Notes to the Condensed Consolidated Financial Statements (Unaudited)
Note 1. Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Univest Financial Corporation (the Corporation) and its wholly owned subsidiaries. The Corporation’s direct subsidiary is Univest Bank and Trust Co. (the Bank). All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations for interim financial information. The accompanying unaudited consolidated financial statements reflect all adjustments which are of a normal recurring nature and are, in the opinion of management, necessary for a fair presentation of the financial statements for the interim periods presented. Certain prior period amounts have been reclassified to conform to the current-period presentation. Operating results for the three-month period ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ended December 31, 2021 or for any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the registrant’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 26, 2021.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes include fair value measurement of investment securities available-for-sale and the determination of the allowance for credit losses.
Accounting Pronouncements Adopted in 2021
In August 2018, the FASB issued ASU No. 2018-14, "Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans." The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit plans or other postretirement plans. Disclosures removed by this ASU include the following: 1) amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year; 2) the amount and timing of plan assets expected to be returned to the employer; and 3) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for postretirement health care benefits. Additional disclosures required by this ASU include: 1) the weighted-average interest crediting rates used in an entity's cash balance pension plans and other similar plans and 2) explanations for reasons for significant changes in the benefit obligation or plan assets. These amendments are to be applied retrospectively. This ASU became effective on January 1, 2021 for the Corporation. The adoption of this ASU did not have a material impact on the Corporation's financial statement disclosures but will result in the elimination of certain disclosures for retirement plans and other postretirement benefits in the Form 10-K.
In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." The ASU adds new guidance to simplify accounting for income taxes, changes the accounting for certain income tax transactions and makes minor improvements to the codification. This ASU became effective on January 1, 2021 for the Corporation. The adoption of this ASU did not have a material impact on the Corporation's financial statements.
Recent Accounting Pronouncements Yet to Be Adopted
In January 2020, the FASB issued ASU No. 2020-01, "Investments—Equity Securities (Topic 321): Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815." This ASU 2020-01 clarifies the interactions between ASC 321, ASC 323 and ASC 815 and addresses accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. This ASU is effective for fiscal years beginning after December 15, 2021 or January 1, 2022
for the Corporation. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.
In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The guidance allows for companies to: (1) account for certain contract modifications as a continuation of the existing contract without additional analysis; (2) continue hedge accounting when certain critical terms of a hedging relationship change and assess effectiveness in ways that disregard certain potential sources of ineffectiveness; and (3) make a one-time sale and/or transfer of certain debt securities from held-to-maturity to available-for-sale or trading. This ASU is available for adoption effective immediately, or as of January 1, 2020 or any date thereafter for the Corporation, and applies prospectively to contract modifications and hedging relationships. The one-time election to sell and/or transfer debt securities classified as held-to-maturity may be made at any time after March 12, 2020. The Corporation anticipates adopting this ASU and will continue to analyze the provisions of the ASU in connection with ongoing procedures to monitor the work of the Alternative Rates Committee of the FRB and Federal Reserve Bank of New York in identifying an alternative U.S. dollar reference interest rate. It is too early to predict whether a new rate index replacement and the adoption of the ASU will have a material impact on the Corporation's financial statements.
In August 2020, the FASB issued ASU No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)." This guidance simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU also simplify the guidance in ASC 815-40 by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and require entities to presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. This ASU is effective for fiscal years beginning after December 15, 2021 or January 1, 2022 for the Corporation. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.
In January 2021, the FASB issued ASU No. 2021-01, which refines the scope of ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting", and clarifies some of its guidance as part of the Board’s monitoring of global reference rate reform activities. The ASU permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest in connection with reference rate reform activities under way in global financial markets (the “discounting transition”). This ASU is available for adoption retrospective to March 12, 2020, or prospectively from January 7, 2021, through December 31, 2022, at which time transition is expected to be complete. The Corporation will analyze the potential impact of the provisions of this ASU in connection with its ongoing evaluation of ASU No. 2020-04.
Note 2. Earnings per Share
The following table sets forth the computation of basic and diluted earnings per share. For additional information on the calculation of basic and diluted earnings per share, see Note 1, "Summary of Significant Accounting Policies - Earnings per Share" of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2020.
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|
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|
|
|
|
|
|
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|
Three Months Ended
|
|
|
|
March 31,
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|
|
(Dollars and shares in thousands, except per share data)
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2021
|
|
2020
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Net income
|
$
|
32,603
|
|
|
$
|
838
|
|
|
|
|
|
Net income allocated to unvested restricted stock awards
|
(37)
|
|
|
—
|
|
|
|
|
|
Net income allocated to common shares
|
$
|
32,566
|
|
|
$
|
838
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
29,329
|
|
|
29,286
|
|
|
|
|
|
Average unvested restricted stock awards
|
(32)
|
|
|
(68)
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|
|
|
|
|
Denominator for basic earnings per share—weighted-average shares outstanding
|
29,297
|
|
|
29,218
|
|
|
|
|
|
Effect of dilutive securities—employee stock options and restricted stock units
|
135
|
|
|
65
|
|
|
|
|
|
Denominator for diluted earnings per share—adjusted weighted-average shares outstanding
|
29,432
|
|
|
29,283
|
|
|
|
|
|
Basic earnings per share
|
$
|
1.11
|
|
|
$
|
0.03
|
|
|
|
|
|
Diluted earnings per share
|
$
|
1.11
|
|
|
$
|
0.03
|
|
|
|
|
|
Average antidilutive options and restricted stock units excluded from computation of diluted earnings per share
|
315
|
|
|
329
|
|
|
|
|
|
Note 3. Investment Securities
The following table shows the amortized cost, the estimated fair value and the allowance for credit losses of the held-to-maturity securities and available-for-sale securities at March 31, 2021 and December 31, 2020, by contractual maturity within each type:
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|
|
|
|
|
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|
|
|
|
|
|
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|
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At March 31, 2021
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(Dollars in thousands)
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Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Allowance for Credit Losses
|
|
Fair Value
|
Securities Held-to-Maturity
|
|
|
|
|
|
|
|
|
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U.S. government corporations and agencies:
|
|
|
|
|
|
|
|
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Within 1 year
|
$
|
5,000
|
|
|
$
|
87
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,087
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|
After 1 year to 5 years
|
1,999
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
2,050
|
|
|
6,999
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|
|
138
|
|
|
—
|
|
|
—
|
|
|
7,137
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
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After 5 years to 10 years
|
5,683
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
5,931
|
|
Over 10 years
|
122,471
|
|
|
3,916
|
|
|
(157)
|
|
|
—
|
|
|
126,230
|
|
|
128,154
|
|
|
4,164
|
|
|
(157)
|
|
|
—
|
|
|
132,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Total
|
$
|
135,153
|
|
|
$
|
4,302
|
|
|
$
|
(157)
|
|
|
$
|
—
|
|
|
$
|
139,298
|
|
Securities Available-for-Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and political subdivisions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After 1 year to 5 years
|
$
|
3,562
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,584
|
|
After 5 years to 10 years
|
6,602
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
6,626
|
|
|
|
|
|
|
|
|
|
|
|
|
10,164
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
10,210
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After 1 year to 5 years
|
287
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
297
|
|
After 5 years to 10 years
|
1,498
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
1,556
|
|
Over 10 years
|
132,250
|
|
|
1,184
|
|
|
(1,896)
|
|
|
—
|
|
|
131,538
|
|
|
134,035
|
|
|
1,252
|
|
|
(1,896)
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|
|
—
|
|
|
133,391
|
|
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After 5 years to 10 years
|
694
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
714
|
|
Over 10 years
|
3,943
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,943
|
|
|
4,637
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
4,657
|
|
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
998
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
1,007
|
|
After 1 year to 5 years
|
29,480
|
|
|
1,239
|
|
|
(56)
|
|
|
(6)
|
|
|
30,657
|
|
After 5 years to 10 years
|
60,000
|
|
|
150
|
|
|
(764)
|
|
|
(479)
|
|
|
58,907
|
|
|
|
|
|
|
|
|
|
|
|
|
90,478
|
|
|
1,398
|
|
|
(820)
|
|
|
(485)
|
|
|
90,571
|
|
Total
|
$
|
239,314
|
|
|
$
|
2,716
|
|
|
$
|
(2,716)
|
|
|
$
|
(485)
|
|
|
$
|
238,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020
|
(Dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Allowance for Credit Losses
|
|
Fair Value
|
Securities Held-to-Maturity
|
|
|
|
|
|
|
|
|
|
U.S. government corporations and agencies:
|
|
|
|
|
|
|
|
|
|
After 1 year to 5 years
|
$
|
6,998
|
|
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,169
|
|
|
6,998
|
|
|
171
|
|
|
—
|
|
|
—
|
|
|
7,169
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
After 5 years to 10 years
|
6,325
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
6,578
|
|
Over 10 years
|
137,934
|
|
|
4,644
|
|
|
—
|
|
|
—
|
|
|
142,578
|
|
|
144,259
|
|
|
4,897
|
|
|
—
|
|
|
—
|
|
|
149,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
151,257
|
|
|
$
|
5,068
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
156,325
|
|
Securities Available-for-Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and political subdivisions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After 1 year to 5 years
|
3,560
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
3,593
|
|
After 5 years to 10 years
|
9,881
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
9,944
|
|
|
|
|
|
|
|
|
|
|
|
|
13,441
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
13,537
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After 1 year to 5 years
|
323
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
333
|
|
After 5 years to 10 years
|
1,664
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
1,722
|
|
Over 10 years
|
110,018
|
|
|
2,153
|
|
|
(63)
|
|
|
—
|
|
|
112,108
|
|
|
112,005
|
|
|
2,221
|
|
|
(63)
|
|
|
—
|
|
|
114,163
|
|
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After 5 years to 10 years
|
754
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
775
|
|
Over 10 years
|
4,561
|
|
|
—
|
|
|
(15)
|
|
|
—
|
|
|
4,546
|
|
|
5,315
|
|
|
21
|
|
|
(15)
|
|
|
—
|
|
|
5,321
|
|
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
499
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
501
|
|
After 1 year to 5 years
|
29,498
|
|
|
1,440
|
|
|
—
|
|
|
(16)
|
|
|
30,922
|
|
After 5 years to 10 years
|
60,496
|
|
|
3
|
|
|
(5,450)
|
|
|
(853)
|
|
|
54,196
|
|
|
|
|
|
|
|
|
|
|
|
|
90,493
|
|
|
1,445
|
|
|
(5,450)
|
|
|
(869)
|
|
|
85,619
|
|
Total
|
$
|
221,254
|
|
|
$
|
3,783
|
|
|
$
|
(5,528)
|
|
|
$
|
(869)
|
|
|
$
|
218,640
|
|
Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties and mortgage-backed securities typically prepay at a rate faster than contractually due.
Securities with a carrying value of $248.9 million and $249.6 million at March 31, 2021 and December 31, 2020, respectively, were pledged to secure public funds deposits and other contractual obligations. In addition, securities of $15.5 million and $32.6 million were pledged to secure credit derivatives and interest rate swaps at March 31, 2021 and December 31, 2020, respectively. See Note 11, "Derivative Instruments and Hedging Activities" for additional information.
The following table presents information related to sales of securities available-for-sale during the three months ended March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
(Dollars in thousands)
|
2021
|
|
2020
|
Securities available-for-sale:
|
|
|
|
Proceeds from sales
|
$
|
1,563
|
|
|
$
|
62,276
|
|
Gross realized gains on sales
|
65
|
|
|
709
|
|
Gross realized losses on sales
|
—
|
|
|
14
|
|
Tax expense related to net realized gains on sales
|
14
|
|
|
146
|
|
At March 31, 2021 and December 31, 2020, there were no reportable investments in any single issuer representing more than 10% of shareholders’ equity.
The following table shows the fair value of securities that were in an unrealized loss position for which an allowance for credit losses has not been recorded at March 31, 2021 and December 31, 2020, by the length of time those securities were in a continuous loss position.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than
Twelve Months
|
|
Twelve Months
or Longer
|
|
Total
|
(Dollars in thousands)
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
At March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
Securities Held-to-Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage-backed securities
|
$
|
4,462
|
|
|
$
|
(157)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,462
|
|
|
$
|
(157)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
4,462
|
|
|
$
|
(157)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,462
|
|
|
$
|
(157)
|
|
Securities Available-for-Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage-backed securities
|
$
|
77,457
|
|
|
$
|
(1,895)
|
|
|
$
|
29
|
|
|
$
|
(1)
|
|
|
$
|
77,486
|
|
|
$
|
(1,896)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
77,457
|
|
|
$
|
(1,895)
|
|
|
$
|
29
|
|
|
$
|
(1)
|
|
|
$
|
77,486
|
|
|
$
|
(1,896)
|
|
At December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
Securities Held-to-Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities Available-for-Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage-backed securities
|
13,677
|
|
|
(62)
|
|
|
31
|
|
|
(1)
|
|
|
13,708
|
|
|
(63)
|
|
Collateralized mortgage obligations
|
4,545
|
|
|
(15)
|
|
|
—
|
|
|
—
|
|
|
4,545
|
|
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
18,222
|
|
|
$
|
(77)
|
|
|
$
|
31
|
|
|
$
|
(1)
|
|
|
$
|
18,253
|
|
|
$
|
(78)
|
|
At March 31, 2021, the fair value of held-to-maturity securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $4.5 million, including unrealized losses of $157 thousand. These holdings were comprised of two federal agency mortgage-backed securities, which are U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The Corporation did not recognize any credit losses on held-to-maturity debt securities for the three months ended March 31, 2021 or March 31, 2020. Accrued interest receivable on held-to-maturity debt securities totaled $357 thousand at March 31, 2021 and is included within Accrued interest receivable and other assets on the condensed consolidated balance sheet. This amount is excluded from the estimate of expected credit losses.
