|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Washington
|
|
91-1857900
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
201 Fifth Avenue SW, Olympia, WA
|
|
98501
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
|
Page
|
|
||
|
|
|
Part I.
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Part II.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
||
|
CERTIFICATIONS
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
ASSETS
|
|
|
|
||||
Cash on hand and in banks
|
$
|
62,540
|
|
|
$
|
74,028
|
|
Interest earning deposits
|
22,772
|
|
|
47,608
|
|
||
Cash and cash equivalents
|
85,312
|
|
|
121,636
|
|
||
Other interest earning deposits
|
5,110
|
|
|
10,126
|
|
||
Investment securities available for sale, at fair value
|
699,122
|
|
|
742,846
|
|
||
Investment securities held to maturity (fair value of $34,494 and $36,874, respectively)
|
33,587
|
|
|
35,814
|
|
||
Loans held for sale
|
6,939
|
|
|
5,582
|
|
||
Noncovered loans receivable, net
|
2,239,621
|
|
|
2,124,877
|
|
||
Allowance for loan losses on noncovered loans
|
(22,779
|
)
|
|
(22,153
|
)
|
||
Noncovered loans receivable, net of allowance for loan losses
|
2,216,842
|
|
|
2,102,724
|
|
||
Covered loans receivable, net
|
107,681
|
|
|
126,200
|
|
||
Allowance for loan losses on covered loans
|
(5,499
|
)
|
|
(5,576
|
)
|
||
Covered loans receivable, net of allowance for loan losses
|
102,182
|
|
|
120,624
|
|
||
Total loans receivable, net
|
2,319,024
|
|
|
2,223,348
|
|
||
FDIC indemnification asset
|
388
|
|
|
1,116
|
|
||
Other real estate owned ($2,758 and $1,177 covered by FDIC shared-loss agreements, respectively)
|
3,017
|
|
|
3,355
|
|
||
Premises and equipment, net
|
63,968
|
|
|
64,938
|
|
||
Federal Home Loan Bank stock, at cost
|
4,148
|
|
|
12,188
|
|
||
Bank owned life insurance
|
60,579
|
|
|
35,176
|
|
||
Accrued interest receivable
|
9,883
|
|
|
9,836
|
|
||
Prepaid expenses and other assets
|
60,383
|
|
|
61,871
|
|
||
Other intangible assets, net
|
9,835
|
|
|
10,889
|
|
||
Goodwill
|
119,029
|
|
|
119,029
|
|
||
Total assets
|
$
|
3,480,324
|
|
|
$
|
3,457,750
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Deposits
|
$
|
2,946,487
|
|
|
$
|
2,906,331
|
|
Junior subordinated debentures
|
19,278
|
|
|
19,082
|
|
||
Securities sold under agreement to repurchase
|
20,589
|
|
|
32,181
|
|
||
Accrued expenses and other liabilities
|
34,842
|
|
|
45,650
|
|
||
Total liabilities
|
3,021,196
|
|
|
3,003,244
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding at June 30, 2015 and December 31, 2014
|
—
|
|
|
—
|
|
||
Common stock, no par value, 50,000,000 shares authorized; 29,954,936 and 30,259,838 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
|
358,365
|
|
|
364,741
|
|
||
Retained earnings
|
98,565
|
|
|
86,387
|
|
||
Accumulated other comprehensive income, net
|
2,198
|
|
|
3,378
|
|
||
Total stockholders’ equity
|
459,128
|
|
|
454,506
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,480,324
|
|
|
$
|
3,457,750
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
INTEREST INCOME:
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
30,554
|
|
|
$
|
27,446
|
|
|
$
|
61,035
|
|
|
$
|
43,897
|
|
Taxable interest on investment securities
|
2,328
|
|
|
1,812
|
|
|
5,012
|
|
|
2,451
|
|
||||
Nontaxable interest on investment securities
|
1,048
|
|
|
638
|
|
|
2,081
|
|
|
1,074
|
|
||||
Interest and dividends on other interest earning assets
|
60
|
|
|
127
|
|
|
111
|
|
|
214
|
|
||||
Total interest income
|
33,990
|
|
|
30,023
|
|
|
68,239
|
|
|
47,636
|
|
||||
INTEREST EXPENSE:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
1,309
|
|
|
1,297
|
|
|
2,626
|
|
|
2,151
|
|
||||
Junior subordinated debentures
|
193
|
|
|
115
|
|
|
432
|
|
|
115
|
|
||||
Other borrowings
|
18
|
|
|
15
|
|
|
37
|
|
|
33
|
|
||||
Total interest expense
|
1,520
|
|
|
1,427
|
|
|
3,095
|
|
|
2,299
|
|
||||
Net interest income
|
32,470
|
|
|
28,596
|
|
|
65,144
|
|
|
45,337
|
|
||||
Provision for loan losses on noncovered loans
|
1,189
|
|
|
370
|
|
|
2,474
|
|
|
349
|
|
||||
Provision for loan losses on covered loans
|
—
|
|
|
321
|
|
|
(77
|
)
|
|
800
|
|
||||
Total provision for loan losses
|
1,189
|
|
|
691
|
|
|
2,397
|
|
|
1,149
|
|
||||
Net interest income after provision for loan losses
|
31,281
|
|
|
27,905
|
|
|
62,747
|
|
|
44,188
|
|
||||
NONINTEREST INCOME:
|
|
|
|
|
|
|
|
||||||||
Service charges and other fees
|
3,687
|
|
|
2,777
|
|
|
6,982
|
|
|
4,175
|
|
||||
Merchant Visa income, net
|
194
|
|
|
316
|
|
|
392
|
|
|
561
|
|
||||
Change in FDIC indemnification asset
|
(304
|
)
|
|
109
|
|
|
(497
|
)
|
|
72
|
|
||||
Gain on sale of investment securities, net
|
425
|
|
|
87
|
|
|
969
|
|
|
267
|
|
||||
Gain on sale of loans, net
|
1,282
|
|
|
233
|
|
|
2,417
|
|
|
233
|
|
||||
Other income
|
1,597
|
|
|
1,258
|
|
|
4,963
|
|
|
1,779
|
|
||||
Total noninterest income
|
6,881
|
|
|
4,780
|
|
|
15,226
|
|
|
7,087
|
|
||||
NONINTEREST EXPENSE:
|
|
|
|
|
|
|
|
||||||||
Compensation and employee benefits
|
13,842
|
|
|
12,779
|
|
|
28,067
|
|
|
20,790
|
|
||||
Occupancy and equipment
|
3,850
|
|
|
2,816
|
|
|
7,541
|
|
|
5,433
|
|
||||
Data processing
|
1,925
|
|
|
4,003
|
|
|
3,552
|
|
|
4,999
|
|
||||
Marketing
|
1,063
|
|
|
496
|
|
|
1,696
|
|
|
1,001
|
|
||||
Professional services
|
904
|
|
|
3,230
|
|
|
1,708
|
|
|
4,060
|
|
||||
State and local taxes
|
569
|
|
|
554
|
|
|
1,189
|
|
|
803
|
|
||||
Impairment loss on investment securities, net
|
—
|
|
|
37
|
|
|
—
|
|
|
45
|
|
||||
Federal deposit insurance premium
|
523
|
|
|
460
|
|
|
1,038
|
|
|
712
|
|
||||
Other real estate owned, net
|
200
|
|
|
214
|
|
|
859
|
|
|
266
|
|
||||
Amortization of intangible assets
|
527
|
|
|
489
|
|
|
1,054
|
|
|
645
|
|
||||
Other expense
|
2,676
|
|
|
1,915
|
|
|
5,413
|
|
|
3,018
|
|
||||
Total noninterest expense
|
26,079
|
|
|
26,993
|
|
|
52,117
|
|
|
41,772
|
|
||||
Income before income taxes
|
12,083
|
|
|
5,692
|
|
|
25,856
|
|
|
9,503
|
|
||||
Income tax expense
|
3,358
|
|
|
1,544
|
|
|
7,352
|
|
|
2,812
|
|
||||
Net income
|
$
|
8,725
|
|
|
$
|
4,148
|
|
|
$
|
18,504
|
|
|
$
|
6,691
|
|
Basic earnings per common share
|
$
|
0.29
|
|
|
$
|
0.16
|
|
|
$
|
0.61
|
|
|
$
|
0.32
|
|
Diluted earnings per common share
|
$
|
0.29
|
|
|
$
|
0.16
|
|
|
$
|
0.61
|
|
|
$
|
0.32
|
|
Dividends declared per common share
|
$
|
0.11
|
|
|
$
|
0.08
|
|
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income
|
$
|
8,725
|
|
|
$
|
4,148
|
|
|
$
|
18,504
|
|
|
$
|
6,691
|
|
Change in fair value of securities available for sale, net of tax of $(2,106), $1,089, $(402) and $1,410, respectively
|
(3,891
|
)
|
|
2,022
|
|
|
(739
|
)
|
|
2,615
|
|
||||
Reclassification adjustment of net gain from sale of investment securities included in income, net of tax of $(149), $(30), $(339) and $(93), respectively
|
(276
|
)
|
|
(57
|
)
|
|
(630
|
)
|
|
(174
|
)
|
||||
Accretion of other-than-temporary impairment on investment securities, net of tax of $1, $8, $4 and $16, respectively
|
3
|
|
|
15
|
|
|
11
|
|
|
30
|
|
||||
Reclassification of other-than-temporary impairment on securities from sale of investment securities, net of tax $99, $0, $99, $0
|
178
|
|
|
—
|
|
|
178
|
|
|
—
|
|
||||
Other comprehensive (loss) income
|
(3,986
|
)
|
|
1,980
|
|
|
(1,180
|
)
|
|
2,471
|
|
||||
Comprehensive income
|
$
|
4,739
|
|
|
$
|
6,128
|
|
|
$
|
17,324
|
|
|
$
|
9,162
|
|
|
Number of
common
shares
|
|
Common
stock
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive (loss)
income, net
|
|
Total
stock-
holders’
equity
|
|||||||||
Balance at December 31, 2013
|
16,211
|
|
|
$
|
138,659
|
|
|
$
|
78,265
|
|
|
$
|
(1,162
|
)
|
|
$
|
215,762
|
|
Restricted and unrestricted stock awards issued, net of forfeitures
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock option compensation expense
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Exercise of stock options (including excess tax benefits from nonqualified stock options)
|
38
|
|
|
427
|
|
|
—
|
|
|
—
|
|
|
427
|
|
||||
Restricted stock compensation expense
|
—
|
|
|
539
|
|
|
—
|
|
|
—
|
|
|
539
|
|
||||
Excess tax benefits from restricted stock
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Common stock repurchased
|
(17
|
)
|
|
(271
|
)
|
|
—
|
|
|
—
|
|
|
(271
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
6,691
|
|
|
—
|
|
|
6,691
|
|
||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
2,471
|
|
|
2,471
|
|
||||
Common stock issued in business combination
|
13,975
|
|
|
226,751
|
|
|
—
|
|
|
—
|
|
|
226,751
|
|
||||
Cash dividends declared on common stock ($0.16 per share)
|
—
|
|
|
—
|
|
|
(2,594
|
)
|
|
—
|
|
|
(2,594
|
)
|
||||
Balance at June 30, 2014
|
30,213
|
|
|
$
|
366,158
|
|
|
$
|
82,362
|
|
|
$
|
1,309
|
|
|
$
|
449,829
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2014
|
30,260
|
|
|
$
|
364,741
|
|
|
$
|
86,387
|
|
|
$
|
3,378
|
|
|
$
|
454,506
|
|
Restricted and unrestricted stock awards issued, net of forfeitures
|
116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exercise of stock options (including excess tax benefits from nonqualified stock options)
|
43
|
|
|
541
|
|
|
—
|
|
|
—
|
|
|
541
|
|
||||
Restricted stock compensation expense
|
—
|
|
|
716
|
|
|
—
|
|
|
—
|
|
|
716
|
|
||||
Excess tax benefits from restricted stock
|
—
|
|
|
90
|
|
|
—
|
|
|
—
|
|
|
90
|
|
||||
Common stock repurchased
|
(464
|
)
|
|
(7,723
|
)
|
|
—
|
|
|
—
|
|
|
(7,723
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
18,504
|
|
|
—
|
|
|
18,504
|
|
||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,180
|
)
|
|
(1,180
|
)
|
||||
Cash dividends declared on common stock ($0.21 per share)
|
—
|
|
|
—
|
|
|
(6,326
|
)
|
|
—
|
|
|
(6,326
|
)
|
||||
Balance at June 30, 2015
|
29,955
|
|
|
$
|
358,365
|
|
|
$
|
98,565
|
|
|
$
|
2,198
|
|
|
$
|
459,128
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
18,504
|
|
|
$
|
6,691
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
6,670
|
|
|
4,829
|
|
||
Changes in net deferred loan fees, net of amortization
|
(1,001
|
)
|
|
(393
|
)
|
||
Provision for loan losses
|
2,397
|
|
|
1,149
|
|
||
Net change in accrued interest receivable, FDIC indemnification asset, prepaid expenses and other assets, accrued expenses and other liabilities
|
(7,672
|
)
|
|
(3,176
|
)
|
||
Restricted and unrestricted stock compensation expense
|
716
|
|
|
539
|
|
||
Stock option compensation expense
|
—
|
|
|
20
|
|
||
Excess tax benefits from stock options and restricted and unrestricted stock
|
(90
|
)
|
|
(33
|
)
|
||
Amortization of intangible assets
|
1,054
|
|
|
645
|
|
||
Gain on sale of investment securities, net
|
(969
|
)
|
|
(267
|
)
|
||
Impairment loss on investment of securities, net
|
—
|
|
|
45
|
|
||
Origination of loans held for sale
|
(66,257
|
)
|
|
(12,592
|
)
|
||
Gain on sale of loans, net
|
(2,417
|
)
|
|
(233
|
)
|
||
Proceeds from sale of loans held for sale
|
67,317
|
|
|
9,329
|
|
||
Earnings on bank owned life insurance
|
(403
|
)
|
|
(95
|
)
|
||
Valuation adjustment on other real estate owned
|
415
|
|
|
—
|
|
||
Loss (gain) on sale of other real estate owned, net
|
97
|
|
|
(65
|
)
|
||
Loss on sale or write-off of furniture, equipment and leasehold improvements
|
—
|
|
|
421
|
|
||
Net cash provided by operating activities
|
18,361
|
|
|
6,814
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Loans originated, net of principal payments
|
(98,885
|
)
|
|
4,969
|
|
||
Maturities of other interest earning deposits
|
4,986
|
|
|
1,494
|
|
||
Maturities of investment securities available for sale
|
56,700
|
|
|
17,916
|
|
||
Maturities of investment securities held to maturity
|
1,235
|
|
|
521
|
|
||
Purchase of investment securities available for sale
|
(81,755
|
)
|
|
(206,075
|
)
|
||
Purchase of investment securities held to maturity
|
—
|
|
|
(3,313
|
)
|
||
Purchase of premises and equipment
|
(979
|
)
|
|
(1,978
|
)
|
||
Proceeds from sales of other real estate owned
|
1,639
|
|
|
3,857
|
|
||
Proceeds from sales of investment securities available for sale
|
64,432
|
|
|
157,987
|
|
||
Proceeds from redemption of FHLB stock
|
8,040
|
|
|
258
|
|
||
Purchase of bank owned life insurance
|
(25,000
|
)
|
|
—
|
|
||
Investment in new market tax credit partnership
|
—
|
|
|
(25,000
|
)
|
||
