|
(Exact name of registrant as specified in its charter)
|
|
|
|
(State or jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification Number)
|
|
(Address of principal executive offices)
|
NONE
|
Former name, address and fiscal year, if changed since last report.
|
Title of each Class
|
Trading Symbol
|
Name of each exchange which registered
|
||
|
|
The
|
|
|
Number(s)
|
PART I -
|
Financial Information
|
|
Item 1.
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
8-70
|
|
Item 2.
|
71-96
|
|
Item 3.
|
97
|
|
Item 4.
|
97
|
|
|
|
|
PART II -
|
Other Information
|
|
Item 1A
|
98-100
|
|
Item 2.
|
101
|
|
Item 6.
|
102
|
• |
economic, market, operational, liquidity, credit, and interest rate risks associated with our business including the impact of the ongoing COVID-19 pandemic on each of
these items;
|
• |
economic conditions generally and in the financial services industry, particularly economic conditions within Michigan and the regional and local real estate markets in
which our bank operates including the economic impact of the ongoing COVID-19 pandemic in each of these areas;
|
• |
the failure of assumptions underlying the establishment of, and provisions made to, our allowance for credit losses;
|
• |
increased competition in the financial services industry, either nationally or regionally;
|
• |
our ability to achieve loan and deposit growth;
|
• |
volatility and direction of market interest rates;
|
• |
the continued services of our management team; and
|
• |
implementation of new legislation, which may have significant effects on us and the financial services industry.
|
Part I - Item 1.
|
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
|
September 30,
2021
|
December 31,
2020
|
|||||||
(Unaudited)
|
||||||||
(In thousands, except share amounts)
|
||||||||
Assets | ||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest bearing deposits
|
|
|
||||||
Cash and Cash Equivalents
|
|
|
||||||
Securities available for sale
|
|
|
||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
|
|
|
||||||
Loans held for sale, carried at fair value
|
|
|
||||||
Loans
|
||||||||
Commercial
|
|
|
||||||
Mortgage
|
|
|
||||||
Installment
|
|
|
||||||
Total Loans
|
|
|
||||||
Allowance for credit losses (1)
|
(
|
)
|
(
|
)
|
||||
Net Loans
|
|
|
||||||
Other real estate and repossessed assets, net
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Bank-owned life insurance
|
|
|
||||||
Capitalized mortgage loan servicing rights, carried at fair value
|
|
|
||||||
Other intangibles
|
|
|
||||||
Goodwill
|
|
|
||||||
Accrued income and other assets
|
|
|
||||||
Total Assets
|
$
|
|
$
|
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Deposits
|
||||||||
Non-interest bearing
|
$
|
|
$
|
|
||||
Savings and interest-bearing checking
|
|
|
||||||
Reciprocal
|
|
|
||||||
Time
|
|
|
||||||
Brokered time
|
|
|
||||||
Total Deposits
|
|
|
||||||
Other borrowings
|
|
|
||||||
Subordinated debt
|
|
|
||||||
Subordinated debentures
|
|
|
||||||
Accrued expenses and other liabilities
|
|
|
||||||
Total Liabilities
|
|
|
||||||
Commitments and contingent liabilities
|
||||||||
|
||||||||
Preferred stock,
|
|
|
||||||
Common stock,
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income
|
|
|
||||||
Total Shareholders’ Equity
|
|
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
|
$
|
|
(1) |
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||
|
(In thousands, except per share amounts)
|
|||||||||||||||
Interest Income
|
||||||||||||||||
Interest and fees on loans
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest on securities available for sale
|
||||||||||||||||
Taxable
|
|
|
|
|
||||||||||||
Tax-exempt
|
|
|
|
|
||||||||||||
Other investments
|
|
|
|
|
||||||||||||
Total Interest Income
|
|
|
|
|
||||||||||||
Interest Expense
|
||||||||||||||||
Deposits
|
|
|
|
|
||||||||||||
Other borrowings and subordinated debt and debentures
|
|
|
|
|
||||||||||||
Total Interest Expense
|
|
|
|
|
||||||||||||
Net Interest Income
|
|
|
|
|
||||||||||||
Provision for credit losses (1)
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Net Interest Income After Provision for Credit Losses
|
|
|
|
|
||||||||||||
Non-interest Income
|
||||||||||||||||
Interchange income
|
|
|
|
|
||||||||||||
Service charges on deposit accounts
|
|
|
|
|
||||||||||||
Net gains on assets
|
||||||||||||||||
Mortgage loans
|
|
|
|
|
||||||||||||
Securities available for sale
|
|
|
|
|
||||||||||||
Mortgage loan servicing, net
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Other
|
|
|
|
|
||||||||||||
Total Non-interest Income
|
|
|
|
|
||||||||||||
Non-interest Expense
|
||||||||||||||||
Compensation and employee benefits
|
|
|
|
|
||||||||||||
Data processing
|
|
|
|
|
||||||||||||
Occupancy, net
|
|
|
|
|
||||||||||||
Interchange expense
|
|
|
|
|
||||||||||||
Furniture, fixtures and equipment
|
|
|
|
|
||||||||||||
Loan and collection
|
|
|
|
|
||||||||||||
Communications
|
|
|
|
|
||||||||||||
Conversion related expenses
|
|
|
|
|
||||||||||||
Legal and professional
|
|
|
|
|
||||||||||||
Advertising
|
|
|
|
|
||||||||||||
FDIC deposit insurance
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total Non-interest Expense
|
|
|
|
|
||||||||||||
Income Before Income Tax
|
|
|
|
|
||||||||||||
Income tax expense
|
|
|
|
|
||||||||||||
Net Income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net Income Per Common Share
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
(Unaudited - In thousands)
|
|||||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other comprehensive income (loss)
|
||||||||||||||||
Securities available for sale
|
||||||||||||||||
Unrealized gains (losses) arising during period
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Change in unrealized gains and losses for which a portion of other than temporary impairment has been
recognized in earnings
|
|
|
|
(
|
)
|
|||||||||||
Reclassification adjustments for gains included in earnings
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Income tax expense (benefit)
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale, net of tax
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Derivative instruments
|
||||||||||||||||
Unrealized losses arising during period
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Reclassification adjustment for expense recognized in earnings
|
|
|
|
|
||||||||||||
Unrealized gains recognized in other comprehensive income (loss) on derivative instruments
|
|
|
|
|
||||||||||||
Income tax expense
|
|
|
|
|
||||||||||||
Unrealized gains recognized in other comprehensive income (loss) on derivative instruments, net of tax
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Comprehensive income
|
$
|
|
$
|
|
$
|
|
$
|
|
Nine months ended September 30,
|
||||||||
2021
|
2020
|
|||||||
(Unaudited - In thousands)
|
||||||||
Net Income
|
$
|
|
$
|
|
||||
Adjustments to Reconcile Net Income to Net Cash From Operating Activities
|
||||||||
Proceeds from sales of loans held for sale
|
|
|
||||||
Disbursements for loans held for sale
|
(
|
)
|
(
|
)
|
||||
Provision for credit losses (1)
|
(
|
)
|
|
|||||
Deferred income tax expense (benefit)
|
|
(
|
)
|
|||||
Net deferred loan fees (costs)
|
(
|
)
|
|
|||||
Net depreciation, amortization of intangible assets and premiums and accretion of discounts on securities
and loans
|
|
|
||||||
Net gains on mortgage loans
|
(
|
)
|
(
|
)
|
||||
Net gains on securities available for sale
|
(
|
)
|
(
|
)
|
||||
Share based compensation
|
|
|
||||||
Increase in accrued income and other assets
|
(
|
)
|
(
|
)
|
||||
Increase in accrued expenses and other liabilities
|
|
|
||||||
Total Adjustments
|
|
(
|
)
|
|||||
Net Cash From Operating Activities
|
|
|
||||||
Cash Flow Used in Investing Activities
|
||||||||
Proceeds from the sale of securities available for sale
|
|
|
||||||
Proceeds from maturities, prepayments and calls of securities available for sale
|
|
|
||||||
Purchases of securities available for sale
|
(
|
)
|
(
|
)
|
||||
Proceeds from the maturity of interest bearing deposits - time
|
|
|
||||||
Purchase of Federal Home Loan Bank stock
|
|
(
|
)
|
|||||
Net increase in portfolio loans (loans originated, net of principal payments)
|
(
|
)
|
(
|
)
|
||||
Proceeds from the sale of portfolio loans
|
|
|
||||||
Proceeds from bank-owned life insurance
|
|
|
||||||
Proceeds from the sale of other real estate and repossessed assets
|
|
|
||||||
Capital expenditures
|
(
|
)
|
(
|
)
|
||||
Net Cash Used in Investing Activities
|
(
|
)
|
(
|
)
|
||||
Cash Flow From Financing Activities
|
||||||||
Net increase in total deposits
|
|
|
||||||
Net decrease in other borrowings
|
(
|
)
|
(
|
)
|
||||
Proceeds from Federal Home Loan Bank Advances
|
|
|
||||||
Payments of Federal Home Loan Bank Advances
|
|
(
|
)
|
|||||
Proceeds from issuance of subordinated debt, net of issuance costs
|
|
|
||||||
Dividends paid
|
(
|
)
|
(
|
)
|
||||
Proceeds from issuance of common stock
|
|
|
||||||
Repurchase of common stock
|
(
|
)
|
(
|
)
|
||||
Share based compensation withholding obligation
|
(
|
)
|
(
|
)
|
||||
Net Cash From Financing Activities
|
|
|
||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
(
|
)
|
|||||
Cash and Cash Equivalents at Beginning of Period
|
|
|
||||||
Cash and Cash Equivalents at End of Period
|
$
|
|
$
|
|
||||
Cash paid during the period for
|
||||||||
Interest
|
$
|
|
$
|
|
||||
Income taxes
|
|
|
||||||
Operating leases
|
|
|
||||||
Transfers to other real estate and repossessed assets
|
|
|
||||||
Purchase of securities available for sale not yet settled
|
|
|
||||||
Securitization of portfolio loans
|
|
|
||||||
Right of use assets obtained in exchange for lease obligations
|
|
|
(1) |
|
Common
Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
Shareholders’
Equity
|
|||||||||||||
|
(Dollars in thousands, except per share amounts)
|
|||||||||||||||
Balances at July 1, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income, three months ended September 30, 2021
|
|
|
|
|
||||||||||||
Cash dividends declared, $
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Repurchase of
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Issuance of
|
|
|
|
|
||||||||||||
Share based compensation (issuance of
|
|
|
|
|
||||||||||||
Share based compensation withholding obligation (withholding of
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Other comprehensive loss
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Balances at September 30, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Balances at July 1, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income, three months ended September 30, 2020
|
|
|
|
|
||||||||||||
Cash dividends declared, $
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Share based compensation (issuance of
|
|
|
|
|
||||||||||||
Share based compensation withholding obligation (withholding of
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Other comprehensive income
|
|
|
|
|
||||||||||||
Balances at September 30, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Balances at January 1, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Adoption of ASU 2016-13
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Balances at January 1, 2021, as adjusted
|
|
|
|
|
||||||||||||
Net income, nine
months ended September 30, 2021
|
|
|
|
|
||||||||||||
Cash dividends declared, $
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Repurchase of
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Issuance of
|
|
|
|
|
||||||||||||
Share based compensation (issuance of
|
|
|
|
|
||||||||||||
Share based compensation withholding obligation (withholding of
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Other comprehensive loss
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Balances at September 30, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Balances at January 1, 2020
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Net income, nine
months ended September 30, 2020
|
|
|
|
|
||||||||||||
Cash dividends declared, $
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Repurchase of
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Issuance of
|
|
|
|
|
||||||||||||
Share based compensation (issuance of
|
|
|
|
|
||||||||||||
Share based compensation withholding obligation (withholding of
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Other comprehensive income
|
|
|
|
|
||||||||||||
Balances at September 30, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
1. |
Preparation of Financial Statements
|
2. |
New Accounting Standards
|
• |
Replaces the existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost, which will reflect
our estimate of credit losses over the full remaining expected life of the financial assets and will consider expected future changes in macroeconomic conditions.
