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SHAREHOLDERS’ EQUITY AND EARNINGS PER COMMON SHARE
 12 Months Ended
Dec. 31, 2017
Stockholders' Equity Note [Abstract]  
SHAREHOLDERS’ EQUITY AND EARNINGS PER COMMON SHARE
SHAREHOLDERS’ EQUITY AND EARNINGS PER COMMON SHARE

The actual and required capital ratios at December 31, 2017 and December 31, 2016 were as follows:
 
 
2017
 
 
Actual
 
Minimum Capital Requirement
 
Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
(in thousands, except ratios)
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
Company (consolidated)
 
 
 
 
 
 
 
 
 
 
 
 
Total capital to risk weighted assets
 
$
307,305

 
13.73
%
 
$
179,047

 
8.00
%
 
$
234,999

 
10.50
%
Common equity tier 1 capital to risk weighted assets
 
252,096

 
11.26

 
100,714

 
4.50

 
145,476

 
6.50

Tier 1 capital to risk weighted assets
 
272,716

 
12.19

 
134,286

 
6.00

 
179,047

 
8.00

Tier 1 capital to average assets
 
272,716

 
8.10

 
134,758

 
4.00

 
168,447

 
5.00

 
 

 

 

 

 

 

Bank
 

 

 

 

 

 

Total capital to risk weighted assets
 
$
306,495

 
13.71
%
 
$
178,868

 
8.00
%
 
$
234,764

 
10.50
%
Common equity tier 1 capital to risk weighted assets
 
288,906

 
12.92

 
100,613

 
4.50

 
145,331

 
6.50

Tier 1 capital to risk weighted assets
 
288,906

 
12.92

 
134,151

 
6.00

 
178,868

 
8.00

Tier 1 capital to average assets
 
288,906

 
8.58

 
134,702

 
4.00

 
168,378

 
5.00

 
 
2016
 
 
Actual
 
Minimum Capital Requirement
 
Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
(in thousands, except ratios)
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
Company (consolidated)
 
 
 
 
 
 
 
 
 
 
 
 
Total capital to risk weighted assets
 
$
171,558

 
16.52
%
 
$
83,097

 
8.00
%
 
$
109,065

 
10.50
%
Common equity tier 1 capital to risk weighted assets
 
155,905

 
15.01

 
46,742

 
4.50

 
67,516

 
6.50

Tier 1 capital to risk weighted assets
 
155,905

 
15.01

 
62,323

 
6.00

 
83,097

 
8.00

Tier 1 capital to average assets
 
155,905

 
8.94

 
69,722

 
4.00

 
87,152

 
5.00

 
 
 
 
 
 
 
 
 
 
 
 
 
Bank
 
 
 
 
 
 
 
 
 
 
 
 
Total capital to risk weighted assets
 
$
173,458

 
16.71
%
 
$
83,031

 
8.00
%
 
$
108,978

 
10.50
%
Common equity tier 1 capital to risk weighted assets
 
157,805

 
15.20

 
46,705

 
4.50

 
67,463

 
6.50

Tier 1 capital to risk weighted assets
 
157,805

 
15.20

 
62,273

 
6.00

 
83,031

 
8.00

Tier 1 capital to average assets
 
157,805

 
9.06

 
69,683

 
4.00

 
87,104

 
5.00



At each date shown, the Company and the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table above.

Effective January 1, 2015, the Company and the Bank became subject to the Basel III rule that requires the Company and the Bank to assess their Common equity tier 1 capital to risk weighted assets and the Company and the Bank each exceed the minimum to be well capitalized. In addition, the final capital rules added a requirement to maintain a minimum conservation buffer, composed of common equity tier 1 capital, of 2.5% of risk-weighted assets, to be phased in over three years and applied to the common equity tier 1 risk-based capital ratio, the Tier 1 risk-based capital ratio and the Total risk-based capital ratio. Accordingly, banking organizations, on a fully phased in basis no later than January 1, 2019, must maintain a minimum Common equity tier 1 risk-based capital ratio of 7.0%, a minimum Tier 1 risk-based capital ratio of 8.5% and a minimum Total risk-based capital ratio of 10.5%.

The required minimum conservation buffer began to be phased in incrementally, starting at 0.625% on January 1, 2016 and increasing to 1.25% on January 1, 2017. The buffer increased to 1.875% on January 1, 2018 and will increase to 2.5% on January 1, 2019. The final capital rules impose restrictions on capital distributions and certain discretionary cash bonus payments if the minimum capital conservation buffer is not met.