Investment in low-income housing tax credit partnership
|
(244
|
)
|
|
—
|
|
||
Net cash received from acquisitions
|
—
|
|
|
31,591
|
|
||
Net cash (used in) provided by investing activities
|
(69,831
|
)
|
|
(17,773
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Net increase in deposits
|
40,156
|
|
|
33,459
|
|
||
Common stock cash dividends paid
|
(6,326
|
)
|
|
(2,594
|
)
|
||
Net decrease in securities sold under agreement to repurchase
|
(11,592
|
)
|
|
(3,970
|
)
|
||
Proceeds from exercise of stock options
|
541
|
|
|
427
|
|
||
Excess tax benefits from stock options and restricted and unrestricted stock
|
90
|
|
|
33
|
|
||
Repurchase of common stock
|
(7,723
|
)
|
|
(271
|
)
|
||
Net cash (used in) provided by financing activities
|
15,146
|
|
|
27,084
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(36,324
|
)
|
|
16,125
|
|
||
Cash and cash equivalents at beginning of period
|
121,636
|
|
|
130,400
|
|
||
Cash and cash equivalents at end of period
|
$
|
85,312
|
|
|
$
|
146,525
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
2,923
|
|
|
$
|
1,848
|
|
Cash paid for income taxes
|
9,805
|
|
|
7,000
|
|
||
|
|
|
|
||||
Supplemental non-cash disclosures of cash flow information:
|
|
|
|
||||
Transfers of loans receivable to other real estate owned
|
$
|
1,813
|
|
|
$
|
218
|
|
Common stock issued for business combinations
|
—
|
|
|
226,751
|
|
||
Assets acquired (liabilities assumed) in acquisitions:
|
|
|
|
||||
Investment securities available for sale
|
—
|
|
|
458,312
|
|
||
Loans held for sale
|
—
|
|
|
3,923
|
|
||
Noncovered loans receivable
|
—
|
|
|
893,824
|
|
||
Covered loans receivable
|
—
|
|
|
109,693
|
|
||
Other real estate owned
|
—
|
|
|
7,121
|
|
||
Premises and equipment
|
—
|
|
|
31,776
|
|
||
Federal Home Loan Bank stock
|
—
|
|
|
7,064
|
|
||
FDIC indemnification asset
|
—
|
|
|
7,047
|
|
||
Accrued interest receivable
|
—
|
|
|
4,943
|
|
||
Bank owned life insurance
|
—
|
|
|
32,519
|
|
||
Prepaid expenses and other assets
|
—
|
|
|
14,942
|
|
||
Other intangible assets
|
—
|
|
|
11,194
|
|
||
Deposits
|
—
|
|
|
(1,433,894
|
)
|
||
Junior subordinated debentures
|
—
|
|
|
(18,937
|
)
|
||
Accrued expenses and other liabilities
|
—
|
|
|
(23,551
|
)
|
(1)
|
Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements
|
•
|
Remove inconsistencies and weaknesses in revenue requirements.
|
•
|
Provide a more robust framework for addressing revenue issues.
|
•
|
Improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets.
|
•
|
Provide more useful information to users of financial statements through improved disclosure requirements.
|
•
|
Simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer.
|
(2)
|
Investment Securities
|
|
Securities Available for Sale
|
||||||||||||||
|
June 30, 2015
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
(In thousands)
|
||||||||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
26,339
|
|
|
$
|
113
|
|
|
$
|
(6
|
)
|
|
$
|
26,446
|
|
Municipal securities
|
172,837
|
|
|
2,246
|
|
|
(873
|
)
|
|
174,210
|
|
||||
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
||||||||
U.S. Government-sponsored agencies
|
488,356
|
|
|
3,199
|
|
|
(1,285
|
)
|
|
490,270
|
|
||||
Corporate obligations
|
6,243
|
|
|
—
|
|
|
(12
|
)
|
|
6,231
|
|
||||
Mutual funds and other equities
|
1,956
|
|
|
9
|
|
|
—
|
|
|
1,965
|
|
||||
Total
|
$
|
695,731
|
|
|
$
|
5,567
|
|
|
$
|
(2,176
|
)
|
|
$
|
699,122
|
|
|
Securities Available for Sale
|
||||||||||||||
|
December 31, 2014
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
(In thousands)
|
||||||||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
21,414
|
|
|
$
|
44
|
|
|
$
|
(31
|
)
|
|
$
|
21,427
|
|
Municipal securities
|
170,082
|
|
|
3,139
|
|
|
(184
|
)
|
|
173,037
|
|
||||
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
||||||||
U.S. Government agencies
|
539,859
|
|
|
4,015
|
|
|
(1,475
|
)
|
|
542,399
|
|
||||
Corporate obligations
|
4,034
|
|
|
—
|
|
|
(24
|
)
|
|
4,010
|
|
||||
Mutual funds and other equities
|
1,956
|
|
|
17
|
|
|
—
|
|
|
1,973
|
|
||||
Total
|
$
|
737,345
|
|
|
$
|
7,215
|
|
|
$
|
(1,714
|
)
|
|
$
|
742,846
|
|
|
Securities Held to Maturity
|
||||||||||||||
|
June 30, 2015
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrecognized Gains |
|
Gross
Unrecognized Losses |
|
Fair
Value
|
||||||||
|
(In thousands)
|
||||||||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
1,582
|
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
1,740
|
|
Municipal securities
|
21,927
|
|
|
553
|
|
|
(24
|
)
|
|
22,456
|
|
||||
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
||||||||
U.S. Government-sponsored agencies
|
10,078
|
|
|
313
|
|
|
(93
|
)
|
|
10,298
|
|
||||
Private residential collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
33,587
|
|
|
$
|
1,024
|
|
|
$
|
(117
|
)
|
|
$
|
34,494
|
|
|
Securities Held to Maturity
|
||||||||||||||
|
December 31, 2014
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrecognized Gains |
|
Gross
Unrecognized Losses |
|
Fair
Value
|
||||||||
|
(In thousands)
|
||||||||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
1,591
|
|
|
$
|
167
|
|
|
$
|
—
|
|
|
$
|
1,758
|
|
Municipal securities
|
22,486
|
|
|
643
|
|
|
(11
|
)
|
|
23,118
|
|
||||
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
||||||||
U.S. Government-sponsored agencies
|
10,866
|
|
|
364
|
|
|
(74
|
)
|
|
11,156
|
|
||||
Private residential collateralized mortgage obligations
|
871
|
|
|
75
|
|
|
(104
|
)
|
|
842
|
|
||||
Total
|
$
|
35,814
|
|
|
$
|
1,249
|
|
|
$
|
(189
|
)
|
|
$
|
36,874
|
|
|
Securities Available for Sale
|
|
Securities Held to Maturity
|
||||||||||||
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
Due in one year or less
|
$
|
3,543
|
|
|
$
|
3,555
|
|
|
$
|
3,005
|
|
|
$
|
3,019
|
|
Due after one year through three years
|
32,677
|
|
|
32,854
|
|
|
3,749
|
|
|
3,779
|
|
||||
Due after three years through five years
|
34,919
|
|
|
35,246
|
|
|
6,911
|
|
|
7,211
|
|
||||
Due after five years through ten years
|
148,604
|
|
|
149,692
|
|
|
16,745
|
|
|
17,331
|
|
||||
Due after ten years
|
474,032
|
|
|
475,810
|
|
|
3,177
|
|
|
3,154
|
|
||||
Investment securities with no stated maturities
|
1,956
|
|
|
1,965
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
695,731
|
|
|
$
|
699,122
|
|
|
$
|
33,587
|
|
|
$
|
34,494
|
|
|
Securities Available for Sale
|
||||||||||||||||||||||
|
June 30, 2015
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or
Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
4,584
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,584
|
|
|
$
|
(6
|
)
|
Municipal securities
|
$
|
54,568
|
|
|
$
|
(855
|
)
|
|
$
|
1,460
|
|
|
$
|
(18
|
)
|
|
$
|
56,028
|
|
|
$
|
(873
|
)
|
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agencies
|
104,716
|
|
|
(569
|
)
|
|
49,465
|
|
|
(716
|
)
|
|
154,181
|
|
|
(1,285
|
)
|
||||||
Corporate obligations
|
6,231
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
6,231
|
|
|
(12
|
)
|
||||||
Total
|
$
|
170,099
|
|
|
$
|
(1,442
|
)
|
|
$
|
50,925
|
|
|
$
|
(734
|
)
|
|
$
|
221,024
|
|
|
$
|
(2,176
|
)
|
|
Securities Available for Sale
|
||||||||||||||||||||||
|
December 31, 2014
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or
Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
3,567
|
|
|
$
|
(31
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,567
|
|
|
$
|
(31
|
)
|
Municipal securities
|
25,176
|
|
|
(184
|
)
|
|
—
|
|
|
—
|
|
|
25,176
|
|
|
(184
|
)
|
||||||
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agencies
|
182,970
|
|
|
(1,475
|
)
|
|
—
|
|
|
—
|
|
|
182,970
|
|
|
(1,475
|
)
|
||||||
Corporate obligations
|
2,119
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
2,119
|
|
|
(24
|
)
|
||||||
Total
|
$
|
213,832
|
|
|
$
|
(1,714
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
213,832
|
|
|
$
|
(1,714
|
)
|
|
Securities Held to Maturity
|
||||||||||||||||||||||
|
June 30, 2015
|
||||||||||||||||||||||
|
Less than 12
Months
|
|
12 Months or
Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrecognized
Losses
|
|
Fair
Value
|
|
Unrecognized
Losses
|
|
Fair
Value
|
|
Unrecognized
Losses
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Municipal securities
|
$
|
1,094
|
|
|
$
|
(24
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,094
|
|
|
$
|
(24
|
)
|
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agencies
|
—
|
|
|
—
|
|
|
2,009
|
|
|
(93
|
)
|
|
2,009
|
|
|
(93
|
)
|
||||||
Total
|
$
|
1,094
|
|
|
$
|
(24
|
)
|
|
$
|
2,009
|
|
|
$
|
(93
|
)
|
|
$
|
3,103
|
|
|
$
|
(117
|
)
|
|
Securities Held to Maturity
|
||||||||||||||||||||||
|
December 31, 2014
|
||||||||||||||||||||||
|
Less than 12
Months
|
|
12 Months or
Longer
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrecognized
Losses
|
|
Fair
Value
|
|
Unrecognized
Losses
|
|
Fair
Value
|
|
Unrecognized
Losses
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Municipal securities
|
$
|
2,196
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,196
|
|
|
$
|
(11
|
)
|
Mortgage backed securities and collateralized mortgage obligations-residential:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government-sponsored agencies
|
2,553
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
2,553
|
|
|
(74
|
)
|
||||||
Private residential collateralized mortgage obligations
|
558
|
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
|
558
|
|
|
(104
|
)
|
||||||
Total
|
$
|
5,307
|
|
|
$
|
(189
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,307
|
|
|
$
|
(189
|
)
|
|
Life-to-Date Gross Other-Than-Temporary Impairments
|
|
Life-to-Date Other-Than-Temporary Impairments Included in Other Comprehensive Income
|
|
Life-to-Date Net
Other-Than-Temporary Impairments Included in Earnings
|
||||||
|
(In thousands)
|
||||||||||
December 31, 2013
|
$
|
2,603
|
|
|
$
|
1,152
|
|
|
$
|
1,451
|
|
Subsequent impairments
|
45
|
|
|
—
|
|
|
45
|
|
|||
June 30, 2014
|
$
|
2,648
|
|
|
$
|
1,152
|
|
|
$
|
1,496
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
(In thousands)
|
||||||||||||||
Washington and Oregon state to secure public deposits
|
$
|
195,548
|
|
|
$
|
197,810
|
|
|
$
|
150,507
|
|
|
$
|
153,785
|
|
Federal Reserve Bank of San Francisco and FHLB to secure borrowing arrangements
|
512
|
|
|
513
|
|
|
4,430
|
|
|
4,460
|
|
||||
Repurchase agreements
|
31,612
|
|
|
31,801
|
|
|
43,676
|
|
|
44,457
|
|
||||
Other securities pledged
|
15,073
|
|
|
15,162
|
|
|
14,828
|
|
|
14,922
|
|
||||
Total
|
$
|
242,745
|
|
|
$
|
245,286
|
|
|
$
|
213,441
|
|
|
$
|
217,624
|
|
(3)
|
Noncovered Loans Receivable
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(In thousands)
|
||||||
Commercial business:
|
|
|
|
||||
Commercial and industrial
|
$
|
551,989
|
|
|
$
|
551,343
|
|
Owner-occupied commercial real estate
|
565,721
|
|
|
535,742
|
|
||
Non-owner occupied commercial real estate
|
676,872
|
|
|
616,757
|
|
||
Total commercial business
|
1,794,582
|
|
|
1,703,842
|
|
||
One-to-four family residential
|
67,083
|
|
|
63,540
|
|
||
Real estate construction and land development:
|
|
|
|
||||
One-to-four family residential
|
41,693
|
|
|
46,749
|
|
||
Five or more family residential and commercial properties
|
66,024
|
|
|
61,360
|
|
||
Total real estate construction and land development
|
107,717
|
|
|
108,109
|
|
||
Consumer
|
270,175
|
|
|
250,323
|
|
||
Gross noncovered loans receivable
|
2,239,557
|
|
|
2,125,814
|
|
||
Net deferred loan fees
|
64
|
|
|
(937
|
)
|
||
Noncovered loans receivable, net
|
2,239,621
|
|
|
2,124,877
|
|
||
Allowance for loan losses
|
(22,779
|
)
|
|
(22,153
|
)
|
||
Noncovered loans receivable, net of allowance for loan losses
|
$
|
2,216,842
|
|
|
$
|
2,102,724
|
|
•
|
Grades 0 to 5:
These grades are considered “pass grade” and include loans with negligible to above average but acceptable risk. These borrowers generally have strong to acceptable capital levels and consistent earnings and debt service capacity. Loans with the higher grades within the “pass” category may include borrowers who are experiencing unusual operating difficulties, but have acceptable payment performance to date. Increased monitoring of financials and/or collateral may be appropriate. Loans with this grade show no immediate loss exposure.
