Florida (State or other jurisdiction of incorporation or organization) | 65-0032379 (I.R.S. Employer Identification No.) |
220 Alhambra Circle Coral Gables, Florida | 33134 |
(Address of principal executive offices) | (Zip Code) |
(305) 460-4038 | |
Registrant’s telephone number, including area code |
Title of each class | Trading Symbols | Name of exchange on which registered |
Class A Common Stock | AMTB | NASDAQ |
Class B Common Stock | AMTBB | NASDAQ |
Large accelerated filer ¨ | Accelerated filer ¨ | Smaller reporting company ¨ | Emerging growth company ý | |||
Non-accelerated filer ý (Do not check if a smaller reporting company) |
Class | Outstanding as of August 12, 2019 | |
Class A Common Stock, $0.10 par value per share | 28,985,996 shares of Class A Common Stock | |
Class B Common Stock, $0.10 par value per share | 14,218,596 shares of Class B Common Stock |
FINANCIAL INFORMATION | Page | |
(in thousands, except per share data) | (Unaudited) June 30, 2019 | December 31, 2018 | |||||
Assets | |||||||
Cash and due from banks | $ | 25,813 | $ | 25,756 | |||
Interest earning deposits with banks | 64,504 | 59,954 | |||||
Cash and cash equivalents | 90,317 | 85,710 | |||||
Securities | |||||||
Available for sale | 1,501,222 | 1,586,051 | |||||
Held to maturity | 81,240 | 85,188 | |||||
Federal Reserve Bank and Federal Home Loan Bank stock | 68,170 | 70,189 | |||||
Securities | 1,650,632 | 1,741,428 | |||||
Loans held for investment, gross | 5,812,755 | 5,920,175 | |||||
Less: Allowance for loan losses | 57,404 | 61,762 | |||||
Loans held for investment, net | 5,755,351 | 5,858,413 | |||||
Bank owned life insurance | 208,965 | 206,142 | |||||
Premises and equipment, net | 124,456 | 123,503 | |||||
Deferred tax assets, net | 7,014 | 16,310 | |||||
Goodwill | 19,193 | 19,193 | |||||
Accrued interest receivable and other assets | 70,898 | 73,648 | |||||
Total assets | $ | 7,926,826 | $ | 8,124,347 | |||
Liabilities and Stockholders' Equity | |||||||
Deposits | |||||||
Demand | |||||||
Noninterest bearing | $ | 785,727 | $ | 768,822 | |||
Interest bearing | 1,183,051 | 1,288,030 | |||||
Savings and money market | 1,510,832 | 1,588,703 | |||||
Time | 2,339,771 | 2,387,131 | |||||
Total deposits | 5,819,381 | 6,032,686 | |||||
Advances from the Federal Home Loan Bank and other borrowings | 1,125,000 | 1,166,000 | |||||
Junior subordinated debentures held by trust subsidiaries | 118,110 | 118,110 | |||||
Accounts payable, accrued liabilities and other liabilities | 57,967 | 60,133 | |||||
Total liabilities | 7,120,458 | 7,376,929 | |||||
Commitments and contingencies (Note 12) | |||||||
Stockholders’ equity | |||||||
Class A common stock, $0.10 par value, 400 million shares authorized; 28,985,996 shares issued and outstanding (2018: 26,851,832 shares issued and outstanding) | 2,899 | 2,686 | |||||
Class B common stock, $0.10 par value, 100 million shares authorized; 17,751,053 shares issued; 14,218,596 shares outstanding (2018: 16,330,917 shares outstanding) | 1,775 | 1,775 | |||||
Additional paid in capital | 417,338 | 385,367 | |||||
Treasury stock, at cost; 3,532,457 shares of Class B common stock (2018: 1,420,136 shares of Class B common stock) | (46,373 | ) | (17,908 | ) | |||
Retained earnings | 419,590 | 393,662 | |||||
Accumulated other comprehensive income (loss) | 11,139 | (18,164 | ) | ||||
Total stockholders' equity | 806,368 | 747,418 | |||||
Total liabilities and stockholders' equity | $ | 7,926,826 | $ | 8,124,347 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Interest income | |||||||||||||||
Loans | $ | 66,801 | $ | 62,448 | $ | 133,523 | $ | 122,118 | |||||||
Investment securities | 11,886 | 12,709 | 24,467 | 24,450 | |||||||||||
Interest earning deposits with banks | 539 | 759 | 1,543 | 1,279 | |||||||||||
Total interest income | 79,226 | 75,916 | 159,533 | 147,847 | |||||||||||
Interest expense | |||||||||||||||
Interest bearing demand deposits | 301 | 113 | 575 | 202 | |||||||||||
Savings and money market deposits | 4,014 | 3,104 | 7,747 | 5,688 | |||||||||||
Time deposits | 12,740 | 10,172 | 25,293 | 18,872 | |||||||||||
Advances from the Federal Home Loan Bank | 6,292 | 6,511 | 12,497 | 12,501 | |||||||||||
Junior subordinated debentures | 2,090 | 2,025 | 4,195 | 3,960 | |||||||||||
Securities sold under agreements to repurchase | — | 2 | — | 2 | |||||||||||
Total interest expense | 25,437 | 21,927 | 50,307 | 41,225 | |||||||||||
Net interest income | 53,789 | 53,989 | 109,226 | 106,622 | |||||||||||
(Reversal of) provision for loan losses | (1,350 | ) | 150 | (1,350 | ) | 150 | |||||||||
Net interest income after (reversal of) provision for loan losses | 55,139 | 53,839 | 110,576 | 106,472 | |||||||||||
Noninterest income | |||||||||||||||
Deposits and service fees | 4,341 | 4,471 | 8,427 | 9,053 | |||||||||||
Brokerage, advisory and fiduciary activities | 3,736 | 4,426 | 7,424 | 8,841 | |||||||||||
Change in cash surrender value of bank owned life insurance | 1,419 | 1,474 | 2,823 | 2,918 | |||||||||||
Cards and trade finance servicing fees | 1,419 | 1,173 | 2,334 | 2,235 | |||||||||||
Gain on early extinguishment of advances from the Federal Home Loan Bank | — | 882 | 557 | 882 | |||||||||||
Securities gains, net | 992 | 16 | 996 | 16 | |||||||||||
Data processing and fees for other services | 365 | 613 | 885 | 1,494 | |||||||||||
Other noninterest income | 1,875 | 1,931 | 3,857 | 3,492 | |||||||||||
Total noninterest income | 14,147 | 14,986 | 27,303 | 28,931 | |||||||||||
Noninterest expense | |||||||||||||||
Salaries and employee benefits | 34,057 | 34,932 | 67,494 | 68,973 | |||||||||||
Occupancy and equipment | 4,232 | 4,060 | 8,274 | 7,775 | |||||||||||
Professional and other services fees | 3,954 | 5,387 | 7,398 | 11,831 | |||||||||||
Telecommunication and data processing | 3,233 | 3,011 | 6,259 | 6,095 | |||||||||||
Depreciation and amortization | 2,010 | 1,945 | 3,952 | 4,086 | |||||||||||
FDIC assessments and insurance | 1,177 | 1,468 | 2,570 | 2,915 | |||||||||||
Other operating expenses | 4,242 | 1,835 | 8,903 | 6,608 | |||||||||||
Total noninterest expenses | 52,905 | 52,638 | 104,850 | 108,283 | |||||||||||
Net income before income tax | 16,381 | 16,187 | 33,029 | 27,120 | |||||||||||
Income tax expense | (3,524 | ) | (5,764 | ) | (7,101 | ) | (7,268 | ) | |||||||
Net income | $ | 12,857 | $ | 10,423 | $ | 25,928 | $ | 19,852 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||
Net unrealized holding gains (losses) on securities available for sale arising during the period | $ | 14,313 | $ | (5,454 | ) | $ | 30,591 | $ | (20,431 | ) | |||||
Net unrealized holding gains (losses) on cash flow hedges arising during the period | — | 2,139 | (11 | ) | 6,352 | ||||||||||
Reclassification adjustment for net (gains) losses included in net income | (1,025 | ) | 2 | (1,277 | ) | 159 | |||||||||
Other comprehensive income (loss) | 13,288 | (3,313 | ) | 29,303 | (13,920 | ) | |||||||||
Comprehensive income | $ | 26,145 | $ | 7,110 | $ | 55,231 | $ | 5,932 | |||||||
Earnings Per Share (Note 14): | |||||||||||||||
Basic earnings per common share | $ | 0.30 | $ | 0.25 | $ | 0.61 | $ | 0.47 | |||||||
Diluted earnings per common share | $ | 0.30 | $ | 0.25 | $ | 0.60 | $ | 0.47 |
Common Stock | Additional Paid in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Stockholders' Equity | ||||||||||||||||||||||||||||
(in thousands, except share data) | Shares Outstanding | Issued Shares - Par Value | |||||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||||||||||||||||||||
Balance at December 31, 2017 | 24,737,470 | 17,751,053 | $ | 2,474 | $ | 1,775 | $ | 367,505 | $ | — | $ | 387,829 | $ | (6,133 | ) | $ | 753,450 | ||||||||||||||||
Dividends | — | — | — | — | — | — | (40,000 | ) | — | (40,000 | ) | ||||||||||||||||||||||
Net income | — | — | — | — | — | — | 19,852 | — | 19,852 | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | — | (13,920 | ) | (13,920 | ) | ||||||||||||||||||||||
Balance at June 30, 2018 | 24,737,470 | 17,751,053 | $ | 2,474 | $ | 1,775 | $ | 367,505 | $ | — | $ | 367,681 | $ | (20,053 | ) | $ | 719,382 | ||||||||||||||||
Balance at December 31, 2018 | 26,851,832 | 16,330,917 | $ | 2,686 | $ | 1,775 | $ | 385,367 | $ | (17,908 | ) | $ | 393,662 | $ | (18,164 | ) | $ | 747,418 | |||||||||||||||
Common stock issued | 2,132,865 | — | 213 | — | 29,005 | — | — | — | 29,218 | ||||||||||||||||||||||||
Repurchase of Class B common stock | — | (2,112,321 | ) | — | — | — | (28,465 | ) | — | — | (28,465 | ) | |||||||||||||||||||||
Restricted stock issued | 1,299 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 2,966 | — | — | — | 2,966 | ||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 25,928 | — | 25,928 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | 29,303 | 29,303 | ||||||||||||||||||||||||
Balance at June 30, 2019 | 28,985,996 | 14,218,596 | $ | 2,899 | $ | 1,775 | $ | 417,338 | $ | (46,373 | ) | $ | 419,590 | $ | 11,139 | $ | 806,368 |
Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Cash flows from operating activities | |||||||
Net income | $ | 25,928 | $ | 19,852 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
(Reversal of) provision for loan losses | (1,350 | ) | 150 | ||||
Net premium amortization on securities | 7,164 | 8,447 | |||||
Depreciation and amortization | 3,952 | 4,086 | |||||
Stock-based compensation expense | 2,966 | — | |||||
Change in cash surrender value of bank owned life insurance | (2,823 | ) | (2,918 | ) | |||
Deferred taxes, securities net gains or losses and others | (2,150 | ) | (4,374 | ) | |||
Net changes in operating assets and liabilities: | |||||||
Accrued interest receivable and other assets | 9,518 | (2,075 | ) | ||||
Accounts payable, accrued liabilities and other liabilities | (9,736 | ) | 3,071 | ||||
Net cash provided by operating activities | 33,469 | 26,239 | |||||
Cash flows from investing activities | |||||||
Purchases of investment securities: | |||||||
Available for sale | (195,390 | ) | (121,245 | ) | |||
Federal Home Loan Bank stock | (12,968 | ) | (13,642 | ) | |||
(208,358 | ) | (134,887 | ) | ||||
Maturities, sales and calls of investment securities: | |||||||
Available for sale | 313,757 | 122,805 | |||||
Held to maturity | 3,737 | 1,338 | |||||
Federal Home Loan Bank stock | 14,987 | 9,563 | |||||
332,481 | 133,706 | ||||||
Net decrease in loans | (109,951 | ) | (174,197 | ) | |||
Proceeds from loan portfolio sales | 214,416 | 23,781 | |||||
Net purchases of premises and equipment, and others | (4,451 | ) | (3,522 | ) | |||
Net proceeds from sale of subsidiary | — | 7,500 | |||||
Net cash provided by (used in) investing activities | 224,137 | (147,619 | ) | ||||
Cash flows from financing activities | |||||||
Net decrease in demand, savings and money market accounts | (165,945 | ) | (165,745 | ) | |||
Net (decrease) increase in time deposits | (47,360 | ) | 205,910 | ||||
Proceeds from Advances from the Federal Home Loan Bank and other borrowings | 590,000 | 656,000 | |||||
Repayments of Advances from the Federal Home Loan Bank and other borrowings | (630,447 | ) | (571,000 | ) | |||
Dividend paid | — | (40,000 | ) | ||||
Proceeds from common stock issued - Class A | 29,218 | — | |||||
Repurchase of common stock - Class B | (28,465 | ) | — | ||||
Net cash (used in) provided by financing activities | (252,999 | ) | 85,165 | ||||
Net increase (decrease) in cash and cash equivalents | 4,607 | (36,215 | ) | ||||
Cash and cash equivalents | |||||||
Beginning of period | 85,710 | 153,445 | |||||
End of period | $ | 90,317 | $ | 117,230 | |||
Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Supplemental disclosures of cash flow information | |||||||
Cash paid: | |||||||
Interest | $ | 49,868 | $ | 40,491 | |||
Income taxes | 3,424 | 15,203 |
1. | Business, Basis of Presentation and Summary of Significant Accounting Policies |
2. | Securities |
June 30, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized | Estimated Fair Value | |||||||||||||
(in thousands) | Gains | Losses | |||||||||||||
U.S. government sponsored enterprise debt securities | $ | 930,137 | $ | 9,440 | $ | (5,907 | ) | $ | 933,670 | ||||||
Corporate debt securities | 268,724 | 3,186 | (204 | ) | 271,706 | ||||||||||
U.S. government agency debt securities | 201,074 | 576 | (2,910 | ) | 198,740 | ||||||||||
Municipal bonds | 70,668 | 2,659 | — | 73,327 | |||||||||||
Mutual funds | 24,269 | — | (490 | ) | 23,779 | ||||||||||
Commercial paper | — | — | — | — | |||||||||||
$ | 1,494,872 | $ | 15,861 | $ | (9,511 | ) | $ | 1,501,222 |
December 31, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized | Estimated Fair Value | |||||||||||||
(in thousands) | Gains | Losses | |||||||||||||
U.S. government sponsored enterprise debt securities | $ | 840,760 | $ | 2,197 | $ | (22,178 | ) | $ | 820,779 | ||||||
Corporate debt securities | 357,602 | 139 | (5,186 | ) | 352,555 | ||||||||||
U.S. government agency debt securities | 221,682 | 187 | (4,884 | ) | 216,985 | ||||||||||
Municipal bonds | 162,438 | 390 | (2,616 | ) | 160,212 | ||||||||||
Mutual funds | 24,266 | — | (1,156 | ) | 23,110 | ||||||||||
Commercial paper | 12,448 | — | (38 | ) | 12,410 | ||||||||||
$ | 1,619,196 | $ | 2,913 | $ | (36,058 | ) | $ | 1,586,051 |
June 30, 2019 | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
(in thousands) | Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | |||||||||||||||||
U.S. government sponsored enterprise debt securities | $ | 41,500 | $ | (307 | ) | $ | 436,675 | $ | (5,600 | ) | $ | 478,175 | $ | (5,907 | ) | ||||||||
Corporate debt securities | 305 | (1 | ) | 48,637 | (203 | ) | 48,942 | (204 | ) | ||||||||||||||
Municipal bonds | — | — | — | — | — | — | |||||||||||||||||
U.S. government agency debt securities | 6,402 | (42 | ) | 141,248 | (2,868 | ) | 147,650 | (2,910 | ) | ||||||||||||||
Mutual funds | — | — | 23,530 | (490 | ) | 23,530 | (490 | ) | |||||||||||||||
Commercial paper | — | — | — | — | — | — | |||||||||||||||||
$ | 48,207 | $ | (350 | ) | $ | 650,090 | $ | (9,161 | ) | $ | 698,297 | $ | (9,511 | ) |
December 31, 2018 | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
(in thousands) | Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | |||||||||||||||||
U.S. government sponsored enterprise debt securities | $ | 90,980 | $ | (2,995 | ) | $ | 608,486 | $ | (19,183 | ) | $ | 699,466 | $ | (22,178 | ) | ||||||||
Corporate debt securities | 243,667 | (3,800 | ) | 75,762 | (1,386 | ) | 319,429 | (5,186 | ) | ||||||||||||||
Municipal bonds | 63,580 | (939 | ) | 133,886 | (3,945 | ) | 197,466 | (4,884 | ) | ||||||||||||||
U.S. government agency debt securities | 1,449 | (6 | ) | 94,331 | (2,610 | ) | 95,780 | (2,616 | ) | ||||||||||||||
Mutual funds | — | — | 22,865 | (1,156 | ) | 22,865 | (1,156 | ) | |||||||||||||||
Commercial paper | 12,410 | (38 | ) | — | — | 12,410 | (38 | ) | |||||||||||||||
$ | 412,086 | $ | (7,778 | ) | $ | 935,330 | $ | (28,280 | ) | $ | 1,347,416 | $ | (36,058 | ) |
June 30, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized | Estimated Fair Value | |||||||||||||
(in thousands) | Gains | Losses | |||||||||||||
Securities Held to Maturity - | |||||||||||||||
U.S. government sponsored enterprise debt securities | $ | 78,448 | $ | 497 | $ | (382 | ) | $ | 78,563 | ||||||
U.S. Government agency debt securities | 2,792 | 54 | — | 2,846 | |||||||||||
$ | 81,240 | $ | 551 | $ | (382 | ) | $ | 81,409 |
December 31, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized | Estimated Fair Value | |||||||||||||
(in thousands) | Gains | Losses | |||||||||||||
Securities Held to Maturity - | |||||||||||||||
U.S. government sponsored enterprise debt securities | $ | 82,326 | $ | — | $ | (3,889 | ) | $ | 78,437 | ||||||
U.S. Government agency debt securities | 2,862 | — | (49 | ) | 2,813 | ||||||||||
$ | 85,188 | $ | — | $ | (3,938 | ) | $ | 81,250 |
Available for Sale | Held to Maturity | ||||||||||||||
(in thousands) | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||
Within 1 year | $ | 44,267 | $ | 44,283 | $ | — | $ | — | |||||||
After 1 year through 5 years | 217,122 | 218,528 | — | — | |||||||||||
After 5 years through 10 years | 175,701 | 179,155 | — | — | |||||||||||
After 10 years | 1,033,513 | 1,035,477 | 81,240 | 81,409 | |||||||||||
No contractual maturities | 24,269 | 23,779 | — | — | |||||||||||
$ | 1,494,872 | $ | 1,501,222 | $ | 81,240 | $ | 81,409 |
3. | Loans |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Real estate loans | |||||||
Commercial real estate | |||||||
Nonowner occupied | $ | 1,872,493 | $ | 1,809,356 | |||
Multi-family residential | 968,080 | 909,439 | |||||
Land development and construction loans | 291,304 | 326,644 | |||||
3,131,877 | 3,045,439 | ||||||
Single-family residential | 535,563 | 533,481 | |||||
Owner occupied | 836,334 | 777,022 | |||||
4,503,774 | 4,355,942 | ||||||
Commercial loans | 1,180,736 | 1,380,428 | |||||
Loans to financial institutions and acceptances | 25,006 | 68,965 | |||||
Consumer loans and overdrafts | 103,239 | 114,840 | |||||
$ | 5,812,755 | $ | 5,920,175 |
June 30, 2019 | |||||||||||
(in thousands) | Venezuela | Others (1) | Total | ||||||||
Real estate loans | |||||||||||
Single-family residential (2) | $ | 116,218 | $ | 6,636 | $ | 122,854 | |||||
Commercial loans | — | 57,374 | 57,374 | ||||||||
Loans to financial institutions and acceptances | — | 5,000 | 5,000 | ||||||||
Consumer loans and overdrafts (3) | 21,197 | 8,368 | 29,565 | ||||||||
$ | 137,415 | $ | 77,378 | $ | 214,793 |
(1) | Loans to borrowers in 15 other countries which do not individually exceed 1% of total assets. |
(2) | Corresponds to mortgage loans secured by single-family residential properties located in the U.S. |
(3) | Mostly comprised of credit card extensions of credit to customers with deposits with the Bank. In April 2019, the Company revised its credit card program to further strengthen credit quality. The Company stopped the charging privileges of its smallest and riskiest cardholders and required repayment of their balances by November 2019. Other cardholders’ charging privileges will end in October 2019 and they will be required to repay all balances by January 2020. Overdrafts to customers outside the United States were de minimis at June 30, 2019 and December 31, 2018. |
December 31, 2018 | ||||||||||||
(in thousands) | Venezuela | Others (1) | Total | |||||||||
Real estate loans | ||||||||||||
Single-family residential (2) | $ | 128,971 | $ | 6,467 | $ | 135,438 | ||||||
Commercial loans | — | 73,636 | 73,636 | |||||||||
Loans to financial institutions and acceptances | — | 49,000 | 49,000 | |||||||||
Consumer loans and overdrafts (3) | 28,191 | 13,494 | 41,685 | |||||||||
$ | 157,162 | $ | 142,597 | $ | 299,759 |
(1) | Loans to borrowers in 17 other countries which do not individually exceed 1% of total assets. |
(2) | Corresponds to mortgage loans secured by single-family residential properties located in the U.S. |
(3) | Mostly comprised of credit card extensions of credit to customers with deposits with the Bank. Charging privileges for Venezuela resident card holders are suspended when the cardholders’ average deposits decline below the outstanding credit balance. At the beginning of 2018, the Company changed the monitoring of such balances from quarterly to monthly. |
June 30, 2019 | |||||||||||||||||||||||||||||||
Total Loans, Net of Unearned Income | Past Due | Total Loans in Nonaccrual Status | Total Loans 90 Days or More Past Due and Accruing | ||||||||||||||||||||||||||||
(in thousands) | Current | 30-59 Days | 60-89 Days | Greater than 90 Days | Total Past Due | ||||||||||||||||||||||||||
Real estate loans | |||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||
Nonowner occupied | $ | 1,872,493 | $ | 1,870,529 | $ | 1,964 | $ | — | $ | — | $ | 1,964 | $ | 1,964 | $ | — | |||||||||||||||
Multi-family residential | 968,080 | 967,423 | — | — | 657 | 657 | 657 | — | |||||||||||||||||||||||
Land development and construction loans | 291,304 | 291,304 | — | — | — | — | — | — | |||||||||||||||||||||||
3,131,877 | 3,129,256 | 1,964 | — | 657 | 2,621 | 2,621 | — | ||||||||||||||||||||||||
Single-family residential | 535,563 | 528,921 | 916 | 1,573 | 4,153 | 6,642 | 9,432 | — | |||||||||||||||||||||||
Owner occupied | 836,334 | 832,924 | 2,715 | — | 695 | 3,410 | 10,528 | — | |||||||||||||||||||||||
4,503,774 | 4,491,101 | 5,595 | 1,573 | 5,505 | 12,673 | 22,581 | — | ||||||||||||||||||||||||
Commercial loans | 1,180,736 | 1,176,688 | 872 | 80 | 3,096 | 4,048 | 10,032 | — | |||||||||||||||||||||||
Loans to financial institutions and acceptances | 25,006 | 25,006 | — | — | — | — | — | — | |||||||||||||||||||||||
