NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2016
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING
POLICIES
Ameris Bancorp (the “Company”
or “Ameris”) is a financial holding company headquartered in Moultrie, Georgia. Ameris conducts substantially
all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At September 30, 2016, the
Bank operated 99 branches in select markets in Georgia, Alabama, Florida and South Carolina. Our business model capitalizes
on the efficiencies of a large financial services company while still providing the community with the personalized banking service
expected by our customers. We manage our Bank through a balance of decentralized management responsibilities and efficient
centralized operating systems, products and loan underwriting standards. The Company’s Board of Directors and senior
managers establish corporate policy, strategy and administrative policies. Within our established guidelines and policies,
the banker closest to the customer responds to the differing needs and demands of his or her unique market.
The accompanying unaudited consolidated
financial statements for Ameris have been prepared in accordance with accounting principles generally accepted in the United States
of America for interim financial information and Regulation S-X. Accordingly, the financial statements do not include all
of the information and footnotes required by accounting principles generally accepted in the United States of America for complete
financial statement presentation. The interim consolidated financial statements included herein are unaudited but reflect
all adjustments (consisting of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation
of the consolidated financial position and results of operations for the interim periods presented. All significant intercompany
accounts and transactions have been eliminated in consolidation. The results of operations for the period ended September
30, 2016 are not necessarily indicative of the results to be expected for the full year. These financial statements should
be read in conjunction with the financial statements and notes thereto and the report of our registered independent public accounting
firm included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
Recent Accounting Pronouncements
ASU 2016-13 -
Financial Instruments—Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
(“ASU 2016-13”). ASU 2016-13
significantly
changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured
at fair value through net income. The standard will replace the current incurred loss approach with an expected loss model, referred
to as the current expected credit loss (“CECL”) model. The new standard will apply to financial assets subject to
credit losses and measured at amortized cost and certain off-balance sheet credit exposures, which include, but are not limited
to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. ASU 2016-13 simplifies the accounting
for purchased credit-impaired debt securities and loans and expands the disclosure requirements regarding an entity’s assumptions,
models and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized
cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU 2016-13
is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim
and annual reporting periods beginning after December 15, 2018.
Upon adoption, ASU 2016-13 provides for a modified retrospective
transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective.
The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial
position or disclosures.
ASU 2016-09 –
Improvements to
Employee Share-Based Payment Accounting
(“ASU 2016-09”). ASU 2016-09 simplifies various aspects of how share-based
payments are accounted for and presented in the financial statements. Under ASU 2016-09, companies will record all excess tax
benefits and tax deficiencies as income tax expense or benefit in the income statement and will no longer record excess tax benefits
and certain tax deficiencies in additional paid-in capital. The standard eliminates the requirement that excess tax benefits be
realized before companies can recognize them. The excess tax benefits will be reported as an operating activity on the statement
of cash flows, and the cash paid to a tax authority when shares are withheld to satisfy a company’s statutory income tax
withholding obligation will be reported as a financing activity on its statement of cash. In addition, the standard increases
the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification
for shares used to satisfy the employer’s statutory income tax withholding obligation. ASU 2016-09 permits companies to
make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards.
Forfeitures can be estimated, as required today, or recognized when they occur. ASU 2016-09 is effective for interim and annual
reporting periods beginning after December 15, 2016. Early adoption is permitted, but all of the guidance must be adopted in the
same period. The Company is currently evaluating the impact this standard will have on the Company’s results of operations,
financial position or disclosures.
ASU 2016-02 –
Leases (Topic 842)
(“ASU 2016-02”). ASU 2016-02 amends the existing standards for lease accounting effectively requiring most leases
be carried on the balance sheets of the related lessees by requiring them to recognize a right-of-use asset and a corresponding
lease liability. ASU 2016-02 includes qualitative and quantitative disclosure requirements intended to provide greater insight
into the nature of an entity’s leasing activities. The standard must be adopted using a modified retrospective transition
with a cumulative-effect adjustment to equity as of the beginning of the period in which it is adopted. ASU 2016-02 is effective
for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods with early adoption
permitted. The Company is currently evaluating the impact this standard will have on the Company’s results of operations,
financial position or disclosures.
ASU 2015-16 –
Business Combinations
(Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments
(“ASU 2015-16”). ASU 2015-16 requires
that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting
period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s
financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result
of the change to the estimated amounts, calculated as if the accounting had been completed at the acquisition date. The standard
also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the
amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment
to the estimated amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for public business entities
for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should
be applied prospectively to adjustments to provisional amounts that occur after the effective date with earlier application permitted
for financial statements that have not been issued. The Company has early adopted the provisions of this amendment, and the adoption
did not have a material impact on the Company's consolidated financial statements.
ASU 2015-03 –
Interest –
Imputation of Interest
(“ASU 2015-03”). ASU 2015-03 simplifies presentation of debt issuance costs by requiring
that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the
carrying amount of the debt liability, consistent with debt discounts.
ASU
2015-03
is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015,
and early adoption is permitted
. It should be applied on a retrospective
basis. The adoption of this standard did not have a material effect on the Company’s
results of operations, financial
position or disclosures.
ASU
2015-02 “
Consolidation (Topic 810) - Amendments to the Consolidation Analysis
(“ASU 2015-02”)
.
ASU
2015-02 includes amendments that are intended to improve targeted areas of consolidation for legal entities including reducing
the number of consolidation models from four to two and simplifying the FASB Accounting Standards Codification. ASU 2015-02 is
effective for annual and interim periods within those annual periods, beginning after December 15, 2015. The amendments may be
applied retrospectively in previously issued financial statements for one or more years with a cumulative effect adjustment to
retained earnings as of the beginning of the first year restated. Early adoption is permitted, including adoption in an interim
period. The adoption of this standard did not have a material effect on the Company’s
results of operations, financial
position or disclosures.
ASU 2015-01-
Income Statement –
Extraordinary and Unusual Items
(“ASU 2015-01”). ASU 2015-01
eliminates
the concept of extraordinary items by no longer allowing companies to segregate an extraordinary item from the results of operations,
separately present an extraordinary item on the income statement, or disclose income taxes or earnings-per-share data applicable
to an extraordinary item. ASU 2015-01
is effective for annual periods and interim periods within those annual periods beginning
after December 15, 2015, and early adoption is permitted
. The adoption
of this standard did not have a material effect on the Company’s
results
of operations, financial position or disclosures.
ASU
2014-09 –
Revenue from Contracts with Customers
(“ASU 2014-09”). ASU 2014-09 provides guidance that an
entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective prospectively,
for annual and interim periods, beginning after December 15, 2016. The Company is currently evaluating the impact t
his
standard will have on the Company’s results of operations, financial position or disclosures.
NOTE 2 – BUSINESS COMBINATIONS
Jacksonville Bancorp, Inc.
On March 11, 2016, the Company completed
its acquisition of Jacksonville Bancorp, Inc. (“JAXB”), a bank holding company headquartered in Jacksonville, Florida.
Upon consummation of the acquisition, JAXB was merged with and into the Company, with Ameris as the surviving entity in the merger.
At that time, JAXB’s wholly owned banking subsidiary, The Jacksonville Bank (“Jacksonville Bank”), was also
merged with and into the Bank. The acquisition expanded the Company’s existing market presence, as Jacksonville Bank had
a total of eight full-service branches located in Jacksonville and Jacksonville Beach, Duval County, Florida. Under the terms
of the merger, JAXB
’s common shareholders received 0.
5861
shares of Ameris common stock or $16.50 in cash for each share of JAXB common stock or nonvoting common stock they previously
held, subject to the total consideration being allocated 75% stock and 25% cash
.
As a result, the Company issued 2,549,469 common shares at a fair value of $72.5 million and paid $23.9 million in cash to former
shareholders of JAXB.
The acquisition of JAXB was accounted
for using the acquisition method of accounting in accordance with FASB ASC 805,
Business Combinations
. Assets acquired,
liabilities assumed and consideration exchanged were recorded at their respective acquisition date fair values. Determining the
fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions
used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing
date of the acquisition as additional information regarding the closing date fair values becomes available. During the third quarter
of 2016, management revised its initial estimates regarding the valuation of loans, premises and equipment, core deposit intangible
and other assets acquired. In addition, management assessed and recorded the deferred tax assets resulting from differences in
the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for income tax
purposes. This estimate also reflects acquired net operating loss carryforwards and other acquired assets with built-in losses
that are expected to be settled or otherwise recovered in future periods where the realization of such benefits would be subject
to applicable limitations under Section 382 of the Internal Revenue Code of 1986, as amended. Management continues to evaluate
fair value adjustments related to loans, other real estate owned and deferred tax assets.
The following table presents the assets
acquired and liabilities of JAXB assumed as of March 11, 2016 and their initial fair value estimates. The fair value adjustments
shown in the following table continue to be evaluated by management and may be subject to further adjustment:
(Dollars in Thousands)
|
|
As Recorded
by
JAXB
|
|
|
Initial Fair
Value
Adjustments
|
|
|
Subsequent Fair
Value
Adjustments
|
|
|
As Recorded
by Ameris
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
9,704
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
9,704
|
|
Federal funds sold and interest-bearing balances
|
|
|
7,027
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,027
|
|
Investment securities
|
|
|
60,836
|
|
|
|
(942
|
)(a)
|
|
|
-
|
|
|
|
59,894
|
|
Other investments
|
|
|
2,458
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,458
|
|
Loans
|
|
|
416,831
|
|
|
|
(15,746
|
)(b)
|
|
|
1,857
|
(j)
|
|
|
402,942
|
|
Less allowance for loan losses
|
|
|
(12,613
|
)
|
|
|
12,613
|
(c)
|
|
|
-
|
|
|
|
-
|
|
Loans, net
|
|
|
404,218
|
|
|
|
(3,133
|
)
|
|
|
1,857
|
|
|
|
402,942
|
|
Other real estate owned
|
|
|
2,873
|
|
|
|
(1,035
|
)(d)
|
|
|
-
|
|
|
|
1,838
|
|
Premises and equipment
|
|
|
4,798
|
|
|
|
-
|
|
|
|
(31
|
)(k)
|
|
|
4,767
|
|
Intangible assets
|
|
|
288
|
|
|
|
5,566
|
(e)
|
|
|
(1,108
|
)(l)
|
|
|
4,746
|
|
Other assets
|
|
|
14,141
|
|
|
|
23,266
|
(f)
|
|
|
(1,841
|
)(m)
|
|
|
35,566
|
|
Total assets
|
|
$
|
506,343
|
|
|
$
|
23,722
|
|
|
$
|
(1,123
|
)
|
|
$
|
528,942
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
|
123,399
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
123,399
|
|
Interest-bearing
|
|
|
277,539
|
|
|
|
421
|
(g)
|
|
|
-
|
|
|
|
277,960
|
|
Total deposits
|
|
|
400,938
|
|
|
|
421
|
|
|
|
-
|
|
|
|
401,359
|
|
Other borrowings
|
|
|
48,350
|
|
|
|
84
|
(h)
|
|
|
-
|
|
|
|
48,434
|
|
Other liabilities
|
|
|
2,354
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,354
|
|
Subordinated deferrable interest debentures
|
|
|
16,294
|
|
|
|
(3,393
|
)(i)
|
|
|
-
|
|
|
|
12,901
|
|
Total liabilities
|
|
|
467,936
|
|
|
|
(2,888
|
)
|
|
|
-
|
|
|
|
465,048
|
|
Net identifiable assets acquired over (under) liabilities assumed
|
|
|
38,407
|
|
|
|
26,610
|
|
|
|
(1,123
|
)
|
|
|
63,894
|
|
Goodwill
|
|
|
-
|
|
|
|
31,375
|
|
|
|
1,123
|
|
|
|
32,498
|
|
Net assets acquired over (under) liabilities assumed
|
|
$
|
38,407
|
|
|
$
|
57,985
|
|
|
$
|
-
|
|
|
$
|
96,392
|
|
Consideration:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameris Bancorp common shares issued
|
|
|
2,549,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase price per share of the Company's common stock
|
|
$
|
28.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company common stock issued
|
|
$
|
72,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash exchanged for shares
|
|
$
|
23,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of total consideration transferred
|
|
$
|
96,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Explanation of fair value adjustments
|
(a)
|
Adjustment reflects the fair value adjustments of
the portfolio of securities available for sale as of the acquisition date.
|
|
(b)
|
Adjustment reflects the fair value adjustments based
on the Company’s evaluation of the acquired loan portfolio, net of the reversal of JAXB remaining fair value adjustments
from their prior acquisitions.
|
|
(c)
|
Adjustment reflects the elimination of JAXB’s
allowance for loan losses.
|
|
(d)
|
Adjustment reflects the fair value adjustment based
on the Company’s evaluation of the acquired OREO portfolio, which is based largely on contracted sale prices.
|
|
(e)
|
Adjustment reflects the recording of core deposit
intangible on the acquired core deposit accounts.
|
|
(f)
|
Adjustment reflects the deferred taxes on the difference
in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal
income tax purposes and the reversal of JAXB valuation allowance established on their deferred tax assets.
|
|
(g)
|
Adjustment reflects the fair value adjustments based
on the Company’s evaluation of the acquired deposits.
|
|
(h)
|
Adjustment reflects the fair value adjustments based
on the Company’s evaluation of the liability for other borrowings.
|
|
(i)
|
Adjustment reflects the fair value adjustment to the
subordinated deferrable interest debentures at the acquisition date, net of the reversal of JAXB remaining fair value adjustments
from their prior acquisitions.
|
|
(j)
|
Adjustment reflects additional recording of fair value
adjustment of the acquired loan portfolio.
|
|
(k)
|
Adjustment reflects recording of fair value adjustment
of the premises and equipment.
|
|
(l)
|
Adjustment reflects adjustment to the core deposit
intangible on the acquired core deposit accounts.
|
|
(m)
|
Adjustment reflects the additional deferred taxes
on the difference in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their
basis for federal income tax purposes.
|
Goodwill of $32.5 million, which is the
excess of the purchase price over the fair value of net assets acquired, was recorded in the JAXB acquisition and is the result
of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes.
In the acquisition, the Company purchased
$402.9 million of loans at fair value, net of $13.9 million, or 3.33%, estimated discount to the outstanding principal balance.
Of the total loans acquired, management identified $28.3 million that were considered to be credit impaired and are accounted
for under ASC Topic 310-30. The table below summarizes the total contractually required principal and interest cash payments,
management’s estimate of expected total cash payments and fair value of the loans as of acquisition date for
purchased
credit impaired loans. Contractually required principal and interest payments have been adjusted for estimated
prepayments.
(Dollars in Thousands)
|
|
|
|
Contractually required principal and interest
|
|
$
|
42,314
|
|
Non-accretable difference
|
|
|
(7,877
|
)
|
Cash flows expected to be collected
|
|
|
34,437
|
|
Accretable yield
|
|
|
(6,182
|
)
|
Total purchased credit-impaired loans acquired
|
|
$
|
28,255
|
|
The following table presents the acquired
loan data for the JAXB acquisition.
|
|
Fair Value of
Acquired Loans at
Acquisition Date
|
|
|
Gross
Contractual
Amounts
Receivable at
Acquisition
Date
|
|
|
Best Estimate
at Acquisition
Date of
Contractual
Cash Flows
Not Expected
to be Collected
|
|
|
|
(Dollars in Thousands)
|
|
Acquired receivables subject to ASC 310-30
|
|
$
|
28,255
|
|
|
$
|
42,314
|
|
|
$
|
7,877
|
|
Acquired receivables not subject to ASC 310-30
|
|
$
|
374,687
|
|
|
$
|
488,346
|
|
|
$
|
-
|
|
Branch Acquisition
On June 12, 2015, the Company completed
its acquisition of 18 branches from Bank of America, National Association located in Calhoun, Columbia, Dixie, Hamilton, Suwanee
and Walton Counties, Florida and Ben Hill, Colquitt, Dougherty, Laurens, Liberty, Thomas, Tift and Ware Counties, Georgia. Under
the terms of the Purchase and Assumption Agreement dated January 28, 2015, the Company paid a deposit premium of $20.0 million,
equal to 3.00% of the average daily deposits for the 15 calendar-day period immediately prior to the acquisition date. In addition,
the Company acquired approximately $4.0 million in loans and $10.7 million in premises and equipment.
The acquisition of the 18 branches was
accounted for using the acquisition method of accounting in accordance with FASB ASC 805,
Business Combinations
. Assets
acquired, liabilities assumed and consideration exchanged were recorded at their respective acquisition date fair values. Determining
the fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions
used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing
date of the acquisition as additional information regarding the closing date fair values becomes available. During the third and
fourth quarters of 2015, management revised its initial estimates regarding the valuation of loans, premises and intangible assets
acquired.
The following table presents the assets
acquired and liabilities assumed as of June 12, 2015 and their fair value estimates.
(Dollars in Thousands)
|
|
As Recorded by
Bank of America
|
|
|
Initial Fair
Value
Adjustments
|
|
|
Subsequent
Fair Value
Adjustments
|
|
|
As Recorded
by Ameris
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
630,220
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
630,220
|
|
Loans
|
|
|
4,363
|
|
|
|
-
|
|
|
|
(364
|
)(d)
|
|
|
3,999
|
|
Premises and equipment
|
|
|
10,348
|
|
|
|
1,060
|
(a)
|
|
|
(755
|
)(e)
|
|
|
10,653
|
|
Intangible assets
|
|
|
-
|
|
|
|
7,651
|
(b)
|
|
|
985
|
(f)
|
|
|
8,636
|
|
Other assets
|
|
|
126
|
|
|
|
-
|
|
|
|
-
|
|
|
|
126
|
|
Total assets
|
|
$
|
645,057
|
|
|
$
|
8,711
|
|
|
$
|
(134
|
)
|
|
$
|
653,634
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
|
149,854
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
149,854
|
|
Interest-bearing
|
|
|
495,110
|
|
|
|
(215
|
)(c)
|
|
|
-
|
|
|
|
494,895
|
|
Total deposits
|
|
|
644,964
|
|
|
|
(215
|
)
|
|
|
-
|
|
|
|
644,749
|
|
Other liabilities
|
|
|
93
|
|
|
|
-
|
|
|
|
-
|
|
|
|
93
|
|
Total liabilities
|
|
|
645,057
|
|
|
|
(215
|
)
|
|
|
-
|
|
|
|
644,842
|
|
Net identifiable assets acquired over (under) liabilities assumed
|
|
|
-
|
|
|
|
8,926
|
|
|
|
(134
|
)
|
|
|
8,792
|
|
Goodwill
|
|
|
-
|
|
|
|
11,076
|
|
|
|
134
|
|
|
|
11,210
|
|
Net assets acquired over (under) liabilities assumed
|
|
$
|
-
|
|
|
$
|
20,002
|
|
|
$
|
-
|
|
|
$
|
20,002
|
|
Consideration:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid as deposit premium
|
|
$
|
20,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of total consideration transferred
|
|
$
|
20,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Explanation of fair value adjustments
|
(a)
|
Adjustment reflects the fair value adjustments of
the premises and equipment as of the acquisition date.
|
|
(b)
|
Adjustment reflects the recording of core deposit
intangible on the acquired core deposit accounts.
|
|
(c)
|
Adjustment reflects the fair value adjustments based
on the Company’s evaluation of the acquired deposits.
|
|
(d)
|
Adjustment reflects the fair value adjustments based
on the Company’s evaluation of the acquired loan portfolio.
|
|
(e)
|
Adjustment reflects additional recording of fair value
adjustment of the premises and equipment.
|
|
(f)
|
Adjustment reflects additional recording of core deposit
intangible on the acquired core deposit accounts.
|
Goodwill of $11.2 million, which is the
excess of the purchase consideration over the fair value of net assets acquired, was recorded in the branch acquisition and is
the result of expected operational synergies and other factors.
In the acquisition, the Company purchased
$4.0 million of loans at fair value. Management identified $364,000 of overdrafts that were considered to be credit impaired and
were subsequently charged off as uncollectible under ASC Topic 310-30.
Merchants & Southern Banks of Florida,
Incorporated
On May 22, 2015, the Company completed
its acquisition of all shares of the outstanding common stock of Merchants & Southern Banks of Florida, Incorporated (“Merchants”),
a bank holding company headquartered in Gainesville, Florida, for a total purchase price of $50,000,000. Upon consummation
of the stock purchase, Merchants was merged with and into the Company, with Ameris as the surviving entity in the merger. At that
time, Merchants’ wholly owned banking subsidiary, Merchants and Southern Bank, was also merged with and into the Bank. The
acquisition grew the Company’s existing market presence, as Merchants and Southern Bank had a total of 13 banking locations
in Alachua, Marion and Clay Counties, Florida.
The acquisition of Merchants was accounted
for using the acquisition method of accounting in accordance with FASB ASC 805,
Business Combinations
. Assets acquired,
liabilities assumed and consideration exchanged were recorded at their respective acquisition date fair values. Determining the
fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions
used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing
date of the acquisition as additional information regarding the closing date fair values becomes available. During the third and
fourth quarters of 2015, management revised its initial estimates regarding the valuation of investment securities, core deposit
intangible and other assets acquired. In addition, management continued its assessment and recorded the deferred tax assets resulting
from differences in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their
basis for income tax purposes. This estimate also reflects acquired net operating loss carryforwards and other acquired assets
with built-in losses that are expected to be settled or otherwise recovered in future periods where the realization of such benefits
would be subject to applicable limitations under Section 382 of the Internal Revenue Code of 1986, as amended. During the second
quarter of 2016, management revised its initial estimates regarding the valuation of loans.
The following table presents the assets
acquired and liabilities of Merchants assumed as of May 22, 2015 and their fair value estimates.
