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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number:
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1-9047
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MA
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04-2870273
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Office Address:
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2036 Washington Street,
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Hanover,
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MA
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02339
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Mailing Address:
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288 Union Street,
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Rockland,
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MA
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02370
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(Address of principal executive offices, including zip code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each Class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $0.01 par value per share
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INDB
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NASDAQ
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Global Select Market
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Large Accelerated Filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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INDEPENDENT BANK CORP.
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2019 ANNUAL REPORT ON FORM 10-K
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TABLE OF CONTENTS
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Page #
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Part I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
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INDEPENDENT BANK CORP.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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•
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a weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area;
|
•
|
changes in market interest rates for interest earning assets and/or interest bearing liabilities;
|
•
|
adverse changes or volatility in the local real estate market;
|
•
|
adverse changes in asset quality including an unanticipated credit deterioration in our loan portfolio including those related to one or more large commercial relationships;
|
•
|
the effect of laws and regulations regarding the financial services industry;
|
•
|
changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;
|
•
|
risks related to the discontinuation of LIBOR and alternative reference rates;
|
•
|
increased competition in the Company’s market area;
|
•
|
inability to retain customers and employees, including those acquired in recent acquisitions;
|
•
|
acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
|
•
|
the inability to realize expected synergies from merger transactions in the amounts or in the time frames anticipated;
|
•
|
a deterioration in the conditions of the securities markets;
|
•
|
a deterioration of the credit rating for U.S. long-term sovereign debt;
|
•
|
changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
|
•
|
higher than expected tax expense, resulting from failure to comply with general tax laws or changes in tax laws;
|
•
|
inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery;
|
•
|
electronic fraudulent activity within the financial services industry, especially in the commercial banking sector;
|
•
|
cyber security attacks or intrusions that could adversely impact our businesses; and
|
•
|
adverse changes in consumer spending and savings habits;
|
•
|
additional regulatory oversight and additional costs associated with the Company's increase in assets to over $10 billion;
|
•
|
changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters including, but not limited to, changes to how the Company accounts for credit losses;
|
•
|
unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;
|
•
|
other unexpected material adverse changes in our operations or earnings.
|
•
|
Six Massachusetts security corporations, namely Rockland Borrowing Collateral Securities Corp., Rockland Deposit Collateral Securities Corp., Taunton Avenue Securities Corp., Goddard Ave Securities Corp., MFLR Securities Corporation, and BH Security Corporation;
|
•
|
Rockland Trust Community Development Corporation, which has two wholly-owned subsidiaries, Rockland Trust Community Development LLC and Rockland Trust Community Development Corporation II, and which also serves as the manager of three Limited Liability Company subsidiaries wholly-owned by the Bank, Rockland Trust Community Development III LLC, Rockland Trust Community Development IV LLC, and Rockland Trust Community Development V LLC, which are all qualified as community development entities under federal New Markets Tax Credit Program criteria;
|
•
|
Rockland MHEF Fund LLC, established as a wholly-owned subsidiary of Rockland Trust, created with Massachusetts Housing Equity Fund, Inc. as the third party nonmember manager and established to invest in certain low-income housing tax credit projects;
|
•
|
RTC LIHTC Investments LLC, established to invest primarily in Massachusetts-based low-income housing tax credit projects;
|
•
|
Rockland Trust Phoenix LLC, formed for the purpose of holding, maintaining, and disposing of certain foreclosed properties;
|
•
|
Bright Rock Capital Management LLC, which was established to act as a registered investment advisor under the Investment Advisors Act of 1940; and
|
•
|
Compass Exchange Advisors LLC, which provides like-kind exchange services pursuant to section 1031 of the Internal Revenue Code.
|
|
As of
|
|
% of Total
Loans
|
|
% of Total Interest Income
Generated For the Years Ended
December 31,
|
||||||||||
|
December 31, 2019
|
2019
|
|
2018
|
|
2017
|
|||||||||
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
6,119,185
|
|
|
69.0
|
%
|
|
66.8
|
%
|
|
67.1
|
%
|
|
67.0
|
%
|
Consumer real estate
|
2,724,367
|
|
|
30.7
|
%
|
|
24.7
|
%
|
|
23.6
|
%
|
|
24.0
|
%
|
|
Other consumer
|
30,087
|
|
|
0.3
|
%
|
|
0.5
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
Total
|
$
|
8,873,639
|
|
|
100.0
|
%
|
|
92.0
|
%
|
|
91.0
|
%
|
|
91.3
|
%
|
|
Bank
|
|
Holding Company
|
||||||||||
|
Total Risk-Based Ratio
|
|
Tier 1 Risk-Based Ratio
|
|
Common Equity Tier 1 Capital
|
Tier 1 Leverage Capital Ratio
|
|
Total Risk-Based Ratio
|
|
Tier 1 Risk-Based Ratio
|
|
Common Equity Tier 1 Capital
|
Tier 1 Leverage Capital Ratio
|
Category
|
|
|
|
|
|
|
|
|
|
|
|
|
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Well capitalized
|
> 10%
|
and
|
> 8%
|
and
|
> 6.5%
|
> 5%
|
|
n/a
|
|
n/a
|
|
> 6.5%
|
n/a
|
Adequately capitalized
|
> 8%
|
and
|
> 6%
|
and
|
> 4.5%
|
> 4%
|
|
> 8%
|
and
|
> 6%
|
and
|
> 4.5%
|
> 4%
|
Undercapitalized
|
< 8%
|
or
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< 6%
|
or
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< 4.5%
|
< 4%
|
|
< 8%
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or
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< 6%
|
or
|
n/a
|
< 4%
|
Significantly undercapitalized
|
< 6%
|
or
|
< 4%
|
or
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< 3%
|
< 3%
|
|
n/a
|
|
n/a
|
|
n/a
|
n/a
|
•
|
to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and
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•
|
to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates.
|
•
|
a loan or extension of credit to an affiliate;
|
•
|
a purchase of, or an investment in, securities issued by an affiliate;
|
•
|
a purchase of assets from an affiliate, with some exceptions;
|
•
|
the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any party; and
|
•
|
the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.
|
•
|
a bank and its subsidiaries may not purchase a low-quality asset from an affiliate;
|
•
|
covered transactions and other specified transactions between a bank or its subsidiaries and an affiliate must be on terms and conditions that are consistent with safe and sound banking practices; and
|
•
|
with some exceptions, each loan or extension of credit by a bank to an affiliate must be secured by collateral with a market value ranging from 100% to 130%, depending on the type of collateral, of the amount of the loan or extension of credit.
|
•
|
eliminated the federal prohibitions on paying interest on demand deposits, thus allowing businesses to have interest-bearing checking accounts.
|
•
|
broadened the base for Federal Deposit Insurance Corporation insurance assessments. The Dodd-Frank Act also permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor.
|
•
|
requires publicly traded companies to give stockholders a nonbinding vote on executive compensation and so-called "golden parachute" payments. The Company provides its shareholders with the opportunity to vote on executive compensation every year.
|
•
|
broadened the scope of derivative instruments, and the Company is subject to increased regulation of its derivative business, including record-keeping, reporting requirements, and heightened supervision.
|
•
|
created a new Consumer Financial Protection Bureau ("CFPB") with broad powers to supervise and enforce consumer protection laws. As the Bank has now surpassed the $10 billion in assets threshold, it now is also subject to CFPB regulatory supervision and enforcement. While it will continue to be examined for compliance with consumer protection regulations by both the FDIC and the Massachusetts Division of Banks ("DOB"), it will now also be similarly monitored and assessed by the CFPB.
|
•
|
debit card and interchange fees must be reasonable and proportional to the issuer’s cost for processing the transaction.
|
•
|
Truth-In-Lending Act and Regulation Z, governing disclosures of credit terms to consumer borrowers;
|
•
|
Home Mortgage Disclosure Act and Regulation C, requiring financial institutions to provide certain information about home mortgage and refinanced loans;
|
•
|
Equal Credit Opportunity Act and Regulation B, prohibiting discrimination on the basis of race, sex, or other prohibited factors in extending credit;
|
•
|
Fair Credit Reporting Act and Regulation V, governing the provision of consumer information to credit reporting agencies and the use of consumer information; and
|
•
|
Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected by collection agencies.
|
•
|
The Truth in Savings Act and Regulation DD, which requires disclosure of deposit terms to consumers;
|
•
|
Regulation CC, which relates to the availability of deposit funds to consumers;
|
•
|
The Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and
|
•
|
Electronic Funds Transfer Act and Regulation E, governing electronic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.
|
|
2019
|
||||||||||
|
High
|
|
Low
|
|
Dividend
|
||||||
4th Quarter
|
$
|
86.35
|
|
|
$
|
70.39
|
|
|
$
|
0.44
|
|
3rd Quarter
|
78.08
|
|
|
65.08
|
|
|
0.44
|
|
|||
2nd Quarter
|
87.35
|
|
|
69.35
|
|
|
0.44
|
|
|||
1st Quarter
|
85.51
|
|
|
71.50
|
|
|
0.44
|
|
|||
|
|
|
|
|
|
||||||
|
2018
|
||||||||||
|
High
|
|
Low
|
|
Dividend
|
||||||
4th Quarter
|
$
|
84.39
|
|
|
$
|
67.22
|
|
|
$
|
0.38
|
|
3rd Quarter
|
92.40
|
|
|
78.50
|
|
|
0.38
|
|
|||
2nd Quarter
|
82.90
|
|
|
70.10
|
|
|
0.38
|
|
|||
1st Quarter
|
75.55
|
|
|
68.60
|
|
|
0.38
|
|
|
Issuer Purchases of Equity Securities
|
|||||||||||
Period
|
Total Number of
Shares
Purchased(1)
|
|
Average Price
Paid Per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plan or
Program
|
|
Maximum Number of Shares
That May Yet Be Purchased
Under the Plan or Program(2)
|
|||||
October 1 to October 31, 2019
|
108
|
|
|
$
|
71.35
|
|
|
—
|
|
|
1,500,000
|
|
November 1 to November 30, 2019
|
1,489
|
|
|
83.53
|
|
|
—
|
|
|
1,500,000
|
|
|
December 1 to December 31, 2019
|
108
|
|
|
83.58
|
|
|
—
|
|
|
1,500,000
|
|
|
Total
|
1,705
|
|
|
|
|
—
|
|
|
|
|
(1)
|
Shares purchased relate to the surrendering of mature shares for the exercise and/or vesting of stock compensation grants and related tax withholding.
|
(2)
|
On October 17, 2019 the Company announced that its Board of Directors authorized a share repurchase program up to 1.5 million shares of the Company's common stock. The program expires on October 31, 2020 and may be modified, suspended or discontinued at any time. As of December 31, 2019, no shares had been repurchased under the program.
|
|
As of or for the Years Ended December 31
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(Dollars in thousands, except per share data)
|
||||||||||||||||||
Financial condition data
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities
|
$
|
1,190,670
|
|
|
$
|
1,075,223
|
|
|
$
|
946,510
|
|
|
$
|
851,524
|
|
|
$
|
845,112
|
|
Loans
|
8,873,639
|
|
|
6,906,194
|
|
|
6,355,553
|
|
|
5,999,605
|
|
|
5,547,721
|
|
|||||
Allowance for loan losses
|
(67,740
|
)
|
|
(64,293
|
)
|
|
(60,643
|
)
|
|
(61,566
|
)
|
|
(55,825
|
)
|
|||||
Goodwill and other intangibles
|
535,492
|
|
|
271,355
|
|
|
241,147
|
|
|
231,374
|
|
|
212,909
|
|
|||||
Total assets
|
11,395,165
|
|
|
8,851,592
|
|
|
8,082,029
|
|
|
7,709,375
|
|
|
7,209,469
|
|
|||||
Deposits
|
9,147,367
|
|
|
7,427,120
|
|
|
6,729,253
|
|
|
6,412,253
|
|
|
5,990,703
|
|
|||||
Borrowings
|
303,103
|
|
|
258,707
|
|
|
323,698
|
|
|
335,474
|
|
|
343,933
|
|
|||||
Stockholders’ equity
|
1,708,143
|
|
|
1,073,490
|
|
|
943,809
|
|
|
864,690
|
|
|
771,463
|
|
|||||
Nonperforming loans
|
48,049
|
|
|
45,418
|
|
|
49,638
|
|
|
57,407
|
|
|
27,690
|
|
|||||
Nonperforming assets
|
48,049
|
|
|
45,418
|
|
|
50,250
|
|
|
61,580
|
|
|
29,849
|
|
|||||
Operating data
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
447,014
|
|
|
$
|
323,701
|
|
|
$
|
277,194
|
|
|
$
|
246,637
|
|
|
$
|
235,545
|
|
Interest expense
|
53,879
|
|
|
25,536
|
|
|
18,334
|
|
|
18,793
|
|
|
20,617
|
|
|||||
Net interest income
|
393,135
|
|
|
298,165
|
|
|
258,860
|
|
|
227,844
|
|
|
214,928
|
|
|||||
Provision for loan losses
|
6,000
|
|
|
4,775
|
|
|
2,950
|
|
|
6,075
|
|
|
1,500
|
|
|||||
Noninterest income
|
115,294
|
|
|
88,505
|
|
|
82,994
|
|
|
82,428
|
|
|
75,888
|
|
|||||
Noninterest expenses
|
284,321
|
|
|
225,969
|
|
|
204,359
|
|
|
192,122
|
|
|
197,138
|
|
|||||
Net income
|
165,175
|
|
|
121,622
|
|
|
87,204
|
|
|
76,648
|
|
|
64,960
|
|
|||||
Per share data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income — basic
|
$
|
5.03
|
|
|
$
|
4.41
|
|
|
$
|
3.19
|
|
|
$
|
2.90
|
|
|
$
|
2.51
|
|
Net income — diluted
|
5.03
|
|
|
4.40
|
|
|
3.19
|
|
|
2.90
|
|
|
2.50
|
|
|||||
Cash dividends declared
|
1.76
|
|
|
1.52
|
|
|
1.28
|
|
|
1.16
|
|
|
1.04
|
|
|||||
Book value
|
49.69
|
|
|
38.23
|
|
|
34.38
|
|
|
32.02
|
|
|
29.40
|
|
|||||
Tangible book value (1)
|
34.11
|
|
|
28.57
|
|
|
25.60
|
|
|
23.45
|
|
|
21.29
|
|
|||||
Performance ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets
|
1.52
|
%
|
|
1.46
|
%
|
|
1.11
|
%
|
|
1.04
|
%
|
|
0.93
|
%
|
|||||
Return on average common equity
|
10.85
|
%
|
|
12.31
|
%
|
|
9.55
|
%
|
|
9.43
|
%
|
|
8.79
|
%
|
|||||
Net interest margin (on a fully tax equivalent basis)
|
4.04
|
%
|
|
3.91
|
%
|
|
3.60
|
%
|
|
3.40
|
%
|
|
3.42
|
%
|
|||||
Dividend payout ratio
|
32.25
|
%
|
|
33.03
|
%
|
|
39.04
|
%
|
|
38.76
|
%
|
|
40.29
|
%
|
|||||
Asset quality ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonperforming loans as a percent of gross loans
|
0.54
|
%
|
|
0.66
|
%
|
|
0.78
|
%
|
|
0.96
|
%
|
|
0.50
|
%
|
|||||
Nonperforming assets as a percent of total assets
|
0.42
|
%
|
|
0.51
|
%
|
|
0.62
|
%
|
|
0.80
|
%
|
|
0.41
|
%
|
|||||
Allowance for loan losses as a percent of total loans
|
0.76
|
%
|
|
0.93
|
%
|
|
0.95
|
%
|
|
1.03
|
%
|
|
1.01
|
%
|
|||||
Allowance for loan losses as a percent of nonperforming loans
|
140.98
|
%
|
|
141.56
|
%
|
|
122.17
|
%
|
|
107.24
|
%
|
|
201.61
|
%
|
|||||
Capital ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity to assets
|
14.99
|
%
|
|
12.13
|
%
|
|
11.68
|
%
|
|
11.22
|
%
|
|
10.70
|
%
|
|||||
Tangible equity to tangible assets (1)
|
10.80
|
%
|
|
9.35
|
%
|
|
8.96
|
%
|
|
8.47
|
%
|
|
7.98
|
%
|
|||||
Tier 1 leverage capital ratio
|
11.28
|
%
|
|
10.69
|
%
|
|
10.04
|
%
|
|
9.77
|
%
|
|
9.33
|
%
|
|||||
Common equity tier 1 capital ratio
|
12.86
|
%
|
|
11.92
|
%
|
|
11.20
|
%
|
|
10.82
|
%
|
|
10.44
|
%
|
|||||
Tier 1 risk-based capital ratio
|
13.53
|
%
|
|
12.99
|
%
|
|
12.31
|
%
|
|
11.99
|
%
|
|
11.71
|
%
|
|||||
Total risk-based capital ratio
|
14.83
|
%
|
|
14.45
|
%
|
|
13.82
|
%
|
|
13.60
|
%
|
|
13.36
|
%
|
•
|
Assuming no significant changes to the current competitive and economic landscape, net loan growth is expected to be in the low-single digit range. New loan closing commitments are expected to remain strong into 2020, while the challenge for net growth will likely continue to be impacted by the recent increase in payoff activity from both the acquired BHB portfolio as well as the current rate environment. Changes in either assumption could result in loan growth volatility or results outside of this range;
|
•
|
Net deposit growth is also expected to be in the low-single digit range. Assuming a static rate environment and with an expectation of continuing to shift balances from maturing time deposits to core deposits, the overall cost of deposits is expected to improve slightly over the course of the upcoming year;
|
•
|
Assuming no interest rate changes, stabilizing loan yields (with nominal level of compression), a normalized level of loan accretion income of $2.0-$2.5 million per quarter, and slight improvements to overall funding costs, full year net interest margin is expected to be in the mid to high 3.80%'s range, which represents a decline from 2019 levels of approximately 15-20 basis points;
|
•
|
Operating fee income should remain essentially flat (excluding certain 2019 items and assuming reduction in interchange income);
|
•
|
Operating expenses, excluding merger related and other noncore expenses incurred in 2019, are anticipated to be well contained with a year over year increase in the low to mid-single digit range, despite continued investment in digital capabilities, internal infrastructure, and new market expansion;
|
•
|
Similar to the impact on the reserve, provisioning for bad debt under the CECL model should not materially change from previous levels and will be driven primarily by net charge-off experience and general economic and credit conditions, both of which do not pose any known, significant concern over the near-term horizon; and
|
•
|
With the final new markets tax credit expiration in 2019, the effective tax rate is expected to increase to approximately 26% in 2020, with some level of discrete benefit in the first quarter due to vesting of equity compensation awards.
|
|
|
||||||||||||||
|
Net Income
|
|
Diluted Earnings Per Share
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Dollars in thousands, except per share data)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net income available to common shareholders (GAAP)
|
$
|
165,175
|
|
|
$
|
121,622
|
|
|
$
|
5.03
|
|
|
$
|
4.40
|
|
Non-GAAP adjustments
|
|
|
|
|
|
|
|
||||||||
Noninterest income components
|
|
|
|
|
|
|
|
||||||||
Less - gain on sale of loans
|
951
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
||||
Noninterest expense components
|
|
|
|
|
|
|
|
||||||||
Add - merger and acquisition expenses
|
26,433
|
|
|
11,168
|
|
|
0.80
|
|
|
0.40
|
|
||||
Total impact of noncore items
|
25,482
|
|
|
11,168
|
|
|
0.77
|
|
|
0.40
|
|
||||
Less - net tax benefit associated with noncore items (1)
|
(6,686
|
)
|
|
(2,967
|
)
|
|
(0.20
|
)
|
|
(0.11
|
)
|
||||
Add - adjustments for tax effect of previously incurred merger and acquisition expenses
|
650
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
Total tax impact
|
(6,036
|
)
|
|
(2,967
|
)
|
|
(0.18
|
)
|
|
(0.11
|
)
|
||||
Noncore items, net of tax
|
$
|
19,446
|
|
|
$
|
8,201
|
|
|
$
|
0.59
|
|
|
$
|
0.29
|
|
Net operating earnings (Non-GAAP)
|
$
|
184,621
|
|
|
$
|
129,823
|
|
|
$
|
5.62
|
|
|
$
|
4.69
|
|
(1)
|
The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate only to those items included in net taxable income.
|
|
Years Ended December 31
|
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in thousands)
|
|
||||||||||||||||||
Net interest income
|
$
|
393,135
|
|
|
$
|
298,165
|
|
|
$
|
258,860
|
|
|
$
|
227,844
|
|
|
$
|
214,928
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest income (GAAP)
|
$
|
115,294
|
|
|
$
|
88,505
|
|
|
$
|
82,994
|
|
|
$
|
82,428
|
|
|
$
|
75,888
|
|
(b)
|
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on sale of loans
|
951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Gain on sale of fixed income securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
798
|
|
|
|||||
Noninterest income on an operating basis (non-GAAP)
|
$
|
114,343
|
|
|
$
|
88,505
|
|
|
$
|
82,994
|
|
|
$
|
82,428
|
|
|
$
|
75,090
|
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest expense (GAAP)
|
$
|
284,321
|
|
|
$
|
225,969
|
|
|
$
|
204,359
|
|
|
$
|
192,122
|
|
|
$
|
197,138
|
|
(d)
|
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment on acquired facilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
437
|
|
|
122
|
|
|
|||||
Loss on sale of fixed income securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,124
|
|
|
|||||
Merger & acquisition expenses
|
26,433
|
|
|
11,168
|
|
|
3,393
|
|
|
5,455
|
|
|
10,501
|
|
|
|||||
Noninterest expense on an operating basis (non-GAAP)
|
$
|
257,888
|
|
|
$
|
214,801
|
|
|
$
|
200,966
|
|
|
$
|
186,230
|
|
|
$
|
185,282
|
|
(e)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue (GAAP)
|
$
|
508,429
|
|
|
$
|
386,670
|
|
|
$
|
341,854
|
|
|
$
|
310,272
|
|
|
$
|
290,816
|
|
(a+b)
|
Total operating revenue (non-GAAP)
|
$
|
507,478
|
|
|
$
|
386,670
|
|
|
$
|
341,854
|
|
|
$
|
310,272
|
|
|
$
|
290,018
|
|
(a+c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratios
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Efficiency ratio (GAAP)
|
55.92
|
%
|
|
58.44
|
%
|
|
59.78
|
%
|
|
61.92
|
%
|
|
67.79
|
%
|
(d/(a+b))
|
|||||
Efficiency ratio on an operating basis (non-GAAP)
|
50.82
|
%
|
|
55.55
|
%
|
|
58.79
|
%
|
|
60.02
|
%
|
|
63.89
|
%
|
(e/(a+c))
|
|
December 31
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Fair value of securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government agency securities
|
$
|
33,115
|
|
|
7.8
|
%
|
|
$
|
32,038
|
|
|
7.2
|
%
|
|
$
|
35,430
|
|
|
7.9
|
%
|
Agency mortgage-backed securities
|
247,000
|
|
|
57.9
|
%
|
|
220,105
|
|
|
49.7
|
%
|
|
215,764
|
|
|
48.2
|
%
|
|||
Agency collateralized mortgage obligations
|
88,511
|
|
|
20.8
|
%
|
|
134,911
|
|
|
30.5
|
%
|
|
122,012
|
|
|
27.3
|
%
|
|||
State, county and municipal securities
|
1,396
|
|
|
0.3
|
%
|
|
1,735
|
|
|
0.4
|
%
|
|
2,274
|
|
|
0.5
|
%
|
|||
Single issuer trust preferred securities issued by banks
|
493
|
|
|
0.1
|
%
|
|
707
|
|
|
0.2
|
%
|
|
2,016
|
|
|
0.4
|
%
|
|||
Pooled trust preferred securities issued by banks and insurers
|
1,114
|
|
|
0.3
|
%
|
|
1,329
|
|
|
0.3
|
%
|
|
1,640
|
|
|
0.4
|
%
|
|||
Small business administration pooled securities
|
54,795
|
|
|
12.8
|
%
|
|
51,927
|
|
|
11.7
|
%
|
|
47,778
|
|
|
10.7
|
%
|
|||
Equity securities (1)
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
20,584
|
|
|
4.6
|
%
|
|||
Total fair value of securities available for sale
|
426,424
|
|
|
100.0
|
%
|
|
442,752
|
|
|
100.0
|
%
|
|
447,498
|
|
|
100.0
|
%
|
|||
Amortized Cost of Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government agency securities
|
12,874
|
|
|
1.7
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
U.S. treasury securities
|
4,032
|
|
|
0.6
|
%
|
|
1,004
|
|
|
0.2
|
%
|
|
1,006
|
|
|
0.2
|
%
|
|||
Agency mortgage-backed securities
|
397,414
|
|
|
53.7
|
%
|
|
252,484
|
|
|
41.3
|
%
|
|
204,768
|
|
|
41.1
|
%
|
|||
Agency collateralized mortgage obligations
|
293,662
|
|
|
39.6
|
%
|
|
332,775
|
|
|
54.4
|
%
|
|
262,998
|
|
|
52.9
|
%
|
|||
Single issuer trust preferred securities issued by banks
|
1,500
|
|
|
0.2
|
%
|
|
1,500
|
|
|
0.2
|
%
|
|
1,500
|
|
|
0.3
|
%
|
|||
Small business administration pooled securities
|
31,324
|
|
|
4.2
|
%
|
|
23,727
|
|
|
3.9
|
%
|
|
27,416
|
|
|
5.5
|
%
|
|||
Total amortized cost of securities held to maturity
|
740,806
|
|
|
100.0
|
%
|
|
611,490
|
|
|
100.0
|
%
|
|
497,688
|
|
|
100.0
|
%
|
|||
Total
|
$
|
1,167,230
|
|
|
|
|
$
|
1,054,242
|
|
|
|
|
$
|
945,186
|
|
|
|
(1)
|
These securities are no longer classified as available for sale due to a change in accounting guidance effective January 1, 2018.
|
|
Within One Year
|
|
One Year to Five Years
|
|
Five Years to Ten Years
|
|
Over Ten Years
|
|
Total
|
|||||||||||||||||||||||||
|
Amount
|
|
Weighted
Average
Yield
|
|
Amount
|
|
Weighted
Average
Yield
|
|
Amount
|
|
Weighted
Average
Yield
|
|
Amount
|
|
Weighted
Average
Yield
|
|
Amount
|
|
Weighted
Average
Yield
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Fair value of securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government agency securities
|
$
|
10,003
|
|
|
1.9
|
%
|
|
$
|
10,154
|
|
|
2.4
|
%
|
|
$
|
12,958
|
|
|
2.6
|
%
|
|
$
|
—
|
|
|
—
|
|
|
$
|
33,115
|
|
|
2.3
|
%
|
Agency mortgage-backed securities
|
—
|
|
|
—
|
|
|
71,305
|
|
|
2.5
|
%
|
|
56,181
|
|
|
3.0
|
%
|
|
119,514
|
|
|
2.7
|
%
|
|
247,000
|
|
|
2.7
|
%
|
|||||
Agency collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,511
|
|
|
2.7
|
%
|
|
88,511
|
|
|
2.7
|
%
|
|||||
State, county and municipal securities
|
—
|
|
|
—
|
|
|
1,193
|
|
|
3.0
|
%
|
|
203
|
|
|
3.0
|
%
|
|
—
|
|
|
—
|
|
|
1,396
|
|
|
3.0
|
%
|
|||||
Single issuer trust preferred securities issued by banks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
493
|
|
|
5.4
|
%
|
|
493
|
|
|
5.4
|
%
|
|||||
Pooled trust preferred securities issued by banks and insurers
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,114
|
|
|
2.4
|
%
|
|
1,114
|
|
|
2.4
|
%
|
|||||
Small business administration pooled securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,795
|
|
|
2.7
|
%
|
|
54,795
|
|
|
2.7
|
%
|
|||||
Total fair value of securities available for sale
|
10,003
|
|
|
1.9
|
%
|
|
82,652
|
|
|
2.5
|
%
|
|
69,342
|
|
|
2.9
|
%
|
|
264,427
|
|
|
2.7
|
%
|
|
426,424
|
|
|
2.7
|
%
|
|||||
Amortized cost of securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government agency securities
|
4,962
|
|
|
2.3
|
%
|
|
7,912
|
|
|
2.3
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,874
|
|
|
2.3
|
%
|
|||||
U.S. Treasury securities
|
—
|
|
|
—
|
|
|
4,032
|
|
|
2.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,032
|
|
|
2.0
|
%
|
|||||
Agency mortgage-backed securities
|
—
|
|
|
—
|
|
|
10,812
|
|
|
2.4
|
%
|
|
35,656
|
|
|
2.6
|
%
|
|
350,946
|
|
|
2.9
|
%
|
|
397,414
|
|
|
2.9
|
%
|
|||||
Agency collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293,662
|
|
|
2.7
|
%
|
|
293,662
|
|
|
2.7
|
%
|
|||||
Single issuer trust preferred securities issued by banks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
8.3
|
%
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
8.3
|
%
|
|||||
Small business administration pooled securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,324
|
|
|
2.6
|
%
|
|
31,324
|
|
|
2.6
|
%
|
|||||
Total amortized cost of securities held to maturity
|
4,962
|
|
|
2.3
|
%
|
|
22,756
|
|
|
2.3
|
%
|
|
37,156
|
|
|
2.8
|
%
|
|
675,932
|
|
|
2.8
|
%
|
|
740,806
|
|
|
2.8
|
%
|
|||||
Total
|
$
|
14,965
|
|
|
2.0
|
%
|
|
$
|
105,408
|
|
|
2.4
|
%
|
|
$
|
106,498
|
|
|
2.9
|
%
|
|
$
|
940,359
|
|
|
2.7
|
%
|
|
$
|
1,167,230
|
|
|
2.7
|
%
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Held in portfolio
|
$
|
193,884
|
|
|
$
|
182,401
|
|
|
$
|
144,482
|
|
Sold or held for sale in the secondary market
|
632,627
|
|
|
190,192
|
|
|
231,437
|
|
|||
Total closed loans
|
$
|
826,511
|
|
|
$
|
372,593
|
|
|
$
|
375,919
|
|
|
|
Years Ended December 31
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in thousands)
|
||||||
Sold with servicing rights released
|
|
$
|
474,571
|
|
|
$
|
192,779
|
|
Sold with servicing rights retained
|
|
127,713
|
|
|
—
|
|
||
Total loans sold
|
|
$
|
602,284
|
|
|
$
|
192,779
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Beginning balance
|
$
|
1,445
|
|
|
$
|
1,697
|
|
Additions
|
1,247
|
|
|
—
|
|
||
Acquired portfolio
|
3,198
|
|
|
37
|
|
||
Amortization
|
(715
|
)
|
|
(301
|
)
|
||
Change in valuation allowance
|
(59
|
)
|
|
12
|
|
||
Ending balance
|
$
|
5,116
|
|
|
$
|
1,445
|
|
|
December 31
|
|
December 31
|
|
Blue Hills
|
|
|
|
Organic Growth/
|
|
Organic Growth/
|
|||||||||||
|
2019
|
|
2018
|
|
Acquisition
|
|
Loans Sold (1)
|
|
(Decline) $
|
|
(Decline) %
|
|||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||
Commercial and industrial
|
$
|
1,395,036
|
|
|
$
|
1,093,629
|
|
|
$
|
259,592
|
|
|
$
|
—
|
|
|
$
|
41,815
|
|
|
3.8
|
%
|
Commercial real estate
|
4,002,359
|
|
|
3,251,248
|
|
|
838,018
|
|
|
—
|
|
|
(86,907
|
)
|
|
(2.7
|
)%
|
|||||
Commercial construction
|
547,293
|
|
|
365,165
|
|
|
78,609
|
|
|
—
|
|
|
103,519
|
|
|
28.3
|
%
|
|||||
Small business
|
174,497
|
|
|
164,676
|
|
|
13,851
|
|
|
—
|
|
|
(4,030
|
)
|
|
(2.4
|
)%
|
|||||
Residential real estate
|
1,590,569
|
|
|
923,294
|
|
|
807,154
|
|
|
67,170
|
|
|
(72,709
|
)
|
|
(7.9
|
)%
|
|||||
Home equity
|
1,133,798
|
|
|
1,092,084
|
|
|
64,299
|
|
|
—
|
|
|
(22,585
|
)
|
|
(2.1
|
)%
|
|||||
Other consumer
|
30,087
|
|
|
16,098
|
|
|
12,191
|
|
|
—
|
|
|
1,798
|
|
|
11.2
|
%
|
|||||
Total loans
|
$
|
8,873,639
|
|
|
$
|
6,906,194
|
|
|
$
|
2,073,714
|
|
|
$
|
67,170
|
|
|
$
|
(39,099
|
)
|
|
(0.6
|
)%
|
(1)
|
During the third quarter of 2019, the Company sold $67.2 million of residential mortgage loans, primarily comprised of acquired BHB loans. The table above adjusts for the amounts sold to arrive at the organic growth/(decline) for the period.