Consumer loans and overdrafts | 103,239 | 102,464 | 419 | 250 | 106 | 775 | 114 | 23 | |||||||||||||||||||||||
$ | 5,812,755 | $ | 5,795,259 | $ | 6,886 | $ | 1,903 | $ | 8,707 | $ | 17,496 | $ | 32,727 | $ | 23 |
December 31, 2018 | |||||||||||||||||||||||||||||||
Total Loans, Net of Unearned Income | Past Due | Total Loans in Nonaccrual Status | Total Loans 90 Days or More Past Due and Accruing | ||||||||||||||||||||||||||||
(in thousands) | Current | 30-59 Days | 60-89 Days | Greater than 90 Days | Total Past Due | ||||||||||||||||||||||||||
Real estate loans | |||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||
Nonowner occupied | $ | 1,809,356 | $ | 1,809,356 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Multi-family residential | 909,439 | 909,439 | — | — | — | — | — | — | |||||||||||||||||||||||
Land development and construction loans | 326,644 | 326,644 | — | — | — | — | — | — | |||||||||||||||||||||||
3,045,439 | 3,045,439 | — | — | — | — | — | — | ||||||||||||||||||||||||
Single-family residential | 533,481 | 519,730 | 7,910 | 2,336 | 3,505 | 13,751 | 6,689 | 419 | |||||||||||||||||||||||
Owner occupied | 777,022 | 773,876 | 2,800 | 160 | 186 | 3,146 | 4,983 | — | |||||||||||||||||||||||
4,355,942 | 4,339,045 | 10,710 | 2,496 | 3,691 | 16,897 | 11,672 | 419 | ||||||||||||||||||||||||
Commercial loans | 1,380,428 | 1,378,022 | 704 | 1,062 | 640 | 2,406 | 4,772 | — | |||||||||||||||||||||||
Loans to financial institutions and acceptances | 68,965 | 68,965 | — | — | — | — | — | — | |||||||||||||||||||||||
Consumer loans and overdrafts | 114,840 | 113,227 | 474 | 243 | 896 | 1,613 | 35 | 884 | |||||||||||||||||||||||
$ | 5,920,175 | $ | 5,899,259 | $ | 11,888 | $ | 3,801 | $ | 5,227 | $ | 20,916 | $ | 16,479 | $ | 1,303 |
4. | Allowance for Loan Losses |
Three Months Ended June 30, 2019 | |||||||||||||||||||
(in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and Others | Total | ||||||||||||||
Balances at beginning of the period | $ | 22,456 | $ | 29,100 | $ | 106 | $ | 8,660 | $ | 60,322 | |||||||||
(Reversal of) provision for loan losses | (556 | ) | (2,646 | ) | (46 | ) | 1,898 | (1,350 | ) | ||||||||||
Loans charged-off | |||||||||||||||||||
Domestic | — | (874 | ) | — | (210 | ) | (1,084 | ) | |||||||||||
International | — | (43 | ) | — | (894 | ) | (937 | ) | |||||||||||
Recoveries | — | 287 | — | 166 | 453 | ||||||||||||||
Balances at end of the period | $ | 21,900 | $ | 25,824 | $ | 60 | $ | 9,620 | $ | 57,404 |
Six Months Ended June 30, 2019 | |||||||||||||||||||
(in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and Others | Total | ||||||||||||||
Balances at beginning of the period | $ | 22,778 | $ | 30,018 | $ | 445 | $ | 8,521 | $ | 61,762 | |||||||||
(Reversal of) provision for loan losses | (878 | ) | (2,677 | ) | (385 | ) | 2,590 | (1,350 | ) | ||||||||||
Loans charged-off | |||||||||||||||||||
Domestic | — | (1,866 | ) | — | (406 | ) | (2,272 | ) | |||||||||||
International | — | (61 | ) | — | (1,300 | ) | (1,361 | ) | |||||||||||
Recoveries | — | 410 | — | 215 | 625 | ||||||||||||||
Balances at end of the period | $ | 21,900 | $ | 25,824 | $ | 60 | $ | 9,620 | $ | 57,404 |
June 30, 2019 | |||||||||||||||||||
(in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and Others | Total | ||||||||||||||
Allowance for loan losses by impairment methodology | |||||||||||||||||||
Individually evaluated | $ | 527 | $ | 2,608 | $ | — | $ | 1,390 | $ | 4,525 | |||||||||
Collectively evaluated | 21,373 | 23,216 | 60 | 8,230 | 52,879 | ||||||||||||||
$ | 21,900 | $ | 25,824 | $ | 60 | $ | 9,620 | $ | 57,404 | ||||||||||
Investment in loans, net of unearned income | |||||||||||||||||||
Individually evaluated | $ | 2,621 | $ | 19,298 | $ | — | $ | 6,633 | $ | 28,552 | |||||||||
Collectively evaluated | 3,123,437 | 2,104,143 | 25,006 | 531,617 | 5,784,203 | ||||||||||||||
$ | 3,126,058 | $ | 2,123,441 | $ | 25,006 | $ | 538,250 | $ | 5,812,755 |
Three Months Ended June 30, 2018 | |||||||||||||||||||
(in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and Others | Total | ||||||||||||||
Balances at beginning of the period | $ | 30,503 | $ | 33,672 | $ | 3,671 | $ | 4,272 | $ | 72,118 | |||||||||
(Reversal of) provision for loan losses | (1,814 | ) | (1,750 | ) | (354 | ) | 4,068 | 150 | |||||||||||
Loans charged-off | |||||||||||||||||||
Domestic | — | (2,355 | ) | — | (98 | ) | (2,453 | ) | |||||||||||
International | — | (52 | ) | — | (230 | ) | (282 | ) | |||||||||||
Recoveries | 4 | 269 | — | 125 | 398 | ||||||||||||||
Balances at end of the period | $ | 28,693 | $ | 29,784 | $ | 3,317 | $ | 8,137 | $ | 69,931 |
Six Months Ended June 30, 2018 | ||||||||||||||
(in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and Others | Total | |||||||||
Balances at beginning of the period | 31,290 | 32,687 | 4,362 | 3,661 | 72,000 | |||||||||
(Reversal of) provision for loan losses | (2,635 | ) | (1,215 | ) | (1,045 | ) | 5,045 | 150 | ||||||
Loans charged-off | ||||||||||||||
Domestic | — | (2,737 | ) | — | (117 | ) | (2,854 | ) | ||||||
International | — | (52 | ) | — | (630 | ) | (682 | ) | ||||||
Recoveries | 38 | 1,101 | — | 178 | 1,317 | |||||||||
Balances at end of the period | 28,693 | 29,784 | 3,317 | 8,137 | 69,931 |
June 30, 2018 | |||||||||||||||||||
(in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and Others | Total | ||||||||||||||
Allowance for loan losses by impairment methodology | |||||||||||||||||||
Individually evaluated | $ | 4,055 | $ | 2,252 | $ | — | $ | — | $ | 6,307 | |||||||||
Collectively evaluated | 24,638 | 27,532 | 3,317 | 8,137 | 63,624 | ||||||||||||||
$ | 28,693 | $ | 29,784 | $ | 3,317 | $ | 8,137 | $ | 69,931 | ||||||||||
Investment in loans, net of unearned income | |||||||||||||||||||
Individually evaluated | $ | 11,078 | $ | 16,206 | $ | — | $ | 306 | $ | 27,590 | |||||||||
Collectively evaluated | 3,078,004 | 2,184,226 | 371,498 | 558,231 | 6,191,959 | ||||||||||||||
$ | 3,089,082 | $ | 2,200,432 | $ | 371,498 | $ | 558,537 | $ | 6,219,549 |
Three Months Ended June 30, (in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and others | Total | ||||||||||||||
2019 | $ | — | $ | 59,282 | $ | — | $ | 2,957 | $ | 62,239 | |||||||||
2018 | $ | 5,049 | $ | 5,774 | $ | — | $ | — | $ | 10,823 |
Six Months Ended June 30, (in thousands) | Real Estate | Commercial | Financial Institutions | Consumer and others | Total | ||||||||||
2019 | 23,475 | 186,120 | — | 4,821 | 214,416 | ||||||||||
2018 | 8,007 | 15,774 | — | 1,864 | — | 23,781 |
June 30, 2019 | |||||||||||||||||||||||
Recorded Investment | |||||||||||||||||||||||
(in thousands) | With a Valuation Allowance | Without a Valuation Allowance | Total | Year Average (1) | Total Unpaid Principal Balance | Valuation Allowance | |||||||||||||||||
Real estate loans | |||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||
Nonowner occupied | $ | 1,964 | $ | — | $ | 1,964 | $ | 3,052 | $ | 1,964 | $ | 313 | |||||||||||
Multi-family residential | 657 | — | 657 | 702 | 657 | 214 | |||||||||||||||||
Land development and construction loans | — | — | — | — | — | — | |||||||||||||||||
2,621 | — | 2,621 | 3,754 | 2,621 | 527 | ||||||||||||||||||
Single-family residential | 6,377 | 484 | 6,861 | 4,697 | 6,950 | 1,444 | |||||||||||||||||
Owner occupied | 3,223 | 6,427 | 9,650 | 5,980 | 9,688 | 1,056 | |||||||||||||||||
12,221 | 6,911 | 19,132 | 14,431 | 19,259 | 3,027 | ||||||||||||||||||
Commercial loans | 9,235 | 92 | 9,327 | 6,987 | 10,477 | 1,448 | |||||||||||||||||
Consumer loans and overdrafts | 84 | 9 | 93 | 39 | 90 | 50 | |||||||||||||||||
$ | 21,540 | $ | 7,012 | $ | 28,552 | $ | 21,457 | $ | 29,826 | $ | 4,525 |
December 31, 2018 | |||||||||||||||||||||||
Recorded Investment | |||||||||||||||||||||||
(in thousands) | With a Valuation Allowance | Without a Valuation Allowance | Total | Year Average (1) | Total Unpaid Principal Balance | Valuation Allowance | |||||||||||||||||
Real estate loans | |||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||
Nonowner occupied | $ | — | $ | — | $ | — | $ | 7,935 | $ | — | $ | — | |||||||||||
Multi-family residential | — | 717 | 717 | 724 | 722 | — | |||||||||||||||||
Land development and construction loans | — | — | — | — | — | — | |||||||||||||||||
— | 717 | 717 | 8,659 | 722 | — | ||||||||||||||||||
Single-family residential | 3,086 | 306 | 3,392 | 4,046 | 3,427 | 1,235 | |||||||||||||||||
Owner occupied | 169 | 4,427 | 4,596 | 5,524 | 4,601 | 75 | |||||||||||||||||
3,255 | 5,450 | 8,705 | 18,229 | 8,750 | 1,310 | ||||||||||||||||||
Commercial loans | 4,585 | 148 | 4,733 | 7,464 | 6,009 | 1,059 | |||||||||||||||||
Consumer loans and overdrafts | 9 | 11 | 20 | 15 | 17 | 4 | |||||||||||||||||
$ | 7,849 | $ | 5,609 | $ | 13,458 | $ | 25,708 | $ | 14,776 | $ | 2,373 |
(1) | Average using trailing four quarter balances. |
June 30, 2019 | |||||||||||||||||||||||
Credit Risk Rating | |||||||||||||||||||||||
Nonclassified | Classified | ||||||||||||||||||||||
(in thousands) | Pass | Special Mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
Real estate loans | |||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||
Nonowner occupied | $ | 1,864,278 | $ | 6,251 | $ | 1,964 | $ | — | $ | — | $ | 1,872,493 | |||||||||||
Multi-family residential | 967,423 | 657 | — | — | 968,080 | ||||||||||||||||||
Land development and construction loans | 291,304 | — | — | — | — | 291,304 | |||||||||||||||||
3,123,005 | 6,251 | 2,621 | — | — | 3,131,877 | ||||||||||||||||||
Single-family residential | 526,131 | — | 9,432 | — | — | 535,563 | |||||||||||||||||
Owner occupied | 812,918 | 9,476 | 13,940 | — | — | 836,334 | |||||||||||||||||
4,462,054 | 15,727 | 25,993 | — | — | 4,503,774 | ||||||||||||||||||
Commercial loans | 1,163,375 | 5,332 | 11,490 | 539 | — | 1,180,736 | |||||||||||||||||
Loans to financial institutions and acceptances | 25,006 | — | — | — | — | 25,006 | |||||||||||||||||
Consumer loans and overdrafts | 98,818 | — | 4,421 | — | — | 103,239 | |||||||||||||||||
$ | 5,749,253 | $ | 21,059 | $ | 41,904 | $ | 539 | $ | — | $ | 5,812,755 |
December 31, 2018 | |||||||||||||||||||||||
Credit Risk Rating | |||||||||||||||||||||||
Nonclassified | Classified | ||||||||||||||||||||||
(in thousands) | Pass | Special Mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
Real estate loans | |||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||
Nonowner occupied | $ | 1,802,573 | $ | 6,561 | $ | 222 | $ | — | $ | — | $ | 1,809,356 | |||||||||||
Multi-family residential | 909,439 | — | — | — | — | 909,439 | |||||||||||||||||
Land development and construction loans | 326,644 | — | — | — | — | 326,644 | |||||||||||||||||
3,038,656 | 6,561 | 222 | — | — | 3,045,439 | ||||||||||||||||||
Single-family residential | 526,373 | — | 7,108 | — | — | 533,481 | |||||||||||||||||
Owner occupied | 758,552 | 9,019 | 9,451 | — | — | 777,022 | |||||||||||||||||
4,323,581 | 15,580 | 16,781 | — | — | 4,355,942 | ||||||||||||||||||
Commercial loans | 1,369,434 | 3,943 | 6,462 | 589 | — | 1,380,428 | |||||||||||||||||
Loans to financial institutions and acceptances | 68,965 | — | — | — | — | 68,965 | |||||||||||||||||
Consumer loans and overdrafts | 108,778 | — | 6,062 | — | — | 114,840 | |||||||||||||||||
$ | 5,870,758 | $ | 19,523 | $ | 29,305 | $ | 589 | $ | — | $ | 5,920,175 |
5. | Time Deposits |
6. | Advances from the Federal Home Loan Bank and Other Borrowings |
Year of Maturity | Interest Rate | June 30, 2019 | December 31, 2018 | ||||||
(in thousands, except percentages) | |||||||||
2019 | 1.80% to 3.86% | $ | 350,000 | $ | 440,000 | ||||
2020 | 1.50% to 2.74% | 325,000 | 306,000 | ||||||
2021 | 1.93% to 3.08% | 240,000 | 210,000 | ||||||
2022 | 2.48% to 2.80% | 120,000 | 120,000 | ||||||
2023 and after | 2.95% to 3.23% | 90,000 | 90,000 | ||||||
$ | 1,125,000 | $ | 1,166,000 |
7. | Derivative Instruments |
June 30, 2019 | December 31, 2018 | ||||||||||||||
(in thousands) | Other Assets | Other Liabilities | Other Assets | Other Liabilities | |||||||||||
Interest rate swaps designated as cash flow hedges | $ | — | $ | — | $ | 9,386 | $ | 283 | |||||||
Interest rate swaps not designated as hedging instruments: | |||||||||||||||
Customers | 10,226 | — | 1,420 | — | |||||||||||
Third party broker | — | 10,226 | — | 1,420 | |||||||||||
10,226 | 10,226 | 1,420 | 1,420 | ||||||||||||
Interest rate caps not designated as hedging instruments: | |||||||||||||||
Customers | — | 78 | — | 685 | |||||||||||
Third party broker | 78 | — | 685 | — | |||||||||||
78 | 78 | 685 | 685 | ||||||||||||
$ | 10,304 | $ | 10,304 | $ | 11,491 | $ | 2,388 |
8. | Stock-based Incentive Compensation Plan |
9. | Income Taxes |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
(in thousands) | Before Tax Amount | Tax Effect | Net of Tax Amount | Before Tax Amount | Tax Effect | Net of Tax Amount | |||||||||||||||||
Net unrealized holding gains (losses) on securities available for sale | $ | 6,350 | $ | (1,552 | ) | $ | 4,798 | $ | (33,145 | ) | $ | 8,104 | $ | (25,041 | ) | ||||||||
Net unrealized holding gains on interest rate swaps designated as cash flow hedges | 8,393 | (2,052 | ) | 6,341 | 9,103 | (2,226 | ) | $ | 6,877 | ||||||||||||||
Total AOCI (AOCL) | $ | 14,743 | $ | (3,604 | ) | $ | 11,139 | $ | (24,042 | ) | $ | 5,878 | $ | (18,164 | ) |
Three Months Ended June 30, | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
(in thousands) | Before Tax Amount | Tax Effect | Net of Tax Amount | Before Tax Amount | Tax Effect | Net of Tax Amount | |||||||||||||||||
Net unrealized holding gains (losses) on securities available for sale: | |||||||||||||||||||||||
Change in fair value arising during the period | $ | 18,946 | $ | (4,633 | ) | $ | 14,313 | $ | (6,716 | ) | $ | 1,262 | $ | (5,454 | ) | ||||||||
Reclassification adjustment for net gains included in net income | (992 | ) | 243 | (749 | ) | (16 | ) | 4 | (12 | ) | |||||||||||||
17,954 | (4,390 | ) | 13,564 | (6,732 | ) | 1,266 | (5,466 | ) | |||||||||||||||
Net unrealized holding gains on interest rate swaps designated as cash flow hedges: | |||||||||||||||||||||||
Change in fair value arising during the period | — | — | — | 2,574 | (435 | ) | 2,139 | ||||||||||||||||
Reclassification adjustment for net interest (income) expense included in net income | (366 | ) | 90 | (276 | ) | 19 | (5 | ) | 14 | ||||||||||||||
(366 | ) | 90 | (276 | ) | 2,593 | (440 | ) | 2,153 | |||||||||||||||
Total other comprehensive income (loss) | $ | 17,588 | $ | (4,300 | ) | $ | 13,288 | $ | (4,139 | ) | $ | 826 | $ | (3,313 | ) |
Six Months Ended June 30, | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
(in thousands) | Before Tax Amount | Tax Effect | Net of Tax Amount | Before Tax Amount | Tax Effect | Net of Tax Amount | |||||||||||||||||
Net unrealized holding gains (losses) on securities available for sale: | |||||||||||||||||||||||
Change in fair value arising during the period | $ | 40,491 | $ | (9,900 | ) | $ | 30,591 | $ | (27,566 | ) | $ | 7,135 | $ | (20,431 | ) | ||||||||
Reclassification adjustment for net gains included in net income | (996 | ) | 244 | (752 | ) | (16 | ) | 4 | (12 | ) | |||||||||||||
39,495 | (9,656 | ) | 29,839 | (27,582 | ) | 7,139 | (20,443 | ) | |||||||||||||||
Net unrealized holding (losses) gains on interest rate swaps designated as cash flow hedges: | |||||||||||||||||||||||
Change in fair value arising during the period | (15 | ) | 4 | (11 | ) | 8,608 | (2,256 | ) | 6,352 | ||||||||||||||
Reclassification adjustment for net interest (income) expense included in net income | (695 | ) | 170 | (525 | ) | 207 | (36 | ) | 171 | ||||||||||||||
(710 | ) | 174 | (536 | ) | 8,815 | (2,292 | ) | 6,523 | |||||||||||||||
Total other comprehensive income (loss) | $ | 38,785 | $ | (9,482 | ) | $ | 29,303 | $ | (18,767 | ) | $ | 4,847 | $ | (13,920 | ) |
(in thousands) | Approximate Contract Amount | ||
Commitments to extend credit | $ | 844,170 | |
Credit card facilities | 143,666 | ||
Standby letters of credit | 22,068 | ||
Commercial letters of credit | 8,496 | ||
$ | 1,018,400 |
June 30, 2019 | |||||||||||||||
(in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Third-Party Models with Observable Market Inputs (Level 2) | Internal Models with Unobservable Market Inputs (Level 3) | Total Carrying Value in the Consolidated Balance Sheet | |||||||||||
Assets | |||||||||||||||
Securities available for sale | |||||||||||||||
U.S. government sponsored enterprise debt securities | $ | — | $ | 933,670 | $ | — | $ | 933,670 | |||||||
Corporate debt securities | — | 271,706 | — | 271,706 | |||||||||||
U.S. government agency debt securities | — | 198,740 | — | 198,740 | |||||||||||
Municipal bonds | — | 73,327 | — | 73,327 | |||||||||||
Mutual funds | — | 23,779 | — | 23,779 | |||||||||||
— | 1,501,222 | — | 1,501,222 | ||||||||||||
Bank owned life insurance | — | 208,965 | — | 208,965 | |||||||||||
Derivative instruments | — | 10,304 | — | 10,304 | |||||||||||
$ | — | $ | 1,720,491 | $ | — | $ | 1,720,491 | ||||||||
Liabilities | |||||||||||||||
Derivative instruments | $ | — | $ | 10,304 | $ | — | $ | 10,304 |
December 31, 2018 | |||||||||||||||
(in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Third-Party Models with Observable Market Inputs (Level 2) | Internal Models with Unobservable Market Inputs (Level 3) | Total Carrying Value in the Consolidated Balance Sheet | |||||||||||
Assets | |||||||||||||||
Securities available for sale | |||||||||||||||
U.S. government sponsored enterprise debt securities | $ | — | $ | 820,779 | $ | — | $ | 820,779 | |||||||
Corporate debt securities | — | 352,555 | — | 352,555 | |||||||||||
U.S. government agency debt securities | — | 216,985 | — | 216,985 | |||||||||||
Municipal bonds | — | 160,212 | — | 160,212 | |||||||||||
Mutual funds | — | 23,110 | — | 23,110 | |||||||||||
Commercial paper | — | 12,410 | — | 12,410 | |||||||||||
— | 1,586,051 | — | 1,586,051 | ||||||||||||
Bank owned life insurance | — | 206,141 | — | 206,141 | |||||||||||
Derivative instruments | — | 11,491 | — | 11,491 | |||||||||||
$ | — | $ | 1,803,683 | $ | — | $ | 1,803,683 | ||||||||
Liabilities | |||||||||||||||
Derivative instruments | $ | — | $ | 2,388 | $ | — | $ | 2,388 |
• | Similar securities actively traded which are selected from recent market transactions; |
• | Observable market data which includes spreads in relationship to LIBOR, swap curve, and prepayment speed rates, as applicable; and |
• | The captured spread and prepayment speed are used to obtain the fair value for each related security. |
• | Because of their nature and short-term maturities, the carrying values of the following financial instruments were used as a reasonable estimate of their fair value: cash and cash equivalents, interest earning deposits with banks, variable-rate loans with re-pricing terms shorter than twelve months, demand and savings deposits, short-term time deposits and other borrowings. |
• | The fair value of loans held for sale, securities, bank owned life insurance and derivative instruments, are based on quoted market prices, when available. If quoted market prices are unavailable, fair value is estimated using the pricing process described in Note 17 to the Company’s audited consolidated financial statements in the Form 10-K. |
• | The fair value of commitments and letters of credit is based on the assumption that the Company will be required to perform on all such instruments. The commitment amount approximates estimated fair value. |
• | The fair value of advances from the FHLB, junior subordinated debentures and fixed-rate loans are estimated using a present value technique by discounting the future expected contractual cash flows using the current rates at which similar instruments would be issued with comparable credit ratings and terms at the measurement date. |
• | The fair value of long-term time deposits, including certificates of deposit, is determined using a present value technique by discounting the future expected contractual cash flows using current rates at which similar instruments would be issued at the measurement date. |
June 30, 2019 | December 31, 2018 | ||||||||||||||
(in thousands) | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||
Financial assets | |||||||||||||||
Loans | $ | 2,768,972 | $ | 2,650,162 | $ | 2,850,015 | $ | 2,739,721 | |||||||
Financial liabilities | |||||||||||||||
Time deposits | 1,721,207 | 1,733,538 | 1,745,025 | 1,740,752 | |||||||||||
Advances from the FHLB | 1,125,000 | 1,136,506 | 1,166,000 | 1,167,213 | |||||||||||
Junior subordinated debentures | 118,110 | 114,581 | 118,110 | 99,450 |
14. | Earnings Per Share |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Numerator: | |||||||||||||||
