ý | 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 |
VIRGINIA | 54-1598552 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
Yes x No ¨ |
Yes x No ¨ |
Large accelerated filer | ý | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Yes ¨ No x |
ITEM | PAGE | ||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 6. | |||
AFS | – | Available for sale |
ALCO | – | Asset Liability Committee |
ALL | – | Allowance for loan losses |
ASC | – | Accounting Standards Codification |
ASU | – | Accounting Standards Update |
ATM | – | Automated teller machine |
the Bank | – | Union Bank & Trust |
bps | – | Basis points |
the Company | – | Union Bankshares Corporation |
Dodd-Frank Act | – | Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 |
EPS | – | Earnings per share |
Exchange Act | – | Securities Exchange Act of 1934 |
FASB | – | Financial Accounting Standards Board |
FDIC | – | Federal Deposit Insurance Corporation |
Federal Reserve | – | Board of Governors of the Federal Reserve System |
Federal Reserve Bank | – | Federal Reserve Bank of Richmond |
FHLB | – | Federal Home Loan Bank of Atlanta |
U.S. GAAP or GAAP | – | Accounting principles generally accepted in the United States |
HELOC | – | Home equity line of credit |
HTM | – | Held to maturity |
LIBOR | – | London Interbank Offered Rate |
NPA | – | Nonperforming assets |
ODCM | – | Old Dominion Capital Management, Inc. |
OREO | – | Other real estate owned |
OTTI | – | Other than temporary impairment |
PCI | – | Purchased credit impaired |
ROA | – | Return on average assets |
ROTCE | – | Return on average tangible common equity |
StellarOne | – | StellarOne Corporation |
TDR | – | Troubled debt restructuring |
UMG | – | Union Mortgage Group, Inc. |
September 30, 2016 | December 31, 2015 | ||||||
(Unaudited) | (Audited) | ||||||
ASSETS | |||||||
Cash and cash equivalents: | |||||||
Cash and due from banks | $ | 103,979 | $ | 111,323 | |||
Interest-bearing deposits in other banks | 51,303 | 29,670 | |||||
Federal funds sold | 893 | 1,667 | |||||
Total cash and cash equivalents | 156,175 | 142,660 | |||||
Securities available for sale, at fair value | 954,984 | 903,292 | |||||
Securities held to maturity, at carrying value | 200,839 | 205,374 | |||||
Restricted stock, at cost | 63,204 | 51,828 | |||||
Loans held for sale | 46,814 | 36,030 | |||||
Loans held for investment, net of deferred fees and costs | 6,148,918 | 5,671,462 | |||||
Less allowance for loan losses | 36,542 | 34,047 | |||||
Net loans held for investment | 6,112,376 | 5,637,415 | |||||
Premises and equipment, net | 123,416 | 126,028 | |||||
Other real estate owned, net of valuation allowance | 10,581 | 15,299 | |||||
Goodwill | 298,191 | 293,522 | |||||
Core deposit intangibles, net | 18,001 | 23,310 | |||||
Other amortizable intangibles, net | 4,342 | — | |||||
Bank owned life insurance | 177,847 | 173,687 | |||||
Other assets | 91,460 | 84,846 | |||||
Total assets | $ | 8,258,230 | $ | 7,693,291 | |||
LIABILITIES | |||||||
Noninterest-bearing demand deposits | $ | 1,442,268 | $ | 1,372,937 | |||
Interest-bearing deposits | 4,816,238 | 4,590,999 | |||||
Total deposits | 6,258,506 | 5,963,936 | |||||
Securities sold under agreements to repurchase | 64,225 | 84,977 | |||||
Other short-term borrowings | 601,500 | 304,000 | |||||
Long-term borrowings | 259,902 | 291,198 | |||||
Other liabilities | 73,133 | 53,813 | |||||
Total liabilities | 7,257,266 | 6,697,924 | |||||
Commitments and contingencies (Note 6) | |||||||
STOCKHOLDERS' EQUITY | |||||||
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,556,486 shares and 44,785,674 shares, respectively. | 57,444 | 59,159 | |||||
Additional paid-in capital | 603,785 | 631,822 | |||||
Retained earnings | 329,876 | 298,134 | |||||
Accumulated other comprehensive income | 9,859 | 6,252 | |||||
Total stockholders' equity | 1,000,964 | 995,367 | |||||
Total liabilities and stockholders' equity | $ | 8,258,230 | $ | 7,693,291 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | ||||||||||||
Interest and dividend income: | |||||||||||||||
Interest and fees on loans | $ | 66,190 | $ | 62,651 | $ | 193,884 | $ | 185,706 | |||||||
Interest on deposits in other banks | 65 | 23 | 178 | 65 | |||||||||||
Interest and dividends on securities: | |||||||||||||||
Taxable | 4,732 | 3,954 | 13,558 | 11,621 | |||||||||||
Nontaxable | 3,446 | 3,372 | 10,344 | 10,062 | |||||||||||
Total interest and dividend income | 74,433 | 70,000 | 217,964 | 207,454 | |||||||||||
Interest expense: | |||||||||||||||
Interest on deposits | 4,552 | 4,204 | 12,945 | 11,204 | |||||||||||
Interest on federal funds purchased | 2 | 1 | 5 | 6 | |||||||||||
Interest on short-term borrowings | 763 | 223 | 2,093 | 728 | |||||||||||
Interest on long-term borrowings | 2,088 | 2,128 | 6,386 | 6,287 | |||||||||||
Total interest expense | 7,405 | 6,556 | 21,429 | 18,225 | |||||||||||
Net interest income | 67,028 | 63,444 | 196,535 | 189,229 | |||||||||||
Provision for credit losses | 2,472 | 2,062 | 7,376 | 7,561 | |||||||||||
Net interest income after provision for credit losses | 64,556 | 61,382 | 189,159 | 181,668 | |||||||||||
Noninterest income: | |||||||||||||||
Service charges on deposit accounts | 4,965 | 4,965 | 14,454 | 13,800 | |||||||||||
Other service charges and fees | 4,397 | 3,983 | 12,971 | 11,618 | |||||||||||
Fiduciary and asset management fees | 2,844 | 2,304 | 7,315 | 6,835 | |||||||||||
Mortgage banking income, net | 3,207 | 2,630 | 8,324 | 7,582 | |||||||||||
Gains on securities transactions, net | — | 75 | 145 | 672 | |||||||||||
Other-than-temporary impairment losses | — | (300 | ) | — | (300 | ) | |||||||||
Bank owned life insurance income | 1,389 | 1,161 | 4,122 | 3,431 | |||||||||||
Other operating income | 2,148 | 1,907 | 5,526 | 4,352 | |||||||||||
Total noninterest income | 18,950 | 16,725 | 52,857 | 47,990 | |||||||||||
Noninterest expenses: | |||||||||||||||
Salaries and benefits | 30,493 | 25,853 | 87,061 | 78,905 | |||||||||||
Occupancy expenses | 4,841 | 4,915 | 14,627 | 15,220 | |||||||||||
Furniture and equipment expenses | 2,635 | 3,015 | 7,867 | 8,818 | |||||||||||
Printing, postage, and supplies | 1,147 | 1,191 | 3,566 | 3,970 | |||||||||||
Communications expense | 948 | 1,159 | 2,964 | 3,481 | |||||||||||
Technology and data processing | 3,917 | 3,549 | 11,340 | 10,020 | |||||||||||
Professional services | 1,895 | 1,991 | 6,432 | 5,008 | |||||||||||
Marketing and advertising expense | 1,975 | 1,781 | 5,838 | 5,841 | |||||||||||
FDIC assessment premiums and other insurance | 1,262 | 1,351 | 4,003 | 4,030 | |||||||||||
Other taxes | 639 | 1,569 | 3,864 | 4,674 | |||||||||||
Loan-related expenses | 1,531 | 1,341 | 3,638 | 3,173 | |||||||||||
OREO and credit-related expenses | 503 | 1,263 | 1,965 | 4,415 | |||||||||||
Amortization of intangible assets | 1,843 | 2,074 | 5,468 | 6,435 | |||||||||||
Training and other personnel costs | 863 | 1,198 | 2,512 | 2,831 | |||||||||||
Other expenses | 2,421 | 1,075 | 5,291 | 5,584 | |||||||||||
Total noninterest expenses | 56,913 | 53,325 | 166,436 | 162,405 | |||||||||||
Income before income taxes | 26,593 | 24,782 | 75,580 | 67,253 | |||||||||||
Income tax expense | 6,192 | 6,566 | 18,881 | 17,989 | |||||||||||
Net income | $ | 20,401 | $ | 18,216 | $ | 56,699 | $ | 49,264 | |||||||
Basic earnings per common share | $ | 0.47 | $ | 0.40 | $ | 1.29 | $ | 1.09 | |||||||
Diluted earnings per common share | $ | 0.47 | $ | 0.40 | $ | 1.29 | $ | 1.09 | |||||||
Dividends declared per common share | $ | 0.19 | $ | 0.17 | $ | 0.57 | $ | 0.49 | |||||||
Basic weighted average number of common shares outstanding | 43,565,937 | 45,087,409 | 43,853,548 | 45,107,290 | |||||||||||
Diluted weighted average number of common shares outstanding | 43,754,915 | 45,171,610 | 43,967,725 | 45,189,578 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 20,401 | $ | 18,216 | $ | 56,699 | $ | 49,264 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Cash flow hedges: | |||||||||||||||
Change in fair value of cash flow hedges | (78 | ) | (2,328 | ) | (3,766 | ) | (2,009 | ) | |||||||
Reclassification adjustment for losses (gains) included in net income (net of tax, $83 and $84 for the three months and $233 and $253 for the nine months ended September 30, 2016 and 2015, respectively) | 154 | 157 | 433 | 470 | |||||||||||
AFS securities: | |||||||||||||||
Unrealized holding gains (losses) arising during period (net of tax, $604 and $673 for the three months and $4,227 and $976 for the nine months ended September 30, 2016 and 2015, respectively) | 1,121 | 1,250 | 7,851 | (1,812 | ) | ||||||||||
Reclassification adjustment for losses (gains) included in net income (net of tax, $0 and $79 for the three months and $51 and $130 for the nine months ended September 30, 2016 and 2015, respectively) | — | 146 | (95 | ) | (242 | ) | |||||||||
HTM securities: | |||||||||||||||
Accretion of unrealized gain for AFS securities transferred to HTM (net of tax, $128 and $166 for the three months and $439 and $278 for the nine months ended September 30, 2016 and 2015, respectively) | (237 | ) | (308 | ) | (816 | ) | (516 | ) | |||||||
Other comprehensive income (loss) | 960 | (1,083 | ) | 3,607 | (4,109 | ) | |||||||||
Comprehensive income | $ | 21,361 | $ | 17,133 | $ | 60,306 | $ | 45,155 |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||
Balance - December 31, 2014 | $ | 59,795 | $ | 643,443 | $ | 261,676 | $ | 12,255 | $ | 977,169 | |||||||||
Net income - 2015 | 49,264 | 49,264 | |||||||||||||||||
Other comprehensive income (net of taxes of $1,130) | (4,109 | ) | (4,109 | ) | |||||||||||||||
Dividends on common stock ($0.49 per share) | (21,000 | ) | (21,000 | ) | |||||||||||||||
Stock purchased under stock repurchase plan (347,021 shares) | (460 | ) | (7,535 | ) | (7,995 | ) | |||||||||||||
Issuance of common stock under Dividend Reinvestment Plan (52,201 shares) | 69 | 1,030 | (1,099 | ) | — | ||||||||||||||
Issuance of common stock under Equity Compensation Plans (37,124 shares) | 49 | 517 | 566 | ||||||||||||||||
Issuance of common stock for services rendered (19,417 shares) | 26 | 420 | 446 | ||||||||||||||||
Vesting of restricted stock, including tax effects, under Equity Compensation Plans (26,576 shares) | 35 | (321 | ) | (286 | ) | ||||||||||||||
Stock-based compensation expense | 957 | 957 | |||||||||||||||||
Balance - September 30, 2015 | $ | 59,514 | $ | 638,511 | $ | 288,841 | $ | 8,146 | $ | 995,012 | |||||||||
Balance - December 31, 2015 | $ | 59,159 | $ | 631,822 | $ | 298,134 | $ | 6,252 | $ | 995,367 | |||||||||
Net income - 2016 | 56,699 | 56,699 | |||||||||||||||||
Other comprehensive income (net of taxes of $3,970) | 3,607 | 3,607 | |||||||||||||||||
Issuance of common stock in regard to acquisition (17,232 shares) | 23 | 430 | 453 | ||||||||||||||||
Dividends on common stock ($0.57 per share) | (24,957 | ) | (24,957 | ) | |||||||||||||||
Stock purchased under stock repurchase plan (1,411,131 shares) | (1,876 | ) | (31,300 | ) | (33,176 | ) | |||||||||||||
Issuance of common stock under Equity Compensation Plans (54,044 shares) | 72 | 681 | 753 | ||||||||||||||||
Issuance of common stock for services rendered (14,576 shares) | 19 | 360 | 379 | ||||||||||||||||
Vesting of restricted stock, including tax effects, under Equity Compensation Plans (35,515 shares) | 47 | (492 | ) | (445 | ) | ||||||||||||||
Stock-based compensation expense | 2,284 | 2,284 | |||||||||||||||||
Balance - September 30, 2016 | $ | 57,444 | $ | 603,785 | $ | 329,876 | $ | 9,859 | $ | 1,000,964 |
2016 | 2015 | ||||||
Operating activities: | |||||||
Net income | $ | 56,699 | $ | 49,264 | |||
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities: | |||||||
Depreciation of premises and equipment | 7,617 | 8,097 | |||||
Writedown of OREO | 879 | 1,773 | |||||
Other-than-temporary impairment recognized in earnings | — | 300 | |||||
Amortization, net | 8,837 | 10,080 | |||||
Amortization (accretion) related to acquisition, net | 1,400 | 1,175 | |||||
Provision for credit losses | 7,376 | 7,561 | |||||
Losses (gains) on securities transactions, net | (145 | ) | (672 | ) | |||
Bank owned life insurance income | (4,122 | ) | (3,431 | ) | |||
Decrease (increase) in loans held for sale, net | (10,784 | ) | 3,206 | ||||
Losses (gains) on sales of other real estate owned, net | (278 | ) | 80 | ||||
Losses (gains) on sales of premises, net | 97 | 98 | |||||
Stock-based compensation expenses | 2,284 | 957 | |||||
Issuance of common stock for services | 379 | 446 | |||||
Net decrease (increase) in other assets | (11,169 | ) | (461 | ) | |||
Net increase (decrease) in other liabilities | 11,005 | 691 | |||||
Net cash and cash equivalents provided by (used in) operating activities | 70,075 | 79,164 | |||||
Investing activities: | |||||||
Purchases of securities available for sale | (159,863 | ) | (171,203 | ) | |||
Proceeds from sales of securities available for sale | 18,272 | 63,928 | |||||
Proceeds from maturities, calls and paydowns of securities available for sale | 83,942 | 110,132 | |||||
Proceeds from maturities, calls and paydowns of securities held to maturity | 1,841 | 795 | |||||
Net decrease (increase) in loans held for investment | (479,346 | ) | (228,839 | ) | |||
Net decrease (increase) in premises and equipment | (5,102 | ) | (2,541 | ) | |||
Proceeds from sales of other real estate owned | 4,982 | 6,374 | |||||
Improvements to other real estate owned | — | (308 | ) | ||||
Cash paid for equity-method investments | — | (355 | ) | ||||
Cash paid in acquisition | (4,077 | ) | — | ||||
Cash acquired in acquisitions | 207 | — | |||||
Net cash and cash equivalents provided by (used in) investing activities | (539,144 | ) | (222,017 | ) | |||
Financing activities: | |||||||
Net increase (decrease) in noninterest-bearing deposits | 69,331 | 138,667 | |||||
Net increase (decrease) in interest-bearing deposits | 225,239 | 43,259 | |||||
Net increase (decrease) in short-term borrowings | 276,748 | 44,024 | |||||
Net increase (decrease) in long-term borrowings | (30,909 | ) | (8,448 | ) | |||
Cash dividends paid - common stock | (24,957 | ) | (21,000 | ) | |||
Repurchase of common stock | (33,176 | ) | (7,995 | ) | |||
Issuance of common stock | 753 | 566 | |||||
Vesting of restricted stock, including tax effects | (445 | ) | (286 | ) | |||
Net cash and cash equivalents provided by (used in) financing activities | 482,584 | 188,787 | |||||
Increase (decrease) in cash and cash equivalents | 13,515 | 45,934 | |||||
Cash and cash equivalents at beginning of the period | 142,660 | 133,260 | |||||
Cash and cash equivalents at end of the period | $ | 156,175 | $ | 179,194 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Cash payments for: | |||||||
Interest | $ | 21,812 | $ | 20,720 | |||
Income taxes | 19,800 | 13,800 | |||||
Supplemental schedule of noncash investing and financing activities | |||||||
Unrealized (losses) gains on securities available for sale | $ | 11,932 | $ | (3,160 | ) | ||
Transfer from securities available for sale to securities held to maturity | — | 201,822 | |||||
Transfer from loans held for investment to loans held for sale | — | 26,400 | |||||
Changes in fair value of interest rate swap loss | (3,333 | ) | (1,539 | ) | |||
Transfers between loans and other real estate owned | 865 | 1,493 | |||||
Transfers from bank premises to other real estate owned | — | 402 | |||||
Issuance of common stock in exchange for net assets in acquisition | 453 | — |
Amortized | Gross Unrealized | Estimated | |||||||||||||
Cost | Gains | (Losses) | Fair Value | ||||||||||||
September 30, 2016 | |||||||||||||||
Obligations of states and political subdivisions | $ | 266,291 | $ | 13,147 | $ | (215 | ) | $ | 279,223 | ||||||
Corporate bonds | 122,130 | 1,196 | (1,579 | ) | 121,747 | ||||||||||
Mortgage-backed securities | 529,228 | 11,877 | (509 | ) | 540,596 | ||||||||||
Other securities | 13,385 | 33 | — | 13,418 | |||||||||||
Total available for sale securities | $ | 931,034 | $ | 26,253 | $ | (2,303 | ) | $ | 954,984 | ||||||
December 31, 2015 | |||||||||||||||
Obligations of states and political subdivisions | $ | 257,740 | $ | 10,479 | $ | (140 | ) | $ | 268,079 | ||||||
Corporate bonds | 77,628 | 55 | (1,704 | ) | 75,979 | ||||||||||
Mortgage-backed securities | 544,823 | 6,127 | (2,779 | ) | 548,171 | ||||||||||
Other securities | 11,085 | — | (22 | ) | 11,063 | ||||||||||
Total available for sale securities | $ | 891,276 | $ | 16,661 | $ | (4,645 | ) | $ | 903,292 |
Less than 12 months | More than 12 months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
September 30, 2016 | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | 11,640 | $ | (209 | ) | $ | 655 | $ | (6 | ) | $ | 12,295 | $ | (215 | ) | ||||||||
Mortgage-backed securities | 37,739 | (156 | ) | 43,430 | (353 | ) | 81,169 | (509 | ) | ||||||||||||||
Corporate bonds and other securities | 5,059 | (16 | ) | 41,000 | (1,563 | ) | 46,059 | (1,579 | ) | ||||||||||||||
Total available for sale | $ | 54,438 | $ | (381 | ) | $ | 85,085 | $ | (1,922 | ) | $ | 139,523 | $ | (2,303 | ) | ||||||||
December 31, 2015 | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | 8,114 | $ | (70 | ) | $ | 4,950 | $ | (70 | ) | $ | 13,064 | $ | (140 | ) | ||||||||
Mortgage-backed securities | 287,113 | (2,442 | ) | 21,660 | (337 | ) | 308,773 | (2,779 | ) | ||||||||||||||
Corporate bonds and other securities | 36,157 | (751 | ) | 19,558 | (975 | ) | 55,715 | (1,726 | ) | ||||||||||||||
Total available for sale | $ | 331,384 | $ | (3,263 | ) | $ | 46,168 | $ | (1,382 | ) | $ | 377,552 | $ | (4,645 | ) |
September 30, 2016 | December 31, 2015 | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
Due in one year or less | $ | 16,667 | $ | 16,860 | $ | 8,380 | $ | 8,370 | |||||||
Due after one year through five years | 109,700 | 113,093 | 65,326 | 66,996 | |||||||||||
Due after five years through ten years | 314,903 | 324,270 | 296,864 | 301,920 | |||||||||||
Due after ten years | 489,764 | 500,761 | 520,706 | 526,006 | |||||||||||
Total securities available for sale | $ | 931,034 | $ | 954,984 | $ | 891,276 | $ | 903,292 |
September 30, 2016 | December 31, 2015 | ||||||
Public deposits | $ | 183,841 | $ | 184,635 | |||
Repurchase agreements | 116,844 | 126,120 | |||||
Other purposes (1) | 23,326 | 26,546 | |||||
Total pledged securities | $ | 324,011 | $ | 337,301 |
Carrying | Gross Unrealized | Estimated | |||||||||||||
Value (1) | Gains | (Losses) | Fair Value | ||||||||||||
September 30, 2016 | |||||||||||||||
Obligations of states and political subdivisions | $ | 200,839 | $ | 8,959 | $ | (81 | ) | $ | 209,717 | ||||||
December 31, 2015 | |||||||||||||||
Obligations of states and political subdivisions | $ | 205,374 | $ | 5,748 | $ | (1,685 | ) | $ | 209,437 |
Less than 12 months | More than 12 months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
September 30, 2016 | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | — | $ | — | $ | 661 | $ | (81 | ) | $ | 661 | $ | (81 | ) | |||||||||
December 31, 2015 | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | 7,056 | $ | (1,685 | ) | $ | — | $ | — | $ | 7,056 | $ | (1,685 | ) |
September 30, 2016 | December 31, 2015 | ||||||||||||||
Carrying Value (1) | Estimated Fair Value | Carrying Value (1) | Estimated Fair Value | ||||||||||||
Due in one year or less | $ | 850 | $ | 850 | $ | 1,488 | $ | 1,491 | |||||||
Due after one year through five years | 25,918 | 26,561 | 4,294 | 4,348 | |||||||||||
Due after five years through ten years | 48,243 | 50,017 | 44,736 | 45,501 | |||||||||||
Due after ten years | 125,828 | 132,289 | 154,856 | 158,097 | |||||||||||
Total securities held to maturity | $ | 200,839 | $ | 209,717 | $ | 205,374 | $ | 209,437 |
September 30, 2016 | December 31, 2015 | ||||||
Public deposits | $ | 209,717 | $ | 207,140 | |||
Total pledged securities | $ | 209,717 | $ | 207,140 |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||
Realized gains (losses): | |||||||
Gross realized gains | $ | — | $ | 242 | |||
Gross realized losses | — | (97 | ) | ||||
Net realized gains | $ | — | $ | 145 | |||
Proceeds from sales of securities | $ | 2,848 | $ | 18,272 |
Three Months Ended September 30, 2015 | Nine Months Ended September 30, 2015 | ||||||
Realized gains (losses): | |||||||
Gross realized gains | $ | 75 | $ | 759 | |||
Gross realized losses | — | (87 | ) | ||||
Net realized gains | $ | 75 | $ | 672 | |||
Proceeds from sales of securities | $ | 5,771 | $ | 63,928 |
September 30, 2016 | December 31, 2015 | ||||||
Construction and Land Development | $ | 776,430 | $ | 749,720 | |||
Commercial Real Estate - Owner Occupied | 857,142 | 860,086 | |||||