(Dollars in Thousands)
|
|
As Recorded by
Merchants
|
|
|
Initial Fair
Value
Adjustments
|
|
|
Subsequent
Fair Value
Adjustments
|
|
|
As Recorded
by Ameris
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
7,527
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
7,527
|
|
Federal funds sold and interest-bearing balances
|
|
|
106,188
|
|
|
|
-
|
|
|
|
-
|
|
|
|
106,188
|
|
Investment securities
|
|
|
164,421
|
|
|
|
(553
|
)(a)
|
|
|
(639
|
)(j)
|
|
|
163,229
|
|
Other investments
|
|
|
872
|
|
|
|
-
|
|
|
|
(253
|
)(k)
|
|
|
619
|
|
Loans
|
|
|
199,955
|
|
|
|
(8,500
|
)(b)
|
|
|
91
|
(l)
|
|
|
191,546
|
|
Less allowance for loan losses
|
|
|
(3,354
|
)
|
|
|
3,354
|
(c)
|
|
|
-
|
|
|
|
-
|
|
Loans, net
|
|
|
196,601
|
|
|
|
(5,146
|
)
|
|
|
91
|
|
|
|
191,546
|
|
Other real estate owned
|
|
|
4,082
|
|
|
|
(1,115
|
)(d)
|
|
|
-
|
|
|
|
2,967
|
|
Premises and equipment
|
|
|
14,614
|
|
|
|
(3,680
|
)(e)
|
|
|
-
|
|
|
|
10,934
|
|
Intangible assets
|
|
|
-
|
|
|
|
4,577
|
(f)
|
|
|
(634
|
)(m)
|
|
|
3,943
|
|
Other assets
|
|
|
2,333
|
|
|
|
2,335
|
(g)
|
|
|
(1,109
|
)(n)
|
|
|
3,559
|
|
Total assets
|
|
$
|
496,638
|
|
|
$
|
(3,582
|
)
|
|
$
|
(2,544
|
)
|
|
$
|
490,512
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
|
121,708
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
121,708
|
|
Interest-bearing
|
|
|
286,112
|
|
|
|
-
|
|
|
|
41,588
|
(o)
|
|
|
327,700
|
|
Total deposits
|
|
|
407,820
|
|
|
|
-
|
|
|
|
41,588
|
|
|
|
449,408
|
|
Federal funds purchased and securities sold under agreements to repurchase
|
|
|
41,588
|
|
|
|
-
|
|
|
|
(41,588
|
)(o)
|
|
|
-
|
|
Other liabilities
|
|
|
2,151
|
|
|
|
81
|
(h)
|
|
|
-
|
|
|
|
2,232
|
|
Subordinated deferrable interest debentures
|
|
|
6,186
|
|
|
|
(2,680
|
)(i)
|
|
|
-
|
|
|
|
3,506
|
|
Total liabilities
|
|
|
457,745
|
|
|
|
(2,599
|
)
|
|
|
-
|
|
|
|
455,146
|
|
Net identifiable assets acquired over (under) liabilities assumed
|
|
|
38,893
|
|
|
|
(983
|
)
|
|
|
(2,544
|
)
|
|
|
35,366
|
|
Goodwill
|
|
|
-
|
|
|
|
12,090
|
|
|
|
2,544
|
|
|
|
14,634
|
|
Net assets acquired over (under) liabilities assumed
|
|
$
|
38,893
|
|
|
$
|
11,107
|
|
|
$
|
-
|
|
|
$
|
50,000
|
|
Consideration:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash exchanged for shares
|
|
$
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of total consideration transferred
|
|
$
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Explanation of fair value adjustments
|
(a)
|
Adjustment reflects the fair value adjustments of
the portfolio of securities available for sale as of the acquisition date.
|
|
(b)
|
Adjustment reflects the fair value adjustments based
on the Company’s evaluation of the acquired loan portfolio.
|
|
(c)
|
Adjustment reflects the elimination of Merchants’
allowance for loan losses.
|
|
(d)
|
Adjustment reflects the fair value adjustment based
on the Company’s evaluation of the acquired OREO portfolio.
|
|
(e)
|
Adjustment reflects the fair value adjustment based
on the Company’s evaluation of the acquired premises.
|
|
(f)
|
Adjustment reflects the recording of core deposit
intangible on the acquired core deposit accounts.
|
|
(g)
|
Adjustment reflects the deferred taxes on the difference
in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal
income tax purposes.
|
|
(h)
|
Adjustment reflects the fair value adjustments based
on the Company’s evaluation of interest rate swap liabilities.
|
|
(i)
|
Adjustment reflects the fair value adjustment to the
subordinated deferrable interest debentures at the acquisition date.
|
|
(j)
|
Adjustment reflects the additional fair value adjustments
of the portfolio of securities available for sale as of the acquisition date.
|
|
(k)
|
Adjustment reflects the fair value adjustments of
other investments as of the acquisition date.
|
|
(l)
|
Adjustment reflects additional recording of fair value
adjustment of the acquired loan portfolio.
|
|
(m)
|
Adjustment reflects adjustment to the core deposit
intangible on the acquired core deposit accounts.
|
|
(n)
|
Adjustment reflects the additional deferred taxes
on the difference in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their
basis for federal income tax purposes.
|
|
(o)
|
Subsequent to acquisition, the acquired securities
sold under agreements to repurchase were converted to deposit accounts and are no longer reported as securities sold under agreements
to repurchase on the Consolidated Balance Sheet as of December 31, 2015.
|
Goodwill of $14.6 million, which is the
excess of the purchase price over the fair value of net assets acquired, was recorded in the Merchants acquisition and is the
result of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes.
In the acquisition, the Company purchased
$191.5 million of loans at fair value, net of $8.4 million, or 4.21%, estimated discount to the outstanding principal balance.
Of the total loans acquired, management identified $11.2 million that were considered to be credit impaired and are accounted
for under ASC Topic 310-30. The table below summarizes the total contractually required principal and interest cash payments,
management’s estimate of expected total cash payments and fair value of the loans as of acquisition date for purchased credit
impaired loans. Contractually required principal and interest payments have been adjusted for estimated prepayments.
(Dollars in Thousands)
|
|
|
|
Contractually required principal and interest
|
|
$
|
17,201
|
|
Non-accretable difference
|
|
|
(2,712
|
)
|
Cash flows expected to be collected
|
|
|
14,489
|
|
Accretable yield
|
|
|
(3,254
|
)
|
Total purchased credit-impaired loans acquired
|
|
$
|
11,235
|
|
The following table presents the acquired
loan data for the Merchants acquisition.
|
|
Fair Value of
Acquired Loans at
Acquisition Date
|
|
|
Gross
Contractual
Amounts
Receivable at
Acquisition
Date
|
|
|
Best Estimate
at Acquisition
Date of
Contractual
Cash Flows
Not Expected
to be Collected
|
|
|
|
(Dollars in Thousands)
|
|
Acquired receivables subject to ASC 310-30
|
|
$
|
11,235
|
|
|
$
|
14,086
|
|
|
$
|
2,712
|
|
Acquired receivables not subject to ASC 310-30
|
|
$
|
180,311
|
|
|
$
|
184,906
|
|
|
$
|
-
|
|
The results of operations of JAXB and
Merchants subsequent to the respective acquisition dates are included in the Company’s consolidated statements of operations. The
following unaudited pro forma information reflects the Company’s estimated consolidated results of operations as if the
acquisitions had occurred on January 1, 2015, unadjusted for potential cost savings (in thousands).
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net interest income and noninterest income
|
|
$
|
85,931
|
|
|
$
|
77,325
|
|
|
$
|
247,697
|
|
|
$
|
210,556
|
|
Net income
|
|
$
|
21,557
|
|
|
$
|
17,076
|
|
|
$
|
54,658
|
|
|
$
|
32,621
|
|
Net income available to common stockholders
|
|
$
|
21,557
|
|
|
$
|
17.076
|
|
|
$
|
54,658
|
|
|
$
|
32,621
|
|
Income per common share available to common stockholders – basic
|
|
$
|
0.62
|
|
|
$
|
0.49
|
|
|
$
|
1.57
|
|
|
$
|
0.95
|
|
Income per common share available to common stockholders – diluted
|
|
$
|
0.61
|
|
|
$
|
0.49
|
|
|
$
|
1.56
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares outstanding, basic
|
|
|
34,870
|
|
|
|
34,744
|
|
|
|
34,817
|
|
|
|
34,163
|
|
Average number of shares outstanding, diluted
|
|
|
35,195
|
|
|
|
35,102
|
|
|
|
35,131
|
|
|
|
34,511
|
|
A rollforward of purchased non-covered loans for the nine
months ended September 30, 2016, the year ended December 31, 2015 and the nine months ended September 30, 2015 is shown below:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Balance, January 1
|
|
$
|
771,554
|
|
|
$
|
674,239
|
|
|
$
|
674,239
|
|
Charge-offs, net of recoveries
|
|
|
(904
|
)
|
|
|
(991
|
)
|
|
|
(814
|
)
|
Additions due to acquisitions
|
|
|
402,942
|
|
|
|
195,818
|
|
|
|
195,818
|
|
Accretion
|
|
|
10,071
|
|
|
|
10,590
|
|
|
|
8,055
|
|
Transfers to purchased non-covered other real estate owned
|
|
|
(3,871
|
)
|
|
|
(4,473
|
)
|
|
|
(2,565
|
)
|
Transfer from covered loans due to loss-share expiration
|
|
|
45,908
|
|
|
|
50,568
|
|
|
|
15,462
|
|
Payments received
|
|
|
(158,700
|
)
|
|
|
(154,666
|
)
|
|
|
(123,311
|
)
|
Other
|
|
|
90
|
|
|
|
469
|
|
|
|
610
|
|
Ending balance
|
|
$
|
1,067,090
|
|
|
$
|
771,554
|
|
|
$
|
767,494
|
|
The following is a summary of changes in the accretable discounts
of purchased non-covered loans during the nine months ended September 30, 2016, the year ended December 31, 2015 and
the nine months ended September 30, 2015:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Balance, January 1
|
|
$
|
24,785
|
|
|
$
|
25,716
|
|
|
$
|
25,716
|
|
Additions due to acquisitions
|
|
|
9,991
|
|
|
|
5,788
|
|
|
|
4,686
|
|
Accretion
|
|
|
(10,071
|
)
|
|
|
(10,590
|
)
|
|
|
(8,055
|
)
|
Transfer from covered loans due to loss-share expiration
|
|
|
3,457
|
|
|
|
1,665
|
|
|
|
-
|
|
Accretable discounts removed due to charge-offs
|
|
|
(161
|
)
|
|
|
(1,768
|
)
|
|
|
(1,686
|
)
|
Transfers between non-accretable and accretable discounts, net
|
|
|
2,263
|
|
|
|
3,974
|
|
|
|
(106
|
)
|
Ending balance
|
|
$
|
30,264
|
|
|
$
|
24,785
|
|
|
$
|
20,555
|
|
NOTE 3 – INVESTMENT SECURITIES
The Company’s investment policy
blends the Company’s liquidity needs and interest rate risk management with its desire to increase income and provide
funds for expected growth in loans. The investment securities portfolio consists primarily of U.S. government-sponsored mortgage-backed
securities and agencies, state, county and municipal securities and corporate debt securities. The Company’s portfolio
and investing philosophy concentrate activities in obligations where the credit risk is limited. For the small portion
of the Company’s portfolio found to present credit risk, the Company has reviewed the investments and financial performance of
the obligors and believes the credit risk to be acceptable.
The amortized cost and estimated fair value of investment securities
available for sale at September 30, 2016, December 31, 2015 and September 30, 2015 are presented below:
|
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair
Value
|
|
|
|
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
999
|
|
|
$
|
29
|
|
|
$
|
(0
|
)
|
|
$
|
1,028
|
|
State, county and municipal securities
|
|
|
150,083
|
|
|
|
5,939
|
|
|
|
(28
|
)
|
|
|
155,994
|
|
Corporate debt securities
|
|
|
28,924
|
|
|
|
194
|
|
|
|
(20
|
)
|
|
|
29,098
|
|
Mortgage-backed securities
|
|
|
641,404
|
|
|
|
10,917
|
|
|
|
(317
|
)
|
|
|
652,004
|
|
Total debt securities
|
|
$
|
821,410
|
|
|
$
|
17,079
|
|
|
$
|
(365
|
)
|
|
$
|
838,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
14,959
|
|
|
$
|
-
|
|
|
$
|
(69
|
)
|
|
$
|
14,890
|
|
State, county and municipal securities
|
|
|
157,681
|
|
|
|
4,046
|
|
|
|
(411
|
)
|
|
|
161,316
|
|
Corporate debt securities
|
|
|
5,900
|
|
|
|
145
|
|
|
|
(28
|
)
|
|
|
6,017
|
|
Mortgage-backed securities
|
|
|
599,721
|
|
|
|
3,945
|
|
|
|
(2,704
|
)
|
|
|
600,962
|
|
Total debt securities
|
|
$
|
778,261
|
|
|
$
|
8,136
|
|
|
$
|
(3,212
|
)
|
|
$
|
783,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
14,957
|
|
|
$
|
26
|
|
|
$
|
(15
|
)
|
|
$
|
14,968
|
|
State, county and municipal securities
|
|
|
161,509
|
|
|
|
3,875
|
|
|
|
(519
|
)
|
|
|
164,865
|
|
Corporate debt securities
|
|
|
5,901
|
|
|
|
150
|
|
|
|
(19
|
)
|
|
|
6,032
|
|
Mortgage-backed securities
|
|
|
622,313
|
|
|
|
5,208
|
|
|
|
(2,001
|
)
|
|
|
625,520
|
|
Total debt securities
|
|
$
|
804,680
|
|
|
$
|
9,259
|
|
|
$
|
(2,554
|
)
|
|
$
|
811,385
|
|
The amortized cost and fair value of available-for-sale securities
at September 30, 2016 by contractual maturity are summarized in the table below. Expected maturities for mortgage-backed
securities may differ from contractual maturities because in certain cases borrowers can prepay obligations without prepayment
penalties. Therefore, these securities are not included in the following maturity summary.
|
|
Amortized
Cost
|
|
|
Fair
Value
|
|
|
|
(Dollars in Thousands)
|
|
Due in one year or less
|
|
$
|
5,260
|
|
|
$
|
5,312
|
|
Due from one year to five years
|
|
|
63,450
|
|
|
|
65,135
|
|
Due from five to ten years
|
|
|
56,521
|
|
|
|
59,169
|
|
Due after ten years
|
|
|
54,775
|
|
|
|
56,504
|
|
Mortgage-backed securities
|
|
|
641,404
|
|
|
|
652,004
|
|
|
|
$
|
821,410
|
|
|
$
|
838,124
|
|
Securities with a carrying value of approximately
$416.8 million serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other
purposes required or permitted by law at September 30, 2016, compared with $551.0 million and $381.9 million at December
31, 2015 and September 30, 2015, respectively.
The following table details the gross unrealized losses and
fair value of securities aggregated by category and duration of continuous unrealized loss position at September 30, 2016, December 31,
2015 and September 30, 2015.
|
|
Less Than 12 Months
|
|
|
12 Months or More
|
|
|
Total
|
|
Description of Securities
|
|
Fair
Value
|
|
|
Unrealized
Losses
|
|
|
Fair
Value
|
|
|
Unrealized
Losses
|
|
|
Fair
Value
|
|
|
Unrealized
Losses
|
|
|
|
(Dollars in Thousands)
|
|
September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
State, county and municipal securities
|
|
|
4,398
|
|
|
|
(17
|
)
|
|
|
1,634
|
|
|
|
(11
|
)
|
|
|
6,032
|
|
|
|
(28
|
)
|
Corporate debt securities
|
|
|
3,012
|
|
|
|
(5
|
)
|
|
|
487
|
|
|
|
(15
|
)
|
|
|
3,499
|
|
|
|
(20
|
)
|
Mortgage-backed securities
|
|
|
66,920
|
|
|
|
(195
|
)
|
|
|
12,519
|
|
|
|
(122
|
)
|
|
|
79,439
|
|
|
|
(317
|
)
|
Total debt securities
|
|
$
|
74,330
|
|
|
$
|
(217
|
)
|
|
$
|
14,640
|
|
|
$
|
(148
|
)
|
|
$
|
88,970
|
|
|
$
|
(365
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
9,932
|
|
|
$
|
(27
|
)
|
|
$
|
4,958
|
|
|
$
|
(42
|
)
|
|
$
|
14,890
|
|
|
$
|
(69
|
)
|
State, county and municipal securities
|
|
|
19,293
|
|
|
|
(199
|
)
|
|
|
11,557
|
|
|
|
(212
|
)
|
|
|
30,850
|
|
|
|
(411
|
)
|
Corporate debt securities
|
|
|
1,383
|
|
|
|
(28
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,383
|
|
|
|
(28
|
)
|
Mortgage-backed securities
|
|
|
263,281
|
|
|
|
(1,950
|
)
|
|
|
29,950
|
|
|
|
(754
|
)
|
|
|
293,231
|
|
|
|
(2,704
|
)
|
Total debt securities
|
|
$
|
293,889
|
|
|
$
|
(2,204
|
)
|
|
$
|
46,465
|
|
|
$
|
(1,008
|
)
|
|
$
|
340,354
|
|
|
$
|
(3,212
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,985
|
|
|
$
|
(15
|
)
|
|
$
|
4,985
|
|
|
$
|
(15
|
)
|
State, county and municipal securities
|
|
|
28,339
|
|
|
|
(297
|
)
|
|
|
10,451
|
|
|
|
(222
|
)
|
|
|
38,790
|
|
|
|
(519
|
)
|
Corporate debt securities
|
|
|
894
|
|
|
|
(19
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
894
|
|
|
|
(19
|
)
|
Mortgage-backed securities
|
|
|
213,439
|
|
|
|
(1,184
|
)
|
|
|
30,708
|
|
|
|
(817
|
)
|
|
|
244,147
|
|
|
|
(2,001
|
)
|
Total debt securities
|
|
$
|
242,672
|
|
|
$
|
(1,500
|
)
|
|
$
|
46,144
|
|
|
$
|
(1,054
|
)
|
|
$
|
288,816
|
|
|
$
|
(2,554
|
)
|
As of September 30, 2016, the Company’s
securities portfolio consisted of 414 securities, 28 of which were in an unrealized loss position. The majority of unrealized
losses are related to the Company’s mortgage-backed securities, as discussed below.
At September 30, 2016, the Company held
23 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored
entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not
credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that
it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities
to be other-than-temporarily impaired at September 30, 2016.
At September 30, 2016, the Company held
three state, county and municipal securities and two corporate debt securities that were in an unrealized loss position. Because
the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not
have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated
recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2016.
During the first nine months of 2016 and
2015, the Company received timely and current interest and principal payments on all of the securities classified as corporate
debt securities, except for one security that began deferring interest during the fourth quarter of 2010. The Company’s
investments in subordinated debt include investments in regional and super-regional banks on which the Company prepares regular
analysis through review of financial information and credit ratings. Investments in preferred securities are also concentrated
in the preferred obligations of regional and super-regional banks through non-pooled investment structures. The Company did not
have investments in “pooled” trust preferred securities at September 30, 2016, December 31, 2015 or September 30,
2015.
Management and the Company’s Asset
and Liability Committee (the “ALCO Committee”) evaluate securities for other-than-temporary impairment at least on
a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. While the majority of
the unrealized losses on debt securities relate to changes in interest rates, corporate debt securities have also been affected
by reduced levels of liquidity and higher risk premiums. Occasionally, management engages independent third parties to evaluate
the Company’s position in certain corporate debt securities to aid management and the ALCO Committee in its determination
regarding the status of impairment. The Company believes that each investment poses minimal credit risk and further, that the
Company does not intend to sell these investment securities at an unrealized loss position at September 30, 2016, and it is more
likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Therefore, at September
30, 2016, these investments are not considered impaired on an other-than-temporary basis.
At September 30, 2016, December 31,
2015 and September 30, 2015, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.
The following table is a summary of sales activities in the
Company’s investment securities available for sale for the nine months ended September 30, 2016, year ended December 31,
2015 and nine months ended September 30, 2015:
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
|
|
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Gross gains on sales of securities
|
|
$
|
312
|
|
|
$
|
396
|
|
|
$
|
396
|
|
Gross losses on sales of securities
|
|
|
(218
|
)
|
|
|
(259
|
)
|
|
|
(259
|
)
|
Net realized gains on sales of securities available for sale
|
|
$
|
94
|
|
|
$
|
137
|
|
|
$
|
137
|
|
Sales proceeds
|
|
$
|
53,026
|
|
|
$
|
72,528
|
|
|
$
|
69,208
|
|
NOTE 4 – LOANS
The Bank engages in a full complement
of lending activities, including real estate-related loans, agriculture-related loans, commercial and financial loans and consumer
installment loans within select markets in Georgia, Alabama, Florida and South Carolina. During the third quarter of 2016, the
Bank began purchasing from an unrelated third party consumer installment home improvement loans made to borrowers throughout the
United States. The Bank also purchased residential mortgage loan pools during 2015 and 2016 collateralized by properties located
outside our Southeast markets, specifically in California, Washington and Illinois. The Bank concentrates the majority of its
lending activities in real estate loans. While risk of loss in the Company’s portfolio is primarily tied to the credit
quality of the various borrowers, risk of loss may increase due to factors beyond the Company’s control, such as local,
regional and/or national economic downturns. General conditions in the real estate market may also impact the relative risk
in the real estate portfolio.
A substantial portion of the Bank’s
loans are secured by real estate in the Bank’s primary market area. In addition, a substantial portion of the OREO
is located in those same markets. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan
portfolio and the recovery of a substantial portion of the carrying amount of OREO are susceptible to changes in real estate conditions
in the Bank’s primary market area.
Commercial, financial and agricultural
loans include both secured and unsecured loans for working capital, expansion, crop production, and other business purposes, including
SBA guaranteed loans and municipal loans. Short-term working capital loans are secured by non-real estate collateral such as accounts
receivable, crops, inventory and equipment. The Bank evaluates the financial strength, cash flow, management, credit history of
the borrower and the quality of the collateral securing the loan. The Bank often requires personal guarantees and secondary sources
of repayment on commercial, financial and agricultural loans.
Real estate loans include construction
and development loans, commercial and farmland loans and residential loans. Construction and development loans include loans for
the development of residential neighborhoods, one-to-four family home residential construction loans to builders and consumers,
and commercial real estate construction loans, primarily for owner-occupied properties. The Company limits its construction lending
risk through adherence to established underwriting procedures. Commercial real estate loans include loans secured by owner-occupied
commercial buildings for office, storage, retail, farmland and warehouse space. They also include non-owner occupied commercial
buildings such as leased retail and office space. Commercial real estate loans may be larger in size and may involve a greater
degree of risk than one-to-four family residential mortgage loans. Payments on such loans are often dependent on successful operation
or management of the properties. Residential loans represent permanent mortgage financing and are secured by residential properties
located within the Bank's market areas, along with warehouse lines of credit secured by residential mortgages.
Consumer installment loans and other loans
include home improvement loans, automobile loans, boat and recreational vehicle financing, and secured and unsecured personal
loans. Consumer loans carry greater risks than other loans, as the collateral can consist of rapidly depreciating assets such
as automobiles and equipment that may not provide an adequate source of repayment of the loan in the case of default.
Loans are stated at unpaid balances, net of unearned income
and deferred loan fees. Balances within the major loans receivable categories are presented in the following table, excluding
purchased non-covered and covered loans:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Commercial, financial and agricultural
|
|
$
|
625,947
|
|
|
$
|
449,623
|
|
|
$
|
427,747
|
|
Real estate – construction and development
|
|
|
328,308
|
|
|
|
244,693
|
|
|
|
220,798
|
|
Real estate – commercial and farmland
|
|
|
1,297,582
|
|
|
|
1,104,991
|
|
|
|
1,067,828
|
|
Real estate – residential
|
|
|
766,933
|
|
|
|
570,430
|
|
|
|
532,285
|
|
Consumer installment
|
|
|
68,305
|
|
|
|
31,125
|
|
|
|
31,299
|
|
Other
|
|
|
3,964
|
|
|
|
6,015
|
|
|
|
10,692
|
|
|
|
$
|
3,091,039
|
|
|
$
|
2,406,877
|
|
|
$
|
2,290,649
|
|
Purchased non-covered loans are defined as loans that were
acquired in bank acquisitions that are not covered by a loss-sharing agreement with the Federal Deposit Insurance Corporation
(the “FDIC”). Purchased non-covered loans totaling $1.07 billion, $771.6 million and $767.5 million at September 30,
2016, December 31, 2015 and September 30, 2015, respectively, are not included in the above schedule.