Net income available to common stockholders | $ | 12,857 | $ | 10,423 | $ | 25,928 | $ | 19,852 | |||||||
Denominator: | |||||||||||||||
Basic weighted average shares outstanding | 42,466 | 42,489 | 42,610 | 42,489 | |||||||||||
Dilutive effect of share-based compensation awards | 353 | — | 255 | — | |||||||||||
Diluted weighted average shares outstanding | 42,819 | 42,489 | 42,865 | 42,489 | |||||||||||
Basic earnings per common share | $ | 0.30 | $ | 0.25 | $ | 0.61 | $ | 0.47 | |||||||
Diluted earnings per common share | $ | 0.30 | $ | 0.25 | $ | 0.60 | $ | 0.47 |
• | our ability to successfully execute our strategic plan, manage our growth and achieve our performance targets which assume, among other things, continued growth in our domestic loans, increased domestic deposits, increased cross-selling of services, increased efficiency and cost savings; |
• | the effects of future economic, business, and market condition changes, domestic and foreign, especially those affecting our Venezuelan depositors and credit card holders; |
• | business and economic conditions, generally and especially in our primary market areas; |
• | operational risks inherent to our business; |
• | our ability to successfully manage our credit risks and the sufficiency of our allowance for possible loan losses; |
• | the failure of assumptions and estimates, as well as differences in, and changes to, economic, market, interest rate, and credit conditions, including changes in borrowers’ credit risks and payment behaviors, including those resulting from the changes to our credit card program in April 2019; |
• | compliance with governmental and regulatory requirements, including the Dodd-Frank Act and others relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with mortgage origination, sale and servicing operations; |
• | compliance with the Bank Secrecy Act of 1970, the rules of the Treasury Department’s Office of Foreign Assets Control and anti-money laundering laws and regulations, especially given our exposure to Venezuela customers; |
• | governmental monetary and fiscal policies, including market interest rates; |
• | the effectiveness of our enterprise risk management framework, including internal controls and disclosure controls; |
• | fluctuations in the values of the securities held in our securities portfolio; |
• | the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values and liquidity of loan collateral, securities, and interest-sensitive assets and liabilities, and the risks and uncertainty of the amounts realizable; |
• | changes in the availability and cost of credit and capital in the financial markets, and the types of instruments that may be included as capital for regulatory purposes; |
• | changes in the prices, values and sales volumes of residential real estate and CRE; |
• | the effects of competition from a wide variety of local, regional, national and other providers of financial, investment, trust and other wealth management services and insurance services, including the disruptive effects of financial technology companies and other competitors who are not subject to the same regulations as the Company and the Bank; |
• | defaults by or deteriorating asset quality of other institutions; |
• | the failure of assumptions and estimates underlying the establishment of allowances for possible loan losses and other asset impairments, losses, valuations of assets and liabilities and other estimates, including the timing and effects of the implementation of the current expected credit losses model to financial instruments (“CECL”) and the change in our credit card programs; |
• | the risks of mergers, acquisitions and divestitures, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; |
• | changes in technology or products that may be more difficult, costly, or less effective than anticipated; |
• | the effects of war, civil unrest, or other conflicts, acts of terrorism, hurricanes or other catastrophic events that may affect general economic conditions, including in countries where we have depositors and other customers; |
• | the effects of recent and future legislative and regulatory changes, including changes in banking, securities, tax, trade and finance laws, rules and regulations, such as the planned cessation of LIBOR, and their application by our regulators; |
• | our ability to continue to increase our core domestic deposits, and reduce the percentage of foreign deposits; |
• | the occurrence of fraudulent activity, data breaches or failures of our information security controls or cybersecurity-related incidents that may compromise our systems or customers’ information; |
• | interruptions involving our information technology and telecommunications systems or third-party services; |
• | changes in our senior management team and our ability to attract, motivate and retain qualified personnel consistent with our strategic plan; |
• | the costs and obligations associated with being a newly public company; |
• | our ability to maintain our strong reputation, particularly in light of our ongoing rebranding effort; |
• | claims or legal actions to which we may be subject; and |
• | the other factors and information in our Form 10-K and other filings that we make with the SEC under the Exchange Act and Securities Act. See “Risk Factors” in our Form 10-K. |
• | Net income of $12.9 million in the second quarter of 2019, 23.4% higher than the $10.4 million reported in the second quarter of 2018, and net income of $25.9 million for the six months ended June 30, 2019, 30.6% higher than the $19.9 million reported in the six months ended June 30, 2018. |
• | NIM was 2.92% in the second quarter of 2019, up from 2.77% in the second quarter of 2018. NIM was 2.94% for the first six months of 2019, up from 2.72% in the same period of 2018. |
• | Credit quality remained strong. The Company released $1.4 million from the allowance for loan losses in the second quarter of 2019, compared to a $0.2 million provision in the second quarter of 2018. The ratio of non-performing assets to total assets was 0.41% as of June 30, 2019, unchanged compared to June 30, 2018. |
• | Noninterest expense was $52.9 million in the second quarter of 2019, up 0.5% compared to $52.6 million in the same quarter of 2018. Noninterest expenses include expenses associated with restructuring activities, including $3.7 million of staff reduction and rebranding costs in the six months ended June 30, 2019. We had non-tax deductible spin-off costs of $6.0 million in the same period of 2018. Adjusted noninterest expense was $50.2 million in the second quarter of 2019, up 1.5% from $49.4 million in the same quarter of 2018. |
• | The launch of our new “Amerant” brand across all our major markets in April 2019. |
• | Increased customer share of wallet, with sales of interest rate cap and swap products to commercial borrowing customers reaching a record high. |
• | The efficiency ratio was 76.80% (74.11%, as adjusted for rebranding and staff reduction costs) for the six months ended June 30, 2019, compared to 79.88% (75.43%, as adjusted for spin-off costs) for the corresponding period of 2018. |
• | Announced the redemption of $25.0 million of the Company’s 10.60% and 10.18% trust preferred securities and related junior subordinated debentures. When completed in September 2019, these actions will increase annual pretax net income by approximately $2.6 million, and the Company’s capital ratios will continue to exceed regulatory minimums. |
• | Added to the Russell 2000® Index in June, which is expected to bolster our recognition in the capital markets, and among investors, including those tracking this index. |
June 30, 2019 | December 31, 2018 | ||||||
(in thousands) | |||||||
Consolidated Balance Sheets | |||||||
Total assets | $ | 7,926,826 | $ | 8,124,347 | |||
Total investments | 1,650,632 | 1,741,428 | |||||
Total net loans (1) | 5,755,351 | 5,858,413 | |||||
Allowance for loan losses | 57,404 | 61,762 | |||||
Total deposits | 5,819,381 | 6,032,686 | |||||
Junior subordinated debentures (2) | 118,110 | 118,110 | |||||
Advances from the FHLB and other borrowings | 1,125,000 | 1,166,000 | |||||
Stockholders' equity | 806,368 | 747,418 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Consolidated Results of Operations | |||||||||||||||
Net interest income | $ | 53,789 | $ | 53,989 | $ | 109,226 | $ | 106,622 | |||||||
(Reversal of) provision for loan losses | (1,350 | ) | 150 | (1,350 | ) | 150 | |||||||||
Noninterest income | 14,147 | 14,986 | 27,303 | 28,931 | |||||||||||
Noninterest expense | 52,905 | 52,638 | 104,850 | 108,283 | |||||||||||
Net income | 12,857 | 10,423 | 25,928 | 19,852 | |||||||||||
Effective income tax rate | 21.51 | % | 35.61 | % | 21.50 | % | 26.80 | % | |||||||
Common Share Data (3) | |||||||||||||||
Tangible stockholders' equity (book value) per common share (4) | $ | 18.18 | $ | 16.43 | $ | 18.18 | $ | 16.43 | |||||||
Basic earnings per common share | $ | 0.30 | $ | 0.25 | $ | 0.61 | $ | 0.47 | |||||||
Diluted earnings per common share | $ | 0.30 | $ | 0.25 | $ | 0.60 | $ | 0.47 | |||||||
Basic weighted average shares outstanding | 42,466 | 42,489 | 42,610 | 42,489 | |||||||||||
Diluted weighted average shares outstanding (5) | 42,819 | 42,489 | 42,865 | 42,489 | |||||||||||
Cash dividend declared per common share (6) | — | — | — | $ | 0.94 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
(in thousands, except per share amounts and percentages) | |||||||||||||
Other Financial and Operating Data (7) | |||||||||||||
Profitability Indicators (%) | |||||||||||||
Net interest income / Average total interest earning assets (NIM) (8) | 2.92 | % | 2.77 | % | 2.94 | % | 2.72 | % | |||||
Net income / Average total assets (ROA) (9) | 0.66 | % | 0.50 | % | 0.66 | % | 0.47 | % | |||||
Net income / Average stockholders' equity (ROE) (10) | 6.56 | % | 5.57 | % | 6.76 | % | 5.31 | % | |||||
Capital Indicators | |||||||||||||
Total capital ratio (11) | 14.70 | % | 12.61 | % | 14.70 | % | 12.61 | % | |||||
Tier 1 capital ratio (12) | 13.85 | % | 11.67 | % | 13.85 | % | 11.67 | % | |||||
Tier 1 leverage ratio (13) | 11.32 | % | 9.87 | % | 11.32 | % | 9.87 | % | |||||
Common equity tier 1 capital ratio (CET1) (14) | 12.14 | % | 10.13 | % | 12.14 | % | 10.13 | % | |||||
Tangible common equity ratio (15) | 9.93 | % | 8.21 | % | 9.93 | % | 8.21 | % | |||||
Asset Quality Indicators (%) | |||||||||||||
Non-performing assets / Total assets (16) | 0.41 | % | 0.41 | % | 0.41 | % | 0.41 | % | |||||
Non-performing loans / Total loans (1) (17) | 0.56 | % | 0.56 | % | 0.56 | % | 0.56 | % | |||||
Allowance for loan losses / Total non-performing loans (18) | 175.28 | % | 201.55 | % | 175.28 | % | 201.55 | % | |||||
Net charge-offs / Average total loans (19) | 0.11 | % | 0.16 | % | 0.11 | % | 0.07 | % | |||||
Efficiency Indicators | |||||||||||||
Efficiency ratio (20) | 77.87 | % | 76.31 | % | 76.80 | % | 79.88 | % | |||||
Full-time-equivalent employees (FTEs) | 839 | 940 | 839 | 940 | |||||||||
Adjusted Selected Consolidated Results of Operations and Other Data (21) | |||||||||||||
Adjusted noninterest expense | $ | 50,169 | $ | 49,438 | 101,181 | 102,245 | |||||||
Adjusted net income | 15,005 | 14,142 | 28,808 | 25,831 | |||||||||
Adjusted earnings per common share (5) | 0.35 | 0.33 | 0.68 | 0.61 | |||||||||
Adjusted earnings per diluted common share (5) | 0.35 | 0.33 | 0.67 | 0.61 | |||||||||
Adjusted net income / Average total assets (Adjusted ROA) (8) | 0.77 | % | 0.67 | % | 0.73 | % | 0.61 | % | |||||
Adjusted net income / Average stockholders' equity (Adjusted ROE) (9) | 7.66 | % | 7.56 | % | 7.51 | % | 6.91 | % | |||||
Adjusted efficiency ratio (22) | 73.84 | % | 71.68 | % | 74.11 | % | 75.43 | % |
(1) | Outstanding loans are net of deferred loan fees and costs and net of the allowance for loan losses. There were no loans held for sale at June 30, 2019 and December 31, 2018. |
(2) | In July 2019, the Company called $25.0 million of its 10.60% and 10.18% trust preferred securities and related junior subordinated debentures, which will be redeemed by September 2019. |
(3) | The earnings per common share reflect the October 2018 reverse stock split which reduced the number of outstanding shares of each class on a 1-for-3 basis. See Note 15 to the audited consolidation financial statements included in the Form 10-K for more details on the reverse stock split. |
(4) | This Non-GAAP financial information is reconciled to GAAP in “Non-GAAP Financial Measures Reconciliation” herein. |
(5) | As of June 30, 2019, potential dilutive instruments included 738,138 unvested shares of restricted stock, including 736,839 shares of restricted stock issued in December 2018 in connection with the Company’s IPO and 1,299 additional shares of restricted stock issued in January 2019. As of June 30, 2019, these 738,138 unvested shares of restricted stock were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share at that date, fewer shares would have been purchased than restricted shares assumed issued. Therefore, at that date, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding in the three and six months ended June 30, 2019, and had a dilutive effect in per share earnings for the three (not shown due to rounding) and six months ended June 30, 2019. We had no outstanding dilutive instruments as of any period prior to December 2018. |
(6) | Special cash dividend of $40.0 million paid to our Former Parent in connection with the spin-off. |
(7) | Operating data for the three and six month periods ended June 30, 2019 and 2018 have been annualized. |
(8) | Net interest margin is net interest income divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets, which yield interest or similar income. |
(9) | Calculated based upon the average daily balance of total assets. |
(10) | Calculated based upon the average daily balance of stockholders’ equity. |
(11) | Total stockholders’ equity divided by total risk-weighted assets, calculated according to the standardized regulatory capital ratio calculations. |
(12) | Tier 1 capital divided by total risk-weighted assets. |
(13) | Tier 1 capital divided by quarter to date average assets. Tier 1 capital is composed of Common Equity Tier 1 (CET 1) capital plus outstanding qualifying trust preferred securities of $114.1 million at June 30, 2019 and 2018. $25.0 million of these trust preferred securities will be redeemed by September 2019. See footnote 2. |
(14) | Common Equity Tier 1 (CET 1) capital divided by total risk-weighted assets. |
(15) | Tangible common equity is calculated as the ratio of common equity less goodwill and other intangibles divided by total assets less goodwill and other intangible assets. Other intangibles assets are included in other assets in the Company’s consolidated balance sheets. |
(16) | Non-performing assets include all accruing loans past due more than 90 days, and all nonaccrual loans and OREO properties acquired through or in lieu of foreclosure. Non-performing assets were $32.8 million and $35.3 million as of June 30, 2019 and 2018, respectively. |
(17) | Non-performing loans include all accruing loans past due by more than 90 days, and all nonaccrual loans. Non-performing loans were $32.8 million and $34.7 million as of June 30, 2019 and 2018, respectively. |
(18) | Allowance for loan losses was $57.4 million and $69.9 million as of June 30, 2019 and 2018, respectively. See Note 5 to our audited consolidated financial statements in our Form 10-K and Note 4 to these unaudited interim consolidated financial statements for more details on our impairment models. |
(19) | Calculated based upon the average daily balance of outstanding loan principal balance net of deferred loan fees and costs, excluding the allowance for loan losses. |
(20) | Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income and net interest income. |
(21) | This presentation contains adjusted financial information, including adjusted noninterest expenses and the other adjusted items shown, determined by methods other than GAAP. This adjusted financial information is reconciled to GAAP in “Non-GAAP Financial Measures Reconciliation.” |
(22) | Adjusted efficiency ratio is the efficiency ratio less the effect of restructuring and spin-off costs, described in “Non-GAAP Financial Measures Reconciliation.” |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands, except per share amounts and percentages) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Total noninterest expenses | $ | 52,905 | $ | 52,638 | $ | 104,850 | $ | 108,283 | |||||||
Less: restructuring costs (1): | |||||||||||||||
Staff reduction costs | 907 | — | 907 | — | |||||||||||
Rebranding costs | 1,829 | — | 2,762 | — | |||||||||||
Total restructuring costs | 2,736 | — | 3,669 | — | |||||||||||
Less spin-off costs: | |||||||||||||||
Legal fees | — | 2,000 | — | 3,000 | |||||||||||
Additional contribution to non-qualified deferred compensation plan on behalf of participants to mitigate tax effects of unexpected early distribution due to spin-off (2) | — | 1,200 | — | 1,200 | |||||||||||
Accounting and consulting fees | — | — | — | 1,294 | |||||||||||
Other expenses | — | — | — | 544 | |||||||||||
Total spin-off costs | — | 3,200 | — | 6,038 | |||||||||||
Adjusted noninterest expenses | $ | 50,169 | $ | 49,438 | $ | 101,181 | $ | 102,245 |
Net income | $ | 12,857 | $ | 10,423 | $ | 25,928 | $ | 19,852 | |||||||
Plus after-tax restructuring costs: | |||||||||||||||
Restructuring costs before income tax effect | 2,736 | — | 3,669 | — | |||||||||||
Income tax effect | (588 | ) | — | (789 | ) | — | |||||||||
Total after-tax restructuring costs | 2,148 | — | 2,880 | — | |||||||||||
Plus after-tax total spin-off costs: | |||||||||||||||
Total spin-off costs before income tax effect | — | 3,200 | — | 6,038 | |||||||||||
Income tax effect (3) | — | 519 | — | (59 | ) | ||||||||||
Total after-tax spin-off costs | — | 3,719 | — | 5,979 | |||||||||||
Adjusted net income | $ | 15,005 | $ | 14,142 | $ | 28,808 | $ | 25,831 | |||||||
Basic earnings per share | $ | 0.30 | $ | 0.25 | $ | 0.61 | $ | 0.47 | |||||||
Plus: after tax impact of restructuring costs | 0.05 | — | 0.07 | — | |||||||||||
Plus: after tax impact of total spin-off costs | — | 0.08 | — | 0.14 | |||||||||||
Total adjusted basic earnings per common share | $ | 0.35 | $ | 0.33 | $ | 0.68 | $ | 0.61 | |||||||
Diluted earnings per share (4) | $ | 0.30 | $ | 0.25 | $ | 0.60 | $ | 0.47 | |||||||
Plus: after tax impact of restructuring costs | 0.05 | — | 0.07 | — | |||||||||||
Plus: after tax impact of total spin-off costs | — | 0.08 | — | 0.14 | |||||||||||
Total adjusted diluted earnings per common share | $ | 0.35 | $ | 0.33 | $ | 0.67 | $ | 0.61 |
Three months ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands, except per share amounts and percentages) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income / Average total assets (ROA) | 0.66 | % | 0.50 | % | 0.66 | % | 0.47 | % | |||||||
Plus: after tax impact of restructuring costs | 0.11 | % | — | % | 0.07 | % | — | % | |||||||
Plus: after tax impact of total spin-off costs | — | % | 0.17 | % | — | % | 0.14 | % | |||||||
Adjusted net income / Average total assets (Adjusted ROA) | 0.77 | % | 0.67 | % | 0.73 | % | 0.61 | % | |||||||
Net income / Average stockholders' equity (ROE) | 6.56 | % | 5.57 | % | 6.76 | % | 5.31 | % | |||||||
Plus: after tax impact of restructuring costs | 1.10 | % | —% | 0.75 | % | — | % | ||||||||
Plus: after tax impact of total spin-off costs | — | % | 1.99 | % | — | % | 1.60 | % | |||||||
Adjusted net income / Stockholders' equity (Adjusted ROE) | 7.66 | % | 7.56 | % | 7.51 | % | 6.91 | % | |||||||
Efficiency ratio | 77.87 | % | 76.31 | % | 76.80 | % | 79.88 | % | |||||||
Less: impact of restructuring costs | (4.03 | )% | —% | (2.69 | )% | — | % | ||||||||
Less: impact of total spin-off costs | — | % | (4.63 | )% | — | % | (4.45 | )% | |||||||
Adjusted efficiency ratio | 73.84 | % | 71.68 | % | 74.11 | % | 75.43 | % | |||||||
Stockholders' equity | $ | 806,368 | $ | 719,382 | $ | 806,368 | $ | 719,382 | |||||||
Less: goodwill and other intangibles | (20,969 | ) | (21,114 | ) | (20,969 | ) | (21,114 | ) | |||||||
Tangible common stockholders' equity | $ | 785,399 | $ | 698,268 | $ | 785,399 | $ | 698,268 | |||||||
Total assets | 7,926,826 | 8,530,464 | 7,926,826 | $ | 8,530,464 | ||||||||||
Less: goodwill and other intangibles | (20,969 | ) | (21,114 | ) | (20,969 | ) | (21,114 | ) | |||||||
Tangible assets | $ | 7,905,857 | $ | 8,509,350 | $ | 7,905,857 | $ | 8,509,350 | |||||||
Common shares outstanding | 43,205 | 42,489 | 43,205 | 42,489 | |||||||||||
