(Mark One) | |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2019. |
or | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From ________ to ________. |
First Internet Bancorp | ||
(Exact Name of Registrant as Specified in its Charter) |
Indiana | 20-3489991 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
11201 USA Parkway | ||
Fishers, Indiana | 46037 | |
(Address of principal executive offices) | (Zip Code) |
(317) 532-7900 |
(Registrant’s telephone number, including area code) |
Title of each class | Trading Symbols | Name of exchange on which registered | ||
Common stock, without par value | INBK | The Nasdaq Stock Market LLC | ||
6.0% Fixed to Floating Subordinated Notes due 2026 | INBKL | The Nasdaq Stock Market LLC | ||
6.0% Fixed to Floating Subordinated Notes due 2029 | INBKZ | The Nasdaq Stock Market LLC |
Large accelerated filer ¨ | Accelerated filer þ |
Non-accelerated filer ¨ | Smaller reporting company þ |
Emerging growth company ¨ |
PART I | PAGE | |
Item 1. | Business | |
Item 1A. | Risk Factors | |
Item 1B. | Unresolved Staff Comments | |
Item 2. | Properties | |
Item 3. | Legal Proceedings | |
Item 4. | Mine Safety Disclosures | |
PART II | ||
Item 5. | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
Item 6. | Selected Financial Data | |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 8. | Financial Statements and Supplementary Data | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |
Item 9A. | Controls and Procedures | |
Item 9B. | Other Information | |
PART III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | |
Item 11. | Executive Compensation | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |
Item 14. | Principal Accountant Fees and Services | |
PART IV | ||
Item 15. | Exhibits and Financial Statement Schedules | |
Item 16. | Form 10-K Summary | |
SIGNATURES |
Basel III Regulatory Capital Levels | ||||||||||||||
January 1, 2015 | January 1, 2016 | January 1, 2017 | January 1, 2018 | January 1, 2019 | ||||||||||
Common equity tier 1 capital to risk-weighted assets | 4.50 | % | 5.125 | % | 5.75 | % | 6.375 | % | 7.00 | % | ||||
Tier 1 capital to risk-weighted assets | 6.00 | % | 6.625 | % | 7.25 | % | 7.875 | % | 8.50 | % | ||||
Total capital to risk-weighted assets | 8.00 | % | 8.625 | % | 9.25 | % | 9.875 | % | 10.50 | % |
• | the Bank would be undercapitalized following the distribution; |
• | the proposed capital distribution raises safety and soundness concerns; or |
• | the capital distribution would violate a prohibition contained in any statute, regulation or agreement applicable to the Bank. |
• | our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC; |
• | announcements of investor conferences and events at which our executives talk about our products and competitive strategies. Archives of some of these events are also available; |
• | press releases on quarterly earnings, product announcements, legal developments and other material news that we may post from time to time; |
• | corporate governance information, including our Corporate Governance Principles, Code of Business Conduct and Ethics, information concerning our Board of Directors and its committees, including the charters of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, and other governance-related policies; |
• | shareholder services information, including ways to contact our transfer agent; and |
• | opportunities to sign up for email alerts and RSS feeds to have information provided in real time. |
• | actual or anticipated variations in quarterly results of operations; |
• | developments in our business or the financial sector generally; |
• | recommendations by securities analysts; |
• | operating and stock price performance of other companies that investors deem comparable to us; |
• | news reports relating to trends, concerns and other issues in the financial services industry; |
• | perceptions in the marketplace regarding us or our competitors; |
• | new technology used or services offered by competitors; |
• | significant acquisitions or business combinations, strategic partnerships, joint venture or capital commitments by or involving us or our competitors; |
• | failure to integrate acquisitions or realize anticipated benefits from acquisitions; |
• | regulatory changes affecting our industry generally or our business or operations; or |
• | geopolitical conditions such as acts or threats of terrorism or military conflicts. |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
December 31, | |||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||
First Internet Bancorp | $ | 100.00 | $ | 173.06 | $ | 194.87 | $ | 234.08 | $ | 126.47 | $ | 148.38 | |||||||||||
Nasdaq Composite Index | 100.00 | 106.96 | 116.45 | 150.96 | 146.67 | 200.49 | |||||||||||||||||
SNL Small Cap U.S. Bank Index | 100.00 | 109.52 | 155.27 | 162.85 | 145.94 | 176.97 |
(dollars in thousands, except per share data) | At Or For The Twelve Months Ended December 31, | |||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Total assets | $ | 4,100,083 | $ | 3,541,692 | $ | 2,767,687 | $ | 1,854,335 | $ | 1,269,870 | ||||||||||
Cash and cash equivalents | 327,361 | 188,712 | 47,981 | 39,452 | 25,152 | |||||||||||||||
Loans | 2,963,547 | 2,716,228 | 2,091,193 | 1,250,789 | 953,859 | |||||||||||||||
Loans held-for-sale | 56,097 | 18,328 | 51,407 | 27,101 | 36,518 | |||||||||||||||
Total securities | 602,730 | 504,095 | 492,484 | 473,371 | 213,698 | |||||||||||||||
Deposits | 3,153,963 | 2,671,351 | 2,084,941 | 1,462,867 | 956,054 | |||||||||||||||
Tangible common equity 1 | 300,226 | 284,048 | 219,440 | 149,255 | 99,643 | |||||||||||||||
Total shareholders’ equity | 304,913 | 288,735 | 224,127 | 153,942 | 104,330 | |||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Interest income | $ | 147,414 | $ | 115,467 | $ | 84,697 | $ | 58,899 | $ | 41,447 | ||||||||||
Interest expense | 84,447 | 53,200 | 30,715 | 19,210 | 10,694 | |||||||||||||||
Net interest income | 62,967 | 62,267 | 53,982 | 39,689 | 30,753 | |||||||||||||||
Provision for loan losses | 5,966 | 3,892 | 4,872 | 4,330 | 1,946 | |||||||||||||||
Net interest income after provision for loan losses | 57,001 | 58,375 | 49,110 | 35,359 | 28,807 | |||||||||||||||
Noninterest income | 16,789 | 8,760 | 10,541 | 14,077 | 10,141 | |||||||||||||||
Noninterest expense | 46,634 | 43,183 | 36,723 | 31,451 | 25,283 | |||||||||||||||
Income before income taxes | 27,156 | 23,952 | 22,928 | 17,985 | 13,665 | |||||||||||||||
Income tax provision | 1,917 | 2,052 | 7,702 | 5,911 | 4,736 | |||||||||||||||
Net income | $ | 25,239 | $ | 21,900 | $ | 15,226 | $ | 12,074 | $ | 8,929 | ||||||||||
Per Share Data: | ||||||||||||||||||||
Net income | ||||||||||||||||||||
Basic | $ | 2.51 | $ | 2.31 | $ | 2.14 | $ | 2.32 | $ | 1.97 | ||||||||||
Diluted | $ | 2.51 | $ | 2.30 | $ | 2.13 | $ | 2.30 | $ | 1.96 | ||||||||||
Book value per common share | $ | 31.30 | $ | 28.39 | $ | 26.65 | $ | 23.76 | $ | 23.28 | ||||||||||
Tangible book value per common share 1 | $ | 30.82 | $ | 27.93 | $ | 26.09 | $ | 23.04 | $ | 22.24 | ||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||
Basic | 10,041,581 | 9,490,506 | 7,118,628 | 5,211,209 | 4,528,528 | |||||||||||||||
Diluted | 10,044,483 | 9,508,653 | 7,149,302 | 5,239,082 | 4,554,219 | |||||||||||||||
Common shares outstanding at end of period | 9,741,800 | 10,170,778 | 8,411,077 | 6,478,050 | 4,481,347 | |||||||||||||||
Dividends declared per share | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | ||||||||||
Dividend payout ratio 2 | 9.56 | % | 10.43 | % | 11.27 | % | 10.43 | % | 12.24 | % |
1 | Refer to the “Reconciliation of Non-GAAP Financial Measures” section of Item 7 of Part II of this report, Management's Discussion and Analysis of Financial Condition and Results of Operations. |
2 | Dividends per share divided by diluted earnings per share. |
At Or For The Twelve Months Ended December 31, | |||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||
Performance Ratios: | |||||||||||||||
Return on average assets | 0.65 | % | 0.72 | % | 0.66 | % | 0.74 | % | 0.81 | % | |||||
Return on average shareholders’ equity | 8.52 | % | 8.44 | % | 8.54 | % | 9.74 | % | 8.89 | % | |||||
Return on average tangible common equity 1 | 8.65 | % | 8.60 | % | 8.77 | % | 10.12 | % | 9.33 | % | |||||
Net interest margin 2 | 1.65 | % | 2.09 | % | 2.39 | % | 2.49 | % | 2.85 | % | |||||
Net interest margin FTE 1, 3 | 1.82 | % | 2.25 | % | 2.57 | % | 2.53 | % | 2.87 | % | |||||
Noninterest expense to average assets | 1.20 | % | 1.41 | % | 1.59 | % | 1.93 | % | 2.28 | % | |||||
Asset Quality Ratios: | |||||||||||||||
Nonperforming loans to total loans | 0.23 | % | 0.03 | % | 0.04 | % | 0.09 | % | 0.02 | % | |||||
Nonperforming assets to total assets | 0.22 | % | 0.10 | % | 0.21 | % | 0.31 | % | 0.37 | % | |||||
Nonperforming assets (including performing troubled debt restructurings) to total assets | 0.23 | % | 0.11 | % | 0.23 | % | 0.35 | % | 0.46 | % | |||||
Allowance for loan losses to total loans | 0.74 | % | 0.66 | % | 0.72 | % | 0.88 | % | 0.88 | % | |||||
Net charge-offs (recoveries) to average loans | 0.07 | % | 0.04 | % | 0.05 | % | 0.15 | % | (0.07 | )% | |||||
Allowance for loan losses to nonperforming loans | 324.4 | % | 2,013.1 | % | 1,784.3 | % | 1,013.9 | % | 5,000.6 | % | |||||
Capital Ratios: | |||||||||||||||
Total shareholders' equity to assets | 7.44 | % | 8.15 | % | 8.10 | % | 8.30 | % | 8.22 | % | |||||
Tangible common equity to tangible assets 1 | 7.33 | % | 8.03 | % | 7.94 | % | 8.07 | % | 7.88 | % | |||||
Tier 1 leverage ratio 4 | 7.64 | % | 9.00 | % | 8.45 | % | 8.65 | % | 8.28 | % | |||||
Common equity tier 1 capital ratio 4, 5 | 10.84 | % | 12.39 | % | 11.43 | % | 11.54 | % | 10.11 | % | |||||
Tier 1 capital ratio 4 | 10.84 | % | 12.39 | % | 11.43 | % | 11.54 | % | 10.11 | % | |||||
Total risk-based capital ratio 4 | 13.99 | % | 14.53 | % | 14.07 | % | 15.01 | % | 12.25 | % | |||||
Other Data: | |||||||||||||||
Full-time equivalent employees | 229 | 201 | 206 | 192 | 152 | ||||||||||
Number of banking and loan production offices | 2 | 2 | 2 | 2 | 3 |
1 | Refer to the “Reconciliation of Non-GAAP Financial Measures” section of Item 7 of Part II of this report, Management's Discussion and Analysis of Financial Condition and Results of Operations. |
2 | Net interest margin is net interest income divided by average earning assets. |
3 | On an FTE basis assuming a 21% tax rate in 2019 and 2018 and a 35% tax rate in 2017, 2016 and 2015. Net interest income is adjusted to reflect income from assets such as municipal loans and securities that are exempt from Federal income taxes. This is to recognize the income tax savings that facilitates a comparison between taxable and tax-exempt assets. The Company believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully-taxable equivalent basis as these measures provide useful information to make peer comparisons. |
4 | Capital ratios are calculated in accordance with regulatory guidelines specified by our primary federal banking regulatory authority. |
5 | Introduced as part of the final implementation of the “Basel III” regulatory capital reforms as of January 1, 2015. |
Twelve Months Ended | |||||||||||||||||||||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest/Dividends | Yield/Cost | Average Balance | Interest/Dividends | Yield/Cost | Average Balance | Interest/Dividends | Yield/Cost | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||||||||||||||
Loans, including loans held-for-sale | $ | 2,894,174 | $ | 122,228 | 4.22 | % | $ | 2,382,504 | $ | 99,082 | 4.16 | % | $ | 1,682,249 | $ | 70,465 | 4.19 | % | |||||||||||||||
Securities - taxable | 462,704 | 13,807 | 2.98 | % | 391,958 | 10,630 | 2.71 | % | 400,449 | 10,036 | 2.51 | % | |||||||||||||||||||||
Securities - non-taxable | 97,613 | 2,595 | 2.66 | % | 94,072 | 2,810 | 2.99 | % | 95,694 | 2,786 | 2.91 | % | |||||||||||||||||||||
Other earning assets | 355,412 | 8,784 | 2.47 | % | 116,074 | 2,945 | 2.54 | % | 79,461 | 1,410 | 1.77 | % | |||||||||||||||||||||
Total interest-earning assets | 3,809,903 | 147,414 | 3.87 | % | 2,984,608 | 115,467 | 3.87 | % | 2,257,853 | 84,697 | 3.75 | % | |||||||||||||||||||||
Allowance for loan losses | (19,891 | ) | (16,097 | ) | (12,964 | ) | |||||||||||||||||||||||||||
Noninterest earning-assets | 100,696 | 86,713 | 68,580 | ||||||||||||||||||||||||||||||
Total assets | $ | 3,890,708 | $ | 3,055,224 | $ | 2,313,469 | |||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 118,874 | $ | 882 | 0.74 | % | $ | 90,229 | $ | 583 | 0.65 | % | $ | 89,081 | $ | 488 | 0.55 | % | |||||||||||||||
Savings accounts | 35,751 | 398 | 1.11 | % | 51,333 | 585 | 1.14 | % | 39,393 | 342 | 0.87 | % | |||||||||||||||||||||
Money market accounts | 637,360 | 12,661 | 1.99 | % | 544,802 | 8,803 | 1.62 | % | 415,910 | 4,227 | 1.02 | % | |||||||||||||||||||||
Certificates and brokered deposits | 2,146,637 | 55,372 | 2.58 | % | 1,585,673 | 32,513 | 2.05 | % | 1,169,219 | 18,918 | 1.62 | % | |||||||||||||||||||||
Total interest-bearing deposits | 2,938,622 | 69,313 | 2.36 | % | 2,272,037 | 42,484 | 1.87 | % | 1,713,603 | 23,975 | 1.40 | % | |||||||||||||||||||||
Other borrowed funds | 564,757 | 15,134 | 2.68 | % | 468,411 | 10,716 | 2.29 | % | 376,470 | 6,740 | 1.79 | % | |||||||||||||||||||||
Total interest-bearing liabilities | 3,503,379 | 84,447 | 2.41 | % | 2,740,448 | 53,200 | 1.94 | % | 2,090,073 | 30,715 | 1.47 | % | |||||||||||||||||||||
Noninterest-bearing deposits | 44,682 | 45,562 | 35,043 | ||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 46,265 | 9,798 | 10,141 | ||||||||||||||||||||||||||||||
Total liabilities | 3,594,326 | 2,795,808 | 2,135,257 | ||||||||||||||||||||||||||||||
Shareholders' equity | 296,382 | 259,416 | 178,212 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,890,708 | $ | 3,055,224 | $ | 2,313,469 | |||||||||||||||||||||||||||
Net interest income | $ | 62,967 | $ | 62,267 | $ | 53,982 | |||||||||||||||||||||||||||
Interest rate spread1 | 1.46 | % | 1.93 | % | 2.28 | % | |||||||||||||||||||||||||||
Net interest margin2 | 1.65 | % | 2.09 | % | 2.39 | % | |||||||||||||||||||||||||||
Net interest margin - FTE3 | 1.82 | % | 2.25 | % | 2.57 | % |
Rate/Volume Analysis of Net Interest Income | ||||||||||||||||||||||||
Twelve Months Ended December 31, 2019 vs. December 31, 2018 Due to Changes in | Twelve Months Ended December 31, 2018 vs. December 31, 2017 Due to Changes in | |||||||||||||||||||||||
(amounts in thousands) | Volume | Rate | Net | Volume | Rate | Net | ||||||||||||||||||
Interest income | ||||||||||||||||||||||||
Loans, including loans held-for-sale | $ | 21,689 | $ | 1,457 | $ | 23,146 | $ | 29,126 | $ | (509 | ) | $ | 28,617 | |||||||||||
Securities – taxable | 2,047 | 1,130 | 3,177 | (212 | ) | 806 | 594 | |||||||||||||||||
Securities – non-taxable | 103 | (318 | ) | (215 | ) | (49 | ) | 73 | 24 | |||||||||||||||
Other earning assets | 5,922 | (83 | ) | 5,839 | 789 | 746 | 1,535 | |||||||||||||||||
Total | 29,761 | 2,186 | 31,947 | 29,654 | 1,116 | 30,770 | ||||||||||||||||||
Interest expense | ||||||||||||||||||||||||
Interest-bearing deposits | 14,172 | 12,657 | 26,829 | 9,117 | 9,392 | 18,509 | ||||||||||||||||||
Other borrowed funds | 2,417 | 2,001 | 4,418 | 1,855 | 2,121 | 3,976 | ||||||||||||||||||
Total | 16,589 | 14,658 | 31,247 | 10,972 | 11,513 | 22,485 | ||||||||||||||||||
Increase (decrease) in net interest income | $ | 13,172 | $ | (12,472 | ) | $ | 700 | $ | 18,682 | $ | (10,397 | ) | $ | 8,285 |
Twelve Months Ended December 31, | |||||||||||||||||||
(amounts in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Service charges and fees | $ | 885 | $ | 934 | $ | 888 | $ | 818 | $ | 764 | |||||||||
Loan servicing revenue | 166 | — | — | — | — | ||||||||||||||
Mortgage banking activities | 11,541 | 5,718 | 7,836 | 12,398 | 9,000 | ||||||||||||||
Gain on sale of loans | 2,074 | 503 | 395 | — | — | ||||||||||||||
Loss on sale of securities | (458 | ) | — | (8 | ) | — | — | ||||||||||||
Other | 2,581 | 1,605 | 1,430 | 861 | 377 | ||||||||||||||
Total noninterest income | $ | 16,789 | $ | 8,760 | $ | 10,541 | $ | 14,077 | $ | 10,141 |
Twelve Months Ended December 31, | |||||||||||||||||||
(amounts in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Salaries and employee benefits | $ | 27,014 | $ | 23,174 | $ | 21,164 | $ | 17,387 | $ | 14,271 | |||||||||
Marketing, advertising and promotion | 1,800 | 2,468 | 2,393 | 1,823 | 1,756 | ||||||||||||||
Consulting and professional services | 3,669 | 3,055 | 3,091 | 3,143 | 2,374 | ||||||||||||||
Data processing | 1,338 | 1,233 | 971 | 1,127 | 1,016 | ||||||||||||||
Loan expenses | 1,142 | 942 | 1,027 | 891 | 631 | ||||||||||||||
Premises and equipment | 6,059 | 4,996 | 4,183 | 3,699 | 2,768 | ||||||||||||||
Deposit insurance premium | 1,903 | 1,956 | 1,410 | 1,159 | 643 | ||||||||||||||
Write-down of other real estate owned | — | 2,423 | — | — | — | ||||||||||||||
Other | 3,709 | 2,936 | 2,484 | 2,222 | 1,824 | ||||||||||||||
Total noninterest expense | $ | 46,634 | $ | 43,183 | $ | 36,723 | $ | 31,451 | $ | 25,283 |
Twelve Months Ended December 31, | |||||||||||||||||||
(amounts in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Statutory rate times pre-tax income | $ | 5,703 | $ | 5,030 | $ | 8,025 | $ | 6,115 | $ | 4,646 | |||||||||
(Subtract) add the tax effect of: | |||||||||||||||||||
Income from tax-exempt securities and loans | (4,881 | ) | (3,833 | ) | (2,512 | ) | (635 | ) | (132 | ) | |||||||||
State income taxes, net of federal tax effect | 1,285 | 1,164 | 693 | 567 | 154 | ||||||||||||||
Bank-owned life insurance | (198 | ) | (200 | ) | (318 | ) | (159 | ) | (137 | ) | |||||||||
Net deferred tax asset revaluation | — | — | 1,846 | — | — | ||||||||||||||
Tax credits | (181 | ) | (180 | ) | — | — | — | ||||||||||||
Other differences | 189 | 71 | (32 | ) | 23 | 205 | |||||||||||||
Income tax expense | $ | 1,917 | $ | 2,052 | $ | 7,702 | $ | 5,911 | $ | 4,736 |
(amounts in thousands) | December 31, | |||||||||||||||||||
Balance Sheet Data: | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Total assets | $ | 4,100,083 | $ | 3,541,692 | $ | 2,767,687 | $ | 1,854,335 | $ | 1,269,870 | ||||||||||
Loans | 2,963,547 | 2,716,228 | 2,091,193 | 1,250,789 | 953,859 | |||||||||||||||
Total securities | 602,730 | 504,095 | 492,484 | 473,371 | 213,698 | |||||||||||||||
Loans held-for-sale | 56,097 | 18,328 | 51,407 | 27,101 | 36,518 | |||||||||||||||
Noninterest-bearing deposits | 57,115 | 43,301 | 44,686 | 31,166 | 23,700 | |||||||||||||||
Interest-bearing deposits | 3,096,848 | 2,628,050 | 2,040,255 | 1,431,701 | 932,354 | |||||||||||||||
Total deposits | 3,153,963 | 2,671,351 | 2,084,941 | 1,462,867 | 956,054 | |||||||||||||||
Advances from Federal Home Loan Bank | 514,910 | 525,153 | 410,176 | 189,981 | 190,957 | |||||||||||||||
Total shareholders' equity | 304,913 | 288,735 | 224,127 | 153,942 | 104,330 |
December 31, | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||
Commercial loans | ||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 96,420 | 3.3 | % | $ | 107,405 | 4.0 | % | $ | 121,966 | 5.8 | % | $ | 101,326 | 8.1 | % | $ | 100,299 | 10.5 | % | ||||||||||||||
Owner-occupied commercial real estate | 73,392 | 2.5 | % | 77,569 | 2.9 | % | 71,872 | 3.4 | % | 55,637 | 4.4 | % | 44,462 | 4.7 | % | |||||||||||||||||||
Investor commercial real estate | 12,567 | 0.4 | % | 5,391 | 0.2 | % | 7,273 | 0.4 | % | 13,181 | 1.0 | % | 16,184 | 1.7 | % | |||||||||||||||||||
Construction | 60,274 | 2.0 | % | 39,916 | 1.5 | % | 49,213 | 2.4 | % | 53,291 | 4.3 | % | 45,898 | 4.8 | % | |||||||||||||||||||
Single tenant lease financing | 995,879 | 33.6 | % | 919,440 | 33.8 | % | 803,299 | 38.5 | % | 606,568 | 48.5 | % | 374,344 | 39.2 | % | |||||||||||||||||||
Public finance | 687,094 | 23.2 | % | 706,342 | 26.0 | % | 438,341 | 21.0 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||||||
Healthcare finance | 300,612 | 10.1 | % | 117,007 | 4.4 | % | 31,573 | 1.5 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||||||
Small business lending | 60,279 | 2.1 | % | 17,370 | 0.5 | % | 4,870 | 0.2 | % | 3,142 | 0.3 | % | 1,701 | 0.2 | % | |||||||||||||||||||
Total commercial loans | 2,286,517 | 77.2 | % | 1,990,440 | 73.3 | % | 1,528,407 | 73.2 | % | 833,145 | 66.6 | % | 582,888 | 61.1 | % | |||||||||||||||||||
Consumer loans | ||||||||||||||||||||||||||||||||||
Residential mortgage | 313,849 | 10.6 | % | 399,898 | 14.7 | % | 299,935 | 14.3 | % | 205,554 | 16.4 | % | 214,559 | 22.5 | % | |||||||||||||||||||
Home equity | 24,306 | 0.8 | % | 28,735 | 1.1 | % | 30,554 | 1.5 | % | 35,036 | 2.8 | % | 43,279 | 4.5 | % | |||||||||||||||||||
Other consumer | 295,309 | 10.0 | % | 279,771 | 10.3 | % | 227,533 | 10.8 | % | 173,449 | 13.9 | % | 108,312 | 11.4 | % | |||||||||||||||||||
Total consumer loans | 633,464 | 21.4 | % | 708,404 | 26.1 | % | 558,022 | 26.6 | % | 414,039 | 33.1 | % | 366,150 | 38.4 | % | |||||||||||||||||||
Total commercial and consumer loans | 2,919,981 | 98.6 | % | 2,698,844 | 99.4 | % | 2,086,429 | 99.8 | % | 1,247,184 | 99.7 | % | 949,038 | 99.5 | % | |||||||||||||||||||
Net deferred loan origination costs and premiums and discounts on purchased loans and other (1) | 43,566 | 1.4 | % | 17,384 | 0.6 | % | 4,764 | 0.2 | % | 3,605 | 0.3 | % | 4,821 | 0.5 | % | |||||||||||||||||||
Total loans | 2,963,547 | 100.0 | % | 2,716,228 | 100.0 | % | 2,091,193 | 100.0 | % | 1,250,789 | 100.0 | % | 953,859 | 100.0 | % | |||||||||||||||||||
Allowance for loan losses | (21,840 | ) | (17,896 | ) | (14,970 | ) | (10,981 | ) | (8,351 | ) | ||||||||||||||||||||||||
Net loans | $ | 2,941,707 | $ | 2,698,332 | $ | 2,076,223 | $ | 1,239,808 | $ | 945,508 |
(amounts in thousands) | Within 1 Year | 1-3 Years | 4-5 Years | Beyond 5 Years | Total | |||||||||||||||
Commercial loans | ||||||||||||||||||||
Commercial and industrial | $ | 30,002 | $ | 23,149 | $ | 7,784 | $ | 35,485 | $ | 96,420 | ||||||||||
Owner-occupied commercial real estate | 7,053 | 16,267 | 15,710 | 34,362 | 73,392 | |||||||||||||||
Investor commercial real estate | 1,477 | 2,483 | 5,969 | 2,638 | 12,567 | |||||||||||||||
Construction | 17,815 | 28,855 | 5,723 | 7,881 | 60,274 | |||||||||||||||
Single tenant lease financing | 35,735 | 132,729 | 127,282 | 700,133 | 995,879 | |||||||||||||||
Public finance | 12,515 | 10,457 | 251 | 663,871 | 687,094 | |||||||||||||||
Healthcare finance | 494 | 30 | 324 | 299,764 | 300,612 | |||||||||||||||
Small business lending | 615 | 1,307 | 3,106 | 55,251 | 60,279 | |||||||||||||||
Total commercial loans | 105,706 | 215,277 | 166,149 | 1,799,385 | 2,286,517 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Residential mortgage | 7,740 | 46,565 | 114,111 | 145,433 | 313,849 | |||||||||||||||
Home equity | 86 | 2,446 | 4,342 | 17,432 | 24,306 | |||||||||||||||
Other consumer | 1,640 | 9,231 | 14,767 | 269,671 | 295,309 | |||||||||||||||
Total consumer loans | 9,466 | 58,242 | 133,220 | 432,536 | 633,464 | |||||||||||||||
Total commercial and consumer loans | $ | 115,172 | $ | 273,519 | $ | 299,369 | $ | 2,231,921 | $ | 2,919,981 |
(amounts in thousands) | Within 1 Year | 1-3 Years | 4-5 Years | Beyond 5 Years | Total | |||||||||||||||
Predetermined rates | $ | 61,110 | $ | 213,662 | $ | 221,088 | $ | 2,016,268 | $ | 2,512,128 | ||||||||||
Adjustable rate | 54,062 | 59,857 | 78,281 | 215,653 | 407,853 | |||||||||||||||
Total commercial and consumer loans | $ | 115,172 | $ | 273,519 | $ | 299,369 | $ | 2,231,921 | $ | 2,919,981 |
December 31, | |||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Nonaccrual loans | |||||||||||||||||||
Commercial loans: | |||||||||||||||||||
Commercial and industrial | 226 | 195 | — | — | — | ||||||||||||||
Owner-occupied commercial real estate | 464 | 325 | — | — | — | ||||||||||||||
Single tenant lease financing | 4,680 | — | — | — | — | ||||||||||||||
Total commercial loans | 5,370 | 520 | — | — | — | ||||||||||||||
Consumer loans: | |||||||||||||||||||
Residential mortgage | 761 | 175 | 724 | 1,024 | 103 | ||||||||||||||
Home equity | — | 55 | 83 | — | — | ||||||||||||||
Other consumer | 33 | 42 | 32 | 59 | 64 | ||||||||||||||
Total consumer loans | 794 | 272 | 839 | 1,083 | 167 | ||||||||||||||
Total nonaccrual loans | 6,164 | 792 | 839 | 1,083 | 167 | ||||||||||||||
Past Due 90 days and accruing loans | |||||||||||||||||||
Consumer loans: | |||||||||||||||||||
Residential mortgage | 416 | 97 | — | — | — | ||||||||||||||
Total consumer loans | 416 | 97 | — | — | — | ||||||||||||||
Total past due 90 days and accruing loans | 416 | 97 | — | — | — | ||||||||||||||
Total nonperforming loans | 6,580 | 889 | 839 | 1,083 | 167 | ||||||||||||||
Other real estate owned | |||||||||||||||||||
