon the occurrence of certain events until the dates specified in the participant’s award agreement. While restricted stock is subject to forfeiture, restricted stock award participants may exercise full voting rights and will receive all dividends and other distributions paid with respect to the restricted shares. Restricted stock units do not have voting rights and are provided dividend equivalents. The restricted stock granted under the Plan is typically subject to a vesting period. Compensation expense for restricted stock is recognized over the requisite service period of generally three or four years for the entire award on a straight-line basis. Upon vesting of restricted stock, the benefit of tax deductions in excess of recognized compensation expense is reflected as an income tax benefit in the unaudited Consolidated Statements of Income. The Corporation may issue a combination of performance-based restricted stock units (“PRSU”) and time-based restricted stock awards to its plan participants. Vesting of the performance based restricted stock units will be measured on the relative Total Shareholder Return (“TSR”) and relative Return on Equity (“ROE”) and will cliff-vest after a three-year measurement period based on the Corporation’s TSR performance and ROE performance compared to a broad peer group of over 100 banks. At the end of the performance period, the number of actual shares to be awarded varies between 0% and 200% of target amounts. The restricted stock awards issued to executive officers will vest ratably over a three-year period. Compensation expense is recognized for PRSU over the requisite service and performance period of generally three years for the entire expected award on a straight-line basis. The compensation expense for the awards expected to vest for the percentage of performance-based restricted stock units subject to the ROE metric will be adjusted if there is a change in the expectation of ROE. The compensation expense for the awards expected to vest for the percentage of performance based restricted stock units subject to the TSR metric are never adjusted, and are amortized utilizing the accounting fair value provided using a Monte Carlo pricing model.
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Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Receivables [Abstract] | |
Loans and Leases Receivable, Allowance for Loan Losses | To determine the level and composition of the allowance for loan and lease losses, the Corporation categorizes the portfolio into segments with similar risk characteristics. First, the Corporation evaluates loans and leases for potential impairment classification. The Corporation analyzes each loan and lease determined to be impaired on an individual basis to determine a specific reserve based upon the estimated value of the underlying collateral for collateral-dependent loans, or alternatively, the present value of expected cash flows. The Corporation applies historical trends from established risk factors to each category of loans and leases that has not been individually evaluated for the purpose of establishing the general portion of the allowance. |
Fair Value Disclosures (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The Corporation determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date and is based on exit prices. Fair value includes assumptions about risk, such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. The standard describes three levels of inputs that may be used to measure fair value. Level 1 — Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Corporation has the ability to access at the measurement date. Level 2 — Level 2 inputs are inputs, other than quoted prices included with Level 1, that are observable for the asset or liability either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Level 3 inputs are supported by little or no market activity and are significant to the fair value of the assets or liabilities. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Corporation’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.Impaired loans were written down to the fair value of their underlying collateral less costs to sell of $659,000 and $1.0 million at March 31, 2022 and December 31, 2021, respectively, through the establishment of specific reserves or by recording charge-offs when the carrying value exceeded the fair value of the underlying collateral of impaired loans. Valuation techniques consistent with the market approach, income approach, or cost approach were used to measure fair value. These techniques included observable inputs for the individual impaired loans being evaluated, such as current appraisals, recent sales of similar assets, or other observable market data, and unobservable inputs, typically when discounts are applied to appraisal values to adjust such values to current market conditions or to reflect net realizable values. The quantification of unobservable inputs for Level 3 impaired loan values range from 13% - 100% as of the measurement date of March 31, 2022. The weighted average of those unobservable inputs was 30%. The majority of the impaired loans are considered collateral dependent loans or are supported by an SBA guaranty. Foreclosed properties, upon initial recognition, are remeasured and reported at fair value through a charge-off to the allowance for loan and lease losses, if deemed necessary, based upon the fair value of the foreclosed property. The fair value of a foreclosed property, upon initial recognition, is estimated using a market approach or based on observable market data, typically a current appraisal, or based upon assumptions specific to the individual property or equipment, such as management applied discounts used to further reduce values to a net realizable value when observable inputs become stale. Loan servicing rights represent the asset retained upon sale of the guaranteed portion of certain SBA loans. When SBA loans are sold, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. The servicing rights are subsequently measured using the amortization method, which requires amortization into interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. The Corporation periodically reviews this portfolio for impairment and engages a third-party valuation firm to assess the fair value of the overall servicing rights portfolio. Loan servicing rights do not trade in an active, open market with readily observable prices. While sales of loan servicing rights do occur, the precise terms and conditions typically are not readily available to allow for a “quoted price for similar assets” comparison. Accordingly, the Corporation utilizes an independent valuation from a third party which uses a discounted cash flow model to estimate the fair value of its loan servicing rights. The valuation model incorporates prepayment assumptions to project loan servicing rights cash flows based on the current interest rate scenario, which is then discounted to estimate an expected fair value of the loan servicing rights. The valuation model considers portfolio characteristics of the underlying serviced portion of the SBA loans and uses the following significant unobservable inputs: (1) constant prepayment rate (“CPR”) assumptions based on the SBA sold pools historical CPR as quoted in Bloomberg and (2) a discount rate. Due to the nature of the valuation inputs, loan servicing rights are classified in Level 3 of the fair value hierarchy.