|
• |
Eliminates existing guidance for purchase credit impaired (‘‘PCI’’) loans, and requires recognition of the nonaccretable difference as an increase to the allowance for
expected credit losses on financial assets purchased with more than insignificant credit deterioration since origination, which will be offset by an increase in the recorded investment of the related loans.
|
• |
Requires inclusion of expected recoveries, limited to the cumulative amount of prior write-offs, when estimating the ACL for in scope financial assets (including
collateral dependent assets).
|
• |
Amends existing impairment guidance for securities available for sale to incorporate an allowance, which will allow for reversals of credit impairments in the event
that the credit of an issuer improves. Credit losses on securities available for sale are limited to the amount of the decline in fair value regardless of what the credit loss model would show for impairment.
|
• |
Generally requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.
|
As Reported
Under
ASU 2016-13
|
Pre-ASU 2016-13
Adoption
|
Impact of
ASU 2016-13
|
||||||||||
Assets
|
||||||||||||
Loans
|
||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
||||||
Mortgage
|
|
|
|
|||||||||
Installment
|
|
|
|
|||||||||
Total loans
|
|
|
|
|||||||||
Allowance for credit losses
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net loans
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Deferred tax assets (1)
|
$
|
|
$
|
|
$
|
|
||||||
Total Assets
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Liabilities and shareholders's equity
|
||||||||||||
Allowance for credit losses on unfunded lending commitments (2)
|
$
|
|
$
|
|
$
|
|
||||||
Total liabilities
|
$
|
|
$
|
|
$
|
|
||||||
Retained earnings
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Total shareholders' equity
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Total liabilities and shareholders' equity
|
$
|
|
$
|
|
$
|
(
|
)
|
(1) |
|
(2) |
|
3. |
Securities
|
Amortized
|
Unrealized
|
|||||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
September 30, 2021
|
||||||||||||||||
U.S. agency
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. agency residential mortgage-backed
|
|
|
|
|
||||||||||||
U.S. agency commercial mortgage-backed
|
|
|
|
|
||||||||||||
Private label mortgage-backed
|
|
|
|
|
||||||||||||
Other asset backed
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
|
|
|
|
||||||||||||
Corporate
|
|
|
|
|
||||||||||||
Trust preferred
|
|
|
|
|
||||||||||||
Foreign government
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
December 31, 2020
|
||||||||||||||||
U.S. agency
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. agency residential mortgage-backed
|
|
|
|
|
||||||||||||
U.S. agency commercial mortgage-backed
|
|
|
|
|
||||||||||||
Private label mortgage-backed
|
|
|
|
|
||||||||||||
Other asset backed
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
|
|
|
|
||||||||||||
Corporate
|
|
|
|
|
||||||||||||
Trust preferred
|
|
|
|
|
||||||||||||
Foreign government
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Less Than Twelve Months
|
Twelve Months or More
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
September 30,
2021
|
||||||||||||||||||||||||
U.S. agency
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
U.S. agency residential mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
U.S. agency commercial mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Private label mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Other asset backed
|
|
|
|
|
|
|
||||||||||||||||||
Obligations of states and political subdivisions
|
|
|
|
|
|
|
||||||||||||||||||
Corporate
|
|
|
|
|
|
|
||||||||||||||||||
Trust preferred
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
December 31, 2020
|
||||||||||||||||||||||||
U.S. agency
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
U.S. agency residential mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Private label mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Other asset backed
|
|
|
|
|
|
|
||||||||||||||||||
Obligations of states and political subdivisions
|
|
|
|
|
|
|
||||||||||||||||||
Corporate
|
|
|
|
|
|
|
||||||||||||||||||
Trust preferred
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Amortized
Cost
|
Fair
Value
|
|||||||
(In thousands)
|
||||||||
Maturing within one year
|
$
|
|
$
|
|
||||
Maturing after one year but within five years
|
|
|
||||||
Maturing after five years but within ten years
|
|
|
||||||
Maturing after ten years
|
|
|
||||||
|
|
|||||||
U.S. agency residential mortgage-backed
|
|
|
||||||
U.S. agency commercial mortgage-backed
|
|
|
||||||
Private label mortgage-backed
|
|
|
||||||
Other asset backed
|
|
|
||||||
Total
|
$
|
|
$
|
|
Realized
|
||||||||||||
Proceeds
|
Gains
|
Losses
|
||||||||||
(In thousands)
|
||||||||||||
2021
|
$
|
|
$
|
|
$
|
|
||||||
2020
|
|
|
|
4. |
Loans
|
Commercial
|
Mortgage
|
Installment
|
Subjective
Allocation
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
2021
|
||||||||||||||||||||
Balance at beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Additions (deductions)
|
||||||||||||||||||||
Provision for credit losses
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
||||||||||||
Recoveries credited to the allowance
|
|
|
|
|
|
|||||||||||||||
Loans charged against the allowance
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
||||||||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
2020
|
||||||||||||||||||||
Balance at beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Additions (deductions)
|
||||||||||||||||||||
Provision for credit losses (1)
|
(
|
)
|
(
|
)
|
|
|
|
|||||||||||||
Recoveries credited to the allowance
|
|
|
|
|
|
|||||||||||||||
Loans charged against the allowance
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
||||||||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
|
Commercial
|
Mortgage
|
Installment
|
Subjective
Allocation
|
Total
|
|||||||||||||||
|
(In thousands)
|
|||||||||||||||||||
2021
|
||||||||||||||||||||
Balance at beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Additions (deductions)
|
||||||||||||||||||||
Impact of adoption of ASC 326
|
|
|
|
(
|
)
|
|
||||||||||||||
Provision for credit losses
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||
Initial allowance on loans purchased with credit deterioration
|
|
|
|
|
|
|||||||||||||||
Recoveries credited to the allowance
|
|
|
|
|
|
|||||||||||||||
Loans charged against the allowance
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
||||||||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
||||||||||||||||||||
2020
|
||||||||||||||||||||
Balance at beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Additions (deductions)
|
||||||||||||||||||||
Provision for credit losses (1)
|
|
(
|
)
|
|
|
|
||||||||||||||
Recoveries credited to the allowance
|
|
|
|
|
|
|||||||||||||||
Loans charged against the allowance
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
Commercial
|
Mortgage
|
Installment
|
Subjective
Allocation
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
December 31, 2020
|
||||||||||||||||||||
ACL:
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|||||||||||||||
Loans acquired with deteriorated credit quality
|
|
|
|
|
|
|||||||||||||||
Total ending ACL
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Loans
|
||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
||||||||||||||||
Loans acquired with deteriorated credit quality
|
|
|
|
|
||||||||||||||||
Total loans recorded investment
|
|
|
|
|
||||||||||||||||
Accrued interest included in recorded investment
|
|
|
|
|
||||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
September 30, 2021
|
||||||||||||||||||||||||
Non- Accrual
|
Non-Accrual
|
December 31,
2020
|
||||||||||||||||||||||
with no
Allowance for
Credit Loss
|
with an
Allowance for
Credit Loss
|
Total
Non-Accrual
|
90+ and Still
Accruing
|
Total
Non-Performing
Loans
|
Total Non-Performing
Loans (1)
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Commercial and industrial (2)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family owner occupied - non-jumbo (3)
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
|
|
||||||||||||||||||
Resort lending
|
|
|
|
|
|
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Boat lending
|
|
|
|
|
|
|
||||||||||||||||||
Recreational vehicle lending
|
|
|
|
|
|
|
||||||||||||||||||
Other
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Accrued interest excluded from total
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
|
$
|
|
$
|
|
(1) |
|
(2) |
|
(3) |
|
Collateral Type
|
||||||||||||
Real
Estate
|
Other
|
Allowance for
Credit Losses
|
||||||||||
(In thousands)
|
||||||||||||
September 30, 2021
|
||||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
$
|
|
$
|
|
|
|||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
Loans Past Due
|
Loans not
|
Total
|
||||||||||||||||||||||
30-59 days
|
60-89 days
|
90+ days
|
Total
|
Past Due
|
Loans
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
September 30,
2021
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Commercial and industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
|
|
||||||||||||||||||
Resort lending
|
|
|
|
|
|
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Boat lending
|
|
|
|
|
|
|
||||||||||||||||||
Recreational vehicle lending
|
|
|
|
|
|
|
||||||||||||||||||
Other
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
December 31, 2020
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Commercial and industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
|
|
||||||||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
|
|
||||||||||||||||||
Resort lending
|
|
|
|
|
|
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Boat lending
|
|
|
|
|
|
|
||||||||||||||||||
Recreational vehicle lending
|
|
|
|
|
|
|
||||||||||||||||||
Other
|
|
|
|
|
|
|
||||||||||||||||||
Total recorded investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Accrued interest included in recorded investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
2020
|
||||
Impaired loans with no allocated ACL
|
(In thousands)
|
|||
Troubled debt restructurings ("TDR")
|
$
|
|
||
Non - TDR
|
|
|||
Impaired loans with an allocated ACL
|
||||
TDR - allowance based on collateral
|
|
|||
TDR - allowance based on present value cash flow
|
|
|||
Non - TDR - allowance based on collateral
|
|
|||
Total impaired loans
|
$
|
|
||
Amount of ACL allocated (1)
|
||||
TDR - allowance based on collateral
|
$
|
|
||
TDR - allowance based on present value cash flow
|
|
|||