Commercial Real Estate - Non-Owner Occupied | 1,454,828 | 1,270,480 | |||||
Multifamily Real Estate | 339,313 | 322,528 | |||||
Commercial & Industrial | 509,857 | 435,365 | |||||
Residential 1-4 Family | 999,361 | 978,469 | |||||
Auto | 255,188 | 234,061 | |||||
HELOC | 524,097 | 516,726 | |||||
Consumer and all other | 432,702 | 304,027 | |||||
Total loans held for investment, net(1) | $ | 6,148,918 | $ | 5,671,462 |
30-59 Days Past Due | 60-89 Days Past Due | Greater than 90 Days and still Accruing | PCI | Nonaccrual | Current | Total Loans | |||||||||||||||||||||
Construction and Land Development | $ | 309 | $ | 697 | $ | 610 | $ | 3,205 | $ | 2,301 | $ | 769,308 | $ | 776,430 | |||||||||||||
Commercial Real Estate - Owner Occupied | 1,411 | 365 | 304 | 19,064 | 1,609 | 834,389 | 857,142 | ||||||||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 324 | — | — | 18,141 | — | 1,436,363 | 1,454,828 | ||||||||||||||||||||
Multifamily Real Estate | — | — | — | 2,079 | — | 337,234 | 339,313 | ||||||||||||||||||||
Commercial & Industrial | 567 | 51 | 77 | 1,145 | 1,344 | 506,673 | 509,857 | ||||||||||||||||||||
Residential 1-4 Family | 4,985 | 6,345 | 2,005 | 16,828 | 5,279 | 963,919 | 999,361 | ||||||||||||||||||||
Auto | 1,846 | 239 | 28 | — | 231 | 252,844 | 255,188 | ||||||||||||||||||||
HELOC | 2,600 | 899 | 407 | 1,498 | 1,464 | 517,229 | 524,097 | ||||||||||||||||||||
Consumer and all other | 1,713 | 1,037 | 98 | 386 | 449 | 429,019 | 432,702 | ||||||||||||||||||||
Total loans held for investment | $ | 13,755 | $ | 9,633 | $ | 3,529 | $ | 62,346 | $ | 12,677 | $ | 6,046,978 | $ | 6,148,918 |
30-59 Days Past Due | 60-89 Days Past Due | Greater than 90 Days and still Accruing | PCI | Nonaccrual | Current | Total Loans | |||||||||||||||||||||
Construction and Land Development | $ | 3,155 | $ | 380 | $ | 128 | $ | 5,986 | $ | 2,113 | $ | 737,958 | $ | 749,720 | |||||||||||||
Commercial Real Estate - Owner Occupied | 1,714 | 118 | 103 | 27,388 | 3,904 | 826,859 | 860,086 | ||||||||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 771 | — | 723 | 13,519 | 100 | 1,255,367 | 1,270,480 | ||||||||||||||||||||
Multifamily Real Estate | — | — | 272 | 1,555 | — | 320,701 | 322,528 | ||||||||||||||||||||
Commercial & Industrial | 1,056 | 27 | 124 | 1,813 | 429 | 431,916 | 435,365 | ||||||||||||||||||||
Residential 1-4 Family | 15,023 | 6,774 | 3,638 | 21,159 | 3,563 | 928,312 | 978,469 | ||||||||||||||||||||
Auto | 2,312 | 233 | 60 | — | 192 | 231,264 | 234,061 | ||||||||||||||||||||
HELOC | 2,589 | 1,112 | 762 | 1,791 | 1,348 | 509,124 | 516,726 | ||||||||||||||||||||
Consumer and all other | 1,167 | 689 | 19 | 526 | 287 | 301,339 | 304,027 | ||||||||||||||||||||
Total loans held for investment | $ | 27,787 | $ | 9,333 | $ | 5,829 | $ | 73,737 | $ | 11,936 | $ | 5,542,840 | $ | 5,671,462 |
30-89 Days Past Due | Greater than 90 Days | Current | Total | ||||||||||||
Construction and Land Development | $ | 29 | $ | — | $ | 3,176 | $ | 3,205 | |||||||
Commercial Real Estate - Owner Occupied | 737 | 634 | 17,693 | 19,064 | |||||||||||
Commercial Real Estate - Non-Owner Occupied | 1,921 | 125 | 16,095 | 18,141 | |||||||||||
Multifamily Real Estate | — | — | 2,079 | 2,079 | |||||||||||
Commercial & Industrial | 45 | 57 | 1,043 | 1,145 | |||||||||||
Residential 1-4 Family | 1,686 | 775 | 14,367 | 16,828 | |||||||||||
HELOC | 122 | 435 | 941 | 1,498 | |||||||||||
Consumer and all other | — | — | 386 | 386 | |||||||||||
Total | $ | 4,540 | $ | 2,026 | $ | 55,780 | $ | 62,346 |
30-89 Days Past Due | Greater than 90 Days | Current | Total | ||||||||||||
Construction and Land Development | $ | 369 | $ | 241 | $ | 5,376 | $ | 5,986 | |||||||
Commercial Real Estate - Owner Occupied | 1,139 | 1,412 | 24,837 | 27,388 | |||||||||||
Commercial Real Estate - Non-Owner Occupied | 755 | 202 | 12,562 | 13,519 | |||||||||||
Multifamily Real Estate | — | — | 1,555 | 1,555 | |||||||||||
Commercial & Industrial | 209 | 21 | 1,583 | 1,813 | |||||||||||
Residential 1-4 Family | 2,143 | 1,923 | 17,093 | 21,159 | |||||||||||
HELOC | 410 | 458 | 923 | 1,791 | |||||||||||
Consumer and all other | — | — | 526 | 526 | |||||||||||
Total | $ | 5,025 | $ | 4,257 | $ | 64,455 | $ | 73,737 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||||||||||
Loans without a specific allowance | |||||||||||||||||||||||
Construction and Land Development | $ | 25,171 | $ | 25,647 | $ | — | $ | 33,250 | $ | 33,731 | $ | — | |||||||||||
Commercial Real Estate - Owner Occupied | 6,414 | 6,579 | — | 7,781 | 8,983 | — | |||||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 3,752 | 3,752 | — | 5,328 | 5,325 | — | |||||||||||||||||
Multifamily Real Estate | — | — | — | 3,828 | 3,828 | — | |||||||||||||||||
Commercial & Industrial | 952 | 1,362 | — | 711 | 951 | — | |||||||||||||||||
Residential 1-4 Family | 9,066 | 10,059 | — | 7,564 | 8,829 | — | |||||||||||||||||
Auto | — | — | — | 7 | 7 | — | |||||||||||||||||
HELOC | 1,347 | 1,416 | — | 1,786 | 2,028 | — | |||||||||||||||||
Consumer and all other | 173 | 223 | — | 211 | 211 | — | |||||||||||||||||
Total impaired loans without a specific allowance | $ | 46,875 | $ | 49,038 | $ | — | $ | 60,466 | $ | 63,893 | $ | — | |||||||||||
Loans with a specific allowance | |||||||||||||||||||||||
Construction and Land Development | $ | 2,070 | $ | 2,442 | $ | 123 | $ | 3,167 | $ | 3,218 | $ | 538 | |||||||||||
Commercial Real Estate - Owner Occupied | 1,198 | 1,215 | 5 | 3,237 | 3,239 | 358 | |||||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 40 | 40 | 1 | 907 | 907 | 75 | |||||||||||||||||
Commercial & Industrial | 2,496 | 2,498 | 642 | 1,952 | 1,949 | 441 | |||||||||||||||||
Residential 1-4 Family | 3,607 | 3,794 | 115 | 6,065 | 6,153 | 418 | |||||||||||||||||
Auto | 231 | 270 | 1 | 192 | 199 | 1 | |||||||||||||||||
HELOC | 706 | 791 | 17 | 769 | 925 | 76 | |||||||||||||||||
Consumer and all other | 278 | 650 | 88 | 363 | 512 | 95 | |||||||||||||||||
Total impaired loans with a specific allowance | $ | 10,626 | $ | 11,700 | $ | 992 | $ | 16,652 | $ | 17,102 | $ | 2,002 | |||||||||||
Total impaired loans | $ | 57,501 | $ | 60,738 | $ | 992 | $ | 77,118 | $ | 80,995 | $ | 2,002 |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||||||||||
Average Investment | Interest Income Recognized | Average Investment | Interest Income Recognized | ||||||||||||
Construction and Land Development | $ | 28,195 | $ | 464 | $ | 27,645 | $ | 1,346 | |||||||
Commercial Real Estate - Owner Occupied | 7,691 | 72 | 7,862 | 230 | |||||||||||
Commercial Real Estate - Non-Owner Occupied | 3,777 | 33 | 3,759 | 98 | |||||||||||
Commercial & Industrial | 4,628 | 42 | 4,964 | 134 | |||||||||||
Residential 1-4 Family | 13,106 | 89 | 13,439 | 267 | |||||||||||
Auto | 271 | — | 289 | 4 | |||||||||||
HELOC | 2,118 | 7 | 2,185 | 35 | |||||||||||
Consumer and all other | 453 | — | 620 | 6 | |||||||||||
Total impaired loans | $ | 60,239 | $ | 707 | $ | 60,763 | $ | 2,120 |
Three Months Ended September 30, 2015 | Nine Months Ended September 30, 2015 | ||||||||||||||
Average Investment | Interest Income Recognized | Average Investment | Interest Income Recognized | ||||||||||||
Construction and Land Development | $ | 33,145 | $ | 530 | $ | 33,727 | $ | 1,579 | |||||||
Commercial Real Estate - Owner Occupied | 18,859 | 195 | 18,709 | 547 | |||||||||||
Commercial Real Estate - Non-Owner Occupied | 8,596 | 96 | 8,809 | 270 | |||||||||||
Multifamily Real Estate | 4,593 | 75 | 4,598 | 222 | |||||||||||
Commercial & Industrial | 3,503 | 42 | 3,633 | 125 | |||||||||||
Residential 1-4 Family | 11,494 | 160 | 11,723 | 374 | |||||||||||
Auto | 115 | 1 | 121 | 5 | |||||||||||
HELOC | 1,710 | 14 | 1,727 | 36 | |||||||||||
Consumer and all other | 534 | 6 | 594 | 20 | |||||||||||
Total impaired loans | $ | 82,549 | $ | 1,119 | $ | 83,641 | $ | 3,178 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||
No. of Loans | Recorded Investment | Outstanding Commitment | No. of Loans | Recorded Investment | Outstanding Commitment | ||||||||||||||||
Performing | |||||||||||||||||||||
Construction and Land Development | 5 | $ | 3,744 | $ | — | 6 | $ | 3,349 | $ | — | |||||||||||
Commercial Real Estate - Owner Occupied | 5 | 2,070 | — | 5 | 1,530 | — | |||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 2 | 2,390 | — | 2 | 2,390 | — | |||||||||||||||
Commercial & Industrial | 4 | 663 | — | 5 | 261 | — | |||||||||||||||
Residential 1-4 Family | 25 | 2,957 | — | 27 | 3,173 | — | |||||||||||||||
Consumer and all other | — | — | — | 1 | 77 | — | |||||||||||||||
Total performing | 41 | $ | 11,824 | $ | — | 46 | $ | 10,780 | $ | — | |||||||||||
Nonperforming | |||||||||||||||||||||
Construction and Land Development | 2 | $ | 215 | $ | — | 2 | $ | 321 | $ | — | |||||||||||
Commercial Real Estate - Owner Occupied | 2 | 161 | — | 1 | 137 | — | |||||||||||||||
Commercial & Industrial | 1 | 125 | — | 1 | 2 | — | |||||||||||||||
Residential 1-4 Family | 8 | 951 | — | 6 | 1,142 | — | |||||||||||||||
HELOC | — | — | — | 1 | 319 | — | |||||||||||||||
Total nonperforming | 13 | $ | 1,452 | $ | — | 11 | $ | 1,921 | $ | — | |||||||||||
Total performing and nonperforming | 54 | $ | 13,276 | $ | — | 57 | $ | 12,701 | $ | — |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||||||||
No. of Loans | Recorded Investment at Period End | No. of Loans | Recorded Investment at Period End | ||||||||||
Term modification, at a market rate | |||||||||||||
Construction and Land Development | — | $ | — | 1 | $ | 1,177 | |||||||
Commercial Real Estate - Owner Occupied | — | — | 2 | 739 | |||||||||
Commercial & Industrial | 1 | 457 | 1 | 457 | |||||||||
Residential 1-4 Family | — | — | 2 | 474 | |||||||||
Total loan term extended at a market rate | 1 | $ | 457 | 6 | $ | 2,847 | |||||||
Term modification, below market rate | |||||||||||||
Residential 1-4 Family | — | $ | — | 1 | $ | 36 | |||||||
Total loan term extended at a below market rate | — | $ | — | 1 | $ | 36 | |||||||
Interest rate modification, below market rate | |||||||||||||
Commercial & Industrial | — | $ | — | 1 | $ | 125 | |||||||
Total interest only at below market rate of interest | — | $ | — | 1 | $ | 125 | |||||||
Total | 1 | $ | 457 | 8 | $ | 3,008 |
Three Months Ended September 30, 2015 | Nine Months Ended September 30, 2015 | ||||||||||||
No. of Loans | Recorded Investment at Period End | No. of Loans | Recorded Investment at Period End | ||||||||||
Term modification, at a market rate | |||||||||||||
Commercial Real Estate - Owner Occupied | — | $ | — | 1 | $ | 117 | |||||||
Commercial & Industrial | — | — | 1 | 17 | |||||||||
Total loan term extended at a market rate | — | $ | — | 2 | $ | 134 | |||||||
Term modification, below market rate | |||||||||||||
Construction and Land Development | 1 | $ | 400 | 1 | $ | 400 | |||||||
Commercial Real Estate - Owner Occupied | — | — | 1 | 871 | |||||||||
Residential 1-4 Family | 3 | 674 | 3 | 674 | |||||||||
Total loan term extended at a below market rate | 4 | $ | 1,074 | 5 | $ | 1,945 | |||||||
Total | 4 | $ | 1,074 | 7 | $ | 2,079 |
Allowance for loan losses | |||||||||||||||||||
Balance, beginning of the year | Recoveries credited to allowance | Loans charged off | Provision charged to operations | Balance, end of period | |||||||||||||||
Construction and Land Development | $ | 6,040 | $ | 165 | $ | (869 | ) | $ | 5,464 | $ | 10,800 | ||||||||
Commercial Real Estate - Owner Occupied | 4,614 | 112 | (772 | ) | (770 | ) | 3,184 | ||||||||||||
Commercial Real Estate - Non-Owner Occupied | 6,929 | 3 | (1 | ) | (813 | ) | 6,118 | ||||||||||||
Multifamily Real Estate | 1,606 | — | — | (658 | ) | 948 | |||||||||||||
Commercial & Industrial | 3,163 | 422 | (1,301 | ) | 3,119 | 5,403 | |||||||||||||
Residential 1-4 Family | 5,414 | 466 | (741 | ) | 518 | 5,657 | |||||||||||||
Auto | 1,703 | 243 | (815 | ) | (260 | ) | 871 | ||||||||||||
HELOC | 2,934 | 229 | (1,272 | ) | (534 | ) | 1,357 | ||||||||||||
Consumer and all other | 1,644 | 382 | (957 | ) | 1,135 | 2,204 | |||||||||||||
Total | $ | 34,047 | $ | 2,022 | $ | (6,728 | ) | $ | 7,201 | $ | 36,542 |
Loans individually evaluated for impairment | Loans collectively evaluated for impairment | Loans acquired with deteriorated credit quality | Total | ||||||||||||||||||||||||||||
Loans | ALL | Loans | ALL | Loans | ALL | Loans | ALL | ||||||||||||||||||||||||
Construction and Land Development | $ | 27,241 | $ | 123 | $ | 745,984 | $ | 10,677 | $ | 3,205 | $ | — | $ | 776,430 | $ | 10,800 | |||||||||||||||
Commercial Real Estate - Owner Occupied | 7,612 | 5 | 830,466 | 3,179 | 19,064 | — | 857,142 | 3,184 | |||||||||||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 3,792 | 1 | 1,432,895 | 6,117 | 18,141 | — | 1,454,828 | 6,118 | |||||||||||||||||||||||
Multifamily Real Estate | — | — | 337,234 | 948 | 2,079 | — | 339,313 | 948 | |||||||||||||||||||||||
Commercial & Industrial | 3,448 | 642 | 505,264 | 4,761 | 1,145 | — | 509,857 | 5,403 | |||||||||||||||||||||||
Residential 1-4 Family | 12,673 | 115 | 969,860 | 5,542 | 16,828 | — | 999,361 | 5,657 | |||||||||||||||||||||||
Auto | 231 | 1 | 254,957 | 870 | — | — | 255,188 | 871 | |||||||||||||||||||||||
HELOC | 2,053 | 17 | 520,546 | 1,340 | 1,498 | — | 524,097 | 1,357 | |||||||||||||||||||||||
Consumer and all other | 451 | 88 | 431,865 | 2,116 | 386 | — | 432,702 | 2,204 | |||||||||||||||||||||||
Total loans held for investment, net | $ | 57,501 | $ | 992 | $ | 6,029,071 | $ | 35,550 | $ | 62,346 | $ | — | $ | 6,148,918 | $ | 36,542 |
Allowance for loan losses | |||||||||||||||||||
Balance, beginning of the year | Recoveries credited to allowance | Loans charged off | Provision charged to operations | Balance, end of period | |||||||||||||||
Construction and Land Development | $ | 4,856 | $ | 594 | $ | (415 | ) | $ | 169 | $ | 5,204 | ||||||||
Commercial Real Estate - Owner Occupied | 4,640 | 15 | (481 | ) | 630 | 4,804 | |||||||||||||
Commercial Real Estate - Non-Owner Occupied | 7,256 | 232 | (2,850 | ) | 1,744 | 6,382 | |||||||||||||
Multifamily Real Estate | 1,374 | — | — | 296 | 1,670 | ||||||||||||||
Commercial & Industrial | 2,610 | 776 | (2,081 | ) | 1,485 | 2,790 | |||||||||||||
Residential 1-4 Family | 5,607 | 513 | (1,303 | ) | 927 | 5,744 | |||||||||||||
Auto | 1,297 | 213 | (545 | ) | 600 | 1,565 | |||||||||||||
HELOC | 2,675 | 237 | (749 | ) | 671 | 2,834 | |||||||||||||
Consumer and all other | 2,069 | 414 | (946 | ) | 739 | 2,276 | |||||||||||||
Total | $ | 32,384 | $ | 2,994 | $ | (9,370 | ) | $ | 7,261 | $ | 33,269 |
Loans individually evaluated for impairment | Loans collectively evaluated for impairment | Loans acquired with deteriorated credit quality | Total | ||||||||||||||||||||||||||||
Loans | ALL | Loans | ALL | Loans | ALL | Loans | ALL | ||||||||||||||||||||||||
Construction and Land Development | $ | 33,647 | $ | 175 | $ | 653,370 | $ | 5,029 | $ | 7,628 | $ | — | $ | 694,645 | $ | 5,204 | |||||||||||||||
Commercial Real Estate - Owner Occupied | 18,564 | 677 | 816,320 | 4,127 | 28,694 | — | 863,578 | 4,804 | |||||||||||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 8,632 | 137 | 1,201,649 | 6,245 | 13,326 | — | 1,223,607 | 6,382 | |||||||||||||||||||||||
Multifamily Real Estate | 4,607 | — | 323,409 | 1,670 | 1,943 | — | 329,959 | 1,670 | |||||||||||||||||||||||
Commercial & Industrial | 3,439 | 318 | 403,973 | 2,472 | 2,245 | — | 409,657 | 2,790 | |||||||||||||||||||||||
Residential 1-4 Family | 10,679 | 615 | 954,730 | 5,129 | 22,379 | — | 987,788 | 5,744 | |||||||||||||||||||||||
Auto | 89 | 1 | 225,905 | 1,564 | — | — | 225,994 | 1,565 | |||||||||||||||||||||||
HELOC | 1,502 | 9 | 511,048 | 2,825 | 1,812 | — | 514,362 | 2,834 | |||||||||||||||||||||||
Consumer and all other | 459 | 80 | 292,993 | 2,196 | 579 | — | 294,031 | 2,276 | |||||||||||||||||||||||
Total loans held for investment, net | $ | 81,618 | $ | 2,012 | $ | 5,383,397 | $ | 31,257 | $ | 78,606 | $ | — | $ | 5,543,621 | $ | 33,269 |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Construction and Land Development | $ | 690,623 | $ | 56,433 | $ | 25,559 | $ | 610 | $ | 773,225 | |||||||||
Commercial Real Estate - Owner Occupied | 806,096 | 26,090 | 5,892 | — | 838,078 | ||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 1,399,369 | 33,608 | 3,710 | — | 1,436,687 | ||||||||||||||
Multifamily Real Estate | 313,497 | 23,737 | — | — | 337,234 | ||||||||||||||
Commercial & Industrial | 495,764 | 10,088 | 2,860 | — | 508,712 | ||||||||||||||
Residential 1-4 Family | 950,707 | 22,163 | 7,571 | 2,092 | 982,533 | ||||||||||||||
Auto | 252,549 | 2,459 | 91 | 89 | 255,188 | ||||||||||||||
HELOC | 516,178 | 4,745 | 1,305 | 371 | 522,599 | ||||||||||||||
Consumer and all other | 428,574 | 3,503 | 42 | 197 | 432,316 | ||||||||||||||
Total | $ | 5,853,357 | $ | 182,826 | $ | 47,030 | $ | 3,359 | $ | 6,086,572 |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Construction and Land Development | $ | 663,067 | $ | 52,650 | $ | 27,980 | $ | 37 | $ | 743,734 | |||||||||
Commercial Real Estate - Owner Occupied | 800,979 | 20,856 | 8,931 | 1,932 | 832,698 | ||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 1,228,956 | 22,341 | 5,664 | — | 1,256,961 | ||||||||||||||
Multifamily Real Estate | 315,128 | 2,017 | 3,828 | — | 320,973 | ||||||||||||||
Commercial & Industrial | 414,333 | 16,724 | 2,396 | 99 | 433,552 | ||||||||||||||
Residential 1-4 Family | 912,839 | 34,728 | 8,037 | 1,706 | 957,310 | ||||||||||||||
Auto | 230,670 | 3,109 | 194 | 88 | 234,061 | ||||||||||||||
HELOC | 507,514 | 4,801 | 1,611 | 1,009 | 514,935 | ||||||||||||||
Consumer and all other | 299,014 | 3,996 | 231 | 260 | 303,501 | ||||||||||||||
Total | $ | 5,372,500 | $ | 161,222 | $ | 58,872 | $ | 5,131 | $ | 5,597,725 |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Construction and Land Development | $ | 1,102 | $ | 1,677 | $ | 426 | $ | — | $ | 3,205 | |||||||||
Commercial Real Estate - Owner Occupied | 5,313 | 9,036 | 4,715 | — | 19,064 | ||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 4,855 | 11,562 | 1,724 | — | 18,141 | ||||||||||||||
Multifamily Real Estate | 347 | 1,732 | — | — | 2,079 | ||||||||||||||
Commercial & Industrial | 93 | 496 | 556 | — | 1,145 | ||||||||||||||
Residential 1-4 Family | 8,085 | 5,297 | 2,941 | 505 | 16,828 | ||||||||||||||
HELOC | 932 | 130 | — | 436 | 1,498 | ||||||||||||||
Consumer and all other | 326 | 38 | 22 | — | 386 | ||||||||||||||
Total | $ | 21,053 | $ | 29,968 | $ | 10,384 | $ | 941 | $ | 62,346 |
Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Construction and Land Development | $ | 2,059 | $ | 1,778 | $ | 1,908 | $ | 241 | $ | 5,986 | |||||||||
Commercial Real Estate - Owner Occupied | 5,260 | 15,530 | 6,598 | — | 27,388 | ||||||||||||||
Commercial Real Estate - Non-Owner Occupied | 4,442 | 7,827 | 1,250 | — | 13,519 | ||||||||||||||
Multifamily Real Estate | 356 | 1,199 | — | — | 1,555 | ||||||||||||||
Commercial & Industrial | 144 | 359 | 1,289 | 21 | 1,813 | ||||||||||||||
Residential 1-4 Family | 9,098 | 6,380 | 4,605 | 1,076 | 21,159 | ||||||||||||||
HELOC | 923 | 410 | 20 | 438 | 1,791 | ||||||||||||||
Consumer and all other | 57 | 379 | 90 | — | 526 | ||||||||||||||
Total | $ | 22,339 | $ | 33,862 | $ | 15,760 | $ | 1,776 | $ | 73,737 |
For the Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Balance at beginning of period | $ | 22,139 | $ | 28,956 | |||
Accretion | (4,232 | ) | (4,707 | ) | |||
Reclass of nonaccretable difference due to improvement in expected cash flows | 3,580 | 3,168 | |||||
Other, net (1) | (1,149 | ) | (5,624 | ) | |||
Balance at end of period | $ | 20,338 | $ | 21,793 |
For the remaining three months of 2016 | $ | 1,745 | |
For the year ending December 31, 2017 | 6,070 | ||
For the year ending December 31, 2018 | 4,624 | ||
For the year ending December 31, 2019 | 3,573 | ||
For the year ending December 31, 2020 | 2,508 | ||
Thereafter | 3,823 | ||
Total estimated amortization expense | $ | 22,343 |
September 30, 2016 | December 31, 2015 | ||||||
Securities sold under agreements to repurchase | $ | 64,225 | $ | 84,977 | |||
Other short-term borrowings | 601,500 | 304,000 | |||||
Total short-term borrowings | $ | 665,725 | $ | 388,977 | |||
Maximum month-end outstanding balance | $ | 678,262 | $ | 445,761 | |||
Average outstanding balance during the period | 583,418 | 379,783 | |||||
Average interest rate (year-to-date) | 0.48 | % | 0.25 | % | |||
Average interest rate at end of period | 0.48 | % | 0.27 | % | |||
Other short-term borrowings: | |||||||
Federal funds purchased | $ | 6,000 | $ | — | |||
FHLB | 579,500 | 304,000 | |||||
Other lines of credit | 16,000 | — |
Trust Preferred Capital Securities(1) | Investment(1) | Spread to 3-Month LIBOR | Rate | Maturity | |||||||||||
