Washington | 0-20288 | 91-1422237 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
1301 A Street Tacoma, WA | 98402 | |||
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
COLUMBIA BANKING SYSTEM, INC. | ||||
Date: December 18, 2017 | /s/ BARRY S. RAY | |||
Barry S. Ray | ||||
Senior Vice President and Chief Accounting Officer |
Page | |
Financial Statements | |
December 31, | ||||||||
2016 | 2015 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 30,154 | $ | 23,819 | ||||
Interest-bearing deposits with banks | 36,959 | 12,856 | ||||||
Total cash and cash equivalents | 67,113 | 36,675 | ||||||
Securities available-for-sale | 470,996 | 366,598 | ||||||
Loans, net of deferred fees | 1,857,767 | 1,404,482 | ||||||
Allowance for loan losses | (22,454 | ) | (17,301 | ) | ||||
Net loans | 1,835,313 | 1,387,181 | ||||||
Interest receivable | 7,107 | 5,721 | ||||||
Federal Home Loan Bank stock | 5,423 | 5,208 | ||||||
Property and equipment, net of accumulated depreciation | 20,208 | 18,014 | ||||||
Goodwill and intangible assets | 70,382 | 43,159 | ||||||
Deferred tax asset | 12,722 | 5,670 | ||||||
Other real estate owned | 12,068 | 11,747 | ||||||
Bank-owned life insurance | 35,165 | 22,884 | ||||||
Other assets | 4,940 | 6,621 | ||||||
Total assets | $ | 2,541,437 | $ | 1,909,478 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Deposits | ||||||||
Noninterest-bearing demand | $ | 858,996 | $ | 568,688 | ||||
Savings and interest-bearing checking | 1,110,224 | 889,802 | ||||||
Core time deposits | 65,847 | 75,452 | ||||||
Total core deposits | 2,035,067 | 1,533,942 | ||||||
Other time deposits | 113,036 | 63,151 | ||||||
Total deposits | 2,148,103 | 1,597,093 | ||||||
Securities sold under agreements to repurchase | 1,966 | 71 | ||||||
Federal Home Loan Bank borrowings | 65,000 | 77,500 | ||||||
Subordinated debentures | 34,096 | — | ||||||
Junior subordinated debentures | 11,311 | 8,248 | ||||||
Accrued interest and other payables | 7,206 | 8,075 | ||||||
Total liabilities | 2,267,682 | 1,690,987 | ||||||
Commitments and contingencies (Note 22) | ||||||||
Shareholders’ equity | ||||||||
Common stock, no par value, shares authorized: 50,000,000; shares issued and outstanding: 22,611,535 at December 31, 2016 and 19,604,182 at December 31, 2015 | 205,584 | 156,099 | ||||||
Retained earnings | 70,486 | 59,693 | ||||||
Accumulated other comprehensive income | (2,315 | ) | 2,699 | |||||
273,755 | 218,491 | |||||||
Total liabilities and shareholders’ equity | $ | 2,541,437 | $ | 1,909,478 |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Interest and dividend income | ||||||||||||
Loans | $ | 80,104 | $ | 65,694 | $ | 53,855 | ||||||
Taxable securities | 7,743 | 6,532 | 6,191 | |||||||||
Tax-exempt securities | 1,942 | 1,976 | 1,971 | |||||||||
Federal funds sold & interest-bearing deposits with banks | 154 | 34 | 10 | |||||||||
89,943 | 74,236 | 62,027 | ||||||||||
Interest expense | ||||||||||||
Deposits | 3,848 | 3,314 | 3,252 | |||||||||
Federal Home Loan Bank & Federal Reserve borrowings | 954 | 885 | 1,088 | |||||||||
Subordinated debentures | 1,143 | — | — | |||||||||
Junior subordinated debentures | 279 | 226 | 225 | |||||||||
Federal funds purchased | 8 | 11 | 14 | |||||||||
6,232 | 4,436 | 4,579 | ||||||||||
Net interest income | 83,711 | 69,800 | 57,448 | |||||||||
Provision for loan losses | 5,450 | 1,695 | — | |||||||||
Net interest income after provision for loan losses | 78,261 | 68,105 | 57,448 | |||||||||
Noninterest income | ||||||||||||
Service charges on deposit accounts | 2,876 | 2,644 | 2,134 | |||||||||
Bankcard income | 1,214 | 1,029 | 951 | |||||||||
Bank-owned life insurance income | 702 | 592 | 473 | |||||||||
Net gain (loss) on sale of investment securities | 373 | 672 | (34 | ) | ||||||||
Impairment losses on investment securities (OTTI) | (21 | ) | (22 | ) | — | |||||||
Other noninterest income | 2,673 | 1,710 | 1,471 | |||||||||
7,817 | 6,625 | 4,995 | ||||||||||
Noninterest expense | ||||||||||||
Salaries and employee benefits | 31,873 | 27,501 | 23,555 | |||||||||
Property and equipment | 4,742 | 4,347 | 3,735 | |||||||||
Data processing | 3,709 | 3,259 | 2,720 | |||||||||
Legal and professional services | 3,297 | 1,924 | 1,252 | |||||||||
Business development | 2,049 | 1,640 | 1,531 | |||||||||
FDIC insurance assessment | 1,089 | 1,051 | 868 | |||||||||
Merger related expense | 4,934 | 1,836 | 470 | |||||||||
Other real estate (income) expense | (36 | ) | 346 | 449 | ||||||||
Other noninterest expense | 4,936 | 3,986 | 3,149 | |||||||||
56,593 | 45,890 | 37,729 | ||||||||||
Income before income tax provision | 29,485 | 28,840 | 24,714 | |||||||||
Income tax provision | 9,709 | 10,089 | 8,672 | |||||||||
Net income | $ | 19,776 | $ | 18,751 | $ | 16,042 | ||||||
Earnings per share | ||||||||||||
Basic | $ | 0.96 | $ | 0.97 | $ | 0.90 | ||||||
Diluted | $ | 0.95 | $ | 0.97 | $ | 0.89 |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Net income | $ | 19,776 | $ | 18,751 | $ | 16,042 | ||||||
Other comprehensive (loss) income: | ||||||||||||
Available-for-sale securities: | ||||||||||||
Unrealized (loss) gain arising during the year | (7,877 | ) | (1,064 | ) | 6,266 | |||||||
Reclassification adjustment for (gains) losses realized in net income | (373 | ) | (672 | ) | 34 | |||||||
Other than temporary impairment | 21 | 22 | — | |||||||||
Income tax benefit (expense) | 3,210 | 668 | (2,457 | ) | ||||||||
Derivative instrument—cash flow hedge | ||||||||||||
Unrealized gain (loss) arising during the year | 336 | (94 | ) | (230 | ) | |||||||
Reclassification adjustment for gains realized in net income | (327 | ) | — | — | ||||||||
Income tax (expense) benefit | (4 | ) | 37 | 90 | ||||||||
Total other comprehensive (loss) income, net of tax | (5,014 | ) | (1,103 | ) | 3,703 | |||||||
Total comprehensive income | $ | 14,762 | $ | 17,648 | $ | 19,745 |
Number of Shares | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (loss) | Total | |||||||||||||||
Balance, December 31, 2013 | 17,891,687 | $ | 133,835 | $ | 45,250 | $ | 99 | $ | 179,184 | ||||||||||
Net income | 16,042 | 16,042 | |||||||||||||||||
Other comprehensive loss, net of tax | 3,703 | 3,703 | |||||||||||||||||
Comprehensive income | 19,745 | ||||||||||||||||||
Stock issuance and related tax benefit | 93,069 | 203 | 203 | ||||||||||||||||
Stock repurchase | (267,080 | ) | (3,600 | ) | (3,600 | ) | |||||||||||||
Share-based compensation expense | 1,454 | 1,454 | |||||||||||||||||
Vested employee RSUs and SARs surrendered to cover tax consequences | (517 | ) | (517 | ) | |||||||||||||||
Cash dividends ($0.69 per share) | (12,308 | ) | (12,308 | ) | |||||||||||||||
Balance, December 31, 2014 | 17,717,676 | $ | 131,375 | $ | 48,984 | $ | 3,802 | $ | 184,161 | ||||||||||
Net income | 18,751 | 18,751 | |||||||||||||||||
Other comprehensive income, net of tax | (1,103 | ) | (1,103 | ) | |||||||||||||||
Comprehensive income | 17,648 | ||||||||||||||||||
Stock issuance and related tax benefit | 108,404 | 95 | 95 | ||||||||||||||||
Stock issued through acquisition | 1,778,102 | 23,578 | 23,578 | ||||||||||||||||
Share-based compensation expense | 1,700 | 1,700 | |||||||||||||||||
Vested employee RSUs and SARs surrendered to cover tax consequences | (649 | ) | (649 | ) | |||||||||||||||
Cash dividends ($0.42 per share) | (8,042 | ) | (8,042 | ) | |||||||||||||||
Balance, December 31, 2015 | 19,604,182 | $ | 156,099 | $ | 59,693 | $ | 2,699 | $ | 218,491 | ||||||||||
Net income | 19,776 | 19,776 | |||||||||||||||||
Other comprehensive loss, net of tax | (5,014 | ) | (5,014 | ) | |||||||||||||||
Comprehensive income | 14,762 | ||||||||||||||||||
Stock issuance and related tax benefit | 153,991 | 734 | 734 | ||||||||||||||||
Stock issued through acquisition | 2,853,362 | 47,794 | 47,794 | ||||||||||||||||
Share-based compensation expense | 1,853 | 1,853 | |||||||||||||||||
Vested employee RSUs and SARs surrendered to cover tax consequences | (896 | ) | (896 | ) | |||||||||||||||
Cash dividends ($0.44 per share) | (8,983 | ) | (8,983 | ) | |||||||||||||||
Balance, December 31, 2016 | 22,611,535 | $ | 205,584 | $ | 70,486 | $ | (2,315 | ) | $ | 273,755 |
Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 19,776 | $ | 18,751 | $ | 16,042 | ||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||
Depreciation and amortization, net of accretion | 6,985 | 7,138 | 6,834 | |||||||||
Valuation adjustment on foreclosed assets | 162 | 129 | 82 | |||||||||
(Gain) loss on sale of other real estate owned | (410 | ) | 2 | (7 | ) | |||||||
Provision for loan losses | 5,450 | 1,695 | — | |||||||||
Deferred income tax provision | (694 | ) | 1,153 | 2,766 | ||||||||
BOLI income | (702 | ) | (592 | ) | (473 | ) | ||||||
Share-based compensation | 2,003 | 1,650 | 1,528 | |||||||||
Excess tax benefit of stock options exercised | (43 | ) | (9 | ) | (14 | ) | ||||||
Other than temporary impairment on investment securities | 21 | 22 | — | |||||||||
(Gain) loss on sale of investment securities | (373 | ) | (672 | ) | 34 | |||||||
Change in: | ||||||||||||
(Increase) decrease in interest receivable | (452 | ) | (401 | ) | (70 | ) | ||||||
Deferred loan fees | 491 | 538 | 66 | |||||||||
Accrued interest payable and other liabilities | (843 | ) | 60 | 598 | ||||||||
Income taxes (receivable) payable | (892 | ) | (1,461 | ) | 80 | |||||||
Decrease (increase) in other assets | 1,038 | 2,010 | (3,328 | ) | ||||||||
Net cash provided by operating activities | 31,517 | 30,013 | 24,138 | |||||||||
Cash flows from investing activities: | ||||||||||||
Proceeds from maturities, sales and paydowns available-for-sale investment securities | 150,668 | 106,332 | 71,622 | |||||||||
Purchase of available-for-sale investment securities | (179,174 | ) | (101,500 | ) | (75,184 | ) | ||||||
Net loan principal originations | (184,498 | ) | (156,746 | ) | (53,447 | ) | ||||||
Purchase of property and equipment | (3,175 | ) | (1,434 | ) | (428 | ) | ||||||
Proceeds on sale of foreclosed assets | 2,104 | 2,463 | 4,831 | |||||||||
Redemption of FHLB stock | 317 | 5,438 | 406 | |||||||||
Cash consideration paid, net of cash acquired in merger | 43,855 | (3,249 | ) | — | ||||||||
Net cash used by investing activities | (169,903 | ) | (148,696 | ) | (52,200 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Change in deposits | 154,502 | 160,033 | 118,113 | |||||||||
Change in repurchase agreements | 1,895 | (22 | ) | — | ||||||||
Increase in federal funds purchased and FHLB short-term borrowings | — | (18,500 | ) | (69,150 | ) | |||||||
FHLB term advances paid-off | (12,500 | ) | — | — | ||||||||
Proceeds from stock options exercised | 691 | 86 | 189 | |||||||||
Redemption of Capital Pacific Bell State Bank debt | — | (3,344 | ) | — | ||||||||
Excess tax benefit of stock options exercised | 43 | 9 | 14 | |||||||||
Dividends paid | (8,983 | ) | (8,042 | ) | (12,308 | ) | ||||||
Repurchase of common stock | — | — | (3,600 | ) | ||||||||
Vested SARs and RSUs surrendered by employees to cover tax consequence | (896 | ) | (649 | ) | (517 | ) | ||||||
Proceeds from subordinated debt issuance | 34,072 | — | — | |||||||||
Net cash provided by financing activities | 168,824 | 129,571 | 32,741 | |||||||||
Net increase (decrease) in cash and cash equivalents | 30,438 | 10,888 | 4,679 | |||||||||
Cash and cash equivalents, beginning of year | 36,675 | 25,787 | 21,108 | |||||||||
Cash and cash equivalents, end of year | $ | 67,113 | $ | 36,675 | $ | 25,787 | ||||||
Supplemental information: | ||||||||||||
Noncash investing and financing activities: | ||||||||||||
Transfers of loans to other real estate owned | $ | 958 | $ | 967 | $ | 1,925 | ||||||
Change in fair value of securities, net of deferred income taxes | $ | 5,019 | $ | 1,046 | $ | 3,843 | ||||||
Acquisitions: | ||||||||||||
Assets acquired | $ | 428,671 | $ | 257,924 | $ | — | ||||||
Liabilities assumed | $ | 402,252 | $ | 232,698 | $ | — | ||||||
Cash paid during the year for: | ||||||||||||
Income taxes | $ | 11,271 | $ | 8,423 | $ | 8,701 | ||||||
Interest | $ | 6,194 | $ | 4,410 | $ | 4,540 |
• | The significance of the decline in net assets of the FHLBs as compared to the capital stock amount for the FHLBs and the length of time this situation has persisted. |
• | Commitments by the FHLBs to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLBs. |
• | The impact of legislative and regulatory changes on the institution and, accordingly, on the customer base of the FHLBs. |
• | The liquidity position of the FHLBs. |
Weighted average shares outstanding as of December 31, | |||||||||
2016 | 2015 | 2014 | |||||||
Basic | 20,610,808 | 19,250,838 | 17,821,580 | ||||||
Common stock equivalents attributable to stock-based compensation plans | 179,187 | 141,241 | 223,448 | ||||||
Diluted | 20,789,995 | 19,392,079 | 18,045,028 |
September 6, 2016 | |||
Cost basis net assets | $ | 90,993 | |
Less: | |||
Cash payment to shareholders | (19,337 | ) | |
Stock issued | (47,794 | ) | |
Fair value adjustments: | |||
Loans, net | (11,257 | ) | |
Core deposit intangible | 5,762 | ||
Junior subordinated debentures | 3,173 | ||
Deferred tax asset adjustment | (2,979 | ) | |
Securities | 1,673 | ||
Other | 1,141 | ||
Goodwill | $ | 21,375 | |
September 6, 2016 | |||
ASSETS | |||
Cash and due from banks, net of consideration paid | $ | 43,855 | |
Securities available-for-sale | 88,464 | ||
Gross loans | 281,790 | ||
Fair value adjustments | |||
Credit quality-related | (8,884 | ) | |
Interest rate-related | (2,373 | ) | |
Net loans | 270,533 | ||
Interest receivable | 934 | ||
Federal Home Loan Bank stock | 532 | ||
Property and equipment | 408 | ||
Goodwill | 21,375 | ||
Core deposit intangible | 5,762 | ||
Deferred tax asset | 3,925 | ||
Other real estate owned | 1,219 | ||
Bank-owned life insurance | 11,574 | ||
Other asset | 1,465 | ||
Total assets | $ | 450,046 | |
LIABILITIES AND SHAREHOLDERS EQUITY | |||
Deposits | $ | 396,509 | |
Other liabilities | 2,730 | ||
Junior subordinated debentures | 3,013 | ||
Total liabilities | 402,252 | ||
Common stock issued to Foundation Bancorp shareholders | 47,794 | ||
Total liabilities and shareholders’ equity | $ | 450,046 |
September 6, 2016 | December 31, 2016 | |||||||
Contractually required principal payments | $ | 281,790 | $ | 243,552 | ||||
Purchase adjustment for credit and interest rate | (11,257 | ) | (8,787 | ) | ||||
Balance of acquired loans | $ | 270,533 | $ | 234,765 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Percentage of Portfolio | |||||||||||||||
Unrealized Loss Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 3,995 | $ | — | $ | (49 | ) | $ | 3,946 | 0.84 | % | ||||||||
Obligations of states and political subdivisions | 41,016 | — | (1,279 | ) | 39,737 | 8.44 | % | ||||||||||||
Private-label mortgage-backed securities | 241 | — | (23 | ) | 218 | 0.05 | % | ||||||||||||
Mortgage-backed securities | 221,835 | — | (5,362 | ) | 216,473 | 45.96 | % | ||||||||||||
SBA variable rate pools | 26,758 | — | (493 | ) | 26,265 | 5.57 | % | ||||||||||||
$ | 293,845 | $ | — | $ | (7,206 | ) | $ | 286,639 | 60.86 | % | |||||||||
Unrealized Gain Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 21,290 | $ | 384 | $ | — | $ | 21,674 | 4.60 | % | |||||||||
Obligations of states and political subdivisions | 69,148 | 1,854 | — | 71,002 | 15.07 | % | |||||||||||||
Private-label mortgage-backed securities | 1,566 | 153 | — | 1,719 | 0.36 | % | |||||||||||||
Mortgage-backed securities | 72,752 | 811 | — | 73,563 | 15.62 | % | |||||||||||||
SBA variable rate pools | 16,281 | 118 | — | 16,399 | 3.48 | % | |||||||||||||
$ | 181,037 | $ | 3,320 | $ | — | $ | 184,357 | 39.14 | % | ||||||||||
$ | 474,882 | $ | 3,320 | $ | (7,206 | ) | $ | 470,996 | 100.00 | % |
Securities in Continuous Unrealized Loss Positions for less than 12 Months | Gross Unrealized Loss on Securities in Loss Position for Less than 12 Months | Securities in Continuous Unrealized Loss Positions for 12 Months or Longer | Gross Unrealized Loss on Securities in Loss Position for 12 Months or Longer | |||||||||||||
Obligations of U.S. government agencies | $ | 3,946 | $ | (49 | ) | $ | — | $ | — | |||||||
Obligations of states and political subdivisions | 39,737 | (1,279 | ) | — | — | |||||||||||
Private-label mortgage-backed securities | — | — | 218 | (23 | ) | |||||||||||
Mortgage-backed securities | 211,721 | (5,266 | ) | 4,752 | (96 | ) | ||||||||||
SBA variable rate pools | 22,076 | (458 | ) | 4,189 | (35 | ) | ||||||||||
$ | 277,480 | $ | (7,052 | ) | $ | 9,159 | $ | (154 | ) |
December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Balance, beginning of period: | $ | 249 | $ | 227 | $ | 227 | ||||||
Additions: | ||||||||||||
OTTI credit loss recorded | 21 | 22 | — | |||||||||
Less: | ||||||||||||
OTTI reduction from sale or maturity | — | — | — | |||||||||
Balance, end of period: | $ | 270 | $ | 249 | $ | 227 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Percentage of Portfolio | |||||||||||||||
Unrealized Loss Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 14,491 | $ | — | $ | (119 | ) | $ | 14,372 | 3.93 | % | ||||||||
Obligations of states and political subdivisions | 13,438 | — | (149 | ) | 13,289 | 3.63 | % | ||||||||||||
Private-label mortgage-backed securities | 663 | — | (33 | ) | 630 | 0.17 | % | ||||||||||||
Mortgage-backed securities | 95,040 | — | (856 | ) | 94,184 | 25.75 | % | ||||||||||||
SBA variable rate pools | 17,225 | — | (101 | ) | 17,124 | 4.68 | % | ||||||||||||
Corporate securities | 899 | — | (5 | ) | 893 | 0.25 | % | ||||||||||||
$ | 140,857 | $ | — | $ | (1,258 | ) | $ | 139,599 | 38.41 | % | |||||||||
Unrealized Gain Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 29,669 | $ | 582 | $ | — | $ | 30,251 | 8.27 | % | |||||||||
Obligations of states and political subdivisions | 80,119 | 3,743 | — | 83,862 | 22.93 | % | |||||||||||||
Private-label mortgage-backed securities | 2,028 | 131 | — | 2,159 | 0.59 | % | |||||||||||||
Mortgage-backed securities | 90,126 | 1,060 | — | 91,186 | 24.93 | % | |||||||||||||
SBA variable rate pools | 18,560 | 88 | — | 18,648 | 5.10 | % | |||||||||||||
220,502 | 5,604 | — | 226,106 | 61.82 | % | ||||||||||||||
$ | 361,359 | $ | 5,604 | $ | (1,258 | ) | $ | 365,705 | 100.23 | % |