|
|
December 31
|
|||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||||||||
Commercial and industrial
|
$
|
1,395,036
|
|
|
15.7
|
%
|
|
$
|
1,093,629
|
|
|
15.8
|
%
|
|
$
|
888,528
|
|
|
14.0
|
%
|
|
$
|
902,053
|
|
|
15.0
|
%
|
|
$
|
843,276
|
|
|
15.2
|
%
|
Commercial real estate
|
4,002,359
|
|
|
45.1
|
%
|
|
3,251,248
|
|
|
47.1
|
%
|
|
3,116,561
|
|
|
48.9
|
%
|
|
3,010,798
|
|
|
50.3
|
%
|
|
2,653,434
|
|
|
47.8
|
%
|
|||||
Commercial construction
|
547,293
|
|
|
6.2
|
%
|
|
365,165
|
|
|
5.3
|
%
|
|
401,797
|
|
|
6.3
|
%
|
|
320,391
|
|
|
5.3
|
%
|
|
373,368
|
|
|
6.7
|
%
|
|||||
Small business
|
174,497
|
|
|
2.0
|
%
|
|
164,676
|
|
|
2.4
|
%
|
|
132,370
|
|
|
2.1
|
%
|
|
122,726
|
|
|
2.0
|
%
|
|
96,246
|
|
|
1.7
|
%
|
|||||
Residential real estate
|
1,590,569
|
|
|
17.9
|
%
|
|
923,294
|
|
|
13.4
|
%
|
|
754,329
|
|
|
11.9
|
%
|
|
644,426
|
|
|
10.7
|
%
|
|
638,606
|
|
|
11.5
|
%
|
|||||
Home equity
|
1,133,798
|
|
|
12.8
|
%
|
|
1,092,084
|
|
|
15.8
|
%
|
|
1,052,088
|
|
|
16.6
|
%
|
|
988,147
|
|
|
16.5
|
%
|
|
927,803
|
|
|
16.8
|
%
|
|||||
Other consumer
|
30,087
|
|
|
0.3
|
%
|
|
16,098
|
|
|
0.2
|
%
|
|
9,880
|
|
|
0.2
|
%
|
|
11,064
|
|
|
0.2
|
%
|
|
14,988
|
|
|
0.3
|
%
|
|||||
Gross loans
|
8,873,639
|
|
|
100.0
|
%
|
|
6,906,194
|
|
|
100.0
|
%
|
|
6,355,553
|
|
|
100.0
|
%
|
|
5,999,605
|
|
|
100.0
|
%
|
|
5,547,721
|
|
|
100.0
|
%
|
|||||
Allowance for loan losses
|
(67,740
|
)
|
|
|
|
(64,293
|
)
|
|
|
|
(60,643
|
)
|
|
|
|
(61,566
|
)
|
|
|
|
(55,825
|
)
|
|
|
||||||||||
Net loans
|
$
|
8,805,899
|
|
|
|
|
$
|
6,841,901
|
|
|
|
|
$
|
6,294,910
|
|
|
|
|
$
|
5,938,039
|
|
|
|
|
$
|
5,491,896
|
|
|
|
|
December 31, 2019
|
||||||||||||||||||||||||||||||
|
Commercial
|
|
Commercial
Real Estate
|
|
Commercial
Construction (1)
|
|
Small
Business
|
|
Residential
Real Estate
|
|
Home Equity
|
|
Consumer
Other
|
|
Total
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
Amounts due in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
One year or less
|
$
|
315,610
|
|
|
$
|
865,506
|
|
|
$
|
231,556
|
|
|
$
|
47,822
|
|
|
$
|
59,911
|
|
|
$
|
28,791
|
|
|
$
|
20,668
|
|
|
$
|
1,569,864
|
|
After one year through five years
|
710,038
|
|
|
1,870,885
|
|
|
161,890
|
|
|
72,954
|
|
|
192,590
|
|
|
116,656
|
|
|
8,722
|
|
|
3,133,735
|
|
||||||||
Beyond five years
|
369,388
|
|
|
1,265,968
|
|
|
153,847
|
|
|
53,721
|
|
|
1,338,068
|
|
|
988,351
|
|
|
697
|
|
|
4,170,040
|
|
||||||||
Total
|
$
|
1,395,036
|
|
|
$
|
4,002,359
|
|
|
$
|
547,293
|
|
|
$
|
174,497
|
|
|
$
|
1,590,569
|
|
|
$
|
1,133,798
|
|
|
$
|
30,087
|
|
|
$
|
8,873,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate terms on amounts due after one year:
|
|||||||||||||||||||||||||||||||
Fixed rate
|
$
|
603,886
|
|
|
$
|
876,489
|
|
|
$
|
86,572
|
|
|
$
|
70,686
|
|
|
$
|
1,217,934
|
|
|
$
|
390,695
|
|
|
$
|
9,419
|
|
|
$
|
3,255,681
|
|
Adjustable rate
|
$
|
475,540
|
|
|
$
|
2,260,364
|
|
|
$
|
229,165
|
|
|
$
|
55,989
|
|
|
$
|
312,724
|
|
|
$
|
714,312
|
|
|
$
|
—
|
|
|
$
|
4,048,094
|
|
(1)
|
Includes certain construction loans that will convert to commercial mortgages and will be reclassified to commercial real estate upon the completion of the construction phase.
|
|
December 31
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Loans accounted for on a nonaccrual basis
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
22,574
|
|
|
$
|
26,310
|
|
|
$
|
32,055
|
|
|
$
|
37,455
|
|
|
$
|
3,699
|
|
Commercial real estate
|
3,016
|
|
|
3,326
|
|
|
3,123
|
|
|
6,266
|
|
|
8,160
|
|
|||||
Small business
|
311
|
|
|
235
|
|
|
230
|
|
|
302
|
|
|
239
|
|
|||||
Residential real estate
|
13,360
|
|
|
8,251
|
|
|
8,129
|
|
|
7,782
|
|
|
8,795
|
|
|||||
Home equity
|
6,570
|
|
|
7,278
|
|
|
6,022
|
|
|
5,553
|
|
|
6,742
|
|
|||||
Other consumer
|
61
|
|
|
13
|
|
|
71
|
|
|
47
|
|
|
55
|
|
|||||
Total (1)
|
45,892
|
|
|
45,413
|
|
|
49,630
|
|
|
57,405
|
|
|
27,690
|
|
|||||
Loans past due 90 days or more but still accruing
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate (2)
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential real estate (2)
|
1,652
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity (2)
|
265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other consumer
|
22
|
|
|
5
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|||||
Total
|
2,157
|
|
|
5
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|||||
Total nonperforming loans
|
48,049
|
|
|
45,418
|
|
|
49,638
|
|
|
57,407
|
|
|
27,690
|
|
|||||
Other real estate owned
|
—
|
|
|
—
|
|
|
612
|
|
|
4,173
|
|
|
2,159
|
|
|||||
Total nonperforming assets
|
$
|
48,049
|
|
|
$
|
45,418
|
|
|
$
|
50,250
|
|
|
$
|
61,580
|
|
|
$
|
29,849
|
|
Nonperforming loans as a percent of gross loans
|
0.54
|
%
|
|
0.66
|
%
|
|
0.78
|
%
|
|
0.96
|
%
|
|
0.50
|
%
|
|||||
Nonperforming assets as a percent of total assets
|
0.42
|
%
|
|
0.51
|
%
|
|
0.62
|
%
|
|
0.80
|
%
|
|
0.41
|
%
|
(1)
|
Included in these amounts were nonaccrual TDRs of $24.8 million at December 31, 2019, $29.3 million at December 31, 2018, $6.1 million at December 31, 2017, and $5.2 million at December 31, 2016, and 2015. During the fourth quarter of 2018, nonaccrual loans associated with a large commercial loan customer that had previously declared bankruptcy were modified when a court confirmed the customer's bankruptcy reorganization plan. That revision to loan terms required the Company to deem loans associated with the customer as troubled debt restructures as of December 31, 2018 which amounted to $25.9 million.
|
(2)
|
Represents purchased credit impaired loans that are accruing interest due to expectations of future cash collections.
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Nonperforming assets beginning balance
|
$
|
45,418
|
|
|
$
|
50,250
|
|
Acquired nonperforming loans
|
2,317
|
|
|
—
|
|
||
New to nonperforming
|
25,061
|
|
|
16,386
|
|
||
Loans charged-off
|
(5,205
|
)
|
|
(2,597
|
)
|
||
Loans paid-off
|
(16,723
|
)
|
|
(14,286
|
)
|
||
Loans restored to accrual status
|
(2,603
|
)
|
|
(3,731
|
)
|
||
Acquired other real estate owned
|
2,818
|
|
|
—
|
|
||
Valuation write down
|
(389
|
)
|
|
(120
|
)
|
||
Sale of other real estate owned
|
(2,500
|
)
|
|
(324
|
)
|
||
Other
|
(145
|
)
|
|
(160
|
)
|
||
Nonperforming assets ending balance
|
$
|
48,049
|
|
|
$
|
45,418
|
|
|
December 31
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Performing troubled debt restructurings
|
$
|
19,599
|
|
|
$
|
23,849
|
|
|
$
|
25,852
|
|
|
$
|
27,093
|
|
|
$
|
32,849
|
|
Nonaccrual troubled debt restructurings (1)
|
24,766
|
|
|
29,348
|
|
|
6,067
|
|
|
5,199
|
|
|
5,225
|
|
|||||
Total
|
$
|
44,365
|
|
|
$
|
53,197
|
|
|
$
|
31,919
|
|
|
$
|
32,292
|
|
|
$
|
38,074
|
|
Performing troubled debt restructurings as a % of total loans
|
0.22
|
%
|
|
0.35
|
%
|
|
0.41
|
%
|
|
0.45
|
%
|
|
0.59
|
%
|
|||||
Nonaccrual troubled debt restructurings as a % of total loans
|
0.28
|
%
|
|
0.42
|
%
|
|
0.10
|
%
|
|
0.09
|
%
|
|
0.09
|
%
|
|||||
Total troubled debt restructurings as a % of total loans
|
0.50
|
%
|
|
0.77
|
%
|
|
0.50
|
%
|
|
0.54
|
%
|
|
0.69
|
%
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
TDRs beginning balance
|
$
|
53,197
|
|
|
$
|
31,919
|
|
New to TDR status
|
1,352
|
|
|
28,020
|
|
||
Paydowns
|
(10,146
|
)
|
|
(6,244
|
)
|
||
Charge-offs
|
(38
|
)
|
|
(498
|
)
|
||
TDRs ending balance
|
$
|
44,365
|
|
|
$
|
53,197
|
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
The amount of incremental gross interest income that would have been recorded if nonaccrual loans had been current in accordance with their original terms
|
$
|
3,000
|
|
|
$
|
2,583
|
|
|
$
|
2,461
|
|
The amount of interest income on nonaccrual loans and performing TDRs that was included in net income
|
$
|
1,330
|
|
|
$
|
1,478
|
|
|
$
|
1,826
|
|
|
December 31
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Average total loans
|
$
|
8,445,921
|
|
|
$
|
6,489,910
|
|
|
$
|
6,191,099
|
|
|
$
|
5,670,427
|
|
|
$
|
5,394,464
|
|
Allowance for loan losses, beginning of year
|
$
|
64,293
|
|
|
$
|
60,643
|
|
|
$
|
61,566
|
|
|
$
|
55,825
|
|
|
$
|
55,100
|
|
Charged-off loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
244
|
|
|
355
|
|
|
3,891
|
|
|
593
|
|
|
2,010
|
|
|||||
Commercial real estate
|
2,614
|
|
|
82
|
|
|
39
|
|
|
414
|
|
|
330
|
|
|||||
Small business
|
509
|
|
|
372
|
|
|
302
|
|
|
228
|
|
|
267
|
|
|||||
Residential real estate
|
—
|
|
|
148
|
|
|
207
|
|
|
28
|
|
|
285
|
|
|||||
Home equity
|
240
|
|
|
293
|
|
|
276
|
|
|
602
|
|
|
710
|
|
|||||
Other consumer
|
1,598
|
|
|
1,347
|
|
|
1,494
|
|
|
1,607
|
|
|
1,316
|
|
|||||
Total charged-off loans
|
5,205
|
|
|
2,597
|
|
|
6,209
|
|
|
3,472
|
|
|
4,918
|
|
|||||
Recoveries on loans previously charged-off
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
1,131
|
|
|
182
|
|
|
615
|
|
|
859
|
|
|
1,593
|
|
|||||
Commercial real estate
|
152
|
|
|
188
|
|
|
385
|
|
|
564
|
|
|
1,073
|
|
|||||
Small business
|
122
|
|
|
46
|
|
|
114
|
|
|
195
|
|
|
264
|
|
|||||
Residential real estate
|
142
|
|
|
12
|
|
|
31
|
|
|
299
|
|
|
133
|
|
|||||
Home equity
|
318
|
|
|
156
|
|
|
198
|
|
|
141
|
|
|
356
|
|
|||||
Other consumer
|
787
|
|
|
888
|
|
|
993
|
|
|
1,080
|
|
|
724
|
|
|||||
Total recoveries
|
2,652
|
|
|
1,472
|
|
|
2,336
|
|
|
3,138
|
|
|
4,143
|
|
|||||
Net loans charged-off (recoveries)
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
(887
|
)
|
|
173
|
|
|
3,276
|
|
|
(266
|
)
|
|
417
|
|
|||||
Commercial real estate
|
2,462
|
|
|
(106
|
)
|
|
(346
|
)
|
|
(150
|
)
|
|
(743
|
)
|
|||||
Small business
|
387
|
|
|
326
|
|
|
188
|
|
|
33
|
|
|
3
|
|
|||||
Residential real estate
|
(142
|
)
|
|
136
|
|
|
176
|
|
|
(271
|
)
|
|
152
|
|
|||||
Home equity
|
(78
|
)
|
|
137
|
|
|
78
|
|
|
461
|
|
|
354
|
|
|||||
Other consumer
|
811
|
|
|
459
|
|
|
501
|
|
|
527
|
|
|
592
|
|
|||||
Total net loans charged-off
|
2,553
|
|
|
1,125
|
|
|
3,873
|
|
|
334
|
|
|
775
|
|
|||||
Provision for loan losses
|
6,000
|
|
|
4,775
|
|
|
2,950
|
|
|
6,075
|
|
|
1,500
|
|
|||||
Total allowances for loan losses, end of year
|
$
|
67,740
|
|
|
$
|
64,293
|
|
|
$
|
60,643
|
|
|
$
|
61,566
|
|
|
$
|
55,825
|
|
Net loans charged-off as a percent of average total loans
|
0.03
|
%
|
|
0.02
|
%
|
|
0.06
|
%
|
|
0.01
|
%
|
|
0.01
|
%
|
|||||
Allowance for loan losses as a percent of total loans
|
0.76
|
%
|
|
0.93
|
%
|
|
0.95
|
%
|
|
1.03
|
%
|
|
1.01
|
%
|
|||||
Allowance for loan losses as a percent of nonperforming loans
|
140.98
|
%
|
|
141.56
|
%
|
|
122.17
|
%
|
|
107.24
|
%
|
|
201.61
|
%
|
|
December 31
|
|||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||
|
Allowance
Amount
|
|
Percent of
Loans
In
Category
To Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Loans
In
Category
To Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Loans
In
Category
To Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Loans
In
Category
To Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Loans
In
Category
To Total
Loans
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Allocated Allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial and industrial
|
$
|
17,594
|
|
|
15.7
|
%
|
|
$
|
15,760
|
|
|
15.8
|
%
|
|
$
|
13,256
|
|
|
14.0
|
%
|
|
$
|
16,921
|
|
|
15.0
|
%
|
|
$
|
13,802
|
|
|
15.2
|
%
|
Commercial real estate
|
32,935
|
|
|
45.1
|
%
|
|
32,370
|
|
|
47.1
|
%
|
|
31,453
|
|
|
48.9
|
%
|
|
30,369
|
|
|
50.2
|
%
|
|
27,327
|
|
|
47.8
|
%
|
|||||
Commercial construction
|
6,053
|
|
|
6.2
|
%
|
|
5,158
|
|
|
5.3
|
%
|
|
5,698
|
|
|
6.3
|
%
|
|
4,522
|
|
|
5.3
|
%
|
|
5,366
|
|
|
6.7
|
%
|
|||||
Small business
|
1,746
|
|
|
2.0
|
%
|
|
1,756
|
|
|
2.4
|
%
|
|
1,577
|
|
|
2.1
|
%
|
|
1,502
|
|
|
2.1
|
%
|
|
1,264
|
|
|
1.7
|
%
|
|||||
Residential real estate
|
3,440
|
|
|
17.9
|
%
|
|
3,219
|
|
|
13.4
|
%
|
|
2,822
|
|
|
11.9
|
%
|
|
2,621
|
|
|
10.7
|
%
|
|
2,590
|
|
|
11.5
|
%
|
|||||
Home equity
|
5,576
|
|
|
12.8
|
%
|
|
5,608
|
|
|
15.8
|
%
|
|
5,390
|
|
|
16.6
|
%
|
|
5,238
|
|
|
16.5
|
%
|
|
4,889
|
|
|
16.7
|
%
|
|||||
Other consumer
|
396
|
|
|
0.3
|
%
|
|
422
|
|
|
0.2
|
%
|
|
447
|
|
|
0.2
|
%
|
|
393
|
|
|
0.2
|
%
|
|
587
|
|
|
0.4
|
%
|
|||||
Total
|
$
|
67,740
|
|
|
100.0
|
%
|
|
$
|
64,293
|
|
|
100.0
|
%
|
|
$
|
60,643
|
|
|
100.0
|
%
|
|
$
|
61,566
|
|
|
100.0
|
%
|
|
$
|
55,825
|
|
|
100.0
|
%
|
|
December 31
2019 |
|
December 31
2018 |
|
BHB Bancorp Acquisition
|
|
Organic Growth/(Decline) $
|
|
Organic Growth/(Decline) %
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||
Noninterest-bearing demand deposits
|
$
|
2,662,591
|
|
|
$
|
2,450,907
|
|
|
$
|
301,276
|
|
|
$
|
(89,592
|
)
|
|
(3.7
|
)%
|
Savings and interest checking
|
3,232,909
|
|
|
2,865,349
|
|
|
351,554
|
|
|
16,006
|
|
|
0.6
|
%
|
||||
Money market
|
1,856,552
|
|
|
1,399,761
|
|
|
543,842
|
|
|
(87,051
|
)
|
|
(6.2
|
)%
|
||||
Time certificates of deposits
|
1,395,315
|
|
|
711,103
|
|
|
733,764
|
|
|
(49,552
|
)
|
|
(7.0
|
)%
|
||||
Total
|
$
|
9,147,367
|
|
|
$
|
7,427,120
|
|
|
$
|
1,930,436
|
|
|
$
|
(210,189
|
)
|
|
(2.8
|
)%
|
|
Balance
|
|
Percentage
|
|||
|
(Dollars in thousands)
|
|||||
1 to 3 months
|
$
|
134,660
|
|
|
20.3
|
%
|
4 to 6 months
|
178,050
|
|
|
26.8
|
%
|
|
7 to 12 months
|
190,744
|
|
|
28.8
|
%
|
|
Over 12 months
|
160,191
|
|
|
24.1
|
%
|
|
Total
|
$
|
663,645
|
|
|
100.0
|
%
|
|
2018
|
|
BHB Deal Financing
|
|
Borrowings Acquired from BHB
|
|
Other Issuances/(Payments)
|
|
2019
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Federal Home Loan Bank borrowings
|
$
|
147,806
|
|
|
$
|
—
|
|
|
$
|
124,817
|
|
|
$
|
(156,875
|
)
|
|
$
|
115,748
|
|
Line of credit
|
—
|
|
|
50,000
|
|
|
—
|
|
|
(50,000
|
)
|
|
—
|
|
|||||
Long-term borrowings
|
—
|
|
|
75,000
|
|
|
—
|
|
|
(94
|
)
|
|
74,906
|
|
|||||
Junior subordinated debentures
|
76,173
|
|
|
—
|
|
|
—
|
|
|
(13,325
|
)
|
|
62,848
|
|
|||||
Subordinated debentures - issued November 17, 2014
|
34,728
|
|
|
—
|
|
|
—
|
|
|
(34,728
|
)
|
|
—
|
|
|||||
Subordinated debentures - issued March 14, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
49,601
|
|
|
49,601
|
|
|||||
Total
|
$
|
258,707
|
|
|
$
|
125,000
|
|
|
$
|
124,817
|
|
|
$
|
(205,421
|
)
|
|
$
|
303,103
|
|
|
Years Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands, except per share data)
|
||||||
Net income
|
$
|
165,175
|
|
|
$
|
121,622
|
|
Diluted earnings per share
|
$
|
5.03
|
|
|
$
|
4.40
|
|
Return on average assets
|
1.52
|
%
|
|
1.46
|
%
|
||
Return on average equity
|
10.85
|
%
|
|
12.31
|
%
|
||
Stockholders' equity as % of assets
|
14.99
|
%
|
|
12.13
|
%
|
||
Net interest margin
|
4.04
|
%
|
|
3.91
|
%
|
|
Years Ended December 31
|
|||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
|
Average Balance
|
|
Interest Earned/ Paid
|
|
Average Yield
|
|
Average Balance
|
|
Interest Earned/ Paid
|
|
Average Yield
|
|
Average Balance
|
|
Interest Earned/ Paid
|
|
Average Yield
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning deposits with banks, federal funds sold, and short term investments
|
$
|
97,028
|
|
|
$
|
2,207
|
|
|
2.27
|
%
|
|
$
|
136,140
|
|
|
$
|
2,676
|
|
|
1.97
|
%
|
|
$
|
124,014
|
|
|
$
|
1,418
|
|
|
1.14
|
%
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Securities - trading
|
1,876
|
|
|
—
|
|
|
—
|
%
|
|
1,549
|
|
|
—
|
|
|
—
|
%
|
|
1,223
|
|
|
—
|
|
|
—
|
%
|
||||||
Securities - taxable investments
|
1,176,992
|
|
|
32,405
|
|
|
2.75
|
%
|
|
999,744
|
|
|
26,513
|
|
|
2.65
|
%
|
|
901,891
|
|
|
22,465
|
|
|
2.49
|
%
|
||||||
Securities - nontaxable investments (1)
|
1,673
|
|
|
66
|
|
|
3.95
|
%
|
|
2,098
|
|
|
76
|
|
|
3.62
|
%
|
|
3,186
|
|
|
135
|
|
|
4.24
|
%
|
||||||
Total securities
|
1,180,541
|
|
|
32,471
|
|
|
2.75
|
%
|
|
1,003,391
|
|
|
26,589
|
|
|
2.65
|
%
|
|
906,300
|
|
|
22,600
|
|
|
2.49
|
%
|
||||||
Loans held for sale
|
40,858
|
|
|
891
|
|
|
2.18
|
%
|
|
5,396
|
|
|
159
|
|
|
2.95
|
%
|
|
4,760
|
|
|
92
|
|
|
1.93
|
%
|
||||||
Loans (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial and industrial
|
1,321,798
|
|
|
74,208
|
|
|
5.61
|
%
|
|
958,414
|
|
|
45,754
|
|
|
4.77
|
%
|
|
875,056
|
|
|
36,048
|
|
|
4.12
|
%
|
||||||
Commercial real estate (1)
|
3,838,526
|
|
|
187,902
|
|
|
4.90
|
%
|
|
3,128,659
|
|
|
144,045
|
|
|
4.60
|
%
|
|
3,067,077
|
|
|
127,512
|
|
|
4.16
|
%
|
||||||
Commercial construction
|
478,865
|
|
|
27,263
|
|
|
5.69
|
%
|
|
385,771
|
|
|
19,615
|
|
|
5.08
|
%
|
|
365,277
|
|
|
16,387
|
|
|
4.49
|
%
|
||||||
Small business
|
169,381
|
|
|
10,280
|
|
|
6.07
|
%
|
|
142,850
|
|
|
8,362
|
|
|
5.85
|
%
|
|
128,559
|
|
|
7,145
|
|
|
5.56
|
%
|
||||||
Total commercial
|
5,808,570
|
|
|
299,653
|
|
|
5.16
|
%
|
|
4,615,694
|
|
|
217,776
|
|
|
4.72
|
%
|
|
4,435,969
|
|
|
187,092
|
|
|
4.22
|
%
|
||||||
Residential real estate
|
1,483,831
|
|
|
59,375
|
|
|
4.00
|
%
|
|
794,735
|
|
|
31,768
|
|
|
4.00
|
%
|
|
713,608
|
|
|
28,179
|
|
|
3.95
|
%
|
||||||
Home equity
|
1,127,425
|
|
|
51,164
|
|
|
4.54
|
%
|
|
1,067,365
|
|
|
44,505
|
|
|
4.17
|
%
|
|
1,030,881
|
|
|
38,388
|
|
|
3.72
|
%
|
||||||
Total consumer real estate
|
2,611,256
|
|
|
110,539
|
|
|
4.23
|
%
|
|
1,862,100
|
|
|
76,273
|
|
|
4.10
|
%
|
|
1,744,489
|
|
|
66,567
|
|
|
3.82
|
%
|
||||||
Other consumer
|
26,095
|
|
|
2,216
|
|
|
8.49
|
%
|
|
12,116
|
|
|
952
|
|
|
7.86
|
%
|
|
10,641
|
|
|
944
|
|
|
8.87
|
%
|
||||||
Total loans
|
8,445,921
|
|
|
412,408
|
|
|
4.88
|
%
|
|
6,489,910
|
|
|
295,001
|
|
|
4.55
|
%
|
|
6,191,099
|
|
|
254,603
|
|
|
4.11
|
%
|
||||||
Total Interest-Earning Assets
|
9,764,348
|
|
|
447,977
|
|
|
4.59
|
%
|
|
7,634,837
|
|
|
324,425
|
|
|
4.25
|
%
|
|
7,226,173
|
|
|
278,713
|
|
|
3.86
|
%
|
||||||
Cash and Due from Banks
|
118,295
|
|
|
|
|
|
|
103,911
|
|
|
|
|
|
|
97,694
|
|
|
|
|
|
||||||||||||
Federal Home Loan Bank Stock
|
15,692
|
|
|
|
|
|
|
13,200
|
|
|
|
|
|
|
12,781
|
|
|
|
|
|
||||||||||||
Other Assets
|
976,962
|
|
|
|
|
|
|
553,226
|
|
|
|
|
|
|
554,117
|
|
|
|
|
|
||||||||||||
Total Assets
|
$
|
10,875,297
|
|
|
|
|
|
|
$
|
8,305,174
|
|
|
|
|
|
|
$
|
7,890,765
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Savings and interest checking accounts
|
$
|
3,121,120
|
|
|
$
|
8,366
|
|
|
0.27
|
%
|
|
$
|
2,658,798
|
|
|
$
|
5,582
|
|
|
0.21
|
%
|
|
$
|
2,541,845
|
|
|
$
|
3,656
|
|
|
0.14
|
%
|
Money market
|
1,817,394
|
|
|
15,135
|
|
|
0.83
|
%
|
|
1,367,743
|
|
|
7,465
|
|
|
0.55
|
%
|
|
1,298,598
|
|
|
4,224
|
|
|
0.33
|
%
|
||||||
Time certificates of deposits
|
1,250,577
|
|
|
17,685
|
|
|
1.41
|
%
|
|
655,983
|
|
|
6,948
|
|
|
1.06
|
%
|
|
622,909
|
|
|
4,822
|
|
|
0.77
|
%
|
||||||
Total interest bearing deposits
|
6,189,091
|
|
|
41,186
|
|
|
0.67
|
%
|
|
4,682,524
|
|
|
19,995
|
|
|
0.43
|
%
|
|
4,463,352
|
|
|
12,702
|
|
|
0.28
|
%
|
||||||
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Federal Home Loan Bank borrowings
|
178,658
|
|
|
4,438
|
|
|
2.48
|
%
|
|
59,932
|
|
|
1,083
|
|
|
1.81
|
%
|
|
59,204
|
|
|
1,385
|
|
|
2.34
|
%
|
||||||
Customer repurchase agreements and other short-term borrowings
|
—
|
|
|
—
|
|
|
—
|
%
|
|
129,890
|
|
|
248
|
|
|
0.19
|
%
|
|
166,152
|
|
|
257
|
|
|
0.15
|
%
|
||||||
Line of credit
|
2,673
|
|
|
104
|
|
|
3.89
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
Long-term borrowings
|
57,270
|
|
|
2,073
|
|
|
3.62
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||||
Junior subordinated debentures
|
67,581
|
|
|
2,388
|
|
|
3.53
|
%
|
|
73,458
|
|
|
2,501
|
|
|
3.40
|
%
|
|
73,074
|
|
|
2,281
|
|
|
3.12
|
%
|
||||||
Subordinated debt
|
70,070
|
|
|
3,690
|
|
|
5.27
|
%
|
|
34,705
|
|
|
1,709
|
|
|
4.92
|
%
|
|
34,658
|
|
|
1,709
|
|
|
4.93
|
%
|
||||||
Total borrowings
|
376,252
|
|
|
12,693
|
|
|
3.37
|
%
|
|
297,985
|
|
|
5,541
|
|
|
1.86
|
%
|
|
333,088
|
|
|
5,632
|
|
|
1.69
|
%
|
||||||
Total interest-bearing liabilities
|
6,565,343
|
|
|
53,879
|
|
|
0.82
|
%
|
|
4,980,509
|
|
|
25,536
|
|
|
0.51
|
%
|
|
4,796,440
|
|
|
18,334
|
|
|
0.38
|
%
|
||||||
Noninterest-bearing demand deposits
|
2,607,763
|
|
|
|
|
|
|
2,252,006
|
|
|
|
|
|
|
2,098,501
|
|
|
|
|
|
||||||||||||
Other liabilities
|
180,270
|
|
|
|
|
|
|
84,671
|
|
|
|
|
|
|
82,840
|
|
|
|
|
|
||||||||||||
Total liabilities
|
9,353,376
|
|
|
|
|
|
|
7,317,186
|
|
|
|
|
|
|
6,977,781
|
|
|
|
|
|
||||||||||||
Stockholders’ equity
|
1,521,921
|
|
|
|
|
|
|
987,988
|
|
|
|
|
|
|
912,984
|
|
|
|
|
|
||||||||||||
Total liabilities and stockholders’ equity
|
$
|
10,875,297
|
|
|
|
|
|
|
$
|
8,305,174
|
|
|
|
|
|
|
$
|
7,890,765
|
|
|
|
|
|
|||||||||
Net interest income (1)
|
|
|
$
|
394,098
|
|
|
|
|
|
|
$
|
298,889
|
|
|
|
|
|
|
$
|
260,379
|
|
|
|
|||||||||
Interest rate spread (3)
|
|
|
|
|
3.77
|
%
|
|
|
|
|
|
3.74
|
%
|
|
|
|
|
|
3.48
|
%
|
||||||||||||
Net interest margin (4)
|
|
|
|
|
4.04
|
%
|
|
|
|
|
|
3.91
|
%
|
|
|
|
|
|
3.60
|
%
|
||||||||||||
Supplemental Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total deposits, including demand deposits
|
$
|
8,796,854
|
|
|
$
|
41,186
|
|
|
|
|
$
|
6,934,530
|
|
|
$
|
19,995
|
|
|
|
|
$
|
6,561,853
|
|
|
$
|
12,702
|
|
|
|
|||
Cost of total deposits
|
|
|
|
|
0.47
|
%
|
|
|
|
|
|
0.29
|
%
|
|
|
|
|
|
0.19
|
%
|
||||||||||||
Total funding liabilities, including demand deposits
|
$
|
9,173,106
|
|
|
$
|
53,879
|
|
|
|
|
$
|
7,232,515
|
|
|
$
|
25,536
|
|
|
|
|
$
|
6,894,941
|
|
|
$
|
18,334
|
|
|
|
|||
Cost of total funding liabilities
|
|
|
|
|
0.59
|
%
|
|
|
|
|
|
0.35
|
%
|
|
|
|
|
|
0.27
|
%
|
(1)
|
The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $963,000, $724,000 and $1.5 million for 2019, 2018 and 2017, respectively. The FTE adjustment relates to nontaxable investment securities with average balances of $1.7 million, $2.1 million, and $3.2 million in 2019, 2018, and 2017, respectively, and tax exempt income relating to loans with average balances of $80.0 million, $55.7 million and $69.9 million at 2019, 2018 and 2017, respectively.