Trust Preferred Capital Note - Statutory Trust I | $ | 22,500,000 | $ | 696,000 | 2.75 | % | 3.60 | % | 6/17/2034 | ||||||
Trust Preferred Capital Note - Statutory Trust II | 36,000,000 | 1,114,000 | 1.40 | % | 2.25 | % | 6/15/2036 | ||||||||
VFG Limited Liability Trust I Indenture | 20,000,000 | 619,000 | 2.73 | % | 3.58 | % | 3/18/2034 | ||||||||
FNB Statutory Trust II Indenture | 12,000,000 | 372,000 | 3.10 | % | 3.95 | % | 6/26/2033 | ||||||||
Total | $ | 90,500,000 | $ | 2,801,000 |
Long-term Type | Spread to 3-Month LIBOR | Interest Rate (1) | Maturity Date | Advance Amount | ||||||||
Adjustable Rate Credit | 0.44 | % | 1.29 | % | 8/23/2022 | $ | 55,000 | |||||
Adjustable Rate Credit | 0.45 | % | 1.31 | % | 11/23/2022 | 65,000 | ||||||
Adjustable Rate Credit | 0.45 | % | 1.31 | % | 11/23/2022 | 10,000 | ||||||
Adjustable Rate Credit | 0.45 | % | 1.31 | % | 11/23/2022 | 10,000 | ||||||
Fixed Rate | — | 3.62 | % | 11/28/2017 | 10,000 | |||||||
Fixed Rate | — | 3.75 | % | 7/30/2018 | 5,000 | |||||||
Fixed Rate | — | 3.97 | % | 7/30/2018 | 5,000 | |||||||
Fixed Rate Hybrid | — | 2.11 | % | 10/5/2016 | 25,000 | |||||||
$ | 185,000 | |||||||||||
(1) Interest rates calculated using non-rounded numbers. |
Long-term Type | Spread to 3-Month LIBOR | Interest Rate (1) | Maturity Date | Advance Amount | ||||||||
Adjustable Rate Credit | 0.44 | % | 1.05 | % | 8/23/2022 | $ | 55,000 | |||||
Adjustable Rate Credit | 0.45 | % | 1.07 | % | 11/23/2022 | 65,000 | ||||||
Adjustable Rate Credit | 0.45 | % | 1.07 | % | 11/23/2022 | 10,000 | ||||||
Adjustable Rate Credit | 0.45 | % | 1.07 | % | 11/23/2022 | 10,000 | ||||||
Fixed Rate | — | 3.62 | % | 11/28/2017 | 10,000 | |||||||
Fixed Rate | — | 3.75 | % | 7/30/2018 | 5,000 | |||||||
Fixed Rate | — | 3.97 | % | 7/30/2018 | 5,000 | |||||||
Fixed Rate Hybrid | — | 2.11 | % | 10/5/2016 | 25,000 | |||||||
Fixed Rate Hybrid | — | 0.91 | % | 7/25/2016 | 15,000 | |||||||
$ | 200,000 | |||||||||||
(1) Interest rates calculated using non-rounded numbers. |
Trust Preferred Capital Notes | FHLB Advances | Fair Value Premium (Discount) | Prepayment Penalty | Total Long-term Borrowings | |||||||||||||||
For the remaining three months of 2016 | $ | — | $ | 25,000 | $ | 71 | $ | (477 | ) | $ | 24,594 | ||||||||
2017 | — | 10,000 | 170 | (1,922 | ) | 8,248 | |||||||||||||
2018 | — | 10,000 | (143 | ) | (1,970 | ) | 7,887 | ||||||||||||
2019 | — | — | (286 | ) | (2,018 | ) | (2,304 | ) | |||||||||||
2020 | — | — | (301 | ) | (2,074 | ) | (2,375 | ) | |||||||||||
Thereafter | 93,301 | 140,000 | (5,623 | ) | (3,826 | ) | 223,852 | ||||||||||||
Total Long-term borrowings | $ | 93,301 | $ | 185,000 | $ | (6,112 | ) | $ | (12,287 | ) | $ | 259,902 |
September 30, 2016 | December 31, 2015 | ||||||
Commitments with off-balance sheet risk: | |||||||
Commitments to extend credit (1) | $ | 1,787,953 | $ | 1,557,350 | |||
Standby letters of credit | 84,491 | 139,371 | |||||
Mortgage loan rate lock commitments | 76,070 | 50,369 | |||||
Total commitments with off-balance sheet risk | $ | 1,948,514 | $ | 1,747,090 | |||
Commitments with balance sheet risk: | |||||||
Loans held for sale | $ | 46,814 | $ | 36,030 | |||
Total other commitments | $ | 1,995,328 | $ | 1,783,120 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
Derivative (2) | Derivative (2) | ||||||||||||||||||||||||||||||
Notional or Contractual Amount (1) | Assets | Liabilities | Collateral Pledged (3) | Notional or Contractual Amount (1) | Assets | Liabilities | Collateral Pledged (3) | ||||||||||||||||||||||||
Derivatives designated as accounting hedges: | |||||||||||||||||||||||||||||||
Interest rate contracts: | |||||||||||||||||||||||||||||||
Cash flow hedges | $ | 188,500 | $ | 343 | $ | 16,087 | $ | 22,071 | $ | 263,000 | $ | 946 | $ | 10,352 | $ | 14,449 | |||||||||||||||
Fair value hedges | 43,455 | — | 3,529 | — | 61,150 | — | 888 | — | |||||||||||||||||||||||
Derivatives not designated as accounting hedges: | |||||||||||||||||||||||||||||||
Loan Swaps (4) | |||||||||||||||||||||||||||||||
Pay fixed - receive floating interest rate swaps | 280,336 | 12,218 | — | — | 138,969 | 3,758 | — | — | |||||||||||||||||||||||
Pay floating - receive fixed interest rate swaps | 280,336 | — | 12,218 | 16,141 | 138,969 | — | 3,758 | 5,983 | |||||||||||||||||||||||
Other contracts: | |||||||||||||||||||||||||||||||
Interest rate lock commitments | 76,070 | 1,422 | — | — | 50,369 | 701 | — | — |
Unrealized Gains (Losses) on AFS Securities | Unrealized Gain for AFS Securities Transferred to HTM | Change in Fair Value of Cash Flow Hedge | Total | ||||||||||||
Balance - June 30, 2016 | $ | 14,412 | $ | 3,853 | $ | (9,366 | ) | $ | 8,899 | ||||||
Other comprehensive income (loss) | 1,121 | (237 | ) | (78 | ) | 806 | |||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | 154 | 154 | |||||||||||
Net current period other comprehensive income (loss) | 1,121 | (237 | ) | 76 | 960 | ||||||||||
Balance - September 30, 2016 | $ | 15,533 | $ | 3,616 | $ | (9,290 | ) | $ | 9,859 |
Unrealized Gains (Losses) on AFS Securities | Unrealized Gain for AFS Securities Transferred to HTM | Change in Fair Value of Cash Flow Hedge | Total | ||||||||||||
Balance - December 31, 2015 | $ | 7,777 | $ | 4,432 | $ | (5,957 | ) | $ | 6,252 | ||||||
Other comprehensive income (loss) | 7,851 | (816 | ) | (3,766 | ) | 3,269 | |||||||||
Amounts reclassified from accumulated other comprehensive income | (95 | ) | — | 433 | 338 | ||||||||||
Net current period other comprehensive income (loss) | 7,756 | (816 | ) | (3,333 | ) | 3,607 | |||||||||
Balance - September 30, 2016 | $ | 15,533 | $ | 3,616 | $ | (9,290 | ) | $ | 9,859 |
Unrealized Gains (Losses) on AFS Securities | Unrealized Gain for AFS Securities Transferred to HTM | Change in Fair Value of Cash Flow Hedge | Total | ||||||||||||
Balance - June 30, 2015 | $ | 8,738 | $ | 5,043 | $ | (4,552 | ) | $ | 9,229 | ||||||
Other comprehensive income (loss) | 1,250 | (308 | ) | (2,328 | ) | (1,386 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | 146 | — | 157 | 303 | |||||||||||
Net current period other comprehensive income (loss) | 1,396 | (308 | ) | (2,171 | ) | (1,083 | ) | ||||||||
Balance - September 30, 2015 | $ | 10,134 | $ | 4,735 | $ | (6,723 | ) | $ | 8,146 |
Unrealized Gains (Losses) on AFS Securities | Unrealized Gain for AFS Securities Transferred to HTM | Change in Fair Value of Cash Flow Hedge | Total | ||||||||||||
Balance - December 31, 2014 | $ | 17,439 | $ | — | $ | (5,184 | ) | $ | 12,255 | ||||||
Unrealized gain transferred from AFS to HTM | (5,251 | ) | 5,251 | — | — | ||||||||||
Other comprehensive income (loss) | (1,812 | ) | (516 | ) | (2,009 | ) | (4,337 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | (242 | ) | — | 470 | 228 | ||||||||||
Net current period other comprehensive income (loss) | (2,054 | ) | (516 | ) | (1,539 | ) | (4,109 | ) | |||||||
Balance - September 30, 2015 | $ | 10,134 | $ | 4,735 | $ | (6,723 | ) | $ | 8,146 |
Level 1 | Valuation is based on quoted prices in active markets for identical assets and liabilities. | |
Level 2 | Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets. | |
Level 3 | Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort. |
Fair Value Measurements at September 30, 2016 using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Level 1 | Level 2 | Level 3 | Balance | ||||||||||||
ASSETS | |||||||||||||||
Securities available for sale: | |||||||||||||||
Obligations of states and political subdivisions | $ | — | $ | 279,223 | $ | — | $ | 279,223 | |||||||
Corporate and other bonds | — | 121,747 | — | 121,747 | |||||||||||
Mortgage-backed securities | — | 540,596 | — | 540,596 | |||||||||||
Other securities | — | 13,418 | — | 13,418 | |||||||||||
Loans held for sale | — | 46,814 | — | 46,814 | |||||||||||
Derivatives: | |||||||||||||||
Interest rate swap | — | 12,218 | — | 12,218 | |||||||||||
Cash flow hedges | — | 343 | — | 343 | |||||||||||
Interest rate lock commitments | — | — | 1,422 | 1,422 | |||||||||||
LIABILITIES | |||||||||||||||
Derivatives: | |||||||||||||||
Interest rate swap | $ | — | $ | 12,218 | $ | — | $ | 12,218 | |||||||
Cash flow hedges | — | 16,087 | — | 16,087 | |||||||||||
Fair value hedges | — | 3,529 | — | 3,529 |
Fair Value Measurements at December 31, 2015 using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Level 1 | Level 2 | Level 3 | Balance | ||||||||||||
ASSETS | |||||||||||||||
Securities available for sale: | |||||||||||||||
Obligations of states and political subdivisions | $ | — | $ | 268,079 | $ | — | $ | 268,079 | |||||||
Corporate and other bonds | — | 75,979 | — | 75,979 | |||||||||||
Mortgage-backed securities | — | 548,171 | — | 548,171 | |||||||||||
Other securities | — | 11,063 | — | 11,063 | |||||||||||
Loans held for sale | — | 36,030 | — | 36,030 | |||||||||||
Derivatives: | |||||||||||||||
Interest rate swap | — | 3,758 | — | 3,758 | |||||||||||
Cash flow hedges | — | 946 | — | 946 | |||||||||||
Interest rate lock commitments | — | — | 701 | 701 | |||||||||||
LIABILITIES | |||||||||||||||
Derivatives: | |||||||||||||||
Interest rate swap | $ | — | $ | 3,758 | $ | — | $ | 3,758 | |||||||
Cash flow hedges | — | 10,352 | — | 10,352 | |||||||||||
Fair value hedges | — | 888 | — | 888 |
Fair Value Measurements at September 30, 2016 using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Level 1 | Level 2 | Level 3 | Balance | ||||||||||||
ASSETS | |||||||||||||||
Impaired loans | $ | — | $ | — | $ | 2,573 | $ | 2,573 | |||||||
Other real estate owned | — | — | 10,581 | 10,581 |
Fair Value Measurements at December 31, 2015 using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Level 1 | Level 2 | Level 3 | Balance | ||||||||||||
ASSETS | |||||||||||||||
Impaired loans | $ | — | $ | — | $ | 2,214 | $ | 2,214 | |||||||
Other real estate owned | — | — | 15,299 | 15,299 |
Fair Value Measurements at September 30, 2016 using | |||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total Fair Value | ||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Balance | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 156,175 | $ | 156,175 | $ | — | $ | — | $ | 156,175 | |||||||||
Securities available for sale | 954,984 | — | 954,984 | — | 954,984 | ||||||||||||||
Held to maturity securities | 200,839 | — | 209,717 | — | 209,717 | ||||||||||||||
Restricted stock | 63,204 | — | 63,204 | — | 63,204 | ||||||||||||||
Loans held for sale | 46,814 | — | 46,814 | — | 46,814 | ||||||||||||||
Net loans | 6,112,376 | — | — | 6,144,971 | 6,144,971 | ||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate lock commitments | 1,422 | — | — | 1,422 | 1,422 | ||||||||||||||
Interest rate swap | 12,218 | — | 12,218 | — | 12,218 | ||||||||||||||
Cash flow hedges | 343 | — | 343 | — | 343 | ||||||||||||||
Accrued interest receivable | 22,084 | — | 22,084 | — | 22,084 | ||||||||||||||
Bank owned life insurance | 177,847 | — | 177,847 | — | 177,847 | ||||||||||||||
LIABILITIES | |||||||||||||||||||
Deposits | $ | 6,258,506 | $ | — | $ | 6,258,166 | $ | — | $ | 6,258,166 | |||||||||
Borrowings | 925,627 | — | 905,653 | — | 905,653 | ||||||||||||||
Accrued interest payable | 1,581 | — | 1,581 | — | 1,581 | ||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate swap | 12,218 | — | 12,218 | — | 12,218 | ||||||||||||||
Cash flow hedges | 16,087 | — | 16,087 | — | 16,087 | ||||||||||||||
Fair value hedges | 3,529 | — | 3,529 | — | 3,529 |
Fair Value Measurements at December 31, 2015 using | |||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total Fair Value | ||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Balance | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 142,660 | $ | 142,660 | $ | — | $ | — | $ | 142,660 | |||||||||
Securities available for sale | 903,292 | — | 903,292 | — | 903,292 | ||||||||||||||
Held to maturity securities | 205,374 | — | 209,437 | — | 209,437 | ||||||||||||||
Restricted stock | 51,828 | — | 51,828 | — | 51,828 | ||||||||||||||
Loans held for sale | 36,030 | — | 36,030 | — | 36,030 | ||||||||||||||
Net loans | 5,637,415 | — | — | 5,671,155 | 5,671,155 | ||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate lock commitments | 701 | — | — | 701 | 701 | ||||||||||||||
Interest rate swap | 3,758 | — | 3,758 | — | 3,758 | ||||||||||||||
Cash flow hedges | 946 | — | 946 | — | 946 | ||||||||||||||
Accrued interest receivable | 20,760 | — | 20,760 | — | 20,760 | ||||||||||||||
Bank owned life insurance | 173,687 | — | 173,687 | — | 173,687 | ||||||||||||||
LIABILITIES | |||||||||||||||||||
Deposits | $ | 5,963,936 | $ | — | $ | 5,957,484 | $ | — | $ | 5,957,484 | |||||||||
Borrowings | 680,175 | — | 659,364 | — | 659,364 | ||||||||||||||
Accrued interest payable | 1,578 | — | 1,578 | — | 1,578 | ||||||||||||||
Derivatives: | |||||||||||||||||||
Interest rate swap | 3,758 | — | 3,758 | — | 3,758 | ||||||||||||||
Cash flow hedges | 10,352 | — | 10,352 | — | 10,352 | ||||||||||||||
Fair value hedges | 888 | — | 888 | — | 888 |
Net Income Available to Common Shareholders (Numerator) | Weighted Average Common Shares (Denominator) | Per Share Amount | ||||||||
Three months ended September 30, 2016 | ||||||||||
Net income, basic | $ | 20,401 | 43,566 | $ | 0.47 | |||||
Add: potentially dilutive common shares - stock awards | — | 189 | — | |||||||
Diluted | $ | 20,401 | 43,755 | $ | 0.47 | |||||
Three months ended September 30, 2015 | ||||||||||
Net income, basic | $ | 18,216 | 45,087 | $ | 0.40 | |||||
Add: potentially dilutive common shares - stock awards | — | 84 | — | |||||||
Diluted | $ | 18,216 | 45,171 | $ | 0.40 | |||||
Nine months ended September 30, 2016 | ||||||||||
Net income, basic | $ | 56,699 | 43,854 | $ | 1.29 | |||||
Add: potentially dilutive common shares - stock awards | — | 114 | — | |||||||
Diluted | $ | 56,699 | 43,968 | $ | 1.29 | |||||
Nine months ended September 30, 2015 | ||||||||||
Net income, basic | $ | 49,264 | 45,107 | $ | 1.09 | |||||
Add: potentially dilutive common shares - stock awards | — | 82 | — | |||||||
Diluted | $ | 49,264 | 45,189 | $ | 1.09 |
Community Bank | Mortgage | Eliminations | Consolidated | ||||||||||||
Three Months Ended September 30, 2016 | |||||||||||||||
Net interest income | $ | 66,605 | $ | 423 | $ | — | $ | 67,028 | |||||||
Provision for credit losses | 2,455 | 17 | — | 2,472 | |||||||||||
Net interest income after provision for credit losses | 64,150 | 406 | — | 64,556 | |||||||||||
Noninterest income | 15,589 | 3,501 | (140 | ) | 18,950 | ||||||||||
Noninterest expenses | 54,353 | 2,700 | (140 | ) | 56,913 | ||||||||||
Income before income taxes | 25,386 | 1,207 | — | 26,593 | |||||||||||
Income tax expense | 5,770 | 422 | — | 6,192 | |||||||||||
Net income | $ | 19,616 | $ | 785 | $ | — | $ | 20,401 | |||||||
Total assets | $ | 8,251,351 | $ | 90,692 | $ | (83,813 | ) | $ | 8,258,230 | ||||||
Three Months Ended September 30, 2015 | |||||||||||||||
Net interest income | $ | 63,075 | $ | 369 | $ | — | $ | 63,444 | |||||||
Provision for credit losses | 2,000 | 62 | — | 2,062 | |||||||||||
Net interest income after provision for credit losses | 61,075 | 307 | — | 61,382 | |||||||||||
Noninterest income | 14,287 | 2,608 | (170 | ) | 16,725 | ||||||||||
Noninterest expenses | 50,674 | 2,821 | (170 | ) | 53,325 | ||||||||||
Income before income taxes | 24,688 | 94 | — | 24,782 | |||||||||||
Income tax expense | 6,531 | 35 | — | 6,566 | |||||||||||
Net income | $ | 18,157 | $ | 59 | $ | — | $ | 18,216 | |||||||
Total assets | $ | 7,588,606 | $ | 62,127 | $ | (56,420 | ) | $ | 7,594,313 | ||||||
Nine Months Ended September 30, 2016 | |||||||||||||||
Net interest income | $ | 195,508 | $ | 1,027 | $ | — | $ | 196,535 | |||||||
Provision for credit losses | 7,215 | 161 | — | 7,376 | |||||||||||
Net interest income after provision for credit losses | 188,293 | 866 | — | 189,159 | |||||||||||
Noninterest income | 44,137 | 9,185 | (465 | ) | 52,857 | ||||||||||
Noninterest expenses | 158,964 | 7,937 | (465 | ) | 166,436 | ||||||||||
Income before income taxes | 73,466 | 2,114 | — | 75,580 | |||||||||||
Income tax expense | 18,145 | 736 | — | 18,881 | |||||||||||
Net income | $ | 55,321 | $ | 1,378 | $ | — | $ | 56,699 | |||||||
Total assets | $ | 8,251,351 | $ | 90,692 | $ | (83,813 | ) | $ | 8,258,230 | ||||||
Nine Months Ended September 30, 2015 | |||||||||||||||
Net interest income | $ | 188,240 | $ | 989 | $ | — | $ | 189,229 | |||||||
Provision for credit losses | 7,450 | 111 | — | 7,561 | |||||||||||
Net interest income after provision for credit losses | 180,790 | 878 | — | 181,668 | |||||||||||
Noninterest income | 40,658 | 7,844 | (512 | ) | 47,990 | ||||||||||
Noninterest expenses | 154,011 | 8,906 | (512 | ) | 162,405 | ||||||||||
Income (loss) before income taxes | 67,437 | (184 | ) | — | 67,253 | ||||||||||
Income tax expense (benefit) | 18,060 | (71 | ) | — | 17,989 | ||||||||||
Net income (loss) | $ | 49,377 | $ | (113 | ) | $ | — | $ | 49,264 | ||||||
Total assets | $ | 7,588,606 | $ | 62,127 | $ | (56,420 | ) | $ | 7,594,313 |
• | Net income for the third quarter of 2016 for the community bank segment was $19.6 million, or $0.45 per share, compared to $18.2 million, or $0.40 per share, in the third quarter of 2015. Net income for the community bank segment for the nine months ended September 30, 2016 was $55.3 million, or $1.26 per share, compared to $49.4 million, or $1.09 per share, for the nine months ended September 30, 2015. |
• | The mortgage segment reported net income of $785,000 for the third quarter of 2016, an improvement of $726,000 from $59,000 in the third quarter of 2015. The mortgage segment had net income of $1.4 million in the first nine months of 2016, an improvement of $1.5 million from a loss of $113,000 in the first nine months of 2015. The improvement was largely a result of higher gain on sale margins and cost control initiatives in personnel costs. |
• | ROA was 1.00% for the quarter ended September 30, 2016 compared to 0.96% for the third quarter of 2015; ROA was 0.95% for the nine months ended September 30, 2016 compared to 0.88% for first nine months of 2015. |
• | ROTCE was 12.00% for the quarter ended September 30, 2016 compared to 10.70% for the third quarter of 2015; ROTCE was 11.25% for the nine months ended September 30, 2016 compared to 9.86% for first nine months of 2015. |
• | During the third quarter of 2016, the Company closed five in-store branches as part of its continuing efforts to become more efficient. The Company incurred approximately $400,000 in related branch closure costs. |
• | Loans held for investment grew $605.3 million, or 10.9%, from September 30, 2015 to $6.1 billion at September 30, 2016, while average loan balances increased $508.6 million, or 9.2%, from the same quarter in the prior year. Period end loan balances grew $477.5 million, or 11.2% (annualized), from December 31, 2015. |
• | Deposits grew $439.7 million, or 7.6%, from September 30, 2015 to $6.3 billion at September 30, 2016, while average deposit balances increased $390.8 million, or 6.7%, from the same quarter in the prior year. Period end deposit balances increased $294.6 million, or 6.6% (annualized), from December 31, 2015. |
• | Asset quality continued to improve as nonperforming assets and past due loan levels continued to decline. |
For the Three Months Ended September 30, | |||||||||||||
2016 | 2015 | Change | |||||||||||
(Dollars in thousands) | |||||||||||||
Average interest-earning assets | $ | 7,354,684 | $ | 6,751,654 | $ | 603,030 | |||||||
Interest income (FTE) | $ | 76,860 | $ | 72,287 | $ | 4,573 | |||||||
Yield on interest-earning assets | 4.16 | % | 4.25 | % | (9 | ) | bps | ||||||
Core yield on interest-earning assets (1) | 4.09 | % | 4.17 | % | (8 | ) | bps | ||||||
Average interest-bearing liabilities | $ | 5,681,102 | $ | 5,162,928 | $ | 518,174 | |||||||
Interest expense | $ | 7,405 | $ | 6,556 | $ | 849 | |||||||
Cost of interest-bearing liabilities | 0.52 | % | 0.50 | % | 2 | bps | |||||||
Core cost of interest-bearing liabilities (1) | 0.53 | % | 0.52 | % | 1 | bps | |||||||
Cost of funds | 0.40 | % | 0.39 | % | 1 | bps | |||||||
Core cost of funds (1) | 0.42 | % | 0.40 | % | 2 | bps | |||||||
Net Interest Income (FTE) | $ | 69,455 | $ | 65,731 | $ | 3,724 | |||||||
Net Interest Margin (FTE) | 3.76 | % | 3.86 | % | (10 | ) | bps | ||||||
Core Net Interest Margin (FTE) (1) | 3.67 | % | 3.77 | % | (10 | ) | bps |
For the Nine Months Ended September 30, | |||||||||||||
2016 | 2015 | Change | |||||||||||
(Dollars in thousands) | |||||||||||||
Average interest-earning assets | $ | 7,159,813 | $ | 6,668,812 | $ | 491,001 | |||||||