Investor commercial real estate | 2,065 | 2,066 | 4,488 | 4,488 | 4,488 | ||||||||||||||
Residential mortgage | — | 553 | 553 | 45 | — | ||||||||||||||
Total other real estate owned | 2,065 | 2,619 | 5,041 | 4,533 | 4,488 | ||||||||||||||
Other nonperforming assets | 75 | — | 12 | 85 | 85 | ||||||||||||||
Total nonperforming assets | $ | 8,720 | $ | 3,508 | $ | 5,892 | $ | 5,701 | $ | 4,740 | |||||||||
Total nonperforming loans to total loans | 0.23 | % | 0.03 | % | 0.04 | % | 0.09 | % | 0.02 | % | |||||||||
Total nonperforming assets to total assets | 0.22 | % | 0.10 | % | 0.21 | % | 0.31 | % | 0.37 | % |
December 31, | |||||||||||||||||||
(amounts in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Troubled debt restructurings – nonaccrual | $ | 94 | $ | — | $ | — | $ | — | $ | — | |||||||||
Troubled debt restructurings – performing | 427 | 410 | 473 | 757 | 1,115 | ||||||||||||||
Total troubled debt restructurings | $ | 521 | $ | 410 | $ | 473 | $ | 757 | $ | 1,115 |
December 31, | |||||||||||||||||||
(amounts in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Balance, beginning of period | $ | 17,896 | $ | 14,970 | $ | 10,981 | $ | 8,351 | $ | 5,800 | |||||||||
Provision charged to expense | 5,966 | 3,892 | 4,872 | 4,330 | 1,946 | ||||||||||||||
Losses charged off | |||||||||||||||||||
Commercial and industrial | (921 | ) | (92 | ) | (271 | ) | (1,582 | ) | — | ||||||||||
Residential mortgage | (76 | ) | (9 | ) | (116 | ) | (134 | ) | (185 | ) | |||||||||
Home equity | (68 | ) | — | — | (33 | ) | — | ||||||||||||
Other consumer | (1,292 | ) | (1,176 | ) | (895 | ) | (440 | ) | (451 | ) | |||||||||
Total losses charged off | (2,357 | ) | (1,277 | ) | (1,282 | ) | (2,189 | ) | (636 | ) | |||||||||
Recoveries | |||||||||||||||||||
Commercial and industrial | 29 | 3 | 69 | 187 | — | ||||||||||||||
Investor commercial real estate | — | — | — | — | 500 | ||||||||||||||
Small business lending | 5 | — | — | — | — | ||||||||||||||
Residential mortgage | 4 | 5 | 4 | 30 | 407 | ||||||||||||||
Home equity | 10 | 16 | 23 | 13 | 1 | ||||||||||||||
Other consumer | 287 | 287 | 303 | 259 | 333 | ||||||||||||||
Total recoveries | 335 | 311 | 399 | 489 | 1,241 | ||||||||||||||
Balance, end of period | $ | 21,840 | $ | 17,896 | $ | 14,970 | $ | 10,981 | $ | 8,351 |
(amounts in thousands) | December 31, | ||||||||||||||||||
Amortized Cost | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Securities available-for-sale | |||||||||||||||||||
U.S. Government-sponsored agencies | $ | 77,715 | $ | 109,631 | $ | 133,424 | $ | 92,599 | $ | 38,093 | |||||||||
Municipal securities | 97,447 | 97,090 | 97,370 | 97,647 | 21,091 | ||||||||||||||
Agency mortgage-backed securities | 264,142 | 242,293 | 215,452 | 238,354 | 113,948 | ||||||||||||||
Private-label mortgage-backed securities | 63,704 | 9,199 | — | — | — | ||||||||||||||
Asset-backed securities | 5,000 | 5,002 | 5,000 | 19,470 | 19,444 | ||||||||||||||
Corporate securities | 38,632 | 36,678 | 27,111 | 20,000 | 20,000 | ||||||||||||||
Other securities | — | — | 3,000 | 3,000 | 3,000 | ||||||||||||||
Total securities available-for-sale | 546,640 | 499,893 | 481,357 | 471,070 | 215,576 | ||||||||||||||
Securities held-to-maturity | |||||||||||||||||||
Municipal securities | 10,142 | 10,157 | 10,164 | 10,171 | — | ||||||||||||||
Corporate securities | 51,736 | 12,593 | 9,045 | 6,500 | — | ||||||||||||||
Total securities held-to-maturity | 61,878 | 22,750 | 19,209 | 16,671 | — | ||||||||||||||
Total securities | $ | 608,518 | $ | 522,643 | $ | 500,566 | $ | 487,741 | $ | 215,576 |
December 31, | |||||||||||||||||||
Approximate Fair Value | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Securities available-for-sale | |||||||||||||||||||
U.S. Government-sponsored agencies | $ | 75,872 | $ | 107,585 | $ | 133,190 | $ | 91,896 | $ | 37,750 | |||||||||
Municipal securities | 97,652 | 92,506 | 96,377 | 91,886 | 21,469 | ||||||||||||||
Agency mortgage-backed securities | 261,440 | 233,734 | 209,720 | 231,641 | 113,052 | ||||||||||||||
Private-label mortgage-backed securities | 63,613 | 9,178 | — | — | — | ||||||||||||||
Asset-backed securities | 4,955 | 4,859 | 5,009 | 19,534 | 19,361 | ||||||||||||||
Corporate securities | 37,320 | 33,483 | 26,047 | 18,811 | 19,087 | ||||||||||||||
Other securities | — | — | 2,932 | 2,932 | 2,979 | ||||||||||||||
Total securities available-for-sale | 540,852 | 481,345 | 473,275 | 456,700 | 213,698 | ||||||||||||||
Securities held-to-maturity | |||||||||||||||||||
Municipal securities | 10,368 | 9,801 | 9,847 | 9,673 | — | ||||||||||||||
Corporate securities | 52,192 | 12,617 | 9,236 | 6,524 | — | ||||||||||||||
Total securities held-to-maturity | 62,560 | 22,418 | 19,083 | 16,197 | — | ||||||||||||||
Total securities | $ | 603,412 | $ | 503,763 | $ | 492,358 | $ | 472,897 | $ | 213,698 |
1 year or less | More than 1 year to 5 years | More than 5 years to 10 years | More than 10 years | Total | |||||||||||||||||||||||||||||||
(dollars in thousands) | Amortized Cost | Wtd. Avg. Yield | Amortized Cost | Wtd. Avg. Yield | Amortized Cost | Wtd. Avg. Yield | Amortized Cost | Wtd. Avg. Yield | Amortized Cost | Wtd. Avg. Yield | |||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||||||||
U.S. Government-sponsored agencies | $ | 30 | 7.31 | % | $ | 2,368 | 3.03 | % | $ | 52,583 | 1.82 | % | $ | 22,734 | 2.37 | % | $ | 77,715 | 2.02 | % | |||||||||||||||
Municipal securities | — | 0.00 | % | 7,334 | 2.17 | % | 20,759 | 2.64 | % | 79,496 | 2.71 | % | 107,589 | 2.66 | % | ||||||||||||||||||||
Agency mortgage-backed securities | — | 0.00 | % | 1,305 | 2.80 | % | 14,666 | 2.24 | % | 248,171 | 2.65 | % | 264,142 | 2.63 | % | ||||||||||||||||||||
Private-label mortgage-backed securities | — | 0.00 | % | — | 0.00 | % | — | — | % | 63,704 | 3.11 | % | 63,704 | 3.11 | % | ||||||||||||||||||||
Asset-backed securities | — | 0.00 | % | — | 0.00 | % | 5,000 | 3.76 | % | — | 0.00 | % | 5,000 | 3.70 | % | ||||||||||||||||||||
Corporate securities | — | 0.00 | % | 18,514 | 2.05 | % | 66,854 | 4.20 | % | 5,000 | 3.03 | % | 90,368 | 3.76 | % | ||||||||||||||||||||
Total securities | $ | 30 | 7.31 | % | $ | 29,521 | 1.95 | % | $ | 159,862 | 3.02 | % | $ | 419,105 | 2.72 | % | $ | 608,518 | 2.78 | % |
December 31, | |||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits | $ | 57,115 | 1.8 | % | $ | 43,301 | 1.6 | % | $ | 44,686 | 2.1 | % | $ | 31,166 | 2.1 | % | $ | 23,700 | 2.5 | % | |||||||||||||||
Interest-bearing demand deposits | 129,020 | 4.1 | % | 121,055 | 4.5 | % | 94,674 | 4.5 | % | 93,074 | 6.4 | % | 84,241 | 8.8 | % | ||||||||||||||||||||
Savings accounts | 29,616 | 0.9 | % | 38,489 | 1.4 | % | 49,939 | 2.4 | % | 27,955 | 1.9 | % | 22,808 | 2.4 | % | ||||||||||||||||||||
Money market accounts | 786,390 | 24.9 | % | 528,533 | 19.9 | % | 499,501 | 24.0 | % | 340,240 | 23.3 | % | 341,732 | 35.7 | % | ||||||||||||||||||||
Certificates of deposits | 1,613,453 | 51.2 | % | 1,292,883 | 48.4 | % | 1,319,488 | 63.3 | % | 964,819 | 65.9 | % | 470,736 | 49.2 | % | ||||||||||||||||||||
Brokered deposits | 538,369 | 17.1 | % | 647,090 | 24.2 | % | 76,653 | 3.7 | % | 5,613 | 0.4 | % | 12,837 | 1.4 | % | ||||||||||||||||||||
Total | $ | 3,153,963 | 100.0 | % | $ | 2,671,351 | 100.0 | % | $ | 2,084,941 | 100.0 | % | $ | 1,462,867 | 100.0 | % | $ | 956,054 | 100.0 | % |
Period to Maturity | Percentage of Total Certificate Accounts | ||||||||||||||||||||||
(dollars in thousands) | Less than 1 year | > 1 year to 2 years | > 2 years to 3 years | More than 3 years | Total | ||||||||||||||||||
Interest Rate: | |||||||||||||||||||||||
<1.00% | $ | 4,780 | $ | — | $ | — | $ | — | $ | 4,780 | 0.3 | % | |||||||||||
1.00% – 1.99% | $ | 302,482 | $ | 334,829 | $ | 41,945 | $ | 9,216 | $ | 688,472 | 39.4 | % | |||||||||||
2.00% – 2.99% | 636,416 | 193,839 | 82,594 | 133,478 | 1,046,327 | 59.8 | % | ||||||||||||||||
3.00% – 3.99% | — | 89 | 5 | 8,084 | 8,178 | 0.5 | % | ||||||||||||||||
Total | $ | 943,678 | $ | 528,757 | $ | 124,544 | $ | 150,778 | $ | 1,747,757 | 100.0 | % |
(dollars in thousands) | December 31, 2019 | ||
Maturity Period: | |||
3 months or less | $ | 195,761 | |
Over 3 through 6 months | 203,178 | ||
Over 6 through 12 months | 267,287 | ||
Over 12 months | 641,021 | ||
Total | $ | 1,307,247 |
At Or For The Twelve Months Ended December 31, | ||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | |||||||||
Balance outstanding at end of period | $ | 514,910 | $ | 525,153 | $ | 410,176 | ||||||
Average amount outstanding during period | 511,093 | 433,211 | 339,823 | |||||||||
Maximum outstanding at any month end during period | 525,000 | 525,153 | 435,183 | |||||||||
Weighted average interest rate at end of period 1 | 1.98 | % | 2.15 | % | 1.50 | % | ||||||
Weighted average interest rate during period 1 | 2.25 | % | 1.92 | % | 1.24 | % |
(dollars in thousands, except share and per share data) | At Or For The Twelve Months Ended December 31, | ||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Total equity - GAAP | $ | 304,913 | $ | 288,735 | $ | 224,127 | $ | 153,942 | $ | 104,330 | |||||||||
Adjustments: | |||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | |||||||||
Tangible common equity | $ | 300,226 | $ | 284,048 | $ | 219,440 | $ | 149,255 | $ | 99,643 | |||||||||
Total assets - GAAP | $ | 4,100,083 | $ | 3,541,692 | $ | 2,767,687 | $ | 1,854,335 | $ | 1,269,870 | |||||||||
Adjustments: | |||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | |||||||||
Tangible assets | $ | 4,095,396 | $ | 3,537,005 | $ | 2,763,000 | $ | 1,849,648 | $ | 1,265,183 | |||||||||
Total common shares outstanding | 9,741,800 | 10,170,778 | 8,411,077 | 6,478,050 | 4,481,347 | ||||||||||||||
Book value per common share | $ | 31.30 | $ | 28.39 | $ | 26.65 | $ | 23.76 | $ | 23.28 | |||||||||
Effect of goodwill | (0.48 | ) | (0.46 | ) | (0.56 | ) | (0.72 | ) | (1.04 | ) | |||||||||
Tangible book value per common share | $ | 30.82 | $ | 27.93 | $ | 26.09 | $ | 23.04 | $ | 22.24 | |||||||||
Total shareholders’ equity to assets ratio | 7.44 | % | 8.15 | % | 8.10 | % | 8.30 | % | 8.22 | % | |||||||||
Effect of goodwill | (0.11 | )% | (0.12 | )% | (0.16 | )% | (0.23 | )% | (0.34 | )% | |||||||||
Tangible common equity to tangible assets ratio | 7.33 | % | 8.03 | % | 7.94 | % | 8.07 | % | 7.88 | % | |||||||||
Total average equity - GAAP | $ | 296,382 | $ | 259,416 | $ | 178,212 | $ | 124,023 | $ | 100,428 | |||||||||
Adjustments: | |||||||||||||||||||
Average goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | |||||||||
Average tangible common equity | $ | 291,695 | $ | 254,729 | $ | 173,525 | $ | 119,336 | $ | 95,741 | |||||||||
Return on average shareholders' equity | 8.52 | % | 8.44 | % | 8.54 | % | 9.74 | % | 8.89 | % | |||||||||
Effect of goodwill | 0.13 | % | 0.16 | % | 0.23 | % | 0.38 | % | 0.44 | % | |||||||||
Return on average tangible common equity | 8.65 | % | 8.60 | % | 8.77 | % | 10.12 | % | 9.33 | % | |||||||||
Net interest income | $ | 62,967 | $ | 62,267 | $ | 53,982 | $ | 39,689 | $ | 30,753 | |||||||||
Adjustments: | |||||||||||||||||||
Fully-taxable equivalent adjustments1 | 6,334 | 5,010 | 4,053 | 1,090 | 224 | ||||||||||||||
Net interest income - FTE | $ | 69,301 | $ | 67,277 | $ | 58,035 | $ | 40,779 | $ | 30,977 | |||||||||
Net interest margin | 1.65 | % | 2.09 | % | 2.39 | % | 2.49 | % | 2.85 | % | |||||||||
Effect of fully-taxable equivalent adjustments1 | 0.17 | % | 0.16 | % | 0.18 | % | 0.06 | % | 0.02 | % | |||||||||
Net interest margin - FTE | 1.82 | % | 2.25 | % | 2.57 | % | 2.55 | % | 2.87 | % |
(dollars in thousands, except share and per share data) | At Or For The Twelve Months Ended December 31, | ||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Income before income taxes - GAAP | $ | 27,156 | $ | 23,952 | $ | 22,928 | $ | 17,985 | $ | 13,665 | |||||||||
Adjustments: | |||||||||||||||||||
Write-down of other real estate owned | — | 2,423 | — | — | — | ||||||||||||||
Adjusted income before income taxes | $ | 27,156 | $ | 26,375 | $ | 22,928 | $ | 17,985 | $ | 13,665 | |||||||||
Income tax provision - GAAP | $ | 1,917 | $ | 2,052 | $ | 7,702 | $ | 5,911 | $ | 4,736 | |||||||||
Adjustments: | |||||||||||||||||||
Write-down of other real estate owned | — | 509 | — | — | — | ||||||||||||||
Net deferred tax asset revaluation | (1,846 | ) | — | — | |||||||||||||||
Adjusted income tax provision | $ | 1,917 | $ | 2,561 | $ | 5,856 | $ | 5,911 | $ | 4,736 | |||||||||
Net income - GAAP | $ | 25,239 | $ | 21,900 | $ | 15,226 | $ | 12,074 | $ | 8,929 | |||||||||
Adjustments: | |||||||||||||||||||
Write-down of other real estate owned | — | 1,914 | — | — | — | ||||||||||||||
Net deferred tax asset revaluation | — | — | 1,846 | — | — | ||||||||||||||
Adjusted net income | $ | 25,239 | $ | 23,814 | $ | 17,072 | $ | 12,074 | $ | 8,929 | |||||||||
Diluted average common shares outstanding | 10,044,483 | 9,508,653 | 7,149,302 | 5,239,082 | 4,554,219 | ||||||||||||||
Diluted earnings per share - GAAP | $ | 2.51 | $ | 2.30 | $ | 2.13 | $ | 2.30 | $ | 1.96 | |||||||||
Adjustments: | |||||||||||||||||||
Effect of write-down of other real estate owned | — | 0.20 | — | — | — | ||||||||||||||
Effect of net deferred tax asset revaluation | — | — | 0.26 | — | — | ||||||||||||||
Adjusted diluted earnings per share | $ | 2.51 | $ | 2.50 | $ | 2.39 | $ | 2.30 | $ | 1.96 | |||||||||
Return on average assets | 0.65 | % | 0.72 | % | 0.66 | % | 0.74 | % | 0.81 | % | |||||||||
Effect of write-down of other real estate owned | 0.00 | % | 0.06 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||
Effect of net deferred tax asset revaluation | 0.00 | % | 0.00 | % | 0.08 | % | 0.00 | % | 0.00 | % | |||||||||
Adjusted return on average assets | 0.65 | % | 0.78 | % | 0.74 | % | 0.74 | % | 0.81 | % | |||||||||
Return on average shareholders' equity | 8.52 | % | 8.44 | % | 8.54 | % | 9.74 | % | 8.89 | % | |||||||||
Effect of write-down of other real estate owned | 0.00 | % | 0.74 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||
Effect of net deferred tax asset revaluation | 0.00 | % | 0.00 | % | 1.04 | % | 0.00 | % | 0.00 | % | |||||||||
Adjusted return on average shareholders' equity | 8.52 | % | 9.18 | % | 9.58 | % | 9.74 | % | 8.89 | % | |||||||||
Return on average tangible common equity | 8.65 | % | 8.60 | % | 8.77 | % | 10.12 | % | 9.33 | % | |||||||||
Effect of write-down of other real estate owned | 0.00 | % | 0.75 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||
Effect of net deferred tax asset revaluation | 0.00 | % | 0.00 | % | 1.07 | % | 0.00 | % | 0.00 | % | |||||||||
Adjusted return on average tangible common equity | 8.65 | % | 9.35 | % | 9.84 | % | 10.12 | % | 9.33 | % | |||||||||
Effective income tax rate | 7.1 | % | 8.6 | % | 33.6 | % | 32.9 | % | 34.7 | % | |||||||||
Effect of write-down of other real estate owned | 0.0 | % | 1.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||
Effect of net deferred tax asset revaluation | 0.0 | % | 0.0 | % | (8.1 | )% | 0.0 | % | 0.0 | % | |||||||||
Adjusted effective income tax rate | 7.1 | % | 9.7 | % | 25.5 | % | 32.9 | % | 34.7 | % |
Payments Due In | |||||||||||||||||||||
(dollars in thousands) | Note Reference | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | |||||||||||||||
Deposits and brokered deposits without stated maturity1 | 8 | $ | 1,171,054 | $ | — | $ | — | $ | — | $ | 1,171,054 | ||||||||||
Certificates of deposits and brokered certificates of deposits1 | 8 | 980,288 | 734,343 | 268,028 | 250 | 1,982,909 | |||||||||||||||
FHLB advances1,2 | 9 | 110,000 | — | 180,000 | 225,000 | 515,000 | |||||||||||||||
Subordinated debt1 | 10 | — | — | — | 72,000 | 72,000 | |||||||||||||||
Operating lease commitments | 6 | 867 | 661 | 116 | — | 1,644 | |||||||||||||||
Total contractual obligations | $ | 2,262,209 | $ | 735,004 | $ | 448,144 | $ | 297,250 | $ | 3,742,607 |
% Change from Base Case for Parallel Changes in Rates | |||||||||||
-100 Basis Points | -50 Basis Points | -25 Basis Points | +100 Basis Points | ||||||||
NII - next twelve months | (7.49 | )% | (3.14 | )% | (1.35 | )% | 3.42 | % | |||
NII - Year 2 | 5.41 | % | 7.85 | % | 8.57 | % | 4.74 | % | |||
EVE | (2.58 | )% | 0.54 | % | 0.69 | % | (10.36 | )% |
Name | Age | Position | ||
David B. Becker | 66 | Chairman, President, Chief Executive Officer and Director | ||
Kenneth J. Lovik | 50 | Executive Vice President and Chief Financial Officer | ||
Nicole S. Lorch | 45 | Executive Vice President and Chief Operating Officer | ||
C. Charles Perfetti | 75 | Executive Vice President and Secretary |
1. | See our financial statements beginning on page F-1. |
Exhibit No. | Description | |
Exhibit No. | Description | |
101 | Financial statements from the Annual Report on Form 10-K of First Internet Bancorp for the period ended December 31, 2019, filed with the SEC on March 12, 2020, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets at December 31, 2019 and 2018, (ii) the Consolidated Statements of Income for the fiscal years ended December 31, 2019, 2018, and 2017, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended December, 2019, 2018, and 2017, (iv) the Consolidated Statements of Shareholders’ Equity for the fiscal years ended December 31, 2019, 2018, and 2017, (v) Consolidated Statements of Cash Flows for the fiscal years ended December 2019, 2018, and 2017, and (iv) Notes to Consolidated Financial Statements. |
FIRST INTERNET BANCORP | ||
By: | /s/ David B. Becker | |
David B. Becker, Chairman, President and Chief Executive Officer |
/s/ David B. Becker | /s/ Kenneth J. Lovik | |
David B. Becker, Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | Kenneth J. Lovik, Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |
* | * | |
John K. Keach, Jr., Director | David R. Lovejoy, Director | |
* | * | |
Ann D. Murtlow, Director | Ralph R. Whitney, Jr., Director | |
* | * | |
Jerry Williams, Director | Jean L. Wojtowicz, Director |
* | David B. Becker, by signing his name hereto, does hereby sign this document on behalf of each of the above-named directors of the Registrant pursuant to powers of attorney duly executed by such persons. |
By: | /s/ David B. Becker | |
David B. Becker, Attorney-in-Fact |
December 31, | ||||||||
2019 | 2018 | |||||||
Assets | ||||||||
Cash and due from banks | $ | 5,061 | $ | 7,080 | ||||
Interest-bearing demand deposits | 322,300 | 181,632 | ||||||
Total cash and cash equivalents | 327,361 | 188,712 | ||||||
Securities available-for-sale - at fair value (amortized cost of $546,640 in 2019 and $499,893 in 2018) | 540,852 | 481,345 | ||||||
Securities held-to-maturity - at amortized cost (fair value of $62,560 in 2019 and $22,418 in 2018) | 61,878 | 22,750 | ||||||
Loans held-for-sale (includes $56,097 in 2019 and $18,328 in 2018 at fair value) | 56,097 | 18,328 | ||||||
Loans | 2,963,547 | 2,716,228 | ||||||
Allowance for loan losses | (21,840 | ) | (17,896 | ) | ||||
Net loans | 2,941,707 | 2,698,332 | ||||||
Accrued interest receivable | 18,607 | 16,822 | ||||||
Federal Home Loan Bank of Indianapolis stock | 25,650 | 23,625 | ||||||
Cash surrender value of bank-owned life insurance | 37,002 | 36,059 | ||||||
Premises and equipment, net | 14,630 | 10,697 | ||||||
Goodwill | 4,687 | 4,687 | ||||||
Servicing asset | 2,481 | — | ||||||
Other real estate owned | 2,065 | 2,619 | ||||||
Accrued income and other assets | 67,066 | 37,716 | ||||||
Total assets | $ | 4,100,083 | $ | 3,541,692 | ||||
Liabilities and shareholders’ equity | ||||||||
Liabilities | ||||||||
Noninterest-bearing deposits | $ | 57,115 | $ | 43,301 | ||||
Interest-bearing deposits | 3,096,848 | 2,628,050 | ||||||
Total deposits | 3,153,963 | 2,671,351 | ||||||
Advances from Federal Home Loan Bank | 514,910 | 525,153 | ||||||
Subordinated debt, net of unamortized discounts and debt issuance costs of $2,472 in 2019 and $1,125 in 2018 | 69,528 | 33,875 | ||||||
Accrued interest payable | 3,767 | 1,108 | ||||||
Accrued expenses and other liabilities | 53,002 | 21,470 | ||||||
Total liabilities | 3,795,170 | 3,252,957 | ||||||
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; 9,741,800 and 10,170,778 shares issued and outstanding in 2019 and 2018, respectively | 219,423 | 227,587 | ||||||
Nonvoting common stock, no par value; 86,221 shares authorized; issued and outstanding - none | — | — | ||||||
Retained earnings | 99,681 | 77,689 | ||||||
Accumulated other comprehensive loss | (14,191 | ) | (16,541 | ) | ||||
Total shareholders’ equity | 304,913 | 288,735 | ||||||
Total liabilities and shareholders’ equity | $ | 4,100,083 | $ | 3,541,692 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Interest income | ||||||||||||
Loans | $ | 122,228 | $ | 99,082 | $ | 70,465 | ||||||
Securities – taxable | 13,807 | 10,630 | 10,036 | |||||||||
Securities – non-taxable | 2,595 | 2,810 | 2,786 | |||||||||
Other earning assets | 8,784 | 2,945 | 1,410 | |||||||||
Total interest income | 147,414 | 115,467 | 84,697 | |||||||||
Interest expense | ||||||||||||
Deposits | 69,313 | 42,484 | 23,975 | |||||||||
Other borrowed funds | 15,134 | 10,716 | 6,740 | |||||||||
Total interest expense | 84,447 | 53,200 | 30,715 | |||||||||
Net interest income | 62,967 | 62,267 | 53,982 | |||||||||
Provision for loan losses | 5,966 | 3,892 | 4,872 | |||||||||
Net interest income after provision for loan losses | 57,001 | 58,375 | 49,110 | |||||||||
Noninterest income | ||||||||||||
Service charges and fees | 885 | 934 | 888 | |||||||||
Loan servicing revenue | 166 | — | — | |||||||||
Mortgage banking activities | 11,541 | 5,718 | 7,836 | |||||||||
Gain on sale of loans | 2,074 | 503 | 395 | |||||||||
Loss on sale of securities | (458 | ) | — | (8 | ) | |||||||
Other | 2,581 | 1,605 | 1,430 | |||||||||
Total noninterest income | 16,789 | 8,760 | 10,541 | |||||||||
Noninterest expense | ||||||||||||
Salaries and employee benefits | 27,014 | 23,174 | 21,164 | |||||||||
Marketing, advertising and promotion | 1,800 | 2,468 | 2,393 | |||||||||
Consulting and professional fees | 3,669 | 3,055 | 3,091 | |||||||||
Data processing | 1,338 | 1,233 | 971 | |||||||||
Loan expenses | 1,142 | 942 | 1,027 | |||||||||
Premises and equipment | 6,059 | 4,996 | 4,183 | |||||||||
Deposit insurance premium | 1,903 | 1,956 | 1,410 | |||||||||
Write-down of other real estate owned | — | 2,423 | — | |||||||||
Other | 3,709 | 2,936 | 2,484 | |||||||||
Total noninterest expense | 46,634 | 43,183 | 36,723 | |||||||||
Income before income taxes | 27,156 | 23,952 | 22,928 | |||||||||
Income tax provision | 1,917 | 2,052 | 7,702 | |||||||||
Net income | $ | 25,239 | $ | 21,900 | $ | 15,226 | ||||||
Income per share of common stock | ||||||||||||
Basic | $ | 2.51 | $ | 2.31 | $ | 2.14 | ||||||
Diluted | 2.51 | 2.30 | 2.13 | |||||||||
Weighted-average number of common shares outstanding | ||||||||||||
Basic | 10,041,581 | 9,490,506 | 7,118,628 | |||||||||
Diluted | 10,044,483 | 9,508,653 | 7,149,302 | |||||||||
Dividends declared per share | $ | 0.24 | $ | 0.24 | $ | 0.24 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Net income | $ | 25,239 | $ | 21,900 | $ | 15,226 | ||||||
Other comprehensive income (loss) | ||||||||||||
Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax | 12,072 | (10,466 | ) | 6,280 | ||||||||
Reclassification adjustment for losses realized | 458 | — | 8 | |||||||||
Net unrealized holding losses on cash flow hedging derivatives recorded within other comprehensive income before income tax | (9,071 | ) | (4,358 | ) | — | |||||||
Other comprehensive income (loss) before tax | 3,459 | (14,824 | ) | 6,288 | ||||||||
Income tax provision (benefit) | 1,109 | (4,365 | ) | 2,039 | ||||||||
Other comprehensive income (loss) - net of tax | 2,350 | (10,459 | ) | 4,249 | ||||||||
Comprehensive income | $ | 27,589 | $ | 11,441 | $ | 19,475 |
Voting and Nonvoting Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||
Balance, January 1, 2017 | $ | 119,506 | $ | 43,704 | $ | (9,268 | ) | $ | 153,942 | |||||||
Net income | — | 15,226 | — | 15,226 | ||||||||||||
Other comprehensive income | — | — | 4,249 | 4,249 | ||||||||||||
Dividends declared ($0.24 per share) | — | (1,827 | ) | (1,827 | ) | |||||||||||
Net cash proceeds from common stock issuance | 51,636 | — | — | 51,636 | ||||||||||||
Recognition of the fair value of share-based compensation | 1,038 | — | — | 1,038 | ||||||||||||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 36 | — | — | 36 | ||||||||||||
Common stock redeemed for the net settlement of share-based awards | (173 | ) | — | — | (173 | ) | ||||||||||
Balance, December 31, 2017 | $ | 172,043 | $ | 57,103 | $ | (5,019 | ) | $ | 224,127 | |||||||
Impact of adoption of new accounting standards (1) | — | 1,063 | (1,063 | ) | — | |||||||||||
Net income | — | 21,900 | — | 21,900 | ||||||||||||
