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.) | |||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| ||||||||||||||
Large Accelerated Filer | ☐ | ☒ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
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52 | |||||
53 | |||||
PART II. OTHER INFORMATION | |||||
54 | |||||
54 | |||||
55 | |||||
55 | |||||
55 | |||||
55 | |||||
56 | |||||
57 |
(unaudited) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Interest bearing deposits with other banks | |||||||||||
Total cash and cash equivalents | |||||||||||
Securities available for sale | |||||||||||
Trading securities | |||||||||||
Loans held for sale | |||||||||||
Loans | |||||||||||
Less: unearned discount | ( | ( | |||||||||
Less: allowance for loan losses | ( | ( | |||||||||
Net loans | |||||||||||
FHLB, other equity, and restricted equity interests | |||||||||||
Premises and equipment, net | |||||||||||
Operating lease assets | |||||||||||
Bank owned life insurance | |||||||||||
Mortgage servicing rights | |||||||||||
Goodwill | |||||||||||
Core deposit intangible | |||||||||||
Accrued interest receivable and other assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Non-interest bearing deposits | $ | $ | |||||||||
Interest bearing deposits | |||||||||||
Total deposits | |||||||||||
FHLB and other long term borrowings | |||||||||||
Subordinated debentures | |||||||||||
Operating lease liabilities | |||||||||||
Accrued interest payable and other liabilities | |||||||||||
Total liabilities | |||||||||||
Preferred stock, Series A non-cumulative perpetual, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost ( | ( | ( | |||||||||
Accumulated other comprehensive income (loss) | |||||||||||
Total shareholders’ equity | |||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ | |||||||||
Three Months Ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
INTEREST AND DIVIDEND INCOME: | |||||||||||||||||||||||
Loans including fees | $ | $ | $ | $ | |||||||||||||||||||
Securities: | |||||||||||||||||||||||
Taxable | |||||||||||||||||||||||
Tax-exempt | |||||||||||||||||||||||
Dividends | |||||||||||||||||||||||
Total interest and dividend income | |||||||||||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Borrowed funds | |||||||||||||||||||||||
Subordinated debentures (includes $ | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
NET INTEREST INCOME | |||||||||||||||||||||||
PROVISION FOR LOAN LOSSES | |||||||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | |||||||||||||||||||||||
NON-INTEREST INCOME: | |||||||||||||||||||||||
Service charges on deposit accounts | |||||||||||||||||||||||
Other service charges and fees | |||||||||||||||||||||||
Wealth and asset management fees | |||||||||||||||||||||||
Net realized gains on available-for-sale securities (includes $ | |||||||||||||||||||||||
Net realized and unrealized gains (losses) on trading securities | ( | ||||||||||||||||||||||
Mortgage banking | |||||||||||||||||||||||
Bank owned life insurance | |||||||||||||||||||||||
Card processing and interchange income | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total non-interest income | |||||||||||||||||||||||
NON-INTEREST EXPENSES: | |||||||||||||||||||||||
Salaries and benefits | |||||||||||||||||||||||
Net occupancy expense | |||||||||||||||||||||||
Amortization of core deposit intangible | |||||||||||||||||||||||
Data processing | |||||||||||||||||||||||
State and local taxes | |||||||||||||||||||||||
Legal, professional, and examination fees | |||||||||||||||||||||||
Advertising | |||||||||||||||||||||||
FDIC insurance premiums | |||||||||||||||||||||||
Card processing and interchange expenses | |||||||||||||||||||||||
Merger costs, prepayment penalties and branch closure costs | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total non-interest expenses | |||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||
INCOME TAX EXPENSE (includes $( | |||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
EARNINGS PER COMMON SHARE: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
DIVIDENDS PER COMMON SHARE: | |||||||||||||||||||||||
Cash dividends per share | $ | $ | $ | $ | |||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Net change in fair value of interest rate swap agreements designated as cash flow hedges: | |||||||||||||||||||||||
Unrealized gain (loss) on interest rate swaps, net of tax $( | ( | ( | ( | ||||||||||||||||||||
Reclassification adjustment for losses recognized in earnings, net of tax $( | |||||||||||||||||||||||
( | ( | ( | |||||||||||||||||||||
Net change in unrealized gains on securities available for sale: | |||||||||||||||||||||||
Unrealized holding gains (losses) arising during the period, net of tax of $ | ( | ||||||||||||||||||||||
Reclassification adjustment for realized gains included in net income, net of tax of $ | ( | ( | |||||||||||||||||||||
( | |||||||||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||||||||
COMPREHENSIVE INCOME | $ | $ | $ | $ | |||||||||||||||||||
Nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
Provision for loan losses | |||||||||||
Depreciation and amortization of premises and equipment, operating leases assets, core deposit intangible, and mortgage servicing rights | |||||||||||
Amortization and accretion of securities premiums and discounts, deferred loan fees and costs, net yield and credit mark on acquired loans, and unearned income | ( | ( | |||||||||
Amortization and accretion of deferred PPP processing fees | ( | ||||||||||
Net realized gains on sales of available-for-sale securities | ( | ( | |||||||||
Net realized and unrealized (gains) losses on trading securities | ( | ||||||||||
Gain on sale of loans | ( | ( | |||||||||
Net losses (gains) on dispositions of premises and equipment and foreclosed assets | ( | ||||||||||
Proceeds from sale of loans | |||||||||||
Origination of loans held for sale | ( | ( | |||||||||
Income on bank owned life insurance | ( | ( | |||||||||
Stock-based compensation expense | |||||||||||
Changes in: | |||||||||||
Accrued interest receivable and other assets | ( | ( | |||||||||
Accrued interest payable, lease liabilities, and other liabilities | ( | ( | |||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Proceeds from maturities, prepayments and calls of available-for-sale securities | |||||||||||
Proceeds from sales of available-for-sale securities | |||||||||||
Purchase of available-for-sale securities | ( | ( | |||||||||
Proceeds from sale of trading securities | |||||||||||
Purchase of trading securities | ( | ( | |||||||||
Loan origination and payments, net | ( | ( | |||||||||
Net cash from business combinations | |||||||||||
Redemption (purchase) of FHLB, other equity, and restricted equity interests | ( | ||||||||||
Purchase of premises and equipment | ( | ( | |||||||||
Proceeds from the sale of premises and equipment and foreclosed assets | |||||||||||
NET CASH USED BY INVESTING ACTIVITIES | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Net change in: | |||||||||||
Checking, money market and savings accounts | |||||||||||
Certificates of deposit | ( | ( | |||||||||
Purchase of treasury stock | ( | ( | |||||||||
Cash dividends paid, common stock | ( | ( | |||||||||
Proceeds from common stock offering, net of issuance costs | |||||||||||
Proceeds from preferred stock offering, net of issuance costs | |||||||||||
Repayment of long-term borrowings | ( | ( | |||||||||
Proceeds from long-term borrowings | |||||||||||
Net change in short-term borrowings | |||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | |||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | |||||||||||
CASH AND CASH EQUIVALENTS, Beginning | |||||||||||
CASH AND CASH EQUIVALENTS, Ending | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | |||||||||||
SUPPLEMENTAL NONCASH DISCLOSURES: | |||||||||||
Transfers to other real estate owned | $ | $ | |||||||||
Grant of restricted stock awards from treasury stock | |||||||||||
Grant of performance based restricted stock awards from treasury stock | |||||||||||
Right of use assets obtained in exchange for lease liabilities | |||||||||||
Preferred Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Share- holders’ Equity | ||||||||||||||||||||||||||||||
Balance, July 1, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Other comprehensive income | ( | ( | |||||||||||||||||||||||||||||||||
Restricted stock award grants ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs | ( | ( | |||||||||||||||||||||||||||||||||
Purchase of treasury stock ( | ( | ( | |||||||||||||||||||||||||||||||||
Issuance of preferred equity, net of issuance costs | |||||||||||||||||||||||||||||||||||
Acquisition of Bank of Akron | |||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | |||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Balance, July 1, 2019 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Forfeiture of restricted stock award grants ( | ( | ( | |||||||||||||||||||||||||||||||||
Performance based restricted stock award grants ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Purchase of treasury stock for the purpose of tax withholding related to restricted stock award vesting ( | ( | ( | |||||||||||||||||||||||||||||||||
Purchase of treasury stock for the purpose of tax withholding related to performance based restricted stock award vesting ( | ( | ( | |||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | |||||||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Preferred Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Share- holders’ Equity | ||||||||||||||||||||||||||||||
Balance, January 1, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Restricted stock award grants ( | ( | ||||||||||||||||||||||||||||||||||
Performance based restricted stock award grants ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs ( | |||||||||||||||||||||||||||||||||||
Purchase of treasury stock ( | ( | ( | |||||||||||||||||||||||||||||||||
Purchase of treasury stock for the purpose of tax withholding related to restricted stock award vesting ( | ( | ( | |||||||||||||||||||||||||||||||||
Purchase of treasury stock for the purpose of tax withholding related to performance based restricted stock award vesting ( | ( | ( | |||||||||||||||||||||||||||||||||
Issuance of preferred equity, net of issuance costs | |||||||||||||||||||||||||||||||||||
Acquisition of Bank of Akron | |||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | |||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Balance, January 1, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Forfeiture of restricted stock award grants ( | ( | ( | |||||||||||||||||||||||||||||||||
Restricted stock award grants ( | ( | ||||||||||||||||||||||||||||||||||
Performance based restricted stock award grants ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Purchase of treasury stock ( | ( | ( | |||||||||||||||||||||||||||||||||
Purchase of treasury stock for the purpose of tax withholding related to restricted stock award vesting ( | ( | ( | |||||||||||||||||||||||||||||||||
Purchase of treasury stock for the purpose of tax withholding related to restricted stock award vesting ( | ( | ( | |||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | |||||||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
July 17, 2020 | |||||
Merger consideration | |||||
Value of stock consideration assigned to Akron common shares exchanged for stock paid to shareholders | $ | ||||
Value of cash consideration for Akron common stock exchanged for cash | |||||
Total merger consideration | $ |
July 17, 2020 | |||||
Identifiable net assets acquired, at fair value | |||||
Assets acquired | |||||
Cash and due from banks | $ | ||||
Interest bearing deposits with other banks | |||||
Investment securities | |||||
Loans | |||||
Premises and equipment, net | |||||
Core deposit intangible | |||||
Deferred tax assets | |||||
Bank owned life insurance | |||||
Accrued interest receivable and other assets | |||||
Total assets acquired | $ | ||||
Liabilities assumed | |||||
Deposits | $ | ||||
Accrued interest payable and other liabilities | |||||
Total liabilities assumed | |||||
Total fair value of identifiable net assets | |||||
Total merger consideration | |||||
Goodwill recognized | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||
Net interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Amortized | Unrealized | Fair | Amortized | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||||||||
Cost | Gains | Losses | Value | Cost | Gains | Losses | Value | ||||||||||||||||||||||||||||||||||||||||
U.S. Gov’t sponsored entities | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
State & political subdivisions | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Residential & multi-family mortgage | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Corporate notes & bonds | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Pooled SBA | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Corporate equity securities | $ | $ | |||||||||
Mutual funds | |||||||||||
Certificates of deposit | |||||||||||
Corporate notes and bonds | |||||||||||
U.S. Government sponsored entities | |||||||||||
Total | $ | $ |
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||||||||||||||
U.S. Gov’t sponsored entities | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
State & political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Residential & multi-family mortgage | ( | ( | ( | ||||||||||||||||||||||||||||||||
Corporate notes & bonds | ( | ( | ( | ||||||||||||||||||||||||||||||||
Pooled SBA | ( | ( | |||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( | $ | $ | ( |
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||
U.S. Gov’t sponsored entities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
State & political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Residential & multi-family mortgage | ( | ( | ( | ||||||||||||||||||||||||||||||||
Corporate notes & bonds | ( | ( | |||||||||||||||||||||||||||||||||
Pooled SBA | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( | $ | $ | ( |
Amortized Cost | Fair Value | ||||||||||
1 year or less | $ | $ | |||||||||
1 year – 5 years | |||||||||||
5 years – 10 years | |||||||||||
After 10 years | |||||||||||
Residential & multi-family mortgage | |||||||||||
Pooled SBA | |||||||||||
Other | |||||||||||
Total debt securities | $ | $ |
Proceeds | Gross Gains | Gross Losses | |||||||||||||||
Three months ended September 30, 2020 | $ | $ | $ | ||||||||||||||
Three months ended September 30, 2019 | $ | $ | $ | ||||||||||||||
Nine months ended September 30, 2020 | $ | $ | $ | ||||||||||||||
Nine months ended September 30, 2019 | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Commercial, industrial and agricultural | $ | $ | |||||||||
Commercial mortgages | |||||||||||
Residential real estate | |||||||||||
Consumer | |||||||||||
Credit cards | |||||||||||
Overdrafts | |||||||||||
Less: unearned discount | ( | ( | |||||||||
allowance for loan losses | ( | ( | |||||||||
Loans, net | $ | $ |
Commercial, Industrial and Agricultural | Commercial Mortgages | Residential Real Estate | Consumer | Credit Cards | Overdrafts | Total | |||||||||||||||||||||||||||||||||||
Allowance for loan losses, July 1, 2020 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ( | ||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses, September 30, 2020 | $ | $ | $ | $ | $ | $ | $ |
