QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
x | Accelerated filer | o | |
Non accelerated filer | o | Smaller reporting company | |
Emerging growth company |
Pages | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Part I - | FINANCIAL INFORMATION |
Item 1 - | Financial Statements |
(Unaudited) | |||||||
June 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Cash and due from banks | $ | $ | |||||
Interest-bearing deposits in depository institutions | |||||||
Cash and Cash Equivalents | |||||||
Investment securities available for sale, at fair value | |||||||
Investment securities held-to-maturity, at amortized cost (approximate fair value at June 30, 2019 and December 31, 2018 - $54,677 and $60,706, respectively) | |||||||
Other securities | |||||||
Total Investment Securities | |||||||
Gross loans | |||||||
Allowance for loan losses | ( | ) | ( | ) | |||
Net Loans | |||||||
Bank owned life insurance | |||||||
Premises and equipment, net | |||||||
Accrued interest receivable | |||||||
Net deferred tax asset | |||||||
Goodwill and other intangible assets, net | |||||||
Other assets | |||||||
Total Assets | $ | $ | |||||
Liabilities | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | $ | |||||
Interest-bearing: | |||||||
Demand deposits | |||||||
Savings deposits | |||||||
Time deposits | |||||||
Total Deposits | |||||||
Short-term borrowings: | |||||||
Federal funds purchased | |||||||
Customer repurchase agreements | |||||||
Long-term debt | |||||||
Other liabilities | |||||||
Total Liabilities | |||||||
Shareholders’ Equity | |||||||
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued | |||||||
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 19,047,548 shares issued at June 30, 2019 and December 31, 2018, less 2,650,266 and 2,492,403 shares in treasury, respectively | |||||||
Capital surplus | |||||||
Retained earnings | |||||||
Cost of common stock in treasury | ( | ) | ( | ) | |||
Accumulated other comprehensive income (loss): | |||||||
Unrealized gain (loss) on securities available-for-sale | ( | ) | |||||
Underfunded pension liability | ( | ) | ( | ) | |||
Total Accumulated Other Comprehensive Income (Loss) | ( | ) | |||||
Total Shareholders’ Equity | |||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
Interest Income | Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Interest and fees on loans | $ | $ | $ | $ | |||||||||
Interest and dividends on investment securities: | |||||||||||||
Taxable | |||||||||||||
Tax-exempt | |||||||||||||
Interest on deposits in depository institutions | |||||||||||||
Total Interest Income | |||||||||||||
Interest Expense | |||||||||||||
Interest on deposits | |||||||||||||
Interest on short-term borrowings | |||||||||||||
Interest on long-term debt | |||||||||||||
Total Interest Expense | |||||||||||||
Net Interest Income | |||||||||||||
(Recovery of) provision for loan losses | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Net Interest Income After (Recovery of) Provision for Loan Losses | |||||||||||||
Non-Interest Income | |||||||||||||
Gains on sale of investment securities, net | |||||||||||||
Unrealized gains recognized on equity securities still held | |||||||||||||
Service charges | |||||||||||||
Bankcard revenue | |||||||||||||
Trust and investment management fee income | |||||||||||||
Bank owned life insurance | |||||||||||||
Other income | |||||||||||||
Total Non-Interest Income | |||||||||||||
Non-Interest Expense | |||||||||||||
Salaries and employee benefits | |||||||||||||
Occupancy related expense | |||||||||||||
Equipment and software related expense | |||||||||||||
FDIC insurance expense | |||||||||||||
Advertising | |||||||||||||
Bankcard expenses | |||||||||||||
Postage, delivery, and statement mailings | |||||||||||||
Office supplies | |||||||||||||
Legal and professional fees | |||||||||||||
Telecommunications | |||||||||||||
Repossessed asset losses, net of expenses | |||||||||||||
Merger related costs | |||||||||||||
Other expenses | |||||||||||||
Total Non-Interest Expense | |||||||||||||
Income Before Income Taxes | |||||||||||||
Income tax expense | |||||||||||||
Net Income Available to Common Shareholders | $ | $ | $ | $ | |||||||||
Total Comprehensive Income | $ | $ | $ | $ | |||||||||
Average shares outstanding, basic | |||||||||||||
Effect of dilutive securities | |||||||||||||
Average shares outstanding, diluted | |||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||
Diluted earnings per common share | $ | $ | $ | $ | |||||||||
Dividends declared per common share | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Net income available to common shareholders | $ | $ | $ | $ | ||||||||
Available-for-Sale Securities | ||||||||||||
Unrealized gains (losses) on available-for-sale securities arising during the period | ( | ) | ( | ) | ||||||||
Reclassification adjustment for gains | ( | ) | ( | ) | ||||||||
Other comprehensive income (loss) before income taxes | ( | ) | ( | ) | ||||||||
Tax effect | ( | ) | ( | ) | ||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | ||||||||
Comprehensive Income, Net of Tax | $ | $ | $ | $ |
Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||
Balance at March 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Net income | — | — | — | — | ||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ) | ( | ) | ||||||||||
Cash dividends declared ($0.46 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||
Restricted awards granted | — | ( | ) | — | — | |||||||||||||
Exercise of 17,760 stock options | — | ( | ) | — | — | |||||||||||||
Purchase of 10,000 treasury shares | — | — | — | ( | ) | — | ( | ) | ||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Net income | — | — | — | — | ||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ||||||||||||||
Cash dividends declared ($0.53 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||
Restricted awards granted | — | ( | ) | — | — | |||||||||||||
Exercise of 2,502 stock options | — | ( | ) | — | — | |||||||||||||
Purchase of 107,210 treasury shares | — | — | — | ( | ) | — | ( | ) | ||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | $ |
Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Net income | — | — | — | — | ||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ) | ( | ) | ||||||||||
Adoption of ASU No. 2016-01 | — | — | — | ( | ) | |||||||||||||
Cash dividends declared ($0.92 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||
Restricted awards granted | — | ( | ) | — | — | |||||||||||||
Exercise of 25,147 stock options | — | ( | ) | — | — | |||||||||||||
Purchase of 214,327 treasury shares | — | — | — | ( | ) | — | ( | ) | ||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Net income | — | — | — | — | ||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ||||||||||||||
Cash dividends declared ($1.06 per share) | — | — | ( | ) | — | — | ( | ) | ||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||
Restricted awards granted | — | ( | ) | — | — | |||||||||||||
Exercise of 8,140 stock options | — | — | — | |||||||||||||||
Purchase of 161,950 treasury shares | — | — | — | ( | ) | — | ( | ) | ||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | $ |
Six months ended June 30, | |||||||
2019 | 2018 | ||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Accretion and amortization, net | |||||||
(Recovery of) provision for loan losses | ( | ) | ( | ) | |||
Depreciation of premises and equipment | |||||||
Deferred income tax expense | |||||||
Net periodic employee benefit cost | |||||||
Unrealized and realized investment securities gains, net | ( | ) | ( | ) | |||
Stock-compensation expense | |||||||
Excess tax benefit from stock-compensation expense | ( | ) | ( | ) | |||
Proceeds from life insurance | |||||||
Increase in value of bank-owned life insurance | ( | ) | ( | ) | |||
Loans held for sale | |||||||
Loans originated for sale | ( | ) | ( | ) | |||
Proceeds from the sale of loans originated for sale | |||||||
Gain on sale of loans | ( | ) | ( | ) | |||
Change in accrued interest receivable | ( | ) | ( | ) | |||
Change in other assets | ( | ) | ( | ) | |||
Change in other liabilities | |||||||
Net Cash Provided by Operating Activities | |||||||
Net decrease (increase) in loans | ( | ) | |||||
Securities available-for-sale | |||||||
Purchases | ( | ) | ( | ) | |||
Proceeds from sales | |||||||
Proceeds from maturities and calls | |||||||
Securities held-to-maturity | |||||||
Proceeds from maturities and calls | |||||||
Other investments | |||||||
Purchases | ( | ) | ( | ) | |||
Proceeds from sales | |||||||
Purchases of premises and equipment | ( | ) | ( | ) | |||
Disposals of premises and equipment | |||||||
Sale of Virginia Beach branch, net | ( | ) | |||||
Net Cash Provided by (Used in) Investing Activities | ( | ) | |||||
Net increase in non-interest-bearing deposits | |||||||
Net increase in interest-bearing deposits | |||||||
Net (decrease) increase in short-term borrowings | ( | ) | |||||
Purchases of treasury stock | ( | ) | ( | ) | |||
Proceeds from exercise of stock options | |||||||
Dividends paid | ( | ) | ( | ) | |||
Net Cash (Used in) Provided by Financing Activities | ( | ) | |||||
Increase in Cash and Cash Equivalents | |||||||
Cash and cash equivalents at beginning of period | |||||||
Cash and Cash Equivalents at End of Period | $ | $ |
Farmers | |||||||||
Deposit | Poage | Total | |||||||
Consideration | $ | $ | $ | ||||||
Identifiable assets: | |||||||||
Cash and cash equivalents | |||||||||
Investment securities | |||||||||
Loans | |||||||||
Bank owned life insurance | |||||||||
Premises and equipment | |||||||||
Deferred tax assets, net | ( | ) | |||||||
Other assets | |||||||||
Total identifiable assets | |||||||||
Identifiable liabilities: | |||||||||
Deposits | |||||||||
Short-term borrowings | |||||||||
Long-term debt | |||||||||
Other liabilities | |||||||||
Total identifiable liabilities | |||||||||
Net identifiable assets | |||||||||
Goodwill | |||||||||
Core deposit intangible | |||||||||
$ | $ | $ |
Acquired Credit-Impaired | |||
Contractually required principal and interest | $ | ||
Contractual cash flows not expected to be collected (non-accretable difference) | ( | ) | |
Expected cash flows | |||
Interest component of expected cash flows (accretable difference) | ( | ) | |
Carrying value of purchased credit-impaired loans acquired | $ | ||
Acquired Noncredit-Impaired | |||
Outstanding balance | $ | ||
Less: fair value adjustment | ( | ) | |
Carrying value of acquired noncredit-impaired loans | $ |
Goodwill | |||
Balance at December 31, 2018 | $ | ||
Adjustment to goodwill acquired in conjunction with the acquisition of Poage | ( | ) | |
Adjustment to goodwill acquired in conjunction with the acquisition of Farmers Deposit | ( | ) | |
Balance at June 30, 2019 | $ |
June 30, 2019 | December 31, 2018 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasuries and U.S. | ||||||||||||||||||||||||
government agencies | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Obligations of states and | ||||||||||||||||||||||||
political subdivisions | ||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. government agencies | ||||||||||||||||||||||||
Private label | ||||||||||||||||||||||||
Trust preferred securities | ||||||||||||||||||||||||
Corporate securities | ||||||||||||||||||||||||
Total Debt Securities | ||||||||||||||||||||||||
Certificates of deposit held for investment | — | — | — | — | ||||||||||||||||||||
Total Securities Available-for-Sale | $ | $ | $ | $ | $ | $ | $ | $ |
Securities held-to-maturity: | ||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
U.S. government agencies | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Trust preferred securities | — | — | — | — | ||||||||||||||||||||
Total Securities Held-to-Maturity | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2019 | ||||||||||||||||||
Less Than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||
Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | |||||||||||||
Securities available-for-sale: | ||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | $ | $ | $ | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||||
U.S. Government agencies | ||||||||||||||||||
Trust preferred securities | ||||||||||||||||||
Total available-for-sale | $ | $ | $ | $ | $ | $ | ||||||||||||
Securities held-to-maturity: | ||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||
U.S. Government agencies | $ | $ | $ | $ | $ | $ | ||||||||||||