Other comprehensive loss | — | — | (10,459 | ) | (10,459 | ) | ||||||||||
Dividends declared ($0.24 per share) | — | (2,377 | ) | — | (2,377 | ) | ||||||||||
Net cash proceeds from common stock issuance | 54,334 | — | — | 54,334 | ||||||||||||
Repurchase of common stock | (216 | ) | — | — | (216 | ) | ||||||||||
Recognition of the fair value of share-based compensation | 1,596 | — | — | 1,596 | ||||||||||||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 40 | — | — | 40 | ||||||||||||
Common stock redeemed for the net settlement of share-based awards | (210 | ) | — | — | (210 | ) | ||||||||||
Balance, December 31, 2018 | $ | 227,587 | $ | 77,689 | $ | (16,541 | ) | $ | 288,735 | |||||||
Impact of adoption of new accounting standards (2) | — | (821 | ) | — | (821 | ) | ||||||||||
Net income | — | 25,239 | — | 25,239 | ||||||||||||
Other comprehensive income | — | — | 2,350 | 2,350 | ||||||||||||
Dividends declared ($0.24 per share) | — | (2,426 | ) | — | (2,426 | ) | ||||||||||
Repurchase of common stock | (9,784 | ) | — | — | (9,784 | ) | ||||||||||
Recognition of the fair value of share-based compensation | 1,680 | — | — | 1,680 | ||||||||||||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 34 | — | — | 34 | ||||||||||||
Common stock redeemed for the net settlement of share-based awards | (94 | ) | — | — | (94 | ) | ||||||||||
Balance, December 31, 2019 | $ | 219,423 | $ | 99,681 | $ | (14,191 | ) | $ | 304,913 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Operating activities | ||||||||||||
Net income | $ | 25,239 | $ | 21,900 | $ | 15,226 | ||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||||||
Amortization of operating lease right-of-use assets | 729 | — | — | |||||||||
Depreciation and amortization | 6,926 | 5,667 | 5,299 | |||||||||
Write-down of other real estate owned | — | 2,423 | — | |||||||||
Increase in cash surrender value of bank-owned life insurance | (943 | ) | (954 | ) | (910 | ) | ||||||
Provision for loan losses | 5,966 | 3,892 | 4,872 | |||||||||
Share-based compensation expense | 1,680 | 1,596 | 1,038 | |||||||||
Loss from sale of available-for-sale securities | 458 | — | 8 | |||||||||
Loans originated for sale | (627,597 | ) | (364,630 | ) | (412,925 | ) | ||||||
Proceeds from sale of loans originated for sale | 601,215 | 376,535 | 425,262 | |||||||||
Gain on sale of loans | (12,349 | ) | (6,605 | ) | (8,170 | ) | ||||||
Increase in fair value of loans held-for-sale | (538 | ) | (57 | ) | (638 | ) | ||||||
(Gain) loss on derivatives | (671 | ) | 501 | 577 | ||||||||
Net change in servicing assets | (2,481 | ) | — | — | ||||||||
Deferred income tax | (4,402 | ) | 978 | (3,296 | ) | |||||||
Net change in other assets | (42,079 | ) | (11,807 | ) | (2,273 | ) | ||||||
Net change in other liabilities | 5,270 | (83 | ) | 554 | ||||||||
Net cash (used in) provided by operating activities | (43,577 | ) | 29,356 | 24,624 | ||||||||
Investing activities | ||||||||||||
Net loan activity, excluding sales and purchases | (191,070 | ) | (463,528 | ) | (870,181 | ) | ||||||
Net change in interest-bearing deposits | — | — | 250 | |||||||||
Purchase of bank owned life insurance | — | — | (10,000 | ) | ||||||||
Proceeds from sales of other real estate owned | 554 | 332 | 30 | |||||||||
Net proceeds from sales of portfolio loans | 293,708 | 41,916 | 67,696 | |||||||||
Maturities of securities available-for-sale | 92,610 | 62,507 | 68,342 | |||||||||
Proceeds from sales of securities available-for-sale | 30,137 | — | 9,192 | |||||||||
Purchase of securities available-for-sale | (171,997 | ) | (87,993 | ) | (91,463 | ) | ||||||
Purchase of securities held-to-maturity | (39,208 | ) | (3,554 | ) | (2,550 | ) | ||||||
Purchase of Federal Home Loan Bank of Indianapolis stock | (2,025 | ) | (4,050 | ) | (10,665 | ) | ||||||
Purchase of premises and equipment | (4,105 | ) | (2,219 | ) | (1,517 | ) | ||||||
Loans purchased | (332,945 | ) | (171,958 | ) | (67,285 | ) | ||||||
Other investing activities | 11,068 | (10,166 | ) | — | ||||||||
Net cash used in investing activities | (313,273 | ) | (638,713 | ) | (908,151 | ) | ||||||
Financing activities | ||||||||||||
Net increase in deposits | 482,612 | 586,410 | 622,074 | |||||||||
Cash dividends paid | (2,418 | ) | (2,230 | ) | (1,675 | ) | ||||||
Net proceeds from issuance of subordinated debt | 35,418 | — | — | |||||||||
Repayment of subordinated debt | — | (3,000 | ) | — | ||||||||
Net proceeds from common stock issuance | — | 54,334 | 51,636 | |||||||||
Repurchase of common stock | (9,784 | ) | (216 | ) | — | |||||||
Proceeds from advances from Federal Home Loan Bank | 595,000 | 375,000 | 542,000 | |||||||||
Repayment of advances from Federal Home Loan Bank | (605,000 | ) | (260,000 | ) | (321,806 | ) | ||||||
Other, net | (329 | ) | (210 | ) | (173 | ) | ||||||
Net cash provided by financing activities | 495,499 | 750,088 | 892,056 | |||||||||
Net increase in cash and cash equivalents | 138,649 | 140,731 | 8,529 | |||||||||
Cash and cash equivalents, beginning of year | 188,712 | 47,981 | 39,452 | |||||||||
Cash and cash equivalents, end of year | $ | 327,361 | $ | 188,712 | $ | 47,981 | ||||||
Supplemental disclosures of cash flows information | ||||||||||||
Initial recognition of right-of-use asset | $ | 2,096 | $ | — | $ | — | ||||||
Initial recognition of operating lease liabilities | 2,096 | — | — | |||||||||
Cash paid during the year for interest | 81,788 | 52,403 | 30,516 | |||||||||
Cash paid during the year for taxes | 4,561 | 485 | 6,568 | |||||||||
Loans transferred to other real estate owned | — | 227 | 648 | |||||||||
Loans transferred to held-for-sale from portfolio | 291,152 | 16,065 | 95,531 | |||||||||
Cash dividends declared, not paid | 585 | 611 | 504 | |||||||||
Transfer of mutual fund securities to other assets | — | 2,932 | — |
• | Securities that the Company has the positive intent and ability to hold to maturity are classified as “held-to-maturity” and reported at amortized cost. |
• | Securities that are acquired and held principally for the purpose of selling them in the near term with the objective of generating economic profits on short-term differences in market characteristics are classified as “trading securities” and reported at fair value, with unrealized gains and losses included in earnings. The Company had no securities classified as “trading securities” at December 31, 2019 or 2018. |
• | Securities not classified as either “held-to-maturity” or “trading securities” are classified as “available-for-sale” and reported at fair value, with unrealized gains and losses, after applicable taxes, excluded from earnings and reported in a separate component of shareholders’ equity. Declines in the value of debt securities and marketable equity securities that are considered to be other-than-temporary are recorded as an other-than-temporary impairment of securities available-for-sale with other-than-temporary impairment losses recorded in the consolidated statements of income. |
1. | Loans are segmented by type of loan. |
2. | The required ALLL for types of performing homogeneous loans which do not have a specific reserve is determined by applying a factor based on historical losses averaged over the past sixteen quarters. In those instances where the Company’s historical experience is not available, management develops factors based on industry experience and best practices. |
3. | All criticized, classified and impaired loans are tested for impairment by applying one of three methodologies: |
a. | Present value of future cash flows; |
b. | Fair value of collateral less costs to sell; or |
c. | The loan’s observable market price. |
4. | All troubled debt restructurings (“TDR”) are considered impaired loans. |
5. | Loans tested for impairment are removed from other pools to prevent layering (double-counting). |
6. | The required ALLL for each group of loans are added together to determine the total required ALLL for the Company. The required ALLL is compared to the existing ALLL to determine the provision required to increase the ALLL or credit to decrease the ALLL. |
1. | Changes in policies and procedures; |
2. | Changes in national, regional, and local economic and business conditions; |
3. | Changes in the composition and size of the portfolio and in the terms of loans; |
4. | Changes in the experience, ability, and depth of lending management and other relevant staff; |
5. | Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans; |
6. | Changes in the quality of the Company’s loan review system; |
7. | Changes in the value of underlying collateral for collateral-dependent loans; |
8. | The existence and effect of any concentration of credit and changes in the level of such concentrations; and |
9. | The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio. |
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 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Basic earnings per share | ||||||||||||
Net income available to common shareholders | $ | 25,239 | $ | 21,900 | $ | 15,226 | ||||||
Weighted-average common shares | 10,041,581 | 9,490,506 | 7,118,628 | |||||||||
Basic earnings per common share | $ | 2.51 | $ | 2.31 | $ | 2.14 | ||||||
Diluted earnings per share | ||||||||||||
Net income available to common shareholders | $ | 25,239 | $ | 21,900 | $ | 15,226 | ||||||
Weighted-average common shares | 10,041,581 | 9,490,506 | 7,118,628 | |||||||||
Dilutive effect of warrants | — | — | 6,120 | |||||||||
Dilutive effect of equity compensation | 2,902 | 18,147 | 24,554 | |||||||||
Weighted-average common and incremental shares | 10,044,483 | 9,508,653 | 7,149,302 | |||||||||
Diluted earnings per common share (1) | $ | 2.51 | $ | 2.30 | $ | 2.13 |
December 31, 2019 | ||||||||||||||||
Amortized | Gross Unrealized | Fair | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities available-for-sale | ||||||||||||||||
U.S. Government-sponsored agencies | $ | 77,715 | $ | 99 | $ | (1,942 | ) | $ | 75,872 | |||||||
Municipal securities | 97,447 | 1,706 | (1,501 | ) | 97,652 | |||||||||||
Agency mortgage-backed securities | 264,142 | 1,304 | (4,006 | ) | 261,440 | |||||||||||
Private label mortgage-backed securities | 63,704 | 97 | (188 | ) | 63,613 | |||||||||||
Asset-backed securities | 5,000 | — | (45 | ) | 4,955 | |||||||||||
Corporate securities | 38,632 | 220 | (1,532 | ) | 37,320 | |||||||||||
Total available-for-sale | $ | 546,640 | $ | 3,426 | $ | (9,214 | ) | $ | 540,852 |
December 31, 2019 | ||||||||||||||||
Amortized | Gross Unrealized | Fair | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities held-to-maturity | ||||||||||||||||
Municipal securities | $ | 10,142 | $ | 226 | $ | — | $ | 10,368 | ||||||||
Corporate securities | 51,736 | 588 | (132 | ) | 52,192 | |||||||||||
Total held-to-maturity | $ | 61,878 | $ | 814 | $ | (132 | ) | $ | 62,560 |
December 31, 2018 | ||||||||||||||||
Amortized | Gross Unrealized | Fair | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities available-for-sale | ||||||||||||||||
U.S. Government-sponsored agencies | $ | 109,631 | $ | 20 | $ | (2,066 | ) | $ | 107,585 | |||||||
Municipal securities | 97,090 | 90 | (4,674 | ) | 92,506 | |||||||||||
Agency mortgage-backed securities | 242,293 | 162 | (8,721 | ) | 233,734 | |||||||||||
Private label mortgage-backed securities | 9,199 | — | (21 | ) | 9,178 | |||||||||||
Asset-backed securities | 5,002 | — | (143 | ) | 4,859 | |||||||||||
Corporate securities | 36,678 | — | (3,195 | ) | 33,483 | |||||||||||
Total available-for-sale | $ | 499,893 | $ | 272 | $ | (18,820 | ) | $ | 481,345 |
December 31, 2018 | ||||||||||||||||
Amortized | Gross Unrealized | Fair | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities held-to-maturity | ||||||||||||||||
Municipal securities | $ | 10,157 | $ | — | $ | (356 | ) | $ | 9,801 | |||||||
Corporate securities | 12,593 | 80 | (56 | ) | 12,617 | |||||||||||
Total held-to-maturity | $ | 22,750 | $ | 80 | $ | (412 | ) | $ | 22,418 |
Available-for-Sale | ||||||||
Amortized Cost | Fair Value | |||||||
Within one year | $ | 30 | $ | 31 | ||||
One to five years | 9,200 | 7,789 | ||||||
Five to ten years | 81,237 | 80,175 | ||||||
After ten years | 123,327 | 122,849 | ||||||
213,794 | 210,844 | |||||||
Agency mortgage-backed securities | 264,142 | 261,440 | ||||||
Private label mortgage-backed securities | 63,704 | 63,613 | ||||||
Asset-backed securities | 5,000 | 4,955 | ||||||
Total | $ | 546,640 | $ | 540,852 |
Held-to-Maturity | ||||||||
Amortized Cost | Fair Value | |||||||
One to five years | $ | 998 | $ | 1,005 | ||||
Five to ten years | 50,848 | 51,493 | ||||||
After ten years | 10,032 | 10,062 | ||||||
Total | $ | 61,878 | $ | 62,560 |
December 31, 2019 | ||||||||||||||||||||||||
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 | $ | 4,820 | $ | (61 | ) | $ | 62,182 | $ | (1,881 | ) | $ | 67,002 | $ | (1,942 | ) | |||||||||
Municipal securities | 1,279 | (1,501 | ) | — | — | 1,279 | (1,501 | ) | ||||||||||||||||
Agency mortgage-backed securities | 91,159 | (829 | ) | 83,212 | (3,177 | ) | 174,371 | (4,006 | ) | |||||||||||||||
Private label mortgage-backed securities | 30,077 | (180 | ) | 2,884 | (8 | ) | 32,961 | (188 | ) | |||||||||||||||
Asset-backed securities | — | — | 4,955 | (45 | ) | 4,955 | (45 | ) | ||||||||||||||||
Corporate securities | — | — | 22,985 | (1,532 | ) | 22,985 | (1,532 | ) | ||||||||||||||||
Total | $ | 127,335 | $ | (2,571 | ) | $ | 176,218 | $ | (6,643 | ) | $ | 303,553 | $ | (9,214 | ) |
December 31, 2019 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||
Corporate securities | 13,977 | (132 | ) | — | — | 13,977 | (132 | ) | ||||||||||||||||
Total | $ | 13,977 | $ | (132 | ) | $ | — | $ | — | $ | 13,977 | $ | (132 | ) |
December 31, 2018 | ||||||||||||||||||||||||
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 | $ | 69,798 | $ | (893 | ) | $ | 33,511 | $ | (1,173 | ) | $ | 103,309 | $ | (2,066 | ) | |||||||||
Municipals | 23,747 | (710 | ) | 59,938 | (3,964 | ) | 83,685 | (4,674 | ) | |||||||||||||||
Agency mortgage-backed securities | 47,000 | (509 | ) | 172,442 | (8,212 | ) | 219,442 | (8,721 | ) | |||||||||||||||
Private label mortgage-backed securities | 9,177 | (20 | ) | — | (1 | ) | 9,177 | (21 | ) | |||||||||||||||
Asset-backed securities | 4,859 | (143 | ) | — | — | 4,859 | (143 | ) | ||||||||||||||||
Corporate securities | 14,092 | (586 | ) | 19,391 | (2,609 | ) | 33,483 | (3,195 | ) | |||||||||||||||
Total | $ | 168,673 | $ | (2,861 | ) | $ | 285,282 | $ | (15,959 | ) | $ | 453,955 | $ | (18,820 | ) |
December 31, 2018 | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Securities held-to-maturity | ||||||||||||||||||||||||
Municipal securities | $ | 9,801 | $ | (356 | ) | $ | — | $ | — | $ | 9,801 | $ | (356 | ) | ||||||||||
Corporate securities | 6,037 | (56 | ) | — | — | 6,037 | (56 | ) | ||||||||||||||||
Total | $ | 15,838 | $ | (412 | ) | $ | — | $ | — | $ | 15,838 | $ | (412 | ) |
Details About Accumulated Other Comprehensive Loss Components | Amounts Reclassified from Accumulated Other Comprehensive Loss for the Year Ended December 31, | Affected Line Item in the Statements of Income | ||||||||||||
2019 | 2018 | 2017 | ||||||||||||
Unrealized gains and losses on securities available-for-sale | ||||||||||||||
Loss realized in earnings | $ | (458 | ) | $ | — | $ | (8 | ) | Loss on sale of securities | |||||
Total reclassified amount before tax | (458 | ) | — | (8 | ) | Income before income taxes | ||||||||
Tax benefit | (124 | ) | — | (3 | ) | Income tax provision | ||||||||
Total reclassifications out of accumulated other comprehensive loss | $ | (334 | ) | $ | — | $ | (5 | ) | Net Income |
December 31, | ||||||||
2019 | 2018 | |||||||
Commercial loans | ||||||||
Commercial and industrial | $ | 96,420 | $ | 107,405 | ||||
Owner-occupied commercial real estate | 73,392 | 77,569 | ||||||
Investor commercial real estate | 12,567 | 5,391 | ||||||
Construction | 60,274 | 39,916 | ||||||
Single tenant lease financing | 995,879 | 919,440 | ||||||
Public finance | 687,094 | 706,342 | ||||||
Healthcare finance | 300,612 | 117,007 | ||||||
Small business lending | 60,279 | 17,370 | ||||||
Total commercial loans | 2,286,517 | 1,990,440 | ||||||
Consumer loans | ||||||||
Residential mortgage | 313,849 | 399,898 | ||||||
Home equity | 24,306 | 28,735 | ||||||
Other consumer | 295,309 | 279,771 | ||||||
Total consumer loans | 633,464 | 708,404 | ||||||
Total commercial and consumer loans | 2,919,981 | 2,698,844 | ||||||
Net deferred loan origination costs and premiums and discounts on purchased loans and other(1) | 43,566 | 17,384 | ||||||
Total loans | 2,963,547 | 2,716,228 | ||||||
Allowance for loan losses | (21,840 | ) | (17,896 | ) | ||||
Net loans | $ | 2,941,707 | $ | 2,698,332 |
Twelve Months Ended December 31, 2019 | ||||||||||||||||||||
Balance, beginning of period | Provision (credit) charged to expense | Losses charged off | Recoveries | Balance, end of period | ||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Commercial and industrial | $ | 1,384 | $ | 1,029 | $ | (921 | ) | $ | 29 | $ | 1,521 | |||||||||
Owner-occupied commercial real estate | 783 | (222 | ) | — | — | 561 | ||||||||||||||
Investor commercial real estate | 61 | 48 | — | — | 109 | |||||||||||||||
Construction | 251 | 129 | — | — | 380 | |||||||||||||||
Single tenant lease financing | 8,827 | 2,348 | — | — | 11,175 | |||||||||||||||
Public finance | 1,670 | (90 | ) | — | — | 1,580 | ||||||||||||||
Healthcare finance | 1,264 | 1,983 | — | — | 3,247 | |||||||||||||||
Small business lending | 203 | (154 | ) | — | 5 | 54 | ||||||||||||||
Residential mortgage | 1,079 | (350 | ) | (76 | ) | 4 | 657 | |||||||||||||
Home equity | 53 | 51 | (68 | ) | 10 | 46 | ||||||||||||||
Other consumer | 2,321 | 1,194 | (1,292 | ) | 287 | 2,510 | ||||||||||||||
Total | $ | 17,896 | $ | 5,966 | $ | (2,357 | ) | $ | 335 | $ | 21,840 |
Twelve Months Ended December 31, 2018 | ||||||||||||||||||||
Balance, beginning of period | Provision (credit) charged to expense | Losses charged off | Recoveries | Balance, end of period | ||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Commercial and industrial | $ | 1,724 | $ | (251 | ) | $ | (92 | ) | $ | 3 | $ | 1,384 | ||||||||
Owner-occupied commercial real estate | 762 | 21 | — | — | 783 | |||||||||||||||
Investor commercial real estate | 85 | (24 | ) | — | — | 61 | ||||||||||||||
Construction | 423 | (172 | ) | — | — | 251 | ||||||||||||||
Single tenant lease financing | 7,872 | 955 | — | — | 8,827 | |||||||||||||||
Public finance | 959 | 711 | — | — | 1,670 | |||||||||||||||
Healthcare finance | 313 | 951 | — | — | 1,264 | |||||||||||||||
Small business lending | 55 | 148 | — | — | 203 | |||||||||||||||
Residential mortgage | 956 | 127 | (9 | ) | 5 | 1,079 | ||||||||||||||
Home equity | 70 | (33 | ) | — | 16 | 53 | ||||||||||||||
Other consumer | 1,751 | 1,459 | (1,176 | ) | 287 | 2,321 | ||||||||||||||
Total | $ | 14,970 | $ | 3,892 | $ | (1,277 | ) | $ | 311 | $ | 17,896 |
Twelve Months Ended December 31, 2017 | ||||||||||||||||||||
Balance, beginning of period | Provision (credit) charged to expense | Losses charged off | Recoveries | Balance, end of period | ||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Commercial and industrial | $ | 1,352 | $ | 574 | $ | (271 | ) | $ | 69 | $ | 1,724 | |||||||||
Owner-occupied commercial real estate | 582 | 180 | — | — | 762 | |||||||||||||||
Investor commercial real estate | 168 | (83 | ) | — | — | 85 | ||||||||||||||
Construction | 544 | (121 | ) | — | — | 423 | ||||||||||||||
Single tenant lease financing | 6,248 | 1,624 | — | — | 7,872 | |||||||||||||||
Public finance | — | 959 | — | — | 959 | |||||||||||||||
Healthcare finance | — | 313 | — | — | 313 | |||||||||||||||
Small business lending | — | 55 | — | — | 55 | |||||||||||||||
Residential mortgage | 754 | 314 | (116 | ) | 4 | 956 | ||||||||||||||
Home equity | 102 | (55 | ) | — | 23 | 70 | ||||||||||||||
Other consumer | 1,231 | 1,112 | (895 | ) | 303 | 1,751 | ||||||||||||||
Total | $ | 10,981 | $ | 4,872 | $ | (1,282 | ) | $ | 399 | $ | 14,970 |
Loans | Allowance for Loan Losses | ||||||||||||||||||||||
December 31, 2019 | Ending Balance: Collectively Evaluated for Impairment | Ending Balance: Individually Evaluated for Impairment | Ending Balance | Ending Balance: Collectively Evaluated for Impairment | Ending Balance: Individually Evaluated for Impairment | Ending Balance | |||||||||||||||||
Commercial and industrial | $ | 93,520 | $ | 2,900 | $ | 96,420 | $ | 1,412 | $ | 109 | $ | 1,521 | |||||||||||
Owner-occupied commercial real estate | 71,067 | 2,325 | 73,392 | 561 | — | 561 | |||||||||||||||||
Investor commercial real estate | 12,567 | — | 12,567 | 109 | — | 109 | |||||||||||||||||
Construction | 60,274 | — | 60,274 | 380 | — | 380 | |||||||||||||||||
Single tenant lease financing | 991,199 | 4,680 | 995,879 | 9,515 | 1,660 | 11,175 | |||||||||||||||||
Public finance | 687,094 | — | 687,094 | 1,580 | — | 1,580 | |||||||||||||||||
Healthcare finance | 300,612 | — | 300,612 | 3,247 | — | 3,247 | |||||||||||||||||
Small business lending | 56,941 | 3,338 | 60,279 | 54 | — | 54 | |||||||||||||||||
Residential mortgage | 312,714 | 1,135 | 313,849 | 657 | — | 657 | |||||||||||||||||
Home equity | 24,306 | — | 24,306 | 46 | — | 46 | |||||||||||||||||
Other consumer | 295,266 | 43 | 295,309 | 2,510 | — | 2,510 | |||||||||||||||||
Total | $ | 2,905,560 | $ | 14,421 | $ | 2,919,981 | $ | 20,071 | $ | 1,769 | $ | 21,840 |
Loans | Allowance for Loan Losses | ||||||||||||||||||||||
December 31, 2018 | Ending Balance: Collectively Evaluated for Impairment | Ending Balance: Individually Evaluated for Impairment | Ending Balance | Ending Balance: Collectively Evaluated for Impairment | Ending Balance: Individually Evaluated for Impairment | Ending Balance | |||||||||||||||||
Commercial and industrial | $ | 101,765 | $ | 5,640 | $ | 107,405 | $ | 1,384 | $ | — | $ | 1,384 | |||||||||||
Owner-occupied commercial real estate | 76,216 | 1,353 | 77,569 | 783 | — | 783 | |||||||||||||||||
Investor commercial real estate | 5,391 | — | 5,391 | 61 | — | 61 | |||||||||||||||||
Construction | 39,916 | — | 39,916 | 251 | — | 251 | |||||||||||||||||
Single tenant lease financing | 919,440 | — | 919,440 | 8,827 | — | 8,827 | |||||||||||||||||
Public finance | 706,342 | — | 706,342 | 1,670 | — | 1,670 | |||||||||||||||||
Healthcare finance | 117,007 | — | 117,007 | 1,264 | — | 1,264 | |||||||||||||||||
Small business lending | 16,414 | 956 | 17,370 | 203 | — | 203 | |||||||||||||||||
Residential mortgage | 399,328 | 570 | 399,898 | 1,079 | — | 1,079 | |||||||||||||||||
Home equity | 28,680 | 55 | 28,735 | 53 | — | 53 | |||||||||||||||||
Other consumer | 279,714 | 57 | 279,771 | 2,321 | — | 2,321 | |||||||||||||||||
Total | $ | 2,690,213 | $ | 8,631 | $ | 2,698,844 | $ | 17,896 | $ | — | $ | 17,896 |
• | “Pass” - Higher quality loans that do not fit any of the other categories described below. |
• | “Special Mention” - Loans that possess some credit deficiency or potential weakness which deserve close attention. |
• | “Substandard” - 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” - 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” - Loans that are considered uncollectible and of such little value that continuing to carry them as assets is not warranted. |
December 31, 2019 | |||||||||||||||
Pass | Special Mention | Substandard | Total | ||||||||||||
Commercial and industrial | $ | 89,818 | $ | 3,973 | $ | 2,629 | $ | 96,420 | |||||||
Owner-occupied commercial real estate | 71,068 | 1,727 | 597 | 73,392 | |||||||||||
Investor commercial real estate | 12,567 | — | — | 12,567 | |||||||||||
Construction | 60,274 | — | — | 60,274 | |||||||||||
Single tenant lease financing | 983,448 | 7,751 | 4,680 | 995,879 | |||||||||||
Public finance | 687,094 | — | — | 687,094 | |||||||||||
Healthcare finance | 300,612 | — | — | 300,612 | |||||||||||
Small business lending | 55,206 | 1,735 | 3,338 | 60,279 | |||||||||||
Total commercial loans | $ | 2,260,087 | $ | 15,186 | $ | 11,244 | $ | 2,286,517 |
December 31, 2019 | ||||||||||||
Performing | Nonaccrual | Total | ||||||||||
Residential mortgage | $ | 313,088 | $ | 761 | $ | 313,849 | ||||||
Home equity | 24,306 | — | 24,306 | |||||||||
Other consumer | 295,276 | 33 | 295,309 | |||||||||
Total | $ | 632,670 | $ | 794 | $ | 633,464 |
December 31, 2018 | |||||||||||||||
Pass | Special Mention | Substandard | Total | ||||||||||||
Commercial and industrial | $ | 100,689 | $ | 1,076 | $ | 5,640 | $ | 107,405 | |||||||
Owner-occupied commercial real estate | 73,593 | 2,623 | 1,353 | 77,569 | |||||||||||
Investor commercial real estate | 5,391 | — | — | 5,391 | |||||||||||
Construction | 39,916 | — | — | 39,916 | |||||||||||