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Fair Value Measurement | Disclosure of fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the unaudited Consolidated Balance Sheets. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Certain financial instruments and all non-financial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not necessarily represent the underlying value of the Corporation. Securities: The fair value measurements of investment securities are determined by a third-party pricing service which considers observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, trade execution data, market consensus prepayment speeds, credit information, and the securities’ terms and conditions, among other things. The fair value measurements are subject to independent verification by another pricing source on a quarterly basis to review for reasonableness. Any significant differences in pricing are reviewed with appropriate members of management who have the relevant technical expertise to assess the results. The Corporation has determined that these valuations are classified in Level 2 of the fair value hierarchy. When the independent pricing service does not provide a fair value measurement for a particular security, the Corporation will estimate the fair value based on specific information about each security. Fair values derived in this manner are classified in Level 3 of the fair value hierarchy. Loans Held for Sale: Loans held for sale, which consist of the guaranteed portions of SBA 7(a) loans, are carried at the lower of cost or estimated fair value. The estimated fair value is based on what secondary markets are currently offering for portfolios with similar characteristics. Interest Rate Swaps: The carrying amount and fair value of existing derivative financial instruments are based upon independent valuation models, which use widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative contract. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Corporation incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Corporation considers the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Limitations: Fair value estimates are made at a discrete 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 Corporation’s entire holding of a particular financial instrument. Because no market exists for a significant portion of the Corporation’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. Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and are not considered in the estimates.
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Derivative Financial Instruments (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | The Corporation offers interest rate swap products directly to qualified commercial borrowers. The Corporation economically hedges client derivative transactions by entering into offsetting interest rate swap contracts executed with a third party. Derivative transactions executed as part of this program are not considered hedging instruments and are marked-to-market through earnings each period. The derivative contracts have mirror-image terms, which results in the positions’ changes in fair value offsetting through earnings each period. The credit risk and risk of non-performance embedded in the fair value calculations is different between the dealer counterparties and the commercial borrowers which may result in a difference in the changes in the fair value of the mirror-image swaps. The Corporation incorporates credit valuation adjustments to appropriately reflect both its own non-performance risk and the counterparty’s risk in the fair value measurements. When evaluating the fair value of its derivative contracts for the effects of non-performance and credit risk, the Corporation considered the impact of netting and any applicable credit enhancements such as collateral postings, thresholds, and guarantees. As of March 31, 2022 and December 31, 2021, the credit valuation allowance was $191,000. |
Earnings Per Common Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted |
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Share-Based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Activity | Restricted stock activity for the year ended December 31, 2021 and the three months ended March 31, 2022 was as follows:
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Share-based Payment Arrangement, Expensed and Capitalized, Amount | Share-based compensation expense related to restricted stock and ESPP included in the unaudited Consolidated Statements of Income was as follows:
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities | The amortized cost and fair value of securities available-for-sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:
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Schedule of Held-to-maturity Securities | The amortized cost and fair value of securities held-to-maturity and the corresponding amounts of gross unrealized gains and losses were as follows:
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Investments Classified by Contractual Maturity | The amortized cost and fair value of securities by contractual maturity at March 31, 2022 are shown below. Actual maturities may differ from contractual maturities because issuers have the right to call or prepay certain obligations with or without call or prepayment penalties.