Total held-to-maturity | $ | $ | $ | $ | $ | $ |
December 31, 2018 | ||||||||||||||||||
Less Than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||
Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | Estimated Fair Value | Unrealized Loss | |||||||||||||
Securities available-for-sale: | ||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | $ | $ | $ | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||||
U.S. Government agencies | ||||||||||||||||||
Corporate securities | ||||||||||||||||||
Total available-for-sale | $ | $ | $ | $ | $ | $ | ||||||||||||
Securities held-to-maturity: | ||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||
U.S. Government agencies | $ | $ | $ | $ | $ | $ | ||||||||||||
Total held-to-maturity | $ | $ | $ | $ | $ | $ |
Amortized Cost | Estimated Fair Value | |||||
Available-for-Sale Debt Securities | ||||||
Due in one year or less | $ | $ | ||||
Due after one year through five years | ||||||
Due after five years through ten years | ||||||
Due after ten years | ||||||
Total | $ | $ | ||||
Held-to-Maturity Debt Securities | ||||||
Due in one year or less | $ | $ | ||||
Due after one year through five years | ||||||
Due after five years through ten years | ||||||
Due after ten years | ||||||
Total | $ | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Gross realized gains on securities sold | $ | $ | $ | $ | ||||||||
Gross realized losses on securities sold | ( | ) | ||||||||||
Net investment security gains | $ | $ | $ | $ | ||||||||
Gross unrealized gains recognized on equity securities still held | $ | $ | $ | $ | ||||||||
Gross unrealized losses recognized on equity securities still held | $ | $ | ( | ) | ||||||||
Net unrealized gains (losses) recognized on equity securities still held | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | |||||
Residential real estate | $ | $ | ||||
Home equity | ||||||
Commercial and industrial | ||||||
Commercial real estate | ||||||
Consumer | ||||||
DDA overdrafts | ||||||
Gross loans | ||||||
Allowance for loan losses | ( | ) | ( | ) | ||
Net loans | $ | $ | ||||
Construction loans included in: | ||||||
Residential real estate | $ | $ | ||||
Commercial real estate |
Commercial and | Commercial | Residential | DDA | ||||||||||||||||||
Industrial | Real Estate | Real Estate | Home Equity | Consumer | Overdrafts | Total | |||||||||||||||
Six months ended June 30, 2019 | |||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Recoveries | |||||||||||||||||||||
(Recovery of) provision | ( | ) | ( | ) | ( | ) | |||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Six months ended June 30, 2018 | |||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ |
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Recoveries | |||||||||||||||||||||
(Recovery of) provision | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Three months ended June 30, 2019 | |||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Recoveries | |||||||||||||||||||||
(Recovery of) provision | ( | ) | ( | ) | ( | ) | |||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Three months ended June 30, 2018 | |||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Recoveries | |||||||||||||||||||||
(Recovery of) provision | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
As of June 30, 2019 | |||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||
Evaluated for impairment: | |||||||||||||||||||||
Individually | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Collectively | |||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Loans | |||||||||||||||||||||
Evaluated for impairment: | |||||||||||||||||||||
Individually | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Collectively | |||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
As of December 31, 2018 | |||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||
Evaluated for impairment: | |||||||||||||||||||||
Individually | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Collectively | |||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Loans | |||||||||||||||||||||
Evaluated for impairment: | |||||||||||||||||||||
Individually | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Collectively | |||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
Risk Rating | Description |
Pass ratings: | |
(a) Exceptional | Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy. Loans rated within this category pose minimal risk of loss to the bank. |
(b) Good | Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles. Loans in this category generally have a low chance of loss to the bank. |
(c) Acceptable | Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles. Loans within this category generally have a low risk of loss to the bank. |
(d) Pass/watch | Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk. A borrower in this category poses a low to moderate risk of loss to the bank. |
Special Mention | Loans classified as special mention have a potential weakness(es) that deserves management’s close attention. The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date. A loan rated in this category poses a moderate loss risk to the bank. |
Substandard | Loans classified as substandard reflect a customer with a well defined weakness that jeopardizes the liquidation of the debt. Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower. |
Doubtful | Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable. Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position. |
Commercial and Industrial | Commercial Real Estate | Total | |||||||
June 30, 2019 | |||||||||
Pass | $ | $ | $ | ||||||
Special mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total | $ | $ | $ | ||||||
December 31, 2018 | |||||||||
Pass | $ | $ | $ | ||||||
Special mention | |||||||||
Substandard | |||||||||
Doubtful | |||||||||
Total | $ | $ | $ |
Performing | Non-Performing | Total | |||||||
June 30, 2019 | |||||||||
Residential real estate | $ | $ | $ | ||||||
Home equity | |||||||||
Consumer | |||||||||
DDA overdrafts | |||||||||
Total | $ | $ | $ | ||||||
December 31, 2018 | |||||||||
Residential real estate | $ | $ | $ | ||||||
Home equity | |||||||||
Consumer | |||||||||
DDA overdrafts | |||||||||
Total | $ | $ | $ |
June 30, 2019 | ||||||||||||||||||
Accruing | ||||||||||||||||||
Current | 30-59 days | 60-89 days | Over 90 days | Non-accrual | Total | |||||||||||||
Residential real estate | $ | $ | $ | $ | $ | $ | ||||||||||||
Home equity | ||||||||||||||||||
Commercial and industrial | ||||||||||||||||||
Commercial real estate | ||||||||||||||||||
Consumer | ||||||||||||||||||
DDA overdrafts | ||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||
December 31, 2018 | ||||||||||||||||||
Accruing | ||||||||||||||||||
Current | 30-59 days | 60-89 days | Over 90 days | Non-accrual | Total | |||||||||||||
Residential real estate | $ | $ | $ | $ | $ | $ | ||||||||||||
Home equity | ||||||||||||||||||
Commercial and industrial | ||||||||||||||||||
Commercial real estate | ||||||||||||||||||
Consumer | ||||||||||||||||||
DDA overdrafts | ||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | |||||||||||||||||
Unpaid | Unpaid | |||||||||||||||||
Recorded | Principal | Related | Recorded | Principal | Related | |||||||||||||
Investment | Balance | Allowance | Investment | Balance | Allowance | |||||||||||||
With no related allowance recorded: | ||||||||||||||||||
Commercial and industrial | $ | $ | $ | — | $ | $ | $ | — | ||||||||||
Commercial real estate | — | — | ||||||||||||||||
Total | $ | $ | $ | — | $ | $ | $ | — | ||||||||||
With an allowance recorded: | ||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | $ | ||||||||||||
Commercial real estate | ||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Six months ended June 30, | ||||||||||||
2019 | 2018 | |||||||||||
Average | Interest | Average | Interest | |||||||||
Recorded | Income | Recorded | Income | |||||||||
Investment | Recognized | Investment | Recognized | |||||||||
With no related allowance recorded: | ||||||||||||
Commercial and industrial | $ | $ | $ | |||||||||
Commercial real estate | ||||||||||||
Total | $ | $ | $ | $ | ||||||||
With an allowance recorded: | ||||||||||||
Commercial and industrial | $ | $ | $ | $ | ||||||||
Commercial real estate | ||||||||||||
Total | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | |||||
Total | Total | |||||
Commercial and industrial | $ | $ | ||||
Commercial real estate | ||||||
Residential real estate | ||||||
Home equity | ||||||
Consumer | ||||||
Total | $ | $ |
New TDRs | ||||||||||||||||
Six months ended June 30, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
Pre | Post | Pre | Post | |||||||||||||
Modification | Modification | Modification | Modification | |||||||||||||
Outstanding | Outstanding | Outstanding | Outstanding | |||||||||||||
Number of | Recorded | Recorded | Number of | Recorded | Recorded | |||||||||||
Contracts | Investment | Investment | Contracts | Investment | Investment | |||||||||||
Commercial and industrial | $ | $ | $ | $ | ||||||||||||
Commercial real estate | ||||||||||||||||
Residential real estate | ||||||||||||||||
Home equity | ||||||||||||||||
Consumer | ||||||||||||||||
Total | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | |||||||||||
Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||
Non-hedging interest rate derivatives: | ||||||||||||
Customer counterparties: | ||||||||||||
Loan interest rate swap - assets | $ | $ | $ | $ | ||||||||
Loan interest rate swap - liabilities | ||||||||||||
Non-hedging interest rate derivatives: | ||||||||||||
Financial institution counterparties: | ||||||||||||
Loan interest rate swap - assets | ||||||||||||
Loan interest rate swap - liabilities |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Change in Fair Value Non-Hedging Interest Rate Derivatives: | ||||||||||||
Other income - derivative assets | $ | $ | $ | $ | ||||||||
Other income - derivative liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Other expense - derivative liabilities |
Six months ended June 30, | ||||||||||
2019 | 2018 | |||||||||
Options | Weighted-Average Exercise Price | Options | Weighted-Average Exercise Price | |||||||
Outstanding at January 1 | $ | $ | ||||||||
Exercised | ( | ) | ( | ) | ||||||
Outstanding at June 30 | $ | $ | ||||||||
Exerciseable at June 30 | $ | $ |
Six months ended June 30, | ||||||
2019 | 2018 | |||||
Proceeds from stock option exercises | $ | $ | ||||
Intrinsic value of stock options exercised | ||||||
Stock-based compensation expense associated with stock options | $ | $ | ||||
At period-end: | June 30, 2019 | |||||
Unrecognized stock-based compensation expense associated with stock options | $ | |||||
Weighted average period (in years) in which the above amount is expected to be | ||||||
recognized |
Six months ended June 30, | ||||||||||
2019 | 2018 | |||||||||
Restricted Awards | Average Market Price at Grant | Restricted Awards | Average Market Price at Grant | |||||||
Outstanding at January 1 | $ | $ | ||||||||
Granted | ||||||||||
Vested | ( | ) | ( | ) | ||||||
Outstanding at June 30 | $ | $ |
Six months ended June 30, | ||||||
2019 | 2018 | |||||
Stock-based compensation expense associated with restricted shares | $ | $ | ||||
At period-end: | June 30, 2019 | |||||
Unrecognized stock-based compensation expense associated with restricted shares | $ | |||||
Weighted average period (in years) in which the above amount is expected to be | ||||||
recognized |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Components of net periodic cost: | ||||||||||||
Interest cost | $ | $ | $ | $ | ||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Net amortization and deferral | ||||||||||||
Settlement | $ | $ | $ | $ | ||||||||
Net Periodic Pension Cost | $ | $ | $ | $ |
Note I – | Commitments and Contingencies |
June 30, 2019 | December 31, 2018 | |||||
Commitments to extend credit: | ||||||
Home equity lines | $ | $ | ||||
Commercial real estate | ||||||
Other commitments | ||||||
Standby letters of credit | ||||||
Commercial letters of credit |
Note J – | Accumulated Other Comprehensive Loss |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||
Unrealized | Unrealized | ||||||||||||||||||
Gains | Gains | ||||||||||||||||||
Defined | (Losses) | Defined | (Losses) | ||||||||||||||||
Benefit | Securities | Benefit | Securities | ||||||||||||||||
Pension | Available- | Pension | Available- | ||||||||||||||||