At March 31, 2021, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded was $77.5 million, including unrealized losses of $1.9 million. These holdings were comprised of sixteen federal agency mortgage-backed securities, which are U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The Corporation does not intend to sell the securities in an unrealized loss position and is unlikely to be required to sell these securities before a recovery of fair value, which may be maturity. The Corporation concluded that the decline in fair value of these securities was not indicative of a credit loss. Accrued interest receivable on available-for-sale debt securities totaled $602 thousand at March 31, 2021 and is included within Accrued interest receivable and other assets on the condensed consolidated balance sheet. This amount is excluded from the estimate of expected credit losses.
The table below presents a rollforward by major security type for the three months ended March 31, 2021 of the allowance for credit losses on securities available-for-sale.
|
|
|
|
|
|
(Dollars in thousands)
|
Corporate Bonds
|
Three months ended March 31, 2021
|
|
Securities Available-for-Sale
|
|
Beginning balance
|
$
|
(869)
|
|
Additions for securities for which no previous expected credit losses were recognized
|
(19)
|
|
Change in securities for which a previous expected credit loss was recognized
|
403
|
|
Ending balance
|
$
|
(485)
|
|
Three months ended March 31, 2020
|
|
Securities Available-for-Sale
|
|
Beginning balance
|
$
|
—
|
|
Adjustment to initially apply ASU No. 2016-13 for CECL
|
(300)
|
|
Additions for securities for which no previous expected credit losses were recognized
|
(25)
|
|
Change in securities for which a previous expected credit loss was recognized
|
(572)
|
|
Ending balance
|
$
|
(897)
|
|
At March 31, 2021, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has been recorded was $52.6 million, including unrealized losses of $820 thousand, and allowance for credit losses of $485 thousand. These holdings were comprised of thirteen investment grade corporate bonds which fluctuate in value based on changes in market conditions. For these securities, fluctuations were primarily due to changes in the interest rate environment. The Corporation does not have the intent to sell these securities and it is not likely that it will be required to sell the securities before their anticipated recovery. The underlying issuers continue to make timely principal and interest payments on the securities. The reversal of the provision for credit losses of $403 thousand for the three months ended March 31, 2021 was primarily related to the improvement in fair value of six underlying securities that are tied to the 10-year swap curve which had significantly steepened during the quarter.
The Corporation recognized a $115 thousand net gain and a $268 thousand net loss on equity securities during the three months ended March 31, 2021 and 2020, respectively, in other noninterest income. There were no sales of equity securities during the three months ended March 31, 2021 or March 31, 2020.
Note 4. Loans and Leases
Summary of Major Loan and Lease Categories
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
At March 31, 2021
|
|
At December 31, 2020
|
Commercial, financial and agricultural
|
$
|
871,996
|
|
|
$
|
892,665
|
|
Paycheck Protection Program
|
528,452
|
|
|
483,773
|
|
Real estate-commercial
|
2,531,700
|
|
|
2,458,872
|
|
Real estate-construction
|
249,652
|
|
|
243,355
|
|
Real estate-residential secured for business purpose
|
387,801
|
|
|
381,446
|
|
Real estate-residential secured for personal purpose
|
494,349
|
|
|
487,600
|
|
Real estate-home equity secured for personal purpose
|
162,529
|
|
|
166,609
|
|
Loans to individuals
|
25,468
|
|
|
27,482
|
|
Lease financings
|
163,059
|
|
|
165,039
|
|
Total loans and leases held for investment, net of deferred income
|
$
|
5,415,006
|
|
|
$
|
5,306,841
|
|
Less: Allowance for credit losses, loans and leases
|
(71,497)
|
|
|
(83,044)
|
|
Net loans and leases held for investment
|
$
|
5,343,509
|
|
|
$
|
5,223,797
|
|
Imputed interest on lease financings, included in the above table
|
$
|
(17,283)
|
|
|
$
|
(17,670)
|
|
Net deferred fees, included in the above table
|
(4,967)
|
|
|
(2,903)
|
|
Overdraft deposits included in the above table
|
4,705
|
|
|
948
|
|
Age Analysis of Past Due Loans and Leases
The following presents, by class of loans and leases, an aging of past due loans and leases, loans and leases which are current and nonaccrual loans and leases at March 31, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing Loans and Leases
|
|
|
|
|
(Dollars in thousands)
|
30-59
Days
Past Due
|
|
60-89
Days
Past Due
|
|
90 Days
or more
Past Due
|
|
Total
Past Due
|
|
Current
|
|
Total Accruing Loans and Leases
|
|
Nonaccrual Loans and Leases
|
|
Total Loans
and Leases
Held for
Investment
|
At March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and agricultural
|
$
|
1,195
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
1,235
|
|
|
$
|
868,755
|
|
|
$
|
869,990
|
|
|
$
|
2,006
|
|
|
$
|
871,996
|
|
Paycheck Protection Program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
528,452
|
|
|
528,452
|
|
|
—
|
|
|
528,452
|
|
Real estate—commercial real estate and construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
3,893
|
|
|
88
|
|
|
—
|
|
|
3,981
|
|
|
2,505,693
|
|
|
2,509,674
|
|
|
22,026
|
|
|
2,531,700
|
|
Construction
|
1,164
|
|
|
—
|
|
|
—
|
|
|
1,164
|
|
|
248,488
|
|
|
249,652
|
|
|
—
|
|
|
249,652
|
|
Real estate—residential and home equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential secured for business purpose
|
2,364
|
|
|
660
|
|
|
—
|
|
|
3,024
|
|
|
381,918
|
|
|
384,942
|
|
|
2,859
|
|
|
387,801
|
|
Residential secured for personal purpose
|
1,014
|
|
|
—
|
|
|
403
|
|
|
1,417
|
|
|
491,065
|
|
|
492,482
|
|
|
1,867
|
|
|
494,349
|
|
Home equity secured for personal purpose
|
682
|
|
|
132
|
|
|
—
|
|
|
814
|
|
|
160,626
|
|
|
161,440
|
|
|
1,089
|
|
|
162,529
|
|
Loans to individuals
|
73
|
|
|
33
|
|
|
123
|
|
|
229
|
|
|
25,239
|
|
|
25,468
|
|
|
—
|
|
|
25,468
|
|
Lease financings
|
290
|
|
|
324
|
|
|
98
|
|
|
712
|
|
|
162,198
|
|
|
162,910
|
|
|
149
|
|
|
163,059
|
|
Total
|
$
|
10,675
|
|
|
$
|
1,237
|
|
|
$
|
664
|
|
|
$
|
12,576
|
|
|
$
|
5,372,434
|
|
|
$
|
5,385,010
|
|
|
$
|
29,996
|
|
|
$
|
5,415,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing Loans and Leases
|
|
|
|
|
(Dollars in thousands)
|
30-59
Days
Past Due
|
|
60-89
Days
Past Due
|
|
90 Days
or more
Past Due
|
|
Total
Past Due
|
|
Current
|
|
Total Accruing Loans and Leases
|
|
Nonaccrual Loans and Leases
|
|
Total Loans
and Leases
Held for
Investment
|
At December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and agricultural
|
$
|
1,104
|
|
|
$
|
279
|
|
|
$
|
50
|
|
|
$
|
1,433
|
|
|
$
|
888,405
|
|
|
$
|
889,838
|
|
|
$
|
2,827
|
|
|
$
|
892,665
|
|
Paycheck Protection Program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
483,773
|
|
|
483,773
|
|
|
—
|
|
|
483,773
|
|
Real estate—commercial real estate and construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
3,230
|
|
|
859
|
|
|
945
|
|
|
5,034
|
|
|
2,431,099
|
|
|
2,436,133
|
|
|
22,739
|
|
|
2,458,872
|
|
Construction
|
361
|
|
|
—
|
|
|
—
|
|
|
361
|
|
|
242,994
|
|
|
243,355
|
|
|
—
|
|
|
243,355
|
|
Real estate—residential and home equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential secured for business purpose
|
3,726
|
|
|
603
|
|
|
—
|
|
|
4,329
|
|
|
374,331
|
|
|
378,660
|
|
|
2,786
|
|
|
381,446
|
|
Residential secured for personal purpose
|
6,057
|
|
|
80
|
|
|
—
|
|
|
6,137
|
|
|
479,377
|
|
|
485,514
|
|
|
2,086
|
|
|
487,600
|
|
Home equity secured for personal purpose
|
607
|
|
|
32
|
|
|
—
|
|
|
639
|
|
|
164,923
|
|
|
165,562
|
|
|
1,047
|
|
|
166,609
|
|
Loans to individuals
|
190
|
|
|
74
|
|
|
185
|
|
|
449
|
|
|
27,033
|
|
|
27,482
|
|
|
—
|
|
|
27,482
|
|
Lease financings
|
898
|
|
|
291
|
|
|
212
|
|
|
1,401
|
|
|
163,431
|
|
|
164,832
|
|
|
207
|
|
|
165,039
|
|
Total
|
$
|
16,173
|
|
|
$
|
2,218
|
|
|
$
|
1,392
|
|
|
$
|
19,783
|
|
|
$
|
5,255,366
|
|
|
$
|
5,275,149
|
|
|
$
|
31,692
|
|
|
$
|
5,306,841
|
|
Nonperforming Loans and Leases
The following presents, by class of loans and leases, nonperforming loans and leases at March 31, 2021 and December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021
|
|
At December 31, 2020
|
(Dollars in thousands)
|
Nonaccrual
Loans and
Leases*
|
|
Accruing
Troubled
Debt
Restructured
Loans and
Lease
Modifications
|
|
Loans and
Leases
90 Days
or more
Past Due
and
Accruing
Interest
|
|
Total Nonperforming
Loans and
Leases
|
|
Nonaccrual
Loans and
Leases*
|
|
Accruing
Troubled
Debt
Restructured
Loans and
Lease
Modifications
|
|
Loans and
Leases
90 Days
or more
Past Due
and
Accruing
Interest
|
|
Total Nonperforming
Loans and
Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial and agricultural
|
$
|
2,006
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
2,046
|
|
|
$
|
2,827
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
2,877
|
|
Real estate—commercial real estate and construction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
22,026
|
|
|
—
|
|
|
—
|
|
|
22,026
|
|
|
22,739
|
|
|
—
|
|
|
945
|
|
|
23,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate—residential and home equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential secured for business purpose
|
2,859
|
|
|
—
|
|
|
—
|
|
|
2,859
|
|
|
2,786
|
|
|
—
|
|
|
—
|
|
|
2,786
|
|
Residential secured for personal purpose
|
1,867
|
|
|
—
|
|
|
403
|
|
|
2,270
|
|
|
2,086
|
|
|
—
|
|
|
—
|
|
|
2,086
|
|
Home equity secured for personal purpose
|
1,089
|
|
|
52
|
|
|
—
|
|
|
1,141
|
|
|
1,047
|
|
|
53
|
|
|
—
|
|
|
1,100
|
|
Loans to individuals
|
—
|
|
|
—
|
|
|
123
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|
185
|
|
Lease financings
|
149
|
|
|
—
|
|
|
98
|
|
|
247
|
|
|
207
|
|
|
—
|
|
|
212
|
|
|
419
|
|
Total
|
$
|
29,996
|
|
|
$
|
52
|
|
|
$
|
664
|
|
|
$
|
30,712
|
|
|
$
|
31,692
|
|
|
$
|
53
|
|
|
$
|
1,392
|
|
|
$
|
33,137
|
|
*Includes nonaccrual troubled debt restructured loans of $13.5 million and $14.1 million at March 31, 2021 and December 31, 2020, respectively.
The following table presents the amortized cost basis of loans and leases on nonaccrual status and loans and leases 90 days or more past due and still accruing as of March 31, 2021 and December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Nonaccrual With No ACL
|
|
Nonaccrual With ACL
|
|
Total Nonaccrual
|
|
Loans 90 Days or more Past Due and Accruing Interest
|
At March 31, 2021
|
|
|
|
|
|
|
|
Commercial, financial and agricultural
|
$
|
1,647
|
|
|
$
|
359
|
|
|
$
|
2,006
|
|
|
$
|
40
|
|
Real estate-commercial
|
22,026
|
|
|
—
|
|
|
22,026
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Real estate-residential secured for business purpose
|
2,832
|
|
|
27
|
|
|
2,859
|
|
|
—
|
|
Real estate-residential secured for personal purpose
|
1,740
|
|
|
127
|
|
|
1,867
|
|
|
403
|
|
Real estate-home equity secured for personal purpose
|
1,089
|
|
|
—
|
|
|
1,089
|
|
|
—
|
|
Loans to individuals
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
Lease financings
|
—
|
|
|
149
|
|
|
149
|
|
|
98
|
|
Total
|
$
|
29,334
|
|
|
$
|
662
|
|
|
$
|
29,996
|
|
|
$
|
664
|
|
At December 31, 2020
|
|
|
|
|
|
|
|
Commercial, financial and agricultural
|
$
|
2,187
|
|
|
$
|
640
|
|
|
$
|
2,827
|
|
|
$
|
50
|
|
Real estate-commercial
|
22,739
|
|
|
—
|
|
|
22,739
|
|
|
945
|
|
|
|
|
|
|
|
|
|
Real estate-residential secured for business purpose
|
2,663
|
|
|
123
|
|
|
2,786
|
|
|
—
|
|
Real estate-residential secured for personal purpose
|
1,958
|
|
|
128
|
|
|
2,086
|
|
|
—
|
|
Real estate-home equity secured for personal purpose
|
1,047
|
|
|
—
|
|
|
1,047
|
|
|
—
|
|
Loans to individuals
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
Lease financings
|
—
|
|
|
207
|
|
|
207
|
|
|
212
|
|
Total
|
$
|
30,594
|
|
|
$
|
1,098
|
|
|
$
|
31,692
|
|
|
$
|
1,392
|
|
The following table presents the amortized cost basis of collateral-dependent nonaccrual loans by class of loans and type of collateral as of March 31, 2021 and December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Real Estate
|
|
Other (1)
|
|
None (2)
|
|
Total
|
At March 31, 2021
|
|
|
|
|
|
|
|
Commercial, financial and agricultural
|
$
|
874
|
|
|
$
|
1,132
|
|
|
$
|
—
|
|
|
$
|
2,006
|
|
Real estate-commercial
|
22,026
|
|
|
—
|
|
|
—
|
|
|
22,026
|
|
|
|
|
|
|
|
|
|
Real estate-residential secured for business purpose
|
2,859
|
|
|
—
|
|
|
—
|
|
|
2,859
|
|
Real estate-residential secured for personal purpose
|
1,867
|
|
|
—
|
|
|
—
|
|
|
1,867
|
|
Real estate-home equity secured for personal purpose
|
1,089
|
|
|
—
|
|
|
—
|
|
|
1,089
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
28,715
|
|
|
$
|
1,132
|
|
|
$
|
—
|
|
|
$
|
29,847
|
|
At December 31, 2020
|
|
|
|
|
|
|
|
Commercial, financial and agricultural
|
$
|
1,351
|
|
|
$
|
1,194
|
|
|
$
|
282
|
|
|
$
|
2,827
|
|
Real estate-commercial
|
22,739
|
|
|
—
|
|
|
—
|
|
|
22,739
|
|
|
|
|
|
|
|
|
|
Real estate-residential secured for business purpose
|
2,786
|
|
|
—
|
|
|
—
|
|
|
2,786
|
|
Real estate-residential secured for personal purpose
|
2,086
|
|
|
—
|
|
|
—
|
|
|
2,086
|
|
Real estate-home equity secured for personal purpose
|
1,047
|
|
|
—
|
|
|
—
|
|
|
1,047
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
30,009
|
|
|
$
|
1,194
|
|
|
$
|
282
|
|
|
$
|
31,485
|
|
(1) Collateral consists of business assets, including accounts receivable and personal property.