Purchased non-covered loans are shown below according to major
loan type as of the end of the periods shown:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Commercial, financial and agricultural
|
|
$
|
99,596
|
|
|
$
|
45,462
|
|
|
$
|
42,350
|
|
Real estate – construction and development
|
|
|
86,099
|
|
|
|
72,080
|
|
|
|
71,109
|
|
Real estate – commercial and farmland
|
|
|
590,388
|
|
|
|
390,755
|
|
|
|
385,032
|
|
Real estate – residential
|
|
|
286,169
|
|
|
|
258,153
|
|
|
|
263,312
|
|
Consumer installment
|
|
|
4,838
|
|
|
|
5,104
|
|
|
|
5,691
|
|
|
|
$
|
1,067,090
|
|
|
$
|
771,554
|
|
|
$
|
767,494
|
|
Purchased loan pools are defined as groups
of residential mortgage loans that were not acquired in bank acquisitions or FDIC-assisted transactions. As of September 30, 2016,
purchased loan pools totaled $624.9 million and consisted of whole-loan, adjustable rate residential mortgages on properties outside
the Company’s markets, with principal balances totaling $614.4 million and $10.5 million of remaining purchase premium paid
at acquisition. As of December 31, 2015, purchased loan pools totaled $593.0 million and consisted of whole-loan, adjustable rate
residential mortgages on properties outside the Company’s markets, with principal balances totaling $580.7 million and $12.3
million of purchase premium paid at acquisition. As of September 30, 2015, purchased loan pools totaled $410.1 million and consisted
of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets, with principal balances
totaling $402.1 million and $8.0 million of purchase premium paid at acquisition. At September 30, 2016, one loan in the purchased
loan pools with a principal balance of $864,000 was past due and risk-rated grade 40, while all other loans included in the purchased
loan pools were performing current loans, risk-rated grade 20. At December 31, 2015 and September 30, 2015, all loans included
in the purchased loan pools were performing current loans, all risk-rated grade 20. At September 30, 2016, December 31, 2015 and
September 30, 2015, the Company had allocated $2.0 million, $581,000 and $402,000, respectively, of allowance for loan losses
for the purchased loan pools. As part of the due diligence process prior to purchasing an individual mortgage pool, a complete
re-underwrite of the individual loan files was conducted. The underwriting process included a review of all income, asset, credit
and property related documentation that was used to originate the loan. Underwriters utilized the originating lender’s program
guidelines, as well as general prudent mortgage lending standards, to assess each individual loan file. Additional research
was conducted to assess the real estate market conditions and market expectations in the geographic areas where a collateral concentration
existed. As part of this review, an automated valuation model was employed to provide current collateral valuations and to support
individual loan-to-value ratios. Additionally, a sample of site inspections was completed to provide further assurance.
The results of the due diligence review were evaluated by officers of the Company in order to determine overall conformance
to the Bank’s credit and lending policies.
Covered loans are defined as loans that were acquired in FDIC-assisted
transactions that are covered by a loss-sharing agreement with the FDIC. Covered loans totaling $62.3 million, $137.5 million
and $191.0 million at September 30, 2016, December 31, 2015 and September 30, 2015, respectively, are not included in
the above schedules.
Covered loans are shown below according to loan type as of
the end of the periods shown:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Commercial, financial and agricultural
|
|
$
|
830
|
|
|
$
|
5,546
|
|
|
$
|
13,349
|
|
Real estate – construction and development
|
|
|
3,220
|
|
|
|
7,612
|
|
|
|
14,266
|
|
Real estate – commercial and farmland
|
|
|
13,688
|
|
|
|
71,226
|
|
|
|
103,399
|
|
Real estate – residential
|
|
|
44,457
|
|
|
|
53,038
|
|
|
|
59,835
|
|
Consumer installment
|
|
|
96
|
|
|
|
107
|
|
|
|
172
|
|
|
|
$
|
62,291
|
|
|
$
|
137,529
|
|
|
$
|
191,021
|
|
Nonaccrual and Past-Due Loans
A loan is placed on nonaccrual status
when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been
accrued and is subsequently determined to have doubtful collectability is charged against interest income. Interest on loans
that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. Loans are
returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments
are reasonably assured. Past-due loans are loans whose principal or interest is past due 30 days or more. In some cases,
where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from
the original contractual terms.
The following table presents an analysis
of loans accounted for on a nonaccrual basis, excluding purchased non-covered and covered loans:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Commercial, financial and agricultural
|
|
$
|
1,313
|
|
|
$
|
1,302
|
|
|
$
|
1,995
|
|
Real estate – construction and development
|
|
|
1,255
|
|
|
|
1,812
|
|
|
|
1,753
|
|
Real estate – commercial and farmland
|
|
|
7,485
|
|
|
|
7,019
|
|
|
|
11,645
|
|
Real estate – residential
|
|
|
5,999
|
|
|
|
6,278
|
|
|
|
4,810
|
|
Consumer installment
|
|
|
518
|
|
|
|
449
|
|
|
|
355
|
|
|
|
$
|
16,570
|
|
|
$
|
16,860
|
|
|
$
|
20,558
|
|
The following table presents an analysis of purchased non-covered
loans accounted for on a nonaccrual basis:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Commercial, financial and agricultural
|
|
$
|
744
|
|
|
$
|
1,064
|
|
|
$
|
214
|
|
Real estate – construction and development
|
|
|
2,403
|
|
|
|
1,106
|
|
|
|
916
|
|
Real estate – commercial and farmland
|
|
|
7,796
|
|
|
|
4,920
|
|
|
|
4,728
|
|
Real estate – residential
|
|
|
7,012
|
|
|
|
6,168
|
|
|
|
5,464
|
|
Consumer installment
|
|
|
38
|
|
|
|
72
|
|
|
|
52
|
|
|
|
$
|
17,993
|
|
|
$
|
13,330
|
|
|
$
|
11,374
|
|
The following table presents an analysis
of covered loans accounted for on a nonaccrual basis:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Commercial, financial and agricultural
|
|
$
|
128
|
|
|
$
|
2,803
|
|
|
$
|
7,916
|
|
Real estate – construction and development
|
|
|
60
|
|
|
|
1,701
|
|
|
|
2,934
|
|
Real estate – commercial and farmland
|
|
|
1,540
|
|
|
|
5,034
|
|
|
|
18,164
|
|
Real estate – residential
|
|
|
4,078
|
|
|
|
3,663
|
|
|
|
3,979
|
|
Consumer installment
|
|
|
28
|
|
|
|
37
|
|
|
|
91
|
|
|
|
$
|
5,834
|
|
|
$
|
13,238
|
|
|
$
|
33,084
|
|
The following table presents an analysis of past-due loans,
excluding purchased non-covered and covered past-due loans as of September 30, 2016, December 31, 2015 and September 30,
2015:
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
798
|
|
|
$
|
336
|
|
|
$
|
1,134
|
|
|
$
|
2,268
|
|
|
$
|
623,679
|
|
|
$
|
625,947
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
5,320
|
|
|
|
177
|
|
|
|
1,136
|
|
|
|
6,633
|
|
|
|
321,675
|
|
|
|
328,308
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
2,726
|
|
|
|
199
|
|
|
|
5,788
|
|
|
|
8,713
|
|
|
|
1,288,869
|
|
|
|
1,297,582
|
|
|
|
-
|
|
Real estate – residential
|
|
|
2,890
|
|
|
|
802
|
|
|
|
5,035
|
|
|
|
8,727
|
|
|
|
758,206
|
|
|
|
766,933
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
513
|
|
|
|
174
|
|
|
|
309
|
|
|
|
996
|
|
|
|
67,309
|
|
|
|
68,305
|
|
|
|
-
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,964
|
|
|
|
3,964
|
|
|
|
-
|
|
Total
|
|
$
|
12,247
|
|
|
$
|
1,688
|
|
|
$
|
13,402
|
|
|
$
|
27,337
|
|
|
$
|
3,063,702
|
|
|
$
|
3,091,039
|
|
|
$
|
-
|
|
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
568
|
|
|
$
|
271
|
|
|
$
|
835
|
|
|
$
|
1,674
|
|
|
$
|
447,949
|
|
|
$
|
449,623
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
1,413
|
|
|
|
261
|
|
|
|
1,739
|
|
|
|
3,413
|
|
|
|
241,280
|
|
|
|
244,693
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
1,781
|
|
|
|
641
|
|
|
|
6,912
|
|
|
|
9,334
|
|
|
|
1,095,657
|
|
|
|
1,104,991
|
|
|
|
-
|
|
Real estate – residential
|
|
|
3,806
|
|
|
|
2,120
|
|
|
|
5,121
|
|
|
|
11,047
|
|
|
|
559,383
|
|
|
|
570,430
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
374
|
|
|
|
188
|
|
|
|
238
|
|
|
|
800
|
|
|
|
30,325
|
|
|
|
31,125
|
|
|
|
-
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,015
|
|
|
|
6,015
|
|
|
|
-
|
|
Total
|
|
$
|
7,942
|
|
|
$
|
3,481
|
|
|
$
|
14,845
|
|
|
$
|
26,268
|
|
|
$
|
2,380,609
|
|
|
$
|
2,406,877
|
|
|
$
|
-
|
|
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past
Due
|
|
|
Loans
90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
781
|
|
|
$
|
714
|
|
|
$
|
1,799
|
|
|
$
|
3,294
|
|
|
$
|
424,453
|
|
|
$
|
427,747
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
1,184
|
|
|
|
417
|
|
|
|
1,753
|
|
|
|
3,354
|
|
|
|
217,444
|
|
|
|
220,798
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
4,275
|
|
|
|
399
|
|
|
|
8,082
|
|
|
|
12,756
|
|
|
|
1,055,072
|
|
|
|
1,067,828
|
|
|
|
-
|
|
Real estate – residential
|
|
|
6,424
|
|
|
|
1,558
|
|
|
|
4,247
|
|
|
|
12,229
|
|
|
|
520,056
|
|
|
|
532,285
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
326
|
|
|
|
82
|
|
|
|
227
|
|
|
|
635
|
|
|
|
30,664
|
|
|
|
31,299
|
|
|
|
-
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,692
|
|
|
|
10,692
|
|
|
|
-
|
|
Total
|
|
$
|
12,990
|
|
|
$
|
3,170
|
|
|
$
|
16,108
|
|
|
$
|
32,268
|
|
|
$
|
2,258,381
|
|
|
$
|
2,290,649
|
|
|
$
|
-
|
|
The following table presents an analysis of purchased non-covered
past-due loans as of September 30, 2016, December 31, 2015 and September 30, 2015:
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
244
|
|
|
$
|
-
|
|
|
$
|
624
|
|
|
$
|
868
|
|
|
$
|
98,728
|
|
|
$
|
99,596
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
1,082
|
|
|
|
233
|
|
|
|
2,070
|
|
|
|
3,385
|
|
|
|
82,714
|
|
|
|
86,099
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
1,806
|
|
|
|
599
|
|
|
|
6,369
|
|
|
|
8,774
|
|
|
|
581,614
|
|
|
|
590,388
|
|
|
|
-
|
|
Real estate – residential
|
|
|
1,481
|
|
|
|
2,144
|
|
|
|
5,379
|
|
|
|
9,004
|
|
|
|
277,165
|
|
|
|
286,169
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
33
|
|
|
|
267
|
|
|
|
38
|
|
|
|
338
|
|
|
|
4,500
|
|
|
|
4,838
|
|
|
|
-
|
|
Total
|
|
$
|
4,646
|
|
|
$
|
3,243
|
|
|
$
|
14,480
|
|
|
$
|
22,369
|
|
|
$
|
1,044,721
|
|
|
$
|
1,067,090
|
|
|
$
|
-
|
|
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
248
|
|
|
$
|
13
|
|
|
$
|
846
|
|
|
$
|
1,107
|
|
|
$
|
44,355
|
|
|
$
|
45,462
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
416
|
|
|
|
687
|
|
|
|
420
|
|
|
|
1,523
|
|
|
|
70,557
|
|
|
|
72,080
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
2,479
|
|
|
|
1,629
|
|
|
|
3,347
|
|
|
|
7,455
|
|
|
|
383,300
|
|
|
|
390,755
|
|
|
|
-
|
|
Real estate – residential
|
|
|
4,965
|
|
|
|
2,176
|
|
|
|
4,928
|
|
|
|
12,069
|
|
|
|
246,084
|
|
|
|
258,153
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
31
|
|
|
|
9
|
|
|
|
70
|
|
|
|
110
|
|
|
|
4,994
|
|
|
|
5,104
|
|
|
|
-
|
|
Total
|
|
$
|
8,139
|
|
|
$
|
4,514
|
|
|
$
|
9,611
|
|
|
$
|
22,264
|
|
|
$
|
749,290
|
|
|
$
|
771,554
|
|
|
$
|
-
|
|
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
140
|
|
|
$
|
11
|
|
|
$
|
112
|
|
|
$
|
263
|
|
|
$
|
42,087
|
|
|
$
|
42,350
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
322
|
|
|
|
-
|
|
|
|
459
|
|
|
|
781
|
|
|
|
70,328
|
|
|
|
71,109
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
2,681
|
|
|
|
613
|
|
|
|
3,391
|
|
|
|
6,685
|
|
|
|
378,347
|
|
|
|
385,032
|
|
|
|
-
|
|
Real estate – residential
|
|
|
3,822
|
|
|
|
1,672
|
|
|
|
4,901
|
|
|
|
10,395
|
|
|
|
252,917
|
|
|
|
263,312
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
5
|
|
|
|
-
|
|
|
|
49
|
|
|
|
54
|
|
|
|
5,637
|
|
|
|
5,691
|
|
|
|
-
|
|
Total
|
|
$
|
6,970
|
|
|
$
|
2,296
|
|
|
$
|
8,912
|
|
|
$
|
18,178
|
|
|
$
|
749,316
|
|
|
$
|
767,494
|
|
|
$
|
-
|
|
The
following table presents an analysis of covered past-due loans as of September 30, 2016, December 31, 2015 and September
30, 2015:
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
128
|
|
|
$
|
128
|
|
|
$
|
702
|
|
|
$
|
830
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
114
|
|
|
|
4
|
|
|
|
-
|
|
|
|
118
|
|
|
|
3,102
|
|
|
|
3,220
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
906
|
|
|
|
-
|
|
|
|
1
|
|
|
|
907
|
|
|
|
12,781
|
|
|
|
13,688
|
|
|
|
-
|
|
Real estate – residential
|
|
|
1,047
|
|
|
|
943
|
|
|
|
2,589
|
|
|
|
4,579
|
|
|
|
39,878
|
|
|
|
44,457
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
96
|
|
|
|
96
|
|
|
|
-
|
|
Total
|
|
$
|
2,067
|
|
|
$
|
947
|
|
|
$
|
2,718
|
|
|
$
|
5,732
|
|
|
$
|
56,559
|
|
|
$
|
62,291
|
|
|
$
|
-
|
|
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,802
|
|
|
$
|
2,802
|
|
|
$
|
2,744
|
|
|
$
|
5,546
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
96
|
|
|
|
-
|
|
|
|
1,633
|
|
|
|
1,729
|
|
|
|
5,883
|
|
|
|
7,612
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
170
|
|
|
|
205
|
|
|
|
3,064
|
|
|
|
3,439
|
|
|
|
67,787
|
|
|
|
71,226
|
|
|
|
-
|
|
Real estate – residential
|
|
|
2,155
|
|
|
|
1,001
|
|
|
|
2,658
|
|
|
|
5,814
|
|
|
|
47,224
|
|
|
|
53,038
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
-
|
|
|
|
-
|
|
|
|
37
|
|
|
|
37
|
|
|
|
70
|
|
|
|
107
|
|
|
|
-
|
|
Total
|
|
$
|
2,421
|
|
|
$
|
1,206
|
|
|
$
|
10,194
|
|
|
$
|
13,821
|
|
|
$
|
123,708
|
|
|
$
|
137,529
|
|
|
$
|
-
|
|
|
|
Loans
30-59
Days Past
Due
|
|
|
Loans
60-89
Days
Past Due
|
|
|
Loans 90
or More
Days Past
Due
|
|
|
Total
Loans
Past Due
|
|
|
Current
Loans
|
|
|
Total
Loans
|
|
|
Loans 90
Days or
More Past
Due and
Still
Accruing
|
|
|
|
(Dollars in Thousands)
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
40
|
|
|
$
|
48
|
|
|
$
|
7,886
|
|
|
$
|
7,974
|
|
|
$
|
5,375
|
|
|
$
|
13,349
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
1,548
|
|
|
|
68
|
|
|
|
2,408
|
|
|
|
4,024
|
|
|
|
10,242
|
|
|
|
14,266
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
1,003
|
|
|
|
550
|
|
|
|
6,573
|
|
|
|
8,126
|
|
|
|
95,273
|
|
|
|
103,399
|
|
|
|
-
|
|
Real estate – residential
|
|
|
2,612
|
|
|
|
783
|
|
|
|
2,140
|
|
|
|
5,535
|
|
|
|
54,300
|
|
|
|
59,835
|
|
|
|
-
|
|
Consumer installment loans
|
|
|
-
|
|
|
|
-
|
|
|
|
49
|
|
|
|
49
|
|
|
|
123
|
|
|
|
172
|
|
|
|
-
|
|
Total
|
|
$
|
5,203
|
|
|
$
|
1,449
|
|
|
$
|
19,056
|
|
|
$
|
25,708
|
|
|
$
|
165,313
|
|
|
$
|
191,021
|
|
|
$
|
-
|
|
Impaired Loans
Loans are considered impaired when, based
on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the
original contractual terms of the loan agreements. Impaired loans include loans on nonaccrual status and accruing troubled debt
restructurings. When determining if the Company will be unable to collect all principal and interest payments due in accordance
with the contractual terms of the loan agreement, the Company considers the borrower’s capacity to pay, which includes such
factors as the borrower’s current financial statements, an analysis of global cash flow sufficient to pay all debt obligations
and an evaluation of secondary sources of repayment, such as guarantor support and collateral value. The Company individually
assesses for impairment all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000
(including all troubled debt restructurings, whether or not currently classified as such). The tables below include all loans
deemed impaired, whether or not individually assessed for impairment. If a loan is deemed impaired, a specific valuation allowance
is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s
existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired
loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest
is recognized on a cash basis.