Plan | -for-Sale | Total | Plan | -for-Sale | Total | ||||||||||||||
2019 | |||||||||||||||||||
Beginning Balance | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Other comprehensive income before reclassifications | — | — | |||||||||||||||||
Amounts reclassified from other comprehensive loss | — | ( | ) | ( | ) | — | ( | ) | ( | ) | |||||||||
— | — | ||||||||||||||||||
Ending Balance | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | |||||||||
2018 | |||||||||||||||||||
Beginning Balance | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |
Other comprehensive loss before reclassifications | — | ( | ) | ( | ) | — | ( | ) | ( | ) | |||||||||
Amounts reclassified from other comprehensive loss | — | — | |||||||||||||||||
— | ( | ) | ( | ) | — | ( | ) | ( | ) | ||||||||||
Adoption of new accounting pronouncement | — | — | ( | ) | ( | ) | |||||||||||||
Ending Balance | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Amount reclassified from Other Comprehensive Loss | |||||||||||||
Three months ended | Six months ended | Affected line item | |||||||||||
June 30, | June 30, | in the Consolidated Statements | |||||||||||
2019 | 2018 | 2019 | 2018 | of Income | |||||||||
Securities available-for-sale: | |||||||||||||
Net securities gains reclassified into earnings | $ | $ | $ | $ | Gains on sale of investment securities | ||||||||
Related income tax expense | ( | ) | ( | ) | Income tax expense | ||||||||
Net effect on accumulated other comprehensive loss | $ | $ | $ | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Net income available to common shareholders | $ | $ | $ | $ | ||||||||
Less: earnings allocated to participating securities | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Net earnings allocated to common shareholders | $ | $ | $ | $ | ||||||||
Distributed earnings allocated to common stock | $ | $ | $ | $ | ||||||||
Undistributed earnings allocated to common stock | ||||||||||||
Net earnings allocated to common shareholders | $ | $ | $ | $ | ||||||||
Average shares outstanding | ||||||||||||
Effect of dilutive securities: | ||||||||||||
Employee stock awards | ||||||||||||
Shares for diluted earnings per share | ||||||||||||
Basic earnings per share | $ | $ | $ | $ | ||||||||
Diluted earnings per share | $ | $ | $ | $ |
Total | Level 1 | Level 2 | Level 3 | Total Gains (Losses) | |||||||||||
June 30, 2019 | |||||||||||||||
Recurring fair value measurements | |||||||||||||||
Financial Assets | |||||||||||||||
U.S. Government agencies | $ | $ | $ | $ | |||||||||||
Obligations of states and political subdivisions | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||
U.S. Government agencies | |||||||||||||||
Private label | |||||||||||||||
Trust preferred securities | |||||||||||||||
Corporate securities | |||||||||||||||
Marketable equity securities | |||||||||||||||
Certificates of deposit held for investment | |||||||||||||||
Derivative assets | |||||||||||||||
Financial Liabilities | |||||||||||||||
Derivative liabilities | |||||||||||||||
Nonrecurring fair value measurements | |||||||||||||||
Financial Assets | |||||||||||||||
Impaired loans | $ | $ | $ | $ | $ | ( | ) | ||||||||
Non-Financial Assets | |||||||||||||||
Other real estate owned | ( | ) | |||||||||||||
December 31, 2018 | |||||||||||||||
Recurring fair value measurements | |||||||||||||||
Financial Assets | |||||||||||||||
U.S. Government agencies | $ | $ | $ | $ | |||||||||||
Obligations of states and political subdivisions | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||
U.S. Government agencies | |||||||||||||||
Private label | |||||||||||||||
Trust preferred securities | |||||||||||||||
Corporate securities | |||||||||||||||
Marketable equity securities | |||||||||||||||
Certificates of deposit held for investment | |||||||||||||||
Derivative assets | |||||||||||||||
Financial Liabilities | |||||||||||||||
Derivative liabilities | |||||||||||||||
Nonrecurring fair value measurements | |||||||||||||||
Financial Assets | |||||||||||||||
Impaired loans | $ | $ | $ | $ | $ | ( | ) | ||||||||
Non-Financial Assets | |||||||||||||||
Other real estate owned | ( | ) | |||||||||||||
Other assets | ( | ) |
Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||
June 30, 2019 | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||
Securities available-for-sale | |||||||||||||||
Securities held-to-maturity | |||||||||||||||
Marketable equity securities | |||||||||||||||
Net loans | |||||||||||||||
Accrued interest receivable | |||||||||||||||
Derivative assets | |||||||||||||||
Liabilities: | |||||||||||||||
Deposits | |||||||||||||||
Short-term debt | |||||||||||||||
Long-term debt | |||||||||||||||
Accrued interest payable | |||||||||||||||
Derivative liabilities | |||||||||||||||
December 31, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | |||||||||||||||
Securities available-for-sale | |||||||||||||||
Securities held-to-maturity | |||||||||||||||
Marketable equity securities | |||||||||||||||
Net loans | |||||||||||||||
Accrued interest receivable | |||||||||||||||
Derivative assets | |||||||||||||||
Liabilities: | |||||||||||||||
Deposits | |||||||||||||||
Short-term debt | |||||||||||||||
Long-term debt | |||||||||||||||
Accrued interest payable | |||||||||||||||
Derivative liabilities |
Point of Revenue | Three months ended June 30, | Six months ended June 30, | |||||||||||
Recognition | 2019 | 2018 | 2019 | 2018 | |||||||||
Major revenue streams | |||||||||||||
Service charges | At a point in time & over time | $ | $ | $ | $ | ||||||||
Bankcard revenue | At a point in time | ||||||||||||
Trust and investment management fee income | Over time | ||||||||||||
Other income | At a point in time & over time | ||||||||||||
Non-interest income from contracts with customers | |||||||||||||
Non-interest income within the scope of other GAAP topics | |||||||||||||
Total non-interest income | $ | $ | $ | $ |
Item 2 - | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Six months ended June 30, | ||||||
2019 | 2018 | |||||
Net income available to common shareholders (in thousands) | $ | 44,370 | $ | 38,590 | ||
Earnings per common share, basic | $ | 2.68 | $ | 2.49 | ||
Earnings per common share, diluted | $ | 2.68 | $ | 2.48 | ||
Dividend payout ratio | 39.6 | % | 37.1 | % | ||
ROA* | 1.80 | % | 1.85 | % | ||
ROE* | 14.3 | % | 15.4 | % | ||
ROATCE* | 17.8 | % | 18.3 | % | ||
Average equity to average assets ratio | 12.6 | % | 12.0 | % |
Three months ended June 30, | ||||||
2019 | 2018 | |||||
Net income available to common shareholders (in thousands) | $ | 22,751 | $ | 20,979 | ||
Earnings per common share, basic | $ | 1.38 | $ | 1.36 | ||
Earnings per common share, diluted | $ | 1.38 | $ | 1.35 | ||
Dividend payout ratio | 38.4 | % | 34.1 | % | ||
ROA* | 1.84 | % | 2.00 | % | ||
ROE* | 14.4 | % | 16.8 | % | ||
ROATCE* | 17.9 | % | 19.9 | % | ||
Average equity to average assets ratio | 12.8 | % | 11.9 | % |
June 30, | December 31, | ||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Cash and cash equivalents | $ | 168.7 | $ | 123.0 | $ | 45.7 | 37.2 | % | |||
Investment securities | 877.6 | 812.9 | 64.7 | 8.0 | % | ||||||
Gross loans | 3,519.4 | 3,587.6 | (68.2 | ) | (1.9 | )% | |||||
Total deposits | 4,031.6 | 3,975.6 | 56.0 | 1.4 | % | ||||||
Federal Funds purchased | — | 40.0 | (40.0 | ) | (100.0 | )% |
Assets | Six months ended June 30, | |||||||||||||||
2019 | 2018 | |||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||
Loan portfolio(1): | ||||||||||||||||
Residential real estate(2) | $ | 1,791,263 | $ | 40,904 | 4.60 | % | $ | 1,601,554 | $ | 33,431 | 4.21 | % | ||||
Commercial, financial, and agriculture(2) | 1,710,281 | 42,503 | 5.01 | 1,500,698 | 32,186 | 4.33 | ||||||||||
Installment loans to individuals(2),(3) | 56,383 | 1,728 | 6.18 | 33,735 | 1,020 | 6.10 | ||||||||||
Previously securitized loans(4) | *** | 317 | *** | *** | 573 | *** | ||||||||||
Total loans | 3,557,927 | 85,452 | 4.84 | 3,135,987 | 67,210 | 4.32 | ||||||||||
Securities: | ||||||||||||||||
Taxable | 731,976 | 11,420 | 3.15 | 539,366 | 8,098 | 3.03 | ||||||||||
Tax-exempt(5) | 101,356 | 1,942 | 3.86 | 91,427 | 1,789 | 3.95 | ||||||||||
Total securities | 833,332 | 13,362 | 3.23 | 630,793 | 9,887 | 3.16 | ||||||||||
Deposits in depository institutions | 98,871 | 767 | 1.56 | 29,405 | 102 | 0.70 | ||||||||||
Total interest-earning assets | 4,490,130 | 99,581 | 4.47 | 3,796,185 | 77,199 | 4.10 | ||||||||||
Cash and due from banks | 52,743 | 82,010 | ||||||||||||||
Bank premises and equipment | 78,671 | 72,803 | ||||||||||||||
Goodwill and intangible assets | 122,114 | 78,483 | ||||||||||||||
Other assets | 192,768 | 172,266 | ||||||||||||||
Less: allowance for loan losses | (15,617 | ) | (18,814 | ) | ||||||||||||
Total assets | $ | 4,920,809 | $ | 4,182,933 | ||||||||||||
Liabilities | ||||||||||||||||
Interest-bearing demand deposits | $ | 880,401 | $ | 1,842 | 0.42 | % | $ | 785,041 | $ | 802 | 0.21 | % | ||||
Savings deposits | 963,804 | 2,302 | 0.48 | 809,389 | 794 | 0.20 | ||||||||||
Time deposits(2) | 1,376,284 | 12,040 | 1.76 | 1,109,784 | 7,649 | 1.39 | ||||||||||
Short-term borrowings | 218,527 | 1,915 | 1.77 | 222,696 | 919 | 0.83 | ||||||||||
Long-term debt | 4,053 | 95 | 4.73 | 16,495 | 441 | 5.39 | ||||||||||
Total interest-bearing liabilities | 3,443,069 | 18,194 | 1.07 | 2,943,405 | 10,605 | 0.73 | ||||||||||
Noninterest-bearing demand deposits | 804,489 | 692,912 | ||||||||||||||
Other liabilities | 52,070 | 46,178 | ||||||||||||||
Stockholders’ equity | 621,181 | 500,438 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,920,809 | $ | 4,182,933 | ||||||||||||
Net interest income | $ | 81,387 | $ | 66,594 | ||||||||||||
Net yield on earning assets | 3.66 | % | 3.54 | % |
(1) | For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income: | ||||||||
Loan fees | $ | 615 | $ | 225 | |||||
(2) | Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions: | ||||||||
Six months ended June 30, | |||||||||
2019 | 2018 | ||||||||
Residential real estate | $ | 115 | $ | 240 | |||||
Commercial, financial and agriculture | 858 | 388 | |||||||
Installment loans to individuals | (12 | ) | 14 | ||||||
Time deposits | 452 | — | |||||||
$ | 1,413 | $ | 642 | ||||||
(3) | Includes the Company’s consumer and DDA overdrafts loan categories. | ||||||||
(4) | Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. | ||||||||
(5) | Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. |
Six months ended June 30, 2019 vs. 2018 | |||||||||
Interest-earning assets: | Increase (Decrease) Due to Change In: | ||||||||
Volume | Rate | Net | |||||||
Loan portfolio | |||||||||
Residential real estate | $ | 3,960 | $ | 3,513 | $ | 7,473 | |||
Commercial, financial, and agriculture | 4,495 | 5,822 | 10,317 | ||||||
Installment loans to individuals | 685 | 23 | 708 | ||||||
Previously securitized loans | — | (256 | ) | (256 | ) | ||||
Total loans | 9,140 | 9,102 | 18,242 | ||||||
Securities: | |||||||||
Taxable | 2,892 | 430 | 3,322 | ||||||
Tax-exempt(1) | 194 | (41 | ) | 153 | |||||
Total securities | 3,086 | 389 | 3,475 | ||||||
Deposits in depository institutions | 241 | 424 | 665 | ||||||
Total interest-earning assets | $ | 12,467 | $ | 9,915 | $ | 22,382 | |||
Interest-bearing liabilities: | |||||||||
Interest-bearing demand deposits | $ | 97 | $ | 943 | $ | 1,040 | |||
Savings deposits | 151 | 1,357 | 1,508 | ||||||
Time deposits | 1,837 | 2,554 | 4,391 | ||||||
Short-term borrowings | (17 | ) | 1,013 | 996 | |||||
Long-term debt | (333 | ) | (13 | ) | (346 | ) | |||
Total interest-bearing liabilities | $ | 1,735 | $ | 5,854 | $ | 7,589 | |||
Net Interest Income | $ | 10,732 | $ | 4,061 | $ | 14,793 |
(1) | Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. |
Assets | Three months ended June 30, | |||||||||||||||
2019 | 2018 | |||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||
Loan portfolio(1): | ||||||||||||||||
Residential real estate(2) | $ | 1,783,718 | $ | 20,454 | 4.60 | % | $ | 1,602,103 | $ | 16,951 | 4.24 | % | ||||
Commercial, financial, and agriculture(2) | 1,698,186 | 21,658 | 5.12 | 1,501,618 | 16,578 | 4.43 | ||||||||||
Installment loans to individuals(2),(3) | 57,173 | 889 | 6.24 | 34,425 | 516 | 6.01 | ||||||||||
Previously securitized loans(4) | *** | 174 | *** | *** | 246 | *** | ||||||||||
Total loans | 3,539,077 | 43,175 | 4.89 | 3,138,146 | 34,291 | 4.38 | ||||||||||
Securities: | ||||||||||||||||