(2) Loans fully reserved given lack of collateral.
Credit Quality Indicators
The Corporation categorizes risk based on relevant information about the ability of the borrower to service their debt. Loans with a relationship balance of less than $1 million are reviewed when necessary based on their performance, primarily when such loans are delinquent. Loans with relationships greater than $1 million are reviewed at least annually. Loan relationships with a higher risk profile or classified as special mention or substandard are reviewed at least quarterly. The Corporation reviews credit quality indicators on at least an annual basis and last completed this review in conjunction with the period ended December 31, 2020. The following is a description of the internal risk ratings and the likelihood of loss related to the credit quality of Commercial, financial and agricultural loans, Paycheck Protection Program loans, Real-estate commercial loans, Real-estate construction loans and Real-estate residential secured for a business purpose loans.
1.Pass—Loans considered satisfactory with no indications of deterioration
2.Special Mention—Potential weakness that deserves management's close attention
3.Substandard—Well-defined weakness or weaknesses that jeopardize the liquidation of the debt
4.Doubtful—Collection or liquidation in-full, on the basis of current existing facts, conditions and values, highly questionable and improbable
Based on the most recent analysis performed, the following table presents the recorded investment in loans and leases held for investment for Commercial, financial and agricultural loans, Paycheck Protection Program loans, Real-estate commercial loans, Real-estate construction loans and Real-estate residential secured for a business purpose loans by credit quality indicator at March 31, 2021 and December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans Amortized Cost Basis by Origination Year
|
|
|
|
|
|
|
(Dollars in thousands)
|
2021
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
Prior
|
|
Revolving Loans Amortized Cost Basis
|
|
|
|
Total
|
At March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, Financial and Agricultural
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
69,723
|
|
|
$
|
146,523
|
|
|
$
|
90,985
|
|
|
$
|
71,413
|
|
|
$
|
34,561
|
|
|
$
|
64,820
|
|
|
$
|
374,556
|
|
|
|
|
$
|
852,581
|
|
2. Special Mention
|
—
|
|
|
2,680
|
|
|
783
|
|
|
299
|
|
|
408
|
|
|
1,766
|
|
|
6,280
|
|
|
|
|
12,216
|
|
3. Substandard
|
—
|
|
|
—
|
|
|
36
|
|
|
145
|
|
|
17
|
|
|
714
|
|
|
6,287
|
|
|
|
|
7,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
69,723
|
|
|
$
|
149,203
|
|
|
$
|
91,804
|
|
|
$
|
71,857
|
|
|
$
|
34,986
|
|
|
$
|
67,300
|
|
|
$
|
387,123
|
|
|
|
|
$
|
871,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paycheck Protection Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
161,718
|
|
|
$
|
366,734
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
528,452
|
|
2. Special Mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
3. Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
161,718
|
|
|
$
|
366,734
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
528,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
207,223
|
|
|
$
|
1,011,644
|
|
|
$
|
466,297
|
|
|
$
|
202,198
|
|
|
$
|
255,578
|
|
|
$
|
262,380
|
|
|
$
|
40,041
|
|
|
|
|
$
|
2,445,361
|
|
2. Special Mention
|
—
|
|
|
6,173
|
|
|
26,482
|
|
|
3,472
|
|
|
—
|
|
|
6,992
|
|
|
1,248
|
|
|
|
|
44,367
|
|
3. Substandard
|
—
|
|
|
12,274
|
|
|
4,597
|
|
|
6,647
|
|
|
11,154
|
|
|
6,964
|
|
|
336
|
|
|
|
|
41,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
207,223
|
|
|
$
|
1,030,091
|
|
|
$
|
497,376
|
|
|
$
|
212,317
|
|
|
$
|
266,732
|
|
|
$
|
276,336
|
|
|
$
|
41,625
|
|
|
|
|
$
|
2,531,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
28,695
|
|
|
$
|
100,814
|
|
|
$
|
56,044
|
|
|
$
|
34,940
|
|
|
$
|
124
|
|
|
$
|
2,949
|
|
|
$
|
4,821
|
|
|
|
|
$
|
228,387
|
|
2. Special Mention
|
—
|
|
|
21,265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
21,265
|
|
3. Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
28,695
|
|
|
$
|
122,079
|
|
|
$
|
56,044
|
|
|
$
|
34,940
|
|
|
$
|
124
|
|
|
$
|
2,949
|
|
|
$
|
4,821
|
|
|
|
|
$
|
249,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Residential Secured for Business Purpose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
55,096
|
|
|
$
|
105,094
|
|
|
$
|
61,128
|
|
|
$
|
45,109
|
|
|
$
|
39,084
|
|
|
$
|
51,891
|
|
|
$
|
24,543
|
|
|
|
|
$
|
381,945
|
|
2. Special Mention
|
—
|
|
|
1,343
|
|
|
—
|
|
|
187
|
|
|
75
|
|
|
304
|
|
|
—
|
|
|
|
|
1,909
|
|
3. Substandard
|
—
|
|
|
27
|
|
|
985
|
|
|
50
|
|
|
46
|
|
|
2,008
|
|
|
831
|
|
|
|
|
3,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
55,096
|
|
|
$
|
106,464
|
|
|
$
|
62,113
|
|
|
$
|
45,346
|
|
|
$
|
39,205
|
|
|
$
|
54,203
|
|
|
$
|
25,374
|
|
|
|
|
$
|
387,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals By Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
522,455
|
|
|
$
|
1,730,809
|
|
|
$
|
674,454
|
|
|
$
|
353,660
|
|
|
$
|
329,347
|
|
|
$
|
382,040
|
|
|
$
|
443,961
|
|
|
|
|
$
|
4,436,726
|
|
2. Special Mention
|
—
|
|
|
31,461
|
|
|
27,265
|
|
|
3,958
|
|
|
483
|
|
|
9,062
|
|
|
7,528
|
|
|
|
|
79,757
|
|
3. Substandard
|
—
|
|
|
12,301
|
|
|
5,618
|
|
|
6,842
|
|
|
11,217
|
|
|
9,686
|
|
|
7,454
|
|
|
|
|
53,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
522,455
|
|
|
$
|
1,774,571
|
|
|
$
|
707,337
|
|
|
$
|
364,460
|
|
|
$
|
341,047
|
|
|
$
|
400,788
|
|
|
$
|
458,943
|
|
|
|
|
$
|
4,569,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans Amortized Cost Basis by Origination Year
|
|
|
|
|
|
|
(Dollars in thousands)
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans Amortized Cost Basis
|
|
|
|
Total
|
At December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, Financial and Agricultural
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
162,547
|
|
|
$
|
93,967
|
|
|
$
|
74,722
|
|
|
$
|
38,906
|
|
|
$
|
17,371
|
|
|
$
|
56,053
|
|
|
$
|
427,336
|
|
|
|
|
$
|
870,902
|
|
2. Special Mention
|
2,723
|
|
|
783
|
|
|
316
|
|
|
500
|
|
|
777
|
|
|
1,144
|
|
|
8,318
|
|
|
|
|
14,561
|
|
3. Substandard
|
—
|
|
|
430
|
|
|
362
|
|
|
28
|
|
|
—
|
|
|
627
|
|
|
5,755
|
|
|
|
|
7,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
165,270
|
|
|
$
|
95,180
|
|
|
$
|
75,400
|
|
|
$
|
39,434
|
|
|
$
|
18,148
|
|
|
$
|
57,824
|
|
|
$
|
441,409
|
|
|
|
|
$
|
892,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paycheck Protection Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
483,773
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
483,773
|
|
2. Special Mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
3. Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
483,773
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
483,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
1,084,157
|
|
|
$
|
481,997
|
|
|
$
|
223,646
|
|
|
$
|
268,236
|
|
|
$
|
143,041
|
|
|
$
|
157,503
|
|
|
$
|
43,008
|
|
|
|
|
$
|
2,401,588
|
|
2. Special Mention
|
6,220
|
|
|
10,076
|
|
|
3,498
|
|
|
—
|
|
|
1,250
|
|
|
5,870
|
|
|
1,247
|
|
|
|
|
28,161
|
|
3. Substandard
|
3,803
|
|
|
3,998
|
|
|
709
|
|
|
11,383
|
|
|
1,207
|
|
|
6,690
|
|
|
1,333
|
|
|
|
|
29,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,094,180
|
|
|
$
|
496,071
|
|
|
$
|
227,853
|
|
|
$
|
279,619
|
|
|
$
|
145,498
|
|
|
$
|
170,063
|
|
|
$
|
45,588
|
|
|
|
|
$
|
2,458,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
116,840
|
|
|
$
|
59,507
|
|
|
$
|
39,009
|
|
|
$
|
113
|
|
|
$
|
2,950
|
|
|
$
|
—
|
|
|
$
|
3,711
|
|
|
|
|
$
|
222,130
|
|
2. Special Mention
|
21,225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
21,225
|
|
3. Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
138,065
|
|
|
$
|
59,507
|
|
|
$
|
39,009
|
|
|
$
|
113
|
|
|
$
|
2,950
|
|
|
$
|
—
|
|
|
$
|
3,711
|
|
|
|
|
$
|
243,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Residential Secured for Business Purpose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
118,925
|
|
|
$
|
72,149
|
|
|
$
|
52,775
|
|
|
$
|
43,347
|
|
|
$
|
37,768
|
|
|
$
|
25,170
|
|
|
$
|
25,510
|
|
|
|
|
$
|
375,644
|
|
2. Special Mention
|
1,354
|
|
|
—
|
|
|
188
|
|
|
77
|
|
|
175
|
|
|
130
|
|
|
—
|
|
|
|
|
1,924
|
|
3. Substandard
|
28
|
|
|
991
|
|
|
50
|
|
|
64
|
|
|
1,065
|
|
|
962
|
|
|
718
|
|
|
|
|
3,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
120,307
|
|
|
$
|
73,140
|
|
|
$
|
53,013
|
|
|
$
|
43,488
|
|
|
$
|
39,008
|
|
|
$
|
26,262
|
|
|
$
|
26,228
|
|
|
|
|
$
|
381,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals By Risk Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Pass
|
$
|
1,966,242
|
|
|
$
|
707,620
|
|
|
$
|
390,152
|
|
|
$
|
350,602
|
|
|
$
|
201,130
|
|
|
$
|
238,726
|
|
|
$
|
499,565
|
|
|
|
|
$
|
4,354,037
|
|
2. Special Mention
|
31,522
|
|
|
10,859
|
|
|
4,002
|
|
|
577
|
|
|
2,202
|
|
|
7,144
|
|
|
9,565
|
|
|
|
|
65,871
|
|
3. Substandard
|
3,831
|
|
|
5,419
|
|
|
1,121
|
|
|
11,475
|
|
|
2,272
|
|
|
8,279
|
|
|
7,806
|
|
|
|
|
40,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
2,001,595
|
|
|
$
|
723,898
|
|
|
$
|
395,275
|
|
|
$
|
362,654
|
|
|
$
|
205,604
|
|
|
$
|
254,149
|
|
|
$
|
516,936
|
|
|
|
|
$
|
4,460,111
|
|
The Corporation had no revolving loans which were converted to term loans included within recorded investment in loans and leases held for investment at March 31, 2021 and December 31, 2020. The Corporation had no loans with a risk rating of Doubtful included within recorded investment in loans and leases held for investment at March 31, 2021 and December 31, 2020.
The Corporation monitors the credit risk profile by payment activity for the following classifications of loans and leases: Real-estate residential secured for personal purpose loans, Real-estate home equity secured for personal purpose loans, Loans to individuals and Lease financings. The Corporation reviews credit quality indicators on at least an annual basis and last completed this review in conjunction with the period ended December 31, 2020. Loans and leases past due 90 days or more, loans and leases on nonaccrual status and troubled debt restructured loans and lease modifications are considered nonperforming. Nonperforming loans and leases are reviewed monthly. Performing loans and leases have a nominal to moderate risk of loss. Performing loans and leases are reviewed only if the loan becomes 60 days or more past due.