Securities in Continuous Unrealized Loss Positions for less than 12 Months | Gross Unrealized Loss on Securities in Loss Position for Less than 12 Months | Securities in Continuous Unrealized Loss Positions for 12 Months or Longer | Gross Unrealized Loss on Securities in Loss Position for 12 Months or Longer | |||||||||||||
Obligations of U.S. government agencies | $ | 14,372 | $ | (119 | ) | $ | — | $ | — | |||||||
Obligations of states and political subdivisions | 12,761 | (145 | ) | 528 | (4 | ) | ||||||||||
Private-label mortgage-backed securities | 240 | (4 | ) | 390 | (29 | ) | ||||||||||
Mortgage-backed securities | 87,896 | (711 | ) | 6,288 | (145 | ) | ||||||||||
SBA variable rate pools | 13,539 | (78 | ) | 3,585 | (23 | ) | ||||||||||
Corporate securities | 893 | (5 | ) | — | — | |||||||||||
$ | 129,701 | $ | (1,062 | ) | $ | 10,791 | $ | (201 | ) |
December 31, | ||||||||||||||||
2016 | 2015 | |||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Due in one year or less | $ | 5,433 | $ | 5,442 | $ | 14,455 | $ | 14,513 | ||||||||
Due after one year through 5 years | 258,557 | 259,777 | 235,926 | 238,637 | ||||||||||||
Due after 5 years through 10 years | 193,063 | 189,049 | 109,017 | 110,539 | ||||||||||||
Due after 10 years | 17,829 | 16,728 | 2,860 | 2,909 | ||||||||||||
$ | 474,882 | $ | 470,996 | $ | 362,258 | $ | 366,598 |
December 31, | ||||||||||||||||
2016 | 2015 | |||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Pledged to secure public deposits | $ | 25,257 | $ | 25,683 | $ | 27,938 | $ | 29,052 | ||||||||
Pledged to secure repurchase agreements | 3,579 | 3,573 | 3,985 | 4,111 | ||||||||||||
$ | 28,836 | $ | 29,256 | $ | 31,923 | $ | 33,163 |
December 31, 2016 | % of gross loans | December 31, 2015 | % of gross loans | |||||||||||
Real estate secured loans: | ||||||||||||||
Multi-family residential | $ | 74,340 | 4.00 | % | $ | 66,445 | 4.73 | % | ||||||
Residential 1-4 family | 61,548 | 3.31 | % | 53,776 | 3.82 | % | ||||||||
Owner-occupied commercial | 461,557 | 24.82 | % | 364,742 | 25.94 | % | ||||||||
Nonowner-occupied commercial | 451,893 | 24.30 | % | 300,774 | 21.39 | % | ||||||||
Total permanent real estate loans | 1,049,338 | 56.43 | % | 785,737 | 55.88 | % | ||||||||
Construction loans: | ||||||||||||||
Multi-family residential | 22,252 | 1.20 | % | 7,027 | 0.50 | % | ||||||||
Residential 1-4 family | 43,532 | 2.34 | % | 30,856 | 2.19 | % | ||||||||
Commercial real estate | 76,301 | 4.10 | % | 42,680 | 3.04 | % | ||||||||
Commercial bare land and acquisition & development | 15,081 | 0.81 | % | 20,537 | 1.46 | % | ||||||||
Residential bare land and acquisition & development | 10,645 | 0.57 | % | 7,268 | 0.52 | % | ||||||||
Total construction real estate loans | 167,811 | 9.02 | % | 108,368 | 7.71 | % | ||||||||
Total real estate loans | 1,217,149 | 65.45 | % | 894,105 | 63.59 | % | ||||||||
Commercial loans | 630,491 | 33.89 | % | 501,976 | 35.70 | % | ||||||||
Consumer loans | 2,922 | 0.16 | % | 3,351 | 0.24 | % | ||||||||
Other loans | 9,225 | 0.50 | % | 6,580 | 0.47 | % | ||||||||
Gross loans | 1,859,787 | 100.00 | % | 1,406,012 | 100.00 | % | ||||||||
Deferred loan origination fees | (2,020 | ) | (1,530 | ) | ||||||||||
1,857,767 | 1,404,482 | |||||||||||||
Allowance for loan losses | (22,454 | ) | (17,301 | ) | ||||||||||
Total loans, net of allowance for loan losses and net deferred fees | $ | 1,835,313 | $ | 1,387,181 |
December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Contractually required principal payments, net of charge offs | $ | 373,674 | $ | 183,347 | $ | 28,187 | ||||||
Purchase adjustment for credit and interest rate | (11,297 | ) | (3,958 | ) | (881 | ) | ||||||
Balance of acquired loans | $ | 362,377 | $ | 179,389 | $ | 27,306 |
December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Contractually required principal payments for purchased credit impaired loans | $ | 22,941 | $ | 11,528 | $ | 2,753 | ||||||
Accretable yield | (1,453 | ) | (1,070 | ) | (151 | ) | ||||||
Nonaccretable yield | (809 | ) | (378 | ) | (321 | ) | ||||||
Balance of purchased credit impaired loans | $ | 20,679 | $ | 10,080 | $ | 2,281 |
Year ended December 31, 2016 | ||||||||||||||||
Century | Capital Pacific | Foundation | Total | |||||||||||||
Balance, beginning of period | $ | 40 | $ | 1,030 | $ | — | $ | 1,070 | ||||||||
Additions | — | — | 908 | 908 | ||||||||||||
Accretion to interest income | (40 | ) | (265 | ) | (220 | ) | (525 | ) | ||||||||
Balance, end of period | $ | — | $ | 765 | $ | 688 | $ | 1,453 |
Year ended December 31, 2015 | ||||||||||||
Century | Capital Pacific | Total | ||||||||||
Balance, beginning of period | $ | 151 | $ | — | $ | 151 | ||||||
Additions | — | 1,569 | 1,569 | |||||||||
Accretion to interest income | (111 | ) | (539 | ) | (650 | ) | ||||||
Balance, end of period | $ | 40 | $ | 1,030 | $ | 1,070 |
• | Changes in international, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments, |
• | Changes in the nature and volume of the portfolio and in the terms of loans, |
• | Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans, |
• | Changes in the quality of the institution’s loan review system, |
• | Changes in the value of underlying collateral for collateral-dependent loans, |
• | The existence and effect of any concentrations of credit, and changes in the level of such concentrations, |
• | The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio, |
• | Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses, and |
• | Changes in the current and future US political environment, including healthcare reform, federal tax structure, and immigration reform that may affect national, regional and local economic conditions, taxation, or |
• | The quality of the current loan portfolio, |
• | The trend in the migration of the loan portfolio’s risk ratings, |
• | The velocity of migration of losses and potential losses, |
• | Current economic conditions, |
• | Loan concentrations, |
• | Loan growth rates, |
• | Past-due and nonperforming trends, |
• | Evaluation of specific loss estimates for all significant problem loans, |
• | Recovery experience, and |
• | Peer comparison loss rates. |
For the year ended December 31, 2016 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Beginning balance | $ | 6,349 | $ | 8,297 | $ | 1,258 | $ | 46 | $ | 1,351 | $ | 17,301 | ||||||||||||
Charge-offs | (716 | ) | — | — | (9 | ) | — | (725 | ) | |||||||||||||||
Recoveries | 207 | 55 | 163 | 3 | — | 428 | ||||||||||||||||||
Provision (reclassification) | 2,774 | 2,520 | 360 | 1 | (205 | ) | 5,450 | |||||||||||||||||
Ending balance | $ | 8,614 | $ | 10,872 | $ | 1,781 | $ | 41 | $ | 1,146 | $ | 22,454 | ||||||||||||
For the year ended December 31, 2015 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Beginning balance | $ | 5,733 | $ | 7,494 | $ | 1,077 | $ | 54 | $ | 1,279 | $ | 15,637 | ||||||||||||
Charge-offs | (630 | ) | (61 | ) | — | (9 | ) | — | (700 | ) | ||||||||||||||
Recoveries | 562 | 76 | 16 | 15 | — | 669 | ||||||||||||||||||
Provision (reclassification) | 684 | 788 | 165 | (14 | ) | 72 | 1,695 | |||||||||||||||||
Ending balance | $ | 6,349 | $ | 8,297 | $ | 1,258 | $ | 46 | $ | 1,351 | $ | 17,301 | ||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Beginning balance | $ | 5,113 | $ | 7,668 | $ | 1,493 | $ | 68 | $ | 1,575 | $ | 15,917 | ||||||||||||
Charge-offs | (610 | ) | (58 | ) | (155 | ) | (12 | ) | — | (835 | ) | |||||||||||||
Recoveries | 348 | 186 | 16 | 5 | — | 555 | ||||||||||||||||||
Provision (reclassification) | 882 | (302 | ) | (277 | ) | (7 | ) | (296 | ) | — | ||||||||||||||
Ending balance | $ | 5,733 | $ | 7,494 | $ | 1,077 | $ | 54 | $ | 1,279 | $ | 15,637 |
December 31, 2016 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Ending allowance: collectively evaluated for impairment | $ | 7,881 | $ | 10,869 | $ | 1,781 | $ | 41 | $ | 1,146 | $ | 21,718 | ||||||||||||
Ending allowance: individually evaluated for impairment | 733 | 3 | — | — | — | 736 | ||||||||||||||||||
Ending allowance: loans acquired with deteriorated credit quality | — | — | — | — | — | — | ||||||||||||||||||
Total ending allowance | $ | 8,614 | $ | 10,872 | $ | 1,781 | $ | 41 | $ | 1,146 | $ | 22,454 | ||||||||||||
Ending loan balance: collectively evaluated for impairment | $ | 628,773 | $ | 1,027,354 | $ | 167,491 | $ | 2,922 | $ | — | $ | 1,826,540 | ||||||||||||
Ending loan balance: individually evaluated for impairment | 4,396 | 7,852 | 320 | — | — | 12,568 | ||||||||||||||||||
Ending loan balance: loans acquired with deteriorated credit quality | 6,547 | 14,132 | — | — | — | 20,679 | ||||||||||||||||||
Total ending loan balance | $ | 639,716 | $ | 1,049,338 | $ | 167,811 | $ | 2,922 | $ | — | $ | 1,859,787 | ||||||||||||
December 31, 2015 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Ending allowance: collectively evaluated for impairment | $ | 6,303 | $ | 8,267 | $ | 1,159 | $ | 46 | $ | 1,351 | $ | 17,126 | ||||||||||||
Ending allowance: individually evaluated for impairment | 46 | 30 | 99 | — | — | 175 | ||||||||||||||||||
Ending allowance: loans acquired with deteriorated credit quality | — | — | — | — | — | — | ||||||||||||||||||
Total ending allowance | $ | 6,349 | $ | 8,297 | $ | 1,258 | $ | 46 | $ | 1,351 | $ | 17,301 | ||||||||||||
Ending loan balance: collectively evaluated for impairment | $ | 504,261 | $ | 771,915 | $ | 107,605 | $ | 3,351 | $ | — | $ | 1,387,132 | ||||||||||||
Ending loan balance: individually evaluated for impairment | 2,627 | 5,782 | 391 | — | — | 8,800 | ||||||||||||||||||
Ending loan balance: loans acquired with deteriorated credit quality | 1,668 | 8,040 | 372 | — | — | 10,080 | ||||||||||||||||||
Total ending loan balance | $ | 508,556 | $ | 785,737 | $ | 108,368 | $ | 3,351 | $ | — | $ | 1,406,012 |
Credit Quality Indicators | ||||||||||||||||||||
As of December 31, 2015 | ||||||||||||||||||||
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Real estate loans | ||||||||||||||||||||
Multi-family residential | $ | 74,340 | $ | — | $ | — | $ | — | $ | 74,340 | ||||||||||
Residential 1-4 family | 58,286 | — | 3,262 | — | 61,548 | |||||||||||||||
Owner-occupied commercial | 443,737 | — | 17,820 | — | 461,557 | |||||||||||||||
Nonowner-occupied commercial | 445,283 | — | 6,610 | — | 451,893 | |||||||||||||||
Total real estate loans | 1,021,646 | — | 27,692 | — | 1,049,338 | |||||||||||||||
Construction | ||||||||||||||||||||
Multi-family residential | 22,252 | — | — | — | 22,252 | |||||||||||||||
Residential 1-4 family | 43,532 | — | — | — | 43,532 | |||||||||||||||
Commercial real estate | 76,301 | — | — | — | 76,301 | |||||||||||||||
Commercial bare land and acquisition & development | 15,081 | — | — | — | 15,081 | |||||||||||||||
Residential bare land and acquisition & development | 9,852 | — | 793 | — | 10,645 | |||||||||||||||
Total construction loans | 167,018 | — | 793 | — | 167,811 | |||||||||||||||
Commercial and other | 621,165 | — | 16,890 | 1,661 | 639,716 | |||||||||||||||
Consumer | 2,922 | — | — | — | 2,922 | |||||||||||||||
Totals | $ | 1,812,751 | $ | — | $ | 45,375 | $ | 1,661 | $ | 1,859,787 | ||||||||||
Percentage of total portfolio | 97.47 | % | — | % | 2.44 | % | 0.09 | % | 100.00 | % | ||||||||||
Credit Quality Indicators | ||||||||||||||||||||
As of December 31, 2015 | ||||||||||||||||||||
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Real estate loans | ||||||||||||||||||||
Multi-family residential | $ | 66,208 | $ | — | $ | 237 | $ | — | $ | 66,445 | ||||||||||
Residential 1-4 family | 49,077 | — | 4,699 | — | 53,776 | |||||||||||||||
Owner-occupied commercial | 353,249 | — | 11,493 | — | 364,742 | |||||||||||||||
Nonowner-occupied commercial | 296,528 | — | 4,246 | — | 300,774 | |||||||||||||||
Total real estate loans | 765,062 | — | 20,675 | — | 785,737 | |||||||||||||||
Construction | ||||||||||||||||||||
Multi-family residential | 7,027 | — | — | — | 7,027 | |||||||||||||||
Residential 1-4 family | 30,803 | — | 53 | — | 30,856 | |||||||||||||||
Commercial real estate | 42,580 | — | 100 | — | 42,680 | |||||||||||||||
Commercial bare land and acquisition & development | 20,265 | — | 272 | — | 20,537 | |||||||||||||||
Residential bare land and acquisition & development | 4,969 | — | 2,299 | — | 7,268 | |||||||||||||||
Total construction loans | 105,644 | — | 2,724 | — | 108,368 | |||||||||||||||
Commercial and other | 494,267 | — | 14,289 | — | 508,556 | |||||||||||||||
Consumer | 3,350 | — | 1 | — | 3,351 | |||||||||||||||
Totals | $ | 1,368,323 | $ | — | $ | 37,689 | $ | — | $ | 1,406,012 | ||||||||||
Percentage of total portfolio | 97.32 | % | — | % | 2.68 | % | — | % | 100.00 | % |
Aged Analysis of Loans Receivable | ||||||||||||||||||||||||||||
As of December 31, 2016 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 Days Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Real estate loans | ||||||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 74,340 | $ | 74,340 | ||||||||||||||
Residential 1-4 family | — | — | — | 158 | 158 | 59,241 | 59,399 | |||||||||||||||||||||
Owner-occupied commercial | — | — | — | — | — | 452,748 | 452,748 | |||||||||||||||||||||
Nonowner-occupied commercial | — | — | — | 601 | 601 | 448,118 | 448,719 | |||||||||||||||||||||
Total real estate loans | — | — | — | 759 | 759 | 1,034,447 | 1,035,206 | |||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | 22,252 | 22,252 | |||||||||||||||||||||
Residential 1-4 family | — | — | — | — | — | 43,532 | 43,532 | |||||||||||||||||||||
Commercial real estate | — | — | — | — | — | 76,301 | 76,301 | |||||||||||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | — | 15,081 | 15,081 | |||||||||||||||||||||
Residential bare land and acquisition & development | — | — | — | — | — | 10,645 | 10,645 | |||||||||||||||||||||
Total construction loans | — | — | — | — | — | 167,811 | 167,811 | |||||||||||||||||||||
Commercial and other | 363 | 366 | — | 2,794 | 3,523 | 629,646 | 633,169 | |||||||||||||||||||||
Consumer | — | — | — | — | — | 2,922 | 2,922 | |||||||||||||||||||||
Total | $ | 363 | $ | 366 | $ | — | $ | 3,553 | $ | 4,282 | $ | 1,834,826 | $ | 1,839,108 | ||||||||||||||
Percentage of total portfolio | 0.02 | % | 0.02 | % | — | % | 0.19 | % | 0.23 | % | 99.77 | % | 100.00 | % |
Aged Analysis of Loans Receivable | ||||||||||||||||||||||||||||
As of December 31, 2015 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 Days Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Real estate loans | ||||||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 66,445 | $ | 66,445 | ||||||||||||||
Residential 1-4 family | — | — | — | 374 | 374 | 51,578 | 51,952 | |||||||||||||||||||||
Owner-occupied commercial | — | — | — | — | — | 359,065 | 359,065 | |||||||||||||||||||||
Nonowner-occupied commercial | — | — | — | 750 | 750 | 299,485 | 300,235 | |||||||||||||||||||||
Total real estate loans | — | — | — | 1,124 | 1,124 | 776,573 | 777,697 | |||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | 7,027 | 7,027 | |||||||||||||||||||||
Residential 1-4 family | 480 | — | — | 53 | 533 | 30,323 | 30,856 | |||||||||||||||||||||
Commercial real estate | — | — | — | — | — | 42,580 | 42,580 | |||||||||||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | — | 20,265 | 20,265 | |||||||||||||||||||||
Residential bare land and acquisition & development | — | — | — | — | — | 7,268 | 7,268 | |||||||||||||||||||||
Total construction loans | 480 | — | — | 53 | 533 | 107,463 | 107,996 | |||||||||||||||||||||
Commercial and other | — | — | — | 1,495 | 1,495 | 505,393 | 506,888 | |||||||||||||||||||||
Consumer | 1 | 3 | — | — | 4 | 3,347 | 3,351 | |||||||||||||||||||||
Total | $ | 481 | $ | 3 | $ | — | $ | 2,672 | $ | 3,156 | $ | 1,392,776 | $ | 1,395,932 | ||||||||||||||
Percentage of total portfolio | 0.03 | % | — | % | — | % | 0.19 | % | 0.23 | % | 99.77 | % | 100.00 | % |
Impaired Loan Analysis As of December 31, 2016 | ||||||||||||||||||||||||
Recorded Investment With No Specific Allowance Valuation | Recorded Investment With Specific Allowance Valuation | Recorded Investment | Unpaid Principal Balance | Average Recorded Investment | Related Specific Allowance Valuation | |||||||||||||||||||
Real estate | ||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Residential 1-4 family | 454 | 300 | 754 | 775 | 644 | 1 | ||||||||||||||||||
Owner-occupied commercial | 4,106 | 865 | 4,971 | 4,971 | 1,804 | 2 | ||||||||||||||||||
Nonowner-occupied commercial | 2,127 | — | 2,127 | 2,189 | 2,228 | — | ||||||||||||||||||
Total real estate loans | 6,687 | 1,165 | 7,852 | 7,935 | 4,676 | 3 | ||||||||||||||||||
Construction | ||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | — | ||||||||||||||||||
Residential 1-4 family | — | — | — | — | 37 | — | ||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | — | — | ||||||||||||||||||
Residential bare land and acquisition & development | 320 | — | 320 | 320 | 1,556 | — | ||||||||||||||||||
Total construction loans | 320 | — | 320 | 320 | 1,593 | — | ||||||||||||||||||
Commercial and other | 2,255 | 2,141 | 4,396 | 4,767 | 3,518 | 733 | ||||||||||||||||||
Consumer | — | — | — | — | — | — | ||||||||||||||||||
Total impaired loans | $ | 9,262 | $ | 3,306 | $ | 12,568 | $ | 13,022 | $ | 9,787 | $ | 736 | ||||||||||||
Impaired Loan Analysis As of December 31, 2015 | ||||||||||||||||||||||||
Recorded Investment With No Specific Allowance Valuation | Recorded Investment With Specific Allowance Valuation | Recorded Investment | Unpaid Principal Balance | Average Recorded Investment | Related Specific Allowance Valuation | |||||||||||||||||||
Real estate | ||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Residential 1-4 family | 374 | 308 | 682 | 911 | 766 | 5 | ||||||||||||||||||
Owner-occupied commercial | 2,788 | — | 2,788 | 2,788 | 1,177 | — | ||||||||||||||||||
Nonowner-occupied commercial | 2,287 | 25 | 2,312 | 2,374 | 2,395 | 25 | ||||||||||||||||||
Total real estate loans | 5,449 | 333 | 5,782 | 6,073 | 4,338 | 30 | ||||||||||||||||||
Construction | ||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | — | ||||||||||||||||||
Residential 1-4 family | 53 | — | 53 | 72 | 32 | — | ||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | — | — | ||||||||||||||||||
Residential bare land and acquisition & development | — | 338 | 338 | 338 | 347 | 99 | ||||||||||||||||||