Non - TDR - allowance based on collateral
|
|
|||
Total amount of ACL allocated
|
$
|
|
(1) |
|
2020
|
||||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
ACL (1)
|
||||||||||
With no related ACL recorded:
|
(In thousands)
|
|||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
$
|
|
$
|
|
$
|
|
||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
|
|
|
||||||||||
With an ACL recorded:
|
||||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
|
|
|
|||||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
|
|
|
||||||||||
Total
|
||||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
|
|
|
|||||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
||||||
Accrued interest included in recorded investment
|
$
|
|
(1) |
|
Three months ended
September 30, 2020
|
Nine months ended
September 30, 2020
|
|||||||||||||||
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||||||||
With no related ACL recorded:
|
(In thousands)
|
|||||||||||||||
Commercial
|
||||||||||||||||
Commercial and industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Commercial real estate
|
|
|
|
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|
||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
||||||||||||
Resort lending
|
|
|
|
|
||||||||||||
Installment
|
||||||||||||||||
Boat lending
|
|
|
|
|
||||||||||||
Recreational vehicle lending
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
|
|
|
|
|||||||||||||
With an a ACL recorded:
|
||||||||||||||||
Commercial
|
||||||||||||||||
Commercial and industrial
|
|
|
|
|
||||||||||||
Commercial real estate
|
|
|
|
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|
||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
||||||||||||
Resort lending
|
|
|
|
|
||||||||||||
Installment
|
||||||||||||||||
Boat lending
|
|
|
|
|
||||||||||||
Recreational vehicle lending
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
|
|
|
|
|||||||||||||
Total
|
||||||||||||||||
Commercial
|
||||||||||||||||
Commercial and industrial
|
|
|
|
|
||||||||||||
Commercial real estate
|
|
|
|
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|
||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
||||||||||||
Resort lending
|
|
|
|
|
||||||||||||
Installment
|
||||||||||||||||
Boat lending
|
|
|
|
|
||||||||||||
Recreational vehicle lending
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
September 30, 2021
|
||||||||||||
Commercial
|
Retail (1)
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDRs
|
$
|
|
$
|
|
$
|
|
||||||
Non-performing TDRs (2)
|
|
|
(3)
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
December 31, 2020
|
||||||||||||
Commercial
|
Retail (1)
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDRs
|
$
|
|
$
|
|
$
|
|
||||||
Non-performing TDRs (2)
|
|
|
(3)
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
(1) |
|
(2) |
|
(3) |
|
Number of
Contracts
|
Pre-modification
Recorded
Balance
|
Post-modification
Recorded
Balance
|
||||||||||
(Dollars in thousands)
|
||||||||||||
2021
|
||||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
|
$
|
|
$
|
|
|||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total
|
|
$
|
|
$
|
|
|||||||
2020
|
||||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
|
$
|
|
$
|
|
|||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total
|
|
$
|
|
$
|
|
|
Number of
Contracts
|
Pre-modification
Balance
|
Post-modification
Balance
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||
2021
|
||||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
|
$
|
|
$
|
|
|||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total
|
|
$
|
|
$
|
|
|||||||
|
||||||||||||
2020
|
||||||||||||
Commercial
|
||||||||||||
Commercial and industrial
|
|
$
|
|
$
|
|
|||||||
Commercial real estate
|
|
|
|
|||||||||
Mortgage
|
||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|||||||||
1-4 family non-owner occupied
|
|
|
|
|||||||||
1-4 family - 2nd lien
|
|
|
|
|||||||||
Resort lending
|
|
|
|
|||||||||
Installment
|
||||||||||||
Boat lending
|
|
|
|
|||||||||
Recreational vehicle lending
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total
|
|
$
|
|
$
|
|
Covid-19 Accomodations
|
Total
|
% of Total
|
||||||||||||||
Loan Category
|
Loans (#)
|
Loans ($)
|
Loans
|
Loans
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Commercial
|
|
$
|
|
$
|
|
|
%
|
|||||||||
Mortgage
|
|
|
|
|
%
|
|||||||||||
Installment
|
|
|
|
|
%
|
|||||||||||
Total
|
|
$
|
|
$
|
|
|
%
|
|||||||||
Mortgage loans serviced for others(1)
|
|
$
|
|
$
|
|
|
%
|
1) |
|
Loan Category
|
Loans (#)
|
Loans ($)
|
||||||
(Dollars in thousands)
|
||||||||
Commercial
|
|
$
|
|
|||||
Mortgage
|
|
|
||||||
Installment
|
|
|
||||||
Total
|
|
$
|
|
1) |
|
As of September 30, 2021
|
As of December 31, 2020
|
|||||||||||||||
Amount (#)
|
Amount
|
Amount (#)
|
Amount
|
|||||||||||||
(Dollars in thousands)
|
(Dollars in thousands)
|
|||||||||||||||
Closed and outstanding - Round 1 loans
|
|
$
|
|
|
$
|
|
||||||||||
Closed and outstanding - Round 2 loans
|
|
|
|
|
||||||||||||
Total closed and outstanding
|
|
$
|
|
|
$
|
|
||||||||||
Unaccreted net fees remaining at period end
|
$
|
|
$
|
|
Commercial
|
||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
Revolving
Loans
Amortized
|
|||||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
2018
|
2017
|
Prior
|
Cost Basis
|
Total
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
September 30, 2021
|
||||||||||||||||||||||||||||||||
Commercial and industrial
|
||||||||||||||||||||||||||||||||
Non-watch (1-6)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Watch (7-8)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard Accrual (9)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Non-Accrual (10-11)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial real estate
|
||||||||||||||||||||||||||||||||
Non-watch (1-6)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Watch (7-8)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard Accrual (9)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Non-Accrual (10-11)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total Commercial
|
||||||||||||||||||||||||||||||||
Non-watch (1-6)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Watch (7-8)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard Accrual (9)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Non-Accrual (10-11)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Commercial
|
||||||||||||||||||||
Non-watch
1-6
|
Watch
7-8
|
Substandard
Accrual
9
|
Non-
Accrual
10-11
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
December 31, 2020
|
||||||||||||||||||||
Commercial and industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Commercial real estate
|
|
|
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Accrued interest included in total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Mortgage (1)
|
||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
Revolving Loans Amortized
|
|||||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
2018
|
2017
|
Prior
|
Cost Basis
|
Total
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
September 30, 2021
|
||||||||||||||||||||||||||||||||
1-4 family owner occupied - jumbo
|
||||||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
1-4 family owner occupied - non-jumbo
|
||||||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
1-4 family non-owner occupied
|
||||||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
1-4 family - 2nd lien
|
||||||||||||||||||||||||||||||||
800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Mortgage - continued (1)
|
||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
Revolving
Loans
Amortized
|
|||||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
2018
|
2017
|
Prior
|
Cost Basis
|
Total
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
September 30, 2021
|
||||||||||||||||||||||||||||||||
Resort lending
|
||||||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total Mortgage
|
||||||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
Installment (1)
|
||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
2018
|
2017
|
Prior
|
Total
|
||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||
September 30, 2021
|
||||||||||||||||||||||||||||
Boat lending
|
||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Recreational vehicle lending
|
||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Other
|
||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Total installment
|
||||||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
_750-799
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_700-749
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_650-699
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_600-649
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_550-599
|
|
|
|
|
|
|
|
|||||||||||||||||||||
_500-549
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Under 500
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Unknown
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Accrued interest excluded from total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
Credit scores have been updated within the last twelve months.
|
Mortgage
|
||||||||||||||||||||||||
1-4 Family
Owner
Occupied -
Jumbo
|
1-4 Family
Owner
Occupied -
Non-jumbo
|
1-4 Family
Non-owner
Occupied
|
1-4 Family
2nd Lien
|
Resort
Lending
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
December 31, 2020
|
||||||||||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
_750-799
|
|
|
|
|
|
|
||||||||||||||||||
_700-749
|
|
|
|
|
|
|
||||||||||||||||||
_650-699
|
|
|
|
|
|
|
||||||||||||||||||
_600-649
|
|
|
|
|
|
|
||||||||||||||||||
_550-599
|
|
|
|
|
|
|
||||||||||||||||||
_500-549
|
|
|
|
|
|
|
||||||||||||||||||
_Under 500
|
|
|
|
|
|
|
||||||||||||||||||
_Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Accrued interest included in total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Installment
|
||||||||||||||||
Boat
Lending
|
Recreational
Vehicle
Lending
|
Other
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2020
|
||||||||||||||||
_800 and above
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
_750-799
|
|
|
|
|
||||||||||||
_700-749
|
|
|
|
|
||||||||||||
_650-699
|
|
|
|
|
||||||||||||
_600-649
|
|
|
|
|
||||||||||||
_550-599
|
|
|
|
|
||||||||||||
_500-549
|
|
|
|
|
||||||||||||
_Under 500
|
|
|
|
|
||||||||||||
_Unknown
|
|
|
|
|
||||||||||||
_Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Accrued interest included in total
|
$
|
|
$
|
|
$
|
|
$
|
|
5. |
Shareholders’ Equity and Earnings Per Common Share
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
(In thousands, except per share data)
|