Commercial, Industrial and Agricultural | Commercial Mortgages | Residential Real Estate | Consumer | Credit Cards | Overdrafts | Total | |||||||||||||||||||||||||||||||||||
Allowance for loan losses, January 1, 2020 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision for loan losses | |||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses, September 30, 2020 | $ | $ | $ | $ | $ | $ | $ |
Commercial, Industrial and Agricultural | Commercial Mortgages | Residential Real Estate | Consumer | Credit Cards | Overdrafts | Total | |||||||||||||||||||||||||||||||||||
Allowance for loan losses, July 1, 2019 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for loan losses | |||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses, September 30, 2019 | $ | $ | $ | $ | $ | $ | $ |
Commercial, Industrial and Agricultural | Commercial Mortgages | Residential Real Estate | Consumer | Credit Cards | Overdrafts | Total | |||||||||||||||||||||||||||||||||||
Allowance for loan losses, January 1, 2019 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for loan losses | ( | ||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses, September 30, 2019 | $ | $ | $ | $ | $ | $ | $ |
Commercial, Industrial and Agricultural | Commercial Mortgages | Residential Real Estate | Consumer | Credit Cards | Overdrafts | Total | |||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | |||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||||||||||||||||||||||
Modified in a troubled debt restructuring | |||||||||||||||||||||||||||||||||||||||||
Total ending allowance balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||||||||||||||||||||||
Modified in a troubled debt restructuring | |||||||||||||||||||||||||||||||||||||||||
Total ending loans balance | $ | $ | $ | $ | $ | $ | $ |
Commercial, Industrial and Agricultural | Commercial Mortgages | Residential Real Estate | Consumer | Credit Cards | Overdrafts | Total | |||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | |||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||||||||||||||||||||||
Modified in a troubled debt restructuring | |||||||||||||||||||||||||||||||||||||||||
Total ending allowance balance | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||||
Acquired with deteriorated credit quality | |||||||||||||||||||||||||||||||||||||||||
Modified in a troubled debt restructuring | |||||||||||||||||||||||||||||||||||||||||
Total ending loans balance | $ | $ | $ | $ | $ | $ | $ |
Unpaid Principal Balance | Recorded Investment | Allowance for Loan Losses Allocated | |||||||||||||||
With an allowance recorded: | |||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | ||||||||||||||
Commercial mortgage | |||||||||||||||||
Residential real estate | |||||||||||||||||
With no related allowance recorded: | |||||||||||||||||
Commercial, industrial and agricultural | 0 | ||||||||||||||||
Commercial mortgage | 0 | ||||||||||||||||
Residential real estate | 0 | ||||||||||||||||
Total | $ | $ | $ |
Unpaid Principal Balance | Recorded Investment | Allowance for Loan Losses Allocated | |||||||||||||||
With an allowance recorded: | |||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | ||||||||||||||
Commercial mortgage | |||||||||||||||||
Residential real estate | |||||||||||||||||
With no related allowance recorded: | |||||||||||||||||
Commercial, industrial and agricultural | 0 | ||||||||||||||||
Commercial mortgage | 0 | ||||||||||||||||
Residential real estate | 0 | ||||||||||||||||
Total | $ | $ | $ |
Three months ended September 30, 2020 | Three months ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Average Recorded Investment | Interest Income Recognized | Cash Basis Interest Recognized | Average Recorded Investment | Interest Income Recognized | Cash Basis Interest Recognized | ||||||||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial mortgage | $ | $ | $ | ||||||||||||||||||||||||||||||||
Residential real estate | $ | $ | $ | ||||||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial mortgage | $ | $ | $ | ||||||||||||||||||||||||||||||||
Residential real estate | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Nine months ended September 30, 2020 | Nine months ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Average Recorded Investment | Interest Income Recognized | Cash Basis Interest Recognized | Average Recorded Investment | Interest Income Recognized | Cash Basis Interest Recognized | ||||||||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial mortgage | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||||||||||
Commercial, industrial and agricultural | |||||||||||||||||||||||||||||||||||
Commercial mortgage | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Nonaccrual | Past Due Over 90 Days Still on Accrual | Nonaccrual | Past Due Over 90 Days Still on Accrual | ||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | |||||||||||||||||||
Commercial mortgages | |||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Credit cards | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 89 Days Past Due | Total Past Due | Loans Not Past Due | Total | ||||||||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial mortgages | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Credit cards | |||||||||||||||||||||||||||||||||||
Overdrafts | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 89 Days Past Due | Total Past Due | Loans Not Past Due | Total | ||||||||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial mortgages | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Credit cards | |||||||||||||||||||||||||||||||||||
Overdrafts | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Number of Loans | Loan Balance | Specific Reserve | Number of Loans | Loan Balance | Specific Reserve | ||||||||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Commercial mortgages | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Credit cards | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three months ended September 30, 2020 | |||||||||||||||||
Number of Loans | Pre-Modification Outstanding Recorded Investment Balance | Post-Modification Outstanding Recorded Investment Reserve | |||||||||||||||
Commercial, industrial and agricultural | $ | $ | |||||||||||||||
Commercial mortgages | |||||||||||||||||
Residential real estate | |||||||||||||||||
Consumer | |||||||||||||||||
Credit cards | |||||||||||||||||
Total | $ | $ |
Nine months ended September 30, 2020 | |||||||||||||||||
Number of Loans | Pre-Modification Outstanding Recorded Investment Balance | Post-Modification Outstanding Recorded Investment Reserve | |||||||||||||||
Commercial, industrial and agricultural | $ | $ | |||||||||||||||
Commercial mortgages | |||||||||||||||||
Residential real estate | |||||||||||||||||
Consumer | |||||||||||||||||
Credit cards | |||||||||||||||||
Total | $ | $ |
Three and nine months ended September 30, 2019 | |||||||||||||||||
Number of Loans | Pre-Modification Outstanding Recorded Investment Balance | Post-Modification Outstanding Recorded Investment Reserve | |||||||||||||||
Commercial, industrial and agricultural | $ | $ | |||||||||||||||
Commercial mortgages | |||||||||||||||||
Residential real estate | |||||||||||||||||
Consumer | |||||||||||||||||
Credit cards | |||||||||||||||||
Total | $ | $ |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial mortgages | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial mortgages | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Residential Real Estate | Consumer | Credit Cards | Residential Real Estate | Consumer | Credit Cards | ||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Consumer | $ | $ | |||||||||
Less: unearned discount | ( | ( | |||||||||
Total | $ | $ |
Leases | Classification | September 30, 2020 | December 31, 2019 | |||||||||||||||||
Assets: | ||||||||||||||||||||
Operating lease assets | Operating lease assets | $ | $ | |||||||||||||||||
Finance lease assets | Premises and equipment, net (1) | |||||||||||||||||||
Total leased assets | $ | $ | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Operating lease liabilities | Operating lease liabilities | $ | $ | |||||||||||||||||
Finance lease liabilities | Accrued interest payable and other liabilities | |||||||||||||||||||
Total leased liabilities | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
Lease Cost | Classification | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||
Operating lease cost | Net occupancy expense | $ | $ | $ | $ | |||||||||||||||||||||||||||
Variable lease cost | Net occupancy expense | |||||||||||||||||||||||||||||||
Finance lease cost: | ||||||||||||||||||||||||||||||||
Amortization of leased assets | Net occupancy expense | |||||||||||||||||||||||||||||||
Interest on lease liabilities | Interest expense - borrowed funds | |||||||||||||||||||||||||||||||
Sublease income (1) | Net occupancy expense | ( | ( | ( | ( | |||||||||||||||||||||||||||
Net lease cost | $ | $ | $ | $ |
Maturity of Lease Liabilities as of September 30, 2020 | Operating Leases | Finance Leases | Total | |||||||||||||||||
2020 | $ | $ | $ | |||||||||||||||||
2021 | ||||||||||||||||||||
2022 | ||||||||||||||||||||
2023 | ||||||||||||||||||||
2024 | ||||||||||||||||||||
After 2024 | ||||||||||||||||||||
Total lease payments | ||||||||||||||||||||
Less: Interest | ||||||||||||||||||||
Present value of lease liabilities | $ | $ | $ |
Lease Term and Discount Rate | September 30, 2020 | December 31, 2019 | ||||||||||||
Weighted-average remaining lease term (years) | ||||||||||||||
Operating leases | ||||||||||||||
Finance leases | ||||||||||||||
Weighted-average discount rate | ||||||||||||||
Operating leases | % | % | ||||||||||||
Finance leases | % | % |
Other Information | September 30, 2020 | September 30, 2019 | ||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||
Operating cash flows from operating leases | $ | $ |
September 30, 2020 | December 31, 2019 | Percentage Change | |||||||||||||||
Checking, non-interest bearing | $ | $ | % | ||||||||||||||
Checking, interest bearing | % | ||||||||||||||||
Savings accounts | % | ||||||||||||||||
Certificates of deposit | % | ||||||||||||||||
Total | $ | $ | % |
Shares | Per Share Weighted Average Grant Date Fair Value | ||||||||||
Nonvested at beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Nonvested at end of period | $ |
Shares | Per Share Weighted Average Grant Date Fair Value | ||||||||||
Nonvested at beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Nonvested at end of period | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Basic earnings per common share computation: | |||||||||||||||||||||||
Net income per consolidated statements of income | $ | $ | $ | $ | |||||||||||||||||||
Net earnings allocated to participating securities | ( | ( | ( | ( | |||||||||||||||||||
Net earnings allocated to common stock | $ | $ | $ | $ | |||||||||||||||||||
Distributed earnings allocated to common stock | $ | $ | $ | $ | |||||||||||||||||||
Undistributed earnings allocated to common stock | |||||||||||||||||||||||
Net earnings allocated to common stock | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding, including shares considered participating securities | |||||||||||||||||||||||
Less: Average participating securities | ( | ( | ( | ( | |||||||||||||||||||
Weighted average shares | |||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share computation: | |||||||||||||||||||||||
Net earnings allocated to common stock | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding for basic earnings per common share | |||||||||||||||||||||||
Add: Dilutive effects of performance based-shares | |||||||||||||||||||||||
Weighted average shares and dilutive potential common shares | |||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
Fair value as of | |||||||||||||||||
Balance Sheet Location | September 30, 2020 | December 31, 2019 | |||||||||||||||
Interest rate contracts | Accrued interest and other liabilities | $ | ( | $ | ( |
For the Three Months Ended September 30, 2020 | (a) | (b) | (c) | (d) | (e) | ||||||||||||||||||||||||
Interest rate contracts | $ | Interest expense – subordinated debentures | $ | ( | Other income | $ | |||||||||||||||||||||||
For the Nine Months Ended September 30, 2020 | (a) | (b) | (c) | (d) | (e) | ||||||||||||||||||||||||
Interest rate contracts | $ | ( | Interest expense – subordinated debentures | $ | ( | Other income | $ | ||||||||||||||||||||||
For the Three Months Ended September 30, 2019 | (a) | (b) | (c) | (d) | (e) | ||||||||||||||||||||||||
Interest rate contracts | $ | ( | Interest expense – subordinated debentures | $ | ( | Other income | $ | ||||||||||||||||||||||
For the Nine Months Ended September 30, 2019 | (a) | (b) | (c) | (d) | (e) | ||||||||||||||||||||||||
Interest rate contracts | $ | ( | Interest expense – subordinated debentures | $ | ( | Other income | $ |
Notional Amount | Weighted Average Maturity (in years) | Weighted Average Fixed Rate | Weighted Average Variable Rate | Fair Value | |||||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||||||||
3rd Party interest rate swaps | $ | % | 1 month LIBOR + 2.27% | $ | (a) | ||||||||||||||||||||||||||||||
Customer interest rate swaps | ( | % | 1 month LIBOR + 2.27% | ( | (b) | ||||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
3rd Party interest rate swaps | $ | % | 1 month LIBOR + 2.27% | $ | (a) | ||||||||||||||||||||||||||||||
Customer interest rate swaps | ( | % | 1 month LIBOR + 2.27% | ( | (b) |
Fair Value Measurements at September 30, 2020 Using: | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Securities Available For Sale: | |||||||||||||||||||||||
U.S. Government sponsored entities | $ | $ | $ | $ | |||||||||||||||||||
States and political subdivisions | |||||||||||||||||||||||
Residential and multi-family mortgage | |||||||||||||||||||||||
Corporate notes and bonds | |||||||||||||||||||||||
Pooled SBA | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Securities Available For Sale | $ | $ | $ | $ | |||||||||||||||||||
Interest Rate swaps | $ | $ | $ | $ | |||||||||||||||||||
Trading Securities: | |||||||||||||||||||||||
Corporate equity securities | $ | $ | $ | $ | |||||||||||||||||||
Mutual funds | |||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
Corporate notes and bonds | |||||||||||||||||||||||
U.S. Government sponsored entities | |||||||||||||||||||||||
Total Trading Securities | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Fair Value Measurements at December 31, 2019 Using: | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Securities Available For Sale: | |||||||||||||||||||||||
U.S. Government sponsored entities | $ | $ | $ | $ | |||||||||||||||||||
States and political subdivisions | |||||||||||||||||||||||
Residential and multi-family mortgage | |||||||||||||||||||||||
Corporate notes and bonds | |||||||||||||||||||||||
Pooled SBA | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Securities Available For Sale | $ | $ | $ | $ | |||||||||||||||||||
Interest Rate swaps | $ | $ | $ | $ | |||||||||||||||||||
Trading Securities: | |||||||||||||||||||||||
Corporate equity securities | $ | $ | $ | $ | |||||||||||||||||||
Mutual funds | |||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
Corporate notes and bonds | |||||||||||||||||||||||
U.S. Government sponsored entities | |||||||||||||||||||||||