Single tenant lease financing | 913,984 | 5,456 | — | 919,440 | |||||||||||
Public finance | 706,342 | — | — | 706,342 | |||||||||||
Healthcare finance | 117,007 | — | — | 117,007 | |||||||||||
Small business lending | 14,648 | 1,766 | 956 | 17,370 | |||||||||||
Total commercial loans | $ | 1,971,570 | $ | 10,921 | $ | 7,949 | $ | 1,990,440 |
December 31, 2018 | ||||||||||||
Performing | Nonaccrual | Total | ||||||||||
Residential mortgage | $ | 399,723 | $ | 175 | $ | 399,898 | ||||||
Home equity | 28,680 | 55 | 28,735 | |||||||||
Other consumer | 279,729 | 42 | 279,771 | |||||||||
Total | $ | 708,132 | $ | 272 | $ | 708,404 |
December 31, 2019 | ||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total loans | Nonaccrual Loans | Total Loans 90 Days or More Past Due and Accruing | |||||||||||||||||||||||||
Commercial and industrial | $ | 15 | $ | 96 | $ | 122 | $ | 233 | $ | 96,187 | $ | 96,420 | $ | 226 | $ | — | ||||||||||||||||
Owner-occupied commercial real estate | — | — | 464 | 464 | 72,928 | 73,392 | 464 | — | ||||||||||||||||||||||||
Investor commercial real estate | — | — | — | — | 12,567 | 12,567 | — | — | ||||||||||||||||||||||||
Construction | — | — | — | — | 60,274 | 60,274 | — | — | ||||||||||||||||||||||||
Single tenant lease financing | — | 4,680 | — | 4,680 | 991,199 | 995,879 | 4,680 | — | ||||||||||||||||||||||||
Public finance | — | — | — | — | 687,094 | 687,094 | — | — | ||||||||||||||||||||||||
Healthcare finance | — | — | — | — | 300,612 | 300,612 | — | — | ||||||||||||||||||||||||
Small business lending | 54 | — | — | 54 | 60,225 | 60,279 | — | — | ||||||||||||||||||||||||
Residential mortgage | — | — | 1,177 | 1,177 | 312,672 | 313,849 | 761 | 416 | ||||||||||||||||||||||||
Home equity | — | — | — | — | 24,306 | 24,306 | — | — | ||||||||||||||||||||||||
Other consumer | 240 | 107 | — | 347 | 294,962 | 295,309 | 33 | — | ||||||||||||||||||||||||
Total | $ | 309 | $ | 4,883 | $ | 1,763 | $ | 6,955 | $ | 2,913,026 | $ | 2,919,981 | $ | 6,164 | $ | 416 |
December 31, 2018 | ||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total loans | Nonaccrual Loans | Total Loans 90 Days or More Past Due and Accruing | |||||||||||||||||||||||||
Commercial and industrial | $ | 9 | $ | — | $ | — | $ | 9 | $ | 107,396 | $ | 107,405 | $ | 195 | $ | — | ||||||||||||||||
Owner-occupied commercial real estate | 92 | 234 | — | 326 | 77,243 | 77,569 | 325 | — | ||||||||||||||||||||||||
Investor commercial real estate | — | — | — | — | 5,391 | 5,391 | — | — | ||||||||||||||||||||||||
Construction | — | — | — | — | 39,916 | 39,916 | — | — | ||||||||||||||||||||||||
Single tenant lease financing | — | — | — | — | 919,440 | 919,440 | — | — | ||||||||||||||||||||||||
Public finance | — | — | — | — | 706,342 | 706,342 | — | — | ||||||||||||||||||||||||
Healthcare finance | — | — | — | — | 117,007 | 117,007 | — | — | ||||||||||||||||||||||||
Small business lending | — | — | — | — | 17,370 | 17,370 | — | — | ||||||||||||||||||||||||
Residential mortgage | — | 3,118 | 98 | 3,216 | 396,682 | 399,898 | 175 | 97 | ||||||||||||||||||||||||
Home equity | — | — | 55 | 55 | 28,680 | 28,735 | 55 | — | ||||||||||||||||||||||||
Other consumer | 235 | 170 | 4 | 409 | 279,362 | 279,771 | 42 | — | ||||||||||||||||||||||||
Total | $ | 336 | $ | 3,522 | $ | 157 | $ | 4,015 | $ | 2,694,829 | $ | 2,698,844 | $ | 792 | $ | 97 |
December 31, 2019 | December 31, 2018 | |||||||||||||||||||||||
Recorded Balance | Unpaid Principal Balance | Specific Allowance | Recorded Balance | Unpaid Principal Balance | Specific Allowance | |||||||||||||||||||
Loans without a specific valuation allowance | ||||||||||||||||||||||||
Commercial and industrial | $ | 2,693 | $ | 2,694 | $ | — | $ | 5,640 | $ | 5,652 | $ | — | ||||||||||||
Owner-occupied commercial real estate | 2,325 | 2,327 | — | 1,353 | 1,353 | — | ||||||||||||||||||
Small business lending | 3,338 | 3,338 | — | 956 | 956 | |||||||||||||||||||
Residential mortgage | 1,135 | 1,209 | — | 570 | 570 | — | ||||||||||||||||||
Home equity | — | — | — | 55 | 55 | — | ||||||||||||||||||
Other consumer | 43 | 107 | — | 57 | 124 | — | ||||||||||||||||||
Total | 9,534 | 9,675 | — | 8,631 | 8,710 | — | ||||||||||||||||||
Loans with a specific valuation allowance | ||||||||||||||||||||||||
Commercial and industrial | $ | 207 | $ | 244 | $ | 109 | $ | — | $ | — | $ | — | ||||||||||||
Single tenant lease financing | 4,680 | 4,680 | 1,660 | — | — | — | ||||||||||||||||||
Total | 4,887 | 4,924 | 1,769 | — | — | — | ||||||||||||||||||
Total impaired loans | $ | 14,421 | $ | 14,599 | $ | 1,769 | $ | 8,631 | $ | 8,710 | $ | — |
Twelve Months Ended | ||||||||||||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||||||||||||||
Average Balance | Interest Income | Average Balance | Interest Income | Average Balance | Interest Income | |||||||||||||||||||
Loans without a specific valuation allowance | ||||||||||||||||||||||||
Commercial and industrial | $ | 3,293 | $ | 289 | $ | 5,961 | $ | 426 | $ | 2,942 | $ | 146 | ||||||||||||
Owner-occupied commercial real estate | 3,292 | 170 | 833 | 44 | 3 | — | ||||||||||||||||||
Small business lending | 331 | 94 | 60 | 15 | — | — | ||||||||||||||||||
Residential mortgage | 2,265 | — | 720 | — | 1,546 | 6 | ||||||||||||||||||
Home equity | 10 | — | 61 | — | 5 | — | ||||||||||||||||||
Other consumer | 68 | 1 | 108 | — | 105 | 4 | ||||||||||||||||||
Total | 9,259 | 554 | 7,743 | 485 | 4,601 | 156 | ||||||||||||||||||
Loans with a specific valuation allowance | ||||||||||||||||||||||||
Commercial and industrial | 1,077 | — | — | — | 35 | — | ||||||||||||||||||
Single tenant lease financing | 1,464 | — | — | — | — | — | ||||||||||||||||||
Total | 2,541 | — | — | — | 35 | — | ||||||||||||||||||
Total impaired loans | $ | 11,800 | $ | 554 | $ | 7,743 | $ | 485 | $ | 4,636 | $ | 156 |
December 31, | ||||||||
2019 | 2018 | |||||||
Land | $ | 2,500 | $ | 2,500 | ||||
Right of use leased asset | 1,602 | — | ||||||
Building and improvements | 10,004 | 6,752 | ||||||
Furniture and equipment | 9,689 | 9,076 | ||||||
Less: accumulated depreciation | (9,165 | ) | (7,631 | ) | ||||
$ | 14,630 | $ | 10,697 |
Note 6: | Leases |
(in thousands) | Twelve Months Ended | |||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||
Operating lease cost | $ | 758 | $ | 724 | $ | 711 |
(in thousands) | Twelve Months Ended | |||
December 31, 2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ | 814 |
(dollars in thousands) | ||||
December 31, 2019 | ||||
Operating lease right-of-use assets | $ | 1,602 | ||
Operating lease liabilities | 1,602 | |||
Weighted-average remaining lease term (years) | ||||
Operating leases | 2.4 | |||
Weighted-average discount rate | ||||
Operating leases | 2.0 | % |
(in thousands) | ||||
Twelve months ended December 31, 2019 | ||||
2020 | $ | 867 | ||
2021 | 423 | |||
2022 | 238 | |||
2023 | 116 | |||
2024 | — | |||
Thereafter | — | |||
Total lease payments | 1,644 | |||
Less imputed interest | (49 | ) | ||
Total | $ | 1,595 |
December 31, | ||||||||
2019 | 2018 | |||||||
Noninterest-bearing demand deposit accounts | $ | 57,115 | $ | 43,301 | ||||
Interest-bearing demand deposit accounts | 129,020 | 121,055 | ||||||
Regular savings accounts | 29,616 | 38,489 | ||||||
Money market accounts | 786,390 | 528,533 | ||||||
Certificates of deposits | 1,613,453 | 1,292,883 | ||||||
Brokered deposits | 538,369 | 647,090 | ||||||
Total deposits | $ | 3,153,963 | $ | 2,671,351 | ||||
Time deposits (in the amount of $250 or more) | $ | 536,028 | $ | 494,403 |
2020 | $ | 943,678 | |
2021 | 528,757 | ||
2022 | 124,544 | ||
2023 | 81,447 | ||
2024 | 69,081 | ||
Thereafter | 250 | ||
$ | 1,747,757 |
Amount | |||
2020 | $ | 110,000 | |
2021 | — | ||
2022 | — | ||
2023 | 35,000 | ||
2024 | 145,000 | ||
Thereafter | 225,000 | ||
515,000 | |||
Net deferred prepayment gain on advance restructure | (90 | ) | |
$ | 514,910 |
December 31, 2019 | December 31, 2018 | |||||||||||
Principal | Unamortized Discount and Debt Issuance Costs | Principal | Unamortized Discount and Debt Issuance Costs | |||||||||
2025 Note | $ | 10,000 | (138 | ) | 10,000 | (162 | ) | |||||
2026 Notes | 25,000 | (839 | ) | 25,000 | (963 | ) | ||||||
2029 Notes | 37,000 | (1,495 | ) | — | — | |||||||
Total | $ | 72,000 | (2,472 | ) | 35,000 | (1,125 | ) |
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 Unit | |||||||||||||||
Unvested at January 1, 2019 | 75,554 | $ | 35.34 | 1,666 | $ | 24.44 | — | $ | — | |||||||||||
Granted | 74,698 | 24.61 | 11,742 | 24.62 | 11 | 21.88 | ||||||||||||||
Vested | (36,218 | ) | 33.08 | (13,408 | ) | 24.60 | (11 | ) | 21.88 | |||||||||||
Forfeited | (6,790 | ) | 29.10 | — | — | — | — | |||||||||||||
Unvested at December 31, 2019 | 107,244 | $ | 29.03 | — | $ | — | — | $ | — |
Deferred Rights | |||
Outstanding, beginning of year | 83,521 | ||
Granted | 984 | ||
Exercised | — | ||
Outstanding, end of year | 84,505 |
December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Current | $ | 6,319 | $ | 1,074 | $ | 10,998 | ||||||
Deferred | (4,402 | ) | 978 | (5,142 | ) | |||||||
Net deferred tax asset revaluation | — | — | 1,846 | |||||||||
Total | $ | 1,917 | $ | 2,052 | $ | 7,702 |
December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Statutory rate times pre-tax income | $ | 5,703 | $ | 5,030 | $ | 8,025 | ||||||
(Subtract) add the tax effect of: | ||||||||||||
Income from tax-exempt securities and loans | (4,881 | ) | (3,833 | ) | (2,512 | ) | ||||||
State income tax, net of federal tax effect | 1,285 | 1,164 | 693 | |||||||||
Bank-owned life insurance | (198 | ) | (200 | ) | (318 | ) | ||||||
Net deferred tax asset revaluation | — | — | 1,846 | |||||||||
Tax credits | (181 | ) | (180 | ) | — | |||||||
Other differences | 189 | 71 | (32 | ) | ||||||||
Total income taxes | $ | 1,917 | $ | 2,052 | $ | 7,702 |
December 31, | ||||||||
2019 | 2018 | |||||||
Deferred tax assets (liabilities) | ||||||||
Allowance for loan losses | $ | 5,897 | $ | 4,832 | ||||
Unrealized loss on available-for-sale securities | 5,021 | 6,137 | ||||||
Fair value adjustments | (1,011 | ) | (5,016 | ) | ||||
Depreciation | (257 | ) | (398 | ) | ||||
Deferred compensation and accrued payroll | 1,358 | 1,043 | ||||||
Loan origination costs | (1,181 | ) | (1,081 | ) | ||||
Prepaid assets | (449 | ) | (406 | ) | ||||
Net operating loss | — | 455 | ||||||
Tax credits | — | 231 | ||||||
Other | 513 | 808 | ||||||
Total deferred tax assets, net | $ | 9,891 | $ | 6,605 |
Actual | Minimum Capital Required - Basel III | Minimum Required to be Considered Well Capitalized | |||||||||||||||||
Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | ||||||||||||||
As of December 31, 2019: | |||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets | |||||||||||||||||||
Consolidated | $ | 313,803 | 10.84 | % | $ | 202,661 | 7.00 | % | N/A | N/A | |||||||||
Bank | 341,242 | 11.80 | % | 202,480 | 7.00 | % | 188,017 | 6.50 | % | ||||||||||
Tier 1 capital to risk-weighted assets | |||||||||||||||||||
Consolidated | 313,803 | 10.84 | % | 246,088 | 8.50 | % | N/A | N/A | |||||||||||
Bank | 341,242 | 11.80 | % | 245,869 | 8.50 | % | 231,406 | 8.00 | % | ||||||||||
Total capital to risk-weighted assets | |||||||||||||||||||
Consolidated | 405,171 | 13.99 | % | 303,991 | 10.50 | % | N/A | N/A | |||||||||||
Bank | 363,082 | 12.55 | % | 303,720 | 10.50 | % | 289,257 | 10.00 | % | ||||||||||
Leverage ratio | |||||||||||||||||||
Consolidated | 313,803 | 7.64 | % | 164,219 | 4.00 | % | N/A | N/A | |||||||||||
Bank | 341,242 | 8.32 | % | 164,121 | 4.00 | % | 205,151 | 5.00 | % |
Actual | Minimum Capital Required - Basel III Phase-In Schedule | Minimum Capital Required - Basel III | Minimum Required to be Considered Well Capitalized | |||||||||||||||||||||||
Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | |||||||||||||||||||
As of December 31, 2018: | ||||||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | $ | 300,589 | 12.39 | % | $ | 154,613 | 6.38 | % | $ | 169,771 | 7.00 | % | N/A | N/A | ||||||||||||
Bank | 286,012 | 11.81 | % | 154,407 | 6.38 | % | 169,545 | 7.00 | % | 157,435 | 6.50 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | 300,589 | 12.39 | % | 190,992 | 7.88 | % | 206,150 | 8.50 | % | N/A | N/A | |||||||||||||||
Bank | 286,012 | 11.81 | % | 190,738 | 7.88 | % | 205,876 | 8.50 | % | 193,766 | 8.00 | % | ||||||||||||||
Total capital to risk-weighted assets | ||||||||||||||||||||||||||
Consolidated | 352,360 | 14.53 | % | 239,498 | 9.88 | % | 254,656 | 10.50 | % | N/A | N/A | |||||||||||||||
Bank | 300,908 | 12.55 | % | 239,180 | 9.88 | % | 254,318 | 10.50 | % | 242,207 | 10.00 | % | ||||||||||||||
Leverage ratio | ||||||||||||||||||||||||||
Consolidated | 300,589 | 9.00 | % | 133,602 | 4.00 | % | 133,602 | 4.00 | % | N/A | N/A | |||||||||||||||
Bank | 286,012 | 8.57 | % | 133,474 | 4.00 | % | 133,474 | 4.00 | % | 166,843 | 5.00 | % |
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 |
December 31, 2019 | ||||||||||||||||
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 | $ | 75,872 | $ | — | $ | 75,872 | $ | — | ||||||||
Municipal securities | 97,652 | — | 97,652 | — | ||||||||||||
Agency mortgage-backed securities | 261,440 | — | 261,440 | — | ||||||||||||
Private-label mortgage-backed securities | 63,613 | — | 63,613 | — | ||||||||||||
Asset-backed securities | 4,955 | — | 4,955 | — | ||||||||||||
Corporate securities | 37,320 | — | 37,320 | — | ||||||||||||
Total available-for-sale securities | $ | 540,852 | $ | — | $ | 540,852 | $ | — | ||||||||
Servicing asset | 2,481 | — | — | 2,481 | ||||||||||||
Interest rate swaps liabilities | (37,786 | ) | — | (37,786 | ) | — | ||||||||||
Loans held-for-sale (mandatory pricing agreements) | 56,097 | — | 56,097 | — | ||||||||||||
Forward contracts | (153 | ) | (153 | ) | — | — | ||||||||||
IRLCs | 910 | — | — | 910 |
December 31, 2018 | ||||||||||||||||
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 | $ | 107,585 | $ | — | $ | 107,585 | $ | — | ||||||||
Municipal securities | 92,506 | — | 92,506 | — | ||||||||||||
Agency mortgage-backed securities | 233,734 | — | 233,734 | — | ||||||||||||
Private-label mortgage-backed securities | 9,178 | — | 9,178 | — | ||||||||||||
Asset-backed securities | 4,859 | — | 4,859 | — | ||||||||||||
Corporate securities | 33,483 | 33,483 | ||||||||||||||
Total available-for-sale securities | $ | 481,345 | $ | — | $ | 481,345 | $ | — | ||||||||
Interest rate swaps assets | 1,579 | — | (271 | ) | — | |||||||||||
Interest rate swaps liabilities | (10,727 | ) | — | (10,727 | ) | — | ||||||||||
Loans held-for-sale (mandatory pricing agreements) | 18,328 | — | 18,328 | — | ||||||||||||
Forward contracts | (360 | ) | (360 | ) | — | — | ||||||||||
IRLCs | 389 | — | — | 389 |
Interest Rate Lock Commitments | |||
Balance as of January 1, 2017 | $ | 610 | |
Total realized gains (losses) | |||
Included in net income | (59 | ) | |
Balance, December 31, 2017 | 551 | ||
Total realized gains | |||
Included in net income | (162 | ) | |
Balance, December 31, 2018 | 389 | ||
Total realized gains | |||
Included in net income | 521 | ||
Balance, December 31, 2019 | $ | 910 |
2019 | ||||||||||||
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) | |||||||||
Impaired loans | 3,019 | — | — | 3,019 |
2018 | ||||||||||||
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) | |||||||||
Other real estate owned | 2,065 | — | — | 2,065 |
Fair Value at December 31, 2019 | Valuation Technique | Unobservable Inputs | Range | |||||||
Impaired loans | $ | 3,019 | Fair value of collateral | Discount for type of property and current market conditions | 10% | |||||
IRLCs | $ | 910 | Discounted cash flow | Loan closing rates | 50% - 100% | |||||
Servicing asset | $ | 2,481 | Discounted cash flow | Prepayment speeds | 0% - 25% |
Fair Value at December 31, 2018 | Valuation Technique | Unobservable Inputs | Range | |||||||
Other real estate owned | $ | 2,065 | Fair value of collateral | Discount to reflect current market conditions | 10% | |||||
IRLCs | $ | 389 | Discounted cash flow | Loan closing rates | 34% - 100% |
December 31, 2019 | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Carrying Amount | Fair Value | 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 | $ | 327,361 | $ | 327,361 | $ | 327,361 | $ | — | $ | — | ||||||||||
Securities held-to-maturity | 61,878 | 62,560 | — | 62,560 | — | |||||||||||||||
Net loans | 2,941,707 | 2,876,688 | — | — | 2,876,688 | |||||||||||||||
Accrued interest receivable | 18,607 | 18,607 | 18,607 | — | — | |||||||||||||||
Federal Home Loan Bank of Indianapolis stock | 25,650 | 25,650 | — | 25,650 | — | |||||||||||||||
Deposits | 3,153,963 | 3,232,065 | 1,002,141 | — | 2,229,924 | |||||||||||||||
Advances from Federal Home Loan Bank | 514,910 | 520,950 | — | 520,950 | — | |||||||||||||||
Subordinated debt | 69,528 | 75,206 | 64,996 | 10,210 | — | |||||||||||||||
Accrued interest payable | 3,767 | 3,767 | 3,767 | — | — |
December 31, 2018 | ||||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||
Carrying Amount | Fair Value | 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 | $ | 188,712 | $ | 188,712 | $ | 188,712 | $ | — | $ | — | ||||||||||
Securities held-to-maturity | 22,750 | 22,418 | — | 22,418 | — | |||||||||||||||
Net loans | 2,698,332 | 2,646,060 | — | — | 2,646,060 | |||||||||||||||
Accrued interest receivable | 16,822 | 16,822 | 16,822 | — | — | |||||||||||||||
Federal Home Loan Bank of Indianapolis stock | 23,625 | 23,625 | — | 23,625 | — | |||||||||||||||
Deposits | 2,671,351 | 2,687,666 | 731,378 | — | 1,956,288 | |||||||||||||||
Advances from Federal Home Loan Bank | 525,153 | 520,120 | — | 520,120 | — | |||||||||||||||
Subordinated debt | 33,875 | 34,490 | 24,250 | 10,240 | — | |||||||||||||||
Accrued interest payable | 1,108 | 1,108 | 1,108 | — | — |
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Gain on loans sold | $ | 10,275 | $ | 6,102 | $ | 7,775 | |||||
Gain resulting from the change in fair value of loans held-for-sale | 538 | 57 | 638 | ||||||||
Gain (loss) resulting from the change in fair value of derivatives | 728 | (441 | ) | (577 | ) | ||||||
Net revenue from mortgage banking activities | $ | 11,541 | $ | 5,718 | $ | 7,836 |
Carrying amount of the hedged assets | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets | |||||||||||||||
Line item in the consolidated balance sheet in which the hedged item is included | ||||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Loans | $ | 474,957 | $ | 474,233 | $ | 21,440 | $ | 4,961 | ||||||||
Securities available-for-sale1 | 151,538 | 159,188 | 2,802 | (229 | ) |
December 31, 2019 | Weighted Average Remaining Maturity (years) | Weighted-Average Rate | ||||||||||||
Instruments Associated With | ||||||||||||||
Notional Value | Fair Value | Receive | Pay | |||||||||||
Loans | $ | 427,446 | 5.5 | $ | (21,551 | ) | 3 month LIBOR | 2.86% | ||||||
Securities available-for-sale | 88,200 | 4.1 | (2,806 | ) | 3 month LIBOR | 2.54% | ||||||||
Total swap portfolio at December 31, 2019 | $ | 515,646 | 5.3 | $ | (24,357 | ) | 3 month LIBOR | 2.80% |
December 31, 2018 | Weighted Average Remaining Maturity (years) | Weighted-Average Rate | ||||||||||||
Instruments Associated With | ||||||||||||||
Notional Value | Fair Value | Receive | Pay | |||||||||||
Loans | $ | 435,926 | 6.5 | $ | (5,025 | ) | 3 month LIBOR | 2.86% | ||||||
Securities available-for-sale | 88,200 | 5.1 | 235 | 3 month LIBOR | 2.54% | |||||||||
Total swap portfolio at December 31, 2018 | $ | 524,126 | 6.3 | $ | (4,790 | ) | 3 month LIBOR | 2.80% |
December 31, 2019 | Weighted Average Remaining Maturity (years) | Weighted-Average Rate | ||||||||||||
Cash Flow Hedges | ||||||||||||||
Notional Value | Fair Value | Receive | Pay | |||||||||||
Interest rate swaps | $ | 110,000 | 7.1 | $ | (8,390 | ) | 3 month LIBOR | 2.88% | ||||||
Interest rate swaps | 100,000 | 4.0 | (5,040 | ) | 1 month LIBOR | 2.88% |
December 31, 2018 | Weighted Average Remaining Maturity (years) | Weighted-Average Rate | ||||||||||||
Cash Flow Hedges | ||||||||||||||
Notional Value | Fair Value | Receive | Pay | |||||||||||
Interest rate swaps | $ | 110,000 | 8.1 | $ | (2,293 | ) | 3 month LIBOR | 2.88% | ||||||
Interest rate swaps | 100,000 | 5.0 | (2,065 | ) | 1 month LIBOR | 2.88% |
December 31, 2019 | December 31, 2018 | |||||||||||||||
Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||||||
Asset Derivatives | ||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Interest rate swaps associated with loans | $ | — | $ | — | $ | 91,135 | $ | 986 | ||||||||
Interest rate swaps associated with securities available-for-sale | — | — | 50,000 | 593 | ||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
IRLCs | 56,256 | 910 | 15,136 | 389 | ||||||||||||
Total contracts | $ | 56,256 | $ | 910 | $ | 156,271 | $ | 1,968 | ||||||||
Liability Derivatives | ||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Interest rate swaps associated with loans | $ | 427,446 | $ | (21,551 | ) | $ | 344,791 | $ | (6,011 | ) | ||||||
Interest rate swaps associated with securities available-for-sale | 88,200 | (2,806 | ) | 38,200 | (358 | ) | ||||||||||
Interest rate swaps associated with liabilities | 210,000 | (13,429 | ) | 210,000 | (4,358 | ) | ||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Forward contracts | 115,000 | (153 | ) | 32,500 | (360 | ) | ||||||||||
Total contracts | $ | 840,646 | $ | (37,939 | ) | $ | 625,491 | $ | (11,087 | ) |
Amount of Loss Recognized in Other Comprehensive Income in the Twelve Months Ended | ||||||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||||||||
Interest rate swap agreements | $ | (9,071 | ) | $ | (4,358 | ) | $ | — |
Amount of (loss) / gain recognized in the twelve months ended | |||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | |||||||
Asset Derivatives | |||||||||
Derivatives not designated as hedging instruments | |||||||||
IRLCs | 521 | (162 | ) | (59 | ) | ||||
Forward contracts | 207 | (279 | ) | (519 | ) |
Line item in the consolidated statements of income | Twelve Months Ended | |||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||
Interest income | ||||||||||||
Loans | $ | (1,533 | ) | $ | (100 | ) | $ | — | ||||
Securities - taxable | (127 | ) | (153 | ) | — | |||||||
Securities - non-taxable | 36 | 23 | — | |||||||||
Total interest income | (1,624 | ) | (230 | ) | — | |||||||
Interest expense | ||||||||||||
Deposits | 618 | 151 | — | |||||||||
Other borrowed funds | 473 | 177 | — | |||||||||
Total interest expense | 1,091 | 328 | — | |||||||||
Net interest income | $ | (2,715 | ) | $ | (558 | ) | $ | — |
Available-For-Sale Securities | Cash Flow Hedges | Total | ||||||||||
Balance, January 1, 2017 | $ | (9,268 | ) | $ | — | $ | (9,268 | ) | ||||
Net change in unrealized gain | 6,280 | — | 6,280 | |||||||||
Reclassification of net loss realized and included in earnings | 8 | — | 8 | |||||||||
Accumulated other comprehensive loss before income tax | (2,980 | ) | — | (2,980 | ) | |||||||
Income tax provision | 2,039 | — | 2,039 | |||||||||
Balance, December 31, 2017 | $ | (5,019 | ) | $ | — | $ | (5,019 | ) | ||||
Net change in unrealized loss | (10,466 | ) | (4,358 | ) | (14,824 | ) | ||||||
Reclassification of certain tax effects 1 | (1,063 | ) | — | (1,063 | ) | |||||||
Accumulated other comprehensive loss before income tax | (16,548 | ) | (4,358 | ) | (20,906 | ) | ||||||
Income tax benefit | (3,188 | ) | (1,177 | ) | (4,365 | ) | ||||||
Balance, December 31, 2018 | $ | (13,360 | ) | $ | (3,181 | ) | $ | (16,541 | ) | |||
Net change in unrealized gain (loss) | 12,072 | (9,071 | ) | 3,001 | ||||||||
Reclassification of net loss realized and included in earnings | 458 | — | 458 | |||||||||
Accumulated other comprehensive loss before income tax | (830 | ) | (12,252 | ) | (13,082 | ) | ||||||
Income tax provision (benefit) | 3,558 | (2,449 | ) | 1,109 | ||||||||
Balance, December 31, 2019 | $ | (4,388 | ) | $ | (9,803 | ) | $ | (14,191 | ) |
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 38,303 | $ | 45,281 | ||||
Investment in common stock of subsidiaries | 332,352 | 274,158 | ||||||
Premises and equipment, net | 6,515 | 6,158 | ||||||
Accrued income and other assets | 2,156 | 1,554 | ||||||
Total assets | $ | 379,326 | $ | 327,151 | ||||
Liabilities and shareholders’ equity | ||||||||
Subordinated debt, net of unamortized discounts and debt issuance costs of $2,472 in 2019 and $1,125 in 2018 | $ | 69,528 | $ | 33,875 | ||||
Note payable to the Bank | 3,000 | 3,300 | ||||||
Accrued expenses and other liabilities | 1,885 | 1,241 | ||||||
Total liabilities | 74,413 | 38,416 | ||||||
Shareholders’ equity | 304,913 | 288,735 | ||||||
Total liabilities and shareholders’ equity | $ | 379,326 | $ | 327,151 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Expenses | ||||||||||||