Based on the most recent analysis performed, the following table presents for the recorded investment in loans and leases held for investment for Real-estate residential secured for personal purpose loans, Real-estate home equity secured for personal purpose loans, Loans to individuals and Lease financings by credit quality indicator at March 31, 2021 and December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans Amortized Cost Basis by Origination Year
|
|
|
|
|
|
|
(Dollars in thousands)
|
2021
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
Prior
|
|
Revolving Loans Amortized Cost Basis
|
|
|
|
Total
|
At March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Residential Secured for Personal Purpose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
65,849
|
|
|
$
|
186,428
|
|
|
$
|
51,724
|
|
|
$
|
37,244
|
|
|
$
|
37,472
|
|
|
$
|
112,249
|
|
|
$
|
1,113
|
|
|
|
|
$
|
492,079
|
|
2. Nonperforming
|
—
|
|
|
1,065
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
1,150
|
|
|
—
|
|
|
|
|
2,270
|
|
Total
|
$
|
65,849
|
|
|
$
|
187,493
|
|
|
$
|
51,724
|
|
|
$
|
37,299
|
|
|
$
|
37,472
|
|
|
$
|
113,399
|
|
|
$
|
1,113
|
|
|
|
|
$
|
494,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Home Equity Secured for Personal Purpose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
311
|
|
|
$
|
1,061
|
|
|
$
|
601
|
|
|
$
|
724
|
|
|
$
|
1,105
|
|
|
$
|
2,367
|
|
|
$
|
155,219
|
|
|
|
|
$
|
161,388
|
|
2. Nonperforming
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|
—
|
|
|
33
|
|
|
922
|
|
|
|
|
1,141
|
|
Total
|
$
|
311
|
|
|
$
|
1,061
|
|
|
$
|
601
|
|
|
$
|
910
|
|
|
$
|
1,105
|
|
|
$
|
2,400
|
|
|
$
|
156,141
|
|
|
|
|
$
|
162,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to Individuals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
263
|
|
|
$
|
1,305
|
|
|
$
|
1,183
|
|
|
$
|
823
|
|
|
$
|
342
|
|
|
$
|
2,180
|
|
|
$
|
19,249
|
|
|
|
|
$
|
25,345
|
|
2. Nonperforming
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
|
|
123
|
|
Total
|
$
|
263
|
|
|
$
|
1,305
|
|
|
$
|
1,183
|
|
|
$
|
823
|
|
|
$
|
342
|
|
|
$
|
2,303
|
|
|
$
|
19,249
|
|
|
|
|
$
|
25,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Financings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
15,160
|
|
|
$
|
67,256
|
|
|
$
|
42,254
|
|
|
$
|
26,121
|
|
|
$
|
9,364
|
|
|
$
|
2,657
|
|
|
$
|
—
|
|
|
|
|
$
|
162,812
|
|
2. Nonperforming
|
—
|
|
|
—
|
|
|
23
|
|
|
3
|
|
|
216
|
|
|
5
|
|
|
—
|
|
|
|
|
247
|
|
Total
|
$
|
15,160
|
|
|
$
|
67,256
|
|
|
$
|
42,277
|
|
|
$
|
26,124
|
|
|
$
|
9,580
|
|
|
$
|
2,662
|
|
|
$
|
—
|
|
|
|
|
$
|
163,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals by Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
81,583
|
|
|
$
|
256,050
|
|
|
$
|
95,762
|
|
|
$
|
64,912
|
|
|
$
|
48,283
|
|
|
$
|
119,453
|
|
|
$
|
175,581
|
|
|
|
|
$
|
841,624
|
|
2. Nonperforming
|
—
|
|
|
1,065
|
|
|
23
|
|
|
244
|
|
|
216
|
|
|
1,311
|
|
|
922
|
|
|
|
|
3,781
|
|
Total
|
$
|
81,583
|
|
|
$
|
257,115
|
|
|
$
|
95,785
|
|
|
$
|
65,156
|
|
|
$
|
48,499
|
|
|
$
|
120,764
|
|
|
$
|
176,503
|
|
|
|
|
$
|
845,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans Amortized Cost Basis by Origination Year
|
|
|
|
|
|
|
(Dollars in thousands)
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans Amortized Cost Basis
|
|
|
|
Total
|
At December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Residential Secured for Personal Purpose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
191,987
|
|
|
$
|
61,880
|
|
|
$
|
56,314
|
|
|
$
|
50,983
|
|
|
$
|
38,975
|
|
|
$
|
84,138
|
|
|
$
|
1,237
|
|
|
|
|
$
|
485,514
|
|
2. Nonperforming
|
666
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
1,364
|
|
|
—
|
|
|
|
|
2,086
|
|
Total
|
$
|
192,653
|
|
|
$
|
61,880
|
|
|
$
|
56,370
|
|
|
$
|
50,983
|
|
|
$
|
38,975
|
|
|
$
|
85,502
|
|
|
$
|
1,237
|
|
|
|
|
$
|
487,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate-Home Equity Secured for Personal Purpose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
1,195
|
|
|
$
|
815
|
|
|
$
|
829
|
|
|
$
|
1,160
|
|
|
$
|
518
|
|
|
$
|
2,189
|
|
|
$
|
158,803
|
|
|
|
|
$
|
165,509
|
|
2. Nonperforming
|
—
|
|
|
—
|
|
|
198
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
866
|
|
|
|
|
1,100
|
|
Total
|
$
|
1,195
|
|
|
$
|
815
|
|
|
$
|
1,027
|
|
|
$
|
1,160
|
|
|
$
|
518
|
|
|
$
|
2,225
|
|
|
$
|
159,669
|
|
|
|
|
$
|
166,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to Individuals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
1,795
|
|
|
$
|
1,425
|
|
|
$
|
970
|
|
|
$
|
441
|
|
|
$
|
220
|
|
|
$
|
2,266
|
|
|
$
|
20,180
|
|
|
|
|
$
|
27,297
|
|
2. Nonperforming
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
162
|
|
|
|
|
185
|
|
Total
|
$
|
1,795
|
|
|
$
|
1,425
|
|
|
$
|
970
|
|
|
$
|
441
|
|
|
$
|
220
|
|
|
$
|
2,289
|
|
|
$
|
20,342
|
|
|
|
|
$
|
27,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Financings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
72,173
|
|
|
$
|
45,972
|
|
|
$
|
30,679
|
|
|
$
|
11,613
|
|
|
$
|
3,616
|
|
|
$
|
567
|
|
|
$
|
—
|
|
|
|
|
$
|
164,620
|
|
2. Nonperforming
|
12
|
|
|
182
|
|
|
5
|
|
|
205
|
|
|
7
|
|
|
8
|
|
|
—
|
|
|
|
|
419
|
|
Total
|
$
|
72,185
|
|
|
$
|
46,154
|
|
|
$
|
30,684
|
|
|
$
|
11,818
|
|
|
$
|
3,623
|
|
|
$
|
575
|
|
|
$
|
—
|
|
|
|
|
$
|
165,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals by Payment Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Performing
|
$
|
267,150
|
|
|
$
|
110,092
|
|
|
$
|
88,792
|
|
|
$
|
64,197
|
|
|
$
|
43,329
|
|
|
$
|
89,160
|
|
|
$
|
180,220
|
|
|
|
|
$
|
842,940
|
|
2. Nonperforming
|
678
|
|
|
182
|
|
|
259
|
|
|
205
|
|
|
7
|
|
|
1,431
|
|
|
1,028
|
|
|
|
|
3,790
|
|
Total
|
$
|
267,828
|
|
|
$
|
110,274
|
|
|
$
|
89,051
|
|
|
$
|
64,402
|
|
|
$
|
43,336
|
|
|
$
|
90,591
|
|
|
$
|
181,248
|
|
|
|
|
$
|
846,730
|
|
The Corporation had no revolving loans which were converted to term loans included within recorded investment in loans and leases held for investment at March 31, 2021 and December 31, 2020.
Allowance for Credit Losses on Loans and Leases and Recorded Investment in Loans and Leases
The allowance for credit losses (ACL) on loans decreased during the three months ended March 31, 2021 primarily due to favorable changes in economic assumptions, which were impacted by the ongoing recovery from the COVID-19 pandemic, partially offset by loan growth. There were no changes to the reasonable and supportable forecast period, the reversion period, or any other significant methodology changes during the three months ended March 31, 2021. The following presents, by portfolio segment, a summary of the activity in the allowance for credit losses, loans and leases, for the three months ended March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Beginning balance
|
|
|
|
Adjustment to initially apply ASU No. 2016-13 for CECL
|
|
(Reversal of provision) provision for credit losses
|
|
|
|
Charge-offs
|
|
Recoveries
|
|
Ending balance
|
Three Months Ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses, loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, Financial and Agricultural
|
$
|
13,584
|
|
|
|
|
$
|
—
|
|
|
$
|
(3,078)
|
|
|
|
|
$
|
(338)
|
|
|
$
|
65
|
|
|
$
|
10,233
|
|
Real Estate-Commercial
|
52,230
|
|
|
|
|
—
|
|
|
(6,771)
|
|
|
|
|
—
|
|
|
—
|
|
|
45,459
|
|
Real Estate-Construction
|
3,298
|
|
|
|
|
—
|
|
|
(499)
|
|
|
|
|
—
|
|
|
—
|
|
|
2,799
|
|
Real Estate-Residential Secured for Business Purpose
|
7,317
|
|
|
|
|
—
|
|
|
(679)
|
|
|
|
|
—
|
|
|
54
|
|
|
6,692
|
|
Real Estate-Residential Secured for Personal Purpose
|
3,055
|
|
|
|
|
—
|
|
|
1
|
|
|
|
|
—
|
|
|
—
|
|
|
3,056
|
|
Real Estate-Home Equity Secured for Personal Purpose
|
1,176
|
|
|
|
|
—
|
|
|
79
|
|
|
|
|
—
|
|
|
2
|
|
|
1,257
|
|
Loans to Individuals
|
533
|
|
|
|
|
—
|
|
|
(58)
|
|
|
|
|
(56)
|
|
|
28
|
|
|
447
|
|
Lease Financings
|
1,701
|
|
|
|
|
—
|
|
|
(254)
|
|
|
|
|
(91)
|
|
|
48
|
|
|
1,404
|
|
Unallocated
|
150
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
N/A
|
|
N/A
|
|
150
|
|
Total
|
$
|
83,044
|
|
|
|
|
$
|
—
|
|
|
$
|
(11,259)
|
|
|
|
|
$
|
(485)
|
|
|
$
|
197
|
|
|
$
|
71,497
|
|
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses, loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, Financial and Agricultural
|
$
|
8,759
|
|
|
|
|
$
|
5,284
|
|
|
$
|
5,630
|
|
|
|
|
$
|
(481)
|
|
|
$
|
52
|
|
|
$
|
19,244
|
|
Real Estate-Commercial
|
15,750
|
|
|
|
|
6,208
|
|
|
12,817
|
|
|
|
|
—
|
|
|
35
|
|
|
34,810
|
|
Real Estate-Construction
|
2,446
|
|
|
|
|
29
|
|
|
642
|
|
|
|
|
—
|
|
|
—
|
|
|
3,117
|
|
Real Estate-Residential Secured for Business Purpose
|
2,622
|
|
|
|
|
2,502
|
|
|
782
|
|
|
|
|
(3)
|
|
|
3
|
|
|
5,906
|
|
Real Estate-Residential Secured for Personal Purpose
|
2,713
|
|
|
|
|
(706)
|
|
|
114
|
|
|
|
|
—
|
|
|
—
|
|
|
2,121
|
|
Real Estate-Home Equity Secured for Personal Purpose
|
1,076
|
|
|
|
|
(364)
|
|
|
78
|
|
|
|
|
—
|
|
|
5
|
|
|
795
|
|
Loans to Individuals
|
470
|
|
|
|
|
104
|
|
|
47
|
|
|
|
|
(35)
|
|
|
14
|
|
|
600
|
|
Lease Financings
|
1,311
|
|
|
|
|
(135)
|
|
|
376
|
|
|
|
|
(152)
|
|
|
73
|
|
|
1,473
|
|
Unallocated
|
184
|
|
|
|
|
—
|
|
|
(34)
|
|
|
|
|
N/A
|
|
N/A
|
|
150
|
|
Total
|
$
|
35,331
|
|
|
|
|
$
|
12,922
|
|
|
$
|
20,452
|
|
|
|
|
$
|
(671)
|
|
|
$
|
182
|
|
|
$
|
68,216
|
|
N/A – Not applicable
The following presents, by portfolio segment, the balance in the ACL on loans and leases, disaggregated on the basis of whether the loan or lease was measured for credit loss as a pooled loan or lease or if it was individually analyzed for a reserve at March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses, loans and leases
|
|
Loans and leases held for investment
|
(Dollars in thousands)
|
Ending balance: individually analyzed
|
|
Ending balance: pooled
|
|
Total ending balance
|
|
Ending balance: individually analyzed
|
|
Ending balance: pooled
|
|
Loans measured at fair value
|
|
Total ending balance
|
At March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, Financial and Agricultural
|
$
|
253
|
|
|
$
|
9,980
|
|
|
$
|
10,233
|
|
|
$
|
2,006
|
|
|
$
|
869,990
|
|
|
$
|
—
|
|
|
$
|
871,996
|
|
Paycheck Protection Program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
528,452
|
|
|
—
|
|
|
528,452
|
|
Real Estate-Commercial
|
—
|
|
|
45,459
|
|
|
45,459
|
|
|
22,026
|
|
|
2,509,522
|
|
|
152
|
|
|
2,531,700
|
|
Real Estate-Construction
|
—
|
|
|
2,799
|
|
|
2,799
|
|
|
—
|
|
|
249,652
|
|
|
—
|
|
|
249,652
|
|
Real Estate-Residential Secured for Business Purpose
|
3
|
|
|
6,689
|
|
|
6,692
|
|
|
2,859
|
|
|
384,942
|
|
|
—
|
|
|
387,801
|
|
Real Estate-Residential Secured for Personal Purpose
|
25
|
|
|
3,031
|
|
|
3,056
|
|
|
1,867
|
|
|
492,482
|
|
|
—
|
|
|
494,349
|
|
Real Estate-Home Equity Secured for Personal Purpose
|
—
|
|
|
1,257
|
|
|
1,257
|
|
|
1,089
|
|
|
161,440
|
|
|
—
|
|
|
162,529
|
|
Loans to Individuals
|
—
|
|
|
447
|
|
|
447
|
|
|
—
|
|
|
25,468
|
|
|
—
|
|
|
25,468
|
|
Lease Financings
|
—
|
|
|
1,404
|
|
|
1,404
|
|
|
—
|
|
|
163,059
|
|
|
—
|
|
|
163,059
|
|
Unallocated
|
N/A
|
|
150
|
|
|
150
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
Total
|
$
|
281
|
|
|
$
|
71,216
|
|
|
$
|
71,497
|
|
|
$
|
29,847
|
|
|
$
|
5,385,007
|
|
|
$
|
152
|
|
|
$
|
5,415,006
|
|
At March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, Financial and Agricultural
|
$
|
698
|
|
|
$
|
18,546
|
|
|
$
|
19,244
|
|
|
$
|
3,934
|
|
|
$
|
940,255
|
|
|
$
|
—
|
|
|
$
|
944,189
|
|
Real Estate-Commercial
|
1,547
|
|
|
33,263
|
|
|
34,810
|
|
|
28,827
|
|
|
2,071,584
|
|
|
288
|
|
|
2,100,699
|
|
Real Estate-Construction
|
—
|
|
|
3,117
|
|
|
3,117
|
|
|
—
|
|
|
215,150
|
|
|
—
|
|
|
215,150
|
|
Real Estate-Residential Secured for Business Purpose
|
95
|
|
|
5,811
|
|
|
5,906
|
|
|
1,270
|
|
|
376,374
|
|
|
—
|
|
|
377,644
|
|
Real Estate-Residential Secured for Personal Purpose
|
195
|
|
|
1,926
|
|
|
2,121
|
|
|
1,280
|
|
|
453,718
|
|
|
—
|
|
|
454,998
|
|
Real Estate-Home Equity Secured for Personal Purpose
|
—
|
|
|
795
|
|
|
795
|
|
|
820
|
|
|
176,585
|
|
|
—
|
|
|
177,405
|
|
Loans to Individuals
|
—
|
|
|
600
|
|
|
600
|
|
|
—
|
|
|
29,170
|
|
|
—
|
|
|
29,170
|
|
Lease Financings
|
—
|
|
|
1,473
|
|
|
1,473
|
|
|
—
|
|
|
149,570
|
|
|
—
|
|
|
149,570
|
|
Unallocated
|
N/A
|
|
150
|
|
|
150
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
Total
|
$
|
2,535
|
|
|
$
|
65,681
|
|
|
$
|
68,216
|
|
|
$
|
36,131
|
|
|
$
|
4,412,406
|
|
|
$
|
288
|
|
|
$
|
4,448,825
|
|
N/A – Not applicable
Troubled Debt Restructured Loans
There were no loans that were restructured during the three months ended March 31, 2021 or March 31, 2020.