Interest income (FTE) | $ | 225,331 | $ | 214,195 | $ | 11,136 | |||||||
Yield on interest-earning assets | 4.20 | % | 4.29 | % | (9 | ) | bps | ||||||
Core yield on interest-earning assets (1) | 4.14 | % | 4.23 | % | (9 | ) | bps | ||||||
Average interest-bearing liabilities | $ | 5,528,833 | $ | 5,131,338 | $ | 397,495 | |||||||
Interest expense | $ | 21,429 | $ | 18,225 | $ | 3,204 | |||||||
Cost of interest-bearing liabilities | 0.52 | % | 0.47 | % | 5 | bps | |||||||
Core cost of interest-bearing liabilities (1) | 0.53 | % | 0.53 | % | — | bps | |||||||
Cost of funds | 0.40 | % | 0.36 | % | 4 | bps | |||||||
Core cost of funds (1) | 0.41 | % | 0.41 | % | — | bps | |||||||
Net Interest Income (FTE) | $ | 203,902 | $ | 195,970 | $ | 7,932 | |||||||
Net Interest Margin (FTE) | 3.80 | % | 3.93 | % | (13 | ) | bps | ||||||
Core Net Interest Margin (FTE) (1) | 3.73 | % | 3.82 | % | (9 | ) | bps |
For the Three Months Ended September 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
Average Balance | Interest Income / Expense (1) | Yield / Rate (1)(2) | Average Balance | Interest Income / Expense (1) | Yield / Rate (1)(2) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 768,608 | $ | 4,732 | 2.45 | % | $ | 710,583 | $ | 3,954 | 2.21 | % | |||||||||
Tax-exempt | 449,944 | 5,302 | 4.69 | % | 427,879 | 5,187 | 4.81 | % | |||||||||||||
Total securities | 1,218,552 | 10,034 | 3.28 | % | 1,138,462 | 9,141 | 3.19 | % | |||||||||||||
Loans, net (3) (4) | 6,033,723 | 66,397 | 4.38 | % | 5,525,119 | 62,745 | 4.51 | % | |||||||||||||
Other earning assets | 102,409 | 429 | 1.67 | % | 88,073 | 401 | 1.81 | % | |||||||||||||
Total earning assets | 7,354,684 | $ | 76,860 | 4.16 | % | 6,751,654 | $ | 72,287 | 4.25 | % | |||||||||||
Allowance for loan losses | (35,995 | ) | (32,857 | ) | |||||||||||||||||
Total non-earning assets | 835,262 | 803,044 | |||||||||||||||||||
Total assets | $ | 8,153,951 | $ | 7,521,841 | |||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
Transaction and money market accounts | $ | 3,016,337 | $ | 1,682 | 0.22 | % | $ | 2,706,542 | $ | 1,289 | 0.19 | % | |||||||||
Regular savings | 598,232 | 207 | 0.14 | % | 567,034 | 248 | 0.17 | % | |||||||||||||
Time deposits (5) | 1,181,936 | 2,663 | 0.90 | % | 1,227,835 | 2,667 | 0.86 | % | |||||||||||||
Total interest-bearing deposits | 4,796,505 | 4,552 | 0.38 | % | 4,501,411 | 4,204 | 0.37 | % | |||||||||||||
Other borrowings (6) | 884,597 | 2,853 | 1.28 | % | 661,517 | 2,352 | 1.41 | % | |||||||||||||
Total interest-bearing liabilities | 5,681,102 | $ | 7,405 | 0.52 | % | 5,162,928 | $ | 6,556 | 0.50 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||
Demand deposits | 1,408,453 | 1,312,735 | |||||||||||||||||||
Other liabilities | 67,728 | 50,715 | |||||||||||||||||||
Total liabilities | 7,157,283 | 6,526,378 | |||||||||||||||||||
Stockholders' equity | 996,668 | 995,463 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 8,153,951 | $ | 7,521,841 | |||||||||||||||||
Net interest income | $ | 69,455 | $ | 65,731 | |||||||||||||||||
Interest rate spread | 3.64 | % | 3.75 | % | |||||||||||||||||
Cost of funds | 0.40 | % | 0.39 | % | |||||||||||||||||
Net interest margin (7) | 3.76 | % | 3.86 | % |
For the Nine Months Ended September 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
Average Balance | Interest Income / Expense (1) | Yield / Rate (1)(2) | Average Balance | Interest Income / Expense (1) | Yield / Rate (1)(2) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 756,042 | $ | 13,558 | 2.40 | % | $ | 720,569 | $ | 11,621 | 2.16 | % | |||||||||
Tax-exempt | 446,840 | 15,914 | 4.76 | % | 421,224 | 15,480 | 4.91 | % | |||||||||||||
Total securities | 1,202,882 | 29,472 | 3.27 | % | 1,141,793 | 27,101 | 3.17 | % | |||||||||||||
Loans, net (3) (4) | 5,869,511 | 194,839 | 4.43 | % | 5,445,243 | 185,959 | 4.57 | % | |||||||||||||
Other earning assets | 87,420 | 1,020 | 1.56 | % | 81,776 | 1,135 | 1.86 | % | |||||||||||||
Total earning assets | 7,159,813 | $ | 225,331 | 4.20 | % | 6,668,812 | $ | 214,195 | 4.29 | % | |||||||||||
Allowance for loan losses | (35,439 | ) | (32,507 | ) | |||||||||||||||||
Total non-earning assets | 832,467 | 812,268 | |||||||||||||||||||
Total assets | $ | 7,956,841 | $ | 7,448,573 | |||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
Transaction and money market accounts | $ | 2,903,336 | $ | 4,523 | 0.21 | % | $ | 2,644,209 | $ | 3,649 | 0.18 | % | |||||||||
Regular savings | 591,699 | 649 | 0.15 | % | 562,288 | 777 | 0.18 | % | |||||||||||||
Time deposits (5) | 1,172,856 | 7,773 | 0.89 | % | 1,243,546 | 6,778 | 0.73 | % | |||||||||||||
Total interest-bearing deposits | 4,667,891 | 12,945 | 0.37 | % | 4,450,043 | 11,204 | 0.34 | % | |||||||||||||
Other borrowings (6) | 860,942 | 8,484 | 1.32 | % | 681,295 | 7,021 | 1.38 | % | |||||||||||||
Total interest-bearing liabilities | 5,528,833 | $ | 21,429 | 0.52 | % | 5,131,338 | $ | 18,225 | 0.47 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||
Demand deposits | 1,376,001 | 1,271,937 | |||||||||||||||||||
Other liabilities | 60,910 | 55,549 | |||||||||||||||||||
Total liabilities | 6,965,744 | 6,458,824 | |||||||||||||||||||
Stockholders' equity | 991,097 | 989,749 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 7,956,841 | $ | 7,448,573 | |||||||||||||||||
Net interest income | $ | 203,902 | $ | 195,970 | |||||||||||||||||
Interest rate spread | 3.68 | % | 3.82 | % | |||||||||||||||||
Cost of funds | 0.40 | % | 0.36 | % | |||||||||||||||||
Net interest margin (7) | 3.80 | % | 3.93 | % |
Three Months Ended September 30, 2016 vs. September 30, 2015 Increase (Decrease) Due to Change in: | Nine Months Ended September 30, 2016 vs. September 30, 2015 Increase (Decrease) Due to Change in: | ||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | ||||||||||||||||||
Earning Assets: | |||||||||||||||||||||||
Securities: | |||||||||||||||||||||||
Taxable | $ | 337 | $ | 441 | $ | 778 | $ | 592 | $ | 1,345 | $ | 1,937 | |||||||||||
Tax-exempt | 263 | (148 | ) | 115 | 922 | (488 | ) | 434 | |||||||||||||||
Total securities | 600 | 293 | 893 | 1,514 | 857 | 2,371 | |||||||||||||||||
Loans, net (1) | 5,642 | (1,990 | ) | 3,652 | 14,191 | (5,311 | ) | 8,880 | |||||||||||||||
Other earning assets | 62 | (34 | ) | 28 | 74 | (189 | ) | (115 | ) | ||||||||||||||
Total earning assets | $ | 6,304 | $ | (1,731 | ) | $ | 4,573 | $ | 15,779 | $ | (4,643 | ) | $ | 11,136 | |||||||||
Interest-Bearing Liabilities: | |||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||
Transaction and money market accounts | $ | 158 | $ | 235 | $ | 393 | $ | 378 | $ | 496 | $ | 874 | |||||||||||
Regular savings | 13 | (54 | ) | (41 | ) | 39 | (167 | ) | (128 | ) | |||||||||||||
Time Deposits (2) | (102 | ) | 98 | (4 | ) | (403 | ) | 1,398 | 995 | ||||||||||||||
Total interest-bearing deposits | 69 | 279 | 348 | 14 | 1,727 | 1,741 | |||||||||||||||||
Other borrowings (3) | 735 | (234 | ) | 501 | 1,782 | (319 | ) | 1,463 | |||||||||||||||
Total interest-bearing liabilities | 804 | 45 | 849 | 1,796 | 1,408 | 3,204 | |||||||||||||||||
Change in net interest income | $ | 5,500 | $ | (1,776 | ) | $ | 3,724 | $ | 13,983 | $ | (6,051 | ) | $ | 7,932 |
Loan Accretion | Borrowings Accretion (Amortization) | Total | |||||||||
For the quarter ended March 31, 2016 | $ | 1,084 | $ | 62 | $ | 1,146 | |||||
For the quarter ended June 30, 2016 | 1,259 | 143 | 1,402 | ||||||||
For the quarter ended September 30, 2016 | 1,338 | 181 | 1,519 | ||||||||
For the remaining three months of 2016 | 1,040 | 71 | 1,111 | ||||||||
For the years ending: | |||||||||||
2017 | 4,089 | 170 | 4,259 | ||||||||
2018 | 3,692 | (143 | ) | 3,549 | |||||||
2019 | 3,029 | (286 | ) | 2,743 | |||||||
2020 | 2,622 | (301 | ) | 2,321 | |||||||
2021 | 2,232 | (316 | ) | 1,916 | |||||||
Thereafter | 8,691 | (5,306 | ) | 3,385 |
For the Three Months Ended | ||||||||||||||
September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(Dollars in thousands) | ||||||||||||||
Noninterest income: | ||||||||||||||
Service charges on deposit accounts | $ | 4,965 | $ | 4,965 | $ | — | — | % | ||||||
Other service charges and fees | 4,397 | 3,983 | 414 | 10.4 | % | |||||||||
Fiduciary and asset management fees | 2,844 | 2,304 | 540 | 23.4 | % | |||||||||
Mortgage banking income, net | 3,207 | 2,630 | 577 | 21.9 | % | |||||||||
Gains on securities transactions, net | — | 75 | (75 | ) | (100.0 | )% | ||||||||
Other-than-temporary impairment losses | — | (300 | ) | 300 | 100.0 | % | ||||||||
Bank owned life insurance income | 1,389 | 1,161 | 228 | 19.6 | % | |||||||||
Other operating income | 2,148 | 1,907 | 241 | 12.6 | % | |||||||||
Total noninterest income | $ | 18,950 | $ | 16,725 | $ | 2,225 | 13.3 | % | ||||||
Mortgage segment operations | $ | (3,501 | ) | (2,608 | ) | $ | (893 | ) | 34.2 | % | ||||
Intercompany eliminations | 140 | 170 | (30 | ) | (17.6 | )% | ||||||||
Community Bank segment | $ | 15,589 | $ | 14,287 | $ | 1,302 | 9.1 | % |
For the Nine Months Ended | ||||||||||||||
September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(Dollars in thousands) | ||||||||||||||
Noninterest income: | ||||||||||||||
Service charges on deposit accounts | $ | 14,454 | $ | 13,800 | $ | 654 | 4.7 | % | ||||||
Other service charges and fees | 12,971 | 11,618 | 1,353 | 11.6 | % | |||||||||
Fiduciary and asset management fees | 7,315 | 6,835 | 480 | 7.0 | % | |||||||||
Mortgage banking income, net | 8,324 | 7,582 | 742 | 9.8 | % | |||||||||
Gains on securities transactions, net | 145 | 672 | (527 | ) | (78.4 | )% | ||||||||
Other-than-temporary impairment losses | — | (300 | ) | 300 | 100.0 | % | ||||||||
Bank owned life insurance income | 4,122 | 3,431 | 691 | 20.1 | % | |||||||||
Other operating income | 5,526 | 4,352 | 1,174 | 27.0 | % | |||||||||
Total noninterest income | $ | 52,857 | $ | 47,990 | $ | 4,867 | 10.1 | % | ||||||
Mortgage segment operations | $ | (9,185 | ) | (7,844 | ) | $ | (1,341 | ) | 17.1 | % | ||||
Intercompany eliminations | 465 | 512 | (47 | ) | (9.2 | )% | ||||||||
Community Bank segment | $ | 44,137 | $ | 40,658 | $ | 3,479 | 8.6 | % |
For the Three Months Ended | ||||||||||||||
September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(Dollars in thousands) | ||||||||||||||
Noninterest expense: | ||||||||||||||
Salaries and benefits | $ | 30,493 | $ | 25,853 | $ | 4,640 | 17.9 | % | ||||||
Occupancy expenses | 4,841 | 4,915 | (74 | ) | (1.5 | )% | ||||||||
Furniture and equipment expenses | 2,635 | 3,015 | (380 | ) | (12.6 | )% | ||||||||
Technology and data processing | 3,917 | 3,549 | 368 | 10.4 | % | |||||||||
Professional services | 1,895 | 1,991 | (96 | ) | (4.8 | )% | ||||||||
Marketing and advertising expense | 1,975 | 1,781 | 194 | 10.9 | % | |||||||||
OREO and credit-related expenses (1) | 503 | 1,263 | (760 | ) | (60.2 | )% | ||||||||
Other operating expenses | 10,654 | 10,958 | (304 | ) | (2.8 | )% | ||||||||
Total noninterest expense | $ | 56,913 | $ | 53,325 | $ | 3,588 | 6.7 | % | ||||||
Mortgage segment operations | $ | (2,700 | ) | $ | (2,821 | ) | $ | 121 | (4.3 | )% | ||||
Intercompany eliminations | 140 | 170 | (30 | ) | (17.6 | )% | ||||||||
Community Bank segment | $ | 54,353 | $ | 50,674 | $ | 3,679 | 7.3 | % |
For the Nine Months Ended | ||||||||||||||
September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | |||||||||||
(Dollars in thousands) | ||||||||||||||
Noninterest expense: | ||||||||||||||
Salaries and benefits | $ | 87,061 | $ | 78,905 | $ | 8,156 | 10.3 | % | ||||||
Occupancy expenses | 14,627 | 15,220 | (593 | ) | (3.9 | )% | ||||||||
Furniture and equipment expenses | 7,867 | 8,818 | (951 | ) | (10.8 | )% | ||||||||
Technology and data processing | 11,340 | 10,020 | 1,320 | 13.2 | % | |||||||||
Professional services | 6,432 | 5,008 | 1,424 | 28.4 | % | |||||||||
Marketing and advertising expense | 5,838 | 5,841 | (3 | ) | (0.1 | )% | ||||||||
OREO and credit-related expenses (1) | 1,965 | 4,415 | (2,450 | ) | (55.5 | )% | ||||||||
Other operating expenses | 31,306 | 34,178 | (2,872 | ) | (8.4 | )% | ||||||||
Total noninterest expense | $ | 166,436 | $ | 162,405 | $ | 4,031 | 2.5 | % | ||||||
Mortgage segment operations | $ | (7,937 | ) | $ | (8,906 | ) | $ | 969 | (10.9 | )% | ||||
Intercompany eliminations | 465 | 512 | (47 | ) | (9.2 | )% | ||||||||
Community Bank segment | $ | 158,964 | $ | 154,011 | $ | 4,953 | 3.2 | % |
September 30, 2016 | December 31, 2015 | ||||||
Available for Sale: | |||||||
Obligations of states and political subdivisions | $ | 279,223 | $ | 268,079 | |||
Corporate and other bonds | 121,747 | 75,979 | |||||
Mortgage-backed securities | 540,596 | 548,171 | |||||
Other securities | 13,418 | 11,063 | |||||
Total securities available for sale, at fair value | 954,984 | 903,292 | |||||
Held to Maturity: | |||||||
Obligations of states and political subdivisions, at carrying value | 200,839 | 205,374 | |||||
Federal Reserve Bank stock | 23,808 | 23,808 | |||||
Federal Home Loan Bank stock | 39,396 | 28,020 | |||||
Total restricted stock, at cost | 63,204 | 51,828 | |||||
Total investments | $ | 1,219,027 | $ | 1,160,494 |
1 Year or Less | 1 - 5 Years | 5 - 10 Years | Over 10 Years | Total | |||||||||||||||
Mortgage backed securities: | |||||||||||||||||||
Amortized cost | $ | 4,997 | $ | 52,523 | $ | 171,804 | $ | 299,904 | $ | 529,228 | |||||||||
Fair value | 5,004 | 53,373 | 176,346 | 305,873 | 540,596 | ||||||||||||||
Weighted average yield (1) | 1.56 | 2.00 | 2.19 | 2.25 | 2.20 | ||||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||
Amortized cost | 5,785 | 51,651 | 79,205 | 129,650 | 266,291 | ||||||||||||||
Fair value | 5,938 | 54,194 | 83,454 | 135,637 | 279,223 | ||||||||||||||
Weighted average yield (1) | 6.44 | 4.72 | 4.60 | 3.95 | 4.35 | ||||||||||||||
Corporate bonds and other securities: | |||||||||||||||||||
Amortized cost | 5,885 | 5,526 | 63,894 | 60,210 | 135,515 | ||||||||||||||
Fair value | 5,918 | 5,526 | 64,470 | 59,251 | 135,165 | ||||||||||||||
Weighted average yield (1) | 1.12 | 0.85 | 4.36 | 2.21 | 3.12 | ||||||||||||||
Total securities available for sale: | |||||||||||||||||||
Amortized cost | 16,667 | 109,700 | 314,903 | 489,764 | 931,034 | ||||||||||||||
Fair value | 16,860 | 113,093 | 324,270 | 500,761 | 954,984 | ||||||||||||||
Weighted average yield (1) | 3.10 | 3.22 | 3.23 | 2.70 | 2.95 |
1 Year or Less | 1 - 5 Years | 5 - 10 Years | Over 10 Years | Total | |||||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||
Carrying Value | $ | 850 | $ | 25,918 | $ | 48,243 | $ | 125,828 | $ | 200,839 | |||||||||
Fair value | 850 | 26,561 | 50,017 | 132,289 | 209,717 | ||||||||||||||
Weighted average yield (1) | 0.69 | 2.81 | 3.03 | 3.78 | 3.46 |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | ||||||||||||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 948,963 | 15.4 | % | $ | 941,446 | 15.8 | % | $ | 926,556 | 16.0 | % | $ | 925,490 | 16.3 | % | $ | 935,266 | 16.9 | % | ||||||||||||||
Commercial | 2,311,970 | 37.7 | % | 2,202,625 | 37.1 | % | 2,145,454 | 37.2 | % | 2,130,566 | 37.6 | % | 2,087,186 | 37.6 | % | |||||||||||||||||||
Construction, land development and other land loans | 776,430 | 12.6 | % | 765,997 | 12.9 | % | 776,698 | 13.4 | % | 749,720 | 13.2 | % | 694,644 | 12.5 | % | |||||||||||||||||||
Second mortgages | 50,398 | 0.8 | % | 51,014 | 0.9 | % | 51,921 | 0.9 | % | 52,977 | 0.9 | % | 52,547 | 0.9 | % | |||||||||||||||||||
Equity lines of credit | 524,097 | 8.5 | % | 519,196 | 8.7 | % | 517,122 | 9.0 | % | 517,050 | 9.1 | % | 514,730 | 9.3 | % | |||||||||||||||||||
Multifamily | 339,313 | 5.5 | % | 337,723 | 5.7 | % | 323,270 | 5.6 | % | 322,528 | 5.7 | % | 329,959 | 6.0 | % | |||||||||||||||||||
Farm land | 29,846 | 0.5 | % | 30,384 | 0.5 | % | 29,724 | 0.5 | % | 28,963 | 0.5 | % | 26,984 | 0.5 | % | |||||||||||||||||||
Total real estate loans | 4,981,017 | 81.0 | % | 4,848,385 | 81.6 | % | 4,770,745 | 82.6 | % | 4,727,294 | 83.3 | % | 4,641,316 | 83.7 | % | |||||||||||||||||||
Commercial & industrial loans | 509,857 | 8.3 | % | 469,054 | 7.9 | % | 453,208 | 7.8 | % | 435,366 | 7.7 | % | 409,654 | 7.4 | % | |||||||||||||||||||
Personal loans | 542,268 | 8.8 | % | 510,684 | 8.6 | % | 447,341 | 7.7 | % | 403,857 | 7.1 | % | 389,379 | 7.0 | % | |||||||||||||||||||
All other loans | 115,776 | 1.9 | % | 112,975 | 1.9 | % | 109,208 | 1.9 | % | 104,945 | 1.9 | % | 103,272 | 1.9 | % | |||||||||||||||||||
Gross loans | $ | 6,148,918 | 100.0 | % | $ | 5,941,098 | 100.0 | % | $ | 5,780,502 | 100.0 | % | $ | 5,671,462 | 100.0 | % | $ | 5,543,621 | 100.0 | % |
Variable Rate | Fixed Rate | ||||||||||||||||||||||||||||||
Total Maturities | Less than 1 year | Total | 1-5 years | More than 5 years | Total | 1-5 years | More than 5 years | ||||||||||||||||||||||||
Loans secured by real estate: | |||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 948,963 | $ | 72,793 | $ | 342,976 | $ | 15,005 | $ | 327,971 | $ | 533,194 | $ | 295,808 | $ | 237,386 | |||||||||||||||
Commercial | 2,311,970 | 229,676 | 716,815 | 186,572 | 530,243 | 1,365,479 | 1,005,989 | 359,490 | |||||||||||||||||||||||
Construction, land development and other land loans | 776,430 | 446,965 | 214,326 | 176,060 | 38,266 | 115,139 | 90,187 | 24,952 | |||||||||||||||||||||||
Second mortgages | 50,398 | 4,514 | 4,055 | 801 | 3,254 | 41,829 | 14,720 | 27,109 | |||||||||||||||||||||||
Equity lines of credit | 524,097 | 35,240 | 488,278 | 39,408 | 448,870 | 579 | 457 | 122 | |||||||||||||||||||||||
Multifamily | 339,313 | 24,247 | 121,428 | 27,802 | 93,626 | 193,638 | 161,330 | 32,308 | |||||||||||||||||||||||
Farm land | 29,846 | 7,362 | 7,973 | 4,644 | 3,329 | 14,511 | 10,110 | 4,401 | |||||||||||||||||||||||
Total real estate loans | 4,981,017 | 820,797 | 1,895,851 | 450,292 | 1,445,559 | 2,264,369 | 1,578,601 | 685,768 | |||||||||||||||||||||||
Commercial & industrial loans | 509,857 | 168,506 | 138,448 | 124,831 | 13,617 | 202,903 | 123,446 | 79,457 | |||||||||||||||||||||||
Consumer loans | 542,268 | 16,319 | 8,467 | 8,254 | 213 | 517,482 | 213,548 | 303,934 | |||||||||||||||||||||||
All other loans | 115,776 | 19,785 | 41,337 | 12,287 | 29,050 | 54,654 | 20,754 | 33,900 | |||||||||||||||||||||||
Gross loans | $ | 6,148,918 | $ | 1,025,407 | $ | 2,084,103 | $ | 595,664 | $ | 1,488,439 | $ | 3,039,408 | $ | 1,936,349 | $ | 1,103,059 |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||
Nonaccrual loans, excluding PCI loans | $ | 12,677 | $ | 10,861 | $ | 13,092 | $ | 11,936 | $ | 12,966 | |||||||||
Foreclosed properties | 7,927 | 10,076 | 10,941 | 11,994 | 18,789 | ||||||||||||||
Former bank premises | 2,654 | 3,305 | 3,305 | 3,305 | 3,305 | ||||||||||||||
Total nonperforming assets | 23,258 | 24,242 | 27,338 | 27,235 | 35,060 | ||||||||||||||
Loans past due 90 days and accruing interest | 3,529 | 3,533 | 5,723 | 5,829 | 5,164 | ||||||||||||||
Total nonperforming assets and loans past due 90 days and accruing interest | $ | 26,787 | $ | 27,775 | $ | 33,061 | $ | 33,064 | $ | 40,224 | |||||||||
Performing Restructurings | $ | 11,824 | $ | 11,885 | $ | 11,486 | $ | 10,780 | $ | 9,468 | |||||||||
Balances | |||||||||||||||||||
Allowance for loan losses | $ | 36,542 | $ | 35,074 | $ | 34,399 | $ | 34,047 | $ | 33,269 | |||||||||
Average loans, net of deferred fees and costs | 6,033,723 | 5,863,007 | 5,709,998 | 5,612,366 | 5,525,119 | ||||||||||||||
Loans, net of deferred fees and costs | 6,148,918 | 5,941,098 | 5,780,502 | 5,671,462 | 5,543,621 | ||||||||||||||
Ratios | |||||||||||||||||||
NPAs to total loans | 0.38 | % | 0.41 | % | 0.47 | % | 0.48 | % | 0.63 | % | |||||||||
NPAs & loans 90 days past due to total loans | 0.44 | % | 0.47 | % | 0.57 | % | 0.58 | % | 0.73 | % | |||||||||
NPAs to total loans & OREO | 0.38 | % | 0.41 | % | 0.47 | % | 0.48 | % | 0.63 | % | |||||||||
NPAs & loans 90 days past due and accruing to total loans & OREO | 0.43 | % | 0.47 | % | 0.57 | % | 0.58 | % | 0.72 | % | |||||||||
ALL to nonaccrual loans | 288.25 | % | 322.94 | % | 262.75 | % | 285.25 | % | 256.59 | % | |||||||||
ALL to nonaccrual loans & loans 90 days past due and accruing | 225.48 | % | 243.67 | % | 182.83 | % | 191.65 | % | 183.50 | % |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||
Beginning Balance | $ | 10,861 | $ | 13,092 | $ | 11,936 | $ | 12,966 | $ | 9,521 | |||||||||
Net customer payments | (1,645 | ) | (2,859 | ) | (1,204 | ) | (1,493 | ) | (1,104 | ) | |||||||||
Additions | 4,359 | 2,568 | 5,150 | 2,344 | 5,213 | ||||||||||||||
Charge-offs | (660 | ) | (1,096 | ) | (1,446 | ) | (1,245 | ) | (541 | ) | |||||||||
Loans returning to accruing status | (23 | ) | (396 | ) | (932 | ) | (402 | ) | (123 | ) | |||||||||
