þ | 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 |
First Internet Bancorp |
(Exact Name of Registrant as Specified in Its Charter) |
Indiana | 20-3489991 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
11201 USA Parkway Fishers, IN | 46037 | |
(Address of Principal Executive Offices) | (Zip Code) |
(317) 532-7900 | ||
(Registrant’s Telephone Number, Including Area Code) | ||
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
Large Accelerated Filer ¨ | Accelerated Filer þ |
Non-accelerated Filer ¨ (Do not check if a smaller reporting company) | Smaller Reporting Company ¨ |
ITEM 1. | FINANCIAL STATEMENTS |
June 30, 2016 | December 31, 2015 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and due from banks | $ | 1,868 | $ | 1,063 | ||||
Interest-bearing demand deposits | 68,140 | 24,089 | ||||||
Total cash and cash equivalents | 70,008 | 25,152 | ||||||
Interest-bearing time deposits | 250 | 1,000 | ||||||
Securities available-for-sale, at fair value (amortized cost of $430,070 and $215,576 in 2016 and 2015, respectively) | 433,806 | 213,698 | ||||||
Loans held-for-sale (includes $38,128 and $24,065 at fair value in 2016 and 2015, respectively) | 44,503 | 36,518 | ||||||
Loans | 1,111,622 | 953,859 | ||||||
Allowance for loan losses | (10,016 | ) | (8,351 | ) | ||||
Net loans | 1,101,606 | 945,508 | ||||||
Accrued interest receivable | 5,508 | 4,105 | ||||||
Federal Home Loan Bank of Indianapolis stock | 8,595 | 8,595 | ||||||
Cash surrender value of bank-owned life insurance | 12,932 | 12,727 | ||||||
Premises and equipment, net | 9,267 | 8,521 | ||||||
Goodwill | 4,687 | 4,687 | ||||||
Other real estate owned | 4,488 | 4,488 | ||||||
Accrued income and other assets | 6,818 | 4,871 | ||||||
Total assets | $ | 1,702,468 | $ | 1,269,870 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Liabilities | ||||||||
Noninterest-bearing deposits | $ | 28,066 | $ | 23,700 | ||||
Interest-bearing deposits | 1,360,867 | 932,354 | ||||||
Total deposits | 1,388,933 | 956,054 | ||||||
Advances from Federal Home Loan Bank | 147,974 | 190,957 | ||||||
Subordinated debt, net of unamortized discounts and debt issuance costs of $222 and $276 in 2016 and 2015, respectively | 12,778 | 12,724 | ||||||
Accrued interest payable | 138 | 117 | ||||||
Accrued expenses and other liabilities | 16,966 | 5,688 | ||||||
Total liabilities | 1,566,789 | 1,165,540 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Preferred stock, no par value; 4,913,779 shares authorized; issued and outstanding - none | — | — | ||||||
Voting common stock, no par value; 45,000,000 shares authorized; 5,533,050 and 4,481,347 shares issued and outstanding in 2016 and 2015, respectively | 95,642 | 72,559 | ||||||
Nonvoting common stock, no par value; 86,221 shares authorized; issued and outstanding - none | — | — | ||||||
Retained earnings | 37,630 | 32,980 | ||||||
Accumulated other comprehensive income (loss) | 2,407 | (1,209 | ) | |||||
Total shareholders’ equity | 135,679 | 104,330 | ||||||
Total liabilities and shareholders’ equity | $ | 1,702,468 | $ | 1,269,870 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest Income | ||||||||||||||||
Loans | $ | 11,661 | $ | 9,043 | $ | 22,850 | $ | 17,433 | ||||||||
Securities – taxable | 1,747 | 945 | 2,916 | 1,667 | ||||||||||||
Securities – non-taxable | 368 | 59 | 533 | 59 | ||||||||||||
Other earning assets | 195 | 83 | 365 | 158 | ||||||||||||
Total interest income | 13,971 | 10,130 | 26,664 | 19,317 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 3,930 | 2,137 | 6,818 | 4,090 | ||||||||||||
Other borrowed funds | 735 | 421 | 1,399 | 881 | ||||||||||||
Total interest expense | 4,665 | 2,558 | 8,217 | 4,971 | ||||||||||||
Net Interest Income | 9,306 | 7,572 | 18,447 | 14,346 | ||||||||||||
Provision for Loan Losses | 924 | 304 | 1,870 | 746 | ||||||||||||
Net Interest Income After Provision for Loan Losses | 8,382 | 7,268 | 16,577 | 13,600 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges and fees | 215 | 193 | 415 | 369 | ||||||||||||
Mortgage banking activities | 3,295 | 2,214 | 5,549 | 5,100 | ||||||||||||
Gain on sale of securities | 177 | — | 177 | — | ||||||||||||
Loss on asset disposals | (48 | ) | (33 | ) | (64 | ) | (47 | ) | ||||||||
Other | 109 | 102 | 211 | 202 | ||||||||||||
Total noninterest income | 3,748 | 2,476 | 6,288 | 5,624 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 4,329 | 3,787 | 8,227 | 7,365 | ||||||||||||
Marketing, advertising, and promotion | 434 | 334 | 898 | 786 | ||||||||||||
Consulting and professional services | 895 | 564 | 1,533 | 1,156 | ||||||||||||
Data processing | 275 | 233 | 549 | 481 | ||||||||||||
Loan expenses | 200 | 181 | 384 | 362 | ||||||||||||
Premises and equipment | 963 | 691 | 1,761 | 1,333 | ||||||||||||
Deposit insurance premium | 215 | 160 | 395 | 310 | ||||||||||||
Other | 564 | 377 | 1,133 | 791 | ||||||||||||
Total noninterest expense | 7,875 | 6,327 | 14,880 | 12,584 | ||||||||||||
Income Before Income Taxes | 4,255 | 3,417 | 7,985 | 6,640 | ||||||||||||
Income Tax Provision | 1,421 | 1,152 | 2,719 | 2,312 | ||||||||||||
Net Income | $ | 2,834 | $ | 2,265 | $ | 5,266 | $ | 4,328 | ||||||||
Income Per Share of Common Stock | ||||||||||||||||
Basic | $ | 0.57 | $ | 0.50 | $ | 1.11 | $ | 0.96 | ||||||||
Diluted | $ | 0.57 | $ | 0.50 | $ | 1.10 | $ | 0.95 | ||||||||
Weighted-Average Number of Common Shares Outstanding | ||||||||||||||||
Basic | 4,972,759 | 4,529,823 | 4,757,243 | 4,523,336 | ||||||||||||
Diluted | 4,992,025 | 4,550,034 | 4,782,700 | 4,536,736 | ||||||||||||
Dividends Declared Per Share | $ | 0.06 | $ | 0.06 | $ | 0.12 | $ | 0.12 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income | $ | 2,834 | $ | 2,265 | $ | 5,266 | $ | 4,328 | ||||||||
Other comprehensive income (loss) | ||||||||||||||||
Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax | 3,917 | (2,539 | ) | 5,791 | (1,721 | ) | ||||||||||
Reclassification adjustment for gains realized | (177 | ) | — | (177 | ) | — | ||||||||||
Other comprehensive income (loss) before income tax | 3,740 | (2,539 | ) | 5,614 | (1,721 | ) | ||||||||||
Income tax provision (benefit) | 1,331 | (909 | ) | 1,998 | (618 | ) | ||||||||||
Other comprehensive income (loss) | 2,409 | (1,630 | ) | 3,616 | (1,103 | ) | ||||||||||
Comprehensive income | $ | 5,243 | $ | 635 | $ | 8,882 | $ | 3,225 |
Voting and Nonvoting Common Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders’ Equity | |||||||||||||
Balance, January 1, 2016 | $ | 72,559 | $ | (1,209 | ) | $ | 32,980 | $ | 104,330 | |||||||
Net income | — | — | 5,266 | 5,266 | ||||||||||||
Other comprehensive income | — | 3,616 | — | 3,616 | ||||||||||||
Dividends declared ($0.12 per share) | — | — | (616 | ) | (616 | ) | ||||||||||
Net cash proceeds from common stock issuance | 22,754 | — | — | 22,754 | ||||||||||||
Recognition of the fair value of share-based compensation | 358 | — | — | 358 | ||||||||||||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 14 | — | — | 14 | ||||||||||||
Excess tax benefit on share-based compensation | 48 | — | — | 48 | ||||||||||||
Common stock redeemed for the net settlement of share-based awards | (91 | ) | — | — | (91 | ) | ||||||||||
Balance, June 30, 2016 | $ | 95,642 | $ | 2,407 | $ | 37,630 | $ | 135,679 |
Six Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
Operating Activities | ||||||||
Net income | $ | 5,266 | $ | 4,328 | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 1,468 | 922 | ||||||
Increase in cash surrender value of bank-owned life insurance | (205 | ) | (199 | ) | ||||
Provision for loan losses | 1,870 | 746 | ||||||
Share-based compensation expense | 358 | 458 | ||||||
Gain from sale of available-for-sale securities | (177 | ) | — | |||||
Loans originated for sale | (259,095 | ) | (277,913 | ) | ||||
Proceeds from sale of loans | 256,592 | 287,065 | ||||||
Gain on loans sold | (4,496 | ) | (4,845 | ) | ||||
(Increase) decrease in fair value of loans held-for-sale | (986 | ) | 492 | |||||
Gain on derivatives | (67 | ) | (747 | ) | ||||
Net change in accrued income and other assets | (3,942 | ) | 250 | |||||
Net change in accrued expenses and other liabilities | 1,485 | (563 | ) | |||||
Net cash (used in) provided by operating activities | (1,929 | ) | 9,994 | |||||
Investing Activities | ||||||||
Net loan activity, excluding purchases | (136,643 | ) | (81,290 | ) | ||||
Net change in interest-bearing time deposits | 750 | 750 | ||||||
Maturities of securities available-for-sale | 16,303 | 10,515 | ||||||
Proceeds from sale of securities available-for-sale | 49,430 | — | ||||||
Purchase of securities available-for-sale | (272,129 | ) | (65,821 | ) | ||||
Purchase of Federal Home Loan Bank of Indianapolis stock | — | (1,596 | ) | |||||
Purchase of premises and equipment | (1,653 | ) | (1,586 | ) | ||||
Loans purchased | (21,325 | ) | — | |||||
Net cash used in investing activities | (365,267 | ) | (139,028 | ) | ||||
Financing Activities | ||||||||
Net increase in deposits | 432,879 | 97,905 | ||||||
Cash dividends paid | (538 | ) | (534 | ) | ||||
Proceeds from advances from Federal Home Loan Bank | 40,000 | 180,000 | ||||||
Repayment of advances from Federal Home Loan Bank | (83,000 | ) | (146,000 | ) | ||||
Net proceeds from common stock issuance | 22,754 | — | ||||||
Other, net | (43 | ) | (24 | ) | ||||
Net cash provided by financing activities | 412,052 | 131,347 | ||||||
Net Increase in Cash and Cash Equivalents | 44,856 | 2,313 | ||||||
Cash and Cash Equivalents, Beginning of Period | 25,152 | 28,289 | ||||||
Cash and Cash Equivalents, End of Period | $ | 70,008 | $ | 30,602 | ||||
Supplemental Disclosures | ||||||||
Cash paid during the period for interest | $ | 8,196 | $ | 4,960 | ||||
Cash paid during the period for taxes | 2,911 | 1,070 | ||||||
Cash dividends declared, paid in subsequent period | 331 | 267 | ||||||
Securities purchased during the period, settled in subsequent period | 8,705 | — |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Basic earnings per share | ||||||||||||||||
Net income | $ | 2,834 | $ | 2,265 | $ | 5,266 | $ | 4,328 | ||||||||
Weighted-average common shares | 4,972,759 | 4,529,823 | 4,757,243 | 4,523,336 | ||||||||||||
Basic earnings per common share | $ | 0.57 | $ | 0.50 | $ | 1.11 | $ | 0.96 | ||||||||
Diluted earnings per share | ||||||||||||||||
Net income | $ | 2,834 | $ | 2,265 | $ | 5,266 | $ | 4,328 | ||||||||
Weighted-average common shares | 4,972,759 | 4,529,823 | 4,757,243 | 4,523,336 | ||||||||||||
Dilutive effect of warrants | 9,743 | 7,006 | 10,518 | 3,522 | ||||||||||||
Dilutive effect of equity compensation | 9,523 | 13,205 | 14,939 | 9,878 | ||||||||||||
Weighted-average common and incremental shares | 4,992,025 | 4,550,034 | 4,782,700 | 4,536,736 | ||||||||||||
Diluted earnings per common share | $ | 0.57 | $ | 0.50 | $ | 1.10 | $ | 0.95 | ||||||||
Number of warrants excluded from the calculation of diluted earnings per share as the exercise prices were greater than the average market price of the Company’s common stock during the period | — | — | — | — |
June 30, 2016 | ||||||||||||||||
Amortized | Gross Unrealized | Fair | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities available-for-sale | ||||||||||||||||
U.S. Government-sponsored agencies | $ | 75,133 | $ | 701 | $ | (156 | ) | $ | 75,678 | |||||||
Municipal securities | 78,594 | 2,227 | (23 | ) | 80,798 | |||||||||||
Mortgage-backed securities | 233,886 | 2,147 | (122 | ) | 235,911 | |||||||||||
Asset-backed securities | 19,457 | — | (125 | ) | 19,332 | |||||||||||
Corporate securities | 20,000 | — | (926 | ) | 19,074 | |||||||||||
Other securities | 3,000 | 13 | — | 3,013 | ||||||||||||
Total available-for-sale | $ | 430,070 | $ | 5,088 | $ | (1,352 | ) | $ | 433,806 |
December 31, 2015 | ||||||||||||||||
Amortized | Gross Unrealized | Fair | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities available-for-sale | ||||||||||||||||
U.S. Government-sponsored agencies | $ | 38,093 | $ | 139 | $ | (482 | ) | $ | 37,750 | |||||||
Municipal securities | 21,091 | 385 | (7 | ) | 21,469 | |||||||||||
Mortgage-backed securities | 113,948 | 110 | (1,006 | ) | 113,052 | |||||||||||
Asset-backed securities | 19,444 | — | (83 | ) | 19,361 | |||||||||||
Corporate securities | 20,000 | — | (913 | ) | 19,087 | |||||||||||
Other securities | 3,000 | — | (21 | ) | 2,979 | |||||||||||
Total available-for-sale | $ | 215,576 | $ | 634 | $ | (2,512 | ) | $ | 213,698 |
Available-for-Sale | ||||||||
Amortized Cost | Fair Value | |||||||
Within one year | $ | — | $ | — | ||||
One to five years | 400 | 362 | ||||||
Five to ten years | 32,047 | 31,904 | ||||||
After ten years | 141,280 | 143,284 | ||||||
173,727 | 175,550 | |||||||
Mortgage-backed securities | 233,886 | 235,911 | ||||||
Asset-backed securities | 19,457 | 19,332 | ||||||