Total Trading Securities | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | $ | ( | $ | $ | ( | $ |
States and Political Subdivisions | Residential & Multi-Family Mortgage | ||||||||||
Balance, January 1, 2020 | $ | $ | |||||||||
Purchases | |||||||||||
Total gains or (losses): | |||||||||||
Included in other comprehensive income (loss) | |||||||||||
Transfers out of Level 3 | $ | ( | |||||||||
Balance, September 30, 2020 | $ | $ |
Fair Value Measurements at September 30, 2020 Using: | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Impaired loans: | |||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | |||||||||||||||||||||
Commercial mortgages | $ | $ | |||||||||||||||||||||
Fair Value Measurements at December 31, 2019 Using | |||||||||||||||||||||||
Quoted Prices in | Significant | ||||||||||||||||||||||
Active Markets for | Significant Other | Unobservable | |||||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | |||||||||||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Impaired loans: | |||||||||||||||||||||||
Commercial, industrial and agricultural | $ | $ | |||||||||||||||||||||
Commercial mortgages | $ | $ |
Fair value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||||||||||||||||
Impaired loans – commercial, industrial and agricultural | $ | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability | ||||||||||||||||||||
Impaired loans – commercial mortgages | $ | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability |
Fair value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||||||||||||||||
Impaired loans – commercial, industrial and agricultural | $ | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability | ||||||||||||||||||||
Impaired loans – commercial mortgages | $ | Collateral based measurements | Discount to reflect current market conditions and ultimate collectability |
Carrying | Fair Value Measurement Using: | Total | |||||||||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||||||||
Trading securities | |||||||||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||||||||
Net loans | |||||||||||||||||||||||||||||
FHLB and other restricted interests | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||||||||||
Deposits | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
FHLB and other borrowings | ( | ( | ( | ||||||||||||||||||||||||||
Subordinated debentures | ( | ( | ( | ||||||||||||||||||||||||||
Interest rate swaps | ( | ( | ( | ||||||||||||||||||||||||||
Accrued interest payable | ( | ( | ( |
Carrying | Fair Value Measurement Using: | Total | |||||||||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||||||||
Trading securities | |||||||||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||||||||
Net loans | |||||||||||||||||||||||||||||
FHLB and other restricted interests | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||||||||||
Deposits | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
FHLB and other borrowings | ( | ( | ( | ||||||||||||||||||||||||||
Subordinated debentures | ( | ( | ( | ||||||||||||||||||||||||||
Interest rate swaps | ( | ( | ( | ||||||||||||||||||||||||||
Accrued interest payable | ( | ( | ( |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Non-interest Income | |||||||||||||||||||||||
Service charges on deposit accounts | $ | $ | $ | $ | |||||||||||||||||||
Wealth and asset management fees | |||||||||||||||||||||||
Mortgage banking (1) | |||||||||||||||||||||||
Card processing and interchange income | |||||||||||||||||||||||
Net gains (losses) on sales of securities (1) | |||||||||||||||||||||||
Other income | |||||||||||||||||||||||
Total non-interest income | $ | $ | $ | $ |
Nine months ending September 30, 2020 | Year ending December 31, 2019 | Nine months ending September 30, 2019 | |||||||||||||||
Balance at beginning of period | $ | 19,473 | $ | 19,704 | $ | 19,704 | |||||||||||
Charge-offs: | |||||||||||||||||
Commercial, industrial and agricultural | (2,710) | (205) | (160) | ||||||||||||||
Commercial mortgages | (522) | (3,391) | (2,652) | ||||||||||||||
Residential real estate | (231) | (386) | (282) | ||||||||||||||
Consumer | (1,310) | (2,200) | (1,609) | ||||||||||||||
Credit cards | (120) | (116) | (55) | ||||||||||||||
Overdrafts | (316) | (453) | (329) | ||||||||||||||
(5,209) | (6,751) | (5,087) | |||||||||||||||
Recoveries: | |||||||||||||||||
Commercial, industrial and agricultural | 40 | 17 | 13 | ||||||||||||||
Commercial mortgages | 177 | 124 | 66 | ||||||||||||||
Residential real estate | 67 | 73 | 72 | ||||||||||||||
Consumer | 126 | 154 | 132 | ||||||||||||||
Credit cards | 13 | 15 | 12 | ||||||||||||||
Overdraft deposit accounts | 135 | 113 | 83 | ||||||||||||||
558 | 496 | 378 | |||||||||||||||
Net charge-offs | (4,651) | (6,255) | (4,709) | ||||||||||||||
Provision for loan losses | 12,065 | 6,024 | 5,212 | ||||||||||||||
Balance at end of period | $ | 26,887 | $ | 19,473 | $ | 20,207 | |||||||||||
Loans, net of unearned | $ | 3,345,810 | $ | 2,804,035 | $ | 2,749,502 | |||||||||||
Allowance to net loans | 0.80 | % | 0.69 | % | 0.73 | % | |||||||||||
Net charge-offs to average loans (annualized) | 0.20 | % | 0.24 | % | 0.24 | % | |||||||||||
Nonperforming assets | $ | 27,986 | $ | 23,430 | $ | 16,832 | |||||||||||
Nonperforming % of total assets | 0.59 | % | 0.62 | % | 0.48 | % | |||||||||||
Allowance to net loans (1) (2) | 0.86 | % | 0.69 | % | 0.73 | % | |||||||||||
Net charge-offs to average loans (annualized) (1) | 0.21 | % | 0.24 | % | 0.24 | % | |||||||||||
Nonperforming % of total assets (1) | 0.65 | % | 0.62 | % | 0.48 | % | |||||||||||
(1) Excludes PPP-related assets | |||||||||||||||||
(2) Loans related to the Bank of Akron acquisition included $7.1 million in fair value credit discounts, net of amounts recognized in the third quarter 2020. The $7.1 million includes fair value general credit discounts and purchase credit impaired discounts. |
As Reported | Excluding PPP-related assets | As Reported | |||||||||||||||
September 30, 2020 | September 30, 2020 | December 31, 2019 | |||||||||||||||
Total risk-based capital ratio | 14.51 | % | 14.51 | % | 12.51 | % | |||||||||||
Tier 1 capital ratio | 12.05 | % | 12.05 | % | 10.03 | % | |||||||||||
Common equity tier 1 ratio | 9.57 | % | 9.57 | % | 9.32 | % | |||||||||||
Leverage ratio | 8.39 | % | 8.82 | % | 7.86 | % | |||||||||||
Tangible common equity/tangible assets (1) | 6.67 | % | 7.00 | % | 7.14 | % | |||||||||||
Book value per common share | $ | 21.28 | $ | 21.28 | $ | 20.00 | |||||||||||
Tangible book value per common share (1) | $ | 18.58 | $ | 18.58 | $ | 17.45 |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Fixed Rate | Variable Rate | Fixed Rate | Variable Rate | ||||||||||||||||||||
Commitments to make loans | $ | 46,578 | $ | 266,835 | $ | 21,375 | $ | 184,106 | |||||||||||||||
Unused lines of credit | 24,875 | 679,577 | 14,637 | 446,407 | |||||||||||||||||||
Standby letters of credit | 15,561 | 1,597 | 14,503 | 824 |
September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||||||||||||||||
Average Balance | Annual Rate | Interest Inc./Exp. | Average Balance | Annual Rate | Interest Inc./Exp. | |||||||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||||||||||
Securities: | ||||||||||||||||||||||||||||||||||||||
Taxable (1) | $ | 515,944 | 2.15 | % | $ | 2,677 | $ | 447,936 | 2.76 | % | $ | 3,056 | ||||||||||||||||||||||||||
Tax-Exempt (1,2) | 47,984 | 3.26 | % | 375 | 83,060 | 3.33 | % | 680 | ||||||||||||||||||||||||||||||
Equity Securities (1,2) | 12,329 | 5.84 | % | 181 | 18,533 | 6.27 | % | 293 | ||||||||||||||||||||||||||||||
Total securities | 576,257 | 2.32 | % | 3,233 | 549,529 | 2.97 | % | 4,029 | ||||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Commercial (2) | 1,322,390 | 4.34 | % | 14,436 | 1,011,725 | 5.28 | % | 13,477 | ||||||||||||||||||||||||||||||
Mortgage (2) | 1,863,421 | 4.79 | % | 22,417 | 1,567,186 | 5.13 | % | 20,248 | ||||||||||||||||||||||||||||||
Consumer | 98,039 | 9.84 | % | 2,426 | 104,779 | 10.06 | % | 2,657 | ||||||||||||||||||||||||||||||
Total loans (3) | 3,283,850 | 4.76 | % | 39,279 | 2,683,690 | 5.38 | % | 36,382 | ||||||||||||||||||||||||||||||
Other earning assets | 581,219 | 0.12 | % | 180 | 4,997 | 2.94 | % | 37 | ||||||||||||||||||||||||||||||
Total earning assets | 4,441,326 | 3.84 | % | $ | 42,692 | 3,238,216 | 4.97 | % | $ | 40,448 | ||||||||||||||||||||||||||||
Total earning assets, net of PPP-related assets | 3,920,422 | 3,238,216 | ||||||||||||||||||||||||||||||||||||
Non interest-bearing assets: | ||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 44,786 | 32,092 | ||||||||||||||||||||||||||||||||||||
Premises and equipment | 77,176 | 69,526 | ||||||||||||||||||||||||||||||||||||
Other assets | 177,120 | 137,546 | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (25,249) | (21,958) | ||||||||||||||||||||||||||||||||||||
Total non interest-bearing assets | 273,833 | 217,206 | ||||||||||||||||||||||||||||||||||||
TOTAL ASSETS | $ | 4,715,159 | $ | 3,455,422 | ||||||||||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||||||||||
Demand—interest-bearing | $ | 829,603 | 0.21 | % | $ | 429 | $ | 585,048 | 0.43 | % | $ | 630 | ||||||||||||||||||||||||||
Savings | 2,080,778 | 0.52 | % | 2,696 | 1,477,377 | 1.41 | % | 5,250 | ||||||||||||||||||||||||||||||
Time | 468,166 | 2.08 | % | 2,453 | 361,765 | 2.10 | % | 1,918 | ||||||||||||||||||||||||||||||
Total interest-bearing deposits | 3,378,547 | 0.66 | % | 5,578 | 2,424,190 | 1.28 | % | 7,798 | ||||||||||||||||||||||||||||||
Short-term borrowings | 0 | 0.00 | % | 0 | 38,702 | 2.43 | % | 237 | ||||||||||||||||||||||||||||||
Long-term borrowings | 246,321 | 1.89 | % | 1,172 | 210,189 | 2.19 | % | 1,162 | ||||||||||||||||||||||||||||||
Subordinated debentures | 70,620 | 5.31 | % | 942 | 70,620 | 5.54 | % | 987 | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 3,695,488 | 0.83 | % | $ | 7,692 | 2,743,701 | 1.47 | % | $ | 10,184 | ||||||||||||||||||||||||||||
Demand—non interest-bearing | 587,405 | 366,424 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 58,175 | 52,387 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 4,341,068 | 3,162,512 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 374,091 | 292,910 | ||||||||||||||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 4,715,159 | $ | 3,455,422 | ||||||||||||||||||||||||||||||||||
Interest income/Earning assets | 3.84 | % | $ | 42,692 | 4.97 | % | $ | 40,448 | ||||||||||||||||||||||||||||||
Interest expense/Interest-bearing liabilities | 0.83 | % | 7,692 | 1.47 | % | 10,184 | ||||||||||||||||||||||||||||||||
Net interest spread | 3.01 | % | $ | 35,000 | 3.50 | % | $ | 30,264 | ||||||||||||||||||||||||||||||
Interest income/Earning assets | 3.84 | % | 42,692 | 4.97 | % | 40,448 | ||||||||||||||||||||||||||||||||
Interest expense/Earning assets | 0.69 | % | 7,692 | 1.25 | % | 10,184 | ||||||||||||||||||||||||||||||||
Net interest margin | 3.15 | % | $ | 35,000 | 3.72 | % | $ | 30,264 | ||||||||||||||||||||||||||||||
Net interest margin, net of PPP-related assets | 3.50 | % | 3.72 | % |
September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||||||||||||||||
Average Balance | Annual Rate | Interest Inc./Exp. | Average Balance | Annual Rate | Interest Inc./Exp. | |||||||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||||||||||
Securities: | ||||||||||||||||||||||||||||||||||||||
Taxable (1) | $ | 498,475 | 2.50 | % | $ | 9,030 | $ | 430,757 | 2.81 | % | $ | 9,226 | ||||||||||||||||||||||||||
Tax-Exempt (1,2) | 58,041 | 3.35 | % | 1,402 | 88,581 | 3.41 | % | 2,226 | ||||||||||||||||||||||||||||||
Equity Securities (1,2) | 13,267 | 6.09 | % | 605 | 18,331 | 6.18 | % | 847 | ||||||||||||||||||||||||||||||
Total securities | 569,783 | 2.67 | % | 11,037 | 537,669 | 3.03 | % | 12,299 | ||||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Commercial (2) | 1,210,359 | 4.48 | % | 40,567 | 971,580 | 5.34 | % | 25,365 | ||||||||||||||||||||||||||||||
Mortgage (2) | 1,724,241 | 4.80 | % | 61,990 | 1,518,400 | 5.07 | % | 37,295 | ||||||||||||||||||||||||||||||
Consumer | 100,390 | 9.66 | % | 7,260 | 94,954 | 10.64 | % | 4,896 | ||||||||||||||||||||||||||||||
Total loans (3) | 3,034,990 | 4.88 | % | 109,817 | 2,584,934 | 5.38 | % | 67,556 | ||||||||||||||||||||||||||||||
Other earning assets | 346,896 | 0.27 | % | 697 | 6,418 | 4.40 | % | 211 | ||||||||||||||||||||||||||||||
Total earning assets | 3,951,669 | 4.13 | % | $ | 121,551 | 3,129,021 | 4.98 | % | $ | 116,236 | ||||||||||||||||||||||||||||
Total earning assets, net of PPP-related assets | 3,641,127 | 3,129,021 | ||||||||||||||||||||||||||||||||||||
Non interest-bearing assets: | ||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 40,412 | 32,434 | ||||||||||||||||||||||||||||||||||||
Premises and equipment | 74,786 | 68,009 | ||||||||||||||||||||||||||||||||||||
Other assets | 161,232 | 136,792 | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (22,760) | (20,804) | ||||||||||||||||||||||||||||||||||||
Total non interest-bearing assets | 253,670 | 216,431 | ||||||||||||||||||||||||||||||||||||
TOTAL ASSETS | $ | 4,205,339 | $ | 3,345,452 | ||||||||||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||||||||||
Demand—interest-bearing | $ | 718,408 | 0.25 | % | $ | 1,368 | $ | 576,816 | 0.43 | % | $ | 1,834 | ||||||||||||||||||||||||||
Savings | 1,854,490 | 0.78 | % | 10,876 | 1,402,286 | 1.37 | % | 14,344 | ||||||||||||||||||||||||||||||
Time | 434,991 | 2.20 | % | 7,174 | 360,631 | 2.00 | % | 5,408 | ||||||||||||||||||||||||||||||
Total interest-bearing deposits | 3,007,889 | 0.86 | % | 19,418 | 2,339,733 | 1.21 | % | 21,586 | ||||||||||||||||||||||||||||||
Short-term borrowings | 0 | 0.00 | % | 0 | 21,421 | 2.65 | % | 425 | ||||||||||||||||||||||||||||||
Long-term borrowings | 251,170 | 1.95 | % | 3,666 | 229,592 | 2.14 | % | 3,676 | ||||||||||||||||||||||||||||||
Subordinated debentures | 70,620 | 5.37 | % | 2,839 | 70,620 | 5.64 | % | 2,980 | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 3,329,679 | 1.04 | % | $ | 25,923 | 2,661,366 | 1.44 | % | $ | 28,667 | ||||||||||||||||||||||||||||
Demand—non interest-bearing | 479,414 | 355,799 | ||||||||||||||||||||||||||||||||||||
Other liabilities | 56,686 | 48,455 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 3,865,779 | 3,065,620 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 339,560 | 279,832 | ||||||||||||||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 4,205,339 | $ | 3,345,452 | ||||||||||||||||||||||||||||||||||
Interest income/Earning assets | 4.13 | % | $ | 121,551 | 4.98 | % | $ | 116,236 | ||||||||||||||||||||||||||||||
Interest expense/Interest-bearing liabilities | 1.04 | % | 25,923 | 1.44 | % | 28,667 | ||||||||||||||||||||||||||||||||
Net interest spread | 3.09 | % | $ | 95,628 | 3.54 | % | $ | 87,569 | ||||||||||||||||||||||||||||||
Interest income/Earning assets | 4.13 | % | 121,551 | 4.98 | % | 116,236 | ||||||||||||||||||||||||||||||||
Interest expense/Earning assets | 0.88 | % | 25,923 | 1.23 | % | 28,667 | ||||||||||||||||||||||||||||||||
Net interest margin | 3.25 | % | $ | 95,628 | 3.75 | % | $ | 87,569 | ||||||||||||||||||||||||||||||
Net interest margin, net of PPP-related assets | 3.50 | % | 3.75 | % |
Calculation of tangible book value per common share and tangible common equity/tangible assets: | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Shareholders’ equity | $ | $ | |||||||||