The Corporation modified certain loans and leases via principal and/or interest deferrals in accordance with Section 4013 of the CARES Act, the Consolidated Appropriations Act, 2021 and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and have not categorized these modifications as troubled debt restructurings. These loan and leases had a combined principal balance of approximately $73.0 million as of March 31, 2021, which represents approximately 1.5% of the loan portfolio, excluding PPP loans.
There were no accruing or nonaccrual troubled debt restructured loans for which there were payment defaults within twelve months of the restructuring date for the three months ended March 31, 2021 or March 31, 2020.
The following presents the amount of consumer mortgages collateralized by residential real estate property that were in the process of foreclosure at March 31, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
At March 31, 2021
|
|
At December 31, 2020
|
Real estate-residential secured for personal purpose
|
$
|
57
|
|
|
$
|
64
|
|
|
|
|
|
Total
|
$
|
57
|
|
|
$
|
64
|
|
There was no foreclosed residential real estate property included in other real estate owned at March 31, 2021 and December 31, 2020.
Lease Financings
The Corporation, through Univest Capital, Inc., an equipment financing business and a subsidiary of the Bank, provides lease financing to customers primarily in the form of sales-type leases with fixed payment terms and $1.00 buyout clauses. A minor number of contracts are classified as either direct financing leases or operating leases. The fair value of the identified assets within sales-type and direct financing leases are equal to the carrying amount such that there is no profit or loss recorded or deferred upon lease commencement. All receivables related to the equipment financing business are recorded within lease financings.
The following presents the schedule of minimum lease payments receivable:
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
At March 31, 2021
|
|
At December 31, 2020
|
2021 (excluding the three months ended March 31, 2021)
|
$
|
47,581
|
|
|
$
|
61,724
|
|
2022
|
53,034
|
|
|
49,970
|
|
2023
|
38,736
|
|
|
35,631
|
|
2024
|
23,604
|
|
|
20,821
|
|
2025
|
10,937
|
|
|
8,319
|
|
Thereafter
|
3,044
|
|
|
2,763
|
|
Total future minimum lease payments receivable
|
176,936
|
|
|
179,228
|
|
Plus: Unguaranteed residual
|
938
|
|
|
914
|
|
Plus: Initial direct costs
|
2,468
|
|
|
2,567
|
|
Less: Imputed interest
|
(17,283)
|
|
|
(17,670)
|
|
Lease financings
|
$
|
163,059
|
|
|
$
|
165,039
|
|
Note 5. Goodwill and Other Intangible Assets
The Corporation has goodwill from acquisitions which is deemed to be an indefinite intangible asset and is not amortized. The Corporation also has core deposit and customer-related intangibles and servicing rights, which are not deemed to have an indefinite life and therefore will continue to be amortized over their useful life using the present value of projected cash flows.
Changes in the carrying amount of the Corporation's goodwill by business segment for the three months ended March 31, 2021 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Banking
|
|
Wealth Management
|
|
Insurance
|
|
Consolidated
|
Balance at December 31, 2020
|
$
|
138,476
|
|
|
$
|
15,434
|
|
|
$
|
18,649
|
|
|
$
|
172,559
|
|
Addition to goodwill from acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Balance at March 31, 2021
|
$
|
138,476
|
|
|
$
|
15,434
|
|
|
$
|
18,649
|
|
|
$
|
172,559
|
|
The following table reflects the components of intangible assets at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021
|
|
At December 31, 2020
|
(Dollars in thousands)
|
Gross Carrying Amount
|
|
Accumulated Amortization (1)
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization (1)
|
|
Net Carrying Amount
|
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core deposit intangibles
|
$
|
6,788
|
|
|
$
|
4,960
|
|
|
$
|
1,829
|
|
|
$
|
6,788
|
|
|
$
|
4,787
|
|
|
$
|
2,001
|
|
Customer related intangibles
|
6,017
|
|
|
5,635
|
|
|
381
|
|
|
7,604
|
|
|
7,147
|
|
|
457
|
|
Servicing rights
|
23,667
|
|
|
16,652
|
|
|
7,015
|
|
|
22,354
|
|
|
15,946
|
|
|
6,408
|
|
Total amortized intangible assets
|
$
|
36,472
|
|
|
$
|
27,247
|
|
|
$
|
9,225
|
|
|
$
|
36,746
|
|
|
$
|
27,880
|
|
|
$
|
8,866
|
|
(1) Included within accumulated amortization is a valuation allowance of $1 thousand and $87 thousand on mortgage servicing rights at March 31, 2021 and December 31, 2020, respectively.
The estimated aggregate amortization expense for core deposit and customer-related intangibles for the remainder of 2021 and the succeeding fiscal years is as follows:
|
|
|
|
|
|
|
|
|
Year
|
(Dollars in thousands)
|
Amount
|
Remainder of 2021
|
|
$
|
675
|
|
2022
|
|
666
|
|
2023
|
|
409
|
|
2024
|
|
267
|
|
2025
|
|
144
|
|
Thereafter
|
|
49
|
|
Total
|
|
$
|
2,210
|
|
The aggregate fair value of mortgage servicing rights was $9.5 million and $6.7 million at March 31, 2021 and December 31, 2020, respectively. The fair value of mortgage servicing rights was determined using a discount rate of 10.0% at March 31, 2021 and December 31, 2020.
Changes in the servicing rights balance are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
(Dollars in thousands)
|
2021
|
|
2020
|
|
|
|
|
Beginning of period
|
$
|
6,408
|
|
|
$
|
6,626
|
|
|
|
|
|
Servicing rights capitalized
|
1,313
|
|
|
526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of servicing rights
|
(792)
|
|
|
(657)
|
|
|
|
|
|
Changes in valuation allowance
|
86
|
|
|
(55)
|
|
|
|
|
|
End of period
|
$
|
7,015
|
|
|
$
|
6,440
|
|
|
|
|
|
Loans serviced for others
|
$
|
1,255,124
|
|
|
$
|
1,087,174
|
|
|
|
|
|
Activity in the valuation allowance for mortgage servicing rights was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
(Dollars in thousands)
|
2021
|
|
2020
|
|
|
|
|
Valuation allowance, beginning of period
|
$
|
(87)
|
|
|
$
|
—
|
|
|
|
|
|
Additions
|
—
|
|
|
(55)
|
|
|
|
|
|
Reductions
|
86
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance, end of period
|
$
|
(1)
|
|
|
$
|
(55)
|
|
|
|
|
|
The estimated amortization expense of servicing rights for the remainder of 2021 and the succeeding fiscal years is as follows:
|
|
|
|
|
|
|
|
|
Year
|
(Dollars in thousands)
|
Amount
|
Remainder of 2021
|
|
$
|
1,307
|
|
2022
|
|
1,077
|
|
2023
|
|
885
|
|
2024
|
|
725
|
|
2025
|
|
593
|
|
Thereafter
|
|
2,428
|
|
Total
|
|
$
|
7,015
|
|
Note 6. Deposits
Deposits and their respective weighted average interest rate at March 31, 2021 and December 31, 2020 consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021
|
|
At December 31, 2020
|
|
Weighted Average Interest Rate
|
|
Amount
|
|
Weighted Average Interest Rate
|
|
Amount
|
|
(Dollars in thousands)
|
Noninterest-bearing deposits
|
—
|
%
|
|
$
|
1,857,547
|
|
|
—
|
%
|
|
$
|
1,690,663
|
|
Demand deposits
|
0.19
|
|
|
2,006,368
|
|
|
0.22
|
|
|
2,070,183
|
|
Savings deposits
|
0.09
|
|
|
973,466
|
|
|
0.08
|
|
|
918,094
|
|
Time deposits
|
1.31
|
|
|
474,211
|
|
|
1.30
|
|
|
563,775
|
|
Total
|
0.21
|
%
|
|
$
|
5,311,592
|
|
|
0.24
|
%
|
|
$
|
5,242,715
|
|
The aggregate amount of time deposits in denominations of $100 thousand or more was $226.3 million at March 31, 2021 and $296.7 million at December 31, 2020. Deposits are insured up to applicable limits by the Deposit Insurance Fund of the FDIC. Deposit insurance per account owner is currently $250 thousand. The aggregate amount of time deposits in denominations over $250 thousand was $91.7 million at March 31, 2021 and $161.6 million at December 31, 2020.
At March 31, 2021, the scheduled maturities of time deposits are as follows:
|
|
|
|
|
|
|
|
|
Year
|
(Dollars in thousands)
|
Amount
|
Remainder of 2021
|
|
$
|
11,944
|
|
2022
|
|
174,693
|
|
2023
|
|
118,952
|
|
2024
|
|
124,004
|
|
2025
|
|
27,477
|
|
Thereafter
|
|
17,141
|
|
Total
|
|
$
|
474,211
|
|
Note 7. Borrowings
The following is a summary of borrowings by type. Short-term borrowings consist of overnight borrowings and term borrowings with an original maturity of one year or less.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021
|
|
At December 31, 2020
|
(Dollars in thousands)
|
Balance at End of Period
|
|
Weighted Average Interest Rate at End of Period
|
|
Balance at End of Period
|
|
Weighted Average Interest Rate at End of Period
|
Short-term borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer repurchase agreements
|
$
|
26,676
|
|
|
0.05
|
%
|
|
$
|
17,906
|
|
|
0.05
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
FHLB advances
|
$
|
95,000
|
|
|
1.34
|
%
|
|
$
|
110,000
|
|
|
1.42
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated notes
|
$
|
173,617
|
|
|
5.02
|
%
|
|
$
|
183,515
|
|
|
4.96
|
%
|
The Corporation, through the Bank, has a credit facility with the Federal Home Loan Bank (the FHLB) with a maximum borrowing capacity of approximately $2.3 billion. All borrowings and letters of credit from the FHLB are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets. At March 31, 2021 and December 31, 2020, the Bank had outstanding short-term letters of credit with the FHLB totaling $560.7 million and $669.7 million, respectively, which were utilized to collateralize public funds deposits and other secured deposits. The maximum borrowing capacity with the FHLB changes as a function of the Bank’s qualifying collateral assets as well as the FHLB’s internal credit rating of the Bank. The available borrowing capacity from the FHLB totaled $1.6 billion at March 31, 2021.
The Corporation, through the Bank, holds collateral at the Federal Reserve Bank of Philadelphia (the FRB of Philadelphia) to provide access to the Discount Window Lending program. The collateral, consisting of investment securities, was valued at $37.7 million and $40.7 million at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 and December 31, 2020, the Corporation had no outstanding borrowings under the Discount Window Lending program.
The Corporation has a $10.0 million committed line of credit with a correspondent bank. At March 31, 2021 and December 31, 2020, the Corporation had no outstanding borrowings under this line.
The Corporation and the Bank have $2.3 billion and $2.2 billion of committed borrowing capacity at March 31, 2021 and December 31, 2020, respectively, of which $1.7 billion and $1.5 billion was available as of March 31, 2021 and December 31, 2020, respectively. The Corporation, through the Bank, also maintained uncommitted funding sources from correspondent banks of $460.0 million at March 31, 2021 and December 31, 2020, which were fully available. Future availability under these lines is subject to the prerogatives of the granting banks and may be withdrawn at will.