Interest on borrowings | $ | 3,804 | $ | 2,616 | $ | 2,724 | ||||||
Salaries and employee benefits | 804 | 564 | 354 | |||||||||
Consulting and professional fees | 1,610 | 958 | 664 | |||||||||
Premises and equipment | 285 | 285 | 302 | |||||||||
Other | 408 | 315 | 258 | |||||||||
Total expenses | 6,911 | 4,738 | 4,302 | |||||||||
Loss before income tax and equity in undistributed net income of subsidiaries | (6,911 | ) | (4,738 | ) | (4,302 | ) | ||||||
Income tax benefit | (1,783 | ) | (1,172 | ) | (1,539 | ) | ||||||
Loss before equity in undistributed net income of subsidiaries | (5,128 | ) | (3,566 | ) | (2,763 | ) | ||||||
Equity in undistributed net income of subsidiaries | 30,367 | 25,466 | 17,989 | |||||||||
Net income | $ | 25,239 | $ | 21,900 | $ | 15,226 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Net income | $ | 25,239 | $ | 21,900 | $ | 15,226 | ||||||
Other comprehensive income (loss) | ||||||||||||
Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax | 12,072 | (10,466 | ) | 6,280 | ||||||||
Reclassification adjustment for losses realized | 458 | — | 8 | |||||||||
Net unrealized holding losses on cash flow hedging derivatives recorded within other comprehensive income before income tax | (9,071 | ) | (4,358 | ) | — | |||||||
Other comprehensive income (loss) before tax | 3,459 | (14,824 | ) | 6,288 | ||||||||
Income tax provision (benefit) | 1,109 | (4,365 | ) | 2,039 | ||||||||
Other comprehensive income (loss) - net of tax | 2,350 | (10,459 | ) | 4,249 | ||||||||
Comprehensive income | $ | 27,589 | $ | 11,441 | $ | 19,475 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Operating activities | ||||||||||||
Net income | $ | 25,239 | $ | 21,900 | $ | 15,226 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in undistributed net income of subsidiaries | (30,367 | ) | (25,466 | ) | (17,989 | ) | ||||||
Depreciation and amortization | 647 | 568 | 572 | |||||||||
Share-based compensation expense | 288 | 243 | 175 | |||||||||
Net change in other assets | (508 | ) | 1,769 | (1,453 | ) | |||||||
Net change in other liabilities | (87 | ) | 79 | (326 | ) | |||||||
Net cash used in operating activities | (4,788 | ) | (907 | ) | (3,795 | ) | ||||||
Investing activities | ||||||||||||
Capital contribution to the Bank | (25,000 | ) | (35,000 | ) | (42,000 | ) | ||||||
Purchase of premises and equipment | (13 | ) | — | (148 | ) | |||||||
Net cash used in investing activities | (25,013 | ) | (35,000 | ) | (42,148 | ) | ||||||
Financing activities | ||||||||||||
Cash dividends paid | (2,418 | ) | (2,230 | ) | (1,675 | ) | ||||||
Net proceeds from issuance of subordinated debt | 35,418 | — | — | |||||||||
Repayment of subordinated debt | — | (3,000 | ) | — | ||||||||
Principal payment on loan from the Bank | (300 | ) | (300 | ) | (400 | ) | ||||||
Net proceeds from common stock issuance | — | 54,334 | 51,636 | |||||||||
Repurchase of common stock | (9,784 | ) | (216 | ) | — | |||||||
Other, net | (93 | ) | (210 | ) | (173 | ) | ||||||
Net cash provided by financing activities | 22,823 | 48,378 | 49,388 | |||||||||
Net (decrease) increase in cash and cash equivalents | (6,978 | ) | 12,471 | 3,445 | ||||||||
Cash and cash equivalents at beginning of year | 45,281 | 32,810 | 29,365 | |||||||||
Cash and cash equivalents at end of year | $ | 38,303 | $ | 45,281 | $ | 32,810 |
Three Months Ended | ||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||
Income Statement Data: | ||||||||||||||||
Interest income | $ | 37,877 | $ | 37,694 | $ | 36,844 | $ | 34,999 | ||||||||
Interest expense | 22,503 | 22,450 | 20,739 | 18,755 | ||||||||||||
Net interest income | 15,374 | 15,244 | 16,105 | 16,244 | ||||||||||||
Provision for loan losses | 468 | 2,824 | 1,389 | 1,285 | ||||||||||||
Net interest income after provision for loan losses | 14,906 | 12,420 | 14,716 | 14,959 | ||||||||||||
Noninterest income | 5,405 | 5,558 | 3,454 | 2,372 | ||||||||||||
Noninterest expense | 12,613 | 11,203 | 11,709 | 11,109 | ||||||||||||
Income before income taxes | 7,698 | 6,775 | 6,461 | 6,222 | ||||||||||||
Income tax provision | 602 | 449 | 340 | 526 | ||||||||||||
Net income | $ | 7,096 | $ | 6,326 | $ | 6,121 | $ | 5,696 | ||||||||
Per Share Data: | ||||||||||||||||
Net income | ||||||||||||||||
Basic | $ | 0.72 | $ | 0.63 | $ | 0.60 | $ | 0.56 | ||||||||
Diluted | $ | 0.72 | $ | 0.63 | $ | 0.60 | $ | 0.56 | ||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 9,825,784 | 9,979,603 | 10,148,285 | 10,217,637 | ||||||||||||
Diluted | 9,843,829 | 9,980,612 | 10,148,285 | 10,230,531 | ||||||||||||
Three Months Ended | ||||||||||||||||
December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||
Income Statement Data: | ||||||||||||||||
Interest income | $ | 31,849 | $ | 30,223 | $ | 27,416 | $ | 25,979 | ||||||||
Interest expense | 16,428 | 14,253 | 11,955 | 10,564 | ||||||||||||
Net interest income | 15,421 | 15,970 | 15,461 | 15,415 | ||||||||||||
Provision for loan losses | 1,487 | 888 | 667 | 850 | ||||||||||||
Net interest income after provision for loan losses | 13,934 | 15,082 | 14,794 | 14,565 | ||||||||||||
Noninterest income | 2,047 | 1,994 | 2,177 | 2,542 | ||||||||||||
Noninterest expense | 12,739 | 10,045 | 10,182 | 10,217 | ||||||||||||
Income before income taxes | 3,242 | 7,031 | 6,789 | 6,890 | ||||||||||||
Income tax (benefit) provision | (334 | ) | 743 | 781 | 862 | |||||||||||
Net income | $ | 3,576 | $ | 6,288 | $ | 6,008 | $ | 6,028 | ||||||||
Per Share Data: | ||||||||||||||||
Net income | ||||||||||||||||
Basic | $ | 0.35 | $ | 0.61 | $ | 0.67 | $ | 0.71 | ||||||||
Diluted | $ | 0.35 | $ | 0.61 | $ | 0.67 | $ | 0.71 | ||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 10,263,086 | 10,261,967 | 8,909,913 | 8,499,196 | ||||||||||||
Diluted | 10,275,040 | 10,273,766 | 8,919,460 | 8,542,363 |
• | one-fifth or more but less than one-third; |
• | one-third or more but less than a majority; or |
• | a majority or more. |
(i) | in the case of clause (i) or (ii) of the definition of “Benchmark Rate Replacement Event,” the later of (A) the date of the public statement or publication of information referenced therein and (B) the date on which the administrator of the Benchmark Rate permanently or indefinitely ceases to provide the Benchmark Rate; or |
(ii) | in the case of clause (iii) of the definition of “Benchmark Rate Replacement Event,” the date of the public statement or publication of information referenced therein. |
(i) | a public statement or publication of information by or on behalf of the administrator of the Benchmark Rate announcing that such administrator has ceased or will cease to provide the Benchmark Rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark Rate; |
(ii) | a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark Rate, the central bank for the currency of the Benchmark Rate, an insolvency official with jurisdiction over the administrator for the Benchmark Rate, a resolution authority with jurisdiction over the administrator for the Benchmark Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark Rate, which states that the administrator of the Benchmark Rate has ceased or will cease to provide the Benchmark Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark Rate; or |
(iii) | a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark Rate announcing that the Benchmark Rate is no longer representative. |
• | the principal and any premium or interest for money borrowed or purchased by the Company; |
• | the principal and any premium or interest for money borrowed or purchased by another person and guaranteed by the Company; |
• | any deferred obligation for the payment of the purchase price of property or assets evidenced by a note or similar instrument or agreement; |
• | obligations to general and trade creditors; |
• | any obligation arising from direct credit substitutes; |
• | any obligation associated with derivative products such as interest rate and currency rate exchange contracts or any similar arrangements, unless the instrument by which we incurred, assumed or guaranteed the obligation expressly provides that it is subordinate or junior in right of payment to any other indebtedness or obligations of the Company; and |
• | all obligations of the type referred to in the first six bullet points above of other persons or entities for the payment of which we are responsible or liable as obligor, guarantor or otherwise, whether or not classified as a liability on a balance sheet prepared in accordance with accounting principles generally accepted in the United States; |
• | expressly states that it is junior to, or ranks equally in right of payment with, the Notes; or |
• | is identified as junior to, or equal in right of payment with, the Notes in any board resolution establishing such series of subordinated indebtedness or in any supplemental indenture. |
• | A court having jurisdiction shall enter a decree or order for the appointment of a receiver, trustee, assignee, liquidator or similar official in any receivership, insolvency, liquidation, or similar proceeding relating to the Company, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; |
• | We shall consent to the appointment of a receiver, liquidator, trustee, assignee or other similar official in any receivership, insolvency, liquidation or similar proceeding with respect to the Company; or |
• | In the event of an appointment of a receiver, trustee, assignee, liquidator or similar official for our principal banking subsidiary, First Internet Bank, and such appointment shall not have been rescinded for a period of 60 consecutive days from the date thereof. |
• | Default in the payment of any interest on the applicable series of Notes or any Additional Amounts with respect thereto when it becomes due and payable, and continuance of such default for a period of 30 days (unless the entire amount of such payment is deposited by the Company with the Trustee or with a paying agent prior to the expiration of such period of 30 days); |
• | Default in the payment of the principal on the applicable series of Notes or any Additional Amounts with respect thereto when it becomes due and payable (whether at the stated maturity or by declaration of acceleration, call for redemption or otherwise); or |
• | Default in the performance or breach of any covenant or warranty of the Company in the Indenture (other than a covenant or warranty for which the consequences of nonperformance or breach are addressed in the five bullet points above and other than a covenant or warranty that has been included in the Indenture solely for the benefit of notes issued thereunder other than the applicable series of Notes), and the continuance of such default or breach (without such default or breach having been waived in accordance with the provisions of the Indenture) uncured for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the holders of not less than 25.0% in principal amount of the applicable series of outstanding Notes a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under the Indenture. |
• | such holder has previously given written notice to the Trustee of a continuing event of default with respect to the applicable series of Notes; |
• | the holders of not less than 25.0% in principal amount of the applicable series of outstanding Notes shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee under the Indenture; |
• | such holder or holders have offered to the Trustee indemnity satisfactory to it against the costs, expenses, and liabilities to be incurred in compliance with such request; |
• | the Trustee for 60 days after its receipt of such notice, request, and offer of indemnity has failed to institute any such proceeding; and |
• | no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the holders of a majority in principal amount of the applicable series of outstanding Notes. |
• | a “Tax Event,” defined in the Indenture to mean the receipt by us of an opinion of independent tax counsel to the effect that as a result of (a) an amendment to, or change (including any announced prospective change) in, the laws or any regulations thereunder of the United States or any political subdivision or taxing authority thereof or therein, or (b) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change becomes effective or which pronouncement or decision is announced on or after the date of original issuance of a series of Notes, there is more than an insubstantial risk that the interest payable by us on such series of Notes is not, or within 90 days of the date of such opinion will not be, deductible by us, in whole or in part, for U.S. federal income tax purposes; |
• | a “Tier 2 Capital Event,” defined in the Indenture to mean our good faith determination that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws or any regulations thereunder of the United States or any rules, guidelines or policies of an applicable regulatory authority for the Company or (b) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of original issuance of a series of Notes, in each case, that there is more than an insubstantial risk that we will not be entitled to treat such series of Notes then outstanding as Tier 2 capital (or its then equivalent if we were subject to such capital requirement) for purposes of capital adequacy guidelines of the Federal Reserve (or any successor regulatory authority with jurisdiction over bank holding companies), as then in effect and applicable, for so long as any such Note is outstanding; or |
• | the Company becoming required to register as an investment company pursuant to the Investment Company Act of 1940, as amended. |
• | reduce the amount of Notes whose holders must consent to an amendment, supplement or waiver; |
• | reduce the rate of or extend the time for payment of interest (including default interest) on any Note; |
• | reduce the principal or change the stated maturity of any Note; |
• | waive a default or event of default in the payment of the principal of or interest, if any, on any Note (except a rescission of acceleration of a series of Notes by the holders of at least a majority in principal amount of such series of outstanding Notes and a waiver of the payment default that resulted from such acceleration); |
• | make any change to the percentage in principal amount of the outstanding Notes, held by holders whose consent is required to waive certain defaults and the consequences thereof under the Indenture or any change to such defaults which require such consent; |
• | make any change to certain provisions of the Indenture relating to, among other things, holders’ rights to receive payment of the principal of and interest on the Notes and to institute suit for the enforcement of any such payment and waivers of past defaults; |
• | make the principal of or interest, if any, on any Note or any Additional Amount with respect thereto payable in any currency other than that stated in the Note; or |
• | waive any redemption payment with respect to any Notes. |
• | to evidence the succession of another person to the Company as obligor under the Indenture and the assumption by any such successor of the covenants and obligations of the Company in the Indenture and in the Notes; |
• | to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as shall be for the protection of the holders of the Notes and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions an event of default permitting the enforcement of all or any of the several remedies provided in the Indenture, with such period of grace, if any, and subject to such conditions as such supplemental indenture may provide; |
• | to add or change any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the issuance of notes in uncertificated or global form; |
• | to provide for the acceptance of appointment by a successor Trustee or facilitate the administration of the trust under the Indenture by more than one Trustee; |
• | to cure any ambiguity, defect or inconsistency in the Indenture; |
• | to add any additional events of default (and if such events of default are to be for less than all series of Notes, stating that such are expressly being included solely for the benefit of such series); |
• | to modify, eliminate or add to the provisions of the Indenture, if the change or elimination (i) becomes effective only when there are no debt securities outstanding of any series created prior to the change or elimination that are entitled to the benefit of the changed or eliminated provision or (ii) shall not apply to the any debt securities outstanding at the time of such change or elimination; |
• | to establish the form of the Notes and to provide for the issuance of any other series of notes under the Indenture; |
• | to comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”); |
• | to modify, eliminate or add to the provisions of the Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the Trust Indenture Act, or under any similar federal statute hereafter enacted, and to add to the Indenture such other provisions as may be expressly permitted by the Trust Indenture Act, excluding certain provisions thereof; or |
• | to make any change that does not adversely affect the rights of any holder of notes of any series issued under the Indenture in any material respect. |
• | we are the surviving corporation or the successor person (if not us), is a corporation organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes our obligations on the Notes and under the Indenture; |
• | immediately after giving effect to such transaction, and treating any indebtedness that becomes an obligation of us or our subsidiaries as a result of such transaction as having been incurred by us or such subsidiary at the effective date of such transaction, no default or event of default shall have occurred and be continuing; and |
• | we have complied with our obligations to deliver certain documentation to the Trustee, including an officers’ certificate and opinion of counsel each stating that such proposed transaction and any supplemental indenture comply with the Indenture. |
• | be unsecured; |
• | have a minimum original maturity of at least five years; |
• | be subordinated to depositors and general creditors; |
• | not contain provisions permitting the holders of the Notes to accelerate payment of principal prior to maturity except in the event of receivership, insolvency, liquidation or similar proceedings of the Company; and |
• | not contain provisions permitting the Company to redeem or repurchase the Notes prior to the maturity date without prior approval of the Federal Reserve. |
• | are not entitled to have such global security certificates or the securities represented by these certificates registered in their names; |
• | will not receive or be entitled to receive physical delivery of securities certificates in exchange for beneficial interests in global security certificates; and |
• | are not considered to be owners or holders of the global security certificates or any securities represented by these certificates for any purpose under the instruments governing the rights and obligations of holders of such securities. |
1. | Term |
2. | Rent |
Rent Period | Monthly Rent | Annual Rent |
June 1, 2018 through May 31, 2021 | $80,095.75 | $961,149.00 |
3. | Ratification |
1. | Term |
2. | Rent |
Rent Period | Monthly Rent | Annual Rent |
February 1, 2020 through March 31, 2022 | $80,095.75 | $961,149.00 |
3. | Ratification |
/s/ John K. Keach Jr. | ||
John K. Keach Jr. |
/s/ David R. Lovejoy | ||
David R. Lovejoy |
/s/ Ann D. Murtlow | ||
Ann D. Murtlow |
/s/ Ralph R. Whitney, Jr. | ||
Ralph R. Whitney, Jr. |
/s/ Jerry Williams | ||
Jerry Williams |
/s/ Jean L. Wojtowicz | ||
Jean L. Wojtowicz |
1. | I have reviewed this Annual Report on Form 10-K 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 functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: March 12, 2020 | |
/s/ David B. Becker | |
David B. Becker, Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K 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 functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: March 12, 2020 | |
/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 | |
March 12, 2020 | |
/s/ Kenneth J. Lovik | |
Kenneth J. Lovik | |
Chief Financial Officer | |
March 12, 2020 |
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of Business The Company was incorporated on September 15, 2005, and consummated a plan of exchange on March 21, 2006, by which the Company became a bank holding company and 100% owner of First Internet Bank of Indiana (the “Bank”). The Bank provides commercial and retail banking services, with operations conducted on the Internet at www.firstib.com and primarily through its corporate office located in Fishers, Indiana as well as a loan production office in Tempe, Arizona. The majority of the Bank’s income is derived from commercial lending, retail lending, and mortgage banking activities. The Bank is subject to competition from other financial institutions. The Bank is regulated by certain state and federal agencies and undergoes periodic examinations by those regulatory authorities. JKH Realty Services, LLC was established on August 20, 2012 as a single member limited liability company wholly owned by the Bank to manage other real estate owned properties as needed. First Internet Public Finance Corp., a wholly-owned subsidiary of the Bank, was incorporated on March 6, 2017 and was established to provide municipal finance lending and leasing products to government entities and to purchase, manage, service, and safekeep municipal securities. SPF15, Inc., a wholly-owned subsidiary of the Bank, was incorporated on August 31, 2018 and was established to acquire and hold real estate. |
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company’s business activities are currently limited to one reporting unit and reportable segment, which is commercial banking. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company utilizes processes that involve the use of significant estimates and the judgment of management in determining the amount of the Company’s allowance for loan losses, income taxes, valuation and impairments of investment securities and goodwill, as well as fair value measurements of derivatives, loans held-for-sale and other real estate owned. Actual results could differ from those estimates. |
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Securities | Securities The Company classifies its securities in one of three categories and accounts for the investments as follows:
Interest and dividend income, adjusted by amortization of premium or discount, is included in earnings using the effective interest rate method. Purchases and sales of securities are recorded in the consolidated balance sheets on the trade date. Gains and losses from security sales or disposals are recognized as of the trade date in the consolidated statements of income for the period in which securities are sold or otherwise disposed of. Gains and losses on sales of securities are determined using the specific-identification method. |
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Loans Held for Sale | Loans Held-for-Sale Loans originated and intended for sale in the secondary market under best-efforts pricing agreements are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income. Loans originated and intended for sale in the secondary market under mandatory pricing agreements are carried at fair value to facilitate hedging of the loans. Gains and losses resulting from changes in fair value are recognized in noninterest income. Gains and losses on loan sales are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenues as they are earned based on contractual terms, as transactions occur, or as services are provided and collectability is reasonably assured. The Company's principal source of revenue is interest income from loans and leases and investment securities. Interest income on loans is accrued as earned using the interest method based on unpaid principal balances except for interest on loans in nonaccrual status. Interest on loans in nonaccrual status is recorded as a reduction of loan principal when received. Premiums and discounts are amortized using the effective interest rate method. Loan fees, net of certain direct origination costs, primarily salaries and wages, are deferred and amortized to interest income as a yield adjustment over the life of the loan. The Company also earns noninterest income through a variety of financial and transaction services provided to corporate and consumer clients such as deposit account, debit card, mortgage banking, portfolio loan sales and sales of the government-guaranteed portion of U.S. Small Business Administration loans. Revenue is recorded for noninterest income based on the contractual terms for the service or transaction performed. In certain circumstances, noninterest income is reported net of associated expenses. |