Taxable | 749,346 | 5,732 | 3.07 | 541,990 | 4,117 | 3.05 | ||||||||||
Tax-exempt(5) | 100,348 | 956 | 3.82 | 91,135 | 898 | 3.95 | ||||||||||
Total securities | 849,694 | 6,688 | 3.16 | 633,125 | 5,015 | 3.18 | ||||||||||
Deposits in depository institutions | 124,732 | 577 | 1.86 | 29,164 | 61 | 0.84 | ||||||||||
Total interest-earning assets | 4,513,503 | 50,440 | 4.48 | 3,800,435 | 39,367 | 4.15 | ||||||||||
Cash and due from banks | 52,922 | 92,426 | ||||||||||||||
Bank premises and equipment | 79,116 | 72,889 | ||||||||||||||
Goodwill and intangible assets | 121,628 | 78,420 | ||||||||||||||
Other assets | 189,618 | 177,299 | ||||||||||||||
Less: allowance for loan losses | (15,057 | ) | (18,215 | ) | ||||||||||||
Total assets | $ | 4,941,730 | $ | 4,203,254 | ||||||||||||
Liabilities | ||||||||||||||||
Interest-bearing demand deposits | $ | 874,039 | $ | 909 | 0.42 | % | $ | 787,554 | $ | 445 | 0.23 | % | ||||
Savings deposits | 980,089 | 1,236 | 0.51 | 817,187 | 453 | 0.22 | ||||||||||
Time deposits(2) | 1,384,017 | 6,272 | 1.82 | 1,123,261 | 4,020 | 1.44 | ||||||||||
Short-term borrowings | 199,648 | 863 | 1.73 | 208,939 | 459 | 0.88 | ||||||||||
Long-term debt | 4,053 | 47 | 4.65 | 16,495 | 230 | 5.59 | ||||||||||
Total interest-bearing liabilities | 3,441,846 | 9,327 | 1.09 | 2,953,436 | 5,607 | 0.76 | ||||||||||
Noninterest-bearing demand deposits | 820,689 | 704,546 | ||||||||||||||
Other liabilities | 48,803 | 45,933 | ||||||||||||||
Shareholders’ equity | 630,392 | 499,339 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,941,730 | $ | 4,203,254 | ||||||||||||
Net interest income | $ | 41,113 | $ | 33,760 | ||||||||||||
Net yield on earning assets | 3.65 | % | 3.56 | % |
(1) | For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income: | ||||||||
Loan fees | $ | 481 | $ | 102 | |||||
(2) | Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions: | ||||||||
Three months ended June 30, | |||||||||
2019 | 2018 | ||||||||
Residential real estate | $ | 83 | $ | 130 | |||||
Commercial, financial and agriculture | 668 | 238 | |||||||
Installment loans to individuals | (6 | ) | 4 | ||||||
Time deposits | 196 | — | |||||||
$ | 941 | $ | 372 | ||||||
(3) | Includes the Company’s consumer and DDA overdrafts loan categories. | ||||||||
(4) | Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. | ||||||||
(5) | Computed on a fully federal tax-equivalent basis assuming a tax rate of 21%. |
Three months ended June 30, 2019 vs. 2018 | |||||||||
Interest-earning assets: | Increase (Decrease) Due to Change In: | ||||||||
Volume | Rate | Net | |||||||
Loan portfolio | |||||||||
Residential real estate | $ | 1,922 | $ | 1,581 | $ | 3,503 | |||
Commercial, financial, and agriculture | 2,170 | 2,910 | 5,080 | ||||||
Installment loans to individuals | 341 | 32 | 373 | ||||||
Previously securitized loans | — | (72 | ) | (72 | ) | ||||
Total loans | 4,433 | 4,451 | 8,884 | ||||||
Securities: | |||||||||
Taxable | 1,575 | 40 | 1,615 | ||||||
Tax-exempt(1) | 91 | (33 | ) | 58 | |||||
Total securities | 1,666 | 7 | 1,673 | ||||||
Deposits in depository institutions | 200 | 316 | 516 | ||||||
Total interest-earning assets | $ | 6,299 | $ | 4,774 | $ | 11,073 | |||
Interest-bearing liabilities: | |||||||||
Interest-bearing demand deposits | $ | 49 | $ | 415 | $ | 464 | |||
Savings deposits | 90 | 693 | 783 | ||||||
Time deposits | 933 | 1,319 | 2,252 | ||||||
Short-term borrowings | (20 | ) | 424 | 404 | |||||
Long-term debt | (173 | ) | (10 | ) | (183 | ) | |||
Total interest-bearing liabilities | $ | 879 | $ | 2,841 | $ | 3,720 | |||
Net Interest Income | $ | 5,420 | $ | 1,933 | $ | 7,353 |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Net interest income (GAAP) | $ | 40,911 | $ | 33,573 | $ | 80,977 | $ | 66,220 | ||||
Taxable equivalent adjustment | 202 | 187 | 410 | 374 | ||||||||
Net interest income, fully taxable equivalent | $ | 41,113 | $ | 33,760 | $ | 81,387 | $ | 66,594 | ||||
Equity to assets (GAAP) | 12.89 | % | 11.52 | % | ||||||||
Effect of goodwill and other intangibles, net | (2.19 | ) | (1.61 | ) | ||||||||
Tangible common equity to tangible assets | 10.70 | % | 9.91 | % | ||||||||
Return on tangible equity (GAAP) | 17.89 | % | 19.94 | % | ||||||||
Impact of merger related expenses | 0.34 | — | ||||||||||
Return on tangible equity, excluding the above item | 18.23 | % | 19.94 | % | ||||||||
Return on assets (GAAP) | 1.84 | % | 2.00 | % | ||||||||
Impact of merger related expenses | 0.04 | — | ||||||||||
Return on assets, excluding the above item | 1.88 | % | 2.00 | % |
June 30, 2019 | December 31, 2018 | June 30, 2018 | |||||||
Residential real estate | $ | 1,644,494 | $ | 1,635,338 | $ | 1,472,916 | |||
Home equity | 150,676 | 153,496 | 139,245 | ||||||
Commercial and industrial | 288,803 | 286,314 | 213,687 | ||||||
Commercial real estate | 1,378,116 | 1,454,942 | 1,294,489 | ||||||
Consumer | 53,356 | 51,190 | 31,137 | ||||||
DDA overdrafts | 3,922 | 6,328 | 3,994 | ||||||
Total loans | $ | 3,519,367 | $ | 3,587,608 | $ | 3,155,468 |
Six months ended June 30, | Year ended December 31, | ||||||||
2019 | 2018 | 2018 | |||||||
Balance at beginning of period | $ | 15,966 | $ | 18,836 | $ | 18,836 | |||
Charge-offs: | |||||||||
Commercial and industrial | (51 | ) | (724 | ) | (733 | ) | |||
Commercial real estate | (178 | ) | (275 | ) | (369 | ) | |||
Residential real estate | (631 | ) | (220 | ) | (682 | ) | |||
Home equity | (117 | ) | (111 | ) | (219 | ) | |||
Consumer | (296 | ) | (354 | ) | (769 | ) | |||
DDA overdrafts | (1,213 | ) | (1,272 | ) | (2,701 | ) | |||
Total charge-offs | (2,486 | ) | (2,956 | ) | (5,473 | ) | |||
Recoveries: | |||||||||
Commercial and industrial | 140 | 1,477 | 2,152 | ||||||
Commercial real estate | 607 | 372 | 732 | ||||||
Residential real estate | 125 | 159 | 367 | ||||||
Home equity | — | — | — | ||||||
Consumer | 143 | 105 | 166 | ||||||
DDA overdrafts | 749 | 765 | 1,496 | ||||||
Total recoveries | 1,764 | 2,878 | 4,913 | ||||||
Net charge-offs | (722 | ) | (78 | ) | (560 | ) | |||
(Recovery of) provision for loan losses | (1,449 | ) | (1,882 | ) | (2,310 | ) | |||
Balance at end of period | $ | 13,795 | $ | 16,876 | $ | 15,966 | |||
As a Percent of Average Total Loans: | |||||||||
Net charge-offs (annualized) | 0.04 | % | — | % | 0.02 | % | |||
(Recovery of) provision for loan losses (annualized) | (0.08 | )% | (0.12 | )% | (0.07 | )% | |||
As a Percent of Non-Performing Loans: | |||||||||
Allowance for loan losses | 115.32 | % | 127.63 | % | 107.82 | % | |||
As a Percent of Total Loans: | |||||||||
Allowance for loan losses | 0.39 | % | 0.53 | % | 0.45 | % |
As of June 30, | As of December 31, | ||||||||
2019 | 2018 | 2018 | |||||||
Commercial and industrial | $ | 2,796 | $ | 3,727 | $ | 4,060 | |||
Commercial real estate | 3,469 | 5,930 | 4,495 | ||||||
Residential real estate | 3,959 | 4,579 | 4,116 | ||||||
Home equity | 1,211 | 1,160 | 1,268 | ||||||
Consumer | 509 | 268 | 319 | ||||||
DDA overdrafts | 1,851 | 1,212 | 1,708 | ||||||
Allowance for Loan Losses | $ | 13,795 | $ | 16,876 | $ | 15,966 |
As of June 30, | December 31, | ||||||||
2019 | 2018 | 2018 | |||||||
Non-accrual loans | $ | 11,868 | $ | 13,078 | $ | 14,551 | |||
Accruing loans past due 90 days or more | 94 | 145 | 257 | ||||||
Total non-performing loans | 11,962 | 13,223 | 14,808 | ||||||
Other real estate owned ("OREO") | 2,581 | 3,636 | 4,608 | ||||||
Total non-performing assets | $ | 14,543 | $ | 16,859 | $ | 19,416 | |||
Non-performing loans (as a percent of loans and OREO) | 0.41 | % | 0.53 | % | 0.54 | % | |||
Past-due loans | $ | 9,475 | $ | 8,166 | $ | 13,131 | |||
Past-due loans (as a percentage of total loans) | 0.27 | % | 0.26 | % | 0.37 | % |
As of June 30, | As of December 31, | ||||||||
2019 | 2018 | 2018 | |||||||
Impaired loans with a valuation allowance | $ | 5,667 | $ | 5,731 | $ | 2,985 | |||
Impaired loans with no valuation allowance | 4,224 | 4,966 | 7,521 | ||||||
Total impaired loans | $ | 9,891 | $ | 10,697 | $ | 10,506 | |||
Allowance for loan losses allocated to impaired loans | $ | 626 | $ | 320 | $ | 428 |
As of June 30, | December 31, | ||||||||
2019 | 2018 | 2018 | |||||||
Residential real estate | $ | 22,373 | $ | 20,731 | $ | 23,521 | |||
Home equity | 3,062 | 3,196 | 3,030 | ||||||
Commercial and industrial | 83 | 119 | 98 | ||||||
Commercial real estate | 8,044 | 8,279 | 8,205 | ||||||
Total TDRs | $ | 33,562 | $ | 32,325 | $ | 34,854 |
Six months ended June 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net investment securities gains | $ | 0.3 | $ | 0.8 | $ | (0.5 | ) | (62.5 | )% | ||
Non-interest income, excluding net investment securities gains | 33.5 | 29.3 | 4.2 | 14.3 | |||||||
Merger related expenses | 0.8 | — | 0.8 | - | |||||||
Non-interest expense, excluding merger related expenses | 59.4 | 49.9 | 9.5 | 19.0 |
Three months ended June 30, | |||||||||||
2019 | 2018 | $ Change | % Change | ||||||||
Net investment securities gains | $ | 0.1 | $ | 0.5 | $ | (0.4 | ) | (80.0 | )% | ||
Non-interest income, excluding net investment securities gains | 17.7 | 15.1 | 2.6 | 17.2 | % | ||||||
Merger related expenses | 0.5 | — | 0.5 | 100.0 | % | ||||||
Non-interest expense, excluding merger related expenses | 30.2 | 24.9 | 5.3 | 21.3 | % |
Immediate Basis Point Change in Interest Rates | Implied Federal Funds Rate Associated with Change in Interest Rates | Estimated Increase (Decrease) in Net Income Over 12 Months | |||
June 30, 2019 | |||||
+300 | 5.50 | % | +1.4 | % | |
+200 | 4.50 | +3.2 | |||
+100 | 3.50 | +2.8 | |||
-50 | 2.00 | -2.2 | |||
-100 | 1.50 | -6.2 | |||
-200 | 0.50 | -15.0 | |||
December 31, 2018 | |||||
+300 | 5.50 | % | +1.6 | % | |
+200 | 4.50 | +2.6 | |||
+100 | 3.50 | +2.8 | |||
-50 | 2.00 | -3.1 | |||
-100 | 1.50 | -6.9 | |||
-200 | 0.50 | -16.3 |
June 30, 2019 | Actual | Minimum Required - Basel III | Required to be Considered Well Capitalized | ||||||||||||
Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | ||||||||||
CET I Capital | |||||||||||||||
City Holding Company | $ | 511,344 | 15.9 | % | $ | 224,991 | 7.0 | % | $ | 208,920 | 6.5 | % | |||
City National Bank | 452,600 | 14.2 | % | 223,225 | 7.0 | % | 207,280 | 6.5 | % | ||||||
Tier I Capital | |||||||||||||||
City Holding Company | 515,344 | 16.0 | % | 273,203 | 8.5 | % | 257,132 | 8.0 | % | ||||||
City National Bank | 452,600 | 14.2 | % | 271,059 | 8.5 | % | 255,114 | 8.0 | % | ||||||
Total Capital | |||||||||||||||
City Holding Company | 529,230 | 16.5 | % | 337,486 | 10.5 | % | 321,415 | 10.0 | % | ||||||
City National Bank | 466,486 | 14.6 | % | 334,837 | 10.5 | % | 318,893 | 10.0 | % | ||||||
Tier I Leverage Ratio | |||||||||||||||
City Holding Company | 515,344 | 10.7 | % | 192,638 | 4.0 | % | 240,798 | 5.0 | % | ||||||
City National Bank | 452,600 | 9.5 | % | 190,291 | 4.0 | % | 237,863 | 5.0 | % | ||||||
December 31, 2018 | Actual | Minimum Required - Basel III Phase-In Schedule | Minimum Required - Basel III Fully Phased-In (*) | Required to be Considered Well Capitalized | ||||||||||||||||
Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | Capital Amount | Ratio | |||||||||||||
CET I Capital | ||||||||||||||||||||
City Holding Company | $ | 492,526 | 15.1 | % | $ | 208,294 | 6.375 | % | $ | 228,715 | 7.0 | % | $ | 212,378 | 6.5 | % | ||||
City National Bank | 423,099 | 13.1 | % | 206,676 | 6.375 | % | 226,938 | 7.0 | % | 210,728 | 6.5 | % | ||||||||
Tier I Capital | ||||||||||||||||||||
City Holding Company | 496,526 | 15.2 | % | 257,304 | 7.875 | % | 277,725 | 8.5 | % | 261,389 | 8.0 | % | ||||||||
City National Bank | 423,099 | 13.1 | % | 255,306 | 7.875 | % | 275,568 | 8.5 | % | 259,358 | 8.0 | % | ||||||||
Total Capital | ||||||||||||||||||||
City Holding Company | 512,801 | 15.7 | % | 322,651 | 9.875 | % | 343,072 | 10.5 | % | 326,736 | 10.0 | % | ||||||||
City National Bank | 439,374 | 13.6 | % | 320,145 | 9.875 | % | 340,408 | 10.5 | % | 324,198 | 10.0 | % | ||||||||
Tier I Leverage Ratio | ||||||||||||||||||||
City Holding Company | 496,526 | 11.4 | % | 174,833 | 4.000 | % | 174,833 | 4.0 | % | 218,542 | 5.0 | % | ||||||||
City National Bank | 423,099 | 9.8 | % | 172,594 | 4.000 | % | 172,594 | 4.0 | % | 215,742 | 5.0 | % | ||||||||
(*) Represents the minimum required capital levels as of January 1, 2019 when Basel III Capital Rules have been fully phased in. |
Item 3 - | Quantitative and Qualitative Disclosures About Market Risk |
Item 4 - | Controls and Procedures |
Part II - | OTHER INFORMATION |