|
(2)
|
Loans include portfolio loans and nonaccrual loans, however unpaid interest on nonaccrual loans has not been included for purposes of determining interest earned.
|
(3)
|
Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average costs of interest-bearing liabilities.
|
(4)
|
Net interest margin represents net interest income as a percentage of average interest-earning assets.
|
|
Years Ended December 31
|
||||||||||||||||||||||||||||||||||
|
2019 Compared To 2018
|
|
2018 Compared To 2017
|
|
2017 Compared To 2016
|
||||||||||||||||||||||||||||||
|
Change
Due to
Rate
|
|
Change
Due to
Volume
|
|
Total
Change
|
|
Change
Due to
Rate
|
|
Change
Due to
Volume
|
|
Total
Change
|
|
Change
Due to
Rate
|
|
Change
Due to
Volume
|
|
Total
Change
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||
Income on interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest-earning deposits, federal funds sold and short term investments
|
$
|
300
|
|
|
$
|
(769
|
)
|
|
$
|
(469
|
)
|
|
$
|
1,119
|
|
|
$
|
139
|
|
|
$
|
1,258
|
|
|
$
|
773
|
|
|
$
|
(545
|
)
|
|
$
|
228
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Taxable securities
|
1,191
|
|
|
4,701
|
|
|
5,892
|
|
|
1,611
|
|
|
2,437
|
|
|
4,048
|
|
|
(298
|
)
|
|
1,912
|
|
|
1,614
|
|
|||||||||
Nontaxable securities (1)
|
5
|
|
|
(15
|
)
|
|
(10
|
)
|
|
(13
|
)
|
|
(46
|
)
|
|
(59
|
)
|
|
7
|
|
|
(52
|
)
|
|
(45
|
)
|
|||||||||
Total securities
|
|
|
|
|
5,882
|
|
|
|
|
|
|
3,989
|
|
|
|
|
|
|
1,569
|
|
|||||||||||||||
Loans held for sale
|
(313
|
)
|
|
1,045
|
|
|
732
|
|
|
55
|
|
|
12
|
|
|
67
|
|
|
(29
|
)
|
|
(114
|
)
|
|
(143
|
)
|
|||||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial and industrial
|
11,106
|
|
|
17,348
|
|
|
28,454
|
|
|
6,272
|
|
|
3,434
|
|
|
9,706
|
|
|
1,800
|
|
|
1,042
|
|
|
2,842
|
|
|||||||||
Commercial real estate
|
11,174
|
|
|
32,683
|
|
|
43,857
|
|
|
13,973
|
|
|
2,560
|
|
|
16,533
|
|
|
2,548
|
|
|
12,987
|
|
|
15,535
|
|
|||||||||
Commercial construction
|
2,915
|
|
|
4,733
|
|
|
7,648
|
|
|
2,309
|
|
|
919
|
|
|
3,228
|
|
|
1,306
|
|
|
(13
|
)
|
|
1,293
|
|
|||||||||
Small business
|
365
|
|
|
1,553
|
|
|
1,918
|
|
|
423
|
|
|
794
|
|
|
1,217
|
|
|
191
|
|
|
1,079
|
|
|
1,270
|
|
|||||||||
Total commercial
|
|
|
|
|
81,877
|
|
|
|
|
|
|
30,684
|
|
|
|
|
|
|
20,940
|
|
|||||||||||||||
Residential real estate
|
62
|
|
|
27,545
|
|
|
27,607
|
|
|
385
|
|
|
3,204
|
|
|
3,589
|
|
|
(539
|
)
|
|
3,231
|
|
|
2,692
|
|
|||||||||
Home equity
|
4,155
|
|
|
2,504
|
|
|
6,659
|
|
|
4,758
|
|
|
1,359
|
|
|
6,117
|
|
|
2,801
|
|
|
2,698
|
|
|
5,499
|
|
|||||||||
Total consumer real estate
|
|
|
|
|
34,266
|
|
|
|
|
|
|
9,706
|
|
|
|
|
|
|
8,191
|
|
|||||||||||||||
Total other consumer
|
166
|
|
|
1,098
|
|
|
1,264
|
|
|
(123
|
)
|
|
131
|
|
|
8
|
|
|
3
|
|
|
(244
|
)
|
|
(241
|
)
|
|||||||||
Loans (1)
|
|
|
|
|
117,407
|
|
|
|
|
|
|
40,398
|
|
|
|
|
|
|
28,890
|
|
|||||||||||||||
Total
|
|
|
|
|
$
|
123,552
|
|
|
|
|
|
|
$
|
45,712
|
|
|
|
|
|
|
$
|
30,544
|
|
||||||||||||
Expense of interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Savings and interest checking accounts
|
$
|
1,813
|
|
|
$
|
971
|
|
|
$
|
2,784
|
|
|
$
|
1,758
|
|
|
$
|
168
|
|
|
$
|
1,926
|
|
|
$
|
294
|
|
|
$
|
189
|
|
|
$
|
483
|
|
Money market
|
5,216
|
|
|
2,454
|
|
|
7,670
|
|
|
3,016
|
|
|
225
|
|
|
3,241
|
|
|
922
|
|
|
306
|
|
|
1,228
|
|
|||||||||
Time certificates of deposits
|
4,439
|
|
|
6,298
|
|
|
10,737
|
|
|
1,870
|
|
|
256
|
|
|
2,126
|
|
|
56
|
|
|
(205
|
)
|
|
(149
|
)
|
|||||||||
Total interest-bearing deposits
|
|
|
|
|
21,191
|
|
|
|
|
|
|
7,293
|
|
|
|
|
|
|
1,562
|
|
|||||||||||||||
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Federal Home Loan Bank borrowings
|
1,210
|
|
|
2,145
|
|
|
3,355
|
|
|
(319
|
)
|
|
17
|
|
|
(302
|
)
|
|
(209
|
)
|
|
(59
|
)
|
|
(268
|
)
|
|||||||||
Customer repurchase agreements and other short-term borrowings
|
—
|
|
|
(248
|
)
|
|
(248
|
)
|
|
47
|
|
|
(56
|
)
|
|
(9
|
)
|
|
25
|
|
|
24
|
|
|
49
|
|
|||||||||
Line of Credit
|
104
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Long-term borrowings
|
2,073
|
|
|
—
|
|
|
2,073
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Junior subordinated debentures
|
87
|
|
|
(200
|
)
|
|
(113
|
)
|
|
208
|
|
|
12
|
|
|
220
|
|
|
(1,795
|
)
|
|
(7
|
)
|
|
(1,802
|
)
|
|||||||||
Subordinated debt
|
239
|
|
|
1,742
|
|
|
1,981
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|||||||||
Total borrowings
|
|
|
|
|
7,152
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
|
|
(2,021
|
)
|
|||||||||||||||
Total
|
|
|
|
|
$
|
28,343
|
|
|
|
|
|
|
$
|
7,202
|
|
|
|
|
|
|
$
|
(459
|
)
|
||||||||||||
Change in net interest income
|
|
|
|
|
$
|
95,209
|
|
|
|
|
|
|
$
|
38,510
|
|
|
|
|
|
|
$
|
31,003
|
|
(1)
|
The table above reflects income determined on a fully tax equivalent basis. See footnotes to Table 20 above for the related adjustments.
|
|
Years Ended December 31
|
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Deposit account fees
|
$
|
20,040
|
|
|
$
|
18,327
|
|
|
$
|
1,713
|
|
|
9.3
|
%
|
Interchange and ATM fees
|
22,152
|
|
|
18,916
|
|
|
3,236
|
|
|
17.1
|
%
|
|||
Investment management
|
28,719
|
|
|
26,155
|
|
|
2,564
|
|
|
9.8
|
%
|
|||
Mortgage banking income
|
11,454
|
|
|
4,071
|
|
|
7,383
|
|
|
181.4
|
%
|
|||
Increase in cash surrender value of life insurance policies
|
5,013
|
|
|
4,060
|
|
|
953
|
|
|
23.5
|
%
|
|||
Gain on life insurance benefits
|
434
|
|
|
1,463
|
|
|
(1,029
|
)
|
|
(70.3
|
)%
|
|||
Loan level derivative income
|
6,478
|
|
|
2,373
|
|
|
4,105
|
|
|
173.0
|
%
|
|||
Other noninterest income
|
21,004
|
|
|
13,140
|
|
|
7,864
|
|
|
59.8
|
%
|
|||
Total
|
$
|
115,294
|
|
|
$
|
88,505
|
|
|
$
|
26,789
|
|
|
30.3
|
%
|
|
Years Ended December 31
|
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Salaries and employee benefits
|
$
|
149,165
|
|
|
$
|
124,328
|
|
|
$
|
24,837
|
|
|
20.0
|
%
|
Occupancy and equipment
|
33,207
|
|
|
27,098
|
|
|
6,109
|
|
|
22.5
|
%
|
|||
Data processing and facilities management
|
6,516
|
|
|
5,125
|
|
|
1,391
|
|
|
27.1
|
%
|
|||
FDIC assessment
|
1,394
|
|
|
2,774
|
|
|
(1,380
|
)
|
|
(49.7
|
)%
|
|||
Advertising
|
5,444
|
|
|
4,942
|
|
|
502
|
|
|
10.2
|
%
|
|||
Consulting
|
5,448
|
|
|
3,891
|
|
|
1,557
|
|
|
40.0
|
%
|
|||
Core deposit amortization
|
5,545
|
|
|
2,344
|
|
|
3,201
|
|
|
136.6
|
%
|
|||
Debit card expense
|
4,220
|
|
|
3,429
|
|
|
791
|
|
|
23.1
|
%
|
|||
Loss on sale of securities
|
1,462
|
|
|
—
|
|
|
1,462
|
|
|
100.0
|
%
|
|||
Merger & acquisitions
|
26,433
|
|
|
11,168
|
|
|
15,265
|
|
|
136.7
|
%
|
|||
Software maintenance
|
5,511
|
|
|
4,202
|
|
|
1,309
|
|
|
31.2
|
%
|
|||
Other noninterest expense
|
39,976
|
|
|
36,668
|
|
|
3,308
|
|
|
9.0
|
%
|
|||
Total
|
$
|
284,321
|
|
|
$
|
225,969
|
|
|
$
|
58,352
|
|
|
25.8
|
%
|
|
December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Combined federal and state income tax provisions
|
$
|
52,933
|
|
|
$
|
34,304
|
|
|
$
|
47,341
|
|
Effective income tax rates
|
24.27
|
%
|
|
22.00
|
%
|
|
35.19
|
%
|
|||
Blended Statutory tax rate
|
27.89
|
%
|
|
28.23
|
%
|
|
40.93
|
%
|
|
Years Ended December 31
|
||||||
|
2019
|
|
2018
|
||||
|
Year 1
|
|
Year 2
|
|
Year 1
|
|
Year 2
|
Parallel rate shocks (basis points)
|
|
|
|
|
|
|
|
-100
|
(2.7)%
|
|
(6.4)%
|
|
(5.3)%
|
|
(7.2)%
|
+100
|
2.5%
|
|
4.3%
|
|
3.5%
|
|
7.6%
|
+200
|
4.6%
|
|
8.5%
|
|
6.4%
|
|
12.6%
|
+300
|
6.6%
|
|
12.5%
|
|
9.3%
|
|
17.6%
|
+400
|
8.5%
|
|
16.4%
|
|
12.2%
|
|
22.6%
|
|
|
|
|
|
|
|
|
Gradual rate shifts (basis points)
|
|
|
|
|
|
|
|
-100 over 12 months
|
(1.0)%
|
|
(5.2)%
|
|
(2.2)%
|
|
(5.8)%
|
+200 over 12 months
|
2.1%
|
|
6.9%
|
|
3.2%
|
|
11.2%
|
+400 over 24 months
|
2.1%
|
|
8.6%
|
|
3.2%
|
|
14.2%
|
|
|
|
|
|
|
|
|
Alternative scenarios
|
|
|
|
|
|
|
|
Yield curve twist (1)
|
0.8%
|
|
4.6%
|
|
n/a
|
|
n/a
|
Flat up 200 basis points scenario
|
n/a
|
|
n/a
|
|
3.5%
|
|
12.1%
|
(1)
|
In the yield curve twist scenario, rates increase 200 basis points over a two year horizon. The parallel shift occurs faster on the long end of the curve than it does on the short end, creating a temporary increase in the steepness of the curve during the interim period of the twist.
|
|
December 31
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Outstanding
|
|
Additional
Borrowing Capacity
|
|
Outstanding
|
|
Additional
Borrowing Capacity
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Federal Home Loan Bank borrowings (1)
|
$
|
115,748
|
|
|
$
|
1,557,559
|
|
|
$
|
147,806
|
|
|
$
|
953,539
|
|
Federal Reserve Bank of Boston (2)
|
—
|
|
|
954,748
|
|
|
—
|
|
|
705,242
|
|
||||
Unpledged securities
|
—
|
|
|
790,304
|
|
|
—
|
|
|
691,383
|
|
||||
Line of Credit
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
||||
Long-term borrowings (3)
|
74,906
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Junior subordinated debentures (3)
|
62,848
|
|
|
—
|
|
|
76,173
|
|
|
—
|
|
||||
Subordinated debt (3)
|
49,601
|
|
|
—
|
|
|
34,728
|
|
|
—
|
|
||||
Reciprocal deposits (3)
|
211,213
|
|
|
|
|
180,514
|
|
|
|
||||||
Brokered deposits (3)
|
281,573
|
|
|
—
|
|
|
6,000
|
|
|
—
|
|
||||
|
$
|
795,889
|
|
|
$
|
3,352,611
|
|
|
$
|
445,221
|
|
|
$
|
2,350,164
|
|
(1)
|
Loans with a carrying value of $2.5 billion and $1.6 billion at December 31, 2019 and 2018, respectively, have been pledged to the Federal Home Loan Bank of Boston resulting in this additional borrowing capacity.
|
(2)
|
Loans with a carrying value of $1.5 billion and $1.2 billion at December 31, 2019 and 2018, respectively, have been pledged to the Federal Reserve Bank of Boston resulting in this additional unused borrowing capacity.
|
(3)
|
The additional borrowing capacity has not been assessed for these categories.
|
|
Payments Due — By Period
|
||||||||||||||||||
Contractual Obligations, Commitments and Contingencies
|
Total
|
|
Less than
One Year
|
|
One to
Three Years
|
|
Four to
Five Years
|
|
After
Five Years (2)
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
FHLB advances (1)
|
$
|
115,748
|
|
|
$
|
104,976
|
|
|
$
|
10,042
|
|
|
$
|
—
|
|
|
$
|
730
|
|
Junior subordinated debentures (1)
|
62,888
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,888
|
|
|||||
Subordinated debt (1)
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|||||
Long term borrowings
|
75,000
|
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
—
|
|
|||||
Time certificates of deposits
|
1,395,315
|
|
|
1,097,407
|
|
|
260,305
|
|
|
37,603
|
|
|
—
|
|
|||||
All other deposits with no maturity
|
7,752,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,752,052
|
|
|||||
Loans sold with recourse
|
404,532
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
404,532
|
|
|||||
Lease obligations
|
63,791
|
|
|
11,752
|
|
|
21,490
|
|
|
15,649
|
|
|
14,900
|
|
|||||
Vendor contracts and other obligations
|
53,305
|
|
|
15,328
|
|
|
23,256
|
|
|
13,530
|
|
|
1,191
|
|
|||||
Retirement benefit obligations (3)
|
47,700
|
|
|
1,010
|
|
|
2,009
|
|
|
2,885
|
|
|
41,796
|
|
|||||
Low income housing project investments unfunded commitments
|
34,967
|
|
|
17,009
|
|
|
17,707
|
|
|
123
|
|
|
128
|
|
|||||
Total Contractual Obligations
|
$
|
10,055,298
|
|
|
$
|
1,247,482
|
|
|
$
|
409,809
|
|
|
$
|
69,790
|
|
|
$
|
8,328,217
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Amount of Commitment Expiring — By Period
|
||||||||||||||||||
Off-Balance Sheet Financial Instruments
|
Total
|
|
Less than
One Year
|
|
One to
Three Years
|
|
Four to
Five Years
|
|
After
Five Years (2)
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Commitments to extend credit
|
$
|
3,337,930
|
|
|
$
|
404,856
|
|
|
$
|
254,795
|
|
|
$
|
131,586
|
|
|
$
|
2,546,693
|
|
Standby letters of credit
|
21,565
|
|
|
1,879
|
|
|
4,870
|
|
|
2,096
|
|
|
12,720
|
|
|||||
Mortgage derivatives - notional value
|
76,534
|
|
|
76,534
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swaps - notional value
|
925,000
|
|
|
—
|
|
|
225,000
|
|
|
700,000
|
|
|
—
|
|
|||||
Customer-related positions
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts - notional value
|
91,434
|
|
|
91,434
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loan level interest rate swaps - notional value
|
1,577,410
|
|
|
156,690
|
|
|
210,806
|
|
|
323,324
|
|
|
886,590
|
|
|||||
Total Commitments
|
$
|
6,029,873
|
|
|
$
|
731,393
|
|
|
$
|
695,471
|
|
|
$
|
1,157,006
|
|
|
$
|
3,446,003
|
|
(1)
|
The Company has hedged certain short-term borrowings and variable rate junior subordinated debentures, effectively converting the borrowings to a fixed rate. Amounts maturing represent contractual amounts due and do not include any issuance costs, which may be presented on a net basis in the financial statements.
|
(2)
|
Items with no maturity are presented in the table in the after five years category.
|
(3)
|
Retirement benefit obligations include expected contributions to the Company’s frozen pension plan, post retirement plans and supplemental executive retirement plans. Expected contributions for the pension plan have been included only through plan year July 1, 2019 - June 30, 2020 and reflect only the expected minimum required contribution. Contributions beyond this plan year cannot be quantified as they will be determined based upon the return on the investments in the plan and the discount rate used to quantify the liability. Expected contributions for the post retirement plans and supplemental executive retirement plans include obligations that are payable over the life of the participants.
|
|
Allowance for loan losses
|
Description of the matter
|
As of December 31, 2019, management established an allowance for loan losses of $67.7 million. As described in notes 1 and 4 to the consolidated financial statements, the Company uses a formula-based approach with loss factors derived from actual historical portfolio losses, which are combined with an assessment of certain qualitative risk factors to determine the allowance amounts allocated to the various loan categories.
|
|
Auditing the allowance for loan losses was challenging due to the subjectivity involved in assessing the judgment management applied in determining the adjustment attributable to the qualitative risk factors.
|
How we addressed the matter in our audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the allowance for loan loss process, which included, among others, those over management’s review of the quantitative adjustments applied to the qualitative risk factors identified. We also evaluated other key allowance controls including the loan risk-rating process, the annual assessment of the loss emergence and confirmation period and the review and approval of calculations used to estimate the allowance for loan loss.
We assessed management’s determination of qualitative risk factors and tested these factors by comparing conclusions reached to independently-obtained third-party data or internally available Company-specific data. Certain qualitative risk factors including (1) national and local economic and business conditions and (2) banking industry conditions and other external factors were more subjective in nature given an increased reliance on management judgment. For these risk factors, we evaluated whether they were consistent with available market information and performed analytical procedures over movements in the loan portfolio.
We evaluated the overall appropriateness of the qualitative risk factors by performing procedures including, among others, comparing the allowance amounts allocated to the various loan categories, inclusive of the qualitative risk factors, to the Company’s historic loss experience along with the loss experience at institutions of a similar size and geographic location.
|
|
|
|
Fair value of loans and core deposit intangibles recognized as part of the acquisition of Blue Hills Bancorp
|
Description of the matter
|
In 2019, the Company completed its acquisition of Blue Hills Bancorp (Blue Hills), which was accounted for as a business combination. As disclosed in note 2 to the consolidated financial statements, the Company recognized a fair value adjustment to acquired loans of $23.2 million and a core deposit intangible (CDI) of $19.9 million.
Auditing the Company's accounting for the fair value adjustment to acquired loans and the recognized CDI was complex due to the sensitivity of the respective fair values to underlying assumptions. With the assistance of an external specialist, the Company used a discounted cash flow model to measure the fair value of acquired assets. The judgmental assumptions in the acquired loan portfolio included the estimate of future credit losses and prepayments along with the application of a market-based discount rate to those cash flows. The judgmental assumptions in the CDI included the attrition rate of the deposit accounts. These significant assumptions were based on market data, the Company’s industry experience, and management’s expectations based on results of previous acquisitions.
|
|
|
How we addressed the matter in our audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s accounting for business combinations. Our tests included controls over the estimation process supporting the recognition and measurement of consideration transferred along with acquired assets and liabilities. We also tested management’s review controls over the assumptions used in the valuation models for loans and CDI. To test the estimated fair value of acquired loans and CDI, we evaluated the Company's valuation methodology, the methods and significant assumptions used by the Company, and the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved our valuation specialists to assist with our evaluation of the methodology used by the Company, significant assumptions included in the fair value estimates, and assessment of the competence and objectivity of management’s external specialist.