Other securities | 3,000 | 3,013 | ||||||
Total | $ | 430,070 | $ | 433,806 |
June 30, 2016 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Securities available-for-sale | ||||||||||||||||||||||||
U.S. Government-sponsored agencies | $ | 19,171 | $ | (116 | ) | $ | 4,043 | $ | (40 | ) | $ | 23,214 | $ | (156 | ) | |||||||||
Municipal securities | 2,241 | (23 | ) | — | — | 2,241 | (23 | ) | ||||||||||||||||
Mortgage-backed securities | 39,268 | (122 | ) | — | — | 39,268 | (122 | ) | ||||||||||||||||
Asset-backed securities | 9,806 | (43 | ) | 9,526 | (82 | ) | 19,332 | (125 | ) | |||||||||||||||
Corporate securities | 4,904 | (95 | ) | 14,170 | (831 | ) | 19,074 | (926 | ) | |||||||||||||||
Total | $ | 75,390 | $ | (399 | ) | $ | 27,739 | $ | (953 | ) | $ | 103,129 | $ | (1,352 | ) |
December 31, 2015 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Securities available-for-sale | ||||||||||||||||||||||||
U.S. Government-sponsored agencies | $ | 18,289 | $ | (237 | ) | $ | 8,537 | $ | (245 | ) | $ | 26,826 | $ | (482 | ) | |||||||||
Municipal securities | 1,026 | (7 | ) | — | — | 1,026 | (7 | ) | ||||||||||||||||
Mortgage-backed securities | 74,198 | (562 | ) | 22,655 | (444 | ) | 96,853 | (1,006 | ) | |||||||||||||||
Asset-backed securities | 19,361 | (83 | ) | — | — | 19,361 | (83 | ) | ||||||||||||||||
Corporate securities | 19,087 | (913 | ) | — | — | 19,087 | (913 | ) | ||||||||||||||||
Other securities | 2,979 | (21 | ) | — | — | 2,979 | (21 | ) | ||||||||||||||||
Total | $ | 134,940 | $ | (1,823 | ) | $ | 31,192 | $ | (689 | ) | $ | 166,132 | $ | (2,512 | ) |
Details About Accumulated Other Comprehensive Income Components | Amounts Reclassified from Accumulated Other Comprehensive Income for the | Affected Line Item in the Statements of Income | ||||||||
Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | |||||||||
Unrealized gains and losses on securities available-for-sale | ||||||||||
Gain realized in earnings | $ | 177 | $ | 177 | Gain on sale of securities | |||||
Total reclassified amount before tax | 177 | 177 | Income Before Income Taxes | |||||||
Tax expense | 60 | 60 | Income Tax Provision | |||||||
Total reclassifications out of accumulated other comprehensive income | $ | 117 | $ | 117 | Net Income |
June 30, 2016 | December 31, 2015 | |||||||
Commercial loans | ||||||||
Commercial and industrial | $ | 111,130 | $ | 102,000 | ||||
Owner-occupied commercial real estate | 46,543 | 44,462 | ||||||
Investor commercial real estate | 12,976 | 16,184 | ||||||
Construction | 53,368 | 45,898 | ||||||
Single tenant lease financing | 500,937 | 374,344 | ||||||
Total commercial loans | 724,954 | 582,888 | ||||||
Consumer loans | ||||||||
Residential mortgage | 202,107 | 214,559 | ||||||
Home equity | 38,981 | 43,279 | ||||||
Other consumer | 141,756 | 108,312 | ||||||
Total consumer loans | 382,844 | 366,150 | ||||||
Total commercial and consumer loans | 1,107,798 | 949,038 | ||||||
Deferred loan origination costs and premiums and discounts on purchased loans | 3,824 | 4,821 | ||||||
Total loans | 1,111,622 | 953,859 | ||||||
Allowance for loan losses | (10,016 | ) | (8,351 | ) | ||||
Net loans | $ | 1,101,606 | $ | 945,508 |
Three Months Ended June 30, 2016 | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Residential mortgage | Home equity | Other consumer | Total | ||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,383 | $ | 475 | $ | 197 | $ | 563 | $ | 4,678 | $ | 871 | $ | 120 | $ | 933 | $ | 9,220 | ||||||||||||||||||
Provision (credit) charged to expense | 451 | (14 | ) | (26 | ) | (8 | ) | 381 | 42 | 30 | 68 | 924 | ||||||||||||||||||||||||
Losses charged off | — | — | — | — | — | (134 | ) | (33 | ) | (65 | ) | (232 | ) | |||||||||||||||||||||||
Recoveries | — | — | — | — | — | 2 | 4 | 98 | 104 | |||||||||||||||||||||||||||
Balance, end of period | $ | 1,834 | $ | 461 | $ | 171 | $ | 555 | $ | 5,059 | $ | 781 | $ | 121 | $ | 1,034 | $ | 10,016 |
Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Residential mortgage | Home equity | Other consumer | Total | ||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,367 | $ | 476 | $ | 212 | $ | 500 | $ | 3,931 | $ | 896 | $ | 125 | $ | 844 | $ | 8,351 | ||||||||||||||||||
Provision (credit) charged to expense | 467 | (15 | ) | (41 | ) | 55 | 1,128 | (8 | ) | 23 | 261 | 1,870 | ||||||||||||||||||||||||
Losses charged off | — | — | — | — | — | (134 | ) | (33 | ) | (214 | ) | (381 | ) | |||||||||||||||||||||||
Recoveries | — | — | — | — | — | 27 | 6 | 143 | 176 | |||||||||||||||||||||||||||
Balance, end of period | $ | 1,834 | $ | 461 | $ | 171 | $ | 555 | $ | 5,059 | $ | 781 | $ | 121 | $ | 1,034 | $ | 10,016 |
Three Months Ended June 30, 2015 | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Residential mortgage | Home equity | Other consumer | Total | ||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,010 | $ | 391 | $ | 218 | $ | 359 | $ | 2,452 | $ | 988 | $ | 203 | $ | 757 | $ | 6,378 | ||||||||||||||||||
Provision (credit) charged to expense | 191 | 48 | (457 | ) | (132 | ) | 641 | 42 | (46 | ) | 17 | 304 | ||||||||||||||||||||||||
Losses charged off | — | — | — | — | — | (100 | ) | — | (132 | ) | (232 | ) | ||||||||||||||||||||||||
Recoveries | — | — | 500 | — | — | 3 | — | 120 | 623 | |||||||||||||||||||||||||||
Balance, end of period | $ | 1,201 | $ | 439 | $ | 261 | $ | 227 | $ | 3,093 | $ | 933 | $ | 157 | $ | 762 | $ | 7,073 |
Six Months Ended June 30, 2015 | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Residential mortgage | Home equity | Other consumer | Total | ||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 920 | $ | 345 | $ | 261 | $ | 330 | $ | 2,061 | $ | 985 | $ | 207 | $ | 691 | $ | 5,800 | ||||||||||||||||||
Provision (credit) charged to expense | 281 | 94 | (500 | ) | (103 | ) | 1,032 | (152 | ) | (50 | ) | 144 | 746 | |||||||||||||||||||||||
Losses charged off | — | — | — | — | — | (171 | ) | — | (289 | ) | (460 | ) | ||||||||||||||||||||||||
Recoveries | — | — | 500 | — | — | 271 | — | 216 | 987 | |||||||||||||||||||||||||||
Balance, end of period | $ | 1,201 | $ | 439 | $ | 261 | $ | 227 | $ | 3,093 | $ | 933 | $ | 157 | $ | 762 | $ | 7,073 |
June 30, 2016 | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Residential mortgage | Home equity | Other consumer | Total | ||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 106,414 | $ | 46,543 | $ | 12,976 | $ | 53,368 | $ | 500,937 | $ | 200,260 | $ | 38,981 | $ | 141,603 | $ | 1,101,082 | ||||||||||||||||||
Ending balance: individually evaluated for impairment | 4,716 | — | — | — | — | 1,847 | — | 153 | 6,716 | |||||||||||||||||||||||||||
Ending balance | $ | 111,130 | $ | 46,543 | $ | 12,976 | $ | 53,368 | $ | 500,937 | $ | 202,107 | $ | 38,981 | $ | 141,756 | $ | 1,107,798 | ||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,362 | $ | 461 | $ | 171 | $ | 555 | $ | 5,059 | $ | 781 | $ | 121 | $ | 1,034 | $ | 9,544 | ||||||||||||||||||
Ending balance: individually evaluated for impairment | 472 | — | — | — | — | — | — | — | 472 | |||||||||||||||||||||||||||
Ending balance | $ | 1,834 | $ | 461 | $ | 171 | $ | 555 | $ | 5,059 | $ | 781 | $ | 121 | $ | 1,034 | $ | 10,016 |
December 31, 2015 | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Residential mortgage | Home equity | Other consumer | Total | ||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 102,000 | $ | 44,462 | $ | 16,184 | $ | 45,898 | $ | 374,344 | $ | 213,426 | $ | 43,279 | $ | 108,163 | $ | 947,756 | ||||||||||||||||||
Ending balance: individually evaluated for impairment | — | — | — | — | — | 1,133 | — | 149 | 1,282 | |||||||||||||||||||||||||||
Ending balance | $ | 102,000 | $ | 44,462 | $ | 16,184 | $ | 45,898 | $ | 374,344 | $ | 214,559 | $ | 43,279 | $ | 108,312 | $ | 949,038 | ||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,367 | $ | 476 | $ | 212 | $ | 500 | $ | 3,931 | $ | 896 | $ | 125 | $ | 844 | $ | 8,351 | ||||||||||||||||||
Ending balance: individually evaluated for impairment | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Ending balance | $ | 1,367 | $ | 476 | $ | 212 | $ | 500 | $ | 3,931 | $ | 896 | $ | 125 | $ | 844 | $ | 8,351 |
• | “Pass” (Grades 1-5) - Higher quality loans that do not fit any of the other categories described below. |
• | “Special Mention” (Grade 6) - Loans that possess some credit deficiency or potential weakness which deserve close attention. |
• | “Substandard” (Grade 7) - Loans that possess a defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. |
• | “Doubtful” (Grade 8) - Such loans have been placed on nonaccrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event which lacks clear certainty. These loans have all of the weaknesses of those classified as Substandard; however, based on existing conditions, these weaknesses make full collection of the principal balance highly improbable. |
• | “Loss” (Grade 9) - Loans that are considered uncollectible and of such little value that continuing to carry them as assets is not warranted. |
June 30, 2016 | ||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Total | |||||||||||||||||||
Rating: | ||||||||||||||||||||||||
1-5 Pass | $ | 104,842 | $ | 46,531 | $ | 12,976 | $ | 53,074 | $ | 500,937 | $ | 718,360 | ||||||||||||
6 Special Mention | 1,001 | — | — | 294 | — | 1,295 | ||||||||||||||||||
7 Substandard | 5,287 | 12 | — | — | — | 5,299 | ||||||||||||||||||
8 Doubtful | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 111,130 | $ | 46,543 | $ | 12,976 | $ | 53,368 | $ | 500,937 | $ | 724,954 |
June 30, 2016 | ||||||||||||||||
Residential mortgage | Home equity | Other consumer | Total | |||||||||||||
Performing | $ | 201,263 | $ | 38,981 | $ | 141,682 | $ | 381,926 | ||||||||
Nonaccrual | 844 | — | 74 | 918 | ||||||||||||
Total | $ | 202,107 | $ | 38,981 | $ | 141,756 | $ | 382,844 |
December 31, 2015 | ||||||||||||||||||||||||
Commercial and industrial | Owner-occupied commercial real estate | Investor commercial real estate | Construction | Single tenant lease financing | Total | |||||||||||||||||||
Rating: | ||||||||||||||||||||||||
1-5 Pass | $ | 95,589 | $ | 43,913 | $ | 14,746 | $ | 45,599 | $ | 374,344 | $ | 574,191 | ||||||||||||
6 Special Mention | 2,006 | 535 | — | 299 | — | 2,840 | ||||||||||||||||||
7 Substandard | 4,405 | 14 | 1,438 | — | — | 5,857 | ||||||||||||||||||
8 Doubtful | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 102,000 | $ | 44,462 | $ | 16,184 | $ | 45,898 | $ | 374,344 | $ | 582,888 |
December 31, 2015 | ||||||||||||||||
Residential mortgage | Home equity | Other consumer | Total | |||||||||||||
Performing | $ | 214,456 | $ | 43,279 | $ | 108,248 | $ | 365,983 | ||||||||
Nonaccrual | 103 | — | 64 | 167 | ||||||||||||
Total | $ | 214,559 | $ | 43,279 | $ | 108,312 | $ | 366,150 |
June 30, 2016 | ||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Commercial and Consumer Loans | Non- accrual Loans | Total Loans 90 Days or More Past Due and Accruing | |||||||||||||||||||||||||
Commercial and industrial | $ | 17 | $ | — | $ | — | $ | 17 | $ | 111,113 | $ | 111,130 | $ | 4,716 | $ | — | ||||||||||||||||
Owner-occupied commercial real estate | — | — | — | — | 46,543 | 46,543 | — | — | ||||||||||||||||||||||||
Investor commercial real estate | — | — | — | — | 12,976 | 12,976 | — | — | ||||||||||||||||||||||||
Construction | — | — | — | — | 53,368 | 53,368 | — | — | ||||||||||||||||||||||||
Single tenant lease financing | — | — | — | — | 500,937 | 500,937 | — | — | ||||||||||||||||||||||||
Residential mortgage | — | — | 810 | 810 | 201,297 | 202,107 | 844 | — | ||||||||||||||||||||||||
Home equity | — | — | — | — | 38,981 | 38,981 | — | — | ||||||||||||||||||||||||
Other consumer | 127 | 42 | 5 | 174 | 141,582 | 141,756 | 74 | 5 | ||||||||||||||||||||||||
Total | $ | 144 | $ | 42 | $ | 815 | $ | 1,001 | $ | 1,106,797 | $ | 1,107,798 | $ | 5,634 | $ | 5 |
December 31, 2015 | ||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Commercial and Consumer Loans | Non- accrual Loans | Total Loans 90 Days or More Past Due and Accruing | |||||||||||||||||||||||||
Commercial and industrial | $ | 29 | $ | — | $ | — | $ | 29 | $ | 101,971 | $ | 102,000 | $ | — | $ | — | ||||||||||||||||
Owner-occupied commercial real estate | — | — | — | — | 44,462 | 44,462 | — | — | ||||||||||||||||||||||||
Investor commercial real estate | — | — | — | — | 16,184 | 16,184 | — | — | ||||||||||||||||||||||||
Construction | — | — | — | — | 45,898 | 45,898 | — | — | ||||||||||||||||||||||||
Single tenant lease financing | — | — | — | — | 374,344 | 374,344 | — | — | ||||||||||||||||||||||||
Residential mortgage | 300 | 23 | 45 | 368 | 214,191 | 214,559 | 103 | — | ||||||||||||||||||||||||
Home equity | 20 | — | — | 20 | 43,259 | 43,279 | — | — | ||||||||||||||||||||||||