|
•
|
Grade 6:
This grade includes "Watch" loans and is considered a “pass grade”. The grade is intended to be utilized on a temporary basis for pass grade borrowers where a potentially significant risk-modifying action is anticipated in the near term.
|
•
|
Grade 7:
This grade includes “Other Assets Especially Mentioned” (“OAEM”) loans in accordance with regulatory guidelines, and is intended to highlight loans with elevated risks. Loans with this grade show signs of deteriorating profits and capital, and the borrower might not be strong enough to sustain a major setback. The borrower is typically higher than normally leveraged, and outside support might
|
•
|
Grade 8:
This grade includes “Substandard” loans in accordance with regulatory guidelines, which the Company has determined have a high credit risk. These loans also have well-defined weaknesses which make payment default or principal exposure likely, but not yet certain. The borrower may have shown serious negative trends in financial ratios and performance. Such loans may be dependent upon collateral liquidation, a secondary source of repayment or an event outside of the normal course of business. Loans with this grade can be placed on accrual or nonaccrual status based on the Company’s accrual policy.
|
•
|
Grade 9:
This grade includes “Doubtful” loans in accordance with regulatory guidelines, and the Company has determined these loans to have excessive credit risk. Such loans are placed on nonaccrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near-term event which lacks certainty. Additionally, these loans generally have a specific valuation allowance or have been partially charged-off for the amount considered uncollectible.
|
•
|
Grade 10:
This grade includes “Loss” loans in accordance with regulatory guidelines, and the Company has determined these loans have the highest risk of loss. Such loans are charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. “Loss” is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt.
|
|
June 30, 2015
|
||||||||||||||||||
|
Pass
|
|
OAEM
|
|
Substandard
|
|
Doubtful
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
522,215
|
|
|
$
|
10,389
|
|
|
$
|
19,073
|
|
|
$
|
312
|
|
|
$
|
551,989
|
|
Owner-occupied commercial real estate
|
545,857
|
|
|
8,136
|
|
|
11,728
|
|
|
—
|
|
|
565,721
|
|
|||||
Non-owner occupied commercial real estate
|
641,385
|
|
|
19,603
|
|
|
15,884
|
|
|
—
|
|
|
676,872
|
|
|||||
Total commercial business
|
1,709,457
|
|
|
38,128
|
|
|
46,685
|
|
|
312
|
|
|
1,794,582
|
|
|||||
One-to-four family residential
|
64,953
|
|
|
—
|
|
|
2,130
|
|
|
—
|
|
|
67,083
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
32,316
|
|
|
1,465
|
|
|
7,912
|
|
|
—
|
|
|
41,693
|
|
|||||
Five or more family residential and commercial properties
|
62,048
|
|
|
—
|
|
|
3,976
|
|
|
—
|
|
|
66,024
|
|
|||||
Total real estate construction and land development
|
94,364
|
|
|
1,465
|
|
|
11,888
|
|
|
—
|
|
|
107,717
|
|
|||||
Consumer
|
263,731
|
|
|
—
|
|
|
6,444
|
|
|
—
|
|
|
270,175
|
|
|||||
Gross noncovered loans
|
$
|
2,132,505
|
|
|
$
|
39,593
|
|
|
$
|
67,147
|
|
|
$
|
312
|
|
|
$
|
2,239,557
|
|
|
December 31, 2014
|
||||||||||||||||||
|
Pass
|
|
OAEM
|
|
Substandard
|
|
Doubtful
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
509,483
|
|
|
$
|
14,487
|
|
|
$
|
27,049
|
|
|
$
|
324
|
|
|
$
|
551,343
|
|
Owner-occupied commercial real estate
|
496,234
|
|
|
22,946
|
|
|
16,562
|
|
|
—
|
|
|
535,742
|
|
|||||
Non-owner occupied commercial real estate
|
584,262
|
|
|
17,643
|
|
|
14,852
|
|
|
—
|
|
|
616,757
|
|
|||||
Total commercial business
|
1,589,979
|
|
|
55,076
|
|
|
58,463
|
|
|
324
|
|
|
1,703,842
|
|
|||||
One-to-four family residential
|
61,185
|
|
|
315
|
|
|
2,040
|
|
|
—
|
|
|
63,540
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
34,356
|
|
|
3,977
|
|
|
8,416
|
|
|
—
|
|
|
46,749
|
|
|||||
Five or more family residential and commercial properties
|
57,025
|
|
|
—
|
|
|
4,335
|
|
|
—
|
|
|
61,360
|
|
|||||
Total real estate construction and land development
|
91,381
|
|
|
3,977
|
|
|
12,751
|
|
|
—
|
|
|
108,109
|
|
|||||
Consumer
|
242,836
|
|
|
—
|
|
|
7,487
|
|
|
—
|
|
|
250,323
|
|
|||||
Gross noncovered loans
|
$
|
1,985,381
|
|
|
$
|
59,368
|
|
|
$
|
80,741
|
|
|
$
|
324
|
|
|
$
|
2,125,814
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(In thousands)
|
||||||
Commercial business:
|
|
|
|
||||
Commercial and industrial
|
$
|
2,533
|
|
|
$
|
3,463
|
|
Owner-occupied commercial real estate
|
1,957
|
|
|
1,163
|
|
||
Non-owner occupied commercial real estate
|
—
|
|
|
93
|
|
||
Total commercial business
|
4,490
|
|
|
4,719
|
|
||
One-to-four family residential
|
—
|
|
|
—
|
|
||
Real estate construction and land development:
|
|
|
|
||||
One-to-four family residential
|
2,489
|
|
|
2,652
|
|
||
Total real estate construction and land development
|
2,489
|
|
|
2,652
|
|
||
Consumer
|
19
|
|
|
139
|
|
||
Gross nonaccrual noncovered loans
|
$
|
6,998
|
|
|
$
|
7,510
|
|
|
June 30, 2015
|
||||||||||||||||||||||
|
30-89 Days
|
|
90 Days or
Greater
|
|
Total Past
Due
|
|
Current
|
|
Total
|
|
90 Days or More
and Still
Accruing (1)
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
$
|
1,194
|
|
|
$
|
1,690
|
|
|
$
|
2,884
|
|
|
$
|
549,105
|
|
|
$
|
551,989
|
|
|
$
|
—
|
|
Owner-occupied commercial real estate
|
1,944
|
|
|
1,087
|
|
|
3,031
|
|
|
562,690
|
|
|
565,721
|
|
|
—
|
|
||||||
Non-owner occupied commercial real estate
|
378
|
|
|
182
|
|
|
560
|
|
|
676,312
|
|
|
676,872
|
|
|
—
|
|
||||||
Total commercial business
|
3,516
|
|
|
2,959
|
|
|
6,475
|
|
|
1,788,107
|
|
|
1,794,582
|
|
|
—
|
|
||||||
One-to-four family residential
|
41
|
|
|
—
|
|
|
41
|
|
|
67,042
|
|
|
67,083
|
|
|
—
|
|
||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One-to-four family residential
|
668
|
|
|
1,964
|
|
|
2,632
|
|
|
39,061
|
|
|
41,693
|
|
|
—
|
|
||||||
Five or more family residential and commercial properties
|
—
|
|
|
—
|
|
|
—
|
|
|
66,024
|
|
|
66,024
|
|
|
—
|
|
||||||
Total real estate construction and land development
|
668
|
|
|
1,964
|
|
|
2,632
|
|
|
105,085
|
|
|
107,717
|
|
|
—
|
|
||||||
Consumer
|
1,358
|
|
|
—
|
|
|
1,358
|
|
|
268,817
|
|
|
270,175
|
|
|
—
|
|
||||||
Gross noncovered loans
|
$
|
5,583
|
|
|
$
|
4,923
|
|
|
$
|
10,506
|
|
|
$
|
2,229,051
|
|
|
$
|
2,239,557
|
|
|
$
|
—
|
|
|
December 31, 2014
|
||||||||||||||||||||||
|
30-89 Days
|
|
90 Days or
Greater
|
|
Total Past
Due
|
|
Current
|
|
Total
|
|
90 Days or More
and Still Accruing (1) |
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
$
|
2,503
|
|
|
$
|
1,962
|
|
|
$
|
4,465
|
|
|
$
|
546,878
|
|
|
$
|
551,343
|
|
|
$
|
—
|
|
Owner-occupied commercial real estate
|
1,038
|
|
|
100
|
|
|
1,138
|
|
|
534,604
|
|
|
535,742
|
|
|
—
|
|
||||||
Non-owner occupied commercial real estate
|
113
|
|
|
75
|
|
|
188
|
|
|
616,569
|
|
|
616,757
|
|
|
—
|
|
||||||
Total commercial business
|
3,654
|
|
|
2,137
|
|
|
5,791
|
|
|
1,698,051
|
|
|
1,703,842
|
|
|
—
|
|
||||||
One-to-four family residential
|
200
|
|
|
—
|
|
|
200
|
|
|
63,340
|
|
|
63,540
|
|
|
—
|
|
||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One-to-four family residential
|
62
|
|
|
2,135
|
|
|
2,197
|
|
|
44,552
|
|
|
46,749
|
|
|
—
|
|
||||||
Five or more family residential and commercial properties
|
—
|
|
|
376
|
|
|
376
|
|
|
60,984
|
|
|
61,360
|
|
|
—
|
|
||||||
Total real estate construction and land development
|
62
|
|
|
2,511
|
|
|
2,573
|
|
|
105,536
|
|
|
108,109
|
|
|
—
|
|
||||||
Consumer
|
2,413
|
|
|
125
|
|
|
2,538
|
|
|
247,785
|
|
|
250,323
|
|
|
—
|
|
||||||
Gross noncovered loans
|
$
|
6,329
|
|
|
$
|
4,773
|
|
|
$
|
11,102
|
|
|
$
|
2,114,712
|
|
|
$
|
2,125,814
|
|
|
$
|
—
|
|
|
June 30, 2015
|
||||||||||||||||||
|
Recorded
Investment With
No Specific
Valuation
Allowance
|
|
Recorded
Investment With
Specific
Valuation
Allowance
|
|
Total
Recorded
Investment
|
|
Unpaid
Contractual
Principal
Balance
|
|
Related
Specific
Valuation
Allowance
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
865
|
|
|
$
|
5,860
|
|
|
$
|
6,725
|
|
|
$
|
7,111
|
|
|
$
|
746
|
|
Owner-occupied commercial real estate
|
—
|
|
|
3,214
|
|
|
3,214
|
|
|
3,232
|
|
|
755
|
|
|||||
Non-owner occupied commercial real estate
|
3,752
|
|
|
5,786
|
|
|
9,538
|
|
|
9,547
|
|
|
943
|
|
|||||
Total commercial business
|
4,617
|
|
|
14,860
|
|
|
19,477
|
|
|
19,890
|
|
|
2,444
|
|
|||||
One-to-four family residential
|
—
|
|
|
241
|
|
|
241
|
|
|
241
|
|
|
74
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
2,424
|
|
|
984
|
|
|
3,408
|
|
|
3,995
|
|
|
28
|
|
|||||
Five or more family residential and commercial properties
|
—
|
|
|
2,009
|
|
|
2,009
|
|
|
2,009
|
|
|
200
|
|
|||||
Total real estate construction and land development
|
2,424
|
|
|
2,993
|
|
|
5,417
|
|
|
6,004
|
|
|
228
|
|
|||||
Consumer
|
—
|
|
|
122
|
|
|
122
|
|
|
124
|
|
|
24
|
|
|||||
Total
|
$
|
7,041
|
|
|
$
|
18,216
|
|
|
$
|
25,257
|
|
|
$
|
26,259
|
|
|
$
|
2,770
|
|
|
December 31, 2014
|
||||||||||||||||||
|
Recorded
Investment With
No Specific
Valuation
Allowance
|
|
Recorded
Investment With
Specific
Valuation
Allowance
|
|
Total
Recorded
Investment
|
|
Unpaid
Contractual
Principal
Balance
|
|
Related
Specific
Valuation
Allowance
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
1,134
|
|
|
$
|
7,906
|
|
|
$
|
9,040
|
|
|
$
|
9,349
|
|
|
$
|
1,325
|
|
Owner-occupied commercial real estate
|
360
|
|
|
2,421
|
|
|
2,781
|
|
|
2,781
|
|
|
684
|
|
|||||
Non-owner occupied commercial real estate