We assessed the key judgments in management’s assumptions by performing procedures over the estimate of future credit losses and the market-based discount rate for the acquired loan portfolio, along with the attrition rate for CDI. We tested, on a sample basis, both the market data and the internally developed assumptions used by management to calculate the fair value including an independent comparative calculation of the fair value adjustment. |
We have served as the Company's auditor since 2009
|
Boston, Massachusetts
|
February 27, 2020
|
|
December 31
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|||||||
Cash and due from banks
|
$
|
114,686
|
|
|
$
|
127,503
|
|
Interest-earning deposits with banks
|
36,288
|
|
|
122,952
|
|
||
Securities
|
|
|
|
||||
Trading
|
2,179
|
|
|
1,504
|
|
||
Equities
|
21,261
|
|
|
19,477
|
|
||
Available for sale
|
426,424
|
|
|
442,752
|
|
||
Held to maturity (fair value $753,263 and $603,640)
|
740,806
|
|
|
611,490
|
|
||
Total securities
|
1,190,670
|
|
|
1,075,223
|
|
||
Loans held for sale (at fair value)
|
33,307
|
|
|
6,431
|
|
||
Loans
|
|
|
|
||||
Commercial and industrial
|
1,395,036
|
|
|
1,093,629
|
|
||
Commercial real estate
|
4,002,359
|
|
|
3,251,248
|
|
||
Commercial construction
|
547,293
|
|
|
365,165
|
|
||
Small business
|
174,497
|
|
|
164,676
|
|
||
Residential real estate
|
1,590,569
|
|
|
923,294
|
|
||
Home equity - first position
|
649,255
|
|
|
654,083
|
|
||
Home equity - subordinate positions
|
484,543
|
|
|
438,001
|
|
||
Other consumer
|
30,087
|
|
|
16,098
|
|
||
Total loans
|
8,873,639
|
|
|
6,906,194
|
|
||
Less: allowance for loan losses
|
(67,740
|
)
|
|
(64,293
|
)
|
||
Net loans
|
8,805,899
|
|
|
6,841,901
|
|
||
Federal Home Loan Bank stock
|
14,424
|
|
|
15,683
|
|
||
Bank premises and equipment, net
|
123,674
|
|
|
97,581
|
|
||
Goodwill
|
506,206
|
|
|
256,105
|
|
||
Other intangible assets
|
29,286
|
|
|
15,250
|
|
||
Cash surrender value of life insurance policies
|
197,372
|
|
|
160,456
|
|
||
Other assets
|
343,353
|
|
|
132,507
|
|
||
Total assets
|
$
|
11,395,165
|
|
|
$
|
8,851,592
|
|
Liabilities and Stockholders' Equity
|
|||||||
Deposits
|
|
|
|
||||
Noninterest-bearing demand deposits
|
$
|
2,662,591
|
|
|
$
|
2,450,907
|
|
Savings and interest checking accounts
|
3,232,909
|
|
|
2,865,349
|
|
||
Money market
|
1,856,552
|
|
|
1,399,761
|
|
||
Time certificates of deposit of $100,000 and over
|
663,645
|
|
|
351,629
|
|
||
Other time certificates of deposits
|
731,670
|
|
|
359,474
|
|
||
Total deposits
|
9,147,367
|
|
|
7,427,120
|
|
||
Borrowings
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
115,748
|
|
|
147,806
|
|
||
Long-term borrowings (less unamortized debt issuance costs of $94)
|
74,906
|
|
|
—
|
|
||
Junior subordinated debentures (less unamortized debt issuance costs of $40 and $118)
|
62,848
|
|
|
76,173
|
|
||
Subordinated debentures (less unamortized debt issuance costs of $399 and $272)
|
49,601
|
|
|
34,728
|
|
||
Total borrowings
|
303,103
|
|
|
258,707
|
|
||
Other liabilities
|
236,552
|
|
|
92,275
|
|
||
Total liabilities
|
9,687,022
|
|
|
7,778,102
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Stockholders' Equity
|
|
|
|
||||
Preferred stock, $.01 par value; authorized: 1,000,000 shares, outstanding: none
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value; authorized: 75,000,000 shares,
issued and outstanding: 34,377,388 shares at December 31, 2019 and 28,080,408 shares at December 31, 2018 (includes 147,184 and 153,459 shares of unvested participating restricted stock awards, respectively) |
342
|
|
|
279
|
|
||
Value of shares held in rabbi trust at cost: 143,820 shares at December 31, 2019 and 153,226 shares at December 31, 2018
|
(4,735
|
)
|
|
(4,718
|
)
|
||
Deferred compensation obligation
|
4,735
|
|
|
4,718
|
|
||
Additional paid in capital
|
1,035,450
|
|
|
527,648
|
|
||
Retained earnings
|
654,182
|
|
|
546,736
|
|
||
Accumulated other comprehensive loss, net of tax
|
18,169
|
|
|
(1,173
|
)
|
||
Total stockholders' equity
|
1,708,143
|
|
|
1,073,490
|
|
||
Total liabilities and stockholders' equity
|
$
|
11,395,165
|
|
|
$
|
8,851,592
|
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands, except per share data)
|
||||||||||
Interest income
|
|
|
|
|
|
||||||
Interest and fees on loans
|
$
|
411,460
|
|
|
$
|
294,293
|
|
|
$
|
253,131
|
|
Taxable interest and dividends on securities
|
32,405
|
|
|
26,513
|
|
|
22,465
|
|
|||
Nontaxable interest and dividends on securities
|
51
|
|
|
60
|
|
|
88
|
|
|||
Interest on loans held for sale
|
891
|
|
|
159
|
|
|
92
|
|
|||
Interest on federal funds sold and short-term investments
|
2,207
|
|
|
2,676
|
|
|
1,418
|
|
|||
Total interest and dividend income
|
447,014
|
|
|
323,701
|
|
|
277,194
|
|
|||
Interest expense
|
|
|
|
|
|
||||||
Interest on deposits
|
41,186
|
|
|
19,995
|
|
|
12,702
|
|
|||
Interest on borrowings
|
12,693
|
|
|
5,541
|
|
|
5,632
|
|
|||
Total interest expense
|
53,879
|
|
|
25,536
|
|
|
18,334
|
|
|||
Net interest income
|
393,135
|
|
|
298,165
|
|
|
258,860
|
|
|||
Provision for loan losses
|
6,000
|
|
|
4,775
|
|
|
2,950
|
|
|||
Net interest income after provision for loan losses
|
387,135
|
|
|
293,390
|
|
|
255,910
|
|
|||
Noninterest income
|
|
|
|
|
|
||||||
Deposit account fees
|
20,040
|
|
|
18,327
|
|
|
17,822
|
|
|||
Interchange and ATM fees
|
22,152
|
|
|
18,916
|
|
|
17,291
|
|
|||
Investment management
|
28,719
|
|
|
26,155
|
|
|
23,802
|
|
|||
Mortgage banking income
|
11,454
|
|
|
4,071
|
|
|
4,960
|
|
|||
Increase in cash surrender value of life insurance policies
|
5,013
|
|
|
4,060
|
|
|
4,127
|
|
|||
Gain on life insurance benefits
|
434
|
|
|
1,463
|
|
|
—
|
|
|||
Loan level derivative income
|
6,478
|
|
|
2,373
|
|
|
3,836
|
|
|||
Other noninterest income
|
21,004
|
|
|
13,140
|
|
|
11,156
|
|
|||
Total noninterest income
|
115,294
|
|
|
88,505
|
|
|
82,994
|
|
|||
Noninterest expenses
|
|
|
|
|
|
||||||
Salaries and employee benefits
|
149,165
|
|
|
124,328
|
|
|
116,600
|
|
|||
Occupancy and equipment expenses
|
33,207
|
|
|
27,098
|
|
|
24,693
|
|
|||
Data processing & facilities management
|
6,516
|
|
|
5,125
|
|
|
4,988
|
|
|||
FDIC assessment
|
1,394
|
|
|
2,774
|
|
|
3,068
|
|
|||
Advertising expense
|
5,444
|
|
|
4,942
|
|
|
4,989
|
|
|||
Consulting expense
|
5,448
|
|
|
3,891
|
|
|
4,038
|
|
|||
Core deposit amortization
|
5,545
|
|
|
2,344
|
|
|
2,711
|
|
|||
Debit card expense
|
4,220
|
|
|
3,429
|
|
|
3,430
|
|
|||
Loss on sale of securities
|
1,462
|
|
|
—
|
|
|
—
|
|
|||
Merger and acquisition expense
|
26,433
|
|
|
11,168
|
|
|
3,393
|
|
|||
Software maintenance
|
5,511
|
|
|
4,202
|
|
|
3,636
|
|
|||
Other noninterest expenses
|
39,976
|
|
|
36,668
|
|
|
32,813
|
|
|||
Total noninterest expenses
|
284,321
|
|
|
225,969
|
|
|
204,359
|
|
|||
Income before income taxes
|
218,108
|
|
|
155,926
|
|
|
134,545
|
|
|||
Provision for income taxes
|
52,933
|
|
|
34,304
|
|
|
47,341
|
|
|||
Net Income
|
$
|
165,175
|
|
|
$
|
121,622
|
|
|
$
|
87,204
|
|
Basic earnings per share
|
$
|
5.03
|
|
|
$
|
4.41
|
|
|
$
|
3.19
|
|
Diluted earnings per share
|
$
|
5.03
|
|
|
$
|
4.40
|
|
|
$
|
3.19
|
|
Weighted average common shares (basic)
|
32,810,433
|
|
|
27,592,380
|
|
|
27,294,028
|
|
|||
Common share equivalents
|
45,801
|
|
|
61,428
|
|
|
78,076
|
|
|||
Weighted average common shares (diluted)
|
32,856,234
|
|
|
27,653,808
|
|
|
27,372,104
|
|
|||
Cash dividends declared per common share
|
$
|
1.76
|
|
|
$
|
1.52
|
|
|
$
|
1.28
|
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net income
|
$
|
165,175
|
|
|
$
|
121,622
|
|
|
$
|
87,204
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||
Net change in fair value of securities available for sale
|
10,345
|
|
|
(4,501
|
)
|
|
(677
|
)
|
|||
Net change in fair value of cash flow hedges
|
10,331
|
|
|
4,829
|
|
|
443
|
|
|||
Net change in other comprehensive income for defined benefit postretirement plans
|
(1,334
|
)
|
|
1,558
|
|
|
(260
|
)
|
|||
Total other comprehensive income (loss)
|
19,342
|
|
|
1,886
|
|
|
(494
|
)
|
|||
Total comprehensive income
|
$
|
184,517
|
|
|
$
|
123,508
|
|
|
$
|
86,710
|
|
|
Common Stock Outstanding
|
|
Common Stock
|
|
Value of Shares Held in Rabbi Trust at Cost
|
|
Deferred Compensation Obligation
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||||||||
|
(Dollars in thousands, except per share data)
|
|||||||||||||||||||||||||||||
Balance December 31, 2016
|
27,005,813
|
|
|
$
|
268
|
|
|
$
|
(4,277
|
)
|
|
$
|
4,277
|
|
|
$
|
451,664
|
|
|
$
|
414,095
|
|
|
$
|
(1,337
|
)
|
|
$
|
864,690
|
|
Cumulative effect accounting adjustment (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
542
|
|
|
(365
|
)
|
|
—
|
|
|
177
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,204
|
|
|
—
|
|
|
87,204
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(494
|
)
|
|
(494
|
)
|
|||||||
Common dividend declared ($1.28 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,997
|
)
|
|
—
|
|
|
(34,997
|
)
|
|||||||
Common stock issued for acquisition
|
369,286
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
23,464
|
|
|
—
|
|
|
—
|
|
|
23,468
|
|
|||||||
Proceeds from exercise of stock options, net of cash paid
|
19,340
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||||
Stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,333
|
|
|
—
|
|
|
—
|
|
|
3,333
|
|
|||||||
Restricted stock awards issued, net of awards surrendered
|
31,665
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1,423
|
)
|
|
—
|
|
|
—
|
|
|
(1,422
|
)
|
|||||||
Shares issued under direct stock purchase plan
|
24,086
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,636
|
|
|
—
|
|
|
—
|
|
|
1,636
|
|
|||||||
Deferred compensation and other retirement benefit obligations
|
—
|
|
|
—
|
|
|
(313
|
)
|
|
313
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance December 31, 2017
|
27,450,190
|
|
|
$
|
273
|
|
|
$
|
(4,590
|
)
|
|
$
|
4,590
|
|
|
$
|
479,430
|
|
|
$
|
465,937
|
|
|
$
|
(1,831
|
)
|
|
$
|
943,809
|
|
Opening balance reclassification (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
(397
|
)
|
|
—
|
|
|||||||
Cumulative effect accounting adjustment (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
831
|
|
|
(831
|
)
|
|
—
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121,622
|
|
|
—
|
|
|
121,622
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,886
|
|
|
1,886
|
|
|||||||
Common dividend declared ($1.52 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,051
|
)
|
|
—
|
|
|
(42,051
|
)
|
|||||||
Common stock issued for acquisition
|
528,353
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
42,469
|
|
|
—
|
|
|
—
|
|
|
42,474
|
|
|||||||
Proceeds from exercise of stock options, net of cash paid
|
23,195
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|||||||
Stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,225
|
|
|
—
|
|
|
—
|
|
|
4,225
|
|
|||||||
Restricted stock awards issued, net of awards surrendered
|
43,383
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1,372
|
)
|
|
—
|
|
|
—
|
|
|
(1,371
|
)
|
|||||||
Shares issued under direct stock purchase plan
|
35,287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,712
|
|
|
—
|
|
|
—
|
|
|
2,712
|
|
|||||||
Deferred compensation and other retirement benefit obligations
|
—
|
|
|
—
|
|
|
(128
|
)
|
|
128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance December 31, 2018
|
28,080,408
|
|
|
$
|
279
|
|
|
$
|
(4,718
|
)
|
|
$
|
4,718
|
|
|
$
|
527,648
|
|
|
$
|
546,736
|
|
|
$
|
(1,173
|
)
|
|
$
|
1,073,490
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165,175
|
|
|
—
|
|
|
165,175
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,342
|
|
|
19,342
|
|
|||||||
Common dividend declared ($1.76 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,729
|
)
|
|
—
|
|
|
(57,729
|
)
|
|||||||
Common stock issued for acquisition
|
6,166,010
|
|
|
61
|
|
|
—
|
|
|
—
|
|
|
499,632
|
|
|
—
|
|
|
—
|
|
|
499,693
|
|
|||||||
Proceeds from exercise of stock options, net of cash paid
|
14,646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|||||||
Stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,403
|
|
|
—
|
|
|
—
|
|
|
4,403
|
|
|||||||
Restricted stock awards issued, net of awards surrendered
|
50,080
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1,464
|
)
|
|
—
|
|
|
—
|
|
|
(1,463
|
)
|
|||||||
Shares issued under direct stock purchase plan
|
66,244
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
4,950
|
|
|
—
|
|
|
—
|
|
|
4,951
|
|
|||||||
Deferred compensation and other retirement benefit obligations
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance December 31, 2019
|
34,377,388
|
|
|
$
|
342
|
|
|
$
|
(4,735
|
)
|
|
$
|
4,735
|
|
|
$
|
1,035,450
|
|
|
$
|
654,182
|
|
|
$
|
18,169
|
|
|
$
|
1,708,143
|
|
(1)
|
Represents adjustment needed to reflect the cumulative impact on retained earnings for previously recognized stock based compensation, which included an adjustment for estimated forfeitures. Pursuant to the Company's adoption of Accounting Standards Update 2016-09, the Company has elected to recognize stock based compensation without inclusion of a forfeiture estimate, and as such has recognized this adjustment to present retained earnings consistent with this election.
|
(2)
|
Represents adjustment needed to reflect the cumulative impact on retained earnings for reclassification of the income tax effects attributable to accumulated other comprehensive income, as a result of the Tax Cuts and Jobs Act (the "Tax Act"). Pursuant to the Company's adoption of Accounting Standards Update 2018-02, the Company has elected to reclassify amounts stranded in other comprehensive income to retained earnings.
|
(3)
|
Represents adjustment needed to reflect the cumulative impact on retained earnings for the classification and measurement of investments in equity securities. Pursuant to the Company's adoption of Accounting Standards Update 2016-01, the Company's investments in equity securities will no longer be classified as available for sale, therefore the Company was required to reclassify the net unrealized gain recognized on the change in fair value of these equity securities from other comprehensive income to retained earnings.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Cash flow from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
165,175
|
|
|
$
|
121,622
|
|
|
$
|
87,204
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization
|
19,439
|
|
|
15,629
|
|
|
15,760
|
|
|||
Change in unamortized net loan costs and premiums
|
(10,086
|
)
|
|
365
|
|
|
(79
|
)
|
|||
Provision for loan losses
|
6,000
|
|
|
4,775
|
|
|
2,950
|
|
|||
Deferred income tax expense (benefit)
|
10,594
|
|
|
(4,497
|
)
|
|
9,211
|
|
|||
Tax expense related to write-down of investments in low income housing projects
|
—
|
|
|
—
|
|
|
466
|
|
|||
Net (gain) loss on equity securities
|
(1,566
|
)
|
|
1,225
|
|
|
—
|
|
|||
Net (gain) loss on sale of securities
|
1,462
|
|
|
—
|
|
|
(3
|
)
|
|||
Net gain on bank premises and equipment
|
(474
|
)
|
|
(1,126
|
)
|
|
(108
|
)
|
|||
Net loss on other real estate owned and foreclosed assets
|
401
|
|
|
112
|
|
|
288
|
|
|||
Realized gain on sale leaseback transaction
|
(578
|
)
|
|
(730
|
)
|
|
(1,034
|
)
|
|||
Stock based compensation
|
4,403
|
|
|
4,225
|
|
|
3,333
|
|
|||
Increase in cash surrender value of life insurance policies
|
(5,013
|
)
|
|
(4,060
|
)
|
|
(4,127
|
)
|
|||
Gain on life insurance benefits
|
(434
|
)
|
|
(1,463
|
)
|
|
—
|
|
|||
Operating lease payments
|
(10,669
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value on loans held for sale
|
(822
|
)
|
|
51
|
|
|
113
|
|
|||
Net change in:
|
|
|
|
|
|
||||||
Trading assets
|
(675
|
)
|
|
(180
|
)
|
|
(520
|
)
|
|||
Loans held for sale
|
59,932
|
|
|
(1,714
|
)
|
|
1,258
|
|
|||
Other assets
|
(39,850
|
)
|
|
503
|
|
|
20,022
|
|
|||
Other liabilities
|
19,283
|
|
|
7,100
|
|
|
(3,825
|
)
|
|||
Total adjustments
|
51,347
|
|
|
20,215
|
|
|
43,705
|
|
|||
Net cash provided by operating activities
|
216,522
|
|
|
141,837
|
|
|
130,909
|
|
|||
Cash flows provided by (used) in investing activities
|
|
|
|
|
|
||||||
Proceeds from sales of equity securities
|
1,461
|
|
|
5,752
|
|
|
—
|
|
|||
Purchases of equity securities
|
(711
|
)
|
|
(6,315
|
)
|
|
—
|
|
|||
Proceeds from sales of securities available for sale
|
45,863
|
|
|
—
|
|
|
1,027
|
|
|||
Proceeds from maturities and principal repayments of securities available for sale
|
51,104
|
|
|
82,418
|
|
|
54,191
|
|
|||
Purchases of securities available for sale
|
(68,677
|
)
|
|
(78,990
|
)
|
|
(140,885
|
)
|
|||
Proceeds from maturities and principal repayments of securities held to maturity
|
126,991
|
|
|
82,355
|
|
|
78,757
|
|
|||
Purchases of securities held to maturity
|
(59,967
|
)
|
|
(195,538
|
)
|
|
(89,033
|
)
|
|||
Net redemption (purchases) of Federal Home Loan Bank stock
|
18,896
|
|
|
(2,376
|
)
|
|
386
|
|
|||
Investments in low income housing projects
|
(10,052
|
)
|
|
(3,434
|
)
|
|
(7,645
|
)
|
|||
Purchases of life insurance policies
|
(163
|
)
|
|
(164
|
)
|
|
(164
|
)
|
|||
Proceeds from life insurance policies
|
3,162
|
|
|
2,850
|
|
|
—
|
|
|||
Net (increase) decrease in loans
|
27,816
|
|
|
(258,633
|
)
|
|
(204,702
|
)
|
|||
Net cash acquired (paid) in business combinations
|
(105,264
|
)
|
|
(6,906
|
)
|
|
6,289
|
|
|||
Purchases of bank premises and equipment
|
(16,583
|
)
|
|
(11,106
|
)
|
|
(25,080
|
)
|
|||
Proceeds from the sale of bank premises and equipment
|
3,796
|
|
|
2,189
|
|
|
6,306
|
|
|||
Proceeds from the sale of other real estate owned and foreclosed assets
|
2,488
|
|
|
387
|
|
|
3,784
|
|
|||
Net cash provided by (used in) investing activities
|
20,160
|
|
|
(387,511
|
)
|
|
(316,769
|
)
|
|||
Cash flows provided by (used in) financing activities
|
|
|
|
|
|
||||||
Net decrease in time deposits
|
(45,272
|
)
|
|
(1,430
|
)
|
|
(19,509
|
)
|
|||
Net increase (decrease) in other deposits
|
(160,637
|
)
|
|
280,017
|
|
|
177,241
|
|
|||
Net proceeds from (repayments of) short-term Federal Home Loan Bank borrowings
|
(132,046
|
)
|
|
67,046
|
|
|
—
|
|
|||
Repayments of long-term Federal Home Loan Bank borrowings
|
(25,000
|
)
|
|
(2,475
|
)
|
|
—
|
|
|||
Net decrease in customer repurchase agreements
|
—
|
|
|
(21,503
|
)
|
|
(14,234
|
)
|
|||
Proceeds from line of credit, net of issuance costs
|
49,980
|
|
|
—
|
|
|
—
|
|
|||
Repayment of line of credit, net of issuance costs
|
(49,980
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from long-term debt, net of issuance costs
|
74,867
|
|
|
—
|
|
|
—
|
|
Repayments of junior subordinated debentures, net of issuance costs
|
(13,329
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from subordinated debentures, net of issuance costs
|
49,526
|
|
|
—
|
|
|
—
|
|
|||
Repayments of subordinated debentures, net of issuance costs
|
(34,767
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds from exercise of stock options
|
281
|
|
|
184
|
|
|
214
|
|
|||
Restricted stock awards issued, net of awards surrendered
|
(1,463
|
)
|
|
(1,371
|
)
|
|
(1,422
|
)
|
|||
Proceeds from shares issued under direct stock purchase plan
|
4,951
|
|
|
2,712
|
|
|
1,636
|
|
|||
Common dividends paid
|
(53,274
|
)
|
|
(40,167
|
)
|
|
(34,045
|
)
|
|||
Net cash provided by (used in) financing activities
|
(336,163
|
)
|
|
283,013
|
|
|
109,881
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(99,481
|
)
|
|
37,339
|
|
|
(75,979
|
)
|
|||
Cash and cash equivalents at beginning of year
|
250,455
|
|
|
213,116
|
|
|
289,095
|
|
|||
Cash and cash equivalents at end of period
|
$
|
150,974
|
|
|
$
|
250,455
|
|
|
$
|
213,116
|
|
Cash paid during the year for
|
|
|
|
|
|
||||||
Interest on deposits and borrowings
|
$
|
49,704
|
|
|
$
|
25,337
|
|
|
$
|
18,626
|
|
Income taxes
|
$
|
39,575
|
|
|
$
|
27,809
|
|
|
$
|
32,865
|
|
Supplemental schedule of noncash investing and financing activities
|
|
|
|
|
|
||||||
Transfer of loans to other real estate owned and foreclosed assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
511
|
|
Net increase in capital commitments relating to low income housing project investments
|
$
|
36,543
|
|
|
$
|
2,833
|
|
|
$
|
20
|
|
Transfer of customer repurchase agreements to deposits
|
$
|
—
|
|
|
$
|
141,176
|
|
|
—
|
|
|
Initial recognition of operating leases upon adoption of Accounting Standards Update 2016-02 (1)
|
$
|
32,777
|
|
|
—
|
|
|
—
|
|
||
Recognition of operating lease at commencement
|
$
|
14,951
|
|
|
—
|
|
|
—
|
|
||
In conjunction with the Company's acquisitions, assets were acquired and liabilities were assumed as follows
|
|
|
|
|
|
||||||
Common stock issued for acquisition
|
$
|
499,693
|
|
|
$
|
42,474
|
|
|
$
|
23,468
|
|
Fair value of assets acquired, net of cash acquired
|
$
|
2,711,067
|
|
|
$
|
362,286
|
|
|
$
|
179,252
|
|
Fair value of liabilities assumed
|
$
|
2,106,110
|
|
|
$
|
312,906
|
|
|
$
|
162,073
|
|
(1)
|
Represents adjustment needed to reflect the opening balance of the Company's Right of Use ("ROU") assets and lease liabilities pursuant to the adoption of Accounting Standards Update 2016-02 effective January 1, 2019. Upon adoption, the Company recognized on its balance sheet ROU assets of approximately $32.8 million, with a corresponding operating lease liability of approximately $34.1 million, with an adjustment to remove the Company's existing deferred rent liability of approximately $1.3 million.
|
•
|
Changes in the expected principal and interest payments over the estimated life - Changes in expected cash flows may be driven by the credit outlook and actions taken with borrowers. Changes in expected future cash flows resulting from loan modifications are included in the assessment of expected cash flows.
|
•
|
Change in prepayment assumptions - Prepayments affect the estimated life of the loans, which may change the amount of interest income expected to be collected.
|
•
|
Change in interest rate indices for variable rate loans - Expected future cash flows are based, as applicable, on the variable rates in effect at the time of the assessment of expected cash flows.
|
•
|
National and local economic and business conditions
|
•
|
Level and trend of delinquencies
|
•
|
Level and trend of charge-offs and recoveries
|
•
|
Trends in volume and terms of loans
|
•
|
Risk selection, lending policy and underwriting standards
|
•
|
Experience and depth of management
|
•
|
Banking industry conditions and other external factors
|
•
|
Concentration risk
|
Core deposit intangibles
|
10 years
|
Noncompete agreement
|
1 year
|
Customer Lists
|
12 years
|
Leases
|
3-30 years
|
|
Net Assets Acquired at Fair Value
|
||
|
(Dollars in thousands)
|
||
Assets
|
|
||
Cash
|
$
|
56,331
|
|
Investments
|
196,937
|
|
|
Loans
|
2,073,714
|
|
|
Premises and equipment
|
24,253
|
|
|
Goodwill
|
250,101
|
|
|
Core deposit and other intangibles
|
19,870
|
|
|
Other assets
|
146,192
|
|
|
Total assets acquired
|
2,767,398
|
|
|
Liabilities
|
|
||
Deposits
|
1,930,436
|
|
|
Borrowings
|
124,817
|
|
|
Other liabilities
|
50,857
|
|
|
Total liabilities assumed
|
2,106,110
|
|
|
Purchase price
|
$
|
661,288
|
|
|
|
As of April 1, 2019
|
||
|
|
(Dollars in thousands)
|
||
Contractually required principal and interest at acquisition
|
|
$
|
14,849
|
|
Contractual cash flows not expected to be collected
|
|
(5,717
|
)
|
|
Expected cash flows at acquisition
|
|
9,132
|
|
|
Interest component of expected cash flows
|
|
(1,464
|
)
|
|
Basis in PCI loans at acquisition - estimated fair value
|
|
$
|
7,668
|
|
|
|
Year Ended
|
||||||
|
|
December 31
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in thousands)
|
||||||
Net interest income after provision for loan losses
|
|
$
|
408,918
|
|
|
$
|
371,264
|
|
Net income
|
|
$
|
129,385
|
|
|
$
|
146,178
|
|
|
Net Assets Acquired at Fair Value
|
||
|
(Dollars in thousands)
|
||
Assets
|
|
||
Cash
|
$
|
6,743
|
|
Investments
|
25,358
|
|
|
Loans
|
293,498
|
|
|
Premises and equipment
|
1,904
|
|
|
Goodwill
|
24,299
|
|
|
Core deposit and other intangibles
|
8,588
|
|
|
Other assets
|
8,639
|
|
|
Total assets acquired
|
369,029
|
|
|
Liabilities
|
|
||
Deposits
|
278,204
|
|
|
Borrowings
|
33,093
|
|
|
Other liabilities
|
1,609
|
|
|
Total liabilities assumed
|
312,906
|
|
|
Purchase price
|
$
|
56,123
|
|
|
|
Years Ended
|
||||||
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
|||||||
Net interest income after provision for loan losses
|
|
$
|
304,049
|
|
|
$
|
267,104
|
|
Net income
|
|
122,310
|
|
|
88,518
|
|
|
Years Ended December 31
|
||||||||
|
2019
|
|
2018
|
|
2017
|
||||
Net gains (losses) recognized during the period on equity securities
|
$
|
1,566
|
|
|
$
|
(1,225
|
)
|
|
n/a
|
Less: net gains recognized during the period on equity securities sold during the period
|
18
|
|
|
874
|
|
|
n/a
|
||
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date
|
$
|
1,548
|
|
|
$
|
(2,099
|
)
|
|
n/a
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Amortized
Cost |
Gross
Unrealized Gains |
Gross Unrealized
Losses |
Fair
Value |
|
Amortized
Cost |
Gross
Unrealized Gains |
Gross Unrealized
Losses |
Fair
Value |
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||
Available for sale securities
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government agency securities
|
$
|
32,473
|
|
$
|
642
|
|
$
|
—
|
|
$
|
33,115
|
|
|
$
|
32,477
|
|
$
|
—
|
|
$
|
(439
|
)
|
$
|
32,038
|
|
Agency mortgage-backed securities
|
243,548
|
|
3,456
|
|
(4
|
)
|
247,000
|
|
|
222,491
|
|
1,020
|
|
(3,406
|
)
|
220,105
|
|
||||||||
Agency collateralized mortgage obligations
|
87,305
|
|
1,225
|
|
(19
|
)
|
88,511
|
|
|
138,149
|
|
197
|
|
(3,435
|
)
|
134,911
|
|
||||||||
State, county, and municipal securities
|
1,377
|
|
19
|
|
—
|
|
1,396
|
|
|
1,719
|
|
16
|
|
—
|
|
1,735
|
|
||||||||
Single issuer trust preferred securities issued by banks
|
488
|
|
5
|
|
—
|
|
493
|
|
|
717
|
|
—
|
|
(10
|
)
|
707
|
|
||||||||
Pooled trust preferred securities issued by banks and insurers
|
1,488
|
|
—
|
|
(374
|
)
|
1,114
|
|
|
1,678
|
|
—
|
|
(349
|
)
|
1,329
|
|
||||||||
Small business administration pooled securities
|
54,024
|
|
771
|
|
—
|
|
54,795
|
|
|
53,317
|
|
—
|
|
(1,390
|
)
|
51,927
|
|
||||||||
Total available for sale securities
|
420,703
|
|
6,118
|
|
(397
|
)
|
426,424
|
|
|
450,548
|
|
1,233
|
|
(9,029
|
)
|
442,752
|
|
||||||||
Held to maturity securities
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government agency securities
|
12,874
|
|
123
|
|
—
|
|
12,997
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
U.S. treasury securities
|
4,032
|
|
21
|
|
—
|
|
4,053
|
|
|
1,004
|
|
11
|
|
—
|
|
1,015
|
|
||||||||
Agency mortgage-backed securities
|
397,414
|
|
8,445
|
|
(57
|
)
|
405,802
|
|
|
252,484
|
|
1,548
|
|
(3,104
|
)
|
250,928
|
|
||||||||
Agency collateralized mortgage obligations
|
293,662
|
|
4,501
|
|
(849
|
)
|
297,314
|
|
|
332,775
|
|
869
|
|
(6,920
|
)
|
326,724
|
|
||||||||
Single issuer trust preferred securities issued by banks
|
1,500
|
|
—
|
|
(10
|
)
|
1,490
|
|
|
1,500
|
|
—
|
|
(10
|
)
|
1,490
|
|
||||||||
Small business administration pooled securities
|
31,324
|
|
338
|
|
(55
|
)
|
31,607
|
|
|
23,727
|
|
105
|
|
(349
|
)
|
23,483
|
|
||||||||
Total held to maturity securities
|
740,806
|
|
13,428
|
|
(971
|
)
|
753,263
|
|
|
611,490
|
|
2,533
|
|
(10,383
|
)
|
603,640
|
|
||||||||
Total
|
$
|
1,161,509
|
|
$
|
19,546
|
|
$
|
(1,368
|
)
|
$
|
1,179,687
|
|
|
$
|
1,062,038
|
|
$
|
3,766
|
|
$
|
(19,412
|
)
|
$
|
1,046,392
|
|
|
Due in one year or less
|
|
Due after one year to five years
|
|
Due after five to ten years
|
|
Due after ten years
|
|
Total
|
||||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||
Available for sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. government agency securities
|
$
|
10,000
|
|
|
$
|
10,003
|
|
|
$
|
10,002
|
|
|
$
|
10,154
|
|
|
$
|
12,471
|
|
|
$
|
12,958
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,473
|
|
|
$
|
33,115
|
|
Agency mortgage-backed securities
|
—
|
|
|
—
|
|
|
70,945
|
|
|
71,305
|
|
|
54,798
|
|
|
56,181
|
|
|
117,805
|
|
|
119,514
|
|
|
243,548
|
|
|
247,000
|
|
||||||||||
Agency collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,305
|
|
|
88,511
|
|
|
87,305
|
|
|
88,511
|
|
||||||||||
State, county, and municipal securities
|
—
|
|
|
—
|
|
|
1,188
|
|
|
1,193
|
|
|
189
|
|
|
203
|
|
|
—
|
|
|
—
|
|
|
1,377
|
|
|
1,396
|
|
||||||||||
Single issuer trust preferred securities issued by banks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|
493
|
|
|
488
|
|
|
493
|
|
||||||||||
Pooled trust preferred securities issued by banks and insurers
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,488
|
|
|
1,114
|
|
|
1,488
|
|
|
1,114
|
|
||||||||||
Small business administration pooled securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,024
|
|
|
54,795
|
|
|
54,024
|
|
|
54,795
|
|
||||||||||
Total available for sale securities
|
$
|
10,000
|
|
|
$
|
10,003
|
|
|
$
|
82,135
|
|
|
$
|
82,652
|
|
|
$
|
67,458
|
|
|
$
|
69,342
|
|
|
$
|
261,110
|
|
|
$
|
264,427
|
|
|
$
|
420,703
|
|
|
$
|
426,424
|
|
Held to maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. government agency securities
|
$
|
4,962
|
|
|
$
|
4,989
|
|
|
$
|
7,912
|
|
|
$
|
8,008
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,874
|
|
|
$
|
12,997
|
|
U.S. Treasury securities
|
—
|
|
|
—
|
|
|
4,032
|
|
|
4,053
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,032
|
|
|
4,053
|
|
||||||||||
Agency mortgage-backed securities
|
—
|
|
|
—
|
|
|
10,812
|
|
|
10,818
|
|
|
35,656
|
|
|
36,151
|
|
|
350,946
|
|
|
358,833
|
|
|
397,414
|
|
|
405,802
|
|
||||||||||
Agency collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293,662
|
|
|
297,314
|
|
|
293,662
|
|
|
297,314
|
|
||||||||||
Single issuer trust preferred securities issued by banks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
1,490
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
1,490
|
|
||||||||||
Small business administration pooled securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,324
|
|
|
31,607
|
|
|
31,324
|
|
|
31,607
|
|
||||||||||
Total held to maturity securities
|
4,962
|
|
|
4,989
|
|
|
22,756
|
|
|
22,879
|
|
|
37,156
|
|
|
37,641
|
|
|
675,932
|
|
|
687,754
|
|
|
740,806
|
|
|
753,263
|
|
||||||||||
Total
|
$
|
14,962
|
|
|
$
|
14,992
|
|
|
$
|
104,891
|
|
|
$
|
105,531
|
|
|
$
|
104,614
|
|
|
$
|
106,983
|
|
|
$
|
937,042
|
|
|
$
|
952,181
|
|
|
$
|
1,161,509
|
|
|
$
|
1,179,687
|
|
|
|
|
December 31, 2019
|
|||||||||||||||||||||||
|
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
|||||||||||||||||||
Description of securities
|
# of
holdings |
|
Fair Value
|
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair Value
|
|
Unrealized
Losses |
|||||||||||||
|
|
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Agency mortgage-backed securities
|
12
|
|
|
$
|
34,009
|
|
|
$
|
(59
|
)
|
|
$
|
243
|
|
|
$
|
(2
|
)
|
|
$
|
34,252
|
|
|
$
|
(61
|
)
|
Agency collateralized mortgage obligations
|
17
|
|
|
48,476
|
|
|
(215
|
)
|
|
37,382
|
|
|
(653
|
)
|
|
85,858
|
|
|
(868
|
)
|
||||||
Single issuer trust preferred securities issued by banks and insurers
|
1
|
|
|
—
|
|
|
—
|
|
|
1,490
|
|
|
(10
|
)
|
|
1,490
|
|
|
(10
|
)
|
||||||
Pooled trust preferred securities issued by banks and insurers
|
1
|
|
|
—
|
|
|
—
|
|
|
1,114
|
|
|
(374
|
)
|
|
1,114
|
|
|
(374
|
)
|
||||||
Small business administration pooled securities
|
1
|
|
|
7,349
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
7,349
|
|
|
(55
|
)
|
||||||
Total temporarily impaired securities
|
32
|
|
|
$
|
89,834
|
|
|
$
|
(329
|
)
|
|
$
|
40,229
|
|
|
$
|
(1,039
|
)
|
|
$
|
130,063
|
|
|
$
|
(1,368
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
December 31, 2018
|
|||||||||||||||||||||||
|
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
|||||||||||||||||||
Description of securities
|
# of
holdings |
|
Fair Value
|
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair Value
|
|
Unrealized
Losses |
|||||||||||||
|
|
|
(Dollars in thousands)
|
|||||||||||||||||||||||
U.S. government agency securities
|
3
|
|
|
$
|
9,960
|
|
|
$
|
(43
|
)
|
|
$
|
22,078
|
|
|
$
|
(396
|
)
|
|
$
|
32,038
|
|
|
$
|
(439
|
)
|
Agency mortgage-backed securities
|
144
|
|
|
104,616
|
|
|
(1,363
|
)
|
|
222,850
|
|
|
(5,147
|
)
|
|
327,466
|
|
|
(6,510
|
)
|
||||||
Agency collateralized mortgage obligations
|
48
|
|
|
57,871
|
|
|
(398
|
)
|
|
279,229
|
|
|
(9,957
|
)
|
|
337,100
|
|
|
(10,355
|
)
|
||||||
Single issuer trust preferred securities issued by banks and insurers
|
2
|
|
|
2,197
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
2,197
|
|
|
(20
|
)
|
||||||
Pooled trust preferred securities issued by banks and insurers
|
1
|
|
|
—
|
|
|
—
|
|
|
1,329
|
|
|
(349
|
)
|
|
1,329
|
|
|
(349
|
)
|
||||||
Small business administration pooled securities
|
7
|
|
|
28,257
|
|
|
(662
|
)
|
|
40,621
|
|
|
(1,077
|
)
|
|
68,878
|
|
|
(1,739
|
)
|
||||||
Total temporarily impaired securities
|
205
|
|
|
$
|
202,901
|
|
|
$
|
(2,486
|
)
|
|
$
|
566,107
|
|
|
$
|
(16,926
|
)
|
|
$
|
769,008
|
|
|
$
|
(19,412
|
)
|
•
|
Agency Mortgage-Backed Securities, Agency Collateralized Mortgage Obligations and Small Business Administration Pooled Securities: These portfolios have contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.