Total construction loans | 53 | 338 | 391 | 410 | 379 | 99 | ||||||||||||||||||
Commercial and other | 2,091 | 536 | 2,627 | 3,018 | 2,404 | 46 | ||||||||||||||||||
Consumer | — | — | — | — | — | — | ||||||||||||||||||
Total impaired loans | $ | 7,593 | $ | 1,207 | $ | 8,800 | $ | 9,501 | $ | 7,121 | $ | 175 |
Troubled Debt Restructurings as of | ||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||
Number of Contracts | Outstanding Recorded Investment | Number of Contracts | Outstanding Recorded Investment | |||||||||||
Real estate | ||||||||||||||
Multifamily residential | — | $ | — | — | $ | — | ||||||||
Residential 1-4 family | 4 | 754 | 6 | 682 | ||||||||||
Owner-occupied commercial | 4 | 5,447 | 3 | 2,788 | ||||||||||
Non owner-occupied commercial | 6 | 2,127 | 7 | 2,312 | ||||||||||
Total real estate loans | 14 | 8,328 | 16 | 5,782 | ||||||||||
Construction | ||||||||||||||
Multifamily residential | — | — | — | — | ||||||||||
Residential 1-4 family | — | — | — | — | ||||||||||
Commercial real estate | — | — | — | — | ||||||||||
Commercial bare land and acquisition & development | — | — | — | — | ||||||||||
Residential bare land and acquisition & development | — | — | — | — | ||||||||||
Total construction loans | — | — | — | — | ||||||||||
Commercial and other | 16 | 2,901 | 11 | 2,170 | ||||||||||
Consumer | — | — | — | — | ||||||||||
30 | $ | 11,229 | 27 | $ | 7,952 |
• | Rate Modification - A modification in which the interest rate is modified. |
• | Term Modification - A modification in which the maturity date, timing of payments, or frequency of payments is changed. |
• | Interest-only Modification - A modification in which the loan is converted to interest-only payments for a period of time. |
• | Combination Modification - Any other type of modification, including the use of multiple types of modifications. |
Troubled Debt Restructurings Restructured during the twelve months ended December 31, 2016 | ||||||||||||||||
Rate Modification | Term Modification | Interest Only Modification | Combination Modification | |||||||||||||
Real estate | ||||||||||||||||
Multifamily residential | $ | — | $ | — | $ | — | $ | — | ||||||||
Residential 1-4 family | — | — | — | 296 | ||||||||||||
Owner-occupied commercial | — | — | 4,478 | — | ||||||||||||
Non owner-occupied commercial | — | — | — | — | ||||||||||||
Total real estate loans | — | — | 4,478 | 296 | ||||||||||||
Construction | ||||||||||||||||
Multifamily residential | — | — | — | — | ||||||||||||
Residential 1-4 family | — | — | — | — | ||||||||||||
Commercial real estate | — | — | — | — | ||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | ||||||||||||
Residential bare land and acquisition & development | — | — | — | — | ||||||||||||
Total construction loans | — | — | — | — | ||||||||||||
Commercial and other | — | — | 445 | 651 | ||||||||||||
Consumer | — | — | — | — | ||||||||||||
$ | — | $ | — | $ | 4,923 | $ | 947 | |||||||||
Troubled Debt Restructurings | ||||||||||||||||
Restructured during the twelve months ended December 31, 2015 | ||||||||||||||||
Rate Modification | Term Modification | Interest Only Modification | Combination Modification | |||||||||||||
Real estate | ||||||||||||||||
Multifamily residential | $ | — | $ | — | $ | — | $ | — | ||||||||
Residential 1-4 family | — | — | — | — | ||||||||||||
Owner-occupied commercial | — | 1,780 | — | — | ||||||||||||
Non owner-occupied commercial | — | — | — | — | ||||||||||||
Total real estate loans | — | 1,780 | — | — | ||||||||||||
Construction | ||||||||||||||||
Multifamily residential | — | — | — | — | ||||||||||||
Residential 1-4 family | — | — | — | — | ||||||||||||
Commercial real estate | — | — | — | — | ||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | ||||||||||||
Residential bare land and acquisition & development | — | — | — | — | ||||||||||||
Total construction loans | — | — | — | — | ||||||||||||
Commercial and other | 297 | — | — | — | ||||||||||||
Consumer | — | — | — | — | ||||||||||||
$ | 297 | $ | 1,780 | $ | — | $ | — |
Troubled Debt Restructurings That Subsequently Defaulted within the 12 Months ended December 31, | ||||||||||||||
2016 | 2015 | |||||||||||||
Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||||||
Real estate | ||||||||||||||
Multifamily residential | — | $ | — | — | $ | — | ||||||||
Residential 1-4 family | — | — | — | — | ||||||||||
Owner-occupied commercial | 1 | 475 | — | — | ||||||||||
Non owner-occupied commercial | — | — | — | — | ||||||||||
Total real estate loans | 1 | 475 | — | — | ||||||||||
Construction | ||||||||||||||
Multifamily residential | — | — | — | — | ||||||||||
Residential 1-4 family | — | — | — | — | ||||||||||
Commercial real estate | — | — | — | — | ||||||||||
Commercial bare land and acquisition & development | — | — | — | — | ||||||||||
Residential bare land and acquisition & development | — | — | — | — | ||||||||||
Total construction loans | — | — | — | — | ||||||||||
Commercial and other | — | — | — | — | ||||||||||
Consumer | — | — | — | — | ||||||||||
1 | $ | 475 | — | $ | — |
December 31, | ||||||||
2016 | 2015 | |||||||
Real estate secured loans: | ||||||||
Owner-occupied commercial | $ | 63,793 | $ | 56,145 | ||||
Other dental real estate loans | 806 | 2,198 | ||||||
Total permanent real estate loans | 64,599 | 58,343 | ||||||
Dental construction loans | 4,109 | 4,334 | ||||||
Total real estate loans | 68,708 | 62,677 | ||||||
Commercial loans | 308,770 | 277,485 | ||||||
Gross loans | $ | 377,478 | $ | 340,162 |
December 31, | ||||||||
2016 | 2015 | |||||||
Local | $ | 150,268 | $ | 145,817 | ||||
National | 227,210 | 194,345 | ||||||
Total | $ | 377,478 | $ | 340,162 |
For the Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Balance, beginning of period | $ | 4,022 | $ | 4,141 | $ | 3,730 | ||||||
Provision (reclassification) | 636 | (71 | ) | 918 | ||||||||
Charge-offs | (9 | ) | (78 | ) | (631 | ) | ||||||
Recoveries | 64 | 30 | 124 | |||||||||
Balance, end of period | $ | 4,713 | $ | 4,022 | $ | 4,141 |
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Local | $ | 148,805 | $ | — | $ | 1,463 | $ | — | $ | 150,268 | ||||||||||
National | 224,493 | — | 1,056 | 1,661 | 227,210 | |||||||||||||||
Total | $ | 373,298 | $ | — | $ | 2,519 | $ | 1,661 | $ | 377,478 |
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Local | $ | 143,541 | $ | — | $ | 2,276 | $ | — | $ | 145,817 | ||||||||||
National | 191,574 | — | 2,771 | — | 194,345 | |||||||||||||||
Total | $ | 335,115 | $ | — | $ | 5,047 | $ | — | $ | 340,162 |
Aged Analysis of Dental Loans Receivable As of December 31, 2016 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 Days Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Local | $ | — | $ | — | $ | — | $ | 407 | $ | 407 | $ | 149,861 | $ | 150,268 | ||||||||||||||
National | 263 | 366 | — | 1,660 | 2,289 | 224,921 | 227,210 | |||||||||||||||||||||
Total | $ | 263 | $ | 366 | $ | — | $ | 2,067 | $ | 2,696 | $ | 374,782 | $ | 377,478 | ||||||||||||||
Aged Analysis of Dental Loans Receivable As of December 31, 2015 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 Days Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Local | $ | — | $ | — | $ | — | $ | 513 | $ | 513 | $ | 145,304 | $ | 145,817 | ||||||||||||||
National | — | — | — | — | — | 194,345 | 194,345 | |||||||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | 513 | $ | 513 | $ | 339,649 | $ | 340,162 |
December 31, | ||||||||
2016 | 2015 | |||||||
Total principal amount outstanding | $ | 61,130 | $ | 74,018 | ||||
less: principal amount derecognized | (28,467 | ) | (37,211 | ) | ||||
Principal amount included in gross loans on the balance sheet | $ | 32,663 | $ | 36,807 |
December 31, | ||||||||
2016 | 2015 | |||||||
Land | $ | 3,831 | $ | 3,831 | ||||
Buildings and improvements | 20,343 | 19,244 | ||||||
Furniture and equipment | 16,794 | 14,310 | ||||||
40,968 | 37,385 | |||||||
less: accumulated depreciation & amortization | (20,760 | ) | (19,371 | ) | ||||
Net property and equipment | $ | 20,208 | $ | 18,014 |
Lease Commitments | Property Leased to Others | |||||||
2017 | $ | 1,755 | $ | 250 | ||||
2018 | 1,650 | 254 | ||||||
2019 | 1,540 | 258 | ||||||
2020 | 1,127 | 228 | ||||||
2021 | 851 | 172 | ||||||
Thereafter | 4,079 | — | ||||||
$ | 11,002 | $ | 1,162 |
Goodwill | Core Deposit Intangible | Total | ||||||||||
Balance, December 31, 2013 | $ | 22,881 | $ | 735 | $ | 23,616 | ||||||
Amortization | — | (121 | ) | (121 | ) | |||||||
Balance, December 31, 2014 | $ | 22,881 | $ | 614 | $ | 23,495 | ||||||
Increase due to Capital Pacific acquisition | 16,374 | 3,721 | 20,095 | |||||||||
Amortization | — | (431 | ) | (431 | ) | |||||||
Balance, December 31, 2015 | $ | 39,255 | $ | 3,904 | $ | 43,159 | ||||||
Increase due to Capital Pacific acquisition | 771 | — | 771 | |||||||||
Increase due to Foundation acquisition | 21,375 | 5,762 | 27,137 | |||||||||
Amortization | — | (685 | ) | (685 | ) | |||||||
Balance, December 31, 2016 | $ | 61,401 | $ | 8,981 | $ | 70,382 |
Year | Expected Amortization | ||
2017 | $ | 1,069 | |
2018 | 1,069 | ||
2019 | 1,069 | ||
2020 | 958 | ||
2021 | 948 | ||
Thereafter | 3,868 | ||
$ | 8,981 |
December 31, | |||
2016 | |||
2017 | $ | 87,701 | |
2018 | 25,640 | ||
2019 | 28,049 | ||
2020 | 17,286 | ||
2021 | 7,842 | ||
Thereafter | 12,365 | ||
$ | 178,883 |
December 31, | ||||||||
2016 | 2015 | |||||||
Balance at end of period | $ | 1,966 | $ | 71 | ||||
Average Balance outstanding for the period | 702 | 183 | ||||||
Maximum amount outstanding at any month end during the period | 2,107 | 618 | ||||||
Weighted average interest rate for the period | 0.06 | % | — | % | ||||
weighted average interest rate at period end | 0.08 | % | — | % |
Current Rates | December 31, 2016 | ||||||
Cash management advance | 0.70 | % | $ | 57,000 | |||
2017 | 2.28 | % | 3,000 | ||||
2018 | 1.55 | % | 3,000 | ||||
2019 | — | — | |||||
2020 | — | — | |||||
Thereafter | 3.85 | % | 2,000 | ||||
$ | 65,000 |
December 31, 2016 | December 31, 2015 | |||||||||||||||
Hedge- Designated | Not-Hedge- Designated | Hedge- Designated | Not-Hedge- Designated | |||||||||||||
Notional amount | $ | 1,492 | $ | 8,540 | $ | 1,525 | $ | 8,774 | ||||||||
Weighted average pay rate | 5.71 | % | 4.85 | % | 5.71 | % | 4.85 | % | ||||||||
Weighted average receive rate | 3.54 | % | 3.63 | % | 3.20 | % | 3.28 | % | ||||||||
Weighted average maturity in years | 6.65 | 5.45 | 7.60 | 6.49 |
Asset Derivatives | Liability Derivatives | |||||||||||||||||
Balance sheet | December 31, | December 31, | ||||||||||||||||
Derivative | location | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest rate swap designated as a hedging instrument | Other assets or other liabilities | $ | 45 | $ | 66 | $ | 67 | $ | 93 | |||||||||
Interest rate swaps not designated as hedging instruments | Other assets or other liabilities | $ | 14 | $ | 24 | $ | 14 | $ | 24 |
Derivative | Consolidated Statements of Operations location | 2016 | 2015 | 2014 | ||||||||||
Interest rate swaps not designated as a hedging instrument | Other noninterest income | $ | 6 | $ | (5 | ) | $ | — | ||||||
$ | 6 | $ | (5 | ) | $ | — |
December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Current payable: | ||||||||||||
Federal | $ | 8,414 | $ | 8,136 | $ | 5,747 | ||||||
State | 1,989 | 800 | 159 | |||||||||
10,403 | 8,936 | 5,906 | ||||||||||
Deferred: | ||||||||||||
Federal | (579 | ) | 358 | 1,608 | ||||||||
State | (115 | ) | 795 | 1,158 | ||||||||
(694 | ) | 1,153 | 2,766 | |||||||||
Total income tax provision | $ | 9,709 | $ | 10,089 | $ | 8,672 |
2016 | 2015 | 2014 | |||||||||||||||||||
Expected federal income tax provision | $ | 10,320 | 35.00 | % | $ | 10,094 | 35.00 | % | $ | 8,650 | 35.00 | % | |||||||||
State income tax, net of federal income tax effect | 1,138 | 3.86 | % | 1,365 | 4.73 | % | 948 | 3.84 | % | ||||||||||||
Municipal securities tax benefit | (1,429 | ) | (4.85 | )% | (1,049 | ) | (3.64 | )% | (747 | ) | (3.02 | )% | |||||||||
Equity-based compensation | — | — | % | — | — | % | 5 | 0.02 | % | ||||||||||||
(Expense) benefit of purchased tax credits | (1 | ) | — | % | 1 | — | % | 25 | 0.10 | % | |||||||||||
Low-income housing tax credits | (393 | ) | (1.33 | )% | (234 | ) | (0.81 | )% | (199 | ) | (0.81 | )% | |||||||||
Bank Owned Life Insurance | (273 | ) | (0.93 | )% | (230 | ) | (0.80 | )% | (184 | ) | (0.74 | )% | |||||||||
Acquisition costs - Century Bank | — | — | % | — | — | % | 150 | 0.61 | % | ||||||||||||
Acquisition costs - Capital Pacific Bank | — | — | % | 155 | 0.54 | % | — | — | % | ||||||||||||
Acquisition costs - Foundation Bank | 484 | 1.64 | % | — | — | % | — | — | % | ||||||||||||
Deferred tax rate adjustments and other | (137 | ) | (0.46 | )% | (13 | ) | (0.05 | )% | 24 | 0.10 | % | ||||||||||
Income tax provision | $ | 9,709 | 32.93 | % | $ | 10,089 | 34.97 | % | $ | 8,672 | 35.10 | % |
December 31, | ||||||||
2016 | 2015 | |||||||
Assets: | ||||||||
Allowance for loan losses | $ | 12,890 | $ | 7,868 | ||||
Basis adjustments on loans | 1,307 | 1,677 | ||||||
Reserve for self-funded insurance | 139 | 104 | ||||||
Nonqualified stock options | 489 | 816 | ||||||
Accrued compensation | 1,592 | 1,617 | ||||||
OTTI credit impairment | 105 | 94 | ||||||
Nonaccrual loan interest | 53 | 193 | ||||||
NOL carryforward | 3,893 | — | ||||||
Net unrealized loss on securities | 1,516 | — | ||||||
Other | 137 | 91 | ||||||
Total deferred tax assets | $ | 22,121 | $ | 12,460 | ||||
Liabilities: | ||||||||
Federal Home Loan Bank stock dividends | $ | 599 | $ | 589 | ||||
Excess tax over book depreciation | 1,502 | 1,134 | ||||||
Prepaid expenses | 583 | 466 | ||||||
Acquisition adjustments relating to core deposit intangible, deferred loan origination costs, junior subordinated debenture and other | 4,877 | 1,512 | ||||||
Loan origination fees | 1,514 | 1,346 | ||||||
Net unrealized gains on swaps | 35 | 32 | ||||||
Net unrealized gains on securities | — | 1,694 | ||||||
Other | 289 | 17 | ||||||
Total deferred tax liabilities | 9,399 | 6,790 | ||||||
Deferred income tax asset | 12,722 | 5,670 | ||||||
Valuation allowance | — | — | ||||||
Net deferred tax asset | $ | 12,722 | $ | 5,670 |
For the Year Ended December 31, | ||||||||||||||||||||||||
2016 | 2015 | 2014 | ||||||||||||||||||||||
Compensation Expense | Tax Benefit | Compensation Expense (Benefit) | Tax Benefit (Expense) | Compensation Expense | Tax Benefit | |||||||||||||||||||
Equity-based awards: | ||||||||||||||||||||||||
Director restricted stock | $ | 269 | $ | 94 | $ | 248 | $ | 87 | $ | 200 | $ | 70 | ||||||||||||
Employee stock options | — | — | — | — | 13 | — | ||||||||||||||||||
Employee stock SARs | — | — | — | — | 26 | 9 | ||||||||||||||||||
Employee RSUs | 1,584 | 554 | 1,452 | 508 | 1,215 | 425 | ||||||||||||||||||
Liability-based awards: | ||||||||||||||||||||||||
Employee cash SARs | 150 | 53 | (50 | ) | (18 | ) | 75 | 26 | ||||||||||||||||
$ | 2,003 | $ | 701 | $ | 1,650 | $ | 577 | $ | 1,529 | $ | 530 |
For the Years Ended December 31, | |||||||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||||||
Options Outstanding | Weighted Average Exercise Price | Options Outstanding | Weighted Average Exercise Price | Options Outstanding | Weighted Average Exercise Price | ||||||||||||||||
Balance, beginning of year | 319,454 | $ | 14.23 | 327,050 | $ | 14.16 | 367,906 | $ | 14.15 | ||||||||||||
Exercised | (68,907 | ) | 14.85 | (7,596 | ) | 11.44 | (16,779 | ) | 11.29 | ||||||||||||
Forfeited or expired | (12,243 | ) | 16.34 | — | — | (24,077 | ) | 16.00 | |||||||||||||
Balance, end of year | 238,304 | $ | 13.94 | 319,454 | $ | 14.23 | 327,050 | $ | 14.16 | ||||||||||||
Options exercisable, end of year | 238,304 | $ | 13.94 | 319,454 | $ | 14.23 | 327,050 | $ | 14.16 |
For the Years Ended December 31, | |||||||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||||||
Stock-settled SARs Outstanding | Weighted Average Exercise Price | Stock-settled SARs Outstanding | Weighted Average Exercise Price | Stock-settled SARs Outstanding | Weighted Average Exercise Price | ||||||||||||||||
Balance, beginning of year | 239,267 | $ | 14.36 | 289,267 | $ | 13.97 | 337,759 | $ | 13.85 | ||||||||||||
Exercised | (103,818 | ) | 14.78 | (49,600 | ) | 12.12 | (26,155 | ) | 11.79 | ||||||||||||
Forfeited or expired | (9,641 | ) | 16.21 | (400 | ) | 11.30 | (22,337 | ) | 14.74 | ||||||||||||
Balance, end of year | 125,808 | $ | 13.87 | 239,267 | $ | 14.36 | 289,267 | $ | 13.97 | ||||||||||||
Stock-settled SARs exercisable, end of year | 125,808 | $ | 13.87 | 239,267 | $ | 14.36 | 289,267 | $ | 13.97 |
For the Years Ended December 31, | |||||||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||||||
Cash-settled SARs Outstanding | Weighted Average Exercise Price | Cash-settled SARs Outstanding | Weighted Average Exercise Price | Cash-settled SARs Outstanding | Weighted Average Exercise Price | ||||||||||||||||
Balance, beginning of year | 142,527 | $ | 1,527.00 | 158,993 | $ | 15.10 | 186,992 | $ | 14.95 | ||||||||||||
Exercised | (75,836 | ) | 15.43 | (12,087 | ) | 12.95 | (11,012 | ) | 12.21 | ||||||||||||
Forfeited or expired | (296 | ) | 12.07 | (4,379 | ) | 15.77 | (16,987 | ) | 15.34 | ||||||||||||
Balance, end of year | 66,395 | $ | 14.94 | 142,527 | $ | 15.27 | 158,993 | $ | 15.10 | ||||||||||||
Cash-settled SARs exercisable, end of year | 66,395 | $ | 14.94 | 142,527 | $ | 15.27 | 158,993 | $ | 15.10 |
Twelve months ended December 31, 2016 | ||||||||||||||||||
Number Exercised | Weighted Average Exercise | Intrinsic Value | Number of Shares Issued | Net Cash Payment to Employees | ||||||||||||||
Stock options | 68,907 | $ | 14.85 | $ | 117 | 48,665 | NA | |||||||||||
Employee stock SARs | 103,818 | $ | 12.28 | $ | 40 | 9,131 | NA | |||||||||||
Employee cash SARs | 75,836 | $ | 11.81 | NA | NA | $ | 178 | |||||||||||
Twelve months ended December 31, 2015 | ||||||||||||||||||
Number Exercised | Weighted Average Exercise | Intrinsic Value | Number of Shares Issued | Net Cash Payment to Employees | ||||||||||||||
Stock options | 7,596 | $ | 11.44 | $ | 29 | 7,596 | NA | |||||||||||
Employee stock SARs | 49,600 | $ | 12.12 | $ | 94 | 6,250 | NA | |||||||||||
Employee cash SARs | 12,087 | $ | 12.95 | NA | NA | $ | 27 |
For the Years Ended December 31, | |||||||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||||||
Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value | Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value | Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value | ||||||||||||||||
Balance, beginning of year | 330,997 | $ | 12.23 | 306,532 | $ | 11.18 | 299,696 | $ | 9.79 | ||||||||||||
Granted | 130,151 | 16.66 | 157,195 | 13.00 | 127,051 | 13.21 | |||||||||||||||
Vested shares issued | (80,051 | ) | 11.50 | (75,373 | ) | 10.59 | (58,518 | ) | 9.65 | ||||||||||||
Vested shares forfeited for taxes | (48,173 | ) | 11.50 | (46,105 | ) | 10.59 | (36,384 | ) | 9.65 | ||||||||||||
Forfeited or expired | (32,084 | ) | 13.70 | (11,252 | ) | 12.33 | (25,313 | ) | 10.67 | ||||||||||||
Balance, end of year | 300,840 | $ | 14.30 | 330,997 | $ | 12.23 | 306,532 | $ | 11.18 |
Unrealized gains and losses on available-for-sale securities | Unrealized gains and losses on derivative instrument - cash flow hedge | Total | ||||||||||
Year ended December 31, 2016 | ||||||||||||
Beginning balance | $ | 2,649 | $ | 50 | $ | 2,699 | ||||||
Other comprehensive (loss) income before reclassifications | (4,804 | ) | 191 | (4,613 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | (215 | ) | (186 | ) | (401 | ) | ||||||
Net current-period other comprehensive (loss) income | (5,019 | ) | 5 | (5,014 | ) | |||||||
Ending balance | $ | (2,370 | ) | $ | 55 | $ | (2,315 | ) | ||||
Year ended December 31, 2015 | ||||||||||||
Beginning balance | $ | 3,695 | $ | 107 | $ | 3,802 | ||||||
Other comprehensive (loss) before reclassifications | (649 | ) | (57 | ) | (706 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income | (397 | ) | — | (397 | ) | |||||||
Net current-period other comprehensive (loss) | (1,046 | ) | (57 | ) | (1,103 | ) | ||||||
Ending balance | $ | 2,649 | $ | 50 | $ | 2,699 | ||||||
Year ended December 31, 2014 | ||||||||||||
Beginning balance | $ | (148 | ) | $ | 247 | $ | 99 | |||||
Other comprehensive income (loss) before reclassifications | 3,822 | (140 | ) | 3,682 | ||||||||
Amounts reclassified from accumulated other comprehensive income | 21 | — | 21 | |||||||||
Net current-period other comprehensive income (loss) | 3,843 | (140 | ) | 3,703 | ||||||||
Ending balance | $ | 3,695 | $ | 107 | $ | 3,802 |
For the Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Balance, beginning of year | $ | 25 | $ | 100 | $ | 100 | ||||||
Additions or renewals | 25 | 35 | — | |||||||||
Amounts collected | (50 | ) | (110 | ) | — | |||||||
Balance, end of year | $ | — | $ | 25 | $ | 100 |
December 31, | ||||||||
2016 | 2015 | |||||||
Commitments to extend credit (principally variable rate) | $ | 408,860 | $ | 256,156 | ||||
Letters of credit and financial guarantees written | $ | 2,425 | $ | 1,184 |
December 31, | ||||||||||||||||
2016 | 2015 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 67,113 | $ | 67,113 | $ | 36,675 | $ | 36,675 | ||||||||
Securities available-for-sale | 470,996 | 470,996 | 366,598 | 366,598 | ||||||||||||
Loans | 1,857,767 | 1,837,673 | 1,404,482 | 1,389,562 | ||||||||||||
Accrued interest receivable | 7,017 | 7,017 | 5,721 | 5,721 | ||||||||||||
Federal Home Loan Bank stock | 5,423 | 5,423 | 5,208 | 5,208 | ||||||||||||
Bank-owned life insurance | 35,165 | 35,165 | 22,884 | 22,884 | ||||||||||||
Interest rate swaps | 150 | 150 | 171 | 171 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits | $ | 2,148,103 | $ | 2,147,056 | $ | 1,597,093 | $ | 1,597,280 | ||||||||
Federal Home Loan Bank borrowings | 65,000 | 65,043 | 77,500 | 77,651 | ||||||||||||
Subordinated debentures | 34,096 | 32,140 | — | — | ||||||||||||
Junior subordinated debentures | 11,311 | 6,972 | 8,248 | 2,741 | ||||||||||||
Accrued interest payable | 176 | 176 | 138 | 138 | ||||||||||||
Interest rate swaps | 81 | 81 | 116 | 116 |
Carrying Amount | Fair Value at December 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 67,113 | $ | 67,113 | $ | — | $ | — | ||||||||
Loans | 1,857,767 | — | — | 1,837,673 | ||||||||||||
Accrued interest receivable | 7,017 | 7,017 | — | — | ||||||||||||
Federal Home Loan Bank stock | 5,423 | 5,423 | — | — | ||||||||||||
Bank-owned life insurance | 35,165 | 35,165 | — | — | ||||||||||||
Interest rate swaps | 150 | 150 | — | — | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits | $ | 2,148,103 | $ | 1,969,220 | $ | 177,836 | $ | — | ||||||||
Federal Home Loan Bank borrowings | 65,000 | — | 65,043 | — | ||||||||||||
Subordinated debentures | 34,096 | — | 32,140 | |||||||||||||
Junior subordinated debentures | 11,311 | — | 6,972 | — | ||||||||||||
Accrued interest payable | 176 | 176 | — | — | ||||||||||||
Interest rate swaps | 81 | 81 | — | — | ||||||||||||
Carrying Amount | Fair Value at December 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 36,675 | $ | 36,675 | $ | — | $ | — | ||||||||
Loans | 1,404,482 | — | — | 1,389,562 | ||||||||||||
Accrued interest receivable | 5,721 | 5,721 | — | — | ||||||||||||
Federal Home Loan Bank stock | 5,208 | 5,208 | — | — | ||||||||||||
Bank-owned life insurance | 22,884 | 22,884 | — | — | ||||||||||||
Swap derivative | 171 | 171 | — | — | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits | $ | 1,597,093 | $ | 1,458,490 | $ | 138,790 | $ | — | ||||||||
Federal Home Loan Bank borrowings | 77,500 | — | 77,651 | — | ||||||||||||
Junior subordinated debentures | 8,248 | — | 2,741 | — | ||||||||||||
Accrued interest payable | 138 | 138 | — | — | ||||||||||||
Interest rate swaps | 116 | 116 | — | — |
Carrying Value | Fair Value Measurements Using | |||||||||||||||
December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Available-for-sale securities | ||||||||||||||||
Obligations of U.S government agencies | $ | 25,620 | $ | — | $ | 25,620 | $ | — | ||||||||
Obligation of states and political subdivisions | 110,739 | — | 110,739 | — | ||||||||||||
Agency mortgage-backed securities | 290,036 | — | 290,036 | — | ||||||||||||
Private-label mortgage-backed securities | 1,937 | — | 569 | 1,368 | ||||||||||||
SBA variable vate pools | 42,664 | — | 42,664 | — | ||||||||||||
Interest rate swaps | 69 | 69 | — | — | ||||||||||||
Total assets measured on a recurring basis | $ | 471,065 | $ | 69 | $ | 469,628 | $ | 1,368 | ||||||||
Carrying Value | Fair Value Measurements Using | |||||||||||||||
December 31, 2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Available-for-sale securities | ||||||||||||||||
Obligations of U.S government agencies | $ | 44,623 | $ | — | $ | 44,623 | $ | — | ||||||||
Obligation of states and political subdivisions | 97,151 | — | 97,151 | — | ||||||||||||
Agency mortgage-backed securities | 185,370 | — | 185,370 | — | ||||||||||||
Private-label mortgage-backed securities | 2,790 | — | 1,204 | 1,586 | ||||||||||||
SBA variable rate pools | 35,771 | — | 35,771 | — | ||||||||||||
Corporate securities | 893 | — | 893 | |||||||||||||
Interest rate swaps | 55 | 55 | — | — | ||||||||||||
Total assets measured on a recurring basis | $ | 366,653 | $ | 55 | $ | 365,012 | $ | 1,586 |
For the Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Beginning balance | $ | 1,586 | $ | 1,568 | $ | 1,786 | ||||||
Transfers into Level 3 | 70 | 300 | — | |||||||||
Transfers out of Level 3 | — | — | — | |||||||||
Total gains or losses | ||||||||||||
Included in earnings | (21 | ) | — | — | ||||||||
Included in other comprehensive income | 43 | 66 | (106 | ) | ||||||||
Paydowns | (310 | ) | (348 | ) | (112 | ) | ||||||
Purchases, issuances, sales, and settlements | ||||||||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | — | — | — | |||||||||
Ending balance | $ | 1,368 | $ | 1,586 | $ | 1,568 |
• | Obligations of U.S. government agencies – TRACE reported trades. |
• | Obligations of states and political subdivisions – MSRB reported trades, material event notices, and Municipal Market Data (MMD) benchmark yields. |
• | Private-label mortgage-backed securities – new issue data, monthly payment information, and collateral performance (whole loan collateral). |
• | Mortgage-backed securities – TBA prices and monthly payment information. |
• | SBA variable pools – TBA prices and monthly payment information. |
• | Corporate securities – TRACE reported trades. |
• | Obligations of U.S. government agencies – security characteristics, defined sector break-down, benchmark yields, applied base spread, yield to maturity (bullet structures), corporate action adjustment, and evaluations based on T+3 settlement. |
• | Obligations of states and political subdivisions – security characteristics, benchmark yields, applied base spread, yield to worst or market convention, ratings updates, prepayment schedules (housing bonds), material event notice adjustments, and evaluations based on T+3 settlement. |
• | Private-label mortgage-backed securities – security characteristics, prepayment speeds, cash flows, TBA, Treasury and swap curves, IO/PO strips or floating indexes, applied base spread, spread adjustments, yield to worst or market convention, ratings updates (whole-loan collateral), and evaluations based on T+0 settlement. |
• | Mortgage-backed securities – security characteristics, TBA, Treasury, or floating index benchmarks, spread to TBA levels, prepayment speeds, applied spreads, and evaluations based on T+0 settlement. |
• | SBA pools – security characteristics, TBA, Treasury, or floating index benchmarks, spread to TBA levels, prepayment speeds, applied spreads, and evaluations based on T+0 settlement. |
• | Corporate securities – security characteristics, defined sector break-down, benchmark yields, applied based spread, yield to maturity (bullet structures), corporate action adjustment, and evaluations based on T+3 settlement. |
Fair Value Measurements Using | ||||||||||||||||
December 31, 2016 | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Other real estate owned | $ | 10,936 | $ | — | $ | — | $ | 10,936 | ||||||||
$ | 10,936 | $ | — | $ | — | $ | 10,936 | |||||||||
Fair Value Measurements Using | ||||||||||||||||
December 31, 2015 | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Loans measured for impairment (net of guarantees and specific reserve) | $ | 53 | $ | — | $ | — | $ | 53 | ||||||||
Other real estate owned | 10,147 | — | — | 10,147 | ||||||||||||
$ | 10,200 | $ | — | $ | — | $ | 10,200 |
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||
As of December 31, 2016: | |||||||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 267,416 | 12.19 | % | $ | 175,555 | 8.00 | % | $ | 219,444 | 10.00 | % | |||||||||
Company: | $ | 278,444 | 12.69 | % | NA | NA | |||||||||||||||
Tier 1 capital (to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 244,414 | 11.14 | % | $ | 131,666 | 6.00 | % | $ | 175,555 | 8.00 | % | |||||||||
Company: | $ | 221,346 | 10.08 | % | NA | NA | |||||||||||||||
Common Equity Tier 1 (to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 244,414 | 11.14 | % | $ | 98,750 | 4.50 | % | $ | 142,638 | 6.50 | % | |||||||||
Company: | $ | 208,873 | 9.52 | % | NA | NA | |||||||||||||||
Tier 1 capital (to leverage assets) | |||||||||||||||||||||
Bank: | $ | 244,414 | 9.96 | % | $ | 98,181 | 4.00 | % | $ | 122,726 | 5.00 | % | |||||||||
Company: | $ | 221,346 | 9.01 | % | NA | NA | |||||||||||||||
As of December 31, 2015: | |||||||||||||||||||||
Total capital (to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 200,236 | 12.52 | % | $ | 127,990 | 8.00 | % | $ | 159,988 | 10.00 | % | |||||||||
Company: | $ | 201,261 | 12.58 | % | NA | NA | |||||||||||||||
Tier 1 capital (to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 182,575 | 11.41 | % | $ | 95,993 | 6.00 | % | $ | 127,990 | 8.00 | % | |||||||||
Company: | $ | 183,600 | 11.47 | % | NA | NA | |||||||||||||||
Common Equity Tier 1 (to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 182,575 | 11.41 | % | $ | 71,995 | 4.50 | % | $ | 103,992 | 6.50 | % | |||||||||
Company: | $ | 175,600 | 10.97 | % | NA | NA | |||||||||||||||
Tier 1 capital (to leverage assets) | |||||||||||||||||||||
Bank: | $ | 182,575 | 9.88 | % | $ | 73,938 | 4.00 | % | $ | 92,422 | 5.00 | % | |||||||||
Company: | $ | 183,600 | 9.93 | % | NA | NA |
December 31, | ||||||||
2016 | 2015 | |||||||
Assets: | ||||||||
Cash deposited with the Bank | $ | 7,558 | $ | 678 | ||||
Cash and due from banks | 403 | 400 | ||||||
Goodwill | 4,464 | — | ||||||
Prepaid expenses | 9 | 4 | ||||||
Equity in Trust | 434 | 248 | ||||||
Swap unrealized gain | 91 | 82 | ||||||
Investment in the Bank | 306,304 | 225,416 | ||||||
$ | 319,263 | $ | 226,828 | |||||
Liabilities and shareholders’ equity: | ||||||||
Liabilities | $ | 66 | $ | 57 | ||||
Deferred tax liability | 35 | 32 | ||||||
Subordinated debentures | 34,096 | — | ||||||
Junior subordinated debentures | 11,311 | 8,248 | ||||||
Shareholders’ equity | 273,755 | 218,491 | ||||||
$ | 319,263 | $ | 226,828 |
For the Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Income: | ||||||||||||
Cash dividends from the Bank | $ | 4,400 | $ | 6,550 | $ | 16,211 | ||||||
Income from Trust Preferred | 8 | 4 | 4 | |||||||||
4,408 | 6,554 | 16,215 | ||||||||||
Expenses: | ||||||||||||
Interest expense | 1,422 | 226 | 225 | |||||||||
Investor relations | 103 | 132 | 84 | |||||||||
Legal, registration expense, and other | 230 | 98 | 132 | |||||||||
Personnel costs paid to Bank | 189 | 167 | 183 | |||||||||
1,944 | 623 | 624 | ||||||||||
Income before income tax expense and equity in undistributed earnings from the Bank | 2,464 | 5,931 | 15,591 | |||||||||
Income tax benefit | 200 | 139 | 140 | |||||||||
Equity in undistributed earnings of the Bank | 17,112 | 12,681 | 311 | |||||||||
Net income | $ | 19,776 | $ | 18,751 | $ | 16,042 |
For the Years Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 19,776 | $ | 18,751 | $ | 16,042 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in undistributed earnings from the Bank | (17,112 | ) | (12,681 | ) | (311 | ) | ||||||
Excess tax benefit of stock options exercised | (43 | ) | (9 | ) | (14 | ) | ||||||
Other, net | (665 | ) | 652 | 525 | ||||||||
Net cash provided by operating activities | 1,956 | 6,713 | 16,242 | |||||||||
Cash flows from investing activities: | ||||||||||||
Capital Investment in the Bank | (20,000 | ) | — | — | ||||||||
Net cash used by investing activities | (20,000 | ) | — | — | ||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from stock options exercised | 691 | 86 | 189 | |||||||||
Excess tax benefit of stock options exercised | 43 | 9 | 14 | |||||||||
Repurchase of common stock | — | — | (3,600 | ) | ||||||||
Dividends paid | (8,983 | ) | (8,042 | ) | (12,308 | ) | ||||||
Vested SARS and RSUs surrendered by employees to cover tax consequences | (896 | ) | (649 | ) | (517 | ) | ||||||
Proceeds from subordinated debt issuance | 34,072 | — | — | |||||||||
Net cash provided by (used in) financing activities | 24,927 | (8,596 | ) | (16,222 | ) | |||||||
Net change in cash | 6,883 | (1,883 | ) | 20 | ||||||||
Cash, beginning of period | 1,078 | 2,961 | 2,941 | |||||||||
Cash, end of period | $ | 7,961 | $ | 1,078 | $ | 2,961 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year Ended December 31, | ||||||||||||||||
2016 | ||||||||||||||||||||
Total interest income | $ | 19,953 | $ | 20,284 | $ | 22,662 | $ | 27,044 | $ | 89,943 | ||||||||||
Total interest expense | 1,144 | 1,137 | 1,891 | 2,060 | 6,232 | |||||||||||||||
Net interset income | 18,809 | 19,147 | 20,771 | 24,984 | 83,711 | |||||||||||||||
Provision for loan losses | 245 | 1,950 | 1,380 | 1,875 | 5,450 | |||||||||||||||
Noninterest Income | 1,807 | 1,747 | 1,919 | 2,344 | 7,817 | |||||||||||||||
Noninterest Expense | 12,007 | 14,932 | 13,825 | 15,829 | 56,593 | |||||||||||||||
Income before income taxes | 8,364 | 4,012 | 7,485 | 9,624 | 29,485 | |||||||||||||||
Provision for income taxes | 2,905 | 1,406 | 2,634 | 2,764 | 9,709 | |||||||||||||||
Net income | $ | 5,459 | $ | 2,606 | $ | 4,851 | $ | 6,860 | $ | 19,776 | ||||||||||
Per common share | ||||||||||||||||||||
Earnings (basic) (1) | $ | 0.28 | $ | 0.13 | $ | 0.24 | $ | 0.30 | $ | 0.96 | ||||||||||
Earnings (diluted) (1) | $ | 0.28 | $ | 0.13 | $ | 0.23 | $ | 0.30 | $ | 0.95 | ||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year Ended December 31, | ||||||||||||||||
2015 | ||||||||||||||||||||
Total interest income | $ | 16,069 | $ | 18,840 | $ | 19,450 | $ | 19,877 | $ | 74,236 | ||||||||||
Total interest expense | 1,095 | 1,144 | 1,142 | 1,055 | 4,436 | |||||||||||||||
Net interset income | 14,974 | 17,696 | 18,308 | 18,822 | 69,800 | |||||||||||||||
Provision for loan losses | — | 550 | 625 | 520 | 1,695 | |||||||||||||||
Noninterest Income | 1,276 | 1,627 | 1,714 | 2,008 | 6,625 | |||||||||||||||
Noninterest Expense | 11,972 | 11,030 | 11,182 | 11,706 | 45,890 | |||||||||||||||
Income before income taxes | 4,278 | 7,743 | 8,215 | 8,604 | 28,840 | |||||||||||||||
Provision for income taxes | 1,475 | 2,648 | 2,890 | 3,076 | 10,089 | |||||||||||||||
Net income | $ | 2,803 | $ | 5,095 | $ | 5,325 | $ | 5,528 | $ | 18,751 | ||||||||||
Per common share | ||||||||||||||||||||
Earnings (basic) (1) | $ | 0.15 | $ | 0.26 | $ | 0.27 | $ | 0.28 | $ | 0.97 | ||||||||||
Earnings (diluted) (1) | $ | 0.15 | $ | 0.26 | $ | 0.27 | $ | 0.28 | $ | 0.97 |
(1) | Due to average share calculations, quarterly earnings per share may not total the amount reported for the full year |
September 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 27,748 | $ | 30,154 | ||||
Interest-bearing deposits with banks | 42,530 | 36,959 | ||||||
Total cash and cash equivalents | 70,278 | 67,113 | ||||||
Securities available-for-sale | 453,660 | 470,996 | ||||||
Loans, net of deferred fees | 1,882,842 | 1,857,767 | ||||||
Allowance for loan losses | (23,363 | ) | (22,454 | ) | ||||
Net loans | 1,859,479 | 1,835,313 | ||||||
Interest receivable | 6,502 | 7,107 | ||||||
Federal Home Loan Bank stock | 7,084 | 5,423 | ||||||
Property and equipment, net of accumulated depreciation | 19,302 | 20,208 | ||||||
Goodwill and intangible assets | 68,969 | 70,382 | ||||||
Deferred tax asset | 11,281 | 12,722 | ||||||
Other real estate owned | 9,900 | 12,068 | ||||||
Bank-owned life insurance | 35,840 | 35,165 | ||||||
Other assets | 4,328 | 4,940 | ||||||
Total assets | $ | 2,546,623 | $ | 2,541,437 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Deposits | ||||||||