Transfers to OREO | (215 | ) | (448 | ) | (412 | ) | (234 | ) | — | ||||||||||
Ending Balance | $ | 12,677 | $ | 10,861 | $ | 13,092 | $ | 11,936 | $ | 12,966 |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||
Construction and Land Development | $ | 2,301 | $ | 1,604 | $ | 2,156 | $ | 2,113 | $ | 3,142 | |||||||||
Commercial Real Estate - Owner Occupied | 1,609 | 1,661 | 2,816 | 3,904 | 3,989 | ||||||||||||||
Commercial Real Estate - Non-owner Occupied | — | — | — | 100 | 200 | ||||||||||||||
Commercial and Industrial | 1,344 | 263 | 810 | 429 | 403 | ||||||||||||||
Residential 1-4 Family | 5,279 | 5,448 | 5,696 | 3,563 | 3,960 | ||||||||||||||
HELOC | 1,464 | 1,495 | 973 | 1,348 | 937 | ||||||||||||||
Consumer and All Other | 680 | 390 | 641 | 479 | 335 | ||||||||||||||
Total | $ | 12,677 | $ | 10,861 | $ | 13,092 | $ | 11,936 | $ | 12,966 | |||||||||
Coverage Ratio | 288.25 | % | 322.94 | % | 262.75 | % | 285.25 | % | 256.59 | % |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||
Beginning Balance | $ | 13,381 | $ | 14,246 | $ | 15,299 | $ | 22,094 | $ | 22,222 | |||||||||
Additions of foreclosed property | 246 | 501 | 456 | 234 | 1,082 | ||||||||||||||
Additions of former bank premises | — | — | — | 1,822 | — | ||||||||||||||
Capitalized improvements | — | — | — | — | 9 | ||||||||||||||
Valuation adjustments | (479 | ) | (274 | ) | (126 | ) | (4,229 | ) | (473 | ) | |||||||||
Proceeds from sales | (2,844 | ) | (1,086 | ) | (1,390 | ) | (4,961 | ) | (767 | ) | |||||||||
Gains (losses) from sales | 277 | (6 | ) | 7 | 339 | 21 | |||||||||||||
Ending Balance | $ | 10,581 | $ | 13,381 | $ | 14,246 | $ | 15,299 | $ | 22,094 |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||
Land | $ | 3,440 | $ | 4,759 | $ | 4,874 | $ | 5,731 | $ | 7,139 | |||||||||
Land Development | 2,320 | 2,416 | 2,616 | 2,918 | 6,700 | ||||||||||||||
Residential Real Estate | 1,806 | 2,412 | 2,707 | 2,601 | 3,517 | ||||||||||||||
Commercial Real Estate | 361 | 489 | 744 | 744 | 1,433 | ||||||||||||||
Former Bank Premises (1) | 2,654 | 3,305 | 3,305 | 3,305 | 3,305 | ||||||||||||||
Total | $ | 10,581 | $ | 13,381 | $ | 14,246 | $ | 15,299 | $ | 22,094 |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||
Balance, beginning of period | $ | 35,074 | $ | 34,399 | $ | 34,047 | $ | 33,269 | $ | 32,344 | |||||||||
Loans charged-off: | |||||||||||||||||||
Commercial | 16 | 668 | 617 | 280 | 388 | ||||||||||||||
Real estate | 929 | 1,299 | 1,427 | 1,360 | 1,480 | ||||||||||||||
Consumer | 518 | 318 | 936 | 525 | 468 | ||||||||||||||
Total loans charged-off | 1,463 | 2,285 | 2,980 | 2,165 | 2,336 | ||||||||||||||
Recoveries: | |||||||||||||||||||
Commercial | 67 | 117 | 238 | 182 | 559 | ||||||||||||||
Real estate | 303 | 281 | 391 | 561 | 565 | ||||||||||||||
Consumer | 164 | 262 | 199 | 190 | 175 | ||||||||||||||
Total recoveries | 534 | 660 | 828 | 933 | 1,299 | ||||||||||||||
Net charge-offs | 929 | 1,625 | 2,152 | 1,232 | 1,037 | ||||||||||||||
Provision for loan losses | 2,397 | 2,300 | 2,504 | 2,010 | 1,962 | ||||||||||||||
Balance, end of period | $ | 36,542 | $ | 35,074 | $ | 34,399 | $ | 34,047 | $ | 33,269 | |||||||||
Allowance for loan losses to loans | 0.59 | % | 0.59 | % | 0.60 | % | 0.60 | % | 0.60 | % | |||||||||
ALL to loans, adjusted for acquisition accounting (Non-GAAP) | 0.90 | % | 0.92 | % | 0.95 | % | 0.98 | % | 1.01 | % | |||||||||
Net charge-offs to average loans | 0.06 | % | 0.11 | % | 0.15 | % | 0.09 | % | 0.07 | % | |||||||||
Provision to average loans | 0.16 | % | 0.16 | % | 0.18 | % | 0.14 | % | 0.14 | % |
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | ||||||||||||||||||||||||||||||
$ | % (1) | $ | % (1) | $ | % (1) | $ | % (1) | $ | % (1) | |||||||||||||||||||||||||
Commercial | $ | 5,403 | 8.3 | % | $ | 4,026 | 7.9 | % | $ | 4,225 | 7.8 | % | $ | 3,163 | 7.7 | % | $ | 2,790 | 7.4 | % | ||||||||||||||
Real estate | 28,064 | 81.0 | % | 28,061 | 81.6 | % | 27,576 | 82.6 | % | 27,537 | 83.3 | % | 26,638 | 83.7 | % | |||||||||||||||||||
Consumer | 3,075 | 10.7 | % | 2,987 | 10.5 | % | 2,598 | 9.6 | % | 3,347 | 9.0 | % | 3,841 | 8.9 | % | |||||||||||||||||||
Total | $ | 36,542 | 100.0 | % | $ | 35,074 | 100.0 | % | $ | 34,399 | 100.0 | % | $ | 34,047 | 100.0 | % | $ | 33,269 | 100.0 | % |
September 30, 2016 | December 31, 2015 | ||||||||||||
Deposits: | Amount | % of total deposits | Amount | % of total deposits | |||||||||
Non-interest bearing | $ | 1,442,268 | 23.0 | % | $ | 1,372,937 | 23.0 | % | |||||
NOW accounts | 1,635,446 | 26.3 | % | 1,521,906 | 25.5 | % | |||||||
Money market accounts | 1,398,177 | 22.3 | % | 1,312,612 | 22.0 | % | |||||||
Savings accounts | 596,702 | 9.5 | % | 572,800 | 9.6 | % | |||||||
Time deposits of $100,000 and over | 528,227 | 8.4 | % | 514,286 | 8.7 | % | |||||||
Other time deposits | 657,686 | 10.5 | % | 669,395 | 11.2 | % | |||||||
Total Deposits | $ | 6,258,506 | 100.0 | % | $ | 5,963,936 | 100.0 | % |
Within 3 Months | 3 - 12 Months | Over 12 Months | Total | ||||||||||||
Maturities of time deposits of $100,000 and over | $ | 62,206 | $ | 139,766 | $ | 326,255 | $ | 528,227 | |||||||
Maturities of other time deposits | 88,509 | 220,744 | 348,433 | 657,686 | |||||||||||
Total time deposits | $ | 150,715 | $ | 360,510 | $ | 674,688 | $ | 1,185,913 |
September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
Common equity Tier 1 capital | $ | 685,329 | $ | 691,195 | $ | 688,376 | |||||
Tier 1 capital | 775,829 | 781,695 | $ | 778,876 | |||||||
Tier 2 capital | 37,032 | 34,346 | 33,666 | ||||||||
Total risk-based capital | 812,861 | 816,041 | 812,542 | ||||||||
Risk-weighted assets | 7,010,112 | 6,551,028 | 6,403,685 | ||||||||
Capital ratios: | |||||||||||
Common equity Tier 1 capital ratio | 9.78 | % | 10.55 | % | 10.75 | % | |||||
Tier 1 capital ratio | 11.07 | % | 11.93 | % | 12.16 | % | |||||
Total capital ratio | 11.60 | % | 12.46 | % | 12.69 | % | |||||
Leverage ratio (Tier 1 capital to average assets) | 9.89 | % | 10.68 | % | 10.80 | % | |||||
Capital conservation buffer ratio (1) | 3.60 | % | N/A | N/A | |||||||
Common equity to total assets | 12.12 | % | 12.94 | % | 13.10 | % | |||||
Tangible common equity to tangible assets | 8.57 | % | 9.20 | % | 9.29 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Tangible Common Equity | |||||||||||||||
Ending equity | $ | 1,000,964 | $ | 995,012 | $ | 1,000,964 | $ | 995,012 | |||||||
Less: Ending goodwill | 298,191 | 293,522 | 298,191 | 293,522 | |||||||||||
Less: Ending core deposit intangibles | 18,001 | 25,320 | 18,001 | 25,320 | |||||||||||
Less: Ending other amortizable intangibles | 4,342 | — | 4,342 | — | |||||||||||
Ending tangible common equity (non-GAAP) | $ | 680,430 | $ | 676,170 | $ | 680,430 | $ | 676,170 | |||||||
Average equity | $ | 996,668 | $ | 995,463 | $ | 991,097 | $ | 989,749 | |||||||
Less: Average goodwill | 297,707 | 293,522 | 295,380 | 293,522 | |||||||||||
Less: Average core deposit intangibles | 18,820 | 26,323 | 20,550 | 28,435 | |||||||||||
Less: Average other amortizable intangibles | 3,833 | — | 1,699 | — | |||||||||||
Average tangible common equity (non-GAAP) | $ | 676,308 | $ | 675,618 | $ | 673,468 | $ | 667,792 |
September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
Allowance for loan losses | $ | 36,542 | $ | 34,047 | $ | 33,269 | |||||
Remaining fair value mark on acquired performing loans | 18,154 | 20,819 | 21,884 | ||||||||
Adjusted allowance for loan losses | $ | 54,696 | $ | 54,866 | $ | 55,153 | |||||
Loans, net of deferred fees | $ | 6,148,918 | $ | 5,671,462 | $ | 5,543,621 | |||||
Remaining fair value mark on acquired performing loans | 18,154 | 20,819 | 21,884 | ||||||||
Less: PCI loans, net of fair value mark | 62,346 | 73,737 | 78,606 | ||||||||
Adjusted loans, net of deferred fees | $ | 6,104,726 | $ | 5,618,544 | $ | 5,486,899 | |||||
Allowance for loan losses ratio | 0.59 | % | 0.60 | % | 0.60 | % | |||||
Allowance for loan losses ratio, adjusted for acquisition accounting | 0.90 | % | 0.98 | % | 1.01 | % |
Change In Net Interest Income September 30, | |||||||||||
2016 | 2015 | ||||||||||
% | $ | % | $ | ||||||||
Change in Yield Curve: | |||||||||||
+300 basis points | 11.25 | 31,821 | 6.03 | 16,192 | |||||||
+200 basis points | 7.65 | 21,636 | 4.07 | 10,933 | |||||||
+100 basis points | 3.91 | 11,051 | 1.72 | 4,611 | |||||||
Most likely rate scenario | — | — | — | — | |||||||
-100 basis points | (3.30 | ) | (9,338 | ) | (1.72 | ) | (4,626 | ) | |||
-200 basis points | (4.66 | ) | (13,197 | ) | (3.85 | ) | (10,334 | ) | |||
-300 basis points | (4.76 | ) | (13,464 | ) | (4.03 | ) | (10,824 | ) |
Change In Economic Value of Equity September 30, | |||||||||||
2016 | 2015 | ||||||||||
% | $ | % | $ | ||||||||
Change in Yield Curve: | |||||||||||
+300 basis points | 2.67 | 35,364 | (0.41 | ) | (5,407 | ) | |||||
+200 basis points | 2.65 | 35,109 | 0.68 | 9,006 | |||||||
+100 basis points | 1.85 | 24,533 | 1.00 | 13,244 | |||||||
Most likely rate scenario | — | — | |||||||||
-100 basis points | (4.68 | ) | (61,889 | ) | (3.54 | ) | (47,052 | ) | |||
-200 basis points | (8.92 | ) | (117,988 | ) | (8.94 | ) | (118,937 | ) | |||
-300 basis points | (5.86 | ) | (77,480 | ) | (9.30 | ) | (123,658 | ) |
Period | Total number of shares purchased (1) | Average price paid per share ($) | Approximate value of shares that may be purchased under the plan ($) | |||||
December 31, 2015 | 21,139,000 | |||||||
January 1 - January 31, 2016 | 380,882 | 23.70 | 12,114,000 | |||||
February 1 - February 29, 2016 | 553,566 | 21.99 | 24,942,000 | |||||
March 1 - March 31, 2016 | 106,164 | 23.55 | 22,442,000 | |||||
April 1 - April 30, 2016 | 102,144 | 24.48 | 19,942,000 | |||||
May 1 - May 31, 2016 | 82,800 | 26.24 | 17,769,000 | |||||
June 1 - June 30, 2016 | 87,000 | 26.21 | 15,489,000 | |||||
July 1 - July 31, 2016 | 98,575 | 25.22 | 13,003,000 | |||||
August 1 - August 31, 2016 | — | — | 13,003,000 | |||||
September 1 - September 30, 2016 | — | — | 13,003,000 | |||||
Total | 1,411,131 | 23.48 |
Exhibit No. | Description | |
10.1 | Employment Agreement, dated August 23, 2016, by and between Union Bankshares Corporation and John C. Asbury (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 24, 2016). | |
10.2 | Management Continuity Agreement, dated August 23, 2016, by and between Union Bankshares Corporation and John C. Asbury (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K on August 24, 2016). | |
10.3 | Transition Agreement, dated August 23, 2016, by and between Union Bankshares Corporation and G. William Beale (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on August 24, 2016). | |
15.01 | Letter regarding unaudited interim financial information. | |
31.01 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.02 | Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.01 | Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.00 | Interactive data files formatted in eXtensible Business Reporting Language for the quarter ended September 30, 2016 pursuant to Rule 405 of Regulation S-T (1): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements. |
Union Bankshares Corporation | ||
(Registrant) | ||
Date: November 3, 2016 | By: | /s/ G. William Beale |
G. William Beale, | ||
Chief Executive Officer | ||
(principal executive officer) | ||
Date: November 3, 2016 | By: | /s/ Robert M. Gorman |
Robert M. Gorman, | ||
Executive Vice President and Chief Financial Officer | ||
(principal financial and accounting officer) |
/s/ G. William Beale | |
G. William Beale, | |
Chief Executive Officer |
/s/ Robert M. Gorman | |
Robert M. Gorman, | |
Executive Vice President and Chief Financial Officer |
/s/ G. William Beale | |
G. William Beale, Chief Executive Officer | |
/s/ Robert M. Gorman | |
Robert M. Gorman, Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 31, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Union Bankshares Corp | |
Entity Central Index Key | 0000883948 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 43,558,217 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 1.33 | $ 1.33 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 43,556,486 | 44,785,674 |
Common stock, shares outstanding (in shares) | 43,556,486 | 44,785,674 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Tax expense (benefit) related to reclassification adjustment for losses included in net income | $ (83) | $ (84) | $ (233) | $ (253) |
Tax expense (benefit) related to unrealized holding (losses) gains arising during period | 604 | 673 | 4,227 | (976) |
Tax expense (benefit) related to (gains) losses on the sale of securities | 0 | (79) | 51 | 130 |
Tax expense (benefit) related to (gains) losses for AFS securities transferred to HTM | $ (128) | $ (166) | $ (439) | $ (278) |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||
Other comprehensive income (loss), tax | $ 3,970 | $ 1,130 |
Issuance of common stock, acquisition, shares | 17,232 | |
Dividends on common stock, per share (in usd per share) | $ 0.57 | $ 0.49 |
Stock purchased under stock repurchase plan, shares | 1,411,131 | 347,021 |
Issuance of common stock under Dividend Reinvestment Plans, shares | 52,201 | |
Issuance of common stock under Equity Compensation Plan , shares | 54,044 | 37,124 |
Issuance of common stock for services rendered, shares | 14,576 | 19,417 |
Vesting of restricted stock under Equity Compensation Plans, shares | 35,515 | 26,576 |
ACCOUNTING POLICIES |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant inter-company accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and follow general practice within the banking industry. Accordingly, the unaudited consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements; however, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2015 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to current period presentation. Business Combinations On May 31, 2016, the Bank completed its acquisition of ODCM, a Charlottesville, Virginia based registered investment advisor with nearly $300.0 million in assets under management at the time of the acquisition. The acquisition date fair value of consideration transferred totaled $9.1 million, which consisted of $4.1 million in cash, $453,000 in stock, and the remainder being contingent on achieving certain performance metrics. The contingent consideration is carried at fair value and is reported as a component of “Other Liabilities” in the Consolidated Balance Sheet. The fair value of this liability will be assessed at each reporting period. In connection with the transaction, the Company recorded $4.7 million in goodwill and $4.5 million of amortizable assets, which primarily relate to the value of customer relationships. The Company is amortizing these intangibles assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. The transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the acquisition date. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition. Loans The Company originates commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by commercial and residential real estate loans (including acquisition and development loans and residential construction loans) throughout its market area. The ability of the Company’s debtors to honor their contracts on such loans is dependent upon the real estate and general economic conditions in those markets, as well as other factors. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for any charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. As of January 1, 2016, the Company enhanced the loan portfolio segmentation to better align with how the Company manages credit risk and to better align with industry practice. Below is a summary of the new loan segmentation. Construction and Land Development – construction loans generally made to commercial and residential builders for specific construction projects. The successful repayment of these types of loans is generally dependent upon (a) a commitment for permanent financing from the Company, or (b) from the sale of the constructed property. These loans carry more risk than both types of commercial real estate term loans due to the dynamics of construction projects, changes in interest rates, the long-term financing market, and state and local government regulations. As in commercial real estate term lending, the Company manages risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations to any one business or industry. Also, included in this category are loans generally made to residential home builders to support their lot and home inventory needs. Repayment relies upon the successful performance of the underlying residential real estate project. This type of lending carries a higher level of risk as compared to other commercial lending. This class of lending manages risks related to residential real estate market conditions, a functioning first and secondary market in which to sell residential properties, and the borrower’s ability to manage inventory and run projects. The Company manages this risk by lending to experienced builders and developers by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations with any particular customer or geographic region. Commercial Real Estate – Owner Occupied - term loans made to support owner occupied real estate properties that rely upon the successful operation of the business occupying the property for repayment. General market conditions and economic activity may affect these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by avoiding concentrations to any one business or industry. Commercial Real Estate – Non-Owner Occupied - term loans typically made to borrowers to support income producing properties that rely upon the successful operation of the property for repayment. General market conditions and economic activity may impact the performance of these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by diversifying the lending to various lines of businesses, such as retail, office, office warehouse, and hotel as well as avoiding concentrations to any one business or industry. Residential 1-4 Family – loans generally made to both commercial and residential borrowers. Mortgage loan portfolios carry risks associated with the creditworthiness of the borrower or the tenant and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans. Multifamily Real Estate – loans made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. This type of lending carries a lower level of risk as compared to other commercial lending. In addition, underwriting requirements for multifamily properties are stricter than for other non-owner-occupied property types. The Company manages this risk by avoiding concentrations with any particular customer. Commercial and Industrial – loans generally made to support the Company’s borrowers’ need for equipment/vehicle purchases and short-term or seasonal cash flow needs. Repayment relies upon the successful operation of the business. This type of lending carries a lower level of commercial credit risk as compared to other commercial lending. The Company manages this risk by using general underwriting policies and procedures for these types of loans and by avoiding concentrations to any one business or industry. HELOC – the consumer HELOC portfolio carries risks associated with the creditworthiness of the borrower and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans. Auto – the consumer indirect auto lending portfolio generally carries certain risks associated with the values of the collateral that management must mitigate. The Company focuses its indirect auto lending on one to two year old used vehicles where substantial depreciation has already occurred thereby minimizing the risk of significant loss of collateral values in the future. This type of lending places reliance on computer-based loan approval systems to supplement other underwriting standards. Consumer and all other - portfolios carry risks associated with the creditworthiness of the borrower and changes in the economic environment. The Company manages these risks through policies and procedures such as experienced underwriting, maximum debt to income ratios, and minimum borrower credit scores. Also included in this category are loans that generally support small business lines of credit and agricultural lending neither of which are a material source of business for the Company. Affordable Housing Entities The Company invests in private investment funds that make equity investments in multifamily affordable housing properties that provide affordable housing tax credits for these investments. The activities of these entities are financed with a combination of invested equity capital and debt. For the three and nine months ended September 30, 2016, the Company recognized amortization of $185,000 and $445,000, respectively, and tax credits of $265,000 and $685,000, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. For the three and nine months ended September 30, 2015, the Company recognized amortization of $118,000 and $397,000, respectively, and tax credits of $213,000 and $641,000, respectively. The carrying value of the Company’s investments in these qualified affordable housing projects was $8.0 million and $8.5 million as of September 30, 2016 and December 31, 2015, respectively. The Company recorded a liability of $5.3 million for the related unfunded commitments as of September 30, 2016, which are expected to be paid from 2016 to 2019. Adoption of New Accounting Standards In February 2015, the FASB issued revised guidance to simplify the consolidation assessment required to evaluate whether organizations should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance also removed the indefinite deferral of specialized guidance for certain investment funds. The Company adopted ASU No. 2015-02, “Amendments to the Consolidation Analysis” during the first quarter of 2016. The adoption of ASU 2015-02 did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. The ASU provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. The ASU also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is only permitted for the provision related to instrument-specific credit risk. The Company is currently assessing the impact ASU 2016-01 will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU requires lessees to put most leases on their balance sheets, but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates the real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in a critical term of the hedging relationship. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-05 to have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments.” This ASU clarifies that in assessing whether an embedded contingent put or call option is clearly and closely related to the debt host, an entity is required to perform only the four-step decision sequence in ASC 815-15-25-42 (as amended by the ASU). The entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-06 will not have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” This ASU simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively and early adoption is permitted. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This ASU amends the principal-versus-agent implementation guidance and illustrations in the FASB’s new revenue standard (ASU 2014-09) and clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14 delaying the effective date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company is currently assessing the impact ASU 2016-08 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted; however, if the Company elects to early adopt, then all amendments must be adopted in the same period. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” This ASU amends certain aspects of the FASB’s new revenue standard, specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments in this update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers, which is not yet effective. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). The Company is currently assessing the impact ASU 2016-10 will have on its consolidated financial statements. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.” This ASU amends certain aspects of the FASB's new revenue standard to reduce the potential for diversity in practice at the initial application of Topic 606 by entities with transactions that fall into the scope of this guidance, as well as reducing the cost and complexity of applying Topic 606 at the transition date and on a continual basis. The amendment affects ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), that is not yet effective. The Company is currently assessing the impact ASU 2016-12 will have on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU updates the existing guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and required consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments (a consensus of Merging Issues Task Force)." This ASU attempts to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The purpose of this update is to reduce existing diversity in practice in eight areas addressed by the update. The amendment will be effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-15 will not have a material impact on its consolidated financial statements. |
SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECURITIES | SECURITIES Available for Sale The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):
The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s available for sale investments with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
As of September 30, 2016, there were $85.1 million, or 28 issues, of individual available for sale securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.9 million and consisted of municipal obligations, mortgage-backed securities, and corporate bonds. As of December 31, 2015, there were $46.2 million, or 20 issues, of individual securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.4 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities. The Company has determined that these securities are temporarily impaired as of September 30, 2016 and December 31, 2015 for the reasons set out below: Mortgage-backed securities. This category’s unrealized losses are primarily the result of interest rate fluctuations. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not intend to sell the investments, and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired. Also, the majority of the Company’s mortgage-backed securities are agency-backed securities, which have a government guarantee. Obligations of state and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the economic downturn on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired. Corporate bonds. The Company’s unrealized losses in corporate debt securities are related to both interest rate fluctuations and ratings downgrades for a limited number of securities. The majority of the securities remain investment grade and the Company’s analysis did not indicate the existence of a credit loss. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired. The following table presents the amortized cost and estimated fair value of available for sale securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
The following table presents the estimated fair value of available for sale securities which were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):
(1) The "Other purposes" category consists of borrowings, derivatives, and accounts held at the Bank. Held to Maturity During the second quarter of 2015, the Company transferred securities, which it intends and has the ability to hold until maturity, with a fair value of $201.8 million on the date of transfer, from securities available for sale to securities held to maturity. The Company transferred these securities to held to maturity to reduce the impact of price volatility on capital and in consideration of changes to the regulatory environment. The securities included net pre-tax unrealized gains of $8.1 million at the date of transfer with a remaining balance of $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015. The Company reports securities held to maturity on the Consolidated Balance Sheets at carrying value. Carrying value is amortized cost which includes any unamortized unrealized gains and losses recognized in accumulated other comprehensive income prior to reclassifying the securities from securities available for sale to securities held to maturity. Investment securities transferred into the held to maturity category from the available for sale category are recorded at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the securities held to maturity. Such unrealized gains/(losses) are accreted over the remaining life of the security with no impact on future net income. The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):
(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion. The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s held to maturity securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
As of September 30, 2016, there was $661,000, or 1 issue, of an individual held to maturity security that had been in a continuous loss position for more than 12 months. This security had an unrealized loss of $81,000 and consisted of a municipal obligation. The Company has determined that these securities in a loss position are temporarily impaired as of September 30, 2016 and December 31, 2015 for the reasons set out below: Obligations of states and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the economic downturn on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired. The following table presents the amortized cost and estimated fair value of held to maturity securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion. The following table presents the estimated fair value of held to maturity securities which were pledged to secure public deposits as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):
Restricted Stock, at cost Due to restrictions placed upon the Bank’s common stock investment in the Federal Reserve Bank and FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications and are included as a separate line item on the Company’s Consolidated Balance Sheets. At September 30, 2016 and December 31, 2015, the FHLB required the Bank to maintain stock in an amount equal to 4.25% of outstanding borrowings and a specific percentage of the Bank’s total assets. The Federal Reserve Bank required the Bank to maintain stock with a par value equal to 6% of its outstanding capital at both September 30, 2016 and December 31, 2015. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $23.8 million for both September 30, 2016 and December 31, 2015 and FHLB stock in the amount of $39.4 million and $28.0 million as of September 30, 2016 and December 31, 2015, respectively. Other-Than-Temporary-Impairment During each quarter, the Company conducts an assessment of the securities portfolio for OTTI consideration. The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis. An impairment is other-than-temporary if any of the following conditions exist: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss. Based on the assessment for the three and nine months ended September 30, 2016, and in accordance with the guidance, no OTTI was recognized. For the year ended December 31, 2015, the Company determined that a municipal security in the available for sale portfolio incurred credit-related OTTI of $300,000. During the quarter ended March 31, 2016, the municipal security was sold. As a result, the Company recognized an additional loss on sale of the previously written down security. Realized Gains and Losses The following table presents the gross realized gains and losses on the sale of securities available for sale and the proceeds from the sale of securities during the three and nine months ended September 30, 2016 and 2015 (dollars in thousands). The Company did not sell any investment securities that are held to maturity.
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LOANS AND ALLOWANCE FOR LOAN LOSSES |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at September 30, 2016 and December 31, 2015 (dollars in thousands):
(1) Loans, as presented, are net of deferred fees and costs totaling $3.3 million and $3.0 million as of September 30, 2016 and December 31, 2015, respectively. The following table shows the aging of the Company’s loan portfolio, by segment, at September 30, 2016 (dollars in thousands):
The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2015 (dollars in thousands):
The following table shows the PCI loan portfolios, by segment and their delinquency status, at September 30, 2016 (dollars in thousands):
The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2015 (dollars in thousands):
The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment at September 30, 2016 and December 31, 2015 (dollars in thousands):
The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment for the three and nine months ended September 30, 2016 and 2015 (dollars in thousands):
The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the three and nine months ended September 30, 2016, the recorded investment in restructured loans prior to modifications was not materially impacted by the modification. The following table provides a summary, by segment, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed on nonaccrual status, which are considered to be nonperforming, as of September 30, 2016 and December 31, 2015 (dollars in thousands):
The Company considers a default of a restructured loan to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the three and nine months ended September 30, 2016, the Company identified one loan, totaling approximately $23,000, that went into default that had been restructured in the twelve-month period prior to the time of default. This loan was a commercial real estate - owner occupied loan which had a term modification at a market rate. During the three and nine months ended September 30, 2015, the Company did not identify any restructured loans that went into default that had been restructured in the twelve-month period prior to default. The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2016 (dollars in thousands):
The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2015 (dollars in thousands):
The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2016. The table below includes the provision for loan losses. As discussed in Note 1 “Accounting Policies,” the Company enhanced its loan segmentation for purposes of the allowance calculation as well as its disclosures. The impact of this enhancement is reflected in the provision amounts in the table below. In addition, a $175,000 provision was recognized during the nine months ended September 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):
The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2015. In addition, a $300,000 provision was recognized during the nine months ended September 30, 2015 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):
The Company uses a risk rating system and past due status as the primary credit quality indicators for the loan categories. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the allowance for loan losses; on those loans without a risk rating, the Company uses past due status to determine risk level. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows: Pass is determined by the following criteria: •Risk rated 0 loans have little or no risk and are generally secured by General Obligation Municipal Credits; •Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents; •Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety; •Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment; •Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan; or •Loans that are not risk rated but that are 0 to 29 days past due. Special Mention is determined by the following criteria: •Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay; •Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position; or •Loans that are not risk rated but that are 30 to 89 days past due. Substandard is determined by the following criteria: •Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected; or •Loans that are not risk rated but that are 90 to 149 days past due. Doubtful is determined by the following criteria: •Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; •Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted; or •Loans that are not risk rated but that are over 149 days past due. The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of September 30, 2016 (dollars in thousands):
The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2015 (dollars in thousands):
The following table shows the recorded investment in only PCI loans by segment with their related risk level as of September 30, 2016 (dollars in thousands):
The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2015 (dollars in thousands):
Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows. The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands):
(1) This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the quarter. The carrying value of the Company’s PCI loan portfolio, accounted for under ASC 310-30, totaled $62.3 million at September 30, 2016 and $73.7 million at December 31, 2015. The outstanding balance of the Company’s PCI loan portfolio totaled $77.9 million at September 30, 2016 and $90.3 million at December 31, 2015. The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, totaled $1.2 billion at September 30, 2016 and $1.4 billion at December 31, 2015; the remaining discount on these loans totaled $18.2 million at September 30, 2016 and $20.8 million at December 31, 2015. |
INTANGIBLE ASSETS |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS | INTANGIBLE ASSETS The Company’s intangible assets consist of core deposits, goodwill, and other intangibles arising from previous and current acquisitions. The Company has determined that core deposit intangibles have finite lives and amortizes them over their estimated useful lives. Core deposit intangible assets are being amortized over the period of expected benefit, which ranges from 4 to 14 years, using an accelerated method. On January 1, 2014, the Company completed the acquisition of StellarOne and acquired intangible assets of $29.6 million and recorded $234.1 million of goodwill. On May 31, 2016, the Company completed the acquisition of ODCM and recorded goodwill of $4.7 million and other amortizable intangible assets of $4.5 million. The Company is amortizing these intangible assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition. In accordance with ASC 350, Intangibles-Goodwill and Other, the Company reviews the carrying value of indefinite lived intangible assets at least annually or more frequently if certain impairment indicators exist. The Company performed its annual impairment testing in the second quarter of 2016 and determined that there was no impairment to its goodwill or intangible assets. Amortization expense of core deposit intangibles for the three and nine months ended September 30, 2016 totaled $1.7 million and $5.3 million, respectively; and the three and nine months ended September 30, 2015 totaled $2.1 million and $6.4 million, respectively. Amortization expense of other intangibles for both the three and nine months ended September 30, 2016 totaled $160,000, respectively. As of September 30, 2016, the estimated remaining amortization expense of core deposit intangibles and other amortizable intangible assets is as follows (dollars in thousands):
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BORROWINGS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS | BORROWINGS Short-term Borrowings The Company classifies all borrowings that will mature within a year from the date on which the Company enters into them as short-term borrowings. Total short-term borrowings consist primarily of advances from the FHLB, federal funds purchased (which are secured overnight borrowings from other financial institutions), and other lines of credit. Also included in total short-term borrowings are securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold. Total short-term borrowings consist of the following as of September 30, 2016 and December 31, 2015 (dollars in thousands):
The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $169.0 million at September 30, 2016 and $175.0 million at December 31, 2015. The Company maintains an alternate line of credit at a correspondent bank, the available balance was $9.0 million at September 30, 2016 and $25.0 million at December 31, 2015. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $2.4 billion and $1.5 billion at September 30, 2016 and December 31, 2015, respectively. Long-term Borrowings In connection with two bank acquisitions prior to 2006, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million. In connection with the acquisition of StellarOne, the Company acquired trust preferred capital notes totaling $32.0 million with a remaining fair value discount of $6.8 million at September 30, 2016. The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.