The following is a summary of information pertaining to impaired
loans, excluding purchased non-covered and covered loans:
|
|
As of and For the Period Ended
|
|
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
|
|
(Dollars in Thousands)
|
|
Nonaccrual loans
|
|
$
|
16,570
|
|
|
$
|
16,860
|
|
|
$
|
20,558
|
|
Troubled debt restructurings not included above
|
|
|
14,013
|
|
|
|
14,418
|
|
|
|
12,075
|
|
Total impaired loans
|
|
$
|
30,583
|
|
|
$
|
31,278
|
|
|
$
|
32,633
|
|
Quarter-to-date interest income recognized on impaired loans
|
|
$
|
252
|
|
|
$
|
274
|
|
|
$
|
241
|
|
Year-to-date interest income recognized on impaired loans
|
|
$
|
808
|
|
|
$
|
909
|
|
|
$
|
635
|
|
Quarter-to-date foregone interest income on impaired loans
|
|
$
|
239
|
|
|
$
|
265
|
|
|
$
|
309
|
|
Year-to-date foregone interest income on impaired loans
|
|
$
|
710
|
|
|
$
|
1,204
|
|
|
$
|
939
|
|
The following table presents an analysis of information pertaining
to impaired loans, excluding purchased non-covered and covered loans as of September 30, 2016, December 31, 2015 and September
30, 2015:
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Nine
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
2,568
|
|
|
$
|
252
|
|
|
$
|
1,114
|
|
|
$
|
1,366
|
|
|
$
|
118
|
|
|
$
|
1,736
|
|
|
$
|
1,640
|
|
Real estate – construction &
development
|
|
|
2,972
|
|
|
|
-
|
|
|
|
1,946
|
|
|
|
1,946
|
|
|
|
537
|
|
|
|
2,001
|
|
|
|
2,214
|
|
Real estate – commercial &
farmland
|
|
|
14,015
|
|
|
|
5,499
|
|
|
|
7,520
|
|
|
|
13,019
|
|
|
|
873
|
|
|
|
12,776
|
|
|
|
12,837
|
|
Real estate – residential
|
|
|
14,350
|
|
|
|
2,046
|
|
|
|
11,667
|
|
|
|
13,713
|
|
|
|
2,648
|
|
|
|
13,686
|
|
|
|
13,516
|
|
Consumer installment
loans
|
|
|
586
|
|
|
|
-
|
|
|
|
539
|
|
|
|
539
|
|
|
|
6
|
|
|
|
492
|
|
|
|
479
|
|
Total
|
|
$
|
34,491
|
|
|
$
|
7,797
|
|
|
$
|
22,786
|
|
|
$
|
30,583
|
|
|
$
|
4,182
|
|
|
$
|
30,691
|
|
|
$
|
30,686
|
|
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Twelve
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
3,062
|
|
|
$
|
158
|
|
|
$
|
1,385
|
|
|
$
|
1,543
|
|
|
$
|
135
|
|
|
$
|
1,887
|
|
|
$
|
2,275
|
|
Real estate – construction &
development
|
|
|
3,581
|
|
|
|
230
|
|
|
|
2,374
|
|
|
|
2,604
|
|
|
|
774
|
|
|
|
2,598
|
|
|
|
3,228
|
|
Real estate – commercial &
farmland
|
|
|
14,385
|
|
|
|
6,702
|
|
|
|
6,083
|
|
|
|
12,785
|
|
|
|
1,067
|
|
|
|
15,074
|
|
|
|
15,105
|
|
Real estate – residential
|
|
|
15,809
|
|
|
|
1,621
|
|
|
|
12,230
|
|
|
|
13,851
|
|
|
|
2,224
|
|
|
|
11,935
|
|
|
|
11,977
|
|
Consumer installment
loans
|
|
|
592
|
|
|
|
-
|
|
|
|
495
|
|
|
|
495
|
|
|
|
9
|
|
|
|
461
|
|
|
|
488
|
|
Total
|
|
$
|
37,429
|
|
|
$
|
8,711
|
|
|
$
|
22,567
|
|
|
$
|
31,278
|
|
|
$
|
4,209
|
|
|
$
|
31,955
|
|
|
$
|
33,073
|
|
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Nine
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
3,761
|
|
|
$
|
471
|
|
|
$
|
1,762
|
|
|
$
|
2,233
|
|
|
$
|
528
|
|
|
$
|
3,289
|
|
|
$
|
2,458
|
|
Real estate – construction &
development
|
|
|
3,757
|
|
|
|
230
|
|
|
|
2,361
|
|
|
|
2,591
|
|
|
|
731
|
|
|
|
2,503
|
|
|
|
3,384
|
|
Real estate – commercial &
farmland
|
|
|
18,652
|
|
|
|
5,870
|
|
|
|
11,494
|
|
|
|
17,364
|
|
|
|
1,635
|
|
|
|
16,459
|
|
|
|
15,684
|
|
Real estate – residential
|
|
|
11,549
|
|
|
|
1,752
|
|
|
|
8,266
|
|
|
|
10,018
|
|
|
|
1,872
|
|
|
|
10,185
|
|
|
|
11,509
|
|
Consumer installment
loans
|
|
|
524
|
|
|
|
-
|
|
|
|
426
|
|
|
|
426
|
|
|
|
7
|
|
|
|
483
|
|
|
|
487
|
|
Total
|
|
$
|
38,243
|
|
|
$
|
8,323
|
|
|
$
|
24,309
|
|
|
$
|
32,632
|
|
|
$
|
4,773
|
|
|
$
|
32,919
|
|
|
$
|
33,522
|
|
The following is a summary of information pertaining to purchased
non-covered impaired loans:
|
|
As of and For the Period Ended
|
|
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
|
|
(Dollars in Thousands)
|
|
Nonaccrual loans
|
|
$
|
17,993
|
|
|
$
|
13,330
|
|
|
$
|
11,374
|
|
Troubled debt restructurings not included above
|
|
|
9,294
|
|
|
|
9,373
|
|
|
|
7,188
|
|
Total impaired loans
|
|
$
|
27,287
|
|
|
$
|
22,703
|
|
|
$
|
18,562
|
|
Quarter-to-date interest income recognized on impaired loans
|
|
$
|
1,339
|
|
|
$
|
442
|
|
|
$
|
158
|
|
Year-to-date interest income recognized on impaired loans
|
|
$
|
1,885
|
|
|
$
|
785
|
|
|
$
|
342
|
|
Quarter-to-date foregone interest income on impaired loans
|
|
$
|
264
|
|
|
$
|
245
|
|
|
$
|
198
|
|
Year-to-date foregone interest income on impaired loans
|
|
$
|
883
|
|
|
$
|
1,365
|
|
|
$
|
1,121
|
|
The following table presents an analysis of information pertaining
to purchased non-covered impaired loans as of September 30, 2016, December 31, 2015 and September 30, 2015:
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Nine
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
4,801
|
|
|
$
|
520
|
|
|
$
|
225
|
|
|
$
|
745
|
|
|
$
|
-
|
|
|
$
|
710
|
|
|
$
|
787
|
|
Real estate – construction &
development
|
|
|
23,284
|
|
|
|
233
|
|
|
|
2,699
|
|
|
|
2,932
|
|
|
|
183
|
|
|
|
2,306
|
|
|
|
2,053
|
|
Real estate – commercial &
farmland
|
|
|
34,021
|
|
|
|
1,778
|
|
|
|
11,858
|
|
|
|
13,636
|
|
|
|
380
|
|
|
|
13,310
|
|
|
|
13,732
|
|
Real estate – residential
|
|
|
12,458
|
|
|
|
2,705
|
|
|
|
7,227
|
|
|
|
9,932
|
|
|
|
722
|
|
|
|
9,685
|
|
|
|
9,163
|
|
Consumer installment
loans
|
|
|
55
|
|
|
|
42
|
|
|
|
-
|
|
|
|
42
|
|
|
|
-
|
|
|
|
43
|
|
|
|
64
|
|
Total
|
|
$
|
74,619
|
|
|
$
|
5,278
|
|
|
$
|
22,009
|
|
|
$
|
27,287
|
|
|
$
|
1,285
|
|
|
$
|
26,054
|
|
|
$
|
25,799
|
|
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Twelve
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
3,103
|
|
|
$
|
1,066
|
|
|
$
|
-
|
|
|
$
|
1,066
|
|
|
$
|
-
|
|
|
$
|
640
|
|
|
$
|
392
|
|
Real estate – construction &
development
|
|
|
8,987
|
|
|
|
1,469
|
|
|
|
-
|
|
|
|
1,469
|
|
|
|
-
|
|
|
|
1,369
|
|
|
|
1,429
|
|
Real estate – commercial &
farmland
|
|
|
14,999
|
|
|
|
11,134
|
|
|
|
-
|
|
|
|
11,134
|
|
|
|
-
|
|
|
|
9,966
|
|
|
|
10,806
|
|
Real estate – residential
|
|
|
14,946
|
|
|
|
8,957
|
|
|
|
-
|
|
|
|
8,957
|
|
|
|
-
|
|
|
|
8,591
|
|
|
|
8,067
|
|
Consumer installment
loans
|
|
|
94
|
|
|
|
77
|
|
|
|
-
|
|
|
|
77
|
|
|
|
-
|
|
|
|
67
|
|
|
|
65
|
|
Total
|
|
$
|
42,129
|
|
|
$
|
22,703
|
|
|
$
|
-
|
|
|
$
|
22,703
|
|
|
$
|
-
|
|
|
$
|
20,633
|
|
|
$
|
20,759
|
|
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Nine
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
1,137
|
|
|
$
|
214
|
|
|
$
|
-
|
|
|
$
|
214
|
|
|
$
|
-
|
|
|
$
|
262
|
|
|
$
|
224
|
|
Real estate – construction &
development
|
|
|
9,211
|
|
|
|
1,268
|
|
|
|
-
|
|
|
|
1,268
|
|
|
|
-
|
|
|
|
1,563
|
|
|
|
1,419
|
|
Real estate – commercial &
farmland
|
|
|
13,399
|
|
|
|
8,799
|
|
|
|
-
|
|
|
|
8,799
|
|
|
|
-
|
|
|
|
11,245
|
|
|
|
10,724
|
|
Real estate – residential
|
|
|
12,443
|
|
|
|
8,224
|
|
|
|
-
|
|
|
|
8,224
|
|
|
|
-
|
|
|
|
8,255
|
|
|
|
7,845
|
|
Consumer installment
loans
|
|
|
74
|
|
|
|
57
|
|
|
|
-
|
|
|
|
57
|
|
|
|
-
|
|
|
|
76
|
|
|
|
63
|
|
Total
|
|
$
|
36,264
|
|
|
$
|
18,562
|
|
|
$
|
-
|
|
|
$
|
18,562
|
|
|
$
|
-
|
|
|
$
|
21,402
|
|
|
$
|
20,275
|
|
The following is a summary of information pertaining to covered
impaired loans:
|
|
As of and For the Period Ended
|
|
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
|
|
(Dollars in Thousands)
|
|
Nonaccrual loans
|
|
$
|
5,834
|
|
|
$
|
13,238
|
|
|
$
|
33,084
|
|
Troubled debt restructurings not included above
|
|
|
11,823
|
|
|
|
13,283
|
|
|
|
16,576
|
|
Total impaired loans
|
|
$
|
17,657
|
|
|
$
|
26,521
|
|
|
$
|
49,660
|
|
Quarter-to-date interest income recognized on impaired loans
|
|
$
|
154
|
|
|
$
|
154
|
|
|
$
|
268
|
|
Year-to-date interest income recognized on impaired loans
|
|
$
|
493
|
|
|
$
|
886
|
|
|
$
|
732
|
|
Quarter-to-date foregone interest income on impaired loans
|
|
$
|
82
|
|
|
$
|
181
|
|
|
$
|
468
|
|
Year-to-date foregone interest income on impaired loans
|
|
$
|
400
|
|
|
$
|
1,596
|
|
|
$
|
1,416
|
|
The following table presents an analysis of information pertaining
to covered impaired loans as of September 30, 2016, December 31, 2015 and September 30, 2015:
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Nine
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
296
|
|
|
$
|
128
|
|
|
$
|
-
|
|
|
$
|
128
|
|
|
$
|
-
|
|
|
$
|
128
|
|
|
$
|
1,464
|
|
Real estate – construction &
development
|
|
|
969
|
|
|
|
63
|
|
|
|
810
|
|
|
|
873
|
|
|
|
1
|
|
|
|
1,640
|
|
|
|
2,022
|
|
Real estate – commercial &
farmland
|
|
|
7,077
|
|
|
|
83
|
|
|
|
3,258
|
|
|
|
3,341
|
|
|
|
22
|
|
|
|
4,886
|
|
|
|
5,837
|
|
Real estate – residential
|
|
|
14,450
|
|
|
|
4,768
|
|
|
|
8,513
|
|
|
|
13,281
|
|
|
|
213
|
|
|
|
13,418
|
|
|
|
13,730
|
|
Consumer installment
loans
|
|
|
43
|
|
|
|
34
|
|
|
|
-
|
|
|
|
34
|
|
|
|
-
|
|
|
|
37
|
|
|
|
41
|
|
Total
|
|
$
|
22,835
|
|
|
$
|
5,076
|
|
|
$
|
12,581
|
|
|
$
|
17,657
|
|
|
$
|
236
|
|
|
$
|
20,109
|
|
|
$
|
23,094
|
|
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Twelve
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
5,188
|
|
|
$
|
2,802
|
|
|
$
|
-
|
|
|
$
|
2,802
|
|
|
$
|
-
|
|
|
$
|
5,360
|
|
|
$
|
7,408
|
|
Real estate – construction &
development
|
|
|
15,119
|
|
|
|
2,480
|
|
|
|
-
|
|
|
|
2,480
|
|
|
|
-
|
|
|
|
4,130
|
|
|
|
6,906
|
|
Real estate – commercial &
farmland
|
|
|
20,508
|
|
|
|
7,001
|
|
|
|
-
|
|
|
|
7,001
|
|
|
|
-
|
|
|
|
14,133
|
|
|
|
18,504
|
|
Real estate – residential
|
|
|
15,830
|
|
|
|
14,192
|
|
|
|
-
|
|
|
|
14,192
|
|
|
|
-
|
|
|
|
14,399
|
|
|
|
16,010
|
|
Consumer installment
loans
|
|
|
60
|
|
|
|
46
|
|
|
|
-
|
|
|
|
46
|
|
|
|
-
|
|
|
|
69
|
|
|
|
86
|
|
Total
|
|
$
|
56,705
|
|
|
$
|
26,521
|
|
|
$
|
-
|
|
|
$
|
26,521
|
|
|
$
|
-
|
|
|
$
|
38,091
|
|
|
$
|
48,914
|
|
|
|
Unpaid
Contractual
Principal
Balance
|
|
|
Recorded
Investment
With No
Allowance
|
|
|
Recorded
Investment
With
Allowance
|
|
|
Total
Recorded
Investment
|
|
|
Related
Allowance
|
|
|
Three
Month
Average
Recorded
Investment
|
|
|
Nine
Month
Average
Recorded
Investment
|
|
|
|
(Dollars
in Thousands)
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial &
agricultural
|
|
$
|
11,794
|
|
|
$
|
7,918
|
|
|
$
|
-
|
|
|
$
|
7,918
|
|
|
$
|
-
|
|
|
$
|
8,625
|
|
|
$
|
8,560
|
|
Real estate – construction &
development
|
|
|
29,596
|
|
|
|
5,780
|
|
|
|
-
|
|
|
|
5,780
|
|
|
|
-
|
|
|
|
6,166
|
|
|
|
8,013
|
|
Real estate – commercial &
farmland
|
|
|
41,724
|
|
|
|
21,265
|
|
|
|
-
|
|
|
|
21,265
|
|
|
|
-
|
|
|
|
20,697
|
|
|
|
21,380
|
|
Real estate – residential
|
|
|
18,097
|
|
|
|
14,605
|
|
|
|
-
|
|
|
|
14,605
|
|
|
|
-
|
|
|
|
14,881
|
|
|
|
16,465
|
|
Consumer installment
loans
|
|
|
126
|
|
|
|
92
|
|
|
|
-
|
|
|
|
92
|
|
|
|
-
|
|
|
|
101
|
|
|
|
96
|
|
Total
|
|
$
|
101,337
|
|
|
$
|
49,660
|
|
|
$
|
-
|
|
|
$
|
49,660
|
|
|
$
|
-
|
|
|
$
|
50,470
|
|
|
$
|
54,514
|
|
Credit Quality Indicators
The Company uses a nine category risk grading system to assign
a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades:
Grade 10 – Prime Credit –
This grade represents loans to the Company’s most creditworthy borrowers or loans that are secured by cash or cash equivalents.
Grade 15 – Good Credit –
This grade includes loans that exhibit one or more characteristics better than that of a
Satisfactory Credit
. Generally,
the debt service coverage and borrower’s liquidity is materially better than required by the Company’s loan policy.
Grade 20 – Satisfactory Credit
– This grade is assigned to loans to borrowers who exhibit satisfactory credit histories, contain acceptable loan structures
and demonstrate ability to repay.
Grade 23 – Performing, Under-Collateralized
Credit –
This grade is assigned to loans that are currently performing and supported by adequate financial information
that reflects repayment capacity but exhibits a loan-to-value ratio greater than 110%, based on a documented collateral valuation.
Grade 25 – Minimum Acceptable
Credit –
This grade includes loans which exhibit all the characteristics of a
Satisfactory Credit
, but warrant
more than normal level of banker supervision due to (i) circumstances which elevate the risks of performance (such as start-up
operations, untested management, heavy leverage and interim losses); (ii) adverse, extraordinary events that have affected, or
could affect, the borrower’s cash flow, financial condition, ability to continue operating profitability or refinancing
(such as death of principal, fire and divorce); (iii) loans that require more than the normal servicing requirements (such
as any type of construction financing, acquisition and development loans, accounts receivable or inventory loans and floor plan
loans); (iv) existing technical exceptions which raise some doubts about the Bank’s perfection in its collateral position
or the continued financial capacity of the borrower; or (v) improvements in formerly criticized borrowers, which may warrant
banker supervision.
Grade 30 – Other Asset Especially
Mentioned –
This grade includes loans that exhibit potential weaknesses that deserve management’s close attention.
If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s
credit position at some future date.
Grade 40 – Substandard –
This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower
or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility
that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due
performance, operating losses or questionable collateral values.
Grade 50 – Doubtful –
This
grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses
make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or
improbable.
Grade 60 – Loss –
This
grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets
of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but
rather it is not practical or desirable to defer writing it off.
The following table presents the loan portfolio, excluding
purchased non-covered and covered loans, by risk grade as of September 30, 2016:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
381,814
|
|
|
$
|
-
|
|
|
$
|
9,053
|
|
|
$
|
127
|
|
|
$
|
7,787
|
|
|
$
|
-
|
|
|
$
|
398,781
|
|
15
|
|
|
23,627
|
|
|
|
6,732
|
|
|
|
105,298
|
|
|
|
54,346
|
|
|
|
386
|
|
|
|
-
|
|
|
|
190,389
|
|
20
|
|
|
105,573
|
|
|
|
41,759
|
|
|
|
835,021
|
|
|
|
596,886
|
|
|
|
24,870
|
|
|
|
3,964
|
|
|
|
1,608,073
|
|
23
|
|
|
372
|
|
|
|
7,126
|
|
|
|
8,719
|
|
|
|
6,530
|
|
|
|
16
|
|
|
|
-
|
|
|
|
22,763
|
|
25
|
|
|
108,887
|
|
|
|
266,728
|
|
|
|
299,714
|
|
|
|
87,480
|
|
|
|
34,339
|
|
|
|
-
|
|
|
|
797,148
|
|
30
|
|
|
967
|
|
|
|
3,087
|
|
|
|
23,457
|
|
|
|
4,165
|
|
|
|
88
|
|
|
|
-
|
|
|
|
31,764
|
|
40
|
|
|
4,707
|
|
|
|
2,876
|
|
|
|
16,320
|
|
|
|
17,399
|
|
|
|
819
|
|
|
|
-
|
|
|
|
42,121
|
|
50
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
60
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
625,947
|
|
|
$
|
328,308
|
|
|
$
|
1,297,582
|
|
|
$
|
766,933
|
|
|
$
|
68,305
|
|
|
$
|
3,964
|
|
|
$
|
3,091,039
|
|
The following table presents the loan portfolio, excluding
purchased non-covered and covered loans, by risk grade as of December 31, 2015:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
241,721
|
|
|
$
|
294
|
|
|
$
|
116
|
|
|
$
|
1,606
|
|
|
$
|
6,872
|
|
|
$
|
-
|
|
|
$
|
250,609
|
|
15
|
|
|
28,420
|
|
|
|
2,074
|
|
|
|
117,880
|
|
|
|
78,165
|
|
|
|
1,191
|
|
|
|
-
|
|
|
|
227,730
|
|
20
|
|
|
97,142
|
|
|
|
46,221
|
|
|
|
685,538
|
|
|
|
369,624
|
|
|
|
19,780
|
|
|
|
6,015
|
|
|
|
1,224,320
|
|
23
|
|
|
559
|
|
|
|
7,827
|
|
|
|
13,073
|
|
|
|
6,112
|
|
|
|
36
|
|
|
|
-
|
|
|
|
27,607
|
|
25
|
|
|
77,829
|
|
|
|
183,512
|
|
|
|
254,012
|
|
|
|
91,465
|
|
|
|
2,595
|
|
|
|
-
|
|
|
|
609,413
|
|
30
|
|
|
1,492
|
|
|
|
1,620
|
|
|
|
13,821
|
|
|
|
7,347
|
|
|
|
143
|
|
|
|
-
|
|
|
|
24,423
|
|
40
|
|
|
2,460
|
|
|
|
3,145
|
|
|
|
20,551
|
|
|
|
16,111
|
|
|
|
506
|
|
|
|
-
|
|
|
|
42,773
|
|
50
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
60
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
2
|
|
Total
|
|
$
|
449,623
|
|
|
$
|
244,693
|
|
|
$
|
1,104,991
|
|
|
$
|
570,430
|
|
|
$
|
31,125
|
|
|
$
|
6,015
|
|
|
$
|
2,406,877
|
|
The following table presents the loan portfolio, excluding
purchased non-covered and covered loans, by risk grade as of September 30, 2015:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
222,693
|
|
|
$
|
294
|
|
|
$
|
116
|
|
|
$
|
1,490
|
|
|
$
|
6,688
|
|
|
$
|
-
|
|
|
$
|
231,281
|
|
15
|
|
|
23,807
|
|
|
|
2,150
|
|
|
|
123,515
|
|
|
|
83,361
|
|
|
|
1,352
|
|
|
|
-
|
|
|
|
234,185
|
|
20
|
|
|
99,414
|
|
|
|
45,091
|
|
|
|
645,949
|
|
|
|
327,576
|
|
|
|
19,302
|
|
|
|
10,692
|
|
|
|
1,148,024
|
|
23
|
|
|
645
|
|
|
|
7,754
|
|
|
|
11,792
|
|
|
|
6,240
|
|
|
|
46
|
|
|
|
-
|
|
|
|
26,477
|
|
25
|
|
|
75,635
|
|
|
|
159,944
|
|
|
|
250,575
|
|
|
|
90,320
|
|
|
|
3,168
|
|
|
|
-
|
|
|
|
579,642
|
|
30
|
|
|
2,378
|
|
|
|
2,035
|
|
|
|
9,762
|
|
|
|
7,811
|
|
|
|
204
|
|
|
|
-
|
|
|
|
22,190
|
|
40
|
|
|
3,175
|
|
|
|
3,530
|
|
|
|
26,119
|
|
|
|
15,487
|
|
|
|
537
|
|
|
|
-
|
|
|
|
48,848
|
|
50
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
2
|
|
60
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
427,747
|
|
|
$
|
220,798
|
|
|
$
|
1,067,828
|
|
|
$
|
532,285
|
|
|
$
|
31,299
|
|
|
$
|
10,692
|
|
|
$
|
2,290,649
|
|
The following table presents the purchased non-covered loan
portfolio by risk grade as of September 30, 2016:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
5,676
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
867
|
|
|
$
|
-
|
|
|
$
|
6,543
|
|
15
|
|
|
1,055
|
|
|
|
-
|
|
|
|
7,842
|
|
|
|
32,763
|
|
|
|
597
|
|
|
|
-
|
|
|
|
42,257
|
|
20
|
|
|
16,726
|
|
|
|
7,741
|
|
|
|
196,901
|
|
|
|
108,007
|
|
|
|
1,934
|
|
|
|
-
|
|
|
|
331,309
|
|
23
|
|
|
-
|
|
|
|
3,677
|
|
|
|
11,925
|
|
|
|
11,902
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27,504
|
|
25
|
|
|
70,241
|
|
|
|
63,343
|
|
|
|
328,657
|
|
|
|
111,720
|
|
|
|
1,319
|
|
|
|
-
|
|
|
|
575,280
|
|
30
|
|
|
4,716
|
|
|
|
7,609
|
|
|
|
26,782
|
|
|
|
5,731
|
|
|
|
-
|
|
|
|
-
|
|
|
|
44,838
|
|
40
|
|
|
1,182
|
|
|
|
3,729
|
|
|
|
18,281
|
|
|
|
16,046
|
|
|
|
121
|
|
|
|
-
|
|
|
|
39,359
|
|
50
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
60
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
99,596
|
|
|
$
|
86,099
|
|
|
$
|
590,388
|
|
|
$
|
286,169
|
|
|
$
|
4,838
|
|
|
$
|
-
|
|
|
$
|
1,067,090
|
|
The following table presents the purchased non-covered loan
portfolio by risk grade as of December 31, 2015:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
8,592
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,010
|
|
|
$
|
-
|
|
|
$
|
9,602
|
|
15
|
|
|
1,186
|
|
|
|
1,143
|
|
|
|
10,490
|
|
|
|
37,808
|
|
|
|
541
|
|
|
|
-
|
|
|
|
51,168
|
|
20
|
|
|
10,057
|
|
|
|
13,678
|
|
|
|
183,219
|
|
|
|
128,005
|
|
|
|
2,031
|
|
|
|
-
|
|
|
|
336,990
|
|
23
|
|
|
-
|
|
|
|
438
|
|
|
|
5,177
|
|
|
|
6,414
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,029
|
|
25
|
|
|
17,565
|
|
|
|
47,517
|
|
|
|
162,253
|
|
|
|
66,166
|
|
|
|
1,328
|
|
|
|
-
|
|
|
|
294,829
|
|
30
|
|
|
6,657
|
|
|
|
4,185
|
|
|
|
14,297
|
|
|
|
5,503
|
|
|
|
51
|
|
|
|
-
|
|
|
|
30,693
|
|
40
|
|
|
1,373
|
|
|
|
5,119
|
|
|
|
15,319
|
|
|
|
14,257
|
|
|
|
143
|
|
|
|
-
|
|
|
|
36,211
|
|
50
|
|
|
30
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30
|
|
60
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
Total
|
|
$
|
45,462
|
|
|
$
|
72,080
|
|
|
$
|
390,755
|
|
|
$
|
258,153
|
|
|
$
|
5,104
|
|
|
$
|
-
|
|
|
$
|
771,554
|
|
The following table presents the purchased non-covered loan
portfolio by risk grade as of September 30, 2015:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
8,741
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,060
|
|
|
$
|
-
|
|
|
$
|
9,801
|
|
15
|
|
|
1,229
|
|
|
|
1,805
|
|
|
|
8,440
|
|
|
|
38,643
|
|
|
|
789
|
|
|
|
-
|
|
|
|
50,906
|
|
20
|
|
|
10,982
|
|
|
|
13,518
|
|
|
|
187,329
|
|
|
|
133,914
|
|
|
|
2,291
|
|
|
|
-
|
|
|
|
348,034
|
|
23
|
|
|
-
|
|
|
|
230
|
|
|
|
4,079
|
|
|
|
6,303
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,612
|
|
25
|
|
|
17,873
|
|
|
|
48,137
|
|
|
|
159,816
|
|
|
|
63,049
|
|
|
|
1,397
|
|
|
|
-
|
|
|
|
290,272
|
|
30
|
|
|
2,379
|
|
|
|
3,418
|
|
|
|
12,997
|
|
|
|
7,609
|
|
|
|
55
|
|
|
|
-
|
|
|
|
26,458
|
|
40
|
|
|
1,116
|
|
|
|
4,001
|
|
|
|
12,371
|
|
|
|
13,794
|
|
|
|
99
|
|
|
|
-
|
|
|
|
31,381
|
|
50
|
|
|
30
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30
|
|
60
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
42,350
|
|
|
$
|
71,109
|
|
|
$
|
385,032
|
|
|
$
|
263,312
|
|
|
$
|
5,691
|
|
|
$
|
-
|
|
|
$
|
767,494
|
|
The following table presents the covered loan portfolio by
risk grade as of September 30, 2016:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
15
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
20
|
|
|
23
|
|
|
|
551
|
|
|
|
2,203
|
|
|
|
7,458
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,235
|
|
23
|
|
|
23
|
|
|
|
-
|
|
|
|
298
|
|
|
|
4,016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,337
|
|
25
|
|
|
657
|
|
|
|
2,214
|
|
|
|
5,757
|
|
|
|
20,349
|
|
|
|
15
|
|
|
|
-
|
|
|
|
28,992
|
|
30
|
|
|
-
|
|
|
|
357
|
|
|
|
1,825
|
|
|
|
3,625
|
|
|
|
46
|
|
|
|
-
|
|
|
|
5,853
|
|
40
|
|
|
127
|
|
|
|
98
|
|
|
|
3,605
|
|
|
|
9,009
|
|
|
|
35
|
|
|
|
-
|
|
|
|
12,874
|
|
50
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
60
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
830
|
|
|
$
|
3,220
|
|
|
$
|
13,688
|
|
|
$
|
44,457
|
|
|
$
|
96
|
|
|
$
|
-
|
|
|
$
|
62,291
|
|
The following table presents the covered loan portfolio by
risk grade as of December 31, 2015:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
15
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
20
|
|
|
93
|
|
|
|
800
|
|
|
|
11,698
|
|
|
|
10,040
|
|
|
|
-
|
|
|
|
-
|
|
|
|
22,631
|
|
23
|
|
|
52
|
|
|
|
-
|
|
|
|
2,957
|
|
|
|
5,723
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,732
|
|
25
|
|
|
2,594
|
|
|
|
3,907
|
|
|
|
38,741
|
|
|
|
24,345
|
|
|
|
11
|
|
|
|
-
|
|
|
|
69,598
|
|
30
|
|
|
5
|
|
|
|
828
|
|
|
|
2,857
|
|
|
|
4,552
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,242
|
|
40
|
|
|
2,802
|
|
|
|
2,077
|
|
|
|
14,973
|
|
|
|
8,378
|
|
|
|
96
|
|
|
|
-
|
|
|
|
28,326
|
|
50
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
60
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
5,546
|
|
|
$
|
7,612
|
|
|
$
|
71,226
|
|
|
$
|
53,038
|
|
|
$
|
107
|
|
|
$
|
-
|
|
|
$
|
137,529
|
|
The following table presents the covered loan portfolio by
risk grade as of September 30, 2015:
Risk
Grade
|
|
Commercial,
financial &
agricultural
|
|
|
Real estate -
construction &
development
|
|
|
Real estate -
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment loans
|
|
|
Other
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
10
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
15
|
|
|
-
|
|
|
|
-
|
|
|
|
478
|
|
|
|
115
|
|
|
|
-
|
|
|
|
-
|
|
|
|
593
|
|
20
|
|
|
327
|
|
|
|
1,147
|
|
|
|
16,211
|
|
|
|
12,304
|
|
|
|
42
|
|
|
|
-
|
|
|
|
30,031
|
|
23
|
|
|
53
|
|
|
|
-
|
|
|
|
4,783
|
|
|
|
6,396
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,232
|
|
25
|
|
|
4,476
|
|
|
|
8,241
|
|
|
|
53,126
|
|
|
|
27,795
|
|
|
|
37
|
|
|
|
-
|
|
|
|
93,675
|
|
30
|
|
|
4,060
|
|
|
|
1,965
|
|
|
|
5,539
|
|
|
|
5,481
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17,045
|
|
40
|
|
|
4,431
|
|
|
|
2,913
|
|
|
|
23,262
|
|
|
|
7,744
|
|
|
|
93
|
|
|
|
-
|
|
|
|
38,443
|
|
50
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
60
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
Total
|
|
$
|
13,349
|
|
|
$
|
14,266
|
|
|
$
|
103,399
|
|
|
$
|
59,835
|
|
|
$
|
172
|
|
|
$
|
-
|
|
|
$
|
191,021
|
|
Troubled Debt Restructurings
The restructuring of a loan is considered
a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the
Company has granted a concession. Concessions may include interest rate reductions to below market interest rates, principal forgiveness,
restructuring amortization schedules and other actions intended to minimize potential losses. The Company has exhibited the greatest
success for rehabilitation of the loan by a reduction in the rate alone (maintaining the amortization of the debt) or a combination
of a rate reduction and the forbearance of previously past due interest or principal. This has most typically been evidenced in
certain commercial real estate loans whereby a disruption in the borrower’s cash flow resulted in an extended past due status,
of which the borrower was unable to catch up completely as the cash flow of the property ultimately stabilized at a level lower
than its original level. A reduction in rate, coupled with a forbearance of unpaid principal and/or interest, allowed the net
cash flows to service the debt under the modified terms.