Item 1. | Legal Proceedings |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Total Number | Maximum Number | ||||||||
of Shares Purchased | of Shares that May | ||||||||
as Part of Publicly | Yet Be Purchased | ||||||||
Total Number of | Average Price | Announced Plans | Under the Plans | ||||||
Period | Shares Purchased | Paid per Share | or Programs | or Programs | |||||
April 1 - April 30, 2019 | 3,750 | $ | 76.85 | 58,490 | 941,510 | ||||
May 1 - May 31, 2019 | 42,944 | $ | 74.96 | 101,434 | 898,566 | ||||
June 1 - June 30, 2019 | 60,516 | $ | 74.58 | 161,950 | 838,050 |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Agreement and Plan of Merger, dated November 14, 2011, by and among Virginia Savings Bancorp, Inc., Virginia Savings Bank, F.S.B., City Holding Company and City National Bank of West Virginia (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated November 14, 2011, and filed with the Securities and Exchange Commission on November 14, 2011). | |||
Agreement and Plan of Merger, dated August 2, 2012, by and among Community Financial Corporation, Community Bank, City Holding Company and City National Bank of West Virginia (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated August 7, 2012, and filed with the Securities and Exchange Commission on August 7, 2012). | |||
Agreement and Plan of Merger, dated July 11, 2018, by and among Poage Bankshares, Inc., Town Square Bank, City Holding Company and City National Bank of West Virginia (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated July 11, 2018, and filed with the Securities and Exchange Commission on July 12, 2018). | |||
Agreement and Plan of Merger, dated July 11, 2018, by and among Farmers Deposit Bancorp, Inc., Farmers Deposit Bank, City Holding Company and City National Bank of West Virginia (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated July 11, 2018, and filed with the Securities and Exchange Commission on July 12, 2018). | |||
3(a) | Articles of Incorporation of City Holding Company (attached to, and incorporated by reference from, Amendment No. 1 to City Holding Company’s Registration Statement on Form S-4, Registration No. 2-86250, filed November 4, 1983 with the Securities and Exchange Commission). | ||
3(b) | Articles of Amendment to the Articles of Incorporation of City Holding Company, dated March 6, 1984 (attached to, and incorporated by reference from, City Holding Company's Form 8-K Report dated March 7, 1984, and filed with the Securities and Exchange Commission on March 22, 1984). | ||
3(c) | Articles of Amendment to the Articles of Incorporation of City Holding Company, dated March 4, 1986 (attached to, and incorporated by reference from, City Holding Company's Form 10-K Annual Report for the year ended December 31, 1986, filed March 31, 1987 with the Securities and Exchange Commission). | ||
3(d) | Articles of Amendment to the Articles of Incorporation of City Holding Company, dated September 29, 1987 (attached to and incorporated by reference from, City Holding Company's Registration Statement on Form S-4, Registration No. 33-23295, filed with the Securities and Exchange Commission on August 3, 1988). | ||
3(e) | Articles of Amendment to the Articles of Incorporation of City Holding Company, dated May 6, 1991 (attached to, and incorporated by reference from, City Holding Company's Form 10-K Annual Report for the year ended December 31, 1991, filed March 17, 1992 with the Securities and Exchange Commission). | ||
3(f) | Articles of Amendment to the Articles of Incorporation of City Holding Company, dated May 7, 1991 (attached to, and incorporated by reference from, City Holding Company's Form 10-K Annual Report for the year ended December 31, 1991, filed March 17, 1992 with the Securities and Exchange Commission). | ||
3(g) | Articles of Amendment to the Articles of Incorporation of City Holding Company, dated August 1, 1994 (attached to, and incorporated by reference from, City Holding Company's Form 10-Q Quarterly Report for the quarter ended September 30, 1994, filed November 14, 1994 with the Securities and Exchange Commission). | ||
3(h) | Articles of Amendment to the Articles of Incorporation of City Holding Company, dated December 9, 1998 (attached to, and incorporated by reference from, City Holding Company’s Form 10-K Annual Report for the year ended December 31, 1998, filed March 31, 1999 with the Securities and Exchange Commission). | ||
Articles of Amendment to the Articles of Incorporation of City Holding Company, dated June 13, 2001 (attached to, and incorporated by reference from, City Holding Company’s Registration Statement on Form 8-A, filed June 22, 2001 with the Securities and Exchange Commission). |
Articles of Amendment to the Articles of Incorporation of City Holding Company, dated May 10, 2006 (attached to, and incorporated by reference from, City Holding Company’s Form 10-Q, Quarterly Report for the quarter ended June 30, 2006, filed August 9, 2006 with the Securities and Exchange Commission). | |||
Articles of Amendment to the Articles of Incorporation of City Holding Company, dated April 19, 2017 (attached to, and incorporated by reference from, City Holding Company's Form 10-Q Quarterly Report for the quarter ended March 31, 2017, filed May 5, 2017 with the Securities and Exchange Commission). | |||
Amended and Restated Bylaws of City Holding Company, revised February 24, 2010 (attached to, and incorporated by reference from, City Holding Company’s Current Report on Form 8-K filed March 1, 2010 with the Securities and Exchange Commission). | |||
Rights Agreement dated as of June 13, 2001 (attached to, and incorporated by reference from, City Holding Company's Form 8–A, filed June 22, 2001, with the Securities and Exchange Commission). | |||
Amendment No. 1 to the Rights Agreement dated as of November 30, 2005 (attached to, and incorporated by reference from, City Holding Company’s Amendment No. 1 on Form 8-A, filed December 21, 2005, with the Securities and Exchange Commission). | |||
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Charles R. Hageboeck | |||
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for David L. Bumgarner | |||
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Charles R. Hageboeck | |||
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for David L. Bumgarner | |||
101 | Interactive Data File - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | ||
101.SCH | XBRL Taxonomy Extension Schema* | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase* | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase* | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase* | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase* | ||
* | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability. |
City Holding Company | ||
(Registrant) | ||
/s/ Charles R. Hageboeck | ||
Charles R. Hageboeck | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
/s/ David L. Bumgarner | ||
David L. Bumgarner | ||
Executive Vice President, Chief Financial Officer and Principal Accounting Officer | ||
(Principal Financial Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 of City Holding Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or such persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Charles R. Hageboeck | ||
Charles R. Hageboeck | ||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 of City Holding Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or such persons performing the equivalent functions) |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ David L. Bumgarner | ||
David L. Bumgarner | ||
Executive Vice President and Chief Financial Officer |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Charles R. Hageboeck | ||
Charles R. Hageboeck | ||
President and Chief Executive Officer |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ David L. Bumgarner | ||
David L. Bumgarner | ||
Executive Vice President and Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Securities held-to-maturity, Estimated Fair Value | $ 54,677 | $ 60,706 |
Preferred stock, par value (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 2.50 | $ 2.50 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 19,047,548 | 19,047,548 |
Common stock, treasury shares (in shares) | 2,650,266 | 2,492,403 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income available to common shareholders | $ 22,751 | $ 20,979 | $ 44,370 | $ 38,590 |
Unrealized gains (losses) on available-for-sale securities arising during the period | 14,309 | (3,170) | 25,671 | (13,882) |
Reclassification adjustment for gains | (21) | 0 | (109) | 0 |
Other comprehensive income (loss) before income taxes | 14,288 | (3,170) | 25,562 | (13,882) |
Tax effect | 3,349 | (733) | 5,992 | (3,232) |
Other comprehensive income (loss) | 10,939 | (2,437) | 19,570 | (10,650) |
Comprehensive Income, Net of Tax | $ 33,690 | $ 18,542 | $ 63,940 | $ 27,940 |
Consolidated Statements of Changes in Shareholders' Equity Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 0.53 | $ 0.46 | $ 1.06 | $ 0.92 |
Exercise of stock options (in shares) | 2,502 | 17,760 | 8,140 | 25,147 |
Purchase of treasury shares (in shares) | 107,210 | 10,000 | 161,950 | 214,327 |
Background and Basis of Presentation |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation City Holding Company ("City Holding"), a West Virginia corporation headquartered in Charleston, West Virginia, is a registered financial holding company under the Bank Holding Company Act and conducts its principal activities through its wholly-owned subsidiary, City National Bank of West Virginia ("City National"). City National is a retail and consumer-oriented community bank with 95 banking offices in West Virginia (58), Kentucky (20), Virginia (13) and southeastern Ohio (4). City National provides credit, deposit, and trust and investment management services to its customers in a broad geographical area that includes many rural and small community markets in addition to larger cities including Charleston (WV), Huntington (WV), Martinsburg (WV), Ashland (KY), Lexington (KY), Winchester (VA) and Staunton (VA). In addition to its branch network, City National's delivery channels include automated-teller-machines ("ATMs"), interactive-teller machines ("ITMs"), mobile banking, debit cards, interactive voice response systems, and Internet technology. The Company’s business activities are currently limited to one reportable business segment, which is community banking. On January 30, 2019, the Company announced that City National had signed a definitive agreement to sell its Virginia Beach, Virginia branch. The terms of the agreement provided for the acquirer to assume the majority of deposits and to acquire the equipment and other select assets associated with the branch, while City National retained the loans. The transaction closed during the second quarter of 2019. As a result of this transaction, the Company recognized a gain of $0.7 million, which is included in the line item "Other Income" in the consolidated statements of income, and outstanding deposit balances decreased by $25.7 million. The accompanying consolidated financial statements, which are unaudited, include all of the accounts of City Holding and its wholly-owned subsidiaries (collectively, the "Company"). All material intercompany transactions have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition for each of the periods presented. Such adjustments are of a normal recurring nature. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2019. The Company’s accounting and reporting policies conform with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Such policies require management to make estimates and develop assumptions that affect the amounts reported in the consolidated financial statements and related footnotes. Actual results could differ from management’s estimates. The consolidated balance sheet as of December 31, 2018 has been derived from audited financial statements included in the Company’s 2018 Annual Report to Shareholders. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. These financial statements should be read in conjunction with the financial statements and notes thereto included in the 2018 Annual Report of the Company. Certain amounts in the financial statements have been reclassified. Such reclassifications had no impact on shareholders’ equity or net income for any period.