(1)The total of the trust preferred capital securities and investments in the respective trusts represents the principal asset of the Company's junior subordinated debt securities with like maturities and like interest rates to the capital securities. The Company's investment in the trusts is reported in "Other Assets" within the Consolidated Balance Sheets. On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances, which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s Consolidated Balance Sheets. In accordance with ASC 470-50, Modifications and Extinguishments, the Company is amortizing this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings in the Company’s Consolidated Statements of Income. Amortization expense for the three and nine months ended September 30, 2016 and 2015 was $474,000 and $1.4 million and $463,000 and $1.4 million, respectively. In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB of which there is $45.0 million remaining at September 30, 2016 that had a remaining fair value premium of $693,000. As of September 30, 2016, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):
As of December 31, 2015, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):
The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $2.0 billion as of September 30, 2016 and $1.9 billion at December 31, 2015. As of September 30, 2016, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation Matters In the ordinary course of its operations, the Company and its subsidiaries are parties to various legal proceedings. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, in the aggregate, will not have a material adverse effect on the business, financial condition, or results of operations of the Company. Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in the Company’s Consolidated Balance Sheets. The contractual amounts of these instruments reflect the extent of the Company’s involvement in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit written is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk. The Company considers credit losses related to off-balance sheet commitments by undergoing a similar process in evaluating losses for loans that are carried on balance sheet. The Company considers historical loss rates, current economic conditions, risk ratings, and past due status among other factors in the consideration of whether credit losses are inherent in the Company’s off-balance sheet commitments to extend credit. The Company does not expect credit losses arising from off-balance sheet commitments to have a material adverse impact on the Company’s consolidated financial statements. Commitments to extend credit are agreements to lend to customers as long as there are no violations of any conditions established in the contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Letters of credit are conditional commitments issued by the Company to guarantee the performance of customers to third parties. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. UMG, a wholly owned subsidiary of the Bank, uses rate lock commitments and best efforts contracts during the origination process and for loans held for sale. These best efforts contracts are designed to mitigate UMG’s exposure to fluctuations in interest rates in connection with rate lock commitments and loans held for sale. The following table presents the balances of commitments and contingencies (dollars in thousands):
(1) Includes unfunded overdraft protection. The Company must maintain a reserve against its deposits in accordance with Regulation D of the Federal Reserve Act. For the final weekly reporting period in the periods ended September 30, 2016 and December 31, 2015, the aggregate amount of daily average required reserves was approximately $52.7 million and $48.7 million, respectively. As of September 30, 2016, the Company had approximately $49.3 million in deposits in other financial institutions, of which $18.8 million and $14.8 million serve as collateral for the cash flow hedges and loan swaps, respectively, as discussed in Note 7 “Derivatives”. The Company had approximately $14.2 million in deposits in other financial institutions that were uninsured at September 30, 2016. On an annual basis, the Company’s management evaluates the loss risk of its uninsured deposits in financial counterparties. For asset/liability management purposes, the Company uses interest rate swap agreements to hedge various exposures or to modify the interest rate characteristics of various balance sheet accounts. See Note 7 “Derivatives” for additional information. In the ordinary course of business, the Company records an indemnification reserve relating to the credit card portfolio and to mortgage loans previously sold based on historical statistics and loss rates; as of September 30, 2016 and December 31, 2015, the Company’s indemnification reserve was approximately $506,000 and $450,000, respectively. |
DERIVATIVES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES | DERIVATIVES The Company is exposed to economic risks arising from its business operations and uses derivatives primarily to manage risk associated with changing interest rates, and to assist customers with their risk management objectives. The Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship (cash flow or fair value hedge). The remaining are classified as free standing derivatives consisting of customer accommodation loan swaps and interest rate lock commitments that do not qualify for hedge accounting. Cash Flow Hedges The Company designates derivatives as cash flow hedges when they are used to manage exposure to variability in cash flows related to forecasted transactions on variable rate borrowings, such as trust preferred capital notes, FHLB borrowings, and prime commercial loans. The Company uses interest rate swap agreements as part of its hedging strategy by exchanging a notional amount, equal to the principal amount of the borrowings, for fixed-rate interest based on benchmarked interest rates. All swaps entered into with counterparties met the Company’s credit standards, and the agreements contain collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in the contract is not significant. The terms and conditions of the interest rate swaps vary and amounts receivable or payable are recognized as accrued under the terms of the agreements. The Company assesses the effectiveness of each hedging relationship on a periodic basis using statistical regression analysis. The Company also measures the ineffectiveness of each hedging relationship using the change in variable cash flows method which compares the cumulative changes in cash flows of the hedging instrument relative to cumulative changes in the hedged item’s cash flows. In accordance with ASC 815, Derivatives and Hedging, the effective portions of the derivatives’ unrealized gains or losses are recorded as a component of other comprehensive income. Based on the Company’s assessment, its cash flow hedges are highly effective, but to the extent that any ineffectiveness exists in the hedge relationships, the amounts would be recorded in interest income or interest expense in the Company’s Consolidated Statements of Income. On June 13, 2016, the Company terminated three interest rate swaps designated as cash flow hedges prior to their respective maturity dates. The unrealized gain of $1.3 million within accumulated Other Comprehensive Income will be re-classified into earnings over a three year period using the effective interest method. The estimated net amount of gains expected to be reclassified into earnings within the next twelve months is $377,000. Fair Value Hedge Derivatives are designated as fair value hedges when they are used to manage exposure to changes in the fair value of certain financial assets and liabilities, referred to as the hedged items, which fluctuate in value as a result of movements in interest rates. During the normal course of business, the Company enters into interest rate swaps to convert certain long-term fixed-rate loans to floating rates to hedge the Company’s exposure to interest rate risk. The Company pays a fixed interest rate to the counterparty and receives a floating rate from the same counterparty, calculated on the aggregate notional amount. At September 30, 2016 and December 31, 2015, the aggregate notional amount of the related hedged items totaled $43.5 million and $61.2 million, respectively, with fair value amounts of $3.2 million and $689,000, respectively. The Company applies hedge accounting in accordance with ASC 815, Derivatives and Hedging, and the fair value hedge and the underlying hedged item, attributable to the risk being hedged, are recorded at fair value with unrealized gains and losses being recorded in the Company’s Consolidated Statements of Income. Statistical regression analysis is used to assess hedge effectiveness, both at inception of the hedging relationship and on an ongoing basis. The regression analysis involves regressing the periodic change in fair value of the hedging instrument against the periodic changes in fair value of the asset being hedged due to changes in the hedged risk. The Company’s fair value hedges continue to be highly effective and had no material impact on the Consolidated Statements of Income, but if any ineffectiveness exists, portions of the unrealized gains or losses would be recorded in interest income or interest expense in the Company’s Consolidated Statements of Income. Loan Swaps During the normal course of business, the Company enters into interest rate swap loan relationships (“loan swaps”) with borrowers to meet their financing needs. Upon entering into the loan swaps, the Company enters into offsetting positions with a third party in order to minimize interest rate risk. These back-to-back loan swaps qualify as financial derivatives, and the fair values are reported in “Other Assets” and “Other Liabilities” within the Company’s Consolidated Balance Sheets. Interest Rate Lock Commitments During the normal course of business, the Company enters into commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding (“rate lock commitments”). Rate lock commitments on mortgage loans that are intended to be sold in the secondary market are considered to be derivatives. The period of time between issuance of a loan commitment, closing, and sale of the loan generally ranges from 30 to 120 days. The Company protects itself from changes in interest rates through the use of best efforts forward delivery commitments, whereby the Company commits to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed interest rate risk on the loan. The correlation between the rate lock commitments and the best efforts contracts is high due to their similarity. The market values of rate lock commitments and best efforts forward delivery commitments is not readily ascertainable with precision because rate lock commitments and best efforts contracts are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments and best efforts contracts by measuring the change in the value of the underlying asset, while taking into consideration the probability that the rate lock commitments will close. The fair value of the rate lock commitments is reported as a component of “Other Assets” in the Company’s Consolidated Balance Sheets; the fair value of the Company’s best efforts forward delivery commitments is recorded as a component of “Other Liabilities” in the Company’s Consolidated Balance Sheets. Any impact to income is recorded in current period earnings as a component of “Mortgage banking income, net” in the Company’s Consolidated Statements of Income. The following table summarizes key elements of the Company’s derivative instruments as of September 30, 2016 and December 31, 2015, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):
(1) Notional amounts are not recorded on the balance sheet and are generally used only as a basis on which interest and other payments are determined. (2) Balances represent fair value of derivative financial instruments. (3) Collateral pledged is comprised of both cash and securities. (4) Prior period reflects reclassifications to conform to the current presentation. |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2016 is summarized as follows, net of tax (dollars in thousands):
The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2015 is summarized as follows, net of tax (dollars in thousands):
Reclassifications of unrealized gains (losses) on available for sale securities are reported in the Company’s Consolidated Statements of Income as “Gains on securities transactions, net” with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported gains of $0 and $145,000 for the three and nine months ended September 30, 2016 and $75,000 and $672,000 for the three and nine months ended September 30, 2015, related to the sale of securities. The Company recorded $300,000 in OTTI in the third quarter of 2015 on a municipal security in the available for sale portfolio. The tax effects of the gains on sales of securities transaction, net of OTTI recorded, were $0 and $51,000 during the three and nine months ended September 30, 2016 and $79,000 and $130,000 during the three and nine months ended September 30, 2015, which amounts were included as a component of income tax expense. Reclassifications of the change in fair value of cash flow hedges are reported in interest income and interest expense in the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported net interest expense of $237,000 and $666,000 for the three and nine months ended September 30, 2016 and $241,000 and $723,000 for the three and nine months ended September 30, 2015. The tax effects of these transactions were $83,000 and $233,000 during the three and nine months ended September 30, 2016 and $84,000 and $253,000 during the three and nine months ended September 30, 2015, which were included as a component of income tax expense. |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company follows ASC 820, Fair Value Measurements and Disclosures, to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows:
The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements. Derivative instruments As discussed in Note 7 “Derivatives”, the Company records derivative instruments at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the re-pricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. Third party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions. The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities. During the ordinary course of business, the Company enters into interest rate lock commitments related to the origination of mortgage loans held for sale as well as best effort forward delivery commitments to mitigate interest rate risk; these instruments are recorded at estimated fair value based on the value of the underlying loan, which in turn is based on quoted prices for similar loans in the secondary market. However, this value is adjusted by a pull-through rate which considers the likelihood that the loan in a lock position will ultimately close. The pull-through rate is derived from the Company’s internal data and is adjusted using significant management judgment. The pull-through rate is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock. As such, interest rate lock commitments are classified as Level 3. An increase in the pull-through rate utilized in the fair value measurement of the interest rate lock commitment derivative will result in positive fair value adjustments while a decrease in the pull-through rate will result in a negative fair value adjustment. The Company’s weighted average pull-through rate was approximately 80% as of September 30, 2016 and December 31, 2015. As of September 30, 2016, the interest rate lock commitments are recorded as a component of “Other Assets” on the Company’s Consolidated Balance Sheets. Securities available for sale Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data (Level 2). If the inputs used to provide the evaluation for certain securities are unobservable and/or there is little, if any, market activity, then the security would fall to the lowest level of the hierarchy (Level 3). The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is Interactive Data Corporation (“IDC”), which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs. The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance, and rating to incorporate additional spreads to the industry benchmark curves. The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of September 30, 2016 and December 31, 2015. The carrying value of restricted Federal Reserve Bank and FHLB stock approximates fair value based on the redemption provisions of each entity and is therefore excluded from the following table. Loans held for sale Loans held for sale are carried at fair value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). Gains and losses on the sale of loans are recorded within the mortgage segment and are reported on a separate line item in the Company’s Consolidated Statements of Income. The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):
Certain assets are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements. Impaired loans Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral if repayment is solely from the underlying value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company’s collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser using observable market data. When evaluating the fair value, management may discount the appraisal further if, based on their understanding of the market conditions, it is determined the collateral is further impaired below the appraised value (Level 3). For the periods ending September 30, 2016 and December 31, 2015, the Level 3 weighted averages related to impaired loans were 12.4% and 7.0%, respectively. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Collateral dependent impaired loans allocated to the allowance for loan losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Company’s Consolidated Statements of Income. Other real estate owned OREO is evaluated for impairment at least quarterly by the Bank’s Special Asset Loan Committee and any necessary write downs to fair values are recorded as impairment and included as a component of noninterest expense. Fair values of OREO are carried at fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as Level 3 valuation. For the nine and twelve month periods ending September 30, 2016 and December 31, 2015, the Level 3 weighted averages related to OREO were approximately 24.7% and 32.0%, respectively. Total valuation expenses related to OREO properties for the three and nine months ended September 30, 2016 and 2015 totaled $479,000 and $879,000 and $473,000 and $1.8 million, respectively. The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):
ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Cash and cash equivalents For those short-term instruments, the carrying amount is a reasonable estimate of fair value. Held to Maturity Securities The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is IDC, which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs. The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance, and rating to incorporate additional spreads to the industry benchmark curves. The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of September 30, 2016 and December 31, 2015. Loans The fair value of performing loans is estimated by discounting expected future cash flows using a yield curve that is constructed by adding a loan spread to a market yield curve. Loan spreads are based on spreads currently observed in the market for loans of similar type and structure. Fair value for impaired loans and their respective level within the fair value hierarchy, are described in the previous disclosure related to fair value measurements of assets that are measured on a nonrecurring basis. Bank owned life insurance The carrying value of bank owned life insurance approximates fair value. The Company records these policies at their cash surrender value, which is estimated using information provided by insurance carriers. Deposits The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. Borrowings The carrying value of the Company’s repurchase agreements is a reasonable estimate of fair value. Other borrowings are discounted using the current yield curve for the same type of borrowing. For borrowings with embedded optionality, a third party source is used to value the instrument. The Company validates all third party valuations for borrowings with optionality using Bloomberg’s derivative pricing functions. Accrued interest The carrying amounts of accrued interest approximate fair value. The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2016 and December 31, 2015 are as follows (dollars in thousands):
The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk. |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares outstanding attributable to stock awards. There were approximately 118 and 51,179 shares underlying anti-dilutive awards for the three months ended September 30, 2016 and 2015, respectively, and there were approximately 579 and 54,475 shares underlying anti-dilutive awards for the nine months ended September 30, 2016 and 2015, respectively. Anti-dilutive awards were excluded from the calculation of diluted EPS. The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share data):
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SEGMENT REPORTING DISCLOSURES |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING DISCLOSURES | SEGMENT REPORTING DISCLOSURES The Company has two reportable segments: a traditional full service community bank segment and a mortgage loan origination business segment. The community bank segment includes one subsidiary bank, the Bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 115 retail locations in Virginia as of September 30, 2016. The mortgage segment includes UMG, which provides a variety of mortgage loan products principally in Virginia, North Carolina, Maryland, and the Washington D.C. metro area. These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which serves to mitigate the Company’s exposure to interest rate risk. Profit and loss is measured by net income after taxes including realized gains and losses on the Company’s investment portfolio. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process. Both of the Company’s reportable segments are service-based. The mortgage business is a primarily fee-based business, while the Bank is driven principally by net interest income. The bank segment provides a distribution and referral network through its customers for the mortgage loan origination business. The mortgage segment offers a more limited referral network for the bank segment. The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest. The interest rate on the warehouse line of credit for each of the three and nine months ended September 30, 2016 and 2015 was the three month LIBOR rate plus 0.15% with no floor. These transactions are eliminated in the consolidation process. During 2015, the mortgage segment began originating loans with the intent that they be held for investment purposes. The community bank segment provides the mortgage segment with the long-term funds needed to originate these loans through a long-term funding facility and charges the mortgage segment interest. The interest charged is determined by the community bank segment based on the cost of funds available to the community bank segment for similar durations of the loans being funded by the mortgage segment. A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals. Information about reportable segments and reconciliation of such information to the consolidated financial statements for each of the three and nine months ended September 30, 2016 and 2015 is as follows (dollars in thousands): UNION BANKSHARES CORPORATION AND SUBSIDIARIES SEGMENT FINANCIAL INFORMATION
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ACCOUNTING POLICIES (Policies) |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Business Combinations | Business Combinations On May 31, 2016, the Bank completed its acquisition of ODCM, a Charlottesville, Virginia based registered investment advisor with nearly $300.0 million in assets under management at the time of the acquisition. The acquisition date fair value of consideration transferred totaled $9.1 million, which consisted of $4.1 million in cash, $453,000 in stock, and the remainder being contingent on achieving certain performance metrics. The contingent consideration is carried at fair value and is reported as a component of “Other Liabilities” in the Consolidated Balance Sheet. The fair value of this liability will be assessed at each reporting period. In connection with the transaction, the Company recorded $4.7 million in goodwill and $4.5 million of amortizable assets, which primarily relate to the value of customer relationships. The Company is amortizing these intangibles assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. The transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the acquisition date. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition. |
Loans | Loans The Company originates commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by commercial and residential real estate loans (including acquisition and development loans and residential construction loans) throughout its market area. The ability of the Company’s debtors to honor their contracts on such loans is dependent upon the real estate and general economic conditions in those markets, as well as other factors. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for any charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. As of January 1, 2016, the Company enhanced the loan portfolio segmentation to better align with how the Company manages credit risk and to better align with industry practice. Below is a summary of the new loan segmentation. Construction and Land Development – construction loans generally made to commercial and residential builders for specific construction projects. The successful repayment of these types of loans is generally dependent upon (a) a commitment for permanent financing from the Company, or (b) from the sale of the constructed property. These loans carry more risk than both types of commercial real estate term loans due to the dynamics of construction projects, changes in interest rates, the long-term financing market, and state and local government regulations. As in commercial real estate term lending, the Company manages risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations to any one business or industry. Also, included in this category are loans generally made to residential home builders to support their lot and home inventory needs. Repayment relies upon the successful performance of the underlying residential real estate project. This type of lending carries a higher level of risk as compared to other commercial lending. This class of lending manages risks related to residential real estate market conditions, a functioning first and secondary market in which to sell residential properties, and the borrower’s ability to manage inventory and run projects. The Company manages this risk by lending to experienced builders and developers by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations with any particular customer or geographic region. Commercial Real Estate – Owner Occupied - term loans made to support owner occupied real estate properties that rely upon the successful operation of the business occupying the property for repayment. General market conditions and economic activity may affect these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by avoiding concentrations to any one business or industry. Commercial Real Estate – Non-Owner Occupied - term loans typically made to borrowers to support income producing properties that rely upon the successful operation of the property for repayment. General market conditions and economic activity may impact the performance of these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by diversifying the lending to various lines of businesses, such as retail, office, office warehouse, and hotel as well as avoiding concentrations to any one business or industry. Residential 1-4 Family – loans generally made to both commercial and residential borrowers. Mortgage loan portfolios carry risks associated with the creditworthiness of the borrower or the tenant and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans. Multifamily Real Estate – loans made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. This type of lending carries a lower level of risk as compared to other commercial lending. In addition, underwriting requirements for multifamily properties are stricter than for other non-owner-occupied property types. The Company manages this risk by avoiding concentrations with any particular customer. Commercial and Industrial – loans generally made to support the Company’s borrowers’ need for equipment/vehicle purchases and short-term or seasonal cash flow needs. Repayment relies upon the successful operation of the business. This type of lending carries a lower level of commercial credit risk as compared to other commercial lending. The Company manages this risk by using general underwriting policies and procedures for these types of loans and by avoiding concentrations to any one business or industry. HELOC – the consumer HELOC portfolio carries risks associated with the creditworthiness of the borrower and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans. Auto – the consumer indirect auto lending portfolio generally carries certain risks associated with the values of the collateral that management must mitigate. The Company focuses its indirect auto lending on one to two year old used vehicles where substantial depreciation has already occurred thereby minimizing the risk of significant loss of collateral values in the future. This type of lending places reliance on computer-based loan approval systems to supplement other underwriting standards. Consumer and all other - portfolios carry risks associated with the creditworthiness of the borrower and changes in the economic environment. The Company manages these risks through policies and procedures such as experienced underwriting, maximum debt to income ratios, and minimum borrower credit scores. Also included in this category are loans that generally support small business lines of credit and agricultural lending neither of which are a material source of business for the Company. |
Affordable Housing Entities | Affordable Housing Entities The Company invests in private investment funds that make equity investments in multifamily affordable housing properties that provide affordable housing tax credits for these investments. The activities of these entities are financed with a combination of invested equity capital and debt. |
Adoption of New Accounting Standards and Recent Accounting Pronouncements | Adoption of New Accounting Standards In February 2015, the FASB issued revised guidance to simplify the consolidation assessment required to evaluate whether organizations should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance also removed the indefinite deferral of specialized guidance for certain investment funds. The Company adopted ASU No. 2015-02, “Amendments to the Consolidation Analysis” during the first quarter of 2016. The adoption of ASU 2015-02 did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. The ASU provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. The ASU also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is only permitted for the provision related to instrument-specific credit risk. The Company is currently assessing the impact ASU 2016-01 will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU requires lessees to put most leases on their balance sheets, but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates the real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in a critical term of the hedging relationship. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-05 to have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments.” This ASU clarifies that in assessing whether an embedded contingent put or call option is clearly and closely related to the debt host, an entity is required to perform only the four-step decision sequence in ASC 815-15-25-42 (as amended by the ASU). The entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-06 will not have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” This ASU simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively and early adoption is permitted. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This ASU amends the principal-versus-agent implementation guidance and illustrations in the FASB’s new revenue standard (ASU 2014-09) and clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14 delaying the effective date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company is currently assessing the impact ASU 2016-08 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted; however, if the Company elects to early adopt, then all amendments must be adopted in the same period. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” This ASU amends certain aspects of the FASB’s new revenue standard, specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments in this update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers, which is not yet effective. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). The Company is currently assessing the impact ASU 2016-10 will have on its consolidated financial statements. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.” This ASU amends certain aspects of the FASB's new revenue standard to reduce the potential for diversity in practice at the initial application of Topic 606 by entities with transactions that fall into the scope of this guidance, as well as reducing the cost and complexity of applying Topic 606 at the transition date and on a continual basis. The amendment affects ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), that is not yet effective. The Company is currently assessing the impact ASU 2016-12 will have on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU updates the existing guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and required consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments (a consensus of Merging Issues Task Force)." This ASU attempts to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The purpose of this update is to reduce existing diversity in practice in eight areas addressed by the update. The amendment will be effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-15 will not have a material impact on its consolidated financial statements. |
SECURITIES (Tables) |
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Gross Realized Gain and Losses on the Sale of Securities | The following table presents the gross realized gains and losses on the sale of securities available for sale and the proceeds from the sale of securities during the three and nine months ended September 30, 2016 and 2015 (dollars in thousands). The Company did not sell any investment securities that are held to maturity.