Tangible common equity ratio | 9.93 | % | 8.21 | % | 9.93 | % | 8.21 | % | |||||||
Tangible stockholders' book value per common share | $ | 18.18 | $ | 16.43 | $ | 18.18 | $ | 16.43 |
(3) | Calculated based upon the estimated annual effective tax rate for the periods, which excludes the tax effect of discrete items, and the amounts that resulted from the permanent difference between spin-off costs that are non-deductible for Federal and state income tax purposes, and total spin-off costs recognized in the consolidated financial statements. The estimated annual effective rate applied for the calculation differs from the reported effective tax rate since it is based on a different mix of statutory rates applicable to these expenses and to the rates applicable to the Company and its subsidiaries. |
Three Months Ended June 30, | Change | Six Months Ended June 30, | Change | ||||||||||||||||||||||||||
(in thousands, except per share amounts and percentages) | 2019 | 2018 | 2019 vs 2018 | 2019 | 2018 | 2019 vs 2018 | |||||||||||||||||||||||
Net interest income | $ | 53,789 | $ | 53,989 | $ | (200 | ) | (0.4 | )% | $ | 109,226 | $ | 106,622 | $ | 2,604 | 2.4 | % | ||||||||||||
(Reversal of) provision for loan losses | (1,350 | ) | 150 | (1,500 | ) | N/M | (1,350 | ) | 150 | (1,500 | ) | N/M | |||||||||||||||||
Net interest income after (reversal of) provision for loan losses | 55,139 | 53,839 | 1,300 | 2.4 | % | 110,576 | 106,472 | 4,104 | 3.9 | % | |||||||||||||||||||
Noninterest income | 14,147 | 14,986 | (839 | ) | (5.6 | )% | 27,303 | 28,931 | (1,628 | ) | (5.6 | )% | |||||||||||||||||
Noninterest expense | 52,905 | 52,638 | 267 | 0.5 | % | 104,850 | 108,283 | (3,433 | ) | (3.2 | )% | ||||||||||||||||||
Net income before income tax | 16,381 | 16,187 | 194 | 1.2 | % | 33,029 | 27,120 | 5,909 | 21.8 | % | |||||||||||||||||||
Income tax | (3,524 | ) | (5,764 | ) | 2,240 | (38.9 | )% | (7,101 | ) | (7,268 | ) | 167 | (2.3 | )% | |||||||||||||||
Net income | $ | 12,857 | $ | 10,423 | $ | 2,434 | 23.4 | % | $ | 25,928 | $ | 19,852 | $ | 6,076 | 30.6 | % | |||||||||||||
Basic earnings per common share | $ | 0.30 | $ | 0.25 | $ | 0.05 | 20.0 | % | $ | 0.61 | $ | 0.47 | $ | 0.14 | 29.8 | % | |||||||||||||
Diluted earnings per common share(1) | $ | 0.30 | $ | 0.25 | $ | 0.05 | 20.0 | % | $ | 0.60 | $ | 0.47 | $ | 0.13 | 27.7 | % |
(1) | At June 30, 2019, potential dilutive instruments consist of 738,138 unvested shares of restricted stock. We had no outstanding dilutive instruments at June 30, 2018. See Note 14 to our unaudited interim financial statements in this Form 10-Q for details on the dilutive effects of the issuance of restricted stock on earnings per share for the six months ended June 30, 2019. |
Three Months Ended June 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
(in thousands, except percentages) | Average Balances | Income/ Expense | Yield/ Rates | Average Balances | Income/ Expense | Yield/ Rates | |||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loan portfolio, net (1) | $ | 5,641,686 | $ | 66,801 | 4.75 | % | $ | 5,890,459 | $ | 62,448 | 4.31 | % | |||||||||
Securities available for sale (2) | 1,522,280 | 10,314 | 2.72 | % | 1,662,799 | 11,257 | 2.74 | % | |||||||||||||
Securities held to maturity (3) | 82,728 | 506 | 2.45 | % | 88,811 | 346 | 1.57 | % | |||||||||||||
Federal Reserve Bank and FHLB stock | 65,861 | 1,066 | 6.49 | % | 70,243 | 1,106 | 6.45 | % | |||||||||||||
Deposits with banks | 88,247 | 539 | 2.45 | % | 175,434 | 759 | 1.74 | % | |||||||||||||
Total interest-earning assets | 7,400,802 | 79,226 | 4.29 | % | 7,887,746 | 75,916 | 3.91 | % | |||||||||||||
Total non-interest-earning assets less allowance for loan losses | 466,318 | 531,294 | |||||||||||||||||||
Total assets | $ | 7,867,120 | $ | 8,419,040 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Checking and saving accounts - | |||||||||||||||||||||
Interest bearing DDA | $ | 1,207,811 | $ | 301 | 0.10 | % | $ | 1,417,230 | $ | 113 | 0.03 | % | |||||||||
Money market | 1,143,072 | 3,997 | 1.40 | % | 1,225,452 | 3,086 | 1.01 | % | |||||||||||||
Savings | 369,538 | 17 | 0.02 | % | 431,686 | 18 | 0.02 | % | |||||||||||||
Total checking and saving accounts | 2,720,421 | 4,315 | 0.64 | % | 3,074,368 | 3,217 | 0.42 | % | |||||||||||||
Time deposits | 2,314,614 | 12,740 | 2.21 | % | 2,371,147 | 10,172 | 1.73 | % | |||||||||||||
Total deposits | 5,035,035 | 17,055 | 1.36 | % | 5,445,515 | 13,389 | 0.99 | % | |||||||||||||
Securities sold under agreements to repurchase | — | — | — | % | 423 | 2 | 1.90 | % | |||||||||||||
Advances from the FHLB and other borrowings (4) | 1,071,978 | 6,292 | 2.35 | % | 1,173,000 | 6,511 | 2.24 | % | |||||||||||||
Junior subordinated debentures | 118,110 | 2,090 | 7.10 | % | 118,110 | 2,025 | 7.04 | % | |||||||||||||
Total interest-bearing liabilities | 6,225,123 | 25,437 | 1.64 | % | 6,737,048 | 21,927 | 1.31 | % | |||||||||||||
Total non-interest-bearing liabilities | 855,874 | 933,968 | |||||||||||||||||||
Total liabilities | 7,080,997 | 7,671,016 | |||||||||||||||||||
Stockholders’ equity | 786,123 | 748,024 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 7,867,120 | $ | 8,419,040 | |||||||||||||||||
Excess of average interest-earning assets over average interest-bearing liabilities | $ | 1,175,679 | $ | 1,150,698 | |||||||||||||||||
Net interest income | $ | 53,789 | $ | 53,989 | |||||||||||||||||
Net interest rate spread | 2.65 | % | 2.60 | % | |||||||||||||||||
Net interest margin (5) | 2.92 | % | 2.77 | % | |||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 118.89 | % | 117.08 | % |
Six Months Ended June 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
(in thousands, except percentages) | Average Balances | Income/ Expense | Yield/ Rates | Average Balances | Income/ Expense | Yield/ Rates | |||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loan portfolio, net (1) | $ | 5,674,606 | $ | 133,523 | 4.74 | % | $ | 5,902,893 | $ | 122,118 | 4.18 | % | |||||||||
Securities available for sale (2) | 1,538,961 | 21,204 | 2.78 | % | 1,669,607 | 21,549 | 2.60 | % | |||||||||||||
Securities held to maturity (3) | 83,665 | 1,092 | 2.63 | % | 89,165 | 856 | 1.93 | % | |||||||||||||
Federal Reserve Bank and FHLB stock | 66,657 | 2,171 | 6.57 | % | 70,304 | 2,045 | 5.90 | % | |||||||||||||
Deposits with banks | 127,551 | 1,543 | 2.44 | % | 157,391 | 1,279 | 1.63 | % | |||||||||||||
Total interest-earning assets | 7,491,440 | 159,533 | 4.29 | % | 7,889,360 | 147,847 | 3.78 | % | |||||||||||||
Total non-interest-earning assets less allowance for loan losses | 473,237 | 524,074 | |||||||||||||||||||
Total assets | $ | 7,964,677 | $ | 8,413,434 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Checking and saving accounts - | |||||||||||||||||||||
Interest bearing DDA | $ | 1,235,056 | $ | 575 | 0.09 | % | $ | 1,446,823 | $ | 202 | 0.03 | % | |||||||||
Money market | 1,150,805 | 7,714 | 1.35 | % | 1,219,748 | 5,652 | 0.93 | % | |||||||||||||
Savings | 376,443 | 33 | 0.02 | % | 438,668 | 36 | 0.02 | % | |||||||||||||
Total checking and saving accounts | 2,762,304 | 8,322 | 0.61 | % | 3,105,239 | 5,890 | 0.38 | % | |||||||||||||
Time deposits | 2,368,185 | 25,293 | 2.15 | % | 2,323,746 | 18,872 | 1.63 | % | |||||||||||||
Total deposits | 5,130,489 | 33,615 | 1.32 | % | 5,428,985 | 24,762 | 0.91 | % | |||||||||||||
Securities sold under agreements to repurchase | — | — | — | % | 213 | 2 | 1.89 | % | |||||||||||||
Advances from the FHLB and other borrowings (4) | 1,086,586 | 12,497 | 2.32 | % | 1,179,934 | 12,501 | 2.13 | % | |||||||||||||
Junior subordinated debentures | 118,110 | 4,195 | 7.16 | % | 118,110 | 3,960 | 6.82 | % | |||||||||||||
Total interest-bearing liabilities | 6,335,185 | 50,307 | 1.60 | % | 6,727,242 | 41,225 | 1.23 | % | |||||||||||||
Total non-interest-bearing liabilities | 856,041 | 938,287 | |||||||||||||||||||
Total liabilities | 7,191,226 | 7,665,529 | |||||||||||||||||||
Stockholders’ equity | 773,451 | 747,905 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 7,964,677 | $ | 8,413,434 | |||||||||||||||||
Excess of average interest-earning assets over average interest-bearing liabilities | $ | 1,156,255 | $ | 1,162,118 | |||||||||||||||||
Net interest income | $ | 109,226 | $ | 106,622 | |||||||||||||||||
Net interest rate spread | 2.69 | % | 2.55 | % | |||||||||||||||||
Net interest margin (5) | 2.94 | % | 2.72 | % | |||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 118.25 | % | 117.27 | % |
(1) | Average non-performing loans of $24.5 million and $34.0 million for the three months ended June 30, 2019 and 2018, respectively, and $22.1 million and $32.7 million for the six months ended June 30, 2019 and 2018, respectively, are included in the average loan portfolio net balance. |
(2) | Includes nontaxable securities with average balances of $122.9 million and $174.1 million for the three months ended June 30, 2019 and 2018, respectively, and $140.4 million and $175.4 million for the six months ended June 30, 2019 and 2018, respectively. The tax equivalent yield for these nontaxable securities for the three months ended June 30, 2019 and 2018 was 4.05% and 4.10%, respectively, and 4.03% and 3.83% for the six months ended June 30, 2019 and 2018, respectively. In the three and six month periods ended June 30, 2019 and 2018, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79. |
(3) | Includes nontaxable securities with average balances of $82.7 million and $88.8 million for the three months ended June 30, 2019 and 2018, respectively, and $83.7 million and $88.9 million for the six months ended June 30, 2019 and 2018, respectively. The tax equivalent yield for these nontaxable securities for the three months ended June 30, 2019 and 2018 was 3.10% and 2.00%, respectively, and 3.33% and 2.45% for the six months ended June 30, 2019 and 2018, respectively. In the three and six month periods ended June 30, 2019 and 2018, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79 (1 minus the tax rate of 0.21). |
(4) | The terms of the advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances. |
(5) | Net interest margin is defined as net interest income divided by average interest-earning assets, which are loans, securities available for sale and held to maturity, deposits with banks and other financial assets, which yield interest or similar income. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Balance at the beginning of the period | $ | 60,322 | $ | 72,118 | $ | 61,762 | $ | 72,000 | |||||||
Charge-offs | |||||||||||||||
Domestic Loans: | |||||||||||||||
Real Estate | |||||||||||||||
Single-family residential | — | (27 | ) | (87 | ) | (27 | ) | ||||||||
Commercial | (874 | ) | (2,355 | ) | (1,866 | ) | (2,737 | ) | |||||||
Consumer and others | (210 | ) | (71 | ) | (319 | ) | (90 | ) | |||||||
(1,084 | ) | (2,453 | ) | (2,272 | ) | (2,854 | ) | ||||||||
International Loans (1): | |||||||||||||||
Commercial | (43 | ) | (52 | ) | (61 | ) | (52 | ) | |||||||
Consumer and others | (894 | ) | (230 | ) | (1,300 | ) | (630 | ) | |||||||
(937 | ) | (282 | ) | (1,361 | ) | (682 | ) | ||||||||
Total Charge-offs | $ | (2,021 | ) | $ | (2,735 | ) | $ | (3,633 | ) | $ | (3,536 | ) | |||
Recoveries | |||||||||||||||
Domestic Loans: | |||||||||||||||
Real Estate Loans | |||||||||||||||
Commercial Real Estate (CRE) | |||||||||||||||
Non-Owner occupied | $ | — | $ | 4 | $ | — | $ | 5 | |||||||
Land development and construction loans | — | — | — | 33 | |||||||||||
— | 4 | — | 38 | ||||||||||||
Single-family residential | 104 | 60 | 143 | 64 | |||||||||||
Owner occupied | 2 | 95 | 2 | 883 | |||||||||||
106 | 159 | 145 | 985 | ||||||||||||
Commercial | 149 | 174 | 180 | 218 | |||||||||||
Consumer and others | 6 | 26 | 7 | 32 | |||||||||||
261 | 359 | 332 | 1,235 | ||||||||||||
International Loans (1): | |||||||||||||||
Real Estate | |||||||||||||||
Single-family residential | $ | — | $ | — | $ | — | $ | — | |||||||
Commercial | 136 | — | 228 | — | |||||||||||
Consumer and others | 56 | 39 | 65 | 82 | |||||||||||
192 | 39 | 293 | 82 | ||||||||||||
Total Recoveries | $ | 453 | $ | 398 | $ | 625 | $ | 1,317 | |||||||
Net charge-offs | (1,568 | ) | (2,337 | ) | (3,008 | ) | (2,219 | ) | |||||||
(Reversal of) provision for loan losses | (1,350 | ) | 150 | (1,350 | ) | 150 | |||||||||
Balance at the end of the period | $ | 57,404 | $ | 69,931 | $ | 57,404 | $ | 69,931 |
(1) | Includes transactions in which the debtor or the customer is domiciled outside the U.S., even when the collateral is located in the U.S. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Venezuela | $ | 729 | $ | 230 | 1,041 | 630 | |||||||||
Other countries | 165 | — | 259 | — | |||||||||||
Total charge offs | $ | 894 | $ | 230 | $ | 1,300 | $ | 630 |
Three Months Ended June 30, | Change | |||||||||||||||||||
2019 | 2018 | 2019 over 2018 | ||||||||||||||||||
Amount | % | Amount | % | Amount | % | |||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||
Deposits and service fees | $ | 4,341 | 30.7 | % | $ | 4,471 | 29.8 | % | $ | (130 | ) | (2.9 | )% | |||||||
Brokerage, advisory and fiduciary activities | 3,736 | 26.4 | % | 4,426 | 29.5 | % | (690 | ) | (15.6 | )% | ||||||||||
Change in cash surrender value of bank owned life insurance (“BOLI”)(1) | 1,419 | 10.0 | % | 1,474 | 9.8 | % | (55 | ) | (3.7 | )% | ||||||||||
Cards and trade finance servicing fees | 1,419 | 10.0 | % | 1,173 | 7.8 | % | 246 | 21.0 | % | |||||||||||
Gain on early extinguishment of FHLB advances | — | — | % | 882 | 5.9 | % | (882 | ) | N/M | |||||||||||
Data processing and fees for other services | 365 | 2.6 | % | $ | 613 | 4.1 | % | (248 | ) | (40.5 | )% | |||||||||
Securities gains, net | 992 | 7.0 | % | 16 | 0.1 | % | 976 | N/M | ||||||||||||
Other noninterest income (2) | 1,875 | 13.3 | % | 1,931 | 13.0 | % | (56 | ) | (2.9 | )% | ||||||||||
Total noninterest income | $ | 14,147 | 100.0 | % | $ | 14,986 | 100.0 | % | $ | (839 | ) | (5.6 | )% |
Six Months Ended June 30, | Change | |||||||||||||||||||
2019 | 2018 | 2019 over 2018 | ||||||||||||||||||
Amount | % | Amount | % | Amount | % | |||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||
Deposits and service fees | $ | 8,427 | 30.9 | % | $ | 9,053 | 31.3 | % | $ | (626 | ) | (6.9 | )% | |||||||
Brokerage, advisory and fiduciary activities | 7,424 | 27.2 | % | 8,841 | 30.6 | % | (1,417 | ) | (16.0 | )% | ||||||||||
Change in cash surrender value of bank owned life insurance (“BOLI”)(1) | 2,823 | 10.3 | % | 2,918 | 10.1 | % | (95 | ) | (3.3 | )% | ||||||||||
Cards and trade finance servicing fees | 2,334 | 8.6 | % | 2,235 | 7.7 | % | 99 | 4.4 | % | |||||||||||
Gain on early extinguishment of FHLB advances | 557 | 2.0 | % | 882 | 3.1 | % | (325 | ) | (36.9 | )% | ||||||||||
Data processing and fees for other services | 885 | 3.2 | % | $ | 1,494 | 5.2 | % | (609 | ) | (40.8 | )% | |||||||||
Securities gains, net | 996 | 3.7 | % | 16 | 0.1 | % | 980 | N/M | ||||||||||||
Other noninterest income (2) | 3,857 | 14.1 | % | 3,492 | 11.9 | % | 365 | 10.5 | % | |||||||||||
Total noninterest income | $ | 27,303 | 100.0 | % | $ | 28,931 | 100.0 | % | $ | (1,628 | ) | (5.6 | )% |
(1) | Changes in cash surrender value are not taxable. |
(2) | Includes rental income, income from derivative and foreign currency exchange transactions with customers, and credits which mirror the valuation loss on the investment balances held in the non-qualified deferred compensation plan in order to adjust our liability to participants of the deferred compensation plan |
Three Months Ended June 30, | Change | |||||||||||||||||||
2019 | 2018 | 2019 vs 2018 | ||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | |||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||
Salaries and employee benefits | $ | 34,057 | 64.4 | % | $ | 34,932 | 66.4 | % | $ | (875 | ) | (2.5 | )% | |||||||
Occupancy and equipment | 4,232 | 8.0 | % | 4,060 | 7.7 | % | 172 | 4.2 | % | |||||||||||
Professional and other services fees | 3,954 | 7.5 | % | 5,387 | 10.2 | % | (1,433 | ) | (26.6 | )% | ||||||||||
Telecommunications and data processing | 3,233 | 6.1 | % | 3,011 | 5.7 | % | 222 | 7.4 | % | |||||||||||
Depreciation and amortization | 2,010 | 3.8 | % | 1,945 | 3.7 | % | 65 | 3.3 | % | |||||||||||
FDIC assessments and insurance | 1,177 | 2.2 | % | 1,468 | 2.8 | % | (291 | ) | (19.8 | )% | ||||||||||
Other operating expenses (1) | 4,242 | 8.0 | % | 1,835 | 3.5 | % | 2,407 | 131.2 | % | |||||||||||
Total noninterest expenses | $ | 52,905 | 100.0 | % | $ | 52,638 | 100.0 | % | $ | 267 | 0.5 | % |
Six Months Ended June 30, | Change | |||||||||||||||||||
2019 | 2018 | 2019 vs 2018 | ||||||||||||||||||
Amount | % | Amount | % | Amount | % | |||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||
Salaries and employee benefits | $ | 67,494 | 64.4 | % | $ | 68,973 | 63.7 | % | $ | (1,479 | ) | (2.1 | )% | |||||||
Occupancy and equipment | 8,274 | 7.9 | % | 7,775 | 7.2 | % | 499 | 6.4 | % | |||||||||||
Professional and other services fees | 7,398 | 7.1 | % | 11,831 | 10.9 | % | (4,433 | ) | (37.5 | )% | ||||||||||
Telecommunications and data processing | 6,259 | 6.0 | % | 6,095 | 5.6 | % | 164 | 2.7 | % | |||||||||||
Depreciation and amortization | 3,952 | 3.8 | % | 4,086 | 3.8 | % | (134 | ) | (3.3 | )% | ||||||||||
FDIC assessments and insurance | 2,570 | 2.5 | % | 2,915 | 2.7 | % | (345 | ) | (11.8 | )% | ||||||||||
Other operating expenses (1) | 8,903 | 8.3 | % | 6,608 | 6.1 | % | 2,295 | 34.7 | % | |||||||||||
Total noninterest expenses | $ | 104,850 | 100.0 | % | $ | 108,283 | 100.0 | % | $ | (3,433 | ) | (3.2 | )% |
Three Months Ended June 30, | Change | Six Months Ended June 30, | Change | ||||||||||||||||||||||||||
2019 | 2018 | 2019 vs 2018 | 2019 | 2018 | 2019 vs 2018 | ||||||||||||||||||||||||
(in thousands, except effective tax rates and percentages) | |||||||||||||||||||||||||||||
Income tax expense | $ | 3,524 | $ | 5,764 | ($2,240 | ) | (38.9 | )% | $ | 7,101 | $ | 7,268 | ($167 | ) | (2.3 | )% | |||||||||||||
Effective income tax rate | 21.51 | % | 35.61 | % | (14.1 | )% | (39.6 | )% | 21.50 | % | 26.80 | % | (5.3 | )% | (19.8 | )% |
June 30, 2019 | December 31, 2018 | ||||||
(in thousands, except percentages) | |||||||
Total loans, gross (1) | $ | 5,812,755 | $ | 5,920,175 | |||
Total loans, gross / total assets | 73.3 | % | 72.9 | % | |||
Allowance for loan losses | $ | 57,404 | $ | 61,762 | |||
Allowance for loan losses / total loans, gross (1) (2) | 0.99 | % | 1.04 | % | |||
Total loans, net (3) | $ | 5,755,351 | $ | 5,858,413 | |||
Total loans, net / total assets | 72.6 | % | 72.1 | % |
(1) | Outstanding loan principal balance net of deferred loan fees and costs, excluding loans held for sale and the allowance for loan losses. |
(2) | See Note 5 of our audited consolidated financial statements in the Form 10-K and Note 4 of these unaudited interim consolidated financial statements for more details on our impairment models. |
(3) | Outstanding loan principal balance net of deferred loan fees and costs, excluding loans held for sale and net of the allowance for loan losses. |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Retail (1) | $ | 1,128,385 | $ | 1,081,142 | |||
Multifamily | 968,080 | 909,439 | |||||
Office space | 457,251 | 441,712 | |||||
Land and construction | 291,304 | 326,644 | |||||
Hospitality | 165,378 | 166,415 | |||||
Industrial and warehouse | 121,479 | 120,086 | |||||
$ | 3,131,877 | $ | 3,045,438 |
(1) | Includes loans generally granted to finance the acquisition or operation of non-owner occupied properties such as retail shopping centers, free-standing single-tenant properties, and mixed-use properties with a primary retail component, where the primary source of repayment is derived from the rental income generated from the use of the property by its tenants. |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Domestic Loans: | |||||||
Real Estate Loans | |||||||
Commercial real estate (CRE) | |||||||
Nonowner occupied | $ | 1,872,493 | $ | 1,809,356 | |||
Multi-family residential | 968,080 | 909,439 | |||||
Land development and construction loans | 291,304 | 326,644 | |||||
3,131,877 | 3,045,439 | ||||||
Single-family residential | 412,709 | 398,043 | |||||
Owner occupied | 836,334 | 777,022 | |||||
4,380,920 | 4,220,504 | ||||||
Commercial loans | 1,123,362 | 1,306,792 | |||||
Loans to depository institutions and acceptances (1) | 20,006 | 19,965 | |||||
Consumer loans and overdrafts (2) | 73,674 | 73,155 | |||||
Total Domestic Loans | 5,597,962 | 5,620,416 | |||||
International Loans: | |||||||
Real Estate Loans | |||||||
Single-family residential (3) | 122,854 | 135,438 | |||||