|
•
|
Single Issuer Trust Preferred Securities: This portfolio consists of one security, which is investment grade. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic environment. Management evaluates various financial metrics for the issuers, including regulatory capital ratios of the issuers.
|
•
|
Pooled Trust Preferred Securities: This portfolio consists of one below investment grade security which is performing. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic and regulatory environment. Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing. In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.
|
|
December 31, 2019
|
|
||||||||||||||||||||||||||||||
|
Commercial
and Industrial |
|
Commercial
Real Estate |
|
Commercial
Construction |
|
Small
Business |
|
Residential
Real Estate |
|
Home
Equity |
|
Other Consumer
|
|
Total
|
|
||||||||||||||||
|
(Dollars in thousands)
|
|
||||||||||||||||||||||||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance
|
$
|
15,760
|
|
|
$
|
32,370
|
|
|
$
|
5,158
|
|
|
$
|
1,756
|
|
|
$
|
3,219
|
|
|
$
|
5,608
|
|
|
$
|
422
|
|
|
$
|
64,293
|
|
|
Charge-offs
|
(244
|
)
|
|
(2,614
|
)
|
|
—
|
|
|
(509
|
)
|
|
—
|
|
|
(240
|
)
|
|
(1,598
|
)
|
|
(5,205
|
)
|
|
||||||||
Recoveries
|
1,131
|
|
|
152
|
|
|
—
|
|
|
122
|
|
|
142
|
|
|
318
|
|
|
787
|
|
|
2,652
|
|
|
||||||||
Provision (benefit)
|
947
|
|
|
3,027
|
|
|
895
|
|
|
377
|
|
|
79
|
|
|
(110
|
)
|
|
785
|
|
|
6,000
|
|
|
||||||||
Ending balance
|
$
|
17,594
|
|
|
$
|
32,935
|
|
|
$
|
6,053
|
|
|
$
|
1,746
|
|
|
$
|
3,440
|
|
|
$
|
5,576
|
|
|
$
|
396
|
|
|
$
|
67,740
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
17,468
|
|
|
$
|
32,887
|
|
|
$
|
6,053
|
|
|
$
|
1,738
|
|
|
$
|
2,803
|
|
|
$
|
5,420
|
|
|
$
|
391
|
|
|
$
|
66,760
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
126
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
637
|
|
|
$
|
156
|
|
|
$
|
5
|
|
|
$
|
980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financing receivables ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Collectively evaluated for impairment
|
$
|
1,370,580
|
|
|
$
|
3,987,848
|
|
|
$
|
547,293
|
|
|
$
|
173,960
|
|
|
$
|
1,571,848
|
|
|
$
|
1,127,963
|
|
|
$
|
29,663
|
|
|
$
|
8,809,155
|
|
|
Individually evaluated for impairment
|
24,456
|
|
|
8,337
|
|
|
—
|
|
|
537
|
|
|
11,228
|
|
|
4,948
|
|
|
122
|
|
|
49,628
|
|
|
||||||||
Purchased credit impaired loans
|
—
|
|
|
6,174
|
|
|
—
|
|
|
—
|
|
|
7,493
|
|
|
887
|
|
|
302
|
|
|
14,856
|
|
|
||||||||
Total loans by group
|
$
|
1,395,036
|
|
|
$
|
4,002,359
|
|
|
$
|
547,293
|
|
|
$
|
174,497
|
|
|
$
|
1,590,569
|
|
|
$
|
1,133,798
|
|
|
$
|
30,087
|
|
|
$
|
8,873,639
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
December 31, 2018
|
|
||||||||||||||||||||||||||||||
|
Commercial
and Industrial |
|
Commercial
Real Estate |
|
Commercial
Construction |
|
Small
Business |
|
Residential
Real Estate |
|
Home
Equity |
|
Other Consumer
|
|
Total
|
|
||||||||||||||||
|
(Dollars in thousands)
|
|
||||||||||||||||||||||||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance
|
$
|
13,256
|
|
|
$
|
31,453
|
|
|
$
|
5,698
|
|
|
$
|
1,577
|
|
|
$
|
2,822
|
|
|
$
|
5,390
|
|
|
$
|
447
|
|
|
$
|
60,643
|
|
|
Charge-offs
|
(355
|
)
|
|
(82
|
)
|
|
—
|
|
|
(372
|
)
|
|
(148
|
)
|
|
(293
|
)
|
|
(1,347
|
)
|
|
(2,597
|
)
|
|
||||||||
Recoveries
|
182
|
|
|
188
|
|
|
—
|
|
|
46
|
|
|
12
|
|
|
156
|
|
|
888
|
|
|
1,472
|
|
|
||||||||
Provision (benefit)
|
2,677
|
|
|
811
|
|
|
(540
|
)
|
|
505
|
|
|
533
|
|
|
355
|
|
|
434
|
|
|
4,775
|
|
|
||||||||
Ending balance
|
$
|
15,760
|
|
|
$
|
32,370
|
|
|
$
|
5,158
|
|
|
$
|
1,756
|
|
|
$
|
3,219
|
|
|
$
|
5,608
|
|
|
$
|
422
|
|
|
$
|
64,293
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
15,753
|
|
|
$
|
32,333
|
|
|
$
|
5,158
|
|
|
$
|
1,755
|
|
|
$
|
2,357
|
|
|
$
|
5,444
|
|
|
$
|
414
|
|
|
$
|
63,214
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
7
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
862
|
|
|
$
|
164
|
|
|
$
|
8
|
|
|
$
|
1,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financing receivables ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Collectively evaluated for impairment
|
$
|
1,064,800
|
|
|
$
|
3,235,418
|
|
|
$
|
365,165
|
|
|
$
|
164,135
|
|
|
$
|
906,959
|
|
|
$
|
1,085,961
|
|
|
$
|
15,901
|
|
|
$
|
6,838,339
|
|
|
Individually evaluated for impairment
|
28,829
|
|
|
10,839
|
|
|
—
|
|
|
541
|
|
|
12,706
|
|
|
5,948
|
|
|
197
|
|
|
59,060
|
|
|
||||||||
Purchased credit impaired loans
|
—
|
|
|
4,991
|
|
|
—
|
|
|
—
|
|
|
3,629
|
|
|
175
|
|
|
—
|
|
|
8,795
|
|
|
||||||||
Total loans by group
|
$
|
1,093,629
|
|
|
$
|
3,251,248
|
|
|
$
|
365,165
|
|
|
$
|
164,676
|
|
|
$
|
923,294
|
|
|
$
|
1,092,084
|
|
|
$
|
16,098
|
|
|
$
|
6,906,194
|
|
(1)
|
|
December 31, 2017
|
|
||||||||||||||||||||||||||||||
|
Commercial
and Industrial |
|
Commercial
Real Estate |
|
Commercial
Construction |
|
Small
Business |
|
Residential
Real Estate |
|
Home Equity |
|
Other Consumer
|
|
Total
|
|
||||||||||||||||
|
(Dollars in thousands)
|
|
||||||||||||||||||||||||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance
|
$
|
16,921
|
|
|
$
|
30,369
|
|
|
$
|
4,522
|
|
|
$
|
1,502
|
|
|
$
|
2,621
|
|
|
$
|
5,238
|
|
|
$
|
393
|
|
|
$
|
61,566
|
|
|
Charge-offs
|
(3,891
|
)
|
|
(39
|
)
|
|
—
|
|
|
(302
|
)
|
|
(207
|
)
|
|
(276
|
)
|
|
(1,494
|
)
|
|
(6,209
|
)
|
|
||||||||
Recoveries
|
615
|
|
|
385
|
|
|
—
|
|
|
114
|
|
|
31
|
|
|
198
|
|
|
993
|
|
|
2,336
|
|
|
||||||||
Provision (benefit)
|
(389
|
)
|
|
738
|
|
|
1,176
|
|
|
263
|
|
|
377
|
|
|
230
|
|
|
555
|
|
|
2,950
|
|
|
||||||||
Ending balance
|
$
|
13,256
|
|
|
$
|
31,453
|
|
|
$
|
5,698
|
|
|
$
|
1,577
|
|
|
$
|
2,822
|
|
|
$
|
5,390
|
|
|
$
|
447
|
|
|
$
|
60,643
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
13,246
|
|
|
$
|
31,411
|
|
|
$
|
5,698
|
|
|
$
|
1,576
|
|
|
$
|
1,815
|
|
|
$
|
5,125
|
|
|
$
|
430
|
|
|
$
|
59,301
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
10
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1,007
|
|
|
$
|
265
|
|
|
$
|
17
|
|
|
$
|
1,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financing receivables ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Collectively evaluated for impairment
|
$
|
853,885
|
|
|
$
|
3,093,945
|
|
|
$
|
401,797
|
|
|
$
|
131,667
|
|
|
$
|
733,809
|
|
|
$
|
1,045,053
|
|
|
$
|
9,573
|
|
|
$
|
6,269,729
|
|
|
Individually evaluated for impairment
|
34,643
|
|
|
16,638
|
|
|
—
|
|
|
703
|
|
|
13,684
|
|
|
6,826
|
|
|
307
|
|
|
72,801
|
|
|
||||||||
Purchase credit impaired loans
|
—
|
|
|
5,978
|
|
|
—
|
|
|
—
|
|
|
6,836
|
|
|
209
|
|
|
—
|
|
|
13,023
|
|
|
||||||||
Total loans by group
|
$
|
888,528
|
|
|
$
|
3,116,561
|
|
|
$
|
401,797
|
|
|
$
|
132,370
|
|
|
$
|
754,329
|
|
|
$
|
1,052,088
|
|
|
$
|
9,880
|
|
|
$
|
6,355,553
|
|
(1)
|
(1)
|
The amount of net deferred costs on originated loans included in the ending balance was $7.1 million, at December 31, 2019 and 2018 and $6.1 million and at December 31, 2017. Net unamortized discounts on acquired loans not deemed to be PCI included in the ending balance were $21.6 million, $15.2 million and $9.4 million at December 31, 2019, 2018 and 2017, respectively.
|
•
|
Commercial and Industrial: Loans in this category consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to: accounts receivable, inventory, plant and equipment, or real estate, if applicable. Repayment sources consist of primarily, operating cash flow, and secondarily, liquidation of assets.
|
•
|
Commercial Real Estate: Loans in this category consist of mortgage loans to finance investment in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties. Loans are typically written with amortizing payment structures. Collateral values are determined based upon third party appraisals and evaluations. Loan to value ratios at origination are governed by established policy and regulatory guidelines. Repayment sources consist of, primarily, cash flow from operating leases and rents and, secondarily, liquidation of assets.
|
•
|
Commercial Construction: Loans in this category consist of short-term construction loans, revolving and nonrevolving credit lines and construction/permanent loans to finance the acquisition, development and construction or rehabilitation of real property. Project types include residential 1-4 family, condominium and multi-family homes, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties. Loans may be written with nonamortizing or hybrid payment structures depending upon the type of project. Collateral values are determined based upon third party appraisals and evaluations. Loan to value ratios at origination are governed by established policy and regulatory guidelines. Repayment sources vary depending upon the type of project and may consist of sale or lease of units, operating cash flows or liquidation of other assets.
|
•
|
Small Business: Loans in this category consist of revolving, term loan and mortgage obligations extended to sole proprietors and small businesses for purposes of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, or real estate if applicable. Repayment sources consist primarily of operating cash flows and, secondarily, liquidation of assets.
|
•
|
Residential Real Estate: Residential mortgage loans held in the Company’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral. Collateral consists of mortgage liens on 1-4 family residential properties. Residential mortgage loans also include loans to construct owner-occupied 1-4 family residential properties.
|
•
|
Home Equity: Home equity loans and credit lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on owner-occupied 1-4 family homes, condominiums or vacation homes. Each home equity loan has a fixed rate and is billed in equal payments comprised of principal and interest. The majority of home equity lines of credit have a variable rate and are billed in interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the then outstanding principal balance plus all accrued interest over a predetermined repayment period, as set forth in the note. Additionally, the Company has the option of renewing each line of credit for additional draw periods. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established policy guidelines.
|
•
|
Other Consumer: Other consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines. These loans may be secured or unsecured.
|
•
|
1- 6 Rating — Pass: Risk-rating grades "1" through "6" comprise those loans ranging from ‘Substantially Risk Free’ which indicates borrowers are of unquestioned credit standing and the pinnacle of credit quality, well established companies with a very strong financial condition, and loans fully secured by cash collateral, through ‘Acceptable Risk’, which indicates borrowers may exhibit declining earnings, strained cash flow, increasing or above average leverage and/or weakening market fundamentals that indicate below average asset quality, margins and market share. Collateral coverage is protective.
|
•
|
7 Rating — Potential Weakness: Borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Company’s asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.
|
•
|
8 Rating — Definite Weakness Loss Unlikely: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Loans may be inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. However, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.
|
•
|
9 Rating — Partial Loss Probable: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.
|
•
|
10 Rating — Definite Loss: Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.
|
|
|
|
December 31, 2019
|
||||||||||||||||||
Category
|
Risk
Rating |
|
Commercial and
Industrial |
|
Commercial Real
Estate |
|
Commercial
Construction |
|
Small Business
|
|
Total
|
||||||||||
|
|
|
(Dollars in thousands)
|
||||||||||||||||||
Pass
|
1 - 6
|
|
$
|
1,274,155
|
|
|
$
|
3,860,555
|
|
|
$
|
542,608
|
|
|
$
|
171,213
|
|
|
$
|
5,848,531
|
|
Potential weakness
|
7
|
|
63,485
|
|
|
97,268
|
|
|
2,247
|
|
|
1,416
|
|
|
164,416
|
|
|||||
Definite weakness - loss unlikely
|
8
|
|
57,396
|
|
|
44,536
|
|
|
2,438
|
|
|
1,868
|
|
|
106,238
|
|
|||||
Partial loss probable
|
9
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Definite loss
|
10
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
|
$
|
1,395,036
|
|
|
$
|
4,002,359
|
|
|
$
|
547,293
|
|
|
$
|
174,497
|
|
|
$
|
6,119,185
|
|
|
|
|
December 31, 2018
|
||||||||||||||||||
Category
|
Risk
Rating |
|
Commercial and
Industrial |
|
Commercial Real
Estate |
|
Commercial
Construction |
|
Small Business
|
|
Total
|
||||||||||
|
|
|
(Dollars in thousands)
|
||||||||||||||||||
Pass
|
1 - 6
|
|
$
|
1,014,370
|
|
|
$
|
3,156,989
|
|
|
$
|
361,884
|
|
|
$
|
161,851
|
|
|
$
|
4,695,094
|
|
Potential weakness
|
7
|
|
16,860
|
|
|
56,840
|
|
|
298
|
|
|
888
|
|
|
74,886
|
|
|||||
Definite weakness - loss unlikely
|
8
|
|
58,909
|
|
|
37,419
|
|
|
2,983
|
|
|
1,937
|
|
|
101,248
|
|
|||||
Partial loss probable
|
9
|
|
3,490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,490
|
|
|||||
Definite loss
|
10
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
|
$
|
1,093,629
|
|
|
$
|
3,251,248
|
|
|
$
|
365,165
|
|
|
$
|
164,676
|
|
|
$
|
4,874,718
|
|
|
December 31
|
||||
|
2019
|
|
2018
|
||
Residential portfolio
|
|
|
|
||
FICO score (re-scored) (1)
|
749
|
|
|
749
|
|
LTV (re-valued) (2)
|
59.0
|
%
|
|
58.6
|
%
|
Home equity portfolio
|
|
|
|
||
FICO score (re-scored) (1)
|
767
|
|
|
767
|
|
LTV (re-valued) (2) (3)
|
46.6
|
%
|
|
49.3
|
%
|
(1)
|
The average FICO scores are based upon rescores available from November and origination score data for loans booked in December.
|
(2)
|
The combined LTV ratios are based upon updated automated valuations as of November, when available, and/or the most current valuation data available. The updated automated valuations provide new information on loans that may be available since the previous valuation was obtained. If no new information is available, the valuation will default to the previously obtained data or most recent appraisal.
|
(3)
|
For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.
|
|
December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Commercial and industrial
|
$
|
22,574
|
|
|
$
|
26,310
|
|
Commercial real estate
|
3,016
|
|
|
3,015
|
|
||
Commercial construction
|
—
|
|
|
311
|
|
||
Small business
|
311
|
|
|
235
|
|
||
Residential real estate
|
13,360
|
|
|
8,251
|
|
||
Home equity
|
6,570
|
|
|
7,278
|
|
||
Other consumer
|
61
|
|
|
13
|
|
||
Total nonaccrual loans (1)
|
$
|
45,892
|
|
|
$
|
45,413
|
|
(1)
|
Included in these amounts were $24.8 million and $29.3 million of nonaccruing TDRs at December 31, 2019 and 2018, respectively.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
(Dollars in thousands)
|
||||||
Foreclosed residential real estate property held by the creditor
|
$
|
—
|
|
|
$
|
—
|
|
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure
|
$
|
3,294
|
|
|
$
|
3,174
|
|
|
December 31, 2019
|
|
||||||||||||||||||||||||||||||||||||||
|
30-59 days
|
|
60-89 days
|
|
90 days or more
|
|
Total Past Due
|
|
Current
|
|
Total
Financing Receivables |
|
Recorded
Investment >90 Days and Accruing |
|
||||||||||||||||||||||||||
|
Number
of Loans |
|
Principal
Balance |
|
Number
of Loans |
|
Principal
Balance |
|
Number
of Loans |
|
Principal
Balance |
|
Number
of Loans |
|
Principal
Balance |
|
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|
||||||||||||||||||||||||||||||||||||||
Commercial and industrial
|
1
|
|
|
$
|
253
|
|
|
2
|
|
|
$
|
323
|
|
|
5
|
|
|
$
|
760
|
|
|
8
|
|
|
$
|
1,336
|
|
|
$
|
1,393,700
|
|
|
$
|
1,395,036
|
|
|
$
|
—
|
|
|
Commercial real estate
|
7
|
|
|
1,690
|
|
|
1
|
|
|
194
|
|
|
8
|
|
|
2,038
|
|
|
16
|
|
|
3,922
|
|
|
3,998,437
|
|
|
4,002,359
|
|
|
218
|
|
(2)
|
|||||||
Commercial construction
|
1
|
|
|
560
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
560
|
|
|
546,733
|
|
|
547,293
|
|
|
—
|
|
|
|||||||
Small business
|
11
|
|
|
837
|
|
|
3
|
|
|
15
|
|
|
6
|
|
|
115
|
|
|
20
|
|
|
967
|
|
|
173,530
|
|
|
174,497
|
|
|
—
|
|
|
|||||||
Residential real estate
|
17
|
|
|
2,237
|
|
|
17
|
|
|
3,055
|
|
|
38
|
|
|
7,020
|
|
|
72
|
|
|
12,312
|
|
|
1,578,257
|
|
|
1,590,569
|
|
|
1,652
|
|
(2)
|
|||||||
Home equity
|
23
|
|
|
1,689
|
|
|
8
|
|
|
524
|
|
|
40
|
|
|
3,854
|
|
|
71
|
|
|
6,067
|
|
|
1,127,731
|
|
|
1,133,798
|
|
|
265
|
|
(2)
|
|||||||
Other consumer (1)
|
387
|
|
|
245
|
|
|
12
|
|
|
44
|
|
|
16
|
|
|
32
|
|
|
415
|
|
|
321
|
|
|
29,766
|
|
|
30,087
|
|
|
22
|
|
|
|||||||
Total
|
447
|
|
|
$
|
7,511
|
|
|
43
|
|
|
$
|
4,155
|
|
|
113
|
|
|
$
|
13,819
|
|
|
603
|
|
|
$
|
25,485
|
|
|
$
|
8,848,154
|
|
|
$
|
8,873,639
|
|
|
$
|
2,157
|
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||||||
|
30-59 days
|
|
60-89 days
|
|
90 days or more
|
|
Total Past Due
|
|
Current
|
|
Total
Financing Receivables |
|
Recorded
Investment >90 Days and Accruing |
||||||||||||||||||||||||||
|
Number
of Loans |
|
Principal
Balance |
|
Number
of Loans |
|
Principal
Balance |
|
Number
of Loans |
|
Principal
Balance |
|
Number
of Loans |
|
Principal
Balance |
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||
Commercial and industrial
|
—
|
|
|
$
|
—
|
|
|
4
|
|
|
$
|
382
|
|
|
11
|
|
|
$
|
26,311
|
|
|
15
|
|
|
$
|
26,693
|
|
|
$
|
1,066,936
|
|
|
$
|
1,093,629
|
|
|
$
|
—
|
|
Commercial real estate
|
9
|
|
|
1,627
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
2,250
|
|
|
17
|
|
|
3,877
|
|
|
3,247,371
|
|
|
3,251,248
|
|
|
—
|
|
|||||||
Commercial construction
|
1
|
|
|
1,271
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
311
|
|
|
2
|
|
|
1,582
|
|
|
363,583
|
|
|
365,165
|
|
|
—
|
|
|||||||
Small business
|
15
|
|
|
506
|
|
|
19
|
|
|
87
|
|
|
24
|
|
|
162
|
|
|
58
|
|
|
755
|
|
|
163,921
|
|
|
164,676
|
|
|
—
|
|
|||||||
Residential real estate
|
23
|
|
|
3,486
|
|
|
6
|
|
|
521
|
|
|
25
|
|
|
4,382
|
|
|
54
|
|
|
8,389
|
|
|
914,905
|
|
|
923,294
|
|
|
—
|
|
|||||||
Home equity
|
22
|
|
|
1,331
|
|
|
12
|
|
|
855
|
|
|
29
|
|
|
2,663
|
|
|
63
|
|
|
4,849
|
|
|
1,087,235
|
|
|
1,092,084
|
|
|
—
|
|
|||||||
Other consumer (1)
|
330
|
|
|
181
|
|
|
15
|
|
|
9
|
|
|
12
|
|
|
13
|
|
|
357
|
|
|
203
|
|
|
15,895
|
|
|
16,098
|
|
|
5
|
|
|||||||
Total
|
400
|
|
|
$
|
8,402
|
|
|
56
|
|
|
$
|
1,854
|
|
|
110
|
|
|
$
|
36,092
|
|
|
566
|
|
|
$
|
46,348
|
|
|
$
|
6,859,846
|
|
|
$
|
6,906,194
|
|
|
$
|
5
|
|
(1)
|
Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.
|
(2)
|
Represents purchased credit impaired loans that are accruing interest due to expectations of future cash collections.