|
2,459
|
|
|
4,846
|
|
|
7,305
|
|
|
7,279
|
|
|
465
|
|
|||||
Total commercial business
|
3,953
|
|
|
15,173
|
|
|
19,126
|
|
|
19,409
|
|
|
2,474
|
|
|||||
One-to-four family residential
|
—
|
|
|
245
|
|
|
245
|
|
|
245
|
|
|
75
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
2,307
|
|
|
2,217
|
|
|
4,524
|
|
|
4,964
|
|
|
396
|
|
|||||
Five or more family residential and commercial properties
|
—
|
|
|
2,056
|
|
|
2,056
|
|
|
2,056
|
|
|
234
|
|
|||||
Total real estate construction and land development
|
2,307
|
|
|
4,273
|
|
|
6,580
|
|
|
7,020
|
|
|
630
|
|
|||||
Consumer
|
33
|
|
|
172
|
|
|
205
|
|
|
208
|
|
|
56
|
|
|||||
Total
|
$
|
6,293
|
|
|
$
|
19,863
|
|
|
$
|
26,156
|
|
|
$
|
26,882
|
|
|
$
|
3,235
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
7,524
|
|
|
$
|
11,899
|
|
|
$
|
9,464
|
|
|
$
|
11,596
|
|
Owner-occupied commercial real estate
|
2,779
|
|
|
3,489
|
|
|
3,137
|
|
|
3,325
|
|
||||
Non-owner occupied commercial real estate
|
8,320
|
|
|
7,854
|
|
|
8,113
|
|
|
7,710
|
|
||||
Total commercial business
|
18,623
|
|
|
23,242
|
|
|
20,714
|
|
|
22,631
|
|
||||
One-to-four family residential
|
242
|
|
|
581
|
|
|
375
|
|
|
585
|
|
||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||||
One-to-four family residential
|
3,496
|
|
|
6,028
|
|
|
4,578
|
|
|
5,580
|
|
||||
Five or more family residential and commercial properties
|
2,020
|
|
|
2,114
|
|
|
2,056
|
|
|
2,211
|
|
||||
Total real estate construction and land development
|
5,516
|
|
|
8,142
|
|
|
6,634
|
|
|
7,791
|
|
||||
Consumer
|
124
|
|
|
967
|
|
|
476
|
|
|
904
|
|
||||
Total
|
$
|
24,505
|
|
|
$
|
32,932
|
|
|
$
|
28,199
|
|
|
$
|
31,911
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Performing
TDRs
|
|
Nonaccrual
TDRs
|
|
Performing
TDRs
|
|
Nonaccrual
TDRs |
||||||||
|
(In thousands)
|
||||||||||||||
TDR noncovered loans
|
$
|
19,783
|
|
|
$
|
4,288
|
|
|
$
|
18,764
|
|
|
$
|
5,010
|
|
Allowance for loan losses on TDR noncovered loans
|
2,280
|
|
|
282
|
|
|
1,908
|
|
|
1,033
|
|
|
Three Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance (1)(2) |
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance
(1)(2)
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
12
|
|
|
$
|
1,691
|
|
|
6
|
|
|
$
|
1,942
|
|
Owner-occupied commercial real estate
|
3
|
|
|
873
|
|
|
—
|
|
|
—
|
|
||
Non-owner occupied commercial real estate
|
3
|
|
|
6,450
|
|
|
2
|
|
|
1,023
|
|
||
Total commercial business
|
18
|
|
|
9,014
|
|
|
8
|
|
|
2,965
|
|
||
One-to-four family residential
|
0
|
|
|
—
|
|
|
0
|
|
|
—
|
|
||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||
One-to-four family residential
|
2
|
|
|
1,038
|
|
|
1
|
|
|
88
|
|
||
Total real estate construction and land development
|
2
|
|
|
1,038
|
|
|
1
|
|
|
88
|
|
||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total TDR noncovered loans
|
20
|
|
|
$
|
10,052
|
|
|
9
|
|
|
$
|
3,053
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance (1)(2) |
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance
(1)(2)
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
19
|
|
|
$
|
2,610
|
|
|
11
|
|
|
$
|
3,072
|
|
Owner-occupied commercial real estate
|
4
|
|
|
873
|
|
|
1
|
|
|
347
|
|
||
Non-owner occupied commercial real estate
|
3
|
|
|
6,450
|
|
|
2
|
|
|
1,023
|
|
||
Total commercial business
|
26
|
|
|
9,933
|
|
|
14
|
|
|
4,442
|
|
||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||
One-to-four family residential
|
4
|
|
|
2,543
|
|
|
1
|
|
|
277
|
|
||
Total real estate construction and land development
|
4
|
|
|
2,543
|
|
|
1
|
|
|
277
|
|
||
Consumer
|
1
|
|
|
38
|
|
|
3
|
|
|
219
|
|
||
Total TDR noncovered loans
|
31
|
|
|
$
|
12,514
|
|
|
18
|
|
|
$
|
4,938
|
|
(1)
|
Number of contracts and outstanding principal balance represent loans which have balances as of period end as certain loans may have been paid-down or charged-off during the
three and six months ended June 30, 2015 and 2014
.
|
(2)
|
Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modification, the Bank’s recorded investment in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification), except when the modification was the initial advance on a one-to-four family residential real estate construction and land development loan under a master guidance line. There were
no
advances on these types of loans during the
three and six months ended June 30, 2015
. During both the
three and six months ended June 30, 2014
, the Company's initial advance at the time of modification on these construction loans totaled
$45,000
and the total commitment amount was
$190,000
.
|
|
Three Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Number of
Contracts
|
|
Outstanding
Principal
Balance
|
|
Number of
Contracts |
|
Outstanding
Principal Balance |
||||||
|
(Dollars in thousands)
|
||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
1
|
|
|
$
|
57
|
|
|
3
|
|
|
$
|
790
|
|
Non-owner occupied commercial real estate
|
0
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||
Total commercial business
|
1
|
|
|
57
|
|
|
4
|
|
|
792
|
|
||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||
One-to-four family residential
|
1
|
|
|
865
|
|
|
—
|
|
|
—
|
|
||
Total real estate construction and land development
|
1
|
|
|
865
|
|
|
—
|
|
|
—
|
|
||
Total
|
2
|
|
|
$
|
922
|
|
|
4
|
|
|
$
|
792
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Number of
Contracts
|
|
Outstanding
Principal
Balance
|
|
Number of
Contracts |
|
Outstanding
Principal Balance |
||||||
|
(Dollars in thousands)
|
||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
1
|
|
|
$
|
57
|
|
|
3
|
|
|
$
|
790
|
|
Non-owner occupied commercial real estate
|
0
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||
Total commercial business
|
1
|
|
|
57
|
|
|
4
|
|
|
792
|
|
||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||
One-to-four family residential
|
1
|
|
|
865
|
|
|
—
|
|
|
—
|
|
||
Total real estate construction and land development
|
1
|
|
|
865
|
|
|
—
|
|
|
—
|
|
||
Total
|
2
|
|
|
$
|
922
|
|
|
4
|
|
|
$
|
792
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Outstanding Principal
|
|
Recorded Investment
|
|
Outstanding Principal
|
|
Recorded Investment
|
||||||||
|
(In thousands)
|
||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
15,338
|
|
|
$
|
11,775
|
|
|
$
|
22,144
|
|
|
$
|
18,040
|
|
Owner-occupied commercial real estate
|
12,435
|
|
|
11,271
|
|
|
18,165
|
|
|
16,208
|
|
||||
Non-owner occupied commercial real estate
|
14,701
|
|
|
12,628
|
|
|
12,684
|
|
|
11,185
|
|
||||
Total commercial business
|
42,474
|
|
|
35,674
|
|
|
52,993
|
|
|
45,433
|
|
||||
One-to-four family residential
|
2,230
|
|
|
2,220
|
|
|
2,269
|
|
|
2,235
|
|
||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||||
One-to-four family residential
|
7,461
|
|
|
3,310
|
|
|
8,456
|
|
|
4,223
|
|
||||
Five or more family residential and commercial properties
|
2,263
|
|
|
2,486
|
|
|
2,721
|
|
|
2,963
|
|
||||
Total real estate construction and land development
|
9,724
|
|
|
5,796
|
|
|
11,177
|
|
|
7,186
|
|
||||
Consumer
|
5,158
|
|
|
6,337
|
|
|
5,983
|
|
|
7,055
|
|
||||
Gross PCI noncovered loans
|
$
|
59,586
|
|
|
$
|
50,027
|
|
|
$
|
72,422
|
|
|
$
|
61,909
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Balance at the beginning of the period
|
|
$
|
14,015
|
|
|
$
|
7,089
|
|
|
$
|
12,572
|
|
|
$
|
7,714
|
|
Accretion
|
|
(1,030
|
)
|
|
(761
|
)
|
|
(2,042
|
)
|
|
(1,589
|
)
|
||||
Disposal and other
|
|
(1,221
|
)
|
|
(703
|
)
|
|
(1,505
|
)
|
|
(1,336
|
)
|
||||
Change in accretable yield
|
|
—
|
|
|
10,773
|
|
|
2,739
|
|
|
11,609
|
|
||||
Balance at the end of the period
|
|
$
|
11,764
|
|
|
$
|
16,398
|
|
|
$
|
11,764
|
|
|
$
|
16,398
|
|
(4)
|
Covered Loans Receivable
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(In thousands)
|
||||||
Commercial business:
|
|
|
|
||||
Commercial and industrial
|
$
|
16,836
|
|
|
$
|
19,110
|
|
Owner-occupied commercial real estate
|
43,521
|
|
|
59,244
|
|
||
Non-owner occupied commercial real estate
|
29,764
|
|
|
26,879
|
|
||
Total commercial business
|
90,121
|
|
|
105,233
|
|
||
One-to-four family residential
|
5,080
|
|
|
5,990
|
|
||
Real estate construction and land development:
|
|
|
|
||||
One-to-four family residential
|
1,962
|
|
|
2,446
|
|
||
Five or more family residential and commercial properties
|
2,319
|
|
|
3,560
|
|
||
Total real estate construction and land development
|
4,281
|
|
|
6,006
|
|
||
Consumer
|
8,199
|
|
|
8,971
|
|
||
Gross covered loans receivable
|
107,681
|
|
|
126,200
|
|
||
Allowance for loan losses
|
(5,499
|
)
|
|
(5,576
|
)
|
||
Covered loans receivable, net
|
$
|
102,182
|
|
|
$
|
120,624
|
|
|
June 30, 2015
|
||||||||||||||||||
|
Pass
|
|
OAEM
|
|
Substandard
|
|
Doubtful
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
10,185
|
|
|
$
|
104
|
|
|
$
|
4,727
|
|
|
$
|
1,820
|
|
|
$
|
16,836
|
|
Owner-occupied commercial real estate
|
31,867
|
|
|
3,266
|
|
|
8,135
|
|
|
253
|
|
|
43,521
|
|
|||||
Non-owner occupied commercial real estate
|
12,958
|
|
|
32
|
|
|
14,628
|
|
|
2,146
|
|
|
29,764
|
|
|||||
Total commercial business
|
55,010
|
|
|
3,402
|
|
|
27,490
|
|
|
4,219
|
|
|
90,121
|
|
|||||
One-to-four family residential
|
4,739
|
|
|
—
|
|
|
341
|
|
|
|
|
|
5,080
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
1,791
|
|
|
—
|
|
|
171
|
|
|
—
|
|
|
1,962
|
|
|||||
Five or more family residential and commercial properties
|
1,503
|
|
|
—
|
|
|
816
|
|
|
—
|
|
|
2,319
|
|
|||||
Total real estate construction and land development