Less preferred equity | 57,760 | 0 | |||||||||
Less goodwill | |||||||||||
Less core deposit intangible | |||||||||||
Tangible common equity | $ | 312,773 | $ | 266,076 | |||||||
Total assets | $ | $ | |||||||||
Less goodwill | |||||||||||
Less core deposit intangible | |||||||||||
Tangible assets | $ | 4,689,105 | $ | 3,724,769 | |||||||
Ending shares outstanding | 16,833,090 | 15,247,985 | |||||||||
Tangible book value per common share | $ | 18.58 | $ | 17.45 | |||||||
Tangible common equity/tangible assets | 6.67 | % | 7.14 | % |
Calculation of tangible common equity/tangible assets, net of PPP-related loans and net of deferred PPP processing fees: | September 30, 2020 | December 31, 2019 | |||||||||
Tangible common equity | $ | 312,773 | $ | 266,076 | |||||||
Tangible assets | $ | 4,689,105 | $ | 3,724,769 | |||||||
Less: PPP-related loans, net of deferred PPP processing fees | 222,972 | 0 | |||||||||
Adjusted tangible assets | $ | 4,466,133 | $ | 3,724,769 | |||||||
Adjusted tangible common equity/tangible assets | 7.00 | % | 7.14 | % |
(unaudited) | (unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Calculation of average loans, net of unearned income and PPP-related loans, net of PPP deferred processing fees: | ||||||||||||||||||||
Average loans, net of unearned | $ | 3,283,850 | $ | 2,683,690 | $ | 3,034,990 | $ | 2,584,934 | ||||||||||||
Less: average PPP loans, net of deferred PPP processing fees | 220,488 | 0 | 132,385 | 0 | ||||||||||||||||
Adjusted average loans, net of unearned income and PPP (non-GAAP) | $ | 3,063,362 | $ | 2,683,690 | $ | 2,902,605 | $ | 2,584,934 | ||||||||||||
Calculation of average total earning assets, net of PPP-related assets: | ||||||||||||||||||||
Average total earning assets | $ | 4,441,326 | $ | 3,238,216 | $ | 3,951,669 | $ | 3,129,021 | ||||||||||||
Less: average PPP loans, net of deferred PPP processing fees | 220,488 | 0 | 132,385 | 0 | ||||||||||||||||
Less: estimated average PPP deposits held at the Federal Reserve | 228,938 | 0 | 135,254 | 0 | ||||||||||||||||
Less: average PPPLF deposits held at the Federal Reserve | 71,478 | 0 | 42,903 | 0 | ||||||||||||||||
Adjusted average total earning assets, net of PPP-related assets (non-GAAP) | $ | 3,920,422 | $ | 3,238,216 | $ | 3,641,127 | $ | 3,129,021 | ||||||||||||
Calculation of average total assets, net of PPP-related assets: | ||||||||||||||||||||
Average total assets | $ | 4,715,159 | $ | 3,455,422 | $ | 4,205,339 | $ | 3,345,452 | ||||||||||||
Less: average PPP loans, net of deferred PPP processing fees | 220,488 | 0 | 132,385 | 0 | ||||||||||||||||
Less: estimated average PPP deposits held at the Federal Reserve | 228,938 | 0 | 135,254 | 0 | ||||||||||||||||
Less: average PPPLF deposits held at the Federal Reserve | 71,478 | 0 | 42,903 | 0 | ||||||||||||||||
Adjusted average total assets, net of PPP-related assets (non-GAAP) | $ | 4,194,255 | $ | 3,455,422 | $ | 3,894,797 | $ | 3,345,452 | ||||||||||||
Calculation of average yield on earning assets, net of unearned income, PPP-related assets and PPP-related processing fees: | ||||||||||||||||||||
Investment income (tax equivalent) | $ | 3,233 | $ | 4,029 | $ | 11,037 | $ | 12,088 | ||||||||||||
Add: loan income (tax equivalent) | 39,279 | 36,382 | 109,817 | 103,937 | ||||||||||||||||
Add: other earning asset income (tax equivalent) | 180 | 37 | 697 | 211 | ||||||||||||||||
Less: PPP- related processing fees | 678 | 0 | 683 | 0 | ||||||||||||||||
Total income related to earning assets (tax equivalent) (non-GAAP) | $ | 42,014 | 40,448 | $ | 120,868 | $ | 116,236 | |||||||||||||
Adjusted average total earning assets, net of PPP-related assets (non-GAAP) | $ | 3,920,422 | $ | 3,238,216 | $ | 3,641,127 | $ | 3,129,021 | ||||||||||||
Less: average mark to market adjustment on investments (non-GAAP) | 21,859 | 10,770 | 18,589 | 3,446 | ||||||||||||||||
Adjusted average total earning assets, net of market to market, PPP-related assets (non-GAAP) | $ | 3,898,563 | $ | 3,227,446 | $ | 3,622,538 | 3,125,575 | |||||||||||||
Adjusted average yield on earning assets, net of unearned income, PPP-related assets and PPP-related processing fees (non-GAAP) (annualized) | 4.29 | % | 4.97 | % | 4.46 | % | 4.97 | % |
(unaudited) | (unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
Calculation of adjusted efficiency ratio, net of merger costs, prepayment penalties and branch closure costs: | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Non-interest expense | $ | 28,368 | $ | 21,444 | $ | 72,309 | $ | 64,603 | ||||||||||||
Less: core deposit intangible amortization | 26 | 139 | 178 | 470 |
Less: merger costs, prepayment penalties and branch closure costs | 4,673 | 0 | 5,207 | 0 | ||||||||||||||||
Adjusted non-interest expense (non-GAAP) | $ | 23,669 | $ | 21,305 | $ | 66,924 | $ | 64,133 | ||||||||||||
Non-interest income | $ | 6,778 | $ | 6,276 | $ | 20,091 | $ | 19,221 | ||||||||||||
Net interest income | $ | 34,664 | $ | 29,901 | $ | 94,596 | $ | 86,453 | ||||||||||||
Less: tax exempt investment and loan income, net of TEFRA (non-GAAP) | 1,375 | 1,733 | 4,351 | 5,058 | ||||||||||||||||
Add: tax exempt investment and loan income (non-GAAP) (tax-equivalent) | 1,792 | 2,194 | 5,730 | 6,797 | ||||||||||||||||
Adjusted net interest income (non-GAAP) | 35,081 | 30,362 | 95,975 | 88,192 | ||||||||||||||||
Adjusted net revenue (non-GAAP) (tax-equivalent) | $ | 41,859 | $ | 36,638 | $ | 116,066 | $ | 107,413 | ||||||||||||
Adjusted efficiency ratio, net of merger costs, prepayment penalties and branch closure costs | 56.54 | % | 58.15 | % | 57.66 | % | 59.71 | % | ||||||||||||
Calculation of adjusted return on average total assets, net of merger costs, prepayment penalties, branch closure costs and PPP-related assets: | ||||||||||||||||||||
Net Income | $ | 7,785 | $ | 10,357 | $ | 24,844 | $ | 29,597 | ||||||||||||
Add: merger costs, prepayment penalties and branch closure costs (net of tax) | 3,803 | 0 | 4,322 | 0 | ||||||||||||||||
Adjusted net income (non-GAAP)(net of tax) | $ | 11,588 | $ | 10,357 | $ | 29,166 | $ | 29,597 | ||||||||||||
Average total assets | $ | 4,715,159 | $ | 3,455,422 | $ | 4,205,339 | $ | 3,345,452 | ||||||||||||
Less: average PPP loans, net of deferred PPP processing fees | 220,488 | 0 | 132,385 | 0 | ||||||||||||||||
Less: average estimated PPP related deposits | 228,938 | 0 | 135,254 | 0 | ||||||||||||||||
Less: average PPPLF excess funds held at the Federal Reserve | 71,478 | 0 | 42,903 | 0 | ||||||||||||||||
Adjusted average total assets (non-GAAP) | $ | 4,194,255 | $ | 3,455,422 | $ | 3,894,797 | $ | 3,345,452 | ||||||||||||
Adjusted return on average total assets, net of merger costs, prepayment penalties, branch closure costs and PPP-related assets (non-GAAP)(annualized) | 1.10 | % | 1.19 | % | 1.00 | % | 1.18 | % | ||||||||||||
Calculation of adjusted return on average common equity, net of merger costs, prepayment penalties and branch closure costs: | ||||||||||||||||||||
Net Income | $ | 7,785 | $ | 10,357 | $ | 24,844 | $ | 29,597 | ||||||||||||
Add: merger costs, prepayment penalties and branch closure costs (net of tax) | 3,803 | 0 | 4,322 | 0 | ||||||||||||||||
Adjusted net income (non-GAAP)(net of tax) | $ | 11,588 | $ | 10,357 | $ | 29,166 | $ | 29,597 | ||||||||||||
Average shareholders' common equity | $ | 351,489 | $ | 292,910 | $ | 331,971 | $ | 279,832 | ||||||||||||
Adjusted return on average common equity, net of merger costs, prepayment penalties and branch closure costs (non-GAAP)(annualized) | 13.12 | % | 14.03 | % | 11.74 | % | 14.14 | % | ||||||||||||
Calculation of adjusted return on average tangible common equity, net of merger costs, prepayment penalties and branch closure costs: | ||||||||||||||||||||
Net Income | $ | 7,785 | $ | 10,357 | $ | 24,844 | $ | 29,597 | ||||||||||||
Add: merger costs, prepayment penalties and branch closure costs (net of tax) | 3,803 | 0 | 4,322 | 0 | ||||||||||||||||
Adjusted net income (non-GAAP)(net of tax) | $ | 11,588 | $ | 10,357 | $ | 29,166 | $ | 29,597 | ||||||||||||
Average tangible common shareholders' equity | $ | 307,257 | $ | 253,836 | $ | 291,333 | $ | 240,597 | ||||||||||||
Adjusted return on average tangible common equity, net of merger costs, prepayment penalties and branch closure costs (non-GAAP)(annualized) | 15.00 | % | 16.19 | % | 13.37 | % | 16.45 | % |
(unaudited) | (unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
Calculation of adjusted earnings per common share, net of merger costs, prepayment penalties and branch closure costs: | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Net earnings allocated to common stock | $ | 7,761 | $ | 10,320 | $ | 24,762 | $ | 29,483 | ||||||||||||
Add: Merger costs, prepayment penalties and branch closure costs, after-tax allocated to common stock | 3,793 | 0 | 4,308 | 0 | ||||||||||||||||
Adjusted net earnings allocated to common stock (non-GAAP) | $ | 11,554 | $ | 10,320 | $ | 29,070 | $ | 29,483 | ||||||||||||
Weighted average common shares outstanding | 16,616 | 15,197 | 15,785 | 15,218 | ||||||||||||||||
Less: Average participating shares | 47 | 51 | 50 | 58 | ||||||||||||||||
Add: Dilutive shares | 0 | 0 | 0 | 0 | ||||||||||||||||
Weighted average shares and dilutive potential common shares | 16,569 | 15,146 | 15,735 | 15,160 | ||||||||||||||||
Adjusted diluted earnings per common share, net of merger costs, prepayment penalties and branch closure costs | $ | 0.70 | $ | 0.68 | $ | 1.85 | $ | 1.94 | ||||||||||||
Calculation of income before provision and income tax expense (1): | ||||||||||||||||||||
Net income | $ | 7,785 | $ | 10,357 | $ | 24,844 | $ | 29,597 | ||||||||||||
Add: Provision expense | 3,306 | 2,118 | 12,065 | 5,212 | ||||||||||||||||
Add: Income tax expense | 1,983 | 2,258 | 5,469 | 6,262 | ||||||||||||||||
Net income before provision and income tax expense (non-GAAP) | $ | 13,074 | $ | 14,733 | $ | 42,378 | $ | 41,071 | ||||||||||||
Calculation of income before provision, income tax, merger costs, prepayment penalties and branch closure costs (1): | ||||||||||||||||||||
Net income before provision and income tax expense (non-GAAP) | $ | 13,074 | $ | 14,733 | $ | 42,378 | $ | 41,071 | ||||||||||||
Add: Merger costs, prepayment penalties and branch closure costs | 4,673 | 0 | 5,207 | 0 | ||||||||||||||||
Net income before provision, income tax, merger costs, prepayment penalties and branch closure costs (non-GAAP) | $ | 17,747 | $ | 14,733 | $ | 47,585 | $ | 41,071 | ||||||||||||
Calculation of non-interest expenses excluding merger costs, prepayment penalties and branch closure costs: | ||||||||||||||||||||
Non-interest expense | $ | 28,368 | $ | 21,444 | $ | 72,309 | $ | 64,603 | ||||||||||||
Less: Merger costs, prepayment penalties and branch closure costs | 4,673 | 0 | 5,207 | 0 | ||||||||||||||||
Non-interest expense excluding merger costs, prepayment penalties and branch closure costs (non-GAAP) | $ | 23,695 | $ | 21,444 | $ | 67,102 | $ | 64,603 | ||||||||||||
(1) Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation's ability to generate capital to cover credit losses through the credit cycle, and provides consistent reporting with a key metric used by bank regulatory agencies. |
(unaudited) | (unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Calculation of net interest margin (fully tax equivalent basis): | ||||||||||||||||||||
Interest income (fully tax equivalent basis) (non-GAAP) | $ | 42,692 | $ | 40,448 | $ | 121,551 | $ | 116,236 | ||||||||||||
Interest expense (fully tax equivalent basis) (non-GAAP) | 7,692 | 10,184 | 25,923 | 28,667 | ||||||||||||||||
Net interest income (fully tax equivalent basis) (non-GAAP) | $ | 35,000 | $ | 30,264 | $ | 95,628 | $ | 87,569 | ||||||||||||
Average total earning assets | $ | 4,441,326 | $ | 3,238,216 | $ | 3,951,669 | $ | 3,129,021 | ||||||||||||
Less: average mark to market adjustment on investments | 21,859 | 10,770 | 18,589 | 3,446 | ||||||||||||||||
Adjusted average total earning assets, net of mark to market (non-GAAP) | $ | 4,419,467 | $ | 3,227,446 | $ | 3,933,080 | $ | 3,125,575 | ||||||||||||
Net interest margin, fully tax equivalent basis (non-GAAP) (annualized) | 3.15 | % | 3.72 | % | 3.25 | % | 3.75 | % | ||||||||||||
Calculation of net interest margin (fully tax equivalent basis), net of PPP-related assets and PPP processing fees: | ||||||||||||||||||||
Net interest income (fully tax equivalent basis) (non-GAAP) | $ | 35,000 | $ | 30,264 | $ | 95,628 | $ | 87,569 | ||||||||||||
Less: Recognized PPP processing fees | 678 | 0 | 683 | 0 | ||||||||||||||||
Adjusted interest income (fully tax equivalent basis), net of PPP processing fees (non-GAAP) | $ | 34,322 | $ | 30,264 | $ | 94,945 | $ | 87,569 | ||||||||||||
Adjusted average total earning assets, net of market to market, PPP-related assets (non-GAAP) | $ | 3,898,563 | $ | 3,227,446 | $ | 3,622,538 | $ | 3,125,575 | ||||||||||||
Net interest margin, fully tax equivalent basis, net of PPP-related assets and PPP processing fees (non-GAAP) (annualized) | 3.50 | % | 3.72 | % | 3.50 | % | 3.75 | % |
(unaudited) | (unaudited) | ||||||||||
September 30, | December 31, | September 30, | |||||||||
2020 | 2019 | 2019 | |||||||||
Calculation of non-performing assets / Total assets, net of PPP-related assets: | |||||||||||
Non-performing assets | $ | 27,986 | $ | 23,430 | $ | 16,832 | |||||
Total assets | $ | 4,734,475 | $ | 3,763,659 | $ | 3,541,170 | |||||
Less: PPP-related loans, net of deferred PPP processing fees | 222,972 | 0 | 0 | ||||||||
Less: estimated PPP deposits held at the Federal Reserve | 231,484 | 0 | 0 | ||||||||
Adjusted total assets, net of PPP and PPPLF (non-GAAP) | $ | 4,280,019 | $ | 3,763,659 | $ | 3,541,170 | |||||
Adjusted non-performing assets / total assets, net of PPP-related assets (non-GAAP) | 0.65 | % | 0.62 | % | 0.48 | % | |||||
Calculation of allowance / loans, net of PPP-related loans and deferred PPP processing fees: | |||||||||||
Total allowance for loan losses | $ | 26,887 | $ | 19,473 | $ | 20,207 | |||||
Total loans net of unearned income | $ | 3,345,810 | $ | 2,804,035 | $ | 2,749,502 | |||||
Less: PPP-related loans, net of deferred PPP processing fees | 222,972 | 0 | 0 | ||||||||
Adjusted total loans, net of unearned income, PPP-related loans and deferred PPP processing fees (non-GAAP) | $ | 3,122,838 | $ | 2,804,035 | $ | 2,749,502 | |||||
Adjusted allowance / loans, net of PPP-related loans deferred PPP processing fees (non-GAAP) | 0.86 | % | 0.69 | % | 0.73 | % | |||||
September 30, 2020 | ||||||||
Change in Basis Points | % Change in Net Interest Income | |||||||
400 | (3.5)% | |||||||
300 | (3.6)% | |||||||
200 | (2.9)% | |||||||
100 | (3.3)% | |||||||
(100) | (2.7)% | |||||||
(200) | (5.7)% |
Period | Total Number of Shares Purchased | Average Price Paid per Common Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or approximate dollar value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) | |||||||||||||||||||
July 1 – 31, 2020 | 0 | $ | 0 | 0 | 249,731 | ||||||||||||||||||
August 1 – 31, 2020 | 0 | 0 | 0 | 249,731 | |||||||||||||||||||
September 1 – 30, 2020 | 66,600 | 14.72 | 66,600 | 183,131 |
Exhibit No. | Description | |||||||
3.1 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | Inline XBRL Instance Document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definitions Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101) |
CNB FINANCIAL CORPORATION | ||||||||||||||||||||
(Registrant) | ||||||||||||||||||||