Commercial loans | 57,374 | 73,636 | |||||
Loans to depository institutions and acceptances | 5,000 | 49,000 | |||||
Consumer loans and overdrafts (4) | 29,565 | 41,685 | |||||
Total International Loans | 214,793 | 299,759 | |||||
Total Loan Portfolio | $ | 5,812,755 | $ | 5,920,175 |
(1) | Secured by cash or U.S. Government securities. |
(2) | Includes customers’ overdraft balances totaling $0.8 million and $1.0 million as of June 30, 2019 and December 31, 2018, respectively. |
(3) | Secured by real estate properties located in the U.S. |
(4) | International customers’ overdraft balances were de minimis at each of the dates presented. |
June 30, 2019 | December 31, 2018 | ||||||||||||
Net Exposure(1) | % Total Assets | Net Exposure(1) | % Total Assets | ||||||||||
(in thousands, except percentages) | |||||||||||||
Venezuela (2) | $ | 137,414 | 1.73 | % | $ | 157,162 | 1.93 | % | |||||
Other (3) | 77,379 | 0.98 | % | 142,597 | 1.77 | % | |||||||
Total | $ | 214,793 | 2.71 | % | $ | 299,759 | 3.70 | % |
(1) | Consists of outstanding principal amounts, net of collateral of cash, cash equivalents or other financial instruments totaling $20.6 million and $19.5 million as of June 30, 2019 and December 31, 2018, respectively. |
(2) | Includes mortgage loans for single-family residential properties located in the U.S. totaling $116.2 million and $129.0 million as of June 30, 2019 and December 31, 2018, respectively. |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
Less than 1 year | 1-3 Years | More than 3 years | Total | Less than 1 year | 1-3 Years | More than 3 years | Total | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Venezuela (1) | $ | 20,770 | $ | 1,778 | $ | 114,866 | $ | 137,414 | $ | 27,415 | $ | 1,059 | $ | 128,688 | $ | 157,162 | |||||||||||||||
Other (2) | 22,301 | 9,263 | 45,815 | 77,379 | 71,707 | 18,200 | 52,690 | 142,597 | |||||||||||||||||||||||
Total (3) | $ | 43,071 | $ | 11,041 | $ | 160,681 | $ | 292,172 | $ | 99,122 | $ | 19,259 | $ | 181,378 | $ | 442,356 |
(1) | Includes mortgage loans for single-family residential properties located in the U.S. totaling $116.2 million and $129.0 million as of June 30, 2019 and December 31, 2018, respectively. Based upon the diligence we customarily perform to "know our customers" for anti-money laundering, OFAC and sanctions purposes, and a preliminary review of the Executive Order issued by the President of the United States on August 5, 2019 and the related Treasury Department Guidance, we do not believe that the U.S. economic embargo on certain Venezuela persons will adversely affect our Venezuela customer relationships, generally. |
(3) | Consists of outstanding principal amounts, net of cash collateral, cash equivalents or other financial instruments totaling $20.6 million and $19.5 million as of June 30, 2019 and December 31, 2018, respectively. |
June 30, 2019 | December 31, 2018 | ||||||||||||
Allowance | % of Loans in Each Category to Total Loans | Allowance | % of Loans in Each Category to Total Loans | ||||||||||
(in thousands, except percentages) | |||||||||||||
Domestic Loans | |||||||||||||
Real estate | $ | 21,900 | 53.8 | % | $ | 22,778 | 51.3 | % | |||||
Commercial | 25,334 | 35.5 | % | 29,278 | 37.0 | % | |||||||
Financial institutions | 42 | 0.3 | % | 41 | 0.3 | % | |||||||
Consumer and others (1) | 2,006 | 6.7 | % | 1,985 | 6.3 | % | |||||||
49,282 | 96.3 | % | 54,082 | 94.9 | % | ||||||||
International Loans (2) | |||||||||||||
Commercial | 490 | 1.0 | % | 740 | 1.2 | % | |||||||
Financial institutions | 18 | 0.1 | % | 404 | 0.8 | % | |||||||
Consumer and others (1) | 7,614 | 2.6 | % | 6,536 | 3.1 | % | |||||||
8,122 | 3.7 | % | 7,680 | 5.1 | % | ||||||||
Total Allowance for Loan Losses | $ | 57,404 | 100.0 | % | $ | 61,762 | 100.0 | % | |||||
% of Total Loans | 0.99 | % | 1.04 | % |
(1) | Includes: (i) credit card receivables to cardholders for whom charge privileges have been stopped as of June 30, 2019; and (ii) mortgage loans for and secured by single-family residential properties located in the U.S. |
(2) | Includes transactions in which the debtor or customer is domiciled outside the U.S. and all collateral is located in the U.S. |
June 30, 2019 | December 31, 2018 | ||||||
(in thousands) | |||||||
Non-Accrual Loans (1) | |||||||
Domestic Loans: | |||||||
Real Estate Loans | |||||||
Commercial real estate (CRE) | |||||||
Nonowner occupied | $ | 1,964 | $ | — | |||
Multi-family residential | 657 | — | |||||
Single-family residential | 8,111 | 5,198 | |||||
Owner occupied | 10,528 | 4,983 | |||||
21,260 | 10,181 | ||||||
Commercial loans | 10,032 | 4,772 | |||||
Consumer loans and overdrafts | 82 | 11 | |||||
Total Domestic | 31,374 | 14,964 | |||||
International Loans: (2) | |||||||
Real Estate Loans | |||||||
Single-family residential | 1,321 | 1,491 | |||||
Consumer loans and overdrafts | 32 | 24 | |||||
Total International | 1,353 | 1,515 | |||||
Total Non-Accrual Loans | $ | 32,727 | $ | 16,479 | |||
Past Due Accruing Loans (3) | |||||||
Domestic Loans: | |||||||
Real Estate Loans | |||||||
Single-family residential | $ | — | $ | 54 | |||
Total Domestic | — | 54 | |||||
International Loans: | |||||||
Real Estate Loans | |||||||
Single-family residential | — | 365 | |||||
Consumer loans and overdrafts | 23 | 884 | |||||
Total International | 23 | 1,249 | |||||
Total Past Due Accruing Loans | $ | 23 | $ | 1,303 | |||
Total Non-Performing Loans | $ | 32,750 | $ | 17,782 | |||
Other Real Estate Owned | — | 367 | |||||
Total Non-Performing Assets | $ | 32,750 | $ | 18,149 |
(1) | Includes loan modifications that met the definition of TDRs that may be performing in accordance with their modified loan terms. |
(2) | Includes transactions in which the debtor or customer is domiciled outside the U.S., but where all collateral is located in the U.S. |
(3) | Loans past due 90 days or more but still accruing. |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
(in thousands) | Special Mention | Substandard | Doubtful | Total (1) | Special Mention | Substandard | Doubtful | Total (1) | |||||||||||||||||||||||
Real Estate Loans | |||||||||||||||||||||||||||||||
Commercial Real Estate (CRE) | |||||||||||||||||||||||||||||||
Nonowner occupied | $ | 6,251 | $ | 1,964 | $ | — | $ | 8,215 | $ | 6,561 | $ | 222 | $ | — | $ | 6,783 | |||||||||||||||
Multi-family residential | — | 657 | — | 657 | — | — | — | — | |||||||||||||||||||||||
6,251 | 2,621 | — | 8,872 | 6,561 | 222 | — | 6,783 | ||||||||||||||||||||||||
Single-family residential | — | 9,432 | — | 9,432 | — | 7,108 | — | 7,108 | |||||||||||||||||||||||
Owner occupied | 9,476 | 13,940 | — | 23,416 | 9,019 | 9,451 | — | 18,470 | |||||||||||||||||||||||
15,727 | 25,993 | — | 41,720 | 15,580 | 16,781 | — | 32,361 | ||||||||||||||||||||||||
Commercial loans | 5,332 | 11,490 | 539 | 17,361 | 3,943 | 6,462 | 589 | 10,994 | |||||||||||||||||||||||
Consumer loans and overdrafts | — | 4,421 | — | 4,421 | — | 6,062 | — | 6,062 | |||||||||||||||||||||||
$ | 21,059 | $ | 41,904 | $ | 539 | $ | 63,502 | $ | 19,523 | $ | 29,305 | $ | 589 | $ | 49,417 |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Real estate loans | |||||||
Commercial real estate (CRE) | |||||||
Nonowner occupied | $ | — | $ | 222 | |||
Owner occupied | 3,411 | 4,468 | |||||
3,411 | 4,690 | ||||||
Commercial loans | 1,997 | 2,433 | |||||
Consumer loans and overdrafts (1) | 4,285 | 5,144 | |||||
$ | 9,693 | $ | 12,267 |
June 30, 2019 | December 31, 2018 | ||||||||||||
Amount | % | Amount | % | ||||||||||
(in thousands, except percentages) | |||||||||||||
Securities held to maturity | |||||||||||||
U.S. Government sponsored enterprise debt | $ | 78,448 | 4.8 | % | $ | 82,326 | 4.7 | % | |||||
U.S. Government agency debt | 2,792 | 0.1 | % | 2,862 | 0.2 | % | |||||||
$ | 81,240 | 4.9 | % | $ | 85,188 | 4.9 | % | ||||||
Securities available for sale: | |||||||||||||
U.S. Government sponsored enterprise debt | $ | 933,670 | 56.6 | % | $ | 820,779 | 47.1 | % | |||||
Corporate debt (1) | 271,706 | 16.5 | % | 352,555 | 20.3 | % | |||||||
U.S. Government agency debt | 198,740 | 12.0 | % | 216,985 | 12.5 | % | |||||||
Municipal bonds | 73,327 | 4.4 | % | 160,212 | 9.2 | % | |||||||
Mutual funds (2) | 23,779 | 1.4 | % | 23,110 | 1.3 | % | |||||||
Commercial paper | — | — | % | 12,410 | 0.7 | % | |||||||
$ | 1,501,222 | 90.9 | % | $ | 1,586,051 | 91.1 | % | ||||||
Other securities (3): | |||||||||||||
FHLB stock | $ | 55,115 | 3.4 | % | $ | 57,179 | 3.3 | % | |||||
Federal Reserve Bank stock | 13,055 | 0.8 | % | 13,010 | 0.7 | % | |||||||
$ | 68,170 | 4.2 | % | $ | 70,189 | 4.0 | % | ||||||
$ | 1,650,632 | 100.0 | % | $ | 1,741,428 | 100.0 | % |
(1) | June 30, 2019 includes $12.1 million in “investment-grade” quality securities issued by corporate entities from Europe and Japan in the financial services sector. December 31, 2018 includes $36.2 million in obligations issued by corporate entities from Europe and Japan in three different sectors. The Company limits exposure to foreign investments based on cross border exposure by country, risk appetite and policy. All foreign investments are denominated in U.S. Dollars. |
(2) | Includes a publicly offered investment company which seeks current income and makes investments that qualify for Community Reinvestment Act (“CRA”) purposes. |
(3) | Amounts correspond to original cost at the date presented. Original cost approximates fair value because of the nature of these investments. |
June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | Total | Less than a year | One to five years | Five to ten years | Over ten years | No maturity | |||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||
Securities held to maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. Government sponsored enterprise debt | $ | 78,448 | 2.72 | % | $ | — | — | % | $ | — | — | $ | — | — | % | $ | 78,448 | 2.72 | % | $ | — | — | % | ||||||||||||||||||
U.S. Government agency debt | 2,792 | 2.74 | — | — | — | — | — | — | 2,792 | 2.74 | — | — | |||||||||||||||||||||||||||||
$ | 81,240 | 2.72 | $ | — | — | $ | — | — | $ | — | — | $ | 81,240 | 2.72 | $ | — | — | ||||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||||||||||||||||||||
U.S. Government sponsored enterprise debt | $ | 933,670 | 2.87 | % | $ | 675 | 3.94 | % | $ | 26,827 | 2.67 | % | $ | 108,013 | 2.93 | % | $ | 798,155 | 2.87 | % | $ | — | — | % | |||||||||||||||||
Corporate debt-domestic | 259,612 | 3.11 | 43,078 | 2.63 | 170,345 | 3.07 | 46,189 | 3.72 | — | — | — | — | |||||||||||||||||||||||||||||
U.S. Government agency debt | 198,740 | 3.06 | 529 | 2.51 | 9,262 | 3.23 | 18,066 | 2.85 | 170,883 | 3.07 | — | — | |||||||||||||||||||||||||||||
Municipal bonds | 73,327 | 3.23 | — | — | — | — | 6,888 | 2.99 | 66,439 | 3.25 | — | — | |||||||||||||||||||||||||||||
Corporate debt-foreign | 12,094 | 3.48 | — | — | 12,094 | 3.48 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Mutual funds | 23,779 | 2.37 | — | — | — | — | — | — | — | — | 23,779 | 2.37 | |||||||||||||||||||||||||||||
Commercial paper | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
$ | 1,501,222 | 2.95 | $ | 44,282 | 2.65 | $ | 218,528 | 3.05 | $ | 179,156 | 3.13 | $ | 1,035,477 | 2.93 | $ | 23,779 | 2.37 | ||||||||||||||||||||||||
Other securities | |||||||||||||||||||||||||||||||||||||||||
FHLB stock | $ | 55,115 | 6.54 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 55,115 | 6.54 | % | |||||||||||||||||
Federal Reserve Bank stock | 13,055 | 6.08 | — | — | — | — | — | — | — | — | 13,055 | 6.08 | |||||||||||||||||||||||||||||
$ | 68,170 | 6.45 | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | 68,170 | 6.45 | ||||||||||||||||||||||||
$ | 1,650,632 | 3.08 | % | $ | 44,282 | 2.65 | % | $ | 218,528 | 3.05 | % | $ | 179,156 | 3.13 | % | $ | 1,116,717 | 2.91 | % | $ | 91,949 | 5.40 | % |
December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | Total | Less than a year | One to five years | Five to ten years | Over ten years | No maturity | |||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||
Securities held to maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. Government sponsored enterprise debt | $ | 82,326 | 2.84 | % | $ | — | — | % | $ | — | — | $ | — | — | % | $ | 82,326 | 2.84 | % | $ | — | — | % | ||||||||||||||||||
U.S. Government agency debt | 2,862 | 2.73 | — | — | — | — | — | — | 2,862 | 2.73 | — | — | |||||||||||||||||||||||||||||
$ | 85,188 | 2.84 | $ | — | — | $ | — | — | $ | — | — | $ | 85,188 | 2.84 | $ | — | — | ||||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||||||||||||||||||||
U.S. Government sponsored enterprise debt | $ | 820,779 | 2.70 | % | $ | 11 | 5.16 | % | $ | 29,807 | 2.70 | % | $ | 86,654 | 2.78 | % | $ | 704,307 | 2.69 | % | $ | — | — | % | |||||||||||||||||
Corporate debt-domestic | 316,387 | 3.12 | 40,804 | 2.66 | 249,709 | 3.17 | 25,874 | 3.35 | — | — | — | — | |||||||||||||||||||||||||||||
U.S. Government agency debt | 216,985 | 2.83 | 1,081 | 2.70 | 10,068 | 2.61 | 21,113 | 2.71 | 184,723 | 2.86 | — | — | |||||||||||||||||||||||||||||
Municipal bonds | 160,212 | 3.11 | — | — | — | — | 29,397 | 3.02 | 130,815 | 3.13 | — | — | |||||||||||||||||||||||||||||
Corporate debt-foreign | 36,168 | 3.38 | — | — | 36,168 | 3.38 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Mutual funds | 23,110 | 2.32 | — | — | — | — | — | — | — | — | 23,110 | 2.32 | |||||||||||||||||||||||||||||
Commercial paper | 12,410 | 2.77 | 12,410 | 2.77 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
$ | 1,586,051 | 2.85 | $ | 54,306 | 2.69 | $ | 325,752 | 3.13 | $ | 163,038 | 2.90 | $ | 1,019,845 | 2.78 | $ | 23,110 | 2.32 | ||||||||||||||||||||||||
Other securities | |||||||||||||||||||||||||||||||||||||||||
FHLB stock | $ | 57,139 | 6.19 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 57,139 | 6.19 | % | |||||||||||||||||
Federal Reserve Bank stock | 13,050 | 5.69 | — | — | — | — | — | — | — | — | 13,050 | 5.69 | |||||||||||||||||||||||||||||
$ | 70,189 | 6.10 | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | 70,189 | 6.10 | ||||||||||||||||||||||||
$ | 1,741,428 | 2.98 | % | $ | 54,306 | 2.69 | % | $ | 325,752 | 3.13 | % | $ | 163,038 | 2.90 | % | $ | 1,105,033 | 2.78 | % | $ | 93,299 | 5.16 | % |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Deposits | |||||||
Domestic | $ | 3,014,269 | $ | 3,001,366 | |||
Foreign: | |||||||
Venezuela (1) | 2,465,718 | 2,694,690 | |||||
Others | 339,394 | 336,630 | |||||
Total foreign | 2,805,112 | 3,031,320 | |||||
Total deposits | $ | 5,819,381 | $ | 6,032,686 |
(1) | Based upon the diligence we customarily perform to "know our customers" for anti-money laundering, OFAC and sanctions purposes, and a preliminary review of the Executive Order issued by the President of the United States on August 5, 2019 and the related Treasury Department Guidance, we do not believe that the U.S. economic embargo on certain Venezuela persons will adversely affect our Venezuela customer relationships, generally. |
Six Months Ended | Year Ended | ||||||||||||
(in thousands, except percentages) | June 30, 2019 | December 31, 2018 | |||||||||||
Amount | % | Amount | % | ||||||||||
Deposits | |||||||||||||
Domestic | $ | 12,903 | 0.4 | % | $ | 178,567 | 6.3 | % | |||||
Foreign: | |||||||||||||
Venezuela | (228,972 | ) | (8.5 | )% | (453,221 | ) | (14.4 | )% | |||||
Others | 2,764 | 0.8 | % | (15,633 | ) | (4.4 | )% | ||||||
Total foreign | (226,208 | ) | (7.5 | )% | (468,854 | ) | (13.4 | )% | |||||
Total deposits | $ | (213,305 | ) | (3.5 | )% | $ | (290,287 | ) | (4.6 | )% |
June 30, 2019 | ||||||
(in thousands, except percentages) | ||||||
Less than 3 months | $ | 281,653 | 20.3 | % | ||
3 to 6 months | 203,195 | 14.6 | % | |||
6 to 12 months | 485,987 | 35.0 | % | |||
1 to 3 years | 202,649 | 14.6 | % | |||
Over 3 years | 216,532 | 15.5 | % | |||
Total | $ | 1,390,016 | 100.0 | % |
June 30, 2019 | December 31, 2018 | ||||||
(in thousands, except percentages) | |||||||
Outstanding at period-end | $ | 600,000 | $ | 440,000 | |||
Average amount | 503,333 | 505,417 | |||||
Maximum amount outstanding at any month-end | 600,000 | 632,000 | |||||
Weighted average interest rate: | |||||||
During period | 2.46 | % | 2.10 | % | |||
End of period | 2.35 | % | 2.52 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands, except percentages and per share data) | |||||||||||||||
Net income | $ | 12,857 | $ | 10,423 | $ | 25,928 | $ | 19,852 | |||||||
Basic earnings per common share | 0.30 | 0.25 | 0.61 | 0.47 | |||||||||||
Diluted earnings per common share (1) | 0.30 | 0.25 | 0.60 | 0.47 | |||||||||||
Average total assets | $ | 7,867,120 | $ | 8,419,040 | $ | 7,964,677 | $ | 8,413,434 | |||||||
Average stockholders' equity | 786,123 | 748,024 | 773,451 | 747,905 | |||||||||||
Net income / Average total assets (ROA) | 0.66 | % | 0.50 | % | 0.66 | % | 0.47 | % | |||||||
Net income / Average stockholders' equity (ROE) | 6.56 | % | 5.57 | % | 6.76 | % | 5.31 | % | |||||||
Average stockholders' equity / Average total assets ratio | 9.99 | % | 8.88 | % | 9.71 | % | 8.89 | % | |||||||
Adjusted net income (2) | $ | 15,005 | $ | 14,142 | $ | 28,808 | $ | 25,831 | |||||||
Adjusted earnings per common share (2) | 0.35 | 0.33 | 0.68 | 0.61 | |||||||||||
Adjusted earnings per diluted common share (2) | 0.35 | 0.33 | 0.67 | 0.61 | |||||||||||
Adjusted net income / Average total assets (Adjusted ROA) (2) | 0.77 | % | 0.67 | % | 0.73 | % | 0.61 | % | |||||||
Adjusted net income / Average stockholders' equity (Adjusted ROE) (2) | 7.66 | % | 7.56 | % | 7.51 | % | 6.91 | % |
(1) | As of June 30, 2019, potential dilutive instruments included 738,138 unvested shares of restricted stock, including 736,839 shares of restricted stock issued in December 2018 in connection with the Company’s IPO and 1,299 additional shares of restricted stock issued in January 2019. As of June 30, 2019, these 738,138 unvested shares of restricted stock were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share at that date, fewer shares would have been purchased than restricted shares assumed issued. Therefore, at that date, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding in the three and six months ended June 30, 2019, and had a dilutive effect in per share earnings in the three (not shown due to rounding) and six months ended June 30, 2019. We had no outstanding dilutive instruments as of June 30, 2018. |
(2) | See “Selected Financial Information” for an explanation of certain non-GAAP financial measures and see “Non-GAAP Financial Measures Reconciliation” for a reconciliation of the non-GAAP financial measures to their GAAP counterparts. |
June 30, 2019 | December 31, 2018 | ||||||
(in thousands) | |||||||
Advances from the FHLB and other borrowings: | |||||||
Fixed rate ranging from 1.50% to 3.86% | $ | 845,000 | $ | 886,000 | |||
Floating rate based on 3-month LIBOR ranging from 2.32% to 2.63% (December 31, 2018 - 2.40% to 2.82%) (1) | 280,000 | 280,000 | |||||
$ | 1,125,000 | $ | 1,166,000 |
(1) | At December 31, 2018, we had designated certain interest rate swaps as cash flow hedges to manage this variable interest rate exposure. In March 2019, the Company terminated these interest rate swap contracts. As a result, the Company received cash equal to the contracts’ fair value at the date of termination of approximately $8.9 million which is recorded in AOCI. This amount will be amortized over the original remaining lives of the contracts as an offset to interest expense on the Company’s FHLB advances. The Company recorded a credit of approximately $0.5 million against interest expense on FHLB advances in the first half of 2019 and expects to record a credit of approximately $0.7 million in the rest of 2019. |
Actual | Required for Capital Adequacy Purposes | Regulatory Minimums To be Well Capitalized | ||||||||||||||||||
(in thousands, except percentages) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||
June 30, 2019 | ||||||||||||||||||||
Total capital ratio | $ | 943,966 | 14.70 | % | $ | 513,809 | 8.00 | % | $ | 642,262 | 10.00 | % | ||||||||
Tier 1 capital ratio | 889,376 | 13.85 | % | 385,357 | 6.00 | % | 513,809 | 8.00 | % | |||||||||||
Tier 1 leverage ratio | 889,376 | 11.32 | % | 314,358 | 4.00 | % | 392,947 | 5.00 | % | |||||||||||
Common Equity Tier 1 | 779,958 | 12.14 | % | 289,018 | 4.50 | % | 417,470 | 6.50 | % | |||||||||||
December 31, 2018 | ||||||||||||||||||||
Total capital ratio | $ | 916,663 | 13.54 | % | $ | 541,638 | 8.00 | % | $ | 677,047 | 10.00 | % | ||||||||
Tier 1 capital ratio | 859,031 | 12.69 | % | 406,228 | 6.00 | % | 541,638 | 8.00 | % | |||||||||||