Long-term advances with the FHLB mature as follows:
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
As of March 31, 2021
|
|
Weighted Average Rate
|
Remainder of 2021
|
$
|
—
|
|
|
—
|
%
|
2022
|
—
|
|
|
—
|
|
2023
|
35,000
|
|
|
1.94
|
|
2024
|
60,000
|
|
|
0.98
|
|
2025
|
—
|
|
|
—
|
|
Thereafter
|
—
|
|
|
—
|
|
Total
|
$
|
95,000
|
|
|
1.34
|
%
|
Note 8. Retirement Plans and Other Postretirement Benefits
Information with respect to the Retirement Plans and Other Postretirement Benefits follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
(Dollars in thousands)
|
Retirement Plans
|
|
Other Post Retirement
Benefits
|
Service cost
|
$
|
130
|
|
|
$
|
117
|
|
|
$
|
36
|
|
|
$
|
28
|
|
Interest cost
|
354
|
|
|
417
|
|
|
21
|
|
|
24
|
|
Expected loss on plan assets
|
(892)
|
|
|
(816)
|
|
|
—
|
|
|
—
|
|
Amortization of net actuarial loss
|
317
|
|
|
291
|
|
|
12
|
|
|
6
|
|
|
|
|
|
|
|
|
|
Net periodic benefit (income) cost
|
$
|
(91)
|
|
|
$
|
9
|
|
|
$
|
69
|
|
|
$
|
58
|
|
The components of net periodic benefit cost other than the service cost component are included in other noninterest expense in the consolidated statements of income.
The Corporation previously disclosed in its financial statements for the year ended December 31, 2020 that it expected to make contributions of $156 thousand to its non-qualified retirement plans and $94 thousand to its other postretirement benefit plans in 2021. During the three months ended March 31, 2021, the Corporation contributed $39 thousand to its non-qualified retirement plans and $27 thousand to its other postretirement plans. During the three months ended March 31, 2021, $664 thousand was paid to participants from the retirement plans and $27 thousand was paid to participants from the other postretirement plans.
Note 9. Stock-Based Incentive Plan
The Corporation maintains the 2013 Long-Term Incentive Plan, which replaced the expired 2003 Long-Term Incentive Plan. In December 2018, the Corporation's Board of Directors approved an Amended and Restated Univest 2013 Long-Term Incentive Plan (the Plan) to permit the issuance of restricted stock units.
Beginning in 2019, the Corporation issued to directors and employees ("grantees") restricted stock units rather than restricted stock awards or stock options, which were issued to grantees in prior reporting periods. Restricted stock units differ from restricted stock awards in that Corporation stock is not issued to grantees at the date of the grant and the grantee does not have voting or dividend rights during the vesting period. In the following schedules, issued restricted stock units have been combined with restricted stock awards, as the determination of the value at the grant date and methodology for recording stock-based compensation expense is the same.
The following is a summary of the Corporation's stock option activity and related information for the three months ended March 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
Shares Under Option
|
|
Weighted Average Exercise Price Per Share
|
|
Weighted Average Remaining Contractual Life (Years)
|
|
Aggregate Intrinsic Value at March 31, 2021
|
Outstanding at December 31, 2020
|
453,785
|
|
|
$
|
25.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
(9,500)
|
|
|
28.33
|
|
|
|
|
|
Exercised
|
(36,286)
|
|
|
20.90
|
|
|
|
|
|
Outstanding at March 31, 2021
|
407,999
|
|
|
25.35
|
|
|
5.6
|
|
$
|
1,322
|
|
Exercisable at March 31, 2021
|
407,999
|
|
|
25.35
|
|
|
5.6
|
|
1,322
|
|
The following is a summary of nonvested stock options at March 31, 2021 including changes during the three months then ended:
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
Nonvested Stock Options
|
|
Weighted Average Grant Date Fair Value
|
Nonvested stock options at December 31, 2020
|
49,771
|
|
|
$
|
6.46
|
|
|
|
|
|
Vested
|
(49,771)
|
|
|
6.46
|
|
|
|
|
|
Nonvested stock options at March 31, 2021
|
—
|
|
|
—
|
|
The Corporation did not issue stock options during the three months ended March 31, 2021 or March 31, 2020.
The following is a summary of nonvested restricted stock awards and nonvested restricted stock units at March 31, 2021 including changes during the three months then ended:
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
Nonvested Stock Awards and Units
|
|
Weighted Average Grant Date Fair Value
|
Nonvested stock awards and units at December 31, 2020
|
305,704
|
|
|
$
|
21.18
|
|
Granted
|
139,007
|
|
|
27.67
|
|
Vested
|
(85,731)
|
|
|
22.68
|
|
Cancelled
|
(9,953)
|
|
|
22.35
|
|
|
|
|
|
Nonvested stock units at March 31, 2021
|
349,027
|
|
|
23.37
|
|
Certain information regarding restricted stock awards and units is summarized below for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
(Dollars in thousands, except per share data)
|
2021
|
|
2020
|
Restricted stock units granted
|
139,007
|
|
|
179,080
|
|
Weighted average grant date fair value
|
$
|
27.67
|
|
|
$
|
18.62
|
|
Intrinsic value of units granted
|
$
|
3,847
|
|
|
$
|
2,923
|
|
Restricted stock awards and units vested
|
85,731
|
|
|
57,355
|
|
Weighted average grant date fair value
|
$
|
22.68
|
|
|
$
|
27.23
|
|
Intrinsic value of awards and units vested
|
$
|
2,354
|
|
|
$
|
1,335
|
|
The total unrecognized compensation expense and the weighted average period over which unrecognized compensation expense is expected to be recognized related to nonvested restricted stock units at March 31, 2021 is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Unrecognized Compensation Cost
|
|
Weighted-Average Period Remaining (Years)
|
|
|
|
|
Restricted stock units
|
$
|
6,925
|
|
|
2.3
|
|
$
|
6,925
|
|
|
2.3
|
The following table presents information related to the Corporation’s compensation expense related to stock incentive plans recognized for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
(Dollars in thousands)
|
2021
|
|
2020
|
Stock-based compensation expense:
|
|
|
|
Stock options
|
$
|
62
|
|
|
$
|
108
|
|
Restricted stock awards and units
|
812
|
|
|
327
|
|
Employee stock purchase plan
|
23
|
|
|
20
|
|
Total
|
$
|
897
|
|
|
$
|
455
|
|
Tax benefit on nonqualified stock option expense, restricted stock awards and disqualifying dispositions of incentive stock options
|
$
|
33
|
|
|
$
|
106
|
|
Note 10. Accumulated Other Comprehensive (Loss) Income
The following table shows the components of accumulated other comprehensive (loss) income, net of taxes, for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Net Unrealized
(Losses) Gains on
Available-for-Sale
Investment
Securities
|
|
Net Change
Related to
Derivatives Used for Cash Flow Hedges
|
|
Net Change
Related to
Defined Benefit
Pension Plans
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
Balance, December 31, 2020
|
$
|
(1,379)
|
|
|
$
|
(421)
|
|
|
$
|
(20,344)
|
|
|
$
|
(22,144)
|
|
Other comprehensive income
|
1,379
|
|
|
65
|
|
|
260
|
|
|
1,704
|
|
Balance, March 31, 2021
|
$
|
—
|
|
|
$
|
(356)
|
|
|
$
|
(20,084)
|
|
|
$
|
(20,440)
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019
|
$
|
(3,231)
|
|
|
$
|
(185)
|
|
|
$
|
(18,314)
|
|
|
$
|
(21,730)
|
|
Adjustment to initially apply ASU No. 2016-13 for CECL
|
237
|
|
|
—
|
|
|
—
|
|
|
237
|
|
Other comprehensive (loss) income
|
(4,000)
|
|
|
(370)
|
|
|
235
|
|
|
(4,135)
|
|
Balance, March 31, 2020
|
$
|
(6,994)
|
|
|
$
|
(555)
|
|
|
$
|
(18,079)
|
|
|
$
|
(25,628)
|
|
Note 11. Derivative Instruments and Hedging Activities
Interest Rate Swaps
The Corporation periodically uses interest rate swap agreements to modify interest rate characteristics from variable to fixed or fixed to variable in order to reduce the impact of interest rate changes on future net interest income. The Corporation’s credit exposure on interest rate swaps includes fair value and any collateral that is held by a third party.
In 2014, the Corporation entered into an amortizing interest rate swap classified as a cash flow hedge with a notional amount of $20.0 million to hedge a portion of the debt financing of a pool of 10-year fixed rate loans with balances totaling $29.1 million, at time of the hedge, that were originated in 2013. A brokered money market demand account with a balance exceeding the amortizing interest rate swap balance is being used for the cash flow hedge. Under the terms of the swap agreement, the Corporation pays a fixed rate of 2.10% and receives a floating rate of one-month LIBOR. The swap matures in November 2022. The Corporation performed an assessment of the hedge for effectiveness at the inception of the hedge and on a recurring basis to determine that the derivative has been and is expected to continue to be highly effective in offsetting changes in cash flows of the hedged item. At March 31, 2021, approximately $233 thousand in net deferred losses, net of tax, recorded in accumulated other comprehensive loss are expected to be reclassified into earnings during the next twelve months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to March 31, 2021. At March 31, 2021, the notional amount of the interest rate swap was $15.3 million and the fair value was a liability of $450 thousand.
The Corporation has an interest rate swap with a current notional amount of $147 thousand, for a 15-year fixed rate loan that is earning interest at 7.43%. The Corporation pays a fixed rate of 7.43% and receives a floating rate based on the one-month LIBOR plus 224 basis points. The swap matures in April 2022. The interest rate swap is carried at fair value in accordance with FASB ASC 815 "Derivatives and Hedging." The loan is carried at fair value under the fair value option as permitted by FASB ASC 825 "Financial Instruments."
Credit Derivatives
The Corporation has agreements with third-party financial institutions whereby the third-party financial institution enters into interest rate derivative contracts with loan customers referred to them by the Corporation. By the terms of the agreements, the third-party financial institution has recourse to the Corporation for any exposure created under each swap contract in the event the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. These transactions represent credit derivatives and are a customary arrangement that allows the Corporation to provide access to interest rate swap transactions for customers without issuing the swap.
At March 31, 2021, the Corporation reported 110 variable-rate to fixed-rate interest rate swap transactions between the third-party financial institution and customers with a current notional amount of $707.3 million and remaining maturities ranging from 12 months to 10 years. At March 31, 2021, the fair value of the Corporation's interest rate swap credit derivatives was a liability of $271 thousand. At March 31, 2021, the fair value of the swaps to the customers was a net liability of $15.5 million and these swaps were in paying positions to the third-party financial institution.
The maximum potential payments by the Corporation to the third-party financial institution under these credit derivatives are not estimable as they are contingent on future interest rates and the agreement does not provide for a limitation of the maximum potential payment amount.
Mortgage Banking Derivatives
Derivative loan commitments represent agreements for delayed delivery of financial instruments in which the buyer agrees to purchase and the seller agrees to deliver, at a specified future date, a specified instrument at a specified price or yield. The Corporation’s derivative loan commitments are commitments to sell loans secured by 1-to 4-family residential properties whose predominant risk characteristic is interest rate risk.
Derivatives Tables
The following table presents the notional amounts and fair values of derivatives designated as hedging instruments recorded on the condensed consolidated balance sheets at March 31, 2021 and December 31, 2020. The Corporation pledges cash or securities to cover the negative fair value of derivative instruments. Cash collateral associated with derivative instruments are not added to or netted against the fair value amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
(Dollars in thousands)
|
Notional
Amount
|
|
Balance Sheet
Classification
|
|
Fair
Value
|
|
Balance Sheet
Classification
|
|
Fair
Value
|
At March 31, 2021
|
|
|
|
|
|
|
|
|
|
Interest rate swap - cash flow hedge
|
$
|
15,255
|
|
|
|
|
$
|
—
|
|
|
Other liabilities
|
|
$
|
450
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
15,255
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
450
|
|
At December 31, 2020
|
|
|
|
|
|
|
|
|
|
Interest rate swap - cash flow hedge
|
$
|
15,465
|
|
|
|
|
$
|
—
|
|
|
Other liabilities
|
|
$
|
533
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
15,465
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
533
|
|
The following table presents the notional amounts and fair values of derivatives not designated as hedging instruments recorded on the condensed consolidated balance sheets at March 31, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
(Dollars in thousands)
|
Notional
Amount
|
|
Balance Sheet
Classification
|
|
Fair
Value
|
|
Balance Sheet
Classification
|
|
Fair
Value
|
At March 31, 2021
|
|
|
|
|
|
|
|
|
|
Interest rate swap
|
$
|
147
|
|
|
|
|
$
|
—
|
|
|
Other liabilities
|
|
$
|
5
|
|
Credit derivatives
|
707,333
|
|
|
|
|
—
|
|
|
Other liabilities
|
|
271
|
|
Interest rate locks with customers
|
97,001
|
|
|
Other assets
|
|
1,163
|
|
|
|
|
—
|
|
Forward loan sale commitments
|
119,637
|
|
|
Other assets
|
|
1,222
|
|
|
|
|
—
|
|
Total
|
$
|
924,118
|
|
|
|
|
$
|
2,385
|
|
|
|
|
$
|
276
|
|
At December 31, 2020
|
|
|
|
|
|
|
|
|
|
Interest rate swap
|
$
|
179
|
|
|
|
|
$
|
—
|
|
|
Other liabilities
|
|
$
|
8
|
|
Credit derivatives
|
643,556
|
|
|
|
|
—
|
|
|
Other liabilities
|
|
535
|
|
Interest rate locks with customers
|
77,246
|
|
|
Other assets
|
|
2,894
|
|
|
|
|
—
|
|
Forward loan sale commitments
|
112,690
|
|
|
|
|
—
|
|
|
Other liabilities
|
|
752
|
|
Total
|
$
|
833,671
|
|
|
|
|
$
|
2,894
|
|
|
|
|
$
|
1,295
|
|
The following table presents amounts included in the consolidated statements of income for derivatives designated as hedging instruments for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Income
Classification
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
(Dollars in thousands)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap—cash flow hedge—net interest payments
|
Interest expense
|
|
$
|
76
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net loss
|
|
|
$
|
(76)
|
|
|
$
|
(29)
|
|
|
|
|
|
The following table presents amounts included in the consolidated statements of income for derivatives not designated as hedging instruments for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Income Classification
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
(Dollars in thousands)
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit derivatives
|
Other noninterest income
|
|
$
|
1,107
|
|
|
$
|
140
|
|
|
|
|
|
Interest rate locks with customers
|
Net (loss) gain on mortgage banking activities
|
|
(1,730)
|
|
|
2,512
|
|
|
|
|
|
Forward loan sale commitments
|
Net gain (loss) on mortgage banking activities
|
|
1,974
|
|
|
(867)
|
|
|
|
|
|
Total net gain
|
|
|
$
|
1,351
|
|
|
$
|
1,785
|
|
|
|
|
|
The following table presents amounts included in accumulated other comprehensive (loss) income for derivatives designated as hedging instruments at March 31, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Accumulated Other
Comprehensive (Loss) Income
|
|
At March 31, 2021
|
|
At December 31, 2020
|
Interest rate swap—cash flow hedge
|
Fair value, net of taxes
|
|
$
|
(356)
|
|
|
$
|
(421)
|
|
Total
|
|
|
$
|
(356)
|
|
|
$
|
(421)
|
|
Note 12. Fair Value Disclosures
Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The Corporation determines the fair value of financial instruments based on the fair value hierarchy. The Corporation maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Corporation. Unobservable inputs are inputs that reflect the Corporation’s assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances, including assumptions about risk. Three levels of inputs are used to measure fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement.