DATE: November 5, 2020 | /s/ Joseph B. Bower, Jr. | |||||||||||||||||||
Joseph B. Bower, Jr. | ||||||||||||||||||||
President and Chief Executive Officer | ||||||||||||||||||||
(Principal Executive Officer) | ||||||||||||||||||||
DATE: November 5, 2020 | /s/ Tito L. Lima | |||||||||||||||||||
Tito L. Lima | ||||||||||||||||||||
Treasurer | ||||||||||||||||||||
(Principal Financial and Accounting Officer) |
/s/ Joseph B. Bower, Jr. | ||
Joseph B. Bower, Jr. | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
/s/ Tito L. Lima | ||
Tito L. Lima | ||
Treasurer | ||
(Principal Financial Officer) |
/s/ Joseph B. Bower, Jr. | ||
Joseph B. Bower, Jr. | ||
President and Chief Executive Officer |
/s/ Tito L. Lima | ||
Tito L. Lima | ||
Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 | |
Preferred stock, liquidation preference | $ 1,000 | $ 1,000 | |
Preferred stock, shares authorized (in shares) | 60,375 | 60,375 | |
Preferred stock, shares issued (in shares) | 0 | 60,375 | |
Common stock, par value (in dollars per share) | $ 0 | $ 0 | |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |
Common stock, shares issued (in shares) | 16,978,057 | 15,360,946 | |
Treasury stock, shares (in shares) | 144,967 | 112,961 |
Consolidated Statements of Income (unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Statement [Abstract] | ||||
Accumulated other comprehensive income reclassification for change in fair value of interest rate swap agreements | $ 68 | $ 11 | $ 154 | $ 31 |
Accumulated other comprehensive income reclassifications for net realized gains on available-for-sale securities | 0 | 0 | 2,190 | 148 |
Income tax expense from reclassification | $ (14) | $ (2) | $ 428 | $ 25 |
Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on interest rate swaps, tax | $ (1) | $ 14 | $ 105 | $ 87 |
Reclassification adjustment for losses recognized in earnings, tax | (14) | (2) | (32) | (7) |
Unrealized (losses) gains on other securities available for sale arising during the period, tax | 272 | (659) | (2,843) | (3,441) |
Reclassification adjustment for realized gains included in net income, tax | $ 0 | $ 0 | $ 460 | $ 31 |
Consolidated Statements of Changes in Shareholders' Equity (unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Forfeiture of restricted stock award grants (in shares) | 2,699 | 2,699 | ||
Restricted stock award grants (in shares) | 1,808 | 36,968 | 39,790 | |
Issuance of common stock, net of issuance costs (in shares) | 115,790 | |||
Performance-based restricted stock award (in shares) | 798 | 8,351 | 798 | |
Purchase of treasury stock (in shares) | 66,600 | 66,600 | 40,000 | |
Cash dividends declared (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.51 | $ 0.51 |
Restricted Stock | ||||
Purchase of treasury stock (in shares) | 217 | 7,267 | 9,088 | |
Performance Shares | ||||
Purchase of treasury stock (in shares) | 294 | 3,458 | 294 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared pursuant to rules and regulations of the SEC and in compliance with accounting principles generally accepted in the United States of America ("GAAP"). Because this report is based on an interim period, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management of the registrant, the accompanying consolidated financial statements as of September 30, 2020 and for the three and nine month periods ended September 30, 2020 and 2019 include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial condition and the results of operations for the periods presented. The financial performance reported for CNB Financial Corporation (the "Corporation") for the three and nine month periods ended September 30, 2020 is not necessarily indicative of the results to be expected for the full year. This information should be read in conjunction with the Corporation’s Annual Report on Form 10-K for the period ended December 31, 2019 (the "2019 Form 10-K"). All dollar amounts are stated in thousands, except share and per share data and other amounts as indicated. Certain amounts appearing in the consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassifications had no effect on net income or shareholders’ equity as previously reported. Risks and Uncertainties The outbreak of the novel strain of coronavirus, or COVID-19, has adversely impacted a broad range of industries in which the Corporation's clients operate and could impair their ability to fulfill their financial obligations to the Corporation. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic, indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed, with the goal of decreasing the rate of new infections. The spread of the COVID-19 outbreak has caused significant disruptions in the U.S. economy and has disrupted banking and other financial activity in the areas in which the Corporation operates. While there has been no material impact to the Corporation’s employees to date, the COVID-19 pandemic could also potentially create widespread business continuity issues for the Corporation. The federal government has taken several actions designed to mitigate the economic impact. Most notably, the Coronavirus Aid, Relief and Economic Security ("CARES") Act, which was signed into law at the end of March 2020, allocated $2 trillion for COVID-19 related relief and initiatives. Among other things, the CARES Act provides direct financial aid to American families and economic stimulus to significantly impacted industry sectors. The CARES Act also includes extensive emergency funding for hospitals and providers. In addition to the general impact of the COVID-19 pandemic, certain provisions of the CARES Act as well as other recent legislative and regulatory relief efforts are expected to have a material impact on the Corporation's operations. The Corporation's business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If the global response to contain the COVID-19 pandemic requires further restricted measures or is unsuccessful, the Corporation could experience a material adverse effect on its business, financial condition, results of operations and cash flows. Since the extent to which the COVID-19 pandemic impacts its operations will depend on future developments that are highly uncertain, the Corporation cannot estimate the impact on its business, financial condition or near or long-term financial or operational results with reasonable certainty. Accordingly, the Corporation is disclosing potentially material items of which it is aware. Asset valuation: Currently, the Corporation does not expect the COVID-19 pandemic to affect its ability to account timely for the assets on its balance sheet; however, this could change in future periods due to any number of potential impacts from the COVID-19 pandemic. The COVID-19 pandemic could cause a further and sustained decline in the Corporation's stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform a goodwill impairment test, resulting in an impairment charge being recorded for that period. In the event that the Corporation concludes that all or a portion of its goodwill is impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. As of September 30, 2020, the Corporation performed an analysis of its goodwill, taking into account the effect that the COVID-19 pandemic continues to have on the economy, and determined its goodwill was not impaired. Lending operations and accommodations to borrowers: In keeping with regulatory guidance to continue to assist borrowers during the COVID-19 pandemic, and as detailed in the CARES Act, the Corporation implemented a payment deferral program for its lending clients that are adversely affected by the pandemic. Depending on the demonstrated need of the client, the Corporation is deferring either the full loan payment or the principal component of the loan payment. As of October 31, 2020, the deferred loan payment commitments were 250 loans, totaling $169.3 million, comprised of (i) 190 loans, totaling $147.4 million, for which principal and interest were deferred, and (ii) 60 loans, totaling $21.9 million, for which principal only was deferred. In accordance with the CARES Act and March 2020 interagency guidance, these deferrals are not considered troubled debt restructurings. It is possible that these deferrals could be extended further under the CARES Act; however, the volume of these future potential extensions is unknown. The Corporation participated in the Paycheck Protection Program ("PPP") established by the CARES Act for loans provided under the auspices of the Small Business Administration ("SBA"). Under this program, the Corporation lent money primarily to its existing loan and/or deposit customers, based on a predetermined SBA-developed formula, intended to incentivize small business owners to retain their employees. These loans carry a customer rate of 1.00% plus a processing fee that varies depending on the balance of the loan at origination and have a two-year maturity. As of September 30, 2020, the Corporation had outstanding approximately $231 million, or 2,044 PPP loan relationships, under this program, at a rate of 1.00% coupled with deferred processing fees of approximately $8.5 million. As of April 16, 2020, the SBA funds allocated in the original PPP authorization were fully utilized. Additional funding was made available on April 24, 2020 under the Paycheck Protection Program and Health Care Enhancement Act ("PPP Enhancement Act"). The PPP Enhancement Act authorized additional funding under the CARES Act of $310 billion for PPP loans to be issued by financial institutions through the SBA. The Corporation provided additional loans with funds from the PPP Enhancement Act. It is the Corporation's understanding that loans funded through the PPP program are fully guaranteed by the U.S. government. Should those circumstances change, the Corporation could be required to establish additional allowance for loan loss through additional provision for loan loss expense charged to earnings. Credit: The Corporation is working with customers directly affected by the COVID-19 pandemic. The Corporation has offered assistance in accordance with regulator guidelines. As a result of the current economic slowdown related to the COVID-19 pandemic, the Corporation is engaging in more frequent communication with borrowers to better understand their situation and the challenges faced, allowing it to respond proactively as needs and issues arise. Should economic conditions worsen, the Corporation could experience further increases in its required allowance for loan losses and record additional provision expense. It is possible that the Corporation's asset quality measures could worsen at future measurement periods if the effects of the COVID-19 pandemic are prolonged.
|
Recent Accounting Pronouncements |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued an Accounting Standards Update ("ASU") 2016-13, "Financial Instruments – Credit Losses" which will require recognition of an entity’s current estimate of all expected credit losses for assets measured at amortized cost. The amendment requires the measurement of all expected credit losses for financial assets held at the reporting date, based on historical credit loss experience, current market conditions, and reasonable and supportable forecast. This eliminates the probable incurred recognition threshold in current GAAP. The update will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments – Credit Losses." The amendment clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 and should be accounted for in accordance with Topic 842, "Leases." In April 2019, ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," was issued to address certain codification improvements and to provide certain accounting policy electives related to accrued interest as well as disclosure related to credit losses, among other things. In May 2019, ASU 2019-05, "Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief," was issued to provide transition relief in connection with the adoption of ASU 2016-03 whereby entities would have the option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. The CARES Act provides financial institutions with the option to delay the adoption of ASU No. 2016-13, "Financial Instruments – Credit Losses," until the earlier of December 31, 2020 or until the national emergency related to the COVID-19 pandemic is terminated. Given the complexity of the processes necessary to properly evaluate, document and implement the current expected credit losses methodology, combined with the extraneous circumstances impacted on its employees, caused by the spread of the coronavirus, the Corporation opted to delay the adoption of ASU No. 2016-13 and recorded its provision for loan losses under the incurred loss model that existed prior to ASU 2016-13. Prior to passage of the CARES Act, based upon the Corporation's fourth quarter parallel run, assessment of the composition, characteristics and credit quality of the Corporation's loan and investment securities portfolio, as well as the economic conditions in effect as of the adoption date, management estimates the adoption of ASU 2016-13 will result in an increase of approximately 20-30% to the Corporation's allowance for credit losses, as reported in its Annual Report Form 10-K for the fiscal year ended December 31, 2019. The adjustment to record the allowance for credit losses may fall outside of management’s estimated increase based on completion of the Corporation's evaluation of qualitative factors and forecasts adjustments to estimate expected credit losses inherent in the loan portfolio. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in the previous two-step impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the prior requirement to calculate a goodwill impairment charge using Step 2, which requires an entity to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount. ASU 2017-04 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statements. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ASU 2018-13 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statement disclosures. In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 amends ASC 715-20, "Compensation - Retirement Benefits - Defined Benefit Plans - General." The amended guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated Other Comprehensive Income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. ASU 2018-14 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statement disclosures. In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. ASU 2018-15 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statements. In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Corporation is currently evaluating the impact of the reference rate reform on the Corporation's consolidated financial statements. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System (the "Federal Reserve") and the Federal Deposit Insurance Corporation (the "FDIC") issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by the COVID-19 pandemic. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, "Receivables - Troubled Debt Restructurings by Creditors" ("ASC 310-40"), a restructuring of debt constitutes a troubled debt restructuring ("TDR") if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. See Note 1 of the footnotes to the consolidated financial statements for disclosure of the impact to date.