|||||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
||||||||||||||||
Weighted average shares outstanding (1)
|
|
|
|
|
||||||||||||
Stock units for deferred compensation plan for non-employee directors
|
|
|
|
|
||||||||||||
Effect of stock options
|
|
|
|
|
||||||||||||
Performance share units
|
|
|
|
|
||||||||||||
Weighted average shares outstanding for calculation of diluted earnings per share
|
|
|
|
|
||||||||||||
|
||||||||||||||||
Net income per common share
|
||||||||||||||||
Basic (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
6. |
Derivative Financial Instruments
|
September 30, 2021
|
||||||||||||
Notional
Amount
|
Average
Maturity
(years)
|
Fair
Value
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Fair value hedge designation
|
||||||||||||
Pay-fixed interest rate swap agreements - commercial
|
$
|
|
|
$
|
(
|
)
|
||||||
Pay-fixed interest rate swap agreements - securities available for sale
|
|
|
|
|||||||||
Total
|
$
|
|
|
$
|
|
|||||||
No hedge designation
|
||||||||||||
Rate-lock mortgage loan commitments
|
$
|
|
|
$
|
|
|||||||
Mandatory commitments to sell mortgage loans
|
|
|
|
|||||||||
Interest rate swaption agreement
|
|
|
|
|||||||||
Pay-fixed interest rate swap agreements - commercial
|
|
|
(
|
)
|
||||||||
Pay-variable interest rate swap agreements - commercial
|
|
|
|
|||||||||
Interest rate cap agreements
|
|
|
|
|||||||||
Purchased options
|
|
|
|
|||||||||
Written options
|
|
|
(
|
)
|
||||||||
Total
|
$
|
|
|
$
|
|
December 31, 2020
|
||||||||||||
Notional
Amount
|
Average
Maturity
(years)
|
Fair
Value
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Fair value hedge designation
|
||||||||||||
Pay-fixed interest rate swap agreements - commercial
|
$
|
|
|
$
|
(
|
)
|
||||||
Pay-fixed interest rate swap agreements - securities available for sale
|
|
|
|
|||||||||
Total
|
$
|
|
|
$
|
(
|
)
|
||||||
No hedge designation
|
||||||||||||
Rate-lock mortgage loan commitments
|
$
|
|
|
$
|
|
|||||||
Mandatory commitments to sell mortgage loans
|
|
|
(
|
)
|
||||||||
Pay-fixed interest rate swap agreements - commercial
|
|
|
(
|
)
|
||||||||
Pay-variable interest rate swap agreements - commercial
|
|
|
|
|||||||||
Pay-fixed interest rate swap agreements
|
|
|
(
|
)
|
||||||||
Interest rate cap agreements
|
|
|
|
|||||||||
Purchased options
|
|
|
|
|||||||||
Written options
|
|
|
(
|
)
|
||||||||
Total
|
$
|
|
|
$
|
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||||||||||||||||
September 30,
2021
|
December 31,
2020
|
September 30,
2021
|
December 31,
2020
|
|||||||||||||||||||||||||||||
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
Other assets
|
$
|
|
Other assets
|
$
|
|
Other liabilities
|
$
|
|
Other liabilities
|
$
|
|
||||||||||||||||||||
Derivatives not designated as hedging instruments
|
||||||||||||||||||||||||||||||||
Rate-lock mortgage loan commitments
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Mandatory commitments to sell mortgage loans
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Interest rate swaption agreement
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Pay-fixed interest rate swap agreements - commercial
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Pay-variable interest rate swap agreements - commercial
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Interest rate cap agreements
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Purchased options
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
Written options
|
Other assets
|
|
Other assets
|
|
Other liabilities
|
|
Other liabilities
|
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Total derivatives
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Month Periods Ended September 30,
|
||||||||||||||||||||||||||
Loss
Recognized in
Other
Comprehensive
Income (Loss)
(Effective Portion)
|
Location of
Loss
Reclassified
from
Accumulated
Other
Comprehensive
Income
into Income
(Effective
|
Loss
Reclassified from
Accumulated Other
Comprehensive
Income
into Income
(Effective Portion)
|
Location of
Gain (Loss)
Recognized
|
Gain (Loss)
Recognized
in Income
|
||||||||||||||||||||||
2021
|
2020
|
Portion)
|
2021
|
2020
|
in Income
|
2021
|
2020
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||
Fair Value Hedges
|
||||||||||||||||||||||||||
Pay-fixed interest rate swap agreement - Commercial loan
|
Interest and fees on loans
|
$
|
|
$
|
|
|||||||||||||||||||||
Pay-fixed interest rate swap agreement - Securities available for sale
|
Interest on securities available for sale - tax - exempt
|
|
|
|||||||||||||||||||||||
Total
|
$
|
|
$
|
|
||||||||||||||||||||||
Cash Flow Hedges
|
||||||||||||||||||||||||||
Interest rate cap agreements
|
$
|
|
$
|
|
Interest expense
|
$
|
|
$
|
(
|
)
|
||||||||||||||||
Pay-fixed interest rate swap agreements
|
|
(
|
)
|
Interest expense
|
|
(
|
)
|
|||||||||||||||||||
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||||||||||||||
No hedge designation
|
||||||||||||||||||||||||||
Rate-lock mortgage loan commitments
|
Net gains on mortgage loans
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||
Mandatory commitments to sell mortgage loans
|
Net gains on mortgage loans
|
|
|
|||||||||||||||||||||||
Interest rate swaption agreement
|
Net gains on mortgage loans
|
|
|
|||||||||||||||||||||||
Pay-fixed interest rate swap agreements - commercial
|
Interest income
|
|
|
|||||||||||||||||||||||
Pay-variable interest rate swap agreements - commercial
|
Interest income
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
Interest expense
|
|
|
|||||||||||||||||||||||
Interest rate cap agreements
|
Interest expense
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||
Purchased options
|
Interest expense
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||
Written options
|
Interest expense
|
|
|
|||||||||||||||||||||||
Total
|
$
|
(
|
)
|
$
|
|
Nine Month Periods Ended September 30,
|
||||||||||||||||||||||||||
|
Gain (Loss)
Recognized in
Other
Comprehensive
Income (Loss)
(Effective Portion)
|
Location of
Loss
Reclassified
from
Accumulated
Other
Comprehensive
Income
into Income
(Effective
|
Loss
Reclassified from
Accumulated Other
Comprehensive
Income
into Income
(Effective Portion)
|
Location of
Gain (Loss)
Recognized
|
Gain (Loss)
Recognized
in Income
|
|||||||||||||||||||||
|
2021
|
2020
|
Portion)
|
2021
|
2020
|
in Income
|
2021
|
2020
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||||
Fair Value Hedges
|
|
|
||||||||||||||||||||||||
Pay-fixed interest rate swap agreement - Commercial loan
|
Interest and fees on loans
|
$
|
|
$
|
(
|
)
|
||||||||||||||||||||
Pay-fixed interest rate swap agreement - Securities available for sale
|
|
Interest on securities available for sale - tax - exempt
|
|
|
||||||||||||||||||||||
Total
|
$
|
|
$
|
(
|
)
|
|||||||||||||||||||||
Cash Flow Hedges
|
||||||||||||||||||||||||||
Interest rate cap agreements
|
$
|
|
$
|
|
Interest expense
|
$
|
|
$
|
(
|
)
|
||||||||||||||||
Pay-fixed interest rate swap agreements
|
|
(
|
)
|
Interest expense
|
|
(
|
)
|
|||||||||||||||||||
Total
|
$
|
|
$
|
(
|
)
|
|
$
|
|
$
|
(
|
)
|
|
||||||||||||||
No hedge designation
|
|
|
||||||||||||||||||||||||
Rate-lock mortgage loan commitments
|
|
Net gains on mortgage loans
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||||
Mandatory commitments to sell mortgage loans
|
|
Net gains on mortgage loans
|
|
(
|
)
|
|||||||||||||||||||||
Interest rate swaption agreement
|
Net gains on mortgage loans
|
(
|
)
|
|
||||||||||||||||||||||
Pay-fixed interest rate swap agreements - commercial
|
|
Interest income
|
|
(
|
)
|
|||||||||||||||||||||
Pay-variable interest rate swap agreements - commercial
|
|
Interest income
|
(
|
)
|
|
|||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
Interest expense
|
|
|
|||||||||||||||||||||||
Interest rate cap agreements
|
Interest expense
|
|
(
|
)
|
||||||||||||||||||||||
Purchased options
|
|
Interest expense
|
(
|
)
|
(
|
)
|
||||||||||||||||||||
Written options
|
|
Interest expense
|
|
|
||||||||||||||||||||||
Total
|
|
|
$
|
(
|
)
|
$
|
|
7. |
Goodwill and Other Intangibles
|
September 30, 2021
|
December 31, 2020
|
|||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Amortized intangible assets - core deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Unamortized intangible assets - goodwill
|
$
|
|
$
|
|
(In thousands)
|
||||
Three months ending December 31, 2021
|
$
|
|
||
2022
|
|
|||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026 and thereafter
|
|
|||
Total
|
$
|
|
8. |
Share Based Compensation
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
||||||||||||||||
Restricted stock
|
|
|
|
|
||||||||||||
PSU
|
|
|
|
|
Number of
Shares
|
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term (Years)
|
Aggregated
Intrinsic
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Outstanding at January 1, 2021
|
|
$
|
|
|||||||||||||
Granted
|
|
|||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited
|
|
|||||||||||||||
Expired
|
|
|||||||||||||||
Outstanding at September 30, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Vested and expected to vest at September 30, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable at September 30, 2021
|
|
$
|
|
|
$
|
|
Number
of Shares
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||
Outstanding at January 1, 2021
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
(
|
)
|
|
|||||
Outstanding at September 30, 2021
|
|
$
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
(In thousands)
|
(In thousands)
|
|||||||||||||||
Intrinsic value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Cash proceeds received
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Tax benefit realized
|
$
|
|
$
|
|
$
|
|
$
|
|
9. |
Income Tax
|
10. |
Regulatory Matters
|
Actual
|
Minimum for
Adequately Capitalized
Institutions
|
Minimum for
Well-Capitalized
Institutions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
September 30,
2021
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
||||||||||||||||
Tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
||||||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
||||||||||||||||
Tier 1 capital to average assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
||||||||||||||||
December 31, 2020
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
||||||||||||||||
Tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
||||||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
||||||||||||||||
Tier 1 capital to average assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
|
|
|
|
$
|
|
|
%
|
(1) |
|
Consolidated
|
Independent Bank
|
|||||||||||||||
September 30,
2021
|
December 31,
2020
|
September 30,