Other consumer | 116 | 12 | — | 128 | 108,184 | 108,312 | 64 | — | ||||||||||||||||||||||||
Total | $ | 465 | $ | 35 | $ | 45 | $ | 545 | $ | 948,493 | $ | 949,038 | $ | 167 | $ | — |
June 30, 2016 | December 31, 2015 | |||||||||||||||||||||||
Recorded Balance | Unpaid Principal Balance | Specific Allowance | Recorded Balance | Unpaid Principal Balance | Specific Allowance | |||||||||||||||||||
Loans without a specific valuation allowance | ||||||||||||||||||||||||
Residential mortgage | $ | 1,847 | $ | 1,973 | $ | — | $ | 1,133 | $ | 1,154 | $ | — | ||||||||||||
Other consumer | 153 | 184 | — | 149 | 178 | — | ||||||||||||||||||
Total | 2,000 | 2,157 | — | 1,282 | 1,332 | — | ||||||||||||||||||
Loans with a specific valuation allowance | ||||||||||||||||||||||||
Commercial and industrial | $ | 4,716 | $ | 4,716 | $ | 472 | $ | — | $ | — | $ | — | ||||||||||||
Total | 4,716 | 4,716 | 472 | — | — | — | ||||||||||||||||||
Total impaired loans | $ | 6,716 | $ | 6,873 | $ | 472 | $ | 1,282 | $ | 1,332 | $ | — |
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
June 30, 2016 | June 30, 2015 | |||||||||||||||||||||||||||||||
Average Balance | Interest Income | Average Balance | Interest Income | Average Balance | Interest Income | Average Balance | Interest Income | |||||||||||||||||||||||||
Loans without a specific valuation allowance | ||||||||||||||||||||||||||||||||
Investor commercial real estate | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 43 | $ | 2 | ||||||||||||||||
Residential mortgage | 1,489 | 1 | 1,278 | 4 | 1,110 | 2 | 1,085 | 4 | ||||||||||||||||||||||||
Other consumer | 138 | 2 | 147 | 4 | 215 | 3 | 168 | 6 | ||||||||||||||||||||||||
Total | 1,627 | 3 | 1,425 | 8 | 1,325 | 5 | 1,296 | 12 | ||||||||||||||||||||||||
Loans with a specific valuation allowance | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,179 | $ | — | 590 | — | $ | — | $ | — | — | — | ||||||||||||||||||||
Residential mortgage | — | — | — | — | 60 | — | 30 | — | ||||||||||||||||||||||||
Other consumer | — | — | — | — | — | — | 27 | 1 | ||||||||||||||||||||||||
Total | 1,179 | — | 590 | — | 60 | — | 57 | 1 | ||||||||||||||||||||||||
Total impaired loans | $ | 2,806 | $ | 3 | $ | 2,015 | $ | 8 | $ | 1,385 | $ | 5 | $ | 1,353 | $ | 13 |
June 30, 2016 | December 31, 2015 | |||||||
Land | $ | 2,500 | $ | 2,500 | ||||
Building and improvements | 4,702 | 4,636 | ||||||
Furniture and equipment | 6,298 | 6,164 | ||||||
Less: accumulated depreciation | (4,233 | ) | (4,779 | ) | ||||
$ | 9,267 | $ | 8,521 |
Balance as of January 1, 2015 | $ | 4,687 | |
Changes in goodwill during the year | — | ||
Balance as of December 31, 2015 | 4,687 | ||
Changes in goodwill during the period | — | ||
Balance as of June 30, 2016 | $ | 4,687 |
June 30, 2016 | December 31, 2015 | ||||||||||||||
Principal | Unamortized Discount and Debt Issuance Costs | Principal | Unamortized Discount and Debt Issuance Costs | ||||||||||||
8.00% subordinated debenture, due 2021 | $ | 3,000 | $ | — | $ | 3,000 | $ | (42 | ) | ||||||
6.4375% subordinated notes, due 2025 | 10,000 | (222 | ) | 10,000 | (234 | ) | |||||||||
Total | $ | 13,000 | $ | (222 | ) | $ | 13,000 | $ | (276 | ) |
Restricted Stock Units | Weighted-Average Grant Date Fair Value Per Share | Restricted Stock Awards | Weighted-Average Grant Date Fair Value Per Share | Deferred Stock Units | Weighted-Average Grant Date Fair Value Per Share | |||||||||||||||
Nonvested at December 31, 2015 | 28,302 | $ | 18.90 | 27,529 | $ | 18.17 | — | $ | — | |||||||||||
Granted | 30,704 | 25.63 | 10,232 | 24.44 | 5 | 24.10 | ||||||||||||||
Vested | (9,470 | ) | 18.92 | (18,815 | ) | 19.94 | (5 | ) | 24.10 | |||||||||||
Nonvested at June 30, 2016 | 49,536 | $ | 23.07 | 18,946 | $ | 19.81 | — | $ | — |
Deferred Stock Rights | |||
Outstanding, beginning of period | 81,693 | ||
Granted | 341 | ||
Exercised | — | ||
Outstanding, end of period | 82,034 |
Level 1 | Quoted prices in active markets for identical assets or liabilities |
Level 2 | Observable inputs other than Level 1 prices, 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 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities |
June 30, 2016 Fair Value Measurements Using | ||||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
U.S. Government-sponsored agencies | $ | 75,678 | $ | — | $ | 75,678 | $ | — | ||||||||
Municipal securities | 80,798 | — | 80,798 | — | ||||||||||||
Mortgage-backed securities | 235,911 | — | 235,911 | — | ||||||||||||
Asset-backed securities | 19,332 | — | 19,332 | — | ||||||||||||
Corporate securities | 19,074 | — | 19,074 | — | ||||||||||||
Other securities | 3,013 | 3,013 | — | — | ||||||||||||
Total available-for-sale securities | 433,806 | 3,013 | 430,793 | — | ||||||||||||
Loans held-for-sale (mandatory pricing agreements) | 38,128 | — | 38,128 | — | ||||||||||||
Forward contracts | (1,045 | ) | (1,045 | ) | — | — | ||||||||||
IRLCs | 1,724 | — | — | 1,724 |
December 31, 2015 Fair Value Measurements Using | ||||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
U.S. Government-sponsored agencies | $ | 37,750 | $ | — | $ | 37,750 | $ | — | ||||||||
Municipal securities | 21,469 | — | 21,469 | — | ||||||||||||
Mortgage-backed securities | 113,052 | — | 113,052 | — | ||||||||||||
Asset-backed securities | 19,361 | — | 19,361 | — | ||||||||||||
Corporate securities | 19,087 | — | 19,087 | — | ||||||||||||
Other securities | 2,979 | 2,979 | — | — | ||||||||||||
Total available-for-sale securities | 213,698 | 2,979 | 210,719 | — | ||||||||||||
Loans held-for-sale (mandatory pricing agreements) | 24,065 | — | 24,065 | — | ||||||||||||
Forward contracts | 30 | 30 | — | — | ||||||||||||
IRLCs | 582 | — | — | 582 |
Three Months Ended | ||||
Interest Rate Lock Commitments | ||||
Balance, April 1, 2016 | $ | 1,283 | ||
Total realized gains | ||||
Included in net income | 441 | |||
Balance, June 30, 2016 | $ | 1,724 | ||
Balance, April 1, 2015 | $ | 913 | ||
Total realized gains | ||||
Included in net income | (290 | ) | ||
Balance, June 30, 2015 | $ | 623 |
Six Months Ended | ||||
Interest Rate Lock Commitments | ||||
Balance, January 1, 2016 | $ | 582 | ||
Total realized gains | ||||
Included in net income | 1,142 | |||
Balance, June 30, 2016 | $ | 1,724 | ||
Balance, January 1, 2015 | $ | 521 | ||
Total realized gains | ||||
Included in net income | 102 | |||
Balance, June 30, 2015 | $ | 623 |
Fair Value at June 30, 2016 | Valuation Technique | Significant Unobservable Inputs | Range | ||||||
IRLCs | 1,724 | Discounted cash flow | Loan closing rates | 36% - 99% |
Fair Value at December 31, 2015 | Valuation Technique | Significant Unobservable Inputs | Range | |||||||
IRLCs | $ | 582 | Discounted cash flow | Loan closing rates | 43% - 100% |
June 30, 2016 Fair Value Measurements Using | ||||||||||||||||
Carrying Amount | Quoted Prices In Active Market for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents | $ | 70,008 | $ | 70,008 | $ | — | $ | — | ||||||||
Interest-bearing time deposits | 250 | 250 | — | — | ||||||||||||
Loans held-for-sale (best efforts pricing agreements) | 6,375 | — | 6,375 | |||||||||||||
Loans | 1,111,622 | — | — | 1,138,152 | ||||||||||||
Accrued interest receivable | 5,508 | 5,508 | — | — | ||||||||||||
Federal Home Loan Bank of Indianapolis stock | 8,595 | — | 8,595 | — | ||||||||||||
Deposits | 1,388,933 | 513,929 | — | 867,231 | ||||||||||||
Advances from Federal Home Loan Bank | 147,974 | — | 146,276 | — | ||||||||||||
Subordinated debt | 12,778 | — | 13,023 | — | ||||||||||||
Accrued interest payable | 138 | 138 | — | — |
December 31, 2015 Fair Value Measurements Using | ||||||||||||||||
Carrying Amount | Quoted Prices In Active Market for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents | $ | 25,152 | $ | 25,152 | $ | — | $ | — | ||||||||
Interest-bearing time deposits | 1,000 | 1,000 | — | — | ||||||||||||
Loans held-for-sale (best efforts pricing agreements) | 12,453 | — | 12,453 | — | ||||||||||||
Loans | 953,859 | — | — | 967,303 | ||||||||||||
Accrued interest receivable | 4,105 | 4,105 | — | — | ||||||||||||
Federal Home Loan Bank of Indianapolis stock | 8,595 | — | 8,595 | — | ||||||||||||
Deposits | 956,054 | 472,481 | — | 478,360 | ||||||||||||
Advances from Federal Home Loan Bank | 190,957 | — | 188,126 | — | ||||||||||||
Subordinated debt | 12,724 | — | 13,212 | — | ||||||||||||
Accrued interest payable | 117 | 117 | — | — |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gain on loans sold | $ | 2,896 | $ | 2,531 | $ | 4,496 | $ | 4,845 | |||||||
Gain (loss) resulting from the change in fair value of loans held-for-sale | 632 | (669 | ) | 986 | (492 | ) | |||||||||
Gain (loss) resulting from the change in fair value of derivatives | (233 | ) | 352 | 67 | 747 | ||||||||||
Net revenue from mortgage banking activities | $ | 3,295 | $ | 2,214 | $ | 5,549 | $ | 5,100 |
June 30, 2016 | December 31, 2015 | |||||||||||||||
Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||||||
Asset Derivatives | ||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
IRLCs | $ | 60,328 | $ | 1,724 | $ | 28,444 | $ | 582 | ||||||||
Forward contracts | — | — | 42,743 | 30 | ||||||||||||
Liability Derivatives | ||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Forward contracts | 98,252 | (1,045 | ) | — | — |
Amount of gain / (loss) recognized in the three months ended | Amount of gain / (loss) recognized in the six months ended | |||||||||||||||
June 30, 2016 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||||
Asset Derivatives | ||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
IRLCs | $ | 441 | $ | (290 | ) | $ | 1,142 | $ | 102 | |||||||
Forward contracts | — | 642 | — | 645 | ||||||||||||
Liability Derivatives | ||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Forward contracts | (674 | ) | — | (1,075 | ) | — |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
(dollars in thousands except for share and per share data) | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||||||||||||
Income Statement Summary: | |||||||||||||||||||||||||||
Net interest income | $ | 9,306 | $ | 9,141 | $ | 8,568 | $ | 7,839 | $ | 7,572 | $ | 18,447 | $ | 14,346 | |||||||||||||
Provision for loan losses | 924 | 946 | 746 | 454 | 304 | 1,870 | 746 | ||||||||||||||||||||
Noninterest income | 3,748 | 2,540 | 2,143 | 2,374 | 2,476 | 6,288 | 5,624 | ||||||||||||||||||||
Noninterest expense | 7,875 | 7,005 | 6,492 | 6,207 | 6,327 | 14,880 | 12,584 | ||||||||||||||||||||
Income tax provision | 1,421 | 1,298 | 1,195 | 1,229 | 1,152 | 2,719 | 2,312 | ||||||||||||||||||||
Net income | $ | 2,834 | $ | 2,432 | $ | 2,278 | $ | 2,323 | $ | 2,265 | $ | 5,266 | $ | 4,328 | |||||||||||||
Per Share Data: | |||||||||||||||||||||||||||
Earnings per share - basic | $ | 0.57 | $ | 0.54 | $ | 0.50 | $ | 0.51 | $ | 0.50 | $ | 1.11 | $ | 0.96 | |||||||||||||
Earnings per share - diluted | $ | 0.57 | $ | 0.53 | $ | 0.50 | $ | 0.51 | $ | 0.50 | $ | 1.10 | $ | 0.95 | |||||||||||||
Dividends declared per share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.12 | $ | 0.12 | |||||||||||||
Book value per common share | $ | 24.52 | $ | 23.98 | $ | 23.28 | $ | 22.95 | $ | 22.28 | $ | 24.52 | $ | 22.28 | |||||||||||||
Tangible book value per common share1 | $ | 23.67 | $ | 22.93 | $ | 22.24 | $ | 21.90 | $ | 21.23 | $ | 23.67 | $ | 21.23 | |||||||||||||
Common shares outstanding | 5,533,050 | 4,497,284 | 4,481,347 | 4,484,513 | 4,484,513 | 5,533,050 | 4,484,513 | ||||||||||||||||||||
Average common shares outstanding: | |||||||||||||||||||||||||||
Basic | 4,972,759 | 4,541,728 | 4,534,910 | 4,532,360 | 4,529,823 | 4,757,243 | 4,523,336 | ||||||||||||||||||||
Diluted | 4,992,025 | 4,575,555 | 4,580,353 | 4,574,455 | 4,550,034 | 4,782,700 | 4,536,736 | ||||||||||||||||||||
Performance Ratios: | |||||||||||||||||||||||||||
Return on average assets | 0.71 | % | 0.72 | % | 0.74 | % | 0.82 | % | 0.84 | % | 0.72 | % | 0.84 | % | |||||||||||||
Return on average shareholders’ equity | 9.67 | % | 9.20 | % | 8.73 | % | 9.14 | % | 9.15 | % | 9.45 | % | 8.85 | % | |||||||||||||
Return on average tangible common equity1 | 10.07 | % | 9.63 | % | 9.14 | % | 9.58 | % | 9.60 | % | 9.86 | % | 9.29 | % | |||||||||||||
Net interest margin | 2.39 | % | 2.78 | % | 2.85 | % | 2.84 | % | 2.87 | % | 2.57 | % | 2.86 | % | |||||||||||||
Capital Ratios: | |||||||||||||||||||||||||||
Tangible common equity to tangible assets 1 | 7.72 | % | 6.77 | % | 7.88 | % | 8.46 | % | 8.66 | % | 7.72 | % | 8.66 | % | |||||||||||||
Tier 1 leverage ratio | 8.08 | % | 7.65 | % | 8.28 | % | 8.81 | % | 8.93 | % | 8.08 | % | 8.93 | % | |||||||||||||
Common equity tier 1 capital ratio | 10.66 | % | 9.38 | % | 10.11 | % | 10.74 | % | 11.12 | % | 10.66 | % | 11.12 | % | |||||||||||||
Tier 1 capital ratio | 10.66 | % | 9.38 | % | 10.11 | % | 10.74 | % | 11.12 | % | 10.66 | % | 11.12 | % | |||||||||||||