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Business Combinations |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | BUSINESS COMBINATIONS On July 17, 2020, the Corporation completed its previously announced acquisition of Bank of Akron ("Akron"), pursuant to that certain Agreement and Plan of Merger, dated as of December 18, 2019 (the "Merger Agreement"), by and among the Corporation, CNB Bank and Akron. Under the terms of the Merger Agreement, Akron merged with and into CNB Bank (the "Merger"), with CNB Bank continuing as the surviving entity. Banking offices of Akron will operate under the trade name BankOnBuffalo, a division of CNB Bank. Pursuant to the Merger Agreement, for each share of Akron common stock, Akron shareholders were entitled to elect to receive either (x) $215.00 in cash or (y) 6.6729 shares of the Corporation's common stock and shall receive cash in lieu of fractional shares. Elections were subject to proration procedures whereby at least 75% of the shares of Akron common stock were exchanged for shares of the Corporation's common stock. Based on the elections and proration procedures, the total consideration payable to Akron shareholders was approximately $40.8 million, comprised of approximately $16.1 million in cash and 1,501,321 shares of the Corporation's common stock, net of fractional shares, valued at approximately $24.7 million based on the July 17, 2020 closing price of $16.43 per share of the Corporation's common stock. Akron's results of operations were included in the Corporation's results beginning July 17, 2020. The Corporation incurred $3.4 million and $3.9 million of merger-related expenses during the three and nine months ended September 30, 2020, consisting largely of professional services of attorneys, accountants, investment bankers and other advisors. There were no merger-related expenses incurred during three and nine months ended September 30, 2019.
Core deposit intangible ("CDI") of $613 thousand and goodwill of $6.0 million were recognized as a result of the acquisition. Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies expected to be derived from the combination of the two entities. Goodwill recognized in this transaction is not deductible for income tax purposes.
The Corporation accounted for this transaction under the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires purchased assets and liabilities assumed and consideration exchanged to be recorded at their respective estimated fair values at the date of acquisition. The determination of estimated fair values required management to make certain estimates about discount rates, future expected cash flows, market conditions at the time of the acquisition and other future events that are highly subjective in nature and subject to refinement for up to one year after the closing date of acquisition as additional information relative to the closing date fair values becomes available and such information is considered final, whichever is earlier. As of September 30, 2020, the final purchase price remains subject to final adjustments and fair value measurements remain preliminary due to the timing of the acquisition. The Corporation continues to review information relating to events or circumstances existing at the acquisition date and expects to finalize its analysis of the acquired assets and assumed liabilities over the next few months, but not later than one year after the acquisition. Management anticipates that this review could result in adjustments to the acquisition date valuation amounts presented herein but does not anticipate that these adjustments, if any, would be material. Securities The estimated fair values of the securities were calculated utilizing Level 2 inputs. The securities acquired are bought and sold in active markets. Prices for these instruments were obtained through security industry sources that actively participate in the buying and selling of securities. Loans Akron’s loan portfolio was recorded at fair value at the date of acquisition. A valuation of Akron’s loan portfolio was performed as of the acquisition date in accordance with ASC 820 to assess the fair value of the loan portfolio, considering adjustments for market discount rates, credit, and liquidity. The loan portfolio was segmented into two groups: non-purchase credit impaired ("PCI") loans and PCI loans. The non-PCI loans were pooled based on similar characteristics, such as loan type, fixed or adjustable interest rates, payment type, index rate and caps/floors, and non-accrual status. The PCI loans were valued at the loan level with similar characteristics noted above. The fair value was calculated using a discounted cash flow analysis. Non-PCI loans and PCI loans had a fair value of $314.7 million and $4.4 million, respectively, at the acquisition date, resulting in a combined fair value credit discount of $7.6 million and a combined fair value interest rate premium of $1.9 million. The related contractual principal balances totaled $318.8 million and $6.0 million, for non-PCI loans and PCI loans, respectively. In accordance with U.S. GAAP, there was no carryover of the allowance for credit losses that had been previously recorded by Akron. Premises and Equipment Fair values are based upon appraisal values. In addition to owned properties, Akron operated one property subject to a lease agreement. Core deposit intangible The CDI on non-maturing deposits was determined by evaluating the underlying characteristics of the deposit relationships, including customer attrition, deposit interest rates and maintenance costs, fee income and costs of alternative funding using the discounted cash flow approach. The core deposit intangibles represent the costs saved by the Corporation between maintaining the existing deposits and obtaining alternative funds over the life of the deposit base. Fixed maturity deposits In determining the fair value of certificates of deposit, the cash flows of the contractual interest payments during the specific period of the certificates of deposit and scheduled principal payout were discounted to present value at market-based interest rates. Supplemental Pro Forma Financial Information The following table presents certain unaudited pro forma financial information for illustrative purposes only, for the three and nine months ended September 30, 2020 and 2019, respectively, as if Akron had been acquired on January 1, 2019. This unaudited pro forma information combines the historical results of Akron with the Corporation’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision expense resulting from recording loan assets at fair value, cost savings or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented and the differences could be significant.
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Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | SECURITIES Securities available for sale at September 30, 2020 and December 31, 2019 are as follows:
At September 30, 2020 and December 31, 2019, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity. The Corporation’s residential and multi-family mortgage securities are issued by government sponsored entities. Trading securities at September 30, 2020 and December 31, 2019 are as follows:
Securities with unrealized losses at September 30, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows: September 30, 2020
December 31, 2019
The Corporation evaluates securities for other-than-temporary impairment on a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation. At September 30, 2020 and December 31, 2019, management performed an assessment for possible other-than-temporary impairment of the Corporation’s debt securities, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. Based on the results of the assessment, management believes impairment of these debt securities at September 30, 2020 and December 31, 2019 to be temporary. For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for other-than-temporary impairment. For financial institution issuers, management monitors information from quarterly “call” report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed as appropriate given the following considerations; the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred, the length of time and extent to which fair value has been less than cost, and whether management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery. As of September 30, 2020 and December 31, 2019, management concluded that the securities described in the previous paragraph were not other-than-temporarily impaired for the following reasons: •There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities. •All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received. The Corporation does not intend to sell and it is not more likely than not that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis. On September 30, 2020 and December 31, 2019, securities carried at $460,503 and $405,200, respectively, were pledged to secure public deposits and for other purposes as provided by law. The following is a schedule of the contractual maturity of securities available for sale at September 30, 2020:
Mortgage and asset backed securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral. Information pertaining to security sales on available for sale securities is as follows:
The tax provision related to these net realized gains was zero and $460 for the three and nine months ended September 30, 2020, respectively, and zero and $31 during the three and nine months ended September 30, 2019, respectively.
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Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | LOANS Total net loans at September 30, 2020 and December 31, 2019 are summarized as follows:
At September 30, 2020 and December 31, 2019, net unamortized loan fees of $12,466 and $3,092, respectively, have been included in the carrying value of loans. The Corporation’s outstanding loans and related unfunded commitments are primarily concentrated within central and northwest Pennsylvania, central and northeast Ohio and western New York. CNB Bank (the "Bank") attempts to limit concentrations within specific industries by utilizing dollar limitations to single industries or customers, and by entering into participation agreements with third parties. Collateral requirements are established based on management’s assessment of the customer. The Corporation maintains lending policies to control the quality of the loan portfolio. These policies delegate the authority to extend loans under specific guidelines and underwriting standards. These policies are prepared by the Corporation’s management and reviewed and ratified annually by the Corporation’s Board of Directors. Pursuant to the Corporation’s lending policies, management considers a variety of factors when determining whether to extend credit to a customer, including loan-to-value ratios, FICO scores, quality of the borrower’s financial statements, and the ability to obtain personal guarantees. Commercial, industrial and agricultural loans comprised 39% and 37% of the Corporation’s total loan portfolio at September 30, 2020 and December 31, 2019, respectively. Commercial mortgage loans comprised 30% and 29% of the Corporation’s total loan portfolio at September 30, 2020 and December 31, 2019, respectively. Management assigns a risk rating to all commercial loans at loan origination. The loan-to-value policy guidelines for commercial, industrial and agricultural loans are generally a maximum of 80% of the value of business equipment, a maximum of 70% of the value of accounts receivable, and a maximum of 60% of the value of business inventory at loan origination. The loan-to-value policy guideline for commercial mortgage loans is generally a maximum of 85% of the appraised value of the real estate. Residential real estate loans comprised 28% and 29% of the Corporation’s total loan portfolio at September 30, 2020 and December 31, 2019, respectively. The loan-to-value policy guidelines for residential real estate loans vary depending on the collateral position and the specific type of loan. Higher loan-to-value terms may be approved with the appropriate private mortgage insurance coverage. The Corporation also originates and prices loans for sale into the secondary market. Loans so originated are classified as loans held for sale and are excluded from residential real estate loans reported above. The rationale for these sales is to mitigate interest rate risk associated with holding lower rate, long-term residential mortgages in the loan portfolio and to generate fee revenue from sales and servicing the loan. The Corporation also offers a variety of unsecured and secured consumer loan and credit card products which represented less than 3% of the total loan portfolio at both September 30, 2020 and December 31, 2019. Terms and collateral requirements vary depending on the size and nature of the loan. Transactions in the allowance for loan losses for the three months ended September 30, 2020 were as follows:
Transactions in the allowance for loan losses for the nine months ended September 30, 2020 were as follows:
Transactions in the allowance for loan losses for the three months ended September 30, 2019 were as follows:
Transactions in the allowance for loan losses for the nine months ended September 30, 2019 were as follows:
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and is based on the Corporation’s impairment method as of September 30, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest and unearned discounts due to their insignificance. September 30, 2020
December 31, 2019
The following tables present information related to loans individually evaluated for impairment, including loans modified in troubled debt restructurings, by portfolio segment as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019: September 30, 2020
December 31, 2019
The unpaid principal balance of impaired loans includes the Corporation’s recorded investment in the loan and amounts that have been charged off.
The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans as of September 30, 2020 and December 31, 2019:
Nonaccrual loans and loans past due over 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The following table presents the aging of the recorded investment in past due loans as of September 30, 2020 and December 31, 2019 by class of loans. September 30, 2020
December 31, 2019
Troubled Debt Restructurings The terms of certain loans have been modified as troubled debt restructurings. The modification of the terms of such loans included either or both of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The following table presents the number of loans, loan balances, and specific reserves for loans that have been restructured in a troubled debt restructuring as of September 30, 2020 and December 31, 2019.
There were one and ten loans modified as troubled debt restructurings during the three and nine months ended September 30, 2020, respectively, and one loan modified as troubled debt restructurings during the three and nine months ended September 30, 2019.
A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no loans modified as troubled debt restructurings for which there was a payment default within a twelve-month cycle following the modification during the three and nine months ended September 30, 2020 and September 30, 2019. There were no principal balances forgiven in connection with the loan restructurings. In order to determine whether a borrower is experiencing financial difficulty, the Corporation evaluates the probability that the borrower will default on any of its debt payments in the foreseeable future without a loan modification. This evaluation is performed using the Corporation’s internal underwriting policies. The Corporation has no further loan commitments to customers whose loans are classified as a troubled debt restructuring. Generally, nonperforming troubled debt restructurings are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Credit Quality Indicators The Corporation classifies commercial, industrial and agricultural loans and commercial mortgage loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation uses the following definitions for risk ratings: Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Corporation’s credit position at some future date. Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans not rated as special mention, substandard, or doubtful are considered to be pass rated loans. All loans included in the following tables have been assigned a risk rating within 12 months of the balance sheet date. September 30, 2020
December 31, 2019
The Corporation considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential real estate, consumer, and credit card loan classes, the Corporation also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in residential, consumer, and credit card loans based on payment activity as of September 30, 2020 and December 31, 2019:
The Corporation’s portfolio of residential real estate and consumer loans maintained within Holiday Financial Services Corporation (“Holiday”) are considered to be subprime loans. Holiday is a subsidiary that offers small balance unsecured and secured loans, primarily collateralized by automobiles and equipment, to borrowers with higher risk characteristics than are typical in the Bank’s consumer loan portfolio. Holiday’s loan portfolio is summarized as follows at September 30, 2020 and December 31, 2019:
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES Operating lease assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the consolidated statements of income. The Corporation leases certain full-serve branch offices, land and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.
(1) Finance lease assets are recorded net of accumulated amortization of $769 as of September 30, 2020 and $715 as of December 31, 2019. The components of the Corporation's net lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows:
(1) Sublease income excludes rental income from owned properties. The following table sets forth future minimum rental payments under noncancelable leases with terms in excess of one year as of September 30, 2020:
Lease terms and discount rates related to the Corporation's lease liabilities as of September 30, 2020 and December 31, 2019 were as follows:
Other information related to the Corporation's lease liabilities as of June 30, 2020 and 2019 was as follows:
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Deposits |
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Banking and Thrift, Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | DEPOSITS Total deposits at September 30, 2020 and December 31, 2019 are summarized as follows:
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Stock Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation | STOCK COMPENSATION The Corporation has a stock incentive plan, which is administered by a committee of the Board of Directors and which permits the Corporation to provide various types of stock-based compensation to its key employees, directors, and/or consultants, including time-based and performance-based shares of restricted stock. The Corporation previously maintained the CNB Financial Corporation 2009 Stock Incentive Plan, which terminated in accordance with its terms on February 10, 2019, and currently maintains the CNB Financial Corporation 2019 Omnibus Incentive Plan (the "2019 Stock Incentive Plan"), which was approved by the Corporation’s shareholders and became effective on April 16, 2019. For key employees, the vesting of time-based restricted stock is one-third, one-fourth, or one-fifth of the granted restricted shares per year, beginning one year after the grant date, with 100% vesting on the third, fourth or fifth anniversary of the grant date, respectively. Prior to 2018, for non-employee directors, the vesting schedule was one-third of the granted restricted shares per year, beginning one year after the grant date, with 100% vested on the third anniversary of the grant date. Beginning in 2018, stock compensation received by non-employee directors vests immediately. At September 30, 2020, there was no unrecognized compensation cost related to stock-based compensation awarded under this plan and, except for the time-based and performance-based restricted stock awards disclosed below and in previous filings, no other stock-based compensation was granted during the three or nine month periods ended September 30, 2020 and 2019. In addition to the time-based restricted stock disclosed above, the Corporation’s Board of Directors grants performance-based restricted stock awards (“PBRSAs”) to key employees. The number of PBRSAs will depend on certain performance conditions earned over a three year period and are also subject to service-based vesting. In 2020, awards with a maximum of 18,100 shares in aggregate were granted to key employees. In 2019, awards with a maximum of 16,681 shares in aggregate were granted to key employees. In 2018, awards with a maximum of 15,657 shares in aggregate were granted to key employees. Compensation expense for the restricted stock awards is recognized over the requisite service period noted above based on the fair value of the shares at the date of grant. Nonvested restricted stock awards are recorded as a reduction of additional paid-in-capital in shareholders’ equity until earned. Compensation expense resulting from time-based, performance-based and director restricted stock awards was $288 and $1,123 for the three and nine months ended September 30, 2020, respectively, and $242 and $1,109 for the three and nine months ended September 30, 2019, respectively. There was $1,235 and $1,026 of total unrecognized compensation cost related to unvested restricted stock awards, as of September 30, 2020 and December 31, 2019, respectively. The total income tax benefit related to the recognized compensation cost of vested restricted stock awards was $60 and $235 for the three and nine months ended September 30, 2020, respectively, and $51 and $233 for the three and nine months ended June 30, 2019, respectively. A summary of changes in time-based nonvested restricted stock awards for the three months ended September 30, 2020 follows:
A summary of changes in time-based nonvested restricted stock awards for the nine months ended September 30, 2020 follows:
The above table excludes 11,502 shares in restricted stock awards that were granted at a weighted average fair value of $29.56 and immediately vested. Compensation expense resulting from the immediately vested shares was $0 and $340 for the three and nine months ended September 30, 2020, respectively, and is included in the amounts discussed above. The fair value of shares vested was $3 and $1,109 during the three and nine months ended September 30, 2020, respectively, and $18 and $1,346 for the three and nine months ended September 30, 2019, respectively.