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Recent Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted: Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This standard requires organizations to recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet and disclose key information about leasing requirements for leases that were historically classified as operating leases under previous generally accepted accounting principles. Leases will be classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement. Topic 842 was subsequently amended by ASU No. 2018-01 "Land Easement Practical Expedient for Transition to Topic 842," ASU No. 2018-10, "Codification Improvements to Topic 842, Leases," ASU No. 2018-11 "Targeted Improvements," ASU No. 2018-20 "Narrow-Scope Improvements for Lessors," and ASU No. 2019-01 "Codification Improvements." The Company adopted the new standard on January 1, 2019 and has chosen to use that date as the effective date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company has elected the "package of practical expedients," which permits it to not reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. As part of the adoption of this standard, the Company recognized lease liabilities, with corresponding ROU assets of approximately the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The adoption of this standard did not have a material impact on the Company's financial statements. Operating lease expense is recognized on a straight-line basis over the lease term. Others In March 2017, the FASB issued ASU No. 2017-08, "Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The amendments in this update shorten the amortization period for certain callable debt securities held at a premium and require the premium to be amortized to the earliest call date. This ASU became effective for the Company on January 1, 2019. The adoption of ASU No. 2017-08 did not have a material impact on the Company's financial statements. In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This amendment expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This ASU became effective for the Company on January 1, 2019. The adoption of this ASU did not have a material impact on the Company's financial statements. In April 2019, the FASB issued ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." This amendment clarifies the guidance in ASU No. 2017-12. This ASU will become effective for the Company on January 1, 2020. The adoption of ASU No. 2019-04 is not expected to have a material impact on the Company's financial statements. In October 2018, the FASB issued ASU No. 2018-16, "Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes." This amendment permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Federal Funds Effective Rate, and the SIFMA Municipal Swap Rate. This ASU became effective for the Company on January 1, 2019. The Company is in the process of reviewing all of its contracts that will be impacted by changing from LIBOR to SOFR. Pending Adoption: CECL In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This standard replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new current expected credit losses model ("CECL") will apply to the allowance for loan losses, available-for-sale and held-to-maturity debt securities, purchased financial assets with credit deterioration and certain off-balance sheet credit exposures. In November 2018, the FASB issued ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses." This amendment clarifies the scope of the guidance in ASU No. 2016-13. In April 2019, the FASB issued ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." This amendment clarifies the guidance in ASU No. 2016-13. In May 2019, the FASB issued ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update provide targeted transition relief that is optional for, and will be available to, all reporting entities within the scope of Topic 326. These ASUs will become effective for the Company for interim and annual periods on January 1, 2020. Management is currently working through its implementation plan, including refining a third-party vendor solution program, finalizing segmentation, completing risk assessments and analyzing qualitative factors related to CECL. The standard will require the Company to gross up its previously purchased credit impaired loans through the allowance at the implementation date. The adoption of these ASUs could result in a material increase to the allowance for loan losses. While we are currently unable to reasonably estimate the impact of adopting these ASUs, management expects that the impact of adoption will be significantly influenced by the loan portfolio's composition and quality, as well as the prevailing economic conditions and forecasts as of the adoption date. Others In January 2017, the FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." This amendment simplifies the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This ASU will become effective for the Company on January 1, 2020. The adoption of ASU No. 2017-04 is not expected to have a material impact on the Company's financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." This amendment removes, modifies, and clarifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU will become effective for the Company on January 1, 2020. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company's financial statements. In August 2018, the FASB issued ASU No. 2018-14, "Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans." This amendment removes, modifies, and clarifies certain disclosure requirements for defined benefit plans and other post-employment benefit plans. This ASU will become effective for the Company on January 1, 2021. The adoption of ASU No. 2018-14 is not expected to have a material impact on the Company's financial statements. |
Acquisitions and Preliminary Purchase Price Allocation Acquisitions and Preliminary Purchase Price Allocation |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Preliminary Purchase Price Allocation | Acquisitions and Preliminary Purchase Price Allocation On December 7, 2018, the Company acquired 100% of the outstanding common stock of Poage Bankshares, Inc., the parent company of Town Square Bank (collectively, "Poage"). The acquisition of Poage was structured as a stock transaction in which the Company issued approximately 1.1 million shares, valued at approximately $82.6 million, or $24.22 per share of Poage common stock. On December 7, 2018, the Company also acquired 100% of the outstanding common stock of Farmers Deposit Bancorp, Inc., the parent company of Farmers Deposit Bank (collectively, "Farmers Deposit"). The acquisition of Farmers Deposit was structured as a cash transaction valued at $24.9 million, or $1,174.14 per share of Farmers Deposit common stock. The Company accounted for both acquisitions using the acquisition method pursuant to "Topic 805 Business Combinations" of the FASB Accounting Standards Codification. The acquisition method requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of acquisition (in thousands):
Acquired Loans The following table presents information regarding the purchased credit-impaired and noncredit-impaired loans acquired in conjunction with both acquisitions as of the date of acquisition (in thousands):
Acquired Deposits The fair values of non-time deposits approximated their carrying value at the acquisition date. For time deposits, the fair values were estimated based on discounted cash flows, using interest rates that are currently being offered compared to the contractual interest rates. Based on this analysis, management recorded a premium on time deposits acquired of $0.1 million and $1.7 million for the Farmers Deposit and Poage acquisitions, respectively, each of which is being amortized over 5 years. Core Deposit Intangible The Company believes that the customer relationships with the deposits acquired have an intangible value. In connection with the acquisitions, the Company recorded a core deposit intangible asset of $3.3 million and $8.1 million for Farmers Deposit and Poage, respectively. Each of the core deposit intangible assets represent the value that the acquiree had with their deposit customers. The fair value was estimated based on a discounted cash flow methodology that considered the type of deposit, deposit retention and the cost of the deposit base. The core deposit intangibles are being amortized over 10 years. Goodwill Under GAAP, management has up to twelve months following the date of the acquisition to finalize the fair value of acquired assets and liabilities. The measurement period ends as soon as the Company receives information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. Any subsequent adjustments to the fair value of the acquired assets and liabilities, intangible assets or other purchase accounting adjustments will result in adjustments to the goodwill recorded. Among the items that are still preliminary at June 30, 2019, is the finalization of the final tax returns for both entities, which management anticipates completing during 2019. Given the form of the respective transactions, the goodwill preliminarily recorded in conjunction with the Farmers Deposit acquisition is expected to be deductible for tax purposes, while the goodwill preliminarily recorded in conjunction with the Poage acquisition is not expected to be deductible for tax purposes. The following table summarizes adjustments to goodwill subsequent to December 31, 2018 (in thousands):
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Investments |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments The aggregate carrying and approximate market values of investment securities follow (in thousands). Fair values are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable financial instruments.
The Company's other investment securities include marketable and non-marketable equity securities. At June 30, 2019 and December 31, 2018, the Company held $12.0 million and $11.8 million, respectively, in marketable equity securities. Marketable equity securities mainly consist of investments made by the Company in equity positions of various community banks. Included within this portfolio are ownership positions in the following community bank holding companies: First National Corporation (FXNC) (4%) and Eagle Financial Services, Inc. (EFSI) (1.5%). The Company's non-marketable securities consist of securities with limited marketability, such as stock in the Federal Reserve Bank ("FRB") or the Federal Home Loan Bank ("FHLB"). At June 30, 2019 and December 31, 2018, the Company held $16.0 million and $18.5 million, respectively, in non-marketable equity securities. These securities are carried at cost due to the restrictions placed on their transferability. The Company's mortgage-backed U.S. government agency securities consist of both residential and commercial securities, all of which are guaranteed by Fannie Mae ("FNMA"), Freddie Mac ("FHLMC"), or Ginnie Mae (GNMA"). At June 30, 2019 and December 31, 2018 there were no securities of any non-governmental issuer whose aggregate carrying value or estimated fair value exceeded 10% of shareholders' equity. The Company's certificates of deposit consist of domestically issued certificates of deposits in denominations of less than the FDIC insurance limit of $250,000. Certain investment securities owned by the Company were in an unrealized loss position (i.e., amortized cost basis exceeded the estimated fair value of the securities) as of June 30, 2019 and December 31, 2018. The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):
The Company incurred no credit-related investment impairment losses in either the six months ended June 30, 2019 or June 30, 2018. At June 30, 2019, the cumulative amount of credit-related investment impairment losses that have been recognized by the Company on the equity securities that remained in the Company's investment portfolio as of that date was $1.8 million. Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other-than-temporary would be reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers, among other things (i) the length of time and the extent to which the fair value has been less than cost; (ii) the financial condition, capital strength, and near-term (within 12 months) prospects of the issuer, including any specific events which may influence the operations of the issuer, such as changes in technology that may impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; (iii) the historical volatility in the market value of the investment and/or the liquidity or illiquidity of the investment; (iv) adverse conditions specifically related to the security, an industry, or a geographic area; and (v) the intent to sell the investment security and if it’s more likely than not that the Company will not have to sell the security before recovery of its cost basis. In addition, management also employs a continuous monitoring process in regards to its marketable equity securities, specifically its portfolio of regional community bank holdings. Although the regional community bank stocks that are owned by the Company are publicly traded, the trading activity for these stocks is minimal, with trading volumes of less than 0.2% of each respective company being traded on a daily basis. As part of management’s review process for these securities, management reviews the financial condition of each respective regional community bank for any indications of financial weakness. Management has the ability and intent to hold the securities classified as held-to-maturity until they mature, at which time the Company expects to receive full value for the securities. Furthermore, as of June 30, 2019, management does not intend to sell any impaired security and it is not more than likely that it will be required to sell any impaired security before the recovery of its amortized cost basis. The unrealized losses on debt securities are primarily the result of interest rate changes, credit spread fluctuations on agency-issued mortgage-related securities, general financial market uncertainty and unprecedented market volatility. These conditions should not prohibit the Company from receiving its contractual principal and interest payments on its debt securities. The fair value is expected to recover as the securities approach their maturity date or repricing date. As of June 30, 2019, management believes the unrealized losses detailed in the table above are temporary and no additional impairment loss has been recognized in the Company’s consolidated income statement. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss will be recognized in net income in the period the other-than-temporary impairment is identified, while any noncredit loss will be recognized in other comprehensive income. The amortized cost and estimated fair value of debt securities at June 30, 2019, by contractual maturity, are shown in the following table (in thousands). Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.
Gross gains and gross losses recognized by the Company from investment security transactions are summarized in the table below (in thousands):
The carrying value of securities pledged to secure public deposits and for other purposes as required or permitted by law approximated $467 million and $510 million at June 30, 2019 and December 31, 2018, respectively.
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Loans |
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Loans and Leases Receivable, Net Amount [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans The following summarizes the Company’s major classifications for loans (in thousands):
The Company’s commercial and residential real estate construction loans are primarily secured by real estate within the Company’s principal markets. These loans were originated under the Company’s loan policies, which are focused on the risk characteristics of the loan portfolio, including construction loans. In the judgment of the Company's management, adequate consideration has been given to these loans in establishing the Company's allowance for loan losses.
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Allowance For Loan Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance For Loan Losses | Allowance For Loan Losses Management systematically monitors the loan portfolio and the adequacy of the allowance for loan losses on a quarterly basis to provide for probable losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. Individual credits are selected throughout the year for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the adequacy of the allowance. Due to the nature of commercial lending, evaluation of the adequacy of the allowance as it relates to these loan types is often based more upon specific credit reviews, with consideration given to the potential impairment of certain credits and historical loss rates, adjusted for economic conditions and other inherent risk factors. The following table summarizes the activity in the allowance for loan losses, by portfolio loan classification, for the six months ended June 30, 2019 and 2018 (in thousands). The allocation of a portion of the allowance in one portfolio segment does not preclude its availability to absorb losses in other portfolio segments. The following table also presents the balance in the allowance for loan loss disaggregated on the basis of the Company’s impairment measurement method and the related recorded investment in loans, by portfolio segment, as of June 30, 2019 and December 31, 2018 (in thousands).
Credit Quality Indicators All commercial loans within the portfolio are subject to internal risk rating. All non-commercial loans are evaluated based on payment history. The Company’s internal risk ratings for commercial loans are: Exceptional, Good, Acceptable, Pass/Watch, Special Mention, Substandard and Doubtful. Each internal risk rating is defined in the loan policy using the following criteria: balance sheet yields; ratios and leverage; cash flow spread and coverage; prior history; capability of management; market position/industry; potential impact of changing economic, legal, regulatory or environmental conditions; purpose; structure; collateral support; and guarantor support. Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process. Based on an individual loan’s risk grade, estimated loss percentages are applied to the outstanding balance of the loan to determine the amount of probable loss. The Company categorizes loans into risk categories based on relevant information regarding the customer’s debt service ability, capacity and overall collateral position, along with other economic trends and historical payment performance. The risk rating for each credit is updated when the Company receives current financial information, the loan is reviewed by the Company’s internal loan review and credit administration departments, or the loan becomes delinquent or impaired. The risk grades are updated a minimum of annually for loans rated Exceptional, Good, Acceptable, or Pass/Watch. Loans rated Special Mention, Substandard or Doubtful are reviewed at least quarterly. The Company uses the following definitions for its risk ratings:
The following table presents the Company’s commercial loans by credit quality indicators, by portfolio loan classification (in thousands):
The following table presents the Company's non-commercial loans by payment performance, by portfolio loan classification (in thousands):
Aging Analysis of Accruing and Non-Accruing Loans Interest income on loans is accrued and credited to operations based upon the principal amount outstanding, using methods that generally result in level rates of return. Loan origination fees, and certain direct costs, are deferred and amortized as an adjustment to the yield over the term of the loan. The accrual of interest generally is discontinued when a loan becomes 90 days past due as to principal or interest for all loan types. However, any loan may be placed on non-accrual status if the Company receives information that indicates a borrower is unable to meet the contractual terms of its respective loan agreement. Other indicators considered for placing a loan on non-accrual status include the borrower’s involvement in bankruptcies, foreclosures, repossessions, litigation and any other situation resulting in doubt as to whether full collection of contractual principal and interest is attainable. When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and interest accrued in prior years is charged to the allowance for loan losses. Management may elect to continue the accrual of interest when the net realizable value of collateral exceeds the principal balance and related accrued interest, and the loan is in the process of collection. Generally for all loan classes, interest income during the period the loan is non-performing is recorded on a cash basis after recovery of principal is reasonably assured. Cash payments received on nonperforming loans are typically applied directly against the outstanding principal balance until the loan is fully repaid. Generally, loans are restored to accrual status when the obligation is brought current, the borrower has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Generally, all loan types are considered past due when the contractual terms of a loan are not met and the borrower is 30 days or more past due on a payment. Furthermore, residential and home equity loans are generally subject to charge-off when the loan becomes 120 days past due, depending on the estimated fair value of the collateral less cost to dispose, versus the outstanding loan balance. Commercial loans are generally charged off when the loan becomes 120 days past due. Open-end consumer loans are generally charged off when the loan becomes 180 days past due. The following table presents an aging analysis of the Company’s accruing and non-accrual loans, by portfolio loan classification (in thousands):
The following table presents the Company’s impaired loans, by class (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off. There are no impaired residential, home equity, or consumer loans.