2021
|
December 31,
2020
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Total shareholders' equity
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Add (deduct) |
||||||||||||||||
Accumulated other comprehensive income for regulatory purposes
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Goodwill and other intangibles
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
CECL (1)
|
|
|
|
|
||||||||||||
Common equity tier 1 capital
|
|
|
|
|
||||||||||||
Qualifying trust preferred securities
|
|
|
|
|
||||||||||||
Tier 1 capital
|
|
|
|
|
||||||||||||
Subordinated debt
|
|
|
|
|
||||||||||||
Allowance for credit losses and allowance for unfunded lending commitments limited to 1.25% of total
risk-weighted assets (2)
|
|
|
|
|
||||||||||||
Total risk-based capital
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|
(2)
|
|
11. |
Fair Value Disclosures
|
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
Measure-
ments
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Un-
observable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
September 30,
2021:
|
||||||||||||||||
Measured at Fair Value on a Recurring Basis
|
||||||||||||||||
Assets
|
||||||||||||||||
Securities available for sale
|
||||||||||||||||
U.S. agency
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. agency residential mortgage-backed
|
|
|
|
|
||||||||||||
U.S. agency commercial mortgage-backed
|
|
|
|
|
||||||||||||
Private label mortgage-backed
|
|
|
|
|
||||||||||||
Other asset backed
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
|
|
|
|
||||||||||||
Corporate
|
|
|
|
|
||||||||||||
Trust preferred
|
|
|
|
|
||||||||||||
Foreign government
|
|
|
|
|
||||||||||||
Loans held for sale, carried at fair value
|
|
|
|
|
||||||||||||
Capitalized mortgage loan servicing rights
|
|
|
|
|
||||||||||||
Derivatives (1)
|
|
|
|
|
||||||||||||
Liabilities
|
||||||||||||||||
Derivatives (2)
|
|
|
|
|
||||||||||||
Measured at Fair Value on a Non-recurring Basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Collateral dependent loans (3)
|
||||||||||||||||
Commercial
|
||||||||||||||||
Commercial and industrial
|
|
|
|
|
||||||||||||
Commercial real estate
|
|
|
|
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
||||||||||||
Resort lending
|
|
|
|
|
||||||||||||
Installment
|
||||||||||||||||
Boat lending
|
|
|
|
|
||||||||||||
Recreational vehicle lending
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
(1) |
|
(2) |
|
(3) |
|
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
Measure-
ments
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Un-
observable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2020:
|
||||||||||||||||
Measured at Fair Value on a Recurring Basis
|
||||||||||||||||
Assets
|
||||||||||||||||
Securities available for sale
|
||||||||||||||||
U.S. agency
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. agency residential mortgage-backed
|
|
|
|
|
||||||||||||
U.S. agency commercial mortgage-backed
|
|
|
|
|
||||||||||||
Private label mortgage-backed
|
|
|
|
|
||||||||||||
Other asset backed
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
|
|
|
|
||||||||||||
Corporate
|
|
|
|
|
||||||||||||
Trust preferred
|
|
|
|
|
||||||||||||
Foreign government
|
|
|
|
|
||||||||||||
Loans held for sale, carried at fair value
|
|
|
|
|
||||||||||||
Capitalized mortgage loan servicing rights
|
|
|
|
|
||||||||||||
Derivatives (1)
|
|
|
|
|
||||||||||||
Liabilities
|
||||||||||||||||
Derivatives (2)
|
|
|
|
|
||||||||||||
Measured at Fair Value on a Non-recurring Basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Impaired loans (3)
|
||||||||||||||||
Commercial
|
||||||||||||||||
Commercial and industrial
|
|
|
|
|
||||||||||||
Commercial real estate
|
|
|
|
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family owner occupied - jumbo
|
|
|
|
|
||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
||||||||||||
1-4 family non-owner occupied
|
|
|
|
|
||||||||||||
1-4 family - 2nd lien
|
|
|
|
|
||||||||||||
Resort lending
|
|
|
|
|
||||||||||||
Installment
|
||||||||||||||||
Boat lending
|
|
|
|
|
||||||||||||
Recreational vehicle lending
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Other real estate (4)
|
||||||||||||||||
1-4 family owner occupied - non-jumbo
|
|
|
|
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
Changes in Fair Values for the Nine-Month
Periods
Ended September 30 for Items
Measured at Fair Value
Pursuant to Election of the Fair Value Option
|
||||||||||||||
Net Gains
on Assets
|
Mortgage |
Total
Change
in Fair
Values
Included
in Current
|
||||||||||||
Mortgage
Loans
|
Loan
Servicing, net
|
Period
Earnings
|
||||||||||||
(In thousands)
|
||||||||||||||
2021
|
||||||||||||||
Loans held for sale
|
$
|
(
|
)
|
$
|
-
|
$
|
(
|
)
|
||||||
Capitalized mortgage loan servicing rights
|
-
|
(
|
)
|
(
|
)
|
|||||||||
2020
|
||||||||||||||
Loans held for sale
|
|
-
|
|
|||||||||||
Capitalized mortgage loan servicing rights
|
-
|
(
|
)
|
(
|
)
|
• |
Loans that are individually evaluated using the fair value of collateral for collateral dependent loans had a carrying amount of $
|
• |
Other real estate, which is measured using the fair value of the property, had a carrying amount of
|
|
Capitalized Mortgage Loan Servicing Rights
|
|||||||||||||||
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
(In thousands)
|
(In thousands)
|
||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total losses realized and unrealized:
|
||||||||||||||||
Included in results of operations
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Included in other comprehensive income (loss)
|
|
|
|
|
||||||||||||
Purchases, issuances, settlements, maturities and calls
|
|
|
|
|
||||||||||||
Transfers in and/or out of Level 3
|
|
|
|
|
||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Amount of total losses for the period included in earnings attributable to the change in unrealized gains
(losses) relating to assets and liabilities still held at September 30
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Asset
Fair
Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Range
|
Weighted
Average
|
||||||||||||||||
(In thousands)
|
-
|
-
|
-
|
|||||||||||||||||
September 30,
2021
|
||||||||||||||||||||
Capitalized mortgage loan servicing rights
|
$
|
|
Present value of net
|
Discount rate
|
|
% |
|
%
|
||||||||||||
servicing revenue
|
Cost to service
|
$
|
|
$
|
|
|||||||||||||||
Ancillary income
|
|
|
||||||||||||||||||
Float rate
|
|
%
|
|
%
|
||||||||||||||||
Prepayment rate
|
|
% |
|
%
|
||||||||||||||||
December 31, 2020
|
||||||||||||||||||||
Capitalized mortgage loan servicing rights
|
$
|
|
Present value of net
|
Discount rate
|
|
% |
|
%
|
||||||||||||
servicing revenue
|
Cost to service
|
$
|
|
$
|
|
|||||||||||||||
Ancillary income
|
|
|
||||||||||||||||||
Float rate
|
|
%
|
|
%
|
||||||||||||||||
Prepayment rate
|
|
% |
|
%
|
Asset
Fair
Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Range
|
Weighted
Average
|
|||||||||||||
(In thousands)
|
-
|
-
|
|||||||||||||||
September 30,
2021
|
|||||||||||||||||
Collateral dependent loans
|
|||||||||||||||||
Commercial
|
$
|
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(
|
|
(
|
|
|||||||||
Mortgage and Installment(1)
|
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(
|
|
||||||||||||
December 31, 2020
|
|||||||||||||||||
Collateral dependent loans
|
|||||||||||||||||
Commercial
|
$
|
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(
|
|
|
||||||||||
Mortgage and Installment(1)
|
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(
|
(
|
||||||||||||
Other real estate
|
|||||||||||||||||
Mortgage
|
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(
|
(
|
(1) |
|
Aggregate
Fair Value
|
Difference
|
Contractual
Principal
|
||||||||||
(In thousands)
|
||||||||||||
Loans held for sale
|
||||||||||||
September 30, 2021
|
$
|
|
$
|
|
$
|
|
||||||
December 31, 2020
|
|
|
|
12. |
Fair Values of Financial Instruments
|
Fair Value Using
|
||||||||||||||||||||
Recorded
Book
Balance
|
Fair Value
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Un-
observable
Inputs
(Level 3)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
September 30,
2021
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest bearing deposits
|
|
|
|
|
|
|||||||||||||||
Securities available for sale
|
|
|
|
|
|
|||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank Stock
|
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||||
Net loans and loans held for sale
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Derivative financial instruments
|
|
|
|
|
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Deposits with no stated maturity (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Deposits with stated maturity (1)
|
|
|
|
|
|
|||||||||||||||
Other borrowings
|
|
|
|
|
|
|||||||||||||||
Subordinated debt
|
|
|
|
|
|
|||||||||||||||
Subordinated debentures
|
|
|
|
|
|
|||||||||||||||
Accrued interest payable
|
|
|
|
|
|
|||||||||||||||
Derivative financial instruments
|
|
|
|
|
|
|||||||||||||||
December 31, 2020
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest bearing deposits
|
|
|
|
|
|
|||||||||||||||
Securities available for sale
|
|
|
|
|
|
|||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank Stock
|
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||||
Net loans and loans held for sale
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Derivative financial instruments
|
|
|
|
|
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Deposits with no stated maturity (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Deposits with stated maturity (1)
|
|
|
|
|
|
|||||||||||||||
Other borrowings
|
|
|
|
|
|
|||||||||||||||
Subordinated debt
|
|
|
|
|
|
|||||||||||||||
Subordinated debentures
|
|
|
|
|
|
|||||||||||||||
Accrued interest payable
|
|
|
|
|
|
|||||||||||||||
Derivative financial instruments
|
|
|
|
|
|
(1) |
|
13. |
Contingencies
|
∙
|
difficulties encountered by our business customers in addressing the effects of the pandemic may cause increases in loan delinquencies,
foreclosures and defaults;
|
∙
|
increases in our allowance for credit losses may be necessary;
|
∙
|
declines in collateral values may occur;
|
∙
|
third party disruptions may occur, including outages at network providers, on-line banking vendors and other suppliers;
|
∙
|
there is increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote
activity;
|
∙
|
we may experience operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental
actions; and/or
|
∙
|
our production and efficiency may suffer due to employee illnesses and/or employees having to work remotely.