Total risk-based capital ratio | 12.54 | % | 11.38 | % | 12.25 | % | 11.90 | % | 12.28 | % | 12.54 | % | 12.28 | % |
(dollars in thousands) | Three Months Ended | ||||||||||||||||||||
June 30, 2016 | March 31, 2016 | June 30, 2015 | |||||||||||||||||||
Average Balance | Yield/Cost | Average Balance | Yield/Cost | Average Balance | Yield/Cost | ||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||
Loans, including loans held-for-sale | $ | 1,110,282 | 4.22 | % | $ | 1,020,168 | 4.41 | % | $ | 825,620 | 4.39 | % | |||||||||
Securities - taxable | 307,336 | 2.29 | % | 202,898 | 2.32 | % | 174,057 | 2.18 | % | ||||||||||||
Securities - non-taxable | 51,162 | 2.89 | % | 22,179 | 2.99 | % | 7,807 | 3.03 | % | ||||||||||||
Other earning assets | 97,774 | 0.80 | % | 78,291 | 0.87 | % | 49,001 | 0.68 | % | ||||||||||||
Total interest-earning assets | 1,566,554 | 3.59 | % | 1,323,536 | 3.86 | % | 1,056,485 | 3.85 | % | ||||||||||||
Allowance for loan losses | (9,472 | ) | (8,655 | ) | (6,545 | ) | |||||||||||||||
Noninterest-earning assets | 39,422 | 37,951 | 35,178 | ||||||||||||||||||
Total assets | $ | 1,596,504 | $ | 1,352,832 | $ | 1,085,118 | |||||||||||||||
Liabilities | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 83,712 | 0.55 | % | $ | 81,338 | 0.55 | % | $ | 76,095 | 0.55 | % | |||||||||
Regular savings accounts | 28,023 | 0.57 | % | 25,021 | 0.58 | % | 23,873 | 0.57 | % | ||||||||||||
Money market accounts | 363,767 | 0.71 | % | 350,809 | 0.71 | % | 282,015 | 0.72 | % | ||||||||||||
Certificates and brokered deposits | 809,450 | 1.56 | % | 575,976 | 1.48 | % | 440,752 | 1.36 | % | ||||||||||||
Total interest-bearing deposits | 1,284,952 | 1.23 | % | 1,033,144 | 1.12 | % | 822,735 | 1.04 | % | ||||||||||||
Other borrowed funds | 161,127 | 1.83 | % | 185,618 | 1.44 | % | 137,421 | 1.23 | % | ||||||||||||
Total interest-bearing liabilities | 1,446,079 | 1.30 | % | 1,218,762 | 1.17 | % | 960,156 | 1.07 | % | ||||||||||||
Noninterest-bearing deposits | 27,687 | 22,899 | 20,697 | ||||||||||||||||||
Other noninterest-bearing liabilities | 4,825 | 4,893 | 4,932 | ||||||||||||||||||
Total liabilities | 1,478,591 | 1,246,554 | 985,785 | ||||||||||||||||||
Shareholders’ equity | 117,913 | 106,278 | 99,333 | ||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,596,504 | $ | 1,352,832 | $ | 1,085,118 | |||||||||||||||
Interest rate spread1 | 2.29 | % | 2.69 | % | 2.78 | % | |||||||||||||||
Net interest margin2 | 2.39 | % | 2.78 | % | 2.87 | % |
(dollars in thousands) | Six Months Ended | |||||||||||||
June 30, 2016 | June 30, 2015 | |||||||||||||
Average Balance | Yield/Cost | Average Balance | Yield/Cost | |||||||||||
Assets | ||||||||||||||
Interest-earning assets | ||||||||||||||
Loans, including loans held-for-sale | $ | 1,065,225 | 4.31 | % | $ | 803,086 | 4.38 | % | ||||||
Securities - taxable | 255,116 | 2.30 | % | 159,729 | 2.10 | % | ||||||||
Securities - non-taxable | 36,671 | 2.92 | % | 3,925 | 3.03 | % | ||||||||
Other earning assets | 88,033 | 0.83 | % | 45,342 | 0.70 | % | ||||||||
Total interest-earning assets | 1,445,045 | 3.71 | % | 1,012,082 | 3.85 | % | ||||||||
Allowance for loan losses | (9,063 | ) | (6,215 | ) | ||||||||||
Noninterest-earning assets | 38,686 | 34,864 | ||||||||||||
Total assets | $ | 1,474,668 | $ | 1,040,731 | ||||||||||
Liabilities | ||||||||||||||
Interest-bearing liabilities | ||||||||||||||
Interest-bearing demand deposits | $ | 82,525 | 0.55 | % | $ | 75,752 | 0.55 | % | ||||||
Regular savings accounts | 26,522 | 0.58 | % | 22,991 | 0.58 | % | ||||||||
Money market accounts | 357,288 | 0.71 | % | 278,185 | 0.72 | % | ||||||||
Certificates and brokered deposits | 692,713 | 1.53 | % | 415,566 | 1.37 | % | ||||||||
Total interest-bearing deposits | 1,159,048 | 1.18 | % | 792,494 | 1.04 | % | ||||||||
Other borrowed funds | 173,372 | 1.62 | % | 123,680 | 1.44 | % | ||||||||
Total interest-bearing liabilities | 1,332,420 | 1.24 | % | 916,174 | 1.09 | % | ||||||||
Noninterest-bearing deposits | 25,293 | 21,477 | ||||||||||||
Other noninterest-bearing liabilities | 4,859 | 4,488 | ||||||||||||
Total liabilities | 1,362,572 | 942,139 | ||||||||||||
Shareholders’ equity | 112,096 | 98,592 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 1,474,668 | $ | 1,040,731 | ||||||||||
Interest rate spread1 | 2.47 | % | 2.76 | % | ||||||||||
Net interest margin2 | 2.57 | % | 2.86 | % |
Rate/Volume Analysis of Net Interest Income | ||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Three Months Ended June 30, 2016 vs. March 31, 2016 Due to Changes in | Three Months Ended June 30, 2016 vs. June 30, 2015 Due to Changes in | Six Months Ended June 30, 2016 vs. June 30, 2015 Due to Changes in | |||||||||||||||||||||||||||||||||
Volume | Rate | Net | Volume | Rate | Net | Volume | Rate | Net | ||||||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||||||||||||
Loans, including loans held-for-sale | $ | 2,923 | $ | (2,451 | ) | $ | 472 | $ | 4,878 | $ | (2,260 | ) | $ | 2,618 | $ | 6,236 | $ | (819 | ) | $ | 5,417 | |||||||||||||||
Securities – taxable | 683 | (105 | ) | 578 | 753 | 49 | 802 | 1,077 | 172 | 1,249 | ||||||||||||||||||||||||||
Securities – non-taxable | 241 | (38 | ) | 203 | 328 | (19 | ) | 309 | 480 | (6 | ) | 474 | ||||||||||||||||||||||||
Other earning assets | 102 | (77 | ) | 25 | 95 | 17 | 112 | 173 | 34 | 207 | ||||||||||||||||||||||||||
Total | 3,949 | (2,671 | ) | 1,278 | 6,054 | (2,213 | ) | 3,841 | 7,966 | (619 | ) | 7,347 | ||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | 743 | 299 | 1,042 | 1,353 | 440 | 1,793 | 2,113 | 615 | 2,728 | |||||||||||||||||||||||||||
Other borrowed funds | (451 | ) | 522 | 71 | 82 | 232 | 314 | 395 | 123 | 518 | ||||||||||||||||||||||||||
Total | 292 | 821 | 1,113 | 1,435 | 672 | 2,107 | 2,508 | 738 | 3,246 | |||||||||||||||||||||||||||
Increase in net interest income | $ | 3,657 | $ | (3,492 | ) | $ | 165 | $ | 4,619 | $ | (2,885 | ) | $ | 1,734 | $ | 5,458 | $ | (1,357 | ) | $ | 4,101 |
(dollars in thousands) | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||||||||||||
Service charges and fees | $ | 215 | $ | 200 | $ | 193 | $ | 202 | $ | 193 | $ | 415 | $ | 369 | |||||||||||||
Mortgage banking activities | 3,295 | 2,254 | 1,805 | 2,095 | 2,214 | 5,549 | 5,100 | ||||||||||||||||||||
Gain on sale of securities | 177 | — | — | — | — | 177 | — | ||||||||||||||||||||
(Loss) gain on asset disposals | (48 | ) | (16 | ) | 40 | (27 | ) | (33 | ) | (64 | ) | (47 | ) | ||||||||||||||
Other | 109 | 102 | 105 | 104 | 102 | 211 | 202 | ||||||||||||||||||||
Total noninterest income | $ | 3,748 | $ | 2,540 | $ | 2,143 | $ | 2,374 | $ | 2,476 | $ | 6,288 | $ | 5,624 |
(dollars in thousands) | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||||||||||||
Salaries and employee benefits | $ | 4,329 | $ | 3,898 | $ | 3,460 | $ | 3,446 | $ | 3,787 | $ | 8,227 | $ | 7,365 | |||||||||||||
Marketing, advertising, and promotion | 434 | 464 | 426 | 544 | 334 | 898 | 786 | ||||||||||||||||||||
Consulting and professional services | 895 | 638 | 674 | 544 | 564 | 1,533 | 1,156 | ||||||||||||||||||||
Data processing | 275 | 274 | 287 | 248 | 233 | 549 | 481 | ||||||||||||||||||||
Loan expenses | 200 | 184 | 172 | 97 | 181 | 384 | 362 | ||||||||||||||||||||
Premises and equipment | 963 | 798 | 759 | 676 | 691 | 1,761 | 1,333 | ||||||||||||||||||||
Deposit insurance premium | 215 | 180 | 170 | 163 | 160 | 395 | 310 | ||||||||||||||||||||
Other | 564 | 569 | 544 | 489 | 377 | 1,133 | 791 | ||||||||||||||||||||
Total noninterest expense | $ | 7,875 | $ | 7,005 | $ | 6,492 | $ | 6,207 | $ | 6,327 | $ | 14,880 | $ | 12,584 |
(dollars in thousands) | ||||||||||||||||||||
Balance Sheet Data: | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Total assets | $ | 1,702,468 | $ | 1,527,719 | $ | 1,269,870 | $ | 1,166,170 | $ | 1,104,645 | ||||||||||
Loans | 1,111,622 | 1,040,683 | 953,859 | 876,578 | 814,243 | |||||||||||||||
Securities available-for-sale | 433,806 | 315,311 | 213,698 | 202,565 | 190,767 | |||||||||||||||
Loans held-for-sale | 44,503 | 29,491 | 36,518 | 27,773 | 29,872 | |||||||||||||||
Noninterest-bearing deposits | 28,066 | 28,945 | 23,700 | 22,338 | 20,994 | |||||||||||||||
Interest-bearing deposits | 1,360,867 | 1,214,233 | 932,354 | 877,412 | 835,509 | |||||||||||||||
Total deposits | 1,388,933 | 1,243,178 | 956,054 | 899,750 | 856,503 | |||||||||||||||
Total shareholders’ equity | 135,679 | 107,830 | 104,330 | 102,912 | 99,908 |
(dollars in thousands) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||||||||||||||||
Commercial loans | ||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 111,130 | 10.0 | % | $ | 106,431 | 10.2 | % | $ | 102,000 | 10.7 | % | $ | 89,762 | 10.2 | % | $ | 89,316 | 11.0 | % | ||||||||||||||
Owner-occupied commercial real estate | 46,543 | 4.2 | % | 47,010 | 4.5 | % | 44,462 | 4.7 | % | 42,117 | 4.8 | % | 39,405 | 4.8 | % | |||||||||||||||||||
Investor commercial real estate | 12,976 | 1.2 | % | 14,756 | 1.4 | % | 16,184 | 1.7 | % | 17,483 | 2.0 | % | 20,163 | 2.5 | % | |||||||||||||||||||
Construction | 53,368 | 4.8 | % | 52,591 | 5.1 | % | 45,898 | 4.8 | % | 30,196 | 3.4 | % | 20,155 | 2.5 | % | |||||||||||||||||||
Single tenant lease financing | 500,937 | 45.1 | % | 445,534 | 42.8 | % | 374,344 | 39.2 | % | 329,149 | 37.6 | % | 279,891 | 34.4 | % | |||||||||||||||||||
Total commercial loans | 724,954 | 65.3 | % | 666,322 | 64.0 | % | 582,888 | 61.1 | % | 508,707 | 58.0 | % | 448,930 | 55.2 | % | |||||||||||||||||||
Consumer loans | ||||||||||||||||||||||||||||||||||
Residential mortgage | 202,107 | 18.2 | % | 208,636 | 20.1 | % | 214,559 | 22.5 | % | 209,507 | 23.9 | % | 207,703 | 25.5 | % | |||||||||||||||||||
Home equity | 38,981 | 3.5 | % | 40,000 | 3.8 | % | 43,279 | 4.5 | % | 47,319 | 5.4 | % | 49,662 | 6.1 | % | |||||||||||||||||||
Other consumer | 141,756 | 12.7 | % | 121,323 | 11.7 | % | 108,312 | 11.4 | % | 106,187 | 12.1 | % | 103,157 | 12.6 | % | |||||||||||||||||||
Total consumer loans | 382,844 | 34.4 | % | 369,959 | 35.6 | % | 366,150 | 38.4 | % | 363,013 | 41.4 | % | 360,522 | 44.2 | % | |||||||||||||||||||
Deferred loan origination costs and premiums and discounts on purchased loans | 3,824 | 0.3 | % | 4,402 | 0.4 | % | 4,821 | 0.5 | % | 4,858 | 0.6 | % | 4,791 | 0.6 | % | |||||||||||||||||||
Total loans | 1,111,622 | 100.0 | % | 1,040,683 | 100.0 | % | 953,859 | 100.0 | % | 876,578 | 100.0 | % | 814,243 | 100.0 | % | |||||||||||||||||||
Allowance for loan losses | (10,016 | ) | (9,220 | ) | (8,351 | ) | (7,671 | ) | (7,073 | ) | ||||||||||||||||||||||||
Net loans | $ | 1,101,606 | $ | 1,031,463 | $ | 945,508 | $ | 868,907 | $ | 807,170 |
(dollars in thousands) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||
Nonaccrual loans | |||||||||||||||||||
Commercial loans: | |||||||||||||||||||
Commercial and industrial | $ | 4,716 | $ | — | $ | — | $ | — | $ | — | |||||||||
Total commercial loans | 4,716 | — | — | — | — | ||||||||||||||
Consumer loans: | |||||||||||||||||||
Residential mortgage | 844 | 103 | 103 | 104 | 119 | ||||||||||||||
Other consumer | 74 | 69 | 64 | 92 | 69 | ||||||||||||||
Total consumer loans | 918 | 172 | 167 | 196 | 188 | ||||||||||||||
Total nonaccrual loans | 5,634 | 172 | 167 | 196 | 188 | ||||||||||||||
Past Due 90 days and accruing loans | |||||||||||||||||||
Commercial loans: | |||||||||||||||||||
Commercial and industrial | — | — | — | 10 | — | ||||||||||||||
Total commercial loans | — | — | — | 10 | — | ||||||||||||||
Consumer loans: | |||||||||||||||||||
Residential mortgage | — | 195 | — | — | — | ||||||||||||||
Other consumer | 5 | — | — | — | — | ||||||||||||||
Total consumer loans | 5 | 195 | — | — | — | ||||||||||||||
Total past due 90 days and accruing loans | 5 | 195 | — | 10 | — | ||||||||||||||
Total nonperforming loans | 5,639 | 367 | 167 | 206 | 188 | ||||||||||||||
Other real estate owned | |||||||||||||||||||
Investor commercial real estate | 4,488 | 4,488 | 4,488 | 4,488 | 4,488 | ||||||||||||||
Total other real estate owned | 4,488 | 4,488 | 4,488 | 4,488 | 4,488 | ||||||||||||||
Other nonperforming assets | 46 | 75 | 85 | 30 | 89 | ||||||||||||||
Total nonperforming assets | $ | 10,173 | $ | 4,930 | $ | 4,740 | $ | 4,724 | $ | 4,765 | |||||||||
Total nonperforming loans to total loans | 0.51 | % | 0.04 | % | 0.02 | % | 0.02 | % | 0.02 | % | |||||||||
Total nonperforming assets to total assets | 0.60 | % | 0.32 | % | 0.37 | % | 0.41 | % | 0.43 | % |
(dollars in thousands) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||
Troubled debt restructurings – performing | $ | 1,082 | $ | 1,100 | $ | 1,115 | $ | 1,134 | $ | 1,150 | |||||||||
Total troubled debt restructurings | $ | 1,082 | $ | 1,100 | $ | 1,115 | $ | 1,134 | $ | 1,150 |