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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 (“ALLL”), any unamortized deferred fees or costs on originated loans, unamortized premiums or discounts on purchased loans and carrying value adjustments related to interest rate swaps associated with 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. |
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Allowance for Loan Losses Methodology | Allowance for Loan Losses Methodology Company policy is designed to maintain an adequate ALLL. Primary responsibility for ensuring that the Company has processes in place to consistently assess the adequacy of the ALLL rests with the Board of Directors (the “Board”). The Board has charged management with responsibility for establishing the methodology to be used and to assess the adequacy of the ALLL. The Board reviews recommendations from management on a quarterly basis to adjust the allowance as appropriate. The methodology employed by management for each portfolio segment, at a minimum, contains the following:
The historical loss experience is determined by portfolio segment and considers two weighted average net charge-off trends: 1) the Company’s average loss history over the previous sixteen quarters; and 2) the average loss history over the previous sixteen quarters for a peer group. 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. The Company also factors in the following qualitative considerations:
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Provision for Loan Losses | 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. |
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Nonaccrual Loans | 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. |
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Impaired Loans | 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 but also include 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. 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. |
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Troubled Debt Restructurings | Troubled Debt Restructurings The loan portfolio includes certain loans that have been modified in a TDR, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from loss mitigation efforts and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally not less than six months. When loans are modified in a TDR, any possible impairment similar to other impaired loans is evaluated based on either the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or the current fair value of the collateral, less selling costs for collateral-dependent loans. If it is determined that the value of the modified loan is less than the recorded balance of the loan, impairment is recognized through a specific ALLL or charge-off to the ALLL. In periods subsequent to modification, all TDRs, including those that have payment defaults, are evaluated for possible impairment, and impairment is recognized through the ALLL. |
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Policy for Charging Off Loans | 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. |
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Federal Home Loan Bank (FHLB) of Indianapolis Stock | Federal Home Loan Bank (“FHLB”) of Indianapolis Stock Federal law requires a member institution of the FHLB system to hold common stock of its district FHLB according to a predetermined formula. This investment is stated at cost, which represents redemption value, and may be pledged as collateral for FHLB advances. |
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Property and Equipment | Premises and Equipment Premises and equipment is stated at cost, less accumulated depreciation. Depreciation is computed on the straight-line method over the estimated useful lives, which range from three to five years for software and equipment, ten years for land improvements, and 39 years for buildings. |
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Other Real Estate Owned | Other Real Estate Owned Other real estate owned represents real estate acquired through foreclosure or deed in lieu of foreclosure and is recorded at its fair value less estimated costs to sell. When property is acquired, it is recorded at its fair value at the date of acquisition with any resulting write-down charged against the ALLL. Any subsequent deterioration of the property is charged directly to operating expense. Costs relating to the development and improvement of other real estate owned are capitalized, whereas costs relating to holding and maintaining the property are charged to expense as incurred. |
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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 interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. Additionally, the Company enters into forward contracts for the future delivery of mortgage loans to third-party investors and enters into interest rate lock commitments ("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. Designating an interest rate swap as an accounting hedge allows the Company to recognize gains and losses, less any ineffectiveness, in the income statement within the same period that the hedged item affects earnings. The Company includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related interest rate swaps. For derivative instruments that are designated and qualify as cash flow hedges, any gains or losses related to changes in fair value are recorded in accumulated other comprehensive loss, net of tax. The fair value of interest rate swaps with a positive fair value are reported in accrued income and other assets in the consolidated balance sheets while interest rate swaps with a negative fair value are reported in accrued expenses and other liabilities in the consolidated balance sheets. The IRLCs and forward contracts are not designated as accounting hedges, and are recorded at fair value with changes in fair value reflected in noninterest income in the 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 consolidated balance sheets, while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the consolidated balance sheets. |
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Fair Value Measurements | Fair Value Measurements The Company records or discloses certain assets and liabilities at fair value. ASC Topic 820, Fair Value Measurements, 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. Fair value measurements are classified within one of three levels in a valuation hierarchy. ASC Topic 820 describes three levels of inputs that may be used to measure fair value:
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Income Taxes | Income Taxes Deferred income tax assets and liabilities reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws and regulations. Deferred income tax expense or benefit is based upon the change in deferred tax assets and liabilities from period to period, subject to an ongoing assessment of realization of deferred tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company files income tax returns in the U.S. federal, Indiana, and other state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2016. ASC Topic 740-10, Accounting for Uncertainty in Income Taxes, prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not identify any material uncertain tax positions that it believes should be recognized in the consolidated financial statements. |
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Earnings Per Share | Earnings Per Share Earnings per share of common stock is based on the weighted-average number of basic shares and dilutive shares outstanding during the year. |
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Stock Compensation | Share-based Compensation The Company has a share-based compensation plan using the fair value recognition provisions of ASC Topic 718, Compensation - Stock Compensation. The plan is described more fully in Note 11. |
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Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available-for-sale and unrealized gains and losses on cash flow hedges. Reclassification adjustments have been determined for all components of other comprehensive income or loss reported in the consolidated statements of changes in shareholders’ equity. |
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Statements of Cash Flows | Statements of Cash Flows Cash and cash equivalents are defined to include cash on-hand, noninterest and interest-bearing amounts due from other banks and federal funds sold. Generally, federal funds are sold for one-day periods. The Company reports net cash flows for customer loan transactions and deposit transactions. |
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Bank Owned Life Insurance | Bank-Owned Life Insurance Bank-owned life insurance policies are carried at their cash surrender value. The Company recognizes tax-free income from the periodic increases in the cash surrender value of these policies and from death benefits. |
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Goodwill | Goodwill Goodwill is tested at least annually for impairment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the consolidated financial statements. |
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Servicing Asset | Servicing Asset Servicing assets are related to small business lending loans sold and are recognized at the time of sale when servicing is retained with the income statement effect recorded in loan servicing revenue. Servicing assets are recorded at fair value in accordance with ASC 860. Fair value is based on a third-party valuation model that calculates the present value of estimated future loan servicing revenue. |
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Reclassifications | Reclassifications Certain reclassifications have been made to the 2018 and 2017 financial statements to conform to the 2019 financial statement presentation. These reclassifications had no effect on net income. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2016-02 - Leases (Topic 842) (February 2016) In February 2016, the Financial Accounting Standards Board (“FASB”) amended its standards with respect to the accounting for leases. This ASU replaces all current GAAP guidance on this topic and requires that an operating lease be recognized by the lessee on the balance sheet as a “right-of-use” asset along with a corresponding liability representing the rent obligation. Key aspects of current lessor accounting remain unchanged from existing guidance. The amended standard has resulted in an increase to assets and liabilities recognized and, therefore, increased risk-weighted assets for regulatory capital purposes. In July 2018, the FASB issued ASU 2018-10 - Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements. ASU 2018-11 allows entities adopting ASU 2016-02 to choose an additional (and optional) transition method, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company elected the optional transition method permitted by ASU 2018-11, which allowed the Company to recognize and measure leases that exist at the application date. Under this method, an entity must recognize and measure leases that exist at the application date and prior comparative periods are not adjusted. The new ASU provides a number of optional practical expedients in transition. The Company has elected the practical expedients that allowed the Company to retain the classifications of existing leases, rather than re-assessing if existing leases have initial direct costs, and to use hindsight when determining the lease term and assessment of impairment. The Company also elected a practical expedient to not assess whether existing or expired land easements that were not previously accounted for as leases under ASC Topic 840 contain a lease. The Company adopted the guidance on January 1, 2019 using the optional transition method and the adoption of the guidance did not have a material impact on the consolidated financial statements. As a result, the Company recognized a $2.1 million increase in assets and liabilities on the consolidated balance sheets. Refer to Note 6 for additional information. In March 2019, the FASB issued ASU 2019-01 - Leases (Topic 842): Codification Improvements. This ASU (1) states that for lessors that are not manufacturers or dealers, the fair value of the underlying asset is its cost, less any volume or trade discounts, as long as there is not a significant amount of time between acquisition of the asset and lease commencement; (2) clarifies that lessors in the scope of ASC Topic 942, such as the Company, must classify principal payments received from sales-type and direct financing leases in investing activities in the statements of cash flows; and (3) clarifies the transition guidance related to certain interim disclosures provided in the year of adoption. To coincide with the adoption of ASU 2016-02, the Company elected to early adopt ASU 2019-01 on January 1, 2019. The adoption of the guidance did not have a material impact on the consolidated financial statements. ASU 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 statements of income reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increase or decrease of 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 collectability 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. •In May 2019, the FASB issued ASU 2019-05 - Financial Instruments - Credit Losses (Topic 326) - Targeted Transition Relief. This ASU allows an option for preparers to irrevocably elect the fair value option, on an instrument-by-instrument basis, for eligible financial assets measured at amortized cost basis upon adoption of the credit losses standard. This increases the comparability of financial statement information provided by institutions that otherwise would have reported similar financial instruments using different measurement methodologies, potentially decreasing costs for financial statement preparers while providing more useful information to investors and other users. For public business entities that are SEC 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 early adopt the amendments in this update as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10 - Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) - Effective Dates. This ASU delayed the effective date for smaller reporting companies to fiscal years beginning after December 15, 2022. 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 OTTI 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. The Company does not expect to early adopt and is currently evaluating the impact of the amendments on the Company’s consolidated financial statements. The Company currently cannot determine or reasonably quantify the impact of the adoption of the amendments due to the complexity and extensive changes. The Company intends to develop processes and procedures prior to the effective date to ensure it is fully compliant with the amendments at the adoption date. The Company has formed an implementation committee and has engaged a third-party consultant to assist in developing current expected credit losses (“CECL”) models using appropriate methodologies. ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (August 2018) The amendments in this update modify the disclosure requirements on fair value measurements in ASC Topic 820. This ASU eliminates the requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. In addition, this ASU requires entities that calculate net asset value to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly. This ASU also adds new requirements, which include the disclosure of the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this ASU were effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2019. The adoption of this guidance did not have a material impact on the consolidated financial statements. ASU 2018-16 - Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes (October 2018) The amendments in this ASU allow all entities that elect to apply hedge accounting to benchmark interest rate hedges under ASC Topic 815, Derivatives and Hedging, to use the OIS rate based on SOFR as a benchmark interest rate, in addition to the four eligible benchmark interest rates. The Company adopted this ASU effective December 31, 2018 and it did not have a material impact on the consolidated financial statements. ASU 2019-04 - Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (April 2019) The amendments in this ASU clarify or correct the guidance in ASC Topic 326, Topic 815 and Topic 825. With respect to Topic 326, ASU 2019-04 addresses a number of issues as it relates to the CECL standard including consideration of accrued interest, recoveries, variable-rate financial instruments, prepayments, extension and renewal options, among other things, in the measurement of expected credit losses. The amendments to Topic 326 have the same effective dates as ASU 2016-13 and the Company is currently evaluating the potential impact of these amendments on the consolidated financial statements. With respect to Topic 815, ASU 2019-04 clarifies issues related to partial-term hedges, hedged debt securities, and transitioning from a quantitative method of assessing hedge effectiveness to a more simplified method. The amendments to Topic 815 are effective for interim and annual reporting periods beginning after December 15, 2019 and are not expected to have a material impact on the consolidated financial statements. With respect to Topic 825, ASU 2019-04 addresses the scope of the guidance, the requirement for remeasurement under ASC Topic 820 when using the measurement alternative, certain disclosure requirements, and which equity securities must be remeasured at historical exchanges rates. The amendments to Topic 825 were effective for interim and annual reporting periods beginning after December 15, 2019 and the adoption of this guidance did not have a material impact on the consolidated financial statements. |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | remises and equipment at December 31, 2019 and 2018.
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Goodwill |
12 Months Ended |
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Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill As of December 31, 2019 and 2018, the carrying amount of goodwill was $4.7 million. There have been no changes in the carrying amount of goodwill for the three years ended December 31, 2019, 2018, and 2017. 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. The annual test indicated no impairment existed as of August 31, 2019 and no events or changes in circumstances have occurred since the August 31, 2019 annual impairment test that would suggest it was more likely than not goodwill impairment existed. |
Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The following tables summarize securities available-for-sale and securities held-to-maturity as of December 31, 2019 and 2018.
The carrying value of securities at December 31, 2019 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.
There were no gross realized gains resulting from sales of available-for-sale securities recognized during the twelve months ended December 31, 2019, 2018, and 2017. There were gross realized losses of $0.5 million, $0.0 million, and $0.0 million resulting from sales of available-for-sale securities recognized during the twelve months ended December 31, 2019, 2018, and 2017, respectively. As of December 31, 2019, the fair value of available-for-sale investment securities pledged as collateral was $469.0 million. The Company pledged the securities for various types of transactions, including FHLB advances, derivative financial instruments and to collateralize municipal deposits. Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. Total fair value of these investments at December 31, 2019 and 2018 was $317.5 million and $469.8 million, which is approximately 53% and 93%, respectively, of the Company’s available-for-sale and held-to-maturity securities portfolio. These declines primarily resulted from fluctuations in market interest rates after purchase. Management believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced with the resulting loss recognized in net income in the period the other-than-temporary impairment is identified. 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 December 31, 2019. Agency Mortgage-Backed, Private-Label Mortgage-Backed and Asset-Backed Securities The unrealized losses on the Company’s investments in agency mortgage-backed, private-label 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 December 31, 2019. The following tables show the 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 December 31, 2019 and 2018:
Amounts reclassified from accumulated other comprehensive loss and the affected line items in the consolidated statements of income during the years ended December 31, 2019, 2018 and 2017 were as follows:
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Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plans | Benefit Plans 401(k) Plan The Company has a 401(k) plan established for substantially all full-time employees, as defined in the plan. Employee contributions are limited to the maximum established by the Internal Revenue Service on an annual basis. The Company has elected to match contributions equal to 100% of the first 1% of employee deferrals and then 50% on deferrals over 1% up to a maximum of 6% of an individual’s total eligible salary, as defined in the plan, which vests immediately. Discretionary employer-matching contributions begin vesting after one year at a rate of 50% per year of employment and are fully vested after the completion of two years of employment. Contributions totaled approximately $0.6 million, $0.5 million and $0.5 million in the twelve months ended December 31, 2019, 2018 and 2017, respectively. Employment Agreement The Company has entered into an employment agreement with its Chief Executive Officer that provides for an annual base salary and an annual bonus, if any, as determined from time to time by the Compensation Committee. The annual bonus is to be determined with reference to the achievement of annual performance objectives established by the Compensation Committee for the Chief Executive Officer and other senior officers. The agreement also provides that the Chief Executive Officer may be awarded additional compensation, benefits or consideration as the Compensation Committee may determine. The agreement provides for the continuation of salary and certain other benefits for a specified period of time upon termination of his employment under certain circumstances, including his resignation for "good reason" or termination by the Company without "cause" at any time or any termination of his employment for any reason within twelve months following a "change in control," along with other specific conditions. 2013 Equity Incentive Plan The 2013 Equity Incentive Plan (“2013 Plan”) authorizes the issuance of up to 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 $1.7 million, $1.6 million, and $1.0 million of share-based compensation expense for the years ended December 31, 2019, 2018, and 2017, respectively, related to awards made under the 2013 Plan. The following table summarizes the status of the 2013 Plan awards as of December 31, 2019, and activity for the year ended December 31, 2019:
As of December 31, 2019, the total unrecognized compensation cost related to unvested awards was $2.0 million, with a weighted-average expense recognition period of 1.8 years. Directors Deferred Stock Plan Until January 1, 2014, the Company had a stock compensation plan for non-employee members of the Board of Directors (“Directors Deferred Stock Plan”). The Company reserved 180,000 shares of common stock that could have been issued pursuant to the Directors Deferred Stock Plan. The plan provided directors the option to elect to receive up to 100% of their annual retainer in either common stock or deferred stock rights. Deferred stock rights were to be settled in common stock following the end of the deferral period payable on the basis of one share of common stock for each deferred stock right. The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the year ended December 31, 2019.