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Schedule of Unrealized Loss on Investments | A summary of unrealized loss information for securities available-for-sale, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:
A summary of unrealized loss information for securities held-to-maturity, categorized by security type and length of time for which the security has been in a continuous unrealized loss position, follows:
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Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan Composition Schedule | Loan and lease receivables consist of the following:
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Ownership of SBA Loans | The total amount of the Corporation’s ownership of SBA loans on-balance sheet is comprised of the following:
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Financing Receivable by Credit Quality Indicators | The following tables illustrate ending balances of the Corporation’s loan and lease portfolio, including impaired loans by class of receivable, and considering certain credit quality indicators:
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Past Due Financing Receivables | The delinquency aging of the loan and lease portfolio by class of receivable was as follows:
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Schedule of Financing Receivables, Non Accrual Status | The Corporation’s total impaired assets consisted of the following:
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Troubled Debt Restructurings on Financing Receivables | The following table provides the number of loans modified as a TDR and the pre- and post-modification recorded investment by class of receivable:
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Impaired Financing Receivables | The following represents additional information regarding the Corporation’s impaired loans and leases, including performing TDRs, by class:
(1)The recorded investment represents the unpaid principal balance net of any partial charge-offs. (2)Average recorded investment is calculated primarily using daily average balances.
(1)The recorded investment represents the unpaid principal balance net of any partial charge-offs. (2)Average recorded investment is calculated primarily using daily average balances.
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Allowance for Loan and Lease Losses by Portfolio Segment | A summary of the activity in the allowance for loan and lease losses by portfolio segment is as follows:
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Allowance for Loan and Lease Losses and Balances by Type of Allowance Methodology | The following tables provide information regarding the allowance for loan and lease losses and balances by type of allowance methodology.
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease expense | The components of total lease expense were as follows:
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Operating Lease Quantitative Information | Quantitative information regarding the Corporation’s operating leases was as follows:
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Operating Lease Maturity Analysis | The following maturity analysis shows the undiscounted cash flows due on the Corporation’s operating lease liabilities:
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Other Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | A summary of accrued interest receivable and other assets was as follows:
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Deposits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | The composition of deposits is shown below. Average balances represent year to date averages.
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Time deposits by maturity | A summary of annual maturities of in-market and wholesale certificates of deposit at March 31, 2022 is as follows:
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FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The composition of borrowed funds is shown below. Average balances represent year to date averages.
(1)Weighted average rate of junior subordinated notes reflects the accelerated amortization of subordinated debt issuance costs as a result of the early redemption of the junior subordinated notes during the first quarter of 2022.
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Schedule of Maturities of Long-term Debt | A summary of annual maturities of borrowings at March 31, 2022 is as follows:
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Commitments and Contingencies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of SBA Recourse Reserve | The summary of the activity in the SBA recourse reserve is as follows:
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Fair Value Disclosures (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring Basis | Assets and liabilities measured at fair value on a recurring basis, segregated by fair value hierarchy level, are summarized below:
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Fair Value Measurements, Nonrecurring Basis | Assets and liabilities measured at fair value on a non-recurring basis, segregated by fair value hierarchy are summarized below:
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Fair Value, by Balance Sheet Grouping | Fair value estimates, methods, and assumptions, consistent with exit price concepts for fair value measurements, are set forth below:
N/A = The fair value is not applicable due to restrictions placed on transferability
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value |
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Regulatory Capital (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following tables summarize both the Corporation’s and the Bank’s capital ratios and the ratios required by their federal regulators:
|
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Basic earnings per common share | ||
Net income | $ 8,672 | $ 9,731 |
Less: earnings allocated to participating securities | 255 | 251 |
Basic earnings allocated to common shareholders | $ 8,417 | $ 9,480 |
Weighted-average common shares outstanding, excluding participating securities | 8,232,142 | 8,429,149 |
Basic earnings per common share | $ 1.02 | $ 1.12 |
Diluted earnings per common share | ||
Diluted earnings allocated to common shareholders | $ 8,417 | $ 9,480 |
Weighted-average diluted common shares outstanding, excluding participating securities | 8,232,142 | 8,429,149 |
Diluted earnings per common share | $ 1.02 | $ 1.12 |
Share-Based Compensation (Narrative Disclosures) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022
shares
| |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 159,606 |
Employee Stock Purchase Plan, Number of Shares Authorized for Grant | 250,000 |
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 1,380 |
Employee Stock Purchase Plan, Number of Shares Available for Grant | 238,122 |
Share-Based Compensation Share-Based Compensation (Compensation Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Payment Arrangement [Abstract] | ||
Share-based compensation | $ 609 | $ 531 |
Securities (Contractual Maturity) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Available-for-Sale, Amortized Cost | ||
Due in one year or less | $ 3,991 | |
Due in one year through five years | 10,368 | |
Due in five through ten years | 61,645 | |
Due in over ten years | 160,105 | |
Amortized cost | 236,109 | $ 205,699 |
Available-for-Sale, Estimated Fair Value | ||
Due in one year or less | 4,001 | |
Due in one year through five years | 9,913 | |
Due in five through ten years | 58,300 | |
Due in over ten years | 151,417 | |
Estimated fair value | 223,631 | 205,702 |
Held-to-Maturity, Amortized Cost | ||
Due in one year or less | 3,138 | |
Due in one year through five years | 6,337 | |
Due in five through ten years | 6,438 | |
Due in over ten years | 1,354 | |
Amortized cost | 17,267 | 19,746 |
Held-to-Maturity, Estimated Fair Value | ||
Due in one year or less | 3,139 | |
Due in one year through five years | 6,342 | |
Due in five through ten years | 6,453 | |
Due in over ten years | 1,342 | |
Estimated Fair Value | $ 17,276 | $ 20,276 |
Securities (Narrative Disclosures) (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
securities
|
Mar. 31, 2021
USD ($)
securities
|
Dec. 31, 2021
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | |||
Number of available-for-sale securities sold | 0 | 0 | |
Securities pledged to secure various obligations | $ | $ 38,700 | $ 70,300 | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | 149 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Positions | 10 | ||
Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale, Recognized in Earnings | $ | $ 0 | $ 0 | |
Number of held-to-maturity securities in an unrealized loss position | 17 | ||
Number of held-to-maturity Securities in an unrealized loss position, twelve months or greater | 1 | ||
Other than temporary impairment on held-to-maturity securities recorded on the income statement | $ | $ 0 | $ 0 |
Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses (SBA Loans) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Receivables [Abstract] | ||
SBA 7(a) loans | $ 31,724 | $ 33,223 |
SBA 504 Loans | 42,432 | 41,394 |
SBA Express Loans and lines of credit | 370 | 387 |
SBA PPP loans | 18,514 | 27,854 |
Total SBA loans | $ 93,040 | $ 102,858 |
Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses (Troubled Debt Restructurings) (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
loans
|
Mar. 31, 2021
USD ($)
loans
|
|
Troubled debt restructurings | ||
Number of Loans | loans | 0 | |
Commercial and industrial | ||
Troubled debt restructurings | ||
Number of Loans | loans | 1 | |
Pre-Modification Recorded Investment | $ | $ 56 | |
Post-Modification Recorded Investment | $ | $ 46 |
Leases Total Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Leases [Abstract] | ||
Operating lease cost | $ 383 | $ 375 |
Short-term lease cost | 37 | 39 |
Variable lease cost | 126 | 129 |
Sublease income | (45) | (39) |
Total lease cost, net | $ 501 | $ 504 |
Leases Quantitative Information (Details) |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 6 years 9 months 18 days | 5 years 18 days |
Weighted-average discount rate | 2.68% | 2.51% |
Leases Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Due 2022 | $ 1,241 | |