Noninterest-bearing demand | $ | 906,015 | $ | 858,996 | ||||
Savings and interest-bearing checking | 1,055,648 | 1,110,224 | ||||||
Core time deposits | 54,625 | 65,847 | ||||||
Total core deposits | 2,016,288 | 2,035,067 | ||||||
Other deposits | 81,869 | 113,036 | ||||||
Total deposits | 2,098,157 | 2,148,103 | ||||||
Securities sold under agreements to repurchase | 2,031 | 1,966 | ||||||
Federal Home Loan Bank borrowings | 101,000 | 65,000 | ||||||
Subordinated debentures | 34,167 | 34,096 | ||||||
Junior subordinated debentures | 11,428 | 11,311 | ||||||
Accrued interest and other payables | 9,262 | 7,206 | ||||||
Total liabilities | 2,256,045 | 2,267,682 | ||||||
Shareholders’ equity | ||||||||
Common stock, no par value, shares authorized: 50,000,000; shares issued and outstanding: 22,772,400 at September 30, 2017, and 22,611,535 at December 31, 2016 | 205,961 | 205,584 | ||||||
Retained earnings | 85,286 | 70,486 | ||||||
Accumulated other comprehensive loss | (669 | ) | (2,315 | ) | ||||
290,578 | 273,755 | |||||||
Total liabilities and shareholders’ equity | $ | 2,546,623 | $ | 2,541,437 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Interest and dividend income | ||||||||||||||||
Loans | $ | 23,916 | $ | 20,145 | $ | 71,282 | $ | 55,810 | ||||||||
Taxable securities | 2,247 | 1,995 | 6,819 | 5,551 | ||||||||||||
Tax-exempt securities | 498 | 482 | 1,510 | 1,435 | ||||||||||||
Interest-bearing deposits with banks | 149 | 40 | 335 | 104 | ||||||||||||
26,810 | 22,662 | 79,946 | 62,900 | |||||||||||||
Interest expense | ||||||||||||||||
Deposits | 1,216 | 984 | 3,597 | 2,678 | ||||||||||||
Federal Home Loan Bank borrowings | 398 | 286 | 1,205 | 758 | ||||||||||||
Subordinated debentures | 590 | 553 | 1,735 | 553 | ||||||||||||
Junior subordinated debentures | 105 | 66 | 293 | 179 | ||||||||||||
Federal funds purchased | — | 2 | 1 | 6 | ||||||||||||
2,309 | 1,891 | 6,831 | 4,174 | |||||||||||||
Net interest income | 24,501 | 20,771 | 73,115 | 58,726 | ||||||||||||
Provision for loan losses | 350 | 1,380 | 3,725 | 3,575 | ||||||||||||
Net interest income after provision for loan losses | 24,151 | 19,391 | 69,390 | 55,151 | ||||||||||||
Noninterest income | ||||||||||||||||
Service charges on deposit accounts | 686 | 717 | 2,119 | 2,099 | ||||||||||||
Bankcard income | 338 | 314 | 968 | 899 | ||||||||||||
Bank-owned life insurance income | 226 | 172 | 675 | 463 | ||||||||||||
Net gain on sale of investment securities | — | — | — | 309 | ||||||||||||
Impairment losses on investment securities (OTTI) | (7 | ) | (2 | ) | (9 | ) | (19 | ) | ||||||||
Other noninterest income | 645 | 718 | 2,797 | 1,726 | ||||||||||||
1,888 | 1,919 | 6,550 | 5,477 | |||||||||||||
Noninterest expense | ||||||||||||||||
Salaries and employee benefits | 7,554 | 7,520 | 25,830 | 23,084 | ||||||||||||
Property and equipment | 1,323 | 1,202 | 3,929 | 3,404 | ||||||||||||
Data processing | 1,062 | 924 | 3,137 | 2,682 | ||||||||||||
Legal and professional services | 576 | 569 | 1,789 | 2,321 | ||||||||||||
Business development | 319 | 460 | 1,299 | 1,492 | ||||||||||||
FDIC insurance assessment | 297 | 273 | 989 | 848 | ||||||||||||
Other real estate expense (income) | 48 | 71 | 20 | (32 | ) | |||||||||||
Merger related expense | 176 | 1,767 | 1,429 | 3,745 | ||||||||||||
Other noninterest expense | 1,453 | 1,039 | 3,846 | 3,222 | ||||||||||||
12,808 | 13,825 | 42,268 | 40,766 | |||||||||||||
Income before provision for income taxes | 13,231 | 7,485 | 33,672 | 19,862 | ||||||||||||
Provision for income taxes | 4,606 | 2,634 | 11,370 | 6,946 | ||||||||||||
Net income | $ | 8,625 | $ | 4,851 | $ | 22,302 | $ | 12,916 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.38 | $ | 0.24 | $ | 0.98 | $ | 0.65 | ||||||||
Diluted | $ | 0.38 | $ | 0.23 | $ | 0.97 | $ | 0.64 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 22,772,393 | 20,511,392 | 22,719,181 | 19,940,709 | ||||||||||||
Common stock equivalents attributable to stock-based awards | 167,018 | 165,572 | 162,032 | 154,813 | ||||||||||||
Diluted | 22,939,411 | 20,676,964 | 22,881,213 | 20,095,522 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income | $ | 8,625 | $ | 4,851 | $ | 22,302 | $ | 12,916 | ||||||||
Other comprehensive income: | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||
Unrealized gain (loss) arising during the period | 17 | (1,929 | ) | 2,781 | 5,397 | |||||||||||
Reclassification adjustment for gains realized in net income | — | — | — | (309 | ) | |||||||||||
Other than temporary impairment | 7 | 2 | 9 | 19 | ||||||||||||
Income tax effects | (9 | ) | 751 | (1,088 | ) | (1,991 | ) | |||||||||
Derivative agreements—cash flow hedge | — | |||||||||||||||
Unrealized gain (loss) arising during the period | — | 160 | (14 | ) | (944 | ) | ||||||||||
Reclassification adjustment for gains realized in net income | — | — | 35 | — | ||||||||||||
Income tax effects | — | (62 | ) | (77 | ) | 368 | ||||||||||
Total other comprehensive income (loss), net of tax | 15 | (1,078 | ) | 1,646 | 2,540 | |||||||||||
Total comprehensive income | $ | 8,640 | $ | 3,773 | $ | 23,948 | $ | 15,456 |
Number of Shares | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (loss) | Total | |||||||||||||||
Balance, December 31, 2015 | 19,604,182 | $ | 156,099 | $ | 59,693 | $ | 2,699 | $ | 218,491 | ||||||||||
Net income | 19,776 | 19,776 | |||||||||||||||||
Other comprehensive loss, net of tax | (5,014 | ) | (5,014 | ) | |||||||||||||||
Comprehensive income | 14,762 | ||||||||||||||||||
Stock issuance and related tax benefit | 153,991 | 734 | 734 | ||||||||||||||||
Stock issued through acquisition | 2,853,362 | 47,794 | 47,794 | ||||||||||||||||
Share-based compensation expense | 1,853 | 1,853 | |||||||||||||||||
Vested employee RSUs and SARs surrendered to cover tax consequences | (896 | ) | (896 | ) | |||||||||||||||
Cash dividends ($0.44 per share) | (8,983 | ) | (8,983 | ) | |||||||||||||||
Balance, December 31, 2016 | 22,611,535 | $ | 205,584 | $ | 70,486 | $ | (2,315 | ) | $ | 273,755 | |||||||||
Net income | 22,302 | 22,302 | |||||||||||||||||
Other comprehensive income, net of tax | 1,646 | 1,646 | |||||||||||||||||
Comprehensive income | 23,948 | ||||||||||||||||||
Stock issuance | 160,865 | 861 | 861 | ||||||||||||||||
Share-based compensation expense | 1,042 | 1,042 | |||||||||||||||||
Vested employee RSUs and SARs surrendered to cover tax consequences | (1,526 | ) | (1,526 | ) | |||||||||||||||
Cash dividends ($.33 per share) | (7,502 | ) | (7,502 | ) | |||||||||||||||
Balance, September 30, 2017 | 22,772,400 | $ | 205,961 | $ | 85,286 | $ | (669 | ) | 290,578 |
Nine months ended September 30, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 22,302 | $ | 12,916 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Depreciation and amortization, net of accretion | 5,947 | 4,919 | ||||||
Deferred income taxes | (1 | ) | 3 | |||||
Bank-owned life insurance income | (675 | ) | (469 | ) | ||||
Share-based compensation | 1,192 | 1,427 | ||||||
Provision for loan losses | 3,725 | 3,575 | ||||||
Gain on sale of investment securities | — | (309 | ) | |||||
Valuation adjustment on foreclosed assets | — | 162 | ||||||
Gain on sale of foreclosed assets | (91 | ) | (302 | ) | ||||
Other than temporary impairment on investment securities | 9 | 19 | ||||||
Change in: | ||||||||
Interest receivable | 605 | 698 | ||||||
Deferred loan fees | (169 | ) | 381 | |||||
Accrued interest payable and other liabilities | 2,094 | (1,991 | ) | |||||
Other assets | 1,520 | (1,073 | ) | |||||
Net cash provided by operating activities | 36,458 | 19,956 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from maturities and sales of available-for-sale investment securities | 41,529 | 135,319 | ||||||
Purchase of available-for-sale investment securities | (25,308 | ) | (160,943 | ) | ||||
Net loan principal originations | (27,905 | ) | (133,405 | ) | ||||
Proceeds from sale of foreclosed assets | 2,442 | 1,371 | ||||||
Net purchase of property and equipment | (342 | ) | (2,196 | ) | ||||
(Purchase) Redemption of Federal Home Loan Bank stock | (1,661 | ) | 1,097 | |||||
Cash consideration received, net of cash acquired in merger | — | 43,855 | ||||||
Net cash used by investing activities | (11,245 | ) | (114,902 | ) | ||||
Cash flows from financing activities: | ||||||||
Change in deposits | (49,946 | ) | 169,032 | |||||
Change in repurchase agreements | 65 | 1,036 | ||||||
Change in Federal Home Loan Bank short-term borrowings | 36,000 | (19,500 | ) | |||||
FHLB term advances paid off | — | (12,500 | ) | |||||
Proceeds from stock options exercised | 861 | 620 | ||||||
Excess tax benefit from stock options exercised | — | 41 | ||||||
Proceeds from subordinated debenture issuance | — | 34,072 | ||||||
Dividends paid | (7,502 | ) | (6,497 | ) | ||||
Vested employee RSUs and SARs surrendered to cover tax consequences | (1,526 | ) | (861 | ) | ||||
Net cash (used)/provided by financing activities | (22,048 | ) | 165,443 | |||||
Net change in cash and cash equivalents | 3,165 | 70,497 | ||||||
Cash and cash equivalents, beginning of period | 67,113 | 36,675 | ||||||
Cash and cash equivalents, end of period | $ | 70,278 | $ | 107,172 | ||||
Supplemental information: | ||||||||
Noncash investing and financing activities: | ||||||||
Transfer of loans to other real estate owned | $ | 183 | $ | 958 | ||||
Change in fair value of securities, net of deferred income taxes | $ | (1,187 | ) | $ | 3,116 | |||
Change in fair value of cash flow hedge, net of deferred income taxes | $ | — | $ | (576 | ) | |||
Cash paid during the period for: | ||||||||
Income taxes | $ | 9,098 | $ | 7,667 | ||||
Interest | $ | 6,336 | $ | 3,653 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Percentage of Portfolio | |||||||||||||||
Unrealized Loss Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 2,000 | $ | — | $ | (25 | ) | $ | 1,975 | 0.44 | % | ||||||||
Obligations of states and political subdivisions | 27,060 | — | (513 | ) | 26,547 | 5.85 | % | ||||||||||||
Private-label mortgage-backed securities | 10 | — | — | 10 | — | % | |||||||||||||
Mortgage-backed securities | 233,868 | — | (4,113 | ) | 229,755 | 50.64 | % | ||||||||||||
SBA pools | 19,649 | — | (298 | ) | 19,351 | 4.27 | % | ||||||||||||
$ | 282,587 | $ | — | $ | (4,949 | ) | $ | 277,638 | 61.20 | % | |||||||||
Unrealized Gain Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 23,270 | $ | 425 | $ | — | $ | 23,695 | 5.22 | % | |||||||||
Obligations of states and political subdivisions | 81,446 | 2,481 | — | 83,927 | 18.50 | % | |||||||||||||
Private-label mortgage-backed securities | 1,309 | 199 | — | 1,508 | 0.33 | % | |||||||||||||
Mortgage-backed securities | 48,558 | 552 | — | 49,110 | 10.83 | % | |||||||||||||
SBA pools | 17,586 | 196 | — | 17,782 | 3.92 | % | |||||||||||||
$ | 172,169 | $ | 3,853 | $ | — | $ | 176,022 | 38.80 | % | ||||||||||
$ | 454,756 | $ | 3,853 | $ | (4,949 | ) | $ | 453,660 | 100.00 | % |
Securities in Continuous Unrealized Loss Position for Less Than 12 Months | Gross Unrealized Loss on Securities in Loss Position for Less Than 12 Months | Securities in Continuous Unrealized Loss Position for 12 Months or Longer | Gross Unrealized Loss on Securities in Loss Position for 12 Months or Longer | |||||||||||||
Obligations of U.S. government agencies | $ | 1,975 | $ | (25 | ) | $ | — | $ | — | |||||||
Obligations of states and political subdivisions | 12,204 | (152 | ) | 14,343 | (361 | ) | ||||||||||
Private-label mortgage-backed securities | 10 | — | — | — | ||||||||||||
Mortgage-backed securities | 171,984 | (2,580 | ) | 57,771 | (1,533 | ) | ||||||||||
SBA pools | 7,949 | (102 | ) | 11,402 | (196 | ) | ||||||||||
$ | 194,122 | $ | (2,859 | ) | $ | 83,516 | $ | (2,090 | ) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Balance, beginning of period: | $ | 272 | $ | 266 | $ | 270 | $ | 249 | ||||||||
Additions: | ||||||||||||||||
Initial OTTI credit loss | 7 | 2 | 9 | 19 | ||||||||||||
Balance, end of period: | $ | 279 | $ | 268 | $ | 279 | $ | 268 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Percentage of Portfolio | |||||||||||||||
Unrealized Loss Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 3,995 | $ | — | $ | (49 | ) | $ | 3,946 | 0.84 | % | ||||||||
Obligations of states and political subdivisions | 41,016 | — | (1,279 | ) | 39,737 | 8.44 | % | ||||||||||||
Private-label mortgage-backed securities | 241 | — | (23 | ) | 218 | 0.05 | % | ||||||||||||
Mortgage-backed securities | 221,835 | — | (5,362 | ) | 216,473 | 45.96 | % | ||||||||||||
SBA pools | 26,758 | — | (493 | ) | 26,265 | 5.58 | % | ||||||||||||
$ | 293,845 | $ | — | $ | (7,206 | ) | $ | 286,639 | 60.86 | % | |||||||||
Unrealized Gain Positions | |||||||||||||||||||
Obligations of U.S. government agencies | $ | 21,290 | $ | 384 | $ | — | $ | 21,674 | 4.60 | % | |||||||||
Obligations of states and political subdivisions | 69,148 | 1,854 | — | 71,002 | 15.07 | % | |||||||||||||
Private-label mortgage-backed securities | 1,566 | 153 | — | 1,719 | 0.36 | % | |||||||||||||
Mortgage-backed securities | 72,752 | 811 | — | 73,563 | 15.62 | % | |||||||||||||
SBA pools | 16,281 | 118 | — | 16,399 | 3.48 | % | |||||||||||||
$ | 181,037 | $ | 3,320 | $ | — | $ | 184,357 | 39.14 | % | ||||||||||
$ | 474,882 | $ | 3,320 | $ | (7,206 | ) | $ | 470,996 | 100.00 | % |
Securities in Continuous Unrealized Loss Position for Less Than 12 Months | Gross Unrealized Loss on Securities in Loss Position for Less Than 12 Months | Securities in Continuous Unrealized Loss Position for 12 Months or Longer | Gross Unrealized Loss on Securities in Loss Position for 12 Months or Longer | |||||||||||||
Obligations of U.S. government agencies | $ | 3,946 | $ | (49 | ) | $ | — | $ | — | |||||||
Obligations of states and political subdivisions | 39,737 | (1,279 | ) | — | — | |||||||||||
Private-label mortgage-backed securities | — | — | 218 | (23 | ) | |||||||||||
Mortgage-backed securities | 211,721 | (5,266 | ) | 4,752 | (96 | ) | ||||||||||
SBA pools | 22,076 | (458 | ) | 4,189 | (35 | ) | ||||||||||
$ | 277,480 | $ | (7,052 | ) | $ | 9,159 | $ | (154 | ) |
September 30, 2017 | ||||||||
Amortized Cost | Estimated Fair Value | |||||||
Due in one year or less | $ | 24,349 | $ | 24,340 | ||||
Due after one year through 5 years | 237,873 | 237,754 | ||||||
Due after 5 years through 10 years | 156,651 | 155,892 | ||||||
Due after 10 years | 35,883 | 35,674 | ||||||
$ | 454,756 | $ | 453,660 |
September 30, 2017 | December 31, 2016 | |||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Pledged to secure public deposits | $ | 23,025 | $ | 23,630 | $ | 25,257 | $ | 25,683 | ||||||||
Pledged to secure repurchase agreements | 4,973 | 4,944 | 3,579 | 3,573 | ||||||||||||
$ | 27,998 | $ | 28,574 | $ | 28,836 | $ | 29,256 |
September 30, 2017 | % of Gross Loans | December 31, 2016 | % of Gross Loans | |||||||||||
Real estate loans | ||||||||||||||
Multi-family residential | $ | 85,732 | 4.55 | % | $ | 74,340 | 4.00 | % | ||||||
Residential 1-4 family | 61,379 | 3.26 | % | 61,548 | 3.31 | % | ||||||||
Owner-occupied commercial | 465,536 | 24.70 | % | 461,557 | 24.82 | % | ||||||||
Nonowner-occupied commercial | 453,895 | 24.08 | % | 451,893 | 24.30 | % | ||||||||
Total permanent real estate loans | 1,066,542 | 56.59 | % | 1,049,338 | 56.43 | % | ||||||||
Construction loans | ||||||||||||||
Multi-family residential | 19,711 | 1.05 | % | 22,252 | 1.20 | % | ||||||||
Residential 1-4 family | 48,274 | 2.56 | % | 43,532 | 2.34 | % | ||||||||
Commercial real estate | 96,426 | 5.12 | % | 76,301 | 4.10 | % | ||||||||
Commercial bare land and acquisition & development | 8,635 | 0.46 | % | 15,081 | 0.81 | % | ||||||||
Residential bare land and acquisition & development | 8,836 | 0.47 | % | 10,645 | 0.57 | % | ||||||||
Total construction real estate loans | 181,882 | 9.66 | % | 167,811 | 9.02 | % | ||||||||
Total real estate loans | 1,248,424 | 66.25 | % | 1,217,149 | 65.45 | % | ||||||||
Commercial loans | 619,266 | 32.85 | % | 630,491 | 33.89 | % | ||||||||
Consumer loans | 2,855 | 0.15 | % | 2,922 | 0.16 | % | ||||||||
Other loans | 14,148 | 0.75 | % | 9,225 | 0.50 | % | ||||||||
Gross loans | 1,884,693 | 100.00 | % | 1,859,787 | 100.00 | % | ||||||||
Deferred loan origination fees | (1,851 | ) | (2,020 | ) | ||||||||||
1,882,842 | 1,857,767 | |||||||||||||
Allowance for loan losses | (23,363 | ) | (22,454 | ) | ||||||||||
Total loans, net of allowance for loan losses and net deferred fees | $ | 1,859,479 | $ | 1,835,313 |
September 30, 2017 | December 31, 2016 | |||||||
Contractually required principal payments for purchased credit impaired loans | $ | 18,883 | $ | 22,941 | ||||
Accretable yield | (1,173 | ) | (1,453 | ) | ||||
Nonaccretable yield | (582 | ) | (809 | ) | ||||
Balance of purchased credit impaired loans | $ | 17,128 | $ | 20,679 |
Three months ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||||
Capital Pacific | Foundation | Total | Century | Capital Pacific | Foundation | Total | ||||||||||||||||||||||
Balance, beginning of period | $ | 682 | $ | 1,324 | $ | 2,006 | $ | — | $ | 860 | $ | — | $ | 860 | ||||||||||||||
Additions | — | — | — | — | — | 908 | 908 | |||||||||||||||||||||
Accretion to interest income | (45 | ) | (46 | ) | (91 | ) | — | (50 | ) | (22 | ) | (72 | ) | |||||||||||||||
Balance, end of period | $ | 637 | $ | 1,278 | $ | 1,915 | $ | — | $ | 810 | $ | 886 | $ | 1,696 | ||||||||||||||
Nine months ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||||
Capital Pacific | Foundation | Total | Century | Capital Pacific | Foundation | Total | ||||||||||||||||||||||
Balance, beginning of period | $ | 765 | $ | 688 | $ | 1,453 | $ | 39 | $ | 1,030 | $ | — | $ | 1,069 | ||||||||||||||
Additions | — | 742 | 742 | — | — | 908 | 908 | |||||||||||||||||||||
Accretion to interest income | (128 | ) | (152 | ) | (280 | ) | (39 | ) | (220 | ) | (22 | ) | (281 | ) | ||||||||||||||
Balance, end of period | $ | 637 | $ | 1,278 | $ | 1,915 | $ | — | $ | 810 | $ | 886 | $ | 1,696 |
• | Changes in international, regional and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments, |
• | Changes in the nature and volume of the portfolio and in the terms of loans, |
• | Changes in the volume and severity of past due loans, the volume of nonaccrual loans and the volume and severity of adversely classified or graded loans, |