|
3,294
|
|
|
—
|
|
|
987
|
|
|
—
|
|
|
4,281
|
|
|||||
Consumer
|
6,099
|
|
|
—
|
|
|
2,100
|
|
|
—
|
|
|
8,199
|
|
|||||
Gross covered loans receivable
|
$
|
69,142
|
|
|
$
|
3,402
|
|
|
$
|
30,918
|
|
|
$
|
4,219
|
|
|
$
|
107,681
|
|
|
December 31, 2014
|
||||||||||||||||||
|
Pass
|
|
OAEM
|
|
Substandard
|
|
Doubtful
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
11,297
|
|
|
$
|
131
|
|
|
$
|
5,442
|
|
|
$
|
2,240
|
|
|
$
|
19,110
|
|
Owner-occupied commercial real estate
|
40,357
|
|
|
4,957
|
|
|
13,583
|
|
|
347
|
|
|
59,244
|
|
|||||
Non-owner occupied commercial real estate
|
9,656
|
|
|
40
|
|
|
17,183
|
|
|
—
|
|
|
26,879
|
|
|||||
Total commercial business
|
61,310
|
|
|
5,128
|
|
|
36,208
|
|
|
2,587
|
|
|
105,233
|
|
|||||
One-to-four family residential
|
5,414
|
|
|
425
|
|
|
151
|
|
|
—
|
|
|
5,990
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
2,178
|
|
|
—
|
|
|
268
|
|
|
—
|
|
|
2,446
|
|
|||||
Five or more family residential and commercial properties
|
1,758
|
|
|
—
|
|
|
1,802
|
|
|
—
|
|
|
3,560
|
|
|||||
Total real estate construction and land development
|
3,936
|
|
|
—
|
|
|
2,070
|
|
|
—
|
|
|
6,006
|
|
|||||
Consumer
|
7,030
|
|
|
—
|
|
|
1,941
|
|
|
—
|
|
|
8,971
|
|
|||||
Gross covered loans receivable
|
$
|
77,690
|
|
|
$
|
5,553
|
|
|
$
|
40,370
|
|
|
$
|
2,587
|
|
|
$
|
126,200
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(In thousands)
|
||||||
Commercial business:
|
|
|
|
||||
Commercial and industrial
|
$
|
1,820
|
|
|
$
|
2,321
|
|
Owner-occupied commercial real estate
|
1,087
|
|
|
1,132
|
|
||
Non-owner-occupied commercial real estate
|
401
|
|
|
424
|
|
||
Total commercial business
|
3,308
|
|
|
3,877
|
|
||
One-to-four family residential
|
171
|
|
|
179
|
|
||
Consumer
|
32
|
|
|
6
|
|
||
Gross nonaccrual covered loans
|
$
|
3,511
|
|
|
$
|
4,062
|
|
|
June 30, 2015
|
||||||||||||||||||||||
|
30-89 Days
|
|
90 Days or
Greater
|
|
Total Past
Due
|
|
Current
|
|
Total
|
|
90 Days or More
and Still
Accruing (1)
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
$
|
162
|
|
|
$
|
2,173
|
|
|
$
|
2,335
|
|
|
$
|
14,501
|
|
|
$
|
16,836
|
|
|
$
|
—
|
|
Owner-occupied commercial real estate
|
—
|
|
|
684
|
|
|
684
|
|
|
42,837
|
|
|
43,521
|
|
|
—
|
|
||||||
Non-owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
29,764
|
|
|
29,764
|
|
|
—
|
|
||||||
Total commercial business
|
162
|
|
|
2,857
|
|
|
3,019
|
|
|
87,102
|
|
|
90,121
|
|
|
—
|
|
||||||
One-to-four family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
5,080
|
|
|
5,080
|
|
|
—
|
|
||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One-to-four family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
1,962
|
|
|
1,962
|
|
|
—
|
|
||||||
Five or more family residential and commercial properties
|
311
|
|
|
41
|
|
|
352
|
|
|
1,967
|
|
|
2,319
|
|
|
—
|
|
||||||
Total real estate construction and land development
|
311
|
|
|
41
|
|
|
352
|
|
|
3,929
|
|
|
4,281
|
|
|
—
|
|
||||||
Consumer
|
71
|
|
|
749
|
|
|
820
|
|
|
7,379
|
|
|
8,199
|
|
|
—
|
|
||||||
Gross covered loans receivable
|
$
|
544
|
|
|
$
|
3,647
|
|
|
$
|
4,191
|
|
|
$
|
103,490
|
|
|
$
|
107,681
|
|
|
$
|
—
|
|
|
December 31, 2014
|
||||||||||||||||||||||
|
30-89 Days
|
|
90 Days or
Greater
|
|
Total Past
Due
|
|
Current
|
|
Total
|
|
90 Days or More
and Still Accruing (1) |
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
$
|
2,262
|
|
|
$
|
1,163
|
|
|
$
|
3,425
|
|
|
$
|
15,685
|
|
|
$
|
19,110
|
|
|
$
|
—
|
|
Owner-occupied commercial real estate
|
645
|
|
|
2,680
|
|
|
3,325
|
|
|
55,919
|
|
|
59,244
|
|
|
—
|
|
||||||
Non-owner occupied commercial real estate
|
1,713
|
|
|
456
|
|
|
2,169
|
|
|
24,710
|
|
|
26,879
|
|
|
—
|
|
||||||
Total commercial business
|
4,620
|
|
|
4,299
|
|
|
8,919
|
|
|
96,314
|
|
|
105,233
|
|
|
—
|
|
||||||
One-to-four family residential
|
112
|
|
|
—
|
|
|
112
|
|
|
5,878
|
|
|
5,990
|
|
|
—
|
|
||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One-to-four family residential
|
178
|
|
|
90
|
|
|
268
|
|
|
2,178
|
|
|
2,446
|
|
|
—
|
|
||||||
Five or more family residential and commercial properties
|
—
|
|
|
220
|
|
|
220
|
|
|
3,340
|
|
|
3,560
|
|
|
—
|
|
||||||
Total real estate construction and land development
|
178
|
|
|
310
|
|
|
488
|
|
|
5,518
|
|
|
6,006
|
|
|
—
|
|
||||||
Consumer
|
263
|
|
|
727
|
|
|
990
|
|
|
7,981
|
|
|
8,971
|
|
|
—
|
|
||||||
Gross covered loans receivable
|
$
|
5,173
|
|
|
$
|
5,336
|
|
|
$
|
10,509
|
|
|
$
|
115,691
|
|
|
$
|
126,200
|
|
|
$
|
—
|
|
|
June 30, 2015
|
||||||||||||||||||
|
Recorded
Investment With
No Specific
Valuation
Allowance
|
|
Recorded
Investment With
Specific
Valuation
Allowance
|
|
Total
Recorded
Investment
|
|
Unpaid
Contractual
Principal
Balance
|
|
Related
Specific
Valuation
Allowance
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
1,820
|
|
|
$
|
—
|
|
|
$
|
1,820
|
|
|
$
|
3,257
|
|
|
$
|
—
|
|
Owner-occupied commercial real estate
|
—
|
|
|
1,395
|
|
|
1,395
|
|
|
1,441
|
|
|
289
|
|
|||||
Non-owner occupied commercial real estate
|
—
|
|
|
401
|
|
|
401
|
|
|
435
|
|
|
49
|
|
|||||
Total commercial business
|
1,820
|
|
|
1,796
|
|
|
3,616
|
|
|
5,133
|
|
|
338
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
—
|
|
|
172
|
|
|
172
|
|
|
180
|
|
|
45
|
|
|||||
Total real estate construction and land development
|
—
|
|
|
172
|
|
|
172
|
|
|
180
|
|
|
45
|
|
|||||
Consumer
|
26
|
|
|
6
|
|
|
32
|
|
|
34
|
|
|
2
|
|
|||||
Total
|
$
|
1,846
|
|
|
$
|
1,974
|
|
|
$
|
3,820
|
|
|
$
|
5,347
|
|
|
$
|
385
|
|
|
December 31, 2014
|
||||||||||||||||||
|
Recorded
Investment With
No Specific
Valuation
Allowance
|
|
Recorded
Investment With
Specific
Valuation
Allowance
|
|
Total
Recorded
Investment
|
|
Unpaid
Contractual
Principal
Balance
|
|
Related
Specific
Valuation
Allowance
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
2,240
|
|
|
$
|
94
|
|
|
$
|
2,334
|
|
|
$
|
3,696
|
|
|
$
|
9
|
|
Owner-occupied commercial real estate
|
—
|
|
|
1,132
|
|
|
1,132
|
|
|
1,156
|
|
|
295
|
|
|||||
Non-owner occupied commercial real estate
|
—
|
|
|
424
|
|
|
424
|
|
|
440
|
|
|
66
|
|
|||||
Total commercial business
|
2,240
|
|
|
1,650
|
|
|
3,890
|
|
|
5,292
|
|
|
370
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
—
|
|
|
179
|
|
|
179
|
|
|
182
|
|
|
51
|
|
|||||
Total real estate construction and land development
|
—
|
|
|
179
|
|
|
179
|
|
|
182
|
|
|
51
|
|
|||||
Consumer
|
—
|
|
|
6
|
|
|
6
|
|
|
8
|
|
|
2
|
|
|||||
Total
|
$
|
2,240
|
|
|
$
|
1,835
|
|
|
$
|
4,075
|
|
|
$
|
5,482
|
|
|
$
|
423
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
2,000
|
|
|
$
|
3,648
|
|
|
$
|
2,739
|
|
|
$
|
3,686
|
|
Owner-occupied commercial real estate
|
1,407
|
|
|
353
|
|
|
844
|
|
|
235
|
|
||||
Non-owner occupied commercial real estate
|
407
|
|
|
—
|
|
|
333
|
|
|
—
|
|
||||
Total commercial business
|
3,814
|
|
|
4,001
|
|
|
3,916
|
|
|
3,921
|
|
||||
One-to-four family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||||
One-to-four family residential
|
173
|
|
|
—
|
|
|
105
|
|
|
—
|
|
||||
Total real estate construction and land development
|
173
|
|
|
—
|
|
|
105
|
|
|
—
|
|
||||
Consumer
|
19
|
|
|
7
|
|
|
12
|
|
|
7
|
|
||||
Total
|
$
|
4,006
|
|
|
$
|
4,008
|
|
|
$
|
4,033
|
|
|
$
|
4,078
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Performing
TDRs
|
|
Nonaccrual
TDRs
|
|
Performing
TDRs |
|
Nonaccrual
TDRs |
||||||||
|
(In thousands)
|
||||||||||||||
TDR covered loans
|
$
|
10,303
|
|
|
$
|
1,826
|
|
|
$
|
10,289
|
|
|
$
|
2,246
|
|
Allowance for loan losses on TDR covered loans
|
29
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
Three Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance (1)(2) |
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance
(1)(2)
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
1
|
|
|
$
|
552
|
|
|
—
|
|
|
$
|
—
|
|
Non-owner occupied commercial real estate
|
1
|
|
|
7,245
|
|
|
—
|
|
|
—
|
|
||
Total commercial business
|
2
|
|
|
7,797
|
|
|
—
|
|
|
—
|
|
||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||
Five or more family residential and commercial properties
|
1
|
|
|
418
|
|
|
—
|
|
|
—
|
|
||
Total real estate construction and land development
|
1
|
|
|
418
|
|
|
—
|
|
|
—
|
|
||
Total TDR covered loans
|
3
|
|
|
$
|
8,215
|
|
|
—
|
|
|
$
|
—
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance (1)(2) |
|
Number of
Contracts
(1)
|
|
Outstanding
Principal Balance
(1)(2)
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
2
|
|
|
$
|
678
|
|
|
1
|
|
|
$
|
3,626
|
|
Owner-occupied commercial real estate
|
1
|
|
|
308
|
|
|
—
|
|
|
—
|
|
||
Non-owner occupied commercial real estate
|
1
|
|
|
7,245
|
|
|
—
|
|
|
—
|
|
||
Total commercial business
|
4
|
|
|
8,231
|
|
|
1
|
|
|
3,626
|
|
||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||
Five or more family residential and commercial properties
|
1
|
|
|
418
|
|
|
—
|
|
|
—
|
|
||
Total real estate construction and land development
|
1
|
|
|
418
|
|
|
—
|
|
|
—
|
|
||
Consumer
|
1
|
|
|
104
|
|
|
—
|
|
|
—
|
|
||
Total TDR covered loans
|
6
|
|
|
$
|
8,753
|
|
|
1
|
|
|
$
|
3,626
|
|
(1)
|
Number of contracts and outstanding principal balance represent loans which have balances as of period end as certain loans may have been paid-down or charged-off during the
three and six months ended June 30, 2015 and 2014
.
|
(2)
|
Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modification, the Bank’s recorded investment in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification).