|
|
December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
TDRs on accrual status
|
$
|
19,599
|
|
|
$
|
23,849
|
|
TDRs on nonaccrual status
|
24,766
|
|
|
29,348
|
|
||
Total TDRs
|
$
|
44,365
|
|
|
$
|
53,197
|
|
Amount of specific reserves included in the allowance for loan loss associated with TDRs:
|
$
|
855
|
|
|
$
|
1,079
|
|
Additional commitments to lend to a borrower who has been a party to a TDR:
|
$
|
63
|
|
|
$
|
982
|
|
|
Years Ended December 31
|
|||||||||
|
2019
|
|||||||||
|
Number
of Contracts |
|
Pre-Modification
Outstanding Recorded Investment |
|
Post-Modification
Outstanding Recorded Investment |
|||||
|
(Dollars in thousands)
|
|||||||||
Troubled debt restructurings
|
|
|
|
|
|
|||||
Commercial and industrial
|
3
|
|
|
$
|
268
|
|
|
$
|
268
|
|
Commercial real estate
|
4
|
|
|
819
|
|
|
819
|
|
||
Small business
|
1
|
|
|
14
|
|
|
14
|
|
||
Residential real estate
|
3
|
|
|
967
|
|
|
1,009
|
|
||
Home equity
|
2
|
|
|
121
|
|
|
121
|
|
||
Total
|
13
|
|
|
$
|
2,189
|
|
|
$
|
2,231
|
|
|
|
|
|
|
|
|||||
|
2018
|
|||||||||
Troubled debt restructurings
|
|
|
|
|
|
|||||
Commercial and industrial (1)
|
12
|
|
|
$
|
35,688
|
|
|
$
|
39,224
|
|
Commercial real estate
|
3
|
|
|
1,600
|
|
|
1,600
|
|
||
Residential real estate
|
5
|
|
|
1,048
|
|
|
1,071
|
|
||
Home equity
|
9
|
|
|
562
|
|
|
562
|
|
||
Total
|
29
|
|
|
$
|
38,898
|
|
|
$
|
42,457
|
|
|
|
|
|
|
|
|||||
|
2017
|
|||||||||
Troubled debt restructurings
|
|
|
|
|
|
|||||
Commercial and industrial
|
12
|
|
|
$
|
1,787
|
|
|
$
|
1,787
|
|
Commercial real estate
|
6
|
|
|
2,705
|
|
|
2,705
|
|
||
Small business
|
9
|
|
|
369
|
|
|
369
|
|
||
Residential real estate
|
10
|
|
|
1,284
|
|
|
1,326
|
|
||
Home equity
|
17
|
|
|
1,985
|
|
|
1,988
|
|
||
Total
|
54
|
|
|
$
|
8,130
|
|
|
$
|
8,175
|
|
(1)
|
The pre-modification and post-modification balances represent the legal principal balance of the loan. These amounts may show an increase when modifications include a capitalization of interest and/or professional fees.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Extended maturity
|
$
|
1,565
|
|
|
$
|
2,878
|
|
|
$
|
5,881
|
|
Adjusted interest rate
|
150
|
|
|
57
|
|
|
—
|
|
|||
Combination rate and maturity
|
441
|
|
|
38,812
|
|
|
568
|
|
|||
Court ordered concession
|
75
|
|
|
710
|
|
|
1,726
|
|
|||
Total
|
$
|
2,231
|
|
|
$
|
42,457
|
|
|
$
|
8,175
|
|
|
As of and For the Years Ended December 31
|
||||||||||||||||||
|
2019
|
||||||||||||||||||
|
Recorded
Investment |
|
Unpaid
Principal Balance |
|
Related
Allowance |
|
Average
Recorded Investment |
|
Interest Income Recognized
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
23,786
|
|
|
$
|
34,970
|
|
|
$
|
—
|
|
|
$
|
27,056
|
|
|
$
|
136
|
|
Commercial real estate
|
6,213
|
|
|
12,101
|
|
|
—
|
|
|
12,595
|
|
|
523
|
|
|||||
Small business
|
469
|
|
|
484
|
|
|
—
|
|
|
471
|
|
|
22
|
|
|||||
Residential real estate
|
4,976
|
|
|
5,123
|
|
|
—
|
|
|
5,045
|
|
|
222
|
|
|||||
Home equity
|
3,764
|
|
|
3,893
|
|
|
—
|
|
|
3,869
|
|
|
184
|
|
|||||
Other consumer
|
34
|
|
|
34
|
|
|
—
|
|
|
41
|
|
|
3
|
|
|||||
Subtotal
|
39,242
|
|
|
56,605
|
|
|
—
|
|
|
49,077
|
|
|
1,090
|
|
|||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
670
|
|
|
670
|
|
|
126
|
|
|
718
|
|
|
29
|
|
|||||
Commercial real estate
|
2,124
|
|
|
2,124
|
|
|
48
|
|
|
2,176
|
|
|
122
|
|
|||||
Small business
|
68
|
|
|
105
|
|
|
8
|
|
|
74
|
|
|
2
|
|
|||||
Residential real estate
|
6,252
|
|
|
7,163
|
|
|
637
|
|
|
6,326
|
|
|
239
|
|
|||||
Home equity
|
1,184
|
|
|
1,382
|
|
|
156
|
|
|
1,214
|
|
|
52
|
|
|||||
Other consumer
|
88
|
|
|
91
|
|
|
5
|
|
|
97
|
|
|
3
|
|
|||||
Subtotal
|
10,386
|
|
|
11,535
|
|
|
980
|
|
|
10,605
|
|
|
447
|
|
|||||
Total
|
$
|
49,628
|
|
|
$
|
68,140
|
|
|
$
|
980
|
|
|
$
|
59,682
|
|
|
$
|
1,537
|
|
|
2018
|
||||||||||||||||||
|
Recorded
Investment |
|
Unpaid
Principal Balance |
|
Related
Allowance |
|
Average
Recorded Investment |
|
Interest
Income Recognized |
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
28,459
|
|
|
$
|
35,913
|
|
|
$
|
—
|
|
|
$
|
31,117
|
|
|
$
|
142
|
|
Commercial real estate
|
9,552
|
|
|
9,832
|
|
|
—
|
|
|
10,561
|
|
|
519
|
|
|||||
Small business
|
358
|
|
|
439
|
|
|
—
|
|
|
401
|
|
|
14
|
|
|||||
Residential real estate
|
4,518
|
|
|
4,686
|
|
|
—
|
|
|
4,597
|
|
|
212
|
|
|||||
Home equity
|
4,957
|
|
|
5,199
|
|
|
—
|
|
|
5,230
|
|
|
220
|
|
|||||
Other consumer
|
56
|
|
|
56
|
|
|
—
|
|
|
64
|
|
|
4
|
|
|||||
Subtotal
|
47,900
|
|
|
56,125
|
|
|
—
|
|
|
51,970
|
|
|
1,111
|
|
|||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
370
|
|
|
370
|
|
|
7
|
|
|
385
|
|
|
19
|
|
|||||
Commercial real estate
|
1,287
|
|
|
1,287
|
|
|
37
|
|
|
1,311
|
|
|
74
|
|
|||||
Small business
|
183
|
|
|
223
|
|
|
1
|
|
|
225
|
|
|
13
|
|
|||||
Residential real estate
|
8,188
|
|
|
9,217
|
|
|
862
|
|
|
8,459
|
|
|
289
|
|
|||||
Home equity
|
991
|
|
|
1,149
|
|
|
164
|
|
|
1,018
|
|
|
43
|
|
|||||
Other consumer
|
141
|
|
|
143
|
|
|
8
|
|
|
154
|
|
|
5
|
|
|||||
Subtotal
|
11,160
|
|
|
12,389
|
|
|
1,079
|
|
|
11,552
|
|
|
443
|
|
|||||
Total
|
$
|
59,060
|
|
|
$
|
68,514
|
|
|
$
|
1,079
|
|
|
$
|
63,522
|
|
|
$
|
1,554
|
|
|
2017
|
||||||||||||||||||
|
Recorded
Investment |
|
Unpaid
Principal Balance |
|
Related
Allowance |
|
Average
Recorded Investment |
|
Interest
Income Recognized |
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
34,267
|
|
|
$
|
38,329
|
|
|
$
|
—
|
|
|
$
|
36,631
|
|
|
$
|
446
|
|
Commercial real estate
|
13,245
|
|
|
14,374
|
|
|
—
|
|
|
13,683
|
|
|
559
|
|
|||||
Small business
|
556
|
|
|
619
|
|
|
—
|
|
|
569
|
|
|
21
|
|
|||||
Residential real estate
|
4,264
|
|
|
4,397
|
|
|
—
|
|
|
4,332
|
|
|
218
|
|
|||||
Home equity
|
4,950
|
|
|
5,056
|
|
|
—
|
|
|
5,063
|
|
|
198
|
|
|||||
Other consumer
|
91
|
|
|
92
|
|
|
—
|
|
|
102
|
|
|
7
|
|
|||||
Subtotal
|
57,373
|
|
|
62,867
|
|
|
—
|
|
|
60,380
|
|
|
1,449
|
|
|||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
376
|
|
|
376
|
|
|
10
|
|
|
391
|
|
|
19
|
|
|||||
Commercial real estate
|
3,393
|
|
|
3,399
|
|
|
42
|
|
|
3,447
|
|
|
198
|
|
|||||
Small business
|
147
|
|
|
153
|
|
|
1
|
|
|
238
|
|
|
14
|
|
|||||
Residential real estate
|
9,420
|
|
|
10,154
|
|
|
1,007
|
|
|
9,575
|
|
|
284
|
|
|||||
Home equity
|
1,876
|
|
|
2,110
|
|
|
265
|
|
|
1,916
|
|
|
55
|
|
|||||
Other consumer
|
216
|
|
|
217
|
|
|
17
|
|
|
233
|
|
|
7
|
|
|||||
Subtotal
|
15,428
|
|
|
16,409
|
|
|
1,342
|
|
|
15,800
|
|
|
577
|
|
|||||
Total
|
$
|
72,801
|
|
|
$
|
79,276
|
|
|
$
|
1,342
|
|
|
$
|
76,180
|
|
|
$
|
2,026
|
|
|
|
December 31
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in thousands)
|
||||||
Outstanding balance
|
|
$
|
18,358
|
|
|
$
|
9,749
|
|
Carrying amount
|
|
$
|
14,856
|
|
|
$
|
8,795
|
|
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in thousands)
|
||||||
Beginning balance
|
|
$
|
1,191
|
|
|
$
|
1,791
|
|
Acquisition
|
|
1,464
|
|
|
—
|
|
||
Accretion
|
|
(1,751
|
)
|
|
(1,135
|
)
|
||
Other change in expected cash flows (1)
|
|
803
|
|
|
310
|
|
||
Reclassification from nonaccretable difference for loans which have paid off (2)
|
|
227
|
|
|
225
|
|
||
Ending balance
|
|
$
|
1,934
|
|
|
$
|
1,191
|
|
(1)
|
Represents changes in cash flows expected to be collected resulting in increased interest income as a prospective yield adjustment over the remaining life of the loan(s).
|
(2)
|
Results in increased income during the period when a loan pays off at amount greater than originally expected.
|
|
2019
|
|
2018
|
|
Estimated
Useful Life |
||||
|
(Dollars in thousands)
|
|
(In years)
|
||||||
Cost
|
|
|
|
|
|
||||
Land
|
$
|
32,619
|
|
|
$
|
24,502
|
|
|
n/a
|
Bank premises
|
62,455
|
|
|
53,052
|
|
|
5-40
|
||
Leasehold improvements
|
35,498
|
|
|
27,615
|
|
|
1-27
|
||
Furniture and equipment
|
77,705
|
|
|
66,974
|
|
|
2-12
|
||
Leased equipment
|
10,644
|
|
|
10,644
|
|
|
7
|
||
Total cost
|
218,921
|
|
|
182,787
|
|
|
|
||
Accumulated depreciation
|
(95,247
|
)
|
|
(85,206
|
)
|
|
|
||
Net bank premises and equipment
|
$
|
123,674
|
|
|
$
|
97,581
|
|
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Balances not subject to amortization
|
|
|
|
||||
Goodwill
|
$
|
506,206
|
|
|
$
|
256,105
|
|
Balances subject to amortization
|
|
|
|
||||
Core deposit intangibles
|
28,016
|
|
|
13,692
|
|
||
Other intangible assets
|
1,270
|
|
|
1,558
|
|
||
Total other intangible assets
|
29,286
|
|
|
15,250
|
|
||
Total goodwill and other intangible assets
|
$
|
535,492
|
|
|
$
|
271,355
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Balance at beginning of year
|
$
|
256,105
|
|
|
$
|
231,806
|
|
Acquisitions
|
250,101
|
|
|
24,299
|
|
||
Balance at end of year
|
$
|
506,206
|
|
|
$
|
256,105
|
|
|
December 31
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Core deposit intangibles
|
$
|
45,245
|
|
|
$
|
(17,229
|
)
|
|
$
|
28,016
|
|
|
$
|
34,137
|
|
|
$
|
(20,445
|
)
|
|
$
|
13,692
|
|
Other intangible assets
|
3,338
|
|
|
(2,068
|
)
|
|
1,270
|
|
|
3,103
|
|
|
(1,545
|
)
|
|
1,558
|
|
||||||
Total
|
$
|
48,583
|
|
|
$
|
(19,297
|
)
|
|
$
|
29,286
|
|
|
$
|
37,240
|
|
|
$
|
(21,990
|
)
|
|
$
|
15,250
|
|
Year
|
Amount
|
||
|
(Dollars in thousands)
|
||
2020
|
$
|
6,179
|
|
2021
|
$
|
5,315
|
|
2022
|
$
|
4,539
|
|
2023
|
$
|
3,948
|
|
2024
|
$
|
3,162
|
|
|
2019
|
|
2018
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||
1 year or less
|
$
|
1,097,407
|
|
|
78.6
|
%
|
|
$
|
511,292
|
|
|
71.9
|
%
|
Over 1 year to 2 years
|
204,690
|
|
|
14.7
|
%
|
|
111,487
|
|
|
15.7
|
%
|
||
Over 2 years to 3 years
|
55,615
|
|
|
4.0
|
%
|
|
41,523
|
|
|
5.8
|
%
|
||
Over 3 years to 4 years
|
24,038
|
|
|
1.7
|
%
|
|
27,040
|
|
|
3.8
|
%
|
||
Over 4 years to 5 years
|
13,565
|
|
|
1.0
|
%
|
|
19,761
|
|
|
2.8
|
%
|
||
Total
|
$
|
1,395,315
|
|
|
100.0
|
%
|
|
$
|
711,103
|
|
|
100.0
|
%
|
|
|
2019
|
|
2018
|
||||||||||
|
|
|
|
Weighted
|
|
|
|
Weighted
|
||||||
|
|
|
|
Average
|
|
|
|
Average
|
||||||
|
|
Total
|
|
Contractual
|
|
Total
|
|
Contractual
|
||||||
|
|
Outstanding
|
|
Rate
|
|
Outstanding
|
|
Rate
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
Stated Maturity
|
|
|
|
|
|
|
|
|
||||||
2019
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
147,046
|
|
|
2.68
|
%
|
2020
|
|
104,976
|
|
|
1.79
|
%
|
|
—
|
|
|
—
|
%
|
||
2021
|
|
10,042
|
|
|
2.95
|
%
|
|
—
|
|
|
—
|
%
|
||
Subtotal
|
|
115,018
|
|
|
1.89
|
%
|
|
147,046
|
|
|
2.68
|
%
|
||
Amortizing advances
|
|
730
|
|
|
|
|
760
|
|
|
|
||||
Total Federal Home Loan Bank Advances
|
|
$
|
115,748
|
|
|
|
|
$
|
147,806
|
|
|
|
|
December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Long term borrowings, net
|
$
|
74,906
|
|
|
$
|
—
|
|
Junior subordinated debentures
|
|
|
|
||||
Capital Trust V
|
51,507
|
|
|
51,505
|
|
||
Slades Ferry Trust I
|
—
|
|
|
10,234
|
|
||
Central Trust I
|
5,258
|
|
|
5,258
|
|
||
Central Trust II
|
6,083
|
|
|
6,083
|
|
||
East Main Street Trust
|
—
|
|
|
3,093
|
|
||
Subordinated debentures
|
49,601
|
|
|
34,728
|
|
||
Total long-term debt
|
$
|
187,355
|
|
|
$
|
110,901
|
|
Trust
|
Description of Capital Securities
|
Capital Trust V
|
$50.0 million due in 2037, interest at a variable rate of 3 month LIBOR plus 1.48% (3.37% at December 31, 2019),which, effective on January 17, 2017, has been converted to a fixed rate of 2.84% through the use of an interest rate swap.
|
Central Trust I
|
$5.1 million due in 2034, bearing interest at a variable rate of 3 month LIBOR plus 2.44% (4.33% at December 31, 2019). These securities are callable quarterly, until maturity.
|
Central Trust II
|
$5.9 million due in 2037, bearing interest at a variable rate of 3 month LIBOR plus 1.65% (3.54% at December 31, 2019). These securities are callable quarterly, until maturity.
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||||||
Long term borrowings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,000
|
|
Junior subordinated debentures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital trust V
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,547
|
|
|
51,547
|
|
|||||||
Central trust I
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,258
|
|
|
5,258
|
|
|||||||
Central trust II
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,083
|
|
|
6,083
|
|
|||||||
Subordinated debentures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|
50,000
|
|
|||||||
Total (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112,888
|
|
|
$
|
187,888
|
|
(1)
|
Amounts in this table are presented on a gross basis, and do not include the capitalized issuance costs as presented in the Company's Consolidated Balance Sheet.
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands, except per share data)
|
||||||||||
Net income
|
$
|
165,175
|
|
|
$
|
121,622
|
|
|
$
|
87,204
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares
|
|
||||||||||
Basic shares
|
32,810,433
|
|
|
27,592,380
|
|
|
27,294,028
|
|
|||
Effect of dilutive securities
|
45,801
|
|
|
61,428
|
|
|
78,076
|
|
|||
Diluted shares
|
32,856,234
|
|
|
27,653,808
|
|
|
27,372,104
|
|
|||
|
|
|
|
|
|
||||||
Net income per share
|
|
|
|
|
|
||||||
Basic EPS
|
$
|
5.03
|
|
|
$
|
4.41
|
|
|
$
|
3.19
|
|
Effect of dilutive securities
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|||
Diluted EPS
|
$
|
5.03
|
|
|
$
|
4.40
|
|
|
$
|
3.19
|
|
|
|
Authorized Awards
|
Cumulatively Granted, Net of
Forfeitures and Expirations |
|
Total
|
|
Authorized
but Unissued |
|
||||||||
Stock
Option Awards |
|
Restricted
Stock Awards |
|
|||||||||||||
2005 Plan
|
|
1,650,000
|
|
387,258
|
|
|
810,381
|
|
|
1,197,639
|
|
|
452,361
|
|
|
|
2010 Plan
|
|
314,600
|
|
46,500
|
|
|
93,245
|
|
|
139,745
|
|
|
—
|
|
(1)
|
|
2018 Plan
|
|
300,000
|
|
—
|
|
|
12,500
|
|
|
12,500
|
|
|
287,500
|
|
(1)
|
(1)
|
The Company may award up to a total of 300,000 shares from the 2018 Plan, inclusive of 174,855 shares that were Authorized but Unissued in the 2010 Plan, and were transferred from the 2010 Plan to the 2018 Plan. Due to this transfer, there are no available shares remaining to be issued from the 2010 Plan.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Stock based compensation expense
|
|
|
|
|
|
||||||
Restricted stock awards (1)
|
$
|
3,679
|
|
|
$
|
3,299
|
|
|
$
|
2,730
|
|
Directors’ fee expense (2)
|
|
|
|
|
|
||||||
Stock options
|
23
|
|
|
66
|
|
|
76
|
|
|||
Restricted stock awards
|
701
|
|
|
860
|
|
|
527
|
|
|||
Total stock based award expense
|
$
|
4,403
|
|
|
$
|
4,225
|
|
|
$
|
3,333
|
|
Related tax benefits recognized in earnings
|
$
|
1,238
|
|
|
$
|
1,188
|
|
|
$
|
1,362
|
|
(1)
|
Inclusive of compensation expense associated with time-vested and performance-based restricted stock awards.
|
(2)
|
Expense related to awards issued to directors is recognized as directors’ fees within other noninterest expense.
|
•
|
Expected volatility is based on the standard deviation of the historical volatility of the weekly adjusted closing price of the Company’s shares for a period equivalent to the expected life of the option.
|
•
|
Expected life represents the period of time that the option is expected to be outstanding, taking into account the contractual term, historical exercise/forfeiture behavior, and the vesting period, if any.
|
•
|
Expected dividend yield is an annualized rate calculated using the most recent dividend payment at time of grant and the Company’s average trailing twelve-month daily closing stock price.
|
•
|
The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option.
|
•
|
Effective January 1, 2017, the Company adopted new accounting guidance and elected to no longer estimate forfeitures on stock compensation and instead recognize forfeitures when they occur. The election required a cumulative effect adjustment to retained earnings which did not materially impact the Company's consolidated financial position.
|
|
|
Years Ended December 31
|
||||||
|
|
2018
|
|
2017
|
||||
Date of grant
|
|
4/3/2018
|
|
|
11/7/2017
|
|
||
Plan
|
|
2010
|
|
|
2010
|
|
||
Options granted
|
|
5,000
|
|
|
5,000
|
|
||
Vesting period (beginning on the grant date)
|
|
21 months
|
|
|
14 months
|
|
||
Expiration date
|
|
4/3/2028
|
|
|
11/7/2027
|
|
||
Expected volatility
|
|
21.15
|
%
|
|
20.80
|
%
|
||
Expected life (years)
|
|
5.5
|
|
|
5.5
|
|
||
Expected dividend yield
|
|
1.94
|
%
|
|
1.87
|
%
|
||
Risk free interest rate
|
|
2.62
|
%
|
|
2.02
|
%
|
||
Fair value per option
|
|
$
|
13.46
|
|
|
$
|
12.43
|
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands, except per share data)
|
||||||||||
Fair value of stock options vested based on grant date fair value
|
$
|
21
|
|
|
$
|
85
|
|
|
$
|
72
|
|
Intrinsic value of stock options exercised
|
$
|
883
|
|
|
$
|
1,525
|
|
|
$
|
1,082
|
|
Cash received from stock option exercises
|
$
|
396
|
|
|
$
|
1,024
|
|
|
$
|
918
|
|
Tax benefit realized on stock option exercises
|
$
|
248
|
|
|
$
|
429
|
|
|
$
|
442
|
|
Weighted average grant date fair value of options granted (per share)
|
n/a
|
|
|
$
|
13.46
|
|
|
$
|
12.43
|
|
|
Outstanding
|
|
Nonvested
|
|
|
||||||||||||||||||||
|
Stock Option
Awards |
|
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term (years) |
|
Aggregate
Intrinsic Value (1) |
|
Stock
Option Awards |
|
|
Weighted
Average Grant Date Fair Value |
|
|
||||||||||
|
(Dollars in thousands, except per share data)
|
|
|
||||||||||||||||||||||
Balance at January 1, 2019
|
54,500
|
|
|
|
$
|
37.28
|
|
|
|
|
|
|
3,332
|
|
|
|
$
|
12.94
|
|
|
|
||||
Granted
|
—
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
||||||
Exercised
|
(16,000
|
)
|
|
|
24.76
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
||||||
Vested
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
(1,666
|
)
|
|
|
12.43
|
|
|
|
||||||
Forfeited
|
—
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
||||||
Expired
|
—
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
||||||
Balance at December 31, 2019
|
38,500
|
|
(2)
|
|
$
|
42.49
|
|
|
4.00 years
|
|
$
|
1,584
|
|
|
1,666
|
|
|
|
$
|
13.46
|
|
|
|
||
Options outstanding and expected to vest at December 31, 2019
|
38,500
|
|
(3)
|
|
$
|
42.49
|
|
|
4.00 years
|
|
$
|
1,584
|
|
|
|
|
|
|
|
|
|||||
Options exercisable at December 31, 2019
|
36,834
|
|
(4)
|
|
$
|
41.21
|
|
|
3.81 years
|
|
$
|
1,563
|
|
|
|
|
|
|
|
|
|||||
Unrecognized compensation cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
—
|
|
||||||||
Weighted average remaining recognition period (years)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.00
|
|
(1)
|
The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the average of the high price and low price at which the Company’s common stock traded on December 31, 2019 of $83.64, which would have been received by in-the-money option holders had they all exercised their options as of that date.
|
|
Shares Granted
|
|
Plan
|
|
Fair Value (1)
|
|
Vesting Period
|
|||
Time-vested
|
|
|
|
|
|
|
|
|||
2019
|
|
|
|
|
|
|
|
|||
2/21/2019
|
43,250
|
|
|
2005
|
|
$
|
83.87
|
|
|
Ratably over 5 years from grant date
|
3/15/2019
|
600
|
|
|
2005
|
|
$
|
79.55
|
|
|
Ratably over 5 years from grant date
|
4/1/2019
|
1,090
|
|
|
2005
|
|
$
|
82.62
|
|
|
Ratably over 3 years from grant date
|
5/21/2019
|
6,500
|
|
|
2018
|
|
$
|
77.08
|
|
|
Immediately upon grant date
|
|
|
|
|
|
|
|
|
|||
2018
|
|
|
|
|
|
|
|
|||
2/15/2018
|
39,950
|
|
|
2005
|
|
$
|
71.75
|
|
|
Ratably over 5 years from grant date
|
2/27/2018
|
1,150
|
|
|
2005
|
|
$
|
72.60
|
|
|
Ratably over 5 years from grant date
|
5/15/2018
|
530
|
|
|
2005
|
|
$
|
74.00
|
|
|
Ratably over 5 years from grant date
|
5/22/2018
|
6,000
|
|
|
2018
|
|
$
|
76.58
|
|
|
Immediately upon grant date
|
11/15/2018
|
560
|
|
|
2005
|
|
$
|
77.78
|
|
|
Ratably over 5 years from grant date
|
|
|
|
|
|
|
|
|
|||
2017
|
|
|
|
|
|
|
|
|||
2/13/2017
|
1,200
|
|
|
2005
|
|
$
|
62.53
|
|
|
Ratably over 5 years from grant date
|
2/16/2017
|
34,150
|
|
|
2005
|
|
$
|
63.10
|
|
|
Ratably over 5 years from grant date
|
3/31/2017
|
500
|
|
|
2005
|
|
$
|
65.63
|
|
|
Ratably over 5 years from grant date
|
4/3/2017
|
1,500
|
|
|
2005
|
|
$
|
64.14
|
|
|
Once on November 30, 2017 (2)
|
5/15/2017
|
1,000
|
|
|
2005
|
|
$
|
64.03
|
|
|
Ratably over 5 years from grant date
|
5/23/2017
|
7,000
|
|
|
2010
|
|
$
|
61.95
|
|
|
At the end of 5 years from grant date (3)
|
6/15/2017
|
950
|
|
|
2005
|
|
$
|
66.18
|
|
|
Ratably over 5 years from grant date
|
|
|
|
|
|
|
|
|
|||
Performance-based
|
|
|
|
|
|
|
|
|||
2/21/2019
|
15,900
|
|
|
2005
|
|
$
|
83.87
|
|
|
The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2022.
|
2/15/2018
|
16,300
|
|
|
2005
|
|
$
|
71.75
|
|
|
The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2021.
|
2/16/2017
|
14,400
|
|
|
2005
|
|
$
|
63.10
|
|
|
The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2020.
|
(1)
|
The fair value of the restricted stock awards are based upon the average of the high and low prices at which the Company’s common stock traded on the date of grant. The holders of time-vested restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. The holders of performance-based restricted stock awards do not participate in the rewards of stock ownership of the Company until vested. The holders of all restricted stock awards are not required to pay any consideration to the Company for the awards.
|
(2)
|
This restricted stock grant fully vested upon an employee's termination, on November 30, 2017.
|
(3)
|
These restricted stock grants will vest at the end of a five year period, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Fair value of restricted stock awards upon vesting
|
$
|
6,005
|
|
|
$
|
6,277
|
|
|
$
|
5,717
|
|
|
Outstanding Restricted Stock
Awards |
|
|
Weighted Average
Grant Price ($) |
|
|
|||||
|
(Dollars in thousands, except per share data)
|
|
|
||||||||
Balance at January 1, 2019
|
202,106
|
|
|
|
$
|
55.62
|
|
|
|
||
Granted
|
67,340
|
|
|
|
83.16
|
|
|
|
|||
Vested/released
|
(74,272
|
)
|
|
|
49.56
|
|
|
|
|||
Forfeited
|
(1,390
|
)
|
|
|
64.76
|
|
|
|
|||
Balance at December 31, 2019
|
193,784
|
|
(1)
|
|
$
|
67.48
|
|
|
|
||
Unrecognized compensation cost (inclusive of directors’ fees)
|
|
|
|
|
|
$
|
8,098
|
|
|||
Weighted average remaining recognition period (years)
|
|
|
|
|
|
2.99
|
|
(1)
|
Inclusive of 17,925 restricted stock awards outstanding to Directors.
|
December 31, 2019
|
||||||||||||||||
|
|
|
|
|
|
Weighted Average Rate
|
|
|
||||||||
|
|
Notional Amount
|
|
Weighted Average Maturity
|
|
Current
Rate Received |
|
Pay Fixed
Swap Rate |
|
Fair Value
|
||||||
|
|
(in thousands)
|
|
(in years)
|
|
|
|
|
|
(in thousands)
|
||||||
Interest rate swaps on borrowings
|
|
$
|
75,000
|
|
|
2.18
|
|
1.90
|
%
|
|
1.53
|
%
|
|
$
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current Rate Paid
|
|
Receive Fixed
Swap Rate
|
|
|
||||||
Interest rate swaps on loans
|
|
450,000
|
|
|
3.66
|
|
1.76
|
%
|
|
2.37
|
%
|
|
12,907
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current Rate Paid
|
|
Receive Fixed Swap Rate
Cap - Floor
|
|
|
||||||
Interest rate collars on loans
|
|
400,000
|
|
|
3.66
|
|
1.76
|
%
|
|
2.73% - 2.20%
|
|
|
9,896
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
925,000
|
|
|
|
|
|
|
|
|
$
|
22,943
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2018
|
||||||||||||||||
|
|
|
|
|
|
Weighted Average Rate
|
|
|
||||||||
|
|
Notional Amount
|
|
Weighted Average Maturity
|
|
Current
Rate Received |
|
Pay Fixed
Swap Rate |
|
Fair Value
|
||||||
|
|
(in thousands)
|
|
(in years)
|
|
|
|
|
|
(in thousands)
|
||||||
Interest rate swaps on borrowings
|
|
$
|
75,000
|
|
|
3.18
|
|
2.74
|
%
|
|
1.53
|
%
|
|
$
|
2,282
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current Rate Paid
|
|
Receive Fixed
Swap Rate
|
|
|
||||||
Interest rate swaps on loans
|
|
250,000
|
|
|
4.52
|
|
2.57
|
%
|
|
2.67
|
%
|
|
2,938
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current Rate Paid
|
|
Receive Fixed Swap Rate
Cap - Floor
|
|
|
||||||
Interest rate collars on loans
|
|
250,000
|
|
|
4.17
|
|
2.47
|
%
|
|
3.02% - 2.51%
|
|
3,344
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
575,000
|
|
|
|
|
|
|
|
|
$
|
8,564
|
|
|
Number of
Positions (1) |
|
Notional Amount Maturing
|
|
|
|||||||||||||||||||||||||
|
Less than 1 year
|
|
Less than 2 years
|
|
Less than 3 years
|
|
Less than 4 years
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
|||||||||||||||||
|
December 31, 2019
|
|||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||
Loan level swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Receive fixed, pay variable
|
299
|
|
|
$
|
156,690
|
|
|
$
|
125,203
|
|
|
$
|
85,603
|
|
|
$
|
165,599
|
|
|
$
|
1,044,315
|
|
|
$
|
1,577,410
|
|
|
$
|
48,596
|
|
Pay fixed, receive variable
|
290
|
|
|
$
|
156,690
|
|
|
$
|
125,203
|
|
|
$
|
85,603
|
|
|
$
|
165,599
|
|
|
$
|
1,044,315
|
|
|
$
|
1,577,410
|
|
|
$
|
(48,591
|
)
|
Foreign exchange contracts
|
||||||||||||||||||||||||||||||
Buys foreign currency, sells U.S. currency
|
40
|
|
|
$
|
91,434
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
91,434
|
|
|
$
|
(81
|
)
|
Buys U.S. currency, sells foreign currency
|
40
|
|
|
$
|
91,434
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
91,434
|
|
|
$
|
123
|
|
|
December 31, 2018
|
|||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||
Loan level swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Receive fixed, pay variable
|
235
|
|
|
$
|
50,702
|
|
|
$
|
124,222
|
|
|
$
|
97,904
|
|
|
$
|
47,308
|
|
|
$
|
631,471
|
|
|
$
|
951,607
|
|
|
$
|
(2,907
|
)
|
Pay fixed, receive variable
|
220
|
|
|
$
|
50,702
|
|
|
$
|
124,222
|
|
|
$
|
97,904
|
|
|
$
|
47,308
|
|
|
$
|
631,471
|
|
|
$
|
951,607
|
|
|
$
|
2,903
|
|
Foreign exchange contracts
|
||||||||||||||||||||||||||||||
Buys foreign currency, sells U.S. currency
|
27
|
|
|
$
|
60,297
|
|
|
$
|
3,505
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63,802
|
|
|
$
|
(1,404
|
)
|
Buys U.S. currency, sells foreign currency
|
27
|
|
|
$
|
60,297
|
|
|
$
|
3,505
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63,802
|
|
|
$
|
1,434
|
|
|
Asset Derivatives (1)
|
|
Liability Derivatives (2)
|
||||||||||||||
|
|
Fair Value at
|
|
Fair Value at
|
|
|
Fair Value at
|
|
Fair Value at
|
||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||
Derivatives designated as hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
|
$
|
23,140
|
|
|
$
|
8,955
|
|
|
|
$
|
197
|
|
|
$
|
391
|
|
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Customer Related Positions:
|
|
|
|
|
|
|
|
|
|
||||||||
Loan level derivatives
|
|
52,374
|
|
|
15,580
|
|
|
|
52,369
|
|
|
15,584
|
|
||||
Foreign exchange contracts
|
|
1,191
|
|
|
1,578
|
|
|
|
1,149
|
|
|
1,548
|
|
||||
Mortgage Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate lock commitments
|
|
1,680
|
|
|
91
|
|
|
|
—
|
|
|
—
|
|
||||
Forward sale loan commitments
|
|
—
|
|
|
106
|
|
|
|
12
|
|
|
—
|
|
||||
Forward sale hedge commitments
|
|
—
|
|
|
—
|
|
|
|
196
|
|
|
—
|
|
||||
|
|
55,245
|
|
|
17,355
|
|
|
|
53,726
|
|
|
17,132
|
|
||||
Total
|
|
$
|
78,385
|
|
|
$
|
26,310
|
|
|
|
$
|
53,923
|
|
|
$
|
17,523
|
|
(1)
|
All asset derivatives are located in other assets on the balance sheet.