At December 31, 2017, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at December 31, 2017 also exceeded the minimum capital requirements including the currently applicable capital conservation buffer of 0.625%.

Accumulated Other Comprehensive Loss
Components of accumulated other comprehensive loss at December 31, 2017 and December 31, 2016 are as follows:
(in thousands)
 
2017
 
2016
Other accumulated comprehensive loss, before tax:
 
 
 
 
Net unrealized loss on AFS securities
 
$
(2,741
)
 
$
(3,269
)
Net unrealized loss on derivative hedges
 
(3,604
)
 
(2,766
)
Net unrealized loss on post-retirement plans
 
(950
)
 
(622
)
 
 

 

Income taxes related to items of accumulated other comprehensive loss:
 

 

Net unrealized loss on AFS securities
 
1,030

 
1,144

Net unrealized loss on derivative hedges
 
1,354

 
968

Net unrealized loss on post-retirement plans
 
357

 
219

Accumulated other comprehensive loss
 
$
(4,554
)
 
$
(4,326
)


The following table presents the components of other comprehensive income in 2017, 2016 and 2015:
 
 
2017
(in thousands)
 
Before Tax
 
Tax Effect
 
Net of Tax
Net unrealized gain on AFS securities:
 
 
 
 
 
 
Net unrealized gain arising during the period
 
$
547

 
$
(121
)
 
$
426

Less: reclassification adjustment for gains (losses) realized in net income
 
19

 
(7
)
 
12

Net unrealized gain on AFS securities
 
528

 
(114
)
 
414

 
 
 
 
 
 
 
Net unrealized loss on derivative hedges:
 
 
 
 
 
 
Net unrealized loss arising during the period
 
(838
)
 
386

 
(452
)
Less: reclassification adjustment for gains (losses) realized in net income
 
—

 
—

 
—

Net unrealized loss on derivative hedges
 
(838
)
 
386

 
(452
)
 
 
 
 
 
 
 
Net unrealized loss on post-retirement plans:
 
 
 
 
 
 
Net unrealized loss arising during the period
 
(349
)
 
146

 
(203
)
Less: reclassification adjustment for gains (losses) realized in net income
 
(21
)
 
8

 
(13
)
Net unrealized loss on post-retirement plans
 
(328
)
 
138

 
(190
)
Other comprehensive loss
 
$
(638
)
 
$
410

 
$
(228
)

 
 
2016
(in thousands)
 
Before Tax
 
Tax Effect
 
Net of Tax
Net unrealized loss on AFS securities:
 
 
 
 
 
 
Net unrealized loss arising during the period
 
$
(7,561
)
 
$
2,647

 
$
(4,914
)
Less: reclassification adjustment for gains (losses) realized in net income
 
4,498

 
(1,574
)
 
2,924

Net unrealized loss on AFS securities
 
(12,059
)
 
4,221

 
(7,838
)
 
 
 
 
 
 
 
Net unrealized loss on derivative hedges:
 
 
 
 
 
 
Net unrealized loss arising during the period
 
(272
)
 
95

 
(177
)
Less: reclassification adjustment for gains (losses) realized in net income
 
—

 
—

 
—

Net unrealized loss on derivative hedges
 
(272
)
 
95

 
(177
)
 
 
 
 
 
 
 
Net unrealized loss on post-retirement plans:
 
 
 
 
 
 
Net unrealized gain arising during the period
 
62

 
(20
)
 
42

Less: reclassification adjustment for gains (losses) realized in net income
 
(28
)
 
10

 
(18
)
Net unrealized gain on post-retirement plans
 
90

 
(30
)
 
60

Other comprehensive loss
 
$
(12,241
)
 
$
4,286

 
$
(7,955
)

 
 
2015
(in thousands)
 
Before Tax
 
Tax Effect
 
Net of Tax
Net unrealized loss on AFS securities:
 
 
 
 
 
 
Net unrealized loss arising during the period
 
$
(2,031
)
 
$
710

 
$
(1,321
)
Less: reclassification adjustment for gains (losses) realized in net income
 
1,334

 
(467
)
 
867

Net unrealized loss on AFS securities
 
(3,365
)
 
1,177

 
(2,188
)
 
 
 
 
 
 
 
Net unrealized loss on derivative hedges:
 
 
 
 
 
 
Net unrealized loss arising during the period
 
(1,383
)
 
484

 
(899
)
Less: reclassification adjustment for gains (losses) realized in net income
 
—

 
—

 
—

Net unrealized loss on derivative hedges
 
(1,383
)
 
484

 
(899
)
 
 
 
 
 
 
 