The Company’s policy requires a
restructure request to be supported by a current, well-documented credit evaluation of the borrower’s financial condition
and a collateral evaluation that is no older than six months from the date of the restructure. Key factors of that evaluation
include the documentation of current, recurring cash flows, support provided by the guarantor(s) and the current valuation of
the collateral. If the appraisal in the file is older than six months, an evaluation must be made as to the continued reasonableness
of the valuation. For certain income-producing properties, current rent rolls and/or other income information can be utilized
to support the appraisal valuation, when coupled with documented cap rates within our markets and a physical inspection of the
collateral to validate the current condition.
The Company’s policy states that
in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard and placed
on nonaccrual status until such time the borrower has demonstrated the ability to service the loan payments based on the restructured
terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are
not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered
toward the six month required term of satisfactory payment history. The Company’s loan policy states that a nonaccrual loan
may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment
of the remaining contractual principal and interest or (ii) it otherwise becomes well secured and in the process of collection.
Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s
financial condition and the prospects for full repayment, approved by the Company’s Chief Credit Officer.
In the normal course of business, the
Company renews loans with a modification of the interest rate or terms that are not deemed as troubled debt restructurings because
the borrower is not experiencing financial difficulty. The Company modified loans in the first nine months of 2016 and 2015 totaling
$58.2 million and $77.4 million, respectively, under such parameters.
As of September 30, 2016, December 31,
2015 and September 30, 2015, the Company had a balance of $17.1 million, $16.4 million and $13.9 million, respectively, in troubled
debt restructurings, excluding purchased non-covered and covered loans. The Company has recorded $1.2 million, $1.3 million and
$1.3 million in previous charge-offs on such loans at September 30, 2016, December 31, 2015 and September 30, 2015, respectively.
The Company’s balance in the allowance for loan losses allocated to such troubled debt restructurings was $2.8 million,
$2.7 million and $183,000 at September 30, 2016, December 31, 2015 and September 30, 2015, respectively. At September 30, 2016,
the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.
During the nine months ending September
30, 2016 and 2015, the Company modified loans as troubled debt restructurings, excluding purchased non-covered and covered loans,
with principal balances of $2.9 million and $4.3 million, respectively, and these modifications did not have a material impact
on the Company’s allowance for loan loss. The following table presents the loans by class modified as troubled debt restructurings,
excluding purchased non-covered and covered loans, which occurred during the nine months ending September 30, 2016 and 2015:
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands
)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
5
|
|
|
$
|
59
|
|
|
|
4
|
|
|
$
|
26
|
|
Real estate – construction & development
|
|
|
2
|
|
|
|
251
|
|
|
|
2
|
|
|
|
15
|
|
Real estate – commercial & farmland
|
|
|
4
|
|
|
|
1,658
|
|
|
|
2
|
|
|
|
2,125
|
|
Real estate – residential
|
|
|
7
|
|
|
|
887
|
|
|
|
28
|
|
|
|
2,089
|
|
Consumer installment
|
|
|
9
|
|
|
|
44
|
|
|
|
13
|
|
|
|
47
|
|
Total
|
|
|
27
|
|
|
$
|
2,899
|
|
|
|
49
|
|
|
$
|
4,302
|
|
Troubled debt restructurings, excluding
purchased non-covered and covered loans, with an outstanding balance of $793,000 and $2.6 million defaulted during the nine months
ended September 30, 2016 and 2015, respectively, and these defaults did not have a material impact on the Company’s allowance
for loan loss. The following table presents the troubled debt restructurings by class that defaulted (defined as 30 days past
due) during the nine months ending September 30, 2016 and 2015:
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
5
|
|
|
$
|
51
|
|
|
|
4
|
|
|
$
|
18
|
|
Real estate – construction & development
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
34
|
|
Real estate – commercial & farmland
|
|
|
5
|
|
|
|
517
|
|
|
|
5
|
|
|
|
1,011
|
|
Real estate – residential
|
|
|
3
|
|
|
|
219
|
|
|
|
18
|
|
|
|
1,473
|
|
Consumer installment
|
|
|
2
|
|
|
|
6
|
|
|
|
9
|
|
|
|
32
|
|
Total
|
|
|
15
|
|
|
$
|
793
|
|
|
|
38
|
|
|
$
|
2,568
|
|
The following table presents the amount
of troubled debt restructurings by loan class, excluding purchased non-covered and covered loans, classified separately as accrual
and nonaccrual at September 30, 2016, December 31, 2015 and September 30, 2015:
As of September 30, 2016
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
4
|
|
|
$
|
53
|
|
|
|
14
|
|
|
$
|
112
|
|
Real estate – construction & development
|
|
|
8
|
|
|
|
691
|
|
|
|
2
|
|
|
|
35
|
|
Real estate – commercial & farmland
|
|
|
17
|
|
|
|
5,535
|
|
|
|
5
|
|
|
|
2,015
|
|
Real estate – residential
|
|
|
53
|
|
|
|
7,713
|
|
|
|
19
|
|
|
|
849
|
|
Consumer installment
|
|
|
7
|
|
|
|
21
|
|
|
|
29
|
|
|
|
120
|
|
Total
|
|
|
89
|
|
|
$
|
14,013
|
|
|
|
69
|
|
|
$
|
3,131
|
|
As of December 31, 2015
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
4
|
|
|
$
|
240
|
|
|
|
10
|
|
|
$
|
110
|
|
Real estate – construction & development
|
|
|
11
|
|
|
|
792
|
|
|
|
3
|
|
|
|
63
|
|
Real estate – commercial & farmland
|
|
|
16
|
|
|
|
5,766
|
|
|
|
3
|
|
|
|
596
|
|
Real estate – residential
|
|
|
51
|
|
|
|
7,574
|
|
|
|
20
|
|
|
|
1,123
|
|
Consumer installment
|
|
|
12
|
|
|
|
46
|
|
|
|
23
|
|
|
|
94
|
|
Total
|
|
|
94
|
|
|
$
|
14,418
|
|
|
|
59
|
|
|
$
|
1,986
|
|
As of September 30, 2015
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
4
|
|
|
$
|
238
|
|
|
|
8
|
|
|
$
|
68
|
|
Real estate – construction & development
|
|
|
12
|
|
|
|
838
|
|
|
|
2
|
|
|
|
30
|
|
Real estate – commercial & farmland
|
|
|
15
|
|
|
|
5,719
|
|
|
|
4
|
|
|
|
943
|
|
Real estate – residential
|
|
|
51
|
|
|
|
5,209
|
|
|
|
16
|
|
|
|
759
|
|
Consumer installment
|
|
|
15
|
|
|
|
71
|
|
|
|
18
|
|
|
|
64
|
|
Total
|
|
|
97
|
|
|
$
|
12,075
|
|
|
|
48
|
|
|
$
|
1,864
|
|
As of September 30, 2016, December 31,
2015 and September 30, 2015, the Company had a balance of $10.4 million, $10.0 million and $7.7 million, respectively, in troubled
debt restructurings included in purchased non-covered loans. The Company has recorded $752,000, $377,000 and $60,000 in previous
charge-offs on such loans at September 30, 2016, December 31, 2015 and September 30, 2015, respectively. At September 30, 2016,
the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.
During the nine months ending September
30, 2016 and 2015, the Company modified purchased non-covered loans as troubled debt restructurings, with principal balances of
$1.3 million and $2.4 million, respectively, and these modifications did not have a material impact on the Company’s allowance
for loan loss. During the nine months ending September 30, 2016, the Company did not transfer any troubled debt restructurings
from the covered loan category to the purchased non-covered loan category due to the expiration of the loss-sharing portion of
the agreements. During the nine months ending September 30, 2015, the Company transferred troubled debt restructurings with principal
balances $4.1 million from the covered loan category to the purchased non-covered loan category due to the expiration of the loss-sharing
portion of the agreements. The following table presents the purchased non-covered loans by class modified as troubled debt restructurings,
which occurred during the nine months ending September 30, 2016 and 2015:
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
-
|
|
|
$
|
-
|
|
|
|
1
|
|
|
$
|
1
|
|
Real estate – construction & development
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
30
|
|
Real estate – commercial & farmland
|
|
|
2
|
|
|
|
235
|
|
|
|
3
|
|
|
|
622
|
|
Real estate – residential
|
|
|
6
|
|
|
|
1,076
|
|
|
|
7
|
|
|
|
1,730
|
|
Consumer installment
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
8
|
|
Total
|
|
|
8
|
|
|
$
|
1,311
|
|
|
|
16
|
|
|
$
|
2,391
|
|
Troubled debt restructurings included
in purchased non-covered loans with an outstanding balance of $217,000 and $618,000 defaulted during the nine months ended September
30, 2016 and 2015, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss.
The following table presents the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the
nine months ending September 30, 2016 and 2015:
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
1
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
1
|
|
|
|
207
|
|
|
|
-
|
|
|
|
-
|
|
Real estate – residential
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
618
|
|
Consumer installment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
2
|
|
|
$
|
217
|
|
|
|
2
|
|
|
$
|
618
|
|
The following table presents the amount
of troubled debt restructurings by loan class of purchased non-covered loans, classified separately as accrual and nonaccrual
at September 30, 2016, December 31, 2015 and September 30, 2015:
As of September 30, 2016
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands
)
|
|
Commercial, financial & agricultural
|
|
|
1
|
|
|
$
|
1
|
|
|
|
1
|
|
|
$
|
16
|
|
Real estate – construction & development
|
|
|
2
|
|
|
|
529
|
|
|
|
3
|
|
|
|
33
|
|
Real estate – commercial & farmland
|
|
|
13
|
|
|
|
5,840
|
|
|
|
3
|
|
|
|
566
|
|
Real estate – residential
|
|
|
16
|
|
|
|
2,919
|
|
|
|
5
|
|
|
|
486
|
|
Consumer installment
|
|
|
1
|
|
|
|
4
|
|
|
|
2
|
|
|
|
1
|
|
Total
|
|
|
33
|
|
|
$
|
9,293
|
|
|
|
14
|
|
|
$
|
1,102
|
|
As of December 31, 2015
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
1
|
|
|
$
|
2
|
|
|
|
2
|
|
|
$
|
21
|
|
Real estate – construction & development
|
|
|
1
|
|
|
|
363
|
|
|
|
3
|
|
|
|
42
|
|
Real estate – commercial & farmland
|
|
|
14
|
|
|
|
6,214
|
|
|
|
3
|
|
|
|
412
|
|
Real estate – residential
|
|
|
13
|
|
|
|
2,789
|
|
|
|
4
|
|
|
|
180
|
|
Consumer installment
|
|
|
2
|
|
|
|
5
|
|
|
|
2
|
|
|
|
3
|
|
Total
|
|
|
31
|
|
|
$
|
9,373
|
|
|
|
14
|
|
|
$
|
658
|
|
As of September 30, 2015
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
-
|
|
|
$
|
-
|
|
|
|
1
|
|
|
$
|
1
|
|
Real estate – construction & development
|
|
|
1
|
|
|
|
351
|
|
|
|
2
|
|
|
|
30
|
|
Real estate – commercial & farmland
|
|
|
6
|
|
|
|
4,071
|
|
|
|
1
|
|
|
|
36
|
|
Real estate – residential
|
|
|
13
|
|
|
|
2,761
|
|
|
|
3
|
|
|
|
397
|
|
Consumer installment
|
|
|
2
|
|
|
|
5
|
|
|
|
2
|
|
|
|
3
|
|
Total
|
|
|
22
|
|
|
$
|
7,188
|
|
|
|
9
|
|
|
$
|
467
|
|
As of September 30, 2016, December 31,
2015 and September 30, 2015, the Company had a balance of $13.9 million, $15.5 million and $20.5 million, respectively, in troubled
debt restructurings included in covered loans. The Company has recorded $791,000, $1.2 million and $1.4 million in previous charge-offs
on such loans at September 30, 2016, December 31, 2015 and September 30, 2015, respectively. At September 30, 2016, the Company
did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.
During the nine months ending September
30, 2016 and 2015, the Company modified covered loans as troubled debt restructurings with principal balances of $603,000 and
$2.5 million, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss.
The following table presents the covered loans by class modified as troubled debt restructurings during the nine months ending
September 30, 2016 and 2015:
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
1
|
|
|
$
|
76
|
|
|
|
1
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
312
|
|
Real estate – commercial & farmland
|
|
|
1
|
|
|
|
473
|
|
|
|
5
|
|
|
|
1,492
|
|
Real estate – residential
|
|
|
2
|
|
|
|
54
|
|
|
|
12
|
|
|
|
679
|
|
Consumer installment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
4
|
|
|
$
|
603
|
|
|
|
20
|
|
|
$
|
2,483
|
|
Troubled debt restructurings of covered
loans with an outstanding balance of $516,000 and $1.3 million defaulted during the nine months ended September 30, 2016 and 2015,
respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss. The following
table presents the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the nine months ending
September 30, 2016 and 2015:
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
2
|
|
|
$
|
76
|
|
|
|
-
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
177
|
|
Real estate – residential
|
|
|
11
|
|
|
|
440
|
|
|
|
9
|
|
|
|
1,088
|
|
Consumer installment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
13
|
|
|
$
|
516
|
|
|
|
12
|
|
|
$
|
1,265
|
|
The following table presents the amount
of troubled debt restructurings by loan class of covered loans, classified separately as accrual and nonaccrual at September 30,
2016, December 31, 2015 and September 30, 2015:
As of September 30, 2016
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
-
|
|
|
$
|
-
|
|
|
|
3
|
|
|
$
|
76
|
|
Real estate – construction & development
|
|
|
4
|
|
|
|
813
|
|
|
|
-
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
4
|
|
|
|
1,801
|
|
|
|
2
|
|
|
|
680
|
|
Real estate – residential
|
|
|
88
|
|
|
|
9,203
|
|
|
|
27
|
|
|
|
1,287
|
|
Consumer installment
|
|
|
1
|
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
97
|
|
|
$
|
11,823
|
|
|
|
32
|
|
|
$
|
2,043
|
|
As of December 31, 2015
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
-
|
|
|
$
|
-
|
|
|
|
2
|
|
|
$
|
1
|
|
Real estate – construction & development
|
|
|
4
|
|
|
|
779
|
|
|
|
-
|
|
|
|
-
|
|
Real estate – commercial & farmland
|
|
|
4
|
|
|
|
1,967
|
|
|
|
3
|
|
|
|
1,067
|
|
Real estate – residential
|
|
|
97
|
|
|
|
10,529
|
|
|
|
26
|
|
|
|
1,116
|
|
Consumer installment
|
|
|
2
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
107
|
|
|
$
|
13,283
|
|
|
|
31
|
|
|
$
|
2,184
|
|
As of September 30, 2015
|
|
Accruing Loans
|
|
|
Non-Accruing Loans
|
|
Loan class:
|
|
#
|
|
|
Balance
(in thousands)
|
|
|
#
|
|
|
Balance
(in thousands)
|
|
Commercial, financial & agricultural
|
|
|
1
|
|
|
$
|
2
|
|
|
|
2
|
|
|
$
|
-
|
|
Real estate – construction & development
|
|
|
3
|
|
|
|
2,847
|
|
|
|
3
|
|
|
|
325
|
|
Real estate – commercial & farmland
|
|
|
9
|
|
|
|
3,101
|
|
|
|
8
|
|
|
|
2,449
|
|
Real estate – residential
|
|
|
96
|
|
|
|
10,625
|
|
|
|
17
|
|
|
|
1,167
|
|
Consumer installment
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
110
|
|
|
$
|
16,576
|
|
|
|
30
|
|
|
$
|
3,941
|
|
Allowance for Loan Losses
The allowance for loan losses represents
an allowance for probable incurred losses in the loan portfolio. The adequacy of the allowance for loan losses is evaluated periodically
based on a review of all significant loans, with a particular emphasis on non-accruing, past-due and other loans that management
believes might be potentially impaired or warrant additional attention. The Company segregates the loan portfolio by type of loan
and utilizes this segregation in evaluating exposure to risks within the portfolio. In addition, based on internal reviews and
external reviews performed by regulatory authorities, the Company further segregates the loan portfolio by loan grades based on
an assessment of risk for a particular loan or group of loans. Certain reviewed loans are assigned specific allowances when a
review of relevant data determines that a general allocation is not sufficient or when the review affords management the opportunity
to adjust the amount of exposure in a given credit. In establishing allowances, management considers historical loan loss experience
but adjusts this data with a significant emphasis on current loan quality trends, current economic conditions and other factors
in the markets where the Company operates. Factors considered include, among others, current valuations of real estate in the
Company’s markets, unemployment rates, the effect of weather conditions on agricultural related entities and other significant
local economic events.
The Company has developed a methodology
for determining the adequacy of the allowance for loan losses which is monitored by the Company’s Chief Credit Officer.
Procedures provide for the assignment of a risk rating for every loan included in the total loan portfolio, with the exception
of certain mortgage loans serviced at a third party, mortgage warehouse lines and overdraft protection loans, which are treated
as pools for risk-rating purposes. The risk rating schedule provides nine ratings of which five ratings are classified as pass
ratings and four ratings are classified as criticized ratings. Each risk rating is assigned a percentage factor to be applied
to the loan balance to determine the adequate amount of reserve. All relationships greater than $1.0 million and a sample of relationships
greater than $250,000 are reviewed annually by the Bank’s independent internal loan review department. As a result of these
loan reviews, certain loans may be identified as having deteriorating credit quality. Other loans that surface as problem loans
may also be assigned specific reserves. Past-due loans are assigned risk ratings based on the number of days past due. The calculation
of the allowance for loan losses, including underlying data and assumptions, is reviewed regularly by the Company’s Chief
Financial Officer and the independent internal loan review department.
Loan losses are charged against the allowance
when management believes the collection of a loan’s principal is unlikely. Subsequent recoveries are credited to the
allowance. Consumer loans are charged-off in accordance with the Federal Financial Institutions Examination Council’s (“FFIEC”)
Uniform Retail Credit Classification and Account Management Policy. Commercial loans are charged-off when they are deemed uncollectible,
which usually involves a triggering event within the collection effort. If the loan is collateral dependent, the loss is more
easily identified and is charged-off when it is identified, usually based upon receipt of an appraisal. However, when a loan has
guarantor support, the Company may carry the estimated loss as a reserve against the loan while collection efforts with the guarantor
are pursued. If, after collection efforts with the guarantor are complete, the deficiency is still considered uncollectible, the
loss is charged-off and any further collections are treated as recoveries. In all situations, when a loan is downgraded to an
Asset Quality Rating of 60 (Loss per the regulatory guidance), the uncollectible portion is charged-off.