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EARNINGS PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE Basic earnings per common share is computed by dividing net income, excluding net earnings allocated to participating securities, by the weighted average number of shares outstanding during the applicable period, excluding outstanding participating securities. Diluted earnings per common share is computed using the weighted average number of shares determined for the basic computation plus the dilutive effect of potential common shares issuable under certain stock compensation plans. For the three and nine months ended September 30, 2020 and 2019, there were no outstanding stock options to include in the diluted earnings per common share calculations and the impact of performance-based shares was immaterial. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per common share pursuant to the two-class method. The Corporation has determined that its outstanding unvested stock awards are participating securities. The computation of basic and diluted earnings per common share is shown below:
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | DERIVATIVE INSTRUMENTS On September 7, 2018, the Corporation executed an interest rate swap agreement with a 5-year term and an effective date of September 15, 2018 in order to hedge cash flows associated with $10 million of a subordinated note that was issued by the Corporation during 2007 and elected cash flow hedge accounting for the agreement. The Corporation’s objective in using this derivative is to add stability to interest expense and to manage its exposure to interest rate risk. The interest rate swap involves the receipt of variable-rate amounts in exchange for fixed-rate payments from September 15, 2018 to September 15, 2023 without the exchange of the underlying notional amount. At September 30, 2020, the variable rate on the subordinated debt was 1.80% (LIBOR plus 155 basis points) and the Corporation was paying 4.53% (2.98% fixed rate plus 155 basis points). As of September 30, 2020 and December 31, 2019, no derivatives were designated as fair value hedges or hedges of net investments in foreign operations. Additionally, the Corporation does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges. The following tables provide information about the amounts and locations of activity related to the interest rate swaps designated as cash flow hedges within the Corporation’s consolidated balance sheet and statement of income as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019:
(a)Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion), net of tax (b)Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) (c)Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) (d)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) (e)Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amounts reported in accumulated other comprehensive income (loss) related to the interest rate swap will be reclassified to interest expense as interest payments are made on the subordinated debentures. Such amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the next twelve months are expected to be $273. As of September 30, 2020 and December 31, 2019, a cash collateral balance in the amount of $1,050 and $750, respectively, was maintained with a counterparty to the interest rate swaps. These balances are included in interest bearing deposits with other banks on the consolidated balance sheets. The Corporation entered into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Corporation enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Corporation agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. Concurrently, the Corporation agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Corporation’s customers to effectively convert a variable rate loan to a fixed rate. Because the Corporation acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts offset each other and do not impact the Corporation’s results of operations. The Corporation pledged cash collateral to another financial institution with a balance $4,700 as of September 30, 2020 and $2,000 as of December 31, 2019. This balance is included in interest bearing deposits with other banks on the consolidated balance sheets. The Corporation may require its customers to post cash or securities as collateral on its program of back-to-back swaps depending upon the specific facts and circumstances surrounding each loan and individual swap. In addition, certain language is included in the International Swaps and Derivatives Association agreement and loan documents where, in default situations, the Corporation is permitted to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Corporation may be required to post additional collateral to swap counterparties in the future in proportion to potential increases in unrealized loss positions. The following table provides information about the amounts and locations of activity related to the back-to-back interest rate swaps within the Corporation’s consolidated balance sheet as of September 30, 2020 and December 31, 2019:
(a)Reported in accrued interest receivable and other assets within the consolidated balance sheets (b)Reported in accrued interest payable and other liabilities within the consolidated balance sheets
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | FAIR VALUE Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a 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. A fair value hierarchy has also been established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three levels of inputs are used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity 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; or 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 fair values of most trading securities and securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). These models utilize the market approach with standard inputs that include, but are not limited to benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. For certain securities that observable inputs about the specific issuer are not available, fair values are estimated using observable data from other securities presumed to be similar or other market data on other similar securities (Level 3 inputs). The Corporation’s derivative instruments are interest rate swaps that are similar to those that trade in liquid markets. As such, significant fair value inputs can generally be verified and do not typically involve significant management judgments (Level 2 inputs). The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals prepared by third-parties. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Management also adjusts appraised values based on the length of time that has passed since the appraisal date and other factors. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2020 and December 31, 2019:
The table below presents a reconciliation of the fair value of securities available for sale measured on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2020:
Assets and liabilities measured at fair value on a non-recurring basis are as follows at September 30, 2020 and December 31, 2019:
The estimated fair values of impaired collateral dependent loans such as commercial or residential mortgages are determined primarily through third-party appraisals. When a collateral dependent loan, such as a commercial or residential mortgage loan, becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal, and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral and a further reduction for estimated costs to sell the property is applied, which results in an amount that is considered to be the estimated fair value. If a loan becomes impaired and the appraisal of related loan collateral is outdated, management applies an appropriate adjustment factor based on its experience with current valuations of similar collateral in determining the loan’s estimated fair value and resulting allowance for loan losses. Third-party appraisals are not customarily obtained in respect of unimpaired loans, unless in management’s view changes in circumstances warrant obtaining an updated appraisal. The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2020:
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2019:
Fair Value of Financial Instruments The following table presents the carrying amount and fair value of financial instruments at September 30, 2020:
The following table presents the carrying amount and fair value of financial instruments at December 31, 2019:
While estimates of fair value are based on management’s judgment of the most appropriate factors as of the balance sheet date, there is no assurance that the estimated fair values would have been realized if the assets had been disposed of or the liabilities settled at that date, since market values may differ depending on various circumstances. The estimated fair values would also not apply to subsequent dates. The fair value of other equity interests is based on the net asset values provided by the underlying investment partnership. ASU 2015-7 removes the requirement to categorize within the fair value hierarchy all investments measured using the net asset value per share practical expedient and related disclosures. In addition, other assets and liabilities that are not financial instruments, such as premises and equipment, are not included in the disclosures. Also, non-financial assets such as, among other things, the estimated earnings power of core deposits, the earnings potential of trust accounts, the trained workforce, and customer goodwill, which typically are not recognized on the balance sheet, may have value but are not included in the fair value disclosures.
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Revenue from Contracts with Customers |
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Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS All of the Corporation’s revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Corporation's Non-Interest Income by revenue stream and reportable segment for the three and nine months ended September 30, 2020 and 2019. Items outside the scope of ASC 606 are noted as such.
(1)Not within scope of ASU 2014-9 Management determined that the primary sources of revenue emanating from interest and dividend income on loans and investment securities along with non-interest revenue resulting from security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit card fees, gains (losses) on sale of other real estate owned not financed by the Corporation, is not within the scope of ASU 2014-9. The types of non-interest income within the scope of the standard that are material to the consolidated financial statements are services charges on deposit accounts, wealth and asset management fee income, card processing and interchange income, and other income. Service charges on deposit accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed, as that is the point in time the Corporation fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Services charges on deposits are withdrawn from the customer’s account balance. Wealth and asset management fees: The Corporation earns wealth and asset management fees from its contracts with trust and brokerage customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management at month end. Fees for these services are billed to customers on a monthly or quarterly basis and are recorded as revenue at the end of the period for which the wealth and asset management services have been performed. Other performance obligations, such as the delivery of account statements to customers, are generally considered immaterial to the overall transaction price. Card processing and interchange income: The Corporation earns interchange fees from check card and credit card transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Other income: The Corporation's other income includes sources such as bank owned life insurance, changes in fair value and realized gains on sales of trading securities, certain service fees, gains (losses) on sales of fixed assets, and gains (losses) on sale of other real estate owned. The service fees are recognized in the same manner as the service charges mentioned above. While gains (losses) on the sale of other real estate owned are within the scope of ASU 2014-9 if financed by the Corporation, the Corporation does not finance the sale of transactions. The revenue on the sale is recorded upon the transfer of control of the property to the buyer and the other real estate owned asset is derecognized.
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Recent Accounting Pronouncements (Policies) |
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Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued an Accounting Standards Update ("ASU") 2016-13, "Financial Instruments – Credit Losses" which will require recognition of an entity’s current estimate of all expected credit losses for assets measured at amortized cost. The amendment requires the measurement of all expected credit losses for financial assets held at the reporting date, based on historical credit loss experience, current market conditions, and reasonable and supportable forecast. This eliminates the probable incurred recognition threshold in current GAAP. The update will be effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments – Credit Losses." The amendment clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 and should be accounted for in accordance with Topic 842, "Leases." In April 2019, ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," was issued to address certain codification improvements and to provide certain accounting policy electives related to accrued interest as well as disclosure related to credit losses, among other things. In May 2019, ASU 2019-05, "Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief," was issued to provide transition relief in connection with the adoption of ASU 2016-03 whereby entities would have the option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. The CARES Act provides financial institutions with the option to delay the adoption of ASU No. 2016-13, "Financial Instruments – Credit Losses," until the earlier of December 31, 2020 or until the national emergency related to the COVID-19 pandemic is terminated. Given the complexity of the processes necessary to properly evaluate, document and implement the current expected credit losses methodology, combined with the extraneous circumstances impacted on its employees, caused by the spread of the coronavirus, the Corporation opted to delay the adoption of ASU No. 2016-13 and recorded its provision for loan losses under the incurred loss model that existed prior to ASU 2016-13. Prior to passage of the CARES Act, based upon the Corporation's fourth quarter parallel run, assessment of the composition, characteristics and credit quality of the Corporation's loan and investment securities portfolio, as well as the economic conditions in effect as of the adoption date, management estimates the adoption of ASU 2016-13 will result in an increase of approximately 20-30% to the Corporation's allowance for credit losses, as reported in its Annual Report Form 10-K for the fiscal year ended December 31, 2019. The adjustment to record the allowance for credit losses may fall outside of management’s estimated increase based on completion of the Corporation's evaluation of qualitative factors and forecasts adjustments to estimate expected credit losses inherent in the loan portfolio. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in the previous two-step impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the prior requirement to calculate a goodwill impairment charge using Step 2, which requires an entity to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount. ASU 2017-04 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statements. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ASU 2018-13 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statement disclosures. In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 amends ASC 715-20, "Compensation - Retirement Benefits - Defined Benefit Plans - General." The amended guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated Other Comprehensive Income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. ASU 2018-14 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statement disclosures. In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. ASU 2018-15 was effective for the Corporation on January 1, 2020 and did not have a material impact on the Corporation's financial statements. In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Corporation is currently evaluating the impact of the reference rate reform on the Corporation's consolidated financial statements. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System (the "Federal Reserve") and the Federal Deposit Insurance Corporation (the "FDIC") issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by the COVID-19 pandemic. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, "Receivables - Troubled Debt Restructurings by Creditors" ("ASC 310-40"), a restructuring of debt constitutes a troubled debt restructuring ("TDR") if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. See Note 1 of the footnotes to the consolidated financial statements for disclosure of the impact to date.
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Business Combinations (Tables) |
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
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Business Acquisition, Pro Forma Information |
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Available for Sale | Securities available for sale at September 30, 2020 and December 31, 2019 are as follows:
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Trading Securities | Trading securities at September 30, 2020 and December 31, 2019 are as follows:
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Securities with Unrealized Losses Aggregated by Investment Category and Length of Time that Individual Securities have been in Continuous Unrealized Loss Position | Securities with unrealized losses at September 30, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows: September 30, 2020
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Schedule of Contractual Maturity of Securities Available for Sale, Excluding Equity Securities | The following is a schedule of the contractual maturity of securities available for sale at September 30, 2020:
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Information Pertaining to Security Sales | Information pertaining to security sales on available for sale securities is as follows:
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Loans (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Loans | Total net loans at September 30, 2020 and December 31, 2019 are summarized as follows:
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Allowance for Loan Losses | Transactions in the allowance for loan losses for the three months ended September 30, 2020 were as follows:
Transactions in the allowance for loan losses for the nine months ended September 30, 2020 were as follows:
Transactions in the allowance for loan losses for the three months ended September 30, 2019 were as follows:
Transactions in the allowance for loan losses for the nine months ended September 30, 2019 were as follows:
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Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment | The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and is based on the Corporation’s impairment method as of September 30, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest and unearned discounts due to their insignificance. September 30, 2020
December 31, 2019
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Loans Individually Evaluated for Impairment Including Loans Modified in Troubled Debt Restructurings by Portfolio Segment | The following tables present information related to loans individually evaluated for impairment, including loans modified in troubled debt restructurings, by portfolio segment as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019: September 30, 2020
December 31, 2019
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Impaired Financing Receivables with Related and not Related Allowances | The unpaid principal balance of impaired loans includes the Corporation’s recorded investment in the loan and amounts that have been charged off.
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Nonaccrual Loans and Loans Past Due over 90 Days Still Accruing Interest by Class of Loans | The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans as of September 30, 2020 and December 31, 2019:
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Aging of Recorded Investment in Past Due Loans | The following table presents the aging of the recorded investment in past due loans as of September 30, 2020 and December 31, 2019 by class of loans. September 30, 2020
December 31, 2019
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Restructured in Troubled Debt | The following table presents the number of loans, loan balances, and specific reserves for loans that have been restructured in a troubled debt restructuring as of September 30, 2020 and December 31, 2019.
There were one and ten loans modified as troubled debt restructurings during the three and nine months ended September 30, 2020, respectively, and one loan modified as troubled debt restructurings during the three and nine months ended September 30, 2019.