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Available-for-sale Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Investment Securities | Available for Sale The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):
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Schedule of Gross Unrealized Losses and Fair Value of Investments | The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s available for sale investments with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
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Schedule of Amortized Cost and Estimated Fair Value of Securities | The following table presents the amortized cost and estimated fair value of available for sale securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Schedule of Securities Pledged to Secure Public Deposits, Repurchase Agreements, and for Other Purposes | The following table presents the estimated fair value of available for sale securities which were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):
(1) The "Other purposes" category consists of borrowings, derivatives, and accounts held at the Bank. |
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Held-to-maturity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost and Estimated Fair Value of Securities | The following table presents the amortized cost and estimated fair value of held to maturity securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion. |
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Schedule of Securities Pledged to Secure Public Deposits, Repurchase Agreements, and for Other Purposes | The following table presents the estimated fair value of held to maturity securities which were pledged to secure public deposits as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):
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Schedule of Carrying Values, Gross Unrealized Gains and Losses and Estimated Fair Value of Securities | The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):
(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion. |
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Gross Unrealized Losses and Fair Value of Securities | The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s held to maturity securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Stated at Face Amount, Net of Unearned Income | Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at September 30, 2016 and December 31, 2015 (dollars in thousands):
(1) Loans, as presented, are net of deferred fees and costs totaling $3.3 million and $3.0 million as of September 30, 2016 and December 31, 2015, respectively. |
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Summary of Aging of the Loan Portfolio by Class | The following table shows the aging of the Company’s loan portfolio, by segment, at September 30, 2016 (dollars in thousands):
The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2015 (dollars in thousands):
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Impaired Loans by Class | The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment at September 30, 2016 and December 31, 2015 (dollars in thousands):
The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment for the three and nine months ended September 30, 2016 and 2015 (dollars in thousands):
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Summary of Modified Loans that Continue to Accrue Interest Under the Terms of Restructuring Agreement | The following table provides a summary, by segment, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed on nonaccrual status, which are considered to be nonperforming, as of September 30, 2016 and December 31, 2015 (dollars in thousands):
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Schedule of TDR by Class and Modification Type | The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2016 (dollars in thousands):
The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2015 (dollars in thousands):
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Allowance for Loan Loss Activity, by Portfolio Segment, Balances for Allowance for Credit Losses, and Loans Based on Impairment Methodology | The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2016. The table below includes the provision for loan losses. As discussed in Note 1 “Accounting Policies,” the Company enhanced its loan segmentation for purposes of the allowance calculation as well as its disclosures. The impact of this enhancement is reflected in the provision amounts in the table below. In addition, a $175,000 provision was recognized during the nine months ended September 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):
The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2015. In addition, a $300,000 provision was recognized during the nine months ended September 30, 2015 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):
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Loans Receivables Related Risk Rating | The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of September 30, 2016 (dollars in thousands):
The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2015 (dollars in thousands):
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Schedule of Acquired Loan Portfolio and Accretable Yield | The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands):
(1) This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the quarter. |
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Purchased Impaired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Aging of the Loan Portfolio by Class | The following table shows the PCI loan portfolios, by segment and their delinquency status, at September 30, 2016 (dollars in thousands):
The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2015 (dollars in thousands):
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Loans Receivables Related Risk Rating | The following table shows the recorded investment in only PCI loans by segment with their related risk level as of September 30, 2016 (dollars in thousands):
The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2015 (dollars in thousands):
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INTANGIBLE ASSETS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Estimated Remaining Amortization Expense of Core Deposit Intangibles | As of September 30, 2016, the estimated remaining amortization expense of core deposit intangibles and other amortizable intangible assets is as follows (dollars in thousands):
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BORROWINGS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Borrowings | Total short-term borrowings consist of the following as of September 30, 2016 and December 31, 2015 (dollars in thousands):
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Trust Preferred Capital Notes Qualify for Tier 1 Capital | The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.
(1)The total of the trust preferred capital securities and investments in the respective trusts represents the principal asset of the Company's junior subordinated debt securities with like maturities and like interest rates to the capital securities. The Company's investment in the trusts is reported in "Other Assets" within the Consolidated Balance Sheets. |
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Advances from the FHLB | As of September 30, 2016, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):
As of December 31, 2015, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):
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Contractual Maturities of Long-Term Debt | As of September 30, 2016, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):
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COMMITMENTS AND CONTINGENCIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances of Commitments and Contingencies | The following table presents the balances of commitments and contingencies (dollars in thousands):
(1) Includes unfunded overdraft protection. |
DERIVATIVES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Derivatives | The following table summarizes key elements of the Company’s derivative instruments as of September 30, 2016 and December 31, 2015, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):
(1) Notional amounts are not recorded on the balance sheet and are generally used only as a basis on which interest and other payments are determined. (2) Balances represent fair value of derivative financial instruments. (3) Collateral pledged is comprised of both cash and securities. (4) Prior period reflects reclassifications to conform to the current presentation. |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Accumulated Other Comprehensive Income | The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2016 is summarized as follows, net of tax (dollars in thousands):
The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2015 is summarized as follows, net of tax (dollars in thousands):
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FAIR VALUE MEASUREMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):
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Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis | The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):
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Carrying Values and Estimated Fair Values of the Company's Financial Instruments | The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2016 and December 31, 2015 are as follows (dollars in thousands):
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EARNINGS PER SHARE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the Denominators of the Basic and Diluted EPS Computations | The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share data):
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SEGMENT REPORTING DISCLOSURES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information About Reportable Segments and Reconciliation | Information about reportable segments and reconciliation of such information to the consolidated financial statements for each of the three and nine months ended September 30, 2016 and 2015 is as follows (dollars in thousands): UNION BANKSHARES CORPORATION AND SUBSIDIARIES SEGMENT FINANCIAL INFORMATION
|
ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
May 31, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | ||||||
Cash paid in acquisition | $ 4,077 | $ 0 | ||||
Goodwill | $ 298,191 | 298,191 | $ 293,522 | |||
Affordable housing projects, recognized amortization | 185 | $ 118 | 445 | 397 | ||
Affordable housing projects, tax credits | 265 | $ 213 | 685 | $ 641 | ||
Affordable housing projects, investment amount | 8,000 | 8,000 | $ 8,500 | |||
Affordable housing projects, liability | $ 5,300 | $ 5,300 | ||||
ODCM | ||||||
Business Acquisition [Line Items] | ||||||
Assets under management | $ 300,000 | |||||
Acquisition date fair value of consideration transferred | 9,100 | |||||
Cash paid in acquisition | 4,100 | |||||
Stock issued | 453 | |||||
Goodwill | 4,700 | |||||
Acquired amortizable intangible assets | $ 4,500 | |||||
Minimum | ODCM | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets, amortization period | 5 years | |||||
Maximum | ODCM | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets, amortization period | 10 years |
SECURITIES (Schedule of Carrying Value, Gross Unrealized Gains and Losses and Estimated Fair Value of Securities) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended |
---|---|---|---|
Jun. 30, 2015 |
Sep. 30, 2016 |
Dec. 31, 2015 |
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Schedule of Held-to-maturity Securities [Line Items] | |||
Total securities held to maturity | $ 200,839 | $ 205,374 | |
Estimated Fair Value | 209,717 | 209,437 | |
Held to maturity securities unrealized gains before tax | $ 8,100 | 5,600 | 6,800 |
Obligations of States and Political Subdivisions | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Total securities held to maturity | 200,839 | 205,374 | |
Gross Unrealized Gains | 8,959 | 5,748 | |
Gross Unrealized (Losses) | (81) | (1,685) | |
Estimated Fair Value | $ 209,717 | $ 209,437 |
SECURITIES (Gross Unrealized Losses and Fair Value of Securities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Held-to-maturity Securities [Line Items] | ||
More than 12 months, Fair Value | $ 661 | |
More than 12 months, Unrealized Losses | (81) | |
Obligations of States and Political Subdivisions | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Less than 12 months, Fair Value | 0 | $ 7,056 |
Less than 12 months, Unrealized Losses | 0 | (1,685) |
More than 12 months, Fair Value | 661 | 0 |
More than 12 months, Unrealized Losses | (81) | 0 |
Total, Fair Value | 661 | 7,056 |
Total, Unrealized Losses | $ (81) | $ (1,685) |
SECURITIES (Gross Realized Gains and Losses on the Sale of Securities) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Realized gains (losses): | ||||
Gross realized gains | $ 0 | $ 75 | $ 242 | $ 759 |
Gross realized losses | 0 | 0 | (97) | (87) |
Net realized gains | 0 | 75 | 145 | 672 |
Proceeds from sales of securities | $ 2,848 | $ 5,771 | $ 18,272 | $ 63,928 |
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Acquired Loan Portfolio and Accretable Yield) (Details) - Purchased Impaired - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Accretable Yield | ||
Balance at beginning of period | $ 22,139 | $ 28,956 |
Accretion | (4,232) | (4,707) |
Reclass of nonaccretable difference due to improvement in expected cash flows | 3,580 | 3,168 |
Other, net | (1,149) | (5,624) |
Balance at end of period | $ 20,338 | $ 21,793 |
INTANGIBLE ASSETS (Estimated Remaining Amortization Expense of Core Deposit Intangibles) (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
For the remaining three months of 2016 | $ 1,745 |
For the year ending December 31, 2017 | 6,070 |
For the year ending December 31, 2018 | 4,624 |
For the year ending December 31, 2019 | 3,573 |
For the year ending December 31, 2020 | 2,508 |
Thereafter | 3,823 |
Total estimated amortization expense | $ 22,343 |
BORROWINGS (Short-Term Borrowings) (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Debt Disclosure [Abstract] | ||
Securities sold under agreements to repurchase | $ 64,225 | $ 84,977 |
Other short-term borrowings | 601,500 | 304,000 |
Total short-term borrowings | 665,725 | 388,977 |
Maximum month-end outstanding balance | 678,262 | 445,761 |
Average outstanding balance during the period | $ 583,418 | $ 379,783 |
Average interest rate (year-to-date) | 0.48% | 0.25% |
Average interest rate at end of period | 0.48% | 0.27% |
Other short-term borrowings: | ||
Federal funds purchased | $ 6,000 | $ 0 |
FHLB | 579,500 | 304,000 |
Other lines of credit | $ 16,000 | $ 0 |
BORROWINGS (Contractual Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value Premium (Discount) | ||
For the remaining three months of 2016 | $ 71 | |
2017 | 170 | |
2018 | (143) | |
2019 | (286) | |
2020 | (301) | |
Thereafter | (5,623) | |
Total Long-term borrowings | (6,112) | |
Prepayment Penalty | ||
For the remaining three months of 2016 | (477) | |
2017 | (1,922) | |
2018 | (1,970) | |
2019 | (2,018) | |
2020 | (2,074) | |
Thereafter | (3,826) | |
Total Long-term borrowings | (12,287) | |
Total Long-term Borrowings | ||
For the remaining three months of 2016 | 24,594 | |
2017 | 8,248 | |
2018 | 7,887 | |
2019 | (2,304) | |
2020 | (2,375) | |
Thereafter | 223,852 | |
Total Long-term borrowings | 259,902 | $ 291,198 |
Trust Preferred Capital Notes | ||
Total Long-term Borrowings, Gross | ||
Thereafter | 93,301 | |
Total Long-term borrowings | 93,301 | |
FHLB Advances | ||
Total Long-term Borrowings, Gross | ||
For the remaining three months of 2016 | 25,000 | |
2017 | 10,000 | |
2018 | 10,000 | |
Thereafter | 140,000 | |
Total Long-term borrowings | $ 185,000 |
COMMITMENTS AND CONTINGENCIES (Balances of Commitments and Contingencies) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Commitments with off-balance sheet risk: | ||
Total commitments with off-balance sheet risk | $ 1,948,514 | $ 1,747,090 |
Commitments with balance sheet risk: | ||
Loans held for sale | 46,814 | 36,030 |
Total other commitments | 1,995,328 | 1,783,120 |
Commitments to Extend Credit | ||
Commitments with off-balance sheet risk: | ||
Total commitments with off-balance sheet risk | 1,787,953 | 1,557,350 |
Standby Letters of Credit | ||
Commitments with off-balance sheet risk: | ||
Total commitments with off-balance sheet risk | 84,491 | 139,371 |
Mortgage Loan Rate Lock Commitments | ||
Commitments with off-balance sheet risk: | ||
Total commitments with off-balance sheet risk | $ 76,070 | $ 50,369 |
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Other Commitments [Line Items] | ||
Daily average required reserves | $ 52,700 | $ 48,700 |
Deposits with other financial institutions | 49,300 | |
Uninsured deposits with other financial institutions | 14,200 | |
Indemnification reserves | 506 | $ 450 |
Loan Swaps | ||
Other Commitments [Line Items] | ||
Deposits with other financial institutions serves as collateral | 14,800 | |
Cash Flow Hedges | ||
Other Commitments [Line Items] | ||
Deposits with other financial institutions serves as collateral | $ 18,800 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Narrative) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Gains on securities transactions, net | $ 0 | $ 75,000 | $ 145,000 | $ 672,000 |
Other than temporary impairment losses, available-for-sale securities | 0 | 300,000 | 0 | 300,000 |
Tax expense (benefit) related to (gains) losses on the sale of securities | 0 | (79,000) | 51,000 | 130,000 |
Tax expense (benefit) related to (gains) losses on the cash flow hedges | (83,000) | (84,000) | (233,000) | (253,000) |
Cash Flow Hedges | Interest Expense, Net | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ 237,000 | $ 241,000 | $ 666,000 | $ 723,000 |
FAIR VALUE MEASUREMENTS (Narrative) (Details) participant in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
participant
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2015 |
|
Fair Value Disclosures [Abstract] | |||||
Weighted average pull through rate | 80.00% | 80.00% | |||
Minimum number of market participants (more than) | participant | 4 | ||||
Level 3 Fair value measurements weighted average related to impaired loans | 12.40% | 7.00% | |||
Level 3 fair value measurements weighted average related to other real estate owned | 24.70% | 32.00% | |||
Total valuation expenses related to OREO properties | $ | $ 479 | $ 473 | $ 879 | $ 1,773 |
FAIR VALUE MEASUREMENTS (Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
ASSETS | ||
Other real estate owned | $ 10,581 | $ 15,299 |
Nonrecurring | ||
ASSETS | ||
Impaired loans | 2,573 | 2,214 |
Other real estate owned | 10,581 | 15,299 |
Nonrecurring | Quoted Prices in Active Markets for Identical Assets Level 1 | ||
ASSETS | ||
Impaired loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Nonrecurring | Significant Other Observable Inputs Level 2 | ||
ASSETS | ||
Impaired loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Nonrecurring | Significant Unobservable Inputs Level 3 | ||
ASSETS | ||
Impaired loans | 2,573 | 2,214 |
Other real estate owned | $ 10,581 | $ 15,299 |
EARNINGS PER SHARE (Narrative) (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Anti-dilutive stock awards, shares | 118 | 51,179 | 579 | 54,475 |
EARNINGS PER SHARE (Reconciliation of the Denominators of the Basic and Diluted EPS Computations) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Basic EPS, Net Income Available to Common Stockholders (Numerator) | $ 20,401 | $ 18,216 | $ 56,699 | $ 49,264 |
Basic EPS, Weighted Average Shares (Denominator) | 43,565,937 | 45,087,409 | 43,853,548 | 45,107,290 |
Basic EPS, Per Share Amount (in usd per share) | $ 0.47 | $ 0.40 | $ 1.29 | $ 1.09 |
Effect of dilutive stock awards, Weighted Average Shares (Denominator) | 189,000 | 84,000 | 114,000 | 82,000 |
Diluted EPS, Net Income Available to Common Stockholders (Numerator) | $ 20,401 | $ 18,216 | $ 56,699 | $ 49,264 |
Diluted EPS, Weighted Average Common Shares | 43,754,915 | 45,171,610 | 43,967,725 | 45,189,578 |
Diluted EPS, Per Share Amount (in usd per share) | $ 0.47 | $ 0.40 | $ 1.29 | $ 1.09 |
SEGMENT REPORTING DISCLOSURES (Narrative) (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016
store
|
Sep. 30, 2015 |
Sep. 30, 2016
segment
store
entity
|
Sep. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Number of subsidiary bank | entity | 1 | |||
Number of retail locations | store | 115 | 115 | ||
Warehouse Line of Credit | LIBOR | ||||
Segment Reporting Information [Line Items] | ||||
Spread on LIBOR | 0.15% | 0.15% | 0.15% | 0.15% |
Mortgage banking segment interest - floor | 0.00% | 0.00% | 0.00% | 0.00% |
SEGMENT REPORTING DISCLOSURES (Information About Reportable Segments and Reconciliation) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Segment Reporting Information [Line Items] | |||||
Net interest income | $ 67,028 | $ 63,444 | $ 196,535 | $ 189,229 | |
Provision for credit losses | 2,472 | 2,062 | 7,376 | 7,561 | |
Net interest income after provision for credit losses | 64,556 | 61,382 | 189,159 | 181,668 | |
Noninterest income | 18,950 | 16,725 | 52,857 | 47,990 | |
Noninterest expenses | 56,913 | 53,325 | 166,436 | 162,405 | |
Income before income taxes | 26,593 | 24,782 | 75,580 | 67,253 | |
Income tax expense | 6,192 | 6,566 | 18,881 | 17,989 | |
Net income (loss) | 20,401 | 18,216 | 56,699 | 49,264 | |
Total assets | 8,258,230 | 7,594,313 | 8,258,230 | 7,594,313 | $ 7,693,291 |
Operating Segments | Community Bank | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income | 66,605 | 63,075 | 195,508 | 188,240 | |
Provision for credit losses | 2,455 | 2,000 | 7,215 | 7,450 | |
Net interest income after provision for credit losses | 64,150 | 61,075 | 188,293 | 180,790 | |
Noninterest income | 15,589 | 14,287 | 44,137 | 40,658 | |
Noninterest expenses | 54,353 | 50,674 | 158,964 | 154,011 | |
Income before income taxes | 25,386 | 24,688 | 73,466 | 67,437 | |
Income tax expense | 5,770 | 6,531 | 18,145 | 18,060 | |
Net income (loss) | 19,616 | 18,157 | 55,321 | 49,377 | |
Total assets | 8,251,351 | 7,588,606 | 8,251,351 | 7,588,606 | |
Operating Segments | Mortgage | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income | 423 | 369 | 1,027 | 989 | |
Provision for credit losses | 17 | 62 | 161 | 111 | |
Net interest income after provision for credit losses | 406 | 307 | 866 | 878 | |
Noninterest income | 3,501 | 2,608 | 9,185 | 7,844 | |
Noninterest expenses | 2,700 | 2,821 | 7,937 | 8,906 | |
Income before income taxes | 1,207 | 94 | 2,114 | (184) | |
Income tax expense | 422 | 35 | 736 | (71) | |
Net income (loss) | 785 | 59 | 1,378 | (113) | |
Total assets | 90,692 | 62,127 | 90,692 | 62,127 | |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Net interest income after provision for credit losses | 0 | 0 | 0 | 0 | |
Noninterest income | (140) | (170) | (465) | (512) | |
Noninterest expenses | (140) | (170) | (465) | (512) | |
Income before income taxes | 0 | 0 | 0 | 0 | |
Income tax expense | 0 | 0 | 0 | 0 | |
Net income (loss) | 0 | 0 | 0 | 0 | |
Total assets | $ (83,813) | $ (56,420) | $ (83,813) | $ (56,420) |
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