(dollars in thousands) | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||||||||||||
Balance, beginning of period | $ | 9,220 | $ | 8,351 | $ | 7,671 | $ | 7,073 | $ | 6,378 | $ | 8,351 | $ | 5,800 | |||||||||||||
Provision charged to expense | 924 | 946 | 746 | 454 | 304 | 1,870 | 746 | ||||||||||||||||||||
Losses charged off | (232 | ) | (149 | ) | (100 | ) | (76 | ) | (232 | ) | (381 | ) | (460 | ) | |||||||||||||
Recoveries | 104 | 72 | 34 | 220 | 623 | 176 | 987 | ||||||||||||||||||||
Balance, end of period | $ | 10,016 | $ | 9,220 | $ | 8,351 | $ | 7,671 | $ | 7,073 | $ | 10,016 | $ | 7,073 | |||||||||||||
Net charge-offs (recoveries) to average loans | 0.05 | % | 0.03 | % | 0.03 | % | (0.07 | )% | (0.20 | )% | 0.04 | % | (0.14 | )% |
(dollars in thousands) | |||||||||||||||||||
Amortized Cost | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||
Securities available-for-sale | |||||||||||||||||||
U.S. Government-sponsored agencies | $ | 75,133 | $ | 60,511 | $ | 38,093 | $ | 36,006 | $ | 27,993 | |||||||||
Municipal securities | 78,594 | 35,016 | 21,091 | 15,213 | 15,219 | ||||||||||||||
Mortgage-backed securities | 233,886 | 177,337 | 113,948 | 109,645 | 107,055 | ||||||||||||||
Asset-backed securities | 19,457 | 19,451 | 19,444 | 19,438 | 19,430 | ||||||||||||||
Corporate securities | 20,000 | 20,000 | 20,000 | 20,000 | 20,000 | ||||||||||||||
Other securities | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | ||||||||||||||
Total securities available-for-sale | $ | 430,070 | $ | 315,315 | $ | 215,576 | $ | 203,302 | $ | 192,697 |
(dollars in thousands) | |||||||||||||||||||
Approximate Fair Value | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||
Securities available-for-sale | |||||||||||||||||||
U.S. Government-sponsored agencies | $ | 75,678 | $ | 60,792 | $ | 37,750 | $ | 35,624 | $ | 27,572 | |||||||||
Municipal securities | 80,798 | 35,639 | 21,469 | 15,224 | 14,779 | ||||||||||||||
Mortgage-backed securities | 235,911 | 177,989 | 113,052 | 110,052 | 106,674 | ||||||||||||||
Asset-backed securities | 19,332 | 18,892 | 19,361 | 19,423 | 19,452 | ||||||||||||||
Corporate securities | 19,074 | 18,978 | 19,087 | 19,229 | 19,305 | ||||||||||||||
Other securities | 3,013 | 3,021 | 2,979 | 3,013 | 2,985 | ||||||||||||||
Total securities available-for-sale | $ | 433,806 | $ | 315,311 | $ | 213,698 | $ | 202,565 | $ | 190,767 |
(dollars in thousands) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits | $ | 28,066 | 2.0 | % | $ | 28,945 | 2.3 | % | $ | 23,700 | 2.5 | % | $ | 22,338 | 2.5 | % | $ | 20,994 | 2.5 | % | |||||||||||||||
Interest-bearing demand deposits | 83,031 | 6.0 | % | 89,180 | 7.2 | % | 84,241 | 8.8 | % | 79,031 | 8.8 | % | 77,822 | 9.1 | % | ||||||||||||||||||||
Regular savings accounts | 28,900 | 2.1 | % | 27,279 | 2.2 | % | 22,808 | 2.4 | % | 26,316 | 2.9 | % | 24,405 | 2.8 | % | ||||||||||||||||||||
Money market accounts | 373,932 | 26.9 | % | 366,195 | 29.5 | % | 341,732 | 35.7 | % | 314,105 | 34.9 | % | 278,791 | 32.5 | % | ||||||||||||||||||||
Certificates of deposits | 862,150 | 62.1 | % | 718,733 | 57.8 | % | 470,736 | 49.2 | % | 444,396 | 49.4 | % | 440,936 | 51.5 | % | ||||||||||||||||||||
Brokered deposits | 12,854 | 0.9 | % | 12,846 | 1.0 | % | 12,837 | 1.4 | % | 13,564 | 1.5 | % | 13,555 | 1.6 | % | ||||||||||||||||||||
Total | $ | 1,388,933 | 100.0 | % | $ | 1,243,178 | 100.0 | % | $ | 956,054 | 100.0 | % | $ | 899,750 | 100.0 | % | $ | 856,503 | 100.0 | % |
Month | Weighted Average Per Share Price | Number of Shares Sold | |||||
May 2016 | $ | 24.06 | 132,087 | ||||
June 2016 | $ | 25.46 | 7,724 |
Actual | Minimum Capital Required - Basel III Phase-In Schedule | Minimum Capital Required - Basel III Fully Phased-In | Minimum Required to be Considered Well Capitalized | |||||||||||||||||||||||
(dollars in thousands) | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | ||||||||||||||||||
As of June 30, 2016: | ||||||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | $ | 128,585 | 10.66 | % | $ | 61,846 | 5.13 | % | $ | 84,473 | 7.00 | % | N/A | N/A | ||||||||||||
Bank | 129,427 | 10.75 | % | 61,705 | 5.13 | % | 84,280 | 7.00 | % | 78,260 | 6.50 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | 128,585 | 10.66 | % | 79,947 | 6.63 | % | 102,574 | 8.50 | % | N/A | N/A | |||||||||||||||
Bank | 129,427 | 10.75 | % | 79,765 | 6.63 | % | 102,340 | 8.50 | % | 96,320 | 8.00 | % | ||||||||||||||
Total capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | 151,385 | 12.54 | % | 104,082 | 8.63 | % | 126,709 | 10.50 | % | N/A | N/A | |||||||||||||||
Bank | 139,449 | 11.58 | % | 103,845 | 8.63 | % | 126,420 | 10.50 | % | 120,400 | 10.00 | % | ||||||||||||||
Leverage ratio | ||||||||||||||||||||||||||
Consolidated | 128,585 | 8.08 | % | 63,663 | 4.00 | % | 63,663 | 4.00 | % | N/A | N/A | |||||||||||||||
Bank | 129,427 | 8.15 | % | 63,558 | 4.00 | % | 63,558 | 4.00 | % | 79,447 | 5.00 | % |
Actual | Minimum Capital Required - Basel III Phase-In Schedule | Minimum Capital Required - Basel III Fully Phased-In | Minimum Required to be Considered Well Capitalized | |||||||||||||||||||||||
(dollars in thousands) | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | ||||||||||||||||||
As of December 31, 2015: | ||||||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | $ | 100,839 | 10.11 | % | $ | 44,881 | 4.50 | % | $ | 69,815 | 7.00 | % | N/A | N/A | ||||||||||||
Bank | 104,434 | 10.50 | % | 44,768 | 4.50 | % | 69,639 | 7.00 | % | 64,664 | 6.50 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | 100,839 | 10.11 | % | 59,842 | 6.00 | % | 84,776 | 8.50 | % | N/A | N/A | |||||||||||||||
Bank | 104,434 | 10.50 | % | 59,690 | 6.00 | % | 84,561 | 8.50 | % | 79,587 | 8.00 | % | ||||||||||||||
Total capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | 122,190 | 12.25 | % | 79,789 | 8.00 | % | 104,723 | 10.50 | % | N/A | N/A | |||||||||||||||
Bank | 112,785 | 11.34 | % | 79,587 | 8.00 | % | 104,458 | 10.50 | % | 99,484 | 10.00 | % | ||||||||||||||
Leverage ratio | ||||||||||||||||||||||||||
Consolidated | 100,839 | 8.28 | % | 48,713 | 4.00 | % | 48,713 | 4.00 | % | N/A | N/A | |||||||||||||||
Bank | 104,434 | 8.59 | % | 48,636 | 4.00 | % | 48,636 | 4.00 | % | 60,796 | 5.00 | % |
(dollars in thousands, except share and per share data) | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | June 30, 2016 | June 30, 2015 | |||||||||||||||||||||
Total equity - GAAP | $ | 135,679 | $ | 107,830 | $ | 104,330 | $ | 102,912 | $ | 99,908 | $ | 135,679 | $ | 99,908 | |||||||||||||
Adjustments: | |||||||||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | |||||||||||||
Tangible common equity | $ | 130,992 | $ | 103,143 | $ | 99,643 | $ | 98,225 | $ | 95,221 | $ | 130,992 | $ | 95,221 | |||||||||||||
Total assets - GAAP | $ | 1,702,468 | $ | 1,527,719 | $ | 1,269,870 | $ | 1,166,170 | $ | 1,104,645 | $ | 1,702,468 | $ | 1,104,645 | |||||||||||||
Adjustments: | |||||||||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | |||||||||||||
Tangible assets | $ | 1,697,781 | $ | 1,523,032 | $ | 1,265,183 | $ | 1,161,483 | $ | 1,099,958 | $ | 1,697,781 | $ | 1,099,958 | |||||||||||||
Total common shares outstanding | 5,533,050 | 4,497,284 | 4,481,347 | 4,484,513 | 4,484,513 | 5,533,050 | 4,484,513 | ||||||||||||||||||||
Book value per common share | $ | 24.52 | $ | 23.98 | $ | 23.28 | $ | 22.95 | $ | 22.28 | $ | 24.52 | $ | 22.28 | |||||||||||||
Effect of goodwill | (0.85 | ) | (1.05 | ) | (1.04 | ) | (1.05 | ) | (1.05 | ) | (0.85 | ) | (1.05 | ) | |||||||||||||
Tangible book value per common share | $ | 23.67 | $ | 22.93 | $ | 22.24 | $ | 21.90 | $ | 21.23 | $ | 23.67 | $ | 21.23 | |||||||||||||
Total shareholders’ equity to assets ratio | 7.97 | % | 7.06 | % | 8.22 | % | 8.82 | % | 9.04 | % | 7.97 | % | 9.04 | % | |||||||||||||
Effect of goodwill | (0.25 | )% | (0.29 | )% | (0.34 | )% | (0.36 | )% | (0.38 | )% | (0.25 | )% | (0.38 | )% | |||||||||||||
Tangible common equity to tangible assets ratio | 7.72 | % | 6.77 | % | 7.88 | % | 8.46 | % | 8.66 | % | 7.72 | % | 8.66 | % | |||||||||||||
Total average equity - GAAP | $ | 117,913 | $ | 106,278 | $ | 103,583 | $ | 100,885 | $ | 99,333 | $ | 112,096 | $ | 98,592 | |||||||||||||
Adjustments: | |||||||||||||||||||||||||||
Average goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | |||||||||||||
Average tangible common equity | $ | 113,226 | $ | 101,591 | $ | 98,896 | $ | 96,198 | $ | 94,646 | $ | 107,409 | $ | 93,905 | |||||||||||||
Return on average shareholders’ equity | 9.67 | % | 9.20 | % | 8.73 | % | 9.14 | % | 9.15 | % | 9.45 | % | 8.85 | % | |||||||||||||
Effect of goodwill | 0.40 | % | 0.43 | % | 0.41 | % | 0.44 | % | 0.45 | % | 0.41 | % | 0.44 | % | |||||||||||||
Return on average tangible common equity | 10.07 | % | 9.63 | % | 9.14 | % | 9.58 | % | 9.60 | % | 9.86 | % | 9.29 | % |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
% Change from Base Case for Parallel Changes in Rates | ||||||||
-100 Basis Points 1 | +100 Basis Points | +200 Basis Points | ||||||
NII - next twelve months | (1.44 | )% | 2.91 | % | 5.98 | % | ||
EVE | (1.07 | )% | (4.64 | )% | (8.82 | )% |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit No. | Description | |
3.1 | Articles of Incorporation of First Internet Bancorp (incorporated by reference to Exhibit 3.1 to registration statement on Form 10 filed November 30, 2012) | |
3.2 | Amended and Restated Bylaws of First Internet Bancorp, as amended March 18, 2013 (incorporated by reference to Exhibit 3.2 to annual report on Form 10-K for the year ended December 31, 2012) | |
10.1 | Sales Agency Agreement, dated as of May 6, 2016, among First Internet Bancorp, First Internet Bank of Indiana and Sandler O’Neill & Partners, L.P. (incorporated by reference to Exhibit 1.1 to current report on Form 8-K filed May 6, 2016) | |
10.2 | Second Amendment to Office Lease dated as of July 1, 2016, by and between First Internet Bancorp and First Internet Bank of Indiana | |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | |
32.1 | Section 1350 Certifications | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
FIRST INTERNET BANCORP | ||
Date: 8/2/2016 | By | /s/ David B. Becker |
David B. Becker, Chairman, President and Chief Executive Officer (on behalf of Registrant) | ||
Date: 8/2/2016 | By | /s/ Kenneth J. Lovik |
Kenneth J. Lovik, Senior Vice President and Chief Financial Officer (principal financial officer) |
Exhibit No. | Description | Method of Filing | ||
3.1 | Articles of Incorporation of First Internet Bancorp | Incorporated by Reference | ||
3.2 | Amended and Restated Bylaws of First Internet Bancorp, as amended March 18, 2013 | Incorporated by Reference | ||
10.1 | Sales Agency Agreement, dated as of May 6, 2016, among First Internet Bancorp, First Internet Bank of Indiana and Sandler O’Neill & Partners, L.P. | Incorporated by Reference | ||
10.2 | Second Amendment to Office Lease dated as of July 1, 2016, by and between First Internet Bancorp and First Internet Bank of Indiana | Filed Electronically | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | Filed Electronically | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | Filed Electronically | ||
32.1 | Section 1350 Certifications | Filed Electronically | ||
101.INS | XBRL Instance Document | Filed Electronically | ||
101.SCH | XBRL Taxonomy Extension Schema | Filed Electronically | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | Filed Electronically | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | Filed Electronically | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase | Filed Electronically | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | Filed Electronically |
LANDLORD: FIRST INTERNET BANCORP | TENANT: FIRST INTERNET BANK OF INDIANA |
By:/s/ David Becker David Becker, Chief Executive Officer | By:/s/ C. Charles Perfetti C. Charles Perfetti, Senior Vice President |
Re: | Additional Premises Workletter Agreement for the Building located at 11201 USA Parkway, Fishers, Indiana |
1. | Landlord shall, at its cost and expense and subject to and in accordance with the provisions of this Additional Premises Workletter Agreement, perform the following work in the Additional Premises, which work shall hereinafter be referred to as the “Additional Premises Work.” |
a. | See construction specifications. |
2. | Changes in the Additional Premises Work may be made without invalidating any part of the Lease, as amended by the Second Amendment or this Additional Premises Workletter Agreement, by written agreement between Landlord and Tenant, hereinafter referred to as a “Change Order.” Each Change Order shall be prepared by Landlord and signed by both Tenant and Landlord stating their agreement upon all of the following: |
a. | The scope of the change in the Additional Premises Work; |