The following table presents information related to the average recorded investment and interest income recognized on the Company’s impaired loans, by class (in thousands):
Approximately $0.1 million of interest income would have been recognized during the six months ended June 30, 2019 and 2018, respectively, if such loans had been current in accordance with their original terms. There were no commitments to provide additional funds on non-accrual, impaired or other potential problem loans at June 30, 2019. Loan Modifications The Company’s policy on loan modifications typically does not allow for modifications that would be considered a concession from the Company. However, when there is a modification, the Company evaluates each modification to determine if the modification constitutes a troubled debt restructuring (“TDR”) in accordance with ASU 2011-02, whereby a modification of a loan would be considered a TDR when both of the following conditions are met: (1) a borrower is experiencing financial difficulty and (2) the modification constitutes a concession. When determining whether the borrower is experiencing financial difficulties, the Company reviews whether the borrower is currently in payment default on any of its debt or whether it is probable that the borrower would be in payment default in the foreseeable future without the modification. Other indicators of financial difficulty include whether the borrower has declared or is in the process of declaring bankruptcy, the borrower’s ability to continue as a going concern, and the borrower’s projected cash flow to service its debt (including principal and interest) in accordance with the contractual terms for the foreseeable future, without a modification. Regulatory guidance requires loans to be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the bankruptcy court, and the borrower has not reaffirmed the debt. The filing of bankruptcy is deemed to be evidence that the borrower is in financial difficulty and the discharge of the debt by the bankruptcy court is deemed to be a concession granted to the borrower. The following tables set forth the Company’s TDRs (in thousands). Substantially all of the Company's TDRs are accruing interest.
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments As of June 30, 2019 and December 31, 2018, the Company primarily utilizes non-hedging derivative financial instruments with commercial banking customers to facilitate their interest rate management strategies. For these instruments, the Company acts as an intermediary for its customers and has offsetting contracts with financial institution counterparties. Changes in the fair value of these underlying derivative contracts generally offset each other and do not significantly impact the Company's results of operations. The following table summarizes the notional and fair value of these derivative instruments (in thousands):
The following table summarizes the change in fair value of these derivative instruments (in thousands):
Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with financial institution counterparties are generally executed under International Swaps and Derivative Association ("ISDA") master agreements which include "right of setoff" provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset financial instruments for financial reporting purposes. Pursuant to the Company's agreements with certain of its derivative counterparties, the Company may receive collateral or post collateral, which may be in the form of cash or securities, based upon mark-to-mark positions.The Company has posted collateral with a market value of $15.6 million as of June 30, 2019.
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Employee Benefit Plans |
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Share-based Payment Arrangement, Noncash Expense [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans Stock Options A summary of the Company’s stock option activity and related information is presented below:
Information regarding stock option exercises and stock-based compensation expense associated with stock options is provided in the following table (in thousands):
Shares issued in connection with stock option exercises are issued from available treasury shares. If no treasury shares are available, new shares would be issued from available authorized shares. During the six months ended June 30, 2019 and 2018, all shares issued in connection with stock option exercises were issued from available treasury stock. For the stock options that have performance-based criteria, management has evaluated those criteria and has determined that, as of June 30, 2019, the criteria were probable of being met. Restricted Shares, Restricted Stock Units, Performance Share Units The Company records compensation expense with respect to restricted shares, restricted stock units and performance share units in an amount equal to the fair value of the common stock covered by each award on the date of grant. These awards become fully vested after various periods of continued employment from the respective dates of grant. The Company is entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Compensation is being charged to expense over the respective vesting periods. Restricted shares are forfeited if the awardee officer or employee terminates his employment with the Company prior to the lapsing of restrictions. The Company records forfeitures of restricted stock as treasury share repurchases and any compensation cost previously recognized is reversed in the period of forfeiture. Recipients of restricted shares do not pay any cash consideration to the Company for the shares, and have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested. For restricted shares that have performance-based criteria, management has evaluated those criteria and has determined that, as of June 30, 2019, the criteria were probable of being met. A summary of the Company’s restricted shares activity and related information is presented below:
Information regarding stock-based compensation associated with restricted shares is provided in the following table (in thousands):
Shares issued in conjunction with restricted stock awards are issued from available treasury shares. If no treasury shares are available, new shares would be issued from available authorized shares. During the six months ended June 30, 2019, and 2018, all shares issued in connection with restricted stock awards were issued from available treasury stock. Benefit Plans The Company provides retirement benefits to its employees through the City Holding Company 401(k) Plan and Trust (the “401(k) Plan”), which is intended to be compliant with Employee Retirement Income Security Act (ERISA) section 404(c). The Company also maintains a frozen defined benefit pension plan (the “Defined Benefit Plan”), which was inherited from the Company's acquisition of the plan sponsor (Horizon Bancorp, Inc.). The following table presents the components of the Company's net periodic benefit cost, which is included in the line item "Other Expenses" in the consolidated statements of income, (in thousands):
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Commitments and Contingencies |
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. The Company has entered into agreements with certain customers to extend credit or provide a conditional commitment to provide payment on drafts presented in accordance with the terms of the underlying credit documents. The Company also provides overdraft protection to certain demand deposit customers that represent an unfunded commitment. Overdraft protection commitments, which are included with other commitments below, are uncollateralized and are paid at the Company’s discretion. Conditional commitments generally include standby and commercial letters of credit. Standby letters of credit represent an obligation of the Company to a designated third party contingent upon the failure of a customer of the Company to perform under the terms of the underlying contract between the customer and the third party. Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, drafts will be drawn when the underlying transaction is consummated, as intended, between the customer and a third party. The funded portion of these financial instruments is reflected in the Company’s balance sheet, while the unfunded portion of these commitments is not reflected in the balance sheet. The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):
Loan commitments and standby and commercial letters of credit have credit risks essentially the same as those involved in extending loans to customers and are subject to the Company’s standard credit policies. Collateral is obtained based on management’s credit assessment of the customer. Management does not anticipate any material losses as a result of these commitments. In addition, the Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately resolved. There can be no assurance that current legal actions will have an immaterial impact on financial results, either positive or negative, or that no material legal actions may be presented in the future. The Company owns 86,605 shares of Class B common stock of Visa, Inc. ("Visa") which are convertible into Class A common stock at a conversion ratio of 1.6298 per Class B share. As of June 30, 2019, the value of the Class A shares was $173.55 per share. Utilizing the conversion ratio, the value of unredeemed Class A equivalent shares owned by the Company was $24.5 million, which has not been reflected in the accompanying consolidated financial statements. The shares of Visa Class B common stock are restricted. Visa Member Banks (as defined in Visa's organizational documents) are required to fund an escrow account to cover settlements, resolution of pending litigation and related claims. If the funds in the escrow account are insufficient to settle the covered litigation, Visa may sell additional Class A shares, use the proceeds to settle litigation and further reduce the conversion ratio. If funds remain in the escrow account after all litigation is settled, the Class B conversion ratio will be increased to reflect that surplus.
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The activity in accumulated other comprehensive loss is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined federal and state income tax rate approximating 23%.
As a result of the adoption of ASU 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," the Company reclassified $2.7 million of unrealized gains and losses net of tax, relating to its equity and perpetual preferred securities, from other comprehensive income to retained earnings on January 1, 2018.
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Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share The following table sets forth the computation of basic and diluted earnings per share using the two class method (in thousands, except per share data):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company bases fair value of assets and liabilities on quoted market prices, prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. If such information is not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amount presented herein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Financial Assets and Liabilities The Company used the following methods and significant assumptions to estimate fair value for financial assets and liabilities measured on a recurring basis. Securities Available for Sale. Securities available for sale are reported at fair value utilizing Level 1, Level 2, and Level 3 inputs. The fair value of securities available for sale is determined by utilizing a market approach by obtaining quoted prices on nationally recognized securities exchanges (other than forced or distressed transactions) that occur in sufficient volume or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities. If such measurements are unavailable, the security is classified as Level 3. Significant judgment is required to make this determination. The Company utilizes a third party pricing service provider to value its Level 1 and Level 2 investment securities. Annually, the Company obtains an independent auditor’s report from its third party pricing service provider regarding its controls over investment securities. On a quarterly basis, the Company reprices its debt securities with a third party that is independent of the primary pricing service provider to verify the reasonableness of the fair values. Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The Company utilizes a market approach by obtaining dealer quotations to value its customer interest rate swaps. The Company’s derivatives are included within Other Assets and Other Liabilities in the accompanying consolidated balance sheets. Derivative assets are typically secured through securities with financial counterparties or cross collateralization with a borrowing customer. Derivative liabilities are typically secured through the Company pledging securities to financial counterparties or, in the case of a borrowing customer, by the right of setoff. The Company considers factors such as the likelihood of default by itself and its counterparties, right of setoff, and remaining maturities in determining the appropriate fair value adjustments. All derivative counterparties approved by the Company's Asset and Liability Committee ("ALCO") are regularly reviewed, and appropriate business action is taken to adjust the exposure to certain counterparties, if necessary. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of marketable collateral securing the position. This approach used to estimate impacted exposures to counterparties is also used by the Company to estimate its own credit risk in derivative liability positions. To date, no material losses have been incurred due to a counterparty's inability to pay any undercollateralized position. There was no significant change in the value of derivative assets and liabilities attributed to credit risk that would have resulted in a derivative credit risk valuation adjustment at June 30, 2019. The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis. Financial assets measured at fair value on a nonrecurring basis include impaired loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on observable market data for both real estate collateral and non-real estate collateral. The following table presents assets and liabilities measured at fair value (in thousands):
The Company's financial assets and liabilities measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3), which solely relates to impaired loans that were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for loan losses based upon the fair value of the underlying collateral (in thousands). The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows. The significant unobservable inputs used in the fair value measurement of collateral for collateral-dependent impaired loans primarily relate to discounts applied to the customers’ reported amount of collateral. The amount of collateral discount depends upon the marketability of the underlying collateral. During the six months ended June 30, 2019 and 2018, collateral discounts ranged from 20% to 30%. During the six months ended June 30, 2019 and 2018, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis. Non-Financial Assets and Liabilities The Company has no non-financial assets or liabilities measured at fair value on a recurring basis. Certain non-financial assets measured at fair value on a non-recurring basis include other real estate owned (“OREO”), which is measured at the lower of cost or fair value, and goodwill and other intangible assets, which are measured at fair value for impairment assessments. Fair Value of Financial Instruments ASC Topic 825 “Financial Instruments,” as amended, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including discount rates and estimate of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. ASC Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The following table represents the estimates of fair value of financial instruments (in thousands). This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.
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Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contracts with Customers | Contracts with Customers The Company's largest source of revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), and non-interest income. The Company's significant sources of non-interest income are: service charges, bankcard revenue, trust and investment management fee income and bank owned life insurance (which is also excluded from ASC 606). The Company's significant policies related to contracts with customers are discussed below. Service Charges: Service charges consist of service charges on deposit accounts (monthly service fees, account analysis fees, non-sufficient funds ("NSF") fees and other deposit account related fees). For transaction based fees, the Company's performance obligation is generally satisfied, and the related revenue recognized, at a point in time. For nontransaction based fees, the Company's performance obligation is generally satisfied, and the related revenue recognized, over the period in which the service is provided (typically one month). Generally, payments are received immediately through a direct charge to the customer's account. Bankcard Revenue: Bankcard revenue is primarily comprised of debit card income and ATM fees. Debit card income is primarily comprised of interchange fees earned whenever the Company's debit cards are processed through card payment networks such as Mastercard. ATM fees are primarily generated when a non-Company cardholder uses a Company ATM or when a Company cardholder uses a non-Company ATM. The Company's performance obligation for bankcard revenue is generally satisfied, and the related revenue recognized, when the services are rendered. Generally, payments are received immediately or in the following month. Trust and Investment Management Fee Income: Trust and investment management fee income is primarily comprised of fees earned from the management and administration of customer assets. The Company's performance obligation is generally satisfied over time (typically a quarter), and the related revenue recognized, based upon the quarter-end market value of the assets under management and the applicable fee rate. Generally, payments are received a few days after quarter-end through a direct charge to the customer's account. The following table illustrates the disaggregation by the Company's major revenue streams (in thousands):
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Contracts with Customers (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Service Charges | Service Charges: Service charges consist of service charges on deposit accounts (monthly service fees, account analysis fees, non-sufficient funds ("NSF") fees and other deposit account related fees). For transaction based fees, the Company's performance obligation is generally satisfied, and the related revenue recognized, at a point in time. For nontransaction based fees, the Company's performance obligation is generally satisfied, and the related revenue recognized, over the period in which the service is provided (typically one month). Generally, payments are received immediately through a direct charge to the customer's account.
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Bankcard Revenue | Bankcard Revenue: Bankcard revenue is primarily comprised of debit card income and ATM fees. Debit card income is primarily comprised of interchange fees earned whenever the Company's debit cards are processed through card payment networks such as Mastercard. ATM fees are primarily generated when a non-Company cardholder uses a Company ATM or when a Company cardholder uses a non-Company ATM. The Company's performance obligation for bankcard revenue is generally satisfied, and the related revenue recognized, when the services are rendered. Generally, payments are received immediately or in the following month.