All deferred stock rights granted during 2019 were additional rights issued in lieu of cash dividends payable on outstanding deferred stock rights. |
Income Taxes - Provisions (Credit) for Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Income Tax Disclosure [Abstract] | |||||||||||
Current | $ 6,319 | $ 1,074 | $ 10,998 | ||||||||
Deferred | (4,402) | 978 | (5,142) | ||||||||
Net deferred tax asset revaluation | 0 | 0 | 1,846 | ||||||||
Total | $ 602 | $ 449 | $ 340 | $ 526 | $ (334) | $ 743 | $ 781 | $ 862 | $ 1,917 | $ 2,052 | $ 7,702 |
Fair Value of Financial Instruments - Unobservable (Level 3) Inputs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Impaired loans | $ 4,887 | $ 0 |
Other Real Estate | 2,065 | 2,619 |
Servicing asset | 2,481 | $ 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Servicing asset | 2,481 | |
Significant Unobservable Inputs (Level 3) | Impaired loans | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Impaired loans | $ 3,019 | |
Other securities, Valuation Technique | Fair value of collateral | |
Other securities, Unobservable Inputs | Discount for type of property and current market conditions | |
Impaired loans | $ 3,019 | |
Impaired loans, discount rate | 10.00% | |
Significant Unobservable Inputs (Level 3) | IRLCs | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Other securities, Valuation Technique | Discounted cash flow | Discounted cash flow |
Other securities, Unobservable Inputs | Loan closing rates | Loan closing rates |
IRLCs, Fair Value | $ 910 | $ 389 |
Significant Unobservable Inputs (Level 3) | Other Real Estate Owned | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Other Real Estate | $ 2,065 | $ 2,065 |
Other real estate owned, discount rate | 10.00% | |
Other securities, Valuation Technique | Fair value of collateral | |
Other securities, Unobservable Inputs | Discount to reflect current market conditions | |
Significant Unobservable Inputs (Level 3) | Servicing asset | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Other securities, Valuation Technique | Discounted cash flow | |
Other securities, Unobservable Inputs | Prepayment speeds | |
Servicing asset | $ 2,481 | |
Significant Unobservable Inputs (Level 3) | Minimum | IRLCs | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
IRLC, Range, Loan closing rates (as a percent) | 50.00% | 34.00% |
Significant Unobservable Inputs (Level 3) | Minimum | Servicing asset | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Servicing asset, discount rate | 0.00% | |
Significant Unobservable Inputs (Level 3) | Maximum | IRLCs | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
IRLC, Range, Loan closing rates (as a percent) | 100.00% | 100.00% |
Significant Unobservable Inputs (Level 3) | Maximum | Servicing asset | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Servicing asset, discount rate | 25.00% |
Deposits (Details Textual) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Banking and Thrift [Abstract] | ||
Time deposits (in the amount of $250 or more) | $ 536,028 | $ 494,403 |
Income Taxes - Net Deferred Taxes (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Deferred tax assets (liabilities) | ||
Allowance for loan losses | $ 5,897 | $ 4,832 |
Unrealized loss on available-for-sale securities | 5,021 | 6,137 |
Fair value adjustments | (1,011) | (5,016) |
Depreciation | (257) | (398) |
Deferred compensation and accrued payroll | 1,358 | 1,043 |
Loan origination costs | (1,181) | (1,081) |
Prepaid assets | (449) | (406) |
Net operating loss | 0 | 455 |
Tax credits | 0 | 231 |
Other | 513 | 808 |
Total deferred tax assets, net | $ 9,891 | $ 6,605 |
Regulatory Capital Requirements (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Tier 1 common equity, (to risk-weighted assets), Actual Amount | $ 313,803 | $ 300,589 | |
Tier 1 common equity, (to risk-weighted assets), Actual Ratio (as a percent) | 10.84% | 12.39% | |
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Actual Amount | $ 154,613 | ||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 7.00% | 6.38% | |
Capital | $ 405,171 | $ 352,360 | |
Capital to Risk Weighted Assets | 13.99% | 14.53% | |
Capital Required for Capital Adequacy | $ 239,498 | ||
Capital Required for Capital Adequacy to Risk Weighted Assets | 10.50% | 9.88% | |
Tier 1 capital (to risk-weighted assets), Actual Amount | $ 313,803 | $ 300,589 | |
Tier 1 capital (to risk-weighted assets), Actual Ratio (as a percent) | 10.84% | 12.39% | |
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Amount | $ 190,992 | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 8.50% | 7.88% | |
Tier 1 capital (to average assets), Actual Amount | $ 313,803 | $ 300,589 | |
Tier 1 capital (to average assets), Actual Ratio (as a percent) | 7.64% | 9.00% | |
Tier 1 capital (to average assets), Minimum Capital Requirement, Amount | $ 133,602 | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Ratio (as a percent) | 4.00% | 4.00% | |
Bank | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Tier 1 common equity, (to risk-weighted assets), Actual Amount | $ 341,242 | $ 286,012 | |
Tier 1 common equity, (to risk-weighted assets), Actual Ratio (as a percent) | 11.80% | 11.81% | |
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Actual Amount | $ 154,407 | ||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 6.38% | ||
Tier One Common Equity Required to be Well Capitalized | $ 188,017 | $ 157,435 | |
Tier One Common Equity Required to be Well Capitalized to Risk Weighted Assets | 6.50% | 6.50% | |
Capital | $ 363,082 | $ 300,908 | |
Capital to Risk Weighted Assets | 12.55% | 12.55% | |
Capital Required for Capital Adequacy | $ 239,180 | ||
Capital Required for Capital Adequacy to Risk Weighted Assets | 9.88% | ||
Capital Required to be Well Capitalized | $ 289,257 | $ 242,207 | |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% | |
Tier 1 capital (to risk-weighted assets), Actual Amount | $ 341,242 | $ 286,012 | |
Tier 1 capital (to risk-weighted assets), Actual Ratio (as a percent) | 11.80% | 11.81% | |
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Amount | $ 190,738 | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 7.88% | ||
Tier 1 capital (to risk-weighted assets), Minimum to be Wel Capitalized Under Prompt Corrective Actions, Amount | $ 231,406 | $ 193,766 | |
Tier 1 capital (to risk-weighted assets), Minimum to be Wel Capitalized Under Prompt Corrective Actions, Ratio (as a percent) | 8.00% | 8.00% | |
Tier 1 capital (to average assets), Actual Amount | $ 341,242 | $ 286,012 | |
Tier 1 capital (to average assets), Actual Ratio (as a percent) | 8.32% | 8.57% | |
Tier 1 capital (to average assets), Minimum Capital Requirement, Amount | $ 133,474 | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Ratio (as a percent) | 4.00% | ||
Tier 1 capital (to average assets), Minimum to be Well Capitalized Under Prompt Corrective Actions, Amount | $ 205,151 | $ 166,843 | |
Tier 1 capital (to average assets), Minimum to be Well Capitalized Under Prompt Corrective Actions, Ratio (as a percent) | 5.00% | 5.00% | |
2016 Period | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Actual Amount | $ 202,661 | ||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 7.00% | ||
Capital Required for Capital Adequacy | $ 303,991 | ||
Capital Required for Capital Adequacy to Risk Weighted Assets | 10.50% | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Amount | $ 246,088 | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 8.50% | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Amount | $ 164,219 | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Ratio (as a percent) | 4.00% | ||
2016 Period | Bank | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Actual Amount | $ 202,480 | ||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 7.00% | ||
Capital Required for Capital Adequacy | $ 303,720 | ||
Capital Required for Capital Adequacy to Risk Weighted Assets | 10.50% | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Amount | $ 245,869 | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 8.50% | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Amount | $ 164,121 | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Ratio (as a percent) | 4.00% | ||
Two Thousand Fifteen Period | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Actual Amount | $ 169,771 | ||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 7.00% | ||
Capital Required for Capital Adequacy | $ 254,656 | ||
Capital Required for Capital Adequacy to Risk Weighted Assets | 10.50% | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Amount | $ 206,150 | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 8.50% | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Amount | $ 133,602 | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Ratio (as a percent) | 4.00% | ||
Two Thousand Fifteen Period | Bank | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Actual Amount | $ 169,545 | ||
Tier 1 common equity, (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 7.00% | ||
Capital Required for Capital Adequacy | $ 254,318 | ||
Capital Required for Capital Adequacy to Risk Weighted Assets | 10.50% | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Amount | $ 205,876 | ||
Tier 1 capital (to risk-weighted assets), Minimum Capital Requirement, Ratio (as a percent) | 8.50% | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Amount | $ 133,474 | ||
Tier 1 capital (to average assets), Minimum Capital Requirement, Ratio (as a percent) | 4.00% |
Subordinated Debt - Schedule Of Subordinated Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt | $ 514,910 | $ 525,153 |
Unamortized discounts and debt issuance costs | (2,472) | (1,125) |
Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 72,000 | 35,000 |
Unamortized discounts and debt issuance costs | (2,472) | (1,125) |
Subordinated Debt | 8% Debenture Due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 10,000 | 10,000 |
Unamortized discounts and debt issuance costs | (138) | (162) |
Subordinated Debt | 6.4375% Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 25,000 | 25,000 |
Unamortized discounts and debt issuance costs | (839) | (963) |
Subordinated Debt | 6% Notes Due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 37,000 | 0 |
Unamortized discounts and debt issuance costs | $ (1,495) | $ 0 |
Securities (Details Textual) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Debt Securities, Available-for-sale [Line Items] | |||
Gross losses | $ 0.5 | $ 0.0 | $ 0.0 |
Securities pledged as collateral | 469.0 | ||
Total fair value | $ 317.5 | $ 469.8 | |
Percentage of available-for-sale portfolio | 53.00% | 93.00% |
Securities (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Securities, Available-for-sale [Abstract] | ||
Amortized Cost | $ 546,640 | $ 499,893 |
Gross Unrealized Gains | 3,426 | 272 |
Gross Unrealized Losses | (9,214) | (18,820) |
Fair Value | 540,852 | 481,345 |
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 61,878 | 22,750 |
Gross Unrealized Gains | 814 | 80 |
Gross Unrealized Losses | (132) | (412) |
Fair Value | 62,560 | 22,418 |
U.S. Government-sponsored agencies | ||
Debt Securities, Available-for-sale [Abstract] | ||
Amortized Cost | 77,715 | 109,631 |
Gross Unrealized Gains | 99 | 20 |
Gross Unrealized Losses | (1,942) | (2,066) |
Fair Value | 75,872 | 107,585 |
Municipal securities | ||
Debt Securities, Available-for-sale [Abstract] | ||
Amortized Cost | 97,447 | 97,090 |
Gross Unrealized Gains | 1,706 | 90 |
Gross Unrealized Losses | (1,501) | (4,674) |
Fair Value | 97,652 | 92,506 |
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 10,142 | 10,157 |
Gross Unrealized Gains | 226 | 0 |
Gross Unrealized Losses | 0 | (356) |
Fair Value | 10,368 | 9,801 |
Agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Abstract] | ||
Amortized Cost | 264,142 | 242,293 |
Gross Unrealized Gains | 1,304 | 162 |
Gross Unrealized Losses | (4,006) | (8,721) |
Fair Value | 261,440 | 233,734 |
Private label mortgage-backed securities | ||
Debt Securities, Available-for-sale [Abstract] | ||
Amortized Cost | 63,704 | 9,199 |
Gross Unrealized Gains | 97 | 0 |
Gross Unrealized Losses | (188) | (21) |
Fair Value | 63,613 | 9,178 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Abstract] | ||
Amortized Cost | 5,000 | 5,002 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (45) | (143) |
Fair Value | 4,955 | 4,859 |
Corporate securities | ||
Debt Securities, Available-for-sale [Abstract] | ||
Amortized Cost | 38,632 | 36,678 |
Gross Unrealized Gains | 220 | 0 |
Gross Unrealized Losses | (1,532) | (3,195) |
Fair Value | 37,320 | 33,483 |
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 51,736 | 12,593 |
Gross Unrealized Gains | 588 | 80 |
Gross Unrealized Losses | (132) | (56) |
Fair Value | $ 52,192 | $ 12,617 |
Leases - Balance Sheet Amounts (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Operating lease right-of-use assets | $ 1,602 |
Operating lease liabilities | $ 1,602 |
Weighted-average remaining lease term (years) | 2 years 4 months 24 days |
Weighted-average discount rate | 2.00% |
Derivative Financial Instruments - Effect of Derivatives on Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Interest income | $ 37,877 | $ 37,694 | $ 36,844 | $ 34,999 | $ 31,849 | $ 30,223 | $ 27,416 | $ 25,979 | $ 147,414 | $ 115,467 | $ 84,697 |
Interest expense | 22,503 | 22,450 | 20,739 | 18,755 | 16,428 | 14,253 | 11,955 | 10,564 | 84,447 | 53,200 | 30,715 |
Net interest income | $ 15,374 | $ 15,244 | $ 16,105 | $ 16,244 | $ 15,421 | $ 15,970 | $ 15,461 | $ 15,415 | 62,967 | 62,267 | 53,982 |
Interest rate swaps assets | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of Loss Recognized in Other Comprehensive Income in the Twelve Months Ended | (9,071) | (4,358) | 0 | ||||||||
Interest income | (1,624) | (230) | 0 | ||||||||
Interest expense | 1,091 | 328 | 0 | ||||||||
Net interest income | (2,715) | (558) | 0 | ||||||||
Interest rate swaps assets | Loans | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Interest income | (1,533) | (100) | 0 | ||||||||
Interest rate swaps assets | Securities - taxable | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Interest income | (127) | (153) | 0 | ||||||||
Interest rate swaps assets | Securities - non-taxable | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Interest income | 36 | 23 | 0 | ||||||||
Interest rate swaps assets | Deposits | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Interest expense | 618 | 151 | 0 | ||||||||
Interest rate swaps assets | Other borrowed funds | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Interest expense | $ 473 | $ 177 | $ 0 |
Derivative Financial Instruments - Carrying Amount and Adjustment (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
AFS, amortized cost basis | $ 546,640 | |
Derivatives designated as hedging instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
AFS, amortized cost basis | 88,200 | $ 88,200 |
Loans | Derivatives designated as hedging instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Carrying amount of the hedged assets | 474,957 | 474,233 |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets | 21,440 | 4,961 |
Securities available-for-sale | Derivatives designated as hedging instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Carrying amount of the hedged assets | 151,538 | 159,188 |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets | $ 2,802 | $ (229) |
Loans - Loan Portfolio Aging Analysis (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | $ 6,955 | $ 4,015 |
Current | 2,913,026 | 2,694,829 |
Total loans | 2,919,981 | 2,698,844 |
Total Loans 90 Days or More Past Due and Accruing | 416 | 97 |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Owner-occupied commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Investor commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Single tenant lease financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Public finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Healthcare finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Small business lending | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 416 | 97 |
Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans 90 Days or More Past Due and Accruing | 0 | 0 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 309 | 336 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 4,883 | 3,522 |
90 Days or More Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,763 | 157 |
Nonaccrual | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 6,164 | 792 |
Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 2,286,517 | 1,990,440 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 233 | 9 |
Current | 96,187 | 107,396 |
Total loans | 96,420 | 107,405 |
Commercial loans | Owner-occupied commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 464 | 326 |
Current | 72,928 | 77,243 |
Total loans | 73,392 | 77,569 |
Commercial loans | Investor commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 12,567 | 5,391 |
Total loans | 12,567 | 5,391 |
Commercial loans | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 60,274 | 39,916 |
Total loans | 60,274 | 39,916 |
Commercial loans | Single tenant lease financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 4,680 | 0 |
Current | 991,199 | 919,440 |
Total loans | 995,879 | 919,440 |
Commercial loans | Public finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 687,094 | 706,342 |
Total loans | 687,094 | 706,342 |
Commercial loans | Healthcare finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 300,612 | 117,007 |
Total loans | 300,612 | 117,007 |
Commercial loans | Small business lending | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 54 | 0 |
Current | 60,225 | 17,370 |
Total loans | 60,279 | 17,370 |
Commercial loans | 30-59 Days Past Due | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 15 | 9 |
Commercial loans | 30-59 Days Past Due | Owner-occupied commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 92 |
Commercial loans | 30-59 Days Past Due | Investor commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 30-59 Days Past Due | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 30-59 Days Past Due | Single tenant lease financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 30-59 Days Past Due | Public finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 30-59 Days Past Due | Healthcare finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 30-59 Days Past Due | Small business lending | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 54 | 0 |
Commercial loans | 60-89 Days Past Due | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 96 | 0 |
Commercial loans | 60-89 Days Past Due | Owner-occupied commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 234 |
Commercial loans | 60-89 Days Past Due | Investor commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | Single tenant lease financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 4,680 | 0 |
Commercial loans | 60-89 Days Past Due | Public finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | Healthcare finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 60-89 Days Past Due | Small business lending | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or More Past Due | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 122 | 0 |
Commercial loans | 90 Days or More Past Due | Owner-occupied commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 464 | 0 |
Commercial loans | 90 Days or More Past Due | Investor commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or More Past Due | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or More Past Due | Single tenant lease financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or More Past Due | Public finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or More Past Due | Healthcare finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | 90 Days or More Past Due | Small business lending | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Commercial loans | Nonaccrual | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 226 | 195 |
Commercial loans | Nonaccrual | Owner-occupied commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 464 | 325 |
Commercial loans | Nonaccrual | Investor commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Commercial loans | Nonaccrual | Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Commercial loans | Nonaccrual | Single tenant lease financing | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 4,680 | 0 |
Commercial loans | Nonaccrual | Public finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Commercial loans | Nonaccrual | Healthcare finance | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Commercial loans | Nonaccrual | Small business lending | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 633,464 | 708,404 |
Consumer loans | Residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,177 | 3,216 |
Current | 312,672 | 396,682 |
Total loans | 313,849 | 399,898 |
Consumer loans | Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 55 |
Current | 24,306 | 28,680 |
Total loans | 24,306 | 28,735 |
Consumer loans | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 347 | 409 |
Current | 294,962 | 279,362 |
Total loans | 295,309 | 279,771 |
Consumer loans | 30-59 Days Past Due | Residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Consumer loans | 30-59 Days Past Due | Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Consumer loans | 30-59 Days Past Due | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 240 | 235 |
Consumer loans | 60-89 Days Past Due | Residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 3,118 |
Consumer loans | 60-89 Days Past Due | Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Consumer loans | 60-89 Days Past Due | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 107 | 170 |
Consumer loans | 90 Days or More Past Due | Residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,177 | 98 |
Consumer loans | 90 Days or More Past Due | Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 55 |
Consumer loans | 90 Days or More Past Due | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 0 | 4 |
Consumer loans | Nonaccrual | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 794 | 272 |
Consumer loans | Nonaccrual | Residential mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 761 | 175 |
Consumer loans | Nonaccrual | Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 55 |
Consumer loans | Nonaccrual | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | $ 33 | $ 42 |
Condensed Financial Information (Parent Company Only) - Condensed Statements of Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Expenses | |||||||||||
Interest on borrowings | $ 15,134 | $ 10,716 | $ 6,740 | ||||||||
Salaries and employee benefits | 27,014 | 23,174 | 21,164 | ||||||||
Consulting and professional fees | 3,669 | 3,055 | 3,091 | ||||||||
Premises and equipment | 6,059 | 4,996 | 4,183 | ||||||||
Income tax benefit | $ 602 | $ 449 | $ 340 | $ 526 | $ (334) | $ 743 | $ 781 | $ 862 | 1,917 | 2,052 | 7,702 |
Net income | $ 7,096 | $ 6,326 | $ 6,121 | $ 5,696 | $ 3,576 | $ 6,288 | $ 6,008 | $ 6,028 | 25,239 | 21,900 | 15,226 |
Parent Company | |||||||||||
Expenses | |||||||||||
Interest on borrowings | 3,804 | 2,616 | 2,724 | ||||||||
Salaries and employee benefits | 804 | 564 | 354 | ||||||||
Consulting and professional fees | 1,610 | 958 | 664 | ||||||||
Premises and equipment | 285 | 285 | 302 | ||||||||
Other | 408 | 315 | 258 | ||||||||
Total expenses | 6,911 | 4,738 | 4,302 | ||||||||
Loss before income tax and equity in undistributed net income of subsidiaries | (6,911) | (4,738) | (4,302) | ||||||||
Income tax benefit | (1,783) | (1,172) | (1,539) | ||||||||
Loss before equity in undistributed net income of subsidiaries | (5,128) | (3,566) | (2,763) | ||||||||
Equity in undistributed net income of subsidiaries | 30,367 | 25,466 | 17,989 | ||||||||
Net income | $ 25,239 | $ 21,900 | $ 15,226 |
Deposits - Scheduled Maturities (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Banking and Thrift [Abstract] | |
2020 | $ 943,678 |
2021 | 528,757 |
2022 | 124,544 |
2023 | 81,447 |
2024 | 69,081 |
Thereafter | 250 |
Time Deposits, Total | $ 1,747,757 |
Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consists of the following:
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Schedule of Effective Income Tax Rate Reconciliation | Income tax provision is reconciled to the statutory rate applied to pre-tax income. The statutory rate was 21%, 21% and 35% at December 31, 2019, 2018 and 2017, respectively.
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Schedule of Deferred Tax Assets and Liabilities | The net deferred tax asset at December 31, 2019 and 2018 consists of the following:
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Derivative Financial Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Derivative Instruments, Cumulative Basis Adjustments | The following table presents amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for interest rate swap derivatives designated as fair value accounting hedges as of December 31, 2019 and 2018.
1 These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. The amounts of the designated hedged items were $88.2 million and $88.2 million, at December 31, 2019 and 2018, respectively. |
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Schedule Of Derivative Instruments Of Fixed Rate Receivables | The following tables present a summary of interest rate swap derivatives designated as fair value accounting hedges of fixed-rate receivables used in the Company's asset/liability management activities at December 31, 2019 and December 31, 2018, identified by the underlying interest rate-sensitive instruments.
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Schedule Of Derivative Instruments Of Variable Rate Liabilities | The following tables present a summary of interest rate swap derivatives designated as cash flow accounting hedges of variable-rate liabilities used in the Company's asset/liability management activities at December 31, 2019 and December 31, 2018.
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the notional amount and fair value of interest rate swaps, IRLCs and forward contracts utilized by the Company at December 31, 2019 and 2018.
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table presents the effects of the Company's cash flow hedge relationships on the consolidated statements of comprehensive income during the twelve months ended December 31, 2019, 2018, and 2017.
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Schedule Of Derivative Instruments In Statements Of Income Fair Value | Fair values of IRLCs and forward contracts 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 presents the effects of the Company's cash flow hedge relationships on the consolidated statements of comprehensive income during the twelve months ended December 31, 2019, 2018, and 2017.
The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the consolidated statements of income for the twelve months ended December 31, 2019, 2018, and 2017.
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Derivative Instruments, Gain (Loss) | The following table presents the effects of the Company's interest rate swap agreements on the consolidated statements of income during the twelve months ended December 31, 2019, 2018, and 2017.
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Condensed Financial Information (Parent Company Only) - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Operating Activities | |||||||||||
Net income | $ 7,096 | $ 6,326 | $ 6,121 | $ 5,696 | $ 3,576 | $ 6,288 | $ 6,008 | $ 6,028 | $ 25,239 | $ 21,900 | $ 15,226 |
Depreciation and amortization | 6,926 | 5,667 | 5,299 | ||||||||
Share-based compensation expense | 1,680 | 1,596 | 1,038 | ||||||||
Net change in other assets | (42,079) | (11,807) | (2,273) | ||||||||
Net change in other liabilities | 5,270 | (83) | 554 | ||||||||
Net cash (used in) provided by operating activities | (43,577) | 29,356 | 24,624 | ||||||||
Investing activities | |||||||||||
Purchase of premises and equipment | (4,105) | (2,219) | (1,517) | ||||||||
Net cash used in investing activities | (313,273) | (638,713) | (908,151) | ||||||||
Financing activities | |||||||||||
Cash dividends paid | (2,418) | (2,230) | (1,675) | ||||||||
Net proceeds from issuance of subordinated debt | 35,418 | 0 | 0 | ||||||||
Repayment of subordinated debt | 0 | (3,000) | 0 | ||||||||
Net proceeds from common stock issuance | 0 | 54,334 | 51,636 | ||||||||
Repurchase of common stock | (9,784) | (216) | 0 | ||||||||
Other, net | (329) | (210) | (173) | ||||||||
Net cash provided by financing activities | 495,499 | 750,088 | 892,056 | ||||||||
Cash and cash equivalents, beginning of year | 188,712 | 188,712 | |||||||||
Cash and cash equivalents, end of year | 327,361 | 188,712 | 327,361 | 188,712 | |||||||
Parent Company | |||||||||||
Operating Activities | |||||||||||
Net income | 25,239 | 21,900 | 15,226 | ||||||||
Equity in undistributed net income of subsidiaries | (30,367) | (25,466) | (17,989) | ||||||||
Depreciation and amortization | 647 | 568 | 572 | ||||||||
Share-based compensation expense | 288 | 243 | 175 | ||||||||
Net change in other assets | (508) | 1,769 | (1,453) | ||||||||
Net change in other liabilities | (87) | 79 | (326) | ||||||||
Net cash (used in) provided by operating activities | (4,788) | (907) | (3,795) | ||||||||
Investing activities | |||||||||||
Capital contribution to the Bank | (25,000) | (35,000) | (42,000) | ||||||||
Purchase of premises and equipment | (13) | 0 | (148) | ||||||||
Net cash used in investing activities | (25,013) | (35,000) | (42,148) | ||||||||
Financing activities | |||||||||||
Cash dividends paid | (2,418) | (2,230) | (1,675) | ||||||||
Net proceeds from issuance of subordinated debt | 35,418 | 0 | 0 | ||||||||
Repayment of subordinated debt | 0 | (3,000) | 0 | ||||||||
Principal payment on loan from the Bank | (300) | (300) | (400) | ||||||||
Net proceeds from common stock issuance | 0 | 54,334 | 51,636 | ||||||||
Repurchase of common stock | (9,784) | (216) | 0 | ||||||||
Other, net | (93) | (210) | (173) | ||||||||
Net cash provided by financing activities | 22,823 | 48,378 | 49,388 | ||||||||
Net increase in cash and cash equivalents | (6,978) | 12,471 | 3,445 | ||||||||
Cash and cash equivalents, beginning of year | $ 45,281 | $ 32,810 | 45,281 | 32,810 | 29,365 | ||||||
Cash and cash equivalents, end of year | $ 38,303 | $ 45,281 | $ 38,303 | $ 45,281 | $ 32,810 |
Shareholders' Equity |
12 Months Ended |
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Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity In June 2018, the Company completed an underwritten public offering of 1,730,750 shares of its common stock at a price of $33.25 per share. The Company received net proceeds of approximately $54.3 million after deducting underwriting discounts and commissions and offering expenses. In September 2017, the Company completed an underwritten public offering of 1,895,750 shares of its common stock at a price of $29.00 per share. The Company received net proceeds of approximately $51.6 million after deducting underwriting discounts and commissions and offering expenses. |
Commitments and Credit Risk |
12 Months Ended |
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Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Credit Risk | Commitments and Credit Risk In the normal course of business, the Company makes various commitments to extend credit which are not reflected in the accompanying consolidated financial statements. At December 31, 2019 and 2018, the Company had outstanding loan commitments totaling approximately $254.4 million and $223.5 million, respectively. In addition, the Company is a limited partner in a Small Business Investment Company fund (the “SBIC Fund”). As of December 31, 2019, the Company has committed to contribute up to $2.3 million of capital to the SBIC Fund. Capital Commitments Capital expenditures contracted for at the balance sheet date but not yet recognized in the financial statements are associated with the construction of premises intended to house our future corporate headquarters. The Company has entered into construction-related contracts in the amount of $65.1 million. As of December 31, 2019, $61.3 million of such contract commitments had not yet been incurred. These commitments are due within 2 years. |
Consolidated Statements of Shareholders' Equity [Parenthetical] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 0.24 | $ 0.24 | $ 0.24 |
Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Amortized cost, at fair value | $ 546,640 | $ 499,893 |
Held-to-maturity securities, fair value | 62,560 | 22,418 |
Loans held-for-sale, Fair Value | 56,097 | 18,328 |
Unamortized discounts and debt issuance costs | $ 2,472 | $ 1,125 |
Preferred Stock, Par or Stated 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, shares outstanding (in shares) | 0 | 0 |
Voting Common Stock | ||
Common Stock, Par or Stated 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) | 9,741,800 | 10,170,778 |
Common stock, shares outstanding (in shares) | 9,741,800 | 10,170,778 |
Nonvoting Common Stock | ||
Common Stock, Par or Stated 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 Financial Information (Parent Company Only) - Condensed Balance Sheets (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Assets | ||||
Cash and cash equivalents | $ 327,361 | $ 188,712 | ||
Premises and equipment, net | 14,630 | 10,697 | ||
Accrued income and other assets | 67,066 | 37,716 | ||
Total assets | 4,100,083 | 3,541,692 | ||
Liabilities and shareholders’ equity | ||||
Subordinated debt, net of unamortized discounts and debt issuance costs of $2,472 in 2019 and $1,125 in 2018 | 69,528 | 33,875 | ||
Accrued expenses and other liabilities | 53,002 | 21,470 | ||
Total liabilities | 3,795,170 | 3,252,957 | ||
Total shareholders’ equity | 304,913 | 288,735 | $ 224,127 | $ 153,942 |
Total liabilities and shareholders’ equity | 4,100,083 | 3,541,692 | ||
Unamortized discounts and debt issuance costs | 2,472 | 1,125 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 38,303 | 45,281 | $ 32,810 | $ 29,365 |
Investment in common stock of subsidiaries | 332,352 | 274,158 | ||
Premises and equipment, net | 6,515 | 6,158 | ||
Accrued income and other assets | 2,156 | 1,554 | ||
Total assets | 379,326 | 327,151 | ||
Liabilities and shareholders’ equity | ||||
Subordinated debt, net of unamortized discounts and debt issuance costs of $2,472 in 2019 and $1,125 in 2018 | 69,528 | 33,875 | ||
Note payable to the Bank | 3,000 | 3,300 | ||
Accrued expenses and other liabilities | 1,885 | 1,241 | ||
Total liabilities | 74,413 | 38,416 | ||
Total shareholders’ equity | 304,913 | 288,735 | ||
Total liabilities and shareholders’ equity | 379,326 | $ 327,151 | ||
Unamortized discounts and debt issuance costs | $ 2,472 |
Deposits (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Banking and Thrift [Abstract] | ||
Noninterest-bearing demand deposit accounts | $ 57,115 | $ 43,301 |
Interest-bearing demand deposit accounts | 129,020 | 121,055 |
Regular savings accounts | 29,616 | 38,489 |
Money market accounts | 786,390 | 528,533 |
Certificates of deposits | 1,613,453 | 1,292,883 |
Brokered deposits | 538,369 | 647,090 |
Total deposits | 3,153,963 | 2,671,351 |
Time deposits (in the amount of $250 or more) | $ 536,028 | $ 494,403 |
Leases - Additional Information (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019
USD ($)
lease
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of leases | lease | 3 | ||
Operating lease cost | $ 758 | $ 724 | $ 711 |
Operating cash flows from operating leases | $ 814 | ||
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Remaining term of contract | 2 years | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Remaining term of contract | 4 years |
Derivative Financial Instruments - Gain (Loss) Recognized (Details) - Asset Derivatives - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
IRLCs | |||
Asset Derivatives | |||
Derivatives not designated as hedging instruments | $ 521 | $ (162) | $ (59) |
Forward contracts | |||
Asset Derivatives | |||
Derivatives not designated as hedging instruments | $ 207 | $ (279) | $ (519) |
Mortgage Banking Activities (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Mortgage Banking [Abstract] | |||
Loans originated for sale | $ 627,597,000 | $ 364,630,000 | $ 412,925,000 |
Proceeds from sale of loans originated for sale | 601,215,000 | 376,535,000 | 425,262,000 |
Proceeds from sale of loans held-for-investment | 100,500,000 | 0 | 42,300,000 |
Gain on loans sold | 10,275,000 | 6,102,000 | 7,775,000 |
Gain resulting from the change in fair value of loans held-for-sale | 538,000 | 57,000 | 638,000 |
Gain (loss) resulting from the change in fair value of derivatives | 728,000 | (441,000) | (577,000) |
Net revenue from mortgage banking activities | $ 11,541,000 | $ 5,718,000 | $ 7,836,000 |
Loans - Credit Risk Profile (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | $ 2,919,981 | $ 2,698,844 |
Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 6,164 | 792 |
Commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,286,517 | 1,990,440 |
Commercial loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,260,087 | 1,971,570 |
Commercial loans | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 15,186 | 10,921 |
Commercial loans | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 11,244 | 7,949 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 96,420 | 107,405 |
Commercial loans | Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 89,818 | 100,689 |
Commercial loans | Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 3,973 | 1,076 |
Commercial loans | Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,629 | 5,640 |
Commercial loans | Commercial and industrial | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 226 | 195 |
Commercial loans | Owner-occupied commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 73,392 | 77,569 |
Commercial loans | Owner-occupied commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 71,068 | 73,593 |
Commercial loans | Owner-occupied commercial real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 1,727 | 2,623 |
Commercial loans | Owner-occupied commercial real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 597 | 1,353 |
Commercial loans | Owner-occupied commercial real estate | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 464 | 325 |
Commercial loans | Investor commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 12,567 | 5,391 |
Commercial loans | Investor commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 12,567 | 5,391 |
Commercial loans | Investor commercial real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Investor commercial real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Investor commercial real estate | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 60,274 | 39,916 |
Commercial loans | Construction | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 60,274 | 39,916 |
Commercial loans | Construction | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Construction | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Construction | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Single tenant lease financing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 995,879 | 919,440 |
Commercial loans | Single tenant lease financing | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 983,448 | 913,984 |
Commercial loans | Single tenant lease financing | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 7,751 | 5,456 |
Commercial loans | Single tenant lease financing | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 4,680 | 0 |
Commercial loans | Single tenant lease financing | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 4,680 | 0 |
Commercial loans | Public finance | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 687,094 | 706,342 |
Commercial loans | Public finance | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 687,094 | 706,342 |
Commercial loans | Public finance | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Public finance | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Public finance | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Healthcare finance | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 300,612 | 117,007 |
Commercial loans | Healthcare finance | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 300,612 | 117,007 |
Commercial loans | Healthcare finance | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Healthcare finance | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Healthcare finance | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Commercial loans | Small business lending | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 60,279 | 17,370 |
Commercial loans | Small business lending | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 55,206 | 14,648 |
Commercial loans | Small business lending | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 1,735 | 1,766 |
Commercial loans | Small business lending | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 3,338 | 956 |
Commercial loans | Small business lending | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 0 |
Consumer loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 633,464 | 708,404 |
Consumer loans | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 632,670 | 708,132 |
Consumer loans | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 794 | 272 |
Consumer loans | Residential mortgage | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 313,849 | 399,898 |
Consumer loans | Residential mortgage | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 313,088 | 399,723 |
Consumer loans | Residential mortgage | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 761 | 175 |
Consumer loans | Home equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 24,306 | 28,735 |
Consumer loans | Home equity | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 24,306 | 28,680 |
Consumer loans | Home equity | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | 55 |
Consumer loans | Other consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 295,309 | 279,771 |
Consumer loans | Other consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 295,276 | 279,729 |
Consumer loans | Other consumer | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | $ 33 | $ 42 |
Condensed Financial Information (Parent Company Only) - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Schedule Of Condensed Comprehensive Income [Line Items] | |||||||||||
Net income | $ 7,096 | $ 6,326 | $ 6,121 | $ 5,696 | $ 3,576 | $ 6,288 | $ 6,008 | $ 6,028 | $ 25,239 | $ 21,900 | $ 15,226 |
Other comprehensive income (loss) | |||||||||||
Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax | 12,072 | (10,466) | 6,280 | ||||||||
Reclassification adjustment for losses realized | 458 | 0 | 8 | ||||||||
Net unrealized holding losses on cash flow hedging derivatives recorded within other comprehensive income before income tax | (9,071) | (4,358) | 0 | ||||||||
Other comprehensive income (loss) before tax | 3,459 | (14,824) | 6,288 | ||||||||
Income tax provision (benefit) | 1,109 | (4,365) | 2,039 | ||||||||
Other comprehensive income (loss) - net of tax | 2,350 | (10,459) | 4,249 | ||||||||
Comprehensive income | 27,589 | 11,441 | 19,475 | ||||||||
Parent Company | |||||||||||
Schedule Of Condensed Comprehensive Income [Line Items] | |||||||||||
Net income | 25,239 | 21,900 | 15,226 | ||||||||
Other comprehensive income (loss) | |||||||||||
Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax | 12,072 | (10,466) | 6,280 | ||||||||
Reclassification adjustment for losses realized | 458 | 0 | 8 | ||||||||
Net unrealized holding losses on cash flow hedging derivatives recorded within other comprehensive income before income tax | (9,071) | (4,358) | 0 | ||||||||
Other comprehensive income (loss) before tax | 3,459 | (14,824) | 6,288 | ||||||||
Other comprehensive income (loss) - net of tax | 2,350 | (10,459) | 4,249 | ||||||||
Comprehensive income | $ 27,589 | $ 11,441 | $ 19,475 |
Regulatory Capital Requirements (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following tables present actual and required capital ratios as of December 31, 2019 and 2018 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of December 31, 2019 and 2018 based on the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
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Accumulated Other Comprehensive Loss (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Amounts reclassified from accumulated other comprehensive loss and the affected line items in the consolidated statements of income during the years ended December 31, 2019, 2018 and 2017 were as follows:
1 Represents the reclassification of stranded income tax effects to Retained Earnings upon adoption of ASU 2018-02 and ASU 2016-01. |
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 interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position. Additionally, 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. The Company entered into various interest rate swap agreements designated and qualifying as accounting hedges during the reported periods. Designating an interest rate swap as an accounting hedge allows the Company to recognize gains and losses, less any ineffectiveness, in the income statement within the same period that the hedged item affects earnings. The Company includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related interest rate swaps. For derivative instruments that are designated and qualify as cash flow hedges, any gains or losses related to changes in fair value are recorded in accumulated other comprehensive loss, net of tax. The fair value of interest rate swaps with a positive fair value are reported in accrued income and other assets in the consolidated balance sheets while interest rate swaps with a negative fair value are reported in accrued expenses and other liabilities in the consolidated balance sheets. The IRLCs and forward contracts are not designated as accounting hedges and are recorded at fair value with changes in fair value reflected in noninterest income in the 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 consolidated balance sheets, while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the consolidated balance sheets. The following table presents amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for interest rate swap derivatives designated as fair value accounting hedges as of December 31, 2019 and 2018.