• | Changes in the quality of the institution’s loan review system, |
• | Changes in the value of underlying collateral for collateral-dependent loans, |
• | The existence and effect of any concentrations of credit, and changes in the level of such concentrations, |
• | The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio, |
• | Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses, and |
• | Changes in the current and future U.S. political environment, including debt ceiling negotiations, government shutdown and healthcare reform that may affect national, regional and local economic conditions, taxation, or disruption of national or global financial markets. |
• | The quality of the current loan portfolio, |
• | The trend in the migration of the loan portfolio’s risk ratings, |
• | The velocity of migration of losses and potential losses, |
• | Current economic conditions, |
• | Loan concentrations, |
• | Loan growth rates, |
• | Past-due and nonperforming trends, |
• | Evaluation of specific loss estimates for all significant problem loans, |
• | Recovery experience, and |
• | Peer comparison loss rates. |
For the three months ended September 30, 2017 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Beginning balance | $ | 8,693 | $ | 11,699 | $ | 2,142 | $ | 41 | $ | 876 | $ | 23,451 | ||||||||||||
Charge-offs | (516 | ) | — | — | (7 | ) | — | (523 | ) | |||||||||||||||
Recoveries | 30 | 54 | 1 | — | — | 85 | ||||||||||||||||||
Provision (reclassification) | 481 | 60 | (134 | ) | 4 | (61 | ) | 350 | ||||||||||||||||
Ending balance | $ | 8,688 | $ | 11,813 | $ | 2,009 | $ | 38 | $ | 815 | $ | 23,363 | ||||||||||||
For the nine months ended September 30, 2017 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Beginning balance | $ | 8,614 | $ | 10,872 | $ | 1,781 | $ | 41 | $ | 1,146 | $ | 22,454 | ||||||||||||
Charge-offs | (2,844 | ) | (150 | ) | — | (12 | ) | — | (3,006 | ) | ||||||||||||||
Recoveries | 90 | 97 | 2 | 1 | — | 190 | ||||||||||||||||||
Provision (reclassification) | 2,828 | 994 | 226 | 8 | (331 | ) | 3,725 | |||||||||||||||||
Ending balance | $ | 8,688 | $ | 11,813 | $ | 2,009 | $ | 38 | $ | 815 | $ | 23,363 |
Balances as of September 30, 2017 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Ending allowance: collectively evaluated for impairment | $ | 8,679 | $ | 11,813 | $ | 2,009 | $ | 38 | $ | 815 | $ | 23,354 | ||||||||||||
Ending allowance: individually evaluated for impairment | 9 | — | — | — | — | 9 | ||||||||||||||||||
Ending allowance: loans acquired with deteriorated credit quality | — | — | — | — | — | — | ||||||||||||||||||
Total ending allowance | $ | 8,688 | $ | 11,813 | $ | 2,009 | $ | 38 | $ | 815 | $ | 23,363 | ||||||||||||
Ending loan balance: collectively evaluated for impairment | $ | 626,451 | $ | 1,046,756 | $ | 181,882 | $ | 2,855 | $ | — | $ | 1,857,944 | ||||||||||||
Ending loan balance: individually evaluated for impairment | 2,105 | 7,516 | — | — | — | 9,621 | ||||||||||||||||||
Ending loan balance: loans acquired with deteriorated credit quality | 4,858 | 12,270 | — | — | — | 17,128 | ||||||||||||||||||
Total ending loan balance | $ | 633,414 | $ | 1,066,542 | $ | 181,882 | $ | 2,855 | $ | — | $ | 1,884,693 | ||||||||||||
Balances as of December 31, 2016 | ||||||||||||||||||||||||
Commercial and Other | Real Estate | Construction | Consumer | Unallocated | Total | |||||||||||||||||||
Ending allowance: collectively evaluated for impairment | $ | 7,881 | $ | 10,869 | $ | 1,781 | $ | 41 | $ | 1,146 | $ | 21,718 | ||||||||||||
Ending allowance: individually evaluated for impairment | 733 | 3 | — | — | — | 736 | ||||||||||||||||||
Ending allowance: loans acquired with deteriorated credit quality | — | — | — | — | — | — | ||||||||||||||||||
Total ending allowance | $ | 8,614 | $ | 10,872 | $ | 1,781 | $ | 41 | $ | 1,146 | $ | 22,454 | ||||||||||||
Ending loan balance: collectively evaluated for impairment | $ | 628,773 | $ | 1,027,354 | $ | 167,491 | $ | 2,922 | $ | — | $ | 1,826,540 | ||||||||||||
Ending loan balance: individually evaluated for impairment | 4,396 | 7,852 | 320 | — | — | 12,568 | ||||||||||||||||||
Ending loan balance: loans acquired with deteriorated credit quality | 6,547 | 14,132 | — | — | — | 20,679 | ||||||||||||||||||
Total ending loan balance | $ | 639,716 | $ | 1,049,338 | $ | 167,811 | $ | 2,922 | $ | — | $ | 1,859,787 |
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Real estate loans | ||||||||||||||||||||
Multi-family residential | $ | 85,732 | $ | — | $ | — | $ | — | $ | 85,732 | ||||||||||
Residential 1-4 family | 60,094 | — | 1,285 | — | 61,379 | |||||||||||||||
Owner-occupied commercial | 446,902 | — | 18,634 | — | 465,536 | |||||||||||||||
Nonowner-occupied commercial | 449,306 | — | 4,589 | — | 453,895 | |||||||||||||||
Total real estate loans | 1,042,034 | — | 24,508 | — | 1,066,542 | |||||||||||||||
Construction | ||||||||||||||||||||
Multi-family residential | 19,711 | — | — | — | 19,711 | |||||||||||||||
Residential 1-4 family | 48,274 | — | — | — | 48,274 | |||||||||||||||
Commercial real estate | 96,426 | — | — | — | 96,426 | |||||||||||||||
Commercial bare land and acquisition & development | 8,635 | — | — | — | 8,635 | |||||||||||||||
Residential bare land and acquisition & development | 8,286 | — | 550 | — | 8,836 | |||||||||||||||
Total construction loans | 181,332 | — | 550 | — | 181,882 | |||||||||||||||
Commercial and other | 618,016 | — | 15,398 | — | 633,414 | |||||||||||||||
Consumer | 2,855 | — | — | — | 2,855 | |||||||||||||||
Totals | $ | 1,844,237 | $ | — | $ | 40,456 | $ | — | $ | 1,884,693 | ||||||||||
Percentage of portfolio | 97.85 | % | — | % | 2.15 | % | — | % | 100.00 | % | ||||||||||
Credit Quality Indicators As of December 31, 2016 | ||||||||||||||||||||
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Real estate loans | ||||||||||||||||||||
Multi-family residential | $ | 74,340 | $ | — | $ | — | $ | — | $ | 74,340 | ||||||||||
Residential 1-4 family | 58,286 | — | 3,262 | — | 61,548 | |||||||||||||||
Owner-occupied commercial | 443,737 | — | 17,820 | — | 461,557 | |||||||||||||||
Nonowner-occupied commercial | 445,283 | — | 6,610 | — | 451,893 | |||||||||||||||
Total real estate loans | 1,021,646 | — | 27,692 | — | 1,049,338 | |||||||||||||||
Construction | ||||||||||||||||||||
Multi-family residential | 22,252 | — | — | — | 22,252 | |||||||||||||||
Residential 1-4 family | 43,532 | — | — | — | 43,532 | |||||||||||||||
Commercial real estate | 76,301 | — | — | — | 76,301 | |||||||||||||||
Commercial bare land and acquisition & development | 15,081 | — | — | — | 15,081 | |||||||||||||||
Residential bare land and acquisition & development | 9,852 | — | 793 | — | 10,645 | |||||||||||||||
Total construction loans | 167,018 | — | 793 | — | 167,811 | |||||||||||||||
Commercial and other | 621,165 | — | 16,890 | 1,661 | 639,716 | |||||||||||||||
Consumer | 2,922 | — | — | — | 2,922 | |||||||||||||||
Totals | $ | 1,812,751 | $ | — | $ | 45,375 | $ | 1,661 | $ | 1,859,787 | ||||||||||
Percentage of portfolio | 97.47 | % | — | % | 2.44 | % | 0.09 | % | 100.00 | % |
Age Analysis of Loans Receivable As of September 30, 2017 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 days Past Due Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Real estate loans | ||||||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 85,732 | $ | 85,732 | ||||||||||||||
Residential 1-4 family | — | — | — | 185 | 185 | 60,478 | 60,663 | |||||||||||||||||||||
Owner-occupied commercial | 837 | — | — | 519 | 1,356 | 455,671 | 457,027 | |||||||||||||||||||||
Nonowner-occupied commercial | — | — | 1,428 | 531 | 1,959 | 448,893 | 450,852 | |||||||||||||||||||||
Total real estate loans | 837 | — | 1,428 | 1,235 | 3,500 | 1,050,774 | 1,054,274 | |||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | 19,711 | 19,711 | |||||||||||||||||||||
Residential 1-4 family | — | — | — | — | — | 48,274 | 48,274 | |||||||||||||||||||||
Commercial real estate | — | — | — | — | — | 96,426 | 96,426 | |||||||||||||||||||||
Commercial bare land and acquisition & development | 199 | — | — | — | 199 | 8,437 | 8,636 | |||||||||||||||||||||
Residential bare land and acquisition & development | — | — | — | — | — | 8,835 | 8,835 | |||||||||||||||||||||
Total construction loans | 199 | — | — | — | 199 | 181,683 | 181,882 | |||||||||||||||||||||
Commercial and other | 696 | — | — | 1,479 | 2,175 | 626,379 | 628,554 | |||||||||||||||||||||
Consumer | 9 | 2 | — | — | 11 | 2,844 | 2,855 | |||||||||||||||||||||
Total | $ | 1,741 | $ | 2 | $ | 1,428 | $ | 2,714 | $ | 5,885 | $ | 1,861,680 | $ | 1,867,565 | ||||||||||||||
Age Analysis of Loans Receivable As of December 31, 2016 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 days Past Due Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Real estate loans | ||||||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 74,340 | $ | 74,340 | ||||||||||||||
Residential 1-4 family | — | — | — | 158 | 158 | 59,241 | 59,399 | |||||||||||||||||||||
Owner-occupied commercial | — | — | — | — | — | 452,748 | 452,748 | |||||||||||||||||||||
Nonowner-occupied commercial | — | — | — | 601 | 601 | 448,118 | 448,719 | |||||||||||||||||||||
Total real estate loans | — | — | — | 759 | 759 | 1,034,447 | 1,035,206 | |||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | 22,252 | 22,252 | |||||||||||||||||||||
Residential 1-4 family | — | — | — | — | — | 43,532 | 43,532 | |||||||||||||||||||||
Commercial real estate | — | — | — | — | — | 76,301 | 76,301 | |||||||||||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | — | 15,081 | 15,081 | |||||||||||||||||||||
Residential bare land and acquisition & development | — | — | — | — | — | 10,645 | 10,645 | |||||||||||||||||||||
Total construction loans | — | — | — | — | — | 167,811 | 167,811 | |||||||||||||||||||||
Commercial and other | 363 | 366 | — | 2,794 | 3,523 | 629,646 | 633,169 | |||||||||||||||||||||
Consumer | — | — | — | — | — | 2,922 | 2,922 | |||||||||||||||||||||
Total | $ | 363 | $ | 366 | $ | — | $ | 3,553 | $ | 4,282 | $ | 1,834,826 | $ | 1,839,108 |
Impaired Loan Analysis As of September 30, 2017 | ||||||||||||||||||||||||
Recorded Investment With No Specific Allowance Valuation | Recorded Investment With Specific Allowance Valuation | Total Recorded Investment | Unpaid Principal Balance | Average Recorded Investment | Related Specific Allowance Valuation | |||||||||||||||||||
Real estate | ||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Residential 1-4 family | 100 | — | 100 | 100 | 101 | — | ||||||||||||||||||
Owner-occupied commercial | 5,456 | — | 5,456 | 5,456 | 5,467 | — | ||||||||||||||||||
Nonowner-occupied commercial | 1,960 | — | 1,960 | 1,959 | 1,999 | — | ||||||||||||||||||
Total real estate loans | 7,516 | — | 7,516 | 7,515 | 7,567 | — | ||||||||||||||||||
Construction | ||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | — | ||||||||||||||||||
Residential 1-4 family | — | — | — | — | — | — | ||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | — | — | ||||||||||||||||||
Residential bare land and acquisition & development | — | — | — | — | — | — | ||||||||||||||||||
Total construction loans | — | — | — | — | — | — | ||||||||||||||||||
Commercial and other | 1,627 | 478 | 2,105 | 3,986 | 2,596 | 9 | ||||||||||||||||||
Consumer | — | — | — | — | — | — | ||||||||||||||||||
Total impaired loans | $ | 9,143 | $ | 478 | $ | 9,621 | $ | 11,501 | $ | 10,163 | $ | 9 | ||||||||||||
Impaired Loan Analysis As of December 31, 2016 | ||||||||||||||||||||||||
Recorded Investment With No Specific Allowance Valuation | Recorded Investment With Specific Allowance Valuation | Total Recorded Investment | Unpaid Principal Balance | Average Recorded Investment | Related Specific Allowance Valuation | |||||||||||||||||||
Real estate | ||||||||||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Residential 1-4 family | 454 | 300 | 754 | 775 | 644 | 1 | ||||||||||||||||||
Owner-occupied commercial | 4,106 | 865 | 4,971 | 4,971 | 1,804 | 2 | ||||||||||||||||||
Nonowner-occupied commercial | 2,127 | — | 2,127 | 2,189 | 2,228 | — | ||||||||||||||||||
Total real estate loans | 6,687 | 1,165 | 7,852 | 7,935 | 4,676 | 3 | ||||||||||||||||||
Construction | ||||||||||||||||||||||||
Multi-family residential | — | — | — | — | — | — | ||||||||||||||||||
Residential 1-4 family | — | — | — | — | 37 | — | ||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | — | — | ||||||||||||||||||
Residential bare land and acquisition & development | 320 | — | 320 | 320 | 1,556 | — | ||||||||||||||||||
Total construction loans | 320 | — | 320 | 320 | 1,593 | — | ||||||||||||||||||
Commercial and other | 2,255 | 2,141 | 4,396 | 4,767 | 3,518 | 733 | ||||||||||||||||||
Consumer | — | — | — | — | — | — | ||||||||||||||||||
Total impaired loans | $ | 9,262 | $ | 3,306 | $ | 12,568 | $ | 13,022 | $ | 9,787 | $ | 736 |
Troubled Debt Restructurings as of | ||||||||||||||
September 30, 2017 | December 31, 2016 | |||||||||||||
Number of Contracts | Post-Modification Outstanding Recorded Investment | Number of Contracts | Post-Modification Outstanding Recorded Investment | |||||||||||
Real estate | ||||||||||||||
Multifamily residential | — | $ | — | — | $ | — | ||||||||
Residential 1-4 family | 1 | 100 | 4 | 754 | ||||||||||
Owner-occupied commercial | 4 | 5,215 | 4 | 5,447 | ||||||||||
Non owner-occupied commercial | 5 | 1,959 | 6 | 2,127 | ||||||||||
Total real estate loans | 10 | 7,274 | 14 | 8,328 | ||||||||||
Construction | ||||||||||||||
Multifamily residential | — | — | — | — | ||||||||||
Residential 1-4 family | — | — | — | — | ||||||||||
Commercial real estate | — | — | — | — | ||||||||||
Commercial bare land and acquisition & development | — | — | — | — | ||||||||||
Residential bare land and acquisition & development | — | — | — | — | ||||||||||
Total construction loans | — | — | — | — | ||||||||||
Commercial and other | 15 | 2,142 | 16 | 2,901 | ||||||||||
Consumer | — | — | — | — | ||||||||||
Total | 25 | $ | 9,416 | 30 | $ | 11,229 |
• | Rate Modification - A modification in which the interest rate is modified. |
• | Term Modification - A modification in which the maturity date, timing of payments, or frequency of payments is changed. |
• | Interest-only Modification - A modification in which the loan is converted to interest-only payments for a period of time. |
• | Combination Modification - Any other type of modification, including the use of multiple types of modifications. |
Troubled Debt Restructurings Identified During the nine months ended September 30, 2017 | ||||||||||||||||
Rate Modification | Term Modification | Interest-only Modification | Combination Modification | |||||||||||||
Real estate | ||||||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | $ | — | ||||||||
Residential 1-4 family | — | — | — | 50 | ||||||||||||
Owner-occupied commercial | — | — | — | — | ||||||||||||
Nonowner-occupied commercial | — | — | — | — | ||||||||||||
Total real estate loans | — | — | — | 50 | ||||||||||||
Construction | ||||||||||||||||
Multi-family residential | — | — | — | — | ||||||||||||
Residential 1-4 family | — | — | — | — | ||||||||||||
Commercial real estate | — | — | — | — | ||||||||||||
Commercial bare land and acquisition & development | — | — | — | — | ||||||||||||
Residential bare land and acquisition & development | — | — | — | — | ||||||||||||
Total construction loans | — | — | — | — | ||||||||||||
Commercial and other | — | — | — | — | ||||||||||||
Consumer | — | — | — | — | ||||||||||||
Total | $ | — | $ | — | $ | — | $ | 50 |
Troubled Debt Restructurings that Subsequently Defaulted During the nine months ended September 30, | ||||||||||||||
2017 | 2016 | |||||||||||||
Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||||||
Real estate | ||||||||||||||
Multi-family residential | — | $ | — | — | $ | — | ||||||||
Residential 1-4 family | — | — | — | — | ||||||||||
Owner-occupied commercial | — | — | 1 | 444 | ||||||||||
Nonowner-occupied commercial | — | — | — | — | ||||||||||
Total real estate loans | — | — | 1 | 444 | ||||||||||
Construction | ||||||||||||||
Multi-family residential | — | — | — | — | ||||||||||
Residential 1-4 family | — | — | — | — | ||||||||||
Commercial real estate | — | — | — | — | ||||||||||
Commercial bare land and acquisition & development | — | — | — | — | ||||||||||
Residential bare land and acquisition & development | — | — | — | — | ||||||||||
Total construction loans | — | — | — | — | ||||||||||
Commercial and other | — | — | — | — | ||||||||||
Consumer | — | — | — | — | ||||||||||
Total | — | $ | — | 1 | $ | 444 |
September 30, 2017 | December 31, 2016 | |||||||
Real estate secured loans: | ||||||||
Owner-occupied commercial | $ | 62,376 | $ | 63,793 | ||||
Other dental real estate loans | 358 | 806 | ||||||
Total permanent real estate loans | 62,734 | 64,599 | ||||||
Dental construction loans | 10,130 | 4,109 | ||||||
Total real estate loans | 72,864 | 68,708 | ||||||
Commercial loans | 317,469 | 308,770 | ||||||
Gross loans | $ | 390,333 | $ | 377,478 |
September 30, 2017 | December 31, 2016 | |||||||
Local | $ | 154,061 | $ | 150,268 | ||||
National | 236,272 | 227,210 | ||||||
Total | $ | 390,333 | $ | 377,478 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Balance, beginning of period | $ | 5,257 | $ | 4,151 | $ | 4,713 | $ | 4,022 | ||||||||
Provision | 120 | 601 | 2,924 | 704 | ||||||||||||
Charge-offs | (50 | ) | (9 | ) | (2,325 | ) | (9 | ) | ||||||||
Recoveries | 46 | 55 | 61 | 81 | ||||||||||||
Balance, end of period | $ | 5,373 | $ | 4,798 | $ | 5,373 | $ | 4,798 |
As of September 30, 2017 | ||||||||||||||||||||
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Local | $ | 151,696 | $ | — | $ | 2,365 | $ | — | $ | 154,061 | ||||||||||
National | 235,090 | — | 1,182 | — | 236,272 | |||||||||||||||
Total | $ | 386,786 | $ | — | $ | 3,547 | $ | — | $ | 390,333 | ||||||||||
As of December 31, 2016 | ||||||||||||||||||||
Loan Grade | ||||||||||||||||||||
Pass | Special Mention | Substandard | Doubtful | Totals | ||||||||||||||||
Local | $ | 148,805 | $ | — | $ | 1,463 | $ | — | $ | 150,268 | ||||||||||
National | 224,493 | — | 1,056 | 1,661 | 227,210 | |||||||||||||||
Total | $ | 373,298 | $ | — | $ | 2,519 | $ | 1,661 | $ | 377,478 |