Due 2023 | 1,248 | |
Due 2024 | 1,073 | |
Due 2025 | 949 | |
Due 2026 | 935 | |
Due thereafter | 3,003 | |
Total undiscounted cash flows | 8,449 | |
Discount on cash flows | (869) | |
Total lease liability | $ 7,580 | $ 5,406 |
Leases (Narrative Disclosures) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Leases [Abstract] | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 1,600 |
Tenant Improvement Allowance Recognized as a Lease Incentive | $ 991 |
Other Assets Accrued Interest Receivable and Other Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Accrued interest receivable | $ 5,973 | $ 5,497 |
Net deferred tax asset | 8,146 | 6,175 |
Investment in historic development entities | 2,299 | 2,299 |
Investment in Low-Income Housing Development Entities | 3,613 | 2,964 |
Investment in limited partnerships | 11,441 | 9,874 |
Investment in Trust II | 0 | 315 |
Prepaid expenses | 3,655 | 2,689 |
Other assets | 8,689 | 9,577 |
Total accrued interest receivable and other assets | $ 43,816 | $ 39,390 |
Other Assets Accrued Interest Receivable and Other Assets (Narrative Disclosures) (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 26, 2008 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Gain (loss) on surrendering of trust preferred securities | $ 0 | ||
Sole ownership of common securities issued by Trust II | 315,000 | $ 315,000 | |
Trust preferred securities | $ 10,000,000 | ||
Fixed Interest Rate, Trust Preferred Securities | 10.50% | ||
Investment in Trust II | $ 0 | $ 315,000 |
Time Deposits by Maturity (Details) $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Deposits [Abstract] | |
Time Deposit Maturities, Remainder of Fiscal Year | $ 51,679 |
Time Deposit Maturities, Year One | 6,550 |
Time Deposit Maturities, Year Two | 15,125 |
Time Deposit Maturities, Year Three | 382 |
Time Deposit Maturities, Year Four | 490 |
Time Deposit Maturities, after Year Five | 2,072 |
Time Deposits | $ 76,298 |
Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deposits | ||
Deposits, carrying amount | $ 2,023,694 | $ 1,957,923 |
Wholesale Certificates of Deposit | ||
Deposits | ||
Deposits, carrying amount | 12,300 | 19,600 |
Non-Reciprocal Interest-Bearing Transaction Accounts | ||
Deposits | ||
Deposits, carrying amount | 0 | 10,000 |
Certificates of Deposits and Wholesale Deposits | ||
Deposits | ||
Time Deposits, $250,000 or More | $ 20,900 | $ 7,900 |
FHLB Advances, Other Borrowings and Junior Subordinated Notes Payable (Debt Maturities) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Disclosure [Abstract] | ||
Long-Term Debt, Maturity, Remainder of Fiscal Year | $ 165,600 | |
Long-Term Debt, Maturity, Year One | 37,300 | |
Long-Term Debt, Maturity, Year Two | 35,500 | |
Long-Term Debt, Maturity, Year Three | 22,763 | |
Long-Term Debt, Maturity, Year Four | 0 | |
Long-Term Debt, Maturity, after Year Four | 153,324 | |
Borrowed funds | $ 414,487 | $ 413,527 |
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Equity [Abstract] | |||
Preferred Stock, Shares Issued | 12,500 | 0 | |
Preferred Stock, Shares Outstanding | 12,500 | 0 | |
Preferred Stock, Value, Outstanding | $ 12,500 | ||
Preferred Stock, Dividend Rate, Percentage | 7.00% | 7.00% | |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 11,992 | $ 0 | |
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | $ 1,000 |
Commitments and Contingencies SBA Recourse Reserve Rollforward (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Beginning balance | $ 635 | $ 723 |
SBA recourse provision | (76) | (130) |
Ending balance | $ 559 | $ 593 |
Commitments and Contingencies Narrative (Details) $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
SBA Loans, Probability of Future Losses | $ 559 |
Derivative Financial Instruments (Narrative Disclosures) (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Derivatives | |||
Accumulated Derivative Credit Valuation Adjustment | $ 191,000 | $ 191,000 | |
Unrealized gains on interest rate swaps | 3,869,000 | $ 2,089,000 | |
Gain recognized in income on ineffective portion of hedges | 0 | ||
Interest rate swap agreements on loans with third-party counter parties | |||
Derivatives | |||
Interest rate swaps - liabilities, fair value | 7,700,000 | ||
Interest rate swaps - assets, fair value | 24,900,000 | ||
Interest rate swap related to FHLB borrowings | Designated as Hedging Instrument | |||
Derivatives | |||
Unrealized gains on interest rate swaps | 3,900,000 | ||
Interest rate swap related to AFS securities | Designated as Hedging Instrument | |||
Derivatives | |||
Unrealized gains on interest rate swaps | $ 50,000 |
Regulatory Capital Narrative Disclosures (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Description of Material Affects of Noncompliance | Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions on the part of regulators, that if undertaken, could have a direct material effect on the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory practices. |
Label | Element | Value |
---|---|---|
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 56,909,000 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 57,110,000 |
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