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Trust and Management Fee Revenue | Trust and Investment Management Fee Income: Trust and investment management fee income is primarily comprised of fees earned from the management and administration of customer assets. The Company's performance obligation is generally satisfied over time (typically a quarter), and the related revenue recognized, based upon the quarter-end market value of the assets under management and the applicable fee rate. Generally, payments are received a few days after quarter-end through a direct charge to the customer's account. |
Acquisitions and Preliminary Purchase Price Allocation Acquisitions and Preliminary Purchase Price Allocation (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The Company accounted for both acquisitions using the acquisition method pursuant to "Topic 805 Business Combinations" of the FASB Accounting Standards Codification. The acquisition method requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of acquisition (in thousands):
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Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period | Acquired Loans The following table presents information regarding the purchased credit-impaired and noncredit-impaired loans acquired in conjunction with both acquisitions as of the date of acquisition (in thousands):
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Schedule of Goodwill | The following table summarizes adjustments to goodwill subsequent to December 31, 2018 (in thousands):
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Investments (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Carrying And Approximate Market Values Of Available-For-Sale Securities |
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Aggregate Carrying And Approximate Market Values Of Held-To-Maturity Securities |
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Gross Unrealized Losses And Fair Value Of Investments | The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):
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Amortized Cost And Estimated Fair Value Of Debt Securities By Contractual Maturity | The amortized cost and estimated fair value of debt securities at June 30, 2019, by contractual maturity, are shown in the following table (in thousands). Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.
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Gross Gains And Losses Realized | Gross gains and gross losses recognized by the Company from investment security transactions are summarized in the table below (in thousands):
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Loans (Tables) |
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Loans and Leases Receivable, Net Amount [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Major Classifications For Loans | The following summarizes the Company’s major classifications for loans (in thousands):
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Allowance For Loan Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Allowance For Loan Loss By Portfolio Segment | The following table summarizes the activity in the allowance for loan losses, by portfolio loan classification, for the six months ended June 30, 2019 and 2018 (in thousands). The allocation of a portion of the allowance in one portfolio segment does not preclude its availability to absorb losses in other portfolio segments. The following table also presents the balance in the allowance for loan loss disaggregated on the basis of the Company’s impairment measurement method and the related recorded investment in loans, by portfolio segment, as of June 30, 2019 and December 31, 2018 (in thousands).
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Schedule Of Credit Quality Indicators | The Company uses the following definitions for its risk ratings:
The following table presents the Company’s commercial loans by credit quality indicators, by portfolio loan classification (in thousands):
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Schedule Of Noncommercial Loans By Payment Performance | The following table presents the Company's non-commercial loans by payment performance, by portfolio loan classification (in thousands):
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Schedule Of Aging Analysis Of Accruing And Non-Accruing Loans | The following table presents an aging analysis of the Company’s accruing and non-accrual loans, by portfolio loan classification (in thousands):
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Schedule Of Impaired Loans | The following table presents the Company’s impaired loans, by class (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off. There are no impaired residential, home equity, or consumer loans.
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Schedule Of Information Related To Average Recorded Investment And Interest Income Recognized On Impaired Loans | The following table presents information related to the average recorded investment and interest income recognized on the Company’s impaired loans, by class (in thousands):
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Schedule Of Troubled Debt Restructurings | The following tables set forth the Company’s TDRs (in thousands). Substantially all of the Company's TDRs are accruing interest.
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Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Derivative Instruments | The following table summarizes the notional and fair value of these derivative instruments (in thousands):
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Change In Fair Value Of Derivative Instruments | The following table summarizes the change in fair value of these derivative instruments (in thousands):
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Employee Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Stock Option Activity | A summary of the Company’s stock option activity and related information is presented below:
Information regarding stock option exercises and stock-based compensation expense associated with stock options is provided in the following table (in thousands):
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Restricted Shares Activity And Related Information | A summary of the Company’s restricted shares activity and related information is presented below:
Information regarding stock-based compensation associated with restricted shares is provided in the following table (in thousands):
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Pension and Other Postretirement Benefits | The following table presents the components of the Company's net periodic benefit cost, which is included in the line item "Other Expenses" in the consolidated statements of income, (in thousands):
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Commitments and Contingencies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Contractual Obligations From Significant Commitments | The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):
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Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes In Each Component of Accumulated Other Comprehensive Income | The activity in accumulated other comprehensive loss is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined federal and state income tax rate approximating 23%.
|
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Schedule of Amounts Reclassified Out Of Accumulated Other Comprehensive Income |
|
Earnings per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Computation Of Basic And Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share using the two class method (in thousands, except per share data):
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring And Nonrecurring Basis | The following table presents assets and liabilities measured at fair value (in thousands):
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Schedule Of Estimates Of Fair Value Of Financial Instruments | The following table represents the estimates of fair value of financial instruments (in thousands). This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.
|
Contracts with Customers (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table illustrates the disaggregation by the Company's major revenue streams (in thousands):
|
Background and Basis of Presentation (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
store
| |
Entity Location [Line Items] | |
Number of Reportable Segments | 1 |
Gain (Loss) on Disposition of Business | $ | $ 0.7 |
Deposits Sold | $ | $ 25.7 |
City National | |
Entity Location [Line Items] | |
Number of Stores | 95 |
WEST VIRGINIA | City National | |
Entity Location [Line Items] | |
Number of Stores | 58 |
KENTUCKY | City National | |
Entity Location [Line Items] | |
Number of Stores | 20 |
VIRGINIA | City National | |
Entity Location [Line Items] | |
Number of Stores | 13 |
OHIO | City National | |
Entity Location [Line Items] | |
Number of Stores | 4 |
Acquisitions and Preliminary Purchase Price Allocation Acquisitions and Preliminary Purchase Price Allocation Loans Acquired (Details) $ in Thousands |
Dec. 07, 2018
USD ($)
|
---|---|
Poage Bankshares, Inc. | |
Business Acquisition [Line Items] | |
Contractually required principal and interest | $ 25,315 |
Contractual cash flows not expected to be collected (non-accretable difference) | (13,593) |
Expected cash flows | 11,722 |
Interest component of expected cash flows (accretable difference) | (2,375) |
Carrying value of purchased credit-impaired loans acquired | 9,347 |
Poage and Farmers | |
Business Acquisition [Line Items] | |
Outstanding balance | 354,374 |
Less: fair value adjustment | (846) |
Carrying value of acquired noncredit-impaired loans | $ 353,528 |
Acquisitions and Preliminary Purchase Price Allocation Acquisitions and Preliminary Purchase Price Allocation Goodwill Rollforward (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at December 31, 2018 | $ 109,567 |
Balance at June 30, 2019 | 109,015 |
Poage Bankshares, Inc. | |
Goodwill [Roll Forward] | |
Adjustment to goodwill acquired | (522) |
Farmers Deposit Bancorp, Inc. | |
Goodwill [Roll Forward] | |
Adjustment to goodwill acquired | $ (30) |
Investments (Gross Gains And Losses Realized) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Investments [Abstract] | ||||
Gross realized gains on securities sold | $ 21 | $ 0 | $ 110 | $ 0 |
Gross realized losses on securities sold | 0 | 0 | (1) | 0 |
Net investment security gains | 21 | 0 | 109 | 0 |
Equity Securities, FV-NI, Unrealized Gain | 97 | 492 | 241 | 772 |
Equity Securities, FV-NI, Unrealized Loss | 16 | 0 | (53) | 0 |
Net unrealized gains (losses) recognized on equity securities still held | $ 113 | $ 492 | $ 188 | $ 772 |
Allowance For Loan Losses (Narrative) (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Financing Receivable, Impaired [Line Items] | ||
Threshold Period for Discontinuance of Interest Accrual | 90 days | 90 days |
Past due threshold in days | 30 days | 30 days |
Interest income | $ 100,000 | $ 100,000 |
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend | $ 0 | |
Residential real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Threshold period past due for write-off of financing receivable | 120 days | 120 days |
Commercial Industrial Loans And Commercial Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Threshold period past due for write-off of financing receivable | 120 days | 120 days |
Consumer | ||
Financing Receivable, Impaired [Line Items] | ||
Threshold period past due for write-off of financing receivable | 180 days | 180 days |
Derivative Instruments (Fair Value Of Derivative Instruments) (Details) - Non-hedging interest rate derivatives: - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Customer Counterparties Loan Interest Rate Swap Assets | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | $ 384,643 | $ 132,146 |
Derivative, Fair Value | 16,275 | 3,131 |
Customer Counterparties Loan Interest Rate Swap Liabilities | Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 95,486 | 372,223 |
Derivative, Fair Value | 1,838 | 13,774 |
Financial Institution Counterparties Loan Interest Rate Swap Asset | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 95,486 | 403,500 |
Derivative, Fair Value | 1,838 | 13,902 |
Financial Institution Counterparties Loan Interest Rate Swap Liabilities | Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 390,054 | 132,146 |
Derivative, Fair Value | $ 16,303 | $ 3,131 |
Derivative Instruments (Change In Fair Value Of Derivative Instruments) (Details) - Non-hedging interest rate derivatives: - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Other Assets | Other Income [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments | $ 5,128 | $ 2,737 | $ 2,249 | $ 9,838 |
Other Liabilities | Other Income [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments | (5,128) | (2,737) | (2,249) | (9,838) |
Other Liabilities | Other Expense | ||||
Derivatives, Fair Value [Line Items] | ||||
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments | $ 97 | $ 33 | $ 154 | $ 123 |
Derivative Instruments Derivative Instruments (Narrative) (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Derivative [Line Items] | |
Collateral Already Posted, Aggregate Fair Value | $ 15.6 |
Employee Benefit Plans (Restricted Shares Activity And Related Information) (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense associated with restricted shares | $ 935 | $ 787 |
Unrecognized stock-based compensation expense associated with restricted shares | $ 5,349 | |
Weighted average period (in years) in which the above amount is expected to be recognized | 3 years 6 months | |
Restricted Awards, Number of Awards [Roll Forward] | ||
Beginning Balance | 152,692 | 170,033 |
Granted | 31,006 | 28,363 |
Vested | (41,657) | (47,104) |
Ending Balance | 142,041 | 151,292 |
Restricted Awards, Number of Awards, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at January 1 | $ 51.85 | $ 44.34 |
Granted | 79.86 | 70.03 |
Vested | 39.79 | 37.45 |
Outstanding at June 30 | $ 61.50 | $ 51.30 |
Employee Benefit Plans (Pension and Other Postretirement Benefits) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Components of net periodic cost: | ||||
Interest cost | $ 140 | $ 147 | $ 280 | $ 295 |
Expected return on plan assets | (214) | (270) | (428) | (540) |
Net amortization and deferral | 229 | 218 | 459 | 436 |
Settlement | 0 | 151 | 0 | 151 |
Net Periodic Pension Cost | $ 155 | $ 246 | $ 311 | $ 342 |
Commitments and Contingencies Commitements and Contingencies (Narrative) (Details) $ / shares in Units, $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
$ / shares
shares
| |
VISA Class B Conversion Ratio | 1.6298 |
Common Class B [Member] | VISA, Inc. (VISA) [Member] | |
Investment Owned, Balance, Shares | shares | 86,605 |
Common Class A [Member] | VISA, Inc. (VISA) [Member] | |
Share Price | $ / shares | $ 173.55 |
Investment Owned, at Fair Value | $ | $ 24.5 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Commitments to extend credit: | Home equity | ||
Other Commitments [Line Items] | ||
Contractual obligations | $ 211,701 | $ 207,509 |
Commitments to extend credit: | Commercial real estate | ||
Other Commitments [Line Items] | ||
Contractual obligations | 100,215 | 68,649 |
Commitments to extend credit: | Other commitments | ||
Other Commitments [Line Items] | ||
Contractual obligations | 208,847 | 201,687 |
Standby letters of credit | ||
Other Commitments [Line Items] | ||
Contractual obligations | 6,789 | 7,183 |
Commercial letters of credit | ||
Other Commitments [Line Items] | ||
Contractual obligations | $ 1,058 | $ 811 |
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Combined Federal And State Income Tax Rate | 23.00% | 23.00% | 23.00% | 23.00% |
New Accounting Pronouncement | $ 0 | |||
Accounting Standards Update 2016-01 | ||||
New Accounting Pronouncement | $ (2,700) |
Accumulated Other Comprehensive Loss Schedule Of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net securities gains reclassified into earnings | $ 297 | $ 772 | ||
Related income tax expense | $ (5,813) | $ (5,358) | (11,623) | (9,763) |
Net income available to common shareholders | 22,751 | 20,979 | 44,370 | 38,590 |
Unrealized Gain (Losses) on Securities Available-for-Sale | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net securities gains reclassified into earnings | 21 | 0 | 109 | 0 |
Related income tax expense | 5 | 0 | (25) | 0 |
Net income available to common shareholders | $ (16) | $ 0 | $ 84 | $ 0 |
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative Credit Risk Valuation Adjustment, Derivative Assets | $ 0 | $ 0 | $ 0 |
Derivative Credit Risk Valuation Adjustment, Derivative Liabilities | $ 0 | $ 0 | $ 0 |
Minimum | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Collateral discount | 20.00% | 20.00% | 20.00% |
Maximum | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Collateral discount | 30.00% | 30.00% | 30.00% |
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