Net unrealized loss on post-retirement plans:
 
 
 
 
 
 
Net unrealized gain arising during the period
 
(11
)
 
11

 
—

Less: reclassification adjustment for gains (losses) realized in net income
 
(38
)
 
13

 
(25
)
Net unrealized gain on post-retirement plans
 
27

 
(2
)
 
25

Other comprehensive loss
 
$
(4,721
)
 
$
1,659

 
$
(3,062
)

The following table presents the changes in each component of accumulated other comprehensive income (loss) in 2017, 2016 and 2015:
 
 
2017
(in thousands)
 
Net unrealized gain on AFS Securities
 
Net loss on effective  derivative hedges
 
Net unrealized loss on post-retirement plans
 
Total
Balance at beginning of period
 
$
(2,125
)
 
$
(1,798
)
 
$
(403
)
 
$
(4,326
)
Other comprehensive gain/(loss) before reclassifications
 
426

 
(452
)
 
(203
)
 
(229
)
Less: amounts reclassified from accumulated other comprehensive income
 
12

 
—

 
(13
)
 
(1
)
Total other comprehensive loss
 
414

 
(452
)
 
(190
)
 
(228
)
Balance at end of period
 
$
(1,711
)
 
$
(2,250
)
 
$
(593
)
 
$
(4,554
)
 
 
2016
(in thousands)
 
Net unrealized gain on AFS Securities
 
Net loss on effective  derivative hedges
 
Net unrealized loss on post-retirement plans
 
Total
Balance at beginning of period
 
$
5,713

 
$
(1,621
)
 
$
(463
)
 
$
3,629

Other comprehensive gain/(loss) before reclassifications
 
(4,914
)
 
(177
)
 
42

 
(5,049
)
Less: amounts reclassified from accumulated other comprehensive income
 
2,924

 
—

 
(18
)
 
2,906

Total other comprehensive loss
 
(7,838
)
 
(177
)
 
60

 
(7,955
)
Balance at end of period
 
$
(2,125
)
 
$
(1,798
)
 
$
(403
)
 
$
(4,326
)

 
 
2015
(in thousands)
 
Net unrealized gain on AFS Securities
 
Net loss on effective  derivative hedges
 
Net unrealized loss on post-retirement plans
 
Total
Balance at beginning of period
 
$
7,901

 
$
(722
)
 
$
(488
)
 
$
6,691

Other comprehensive gain/(loss) before reclassifications
 
(1,321
)
 
(899
)
 
—

 
(2,220
)
Less: amounts reclassified from accumulated other comprehensive income
 
867

 
—

 
(25
)
 
842

Total other comprehensive loss
 
(2,188
)
 
(899
)
 
25

 
(3,062
)
Balance at end of period
 
$
5,713

 
$
(1,621
)
 
$
(463
)
 
$
3,629

The following tables presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) in 2017, 2016 and 2015:
(in thousands)
 
2017
 
2016
 
2015
 
Affected Line Item where Net Income is Presented
Realized gains on AFS securities:
 
 
 
 
 
 
 
 
Before tax
 
$
19

 
$
4,498

 
$
1,334

 
Non-interest income
Tax effect
 
(7
)
 
(1,574
)
 
(467
)
 
Tax expense
Total reclassifications for the period
 
$
12

 
$
2,924

 
$
867

 
Net of tax

(in thousands)
 
2017
 
2016
 
2015
 
Affected Line Item where Net Income is Presented
Realized loss on post-retirement plans:
 
 
 
 
 
 
 
 
Before tax
 
$
(21
)
 
$
(28
)
 
$
(38
)
 
Salaries and benefits
Tax effect
 
8

 
10

 
13

 
Tax benefit
Total reclassifications for the period
 
$
(13
)
 
$
(18
)
 
$
(25
)
 
Net of tax


Earnings per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method:
(in thousands, except per share and share data)
 
2017
 
2016
 
2015
Net income
 
$
25,993

 
$
14,933

 
$
15,153

 
 
 
 
 
 
 
Average number of basic common shares outstanding
 
15,183,615

 
9,068,624

 
8,970,368

Plus: dilutive effect of stock options and awards outstanding
 
106,795

 
74,029

 
120,018

Average number of diluted common shares outstanding
 
15,290,410

 
9,142,653

 
9,090,386

 
 
 
 
 
 
 
Anti-dilutive options excluded from earnings calculation
 
8,659

 
90,249

 
129,198

 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
Basic
 
$
1.71

 
$
1.65

 
$
1.69

Diluted
 
$
1.70

 
$
1.63

 
$
1.67