As of September 30, 2017 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 Days Past Due Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Local | $ | 74 | $ | — | $ | — | $ | 358 | $ | 432 | $ | 153,629 | $ | 154,061 | ||||||||||||||
National | — | — | — | 767 | 767 | 235,505 | 236,272 | |||||||||||||||||||||
Total | $ | 74 | $ | — | $ | — | $ | 1,125 | $ | 1,199 | $ | 389,134 | $ | 390,333 |
As of December 31, 2016 | ||||||||||||||||||||||||||||
30-59 Days Past Due Still Accruing | 60-89 Days Past Due Still Accruing | Greater Than 90 Days Past Due Still Accruing | Nonaccrual | Total Past Due and Nonaccrual | Total Current | Total Loans Receivable | ||||||||||||||||||||||
Local | $ | — | $ | — | $ | — | $ | 407 | $ | 407 | $ | 149,861 | $ | 150,268 | ||||||||||||||
National | 263 | 366 | — | 1,660 | 2,289 | 224,921 | 227,210 | |||||||||||||||||||||
Total | $ | 263 | $ | 366 | $ | — | $ | 2,067 | $ | 2,696 | $ | 374,782 | $ | 377,478 |
September 30, 2017 | December 31, 2016 | |||||||
Balance at end of period | $ | 2,031 | $ | 1,966 | ||||
Average balance outstanding for the period | 2,134 | 702 | ||||||
Maximum amount outstanding at any month end during the period | 3,100 | 2,017 | ||||||
Weighted average interest rate for the period | 0.08 | % | 0.06 | % | ||||
Weighted average interest rate at period end | 0.07 | % | 0.08 | % |
Current Rates | September 30, 2017 | ||||||
Cash management advance | NA | $ | 96,000 | ||||
2017 | — | — | |||||
2018 | 1.55 | 3,000 | |||||
2019 | — | — | |||||
2020 | — | — | |||||
2021 | — | — | |||||
Thereafter | 3.85 | 2,000 | |||||
$ | 101,000 |
Three months ended September 30, | ||||||||||||||||
2017 | 2016 | |||||||||||||||
Compensation Expense | Tax Benefit | Compensation Expense | Tax Benefit | |||||||||||||
Equity-based awards: | ||||||||||||||||
Employee RSUs | $ | 315 | $ | 120 | $ | 397 | $ | 151 | ||||||||
Liability-based awards: | ||||||||||||||||
Employee cash SARs | — | — | — | — | ||||||||||||
$ | 315 | $ | 120 | $ | 397 | $ | 151 | |||||||||
Nine months ended | ||||||||||||||||
September 30, | ||||||||||||||||
2017 | 2016 | |||||||||||||||
Compensation Expense | Tax Benefit | Compensation Expense | Tax Benefit | |||||||||||||
Equity-based awards: | ||||||||||||||||
Director restricted stock | $ | — | $ | — | $ | 240 | $ | 91 | ||||||||
Employee RSUs | 1,042 | 396 | 1,187 | 451 | ||||||||||||
Liability-based awards: | ||||||||||||||||
Employee cash SARs | 150 | — | — | — | ||||||||||||
$ | 1,192 | $ | 396 | $ | 1,427 | $ | 542 |
Three months ended September 30, 2017 | ||||||||||||||||||
Number Exercised | Weighted Average Exercise Price | Intrinsic Value | Number of Shares Issued | Net Cash Payment to Employees | ||||||||||||||
Stock options | — | — | — | — | NA | |||||||||||||
Employee stock SARs | 77 | $ | 11.30 | — | 24 | NA | ||||||||||||
Employee cash SARs | — | — | NA | NA | — | |||||||||||||
77 | — | 24 | — | |||||||||||||||
Nine months ended September 30, 2017 | ||||||||||||||||||
Number Exercised | Weighted Average Exercise Price | Intrinsic Value | Number of Shares Issued | Net Cash Payment to Employees | ||||||||||||||
Stock options | 137,307 | $ | 14.90 | $ | 1,396 | 79,601 | NA | |||||||||||
Employee stock SARs | 46,798 | $ | 15.84 | 116 | 10,614 | NA | ||||||||||||
Employee cash SARs | 28,150 | $ | 16.47 | NA | NA | $ | 169 | |||||||||||
212,255 | $ | 1,512 | 90,215 | $ | 169 | |||||||||||||
Three months ended September 30, 2016 | ||||||||||||||||||
Number Exercised | Weighted Average Exercise Price | Intrinsic Value | Number of Shares Issued | Net Cash Payment to Employees | ||||||||||||||
Stock options | 30,074 | $ | 16.54 | $ | 9 | 9,832 | NA | |||||||||||
Employee stock SARs | 41,237 | $ | 15.83 | 5 | 1,768 | NA | ||||||||||||
Employee cash SARs | 27,521 | $ | 15.95 | NA | NA | $ | 45 | |||||||||||
98,832 | $ | 14 | 11,600 | $ | 45 | |||||||||||||
Nine months ended September 30, 2016 | ||||||||||||||||||
Number Exercised | Weighted Average Exercise Price | Intrinsic Value | Number of Shares Issued | Net Cash Payment to Employees | ||||||||||||||
Stock options | 65,034 | $ | 13.86 | $ | 117 | 44,792 | NA | |||||||||||
Employee stock SARs | 79,806 | $ | 14.54 | 26 | 6,634 | NA | ||||||||||||
Employee cash SARs | 47,644 | $ | 15.11 | NA | NA | $ | 73 | |||||||||||
192,484 | 143 | 51,426 | 73 |
September 30, 2017 | December 31, 2016 | |||||||||||
Not-Hedge- Designated | Hedge- Designated | Not-Hedge- Designated | ||||||||||
Notional amount | $ | 8,357 | $ | 1,492 | $ | 8,540 | ||||||
Weighted average pay rate | 4.58 | % | 5.71 | % | 4.85 | % | ||||||
Weighted average receive rate | 4.32 | % | 3.54 | % | 3.63 | % | ||||||
Weighted average maturity in years | 4.70 | 6.65 | 5.45 |
Asset Derivatives | Liability Derivatives | |||||||||||||||||
Derivative | Balance sheet location | September 30, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2016 | |||||||||||||
Cash flow hedge - trust preferred | Other assets or other payables | $ | — | $ | 91 | $ | — | $ | — | |||||||||
Interest rate swap designated as hedging instrument | Other assets or other payables | — | 45 | — | 67 | |||||||||||||
Interest rate swap not designated as hedging instrument | Other assets or other payables | 17 | 14 | 17 | 14 | |||||||||||||
$ | 17 | $ | 150 | $ | 17 | $ | 81 |
Derivative | Income statement location | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Interest rate swap designated as hedging instrument | Other noninterest income | $ | — | $ | (2 | ) | $ | 4 | $ | (6 | ) | |||||||
$ | — | $ | (2 | ) | $ | 4 | $ | (6 | ) |
September 30, 2017 | December 31, 2016 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 70,278 | $ | 70,278 | $ | 67,113 | $ | 67,113 | ||||||||
Securities available-for-sale | 453,660 | 453,660 | 470,996 | 470,996 | ||||||||||||
Loans, net of deferred fees | 1,882,842 | 1,855,447 | 1,857,767 | 1,837,673 | ||||||||||||
Accrued interest receivable | 6,502 | 6,502 | 7,017 | 7,017 | ||||||||||||
Federal Home Loan Bank stock | 7,084 | 7,084 | 5,423 | 5,423 | ||||||||||||
Bank-owned life insurance | 35,840 | 35,840 | 35,165 | 35,165 | ||||||||||||
Interest rate swaps | 17 | 17 | 150 | 150 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits | $ | 2,098,157 | 2,097,073 | $ | 2,148,103 | $ | 2,147,056 | |||||||||
Federal Home Loan Bank borrowings | 101,000 | 101,005 | 65,000 | 65,043 | ||||||||||||
Subordinated debenture | 34,167 | 34,167 | 34,096 | 32,140 | ||||||||||||
Junior subordinated debentures | 11,428 | 7,610 | 11,311 | 6,972 | ||||||||||||
Accrued interest payable | 672 | 672 | 176 | 176 | ||||||||||||
Interest rate swaps | 17 | 17 | 81 | 81 |
• | Level 1 – Quoted prices for identical instruments in active markets. |
• | Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active or model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
• | Level 3 – Unobservable inputs are used to measure fair value to the extent that observable inputs are not available. The Company’s own data used to develop unobservable inputs is adjusted for market consideration when reasonably available. |
Carrying Amount | Fair Value at September 30, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 70,278 | $ | 70,278 | $ | — | $ | — | ||||||||
Loans, net of deferred fees | 1,882,842 | — | — | 1,855,447 | ||||||||||||
Accrued interest receivable | 6,502 | 6,502 | — | — | ||||||||||||
Federal Home Loan Bank stock | 7,084 | 7,084 | — | — | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits | $ | 2,098,157 | $ | 1,961,663 | $ | 135,410 | $ | — | ||||||||
Federal Home Loan Bank borrowings | 101,000 | — | 101,005 | — | ||||||||||||
Subordinated debentures | 34,167 | — | 34,167 | — | ||||||||||||
Junior subordinated debentures | 11,428 | — | 7,610 | — | ||||||||||||
Accrued interest payable | 672 | 672 | — | — | ||||||||||||
Carrying Amount | Fair Value at December 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 67,113 | $ | 67,113 | $ | — | $ | — | ||||||||
Loans | 1,857,767 | — | — | 1,837,673 | ||||||||||||
Accrued interest receivable | 7,017 | 7,017 | — | — | ||||||||||||
Federal Home Loan Bank stock | 5,423 | 5,423 | — | — | ||||||||||||
Bank-owned life insurance | 35,165 | 35,165 | — | — | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits | $ | 2,148,103 | $ | 1,969,220 | $ | 177,836 | $ | — | ||||||||
Federal Home Loan Bank borrowings | 65,000 | — | 65,043 | — | ||||||||||||
Subordinated debentures | 34,096 | — | 32,140 | — | ||||||||||||
Junior subordinated debentures | 11,311 | — | 6,972 | — | ||||||||||||
Accrued interest payable | 176 | 176 | — | — |
Carrying | Fair Value at September 30, 2017 | |||||||||||||||
Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Financial Assets | ||||||||||||||||
Available-for-sale securities | ||||||||||||||||
Obligations of U.S. government agencies | $ | 25,670 | $ | — | $ | 25,670 | $ | — | ||||||||
Obligations of states and political subdivisions | 110,474 | — | 110,474 | — | ||||||||||||
Agency mortgage-backed securities | 278,865 | — | 278,865 | — | ||||||||||||
Private-label mortgage-backed securities | 1,518 | — | 315 | 1,203 | ||||||||||||
SBA variable rate pools | 37,133 | — | 37,133 | — | ||||||||||||
Interest rate swaps | 17 | 17 | — | — | ||||||||||||
Total assets measured on a recurring basis | $ | 453,677 | $ | 17 | $ | 452,457 | $ | 1,203 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap liabilities measured on a recurring basis | $ | 17 | $ | 17 | $ | — | $ | — | ||||||||
Carrying | Fair Value at December 31, 2016 | |||||||||||||||
Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Available-for-sale securities | ||||||||||||||||
Obligations of U.S. government agencies | $ | 25,620 | $ | — | $ | 25,620 | $ | — | ||||||||
Obligations of states and political subdivisions | 110,739 | — | 110,739 | — | ||||||||||||
Agency mortgage-backed securities | 290,036 | — | 290,036 | — | ||||||||||||
Private-label mortgage-backed securities | 1,937 | — | 569 | 1,368 | ||||||||||||
SBA variable rate pools | 42,664 | — | 42,664 | — | ||||||||||||
Interest rate swaps | 150 | 150 | — | — | ||||||||||||
Total assets measured on a recurring basis | $ | 471,146 | $ | 150 | $ | 469,628 | $ | 1,368 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap liabilities measured on a recurring basis | $ | 81 | $ | 81 | $ | — | $ | — |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Beginning balance | $ | 1,267 | $ | 1,399 | $ | 1,368 | $ | 1,586 | ||||||||
Transfers into level 3 | — | 70 | — | 70 | ||||||||||||
Transfers out of Level 3 | — | — | — | — | ||||||||||||
Total gains or losses | ||||||||||||||||
Included in earnings | (7 | ) | (2 | ) | (9 | ) | (19 | ) | ||||||||
Included in other comprehensive income | 13 | 64 | 70 | 45 | ||||||||||||
Paydowns | (70 | ) | (77 | ) | (226 | ) | (228 | ) | ||||||||
Purchases, issuances, sales and settlements | ||||||||||||||||
Purchases | — | — | — | — | ||||||||||||
Issuances | — | — | — | — | ||||||||||||
Sales | — | — | — | — | ||||||||||||
Settlements | — | — | — | — | ||||||||||||
Ending balance | $ | 1,203 | $ | 1,454 | $ | 1,203 | $ | 1,454 |
• | Obligations of U.S. government agencies – TRACE reported trades. |
• | Obligations of states and political subdivisions – MSRB reported trades, material event notices, and Municipal Market Data (MMD) benchmark yields. |
• | Private-label mortgage-backed securities – new issue data, monthly payment information, and collateral performance (whole loan collateral). |
• | Mortgage-backed securities – TBA prices and monthly payment information. |
• | SBA variable pools – TBA prices and monthly payment information. |
• | Obligations of U.S. government agencies – security characteristics, defined sector break-down, benchmark yields, applied base spread, yield to maturity (bullet structures), corporate action adjustment, and evaluations based on T+3 settlement. |
• | Obligations of states and political subdivisions – security characteristics, benchmark yields, applied base spread, yield to worst or market convention, ratings updates, prepayment schedules (housing bonds), material event notice adjustments, and evaluations based on T+3 settlement. |
• | Private-label mortgage-backed securities – security characteristics, prepayment speeds, cash flows, TBA, Treasury and swap curves, IO/PO strips or floating indexes, applied base spread, spread adjustments, yield to worst or market convention, ratings updates (whole-loan collateral), and evaluations based on T+0 settlement. |
• | Mortgage-backed securities – security characteristics, TBA, Treasury, or floating index benchmarks, spread to TBA levels, prepayment speeds, applied spreads, and evaluations based on T+0 settlement. |
• | SBA pools – security characteristics, TBA, Treasury, or floating index benchmarks, spread to TBA levels, prepayment speeds, applied spreads, and evaluations based on T+0 settlement. |
Carrying | Fair Value | |||||||||||||||
September 30, 2017 | Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Loans measured for impairment (net of government guarantees and specific reserve) | $ | 458 | $ | — | $ | — | $ | 458 | ||||||||
Carrying | Fair Value | |||||||||||||||
December 31, 2016 | Value | Level 1 | Level 2 | Level 3 | ||||||||||||
Other real estate owned | $ | 10,936 | $ | — | $ | — | $ | 10,936 |
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||
As of September 30, 2017: | |||||||||||||||||||||
Total capital | |||||||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 291,800 | 13.41 | % | $ | 174,002 | 8.00 | % | $ | 217,502 | 10.00 | % | |||||||||
Company: | $ | 295,048 | 13.56 | % | NA | NA | |||||||||||||||
Tier 1 capital | |||||||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 267,989 | 12.32 | % | $ | 130,501 | 6.00 | % | $ | 174,002 | 8.00 | % | |||||||||
Company: | $ | 237,069 | 10.90 | % | NA | NA | |||||||||||||||
Common Equity Tier 1 | |||||||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 267,989 | 12.32 | % | $ | 97,876 | 4.50 | % | $ | 141,376 | 6.50 | % | |||||||||
Company: | $ | 223,696 | 10.28 | % | NA | NA | |||||||||||||||
Tier 1 capital | |||||||||||||||||||||
(to leverage assets) | |||||||||||||||||||||
Bank: | $ | 267,989 | 10.72 | % | $ | 100,002 | 4.00 | % | $ | 108,751 | 5.00 | % | |||||||||
Company: | $ | 237,069 | 9.48 | % | NA | NA | |||||||||||||||
As of December 31, 2016: | |||||||||||||||||||||
Total capital | |||||||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 267,416 | 12.19 | % | $ | 175,555 | 8.00 | % | $ | 219,444 | 10.00 | % | |||||||||
Company: | $ | 278,444 | 12.69 | % | NA | NA | |||||||||||||||
Tier 1 capital | |||||||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 244,414 | 11.14 | % | $ | 131,666 | 6.00 | % | $ | 175,555 | 8.00 | % | |||||||||
Company: | $ | 221,346 | 10.08 | % | NA | NA | |||||||||||||||
Common Equity Tier 1 | |||||||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||
Bank: | $ | 244,414 | 11.14 | % | $ | 98,750 | 4.50 | % | $ | 142,638 | 6.50 | % | |||||||||
Company: | $ | 208,873 | 9.52 | % | NA | NA | |||||||||||||||
Tier 1 capital | |||||||||||||||||||||
(to leverage assets) | |||||||||||||||||||||
Bank: | $ | 244,414 | 9.96 | % | $ | 98,181 | 4.00 | % | $ | 122,726 | 5.00 | % | |||||||||
Company: | $ | 221,346 | 9.01 | % | NA | NA |
• | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
• | Columbia's separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2016, included in Columbia's Annual Report on Form 10-K for the year ended December 31, 2016; |
• | Columbia's separate unaudited historical consolidated financial statements and accompanying notes as of and for the nine months ended September 30, 2017; |
• | Pacific Continental's separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2016, included in Pacific Continental's Annual Report on Form 10-K for the year ended December 31, 2016; |
• | Pacific Continental's separate unaudited historical consolidated financial statements and accompanying notes as of and for the nine months ended September 30, 2017; and |
• | the amended Form S-4 related to the merger of Columbia and Pacific Continental. |
Columbia Historical | Pacific Continental Historical | Pro Forma Merger Adjustments | Notes | Pro Forma Combined | ||||||||||||||
ASSETS | (in thousands) | |||||||||||||||||
Cash and cash equivalents | $ | 322,694 | $ | 70,278 | $ | (21,706 | ) | A | $ | 371,266 | ||||||||
Securities available for sale at fair value | 2,207,873 | 453,660 | — | 2,661,533 | ||||||||||||||
Federal Home Loan Bank stock, at cost | 10,240 | 7,084 | — | 17,324 | ||||||||||||||
Loans held for sale | 7,802 | — | — | 7,802 | ||||||||||||||
Loans, net of unearned income | 6,512,006 | 1,882,842 | (32,061 | ) | B | 8,362,787 | ||||||||||||
Less: allowance for loan and lease losses | 71,616 | 23,363 | (23,363 | ) | C | 71,616 | ||||||||||||
Loans, net | 6,440,390 | 1,859,479 | (8,698 | ) | 8,291,171 | |||||||||||||
Interest receivable | 36,163 | 6,502 | — | 42,665 | ||||||||||||||
Premises and equipment, net | 143,351 | 19,302 | 8,600 | D | 171,253 | |||||||||||||
Other real estate owned | 3,682 | 9,900 | 642 | E | 14,224 | |||||||||||||
Goodwill | 382,762 | 60,790 | 324,524 | F | 768,076 | |||||||||||||
Other intangible assets, net | 13,845 | 8,179 | 41,421 | G | 63,445 | |||||||||||||
Other assets | 245,776 | 51,449 | 4,794 | H | 302,019 | |||||||||||||
Total assets | $ | 9,814,578 | $ | 2,546,623 | $ | 349,577 | $ | 12,710,778 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||
Deposits | $ | 8,341,717 | $ | 2,098,157 | $ | (831 | ) | I | $ | 10,439,043 | ||||||||
Federal Home Loan Bank advances | 6,465 | 101,000 | 127 | J | 107,592 | |||||||||||||
Subordinated debentures | — | 34,167 | 1,511 | K | 35,678 | |||||||||||||
Junior subordinated debentures | — | 11,428 | (11,428 | ) | L | — | ||||||||||||
Securities sold under agreements to repurchase | 40,933 | 2,031 | — | 42,964 | ||||||||||||||
Other liabilities | 97,035 | 9,262 | 21,050 | M | 127,347 | |||||||||||||
Total liabilities | 8,486,150 | 2,256,045 | 10,429 | 10,752,624 | ||||||||||||||
Shareholders’ equity: | ||||||||||||||||||
Common stock | 1,003,887 | 205,961 | 423,765 | N | 1,633,613 | |||||||||||||
Retained earnings | 330,474 | 85,286 | (85,286 | ) | O | 330,474 | ||||||||||||
Accumulated other comprehensive income | (5,933 | ) | (669 | ) | 669 | P | (5,933 | ) | ||||||||||