|
(2)
|
All liability derivatives are located in other liabilities on the balance sheet.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Derivatives designated as hedges
|
|
|
|
|
|
||||||
Gain in OCI on derivatives (effective portion), net of tax
|
$
|
10,331
|
|
|
$
|
4,829
|
|
|
$
|
443
|
|
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion)
|
$
|
2,346
|
|
|
$
|
1,000
|
|
|
$
|
(441
|
)
|
Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
|
|
|
|
|
|
||||||
Interest expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives not designated as hedges
|
|
|
|
|
|
||||||
Changes in fair value of customer related positions
|
|
|
|
|
|
||||||
Other income
|
$
|
39
|
|
|
$
|
46
|
|
|
$
|
6
|
|
Other expenses
|
(18
|
)
|
|
(29
|
)
|
|
(21
|
)
|
|||
Changes in fair value of mortgage derivatives
|
|
|
|
|
|
||||||
Mortgage banking income
|
1,275
|
|
|
39
|
|
|
(39
|
)
|
|||
Total
|
$
|
1,296
|
|
|
$
|
56
|
|
|
$
|
(54
|
)
|
|
|
|
|
Gross Amounts Not Offset in the Statement of Financial Position
|
|
|||||||||||||
|
Gross Amounts Recognized in the Statement of Financial Position
|
Gross Amounts Offset in the Statement of Financial Position
|
Net Amounts Presented in the Statement of Financial Position
|
Financial Instruments (1)
|
Collateral Pledged (Received)
|
Net Amount
|
||||||||||||
|
December 31, 2019
|
|||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||
Derivative Assets
|
|
|||||||||||||||||
Interest rate swaps
|
$
|
23,140
|
|
$
|
—
|
|
$
|
23,140
|
|
$
|
23,140
|
|
$
|
—
|
|
$
|
—
|
|
Loan level derivatives
|
52,374
|
|
—
|
|
52,374
|
|
1,742
|
|
—
|
|
50,632
|
|
||||||
Customer foreign exchange contracts
|
1,191
|
|
—
|
|
1,191
|
|
—
|
|
—
|
|
1,191
|
|
||||||
|
$
|
76,705
|
|
$
|
—
|
|
$
|
76,705
|
|
$
|
24,882
|
|
$
|
—
|
|
$
|
51,823
|
|
Derivative Liabilities
|
|
|||||||||||||||||
Interest rate swaps
|
$
|
197
|
|
$
|
—
|
|
$
|
197
|
|
$
|
—
|
|
$
|
197
|
|
$
|
—
|
|
Loan level derivatives
|
52,369
|
|
—
|
|
52,369
|
|
24,882
|
|
25,296
|
|
2,191
|
|
||||||
Customer foreign exchange contracts
|
1,149
|
|
—
|
|
1,149
|
|
—
|
|
—
|
|
1,149
|
|
||||||
|
$
|
53,715
|
|
$
|
—
|
|
$
|
53,715
|
|
$
|
24,882
|
|
$
|
25,493
|
|
$
|
3,340
|
|
(1)
|
Reflects offsetting derivative positions with the same counterparty.
|
|
|
|
|
Gross Amounts Not Offset in the Statement of Financial Position
|
|
|||||||||||||
|
Gross Amounts Recognized in the Statement of Financial Position
|
Gross Amounts Offset in the Statement of Financial Position
|
Net Amounts Presented in the Statement of Financial Position
|
Financial Instruments (1)
|
Collateral Pledged (Received)
|
Net Amount
|
||||||||||||
|
December 31, 2018
|
|||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||
Derivative Assets
|
|
|||||||||||||||||
Interest rate swaps
|
$
|
8,955
|
|
$
|
—
|
|
$
|
8,955
|
|
$
|
391
|
|
$
|
(5,527
|
)
|
$
|
3,037
|
|
Loan level derivatives
|
15,580
|
|
—
|
|
15,580
|
|
6,165
|
|
(3,001
|
)
|
6,414
|
|
||||||
Customer foreign exchange contracts
|
1,578
|
|
—
|
|
1,578
|
|
—
|
|
—
|
|
1,578
|
|
||||||
|
$
|
26,113
|
|
$
|
—
|
|
$
|
26,113
|
|
$
|
6,556
|
|
$
|
(8,528
|
)
|
$
|
11,029
|
|
Derivative Liabilities
|
|
|||||||||||||||||
Interest rate swaps
|
$
|
391
|
|
$
|
—
|
|
$
|
391
|
|
$
|
391
|
|
$
|
—
|
|
$
|
—
|
|
Loan level derivatives
|
15,584
|
|
—
|
|
15,584
|
|
6,165
|
|
173
|
|
9,246
|
|
||||||
Customer foreign exchange contracts
|
1,548
|
|
—
|
|
1,548
|
|
—
|
|
—
|
|
1,548
|
|
||||||
|
$
|
17,523
|
|
$
|
—
|
|
$
|
17,523
|
|
$
|
6,556
|
|
$
|
173
|
|
$
|
10,794
|
|
(1)
|
Reflects offsetting derivative positions with the same counterparty.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Current expense
|
|
|
|
|
|
||||||
Federal
|
$
|
27,980
|
|
|
$
|
25,129
|
|
|
$
|
28,852
|
|
State
|
14,359
|
|
|
13,672
|
|
|
9,278
|
|
|||
Total current expense
|
42,339
|
|
|
38,801
|
|
|
38,130
|
|
|||
Deferred expense (benefit)
|
|
|
|
|
|
||||||
Federal
|
9,080
|
|
|
(3,080
|
)
|
|
7,953
|
|
|||
State
|
1,514
|
|
|
(1,417
|
)
|
|
1,258
|
|
|||
Total deferred expense (benefit)
|
10,594
|
|
|
(4,497
|
)
|
|
9,211
|
|
|||
Total expense
|
$
|
52,933
|
|
|
$
|
34,304
|
|
|
$
|
47,341
|
|
|
Years Ended December 31
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||
Computed statutory federal income tax provision
|
$
|
45,803
|
|
21.00
|
%
|
|
$
|
32,744
|
|
21.00
|
%
|
|
$
|
47,091
|
|
35.00
|
%
|
State taxes, net of federal tax benefit
|
12,262
|
|
5.63
|
%
|
|
9,633
|
|
6.18
|
%
|
|
6,817
|
|
5.07
|
%
|
|||
Merger and other related costs (non-deductible)
|
582
|
|
0.27
|
%
|
|
130
|
|
0.08
|
%
|
|
213
|
|
0.16
|
%
|
|||
Change in valuation allowance
|
17
|
|
0.01
|
%
|
|
49
|
|
0.03
|
%
|
|
31
|
|
0.02
|
%
|
|||
Revaluation of net deferred tax assets
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
1,895
|
|
1.41
|
%
|
|||
New Markets Tax Credits
|
(2,675
|
)
|
(1.23
|
)%
|
|
(3,960
|
)
|
(2.54
|
)%
|
|
(3,960
|
)
|
(2.94
|
)%
|
|||
Increase in cash surrender value of life insurance
|
(1,144
|
)
|
(0.52
|
)%
|
|
(1,160
|
)
|
(0.74
|
)%
|
|
(1,445
|
)
|
(1.07
|
)%
|
|||
Low Income Housing Project Investments
|
(1,696
|
)
|
(0.78
|
)%
|
|
(1,030
|
)
|
(0.66
|
)%
|
|
(1,253
|
)
|
(0.93
|
)%
|
|||
Stock-based compensation
|
(824
|
)
|
(0.38
|
)%
|
|
(885
|
)
|
(0.57
|
)%
|
|
(1,258
|
)
|
(0.94
|
)%
|
|||
Nontaxable interest, net
|
(757
|
)
|
(0.35
|
)%
|
|
(566
|
)
|
(0.36
|
)%
|
|
(987
|
)
|
(0.73
|
)%
|
|||
Other, net
|
1,365
|
|
0.63
|
%
|
|
(651
|
)
|
(0.42
|
)%
|
|
197
|
|
0.15
|
%
|
|||
Total expense
|
$
|
52,933
|
|
24.28
|
%
|
|
$
|
34,304
|
|
22.00
|
%
|
|
$
|
47,341
|
|
35.20
|
%
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Deferred tax assets
|
|
|
|
||||
Accrued expenses not deducted for tax purposes
|
$
|
13,855
|
|
|
$
|
11,922
|
|
Allowance for loan losses
|
18,993
|
|
|
17,764
|
|
||
Employee and director equity compensation
|
1,708
|
|
|
1,636
|
|
||
Loan basis difference fair value adjustment
|
6,804
|
|
|
4,761
|
|
||
Net operating loss carry-forward
|
2,546
|
|
|
170
|
|
||
Net unrealized loss on securities available for sale
|
—
|
|
|
1,850
|
|
||
Operating lease liability
|
16,393
|
|
|
—
|
|
||
Other
|
1,311
|
|
|
1,561
|
|
||
Gross deferred tax assets
|
$
|
61,610
|
|
|
$
|
39,664
|
|
Valuation allowance
|
(187
|
)
|
|
(170
|
)
|
||
Total deferred tax assets net of valuation allowance
|
$
|
61,423
|
|
|
$
|
39,494
|
|
Deferred tax liabilities
|
|
|
|
||||
Core deposit and other intangibles
|
$
|
5,802
|
|
|
$
|
3,803
|
|
Deferred loan fees, net
|
4,944
|
|
|
4,759
|
|
||
Derivatives fair value adjustment
|
6,461
|
|
|
2,413
|
|
||
Fixed assets
|
8,194
|
|
|
5,259
|
|
||
Goodwill
|
10,645
|
|
|
10,388
|
|
||
Prepaid pension
|
3,487
|
|
|
3,483
|
|
||
Right of use asset
|
15,911
|
|
|
—
|
|
||
Other
|
3,965
|
|
|
1,139
|
|
||
Gross deferred tax liabilities
|
$
|
59,409
|
|
|
$
|
31,244
|
|
Total net deferred tax asset
|
$
|
2,014
|
|
|
$
|
8,250
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Original investment value
|
$
|
96,275
|
|
|
$
|
50,232
|
|
|
$
|
47,399
|
|
Current recorded investment
|
$
|
72,510
|
|
|
$
|
33,681
|
|
|
$
|
35,225
|
|
Unfunded liability obligation
|
$
|
34,967
|
|
|
$
|
3,935
|
|
|
$
|
4,536
|
|
Tax credits and benefits earned during the year
|
$
|
7,342
|
|
|
$
|
5,407
|
|
|
$
|
5,654
|
|
Amortization of investments during the year (1)
|
$
|
5,645
|
|
|
$
|
4,377
|
|
|
$
|
4,402
|
|
Net income tax benefit recognized during the year
|
$
|
1,696
|
|
|
$
|
1,030
|
|
|
$
|
1,253
|
|
(1)
|
The 2017 amount is inclusive of $466,000 related to the revaluation of Low Income Housing tax credit investments as a result of the 2017 Tax Act.
|
|
|
|
Funding Status
of Pension Plan |
|
FIP/RP Status
Pending/ Implemented |
|
Surcharge
Imposed |
|
Expiration
Date of Collective- Bargaining Agreement |
|
Minimum
Contributions Required for Future Periods |
||||
|
EIN/Pension
Plan Number |
|
2019
|
|
2018
|
|
|||||||||
Pentegra defined benefit plan for financial institutions
|
13-5645888/333
|
|
At least 80 percent
|
|
At least 80 percent
|
|
No
|
|
No
|
|
N/A
|
|
$
|
—
|
|
|
|
|
|
|
Required Contributions - Plan Year Allocation
|
||||||||||||||
|
Cash Payment
|
|
Future period funding
|
|
2019-2020
|
|
2018-2019
|
|
2017-2018
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
2019
|
$
|
2,063
|
|
|
$
|
—
|
|
|
$
|
2,063
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2018
|
$
|
2,642
|
|
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
642
|
|
|
$
|
—
|
|
2017
|
$
|
6,432
|
|
|
$
|
5,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,432
|
|
|
Amount
|
||
|
(Dollars in thousands)
|
||
Change in plan assets:
|
|
||
Fair value of plan assets at beginning of year
|
$
|
9,697
|
|
Actual return on plan assets
|
1,886
|
|
|
Employer contribution
|
505
|
|
|
Benefits paid
|
(435
|
)
|
|
Fair value of plan assets at end of year
|
$
|
11,653
|
|
Change in benefit obligation:
|
|
||
Benefit obligation at beginning of year
|
10,824
|
|
|
Interest cost
|
424
|
|
|
Actuarial loss
|
2,874
|
|
|
Benefits paid
|
(435
|
)
|
|
Benefit obligation at end of year
|
$
|
13,687
|
|
Funded status and accrued liability at end of year
|
$
|
(2,034
|
)
|
|
|
||
Accumulated benefit obligation at end of year
|
$
|
13,687
|
|
|
Amount
|
||
|
(Dollars in thousands)
|
||
Interest cost
|
$
|
424
|
|
Expected return on plan assets
|
(780
|
)
|
|
Amortization of net actuarial loss
|
327
|
|
|
Net period pension benefit
|
$
|
(29
|
)
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Collective funds
|
$
|
967
|
|
|
967
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Equity securities
|
1,131
|
|
|
1,131
|
|
|
—
|
|
|
—
|
|
||||
Mutual funds
|
3,628
|
|
|
3,628
|
|
|
—
|
|
|
—
|
|
||||
Total investments in the fair value hierarchy
|
$
|
5,726
|
|
|
$
|
5,726
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Investments measured at net asset value (1)
|
5,927
|
|
|
|
|
|
|
|
|||||||
|
$
|
11,653
|
|
|
|
|
|
|
|
(1)
|
Under the Fair Value Measurements and Disclosure Topic of the FASB ASC, certain investments that were measured at fair value at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.
|
|
Amount
|
||
|
(Dollars in thousands)
|
||
2020
|
$
|
629
|
|
2021
|
$
|
834
|
|
2022
|
$
|
591
|
|
2023
|
$
|
583
|
|
2024
|
$
|
556
|
|
2025-2029
|
$
|
2,867
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Retirement expense
|
$
|
1,356
|
|
|
$
|
1,683
|
|
|
$
|
1,580
|
|
Contributions paid
|
$
|
486
|
|
|
$
|
434
|
|
|
$
|
367
|
|
|
|||
|
(Dollars in thousands)
|
||
2020
|
$
|
472
|
|
2021
|
$
|
466
|
|
2022
|
$
|
458
|
|
2023
|
$
|
571
|
|
2024
|
$
|
1,220
|
|
2025-2029
|
$
|
5,853
|
|
|
Defined Benefit Supplemental Executive
Retirement Benefits |
|||||||||
|
2019
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
|||||||||
Change in accumulated benefit obligation
|
|
|
|
|
||||||
Benefit obligation at beginning of year
|
$
|
14,963
|
|
$
|
15,749
|
|
|
$
|
14,177
|
|
Service cost
|
433
|
|
459
|
|
|
423
|
|
|||
Interest cost
|
601
|
|
533
|
|
|
547
|
|
|||
Actuarial loss (gain)
|
1,850
|
|
(1,344
|
)
|
|
969
|
|
|||
Benefits paid
|
(486
|
)
|
(434
|
)
|
|
(367
|
)
|
|||
Benefit obligation at end of year
|
$
|
17,361
|
|
$
|
14,963
|
|
|
$
|
15,749
|
|
Change in plan assets
|
|
|
|
|
||||||
Fair value of plan assets at beginning of year
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer contribution
|
486
|
|
434
|
|
|
367
|
|
|||
Benefits paid
|
(486
|
)
|
(434
|
)
|
|
(367
|
)
|
|||
Fair value of plan assets at end of year
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status at end of year
|
$
|
(17,361
|
)
|
$
|
(14,963
|
)
|
|
$
|
(15,749
|
)
|
Assets
|
—
|
|
—
|
|
|
—
|
|
|||
Liabilities
|
(17,361
|
)
|
(14,963
|
)
|
|
(15,749
|
)
|
|||
Funded status at end of year
|
$
|
(17,361
|
)
|
$
|
(14,963
|
)
|
|
$
|
(15,749
|
)
|
Amounts recognized in accumulated other comprehensive income ("AOCI")
|
|
|
|
|
||||||
Net loss
|
$
|
3,509
|
|
$
|
1,705
|
|
|
$
|
3,465
|
|
Prior service cost
|
494
|
|
770
|
|
|
1,047
|
|
|||
Amounts recognized in AOCI
|
$
|
4,003
|
|
$
|
2,475
|
|
|
$
|
4,512
|
|
Information for plans with an accumulated benefit obligation in excess of plan assets
|
|
|
|
|
||||||
Projected benefit obligation
|
$
|
17,361
|
|
$
|
14,963
|
|
|
$
|
15,749
|
|
Accumulated benefit obligation
|
$
|
17,361
|
|
$
|
14,963
|
|
|
$
|
15,749
|
|
Net periodic benefit cost
|
|
|
|
|
||||||
Service cost
|
$
|
433
|
|
$
|
459
|
|
|
$
|
423
|
|
Interest cost
|
601
|
|
533
|
|
|
547
|
|
|||
Amortization of prior service cost
|
276
|
|
276
|
|
|
276
|
|
|||
Recognized net actuarial loss
|
46
|
|
415
|
|
|
334
|
|
|||
Net periodic benefit cost
|
$
|
1,356
|
|
$
|
1,683
|
|
|
$
|
1,580
|
|
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost over next fiscal year
|
|
|
|
|
||||||
Net actuarial loss
|
$
|
471
|
|
$
|
41
|
|
|
$
|
415
|
|
Net prior service cost
|
$
|
276
|
|
$
|
276
|
|
|
$
|
276
|
|
Discount rate used for benefit obligation
|
2.00 - 3.04%
|
|
3.24 - 4.09%
|
|
|
2.48-3.45%
|
|
|||
Discount rate used for net periodic benefit cost
|
3.24 - 4.09%
|
|
2.48 - 3.45%
|
|
|
2.49-3.94%
|
|
|||
Rate of compensation increase
|
n/a
|
|
n/a
|
|
|
n/a
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
Balance
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
|
December 31, 2019
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Trading securities
|
$
|
2,179
|
|
|
$
|
2,179
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
|
21,261
|
|
|
21,261
|
|
|
—
|
|
|
—
|
|
||||
Securities available for sale
|
|
|
|
|
|
|
|
||||||||
U.S. government agency securities
|
33,115
|
|
|
—
|
|
|
33,115
|
|
|
—
|
|
||||
Agency mortgage-backed securities
|
247,000
|
|
|
—
|
|
|
247,000
|
|
|
—
|
|
||||
Agency collateralized mortgage obligations
|
88,511
|
|
|
—
|
|
|
88,511
|
|
|
—
|
|
||||
State, county, and municipal securities
|
1,396
|
|
|
—
|
|
|
1,396
|
|
|
—
|
|
||||
Single issuer trust preferred securities issued by banks and insurers
|
493
|
|
|
—
|
|
|
493
|
|
|
—
|
|
||||
Pooled trust preferred securities issued by banks and insurers
|
1,114
|
|
|
—
|
|
|
—
|
|
|
1,114
|
|
||||
Small business administration pooled securities
|
54,795
|
|
|
—
|
|
|
54,795
|
|
|
—
|
|
||||
Loans held for sale
|
33,307
|
|
|
—
|
|
|
33,307
|
|
|
—
|
|
||||
Derivative instruments
|
78,385
|
|
|
—
|
|
|
78,385
|
|
|
—
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
53,923
|
|
|
—
|
|
|
53,923
|
|
|
—
|
|
||||
Total recurring fair value measurements
|
$
|
507,633
|
|
|
$
|
23,440
|
|
|
$
|
483,079
|
|
|
$
|
1,114
|
|
|
|
|
|
|
|
|
|
||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Collateral dependent impaired loans
|
$
|
25,515
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,515
|
|
Total nonrecurring fair value measurements
|
$
|
25,515
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,515
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
Balance
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
|
December 31, 2018
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Trading securities
|
$
|
1,504
|
|
|
$
|
1,504
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
|
19,477
|
|
|
19,477
|
|
|
—
|
|
|
—
|
|
||||
Securities available for sale
|
|
|
|
|
|
|
|
||||||||
U.S. government agency securities
|
32,038
|
|
|
—
|
|
|
32,038
|
|
|
—
|
|
||||
Agency mortgage-backed securities
|
220,105
|
|
|
—
|
|
|
220,105
|
|
|
—
|
|
||||
Agency collateralized mortgage obligations
|
134,911
|
|
|
—
|
|
|
134,911
|
|
|
—
|
|
||||
State, county, and municipal securities
|
1,735
|
|
|
—
|
|
|
1,735
|
|
|
—
|
|
||||
Single issuer trust preferred securities issued by banks and insurers
|
707
|
|
|
—
|
|
|
707
|
|
|
—
|
|
||||
Pooled trust preferred securities issued by banks and insurers
|
1,329
|
|
|
—
|
|
|
—
|
|
|
1,329
|
|
||||
Small business administration pooled securities
|
51,927
|
|
|
—
|
|
|
51,927
|
|
|
—
|
|
||||
Loans held for sale
|
6,431
|
|
|
—
|
|
|
6,431
|
|
|
—
|
|
||||
Derivative instruments
|
26,310
|
|
|
—
|
|
|
26,310
|
|
|
—
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
17,523
|
|
|
—
|
|
|
17,523
|
|
|
—
|
|
||||
Total recurring fair value measurements
|
$
|
478,951
|
|
|
$
|
20,981
|
|
|
$
|
456,641
|
|
|
$
|
1,329
|
|
|
|
|
|
|
|
|
|
||||||||
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Collateral dependent impaired loans
|
$
|
29,109
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,109
|
|
Total nonrecurring fair value measurements
|
$
|
29,109
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,109
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Pooled Trust Preferred Securities
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
1,329
|
|
|
$
|
1,640
|
|
|
$
|
1,584
|
|
Gain and (losses) (realized/unrealized)
|
|
|
|
|
|
|
||||||
Included in earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Included in other comprehensive income
|
|
(26
|
)
|
|
191
|
|
|
77
|
|
|||
Settlements
|
|
(189
|
)
|
|
(502
|
)
|
|
(21
|
)
|
|||
Ending Balance
|
|
$
|
1,114
|
|
|
$
|
1,329
|
|
|
$
|
1,640
|
|
(1)
|
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of these possible adjustments may vary.
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||||
|
December 31, 2019
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Financial assets
|
|
|
|
||||||||||||||||
Securities held to maturity (a)
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government agency securities
|
$
|
12,874
|
|
|
$
|
12,997
|
|
|
$
|
—
|
|
|
$
|
12,997
|
|
|
$
|
—
|
|
U.S. Treasury securities
|
4,032
|
|
|
4,053
|
|
|
—
|
|
|
4,053
|
|
|
—
|
|
|||||
Agency mortgage-backed securities
|
397,414
|
|
|
405,802
|
|
|
—
|
|
|
405,802
|
|
|
—
|
|
|||||
Agency collateralized mortgage obligations
|
293,662
|
|
|
297,314
|
|
|
—
|
|
|
297,314
|
|
|
—
|
|
|||||
Single issuer trust preferred securities issued by banks
|
1,500
|
|
|
1,490
|
|
|
—
|
|
|
1,490
|
|
|
—
|
|
|||||
Small business administration pooled securities
|
31,324
|
|
|
31,607
|
|
|
—
|
|
|
31,607
|
|
|
—
|
|
|||||
Loans, net of allowance for loan losses (b)
|
8,780,384
|
|
|
8,613,635
|
|
|
—
|
|
|
—
|
|
|
8,613,635
|
|
|||||
Federal Home Loan Bank stock (c)
|
14,424
|
|
|
14,424
|
|
|
—
|
|
|
14,424
|
|
|
—
|
|
|||||
Cash surrender value of life insurance policies (d)
|
197,372
|
|
|
197,372
|
|
|
—
|
|
|
197,372
|
|
|
—
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities, other than time deposits (e)
|
$
|
7,752,052
|
|
|
$
|
7,752,052
|
|
|
$
|
—
|
|
|
$
|
7,752,052
|
|
|
$
|
—
|
|
Time certificates of deposits (f)
|
1,395,315
|
|
|
1,396,760
|
|
|
—
|
|
|
1,396,760
|
|
|
—
|
|
|||||
Federal Home Loan Bank borrowings (f)
|
115,748
|
|
|
115,881
|
|
|
—
|
|
|
115,881
|
|
|
—
|
|
|||||
Long-term borrowings (f)
|
74,906
|
|
|
72,219
|
|
|
—
|
|
|
72,219
|
|
|
—
|
|
|||||
Junior subordinated debentures (g)
|
62,848
|
|
|
65,603
|
|
|
—
|
|
|
65,603
|
|
|
—
|
|
|||||
Subordinated debentures (f)
|
49,601
|
|
|
52,870
|
|
|
—
|
|
|
—
|
|
|
52,870
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||||
|
December 31, 2018
|
||||||||||||||||||
Financial assets
|
(Dollars in thousands)
|
||||||||||||||||||
Securities held to maturity (a)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Treasury securities
|
$
|
1,004
|
|
|
$
|
1,015
|
|
|
$
|
—
|
|
|
$
|
1,015
|
|
|
$
|
—
|
|
Agency mortgage-backed securities
|
252,484
|
|
|
250,928
|
|
|
—
|
|
|
250,928
|
|
|
—
|
|
|||||
Agency collateralized mortgage obligations
|
332,775
|
|
|
326,724
|
|
|
—
|
|
|
326,724
|
|
|
—
|
|
|||||
Single issuer trust preferred securities issued by banks
|
1,500
|
|
|
1,490
|
|
|
—
|
|
|
1,490
|
|
|
—
|
|
|||||
Small business administration pooled securities
|
23,727
|
|
|
23,483
|
|
|
—
|
|
|
23,483
|
|
|
—
|
|
|||||
Loans, net of allowance for loan losses (b)
|
6,812,792
|
|
|
6,635,209
|
|
|
—
|
|
|
—
|
|
|
6,635,209
|
|
|||||
Federal Home Loan Bank stock (c)
|
15,683
|
|
|
15,683
|
|
|
—
|
|
|
15,683
|
|
|
—
|
|
|||||
Cash surrender value of life insurance policies (d)
|
160,456
|
|
|
160,456
|
|
|
—
|
|
|
160,456
|
|
|
—
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities, other than time deposits (e)
|
$
|
6,716,017
|
|
|
$
|
6,716,017
|
|
|
$
|
—
|
|
|
$
|
6,716,017
|
|
|
$
|
—
|
|
Time certificates of deposits (f)
|
711,103
|
|
|
703,728
|
|
|
—
|
|
|
703,728
|
|
|
—
|
|
|||||
Federal Home Loan Bank borrowings (f)
|
147,806
|
|
|
147,603
|
|
|
—
|
|
|
147,603
|
|
|
—
|
|
|||||
Junior subordinated debentures (g)
|
76,173
|
|
|
73,827
|
|
|
—
|
|
|
73,827
|
|
|
—
|
|
|||||
Subordinated debentures (f)
|
34,728
|
|
|
32,509
|
|
|
—
|
|
|
—
|
|
|
32,509
|
|
(a)
|
The fair values presented are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments and/or discounted cash flow analysis.
|
(b)
|
Fair value of loans is measured using the exit price valuation method, determined primarily by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or cash flows, while incorporating liquidity and credit assumptions. Additionally, this amount excludes collateral dependent impaired loans, which are deemed to be marked to fair value on a nonrecurring basis.
|
(c)
|
FHLB stock has no quoted market value and is carried at cost, therefore the carrying amount approximates fair value.
|
(d)
|
Cash surrender value of life insurance is recorded at its cash surrender value (or the amount that can be realized upon surrender of the policy), therefore carrying amount approximates fair value.
|
(e)
|
Fair value of demand deposits, savings and interest checking accounts and money market deposits is the amount payable on demand at the reporting date.
|
(f)
|
Fair value was determined by discounting anticipated future cash payments using rates currently available for instruments with similar remaining maturities.
|
(g)
|
Fair value was determined based upon market prices of securities with similar terms and maturities.
|
1.
|
Identify the contract(s) with customers
|
2.
|
Identify the performance obligations
|
3.
|
Determine the transaction price
|
4.
|
Allocate the transaction price to the performance obligations
|
5.