The following table details activity in
the allowance for loan losses by portfolio segment for the nine months ended September 30, 2016, the year ended December 31,
2015 and the nine months ended September 30, 2015. Allocation of a portion of the allowance to one category of loans does not
preclude its availability to absorb losses in other categories.
|
|
Commercial,
financial
&
agricultural
|
|
|
Real estate –
construction &
development
|
|
|
Real estate –
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment
loans and
Other
|
|
|
Purchased
non-covered
loans,
including
pools
|
|
|
Covered
loans
|
|
|
Total
|
|
|
|
(Dollars
in Thousands)
|
|
Three months ended September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2016
|
|
$
|
1,667
|
|
|
$
|
3,599
|
|
|
$
|
7,459
|
|
|
$
|
4,263
|
|
|
$
|
2,160
|
|
|
$
|
2,056
|
|
|
$
|
530
|
|
|
$
|
21,734
|
|
Provision for loan losses
|
|
|
677
|
|
|
|
(521
|
)
|
|
|
(554
|
)
|
|
|
2,649
|
|
|
|
(1,595
|
)
|
|
|
1,247
|
|
|
|
(1,092
|
)
|
|
|
811
|
|
Loans charged off
|
|
|
(326
|
)
|
|
|
(60
|
)
|
|
|
-
|
|
|
|
(292
|
)
|
|
|
(74
|
)
|
|
|
(408
|
)
|
|
|
(291
|
)
|
|
|
(1,451
|
)
|
Recoveries
of loans previously charged off
|
|
|
119
|
|
|
|
131
|
|
|
|
13
|
|
|
|
40
|
|
|
|
78
|
|
|
|
399
|
|
|
|
1,089
|
|
|
|
1,869
|
|
Balance, September 30, 2016
|
|
$
|
2,137
|
|
|
$
|
3,149
|
|
|
$
|
6,918
|
|
|
$
|
6,660
|
|
|
$
|
569
|
|
|
$
|
3,294
|
|
|
$
|
236
|
|
|
$
|
22,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2016
|
|
$
|
1,144
|
|
|
$
|
5,009
|
|
|
$
|
7,994
|
|
|
$
|
4,760
|
|
|
$
|
1,574
|
|
|
$
|
581
|
|
|
$
|
-
|
|
|
$
|
21,062
|
|
Provision for loan losses
|
|
|
1,987
|
|
|
|
(2,010
|
)
|
|
|
(559
|
)
|
|
|
2,415
|
|
|
|
(932
|
)
|
|
|
2,274
|
|
|
|
(794
|
)
|
|
|
2,381
|
|
Loans charged off
|
|
|
(1,273
|
)
|
|
|
(324
|
)
|
|
|
(708
|
)
|
|
|
(883
|
)
|
|
|
(192
|
)
|
|
|
(826
|
)
|
|
|
(435
|
)
|
|
|
(4,641
|
))
|
Recoveries
of loans previously charged off
|
|
|
279
|
|
|
|
474
|
|
|
|
191
|
|
|
|
368
|
|
|
|
119
|
|
|
|
1,265
|
|
|
|
1,465
|
|
|
|
4,161
|
|
Balance, September 30, 2016
|
|
$
|
2,137
|
|
|
$
|
3,149
|
|
|
$
|
6,918
|
|
|
$
|
6,660
|
|
|
$
|
569
|
|
|
$
|
3,294
|
|
|
$
|
236
|
|
|
$
|
22,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-end amount allocated to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated
for impairment
(1)
|
|
$
|
107
|
|
|
$
|
529
|
|
|
$
|
883
|
|
|
$
|
2,629
|
|
|
$
|
-
|
|
|
$
|
1,286
|
|
|
$
|
236
|
|
|
$
|
5,670
|
|
Loans
collectively evaluated for impairment
|
|
|
2,030
|
|
|
|
2,620
|
|
|
|
6,035
|
|
|
|
4,031
|
|
|
|
569
|
|
|
|
2,008
|
|
|
|
-
|
|
|
|
17,293
|
|
Ending balance
|
|
$
|
2,137
|
|
|
$
|
3,149
|
|
|
$
|
6,918
|
|
|
$
|
6,660
|
|
|
$
|
569
|
|
|
$
|
3,294
|
|
|
$
|
236
|
|
|
$
|
22,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated
for impairment
(1)
|
|
$
|
424
|
|
|
$
|
1,154
|
|
|
$
|
11,699
|
|
|
$
|
11,571
|
|
|
$
|
-
|
|
|
$
|
22,173
|
|
|
$
|
12,818
|
|
|
$
|
59,839
|
|
Collectively evaluated
for impairment
|
|
|
625,523
|
|
|
|
327,154
|
|
|
|
1,285,883
|
|
|
|
755,362
|
|
|
|
72,269
|
|
|
|
1,536,176
|
|
|
|
27,953
|
|
|
|
4,630,320
|
|
Acquired
with deteriorated credit quality
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
133,627
|
|
|
|
21,520
|
|
|
|
155,147
|
|
Ending balance
|
|
$
|
625,947
|
|
|
$
|
328,308
|
|
|
$
|
1,297,582
|
|
|
$
|
766,933
|
|
|
$
|
72,269
|
|
|
$
|
1,691,976
|
|
|
$
|
62,291
|
|
|
$
|
4,845,306
|
|
|
(1)
|
At September 30, 2016, loans individually evaluated
for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000,
including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.
|
|
|
Commercial,
financial &
agricultural
|
|
|
Real
estate –
construction &
development
|
|
|
Real
estate –
commercial &
farmland
|
|
|
Real
estate -
residential
|
|
|
Consumer
installment
loans and
Other
|
|
|
Purchased
non-covered
loans,
including
pools
|
|
|
Covered
loans
|
|
|
Total
|
|
|
|
(Dollars
in Thousands)
|
|
Twelve months ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2015
|
|
$
|
2,004
|
|
|
$
|
5,030
|
|
|
$
|
8,823
|
|
|
$
|
4,129
|
|
|
$
|
1,171
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
21,157
|
|
Provision for loan losses
|
|
|
(73
|
)
|
|
|
278
|
|
|
|
1,221
|
|
|
|
2,067
|
|
|
|
676
|
|
|
|
344
|
|
|
|
751
|
|
|
|
5,264
|
|
Loans charged off
|
|
|
(1,438
|
)
|
|
|
(622
|
)
|
|
|
(2,367
|
)
|
|
|
(1,587
|
)
|
|
|
(410
|
)
|
|
|
(950
|
)
|
|
|
(1,759
|
)
|
|
|
(9,133
|
)
|
Recoveries
of loans previously charged off
|
|
|
651
|
|
|
|
323
|
|
|
|
317
|
|
|
|
151
|
|
|
|
137
|
|
|
|
1,187
|
|
|
|
1,008
|
|
|
|
3,774
|
|
Balance, December 31, 2015
|
|
$
|
1,144
|
|
|
$
|
5,009
|
|
|
$
|
7,994
|
|
|
$
|
4,760
|
|
|
$
|
1,574
|
|
|
$
|
581
|
|
|
$
|
-
|
|
|
$
|
21,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-end amount allocated to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated
for impairment
(1)
|
|
$
|
126
|
|
|
$
|
759
|
|
|
$
|
1,074
|
|
|
$
|
2,172
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,131
|
|
Loans
collectively evaluated for impairment
|
|
|
1,018
|
|
|
|
4,250
|
|
|
|
6,920
|
|
|
|
2,588
|
|
|
|
1,574
|
|
|
|
581
|
|
|
|
-
|
|
|
|
16,931
|
|
Ending balance
|
|
$
|
1,144
|
|
|
$
|
5,009
|
|
|
$
|
7,994
|
|
|
$
|
4,760
|
|
|
$
|
1,574
|
|
|
$
|
581
|
|
|
$
|
-
|
|
|
$
|
21,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated
for impairment
(1)
|
|
$
|
323
|
|
|
$
|
1,958
|
|
|
$
|
11,877
|
|
|
$
|
9,554
|
|
|
$
|
-
|
|
|
$
|
22,672
|
|
|
$
|
22,317
|
|
|
$
|
68,701
|
|
Collectively evaluated
for impairment
|
|
|
449,300
|
|
|
|
242,735
|
|
|
|
1,093,114
|
|
|
|
560,876
|
|
|
|
37,140
|
|
|
|
1,261,821
|
|
|
|
52,451
|
|
|
|
3,697,437
|
|
Acquired
with deteriorated credit quality
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
80,024
|
|
|
|
62,761
|
|
|
|
142,785
|
|
Ending balance
|
|
$
|
449,623
|
|
|
$
|
244,693
|
|
|
$
|
1,104,991
|
|
|
$
|
570,430
|
|
|
$
|
37,140
|
|
|
$
|
1,364,517
|
|
|
$
|
137,529
|
|
|
$
|
3,908,923
|
|
|
(1)
|
At December 31, 2015, loans individually evaluated
for impairment includes all nonaccrual loans greater than $200,000 and all troubled debt restructurings greater than $100,000,
including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.
|
|
|
Commercial,
financial
&
agricultural
|
|
|
Real estate –
construction &
development
|
|
|
Real estate –
commercial &
farmland
|
|
|
Real estate -
residential
|
|
|
Consumer
installment
loans and
Other
|
|
|
Purchased
non-covered
loans,
including
pools
|
|
|
Covered
loans
|
|
|
Total
|
|
|
|
(Dollars
in Thousands)
|
|
Three months ended September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2015
|
|
$
|
1,426
|
|
|
$
|
5,365
|
|
|
$
|
8,381
|
|
|
$
|
4,805
|
|
|
$
|
1,681
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
21,658
|
|
Provision for loan losses
|
|
|
110
|
|
|
|
643
|
|
|
|
43
|
|
|
|
1,238
|
|
|
|
(1,386
|
)
|
|
|
531
|
|
|
|
(193
|
)
|
|
|
986
|
|
Loans charged off
|
|
|
(135
|
)
|
|
|
(105
|
)
|
|
|
(184
|
)
|
|
|
(234
|
)
|
|
|
(61
|
)
|
|
|
(302
|
)
|
|
|
(246
|
)
|
|
|
(1,267
|
)
|
Recoveries
of loans previously charged off
|
|
|
117
|
|
|
|
6
|
|
|
|
272
|
|
|
|
54
|
|
|
|
33
|
|
|
|
173
|
|
|
|
439
|
|
|
|
1,094
|
|
Balance, September 30, 2015
|
|
$
|
1,518
|
|
|
$
|
5,909
|
|
|
$
|
8,512
|
|
|
$
|
5,863
|
|
|
$
|
267
|
|
|
$
|
402
|
|
|
$
|
-
|
|
|
$
|
22,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2015
|
|
$
|
2,004
|
|
|
$
|
5,030
|
|
|
$
|
8,823
|
|
|
$
|
4,129
|
|
|
$
|
1,171
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
21,157
|
|
Provision for loan losses
|
|
|
(66
|
)
|
|
|
1,030
|
|
|
|
743
|
|
|
|
2,562
|
|
|
|
(721
|
)
|
|
|
219
|
|
|
|
944
|
|
|
|
4,711
|
|
Loans charged off
|
|
|
(937
|
)
|
|
|
(465
|
)
|
|
|
(1,358
|
)
|
|
|
(966
|
)
|
|
|
(300
|
)
|
|
|
(772
|
)
|
|
|
(1,661
|
)
|
|
|
(6,459
|
)
|
Recoveries
of loans previously charged off
|
|
|
517
|
|
|
|
314
|
|
|
|
304
|
|
|
|
138
|
|
|
|
117
|
|
|
|
955
|
|
|
|
717
|
|
|
|
3,062
|
|
Balance, September 30, 2015
|
|
$
|
1,518
|
|
|
$
|
5,909
|
|
|
$
|
8,512
|
|
|
$
|
5,863
|
|
|
$
|
267
|
|
|
$
|
402
|
|
|
$
|
-
|
|
|
$
|
22,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-end amount allocated to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated
for impairment
(1)
|
|
$
|
521
|
|
|
$
|
708
|
|
|
$
|
1,622
|
|
|
$
|
1,848
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,699
|
|
Loans
collectively evaluated for impairment
|
|
|
997
|
|
|
|
5,201
|
|
|
|
6,890
|
|
|
|
4,015
|
|
|
|
267
|
|
|
|
402
|
|
|
|
-
|
|
|
|
17,772
|
|
Ending balance
|
|
$
|
1,518
|
|
|
$
|
5,909
|
|
|
$
|
8,512
|
|
|
$
|
5,863
|
|
|
$
|
267
|
|
|
$
|
402
|
|
|
$
|
-
|
|
|
$
|
22,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated
for impairment
(1)
|
|
$
|
1,286
|
|
|
$
|
1,820
|
|
|
$
|
13,306
|
|
|
$
|
8,415
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
24,827
|
|
Collectively evaluated
for impairment
|
|
|
426,461
|
|
|
|
218,978
|
|
|
|
1,054,522
|
|
|
|
523,870
|
|
|
|
41,991
|
|
|
|
1,078,686
|
|
|
|
83,974
|
|
|
|
3,428,482
|
|
Acquired
with deteriorated credit quality
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
98,880
|
|
|
|
107,047
|
|
|
|
205,927
|
|
Ending balance
|
|
$
|
427,747
|
|
|
$
|
220,798
|
|
|
$
|
1,067,828
|
|
|
$
|
532,285
|
|
|
$
|
41,991
|
|
|
$
|
1,177,566
|
|
|
$
|
191,021
|
|
|
$
|
3,659,236
|
|
|
(1)
|
At September 30, 2015, loans individually evaluated
for impairment includes all nonaccrual loans greater than $200,000 and all troubled debt restructurings greater than $100,000,
including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.
|
NOTE 5 – ASSETS ACQUIRED IN FDIC-ASSISTED ACQUISITIONS
From October 2009 through July 2012, the
Company participated in ten FDIC-assisted acquisitions whereby the Company purchased certain failed institutions out of the FDIC’s
receivership. These institutions include the following:
Bank
Acquired
|
|
Location
|
|
Branches
|
|
Date
Acquired
|
American United Bank (“AUB”)
|
|
Lawrenceville, Ga.
|
|
1
|
|
October 23, 2009
|
United Security Bank (“USB”)
|
|
Sparta, Ga.
|
|
2
|
|
November 6, 2009
|
Satilla Community Bank (“SCB”)
|
|
St. Marys, Ga.
|
|
1
|
|
May 14, 2010
|
First Bank of Jacksonville (“FBJ”)
|
|
Jacksonville, Fl.
|
|
2
|
|
October 22, 2010
|
Tifton Banking Company (“TBC”)
|
|
Tifton, Ga.
|
|
1
|
|
November 12, 2010
|
Darby Bank & Trust (“DBT”)
|
|
Vidalia, Ga.
|
|
7
|
|
November 12, 2010
|
High Trust Bank (“HTB”)
|
|
Stockbridge, Ga.
|
|
2
|
|
July 15, 2011
|
One Georgia Bank (“OGB”)
|
|
Midtown Atlanta, Ga.
|
|
1
|
|
July 15, 2011
|
Central Bank of Georgia (“CBG”)
|
|
Ellaville, Ga.
|
|
5
|
|
February 24, 2012
|
Montgomery Bank & Trust (“MBT”)
|
|
Ailey, Ga.
|
|
2
|
|
July 6, 2012
|
The determination of the initial fair
values of loans at the acquisition date and the initial fair values of the related FDIC indemnification assets involves a high
degree of judgment and complexity. The carrying values of the acquired loans and the FDIC indemnification assets reflect
management’s best estimate of the fair value of each of these assets as of the date of acquisition. However, the amount
that the Company realizes on these assets could differ materially from the carrying values reflected in the financial statements
included in this report, based upon the timing and amount of collections on the acquired loans in future periods. Because
of the loss-sharing agreements with the FDIC on these assets, the Company does not expect to incur any significant losses. To
the extent the actual values realized for the acquired loans are different from the estimates, the indemnification assets will
generally be affected in an offsetting manner due to the loss-sharing support from the FDIC.
FASB ASC 310-30,
Loans and Debt Securities
Acquired with Deteriorated Credit Quality
(“ASC 310-30”), applies to a loan with evidence of deterioration of
credit quality since origination, acquired by completion of a transfer for which it is probable, at acquisition, that the investor
will be unable to collect all contractually required payments receivable. ASC 310-30 prohibits carrying over or creating
an allowance for loan losses upon initial recognition for loans which fall under the scope of this statement. At the acquisition
dates, a majority of these loans were valued based on the liquidation value of the underlying collateral because the future cash
flows are primarily based on the liquidation of underlying collateral. There was no allowance for credit losses established
related to these ASC 310-30 loans at the acquisition dates, based on the provisions of this statement. Over the life of the acquired
loans, the Company continues to estimate cash flows expected to be collected. If the expected cash flows expected to be collected
increases, then the Company adjusts the amount of accretable discount recognized on a prospective basis over the loan’s
remaining life. If the expected cash flows expected to be collected decreases, then the Company records a provision for loan loss
in its consolidated statement of operations.
Each acquisition with loss-sharing agreements
has separate agreements for the single family residential assets (“SFR”) and the non-single family assets (“NSF”).
The SFR agreements cover losses and recoveries for ten years. The NSF agreements are for eight years. During the first five years,
losses and recoveries are covered. During the final three years, only recoveries, net of expenses, are covered. The AUB SFR agreement
was terminated during 2012 and Ameris received a payment of $87,000. The AUB and USB NSF agreements passed their five-year anniversaries
during the fourth quarter of 2014, the SCB NSF agreement passed its five-year anniversary during the second quarter of 2015, the
FBJ, TBC and DBT NSF agreements passed their five-year anniversaries during the fourth quarter of 2015 and the HTB and OGB NSF
agreements passed their five-year anniversaries during the third quarter of 2016. Losses will no longer be reimbursed on these
agreements. The remaining NSF assets for these eight agreements have been reclassified to purchased non-covered loans and purchased
non-covered other real estate owned.
At September 30, 2016, the Company’s
FDIC loss-sharing payable totaled $7.8 million, which is comprised of an accrued clawback liability of $8.9 million and $1.3 million
in current activity incurred but not yet remitted to the FDIC (net recoveries offset by reimbursable expenses), less remaining
indemnification of $2.4 million (for reimbursements associated with anticipated losses in future quarters).
The following table summarizes components
of all covered assets at September 30, 2016, December 31, 2015 and September 30, 2015 and their origin (dollars in thousands):
|
|
Covered loans
|
|
|
Less: Fair
value
adjustments
|
|
|
Total
covered
loans
|
|
|
OREO
|
|
|
Less: Fair
value
adjustments
|
|
|
Total
covered
OREO
|
|
|
Total
covered
assets
|
|
|
FDIC loss-share
receivable
(payable)
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUB
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USB
|
|
|
3,309
|
|
|
|
13
|
|
|
|
3,296
|
|
|
|
30
|
|
|
|
-
|
|
|
|
30
|
|
|
|
3,326
|
|
|
|
(1,682
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCB
|
|
|
4,475
|
|
|
|
61
|
|
|
|
4,414
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,414
|
|
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FBJ
|
|
|
3,811
|
|
|
|
488
|
|
|
|
3,323
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,323
|
|
|
|
(164
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DBT
|
|
|
12,964
|
|
|
|
690
|
|
|
|
12,274
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,274
|
|
|
|
(4,898
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TBC
|
|
|
1,867
|
|
|
|
7
|
|
|
|
1,860
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,860
|
|
|
|
(2,727
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HTB
|
|
|
1,926
|
|
|
|
35
|
|
|
|
1,891
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,891
|
|
|
|
1,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OGB
|
|
|
1,086
|
|
|
|
32
|
|
|
|
1,054
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,054
|
|
|
|
(776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CBG
|
|
|
36,468
|
|
|
|
2,289
|
|
|
|
34,179
|
|
|
|
974
|
|
|
|
4
|
|
|
|
970
|
|
|
|
35,149
|
|
|
|
833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
65,906
|
|
|
$
|
3,615
|
|
|
$
|
62,291
|
|
|
$
|
1,004
|
|
|
$
|
4
|
|
|
$
|
1,000
|
|
|
$
|
63,291
|
|
|
$
|
(7,77
5
|
)
|
|
|
Covered
loans
|
|
|
Less:
Fair
value
adjustments
|
|
|
Total
covered
loans
|
|
|
OREO
|
|
|
Less:
Fair
value
adjustments
|
|
|
Total
covered
OREO
|
|
|
Total
covered
assets
|
|
|
FDIC
loss-share
receivable
(payable)
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUB
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USB
|
|
|
3,639
|
|
|
|
16
|
|
|
|
3,623
|
|
|
|
165
|
|
|
|
-
|
|
|
|
165
|
|
|
|
3,788
|
|
|
|
(1,424
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCB
|
|
|
5,228
|
|
|
|
124
|
|
|
|
5,104
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,104
|
|
|
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FBJ
|
|
|
4,782
|
|
|
|
562
|
|
|
|
4,220
|
|
|
|
41
|
|
|
|
-
|
|
|
|
41
|
|
|
|
4,261
|
|
|
|
252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DBT
|
|
|
15,934
|
|
|
|
1,131
|
|
|
|
14,803
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14,803
|
|
|
|
(1,084
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TBC
|
|
|
2,159
|
|
|
|
11
|
|
|
|
2,148
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,148
|
|
|
|
1,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HTB
|
|
|
44,405
|
|
|
|
3,881
|
|
|
|
40,524
|
|
|
|
2,433
|
|
|
|
643
|
|
|
|
1,790
|
|
|
|
42,314
|
|
|
|
3,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OGB
|
|
|
27,561
|
|
|
|
1,900
|
|
|
|
25,661
|
|
|
|
160
|
|
|
|
-
|
|
|
|
160
|
|
|
|
25,821
|
|
|
|
913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CBG
|
|
|
44,865
|
|
|
|
3,419
|
|
|
|
41,446
|
|
|
|
3,139
|
|
|
|
284
|
|
|
|
2,855
|
|
|
|
44,301
|
|
|
|
2,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
148,573
|
|
|
$
|
11,044
|
|
|
$
|
137,529
|
|
|
$
|
5,938
|
|
|
$
|
927
|
|
|
$
|
5,011
|
|
|
$
|
142,540
|
|
|
$
|
6,301
|
|
|
|
Covered loans
|
|
|
Less: Fair
value
adjustments
|
|
|
Total
covered
loans
|
|
|
OREO
|
|
|
Less: Fair
value
adjustments
|
|
|
Total
covered
OREO
|
|
|
Total
covered
assets
|
|
|
FDIC
loss-share
receivable
(payable)
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUB
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USB
|
|
|
3,686
|
|
|
|
17
|
|
|
|
3,669
|
|
|
|
165
|
|
|
|
-
|
|
|
|
165
|
|
|
|
3,834
|
|
|
|
(1,453
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCB
|
|
|
5,269
|
|
|
|
174
|
|
|
|
5,095
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,095
|
|
|
|
280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FBJ
|
|
|
13,826
|
|
|
|
991
|
|
|
|
12,835
|
|
|
|
984
|
|
|
|
171
|
|
|
|
813
|
|
|
|
13,648
|
|
|
|
679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DBT
|
|
|
44,112
|
|
|
|
3,107
|
|
|
|
41,005
|
|
|
|
5,044
|
|
|
|
624
|
|
|
|
4,420
|
|
|
|
45,425
|
|
|
|
(1,737
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TBC
|
|
|
16,813
|
|
|
|
481
|
|
|
|
16,332
|
|
|
|
1,480
|
|
|
|
116
|
|
|
|
1,364
|
|
|
|
17,696
|
|
|
|
(2,225
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HTB
|
|
|
45,345
|
|
|
|
3,999
|
|
|
|
41,346
|
|
|
|
2,985
|
|
|
|
955
|
|
|
|
2,030
|
|
|
|
43,376
|
|
|
|
4,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OGB
|
|
|
28,309
|
|
|
|
1,971
|
|
|
|
26,338
|
|
|
|
320
|
|
|
|
39
|
|
|
|
281
|
|
|
|
26,619
|
|
|
|
1,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CBG
|
|
|
48,397
|
|
|
|
3,996
|
|
|
|
44,401
|
|
|
|
3,474
|
|
|
|
344
|
|
|
|
3,130
|
|
|
|
47,531
|
|
|
|
3,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
205,757
|
|
|
$
|
14,736
|
|
|
$
|
191,021
|
|
|
$
|
14,452
|
|
|
$
|
2,249
|
|
|
$
|
12,203
|
|
|
$
|
203,224
|
|
|
$
|
4,506
|
|
A rollforward of acquired covered loans
for the nine months ended September 30, 2016, the year ended December 31, 2015 and the nine months ended September
30, 2015 is shown below:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Balance, January 1
|
|
$
|
137,529
|
|
|
$
|
271,279
|
|
|
$
|
271,279
|
|
Charge-offs, net of recoveries
|
|
|
(2,218
|
)
|
|
|
(5,558
|
)
|
|
|
(5,062
|
)
|
Accretion
|
|
|
2,855
|
|
|
|
9,658
|
|
|
|
8,105
|
|
Transfer to covered other real estate owned
|
|
|
(2,391
|
)
|
|
|
(7,910
|
)
|
|
|
(6,909
|
)
|
Transfer to purchased, non-covered loans due to loss-share expiration
|
|
|
(45,908
|
)
|
|
|
(50,568
|
)
|
|
|
(15,462
|
)
|
Payments received
|
|
|
(27,576
|
)
|
|
|
(79,372
|
)
|
|
|
(60,930
|
)
|
Ending balance
|
|
$
|
62,291
|
|
|
$
|
137,529
|
|
|
$
|
191,021
|
|
The following is a summary of changes
in the accretable discounts of acquired loans during the nine months ended September 30, 2016, the year ended December 31,
2015 and the nine months ended September 30, 2015:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Balance, January 1
|
|
$
|
9,063
|
|
|
$
|
15,578
|
|
|
$
|
15,578
|
|
Accretion
|
|
|
(2,855
|
)
|
|
|
(9,658
|
)
|
|
|
(8,105
|
)
|
Transfer to purchased, non-covered loans due to loss-share expiration
|
|
|
(3,457
|
)
|
|
|
(1,665
|
)
|
|
|
(84
|
)
|
Transfers between non-accretable and accretable discounts, net
|
|
|
281
|
|
|
|
4,808
|
|
|
|
3,312
|
|
Ending balance
|
|
$
|
3,032
|
|
|
$
|
9,063
|
|
|
$
|
10,701
|
|
The shared-loss agreements are subject
to the servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the shared-loss agreements
were recorded as an indemnification asset at their estimated fair values on the acquisition dates. As of September 30, 2016, December
31, 2015 and September 30, 2015, the Company has recorded a clawback liability of $8.9 million, $8.2 million and $7.7 million,
respectively, which represents the obligation of the Company to reimburse the FDIC should actual losses be less than certain thresholds
established in each loss-share agreement. Changes in the FDIC shared-loss receivable (payable) for the nine months ended
September 30, 2016, for the year ended December 31, 2015 and for the nine months ended September 30, 2015 are as
follows:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Beginning balance, January 1
|
|
$
|
6,301
|
|
|
$
|
31,351
|
|
|
$
|
31,351
|
|
Payments received from FDIC
|
|
|
(4,770
|
)
|
|
|
(19,273
|
)
|
|
|
(19,089
|
)
|
Accretion, net
|
|
|
(3,351
|
)
|
|
|
(8,878
|
)
|
|
|
(7,914
|
)
|
Changes in clawback liability
|
|
|
(682
|
)
|
|
|
(2,008
|
)
|
|
|
(1,483
|
)
|
Increase in receivable due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs on covered loans
|
|
|
(4,118
|
)
|
|
|
416
|
|
|
|
1,180
|
|
Write downs of covered other real estate owned
|
|
|
203
|
|
|
|
4,752
|
|
|
|
2,349
|
|
Reimbursable expenses on covered assets
|
|
|
604
|
|
|
|
2,582
|
|
|
|
2,312
|
|
Other activity, net
|
|
|
(1,962
|
)
|
|
|
(2,641
|
)
|
|
|
(4,200
|
)
|
Ending balance
|
|
$
|
(7,775
|
)
|
|
$
|
6,301
|
|
|
$
|
4,506
|
|
NOTE 6. OTHER REAL ESTATE OWNED
The following is a summary of the activity
in other real estate owned during the nine months ended September 30, 2016, the year ended December 31, 2015 and the nine
months ended September 30, 2015:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Beginning balance, January 1
|
|
$
|
16,147
|
|
|
$
|
33,160
|
|
|
$
|
33,160
|
|
Loans transferred to other real estate owned
|
|
|
2,101
|
|
|
|
11,261
|
|
|
|
9,838
|
|
Net gains (losses) on sale and write-downs
|
|
|
(1,276
|
)
|
|
|
(9,971
|
)
|
|
|
(9,583
|
)
|
Sales proceeds
|
|
|
(6,580
|
)
|
|
|
(18,303
|
)
|
|
|
(12,685
|
)
|
Ending balance
|
|
$
|
10,392
|
|
|
$
|
16,147
|
|
|
$
|
20,730
|
|
The following is a summary of the activity
in purchased, non-covered other real estate owned during the nine months ended September 30, 2016, the year ended December 31,
2015 and the nine months ended September 30, 2015:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Beginning balance, January 1
|
|
$
|
14,333
|
|
|
$
|
15,585
|
|
|
$
|
15,585
|
|
Loans transferred to other real estate owned
|
|
|
3,871
|
|
|
|
4,473
|
|
|
|
2,565
|
|
Acquired in acquisitions
|
|
|
1,838
|
|
|
|
2,160
|
|
|
|
2,189
|
|
Transfer from covered other real estate owned due to loss-share expiration
|
|
|
466
|
|
|
|
3,148
|
|
|
|
75
|
|
Net gains (losses) on sale and write-downs
|
|
|
(68
|
)
|
|
|
201
|
|
|
|
326
|
|
Sales proceeds
|
|
|
(6,314
|
)
|
|
|
(11,234
|
)
|
|
|
(9,202
|
)
|
Ending balance
|
|
$
|
14,126
|
|
|
$
|
14,333
|
|
|
$
|
11,538
|
|
The following is a summary of the activity in covered other
real estate owned during the nine months ended September 30, 2016, the year ended December 31, 2015 and the nine months ended
September 30, 2015:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Beginning balance, January 1
|
|
$
|
5,011
|
|
|
$
|
19,907
|
|
|
$
|
19,907
|
|
Loans transferred to other real estate owned
|
|
|
2,391
|
|
|
|
7,910
|
|
|
|
6,909
|
|
Transfer from covered other real estate owned due to loss-share expiration
|
|
|
(466
|
)
|
|
|
(3,148
|
)
|
|
|
(75
|
)
|
Net gains (losses) on sale and write-downs
|
|
|
(500
|
)
|
|
|
(5,926
|
)
|
|
|
(2,936
|
)
|
Sales proceeds
|
|
|
(5,436
|
)
|
|
|
(13,732
|
)
|
|
|
(11,602
|
)
|
Ending balance
|
|
$
|
1,000
|
|
|
$
|
5,011
|
|
|
$
|
12,203
|
|
NOTE 7 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
The Company classifies the sales of securities
under agreements to repurchase as short-term borrowings. The amounts received under these agreements are reflected as a liability
in the Company’s consolidated balance sheets and the securities underlying these agreements are included in investment securities
in the Company’s consolidated balance sheets. At September 30, 2016, December 31, 2015 and September 30, 2015, all securities
sold under agreements to repurchase mature on a daily basis. The market value of the securities fluctuate on a daily basis due
to market conditions. The Company monitors the market value of the securities underlying these agreements on a daily basis and
is required to transfer additional securities if the market value of the securities fall below the repurchase agreement price.