Level 1: Valuations are based on quoted prices in active markets for identical assets or liabilities that the Corporation can access at the measurement date. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
Level 2: Valuations are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3: Valuations are based on inputs that are unobservable and significant to the overall fair value measurement. Assets and liabilities utilizing Level 3 inputs include: financial instruments whose value is determined using pricing models, discounted cash-flow methodologies, or similar techniques, as well as instruments for which the fair value calculation requires significant management judgment or estimation.
Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy.
Investment Securities
Where quoted prices are available in an active market for identical instruments, investment securities are classified within Level 1 of the valuation hierarchy. Level 1 investment securities include U.S. Treasury securities, most equity securities and money market mutual funds. Mutual funds are registered investment companies which are valued at net asset value of shares on a market exchange at the end of each trading day. Level 2 of the valuation hierarchy includes securities issued by U.S. Government sponsored enterprises, mortgage-backed securities, collateralized mortgage obligations, corporate and municipal bonds and certain equity securities. 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. In cases where there is limited activity or less transparency around inputs to the valuation, investment securities are classified within Level 3 of the valuation hierarchy.
Fair values for securities are determined using independent pricing services and market-participating brokers. The Corporation’s independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flow and, when available, loan performance data. Because many fixed income securities do not trade on a daily basis, the pricing service’s evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. If at any time, the pricing service determines that it does not have sufficient verifiable information to value a particular security, the Corporation will utilize valuations from another pricing service. Management has a sufficient understanding of the third-party service’s valuation models, assumptions and inputs used in determining the fair value of securities to enable management to maintain an appropriate system of internal control.
On a quarterly basis, the Corporation reviews changes, as submitted by the pricing service, in the market value of its security portfolio. Individual changes in valuations are reviewed for consistency with general interest rate movements and any known credit concerns for specific securities. If, upon the Corporation’s review or in comparing with another service, a material difference between pricing evaluations were to exist, the Corporation may submit an inquiry to the current pricing service regarding the data used to determine the valuation of a particular security. If the Corporation determines there is market information that would support a different valuation than from the current pricing service’s evaluation, the Corporation may utilize and change the security's valuation. There were no material differences in valuations noted at March 31, 2021.
Loans Held for Sale
The fair value of our loans held for sale is based on estimates using Level 2 inputs. These inputs are based on pricing information obtained from wholesale mortgage banks and brokers and applied to loans with similar interest rates and maturities.
Derivative Financial Instruments
The fair values of derivative financial instruments are based upon the estimated amount the Corporation would receive or pay to terminate the contracts or agreements, taking into account current interest rates and, when appropriate, the current creditworthiness of the counterparties. Interest rate swaps and mortgage banking derivative financial instruments are classified within Level 2 of the valuation hierarchy. Credit derivatives are valued based on credit worthiness of the underlying borrower which is a significant unobservable input and therefore classified in Level 3 of the valuation hierarchy.
One commercial loan associated with an interest rate swap is classified in Level 3 of the valuation hierarchy at March 31, 2021 since lending credit risk is not an observable input for this loan. The unrealized gain on the one loan was $4 thousand at March 31, 2021.
Contingent Consideration Liability
The Corporation estimates the fair value of the contingent consideration liability by using a discounted cash flow model of future contingent payments based on projected revenue related to the acquired business. The estimated fair value of the contingent consideration liability is reviewed on a quarterly basis and any valuation adjustments resulting from a change of estimated future contingent payments based on projected revenue of the acquired business affecting the contingent consideration liability will be recorded through noninterest expense. Due to the significant unobservable input related to the projected revenue, the contingent consideration liability is classified within Level 3 of the valuation hierarchy. An increase in
the projected revenue may result in a higher fair value of the contingent consideration liability. Alternatively, a decrease in the projected revenue may result in a lower estimated fair value of the contingent consideration liability.
The following table presents the assets and liabilities measured at fair value on a recurring basis at March 31, 2021 and December 31, 2020, classified using the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021
|
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets/
Liabilities at
Fair Value
|
Assets:
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and political subdivisions
|
$
|
—
|
|
|
$
|
10,210
|
|
|
$
|
—
|
|
|
$
|
10,210
|
|
Residential mortgage-backed securities
|
—
|
|
|
133,391
|
|
|
—
|
|
|
133,391
|
|
Collateralized mortgage obligations
|
—
|
|
|
4,657
|
|
|
—
|
|
|
4,657
|
|
Corporate bonds
|
—
|
|
|
80,971
|
|
|
9,600
|
|
|
90,571
|
|
Total available-for-sale securities
|
—
|
|
|
229,229
|
|
|
9,600
|
|
|
238,829
|
|
Equity securities:
|
|
|
|
|
|
|
|
Equity securities - financial services industry
|
933
|
|
|
—
|
|
|
—
|
|
|
933
|
|
Money market mutual funds
|
2,591
|
|
|
—
|
|
|
—
|
|
|
2,591
|
|
Total equity securities
|
3,524
|
|
|
—
|
|
|
—
|
|
|
3,524
|
|
Loans*
|
—
|
|
|
—
|
|
|
152
|
|
|
152
|
|
Loans held for sale
|
—
|
|
|
22,636
|
|
|
—
|
|
|
22,636
|
|
|
|
|
|
|
|
|
|
Interest rate locks with customers*
|
—
|
|
|
1,163
|
|
|
—
|
|
|
1,163
|
|
Forward loan sale commitments*
|
—
|
|
|
1,222
|
|
|
—
|
|
|
1,222
|
|
Total assets
|
$
|
3,524
|
|
|
$
|
254,250
|
|
|
$
|
9,752
|
|
|
$
|
267,526
|
|
Liabilities:
|
|
|
|
|
|
|
|
Contingent consideration liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
28
|
|
Interest rate swaps*
|
—
|
|
|
455
|
|
|
—
|
|
|
455
|
|
Credit derivatives*
|
—
|
|
|
—
|
|
|
271
|
|
|
271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
455
|
|
|
$
|
299
|
|
|
$
|
754
|
|
* Such financial instruments are recorded at fair value as further described in Note 11, "Derivative Instruments and Hedging Activities."
The $9.6 million of corporate bonds was comprised of one investment grade bond and the Corporation utilizes a third party to estimate fair value. The value is derived from a discounted cash flow analysis which utilizes a probability of default input. The $271 thousand of credit derivatives liability represents the Credit Valuation Adjustment (CVA), which is obtained from real-time financial market data, of 110 interest rate swaps with a current notional amount of $707.3 million. The March 31, 2021 CVA assumes a zero-deal recovery percentage based on the most recent index credit curve.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020
|
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets/
Liabilities at
Fair Value
|
Assets:
|
|
|
|
|
|
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and political subdivisions
|
$
|
—
|
|
|
$
|
13,537
|
|
|
$
|
—
|
|
|
$
|
13,537
|
|
Residential mortgage-backed securities
|
—
|
|
|
114,163
|
|
|
—
|
|
|
114,163
|
|
Collateralized mortgage obligations
|
—
|
|
|
5,321
|
|
|
—
|
|
|
5,321
|
|
Corporate bonds
|
—
|
|
|
76,019
|
|
|
9,600
|
|
|
85,619
|
|
Total available-for-sale securities
|
—
|
|
|
209,040
|
|
|
9,600
|
|
|
218,640
|
|
Equity securities:
|
|
|
|
|
|
|
|
Equity securities - financial services industry
|
818
|
|
|
—
|
|
|
—
|
|
|
818
|
|
Money market mutual funds
|
2,461
|
|
|
—
|
|
|
—
|
|
|
2,461
|
|
Total equity securities
|
3,279
|
|
|
—
|
|
|
—
|
|
|
3,279
|
|
Loans*
|
—
|
|
|
—
|
|
|
187
|
|
|
187
|
|
Loans held for sale
|
—
|
|
|
37,039
|
|
|
—
|
|
|
37,039
|
|
Interest rate locks with customers*
|
—
|
|
|
2,894
|
|
|
—
|
|
|
2,894
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
3,279
|
|
|
$
|
248,973
|
|
|
$
|
9,787
|
|
|
$
|
262,039
|
|
Liabilities:
|
|
|
|
|
|
|
|
Contingent consideration liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55
|
|
|
$
|
55
|
|
Interest rate swaps*
|
—
|
|
|
541
|
|
|
—
|
|
|
541
|
|
Credit derivatives*
|
—
|
|
|
—
|
|
|
535
|
|
|
535
|
|
Forward loan sale commitments*
|
—
|
|
|
752
|
|
|
—
|
|
|
752
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
1,293
|
|
|
$
|
590
|
|
|
$
|
1,883
|
|
* Such financial instruments are recorded at fair value as further described in Note 11, "Derivative Instruments and Hedging Activities."
The following table includes a rollforward of corporate bonds, loans and credit derivatives for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the three months ended March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021
|
(Dollars in thousands)
|
Balance at
December 31,
2020
|
|
Additions
|
|
|
|
Payments received
|
|
|
|
(Decrease) increase in value
|
|
Balance at March 31, 2021
|
Corporate bonds
|
$
|
9,600
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
9,600
|
|
Loans
|
187
|
|
|
—
|
|
|
|
|
(33)
|
|
|
|
|
(2)
|
|
|
152
|
|
Credit derivatives
|
(535)
|
|
|
(843)
|
|
|
|
|
—
|
|
|
|
|
1,107
|
|
|
(271)
|
|
Net total
|
$
|
9,252
|
|
|
$
|
(843)
|
|
|
|
|
$
|
(33)
|
|
|
|
|
$
|
1,105
|
|
|
$
|
9,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
(Dollars in thousands)
|
Balance at
December 31,
2019
|
|
Additions
|
|
|
|
Payments received
|
|
|
|
Increase in value
|
|
Balance at March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
317
|
|
|
$
|
—
|
|
|
|
|
$
|
(30)
|
|
|
|
|
$
|
1
|
|
|
$
|
288
|
|
Credit derivatives
|
(176)
|
|
|
(1,073)
|
|
|
|
|
—
|
|
|
|
|
140
|
|
|
(1,109)
|
|
Net total
|
$
|
141
|
|
|
$
|
(1,073)
|
|
|
|
|
$
|
(30)
|
|
|
|
|
$
|
141
|
|
|
$
|
(821)
|
|
The following table presents the change in the balance of the contingent consideration liability related to acquisitions for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the three months ended March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021
|
(Dollars in thousands)
|
Balance at
December 31,
2020
|
|
Contingent
Consideration
from New
Acquisition
|
|
Payment of
Contingent
Consideration
|
|
Adjustment
of Contingent
Consideration
|
|
Balance at March 31, 2021
|
Girard Partners
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
28
|
|
Total contingent consideration liability
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
(Dollars in thousands)
|
Balance at
December 31,
2019
|
|
Contingent
Consideration
from New
Acquisition
|
|
Payment of
Contingent
Consideration
|
|
Adjustment
of Contingent
Consideration
|
|
Balance at March 31, 2020
|
Girard Partners
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
6
|
|
|
$
|
135
|
|
Total contingent consideration liability
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
6
|
|
|
$
|
135
|
|
The Corporation may be required to periodically measure certain assets and liabilities at fair value on a non-recurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or market accounting or changes in the value of loans held for investment analyzed on an individual basis. The following table represents assets measured at fair value on a non-recurring basis at March 31, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021
|
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets at
Fair Value
|
Individually analyzed loans held for investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,564
|
|
|
$
|
29,564
|
|
|
|
|
|
|
|
|
|
Other real estate owned
|
—
|
|
|
—
|
|
|
7,481
|
|
|
7,481
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,045
|
|
|
$
|
37,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020
|
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets at
Fair Value
|
Individually analyzed loans held for investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,900
|
|
|
$
|
30,900
|
|
|
|
|
|
|
|
|
|
Other real estate owned
|
—
|
|
|
—
|
|
|
7,355
|
|
|
7,355
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,255
|
|
|
$
|
38,255
|
|
The following table presents assets and liabilities not measured at fair value on a recurring or non-recurring basis in the Corporation’s condensed consolidated balance sheets but for which the fair value is required to be disclosed at March 31, 2021 and December 31, 2020. The disclosed fair values are classified using the fair value hierarchy.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021
|
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair
Value
|
|
Carrying
Amount
|
Assets:
|
|
|
|
|
|
|
|
|
|
Cash and short-term interest-earning assets
|
$
|
187,317
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
187,317
|
|
|
$
|
187,317
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity securities
|
—
|
|
|
139,298
|
|
|
—
|
|
|
139,298
|
|
|
135,153
|
|
Federal Home Loan Bank, Federal Reserve Bank and other stock
|
NA
|
|
NA
|
|
NA
|
|
NA
|
|
25,571
|
|
Net loans and leases held for investment
|
—
|
|
|
—
|
|
|
5,381,681
|
|
|
5,381,681
|
|
|
5,313,793
|
|
Servicing rights
|
—
|
|
|
—
|
|
|
9,655
|
|
|
9,655
|
|
|
7,015
|
|
Total assets
|
$
|
187,317
|
|
|
$
|
139,298
|
|
|
$
|
5,391,336
|
|
|
$
|
5,717,951
|
|
|
$
|
5,668,849
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
Demand and savings deposits, non-maturity
|
$
|
4,837,381
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,837,381
|
|
|
$
|
4,837,381
|
|
Time deposits
|
—
|
|
|
482,098
|
|
|
—
|
|
|
482,098
|
|
|
474,211
|
|
Total deposits
|
4,837,381
|
|
|
482,098
|
|
|
—
|
|
|
5,319,479
|
|
|
5,311,592
|
|
Short-term borrowings
|
—
|
|
|
26,676
|
|
|
—
|
|
|
26,676
|
|
|
26,676
|
|
Long-term debt
|
—
|
|
|
97,193
|
|
|
—
|
|
|
97,193
|
|
|
95,000
|
|
Subordinated notes
|
—
|
|
|
181,000
|
|
|
—
|
|
|
181,000
|
|
|
173,617
|
|
Total liabilities
|
$
|
4,837,381
|
|
|
$
|
786,967
|
|
|
$
|
—
|
|
|
$
|
5,624,348
|
|
|
$
|
5,606,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2020
|
(Dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair
Value
|
|
Carrying
Amount
|
Assets:
|
|
|
|
|
|
|
|
|
|
Cash and short-term interest-earning assets
|
$
|
219,858
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
219,858
|
|
|
$
|
219,858
|
|
Held-to-maturity securities
|
—
|
|
|
156,325
|
|
|
—
|
|
|
156,325
|
|
|
151,257
|
|
Federal Home Loan Bank, Federal Reserve Bank and other stock
|
NA
|
|
NA
|
|
NA
|
|
NA
|
|
28,183
|
|
Net loans and leases held for investment
|
—
|
|
|
—
|
|
|
5,338,782
|
|
|
5,338,782
|
|
|
5,192,710
|
|
Servicing rights
|
—
|
|
|
—
|
|
|
6,783
|
|
|
6,783
|
|
|
6,408
|
|
Total assets
|
$
|
219,858
|
|
|
$
|
156,325
|
|
|
$
|
5,345,565
|
|
|
$
|
5,721,748
|
|
|
$
|
5,598,416
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
Demand and savings deposits, non-maturity
|
$
|
4,678,940
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,678,940
|
|
|
$
|
4,678,940
|
|
Time deposits
|
—
|
|
|
574,018
|
|
|
—
|
|
|
574,018
|
|
|
563,775
|
|
Total deposits
|
4,678,940
|
|
|
574,018
|
|
|
—
|
|
|
5,252,958
|
|
|
5,242,715
|
|
Short-term borrowings
|
—
|
|
|
17,906
|
|
|
—
|
|
|
17,906
|
|
|
17,906
|
|
Long-term debt
|
—
|
|
|
112,968
|
|
|
—
|
|
|
112,968
|
|
|
110,000
|
|
Subordinated notes
|
—
|
|
|
190,045
|
|
|
—
|
|
|
190,045
|
|
|
183,515
|
|
Total liabilities
|
$
|
4,678,940
|
|
|
$
|
894,937
|
|
|
$
|
—
|
|
|
$
|
5,573,877
|
|
|
$
|
5,554,136
|
|
The following valuation methods and assumptions were used by the Corporation in estimating the fair value for financial instruments measured at fair value on a non-recurring basis and financial instruments not measured at fair value on a recurring or non-recurring basis in the Corporation’s condensed consolidated balance sheets but for which the fair value is required to be disclosed:
Cash and short-term interest-earning assets: The carrying amounts reported in the balance sheet for cash and due from banks, interest-earning deposits with other banks and other short-term investments is their stated value. Cash and short-term interest-earning assets are classified within Level 1 in the fair value hierarchy.