b. | Any increase or decrease in the cost of the Additional Premises Work as a result of the change; and |
c. | The manner in which the increase or decrease in the cost of the Additional Premises Work as a result of the change will be paid or credited (as applicable). |
3. | Prior to Tenant’s occupancy of the Additional Premises, Tenant shall identify any Punch List Items and provide Landlord with a complete list of such Punch List Items as part of the Additional Premises Letter Agreement in the form of Exhibit C to the Amendment. |
4. | All materials and installations constructed for Tenant within the Additional Premises pursuant to this Additional Premises Workletter Agreement shall become the property of the Landlord upon installation. No refund, credit or removal of said items shall be permitted at the termination of the Lease, except for the removal of those items or improvements which Landlord requires Tenant to remove at the expiration or earlier termination of the Lease pursuant to Section 3.2 of the Lease. |
5. | It is acknowledged that the Amendment provides for the Additional Space Commencement Date to occur when Landlord has “substantially completed” the Additional Premises Work to be performed by Landlord as set forth in Paragraph 1 above; provided, however, that if Landlord shall be delayed in substantially completing the Additional Premises Work as a result of the following (“Tenant Delays”): |
a. | Tenant’s failure to cooperate with Landlord to facilitate final approval of any plans for the work; or |
b. | Tenant’s request for changes in the Additional Premises Work that delay the completion of the Additional Premises Work; |
6. | No part of the Additional Premises shall be deemed unavailable for occupancy by Tenant, nor shall any work which Landlord is obligated to perform in such part of the Additional Premises be deemed incomplete for the purpose of the obligation to pay Minimum Rent and Additional Rent, solely due to the non-completion of details of construction, decoration or mechanical adjustments which are minor in character and the non-completion of which does not materially interfere with the Tenant’s use of the Additional Premises (“Punch List Items”). |
7. | Tenant is responsible for all costs related to the repair and maintenance of any additional HVAC systems, appliances and equipment which are installed to meet Tenant’s specific requirements. Tenant shall purchase a service contract for such equipment so that the equipment is covered by such service contract each year of the term of the Lease. |
LANDLORD: FIRST INTERNET BANCORP | TENANT: FIRST INTERNET BANK OF INDIANA |
By:/s/ David Becker David Becker, Chief Executive Officer | By:/s/ C. Charles Perfetti C. Charles Perfetti, Senior Vice President |
1. | The Additional Premises has been substantially completed in accordance with the terms of the Lease, excepting only: . |
2. | Tenant has accepted possession of the Additional Premises. |
3. | Except as hereby amended, the Lease shall continue in full force and effect. |
4. | This Agreement shall be binding on the parties hereto, their heirs, executors, successors and assigns. |
LANDLORD: FIRST INTERNET BANCORP | TENANT: FIRST INTERNET BANK OF INDIANA |
By:/s/ David Becker David Becker, Chief Executive Officer | By:/s/ C. Charles Perfetti C. Charles Perfetti, Senior Vice President |
1. | I have reviewed this Quarterly Report on Form 10-Q of First Internet Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 2, 2016 | |
/s/ David B. Becker | ||
David B. Becker, Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of First Internet Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 2, 2016 | |
/s/ Kenneth J. Lovik | ||
Kenneth J. Lovik, Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ David B. Becker | |
David B. Becker | |
Chief Executive Officer | |
August 2, 2016 | |
/s/ Kenneth J. Lovik | |
Kenneth J. Lovik | |
Chief Financial Officer | |
August 2, 2016 |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jul. 29, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | First Internet Bancorp | |
Entity Central Index Key | 0001562463 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | INBK | |
Entity Common Stock, Shares Outstanding | 5,533,050 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q2 | |
Document Fiscal Year Focus | 2016 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Amortized cost, at fair value | $ 430,070 | $ 215,576 |
Loans held-for-sale, at fair value | $ 38,128 | $ 24,065 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 4,913,779 | 4,913,779 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, share outstanding (in shares) | 0 | 0 |
Voting Common Stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, shares issued (in shares) | 5,533,050 | 4,481,347 |
Common stock, shares outstanding (in shares) | 5,533,050 | 4,481,347 |
Nonvoting Common Stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 86,221 | 86,221 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Interest Income | ||||
Loans | $ 11,661 | $ 9,043 | $ 22,850 | $ 17,433 |
Securities – taxable | 1,747 | 945 | 2,916 | 1,667 |
Securities – non-taxable | 368 | 59 | 533 | 59 |
Other earning assets | 195 | 83 | 365 | 158 |
Total interest income | 13,971 | 10,130 | 26,664 | 19,317 |
Interest Expense | ||||
Deposits | 3,930 | 2,137 | 6,818 | 4,090 |
Other borrowed funds | 735 | 421 | 1,399 | 881 |
Total interest expense | 4,665 | 2,558 | 8,217 | 4,971 |
Net Interest Income | 9,306 | 7,572 | 18,447 | 14,346 |
Provision for Loan Losses | 924 | 304 | 1,870 | 746 |
Net Interest Income After Provision for Loan Losses | 8,382 | 7,268 | 16,577 | 13,600 |
Noninterest Income | ||||
Service charges and fees | 215 | 193 | 415 | 369 |
Mortgage banking activities | 3,295 | 2,214 | 5,549 | 5,100 |
Gain on sale of securities | 177 | 0 | 177 | 0 |
Loss on asset disposals | (48) | (33) | (64) | (47) |
Other | 109 | 102 | 211 | 202 |
Total noninterest income | 3,748 | 2,476 | 6,288 | 5,624 |
Noninterest Expense | ||||
Salaries and employee benefits | 4,329 | 3,787 | 8,227 | 7,365 |
Marketing, advertising, and promotion | 434 | 334 | 898 | 786 |
Consulting and professional services | 895 | 564 | 1,533 | 1,156 |
Data processing | 275 | 233 | 549 | 481 |
Loan expenses | 200 | 181 | 384 | 362 |
Premises and equipment | 963 | 691 | 1,761 | 1,333 |
Deposit insurance premium | 215 | 160 | 395 | 310 |
Other | 564 | 377 | 1,133 | 791 |
Total noninterest expense | 7,875 | 6,327 | 14,880 | 12,584 |
Income Before Income Taxes | 4,255 | 3,417 | 7,985 | 6,640 |
Income Tax Provision | 1,421 | 1,152 | 2,719 | 2,312 |
Net Income | $ 2,834 | $ 2,265 | $ 5,266 | $ 4,328 |
Income Per Share of Common Stock | ||||
Basic (in dollars per share) | $ 0.57 | $ 0.50 | $ 1.11 | $ 0.96 |
Diluted (in dollars per share) | $ 0.57 | $ 0.50 | $ 1.10 | $ 0.95 |
Weighted-Average Number of Common Shares Outstanding | ||||
Basic (in shares) | 4,972,759 | 4,529,823 | 4,757,243 | 4,523,336 |
Diluted (in shares) | 4,992,025 | 4,550,034 | 4,782,700 | 4,536,736 |
Dividends Declared Per Share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.12 | $ 0.12 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,834 | $ 2,265 | $ 5,266 | $ 4,328 |
Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax | 3,917 | (2,539) | 5,791 | (1,721) |
Reclassification adjustment for gains realized | 177 | 0 | 177 | 0 |
Other comprehensive income (loss) before income tax | 3,740 | (2,539) | 5,614 | (1,721) |
Income tax provision (benefit) | 1,331 | (909) | 1,998 | (618) |
Other comprehensive income (loss) | 2,409 | (1,630) | 3,616 | (1,103) |
Comprehensive income | $ 5,243 | $ 635 | $ 8,882 | $ 3,225 |
Consolidated Statements of Shareholders' Equity (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands |
Total |
Common Stock
Voting and Nonvoting Common Stock
|
Accumulated Other Comprehensive Income (Loss) |
Retained Earnings |
---|---|---|---|---|
Balance, beginning of period at Dec. 31, 2015 | $ 104,330 | $ 72,559 | $ (1,209) | $ 32,980 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 5,266 | 5,266 | ||
Other comprehensive income | 3,616 | 3,616 | ||
Dividends declared ($0.12 per share) | (616) | (616) | ||
Net cash proceeds from common stock issuance | 22,754 | 22,754 | ||
Recognition of the fair value of share-based compensation | 358 | 400 | ||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 14 | 14 | ||
Excess tax benefit on share-based compensation | 48 | 48 | ||
Common stock redeemed for the net settlement of share-based awards | (91) | (91) | ||
Balance, end of period at Jun. 30, 2016 | $ 135,679 | $ 95,642 | $ 2,407 | $ 37,630 |
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement Of Stockholders Equity Parenthetical [Abstract] | ||||
Dividends declared (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.12 | $ 0.12 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information or footnotes necessary for a complete presentation of financial condition, results of operations, or cash flows in accordance with GAAP. In our opinion, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results expected for the year ending December 31, 2016 or any other period. The June 30, 2016 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the First Internet Bancorp Annual Report on Form 10-K for the year ended December 31, 2015. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, or assumptions that could have a material effect on the carrying value of certain assets and liabilities. These estimates, judgments, and assumptions affect the amounts reported in the condensed consolidated financial statements and the disclosures provided. The determination of the allowance for loan losses, valuations and impairments of investment securities, and the accounting for income tax expense are highly dependent upon management’s estimates, judgments, and assumptions where changes in any of these could have a significant impact on the financial statements. The condensed consolidated financial statements include the accounts of First Internet Bancorp (the “Company”), its wholly-owned subsidiary, First Internet Bank of Indiana (the “Bank”), and the Bank’s wholly-owned subsidiary, JKH Realty Services, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations, and cash flows of the Company. Certain reclassifications have been made to the 2015 financial statements to conform to the presentation of the 2016 financial statements. These reclassifications had no effect on net income. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Earnings per share of common stock are based on the weighted-average number of basic shares and dilutive shares outstanding during the period. The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations for the three and six months ended June 30, 2016 and 2015.
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Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The following tables summarize securities available-for-sale as of June 30, 2016 and December 31, 2015.
The carrying value of securities at June 30, 2016 is shown below by their contractual maturity date. Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Gross gains of $0.2 million and gross losses of $0.0 million resulted from sales of available-for-sale securities during the three and six months ended June 30, 2016. There were no gross gains or losses recognized during the three and six months ended June 30, 2015. Certain investments in debt securities are reported in the condensed consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at June 30, 2016 and December 31, 2015 was $103.1 million and $166.1 million, which was approximately 24% and 78%, respectively, of the Company’s available-for-sale securities portfolio. These declines resulted primarily from fluctuations in market interest rates after purchase. U. S. Government-Sponsored Agencies, Municipal Securities and Corporate Securities The unrealized losses on the Company’s investments in securities issued by U.S. Government-sponsored agencies, municipal organizations and corporate entities were caused by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2016. Mortgage-Backed and Asset-Backed Securities The unrealized losses on the Company’s investments in mortgage-backed and asset-backed securities were caused by interest rate changes. The Company expects to recover the amortized cost bases over the term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2016. Should any future impairment of these securities become other-than-temporary, the cost basis of the security will be reduced, with the resulting loss recognized in net income in the period in which the other-than-temporary impairment (“OTTI”) is identified. The following tables show the available-for-sale securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015.