|
Amount
|
% of
Total
Loans
|
|||||||
(Dollars in millions)
|
||||||||
Commercial and industrial portfolio segment:
|
||||||||
Retail
|
$
|
|
|
%
|
||||
Food service
|
|
|
||||||
Hotel
|
|
|
||||||
|
|
|||||||
Commercial real estate portfolio segment:
|
||||||||
Retail
|
|
|
||||||
Office
|
|
|
||||||
Multifamily
|
|
|
||||||
|
|
|||||||
Total
|
$
|
|
|
%
|
14. |
Accumulated Other Comprehensive Income (Loss) (“AOCIL”)
|
Unrealized
Gains on
Securities
Available
for Sale
|
Dispropor-
tionate
Tax Effects
from
Securities
Available
for Sale
|
Unrealized
Losses on
Cash Flow
Hedges
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
For the three months ended September 30, 2021
|
||||||||||||||||
Balances at beginning of period
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||
Other comprehensive loss before reclassifications
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Amounts reclassified from AOCIL
|
|
|
|
|
||||||||||||
Net current period other comprehensive loss
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Balances at end of period
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||
2020
|
||||||||||||||||
Balances at beginning of period
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||
Other comprehensive income (loss) before reclassifications
|
|
|
(
|
)
|
|
|||||||||||
Amounts reclassified from AOCIL
|
|
|
|
|
||||||||||||
Net current period other comprehensive income
|
|
|
|
|
||||||||||||
Balances at end of period
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||
For the nine months ended September 30, 2021
|
||||||||||||||||
Balances at beginning of period
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||
Other comprehensive loss before reclassifications
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Amounts reclassified from AOCIL
|
|
|
|
|
||||||||||||
Net current period other comprehensive loss
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Balances at end of period
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||
2020
|
||||||||||||||||
Balances at beginning of period
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
|
|
(
|
)
|
|
|||||||||||
Amounts reclassified from AOCIL
|
(
|
)
|
|
|
|
|||||||||||
Net current period other comprehensive income
|
|
|
|
|
||||||||||||
Balances at end of period
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
AOCIL Component
|
Amount
Reclassified
From
AOCIL
|
Affected Line Item in Condensed
Consolidated Statements of Operations
|
|||
|
(In thousands)
|
|
|||
2021
|
|
||||
Unrealized gains on securities available for sale
|
|
||||
|
$
|
|
Net gains on securities available for sale
|
||
|
|
Income tax expense
|
|||
|
$
|
|
Reclassifications, net of tax
|
||
|
|
||||
2020
|
|
||||
Unrealized gains on securities available for sale
|
|
||||
|
$
|
|
Net gains on securities available for sale
|
||
|
|
Net impairment loss recognized in earnings
|
|||
|
|
Total reclassifications before tax
|
|||
|
|
Income tax expense
|
|||
|
$
|
|
Reclassifications, net of tax
|
||
|
|
||||
Unrealized losses on cash flow hedges
|
|
||||
|
$
|
|
Interest expense
|
||
|
|
Income tax expense
|
|||
|
$
|
|
Reclassification, net of tax
|
||
|
|
||||
|
$
|
(
|
)
|
Total reclassifications for the period, net of tax
|
AOCIL Component
|
Amount
Reclassified
From
AOCIL
|
Affected Line Item in Condensed
Consolidated Statements of Operations
|
|||
|
(In thousands)
|
|
|||
2021
|
|
||||
Unrealized gains on securities available for sale
|
|
||||
|
$
|
|
Net gains on securities available for sale
|
||
|
|
Income tax expense
|
|||
|
$
|
|
Reclassifications, net of tax
|
||
|
|
||||
2020
|
|
||||
Unrealized gains on securities available for sale
|
|
||||
|
$
|
|
Net gains on securities available for sale
|
||
|
|
Net impairment loss recognized in earnings
|
|||
|
|
Total reclassifications before tax
|
|||
|
|
Income tax expense
|
|||
|
$
|
|
Reclassifications, net of tax
|
||
|
|
||||
Unrealized losses on cash flow hedges
|
|
||||
|
$
|
|
Interest expense
|
||
|
|
Income tax expense
|
|||
|
$
|
|
Reclassification, net of tax
|
||
|
|
||||
|
$
|
(
|
)
|
Total reclassifications for the period, net of tax
|
15. |
Revenue from Contracts with Customers
|
Three months ending September 30, 2021
|
||||||||||||||||||||
Service
Charges
on Deposit
Accounts
|
Other
Deposit
Related
Income
|
Interchange
Income
|
Investment
and
Insurance
Commissions
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Retail
|
||||||||||||||||||||
Overdraft fees
|
$
|
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
|
||||||||||
Account service charges
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other
|
-
|
|
-
|
-
|
|
|||||||||||||||
Business
|
||||||||||||||||||||
Overdraft fees
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other
|
-
|
|
-
|
-
|
|
|||||||||||||||
Interchange income
|
-
|
-
|
|
-
|
|
|||||||||||||||
Asset management revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
Transaction based revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Reconciliation to Condensed Consolidated Statement of Operations:
|
||||||||||||||||||||
Non-interest income - other:
|
||||||||||||||||||||
Other deposit related income
|
$
|
|
||||||||||||||||||
Investment and insurance commissions
|
|
|||||||||||||||||||
Bank owned life insurance
|
|
|||||||||||||||||||
Other
|
|
|||||||||||||||||||
Total
|
$
|
|
Three months ending September 30, 2020
|
||||||||||||||||||||
Service
Charges
on Deposit
Accounts
|
Other
Deposit
Related
Income
|
Interchange
Income
|
Investment
and
Insurance
Commissions
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Retail
|
||||||||||||||||||||
Overdraft fees
|
$
|
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
|
||||||||||
Account service charges
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other
|
-
|
|
-
|
-
|
|
|||||||||||||||
Business
|
||||||||||||||||||||
Overdraft fees
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other |
-
|
|
-
|
-
|
|
|||||||||||||||
Interchange income
|
-
|
-
|
|
-
|
|
|||||||||||||||
Asset management revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
Transaction based revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Reconciliation to Condensed Consolidated Statement of Operations:
|
||||||||||||||||||||
Non-interest income - other:
|
||||||||||||||||||||
Other deposit related income
|
$
|
|
||||||||||||||||||
Investment and insurance commissions
|
|
|||||||||||||||||||
Bank owned life insurance
|
|
|||||||||||||||||||
Other
|
|
|||||||||||||||||||
Total
|
$
|
|
Nine months ending September 30, 2021
|
||||||||||||||||||||
|
Service
Charges
on Deposit
Accounts
|
Other
Deposit
Related
Income
|
Interchange
Income
|
Investment
and
Insurance
Commissions
|
Total
|
|||||||||||||||
|
(In thousands)
|
|||||||||||||||||||
Retail
|
||||||||||||||||||||
Overdraft fees
|
$
|
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
|
||||||||||
Account service charges
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other
|
-
|
|
-
|
-
|
|
|||||||||||||||
Business
|
||||||||||||||||||||
Overdraft fees
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other
|
-
|
|
-
|
-
|
|
|||||||||||||||
Interchange income
|
-
|
-
|
|
-
|
|
|||||||||||||||
Asset management revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
Transaction based revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
|
||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
||||||||||||||||||||
Reconciliation to Condensed Consolidated Statement of Operations:
|
||||||||||||||||||||
Non-interest income - other:
|
||||||||||||||||||||
Other deposit related income
|
$
|
|
||||||||||||||||||
Investment and insurance commissions
|
|
|||||||||||||||||||
Bank owned life insurance
|
|
|||||||||||||||||||
Other
|
|
|||||||||||||||||||
Total
|
$
|
|
Nine months ending September 30, 2020
|
||||||||||||||||||||
|
Service
Charges
on Deposit
Accounts
|
Other
Deposit
Related
Income
|
Interchange
Income
|
Investment
and
Insurance
Commissions
|
Total
|
|||||||||||||||
|
(In thousands)
|
|||||||||||||||||||
Retail
|
||||||||||||||||||||
Overdraft fees
|
$
|
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
|
||||||||||
Account service charges
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other
|
-
|
|
-
|
-
|
|
|||||||||||||||
Business
|
||||||||||||||||||||
Overdraft fees
|
|
-
|
-
|
-
|
|
|||||||||||||||
ATM fees
|
-
|
|
-
|
-
|
|
|||||||||||||||
Other
|
-
|
|
-
|
-
|
|
|||||||||||||||
Interchange income
|
-
|
-
|
|
-
|
|
|||||||||||||||
Asset management revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
Transaction based revenue
|
-
|
-
|
-
|
|
|
|||||||||||||||
|
||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
||||||||||||||||||||
Reconciliation to Condensed Consolidated Statement of Operations:
|
||||||||||||||||||||
Non-interest income - other:
|
||||||||||||||||||||
Other deposit related income
|
$
|
|
||||||||||||||||||
Investment and insurance commissions
|
|
|||||||||||||||||||
Bank owned life insurance
|
|
|||||||||||||||||||
Other
|
|
|||||||||||||||||||
Total
|
$
|
|
16. |
Leases
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(In thousands)
|
(In thousands)
|
|||||||||||||||
Operating lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Variable lease cost
|
|
|
|
|
||||||||||||
Short-term lease cost
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30,
2021
|
December 31,
2020
|
|||||||
(Dollars in thousands)
|
||||||||
Lease right of use asset (1)
|
$
|
|
$
|
|
||||
Lease liabilities (2)
|
$
|
|
$
|
|
||||
Weighted average remaining lease term (years)
|
|
|
||||||
Weighted average discount rate
|
|
%
|
|
%
|
(1) |
|
(2) |
|
(In thousands)
|
||||
Three months ending December 31, 2021
|
$
|
|
||
2022
|
|
|||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026 and thereafter
|
|
|||
Total lease payments
|
|
|||
Less imputed interest
|
(
|
)
|
||
Total
|
$
|
|
∙ |
difficulties encountered by our business customers in addressing the effects of the pandemic may cause increases in loan delinquencies, foreclosures and defaults;
|
∙ |
increases in our allowance for credit losses may be necessary;
|
∙ |
declines in collateral values may occur;
|
∙ |
third party disruptions may occur, including outages at network providers, on-line banking vendors and other suppliers;
|
∙ |
there is increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity;
|
∙ |
we may experience operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions; and/or
|
∙ |
our production and efficiency may suffer due to employee illnesses and/or employees having to work remotely.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net income (annualized) to
|
||||||||||||||||
Average assets
|
1.40
|
%
|
1.90
|
%
|
1.53
|
%
|
1.36
|
%
|
||||||||
Average shareholders’ equity
|
15.93
|
%
|
21.36
|
%
|
17.32
|
%
|
14.87
|
%
|
||||||||
.