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Schedule of Loan Assigned Risk Rating within 12 Months of Balance Sheet Date | September 30, 2020
December 31, 2019
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Recorded Investment in Residential, Consumer and Credit Card Loans Based on Payment Activity | The following table presents the recorded investment in residential, consumer, and credit card loans based on payment activity as of September 30, 2020 and December 31, 2019:
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Summary of Holiday's Loan Portfolio | Holiday’s loan portfolio is summarized as follows at September 30, 2020 and December 31, 2019:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Operating And Finance Lease Liabilities |
(1) Finance lease assets are recorded net of accumulated amortization of $769 as of September 30, 2020 and $715 as of December 31, 2019.
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Schedule Of Lease Cost | The components of the Corporation's net lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows:
(1) Sublease income excludes rental income from owned properties. Other information related to the Corporation's lease liabilities as of June 30, 2020 and 2019 was as follows:
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Finance Lease, Liability, Maturity | The following table sets forth future minimum rental payments under noncancelable leases with terms in excess of one year as of September 30, 2020:
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Lessee, Operating Lease, Liability, Maturity | The following table sets forth future minimum rental payments under noncancelable leases with terms in excess of one year as of September 30, 2020:
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Schedule of Weighted Average Lease Term and Discount Rate | Lease terms and discount rates related to the Corporation's lease liabilities as of September 30, 2020 and December 31, 2019 were as follows:
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Deposits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift, Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Deposits | Total deposits at September 30, 2020 and December 31, 2019 are summarized as follows:
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Stock Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Nonvested Restricted Stock Awards | A summary of changes in time-based nonvested restricted stock awards for the three months ended September 30, 2020 follows:
A summary of changes in time-based nonvested restricted stock awards for the nine months ended September 30, 2020 follows:
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings per common share is shown below:
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Derivative Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts and Locations of Activity Related to Interest Rate Swaps Designated as Cash Flow Hedges within Corporation's Consolidated Balance Sheet and Statement of Income | The following tables provide information about the amounts and locations of activity related to the interest rate swaps designated as cash flow hedges within the Corporation’s consolidated balance sheet and statement of income as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019:
(a)Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion), net of tax (b)Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) (c)Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) (d)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) (e)Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
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Amounts and Locations of Activity Related to Back-to-Back Interest Rate Swaps within Corporation's Consolidated Balance Sheet | The following table provides information about the amounts and locations of activity related to the back-to-back interest rate swaps within the Corporation’s consolidated balance sheet as of September 30, 2020 and December 31, 2019:
(a)Reported in accrued interest receivable and other assets within the consolidated balance sheets (b)Reported in accrued interest payable and other liabilities within the consolidated balance sheets
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Fair Value (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2020 and December 31, 2019:
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below presents a reconciliation of the fair value of securities available for sale measured on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2020:
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Assets and Liabilities Measured at Fair Value on Non-Recurring Basis | Assets and liabilities measured at fair value on a non-recurring basis are as follows at September 30, 2020 and December 31, 2019:
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Quantitative Information about Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value on Non Recurring Basis | The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2020:
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2019:
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Carrying Amount and Fair Value of Financial Instruments | The following table presents the carrying amount and fair value of financial instruments at September 30, 2020:
The following table presents the carrying amount and fair value of financial instruments at December 31, 2019:
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Revenue from Contracts with Customers (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue Derived from Contracts with Customers | The following table presents the Corporation's Non-Interest Income by revenue stream and reportable segment for the three and nine months ended September 30, 2020 and 2019. Items outside the scope of ASC 606 are noted as such.
(1)Not within scope of ASU 2014-9
|
Basis of Presentation Narrative (Details) $ in Millions |
Apr. 16, 2020
USD ($)
relationship
|
Oct. 31, 2020
USD ($)
loan
|
---|---|---|
Subsequent Event [Line Items] | ||
PPP, Amount | $ 231.0 | |
PPP, Relationship | relationship | 2,044 | |
PPP, Interest Rate | 1.00% | |
PPP, Processing Fees | $ 8.5 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Deferred loan payment, number of loans | loan | 250 | |
Deferred loan payment, amount | $ 169.3 | |
Deferred loan payment, amount, principal | $ 21.9 | |
Deferred loan payment, number of loans, principal and interest | loan | 190 | |
Deferred loan payment, amount, principal and interest | $ 147.4 | |
Deferred loan payment, amount, number of loans, principal | loan | 60 |
Recent Accounting Pronouncements (Details) |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Allowance for credit loss, percentage increase | 20.00% |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Allowance for credit loss, percentage increase | 30.00% |
Business Combinations - Merger consideration (Details) - Bank of Akron $ in Thousands |
Jul. 17, 2020
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Value of stock consideration assigned to Akron common shares exchanged for stock paid to shareholders | $ 24,667 |
Value of cash consideration for Akron common stock exchanged for cash | 16,126 |
Total merger consideration | $ 40,793 |
Business Combinations - Recognized Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jul. 17, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Liabilities assumed | |||
Goodwill | $ 44,775 | $ 38,730 | |
Bank of Akron | |||
Assets acquired | |||
Cash and due from banks | $ 78,830 | ||
Interest bearing deposits with other banks | 10,148 | ||
Investment securities | 29,407 | ||
Loans | 319,063 | ||
Premises and equipment, net | 4,265 | ||
Core deposit intangible | 613 | ||
Deferred tax assets | 1,751 | ||
Bank owned life insurance | 8,187 | ||
Accrued interest receivable and other assets | 5,309 | ||
Total assets acquired | 457,573 | ||
Liabilities assumed | |||
Deposits | 419,476 | ||
Accrued interest payable and other liabilities | 3,348 | ||
Total liabilities assumed | 422,824 | ||
Total fair value of identifiable net assets | 34,749 | ||
Total merger consideration | 40,793 | ||
Goodwill | $ 6,044 |
Business Combinations - Supplemental Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Business Combinations [Abstract] | ||||
Net interest income | $ 34,903 | $ 30,617 | $ 96,266 | $ 88,601 |
Net income | $ 7,974 | $ 10,923 | $ 26,164 | $ 31,294 |
Basic earnings per common share (in USD per share) | $ 0.47 | $ 0.66 | $ 1.55 | $ 1.88 |
Diluted earnings per common share (in USD per share) | $ 0.47 | $ 0.66 | $ 1.55 | $ 1.88 |
Securities - Additional Information (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
security
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
security
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
security
|
|
Debt and Equity Securities, FV-NI [Line Items] | |||||
Number of securities holdings | security | 0 | 0 | 0 | ||
Shareholders' equity percentage (greater than) | 10.00% | 10.00% | 10.00% | ||
Tax provision related to net realized gains | $ 0 | $ 0 | $ 460,000 | $ 31,000 | |
Collateral Pledged | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Debt securities, trading, restricted | $ 460,503,000 | $ 460,503,000 | $ 405,200,000 |
Securities - Trading Securities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt and Equity Securities, FV-NI [Line Items] | ||
Trading securities | $ 6,164 | $ 9,809 |
Corporate equity securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Trading securities | 3,964 | 7,946 |
Mutual funds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Trading securities | 1,060 | 807 |
Certificates of deposit | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Trading securities | 417 | 350 |
Corporate notes and bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Trading securities | 672 | 655 |
U.S. Gov’t sponsored entities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Trading securities | $ 51 | $ 51 |
Securities - Information Pertaining to Security Sales (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds | $ 0 | $ 0 | $ 57,185 | $ 11,403 |
Gross Gains | 0 | 0 | 2,257 | 152 |
Gross Losses | $ 0 | $ 0 | $ 67 | $ 4 |
Loans - Nonaccrual Loans and Loans Past Due over 90 Days Still Accruing Interest by Class of Loans (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | $ 26,844 | $ 21,736 |
Past Due Over 90 Days Still on Accrual | 265 | 61 |
Commercial, industrial and agricultural | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | 6,983 | 11,644 |
Past Due Over 90 Days Still on Accrual | 189 | 0 |
Commercial mortgages | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | 14,199 | 4,533 |
Past Due Over 90 Days Still on Accrual | 0 | 0 |
Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | 5,183 | 4,724 |
Past Due Over 90 Days Still on Accrual | 58 | 59 |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | 479 | 835 |
Past Due Over 90 Days Still on Accrual | 0 | 0 |
Credit Cards | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | 0 | 0 |
Past Due Over 90 Days Still on Accrual | $ 18 | $ 2 |
Loans - Summary of Holiday's Loan Portfolio (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Consumer | $ 3,350,734 | $ 2,809,197 |
Less: unearned discount | 12,466 | 3,092 |
Net loans | 3,318,923 | 2,784,562 |
Holiday Financial Services Corporation | Residential Real Estate And Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Consumer | 26,885 | 28,122 |
Less: unearned discount | (4,924) | (5,162) |
Net loans | $ 21,961 | $ 22,960 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating lease assets | $ 17,475 | $ 18,422 |
Operating lease liabilities | $ 18,469 | $ 19,363 |
Leases - Schedule of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets: | ||
Operating lease assets | $ 17,475 | $ 18,422 |
Finance lease assets | 447 | 501 |
Total leased assets | 17,922 | 18,923 |
Liabilities: | ||
Operating lease liabilities | 18,469 | 19,363 |
Finance lease liabilities | 570 | 629 |
Total leased liabilities | 19,039 | 19,992 |
Finance lease, net of accumulated amortization | $ 769 | $ 715 |
Premises and equipment, net | us-gaap:AssetsAbstract | |
Accrued interest payable and other liabilities | us-gaap:LiabilitiesAbstract |
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 435 | $ 423 | $ 1,349 | $ 1,228 |
Variable lease cost | 26 | 33 | 67 | 82 |
Finance lease cost: | ||||
Amortization of leased assets | 18 | 18 | 54 | 54 |
Interest on lease liabilities | 6 | 7 | 20 | 23 |
Sublease income | (25) | (21) | (67) | (62) |
Net lease cost | $ 460 | $ 460 | $ 1,423 | $ 1,325 |
Leases - Schedule of Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Leases | ||
2020 | $ 388 | |
2021 | 1,555 | |
2022 | 1,601 | |
2023 | 1,490 | |
2024 | 1,455 | |
After 2024 | 19,171 | |
Total lease payments | 25,660 | |
Less: Interest | 7,191 | |
Operating lease liabilities | 18,469 | $ 19,363 |
Finance Leases | ||
2020 | 26 | |
2021 | 105 | |
2022 | 105 | |
2023 | 105 | |
2024 | 105 | |
After 2024 | 210 | |
Total lease payments | 656 | |
Less: Interest | 86 | |
Present value of lease liabilities | 570 | $ 629 |
Total | ||
2020 | 414 | |
2021 | 1,660 | |
2022 | 1,706 | |
2023 | 1,595 | |
2024 | 1,560 | |
After 2024 | 19,381 | |
Total lease payments | 26,316 | |
Less: Interest | 7,277 | |
Present value of lease liabilities | $ 19,039 |
Leases - Schedule of Weighted Average Lease Term and Discount Rate (Details) |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Weighted-average remaining lease term (years) | ||
Operating leases | 18 years 4 months 24 days | 18 years 8 months 12 days |
Finance leases | 6 years 3 months 18 days | 7 years |
Weighted-average discount rate | ||
Operating leases | 3.52% | 3.52% |
Finance leases | 4.49% | 4.49% |
Leases Leases- Other Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 695 | $ 557 |
Deposits (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Banking and Thrift, Interest [Abstract] | ||
Checking, non-interest bearing | $ 602,902 | $ 382,259 |
Checking, interest bearing | 847,498 | 628,579 |
Savings accounts | 2,092,938 | 1,663,673 |
Certificates of deposit | 479,367 | 427,816 |
Total deposits | $ 4,022,705 | $ 3,102,327 |
Percentage Change, Checking, non-interest bearing | 57.70% | |
Percentage Change, Checking, interest bearing | 34.80% | |
Percentage Change, Savings accounts | 25.80% | |
Percentage Change, Certificates of deposit | 12.00% | |
Percentage Change | 29.70% |
Stock Compensation - Summary of Changes in Time-based Nonvested Restricted Stock Awards (Details) - Restricted Stock Units (RSUs) - $ / shares |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2020 |
|
Shares | ||
Nonvested at beginning of period, Shares (in shares) | 55,466 | 58,370 |
Granted, shares (in shares) | 1,808 | 25,466 |
Vested, Shares (in shares) | (150) | (26,712) |
Nonvested at end of period, Shares (in shares) | 57,124 | 57,124 |
Per Share Weighted Average Grant Date Fair Value | ||
Nonvested at beginning of period, Weighted-average Grant Date Fair Value (in dollars per share) | $ 27.47 | $ 24.96 |
Granted, Weighted-average Grant Date Fair Value (in dollars per share) | 16.60 | 28.64 |
Vested, Weighted-average Grant Date Fair Value (in dollars per share) | 18.40 | 23.98 |
Nonvested at end of period, Weighted-average Grant Date Fair Value (in dollars per share) | $ 27.15 | $ 27.15 |
Earnings Per Share - Additional Information (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Add: Dilutive effects of performance based-shares (in shares) | 0 | 0 | 0 | 0 |
Derivative Instruments - Amounts and Locations of Activity Related to Interest Rate Swaps Designated as Cash Flow Hedges within Corporation's Consolidated Balance Sheet and Statement of Income (Details) - Interest Rate Swaps - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Derivative [Line Items] | |||||
Interest rate contracts | $ 56 | $ (45) | $ (277) | $ (302) | |
Accrued interest and other liabilities | |||||
Derivative [Line Items] | |||||
Accrued interest and other liabilities | (834) | (834) | $ (485) | ||
Interest expense – subordinated debentures | |||||
Derivative [Line Items] | |||||
Other income | (67) | (11) | (153) | (31) | |
Other income | |||||
Derivative [Line Items] | |||||
Other income | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value - Securities Available for Sale Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Residential & multi-family mortgage | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, January 1, 2020 | $ 2,795 |
Purchases | 0 |
Total gains or (losses): | |
Included in other comprehensive income (loss) | 0 |
Transfers out of Level 3 | (2,795) |
Balance, September 30, 2020 | 0 |
State & political subdivisions | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, January 1, 2020 | 0 |
Purchases | 422 |
Total gains or (losses): | |
Included in other comprehensive income (loss) | 0 |
Transfers out of Level 3 | 0 |
Balance, September 30, 2020 | $ 422 |
Revenue from Contracts with Customers - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Non-interest Income | ||||
Service charges on deposit accounts | $ 1,201 | $ 1,676 | $ 3,652 | $ 4,726 |
Wealth and asset management fees | 1,414 | 1,238 | 4,081 | 3,482 |
Mortgage banking | 1,089 | 408 | 2,090 | 1,017 |
Card processing and interchange income | 1,606 | 1,195 | 4,059 | 3,445 |
Net gains (losses) on sales of securities | 0 | 0 | 2,190 | 148 |
Other income | 1,468 | 1,759 | 4,019 | 6,403 |
Total non-interest income | $ 6,778 | $ 6,276 | $ 20,091 | $ 19,221 |
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