There were no amounts reclassified from accumulated other comprehensive income (loss) during the three and six months ended June 30, 2015. Amounts reclassified from accumulated other comprehensive income (loss) and the affected line items in the consolidated statements of income during the three and six months ended June 30, 2016 were as follows:
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Loans Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable | Loans Loans that management intends to hold until maturity are reported at their outstanding principal balance adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans, and unamortized premiums or discounts on purchased loans. For loans recorded at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan. Categories of loans include:
The risk characteristics of each loan portfolio segment are as follows: Commercial and Industrial: Commercial and industrial loans’ sources of repayment are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Loans are made for working capital, equipment purchases, or other purposes. Most commercial and industrial loans are secured by the assets being financed and may incorporate a personal guarantee. Owner-Occupied Commercial Real Estate: The primary source of repayment is the cash flow from the ongoing operations and activities conducted by the borrower, or an affiliate of the borrower, who owns the property. This portfolio segment is generally concentrated in the Central Indiana and greater Phoenix, Arizona markets and its loans often times are secured by manufacturing and service facilities, as well as office buildings. Investor Commercial Real Estate: These loans are underwritten primarily based on the cash flow expected to be generated from the property and are secondarily supported by the value of the real estate. These loans typically incorporate a personal guarantee. This portfolio segment typically involves higher loan principal amounts, and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Investor commercial real estate loans may be more adversely affected by conditions in the real estate markets, changing industry dynamics, or the overall health of the general economy. The properties securing the Company’s investor commercial real estate portfolio tend to be diverse in terms of property type and are typically located in the state of Indiana and markets adjacent to Indiana. Management monitors and evaluates commercial real estate loans based on property financial performance, collateral value, guarantor strength, and other risk grade criteria. As a general rule, the Company avoids financing special use projects or properties outside of its designated market areas unless other underwriting factors are present to help mitigate risk. Construction: Construction loans are secured by real estate and improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, multi-family) properties or single family residential properties offered for sale by the builder. These loans generally finance a variety of project costs, including land, site preparation, construction, closing and soft costs and interim financing needs. The cash flows of builders, while initially predictable, may fluctuate with market conditions, and the value of the collateral securing these loans may be subject to fluctuations based on general economic changes. Single Tenant Lease Financing: These loans are made to property owners of real estate subject to long term lease arrangements with single tenant operators. The real estate is typically operated by regionally, nationally or globally branded businesses. The loans are underwritten based on the financial strength of the borrower, characteristics of the real estate, cash flows generated from the lease arrangements and the financial strength of the tenant. Similar to the other loan portfolio segments, management monitors and evaluates these loans based on borrower and tenant financial performance, collateral value, industry trends and other risk grade criteria. Residential Mortgage: With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, the Company typically establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Repayment of these loans is primarily dependent on the financial circumstances of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in residential property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country. Home Equity: Home equity loans and lines of credit are typically secured by a subordinate interest in 1-4 family residences. The properties securing the Company's home equity portfolio segment are generally geographically diverse as the Company offers these products on a nationwide basis. Repayment of home equity loans and lines of credit may be impacted by changes in property values on residential properties and unemployment levels, among other economic conditions and financial circumstances in the market. Other Consumer: These loans primarily consist of consumer loans and credit cards. Consumer loans may be secured by consumer assets such as horse trailers or recreational vehicles. Some consumer loans are unsecured, such as small installment loans, home improvement loans and certain lines of credit. Repayment of consumer loans is primarily dependent upon the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country. Allowance for Loan Losses Methodology Company policy is designed to maintain an adequate allowance for loan losses (“ALLL”). The portfolio is segmented by loan type, and the required ALLL for types of performing homogeneous loans which do not have a specific reserve is determined by applying a factor based on average historical losses, adjusted for current economic factors and portfolio trends. Management believes the historical loss experience methodology is appropriate in the current economic environment as it captures loss rates that are comparable to the current period being analyzed. Management adds qualitative factors for observable trends, changes in internal practices, changes in delinquencies and impairments, and external factors. Observable factors include changes in the composition and size of portfolios, as well as loan terms or concentration levels. The Company evaluates the impact of internal changes such as management and staff experience levels or modification to loan underwriting processes. Delinquency trends are scrutinized for both volume and severity of past due, nonaccrual, or classified loans as well as any changes in the value of underlying collateral. Finally, the Company considers the effect of other external factors such as national, regional, and local economic and business conditions, as well as competitive, legal, and regulatory requirements. Loans that are considered to be impaired are evaluated to determine the need for a specific allowance by applying at least one of three methodologies: present value of future cash flows; fair value of collateral less costs to sell; or the loan’s observable market price. All troubled debt restructurings (“TDR”) are considered impaired loans. Loans evaluated for impairment are removed from other pools to prevent double-counting. Accounting Standards Codification (“ASC”) Topic 310, Receivables, requires that impaired loans be measured based on the present value of expected future cash flows discounted at the loans’ effective interest rates or the fair value of the underlying collateral less costs to sell and allows existing methods for recognizing interest income. Provision for Loan Losses A provision for estimated losses on loans is charged to income based upon management’s evaluation of the potential losses. Such an evaluation, which includes a review of all loans for which full repayment may not be reasonably assured, considers, among other matters, the estimated net realizable value of the underlying collateral, as applicable, economic conditions, loan loss experience, and other factors that are particularly susceptible to changes that could result in a material adjustment in the near term. While management attempts to use the best information available in making its evaluations, future allowance adjustments may be necessary if economic conditions change substantially from the assumptions used in making the evaluations. Policy for Charging Off Loans The Company’s policy is to charge off a loan at any point in time when it no longer can be considered a bankable asset, meaning collectible within the parameters of policy. A secured loan is generally charged down to the estimated fair value of the collateral, less costs to sell, no later than when it is 120 days past due as to principal or interest. An unsecured loan generally is charged off no later than when it is 180 days past due as to principal or interest. A home improvement loan generally is charged off no later than when it is 90 days past due as to principal or interest. The following tables present changes in the balance of the ALLL during the three and six month periods ended June 30, 2016 and 2015.
The following tables present the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2016, and December 31, 2015.
The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans. Loans are graded on a scale of 1 to 9. A description of the general characteristics of the nine risk grades is as follows:
Nonaccrual Loans Any loan which becomes 90 days delinquent or for which the full collection of principal and interest may be in doubt will be considered for nonaccrual status. At the time a loan is placed on nonaccrual status, all accrued but unpaid interest will be reversed from interest income. Placing the loan on nonaccrual status does not relieve the borrower of the obligation to repay interest. A loan placed on nonaccrual status may be restored to accrual status when all delinquent principal and interest has been brought current, and the Company expects full payment of the remaining contractual principal and interest. The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios based on rating category and payment activity as of June 30, 2016 and December 31, 2015.
The following tables present the Company’s loan portfolio delinquency analysis as of June 30, 2016 and December 31, 2015.
Impaired Loans A loan is designated as impaired, in accordance with the impairment accounting guidance when, based on current information or events, it is probable that the Company will be unable to collect all amounts due (principal and interest) according to the contractual terms of the loan agreement. Payments with delays generally not exceeding 90 days outstanding are not considered impaired. Certain nonaccrual and substantially all delinquent loans more than 90 days past due may be considered to be impaired. Generally, loans are placed on nonaccrual status at 90 days past due and accrued interest is reversed against earnings, unless the loan is well-secured and in the process of collection. The accrual of interest on impaired and nonaccrual loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due. Impaired loans include nonperforming loans as well as loans modified in TDRs where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance, or other actions intended to maximize collection. ASC Topic 310, Receivables, requires that impaired loans be measured based on the present value of expected future cash flows discounted at the loans’ effective interest rates or the fair value of the underlying collateral, less costs to sell, and allows existing methods for recognizing interest income. The following table presents the Company’s impaired loans as of June 30, 2016 and December 31, 2015. The Company had no impaired loans with a specific valuation allowance as of December 31, 2015.
The table below presents average balances and interest income recognized for impaired loans during the three and six month periods ended June 30, 2016 and June 30, 2015.
There were no residential mortgage loans in other real estate owned at June 30, 2016 or December 31, 2015 and there were less than $0.1 million of loans at June 30, 2016 and December 31, 2015 in the process of foreclosure. |
Premises and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | Premises and Equipment The following table summarizes premises and equipment at June 30, 2016 and December 31, 2015.
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Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill | Goodwill The following table shows the changes in the carrying amount of goodwill for the periods ended June 30, 2016 and December 31, 2015.
Goodwill is tested for impairment on an annual basis as of August 31, or whenever events or changes in circumstances indicate the carrying amount of goodwill exceeds its implied fair value. No events or changes in circumstances have occurred since the August 31, 2015 annual impairment test that would suggest it was more likely than not goodwill impairment existed. |
Subordinated Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated Debt | Subordinated Debt In June 2013, the Company issued a subordinated debenture (the “Debenture”) in the principal amount of $3.0 million. The Debenture bears a fixed interest rate of 8.00% per year, payable quarterly, and is scheduled to mature on June 28, 2021. The Debenture may be repaid, without penalty, at any time after June 28, 2016. The Debenture is intended to qualify as Tier 2 capital under regulatory guidelines. In connection with the Debenture, the Company also issued a warrant to purchase up to 48,750 shares of common stock at an initial per share exercise price equal to $19.33. The warrant became exercisable on June 28, 2014 and, unless previously exercised, will expire on June 28, 2021. The Company has the right to force an exercise of the warrant after the Debenture has been repaid in full if the 20-day volume-weighted average price of a share of its common stock exceeds $30.00. The Company used the Black-Scholes option pricing model to assign a fair value of $0.3 million to the warrant as of June 28, 2013. The following assumptions were used to value the warrant: a risk-free interest rate of 0.66% per the U.S. Treasury yield curve in effect at the date of issuance, an expected dividend yield of 1.19% calculated using the dividend rate and stock price at the date of the issuance, and an expected volatility of 34% based on the estimated volatility of the Company’s stock over the expected term of the warrant, which is estimated to be three years. In October 2015, the Company issued subordinated notes (the “Notes”) in the principal amount of $10.0 million. The Notes bear a fixed interest rate of 6.4375% per year, payable quarterly, and are scheduled to mature on October 1, 2025. The Notes may be repaid, without penalty, on any interest payment date on or after October 15, 2020. The Notes are intended to qualify as Tier 2 capital under regulatory guidelines. The following table presents the principal balance and unamortized discount and debt issuance costs for the Debenture and the Notes as of June 30, 2016 and December 31, 2015.
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Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plans | Benefit Plans Employment Agreement The Company has entered into an employment agreement with its Chief Executive Officer that provides for the continuation of salary and certain benefits for a specified period of time under certain conditions. Under the terms of the agreement, these payments could occur in the event of a change in control of the Company, as defined in the agreement, along with other specific conditions. 2013 Equity Incentive Plan The 2013 Equity Incentive Plan (the “2013 Plan”) authorizes the issuance of 750,000 shares of the Company’s common stock in the form of equity-based awards to employees, directors, and other eligible persons. Under the terms of the 2013 Plan, the pool of shares available for issuance may be used for available types of equity awards under the 2013 Plan, which includes stock options, stock appreciation rights, restricted stock awards, stock unit awards, and other share-based awards. All employees, consultants, and advisors of the Company or any subsidiary, as well as all non-employee directors of the Company, are eligible to receive awards under the 2013 Plan. The Company recorded $0.2 million and $0.4 million of share-based compensation expense for the three and six month periods ended June 30, 2016, respectively, related to awards made under the 2013 Plan. The Company recorded $0.2 million and $0.5 million of share-based compensation expense for the three and six month periods ended June 30, 2015, respectively, related to awards made under the 2013 Plan. The following table summarizes the status of the 2013 Plan awards as of June 30, 2016, and activity for the six months ended June 30, 2016.
At June 30, 2016, the total unrecognized compensation cost related to nonvested awards was $1.1 million with a weighted-average expense recognition period of 2.1 years. Directors Deferred Stock Plan Until January 1, 2014, the Company had a stock compensation plan for members of the Board of Directors (“Directors Deferred Stock Plan”). The Company reserved 180,000 shares of common stock that could have been issued pursuant to the Directors Deferred Stock Plan. The plan provided directors the option to elect to receive up to 100% of their annual retainer in either common stock or deferred stock rights. Deferred stock rights were to be settled in common stock following the end of the deferral period payable on the basis of one share of common stock for each deferred stock right. The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the six months ended June 30, 2016.
All deferred stock rights granted during the 2016 period were additional rights issued in lieu of cash dividends payable on outstanding deferred stock rights. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. Securities Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid mutual funds. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Government-sponsored agencies, municipal securities, mortgage and asset-backed securities and certain corporate securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities but also on the investment securities’ relationship to other benchmark quoted investment securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair values are calculated using discounted cash flows. Discounted cash flows are calculated based off of the anticipated future cash flows updated to incorporate loss severities. Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation. The Company did not own any securities classified within Level 3 of the hierarchy as of June 30, 2016 or December 31, 2015. Loans Held-for-Sale (mandatory pricing agreements) The fair value of loans held-for-sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2). Forward Contracts The fair values of forward contracts on to-be-announced securities are determined using quoted prices in active markets, or benchmarked thereto (Level 1). Interest Rate Lock Commitments The fair values of interest rate lock commitments (“IRLCs”) are determined using the projected sale price of individual loans based on changes in market interest rates, projected pull-through rates (the probability that an IRLC will ultimately result in an originated loan), the reduction in the value of the applicant’s option due to the passage of time, and the remaining origination costs to be incurred based on management’s estimate of market costs (Level 3). The following tables present the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2016 and December 31, 2015.
The following tables reconcile the beginning and ending balances of recurring fair value measurements recognized in the accompanying condensed consolidated balance sheets using significant unobservable (Level 3) inputs for the three and six month periods ended June 30, 2016 and June 30, 2015.
The following describes valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. Impaired Loans Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. The amount of the impairment may be determined based on the fair value of the underlying collateral, less costs to sell, the estimated present value of future cash flows or the loan’s observable market price. If the impaired loan is identified as collateral dependent, the fair value of the underlying collateral, less costs to sell, is used to measure impairment. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. If the impaired loan is not collateral dependent, the Company utilizes a discounted cash flow analysis to measure impairment. Impaired loans with a specific valuation allowance based on the value of the underlying collateral or a discounted cash flow analysis are classified as Level 3 assets. Significant Unobservable (Level 3) Inputs The following tables present quantitative information about significant unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill.