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Outstanding Principal
|
|
Recorded Investment
|
|
Outstanding Principal
|
|
Recorded Investment
|
||||||||
|
(In thousands)
|
||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
10,324
|
|
|
$
|
8,139
|
|
|
$
|
9,635
|
|
|
$
|
7,134
|
|
Owner-occupied commercial real estate
|
15,431
|
|
|
13,755
|
|
|
23,071
|
|
|
20,666
|
|
||||
Non-owner occupied commercial real estate
|
18,940
|
|
|
19,575
|
|
|
20,607
|
|
|
20,257
|
|
||||
Total commercial business
|
44,695
|
|
|
41,469
|
|
|
53,313
|
|
|
48,057
|
|
||||
One-to-four family residential
|
3,278
|
|
|
2,958
|
|
|
3,837
|
|
|
3,478
|
|
||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||||
One-to-four family residential
|
—
|
|
|
1,209
|
|
|
103
|
|
|
1,308
|
|
||||
Five or more family residential and commercial properties
|
901
|
|
|
816
|
|
|
2,140
|
|
|
1,802
|
|
||||
Total real estate construction and land development
|
901
|
|
|
2,025
|
|
|
2,243
|
|
|
3,110
|
|
||||
Consumer
|
2,719
|
|
|
2,529
|
|
|
2,945
|
|
|
2,717
|
|
||||
Gross PCI covered loans
|
$
|
51,593
|
|
|
$
|
48,981
|
|
|
$
|
62,338
|
|
|
$
|
57,362
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
|||||||||||||||
Balance at the beginning of the period
|
|
$
|
8,310
|
|
|
$
|
9,063
|
|
|
$
|
8,520
|
|
|
$
|
9,535
|
|
Accretion
|
|
(798
|
)
|
|
(615
|
)
|
|
(1,696
|
)
|
|
(1,300
|
)
|
||||
Disposal and other
|
|
(545
|
)
|
|
(392
|
)
|
|
(899
|
)
|
|
(435
|
)
|
||||
Change in accretable yield
|
|
—
|
|
|
3,712
|
|
|
1,042
|
|
|
3,968
|
|
||||
Balance at the end of the period
|
|
$
|
6,967
|
|
|
$
|
11,768
|
|
|
$
|
6,967
|
|
|
$
|
11,768
|
|
(5)
|
Allowance for Loan Losses
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
22,317
|
|
|
$
|
22,820
|
|
|
$
|
22,153
|
|
|
$
|
22,657
|
|
Charge-offs
|
(1,110
|
)
|
|
(1,152
|
)
|
|
(2,545
|
)
|
|
(1,215
|
)
|
||||
Recoveries of loans previously charged-off
|
383
|
|
|
331
|
|
|
697
|
|
|
578
|
|
||||
Provision for loan losses
|
1,189
|
|
|
370
|
|
|
2,474
|
|
|
349
|
|
||||
Balance at the end of the period
|
$
|
22,779
|
|
|
$
|
22,369
|
|
|
$
|
22,779
|
|
|
$
|
22,369
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
5,499
|
|
|
$
|
6,567
|
|
|
$
|
5,576
|
|
|
$
|
6,167
|
|
Charge-offs
|
—
|
|
|
(775
|
)
|
|
—
|
|
|
(854
|
)
|
||||
Provision for loan losses
|
—
|
|
|
321
|
|
|
(77
|
)
|
|
800
|
|
||||
Balance at the end of the period
|
$
|
5,499
|
|
|
$
|
6,114
|
|
|
$
|
5,499
|
|
|
$
|
6,114
|
|
|
Balance at Beginning of Period
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for Loan Losses
|
|
Balance at End of Period
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
9,858
|
|
|
$
|
(662
|
)
|
|
$
|
187
|
|
|
$
|
508
|
|
|
$
|
9,891
|
|
Owner-occupied commercial real estate
|
4,173
|
|
|
—
|
|
|
—
|
|
|
414
|
|
|
4,587
|
|
|||||
Non-owner occupied commercial real estate
|
6,029
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
6,146
|
|
|||||
Total commercial business
|
20,060
|
|
|
(662
|
)
|
|
187
|
|
|
1,039
|
|
|
20,624
|
|
|||||
One-to-four family residential
|
1,242
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
1,271
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
1,565
|
|
|
—
|
|
|
100
|
|
|
(203
|
)
|
|
1,462
|
|
|||||
Five or more family residential and commercial properties
|
1,005
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
1,062
|
|
|||||
Total real estate construction and land development
|
2,570
|
|
|
—
|
|
|
100
|
|
|
(146
|
)
|
|
2,524
|
|
|||||
Consumer
|
3,175
|
|
|
(448
|
)
|
|
96
|
|
|
344
|
|
|
3,167
|
|
|||||
Unallocated
|
769
|
|
|
—
|
|
|
—
|
|
|
(77
|
)
|
|
692
|
|
|||||
Total
|
$
|
27,816
|
|
|
$
|
(1,110
|
)
|
|
$
|
383
|
|
|
$
|
1,189
|
|
|
$
|
28,278
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
10,553
|
|
|
$
|
(1,322
|
)
|
|
$
|
388
|
|
|
$
|
272
|
|
|
$
|
9,891
|
|
Owner-occupied commercial real estate
|
4,095
|
|
|
—
|
|
|
—
|
|
|
492
|
|
|
4,587
|
|
|||||
Non-owner occupied commercial real estate
|
5,538
|
|
|
(188
|
)
|
|
—
|
|
|
796
|
|
|
6,146
|
|
|||||
Total commercial business
|
20,186
|
|
|
(1,510
|
)
|
|
388
|
|
|
1,560
|
|
|
20,624
|
|
|||||
One-to-four family residential
|
1,200
|
|
|
—
|
|
|
1
|
|
|
70
|
|
|
1,271
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
1,786
|
|
|
(106
|
)
|
|
100
|
|
|
(318
|
)
|
|
1,462
|
|
|||||
Five or more family residential and commercial properties
|
972
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
1,062
|
|
|||||
Total real estate construction and land development
|
2,758
|
|
|
(106
|
)
|
|
100
|
|
|
(228
|
)
|
|
2,524
|
|
|||||
Consumer
|
2,769
|
|
|
(929
|
)
|
|
208
|
|
|
1,119
|
|
|
3,167
|
|
|||||
Unallocated
|
816
|
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
|
692
|
|
|||||
Total
|
$
|
27,729
|
|
|
$
|
(2,545
|
)
|
|
$
|
697
|
|
|
$
|
2,397
|
|
|
$
|
28,278
|
|
|
Noncovered loans individually evaluated for impairment
|
|
Noncovered loans collectively evaluated for impairment
|
|
Covered loans individually evaluated for impairment
|
|
Covered loans collectively evaluated for impairment
|
|
PCI noncovered loans
|
|
PCI
covered loans
|
|
Total as of June 30, 2015
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
746
|
|
|
$
|
6,359
|
|
|
$
|
—
|
|
|
$
|
117
|
|
|
$
|
2,213
|
|
|
$
|
456
|
|
|
$
|
9,891
|
|
Owner-occupied commercial real estate
|
755
|
|
|
2,045
|
|
|
289
|
|
|
26
|
|
|
330
|
|
|
1,142
|
|
|
4,587
|
|
|||||||
Non-owner occupied commercial real estate
|
943
|
|
|
2,729
|
|
|
49
|
|
|
14
|
|
|
363
|
|
|
2,048
|
|
|
6,146
|
|
|||||||
Total commercial business
|
2,444
|
|
|
11,133
|
|
|
338
|
|
|
157
|
|
|
2,906
|
|
|
3,646
|
|
|
20,624
|
|
|||||||
One-to-four family residential
|
74
|
|
|
607
|
|
|
—
|
|
|
11
|
|
|
207
|
|
|
372
|
|
|
1,271
|
|
|||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
One-to-four family residential
|
28
|
|
|
386
|
|
|
45
|
|
|
—
|
|
|
264
|
|
|
739
|
|
|
1,462
|
|
|||||||
Five or more family residential and commercial properties
|
200
|
|
|
774
|
|
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
1,062
|
|
|||||||
Total real estate construction and land development
|
228
|
|
|
1,160
|
|
|
45
|
|
|
—
|
|
|
352
|
|
|
739
|
|
|
2,524
|
|
|||||||
Consumer
|
24
|
|
|
2,286
|
|
|
2
|
|
|
4
|
|
|
666
|
|
|
185
|
|
|
3,167
|
|
|||||||
Unallocated
|
—
|
|
|
692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
692
|
|
|||||||
Total
|
$
|
2,770
|
|
|
$
|
15,878
|
|
|
$
|
385
|
|
|
$
|
172
|
|
|
$
|
4,131
|
|
|
$
|
4,942
|
|
|
$
|
28,278
|
|
|
Noncovered loans individually evaluated for impairment
|
|
Noncovered loans collectively evaluated for impairment
|
|
Covered loans individually evaluated for impairment
|
|
Covered loans collectively evaluated for impairment
|
|
PCI noncovered loans
|
|
PCI
covered loans |
|
Total as of June 30, 2015
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
6,725
|
|
|
$
|
533,489
|
|
|
$
|
1,820
|
|
|
$
|
6,877
|
|
|
$
|
11,775
|
|
|
$
|
8,139
|
|
|
$
|
568,825
|
|
Owner-occupied commercial real estate
|
3,214
|
|
|
551,236
|
|
|
1,395
|
|
|
28,371
|
|
|
11,271
|
|
|
13,755
|
|
|
609,242
|
|
|||||||
Non-owner occupied commercial real estate
|
9,538
|
|
|
654,706
|
|
|
401
|
|
|
9,788
|
|
|
12,628
|
|
|
19,575
|
|
|
706,636
|
|
|||||||
Total commercial business
|
19,477
|
|
|
1,739,431
|
|
|
3,616
|
|
|
45,036
|
|
|
35,674
|
|
|
41,469
|
|
|
1,884,703
|
|
|||||||
One-to-four family residential
|
241
|
|
|
64,622
|
|
|
—
|
|
|
2,122
|
|
|
2,220
|
|
|
2,958
|
|
|
72,163
|
|
|||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
One-to-four family residential
|
3,408
|
|
|
34,975
|
|
|
172
|
|
|
581
|
|
|
3,310
|
|
|
1,209
|
|
|
43,655
|
|
|||||||
Five or more family residential and commercial properties
|
2,009
|
|
|
61,529
|
|
|
—
|
|
|
1,503
|
|
|
2,486
|
|
|
816
|
|
|
68,343
|
|
|||||||
Total real estate construction and land development
|
5,417
|
|
|
96,504
|
|
|
172
|
|
|
2,084
|
|
|
5,796
|
|
|
2,025
|
|
|
111,998
|
|
|||||||
Consumer
|
122
|
|
|
263,716
|
|
|
32
|
|
|
5,638
|
|
|
6,337
|
|
|
2,529
|
|
|
278,374
|
|
|||||||
Total
|
$
|
25,257
|
|
|
$
|
2,164,273
|
|
|
$
|
3,820
|
|
|
$
|
54,880
|
|
|
$
|
50,027
|
|
|
$
|
48,981
|
|
|
$
|
2,347,238
|
|
|
Balance at Beginning of Period
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for Loan Losses
|
|
Balance at End of Period
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Three Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
12,277
|
|
|
$
|
(1,403
|
)
|
|
$
|
269
|
|
|
$
|
161
|
|
|
$
|
11,304
|
|
Owner-occupied commercial real estate
|
4,463
|
|
|
—
|
|
|
—
|
|
|
(263
|
)
|
|
4,200
|
|
|||||
Non-owner occupied commercial real estate
|
5,226
|
|
|
—
|
|
|
—
|
|
|
459
|
|
|
5,685
|
|
|||||
Total commercial business
|
21,966
|
|
|
(1,403
|
)
|
|
269
|
|
|
357
|
|
|
21,189
|
|
|||||
One-to-four family residential
|
1,121
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
1,155
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
1,979
|
|
|
(345
|
)
|
|
43
|
|
|
(144
|
)
|
|
1,533
|
|
|||||
Five or more family residential and commercial properties
|
1,983
|
|
|
—
|
|
|
—
|
|
|
(353
|
)
|
|
1,630
|
|
|||||
Total real estate construction and land development
|
3,962
|
|
|
(345
|
)
|
|
43
|
|
|
(497
|
)
|
|
3,163
|
|
|||||
Consumer
|
1,690
|
|
|
(179
|
)
|
|
20
|
|
|
644
|
|
|
2,175
|
|
|||||
Unallocated
|
648
|
|
|
—
|
|
|
—
|
|
|
153
|
|
|
801
|
|
|||||
Total
|
$
|
29,387
|
|
|
$
|
(1,927
|
)
|
|
$
|
332
|
|
|
$
|
691
|
|
|
$
|
28,483
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
13,478
|
|
|
$
|
(1,482
|
)
|
|
$
|
501
|
|
|
$
|
(1,193
|
)
|
|
$
|
11,304
|
|