|
||||||||||||||||
Net income per common share
|
||||||||||||||||
Basic
|
$
|
0.74
|
$
|
0.90
|
$
|
2.32
|
$
|
1.78
|
||||||||
Diluted
|
0.73
|
0.89
|
2.30
|
1.76
|
Three Months Ended
September 30,
|
||||||||||||||||||||||||
2021
|
2020
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Balance
|
Interest
|
Rate (2)
|
Balance
|
Interest
|
Rate (2)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable loans
|
$
|
2,896,552
|
$
|
30,061
|
4.13
|
%
|
$
|
2,918,946
|
$
|
30,323
|
4.14
|
%
|
||||||||||||
Tax-exempt loans (1)
|
7,148
|
90
|
5.00
|
6,926
|
88
|
5.05
|
||||||||||||||||||
Taxable securities available for sale
|
951,445
|
3,922
|
1.65
|
733,977
|
3,450
|
1.88
|
||||||||||||||||||
Tax-exempt securities available for sale(1)
|
365,937
|
2,070
|
2.26
|
157,998
|
1,194
|
3.02
|
||||||||||||||||||
Interest bearing cash
|
57,153
|
23
|
0.16
|
51,181
|
14
|
0.11
|
||||||||||||||||||
Other investments
|
18,427
|
181
|
3.90
|
18,427
|
223
|
4.81
|
||||||||||||||||||
Interest Earning Assets
|
4,296,662
|
36,347
|
3.37
|
3,887,455
|
35,292
|
3.62
|
||||||||||||||||||
Cash and due from banks
|
57,151
|
52,676
|
||||||||||||||||||||||
Other assets, net
|
159,961
|
162,187
|
||||||||||||||||||||||
Total Assets
|
$
|
4,513,774
|
$
|
4,102,318
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest-bearing checking
|
$
|
2,317,142
|
695
|
0.12
|
$
|
1,922,971
|
686
|
0.14
|
||||||||||||||||
Time deposits
|
314,394
|
395
|
0.50
|
498,796
|
1,376
|
1.1
|
||||||||||||||||||
Other borrowings
|
108,908
|
962
|
3.50
|
110,714
|
1,006
|
3.61
|
||||||||||||||||||
Interest Bearing Liabilities
|
2,740,444
|
2,052
|
0.30
|
2,532,481
|
3,068
|
0.48
|
||||||||||||||||||
Non-interest bearing deposits
|
1,303,401
|
1,137,303
|
||||||||||||||||||||||
Other liabilities
|
72,387
|
67,820
|
||||||||||||||||||||||
Shareholders’ equity
|
397,542
|
364,714
|
||||||||||||||||||||||
|
||||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
4,513,774
|
$
|
4,102,318
|
||||||||||||||||||||
Net Interest Income
|
$
|
34,295
|
$
|
32,224
|
||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.18
|
%
|
3.31
|
%
|
(1) |
Interest on tax-exempt loans and securities available for sale is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
(2) |
Annualized
|
Nine Months Ended
September 30,
|
||||||||||||||||||||||||
2021
|
2020
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Balance
|
Interest
|
Rate (2)
|
Balance
|
Interest
|
Rate (2)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable loans
|
$
|
2,859,207
|
$
|
86,126
|
4.02
|
%
|
$
|
2,861,776
|
$
|
91,804
|
4.28
|
%
|
||||||||||||
Tax-exempt loans (1)
|
6,801
|
256
|
5.03
|
7,266
|
273
|
5.02
|
||||||||||||||||||
Taxable securities available for sale
|
881,465
|
10,374
|
1.57
|
579,704
|
9,356
|
2.15
|
||||||||||||||||||
Tax-exempt securities available for sale(1)
|
347,873
|
5,845
|
2.24
|
114,187
|
2,682
|
3.13
|
||||||||||||||||||
Interest bearing cash
|
76,533
|
74
|
0.13
|
52,265
|
160
|
0.41
|
||||||||||||||||||
Other investments
|
18,427
|
555
|
4.03
|
18,404
|
694
|
5.04
|
||||||||||||||||||
Interest Earning Assets
|
4,190,306
|
103,230
|
3.29
|
3,633,602
|
104,969
|
3.85
|
||||||||||||||||||
Cash and due from banks
|
55,883
|
49,345
|
||||||||||||||||||||||
Other assets, net
|
155,701
|
163,503
|
||||||||||||||||||||||
Total Assets
|
$
|
4,401,890
|
$
|
3,846,450
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest-
bearing checking
|
$
|
2,239,887
|
2,059
|
0.12
|
$
|
1,764,933
|
3,121
|
0.24
|
||||||||||||||||
Time deposits
|
319,792
|
1,429
|
0.6
|
529,248
|
6,029
|
1.52
|
||||||||||||||||||
Other borrowings
|
108,866
|
2,888
|
3.55
|
121,195
|
2,598
|
2.86
|
||||||||||||||||||
Interest Bearing Liabilities
|
2,668,545
|
6,376
|
0.32
|
2,415,376
|
11,748
|
0.65
|
||||||||||||||||||
Non-interest bearing deposits
|
1,279,006
|
1,016,286
|
||||||||||||||||||||||
Other liabilities
|
65,464
|
62,984
|
||||||||||||||||||||||
Shareholders’ equity
|
388,875
|
351,804
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
4,401,890
|
$
|
3,846,450
|
||||||||||||||||||||
Net Interest Income
|
$
|
96,854
|
$
|
93,221
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.09
|
%
|
3.42
|
%
|
(1)
|
Interest on tax-exempt loans and securities available for sale is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
(2)
|
Annualized |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net Interest Margin, Fully Taxable Equivalent (“FTE”)
|
||||||||||||||||
|
||||||||||||||||
Net interest income
|
$
|
33,803
|
$
|
31,966
|
$
|
95,480
|
$
|
92,619
|
||||||||
Add: taxable equivalent adjustment
|
492
|
258
|
1,374
|
602
|
||||||||||||
Net interest income - taxable equivalent
|
$
|
34,295
|
$
|
32,224
|
$
|
96,854
|
$
|
93,221
|
||||||||
Net interest margin (GAAP) (1)
|
3.13
|
%
|
3.28
|
%
|
3.04
|
%
|
3.40
|
%
|
||||||||
Net interest margin (FTE) (1)
|
3.18
|
%
|
3.31
|
%
|
3.09
|
%
|
3.42
|
%
|
(1) |
Annualized.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Interchange income
|
$
|
4,237
|
$
|
3,428
|
$
|
10,739
|
$
|
8,411
|
||||||||
Service charges on deposit accounts
|
2,944
|
2,085
|
7,178
|
6,299
|
||||||||||||
Net gains on assets
|
||||||||||||||||
Mortgage loans
|
8,361
|
20,205
|
30,280
|
46,687
|
||||||||||||
Securities available for sale
|
5
|
-
|
1,421
|
253
|
||||||||||||
Mortgage loan servicing, net
|
1,271
|
(644
|
)
|
4,476
|
(8,966
|
)
|
||||||||||
Investment and insurance commissions
|
678
|
530
|
1,895
|
1,478
|
||||||||||||
Bank owned life insurance
|
145
|
215
|
411
|
750
|
||||||||||||
Other
|
2,054
|
1,192
|
4,472
|
3,470
|
||||||||||||
Total non-interest income
|
$
|
19,695
|
$
|
27,011
|
$
|
60,872
|
$
|
58,382
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Mortgage loans originated
|
$
|
453,752
|
$
|
536,502
|
$
|
1,436,497
|
$
|
1,318,206
|
||||||||
Mortgage loans sold
|
279,235
|
417,092
|
963,442
|
1,058,400
|
||||||||||||
Net gains on mortgage loans
|
8,361
|
20,205
|
30,280
|
46,687
|
||||||||||||
Net gains as a percent of mortgage loans sold (“Loan Sales Margin”)
|
2.99
|
%
|
4.84
|
%
|
3.14
|
%
|
4.41
|
%
|
||||||||
Fair value adjustments included in the Loan Sales Margin
|
0.04
|
0.50
|
(0.40
|
)
|
0.81
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Mortgage loan servicing
|
(In thousands)
|
|||||||||||||||
Revenue, net
|
$
|
2,023
|
$
|
1,743
|
$
|
5,809
|
$
|
5,062
|
||||||||
Fair value change due to price
|
599
|
(1,089
|
)
|
2,813
|
(9,941
|
)
|
||||||||||
Fair value change due to pay-downs
|
(1,351
|
)
|
(1,298
|
)
|
(4,146
|
)
|
(4,087
|
)
|
||||||||
Total
|
$
|
1,271
|
$
|
(644
|
)
|
$
|
4,476
|
$
|
(8,966
|
)
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
22,431
|
$
|
13,773
|
$
|
16,904
|
$
|
19,171
|
||||||||
Originated servicing rights capitalized
|
2,529
|
4,017
|
8,637
|
10,260
|
||||||||||||
Change in fair value
|
(752
|
)
|
(2,387
|
)
|
(1,333
|
)
|
(14,028
|
)
|
||||||||
Balance at end of period
|
$
|
24,208
|
$
|
15,403
|
$
|
24,208
|
$
|
15,403
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Compensation
|
$
|
11,507
|
$
|
10,294
|
$
|
32,764
|
$
|
30,665
|
||||||||
Performance-based compensation
|
6,252
|
8,310
|
15,327
|
14,240
|
||||||||||||
Payroll taxes and employee benefits
|
3,900
|
3,350
|
11,973
|
9,837
|
||||||||||||
Compensation and employee benefits
|
21,659
|
21,954
|
60,064
|
54,742
|
||||||||||||
Data processing
|
3,022
|
2,215
|
7,972
|
6,160
|
||||||||||||
Occupancy, net
|
2,082
|
2,199
|
6,578
|
6,818
|
||||||||||||
Interchange expense
|
1,202
|
831
|
3,351
|
2,416
|
||||||||||||
Furniture, fixtures and equipment
|
1,075
|
999
|
3,112
|
3,125
|
||||||||||||
Loan and collection
|
735
|
768
|
2,353
|
2,329
|
||||||||||||
Communications
|
683
|
806
|
2,341
|
2,409
|
||||||||||||
Conversion related expenses
|
275
|
643
|
1,636
|
1,045
|
||||||||||||
Legal and professional
|
513
|
566
|
1,534
|
1,427
|
||||||||||||
Advertising
|
666
|
589
|
1,319
|
1,636
|
||||||||||||
FDIC deposit insurance
|
346
|
411
|
983
|
1,211
|
||||||||||||
Amortization of intangible assets
|
242
|
255
|
727
|
765
|
||||||||||||
Supplies
|
116
|
126
|
460
|
513
|
||||||||||||
Costs related to unfunded lending commitments
|
369
|
41
|
363
|
271
|
||||||||||||
Correspondent bank service fees
|
77
|
101
|
292
|
294
|
||||||||||||
Provision for loss reimbursement on sold loans
|
36
|
46
|
95
|
160
|
||||||||||||
Branch closure costs
|
-
|
-
|
-
|
417
|
||||||||||||
Net (gains) losses on other real estate and repossessed assets
|
(28
|
)
|
46
|
(202
|
)
|
146
|
||||||||||
Other
|
1,442
|
1,045
|
4,091
|
3,822
|
||||||||||||
Total non-interest expense
|
$
|
34,512
|
$
|
33,641
|
$
|
97,069
|
$
|
89,706
|
Amortized
|
Unrealized
|
Fair
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
Securities available for sale
|
(in thousands)
|
|||||||||||||||
September 30, 2021
|
$
|
1,332,054
|
$
|
19,811
|
$
|
3,487
|
$
|
1,348,378
|
||||||||
December 31, 2020
|
1,052,132
|
21,431
|
1,404
|
1,072,159
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Proceeds
|
$
|
505
|
$
|
-
|
$
|
81,683
|
$
|
36,593
|
||||||||
Gross gains
|
5
|
-
|
1,471
|
253
|
||||||||||||
Gross losses
|
-
|
-
|
50
|
-
|
||||||||||||
Net impairment charges
|
-
|
-
|
-
|
-
|
||||||||||||
Net gains
|
$
|
5
|
$
|
-
|
$
|
1,421
|
$
|
253
|
September 30, 2021
|
September 30, 2020
|
|||||||||||||||
Amount (#)
|
Amount
|
Amount (#)
|
Amount
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Closed and outstanding at quarter end
|
826
|
$
|
90,150
|
2,117
|
$
|
261,182
|
||||||||||
Cumulative forgiveness applications submitted to the SBA
|
2,916
|
311,385
|
197
|
37,223
|
||||||||||||
Net fees accreted into interest income for the quarter
|
n/a
|
2,630
|
n/a
|
1,321
|
||||||||||||
Net fees accreted into interest income year-to-date
|
n/a
|
6,528
|
n/a
|
2,298
|
||||||||||||
Unaccreted net fees remaining at quarter end
|
n/a
|
3,178
|
n/a
|
6,494
|
• |
The modified loan must be current when the modification is made;
|
• |
The modification must be short term in nature (up to nine months), and;
|
• |
Modifications may include payment deferrals, fee waivers, extensions of repayment terms or other delays in payment that are insignificant.