Tier 1 leverage ratio | 859,031 | 10.34 | % | 332,190 | 4.00 | % | 415,238 | 5.00 | % | |||||||||||
Common Equity Tier 1 | 749,465 | 11.07 | % | 304,671 | 4.50 | % | 440,080 | 6.50 | % |
Actual | Required for Capital Adequacy Purposes | Regulatory Minimums to be Well Capitalized | ||||||||||||||||||
(in thousands, except percentages) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||
June 30, 2019 | ||||||||||||||||||||
Total capital ratio | $ | 891,632 | 13.89 | % | $ | 513,710 | 8.00 | % | $ | 642,138 | 10.00 | % | ||||||||
Tier 1 capital ratio | 837,042 | 13.04 | % | 385,283 | 6.00 | % | 513,710 | 8.00 | % | |||||||||||
Tier 1 leverage ratio | 837,042 | 10.66 | % | 314,024 | 4.00 | % | 392,530 | 5.00 | % | |||||||||||
Common Equity Tier 1 | 837,042 | 13.04 | % | 288,962 | 4.50 | % | 417,389 | 6.50 | % | |||||||||||
December 31, 2018 | ||||||||||||||||||||
Total capital ratio | $ | 883,746 | 13.05 | % | $ | 541,564 | 8.00 | % | $ | 676,955 | 10.00 | % | ||||||||
Tier 1 capital ratio | 826,114 | 12.20 | % | 406,173 | 6.00 | % | 541,564 | 8.00 | % | |||||||||||
Tier 1 leverage ratio | 826,114 | 9.96 | % | 331,829 | 4.00 | % | 414,786 | 5.00 | % | |||||||||||
Common Equity Tier 1 | 826,114 | 12.20 | % | 304,630 | 4.50 | % | 440,021 | 6.50 | % |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Commitments to extend credit | $ | 844,170 | $ | 923,424 | |||
Credit card facilities (1) | 143,666 | 198,500 | |||||
Letters of credit | 30,564 | 27,232 | |||||
$ | 1,018,400 | $ | 1,149,156 |
(1) | In April 2019, we revised our credit card program to further strengthen credit quality. The Company stopped the charging privileges to our smallest and riskiest cardholders and required repayment of their balances by November 2019. Other cardholders’ charging privileges will end in October 2019 and they will be required to repay all balances by January 2020. |
• | maintains a comprehensive market risk and ALM framework; |
• | measures and monitors market risk and ALM across the organization to ensure that they are within approved risk limits and reports to the Bank’s asset-liability committee (“ALCO”) and to the board of directors; and |
• | recommends changes to risk limits to the board of directors. |
• | earnings sensitivity; |
• | economic value of equity, or EVE; and |
• | investment portfolio mark-to-market exposure (both available for sale and held to maturity). |
Change in earnings (1) | |||||||||||||
(in thousands, except percentages) | June 30, 2019 | December 31, 2018 | |||||||||||
Change in Interest Rates (Basis points) | |||||||||||||
Increase of 200 | $ | 24,021 | 10.9 | % | $ | 30,993 | 12.8 | % | |||||
Increase of 100 | 14,991 | 6.8 | % | 18,702 | 7.7 | % | |||||||
Decrease of 25 | (4,271 | ) | (1.9 | )% | (5,554 | ) | (2.3 | )% | |||||
Decrease of 100 | (18,016 | ) | (8.2 | )% | (22,789 | ) | (9.4 | )% |
Change in equity (1) | |||||
June 30, 2019 | December 31, 2018 | ||||
Change in Interest Rates (Basis points) | |||||
Increase of 200 | (6.58 | )% | (4.94 | )% | |
Increase of 100 | (1.59 | )% | (1.21 | )% | |
Decrease of 25 | (0.19 | )% | (0.28 | )% | |
Decrease of 100 | (1.87 | )% | (1.86 | )% |
Change in market value(1) | |||||||
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Change in Interest Rates | |||||||
(Basis points) | |||||||
Increase of 200 | $ | (117,852 | ) | $ | (92,213 | ) | |
Increase of 100 | (54,847 | ) | (44,780 | ) | |||
Decrease of 25 | 10,994 | 9,831 | |||||
Decrease of 100 | 41,142 | 35,916 |
June 30, 2019 | |||||||||||||||||||||||
(in thousands except percentages) | Total | Less than one year | One to three years | Four to Five Years | More than five years | Non-rate | |||||||||||||||||
Earning Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 90,317 | $ | 64,504 | $ | — | $ | — | $ | — | $ | 25,813 | |||||||||||
Securities: | |||||||||||||||||||||||
Available for sale | 1,501,222 | 389,561 | 339,625 | 248,158 | 499,609 | 24,269 | |||||||||||||||||
Held to maturity | 81,240 | — | — | — | 81,240 | — | |||||||||||||||||
Federal Reserve Bank and FHLB stock | 68,170 | 55,115 | — | — | — | 13,055 | |||||||||||||||||
Loans portfolio-performing (1) | 5,780,005 | 3,802,118 | 1,041,217 | 612,415 | 324,255 | — | |||||||||||||||||
Earning Assets | $ | 7,520,954 | $ | 4,311,298 | $ | 1,380,842 | $ | 860,573 | $ | 905,104 | $ | 63,137 | |||||||||||
Liabilities | |||||||||||||||||||||||
Interest bearing demand deposits | $ | 1,183,051 | $ | 1,183,051 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Saving and money market | 1,510,832 | 1,510,832 | — | — | — | — | |||||||||||||||||
Time deposits | 2,339,771 | 1,503,658 | 507,194 | 312,906 | 16,013 | — | |||||||||||||||||
FHLB advances and other borrowings | 1,125,000 | 600,000 | 385,000 | 140,000 | — | — | |||||||||||||||||
Junior subordinated debentures | 118,110 | 64,178 | — | — | 53,932 | — | |||||||||||||||||
Interest bearing liabilities | $ | 6,276,764 | $ | 4,861,719 | $ | 892,194 | $ | 452,906 | $ | 69,945 | — | ||||||||||||
Interest rate sensitivity gap | (550,421 | ) | 488,648 | 407,667 | 835,159 | 63,137 | |||||||||||||||||
Cumulative interest rate sensitivity gap | (550,421 | ) | (61,773 | ) | 345,894 | 1,181,053 | 1,244,190 | ||||||||||||||||
Earnings assets to interest bearing liabilities (%) | 88.7 | % | 154.8 | % | 190.0 | % | 1,294.0 | % | N/M |
(1) | “Loan portfolio-performing” excludes $32.8 million of non-performing loans. |
N/M | Not meaningful |
Exhibit Number | Description |
3.1.1 | |
3.1.2 | |
3.2 | |
10.1 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
AMERANT BANCORP INC. (Registrant) | ||||
Date: | August 12, 2019 | By: | /s/ Millar Wilson | |
Millar Wilson | ||||
Vice-Chairman and Chief Executive Officer | ||||
Date: | August 12, 2019 | By: | /s/ Alberto Peraza | |
Alberto Peraza | ||||
Co-President and Chief Financial Officer | ||||
(a) | Maximum Shares Available Under this Plan. |
(i) | Subject to adjustment as provided in Section 11 of this Plan and the share counting rules set forth in Section 3(b) of this Plan, the number of shares of Common Stock available under this Plan for awards of (A) Option Rights or Appreciation Rights, (B) Restricted Stock, (C) Restricted Stock Units, (D) Performance Shares or Performance Units, (E) awards contemplated by Section 9 of this Plan, or (F) dividend equivalents paid with respect to awards made under this Plan will not exceed in the aggregate 3,333,333 shares of Common Stock. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. |
(ii) | The aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan will be reduced by one share of Common Stock for every one share of Common Stock subject to an award granted under this Plan. |
(i) | Except as provided in Section 22 of this Plan, if any award granted under this Plan is cancelled or forfeited, expires, is settled for cash (in whole or in part), or is unearned (in whole or in part), the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, again be available under Section 3(a)(i) above. |
(ii) | If, after the Effective Date, any shares of Common Stock subject to an award granted under the Predecessor Plans are forfeited, or an award granted under the Predecessor Plans is cancelled or forfeited, expires, is settled for cash (in whole or in part), or is unearned (in whole or in part), the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, be available for awards under this Plan. |
(iii) | Notwithstanding anything to the contrary contained in this Plan: (A) shares of Common Stock withheld by the Company, tendered or otherwise used in payment of the Option Price of an Option Right will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; (B) shares of Common Stock subject to an Appreciation Right that are not actually issued in connection with the settlement of such Appreciation Right on the exercise thereof will not be added back to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; (C) shares of Common Stock reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Option Rights will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; and (D) shares of Common Stock withheld by the Company, tendered or otherwise used to satisfy tax withholding will be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan. |
(iv) | If, under this Plan, a Participant has elected to give up the right to receive compensation in exchange for shares of Common Stock based on fair market value, such shares of Common Stock will not count against the aggregate limit under Section 3(a)(i) of this Plan. |
(i) | Each grant may specify that the amount payable on exercise of an Appreciation Right will be paid by the Company in cash, shares of Common Stock or any combination thereof. |
(ii) | Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Committee on the Date of Grant. |
(iii) | Any grant may specify waiting periods before exercise and permissible exercise dates or periods. |
(iv) | Each grant will specify the period or periods of continuous service by the Participant with the Company or any Subsidiary, if any, that is necessary before the Appreciation Rights or installments thereof will become exercisable. Appreciation Rights may provide for continued vesting or the earlier exercise of such Appreciation Rights, including in the event of the retirement, death or disability of a Participant or in the event of a Change in Control. |
(v) | Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such Appreciation Rights. |
(vi) | Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon. |
(vii) | Successive grants of Appreciation Rights may be made to the same Participant regardless of whether any Appreciation Rights previously granted to the Participant remain unexercised. |
(viii) | Each grant of Appreciation Rights will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. |
(i) | Each grant will specify in respect of each Appreciation Right a Base Price, which (except with respect to awards under Section 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant; and |
(ii) | No Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. The Committee may provide in any Evidence of Award for the automatic exercise of an Appreciation Right upon such terms and conditions as established by the Committee. |
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 |
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 |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Millar Wilson |
Millar Wilson Vice-Chairman and Chief Executive Officer |
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 |
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 |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Alberto Peraza |
Alberto Peraza Co-President and 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/ Millar Wilson |
Millar Wilson |
Vice-Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Alberto Peraza |
Alberto Peraza |
Co-President and Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Aug. 12, 2019 |
|
Entity Registrant Name | Amerant Bancorp Inc. | |
Entity Central Index Key | 0001734342 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 28,985,996 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 14,218,596 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 28,985,996 | 26,851,832 |
Common stock, shares outstanding (in shares) | 28,985,996 | 26,851,832 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 17,751,053 | 17,751,053 |
Common stock, shares outstanding (in shares) | 14,218,596 | 16,330,917 |
Treasury stock (in shares) | 3,532,457 | 1,420,136 |
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands |
Total |
Class A |
Class B |
Common Stock
Class A
|
Common Stock
Class B
|
Additional Paid in Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive (Loss) Income |
---|---|---|---|---|---|---|---|---|---|
Shares Outstanding (in shares) at Dec. 31, 2017 | 24,737,470 | 17,751,053 | |||||||
Beginning balance at Dec. 31, 2017 | $ 753,450 | $ 2,474 | $ 1,775 | $ 367,505 | $ 0 | $ 387,829 | $ (6,133) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Dividends | (40,000) | (40,000) | |||||||
Net income | 19,852 | 19,852 | |||||||
Other comprehensive (loss) income | (13,920) | (13,920) | |||||||
Shares Outstanding (in shares) at Jun. 30, 2018 | 24,737,470 | 17,751,053 | |||||||
Ending balance at Jun. 30, 2018 | 719,382 | $ 2,474 | $ 1,775 | 367,505 | 0 | 367,681 | (20,053) | ||
Shares Outstanding (in shares) at Dec. 31, 2018 | 26,851,832 | 16,330,917 | 26,851,832 | 16,330,917 | |||||
Beginning balance at Dec. 31, 2018 | 747,418 | $ 2,686 | $ 1,775 | 385,367 | (17,908) | 393,662 | (18,164) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued (in shares) | 2,132,865 | ||||||||
Common stock issued | 29,218 | $ 213 | 29,005 | ||||||
Repurchase of Class B common stock (in shares) | (2,112,321) | ||||||||
Repurchase of Class B common stock | (28,465) | (28,465) | |||||||
Restricted stock issued (in shares) | 1,299 | ||||||||
Restricted stock issued | 0 | ||||||||
Stock-based compensation expense | 2,966 | 2,966 | |||||||
Net income | 25,928 | 25,928 | |||||||
Other comprehensive (loss) income | 29,303 | 29,303 | |||||||
Shares Outstanding (in shares) at Jun. 30, 2019 | 28,985,996 | 14,218,596 | 28,985,996 | 14,218,596 | |||||
Ending balance at Jun. 30, 2019 | $ 806,368 | $ 2,899 | $ 1,775 | $ 417,338 | $ (46,373) | $ 419,590 | $ 11,139 |
Business, Basis of Presentation and Summary of Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business, Basis of Presentation and Summary of Significant Accounting Policies | Business, Basis of Presentation and Summary of Significant Accounting Policies a) Business Amerant Bancorp Inc., formerly Mercantil Bank Holding Corporation, (the “Company”), is a Florida corporation incorporated in 1985, which has operated since January 1987. The Company is a bank holding company registered under the Bank Holding Company Act of 1956, as a result of its 100% indirect ownership of Amerant Bank, N.A. (the “Bank”). The Company’s principal office is in the City of Coral Gables, Florida. The Bank is a member of the Federal Reserve Bank of Atlanta (“Federal Reserve Bank”) and the Federal Home Loan Bank of Atlanta (“FHLB”). The Bank has two principal subsidiaries, Amerant Investments, Inc., a securities broker-dealer (“Amerant Investments”), and Amerant Trust, N.A, a non-depository trust company (“Amerant Trust”). Beginning in the second quarter of 2019, the Company is managed using a single segment concept, on a consolidated basis, and management determined to discontinue its separate disclosures of operating segments. See “Reportable Segments” within “Basis of Presentation and Summary of Significant Accounting Policies” in this footnote for further details. The Company’s Class A common stock, par value $0.10 per common share, and Class B common stock, par value $0.10 per common share, are listed and trade on the Nasdaq Global Select Market under the symbols “AMTB” and “AMTBB,” respectively. Initial Public Offering and Shares Repurchase On December 21, 2018, the Company completed an initial public offering (the “IPO”). For more information about the IPO, see Note 15 to our audited consolidated financial statements included in the Company’s annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 1, 2019 (the “Form 10-K”). In March 2019, following the partial exercise of the over-allotment option by the IPO’s underwriters, and completion of certain private placements of shares of the Company’s Class A common stock, the Company repurchased the remaining shares of its Class B common stock held by Mercantil Servicios Financieros, C.A., the Company’s former parent company (“MSF” or “the Former Parent”). See Note 11 to these unaudited interim consolidated financial statements for more information about the private placements and the repurchase of Class B common stock previously held by MSF. Rebranding On June 4, 2019, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) to change the Company’s name from “Mercantil Bank Holding Corporation” to “Amerant Bancorp Inc.” (the “Name Change”). The Name Change became effective on June 5, 2019. Each of the Company, the Bank and its principal subsidiaries now operate under the “Amerant” brand. b) Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, they do not include all of the information and footnotes required for a fair statement of financial position, results of operations and cash flows in conformity with U.S. GAAP. These unaudited interim consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year or any other period. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018 and the accompanying footnote disclosures for the Company, which are included in the Form 10-K. For a complete summary of our significant accounting policies, please see Note 1 to the Company’s audited consolidated financial statements in the Form 10-K. Reportable Segments Prior to the second quarter of 2019, the Company had four reportable segments: Personal and Commercial Banking (“PAC”), Corporate LATAM, Treasury, and Institutional. Results of these segments were presented on a managed basis. This structure was driven, among other things, by how the Company previously managed the business, how internal reporting was prepared and analyzed, and how management made decisions. Beginning in the second quarter of 2019, all decisions, including those relating to loan growth and concentrations, deposit and other funding, market risk, credit risk, operational risk and pricing are made after assessing their effects on the Company as a whole, using a single segment concept. This change is consistent with the Company’s strategic shift to focus on community banking after the spin-off from its Former Parent in August 2018, and the rebranding of the Company launched in April 2019. As part of this strategic shift, the Company has significantly reduced its international lending activities, which had been largely allocated to the Corporate LATAM segment. As a result, management reassessed the Company’s remaining international business activities as well as the remaining three segments to determine whether the Company would continue to manage these businesses as separate operating segments, or consolidated as one single segment. In performing its assessment, management noted a similarity in the nature of products and services, processes, type of customers, distribution methods, and regulatory environment of its businesses. Further, management determined that it will no longer review discrete financial information related to the remaining operating segments for purposes of assessing performance or to allocate resources. As a result of the above referenced strategic shift, assessments and determination, the Company is now managed as a single operating segment, on a consolidated basis. Therefore, beginning with the quarter ended June 30, 2019, the Company determined that no separate current or historical reportable segment disclosures are required under U.S. GAAP. Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include: (i) the determination of the allowance for loan losses; (ii) the fair values of securities and the value assigned to goodwill during the annual goodwill impairment test; (iii) the cash surrender value of bank owned life insurance; and (iv) the determination of whether the amount of deferred tax assets will more likely than not be realized. Management believes that these estimates are appropriate. Actual results could differ from these estimates. c) Subsequent Events On July 10, 2019 the Company announced the redemption of all $15.0 million of its outstanding 10.60% trust preferred securities issued by its Commercebank Statutory Trust II (“Statutory Trust II”), and all $10.0 million of its outstanding 10.18% trust preferred securities issued by its Commercebank Capital Trust III (“Capital Trust III”). The Capital Trust III securities were redeemed on July 31, 2019 at the contractual call price of 101.018% and the Statutory Trust II securities will be redeemed on September 7, 2019, the earliest call date, at the contractual call price of 100.53%. The Company will simultaneously redeem all $15.5 million and $10.4 million junior subordinated debentures held by its Statutory Trust II and Capital Trust III, respectively, as part of these redemption transactions. These redemptions together will reduce total cash and cash equivalents by approximately $23.8 million, financial liabilities by approximately $25.9 million and other assets by approximately $2.4 million. In addition, third quarter 2019 results will include a total charge of $0.3 million for the premiums paid to security holders from these redemptions. The redemption of these legacy Tier 1 capital instruments will reduce the Company’s Tier 1 equity capital by a total of $23.5 million. The Company’s regulatory capital ratios will continue to exceed regulatory minimums to be well-capitalized, upon these redemptions. In August 2019, the Company entered into interest rate swaps that were designated as cash flow hedges to manage exposure of floating rate interest payments on all of the Company’s outstanding variable-rate junior subordinated debentures. See Note 7 to our unaudited interim consolidated financial statements in this Form 10-Q for details on the interest rate swap transaction. All significant subsequent events have been recognized or disclosed in these unaudited interim consolidated financial statements. |
Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities Amortized cost and approximate fair values of securities available for sale are summarized as follows:
At June 30, 2019 and December 31, 2018, the Company had no foreign sovereign or government agency debt securities. The Company’s securities available for sale with unrealized losses that are deemed temporary, aggregated by the length of time that individual securities have been in a continuous unrealized loss position, are summarized below:
At June 30, 2019 and December 31, 2018, certain debt securities issued or guaranteed by U.S. government-sponsored entities and agencies were held by the Company. The Company believes these issuers to present little credit risk. The Company does not consider these securities to be other-than-temporarily impaired because the decline in fair value is attributable to changes in interest rates and investment securities markets, generally, and not credit quality. The Company does not intend to sell these debt securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. Unrealized losses on corporate debt securities at June 30, 2019, and municipal and corporate debt securities at December 31, 2018, are attributable to changes in interest rates and investment securities markets, generally, and as a result, temporary in nature. The Company does not consider these securities to be other-than-temporarily impaired because the issuers of these debt securities are considered to be high quality, and management does not intend to sell these investments and it is more likely than not that it will not be required to sell these investments before their anticipated recovery. Amortized cost and approximate fair values of securities held to maturity, are summarized as follows:
Contractual maturities of securities at June 30, 2019 are as follows:
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Loans |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans The loan portfolio consists of the following loan classes:
The amounts above include loans under syndication facilities of approximately $609 million and $807 million at June 30, 2019 and December 31, 2018, respectively, which include Shared National Credit facilities and agreements to enter into credit agreements among other lenders (club deals), and other agreements. The following tables summarize international loans by country, net of loans fully collateralized with cash of approximately $20.6 million and $19.5 million at June 30, 2019 and December 31, 2018, respectively.
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The age analysis of the loan portfolio by class, including nonaccrual loans, as of June 30, 2019 and December 31, 2018 are summarized in the following tables:
At June 30, 2019 and December 31, 2018, loans with an outstanding principal balance of $1.7 billion were pledged as collateral to secure advances from the FHLB. |
Allowance for Loan Losses |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Allowance for Loan Losses The analyses by loan segment of the changes in the allowance for loan losses for the three and six month periods ended June 30, 2019 and 2018, and its allocation by impairment methodology and the related investment in loans, net as of June 30, 2019 and 2018 are summarized in the following tables:
The following is a summary of the recorded investment amount of loan sales by portfolio segment:
The following is a summary of impaired loans as of June 30, 2019 and December 31, 2018
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The Company recognized interest income on impaired loans of $14 thousand and $83 thousand during the three months ended June 30, 2019 and 2018, respectively, and $32 thousand and $108 thousand during the six months ended June 30, 2019 and 2018, respectively. During the six months ended June 30, 2019, new troubled debt restructurings (“TDRs”) consisted of one single-family residential loan with a recorded investment of $202 thousand as of June 30, 2019. During the six months ended June 30, 2019, the Company had no charge-offs against the allowance for loan losses as a result of TDR loans. Since June 30, 2018, no TDRs subsequently defaulted under the modified terms of the loan agreement. On July 30, 2019, the Company agreed to restructure certain CRE, owner occupied and commercial loans totaling $9.4 million in a multiple loan relationship with a South Florida customer. This TDR restructure consisted of extending repayment terms and adjusting future periodic payments, and the Company determined no additional impairment charges were necessary. Four residential loans, totaling $2.2 million, which are included in this loan relationship, were not modified. The Company believes the specific reserves associated with these CRE, owner occupied, commercial loans, and residential loans, which total a $11.6 million impaired loan relationship as of June 30, 2019, are adequate to cover probable losses given current facts and circumstances. The Company will continue to closely monitor the performance of these loans under their modified terms. Credit Risk Quality The Company’s investment in loans by credit quality indicators as of June 30, 2019 and December 31, 2018 are summarized in the following tables:
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Time Deposits |
6 Months Ended |
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Jun. 30, 2019 | |
Banking and Thrift [Abstract] | |
Time Deposits | Time Deposits Time deposits in denominations of $100,000 or more amounted to approximately $1.4 billion at June 30, 2019 and December 31, 2018. Time deposits in denominations of $250,000 or more amounted to approximately $740 million and $718 million at June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019 and December 31, 2018, brokered time deposits amounted to $619 million and $642 million, respectively. |
Advances from the Federal Home Loan Bank and Other Borrowings |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advances from the Federal Home Loan Bank and Other Borrowings | Advances from the Federal Home Loan Bank and Other Borrowings The Company had outstanding advances from the FHLB and other borrowings. These borrowings bear fixed interest rates or variable rates based on 3-month LIBOR as follows:
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments At June 30, 2019 and December 31, 2018, the fair values of the Company’s derivative instruments were as follows:
Derivatives Designated as Hedging Instruments At December 31, 2018, the Company had 16 interest rate swap contracts with total notional amounts of $280 million, that were designated as cash flow hedges of floating rate interest payments on the outstanding and expected rollover of variable-rate advances from the FHLB. These hedge relationships were expected to be highly effective in offsetting the effects of changes in interest rates in the cash flows associated with the advances from the FHLB. No hedge ineffectiveness gains or losses were recognized in the six months ended June 30, 2019 and 2018. In February and March 2019, the Company terminated these 16 interest rate swaps designated as cash flow hedges. The Company will recognize the contracts’ cumulative net unrealized gains of $8.9 million in earnings over the remaining original life of the terminated interest rate swaps of between six months and seven years. On August 8, 2019, the Company entered into five interest rate swap contracts with notional amounts totaling $64.2 million that were designated as cash flow hedges to manage exposure of floating rate interest payments on all of the Company’s outstanding variable-rate junior subordinated debentures with carrying amounts at June 30, 2019 totaling $64.2 million. These interest rate swap contracts mature in approximately three years. The Company expects these interest rates swaps to be highly effective in offsetting the effects of changes in interest rates on cash flows associated with the Company’s variable-rate junior subordinated debentures. The Company’s interest rate swaps designated as cash flow hedges involve the Company’s payment of fixed-rate amounts in exchange for the Company receiving variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Derivatives Not Designated as Hedging Instruments At June 30, 2019 and December 31, 2018, the Company had 22 and eight interest rate swap contracts with customers, respectively, with a total notional amount of $199.1 million and $80.4 million, respectively. These instruments involve the payment of fixed-rate amounts in exchange for the Company receiving variable-rate payments over the life of the contract. In addition, at June 30, 2019 and December 31, 2018, the Company had interest rate swap mirror contracts with a third party broker with similar terms. At each of June 30, 2019 and December 31, 2018, the Company had 16 interest rate cap contracts with customers with a total notional amount of $302.8 million and $323.7 million, respectively. In addition, at June 30, 2019 and December 31, 2018, the Company had interest rate cap mirror contracts with various third party brokers with similar terms. |
Stock-based Incentive Compensation Plan |
6 Months Ended |
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Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Incentive Compensation Plan | Stock-based Incentive Compensation Plan The Company sponsors the 2018 Equity and Incentive Compensation Plan (the “2018 Equity Plan”). See Note 11 to the Company’s audited consolidated financial statements in the Form 10-K for more information on the 2018 Equity Plan and restricted stock awards for the year ended 2018. The 2018 Equity Plan was renamed as of August 8, 2019 to reflect the change of the Company’s name to Amerant Bancorp Inc. on June 5, 2019. On January 22, 2019, the Company granted an additional 1,299 shares of restricted stock to an employee who was not included in the December 21, 2018 restricted stock award. These shares of restricted stock will vest in three approximately equal amounts on each of January 21, 2020, 2021 and 2022. The fair value of the restricted stock granted was based on the market price of the shares of the Company’s Class A common stock at the grant date which was $13.58 per share. During the three and six month periods ended June 30, 2019, the Company recorded $1.5 million and $3.0 million, respectively, of compensation expense related to the restricted stock awards granted in December 2018 and January 2019. The total unamortized deferred compensation expense of $6.8 million for all unvested restricted stock outstanding at June 30, 2019 will be recognized over a weighted average period of 1.6 years. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company uses an estimated annual effective tax rate method in computing its interim tax provision. This effective tax rate is based on forecast annual consolidated pre-tax income, permanent tax differences and statutory tax rates. Under this method, the tax effect of certain items that do not meet the definition of ordinary income or expense are computed and recognized as discrete items when they occur. The effective combined federal and state tax rates for the six months ended June 30, 2019 and 2018 were 21.50% and 26.80%, respectively. Effective tax rates differ from the statutory rates mainly due to the impact of forecast permanent non-taxable interest and other income, and the impact of permanent non-deductible discrete expense items incurred during the period, which primarily include the non-deductible spin-off costs in 2018 and the effect of corporate state taxes. |
Accumulated Other Comprehensive Income (Loss) (“AOCI/AOCL”) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) (“AOCI/AOCL”) | Accumulated Other Comprehensive Income (Loss) (“AOCI/AOCL”): The components of AOCI/AOCL are summarized as follows using applicable blended average federal and state tax rates for each period:
The components of other comprehensive income (loss) for the periods presented is summarized as follows:
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Stockholders’ Equity |
6 Months Ended |
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Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity a) Class A Common Stock Shares of the Company’s Class A common stock issued and outstanding as of June 30, 2019 and December 31, 2018 were 28,985,996 and 26,851,832, respectively. IPO Over-allotment Option On January 23, 2019, the underwriters of the Company’s IPO partially exercised their over-allotment option by purchasing 229,019 shares of the Company’s Class A common stock at the public offering price of $13.00 per share. The net proceeds to the Company from this transaction were approximately $3.0 million. Private Placements On February 1, 2019 and February 28, 2019, the Company issued and sold 153,846 and 1,750,000 shares of its Class A common stock, respectively, in private placements exempt from registration under Section 4(a)(2) of the Securities Act and Securities and SEC Rule 506 (the “Private Placements”). The net proceeds to the Company from the Private Placements totaled approximately $26.7 million. b) Class B Common Stock and Treasury Stock Shares of the Company’s Class B common stock issued as of June 30, 2019 and December 31, 2018 were 17,751,053. As of June 30, 2019 and December 31, 2018, there were 14,218,596 shares and 16,330,917 shares, respectively, of Class B common stock outstanding. As of June 30, 2019 and December 31, 2018, the Company had 3,532,457 shares and 1,420,136 shares, respectively, of Class B common stock held as treasury stock under the cost method. On March 7, 2019, the Company repurchased all of MSF’s 2,112,321 remaining shares of nonvoting Class B common stock at a weighted average price of $13.48 per share with proceeds from the IPO over-allotment exercise and the Private Placements, representing an aggregate purchase price of approximately $28.5 million. The aforementioned 2,112,321 shares of Class B common stock are held in treasury stock under the cost method. Following this repurchase, MSF no longer owns any shares of the Company’s Class A common stock or Class B common stock, and therefore, MSF no longer has any rights to register Company shares for resale. e) Dividends On March 13, 2018, the Company paid a special, one-time, cash dividend of $40.0 million to MSF, or $0.94 per common share. |
Commitments and Contingencies |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The Company and its subsidiaries are parties to various legal actions arising in the ordinary course of business. In the opinion of management, the outcome of these proceedings will not have a significant effect on the Company’s consolidated financial position or results of operations. The Company occupies various premises under noncancelable lease agreements expiring through the year 2046. Actual rental expenses may include deferred rents that are recognized as rent expense on a straight line basis. Rent expense under these leases was approximately $1.2 million and $1.6 million for the three months ended June 30, 2019 and 2018, respectively, and $2.8 million and and $3.0 million for the six months ended June 30, 2019 and 2018, respectively. Financial instruments whose contract amount represents off-balance sheet credit risk at June 30, 2019 are generally short-term and are as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis are summarized below:
At the dates shown, there were no Level 3 assets or liabilities. Level 2 Valuation Techniques The valuation of securities and derivative instruments is performed through a monthly pricing process using data provided by generally recognized providers of independent data pricing services (the “Pricing Providers”). These Pricing Providers collect, use and incorporate descriptive market data from various sources, quotes and indicators from leading broker dealers to generate independent and objective valuations. The fair value of bank-owned life insurance policies is based on the cash surrender values of the policies as reported by the insurance companies. The valuation techniques and the inputs used in our consolidated financial statements to measure the fair value of our recurring Level 2 financial instruments consider, among other factors, the following:
On a quarterly basis, the Company evaluates the reasonableness of the monthly pricing process for the valuation of securities and derivative instruments. This evaluation includes challenging the valuation of a random sample of the different types of securities in the investment portfolio as of the end of the quarter selected. This challenge consists of obtaining from the Pricing Providers a document explaining the methodology applied to obtain their fair value assessments for each type of investment included in the sample selection. The Company then analyzes in detail the various inputs used in the fair value calculation, both observable and unobservable (e.g., prepayment speeds, yield curve benchmarks, spreads, delinquency rates). Management believes that the consistent application of this methodology allows the Company to understand and evaluate the categorization of its investment portfolio. The methods described above may produce a fair value calculation that may differ from the net realizable value or may not be reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of its financial instruments could result in different estimates of fair value at the reporting date. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis There were no assets or liabilities measured at fair value on a nonrecurring basis at June 30, 2019 and December 31, 2018. Fair Value of Financial Instruments The fair value of a financial instrument represents the price that would be received from its sale in an orderly transaction between market participants at the measurement date. The best indication of the fair value of a financial instrument is determined based upon quoted market prices. However, in many cases, there are no quoted market prices for the Company’s various financial instruments. As a result, the Company derives the fair value of the financial instruments held at the reporting period-end, in part, using present value or other valuation techniques. Those techniques are significantly affected by management’s assumptions, the estimated amount and timing of future cash flows and estimated discount rates included in present value and other techniques. The use of different assumptions could significantly affect the estimated fair values of the Company’s financial instruments. Accordingly, the net realized values could be materially different from the estimates presented below. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
The estimated fair value of financial instruments where fair value differs from carrying value are as follows:
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following table shows the calculation of basic and diluted earnings per share:
As of June 30, 2019, potential dilutive instruments consist of 738,138 unvested shares of restricted stock, including 736,839 shares of restricted stock issued in December 2018 in connection with the Company’s IPO and 1,299 additional shares of restricted stock issued in January 2019. As of June 30, 2019, these 738,138 unvested shares of restricted stock were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share at that date, fewer shares would have been purchased than restricted shares assumed issued. Therefore, at that date, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding in the three and six months ended June 30, 2019, and had a dilutive effect in per share earnings for the three (not shown due to rounding) and six months ended June 30, 2019. As of June 30, 2018, the Company had no potentially dilutive instruments. |
Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2019 | |||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