Owner-occupied commercial real estate
|
4,049
|
|
|
—
|
|
|
—
|
|
|
151
|
|
|
4,200
|
|
|||||
Non-owner occupied commercial real estate
|
5,326
|
|
|
—
|
|
|
—
|
|
|
359
|
|
|
5,685
|
|
|||||
Total commercial business
|
22,853
|
|
|
(1,482
|
)
|
|
501
|
|
|
(683
|
)
|
|
21,189
|
|
|||||
One-to-four family residential
|
1,100
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
1,155
|
|
|||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
||||||||||
One-to-four family residential
|
1,720
|
|
|
(345
|
)
|
|
43
|
|
|
115
|
|
|
1,533
|
|
|||||
Five or more family residential and commercial properties
|
953
|
|
|
—
|
|
|
—
|
|
|
677
|
|
|
1,630
|
|
|||||
Total real estate construction and land development
|
2,673
|
|
|
(345
|
)
|
|
43
|
|
|
792
|
|
|
3,163
|
|
|||||
Consumer
|
1,597
|
|
|
(242
|
)
|
|
35
|
|
|
785
|
|
|
2,175
|
|
|||||
Unallocated
|
601
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
801
|
|
|||||
Total
|
$
|
28,824
|
|
|
$
|
(2,069
|
)
|
|
$
|
579
|
|
|
$
|
1,149
|
|
|
$
|
28,483
|
|
|
Noncovered loans individually evaluated for impairment
|
|
Noncovered loans collectively evaluated for impairment
|
|
Covered loans individually evaluated for impairment
|
|
Covered loans collectively evaluated for impairment
|
|
PCI noncovered loans
|
|
PCI
covered loans |
|
Total as of December 31, 2014
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
1,325
|
|
|
$
|
6,449
|
|
|
$
|
9
|
|
|
$
|
108
|
|
|
$
|
2,191
|
|
|
$
|
471
|
|
|
$
|
10,553
|
|
Owner-occupied commercial real estate
|
684
|
|
|
1,629
|
|
|
295
|
|
|
14
|
|
|
330
|
|
|
1,143
|
|
|
4,095
|
|
|||||||
Non-owner occupied commercial real estate
|
465
|
|
|
2,541
|
|
|
66
|
|
|
6
|
|
|
353
|
|
|
2,107
|
|
|
5,538
|
|
|||||||
Total commercial business
|
2,474
|
|
|
10,619
|
|
|
370
|
|
|
128
|
|
|
2,874
|
|
|
3,721
|
|
|
20,186
|
|
|||||||
One-to-four family residential
|
75
|
|
|
530
|
|
|
—
|
|
|
8
|
|
|
207
|
|
|
380
|
|
|
1,200
|
|
|||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
One-to-four family residential
|
396
|
|
|
322
|
|
|
51
|
|
|
—
|
|
|
264
|
|
|
753
|
|
|
1,786
|
|
|||||||
Five or more family residential and commercial properties
|
234
|
|
|
650
|
|
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
972
|
|
|||||||
Total real estate construction and land development
|
630
|
|
|
972
|
|
|
51
|
|
|
—
|
|
|
352
|
|
|
753
|
|
|
2,758
|
|
|||||||
Consumer
|
56
|
|
|
1,931
|
|
|
2
|
|
|
12
|
|
|
617
|
|
|
151
|
|
|
2,769
|
|
|||||||
Unallocated
|
—
|
|
|
816
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
816
|
|
|||||||
Total
|
$
|
3,235
|
|
|
$
|
14,868
|
|
|
$
|
423
|
|
|
$
|
148
|
|
|
$
|
4,050
|
|
|
$
|
5,005
|
|
|
$
|
27,729
|
|
|
Noncovered loans individually evaluated for impairment
|
|
Noncovered loans collectively evaluated for impairment
|
|
Covered loans individually evaluated for impairment
|
|
Covered loans collectively evaluated for impairment
|
|
PCI noncovered loans
|
|
PCI
covered loans |
|
Total as of December 31, 2014
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
9,040
|
|
|
$
|
524,263
|
|
|
$
|
2,334
|
|
|
$
|
9,642
|
|
|
$
|
18,040
|
|
|
$
|
7,134
|
|
|
$
|
570,453
|
|
Owner-occupied commercial real estate
|
2,781
|
|
|
516,753
|
|
|
1,132
|
|
|
37,446
|
|
|
16,208
|
|
|
20,666
|
|
|
594,986
|
|
|||||||
Non-owner occupied commercial real estate
|
7,305
|
|
|
598,267
|
|
|
424
|
|
|
6,198
|
|
|
11,185
|
|
|
20,257
|
|
|
643,636
|
|
|||||||
Total commercial business
|
19,126
|
|
|
1,639,283
|
|
|
3,890
|
|
|
53,286
|
|
|
45,433
|
|
|
48,057
|
|
|
1,809,075
|
|
|||||||
One-to-four family residential
|
245
|
|
|
61,060
|
|
|
—
|
|
|
2,512
|
|
|
2,235
|
|
|
3,478
|
|
|
69,530
|
|
|||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
One-to-four family residential
|
4,524
|
|
|
38,002
|
|
|
179
|
|
|
959
|
|
|
4,223
|
|
|
1,308
|
|
|
49,195
|
|
|||||||
Five or more family residential and commercial properties
|
2,056
|
|
|
56,341
|
|
|
—
|
|
|
1,758
|
|
|
2,963
|
|
|
1,802
|
|
|
64,920
|
|
|||||||
Total real estate construction and land development
|
6,580
|
|
|
94,343
|
|
|
179
|
|
|
2,717
|
|
|
7,186
|
|
|
3,110
|
|
|
114,115
|
|
|||||||
Consumer
|
205
|
|
|
243,063
|
|
|
6
|
|
|
6,248
|
|
|
7,055
|
|
|
2,717
|
|
|
259,294
|
|
|||||||
Total
|
$
|
26,156
|
|
|
$
|
2,037,749
|
|
|
$
|
4,075
|
|
|
$
|
64,763
|
|
|
$
|
61,909
|
|
|
$
|
57,362
|
|
|
$
|
2,252,014
|
|
(6)
|
FDIC Indemnification Asset
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
692
|
|
|
$
|
3,969
|
|
|
$
|
1,116
|
|
|
$
|
4,382
|
|
Additions as a result of the Washington Banking Merger
|
—
|
|
|
7,407
|
|
|
—
|
|
|
7,407
|
|
||||
Cash payments received or receivable from the FDIC
|
—
|
|
|
(2,365
|
)
|
|
(231
|
)
|
|
(2,741
|
)
|
||||
FDIC share of additional estimated (gains) losses
|
(283
|
)
|
|
469
|
|
|
(352
|
)
|
|
805
|
|
||||
Net amortization
|
(21
|
)
|
|
(360
|
)
|
|
(145
|
)
|
|
(733
|
)
|
||||
Balance at the end of the period
|
$
|
388
|
|
|
$
|
9,120
|
|
|
$
|
388
|
|
|
$
|
9,120
|
|
(7)
|
Other Real Estate Owned
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
4,094
|
|
|
$
|
4,284
|
|
|
$
|
3,355
|
|
|
$
|
4,559
|
|
Additions
|
85
|
|
|
—
|
|
|
1,813
|
|
|
218
|
|
||||
Additions from acquisitions
|
—
|
|
|
7,121
|
|
|
—
|
|
|
7,121
|
|
||||
Proceeds from dispositions
|
(1,050
|
)
|
|
(3,337
|
)
|
|
(1,639
|
)
|
|
(3,857
|
)
|
||||
(Loss) gain on sales, net
|
(27
|
)
|
|
38
|
|
|
(97
|
)
|
|
65
|
|
||||
Valuation adjustment
|
(85
|
)
|
|
—
|
|
|
(415
|
)
|
|
—
|
|
||||
Balance at the end of the period
|
$
|
3,017
|
|
|
$
|
8,106
|
|
|
$
|
3,017
|
|
|
$
|
8,106
|
|
(8)
|
Goodwill and Other Intangible Assets
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Balance at the beginning of the period
|
|
$
|
10,362
|
|
|
$
|
1,459
|
|
|
$
|
10,889
|
|
|
$
|
1,615
|
|
Additions as a result of acquisitions
|
|
—
|
|
|
11,194
|
|
|
—
|
|
|
11,194
|
|
||||
Less: Amortization
|
|
527
|
|
|
489
|
|
|
1,054
|
|
|
645
|
|
||||
Balance at the end of the period
|
|
$
|
9,835
|
|
|
$
|
12,164
|
|
|
$
|
9,835
|
|
|
$
|
12,164
|
|
(9)
|
Junior Subordinated Debentures
|
(10)
|
Repurchase Agreements
|
|
June 30, 2015
|
||
|
(in thousands)
|
||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
—
|
|
Municipal securities
|
—
|
|
|
Mortgage backed securities and collateralized mortgage obligations- residential:
|
|
||
U.S. Government-sponsored agencies
|
20,589
|
|
|
Corporate obligations
|
—
|
|
|
Total borrowings
|
$
|
20,589
|
|
(11)
|
Stockholders’ Equity
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Net income:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
8,725
|
|
|
$
|
4,148
|
|
|
$
|
18,504
|
|
|
$
|
6,691
|
|
Less: Dividends and undistributed earnings allocated to participating securities
|
(76
|
)
|
|
(20
|
)
|
|
(162
|
)
|
|
(32
|
)
|
||||
Net income allocated to common shareholders
|
$
|
8,649
|
|
|
$
|
4,128
|
|
|
$
|
18,342
|
|
|
$
|
6,659
|
|
Basic:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
30,046,211
|
|
|
25,592,389
|
|
|
30,150,063
|
|
|
20,929,467
|
|
||||
Less: Restricted stock awards
|
(281,774
|
)
|
|
(166,577
|
)
|
|
(271,843
|
)
|
|
(182,051
|
)
|
||||
Total basic weighted average common shares outstanding
|
29,764,437
|
|
|
25,425,812
|
|
|
29,878,220
|
|
|
20,747,416
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
29,764,437
|
|
|
25,425,812
|
|
|
29,878,220
|
|
|
20,747,416
|
|
||||
Incremental shares from stock options
|
21,007
|
|
|
50,091
|
|
|
22,359
|
|
|
58,313
|
|
||||
Total diluted weighted average common shares outstanding
|
29,785,444
|
|
|
25,475,903
|
|
|
29,900,579
|
|
|
20,805,729
|
|
Declared
|
|
Cash Dividend per Share
|
|
Record Date
|
|
Paid Date
|
January 29, 2014
|
|
$0.08
|
|
February 10, 2014
|
|
February 24, 2014
|
March 27, 2014
|
|
$0.08
|
|
April 8, 2014
|
|
April 23, 2014
|
July 24, 2014
|
|
$0.09
|
|
August 7, 2014
|
|
August 21, 2014
|
October 23, 2014
|
|
$0.09
|
|
November 6, 2014
|
|
November 20, 2014
|
November 11, 2014
|
|
$0.16
|
|
December 2, 2014
|
|
December 12, 2014
|
January 28, 2015
|
|
$0.10
|
|
February 10, 2015
|
|
February 24, 2015
|
April 22, 2015
|
|
$0.11
|
|
May 7, 2015
|
|
May 21, 2015
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Plan Total (1)
|
||||||||||
Tenth Plan
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchased shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704,975
|
|
|||||
Stock repurchase average share price
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15.85
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Eleventh Plan
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchased shares
|
304,600
|
|
|
—
|
|
|
441,966
|
|
|
—
|
|
|
441,966
|
|
|||||
Stock repurchase average share price
|
$
|
16.88
|
|
|
$
|
—
|
|
|
$
|
16.64
|
|
|
$
|
—
|
|
|
$
|
16.64
|
|
(12)
|
Accumulated Other Comprehensive Income (Loss)
|
|
Three Months Ended June 30, 2015
|
||||||||||
|
Changes in
fair value of available for sale securities (1) |
|
Accretion of other-than-
temporary impairment on held to maturity securities (1) |
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance of AOCI at the beginning of period
|
$
|
6,365
|
|
|
$
|
(181
|
)
|
|
$
|
6,184
|
|
Other comprehensive income before reclassification
|
(3,891
|
)
|
|
3
|
|
|
(3,888
|
)
|
|||
Amounts reclassified from AOCI for gain on sale of investment securities included in net income
|
(276
|
)
|
|
178
|
|
|
(98
|
)
|
|||
Net current period other comprehensive income
|
(4,167
|
)
|
|
181
|
|
|
(3,986
|
)
|
|||
Balance of AOCI at the end of period
|
$
|
2,198
|
|
|
$
|
—
|
|
|
$
|
2,198
|
|
(1)
|
All amounts are net of tax.