The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying condensed consolidated balance sheets at amounts other than fair value. Cash and Cash Equivalents For these instruments, the carrying amount is a reasonable estimate of fair value. Interest-Bearing Time Deposits The fair value of these financial instruments approximates carrying value. Loans Held-for-Sale (best efforts pricing agreements) The fair value of these loans approximates carrying value. Loans The fair value of loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. Accrued Interest Receivable The fair value of these financial instruments approximates carrying value. Federal Home Loan Bank of Indianapolis Stock The fair value approximates carrying value. Deposits The fair value of noninterest-bearing and interest-bearing demand deposits, savings and money market accounts approximates carrying value. The fair value of fixed maturity certificates of deposit and brokered deposits are estimated using rates currently offered for deposits of similar remaining maturities. Advances from Federal Home Loan Bank The fair value of fixed rate advances is estimated using rates currently available for advances with similar remaining maturities. The carrying value of variable rate advances approximates fair value. Subordinated Debt The fair value of the Company’s subordinated debt is estimated using discounted cash flow analysis, based on current borrowing rates for similar types of debt instruments. Accrued Interest Payable The fair value of these financial instruments approximates carrying value. Commitments The fair value of commitments to extend credit are based on fees currently charged to enter into similar agreements with similar maturities and interest rates. The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at each of June 30, 2016 and December 31, 2015. The following tables summarize the carrying value and estimated fair value of all financial assets and liabilities at June 30, 2016 and December 31, 2015.
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Mortgage Banking Activities |
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Mortgage Banking [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Banking Activities | Mortgage Banking Activities The Company’s residential real estate lending business originates mortgage loans for customers and sells a majority of the originated loans into the secondary market. The Company hedges its mortgage banking pipeline by entering into forward contracts for the future delivery of mortgage loans to third party investors and entering into interest rate lock commitments with potential borrowers to fund specific mortgage loans that will be sold into the secondary market. To facilitate the hedging of the loans, the Company has elected the fair value option for loans originated and intended for sale in the secondary market under mandatory pricing agreements. Changes in the fair value of loans held-for-sale, interest rate lock commitments and forward contracts are recorded in the mortgage banking activities line item within noninterest income. Refer to Note 11 for further information on derivative financial instruments. During the three months ended June 30, 2016 and 2015, the Company originated mortgage loans held-for-sale of $151.1 million and $143.8 million, respectively, and sold $139.6 million and $143.3 million of mortgage loans, respectively, into the secondary market. During the six months ended June 30, 2016 and 2015, the Company originated mortgage loans held-for-sale of $259.1 million and $277.9 million, respectively, and sold $256.6 million and $287.1 million of mortgage loans, respectively, into the secondary market. The following table provides the components of income from mortgage banking activities for the three and six months ended June 30, 2016 and 2015.
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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 Company uses derivative financial instruments to help manage exposure to interest rate risk and the effects that changes in interest rates may have on net income and the fair value of assets and liabilities. The Company enters into forward contracts for the future delivery of mortgage loans to third party investors and enters into IRLCs with potential borrowers to fund specific mortgage loans that will be sold into the secondary market. The forward contracts are entered into in order to economically hedge the effect of changes in interest rates resulting from the Company’s commitment to fund the loans. Each of these items are considered derivatives, but are not designated as accounting hedges, and are recorded at fair value with changes in fair value reflected in noninterest income on the condensed consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in accrued income and other assets in the condensed consolidated balance sheets while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the condensed consolidated balance sheets. The following table presents the notional amount and fair value of IRLCs and forward contracts utilized by the Company at June 30, 2016 and December 31, 2015.
Fair values of derivative financial instruments were estimated using changes in mortgage interest rates from the date the Company entered into the IRLC and the balance sheet date. The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income for the three and six month periods ended June 30, 2016 and 2015.
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Recent Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Accounting Pronouncements Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (June 2016) The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets that are not accounted for at fair value through net income. The amendments affect loans, debt securities, off-balance-sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this Update affect an entity to varying degrees depending on the credit quality of the assets held by the entity, their duration, and how the entity applies current GAAP. There is diversity in practice in applying the incurred loss methodology, which means that before transition some entities may be more aligned, under current GAAP, than others to the new measure of expected credit losses. The following describes the main provisions of this Update. •Assets Measured at Amortized Cost: The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. •Available-for-Sale Debt Securities: Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. Available-for-sale accounting recognizes that value may be realized either through collection of contractual cash flows or through sale of the security. Therefore, the amendments limit the amount of the allowance for credit losses to the amount by which fair value is below amortized cost because the classification as available for sale is premised on an investment strategy that recognizes that the investment could be sold at fair value, if cash collection would result in the realization of an amount less than fair value. For public business entities that are U.S. Securities and Exchange Commission filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the effective date of this Update. |
Recent Accounting Pronouncements Recent Accounting Pronouncements (Policies) |
6 Months Ended |
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Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (June 2016) The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets that are not accounted for at fair value through net income. The amendments affect loans, debt securities, off-balance-sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this Update affect an entity to varying degrees depending on the credit quality of the assets held by the entity, their duration, and how the entity applies current GAAP. There is diversity in practice in applying the incurred loss methodology, which means that before transition some entities may be more aligned, under current GAAP, than others to the new measure of expected credit losses. The following describes the main provisions of this Update. •Assets Measured at Amortized Cost: The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. •Available-for-Sale Debt Securities: Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. Available-for-sale accounting recognizes that value may be realized either through collection of contractual cash flows or through sale of the security. Therefore, the amendments limit the amount of the allowance for credit losses to the amount by which fair value is below amortized cost because the classification as available for sale is premised on an investment strategy that recognizes that the investment could be sold at fair value, if cash collection would result in the realization of an amount less than fair value. For public business entities that are U.S. Securities and Exchange Commission filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the effective date of this Update. |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations for the three and six months ended June 30, 2016 and 2015.
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Classification of Available for Sale Securities Investment | The following tables summarize securities available-for-sale as of June 30, 2016 and December 31, 2015.
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Available-for-sale Securities | The carrying value of securities at June 30, 2016 is shown below by their contractual maturity date. Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following tables show the available-for-sale securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015.
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Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from accumulated other comprehensive income (loss) and the affected line items in the consolidated statements of income during the three and six months ended June 30, 2016 were as follows:
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Loans Receivable (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | Categories of loans include:
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Allowance for Credit Losses on Financing Receivables | The following tables present changes in the balance of the ALLL during the three and six month periods ended June 30, 2016 and 2015.
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Allowance For Credit Losses On Financing Receivables Portfolio Segment | The following tables present the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2016, and December 31, 2015.
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Financing Receivable Credit Quality Indicators | The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios based on rating category and payment activity as of June 30, 2016 and December 31, 2015.
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Past Due Financing Receivables | The following tables present the Company’s loan portfolio delinquency analysis as of June 30, 2016 and December 31, 2015.
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Impaired Financing Receivables | The following table presents the Company’s impaired loans as of June 30, 2016 and December 31, 2015. The Company had no impaired loans with a specific valuation allowance as of December 31, 2015.
The table below presents average balances and interest income recognized for impaired loans during the three and six month periods ended June 30, 2016 and June 30, 2015.
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Premises and Equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The following table summarizes premises and equipment at June 30, 2016 and December 31, 2015.
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Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Goodwill | The following table shows the changes in the carrying amount of goodwill for the periods ended June 30, 2016 and December 31, 2015.
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Subordinated Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Subordinated Borrowing |
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Benefit Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested Restricted Stock Shares Activity | The following table summarizes the status of the 2013 Plan awards as of June 30, 2016, and activity for the six months ended June 30, 2016.
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Schedule Of Deferred Stock Option Plan | The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the six months ended June 30, 2016.
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis | The following tables present the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2016 and December 31, 2015.
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables reconcile the beginning and ending balances of recurring fair value measurements recognized in the accompanying condensed consolidated balance sheets using significant unobservable (Level 3) inputs for the three and six month periods ended June 30, 2016 and June 30, 2015.
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Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | The following tables present quantitative information about significant unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill.
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Fair Value, by Balance Sheet Grouping | The following tables summarize the carrying value and estimated fair value of all financial assets and liabilities at June 30, 2016 and December 31, 2015.
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Mortgage Banking Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Banking [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Participating Mortgage Loans | The following table provides the components of income from mortgage banking activities for the three and six months ended June 30, 2016 and 2015.
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | the notional amount and fair value of IRLCs and forward contracts utilized by the Company at June 30, 2016 and December 31, 2015.
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Schedule of Derivative Instruments in Statements of Income Fair Value | Fair values of derivative financial instruments were estimated using changes in mortgage interest rates from the date the Company entered into the IRLC and the balance sheet date. The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income for the three and six month periods ended June 30, 2016 and 2015.
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Securities - Carrying Value (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Amortized Cost | ||
Within one year | $ 0 | |
One to five years | 400 | |
Five to ten years | 32,047 | |
After ten years | 141,280 | |
Amortized Cost | 173,727 | |
Amortized cost | 430,070 | $ 215,576 |
Fair Value | ||
Within one year | 0 | |
One to five years | 362 | |
Five to ten years | 31,904 | |
After ten years | 143,284 | |
Fair Value | 175,550 | |
Fair Value | 433,806 | 213,698 |
Mortgage-backed securities | ||
Amortized Cost | ||
Amortized cost | 233,886 | 113,948 |
Fair Value | ||
Fair Value | 235,911 | 113,052 |
Asset-backed securities | ||
Amortized Cost | ||
Amortized cost | 19,457 | 19,444 |
Fair Value | ||
Fair Value | 19,332 | 19,361 |
Other securities | ||
Amortized Cost | ||
Amortized cost | 3,000 | 3,000 |
Fair Value | ||
Fair Value | $ 3,013 | $ 2,979 |
Securities (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
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Investments, Debt and Equity Securities [Abstract] | |||
Gain on sale of securities | $ 177 | ||
Available-for-sale securities, gross realized losses | $ 0 | ||
Total fair value of investments | $ 103,129 | $ 103,129 | $ 166,132 |
Continuous unrealized loss position, fair value (as a percent) | 24.00% | 78.00% |
Securities - Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Income Before Income Taxes | $ 4,255 | $ 3,417 | $ 7,985 | $ 6,640 |
Income Tax Provision | 1,421 | $ 1,152 | 2,719 | $ 2,312 |
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) for the | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Gain on sale of securities | 177 | 177 | ||
Income Before Income Taxes | 177 | 177 | ||
Income Tax Provision | 60 | 60 | ||
Net Income | $ 117 | $ 117 |
Premises and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Less: accumulated depreciation | $ (4,233) | $ (4,779) |
Premises and equipment, net | 9,267 | 8,521 |
Land | ||
Premises and equipment, gross | 2,500 | 2,500 |
Building and improvements | ||
Premises and equipment, gross | 4,702 | 4,636 |
Furniture and equipment | ||
Premises and equipment, gross | $ 6,298 | $ 6,164 |
Goodwill (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 4,687 | $ 4,687 |
Changes in goodwill during the year | 0 | 0 |
Ending balance | $ 4,687 | $ 4,687 |
Subordinated Debt - Schedule of Subordinated Debt (Details) - Subordinated Debt - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Principal | $ 13,000 | $ 13,000 |
Unamortized Discount and Debt Issuance Costs | (222) | (276) |
8.00% subordinated debenture, due 2021 | ||
Debt Instrument [Line Items] | ||
Principal | 3,000 | 3,000 |
Unamortized Discount and Debt Issuance Costs | 0 | (42) |
6.4375% subordinated notes, due 2025 | ||
Debt Instrument [Line Items] | ||
Principal | 10,000 | 10,000 |
Unamortized Discount and Debt Issuance Costs | $ (222) | $ (234) |
Benefit Plans - Deferred Stock Rights (Details) |
6 Months Ended |
---|---|
Jun. 30, 2016
shares
| |
Deferred Stock Rights | |
Outstanding, beginning of period | 81,693 |
Granted | 341 |
Exercised | 0 |
Outstanding, end of period | 82,034 |
Fair Value of Financial Instruments - Fair Value Roll Forward (Details) - Interest Rate Lock Commitments - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 1,283 | $ 913 | $ 582 | $ 521 |
Included in net income | 441 | (290) | 1,142 | 102 |
Ending balance | $ 1,724 | $ 623 | $ 1,724 | $ 623 |
Fair Value of Financial Instruments - Quantative Information About Unobservable Inputs (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Significant Unobservable Inputs (Level 3) | Minimum | ||
IRLC - Loan closing rates | 36.00% | 43.00% |
Significant Unobservable Inputs (Level 3) | Maximum | ||
IRLC - Loan closing rates | 99.00% | 100.00% |
IRLCs | ||
IRLCs Fair Value | $ 1,724 | $ 582 |
IRLCs | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
IRLCs Fair Value | 0 | 0 |
IRLCs | Significant Other Observable Inputs (Level 2) | ||
IRLCs Fair Value | 0 | 0 |
IRLCs | Significant Unobservable Inputs (Level 3) | ||
IRLCs Fair Value | $ 1,724 | $ 582 |
Other securities Valuation Technique | Discounted cash flow | Discounted cash flow |
Other securities Unobservable Inputs | Loan closing rates | Loan closing rates |
Mortgage Banking Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Mortgage Banking [Abstract] | ||||
Loans originated for sale | $ 151,100 | $ 143,800 | $ 259,095 | $ 277,913 |
Proceeds from sale of loans | 139,600 | 143,300 | 256,592 | 287,065 |
Gain on loans sold | 2,896 | 2,531 | 4,496 | 4,845 |
(Loss) gain resulting from the change in fair value of loans held-for-sale | 632 | (669) | 986 | (492) |
Gain (loss) resulting from the change in fair value of derivatives | (233) | 352 | 67 | 747 |
Mortgage banking activities | $ 3,295 | $ 2,214 | $ 5,549 | $ 5,100 |
Derivative Financial Instruments - Notional Amount and Fair Value (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Forward contracts | ||
Asset Derivatives | ||
Notional Amount | $ 0 | $ 42,743 |
Fair Value | 0 | 30 |
Liability Derivatives | ||
Notional Amount | 98,252 | 0 |
IRLCs | ||
Asset Derivatives | ||
Notional Amount | 60,328 | 28,444 |
Fair Value | 1,724 | 582 |
Forward contracts | Forward contracts | ||
Liability Derivatives | ||
Derivative financial instrument | $ (1,045) | $ 0 |
Derivative Financial Instruments - Derivatives not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Asset Derivatives | IRLCs | ||||
Derivatives not designated as hedging instruments | $ 441 | $ (290) | $ 1,142 | $ 102 |
Liability Derivatives | Forward contracts | ||||
Derivatives not designated as hedging instruments | (674) | 0 | (1,075) | 0 |
Liability Derivatives | IRLCs | ||||
Derivatives not designated as hedging instruments | $ 0 | $ 642 | $ 0 | $ 645 |
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