Reportable Segments | Reportable Segments Prior to the second quarter of 2019, the Company had four reportable segments: Personal and Commercial Banking (“PAC”), Corporate LATAM, Treasury, and Institutional. Results of these segments were presented on a managed basis. This structure was driven, among other things, by how the Company previously managed the business, how internal reporting was prepared and analyzed, and how management made decisions. Beginning in the second quarter of 2019, all decisions, including those relating to loan growth and concentrations, deposit and other funding, market risk, credit risk, operational risk and pricing are made after assessing their effects on the Company as a whole, using a single segment concept. This change is consistent with the Company’s strategic shift to focus on community banking after the spin-off from its Former Parent in August 2018, and the rebranding of the Company launched in April 2019. As part of this strategic shift, the Company has significantly reduced its international lending activities, which had been largely allocated to the Corporate LATAM segment. As a result, management reassessed the Company’s remaining international business activities as well as the remaining three segments to determine whether the Company would continue to manage these businesses as separate operating segments, or consolidated as one single segment. In performing its assessment, management noted a similarity in the nature of products and services, processes, type of customers, distribution methods, and regulatory environment of its businesses. Further, management determined that it will no longer review discrete financial information related to the remaining operating segments for purposes of assessing performance or to allocate resources. As a result of the above referenced strategic shift, assessments and determination, the Company is now managed as a single operating segment, on a consolidated basis. Therefore, beginning with the quarter ended June 30, 2019, the Company determined that no separate current or historical reportable segment disclosures are required under U.S. GAAP. |
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Estimates | Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include: (i) the determination of the allowance for loan losses; (ii) the fair values of securities and the value assigned to goodwill during the annual goodwill impairment test; (iii) the cash surrender value of bank owned life insurance; and (iv) the determination of whether the amount of deferred tax assets will more likely than not be realized. Management believes that these estimates are appropriate. Actual results could differ from these estimates. |
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Subsequent Events | Subsequent Events On July 10, 2019 the Company announced the redemption of all $15.0 million of its outstanding 10.60% trust preferred securities issued by its Commercebank Statutory Trust II (“Statutory Trust II”), and all $10.0 million of its outstanding 10.18% trust preferred securities issued by its Commercebank Capital Trust III (“Capital Trust III”). The Capital Trust III securities were redeemed on July 31, 2019 at the contractual call price of 101.018% and the Statutory Trust II securities will be redeemed on September 7, 2019, the earliest call date, at the contractual call price of 100.53%. The Company will simultaneously redeem all $15.5 million and $10.4 million junior subordinated debentures held by its Statutory Trust II and Capital Trust III, respectively, as part of these redemption transactions. These redemptions together will reduce total cash and cash equivalents by approximately $23.8 million, financial liabilities by approximately $25.9 million and other assets by approximately $2.4 million. In addition, third quarter 2019 results will include a total charge of $0.3 million for the premiums paid to security holders from these redemptions. The redemption of these legacy Tier 1 capital instruments will reduce the Company’s Tier 1 equity capital by a total of $23.5 million. The Company’s regulatory capital ratios will continue to exceed regulatory minimums to be well-capitalized, upon these redemptions. |
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Fair Value Measurement | The valuation of securities and derivative instruments is performed through a monthly pricing process using data provided by generally recognized providers of independent data pricing services (the “Pricing Providers”). These Pricing Providers collect, use and incorporate descriptive market data from various sources, quotes and indicators from leading broker dealers to generate independent and objective valuations. The fair value of bank-owned life insurance policies is based on the cash surrender values of the policies as reported by the insurance companies. The valuation techniques and the inputs used in our consolidated financial statements to measure the fair value of our recurring Level 2 financial instruments consider, among other factors, the following:
On a quarterly basis, the Company evaluates the reasonableness of the monthly pricing process for the valuation of securities and derivative instruments. This evaluation includes challenging the valuation of a random sample of the different types of securities in the investment portfolio as of the end of the quarter selected. This challenge consists of obtaining from the Pricing Providers a document explaining the methodology applied to obtain their fair value assessments for each type of investment included in the sample selection. The Company then analyzes in detail the various inputs used in the fair value calculation, both observable and unobservable (e.g., prepayment speeds, yield curve benchmarks, spreads, delinquency rates). Management believes that the consistent application of this methodology allows the Company to understand and evaluate the categorization of its investment portfolio. The methods described above may produce a fair value calculation that may differ from the net realizable value or may not be reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of its financial instruments could result in different estimates of fair value at the reporting date. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of a financial instrument represents the price that would be received from its sale in an orderly transaction between market participants at the measurement date. The best indication of the fair value of a financial instrument is determined based upon quoted market prices. However, in many cases, there are no quoted market prices for the Company’s various financial instruments. As a result, the Company derives the fair value of the financial instruments held at the reporting period-end, in part, using present value or other valuation techniques. Those techniques are significantly affected by management’s assumptions, the estimated amount and timing of future cash flows and estimated discount rates included in present value and other techniques. The use of different assumptions could significantly affect the estimated fair values of the Company’s financial instruments. Accordingly, the net realized values could be materially different from the estimates presented below. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of available for sale securities from amortized cost to fair value | Amortized cost and approximate fair values of securities available for sale are summarized as follows:
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Schedule of available for sale securities with unrealized losses | The Company’s securities available for sale with unrealized losses that are deemed temporary, aggregated by the length of time that individual securities have been in a continuous unrealized loss position, are summarized below:
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Schedule of held to maturity securities | Amortized cost and approximate fair values of securities held to maturity, are summarized as follows:
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Schedule of contractual maturities of securities | Contractual maturities of securities at June 30, 2019 are as follows:
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Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of loan portfolio by classes and countries | The loan portfolio consists of the following loan classes:
The following tables summarize international loans by country, net of loans fully collateralized with cash of approximately $20.6 million and $19.5 million at June 30, 2019 and December 31, 2018, respectively.
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Schedule of loan portfolio delinquencies | The age analysis of the loan portfolio by class, including nonaccrual loans, as of June 30, 2019 and December 31, 2018 are summarized in the following tables:
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Allowance for Loan Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allowance for loan losses |
The following is a summary of the recorded investment amount of loan sales by portfolio segment:
The analyses by loan segment of the changes in the allowance for loan losses for the three and six month periods ended June 30, 2019 and 2018, and its allocation by impairment methodology and the related investment in loans, net as of June 30, 2019 and 2018 are summarized in the following tables:
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Schedule of impaired loans | The following is a summary of impaired loans as of June 30, 2019 and December 31, 2018
_______________
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Schedule of credit quality indicators | The Company’s investment in loans by credit quality indicators as of June 30, 2019 and December 31, 2018 are summarized in the following tables:
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Advances from the Federal Home Loan Bank and Other Borrowings (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding advances from the FHLB | The Company had outstanding advances from the FHLB and other borrowings. These borrowings bear fixed interest rates or variable rates based on 3-month LIBOR as follows:
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Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | At June 30, 2019 and December 31, 2018, the fair values of the Company’s derivative instruments were as follows:
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Accumulated Other Comprehensive Income (Loss) (“AOCI/AOCL”) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of AOCL | The components of AOCI/AOCL are summarized as follows using applicable blended average federal and state tax rates for each period:
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Components of Other Comprehensive Loss | The components of other comprehensive income (loss) for the periods presented is summarized as follows:
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Summary of Financial Instruments Whose Contract Amount Represents Off-Balance Sheet Credit Risk | Financial instruments whose contract amount represents off-balance sheet credit risk at June 30, 2019 are generally short-term and are as follows:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below:
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Summary of Estimated Fair Value of Financial Instruments Where Fair Value Differs from Carrying Value | The estimated fair value of financial instruments where fair value differs from carrying value are as follows:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share | The following table shows the calculation of basic and diluted earnings per share:
|
Business, Basis of Presentation and Summary of Significant Accounting Policies - Business (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019
segment
$ / shares
|
Mar. 31, 2019
segment
|
Jun. 30, 2019
subsidiary
$ / shares
|
Dec. 31, 2018
$ / shares
|
|
Class of Stock [Line Items] | ||||
Number of subsidiaries | subsidiary | 2 | |||
Number of operating segments | segment | 1 | 4 | ||
Class A common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | |
Class B common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | |
Amerant Bank, N.A | ||||
Class of Stock [Line Items] | ||||
Ownership percentage of subsidiary | 100.00% | 100.00% |
Securities - Narrative (Details) - USD ($) |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Available for sale | $ 1,501,222,000 | $ 1,586,051,000 |
Foreign sovereign debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available for sale | $ 0 | $ 0 |
Securities - Held to Maturity Securities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 81,240 | $ 85,188 |
Gross Unrealized Gains | 551 | 0 |
Gross Unrealized Losses | (382) | (3,938) |
Estimated Fair Value | 81,409 | 81,250 |
U.S. government sponsored enterprise debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 78,448 | 82,326 |
Gross Unrealized Gains | 497 | 0 |
Gross Unrealized Losses | (382) | (3,889) |
Estimated Fair Value | 78,563 | 78,437 |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 2,792 | 2,862 |
Gross Unrealized Gains | 54 | 0 |
Gross Unrealized Losses | 0 | (49) |
Estimated Fair Value | $ 2,846 | $ 2,813 |
Securities - Contractual Maturities on Securities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Available for Sale, Amortized Cost | ||
Within 1 year | $ 44,267 | |
After 1 year through 5 years | 217,122 | |
After 5 years through 10 years | 175,701 | |
After 10 years | 1,033,513 | |
No contractual maturities | 24,269 | |
Amortized Cost | 1,494,872 | $ 1,619,196 |
Available for Sale, Estimated Fair Value | ||
Within 1 year | 44,283 | |
After 1 year through 5 years | 218,528 | |
After 5 years through 10 years | 179,155 | |
After 10 years | 1,035,477 | |
No contractual maturities | 23,779 | |
Estimated Fair Value | 1,501,222 | 1,586,051 |
Held to Maturity, Amortized Cost | ||
Within 1 year | 0 | |
After 1 year through 5 years | 0 | |
After 5 years through 10 years | 0 | |
After 10 years | 81,240 | |
No contractual maturities | 0 | |
Amortized Cost | 81,240 | 85,188 |
Held to Maturity, Estimated Fair Value | ||
Within 1 year | 0 | |
After 1 year through 5 years | 0 | |
After 5 years through 10 years | 0 | |
After 10 years | 81,409 | |
No contractual maturities | 0 | |
Estimated Fair Value | $ 81,409 | $ 81,250 |
Loans - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Receivables [Abstract] | ||
Syndication facilities included in loans | $ 609.0 | $ 807.0 |
Cash collateral on loans | 20.6 | 19.5 |
Loans pledged as collateral | $ 1,700.0 | $ 1,700.0 |
Allowance for Loan Losses - Recorded Investment of Loan Sales (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Financing Receivable, Impaired [Line Items] | ||||
Amount of loan sales | $ 62,239 | $ 10,823 | $ 214,416 | $ 23,781 |
Real estate loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Amount of loan sales | 0 | 5,049 | 23,475 | 8,007 |
Commercial loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Amount of loan sales | 59,282 | 5,774 | 186,120 | 15,774 |
Loans to financial institutions and acceptances | ||||
Financing Receivable, Impaired [Line Items] | ||||
Amount of loan sales | 0 | 0 | 0 | 0 |
Consumer loans and overdrafts | ||||
Financing Receivable, Impaired [Line Items] | ||||
Amount of loan sales | $ 2,957 | $ 0 | $ 4,821 | $ 0 |
Allowance for Loan Losses - Narrative (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 30, 2019
USD ($)
contract
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
contract
|
Jun. 30, 2018
USD ($)
|
|
Financing Receivable, Impaired [Line Items] | |||||
Interest income recognized on impaired loans | $ 14,000 | $ 83,000 | $ 32,000 | $ 108,000 | |
Charge off against Allowance for loan losses | $ 0 | ||||
TDRs subsequently defaulted | contract | 0 | ||||
Real estate loans | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment | 11,600,000 | $ 11,600,000 | |||
Real estate loans | Subsequent Event | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment | $ 9,400,000 | ||||
Real estate loans | One single-family residential loan | |||||
Financing Receivable, Impaired [Line Items] | |||||
Number of contracts | contract | 1 | ||||
Recorded investment | $ 202,000 | $ 202,000 | |||
Real estate loans | Residential Loans | Subsequent Event | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment | $ 2,200,000 | ||||
Number of contracts | contract | 4 |
Time Deposits (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Banking and Thrift [Abstract] | ||
Time deposits, $100,000 or more | $ 1,400 | $ 1,400 |
Time deposits, $250,000 or more | 740 | 718 |
Brokered time deposits | $ 619 | $ 642 |
Advances from the Federal Home Loan Bank and Other Borrowings (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
2019 | $ 350,000 | $ 440,000 |
2020 | 325,000 | 306,000 |
2021 | 240,000 | 210,000 |
2022 | 120,000 | 120,000 |
2023 and after | 90,000 | 90,000 |
Advances from Federal Home Loan Banks | $ 1,125,000 | $ 1,166,000 |
3-month LIBOR | Minimum | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate 2019 | 1.80% | |
Interest Rate 2020 | 1.50% | |
Interest Rate 2021 | 1.93% | |
Interest Rate 2022 | 2.48% | |
Interest Rate 2023 and after | 2.95% | |
3-month LIBOR | Maximum | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate 2019 | 3.86% | |
Interest Rate 2020 | 2.74% | |
Interest Rate 2021 | 3.08% | |
Interest Rate 2022 | 2.80% | |
Interest Rate 2023 and after | 3.23% |
Stock-based Incentive Compensation Plan (Details) - Restricted Stock - Class A common stock - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jan. 22, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Defined Contribution Plan Disclosure [Line Items] | |||
Grants in period (in shares) | 1,299 | ||
Award vesting period | 3 years | ||
Grants in period, weighted average grant date fair value (in dollars per share) | $ 13.58 | ||
Share-based compensation expense | $ 1.5 | $ 3.0 | |
Nonvested awards, compensation not yet recognized | $ 6.8 | $ 6.8 | |
Nonvested awards, compensation cost not yet recognized, period | 1 year 7 months 6 days |
Income Taxes (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.50% | 26.80% |
Accumulated Other Comprehensive Income (Loss) (“AOCI/AOCL”) - Componenets of AOCL (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Before Tax Amount | $ 14,743 | $ (24,042) |
Tax Effect | (3,604) | 5,878 |
Net of Tax Amount | 11,139 | (18,164) |
Net unrealized holding gains (losses) on securities available for sale | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Before Tax Amount | 6,350 | (33,145) |
Tax Effect | (1,552) | 8,104 |
Net of Tax Amount | 4,798 | (25,041) |
Net unrealized holding gains on interest rate swaps designated as cash flow hedges | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Before Tax Amount | 8,393 | 9,103 |
Tax Effect | (2,052) | (2,226) |
Net of Tax Amount | $ 6,341 | $ 6,877 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 1.2 | $ 1.6 | $ 2.8 | $ 3.0 |
Commitments and Contingencies - Summary of Off-Balance Sheet Credit Risk (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Approximate Contract Amount | $ 1,018,400 |
Commitments to extend credit | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Approximate Contract Amount | 844,170 |
Credit card facilities | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Approximate Contract Amount | 143,666 |
Standby letters of credit | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Approximate Contract Amount | 22,068 |
Commercial letters of credit | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Approximate Contract Amount | $ 8,496 |
Fair Value Measurements - Narrative (Details) - USD ($) |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets (liabilities) measured at fair value | $ 0 | $ 0 |
Fair Value Measurements - Summary of Financial Instruments Where Fair Value Differes from Carrying Value (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Carrying Value | ||
Financial assets | ||
Loans | $ 2,768,972 | $ 2,850,015 |
Financial liabilities | ||
Time deposits | 1,721,207 | 1,745,025 |
Advances from the FHLB | 1,125,000 | 1,166,000 |
Junior subordinated debentures | 118,110 | 118,110 |
Estimated Fair Value | ||
Financial assets | ||
Loans | 2,650,162 | 2,739,721 |
Financial liabilities | ||
Time deposits | 1,733,538 | 1,740,752 |
Advances from the FHLB | 1,136,506 | 1,167,213 |
Junior subordinated debentures | $ 114,581 | $ 99,450 |
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