1 These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. The amounts of the designated hedged items were $88.2 million and $88.2 million, at December 31, 2019 and 2018, respectively. The following tables present a summary of interest rate swap derivatives designated as fair value accounting hedges of fixed-rate receivables used in the Company's asset/liability management activities at December 31, 2019 and December 31, 2018, identified by the underlying interest rate-sensitive instruments.
The following tables present a summary of interest rate swap derivatives designated as cash flow accounting hedges of variable-rate liabilities used in the Company's asset/liability management activities at December 31, 2019 and December 31, 2018.
These derivative financial instruments were entered into for the purpose of managing the interest rate risk of certain assets and liabilities. The Company pledged $42.3 million and $7.0 million of cash collateral to counterparties as security for its obligations related to these interest rate swap transactions at December 31, 2019 and 2018, respectively. Collateral posted and received is dependent on the market valuation of the underlying hedges. The following table presents the notional amount and fair value of interest rate swaps, IRLCs and forward contracts utilized by the Company at December 31, 2019 and 2018.
The fair values of interest rate swaps were estimated using a discounted cash flow method that incorporates current market interest rates as of the balance sheet date. Fair values of IRLCs and forward contracts 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 presents the effects of the Company's cash flow hedge relationships on the consolidated statements of comprehensive income during the twelve months ended December 31, 2019, 2018, and 2017.
The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the consolidated statements of income for the twelve months ended December 31, 2019, 2018, and 2017.
The following table presents the effects of the Company's interest rate swap agreements on the consolidated statements of income during the twelve months ended December 31, 2019, 2018, and 2017.
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Regulatory Capital Requirements |
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Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Requirements | Regulatory Capital Requirements The Company and the Bank are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors. The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015, subject to a phase-in period for certain provisions. Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios of Common Equity Tier 1 capital, Tier 1 capital and Total capital, as defined in the regulations, to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets (“Leverage Ratio”). The Basel III Capital Rules were fully phased in on January 1, 2019 and require the Company and the Bank to maintain: 1) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 7.0%); 2) a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%); 3) a minimum ratio of Total capital to risk-weighted assets of 8.0%, plus the capital conservation buffer (resulting in a minimum Total capital ratio of 10.5%); and 4) a minimum Leverage Ratio of 4.0%. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and was phased in over a four-year period, increasing by increments of that amount on each subsequent January 1 until it reached 2.5% on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress. Failure to maintain the minimum Common Equity Tier 1 capital ratio plus the capital conservation buffer will result in potential restrictions on a banking institution’s ability to pay dividends, repurchase stock and/or pay discretionary compensation to its employees. The following tables present actual and required capital ratios as of December 31, 2019 and 2018 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of December 31, 2019 and 2018 based on the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
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Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands |
Total |
Common Stock
Voting and Nonvoting Common Stock
|
Retained Earnings |
Accumulated Other Comprehensive Loss |
---|---|---|---|---|
Balance at Dec. 31, 2016 | $ 153,942 | $ 119,506 | $ 43,704 | $ (9,268) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 15,226 | 15,226 | ||
Other comprehensive income (loss) | 4,249 | 4,249 | ||
Cash dividends declared | (1,827) | (1,827) | ||
Net cash proceeds from common stock issuance | 51,636 | 51,636 | ||
Recognition of the fair value of share-based compensation | 1,038 | 1,038 | ||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 36 | 36 | ||
Common stock redeemed for the net settlement of share-based awards | (173) | (173) | ||
Balance at Dec. 31, 2017 | 224,127 | 172,043 | 57,103 | (5,019) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 21,900 | 21,900 | ||
Other comprehensive income (loss) | (10,459) | (10,459) | ||
Cash dividends declared | (2,377) | (2,377) | ||
Net cash proceeds from common stock issuance | 54,334 | 54,334 | ||
Repurchase of common stock | (216) | (216) | ||
Recognition of the fair value of share-based compensation | 1,596 | 1,596 | ||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 40 | 40 | ||
Common stock redeemed for the net settlement of share-based awards | (210) | (210) | ||
Balance at Dec. 31, 2018 | 288,735 | 227,587 | 77,689 | (16,541) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Retained earnings | 77,689 | |||
Net income | 25,239 | 25,239 | ||
Other comprehensive income (loss) | 2,350 | 2,350 | ||
Cash dividends declared | (2,426) | (2,426) | ||
Repurchase of common stock | (9,784) | (9,784) | ||
Recognition of the fair value of share-based compensation | 1,680 | 1,680 | ||
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units | 34 | 34 | ||
Common stock redeemed for the net settlement of share-based awards | (94) | (94) | ||
Balance at Dec. 31, 2019 | 304,913 | $ 219,423 | $ 99,681 | $ (14,191) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Retained earnings | $ 99,681 |
Consolidated Balance Sheets - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets | ||
Cash and due from banks | $ 5,061 | $ 7,080 |
Interest-bearing demand deposits | 322,300 | 181,632 |
Total cash and cash equivalents | 327,361 | 188,712 |
Securities available-for-sale - at fair value (amortized cost of $546,640 in 2019 and $499,893 in 2018) | 540,852 | 481,345 |
Securities held-to-maturity - at amortized cost (fair value of $62,560 in 2019 and $22,418 in 2018) | 61,878 | 22,750 |
Loans held-for-sale (includes $56,097 in 2019 and $18,328 in 2018 at fair value) | 56,097 | 18,328 |
Loans | 2,963,547 | 2,716,228 |
Allowance for loan losses | (21,840) | (17,896) |
Net loans | 2,941,707 | 2,698,332 |
Accrued interest receivable | 18,607 | 16,822 |
Federal Home Loan Bank of Indianapolis stock | 25,650 | 23,625 |
Cash surrender value of bank-owned life insurance | 37,002 | 36,059 |
Premises and equipment, net | 14,630 | 10,697 |
Goodwill | 4,687 | 4,687 |
Servicing asset | 2,481 | 0 |
Other real estate owned | 2,065 | 2,619 |
Accrued income and other assets | 67,066 | 37,716 |
Total assets | 4,100,083 | 3,541,692 |
Liabilities | ||
Noninterest-bearing deposits | 57,115 | 43,301 |
Interest-bearing deposits | 3,096,848 | 2,628,050 |
Total deposits | 3,153,963 | 2,671,351 |
Advances from Federal Home Loan Bank | 514,910 | 525,153 |
Subordinated debt, net of unamortized discounts and debt issuance costs of $2,472 in 2019 and $1,125 in 2018 | 69,528 | 33,875 |
Accrued interest payable | 3,767 | 1,108 |
Accrued expenses and other liabilities | 53,002 | 21,470 |
Total liabilities | 3,795,170 | 3,252,957 |
Commitments and Contingencies | ||
Shareholders’ equity | ||
Preferred stock, no par value; 4,913,779 shares authorized; issued and outstanding - none | 0 | 0 |
Retained earnings | 99,681 | 77,689 |
Accumulated other comprehensive loss | (14,191) | (16,541) |
Total shareholders’ equity | 304,913 | 288,735 |
Total liabilities and shareholders’ equity | 4,100,083 | 3,541,692 |
Voting Common Stock | ||
Shareholders’ equity | ||
Voting and nonvoting common stock | 219,423 | 227,587 |
Nonvoting Common Stock | ||
Shareholders’ equity | ||
Voting and nonvoting common stock | $ 0 | $ 0 |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [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.
(1) Potential dilutive common shares are excluded from the computation of diluted EPS in the periods where the effect would be antidilutive. Excluded from the computation of diluted EPS were weighted-average antidilutive shares totaling 15,758 and 8,523 for the years ended December 31, 2019 and 2018, respectively. |
Leases (Tables) |
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The following table shows the components of lease expense.
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Lessee, Supplemental Cash Flow | The following table shows supplemental cash flow information related to leases.
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Lessee, Supplemental Balance Sheet | The following table shows the operating leases’ impact on the consolidated balance sheets. The Company elected not to include short-term leases (leases with original terms of 12 months or less) or equipment leases, as those amounts are insignificant. The Company’s leases do not provide an implicit rate. The discount rate utilized to determine the present value of lease payments is the Company’s incremental borrowing rate based on the information available at the lease inception date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
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Lessee, Operating Lease, Liability, Maturity | The following table shows the future minimum payments of operating leases with initial or remaining terms of one year or more as of December 31, 2019.
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Subordinated Debt |
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated Debt | Subordinated Debt In October 2015, the Company entered into a term loan in the principal amount of $10.0 million, evidenced by a term note due 2025 (the “2025 Note”). The 2025 Note bears a fixed interest rate of 6.4375% per year, payable quarterly, and is scheduled to mature on October 1, 2025. The 2025 Note is an unsecured subordinated obligation of the Company and may be repaid, without penalty, on any interest payment date on or after October 15, 2020. The 2025 Note is intended to qualify as Tier 2 capital under regulatory guidelines. In September 2016, the Company issued $25.0 million aggregate principal amount of 6.0% Fixed-to-Floating Rate Subordinated Notes due 2026 (the “2026 Notes”) in a public offering. The 2026 Notes initially bear a fixed interest rate of 6.00% per year to, but excluding, September 30, 2021, and thereafter a floating rate equal to the then-current three-month London Interbank Offered Rate (“LIBOR”) plus 485 basis points. LIBOR will be phased-out after 2021 and the transition to another benchmark rate could have an adverse effect on the 2026 Notes. Refer to Part I Item 1A. Risk Factors for more information on the LIBOR phase out. All interest on the 2026 Notes is payable quarterly. The 2026 Notes are scheduled to mature on September 30, 2026. The 2026 Notes are unsecured subordinated obligations of the Company and may be repaid, without penalty, on any interest payment date on or after September 30, 2021. The 2026 Notes are intended to qualify as Tier 2 capital under regulatory guidelines. In June 2019, the Company issued $37.0 million aggregate principal amount of 6.0% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2029 Notes”) in a public offering. The 2029 Notes initially bear a fixed interest rate of 6.0% per year to, but excluding, June 30, 2024, and thereafter a floating rate equal to the then-current benchmark rate (initially three-month LIBOR rate) plus 411 basis points. All interest on the 2029 Notes is payable quarterly. The 2029 Notes are scheduled to mature on June 30, 2029. The 2029 Notes are unsecured subordinated obligations of the Company and may be repaid, without penalty, on any interest payment date on or after June 30, 2024. The 2029 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 2025 Note, the 2026 Notes and the 2029 Notes as of December 31, 2019 and 2018.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU 2016-02 - Leases (Topic 842) and elected the optional transition method, which allows the Company to not separate non-lease components from the associated lease component if certain conditions are met. In addition, the Company elected not to adjust prior comparative periods. Refer to Note 22 for further information regarding transition guidance related to the new standard. The Company has three operating leases that are used for general office operations with remaining lease terms of two to four years. With the adoption of ASU 2016-02, operating lease agreements are required to be recognized on the consolidated balance sheets as a right-of-use asset and a corresponding lease liability. The following table shows the components of lease expense.
The following table shows supplemental cash flow information related to leases.
The following table shows the operating leases’ impact on the consolidated balance sheets. The Company elected not to include short-term leases (leases with original terms of 12 months or less) or equipment leases, as those amounts are insignificant. The Company’s leases do not provide an implicit rate. The discount rate utilized to determine the present value of lease payments is the Company’s incremental borrowing rate based on the information available at the lease inception date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
The following table shows the future minimum payments of operating leases with initial or remaining terms of one year or more as of December 31, 2019.
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Cash and Cash Equivalents |
12 Months Ended |
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Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents At December 31, 2019, the Company’s interest-bearing and noninterest-bearing cash accounts at other institutions exceeded the limits for full FDIC insurance coverage by $275.9 million. In addition, approximately $1.9 million and $44.6 million of cash was held by the FHLB of Indianapolis and Federal Reserve Bank of Chicago, respectively, which are not federally insured. The Company is required to maintain reserve funds in cash and/or on deposit with the Federal Reserve Bank. The reserve required at December 31, 2019 was $1.7 million. |
FHLB Advances (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Banking and Thrift [Abstract] | ||
2020 | $ 110,000 | |
2021 | 0 | |
2022 | 0 | |
2023 | 35,000 | |
2024 | 145,000 | |
Thereafter | 225,000 | |
Summary total | 515,000 | |
Net deferred prepayment gain on advance restructure | (90) | |
Total | $ 514,910 | $ 525,200 |
Income Taxes (Details Textual) |
12 Months Ended | ||
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Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Income Tax Disclosure [Abstract] | |||
Statutory rate (as a percent) | 21.00% | 21.00% | 35.00% |
Commitments and Credit Risk (Details) - USD ($) $ in Millions |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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Other Commitments [Line Items] | ||
Loan commitments | $ 254.4 | $ 223.5 |
Capital committed to Small Business Investment Company fund, not contributed | 2.3 | |
Capital Addition Purchase Commitments | ||
Other Commitments [Line Items] | ||
Construction related contract commitment | 65.1 | |
Construction related contract commitment, not yet incurred | $ 61.3 | |
Construction related contract commitment, term | 2 years |
Benefit Plans - Restricted Stock (Details) |
12 Months Ended |
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Dec. 31, 2019
$ / shares
shares
| |
Restricted Stock Units | |
Restricted Stock Awards (in shares) | |
Nonvested at beginning of period | shares | 75,554 |
Granted | shares | 74,698 |
Vested | shares | (36,218) |
Forfeited | shares | (6,790) |
Nonvested at end of period | shares | 107,244 |
Weighted-Average Grant Date Fair Value Per Share (in dollars per share) | |
Weighted-Average Grant Date Fair Value Per Share Nonvested, Beginning Balance (in dollars per share) | $ / shares | $ 35.34 |
Weighted-Average Grant Date Fair Value Per Share Granted (in dollars per share) | $ / shares | 24.61 |
Weighted-Average Grant Date Fair Value Per Share Vested (in dollars per share) | $ / shares | 33.08 |
Weighted-Average Grant Date Fair Value Per Share Forfeited (in dollars per share) | $ / shares | 29.10 |
Weighted-Average Grant Date Fair Value Per Share Nonvested, Ending Balance (in dollars per share) | $ / shares | $ 29.03 |
Restricted Stock Awards | |
Restricted Stock Awards (in shares) | |
Nonvested at beginning of period | shares | 1,666 |
Granted | shares | 11,742 |
Vested | shares | (13,408) |
Forfeited | shares | 0 |
Nonvested at end of period | shares | 0 |
Weighted-Average Grant Date Fair Value Per Share (in dollars per share) | |
Weighted-Average Grant Date Fair Value Per Share Nonvested, Beginning Balance (in dollars per share) | $ / shares | $ 24.44 |
Weighted-Average Grant Date Fair Value Per Share Granted (in dollars per share) | $ / shares | 24.62 |
Weighted-Average Grant Date Fair Value Per Share Vested (in dollars per share) | $ / shares | 24.60 |
Weighted-Average Grant Date Fair Value Per Share Forfeited (in dollars per share) | $ / shares | 0.00 |
Weighted-Average Grant Date Fair Value Per Share Nonvested, Ending Balance (in dollars per share) | $ / shares | $ 0.00 |
Deferred Stock Units | |
Restricted Stock Awards (in shares) | |
Nonvested at beginning of period | shares | 0 |
Granted | shares | 11 |
Vested | shares | (11) |
Forfeited | shares | 0 |
Nonvested at end of period | shares | 0 |
Weighted-Average Grant Date Fair Value Per Share (in dollars per share) | |
Weighted-Average Grant Date Fair Value Per Share Nonvested, Beginning Balance (in dollars per share) | $ / shares | $ 0.00 |
Weighted-Average Grant Date Fair Value Per Share Granted (in dollars per share) | $ / shares | 21.88 |
Weighted-Average Grant Date Fair Value Per Share Vested (in dollars per share) | $ / shares | 21.88 |
Weighted-Average Grant Date Fair Value Per Share Forfeited (in dollars per share) | $ / shares | 0.00 |
Weighted-Average Grant Date Fair Value Per Share Nonvested, Ending Balance (in dollars per share) | $ / shares | $ 0.00 |
Income Taxes - Income Tax Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||||||||||
Statutory rate times pre-tax income | $ 5,703 | $ 5,030 | $ 8,025 | ||||||||
(Subtract) add the tax effect of: | |||||||||||
Income from tax-exempt securities and loans | (4,881) | (3,833) | (2,512) | ||||||||
State income tax, net of federal tax effect | 1,285 | 1,164 | 693 | ||||||||
Bank-owned life insurance | (198) | (200) | (318) | ||||||||
Net deferred tax asset revaluation | 0 | 0 | 1,846 | ||||||||
Tax credits | (181) | (180) | 0 | ||||||||
Other differences | 189 | 71 | (32) | ||||||||
Total | $ 602 | $ 449 | $ 340 | $ 526 | $ (334) | $ 743 | $ 781 | $ 862 | $ 1,917 | $ 2,052 | $ 7,702 |
Fair Value of Financial Instruments - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Carrying Value | $ 327,361 | $ 188,712 |
Debt Securities, Held-to-maturity | 61,878 | 22,750 |
Held-to-maturity securities, fair value | 62,560 | 22,418 |
Loans | 2,963,547 | 2,716,228 |
Net loans, Carrying Amount | 2,941,707 | 2,698,332 |
Accrued interest receivable, Carrying Amount | 18,607 | 16,822 |
FHLB stock, Carrying Amount | 25,650 | 23,625 |
Deposits, Carrying Amount | 3,153,963 | 2,671,351 |
FHLB advances, Carrying Amount | 514,910 | 525,153 |
Subordinated Debt, Carrying Value | 69,528 | 33,875 |
Accrued interest payable, Carrying Amount | 3,767 | 1,108 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, Fair Value | 327,361 | 188,712 |
Held-to-maturity securities, fair value | 62,560 | 22,418 |
Loans receivable - net, Fair Value | 2,876,688 | 2,646,060 |
Accrued interest receivable, Fair Value | 18,607 | 16,822 |
FHLB stock, Fair Value | 25,650 | 23,625 |
Deposits, Fair Value | 3,232,065 | 2,687,666 |
FHLB advances, Fair Value | 520,950 | 520,120 |
Subordinated Debt, Fair Value | 75,206 | 34,490 |
Accrued interest payable, Fair Value | 3,767 | 1,108 |
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, Fair Value | 327,361 | 188,712 |
Held-to-maturity securities, fair value | 0 | 0 |
Loans receivable - net, Fair Value | 0 | 0 |
Accrued interest receivable, Fair Value | 18,607 | 16,822 |
FHLB stock, Fair Value | 0 | 0 |
Deposits, Fair Value | 1,002,141 | 731,378 |
FHLB advances, Fair Value | 0 | 0 |
Subordinated Debt, Fair Value | 64,996 | 24,250 |
Accrued interest payable, Fair Value | 3,767 | 1,108 |
Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, Fair Value | 0 | 0 |
Held-to-maturity securities, fair value | 62,560 | 22,418 |
Loans receivable - net, Fair Value | 0 | 0 |
Accrued interest receivable, Fair Value | 0 | 0 |
FHLB stock, Fair Value | 25,650 | 23,625 |
Deposits, Fair Value | 0 | 0 |
FHLB advances, Fair Value | 520,950 | 520,120 |
Subordinated Debt, Fair Value | 10,210 | 10,240 |
Accrued interest payable, Fair Value | 0 | 0 |
Fair Value | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, Fair Value | 0 | 0 |
Held-to-maturity securities, fair value | 0 | 0 |
Loans receivable - net, Fair Value | 2,876,688 | 2,646,060 |
Accrued interest receivable, Fair Value | 0 | 0 |
FHLB stock, Fair Value | 0 | 0 |
Deposits, Fair Value | 2,229,924 | 1,956,288 |
FHLB advances, Fair Value | 0 | 0 |
Subordinated Debt, Fair Value | 0 | 0 |
Accrued interest payable, Fair Value | $ 0 | $ 0 |
Securities - Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | |||
Loss realized in earnings | $ (458) | $ 0 | $ (8) |
Total reclassified amount before tax | (458) | 0 | (8) |
Tax benefit | (124) | 0 | (3) |
Total reclassifications out of accumulated other comprehensive loss | $ (334) | $ 0 | $ (5) |
Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2006 |
|
Significant Accounting Policies [Line Items] | ||
Date of incorporation | Sep. 15, 2005 | |
Ownership (as a percent) | 100.00% | |
Equipment | Minimum | ||
Significant Accounting Policies [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Equipment | Maximum | ||
Significant Accounting Policies [Line Items] | ||
Estimated useful lives (in years) | 5 years | |
Land Improvements | ||
Significant Accounting Policies [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Buildings | ||
Significant Accounting Policies [Line Items] | ||
Estimated useful lives (in years) | 39 years |
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