|
Loan Category
|
Covid-19 Accomodations
|
Total
|
% of Total
|
|||||||||||||
Loans (#)
|
Loans ($)
|
Loans
|
Loans
|
|||||||||||||
Commercial
|
-
|
$
|
-
|
$
|
1,222,802
|
0.0
|
%
|
|||||||||
Mortgage
|
39
|
5,901
|
1,100,992
|
0.5
|
%
|
|||||||||||
Installment
|
7
|
109
|
560,184
|
0.0
|
%
|
|||||||||||
Total
|
46
|
$
|
6,010
|
$
|
2,883,978
|
0.2
|
%
|
|||||||||
Mortgage loans serviced for others(1)
|
64
|
$
|
7,986
|
$
|
3,237,251
|
0.2
|
%
|
September 30,
2021
|
December 31,
2020
|
|||||||
(In thousands)
|
||||||||
Real estate(1)
|
||||||||
Residential first mortgages
|
$
|
860,487
|
$
|
792,762
|
||||
Residential home equity and other junior mortgages
|
143,128
|
138,128
|
||||||
Construction and land development
|
258,579
|
232,693
|
||||||
Other(2)
|
694,503
|
669,150
|
||||||
Consumer
|
542,794
|
468,090
|
||||||
Commercial
|
378,995
|
429,011
|
||||||
Agricultural
|
5,492
|
3,844
|
||||||
Total loans
|
$
|
2,883,978
|
$
|
2,733,678
|
(1) |
Includes both residential and non-residential commercial loans secured by real estate.
|
(2) |
Includes loans secured by multi-family residential and non-farm, non-residential property.
|
September 30,
2021
|
December 31,
2020
|
|||||||
(Dollars in thousands)
|
||||||||
Non-accrual loans
|
$
|
5,917
|
$
|
8,312
|
||||
Loans 90 days or more past due and still accruing interest
|
-
|
-
|
||||||
Subtotal
|
5,917
|
8,312
|
||||||
Less: Government guaranteed loans
|
327
|
439
|
||||||
Total non-performing loans
|
5,590
|
7,873
|
||||||
Other real estate and repossessed assets
|
224
|
766
|
||||||
Total non-performing assets
|
$
|
5,814
|
$
|
8,639
|
||||
As a percent of Portfolio Loans
|
||||||||
Non-performing loans
|
0.19
|
%
|
0.29
|
%
|
||||
Allowance for credit losses
|
1.62
|
1.30
|
||||||
Non-performing assets to total assets
|
0.13
|
0.21
|
||||||
Allowance for credit losses as a percent of non-performing loans
|
837.19
|
450.01
|
(1)
|
Excludes loans classified as “troubled debt restructured” that are not past due.
|
September 30, 2021
|
||||||||||||
Commercial
|
Retail (1)
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDR’s
|
$
|
4,692
|
$
|
32,037
|
$
|
36,729
|
||||||
Non-performing TDR’s (2)
|
-
|
1,198
|
(3)
|
1,198
|
||||||||
Total
|
$
|
4,692
|
$
|
33,235
|
$
|
37,927
|
December 31, 2020
|
||||||||||||
Commercial
|
Retail (1)
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDR’s
|
$
|
7,956
|
$
|
36,385
|
$
|
44,341
|
||||||
Non-performing TDR’s (2)
|
1,148
|
1,584
|
(3) |
2,732
|
||||||||
Total
|
$
|
9,104
|
$
|
37,969
|
$
|
47,073
|
(1) |
Retail loans include mortgage and installment loan portfolio segments.
|
(2) |
Included in non-performing assets table above.
|
(3) |
Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.
|
Nine months ended
September 30,
|
||||||||||||||||
2021
|
2020
|
|||||||||||||||
Unfunded
|
Unfunded
|
|||||||||||||||
Loans
|
Commitments
|
Loans
|
Commitments
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
35,429
|
$
|
1,805
|
$
|
26,148
|
$
|
1,542
|
||||||||
Additions (deductions)
|
||||||||||||||||
Impact of adoption of ASC 326
|
11,574
|
1,469
|
-
|
-
|
||||||||||||
Provision for credit losses (1)
|
(2,558
|
)
|
-
|
12,884
|
-
|
|||||||||||
Initial allowance on loans purchased with credit deterioration
|
134
|
-
|
-
|
-
|
||||||||||||
Recoveries credited to allowance
|
3,918
|
-
|
2,404
|
-
|
||||||||||||
Loans charged against the allowance
|
(1,698
|
)
|
-
|
(5,665
|
)
|
-
|
||||||||||
Additions (recoveries) included in non-interest expense
|
-
|
363
|
-
|
271
|
||||||||||||
Balance at end of period
|
$
|
46,799
|
$
|
3,637
|
$
|
35,771
|
$
|
1,813
|
||||||||
Net loans charged (recovered) against the allowance to average Portfolio Loans
|
(0.11
|
)%
|
0.16
|
%
|
(1)
|
Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based on the probable incurred loss methodology.
|
September 30,
2021
|
January 1,
2021
|
|||||||
(Dollars in thousands)
|
||||||||
Specific allocations
|
$
|
1,524
|
$
|
2,452
|
||||
Pooled analysis allocations
|
31,588
|
30,796
|
||||||
Additional allocations based on subjective factors
|
13,687
|
13,889
|
||||||
Total
|
$
|
46,799
|
$
|
47,137
|
(1)
|
January 1, 2021 includes impact of the adoption of CECL.
|
September 30,
2021
|
December 31,
2020
|
|||||||
(In thousands)
|
||||||||
Subordinated debt
|
$
|
39,338
|
$
|
39,281
|
||||
Subordinated debentures
|
39,575
|
39,524
|
||||||
Amount not qualifying as regulatory capital
|
(562
|
)
|
(505
|
)
|
||||
Amount qualifying as regulatory capital
|
78,351
|
78,300
|
||||||
Shareholders’ equity
|
||||||||
Common stock
|
326,390
|
339,353
|
||||||
Retained earnings
|
66,543
|
40,145
|
||||||
Accumulated other comprehensive income
|
7,098
|
10,024
|
||||||
Total shareholders’ equity
|
400,031
|
389,522
|
||||||
Total capitalization
|
$
|
478,382
|
$
|
467,822
|
Change in Interest Rates
|
Market
Value of
Portfolio
Equity(1)
|
|
Percent
Change
|
|
Net
Interest
Income(2)
|
|
Percent
Change
|
|||||||||
(Dollars in thousands)
|
||||||||||||||||
September 30, 2021
|
||||||||||||||||
200 basis point rise
|
$
|
512,400
|
(3.38
|
)%
|
$
|
136,400
|
4.36
|
%
|
||||||||
100 basis point rise
|
546,000
|
2.96
|
134,800
|
3.14
|
||||||||||||
Base-rate scenario
|
530,300
|
-
|
130,700
|
-
|
||||||||||||
100 basis point decline
|
465,000
|
(12.31
|
)
|
124,300
|
(4.90
|
)
|
||||||||||
December 31, 2020
|
||||||||||||||||
200 basis point rise
|
$
|
494,600
|
15.02
|
%
|
$
|
125,200
|
4.16
|
%
|
||||||||
100 basis point rise
|
483,200
|
12.37
|
123,700
|
2.91
|
||||||||||||
Base-rate scenario
|
430,000
|
-
|
120,200
|
-
|
||||||||||||
100 basis point decline
|
395,500
|
(8.02
|
)
|
114,900
|
(4.41
|
)
|
(1) |
Simulation analyses calculate the change in the net present value of our assets and liabilities, including debt and related financial derivative instruments, under parallel shifts in interest rates by discounting the estimated future
cash flows using a market-based discount rate. Cash flow estimates incorporate anticipated changes in prepayment speeds and other embedded options.
|
(2) |
Simulation analyses calculate the change in net interest income under immediate parallel shifts in interest rates over the next twelve months, based upon a static statement of financial condition, which includes debt and related
financial derivative instruments, and do not consider loan fees.
|
(a) |
Evaluation of Disclosure Controls and Procedures.
|
(b) |
Changes in Internal Controls.
|
∙ |
difficulties encountered by our business customers in addressing the effects of the pandemic may cause increases in loan delinquencies, foreclosures and defaults;
|
∙ |
increases in our allowance for credit losses may be necessary;
|
∙ |
declines in collateral values may occur;
|
∙ |
third party disruptions may occur, including outages at network providers, on-line banking vendors and other suppliers;
|
∙ |
there is increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity;
|
∙ |
we may experience operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions; and/or
|
∙ |
our production and efficiency may suffer due to employee illnesses and/or employees having to work remotely.
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of
Shares Purchased (1)
|
|
|
Average Price
Paid Per Share
|
|
|
Total Number of
Shares Purchased
as Part of a
Publicly
Announced Plan
|
|
|
Remaining
Number of
Shares Authorized
for Purchase
Under the Plan
|
|
||||
July 2021
|
103,416
|
$
|
20.89
|
103,261
|
652,734
|
|||||||||||
August 2021
|
13,788
|
20.96
|
10,000
|
642,734
|
||||||||||||
September 2021
|
202,084
|
20.40
|
202,084
|
440,650
|
||||||||||||
Total
|
319,288
|
$
|
20.58
|
315,345
|
440,650
|
(1) |
July and August include 155 shares and 3,788 shares, respectively, withheld from the shares that would otherwise have been issued to certain officers in order to satisfy tax withholding obligations resulting from the vesting of
restricted stock and performance share units.
|
Item 6. |
Exhibits
|
(a) |
The following exhibits (listed by number corresponding to the Exhibit Table as Item 601 in Regulation S-K) are filed with this report:
|
Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
|
Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
|
Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
|
Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
|
101.
|
INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
101.
|
SCH Inline XBRL Taxonomy Extension Schema Document
|
101.
|
CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.
|
DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.
|
LAB Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.
|
PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101)
|
Date
|
November 5, 2021
|
By
|
/s/ Gavin A. Mohr
|
|
Gavin A. Mohr, Principal Financial Officer
|
||||
Date
|
November 5, 2021
|
By
|
/s/ James J. Twarozynski
|
|
James J. Twarozynski, Principal Accounting Officer
|