The Company maintains an unpledged securities portfolio that it believes is sufficient to protect against a decline in the market
value of the securities sold under agreements to repurchase.
The following is a summary of the Company’s securities
sold under agreements to repurchase at September 30, 2016, December 31, 2015 and September 30, 2015:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Securities sold under agreements to repurchase
|
|
$
|
42,647
|
|
|
$
|
63,585
|
|
|
$
|
51,506
|
|
At September 30, 2016, December 31, 2015
and September 30, 2015, the investment securities underlying these agreements were all mortgage-backed securities.
NOTE 8 – OTHER BORROWINGS
The Company has, from time to time, utilized
certain borrowing arrangements with various financial institutions to fund growth in earning assets or provide additional liquidity
when appropriate spreads can be realized. At September 30, 2016, December 31, 2015 and September 30, 2015, there were $373.5
million, $39.0 million and $39.0 million, respectively, in outstanding borrowings with the Company’s correspondent banks.
Other borrowings consist of the following:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Daily Rate Credit from Federal Home Loan Bank with a variable interest rate (0.56% at September 30, 2016)
|
|
$
|
227,500
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Advance from Federal Home Loan Bank with a fixed interest rate of 0.40%, due October 14, 2016
|
|
|
100,000
|
|
|
$
|
-
|
|
|
|
-
|
|
Advance from Federal Home Loan Bank with a fixed interest rate of 1.40%, due January 9, 2017
|
|
|
4,008
|
|
|
$
|
-
|
|
|
|
-
|
|
Advance from Federal Home Loan Bank with a fixed interest rate of 1.23%, due May 30, 2017
|
|
|
5,009
|
|
|
$
|
-
|
|
|
|
-
|
|
Advances under revolving credit agreement with a regional bank with interest at 90-day LIBOR plus 3.50% (4.34% at September 30, 2016, 3.92% at December 31, 2015, and 3.78% at September 30, 2015) due in August 2017, secured by subsidiary bank stock
|
|
|
36,000
|
|
|
|
24,000
|
|
|
|
24,000
|
|
Advances under revolving credit agreement with a regional bank with a fixed interest rate of 8.00% due January 2017
|
|
|
860
|
|
|
|
-
|
|
|
|
-
|
|
Advance from correspondent bank with a fixed interest rate of 4.25%, due October 15, 2019, secured by a loan receivable
|
|
|
84
|
|
|
|
-
|
|
|
|
-
|
|
Subordinated debt issued by The Prosperity Banking Company due September 2016 with an interest rate of 90-day LIBOR plus 1.75% (2.28% at December 31, 2015 and 2.09% at September 30, 2015)
|
|
|
-
|
|
|
|
15,000
|
|
|
|
15,000
|
|
Total
|
|
$
|
373,461
|
|
|
$
|
39,000
|
|
|
$
|
39,000
|
|
The advances from the Federal Home Loan
Bank (“FHLB”) are collateralized by a blanket lien on all first mortgage loans and other specific loans in addition
to FHLB stock. At September 30, 2016, $661.5 million was available for borrowing on lines with the FHLB.
As of September 30, 2016, the Company
maintained credit arrangements with various financial institutions to purchase federal funds up to $67 million.
At September 30, 2016, $4.0 million was available for borrowing
under the revolving credit agreement with a regional bank, secured by subsidiary bank stock.
The Company also participates in the Federal
Reserve discount window borrowings. At September 30, 2016, the Company had $861.5 million of loans pledged at the Federal Reserve
discount window and had $574.7 million available for borrowing.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Loan Commitments
The Company is a party to financial instruments
with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial
instruments include commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements
of credit risk and interest rate risk in excess of the amount recognized in the balance sheets.
The Company’s exposure to credit
loss is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments
and conditional obligations as it does for on-balance-sheet instruments. A summary of the Company’s commitments is
as follows:
(Dollars in Thousands)
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
Commitments to extend credit
|
|
$
|
924,374
|
|
|
$
|
548,898
|
|
|
$
|
500,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unused lines of credit
|
|
$
|
62,544
|
|
|
$
|
52,798
|
|
|
$
|
53,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial standby letters of credit
|
|
$
|
14,002
|
|
|
$
|
14,712
|
|
|
$
|
11,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage interest rate lock commitments
|
|
$
|
134,619
|
|
|
$
|
77,710
|
|
|
$
|
79,635
|
|
Commitments to extend credit are agreements
to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally
have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments
are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The
amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit
evaluation of the customer.
Standby letters of credit are conditional
commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily
issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially
the same as that involved in extending loans to customers. Collateral is required in instances which the Company deems necessary.
Other Commitments
During the third quarter of 2016, the
Bank began purchasing from an unrelated third party consumer installment home improvement loans made to borrowers throughout the
United States. Under the purchase agreement, the Bank has committed to increasing outstanding balances of the home improvement
loans by $12.5 million per month until the aggregate purchase commitment of $150.0 million has been reached. As of September 30,
2016, the carrying value of consumer installment home improvement loans purchased under the agreement totaled approximately $32.8
million.
As of September 30, 2016, a $75.0 million
letter of credit issued by the Federal Home Loan Bank was used to guarantee the Bank’s performance related to public fund
deposit balances.
Contingencies
Certain conditions may exist as of the
date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or
more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings
that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel
evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of
relief sought or expected to be sought therein.
If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material
loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.
Loss contingencies considered remote are
generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
A former borrower of the Company has filed
a claim related to a loan previously made by the Company asserting lender liability. The case was tried without a jury and
an order was issued by the court against the Company awarding the borrower approximately $2.9 million on August 8, 2013.
The order is currently on appeal to the South Carolina Court of Appeals and the Company is asserting it had no fiduciary responsibility
to the borrower. As of September 30, 2016, the Company believes that it has valid bases in law and fact to overturn on appeal
the verdict. As a result, the Company believes that the likelihood that the amount of the judgment will be affirmed is not probable,
and, accordingly, that the amount of any loss cannot be reasonably estimated at this time. Because the Company believes that this
potential loss is not probable or estimable, it has not recorded any reserves or contingencies related to this legal matter. In
the event that the Company's assumptions used to evaluate this matter as neither probable nor estimable change in future periods,
it may be required to record a liability for an adverse outcome.
NOTE 10 –
ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income
for the Company consists of changes in net unrealized gains and losses on investment securities available for sale and interest
rate swap derivatives. The following tables present a summary of the accumulated other comprehensive income balances, net of tax,
as of September 30, 2016 and 2015:
(Dollars in Thousands)
|
|
Unrealized
Gain (Loss) on
Derivatives
|
|
|
Unrealized
Gain (Loss) on
Securities
|
|
|
Accumulated Other
Comprehensive Income
(Loss)
|
|
Balance, January 1, 2016
|
|
$
|
152
|
|
|
$
|
3,201
|
|
|
$
|
3,353
|
|
Reclassification for gains included in net income, net of tax
|
|
|
-
|
|
|
|
(61
|
)
|
|
|
(61
|
)
|
Current year changes, net of tax
|
|
|
(567
|
)
|
|
|
7,724
|
|
|
|
7,157
|
|
Balance, September 30, 2016
|
|
$
|
(415
|
)
|
|
$
|
10,864
|
|
|
$
|
10,449
|
|
(Dollars in Thousands)
|
|
Unrealized
Gain (Loss) on
Derivatives
|
|
|
Unrealized
Gain (Loss) on
Securities
|
|
|
Accumulated Other
Comprehensive Income
(Loss)
|
|
Balance, January 1, 2015
|
|
$
|
508
|
|
|
$
|
5,590
|
|
|
$
|
6,098
|
|
Reclassification for gains included in net income, net of tax
|
|
|
-
|
|
|
|
(89
|
)
|
|
|
(89
|
)
|
Current year changes, net of tax
|
|
|
(669
|
)
|
|
|
(1,143
|
)
|
|
|
(1,812
|
)
|
Balance, September 30, 2015
|
|
$
|
(161
|
)
|
|
$
|
4,358
|
|
|
$
|
4,197
|
|
NOTE 11 – WEIGHTED AVERAGE SHARES OUTSTANDING
Earnings per share have been computed based on the following
weighted average number of common shares outstanding:
|
|
For the Three Months
Ended September 30,
|
|
|
For the Nine Months
Ended September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(Share Data in
Thousands)
|
|
|
(Share Data in
Thousands)
|
|
Basic shares outstanding
|
|
|
34,870
|
|
|
|
32,195
|
|
|
|
34,156
|
|
|
|
31,614
|
|
Plus: Dilutive effect of ISOs
|
|
|
108
|
|
|
|
126
|
|
|
|
100
|
|
|
|
118
|
|
Plus: Dilutive effect of restricted share grants
|
|
|
217
|
|
|
|
232
|
|
|
|
214
|
|
|
|
230
|
|
Diluted shares outstanding
|
|
|
35,195
|
|
|
|
32,553
|
|
|
|
34,470
|
|
|
|
31,962
|
|
For the three- and nine-month periods ended
September 30, 2016 and 2015, there were no potential common shares with strike prices that would cause them to be anti-dilutive.
NOTE 12 – FAIR VALUE MEASURES
The fair value of an asset or liability
is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best
determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s
various assets and liabilities. In cases where quoted market prices are not available, fair value is based on discounted cash flows
or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount
rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement
of the asset or liability. The accounting standard for disclosures about fair value measures excludes certain financial instruments
and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented
may not necessarily represent the underlying fair value of the Company.
The Company has elected to record mortgage
loans held-for-sale at fair value in order to eliminate the complexities and inherent difficulties of achieving hedge accounting
and to better align reported results with the underlying economic changes in value of the loans and related hedge instruments.
This election impacts the timing and recognition of origination fees and costs, as well as servicing value, which are now recognized
in earnings at the time of origination. Interest income on mortgage loans held-for-sale is recorded on an accrual basis in the
consolidated statement of earnings and comprehensive income under the heading “Interest income – interest and fees
on loans”. The servicing value is included in the fair value of the interest rate lock commitments (“IRLCs”)
with borrowers. The mark to market adjustments related to loans held-for-sale and the associated economic hedges are captured in
mortgage banking activities. Net gains of $4.9 million and $3.3 million resulting from fair value changes of these mortgage loans
were recorded in income during the nine months ended September 30, 2016 and 2015, respectively. The amount does not reflect changes
in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage
loans. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage
banking activity” in the Consolidated Statements of Earnings and Comprehensive Income. The Company’s valuation of mortgage
loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these
loans, valuation adjustments attributable to instrument-specific credit risk is nominal.
The following table summarizes the difference
between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of September 30, 2016,
December 31, 2015 and September 30, 2015:
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
September 30,
2015
|
|
|
|
(Dollars in Thousands)
|
|
Aggregate fair value of mortgage loans held for sale
|
|
$
|
126,263
|
|
|
$
|
111,182
|
|
|
$
|
111,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate unpaid principal balance
|
|
$
|
121,308
|
|
|
$
|
107,652
|
|
|
$
|
108,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past-due loans of 90 days or more
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
The Company utilizes fair value measurements
to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available
for sale, mortgage loans held for sale and derivatives are recorded at fair value on a recurring basis. From time to time, the
Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans and OREO. Additionally,
the Company is required to disclose, but not record, the fair value of other financial instruments.
Fair Value Hierarchy
The Company groups assets and liabilities
at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions
used to determine fair value. These levels are:
Level 1 -
Quoted prices in active
markets for identical assets or liabilities.
Level 2 -
Observable inputs other
than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets
or liabilities.
Level 3 -
Unobservable inputs that
are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following methods and assumptions were
used by the Company in estimating the fair value of assets and liabilities recorded at fair value and for estimating the fair value
of its financial instruments:
Cash and Due From Banks, Federal Funds
Sold and Interest-Bearing Accounts:
The carrying amount of cash and due from banks, federal funds sold and interest-bearing
accounts approximates fair value.
Investment Securities Available for
Sale:
The fair value of securities available for sale is determined by various valuation methodologies. Where quoted
market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted
market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar
characteristics, or discounted cash flows. Level 2 securities include mortgage-backed securities issued by government-sponsored
enterprises and municipal bonds. The Level 2 fair value pricing is provided by an independent third-party and is based upon similar
securities in an active market. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified
within Level 3 of the hierarchy and include certain residual municipal securities and other less liquid securities.
Other Investments:
FHLB stock is
included in other investments at its original cost basis. It is not practical to determine the fair value of FHLB stock due to
restrictions placed on its transferability.
Mortgage Loans Held for Sale:
The
Company records mortgage loans held for sale at fair value. The fair value of mortgage loans held for sale is determined on outstanding
commitments from third party investors in the secondary markets and is classified within Level 2 of the valuation hierarchy.
Loans:
The carrying amount of variable-rate
loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair value of fixed-rate
loans is estimated based on discounted contractual cash flows, using interest rates currently being offered for loans with similar
terms to borrowers with similar credit quality. The fair value of impaired loans is estimated based on discounted contractual
cash flows or underlying collateral values, where applicable. A loan is determined to be impaired if the Company believes it is
probable that all principal and interest amounts due according to the terms of the note will not be collected as scheduled. The
fair value of impaired loans is determined in accordance with ASC 310-10,
Accounting by Creditors for Impairment of a Loan
,
and generally results in a specific reserve established through a charge to the provision for loan losses. Losses on impaired loans
are charged to the allowance when management believes the uncollectability of a loan is confirmed. Management has determined
that the majority of impaired loans are Level 3 assets due to the extensive use of market appraisals.
Other Real Estate Owned:
The fair
value of other real estate owned (“OREO”) is determined using certified appraisals, internal evaluations and broker
price opinions that value the property at its highest and best uses by applying traditional valuation methods common to the
industry. The Company does not hold any OREO for profit purposes and all other real estate is actively marketed for sale. In
most cases, management has determined that additional write-downs are required beyond what is calculable from the appraisal to
carry the property at levels that would attract buyers. Because this additional write-down is not based on observable inputs, management
has determined that other real estate owned should be classified as Level 3.
Covered Other Real Estate Owned:
Covered other real estate owned includes other real estate owned on which the majority of losses would be covered by loss-sharing
agreements with the FDIC. Management initially valued these assets at fair value using mostly unobservable inputs and, as such,
has classified these assets as Level 3.
Intangible Assets:
Intangible assets
consist of core deposit premiums acquired in connection with business combinations and are based on the established value of acquired
customer deposits. The core deposit premium is initially recognized based on a valuation performed as of the consummation
date and is amortized over an estimated useful life of three to ten years.
FDIC Loss-Share Receivable/Payable:
Because the FDIC will reimburse the Company for certain acquired loans should the Company experience a loss, an indemnification
asset is recorded at fair value at the acquisition date. The indemnification asset is recognized at the same time as the indemnified
loans, and measured on the same basis, subject to collectability or contractual limitations. The shared loss agreements on the
acquisition date reflect the reimbursements expected to be received from the FDIC, using an appropriate discount rate, which reflects
counterparty credit risk and other uncertainties. The shared loss agreements continue to be measured on the same basis as the related
indemnified loans, and the loss-share receivable is impacted by changes in estimated cash flows associated with these loans.
Accrued Interest Receivable/Payable:
The
carrying amount of accrued interest receivable and accrued interest payable approximates fair value.
Cash Value of Bank Owned Life Insurance:
The carrying value of cash value of bank owned life insurance approximates fair value.
Deposits:
The carrying amount
of demand deposits, savings deposits and variable-rate certificates of deposit approximates fair value. The fair value of fixed-rate
certificates of deposit is estimated based on discounted contractual cash flows using interest rates currently offered for certificates
with similar maturities.
Securities Sold under Agreements to
Repurchase and Other Borrowings:
The carrying amount of variable rate borrowings and securities sold under repurchase
agreements approximates fair value and are classified as Level 1. The fair value of fixed rate other borrowings is estimated
based on discounted contractual cash flows using the current incremental borrowing rates for similar borrowing arrangements and
are classified as Level 2.
Subordinated Deferrable Interest Debentures:
The fair value of the Company’s variable rate trust preferred securities is based primarily upon discounted cash flows
using rates for securities with similar terms and remaining maturities and are classified as Level 2.
Off-Balance-Sheet Instruments:
Because
commitments to extend credit and standby letters of credit are typically made using variable rates and have short maturities, the
carrying value and fair value are immaterial for disclosure.
Derivatives:
The Company has entered
into derivative financial instruments to manage interest rate risk. The valuation of these instruments is determined using widely
accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis
reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including
interest rate curves and implied volatilities. The fair value of the derivatives is determined using the market standard methodology
of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments
are based on an expectation of future interest rates (forward curves derived from observable market interest rate curves).
The Company incorporates credit valuation
adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk
in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk,
the Company has considered the impact of netting any applicable credit enhancements such as collateral postings, thresholds, mutual
puts and guarantees.
Although the Company has determined that
the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation
adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the
likelihood of default by itself or the counterparty. However, as of September 30, 2016, December 31, 2015 and September
30, 2015, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation
of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation
of its derivatives. As a result, the Company has determined that its derivative valuation in its entirety is classified in Level
2 of the fair value hierarchy.