Held-to-maturity securities: Fair values for the held-to-maturity investment securities are estimated by using pricing models or quoted prices of securities with similar characteristics and are classified in Level 2 in the fair value hierarchy.
Federal Home Loan Bank, Federal Reserve Bank and other stock: It is not practical to determine the fair values of Federal Home Loan Bank, Federal Reserve Bank and other stock, due to restrictions placed on their transferability.
Loans held for sale: Loans held for sale are carried at the lower of cost or estimated fair value. The fair value of the Corporation’s mortgage loans held for sale are generally determined using a pricing model based on current market information obtained from external sources, including interest rates, bids or indications provided by market participants on specific loans that are actively marketed for sale. These loans are primarily residential mortgage loans and are generally classified in Level 2 due to the observable pricing data.
Loans and leases held for investment: The fair values for loans and leases held for investment are estimated using discounted cash flow analyses, using a discount rate based on current interest rates at which similar loans with similar terms would be made to borrowers, adjusted as appropriate to consider credit, liquidity and marketability factors to arrive at a fair value that represents the Corporation's exit price at which these instruments would be sold or transferred. Loans and leases are classified within Level 3 in the fair value hierarchy since credit risk is not an observable input.
Individually analyzed loans and leases held for investment: For individually analyzed loans and leases, the Corporation uses a variety of techniques to measure fair value, such as using the current appraised value of the collateral, agreements of sale, discounting the contractual cash flows, and analyzing market data that the Corporation may adjust due to specific characteristics of the loan/lease or collateral. At March 31, 2021, individually analyzed loans held for investment had a carrying amount of $29.8 million with a valuation allowance of $281 thousand. At December 31, 2020, individually analyzed loans held for investment had a carrying amount of $31.5 million with a valuation allowance of $585 thousand. The Corporation had no individually analyzed leases at March 31, 2021 or December 31, 2020.
Servicing rights: The Corporation estimates the fair value of servicing rights using discounted cash flow models that calculate the present value of estimated future net servicing income. The model uses readily available prepayment speed assumptions for the interest rates of the portfolios serviced. Servicing rights are classified within Level 3 in the fair value hierarchy based upon management's assessment of the inputs. The Corporation reviews the servicing rights portfolio on a quarterly basis for impairment and the servicing rights are carried at the lower of amortized cost or estimated fair value. At March 31, 2021, servicing rights had a net carrying amount of $7.0 million, which included a valuation allowance of $1 thousand. At December 31, 2020, servicing rights had a net carrying amount of $6.5 million, which included a valuation allowance of $87 thousand.
Goodwill and other identifiable assets: Certain non-financial assets subject to measurement at fair value on a non-recurring basis include goodwill and other identifiable intangible assets. During the three months ended March 31, 2021, there were no required valuation adjustments of goodwill and other identifiable intangible assets.
Other real estate owned: Other real estate owned (OREO) represents properties that the Corporation has acquired through foreclosure by either accepting a deed in lieu of foreclosure, or by taking possession of assets that were used as loan collateral. The Corporation reports OREO at the lower of cost or fair value less cost to sell, adjusted periodically based on a current appraisal or an executed agreement of sale. Capital improvement expenses associated with the construction or repair of the property are capitalized as part of the cost of the OREO asset. Write-downs and any gain or loss upon the sale of OREO is recorded in other noninterest income. OREO is reported in other assets on the condensed consolidated balance sheet. During the three months ended March 31, 2021, three commercial real estate properties were transferred to OREO with a carrying balance of $126 thousand. At March 31, 2021 and December 31, 2020, OREO had a carrying amount of $7.5 million and $7.4 million, respectively. Other real estate owned is classified within Level 3 of the valuation hierarchy due to the unique characteristics of the collateral for each loan.
Deposit liabilities: The fair values for demand and savings accounts, with no stated maturities, is the amount payable on demand at the reporting date (carrying value) and are classified within Level 1 in the fair value hierarchy. The fair values for time deposits with fixed maturities are estimated by discounting the final maturity using interest rates currently offered for deposits with similar remaining maturities. Time deposits are classified within Level 2 in the fair value hierarchy.
Short-term borrowings: The fair value of short-term borrowings are estimated using current market rates for similar borrowings and are classified within Level 2 in the fair value hierarchy.
Long-term debt: The fair value of long-term debt is estimated by using discounted cash flow analysis, based on current market rates for debt with similar terms and remaining maturities. Long-term debt is classified within Level 2 in the fair value hierarchy.
Subordinated notes: The fair value of the subordinated notes are estimated by discounting the principal balance using the treasury yield curve for the term to the call date as the Corporation has the option to call the subordinated notes. The subordinated notes are classified within Level 2 in the fair value hierarchy.
Note 13. Segment Reporting
At March 31, 2021, the Corporation has three reportable business segments: Banking, Wealth Management and Insurance. The Corporation determines the segments based primarily upon product and service offerings, through the types of income generated and the regulatory environment. This is strategically how the Corporation operates and has positioned itself in the marketplace. Accordingly, significant operating decisions are based upon analysis of each of these segments. The parent holding company and intercompany eliminations are included in the "Other" segment.
Each segment generates revenue from a variety of products and services it provides. Examples of products and services provided for each reportable segment are indicated as follows:
|
|
|
|
|
|
●
|
The Banking segment provides financial services to individuals, businesses, municipalities and nonprofit organizations. These services include a full range of banking services such as deposit taking, loan origination and servicing, mortgage banking, other general banking services and equipment lease financing.
|
●
|
The Wealth Management segment offers investment advisory, financial planning, trust and brokerage services. The Wealth Management segment serves a diverse client base of private families and individuals, municipal pension plans, retirement plans, trusts and guardianships.
|
●
|
The Insurance segment includes a full-service insurance brokerage agency offering commercial property and casualty insurance, employee benefit solutions, personal insurance lines and human resources consulting.
|
The following table provides total assets by reportable business segment as of the dates indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
At March 31, 2021
|
|
At December 31, 2020
|
|
At March 31, 2020
|
Banking
|
$
|
6,313,000
|
|
|
$
|
6,234,336
|
|
|
$
|
5,362,279
|
|
Wealth Management
|
48,124
|
|
|
48,646
|
|
|
45,786
|
|
Insurance
|
37,075
|
|
|
35,906
|
|
|
35,935
|
|
Other
|
18,466
|
|
|
17,608
|
|
|
20,768
|
|
Consolidated assets
|
$
|
6,416,665
|
|
|
$
|
6,336,496
|
|
|
$
|
5,464,768
|
|
The following tables provide reportable segment-specific information and reconciliations to consolidated financial information for the three months ended March 31, 2021 and 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
March 31, 2021
|
(Dollars in thousands)
|
Banking
|
|
Wealth Management
|
|
Insurance
|
|
Other
|
|
Consolidated
|
Interest income
|
$
|
51,449
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
51,457
|
|
Interest expense
|
3,750
|
|
|
—
|
|
|
—
|
|
|
2,293
|
|
|
6,043
|
|
Net interest income (expense)
|
47,699
|
|
|
—
|
|
|
—
|
|
|
(2,285)
|
|
|
45,414
|
|
Reversal of provision for credit losses
|
(11,283)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,283)
|
|
Noninterest income
|
11,230
|
|
|
6,773
|
|
|
5,105
|
|
|
142
|
|
|
23,250
|
|
Noninterest expense
|
30,496
|
|
|
4,191
|
|
|
3,304
|
|
|
1,549
|
|
|
39,540
|
|
Intersegment (revenue) expense*
|
(323)
|
|
|
164
|
|
|
159
|
|
|
—
|
|
|
—
|
|
Income (expense) before income taxes
|
40,039
|
|
|
2,418
|
|
|
1,641
|
|
|
(3,692)
|
|
|
40,407
|
|
Income tax expense (benefit)
|
8,271
|
|
|
498
|
|
|
351
|
|
|
(1,316)
|
|
|
7,804
|
|
Net income (loss)
|
$
|
31,768
|
|
|
$
|
1,920
|
|
|
$
|
1,290
|
|
|
$
|
(2,376)
|
|
|
$
|
32,603
|
|
|
|
|
|
|
|
|
|
|
|
Net capital expenditures
|
$
|
1,111
|
|
|
$
|
5
|
|
|
$
|
9
|
|
|
$
|
62
|
|
|
$
|
1,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
March 31, 2020
|
(Dollars in thousands)
|
Banking
|
|
Wealth Management
|
|
Insurance
|
|
Other
|
|
Consolidated
|
Interest income
|
$
|
52,004
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
52,019
|
|
Interest expense
|
8,276
|
|
|
—
|
|
|
—
|
|
|
1,275
|
|
|
9,551
|
|
Net interest income (expense)
|
43,728
|
|
|
7
|
|
|
—
|
|
|
(1,267)
|
|
|
42,468
|
|
Provision for credit losses
|
21,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,843
|
|
Noninterest income
|
7,552
|
|
|
6,187
|
|
|
4,887
|
|
|
(242)
|
|
|
18,384
|
|
|
|
|
|
|
|
|
|
|
|
Other noninterest expense
|
31,247
|
|
|
4,178
|
|
|
3,196
|
|
|
156
|
|
|
38,777
|
|
Intersegment (revenue) expense*
|
(282)
|
|
|
152
|
|
|
130
|
|
|
—
|
|
|
—
|
|
(Loss) income before income taxes
|
(1,528)
|
|
|
1,864
|
|
|
1,561
|
|
|
(1,665)
|
|
|
232
|
|
Income tax (benefit) expense
|
(844)
|
|
|
382
|
|
|
336
|
|
|
(480)
|
|
|
(606)
|
|
Net (loss) income
|
$
|
(684)
|
|
|
$
|
1,482
|
|
|
$
|
1,225
|
|
|
$
|
(1,185)
|
|
|
$
|
838
|
|
|
|
|
|
|
|
|
|
|
|
Net capital expenditures
|
$
|
371
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
379
|
|
*Includes an allocation of general and administrative expenses from both the parent holding company and the Bank. These expenses are generally allocated based upon number of employees and square footage utilized.
Note 14. Contingencies
The Corporation is periodically subject to various pending and threatened legal actions, which involve claims for monetary relief. Based upon information presently available to the Corporation, it is the Corporation's opinion that any legal and financial responsibility arising from such claims will not have a material adverse effect on the Corporation's results of operations, financial position or cash flows.