Total shareholders’ equity | 1,328,428 | 290,578 | 339,148 | 1,958,154 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 9,814,578 | $ | 2,546,623 | $ | 349,577 | $ | 12,710,778 |
Columbia Historical | Pacific Continental Historical | Pro Forma Merger Adjustments | Notes | Pro Forma Combined | ||||||||||||||
Interest Income | (in thousands except per share amounts) | |||||||||||||||||
Loans | $ | 228,340 | $ | 71,282 | 4,809 | Q | $ | 304,431 | ||||||||||
Taxable securities | 29,172 | 6,819 | — | 35,991 | ||||||||||||||
Tax-exempt securities | 8,125 | 1,510 | — | 9,635 | ||||||||||||||
Other | 268 | 335 | — | 603 | ||||||||||||||
Total interest income | 265,905 | 79,946 | 4,809 | 350,660 | ||||||||||||||
Interest Expense | ||||||||||||||||||
Deposits | 2,778 | 3,597 | (194 | ) | R | 6,181 | ||||||||||||
Federal Home Loan Bank advances | 979 | 1,205 | (21 | ) | S | 2,163 | ||||||||||||
Subordinated debentures | — | 1,735 | (59 | ) | T | 1,676 | ||||||||||||
Other borrowings | 383 | 294 | — | 677 | ||||||||||||||
Total interest expense | 4,140 | 6,831 | (274 | ) | 10,697 | |||||||||||||
Net Interest Income | 261,765 | 73,115 | 5,083 | 339,963 | ||||||||||||||
Provision for loan and lease losses | 5,304 | 3,725 | — | 9,029 | ||||||||||||||
Net interest income after provision for loan and lease losses | 256,461 | 69,390 | 5,083 | 330,934 | ||||||||||||||
Noninterest Income | ||||||||||||||||||
Deposit account and treasury management fees | 22,368 | 2,119 | — | 24,487 | ||||||||||||||
Card revenue | 18,660 | 968 | — | 19,628 | ||||||||||||||
Financial services and trust revenue | 8,520 | — | — | 8,520 | ||||||||||||||
Loan revenue | 9,736 | — | — | 9,736 | ||||||||||||||
Merchant processing revenue | 4,283 | — | — | 4,283 | ||||||||||||||
Bank owned life insurance | 4,003 | 675 | — | 4,678 | ||||||||||||||
Change in FDIC loss-sharing asset | (447 | ) | — | — | (447 | ) | ||||||||||||
Gain on sale of merchant card services portfolio | 14,000 | — | — | 14,000 | ||||||||||||||
Other | 4,938 | 2,788 | — | 7,726 | ||||||||||||||
Total noninterest income | 86,061 | 6,550 | — | 92,611 | ||||||||||||||
Noninterest Expense | ||||||||||||||||||
Compensation and employee benefits | 119,201 | 25,830 | (3 | ) | U | 145,028 | ||||||||||||
Occupancy | 22,853 | 3,929 | (968 | ) | V | 25,814 | ||||||||||||
Merchant processing expense | 2,196 | — | — | 2,196 | ||||||||||||||
Advertising and promotion | 2,923 | 1,299 | (201 | ) | W | 4,021 | ||||||||||||
Data processing | 13,071 | 3,137 | (539 | ) | X | 15,669 | ||||||||||||
Legal and professional fees | 9,196 | 1,789 | (1,587 | ) | Y | 9,398 | ||||||||||||
Taxes, licenses, and fees | 3,494 | — | (3 | ) | Z | 3,491 | ||||||||||||
Regulatory premiums | 2,299 | 989 | — | 3,288 | ||||||||||||||
Net cost of operation of other real estate owned | 422 | 20 | — | 442 | ||||||||||||||
Amortization of intangibles | 3,786 | 802 | 5,285 | AA | 9,873 | |||||||||||||
Merger related expense | — | 1,429 | (1,429 | ) | AB | — | ||||||||||||
Other | 25,949 | 3,044 | (280 | ) | AC | 28,713 | ||||||||||||
Total noninterest expense | 205,390 | 42,268 | 275 | 247,933 | ||||||||||||||
Income before provision for income taxes | 137,132 | 33,672 | 4,808 | 175,612 | ||||||||||||||
Income tax provision | 40,032 | 11,370 | 1,683 | AD | 53,085 | |||||||||||||
Net Income | $ | 97,100 | $ | 22,302 | $ | 3,125 | $ | 122,527 | ||||||||||
Per Common Share | ||||||||||||||||||
Earnings basic | $ | 1.67 | $ | 0.98 | $ | 1.70 | ||||||||||||
Earnings diluted | $ | 1.67 | $ | 0.97 | $ | 1.70 | ||||||||||||
Dividends declared per common share | $ | 0.66 | $ | 0.33 | $ | 0.66 | ||||||||||||
Weighted average number of common shares outstanding | 57,459 | 22,719 | (8,077 | ) | AE | 72,101 | ||||||||||||
Weighted average number of diluted common shares outstanding | 57,465 | 22,881 | (8,239 | ) | AF | 72,107 |
Columbia Historical | Pacific Continental Historical | Pro Forma Merger Adjustments | Notes | Pro Forma Combined | ||||||||||||||
Interest Income | (in thousands except per share amounts) | |||||||||||||||||
Loans | $ | 291,465 | $ | 80,104 | 6,412 | Q | $ | 377,981 | ||||||||||
Taxable securities | 35,167 | 7,743 | — | 42,910 | ||||||||||||||
Tax-exempt securities | 11,121 | 1,942 | — | 13,063 | ||||||||||||||
Other | 216 | 154 | — | 370 | ||||||||||||||
Total interest income | 337,969 | 89,943 | 6,412 | 434,324 | ||||||||||||||
Interest Expense | ||||||||||||||||||
Deposits | 3,134 | 3,848 | $ | (382 | ) | R | 6,600 | |||||||||||
Federal Home Loan Bank advances | 671 | 954 | (21 | ) | S | 1,604 | ||||||||||||
Subordinated debentures | — | 1,143 | (78 | ) | T | 1,065 | ||||||||||||
Other borrowings | 545 | 287 | — | 832 | ||||||||||||||
Total interest expense | 4,350 | 6,232 | (481 | ) | 10,101 | |||||||||||||
Net Interest Income | 333,619 | 83,711 | 6,893 | 424,223 | ||||||||||||||
Provision for loan and lease losses | 10,778 | 5,450 | — | 16,228 | ||||||||||||||
Net interest income after provision for loan and lease losses | 322,841 | 78,261 | 6,893 | 407,995 | ||||||||||||||
Noninterest Income | ||||||||||||||||||
Deposit account and treasury management fees | 28,500 | 2,876 | — | 31,376 | ||||||||||||||
Card revenue | 23,620 | 1,214 | — | 24,834 | ||||||||||||||
Financial services and trust revenue | 11,266 | — | — | 11,266 | ||||||||||||||
Loan revenue | 10,967 | — | — | 10,967 | ||||||||||||||
Merchant processing revenue | 8,732 | — | — | 8,732 | ||||||||||||||
Bank owned life insurance | 4,546 | 702 | — | 5,248 | ||||||||||||||
Investment securities gains, net | 1,181 | 373 | — | 1,554 | ||||||||||||||
Change in FDIC loss-sharing asset | (2,585 | ) | — | — | (2,585 | ) | ||||||||||||
Other | 1,855 | 2,652 | — | 4,507 | ||||||||||||||
Total noninterest income | 88,082 | 7,817 | — | 95,899 | ||||||||||||||
Noninterest Expense | ||||||||||||||||||
Compensation and employee benefits | 150,282 | 31,873 | — | 182,155 | ||||||||||||||
Occupancy | 33,734 | 4,742 | (30 | ) | V | 38,446 | ||||||||||||
Merchant processing expense | 4,330 | — | — | 4,330 | ||||||||||||||
Advertising and promotion | 4,598 | 2,049 | — | 6,647 | ||||||||||||||
Data processing | 16,488 | 3,709 | — | 20,197 | ||||||||||||||
Legal and professional fees | 7,889 | 3,297 | (476 | ) | Y | 10,710 | ||||||||||||
Taxes, licenses, and fees | 5,185 | — | — | 5,185 | ||||||||||||||
Regulatory premiums | 3,777 | 1,089 | — | 4,866 | ||||||||||||||
Net cost (benefit) of operation of other real estate owned | 551 | (36 | ) | — | 515 | |||||||||||||
Amortization of intangibles | 5,946 | 685 | 8,333 | AA | 14,964 | |||||||||||||
Merger related expense | — | 4,934 | — | 4,934 | ||||||||||||||
Other | 28,362 | 4,251 | — | 32,613 | ||||||||||||||
Total noninterest expense | 261,142 | 56,593 | 7,827 | 325,562 | ||||||||||||||
Income before provision for income taxes | 149,781 | 29,485 | (934 | ) | 178,332 | |||||||||||||
Income tax provision | 44,915 | 9,709 | (327 | ) | AD | 54,297 | ||||||||||||
Net Income | $ | 104,866 | $ | 19,776 | $ | (607 | ) | $ | 124,035 | |||||||||
Per Common Share | ||||||||||||||||||
Earnings basic | $ | 1.81 | $ | 0.96 | $ | 1.73 | ||||||||||||
Earnings diluted | $ | 1.81 | $ | 0.95 | $ | 1.73 | ||||||||||||
Dividends declared per common share | $ | 1.53 | $ | 0.44 | $ | 1.53 | ||||||||||||
Weighted average number of common shares outstanding | 57,184 | 20,611 | (5,969 | ) | AE | 71,826 | ||||||||||||
Weighted average number of diluted common shares outstanding | 57,193 | 20,790 | (6,148 | ) | AF | 71,835 |
To reflect cash used to settle Pacific Continental equity awards. | $ | (7,674 | ) | |
To reflect cash payment in lieu of Pacific Continental fractional shares. | (32 | ) | ||
To reflect cash used to redeem Pacific Continental junior subordinated debentures. | (14,000 | ) | ||
$ | (21,706 | ) |
To reflect estimated fair value at merger date. The adjustment to loans reflects an estimate of fair value based upon current interest rates for similar loans and expected losses in the acquired loan portfolio, based on third party estimates. | $ | (32,061 | ) |
To remove Pacific Continental allowance at merger date as the credit risk is contemplated in the fair value adjustment in adjustment B above. | $ | (23,363 | ) |
To reflect estimated fair value of Pacific Continental land at merger date, based on third-party estimates. | $ | 4,400 | ||
To reflect estimated fair value of Pacific Continental buildings at merger date, based on third-party estimates. The estimated useful life of the buildings is 39 years. | 4,200 | |||
$ | 8,600 |
To reflect estimated fair value of Pacific Continental other real estate owned at merger date, based on third-party estimates. | $ | 642 |
To reverse Pacific Continental Goodwill on the books. | $ | (60,790 | ) | |
To reflect the goodwill associated with the Pacific Continental merger. | 385,314 | |||
$ | 324,524 |
To reverse Pacific Continental CDI on the books | $ | (8,179 | ) | |
To record the estimated fair value of acquired identifiable intangible assets, based on third-party estimates. Core deposits were identified as the demand, savings and money market accounts. The acquired core deposit intangible will be amortized over 10 years using a sum-of-the-years-digits method. | 49,600 | |||
$ | 41,421 |
To reflect deferred tax asset created in the merger. | $ | 4,794 | |||||
Deferred tax asset is calculated as follows: | |||||||
Adjustment to loans | $ | (32,061 | ) | ||||
Adjustment to allowance for loan and lease losses | 23,363 | ||||||
Adjustment for unfavorable lease contracts | (790 | ) | |||||
Adjustment to Federal Home Loan Bank advances | (127 | ) | |||||
Adjustment to subordinated debentures | (1,511 | ) | |||||
Adjustment to junior subordinated debentures | (2,572 | ) | |||||
Subtotal for fair value adjustments | (13,698 | ) | |||||
Calculated deferred tax asset at Columbia's estimated statutory rate of 35% | $ | 4,794 |
To reflect estimated fair value at merger date based on current market rates for similar products. This adjustment will be accreted into income over the estimated lives of the deposits, ranging between 5 months and 6 years. | $ | (831 | ) |
To reflect estimated fair value of Federal Home Loan Bank advances. | $ | 127 |
To reverse Pacific Continental subordinated debentures debt issuance costs on the books. | $ | 833 | ||
To reflect estimated fair value of Pacific Continental subordinated debentures. | 678 | |||
$ | 1,511 |
To reflect cash redemption of Pacific Continental junior subordinated debentures. | $ | (14,000 | ) | |
To reverse Pacific Continental valuation mark on junior subordinated debentures on the books. | 2,572 | |||
$ | (11,428 | ) |
To reflect unfavorable lease contracts. | $ | 790 | |||||
To reflect settlement of cash-settled stock appreciation rights. | (329 | ) | |||||
To reflect reversal of straight-line lease liability. | (457 | ) | |||||
To reflect deferred tax liability created in the merger. | 21,046 | ||||||
$ | 21,050 | ||||||
The deferred tax liability is calculated as follows: | |||||||
Adjustment to straight-line lease liability | $ | 457 | |||||
Adjustment to premises and equipment | 8,600 | ||||||
Adjustment to other real estate owned | 642 | ||||||
Adjustment to deposits | 831 | ||||||
Adjustment to core deposit intangible, net | 49,600 | ||||||
Subtotal for fair value adjustments | 60,130 | ||||||
Calculated deferred tax liability at Columbia's estimated statutory rate of 35% | $ | 21,046 |
To eliminate historical Pacific Continental common stock. | $ | (205,961 | ) | |
To reflect settlement of Pacific Continental equity awards. | (7,345 | ) | ||
To reflect the issuance of Columbia common stock to Pacific Continental shareholders. | 637,071 | |||
$ | 423,765 |
To eliminate historical Pacific Continental retained earnings. | $ | (85,286 | ) |
To eliminate historical Pacific Continental accumulated other comprehensive income. | $ | 669 |
Nine months Ended September 30, 2017 | Year Ended December 31, 2016 | ||||||||||
Q. | Adjustment to loan interest income | ||||||||||
To reflect accretion of loan discount resulting from loan fair value pro forma adjustment based on weighted average remaining life of five years. | $ | 4,809 | $ | 6,412 | |||||||
R. | Adjustment to deposit interest expense | ||||||||||
To reflect amortization of deposit premium resulting from deposit fair value pro forma adjustment based on remaining life of time deposits. | $ | (194 | ) | $ | (382 | ) | |||||
S. | Adjustment to Federal Home Loan Bank (FHLB) advances interest expense | ||||||||||
To reflect amortization of FHLB advance premiums resulting from fair value pro forma adjustment based on remaining months until maturity ranging from 13 - 57 months. | $ | (21 | ) | $ | (21 | ) | |||||
T. | Adjustment to subordinated debentures | ||||||||||
To reflect amortization of subordinated debentures premium resulting from fair value pro forma adjustment based on remaining life of subordinated debentures. | $ | (59 | ) | $ | (78 | ) | |||||
U. | Adjustment to compensation and employee benefits | ||||||||||
To remove direct incremental costs of the merger incurred by Columbia. | $ | (3 | ) | $ | — | ||||||
V. | Adjustments to occupancy | ||||||||||
To reflect additional depreciation expense resulting from premises and equipment pro forma adjustment based on estimated useful life of buildings of 39 years. | $ | 81 | $ | 108 | |||||||
To remove direct, incremental costs of the merger incurred by Columbia. | (945 | ) | — | ||||||||
To reflect the net premium amortization and discount accretion of favorable and unfavorable leases based on the remaining term of the leases. | (104 | ) | (138 | ) | |||||||
$ | (968 | ) | $ | (30 | ) | ||||||
W. | Adjustment to advertising and promotion | ||||||||||
To remove direct incremental costs of the merger incurred by Columbia. | $ | (201 | ) | $ | — | ||||||
X. | Adjustment to data processing | ||||||||||
To remove direct incremental costs of the merger incurred by Columbia. | $ | (539 | ) | $ | — | ||||||
Y. | Adjustment to legal and professional | ||||||||||
To remove direct incremental costs of the merger incurred by Columbia and Pacific Continental. | $ | (1,587 | ) | $ | (476 | ) | |||||
Z. | Adjustment to taxes, licenses, and fees | ||||||||||
To remove direct incremental costs of the merger incurred by Columbia. | $ | (3 | ) | $ | — | ||||||
AA. | Adjustment to amortization of intangibles | ||||||||||
To remove historical CDI amortization from Pacific Continental. | $ | (802 | ) | $ | (685 | ) | |||||
To reflect amortization of acquired intangible assets based on amortization period of 10 years and using the sum-of-the-years-digits method of amortization. | 6,087 | 9,018 | |||||||||
$ | 5,285 | $ | 8,333 | ||||||||
AB. | Adjustment to merger related expense | ||||||||||
To remove direct incremental costs of the merger incurred by Pacific Continental. | $ | (1,429 | ) | $ | — | ||||||
AC. | Adjustment to other noninterest expense | ||||||||||
To remove direct incremental costs of the merger incurred by Columbia. | $ | (280 | ) | $ | — | ||||||
AD. | Adjustment to income tax provision | ||||||||||
To reflect the income tax effect of pro forma adjustments Q - AC at Columbia's estimated statutory tax rate of 35%. | $ | 1,683 | $ | (327 | ) |
AE. | Adjustments to weighted average number of common shares outstanding | (8,077 | ) | (5,969 | ) | |||||
Adjustment to nine months ended September 30, 2017 calculated as follows: | ||||||||||
Removal of Pacific Continental weighted average number of common shares outstanding for the nine months ended September 30, 2017 | (22,719 | ) | ||||||||
Columbia shares issued to Pacific Continental shareholders | 14,642 | |||||||||
Adjustment to weighted average number of common shares outstanding for the nine months ended September 30, 2017 | ||||||||||
Adjustment to year ended December 31, 2016 calculated as follows: | ||||||||||
Removal of Pacific Continental weighted average number of common shares outstanding for the year ended December 31, 2016 | (20,611 | ) | ||||||||
Columbia shares issued to Pacific Continental shareholders | 14,642 | |||||||||
Adjustment to weighted average number of common shares outstanding for the year ended December 31, 2016 | ||||||||||
AF. | Adjustments to weighted average number of diluted common shares outstanding | (8,239 | ) | (6,148 | ) | |||||
Adjustment to nine months ended September 30, 2017 calculated as follows: | ||||||||||
Removal of Pacific Continental weighted average number of diluted common shares outstanding for the nine months ended September 30, 2017 | (22,881 | ) | ||||||||
Columbia shares issued to Pacific Continental shareholders | 14,642 | |||||||||
Adjustment to weighted average number of diluted common shares outstanding for the nine months ended September 30, 2017 | ||||||||||
Adjustment to year ended December 31, 2016 calculated as follows: | ||||||||||
Removal of Pacific Continental weighted average number of diluted common shares outstanding for the year ended December 31, 2016 | (20,790 | ) | ||||||||
Columbia shares issued to Pacific Continental shareholders | 14,642 | |||||||||
Adjustment to weighted average number of diluted common shares outstanding for the year ended December 31, 2016 |
September 30, 2017 | |||
(in thousands) | |||
Cash paid to Pacific Continental shareholders in lieu of fractional shares | $ | 32 | |
Columbia common stock exchanged with Pacific Continental common shareholders | 637,071 | ||
Total purchase price | 637,103 | ||
Fair value of assets acquired: | |||
Cash and cash equivalents | 56,278 | ||
Securities available for sale | 453,660 | ||
Federal Home Loan Bank stock | 7,084 | ||
Loans, net of unearned income | 1,850,781 | ||
Interest receivable | 6,502 | ||
Premises and equipment | 27,902 | ||
Other real estate owned | 10,542 | ||
Core deposit intangible | 49,600 | ||
Other assets | 56,243 | ||
Total assets acquired | 2,518,592 | ||
Fair value of liabilities assumed: | |||
Deposits | 2,097,326 | ||
FHLB advances | 101,127 | ||
Subordinated debentures | 35,678 | ||
Junior subordinated debentures | — | ||
Securities sold under agreements to repurchase | 2,031 | ||
Other liabilities | 30,641 | ||
Total liabilities assumed | 2,266,803 | ||
Fair value of net assets acquired | 251,789 | ||
Goodwill | $ | 385,314 |