The following table presents the fair value measurements of
assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair
value measurements fall as of September 30, 2016, December 31, 2015 and September 30, 2015 (dollars in thousands):
|
|
Fair Value Measurements on a Recurring Basis
As of September 30, 2016
|
|
|
|
Fair Value
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
1,028
|
|
|
$
|
-
|
|
|
$
|
1,028
|
|
|
$
|
-
|
|
State, county and municipal securities
|
|
|
155,994
|
|
|
|
-
|
|
|
|
155,994
|
|
|
|
-
|
|
Corporate debt securities
|
|
|
29,098
|
|
|
|
-
|
|
|
|
27,598
|
|
|
|
1,500
|
|
Mortgage-backed securities
|
|
|
652,004
|
|
|
|
-
|
|
|
|
652,004
|
|
|
|
-
|
|
Mortgage loans held for sale
|
|
|
126,263
|
|
|
|
-
|
|
|
|
126,263
|
|
|
|
-
|
|
Mortgage banking derivative instruments
|
|
|
5,083
|
|
|
|
-
|
|
|
|
5,083
|
|
|
|
-
|
|
Total recurring assets at fair value
|
|
$
|
969,470
|
|
|
$
|
-
|
|
|
$
|
967,970
|
|
|
$
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
$
|
2,964
|
|
|
|
-
|
|
|
$
|
2,964
|
|
|
|
-
|
|
Mortgage banking derivative instruments
|
|
$
|
840
|
|
|
|
-
|
|
|
|
840
|
|
|
|
-
|
|
Total recurring liabilities at fair value
|
|
$
|
3,804
|
|
|
$
|
-
|
|
|
$
|
3,804
|
|
|
$
|
-
|
|
|
|
Fair Value Measurements on a Recurring Basis
As of December 31, 2015
|
|
|
|
Fair Value
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
14,890
|
|
|
$
|
-
|
|
|
$
|
14,890
|
|
|
$
|
-
|
|
State, county and municipal securities
|
|
|
161,316
|
|
|
|
-
|
|
|
|
161,316
|
|
|
|
-
|
|
Corporate debt securities
|
|
|
6,017
|
|
|
|
-
|
|
|
|
3,019
|
|
|
|
2,998
|
|
Mortgage-backed securities
|
|
|
600,962
|
|
|
|
-
|
|
|
|
600,962
|
|
|
|
-
|
|
Mortgage loans held for sale
|
|
|
111,182
|
|
|
|
-
|
|
|
|
111,182
|
|
|
|
-
|
|
Mortgage banking derivative instruments
|
|
|
2,687
|
|
|
|
-
|
|
|
|
2,687
|
|
|
|
-
|
|
Total recurring assets at fair value
|
|
$
|
897,054
|
|
|
$
|
-
|
|
|
$
|
894,056
|
|
|
$
|
2,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
$
|
1,439
|
|
|
$
|
-
|
|
|
$
|
1,439
|
|
|
$
|
-
|
|
Mortgage banking derivative instruments
|
|
|
137
|
|
|
|
-
|
|
|
|
137
|
|
|
|
-
|
|
Total recurring liabilities at fair value
|
|
$
|
1,576
|
|
|
$
|
-
|
|
|
$
|
1,576
|
|
|
$
|
-
|
|
|
|
Fair Value Measurements on a Recurring Basis
As of September 30, 2015
|
|
|
|
Fair Value
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
14,968
|
|
|
$
|
-
|
|
|
$
|
14,968
|
|
|
$
|
-
|
|
State, county and municipal securities
|
|
|
164,865
|
|
|
|
-
|
|
|
|
164,865
|
|
|
|
-
|
|
Corporate debt securities
|
|
|
6,032
|
|
|
|
-
|
|
|
|
3,532
|
|
|
|
2,500
|
|
Mortgage-backed securities
|
|
|
625,520
|
|
|
|
-
|
|
|
|
625,520
|
|
|
|
-
|
|
Mortgage loans held for sale
|
|
|
111,807
|
|
|
|
-
|
|
|
|
111,807
|
|
|
|
-
|
|
Mortgage banking derivative instruments
|
|
|
3,025
|
|
|
|
-
|
|
|
|
3,025
|
|
|
|
-
|
|
Total recurring assets at fair value
|
|
$
|
926,217
|
|
|
$
|
-
|
|
|
$
|
923,717
|
|
|
$
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
$
|
2,028
|
|
|
$
|
-
|
|
|
$
|
2,028
|
|
|
$
|
-
|
|
Total recurring liabilities at fair value
|
|
$
|
2,028
|
|
|
$
|
-
|
|
|
$
|
2,028
|
|
|
$
|
-
|
|
The following table presents the fair value
measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments
pursuant to the valuation hierarchy as of September 30, 2016, December 31, 2015 and September 30, 2015 (dollars in thousands):
|
|
Fair Value Measurements on a Nonrecurring Basis
As of September 30, 2016
|
|
|
|
Fair
Value
|
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans carried at fair value
|
|
$
|
26,210
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
26,210
|
|
Other real estate owned
|
|
|
425
|
|
|
|
-
|
|
|
|
-
|
|
|
|
425
|
|
Purchased, non-covered other real estate owned
|
|
|
14,126
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14,126
|
|
Covered other real estate owned
|
|
|
1,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000
|
|
Total nonrecurring assets at fair value
|
|
$
|
41,761
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
41,761
|
|
|
|
Fair Value Measurements on a Nonrecurring Basis
As of December 31, 2015
|
|
|
|
Fair
Value
|
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans carried at fair value
|
|
$
|
27,069
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
27,069
|
|
Other real estate owned
|
|
|
10,456
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,456
|
|
Purchased, non-covered other real estate owned
|
|
|
14,333
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14,333
|
|
Covered other real estate owned
|
|
|
5,011
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,011
|
|
Total nonrecurring assets at fair value
|
|
$
|
56,869
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
56,869
|
|
|
|
Fair Value Measurements on a Nonrecurring Basis
As of September 30, 2015
|
|
|
|
Fair
Value
|
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans carried at fair value
|
|
$
|
27,859
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
27,859
|
|
Other real estate owned
|
|
|
5,737
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,737
|
|
Purchased, non-covered other real estate owned
|
|
|
11,538
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,538
|
|
Covered other real estate owned
|
|
|
12,203
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,203
|
|
Total nonrecurring assets at fair value
|
|
$
|
57,337
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
57,337
|
|
The inputs used to determine estimated
fair value of impaired loans and covered loans include market conditions, loan terms, underlying collateral characteristics and
discount rates. The inputs used to determine fair value of other real estate owned and covered other real estate owned include
market conditions, estimated marketing period or holding period, underlying collateral characteristics and discount rates.
For the nine months ended September 30,
2016, the year ended December 31, 2015 and the nine months ended September 30, 2015, there was not a change in the methods and
significant assumptions used to estimate fair value.
The following table shows significant unobservable
inputs used in the fair value measurement of Level 3 assets and liabilities (dollars in thousands):
|
|
Fair
Value
|
|
|
Valuation
Technique
|
|
Unobservable
Inputs
|
|
Range
of
Discounts
|
|
|
Weighted
Average
Discount
|
|
|
|
|
|
As of September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired
loans
|
|
$
|
26,210
|
|
|
Third-party appraisals and discounted
cash flows
|
|
Collateral discounts and discount rates
|
|
|
15%
- 100
|
%
|
|
|
27
|
%
|
Other
real estate owned
|
|
$
|
425
|
|
|
Third-party appraisals, sales contracts,
broker price opinions
|
|
Collateral discounts and estimated costs to sell
|
|
|
10%
- 90
|
%
|
|
|
12
|
%
|
Purchased
non-covered other real estate owned
|
|
$
|
14,126
|
|
|
Third-party appraisals
|
|
Collateral discounts and estimated costs to sell
|
|
|
10%
- 75
|
%
|
|
|
15
|
%
|
Covered
other real estate owned
|
|
$
|
1,000
|
|
|
Third-party appraisals
|
|
Collateral discounts and estimated costs to sell
|
|
|
15%
- 56
|
%
|
|
|
16
|
%
|
Recurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities available for sale
|
|
$
|
1,500
|
|
|
Discounted par values
|
|
Credit quality of underlying issuer
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired
loans
|
|
$
|
27,069
|
|
|
Third-party appraisals and discounted cash
flows
|
|
Collateral discounts and discount rates
|
|
|
0%
- 100
|
%
|
|
|
29
|
%
|
Other
real estate owned
|
|
$
|
10,456
|
|
|
Third-party appraisals, sales contracts,
broker price opinions
|
|
Collateral discounts and estimated costs to sell
|
|
|
10%
- 90
|
%
|
|
|
13
|
%
|
Purchased
non-covered other real estate owned
|
|
$
|
14,333
|
|
|
Third-party appraisals
|
|
Collateral discounts and estimated costs to sell
|
|
|
10%
- 69
|
%
|
|
|
19
|
%
|
Covered
other real estate owned
|
|
$
|
5,011
|
|
|
Third-party appraisals
|
|
Collateral discounts and estimated costs to sell
|
|
|
0%
- 74
|
%
|
|
|
12
|
%
|
Recurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities available for sale
|
|
$
|
2,998
|
|
|
Discounted par values
|
|
Credit quality of underlying issuer
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired
loans
|
|
$
|
27,859
|
|
|
Third-party appraisals and discounted
cash flows
|
|
Collateral discounts and discount rates
|
|
|
0%
- 50
|
%
|
|
|
25
|
%
|
Other
real estate owned
|
|
$
|
5,737
|
|
|
Third-party appraisals, sales contracts,
broker price opinions
|
|
Collateral discounts and estimated costs to sell
|
|
|
0%
- 43
|
%
|
|
|
14
|
%
|
Purchased
non-covered other real estate owned
|
|
$
|
11,538
|
|
|
Third-party appraisals
|
|
Collateral discounts and estimated costs to sell
|
|
|
0%
-75
|
%
|
|
|
20
|
%
|
Covered
other real estate owned
|
|
$
|
12,203
|
|
|
Third-party appraisals
|
|
Collateral discounts and estimated costs to sell
|
|
|
0%
- 73
|
%
|
|
|
12
|
%
|
Recurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities available for sale
|
|
$
|
2,500
|
|
|
Discounted par values
|
|
Credit quality of underlying issuer
|
|
|
0
|
%
|
|
|
0
|
%
|
The carrying amount and estimated fair
value of the Company’s financial instruments, not shown elsewhere in these financial statements, were as follows:
|
|
|
|
|
Fair Value Measurements at September 30, 2016 Using:
|
|
|
|
Carrying
Amount
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$
|
123,270
|
|
|
$
|
123,270
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
123,270
|
|
Federal funds sold and interest-bearing accounts
|
|
|
90,801
|
|
|
|
90,801
|
|
|
|
-
|
|
|
|
-
|
|
|
|
90,801
|
|
Loans, net
|
|
|
4,922,395
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,918,360
|
|
|
|
4,918,360
|
|
Accrued interest receivable
|
|
|
21,775
|
|
|
|
21,775
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
5,306,098
|
|
|
$
|
-
|
|
|
$
|
5,305,463
|
|
|
$
|
-
|
|
|
$
|
5,305,463
|
|
Securities sold under agreements to repurchase
|
|
|
42,647
|
|
|
|
42,647
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42,647
|
|
FDIC loss-share payable
|
|
|
7,775
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,141
|
|
|
|
10,141
|
|
Other borrowings
|
|
|
373,461
|
|
|
|
-
|
|
|
|
373,461
|
|
|
|
-
|
|
|
|
373,461
|
|
Accrued interest payable
|
|
|
1,282
|
|
|
|
1,282
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,282
|
|
Subordinated deferrable interest debentures
|
|
|
83,898
|
|
|
|
-
|
|
|
|
66,252
|
|
|
|
-
|
|
|
|
66,252
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2015 Using:
|
|
|
|
Carrying
Amount
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$
|
118,518
|
|
|
$
|
118,518
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
118,518
|
|
Federal funds sold and interest-bearing accounts
|
|
|
272,045
|
|
|
|
272,045
|
|
|
|
-
|
|
|
|
-
|
|
|
|
272,045
|
|
Loans, net
|
|
|
3,971,974
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,982,606
|
|
|
|
3,982,606
|
|
FDIC loss-share receivable
|
|
|
6,301
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(944
|
)
|
|
|
(944
|
)
|
Accrued interest receivable
|
|
|
21,274
|
|
|
|
21,274
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
4,879,290
|
|
|
$
|
-
|
|
|
$
|
4,880,294
|
|
|
$
|
-
|
|
|
$
|
4,880,294
|
|
Securities sold under agreements to repurchase
|
|
|
63,585
|
|
|
|
63,585
|
|
|
|
-
|
|
|
|
-
|
|
|
|
63,585
|
|
Other borrowings
|
|
|
39,000
|
|
|
|
-
|
|
|
|
39,000
|
|
|
|
-
|
|
|
|
39,000
|
|
Accrued interest payable
|
|
|
1,054
|
|
|
|
1,054
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,054
|
|
Subordinated deferrable interest debentures
|
|
|
69,874
|
|
|
|
-
|
|
|
|
52,785
|
|
|
|
-
|
|
|
|
52,785
|
|
|
|
|
|
|
Fair Value Measurements at September 30, 2015 Using:
|
|
|
|
Carrying
Amount
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$
|
114,396
|
|
|
$
|
114,396
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
114,396
|
|
Federal funds sold and interest-bearing accounts
|
|
|
120,925
|
|
|
|
120,925
|
|
|
|
-
|
|
|
|
-
|
|
|
|
120,925
|
|
Loans, net
|
|
|
3,720,713
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,711,522
|
|
|
|
3,711,522
|
|
FDIC loss-share receivable
|
|
|
4,506
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,042
|
)
|
|
|
(4,042
|
)
|
Accrued interest receivable
|
|
|
20,062
|
|
|
|
20,062
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
4,530,523
|
|
|
$
|
-
|
|
|
$
|
4,531,851
|
|
|
$
|
-
|
|
|
$
|
4,531,851
|
|
Securities sold under agreements to repurchase
|
|
|
51,506
|
|
|
|
51,506
|
|
|
|
-
|
|
|
|
-
|
|
|
|
51,506
|
|
Other borrowings
|
|
|
39,000
|
|
|
|
-
|
|
|
|
39,000
|
|
|
|
-
|
|
|
|
39,000
|
|
Accrued interest payable
|
|
|
1,149
|
|
|
|
1,149
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,149
|
|
Subordinated deferrable interest debentures
|
|
|
69,600
|
|
|
|
-
|
|
|
|
51,617
|
|
|
|
-
|
|
|
|
51,617
|
|
NOTE 13 – SEGMENT REPORTING
The following tables present selected financial information
with respect to the Company’s reportable business segments for the three months ended September 30, 2016 and 2015:
|
|
Three Months Ended
September 30, 2016
|
|
|
|
Banking
Division
|
|
|
Retail
Mortgage
Division
|
|
|
Warehouse
Lending
Division
|
|
|
SBA
Division
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
Interest income
|
|
$
|
55,369
|
|
|
$
|
3,679
|
|
|
$
|
2,073
|
|
|
$
|
1,089
|
|
|
$
|
62,210
|
|
Interest expense
|
|
|
4,995
|
|
|
|
-
|
|
|
|
-
|
|
|
|
148
|
|
|
|
5,143
|
|
Net interest income
|
|
|
50,374
|
|
|
|
3,679
|
|
|
|
2,073
|
|
|
|
941
|
|
|
|
57,067
|
|
Provision for loan losses
|
|
|
57
|
|
|
|
447
|
|
|
|
94
|
|
|
|
213
|
|
|
|
811
|
|
Noninterest income
|
|
|
13,949
|
|
|
|
13,198
|
|
|
|
555
|
|
|
|
1,162
|
|
|
|
28,864
|
|
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
18,323
|
|
|
|
8,940
|
|
|
|
103
|
|
|
|
616
|
|
|
|
27,982
|
|
Equipment and occupancy expenses
|
|
|
5,490
|
|
|
|
433
|
|
|
|
1
|
|
|
|
65
|
|
|
|
5,989
|
|
Data processing and telecommunications expenses
|
|
|
5,794
|
|
|
|
364
|
|
|
|
26
|
|
|
|
1
|
|
|
|
6,185
|
|
Other expenses
|
|
|
11,533
|
|
|
|
1,303
|
|
|
|
26
|
|
|
|
181
|
|
|
|
13,043
|
|
Total noninterest expense
|
|
|
41,140
|
|
|
|
11,040
|
|
|
|
156
|
|
|
|
863
|
|
|
|
53,199
|
|
Income before income tax expense
|
|
|
23,126
|
|
|
|
5,390
|
|
|
|
2,378
|
|
|
|
1,027
|
|
|
|
31,921
|
|
Income tax expense
|
|
|
7,286
|
|
|
|
1,887
|
|
|
|
832
|
|
|
|
359
|
|
|
|
10,364
|
|
Net income
|
|
$
|
15,840
|
|
|
$
|
3,503
|
|
|
$
|
1,546
|
|
|
$
|
668
|
|
|
$
|
21,557
|
|
Total assets
|
|
$
|
5,841,207
|
|
|
$
|
356,755
|
|
|
$
|
203,334
|
|
|
$
|
92,199
|
|
|
$
|
6,493,495
|
|
Other intangible assets, net ,
|
|
$
|
18,472
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
18,472
|
|
Goodwill
|
|
$
|
122,545
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
122,545
|
|
|
|
Three Months Ended
September 30, 2015
|
|
|
|
Banking
Division
|
|
|
Retail
Mortgage
Division
|
|
|
Warehouse
Lending
Division
|
|
|
SBA
Division
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
Interest income
|
|
$
|
46,734
|
|
|
$
|
2,485
|
|
|
$
|
1,128
|
|
|
$
|
848
|
|
|
$
|
51,195
|
|
Interest expense
|
|
|
3,690
|
|
|
|
-
|
|
|
|
-
|
|
|
|
106
|
|
|
|
3,796
|
|
Net interest income
|
|
$
|
43,044
|
|
|
$
|
2,485
|
|
|
$
|
1,128
|
|
|
$
|
742
|
|
|
$
|
47,399
|
|
Provision for loan losses
|
|
|
960
|
|
|
|
26
|
|
|
|
-
|
|
|
|
-
|
|
|
|
986
|
|
Noninterest income
|
|
|
13,470
|
|
|
|
9,827
|
|
|
|
372
|
|
|
|
1,309
|
|
|
|
24,978
|
|
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
17,921
|
|
|
|
6,138
|
|
|
|
137
|
|
|
|
738
|
|
|
|
24,934
|
|
Equipment and occupancy expenses
|
|
|
5,444
|
|
|
|
397
|
|
|
|
1
|
|
|
|
73
|
|
|
|
5,915
|
|
Data processing and telecommunications expenses
|
|
|
4,998
|
|
|
|
308
|
|
|
|
22
|
|
|
|
1
|
|
|
|
5,329
|
|
Other expenses
|
|
|
11,379
|
|
|
|
662
|
|
|
|
40
|
|
|
|
137
|
|
|
|
12,218
|
|
Total noninterest expense
|
|
|
39,742
|
|
|
|
7,505
|
|
|
|
200
|
|
|
|
949
|
|
|
|
48,396
|
|
Income before income tax expense
|
|
|
15,812
|
|
|
|
4,781
|
|
|
|
1,300
|
|
|
|
1,102
|
|
|
|
22,995
|
|
Income tax expense
|
|
|
4,854
|
|
|
|
1,673
|
|
|
|
455
|
|
|
|
386
|
|
|
|
7,368
|
|
Net income
|
|
$
|
10,958
|
|
|
$
|
3,108
|
|
|
$
|
845
|
|
|
$
|
716
|
|
|
$
|
15,627
|
|
Total assets
|
|
$
|
4,805,387
|
|
|
$
|
216,640
|
|
|
$
|
92,398
|
|
|
$
|
101,875
|
|
|
$
|
5,216,300
|
|
Other intangible assets, net
|
|
$
|
18,218
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
18,218
|
|
Goodwill
|
|
$
|
87,701
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
87,701
|
|
The following tables present selected financial information
with respect to the Company’s reportable business segments for the nine months ended September 30, 2016 and 2015:
|
|
Nine Months Ended
September 30, 2016
|
|
|
|
Banking
Division
|
|
|
Retail
Mortgage
Division
|
|
|
Warehouse
Lending
Division
|
|
|
SBA
Division
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
Interest income
|
|
$
|
158,682
|
|
|
$
|
9,992
|
|
|
$
|
4,714
|
|
|
$
|
2,721
|
|
|
$
|
176,109
|
|
Interest expense
|
|
|
13,567
|
|
|
|
-
|
|
|
|
-
|
|
|
|
450
|
|
|
|
14,017
|
|
Net interest income
|
|
|
145,115
|
|
|
|
9,992
|
|
|
|
4,714
|
|
|
|
2,271
|
|
|
|
162,092
|
|
Provision for loan losses
|
|
|
1,471
|
|
|
|
540
|
|
|
|
94
|
|
|
|
276
|
|
|
|
2,381
|
|
Noninterest income
|
|
|
39,702
|
|
|
|
36,126
|
|
|
|
1,328
|
|
|
|
4,373
|
|
|
|
81,529
|
|
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
55,740
|
|
|
|
23,591
|
|
|
|
399
|
|
|
|
1,970
|
|
|
|
81,700
|
|
Equipment and occupancy expenses
|
|
|
16,541
|
|
|
|
1,326
|
|
|
|
3
|
|
|
|
190
|
|
|
|
18,060
|
|
Data processing and telecommunications expenses
|
|
|
17,299
|
|
|
|
974
|
|
|
|
71
|
|
|
|
3
|
|
|
|
18,347
|
|
Other expenses
|
|
|
39,040
|
|
|
|
3,392
|
|
|
|
77
|
|
|
|
542
|
|
|
|
43,051
|
|
Total noninterest expense
|
|
|
128,620
|
|
|
|
29,283
|
|
|
|
550
|
|
|
|
2,705
|
|
|
|
161,158
|
|
Income before income tax expense
|
|
|
54,726
|
|
|
|
16,295
|
|
|
|
5,398
|
|
|
|
3,663
|
|
|
|
80,082
|
|
Income tax expense
|
|
|
17,285
|
|
|
|
5,703
|
|
|
|
1,889
|
|
|
|
1,282
|
|
|
|
26,159
|
|
Net income
|
|
$
|
37,441
|
|
|
$
|
10,592
|
|
|
$
|
3,509
|
|
|
$
|
2,381
|
|
|
$
|
53,923
|
|
|
|
Nine Months Ended
September 30, 2015
|
|
|
|
Banking
Division
|
|
|
Retail
Mortgage
Division
|
|
|
Warehouse
Lending
Division
|
|
|
SBA
Division
|
|
|
Total
|
|
|
|
(Dollars in Thousands)
|
|
Interest income
|
|
$
|
126,283
|
|
|
$
|
6,009
|
|
|
$
|
3,142
|
|
|
$
|
2,358
|
|
|
$
|
137,792
|
|
Interest expense
|
|
|
10,594
|
|
|
|
-
|
|
|
|
-
|
|
|
|
279
|
|
|
|
10,873
|
|
Net interest income
|
|
$
|
115,689
|
|
|
$
|
6,009
|
|
|
$
|
3,142
|
|
|
$
|
2,079
|
|
|
$
|
126,919
|
|
Provision for loan losses
|
|
|
4,343
|
|
|
|
368
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,711
|
|
Noninterest income
|
|
|
31,512
|
|
|
|
26,532
|
|
|
|
1,028
|
|
|
|
4,107
|
|
|
|
63,179
|
|
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
48,958
|
|
|
|
16,257
|
|
|
|
363
|
|
|
|
2,453
|
|
|
|
68,031
|
|
Equipment and occupancy expenses
|
|
|
13,964
|
|
|
|
1,173
|
|
|
|
4
|
|
|
|
137
|
|
|
|
15,278
|
|
Data processing and telecommunications expenses
|
|
|
12,922
|
|
|
|
799
|
|
|
|
75
|
|
|
|
7
|
|
|
|
13,803
|
|
Other expenses
|
|
|
45,783
|
|
|
|
2,744
|
|
|
|
95
|
|
|
|
353
|
|
|
|
48,975
|
|
Total noninterest expense
|
|
|
121,627
|
|
|
|
20,973
|
|
|
|
537
|
|
|
|
2,950
|
|
|
|
146,087
|
|
Income before income tax expense
|
|
|
21,231
|
|
|
|
11,200
|
|
|
|
3,633
|
|
|
|
3,236
|
|
|
|
39,300
|
|
Income tax expense
|
|
|
6,277
|
|
|
|
3,920
|
|
|
|
1,272
|
|
|
|
1,133
|
|
|
|
12,601
|
|
Net income
|
|
|
14,954
|
|
|
|
7,280
|
|
|
|
2,361
|
|
|
|
2,103
|
|
|
|
26,699
|
|