|
Recognize revenue when (or as) the entity satisfies a performance obligation
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Deposit account fees (inclusive of cash management fees)
|
$
|
20,040
|
|
|
$
|
18,327
|
|
|
$
|
17,822
|
|
Interchange fees
|
18,262
|
|
|
15,433
|
|
|
13,899
|
|
|||
ATM fees
|
3,224
|
|
|
2,961
|
|
|
2,938
|
|
|||
Investment management - wealth management and advisory services
|
25,940
|
|
|
23,441
|
|
|
21,644
|
|
|||
Investment management - retail investments and insurance revenue
|
2,779
|
|
|
2,714
|
|
|
2,158
|
|
|||
Merchant processing income
|
1,175
|
|
|
1,401
|
|
|
1,229
|
|
|||
Other noninterest income
|
8,696
|
|
|
4,432
|
|
|
4,569
|
|
|||
Total noninterest income in-scope of ASC 606
|
80,116
|
|
|
68,709
|
|
|
64,259
|
|
|||
Total noninterest income out-of-scope of ASC 606
|
35,178
|
|
|
19,796
|
|
|
18,735
|
|
|||
Total noninterest income
|
$
|
115,294
|
|
|
88,505
|
|
|
$
|
82,994
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
(Dollars in thousands)
|
||||||
Receivables, included in other assets
|
$
|
2,341
|
|
|
$
|
1,893
|
|
|
Year Ended December 31, 2019
|
||||||||||
|
Pre Tax
Amount |
|
Tax (Expense)
Benefit |
|
After Tax
Amount |
||||||
|
(Dollars in thousands)
|
||||||||||
Change in fair value of securities available for sale
|
$
|
12,055
|
|
|
$
|
(2,761
|
)
|
|
$
|
9,294
|
|
Less: net security losses reclassified into other noninterest expense
|
(1,462
|
)
|
|
411
|
|
|
(1,051
|
)
|
|||
Net change in fair value of securities available for sale
|
13,517
|
|
|
(3,172
|
)
|
|
10,345
|
|
|||
|
|
|
|
|
|
||||||
Change in fair value of cash flow hedges
|
16,725
|
|
|
(4,708
|
)
|
|
12,017
|
|
|||
Less: net cash flow hedge gains reclassified into interest income or interest expense
|
2,346
|
|
|
(660
|
)
|
|
1,686
|
|
|||
Net change in fair value of cash flow hedges
|
14,379
|
|
|
(4,048
|
)
|
|
10,331
|
|
|||
|
|
|
|
|
|
||||||
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period
|
(2,123
|
)
|
|
597
|
|
|
(1,526
|
)
|
|||
Amortization of net actuarial gains
|
(8
|
)
|
|
2
|
|
|
(6
|
)
|
|||
Amortization of net prior service costs
|
276
|
|
|
(78
|
)
|
|
198
|
|
|||
Net change in other comprehensive income for defined benefit postretirement plans (2)
|
(1,855
|
)
|
|
521
|
|
|
(1,334
|
)
|
|||
Total other comprehensive income
|
$
|
26,041
|
|
|
$
|
(6,699
|
)
|
|
$
|
19,342
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31, 2018
|
||||||||||
|
Pre Tax
Amount |
|
Tax (Expense)
Benefit |
|
After Tax
Amount |
||||||
|
(Dollars in thousands)
|
||||||||||
Change in fair value of securities available for sale
|
$
|
(5,923
|
)
|
|
$
|
1,422
|
|
|
$
|
(4,501
|
)
|
Less: net security gains reclassified into other noninterest income (expense)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net change in fair value of securities available for sale
|
(5,923
|
)
|
|
1,422
|
|
|
(4,501
|
)
|
|||
|
|
|
|
|
|
||||||
Change in fair value of cash flow hedges
|
7,717
|
|
|
(2,169
|
)
|
|
5,548
|
|
|||
Less: net cash flow hedge losses reclassified into interest income or interest expense (1)
|
1,000
|
|
|
(281
|
)
|
|
719
|
|
|||
Net change in fair value of cash flow hedges
|
6,717
|
|
|
(1,888
|
)
|
|
4,829
|
|
|||
|
|
|
|
|
|
||||||
Net unamortized gain related to defined benefit pension and other postretirement adjustments arising during the period
|
1,521
|
|
|
(428
|
)
|
|
1,093
|
|
|||
Amortization of net actuarial losses
|
372
|
|
|
(105
|
)
|
|
267
|
|
|||
Amortization of net prior service costs
|
276
|
|
|
(78
|
)
|
|
198
|
|
|||
Net change in other comprehensive income for defined benefit postretirement plans (2)
|
2,169
|
|
|
(611
|
)
|
|
1,558
|
|
|||
Total other comprehensive income
|
$
|
2,963
|
|
|
$
|
(1,077
|
)
|
|
$
|
1,886
|
|
|
Year Ended December 31, 2017
|
||||||||||
|
Pre Tax
Amount |
|
Tax (Expense)
Benefit |
|
After Tax
Amount |
||||||
|
(Dollars in thousands)
|
||||||||||
Change in fair value of securities available for sale
|
$
|
(996
|
)
|
|
$
|
321
|
|
|
$
|
(675
|
)
|
Less: net security gains reclassified into other noninterest income (expense)
|
3
|
|
|
(1
|
)
|
|
2
|
|
|||
Net change in fair value of securities available for sale
|
(999
|
)
|
|
322
|
|
|
(677
|
)
|
|||
|
|
|
|
|
|
||||||
Change in fair value of cash flow hedges
|
307
|
|
|
(125
|
)
|
|
182
|
|
|||
Less: net cash flow hedge losses reclassified into interest income or interest expense (1)
|
(441
|
)
|
|
180
|
|
|
(261
|
)
|
|||
Net change in fair value of cash flow hedges
|
748
|
|
|
(305
|
)
|
|
443
|
|
|||
|
|
|
|
|
|
||||||
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period
|
(995
|
)
|
|
407
|
|
|
(588
|
)
|
|||
Amortization of net actuarial losses
|
278
|
|
|
(113
|
)
|
|
165
|
|
|||
Amortization of net prior service costs
|
276
|
|
|
(113
|
)
|
|
163
|
|
|||
Net change in other comprehensive income for defined benefit postretirement plans (2)
|
(441
|
)
|
|
181
|
|
|
(260
|
)
|
|||
Total other comprehensive loss
|
$
|
(692
|
)
|
|
$
|
198
|
|
|
$
|
(494
|
)
|
(1)
|
Includes the amortization of the remaining balance of a realized but unrecognized gain, net of tax, from the termination of interest rate swaps in 2009. The original gain of $1.4 million, net of tax, was recognized in earnings through December 2018, the original maturity date of the swap. The balance of the gain was amortized to $137,000 at December 31, 2017.
|
(2)
|
The amortization of prior service costs is included in the computation of net periodic pension costs as disclosed in Note 15 - Employee Benefit Plans.
|
|
Unrealized Gain (Loss) on Securities
|
|
Unrealized Gain (Loss) on Cash Flow Hedge
|
|
Deferred Gain on Hedge Transactions
|
|
Defined Benefit Postretirement Plans
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||
Beginning balance: January 1, 2017
|
$
|
173
|
|
|
$
|
361
|
|
|
$
|
281
|
|
|
$
|
(2,152
|
)
|
|
$
|
(1,337
|
)
|
Other comprehensive income (loss)
|
(677
|
)
|
|
587
|
|
|
(144
|
)
|
|
(260
|
)
|
|
(494
|
)
|
|||||
Ending balance: December 31, 2017
|
$
|
(504
|
)
|
|
$
|
948
|
|
|
$
|
137
|
|
|
$
|
(2,412
|
)
|
|
$
|
(1,831
|
)
|
Opening balance reclassification
|
(111
|
)
|
|
205
|
|
|
29
|
|
|
(520
|
)
|
|
(397
|
)
|
|||||
Cumulative effect accounting adjustment
|
(831
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(831
|
)
|
|||||
Other comprehensive income (loss)
|
(4,501
|
)
|
|
4,995
|
|
|
(166
|
)
|
|
1,558
|
|
|
1,886
|
|
|||||
Ending balance: December 31, 2018
|
$
|
(5,947
|
)
|
|
$
|
6,148
|
|
|
$
|
—
|
|
|
$
|
(1,374
|
)
|
|
$
|
(1,173
|
)
|
Other comprehensive income (loss)
|
10,345
|
|
|
10,331
|
|
|
—
|
|
|
(1,334
|
)
|
|
19,342
|
|
|||||
Ending balance: December 31, 2019
|
$
|
4,398
|
|
|
$
|
16,479
|
|
|
$
|
—
|
|
|
$
|
(2,708
|
)
|
|
$
|
18,169
|
|
|
For the year ended
|
|
|
December 31, 2019
|
|
|
(Dollars in thousands)
|
|
Operating lease cost
|
$10,718
|
|
Short-term lease cost
|
116
|
|
Variable lease cost
|
—
|
|
Total lease cost
|
$10,834
|
|
As of December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Commitments to extend credit
|
$
|
3,337,930
|
|
|
$
|
2,639,689
|
|
Standby letters of credit
|
$
|
21,565
|
|
|
$
|
16,708
|
|
Deferred standby letter of credit fees
|
$
|
158
|
|
|
$
|
122
|
|
Loans sold with recourse
|
$
|
404,532
|
|
|
$
|
—
|
|
|
Actual
|
|
For Capital
Adequacy Purposes |
|
To Be Well Capitalized
Under Prompt Corrective Action Provisions |
|||||||||||||||||||
|
Amount
|
|
Ratio
|
|
Amount
|
|
|
|
Ratio
|
|
Amount
|
|
|
|
Ratio
|
|||||||||
|
December 31, 2019
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Independent Bank Corp.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital (to risk weighted assets)
|
$
|
1,352,341
|
|
|
14.83
|
%
|
|
$
|
729,291
|
|
|
≥
|
|
8.0
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Common equity tier 1 capital (to risk weighted assets)
|
$
|
1,171,963
|
|
|
12.86
|
%
|
|
$
|
410,226
|
|
|
≥
|
|
4.5
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Tier 1 capital (to risk weighted assets)
|
$
|
1,232,963
|
|
|
13.53
|
%
|
|
$
|
546,969
|
|
|
≥
|
|
6.0
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Tier 1 capital (to average assets) leverage
|
$
|
1,232,963
|
|
|
11.28
|
%
|
|
$
|
437,271
|
|
|
≥
|
|
4.0
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Rockland Trust Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital (to risk weighted assets)
|
$
|
1,275,611
|
|
|
14.00
|
%
|
|
$
|
728,868
|
|
|
≥
|
|
8.0
|
%
|
|
$
|
911,085
|
|
|
≥
|
|
10.0
|
%
|
Common equity tier 1 capital (to risk weighted assets)
|
$
|
1,205,740
|
|
|
13.23
|
%
|
|
$
|
409,988
|
|
|
≥
|
|
4.5
|
%
|
|
$
|
592,205
|
|
|
≥
|
|
6.5
|
%
|
Tier 1 capital (to risk weighted assets)
|
$
|
1,205,740
|
|
|
13.23
|
%
|
|
$
|
546,651
|
|
|
≥
|
|
6.0
|
%
|
|
$
|
728,868
|
|
|
≥
|
|
8.0
|
%
|
Tier 1 capital (to average assets) leverage
|
$
|
1,205,740
|
|
|
11.06
|
%
|
|
$
|
435,886
|
|
|
≥
|
|
4.0
|
%
|
|
$
|
544,857
|
|
|
≥
|
|
5.0
|
%
|
|
December 31, 2018
|
|||||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Independent Bank Corp.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital (to risk weighted assets)
|
$
|
992,454
|
|
|
14.45
|
%
|
|
$
|
549,297
|
|
|
≥
|
|
8.0
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Common equity tier 1 capital (to risk weighted assets)
|
$
|
818,176
|
|
|
11.92
|
%
|
|
$
|
308,980
|
|
|
≥
|
|
4.5
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Tier 1 capital (to risk weighted assets)
|
$
|
892,176
|
|
|
12.99
|
%
|
|
$
|
411,973
|
|
|
≥
|
|
6.0
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Tier 1 capital (to average assets)
|
$
|
892,176
|
|
|
10.69
|
%
|
|
$
|
333,754
|
|
|
≥
|
|
4.0
|
%
|
|
N/A
|
|
|
|
|
N/A
|
|
|
Rockland Trust Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital (to risk weighted assets)
|
$
|
937,574
|
|
|
13.66
|
%
|
|
$
|
549,036
|
|
|
≥
|
|
8.0
|
%
|
|
$
|
686,295
|
|
|
≥
|
|
10.0
|
%
|
Common equity tier 1 capital (to risk weighted assets)
|
$
|
872,024
|
|
|
12.71
|
%
|
|
$
|
308,833
|
|
|
≥
|
|
4.5
|
%
|
|
$
|
446,092
|
|
|
≥
|
|
6.5
|
%
|
Tier 1 capital (to risk weighted assets)
|
$
|
872,024
|
|
|
12.71
|
%
|
|
$
|
411,777
|
|
|
≥
|
|
6.0
|
%
|
|
$
|
549,036
|
|
|
≥
|
|
8.0
|
%
|
Tier 1 capital (to average assets)
|
$
|
872,024
|
|
|
10.46
|
%
|
|
$
|
333,595
|
|
|
≥
|
|
4.0
|
%
|
|
$
|
416,994
|
|
|
≥
|
|
5.0
|
%
|
|
December 31
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Assets
|
|
||||||
Cash (1)
|
$
|
135,688
|
|
|
$
|
64,256
|
|
Investments in subsidiaries (2)
|
1,743,435
|
|
|
1,128,407
|
|
||
Prepaid income taxes
|
31,586
|
|
|
1,014
|
|
||
Deferred tax asset
|
612
|
|
|
—
|
|
||
Derivative instruments (1)
|
290
|
|
|
1,711
|
|
||
Other assets
|
—
|
|
|
37
|
|
||
Total assets
|
$
|
1,911,611
|
|
|
$
|
1,195,425
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Dividends payable
|
$
|
15,126
|
|
|
$
|
10,671
|
|
Long-term borrowings (less unamortized debt issuance costs of $94)
|
74,906
|
|
|
—
|
|
||
Junior subordinated debentures (less unamortized debt issuance costs of $40 and $118)
|
62,848
|
|
|
76,173
|
|
||
Subordinated debentures (less unamortized debt issuance costs of $399 and $272)
|
49,601
|
|
|
34,728
|
|
||
Other liabilities
|
987
|
|
|
363
|
|
||
Total liabilities
|
203,468
|
|
|
121,935
|
|
||
Stockholders’ equity
|
1,708,143
|
|
|
1,073,490
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,911,611
|
|
|
$
|
1,195,425
|
|
(1)
|
Entire balance eliminates in consolidation.
|
(2)
|
Majority of balance eliminates in consolidation.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Income
|
|
||||||||||
Dividends received from subsidiaries (1)
|
$
|
181,790
|
|
|
$
|
71,255
|
|
|
$
|
47,006
|
|
Interest income (2)
|
—
|
|
|
—
|
|
|
50
|
|
|||
Total income
|
181,790
|
|
|
71,255
|
|
|
47,056
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Interest expense
|
8,236
|
|
|
4,234
|
|
|
3,995
|
|
|||
Total expenses
|
8,236
|
|
|
4,234
|
|
|
3,995
|
|
|||
Income before income taxes and equity in undistributed income of subsidiaries
|
173,554
|
|
|
67,021
|
|
|
43,061
|
|
|||
Income tax benefit
|
(2,262
|
)
|
|
(1,151
|
)
|
|
(1,523
|
)
|
|||
Income of parent company
|
175,816
|
|
|
68,172
|
|
|
44,584
|
|
|||
Equity (deficit) in undistributed income of subsidiaries
|
(10,641
|
)
|
|
53,450
|
|
|
42,620
|
|
|||
Net income
|
$
|
165,175
|
|
|
$
|
121,622
|
|
|
$
|
87,204
|
|
(1)
|
Majority of balance eliminates in consolidation.
|
(2)
|
Entire balance eliminated in consolidation.
|
|
Years Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Cash flows from operating activities
|
|
||||||||||
Net income
|
$
|
165,175
|
|
|
$
|
121,622
|
|
|
$
|
87,204
|
|
Adjustments to reconcile net income to cash provided by operating activities
|
|
|
|
|
|
||||||
Amortization
|
157
|
|
|
54
|
|
|
12
|
|
|||
Deferred income tax expense
|
1,021
|
|
|
49
|
|
|
51
|
|
|||
Change in prepaid income taxes and other assets
|
20,556
|
|
|
135
|
|
|
(99
|
)
|
|||
Change in other liabilities
|
(4,613
|
)
|
|
6
|
|
|
(562
|
)
|
|||
Deficit (equity) in undistributed income of subsidiaries
|
10,641
|
|
|
(53,450
|
)
|
|
(42,620
|
)
|
|||
Net cash provided by operating activities
|
192,937
|
|
|
68,416
|
|
|
43,986
|
|
|||
Cash flows provided by (used in) investing activities
|
|
|
|
|
|
||||||
Cash paid for acquisitions, net of cash acquired (1)
|
(148,297
|
)
|
|
(13,649
|
)
|
|
(4,834
|
)
|
|||
Net cash used in investing activities
|
(148,297
|
)
|
|
(13,649
|
)
|
|
(4,834
|
)
|
|||
Cash flows used in financing activities
|
|
|
|
|
|
||||||
Proceeds from line of credit, net of issuance costs
|
49,980
|
|
|
—
|
|
|
—
|
|
|||
Repayment of line of credit, net of issuance costs
|
(49,980
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from long-term debt, net of issuance costs
|
74,867
|
|
|
—
|
|
|
—
|
|
|||
Repayments of junior subordinated debentures, net of issuance costs
|
(13,329
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of subordinated debentures, net of issuance costs
|
49,526
|
|
|
—
|
|
|
—
|
|
|||
Repayments of subordinated debentures, net of issuance costs
|
(34,767
|
)
|
|
—
|
|
|
—
|
|
|||
Restricted stock awards issued, net of awards surrendered
|
(1,463
|
)
|
|
(1,371
|
)
|
|
(1,422
|
)
|
|||
Net proceeds from exercise of stock options
|
281
|
|
|
184
|
|
|
214
|
|
|||
Proceeds from shares issued under the direct stock purchase plan
|
4,951
|
|
|
2,712
|
|
|
1,636
|
|
|||
Common dividends paid
|
(53,274
|
)
|
|
(40,167
|
)
|
|
(34,045
|
)
|
|||
Net cash provided by (used in) financing activities
|
26,792
|
|
|
(38,642
|
)
|
|
(33,617
|
)
|
|||
Net increase in cash and cash equivalents
|
71,432
|
|
|
16,125
|
|
|
5,535
|
|
|||
Cash and cash equivalents at the beginning of the year
|
64,256
|
|
|
48,131
|
|
|
42,596
|
|
|||
Cash and cash equivalents at the end of the year
|
$
|
135,688
|
|
|
$
|
64,256
|
|
|
$
|
48,131
|
|
(1)
|
The majority of the net assets acquired at the parent company represented each of the acquired companies' investments in their wholly owned subsidiaries, which were eliminated in consolidation at December 31, 2019, 2018, and 2017, respectively.
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
|
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
|
|
||||||||||||||||||||||
Interest income
|
$
|
91,543
|
|
|
$
|
73,749
|
|
|
$
|
122,144
|
|
|
$
|
79,167
|
|
|
$
|
119,624
|
|
|
$
|
82,875
|
|
|
$
|
113,703
|
|
|
$
|
87,910
|
|
Interest expense
|
9,018
|
|
|
5,278
|
|
|
16,125
|
|
|
5,999
|
|
|
15,026
|
|
|
6,641
|
|
|
13,710
|
|
|
7,618
|
|
||||||||
Net interest income
|
82,525
|
|
|
68,471
|
|
|
106,019
|
|
|
73,168
|
|
|
104,598
|
|
|
76,234
|
|
|
99,993
|
|
|
80,292
|
|
||||||||
Provision for loan losses
|
1,000
|
|
|
500
|
|
|
1,000
|
|
|
2,000
|
|
|
—
|
|
|
1,075
|
|
|
4,000
|
|
|
1,200
|
|
||||||||
Total noninterest income
|
21,533
|
|
|
19,863
|
|
|
28,648
|
|
|
21,887
|
|
|
31,816
|
|
|
23,264
|
|
|
33,297
|
|
|
23,491
|
|
||||||||
Total noninterest expenses
|
56,311
|
|
|
53,451
|
|
|
93,032
|
|
|
52,688
|
|
|
67,533
|
|
|
55,439
|
|
|
67,445
|
|
|
64,391
|
|
||||||||
Provision for income taxes
|
11,522
|
|
|
6,828
|
|
|
10,007
|
|
|
9,249
|
|
|
17,036
|
|
|
9,969
|
|
|
14,368
|
|
|
8,258
|
|
||||||||
Net income
|
$
|
35,225
|
|
|
$
|
27,555
|
|
|
$
|
30,628
|
|
|
$
|
31,118
|
|
|
$
|
51,845
|
|
|
$
|
33,015
|
|
|
$
|
47,477
|
|
|
$
|
29,934
|
|
Basic earnings per share
|
$
|
1.25
|
|
|
$
|
1.00
|
|
|
$
|
0.89
|
|
|
$
|
1.13
|
|
|
$
|
1.51
|
|
|
$
|
1.20
|
|
|
$
|
1.38
|
|
|
$
|
1.08
|
|
Diluted earnings per share
|
$
|
1.25
|
|
|
$
|
1.00
|
|
|
$
|
0.89
|
|
|
$
|
1.13
|
|
|
$
|
1.51
|
|
|
$
|
1.20
|
|
|
$
|
1.38
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average common shares (basic)
|
28,106,184
|
|
|
27,486,573
|
|
|
34,313,492
|
|
|
27,526,653
|
|
|
34,361,176
|
|
|
27,537,841
|
|
|
34,374,953
|
|
|
27,815,437
|
|
||||||||
Common stock equivalents
|
54,466
|
|
|
67,381
|
|
|
41,878
|
|
|
54,525
|
|
|
39,390
|
|
|
63,499
|
|
|
46,245
|
|
|
58,576
|
|
||||||||
Weighted average common shares (diluted)
|
28,160,650
|
|
|
27,553,954
|
|
|
34,355,370
|
|
|
27,581,178
|
|
|
34,400,566
|
|
|
27,601,340
|
|
|
34,421,198
|
|
|
27,874,013
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Unusual or infrequently occurring items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Items within noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gain on sale of loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Items within noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Merger and acquisition expense
|
$
|
1,032
|
|
|
$
|
—
|
|
|
$
|
24,696
|
|
|
$
|
434
|
|
|
$
|
705
|
|
|
$
|
2,688
|
|
|
$
|
—
|
|
|
$
|
8,046
|
|
Adjustment for tax effect of previously incurred merger and acquisition expense
|
650
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Items within provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total
|
$
|
1,682
|
|
|
$
|
—
|
|
|
$
|
24,696
|
|
|
$
|
434
|
|
|
$
|
705
|
|
|
$
|
2,688
|
|
|
$
|
—
|
|
|
$
|
8,046
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Principal balance of loans outstanding at beginning of year
|
$
|
41,170
|
|
|
$
|
52,458
|
|
Loan advances (1)
|
49,771
|
|
|
14,862
|
|
||
Loan payments/payoffs
|
(35,111
|
)
|
|
(14,057
|
)
|
||
Reduction for retired directors
|
—
|
|
|
(12,093
|
)
|
||
Principal balance of loans outstanding at end of year
|
$
|
55,830
|
|
|
$
|
41,170
|
|
(1)
|
The 2019 amount includes $7.0 million of BHB acquired loans associated with a director during the year, which represent the outstanding loan balances at the effective date of appointment.
|
Equity Compensation Plan Category
|
Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights
|
|
Weighted-
Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights
|
|
Number of
Securities
Remaining
Available
for Future Issuance
Under Equity
Compensation
Plans
(Excluding
Securities Reflected
in Column (a))
|
|
||||
|
(a)
|
|
(b)
|
|
(c)
|
|
||||
Plans approved by security holders
|
38,500
|
|
|
$
|
42.49
|
|
|
739,861
|
|
(1)
|
Plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
|
TOTAL
|
38,500
|
|
|
$
|
42.49
|
|
|
739,861
|
|
|
(1)
|
There are 452,361 shares available for future issuance under the 2005 Employee Stock Plan and there are 287,500 shares available for future issuance under the 2018 Non-Employee Director Stock Plan. Shares under the 2005 and 2018 Plans may be issued as stock options or restricted stock awards.
|
No.
|
Exhibit
|
3.1
|
|
3.2
|
|
4.1
|
Specimen Common Stock Certificate, incorporated by reference to Form 10-K for the year ended December 31, 1992, filed on March 29, 1993 (SEC File No. 001-09047).
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
|
4.8
|
|
4.90
|
|
4.10
|
|
4.11
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.18
|
|
10.19
|
|
10.20
|
|
10.21
|
|
10.22
|
|
10.23
|
|
10.24
|
|
10.25
|
|
10.26
|
|
10.27
|
|
10.28
|
|
10.29
|
|
10.30
|
21.1
|
|
23.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
|
104
|
Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101)
|
*
|
Filed herewith
|
+
|
Furnished herewith
|
#
|
Management contract or compensatory plan or arrangement.
|
++
|
Confidential treatment has been granted for certain portions of this exhibit pursuant to a confidential treatment order granted by the SEC. The omitted portions have been separately filed with the SEC.
|
INDEPENDENT BANK CORP.
|
|
/s/ CHRISTOPHER ODDLEIFSON
|
Christopher Oddleifson,
Chief Executive Officer and President
|
/s/ CHRISTOPHER ODDLEIFSON
|
Director, CEO/President
|
Date:
|
February 27, 2020
|
Christopher Oddleifson
|
(Principal Executive Officer)
|
|
|
|
|
|
|
/s/ DONNA L. ABELLI
|
Director and Chairman of the Board
|
Date:
|
February 27, 2020
|
Donna L. Abelli
|
|
|
|
|
|
|
|
/s/ MARK RUGGIERO
|
CFO (Principal Financial and Accounting Officer)
|
Date:
|
February 27, 2020
|
Mark Ruggiero
|
|
|
|
|
|
|
|
/s/MICHAEL P. HOGAN
|
Director
|
Date:
|
February 27, 2020
|
Michael P. Hogan
|
|
|
|
|
|
|
|
/s/ KEVIN J. JONES
|
Director
|
Date:
|
February 27, 2020
|
Kevin J. Jones
|
|
|
|
|
|
|
|
/s/ MARY L. LENTZ
|
Director
|
Date:
|
February 27, 2020
|
Mary L. Lentz
|
|
|
|
|
|
|
|
/s/ EILEEN C. MISKELL
|
Director
|
Date:
|
February 27, 2020
|
Eileen C. Miskell
|
|
|
|
|
|
|
|
/s/ JOHN J. MORRISSEY
|
Director
|
Date:
|
February 27, 2020
|
John J. Morrissey
|
|
|
|
|
|
|
|
/s/ GERARD F. NADEAU
|
Director
|
Date:
|
February 27, 2020
|
Gerard F. Nadeau
|
|
|
|
|
|
|
|
/s/ DANIEL F. O’BRIEN
|
Director
|
Date:
|
February 27, 2020
|
Daniel F. O’ Brien
|
|
|
|
|
|
|
|
/s/ DAVID A. POWERS
|
Director
|
Date:
|
February 27, 2020
|
David A. Powers
|
|
|
|
|
|
|
|
/s/ SCOTT K. SMITH
|
Director
|
Date:
|
February 27, 2020
|
Scott K. Smith
|
|
|
|
|
|
|
|
/s/ FREDERICK TAW
|
Director
|
Date:
|
February 27, 2020
|
Frederick Taw
|
|
|
|
|
|
|
|
/s/ THOMAS R. VENABLES
|
Director
|
Date:
|
February 27, 2020
|
Thomas R. Venables
|
|
|
|
Subsidiaries of Independent Bank Corp.
|
|||||
Name of Subsidiary
|
|
State or Other Jurisdiction of Incorporation or Organization
|
|
Percentage of Voting Securities Owned by Independent Bank Corp.
|
|
Rockland Trust Company
|
|
Massachusetts
|
|
100
|
%
|
Independent Capital Trust V
|
|
Delaware
|
|
100
|
%
|
Central Bancorp Capital Trust I
|
|
Delaware
|
|
100
|
%
|
Central Bancorp Statutory Trust II
|
|
Connecticut
|
|
100
|
%
|
East Main Street Trust I
|
|
Delaware
|
|
100
|
%
|
Blue Hills Funding Corporation
|
|
Massachusetts
|
|
100
|
%
|
•
|
Registration Statement (Form S-3 ASR No. 333-221227) pertaining to the Independent Bank Corp. 2014 Dividend Reinvestment and Stock Purchase Plan
|
•
|
Registration Statement (Form S-3 ASR No. 333-226874) of Independent Bank Corp.
|
•
|
Registration Statement (Form S-8 No. 333-174991) pertaining to the Independent Bank Corp. Amended and Restated 2005 Employee Stock Plan
|
•
|
Registration Statement (Form S-8 No. 333-167046) pertaining to the Independent Bank Corp. 2010 Non-Employee Director Stock Plan
|
•
|
Registration Statement (Form S-8 No. 333-225034) pertaining to the Independent Bank Corp. 2018 Non-Employee Director Stock Plan
|
•
|
Registration Statement (Form S-8 No. 333-166124) pertaining to The Rockland Trust Company Employee Savings, Profit Sharing, and Stock Ownership Plan
|
•
|
Registration Statement (Form S-8 No. 333-126986) pertaining to the Independent Bank Corp. 2005 Employee Stock Plan
|
•
|
Registration Statement (Form S-8 No. 333-203525) pertaining to the Rockland Trust Company Amended and Restated 401(k) Restoration Plan
|
/s/ CHRISTOPHER ODDLEIFSON
|
Christopher Oddleifson
|
Chief Executive Officer
|
/s/ MARK J. RUGGIERO
|
Mark J. Ruggiero
|
Chief Financial Officer
|
(a)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Independent Bank Corp.
|
(“Company”)
|
|
/s/ CHRISTOPHER ODDLEIFSON
|
Christopher Oddleifson
|
Chief Executive Officer
|
(a)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Independent Bank Corp.
|
(“Company”)
|
|
/s/ MARK J. RUGGIERO
|
Mark J. Ruggiero
|
Chief Financial Officer
|