|
|
Six Months Ended June 30, 2015
|
||||||||||
|
Changes in
fair value of available for sale securities (1) |
|
Accretion of other-than-
temporary impairment on held to maturity securities (1) |
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance of AOCI at the beginning of period
|
$
|
3,567
|
|
|
$
|
(189
|
)
|
|
$
|
3,378
|
|
Other comprehensive income before reclassification
|
(739
|
)
|
|
11
|
|
|
(728
|
)
|
|||
Amounts reclassified from AOCI for gain on sale of investment securities included in net income
|
(630
|
)
|
|
178
|
|
|
(452
|
)
|
|||
Net current period other comprehensive income
|
(1,369
|
)
|
|
189
|
|
|
(1,180
|
)
|
|||
Balance of AOCI at the end of period
|
$
|
2,198
|
|
|
$
|
—
|
|
|
$
|
2,198
|
|
(1)
|
All amounts are net of tax.
|
|
Three Months Ended June 30, 2014
|
||||||||||
|
Changes in
fair value of available for sale securities (1) |
|
Accretion of other-than-
temporary impairment on held to maturity securities (1) |
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance of AOCI at the beginning of period
|
$
|
(447
|
)
|
|
$
|
(224
|
)
|
|
$
|
(671
|
)
|
Other comprehensive income before reclassification
|
2,022
|
|
|
15
|
|
|
2,037
|
|
|||
Amounts reclassified from AOCI for gain on sale of investment securities available for sale included in net income
|
(57
|
)
|
|
—
|
|
|
(57
|
)
|
|||
Net current period other comprehensive income
|
1,965
|
|
|
15
|
|
|
1,980
|
|
|||
Balance of AOCI at the end of period
|
$
|
1,518
|
|
|
$
|
(209
|
)
|
|
$
|
1,309
|
|
(1)
|
All amounts are net of tax.
|
|
Six Months Ended June 30, 2014
|
||||||||||
|
Changes in
fair value of available for sale securities (1) |
|
Accretion of other-than-
temporary impairment on held to maturity securities (1) |
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance of AOCI at the beginning of the period
|
$
|
(923
|
)
|
|
$
|
(239
|
)
|
|
$
|
(1,162
|
)
|
Other comprehensive income before reclassification
|
2,615
|
|
|
30
|
|
|
2,645
|
|
|||
Amounts reclassified from AOCI for gain on sale of investment securities available for sale included in net income
|
(174
|
)
|
|
—
|
|
|
(174
|
)
|
|||
Net current period other comprehensive income
|
2,441
|
|
|
30
|
|
|
2,471
|
|
|||
Balance of AOCI at the end of the period
|
$
|
1,518
|
|
|
$
|
(209
|
)
|
|
$
|
1,309
|
|
(1)
|
All amounts are net of tax.
|
(13)
|
Stock-Based Compensation
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average
Remaining
Contractual
Term (In years)
|
|
Aggregate
Intrinsic
Value (In
thousands)
|
|||||
Outstanding at December 31, 2013
|
194,482
|
|
|
$
|
15.82
|
|
|
|
|
|
||
Granted (1)
|
90,248
|
|
|
10.72
|
|
|
|
|
|
|||
Exercised
|
(38,844
|
)
|
|
10.98
|
|
|
|
|
|
|||
Forfeited or expired
|
(35,744
|
)
|
|
23.66
|
|
|
|
|
|
|||
Outstanding at June 30, 2014
|
210,142
|
|
|
$
|
13.19
|
|
|
3.30
|
|
$
|
677
|
|
|
|
|
|
|
|
|
|
|||||
Outstanding at December 31, 2014
|
156,407
|
|
|
$
|
13.59
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(42,893
|
)
|
|
12.24
|
|
|
|
|
|
|||
Forfeited or expired
|
(11,249
|
)
|
|
16.91
|
|
|
|
|
|
|||
Outstanding at June 30, 2015
|
102,265
|
|
|
$
|
13.79
|
|
|
3.08
|
|
$
|
422
|
|
Vested and expected to vest at June 30, 2015
|
102,265
|
|
|
$
|
13.79
|
|
|
3.08
|
|
$
|
422
|
|
Exercisable at June 30, 2015
|
102,265
|
|
|
$
|
13.79
|
|
|
3.08
|
|
$
|
422
|
|
(1)
|
Options granted during the six months ended June 30, 2014 represent only the stock options issued in conjunction with the Washington Banking Merger. See "Note 14. Business Combination" for additional information. The weighted average exercise price reflects the exchange ratio applied to the original Washington Banking exercise price pursuant to the Merger Agreement.
|
|
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Nonvested at December 31, 2013
|
202,939
|
|
|
$
|
14.29
|
|
Granted
|
10,168
|
|
|
16.72
|
|
|
Vested
|
(63,639
|
)
|
|
14.39
|
|
|
Forfeited
|
(3,993
|
)
|
|
14.28
|
|
|
Nonvested at June 30, 2014
|
145,475
|
|
|
$
|
14.42
|
|
|
|
|
|
|||
Nonvested at December 31, 2014
|
238,669
|
|
|
$
|
15.20
|
|
Granted
|
117,868
|
|
|
16.66
|
|
|
Vested
|
(90,217
|
)
|
|
15.13
|
|
|
Forfeited
|
(2,087
|
)
|
|
15.58
|
|
|
Nonvested at June 30, 2015
|
264,233
|
|
|
$
|
15.87
|
|
(14)
|
Fair Value Measurements
|
|
June 30, 2015
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(In thousands)
|
||||||||||||||
Investment securities available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
26,446
|
|
|
$
|
—
|
|
|
$
|
26,446
|
|
|
$
|
—
|
|
Municipal securities
|
174,210
|
|
|
—
|
|
|
174,210
|
|
|
—
|
|
||||
Mortgage backed securities and collateralized mortgage obligations—residential:
|
|
|
|
|
|
|
|
||||||||
U.S Government-sponsored agencies
|
490,270
|
|
|
—
|
|
|
490,270
|
|
|
—
|
|
||||
Corporate obligations
|
6,231
|
|
|
—
|
|
|
6,231
|
|
|
—
|
|
||||
Mutual funds and other equities
|
1,965
|
|
|
1,965
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
699,122
|
|
|
$
|
1,965
|
|
|
$
|
697,157
|
|
|
$
|
—
|
|
|
December 31, 2014
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(In thousands)
|
||||||||||||||
Investment securities available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and U.S. Government-sponsored agencies
|
$
|
21,427
|
|
|
$
|
—
|
|
|
$
|
21,427
|
|
|
$
|
—
|
|
Municipal securities
|
173,037
|
|
|
—
|
|
|
173,037
|
|
|
—
|
|
||||
Mortgage backed securities and collateralized mortgage obligations—residential:
|
|
|
|
|
|
|
|
||||||||
U.S Government-sponsored agencies
|
542,399
|
|
|
—
|
|
|
542,399
|
|
|
—
|
|
||||
Corporate obligations
|
4,010
|
|
|
—
|
|
|
4,010
|
|
|
—
|
|
||||
Mutual funds and other equities
|
1,973
|
|
|
1,973
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
742,846
|
|
|
$
|
1,973
|
|
|
$
|
740,873
|
|
|
$
|
—
|
|
|
Basis
(1)
|
|
Fair Value at June 30, 2015
|
|
|
|
|
||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Losses
Recorded in
Earnings
During
the Three Months Ended June 30, 2015
|
|
Net Losses
(Gains)
Recorded in
Earnings
During
the Six Months Ended June 30, 2015
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Impaired noncovered loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
83
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Total commercial business
|
83
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
|
1
|
|
|
1
|
|
|||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
One-to-four family residential
|
865
|
|
|
863
|
|
|
—
|
|
|
—
|
|
|
863
|
|
|
(2
|
)
|
|
103
|
|
|||||||
Total real estate construction and land development
|
865
|
|
|
863
|
|
|
—
|
|
|
—
|
|
|
863
|
|
|
(2
|
)
|
|
103
|
|
|||||||
Total
|
948
|
|
|
944
|
|
|
—
|
|
|
—
|
|
|
944
|
|
|
(1
|
)
|
|
104
|
|
|||||||
Other real estate owned:
|
1,004
|
|
|
603
|
|
|
—
|
|
|
—
|
|
|
603
|
|
|
84
|
|
|
414
|
|
|||||||
Total assets measured
|
$
|
1,952
|
|
|
$
|
1,547
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,547
|
|
|
$
|
83
|
|
|
$
|
518
|
|
(1)
|
Basis represents the unpaid principal balance of impaired noncovered loans and carrying value at ownership date of other real estate owned.
|
|
Basis
(1)
|
|
Fair Value at December 31, 2014
|
|
|
|
|
||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Losses
(Gains)
Recorded in
Earnings
During
the Three Months Ended June 30, 2014
|
|
Net Losses
(Gains)
Recorded in
Earnings
During
the Six Months Ended June 30, 2014
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Impaired noncovered loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
161
|
|
|
$
|
138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
$
|
(79
|
)
|
|
$
|
81
|
|
Owner-occupied commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(158
|
)
|
|
(220
|
)
|
|||||||
Non-owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
195
|
|
|||||||
Total commercial business
|
161
|
|
|
138
|
|
|
—
|
|
|
—
|
|
|
138
|
|
|
(14
|
)
|
|
56
|
|
|||||||
Real estate construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
One-to-four family residential
|
2,094
|
|
|
1,725
|
|
|
—
|
|
|
—
|
|
|
1,725
|
|
|
(32
|
)
|
|
(42
|
)
|
|||||||
Five or more family residential and commercial properties
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
107
|
|
|||||||
Total real estate construction and land development
|
2,094
|
|
|
1,725
|
|
|
—
|
|
|
—
|
|
|
1,725
|
|
|
75
|
|
|
65
|
|
|||||||
Consumer
|
49
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
(1
|
)
|
|
23
|
|
|||||||
Total
|
2,304
|
|
|
1,908
|
|
|
—
|
|
|
—
|
|
|
1,908
|
|
|
60
|
|
|
144
|
|
|||||||
Covered impaired loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(234
|
)
|
|||||||
Owner-occupied commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(155
|
)
|
|
233
|
|
|||||||
Total commercial business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(155
|
)
|
|
(1
|
)
|
|||||||
Total
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(155
|
)
|
|
(1
|
)
|
|||||||
Investment securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage back securities and collateralized mortgage obligations – residential:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Private residential collateralized mortgage obligations
|
36
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
25
|
|
|
25
|
|
|||||||
Total assets measured
|
$
|
2,340
|
|
|
$
|
1,919
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
1,908
|
|
|
$
|
(70
|
)
|
|
$
|
168
|
|
(1)
|
Basis represents the unpaid principal balance of impaired noncovered and impaired covered loans and amortized cost of investment securities held to maturity.
|
|
June 30, 2015
|
||||||||
|
Fair
Value
|
|
Valuation
Technique(s)
|
|
Unobservable Input(s)
|
|
Range of Inputs; Weighted
Average
|
||
|
(Dollars in thousands)
|
||||||||
Impaired noncovered loans
|
$
|
944
|
|
|
Market approach
|
|
Adjustment for differences between the comparable sales
|
|
(8.50%) - 10.4%; 0.95%
|
Other real estate owned
|
$
|
603
|
|
|
Market approach
|
|
Adjustment for differences between the comparable sales
|
|
(48.6%) - 3.0%; (7.03%)
|
|
December 31, 2014
|
||||||||
|
Fair
Value
|
|
Valuation
Technique(s)
|
|
Unobservable Input(s)
|
|
Range of Inputs; Weighted
Average
|
||
|
(Dollars in thousands)
|
||||||||
Impaired noncovered loans
|
$
|
1,908
|
|
|
Market approach
|
|
Adjustment for differences between the comparable sales
|
|
(47.5%) - 96.2%; 7.0%
|
|
June 30, 2015
|
||||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Fair Value Measurements Using:
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||||
|
(In thousands)
|
||||||||||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
85,312
|
|
|
$
|
85,312
|
|
|
$
|
85,312
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other interest earning deposits
|
5,110
|
|
|
5,121
|
|
|
—
|
|
|
5,121
|
|
|
—
|
|
|||||
Investment securities available for sale
|
699,122
|
|
|
699,122
|
|
|
1,965
|
|
|
697,157
|
|
|
—
|
|
|||||
Investment securities held to maturity
|
33,587
|
|
|
34,494
|
|
|
—
|
|
|
34,494
|
|
|
—
|
|
|||||
Federal Home Loan Bank stock
|
4,148
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Loans held for sale
|
6,939
|
|
|
7,089
|
|
|
—
|
|
|
7,089
|
|
|
—
|
|
|||||
Loans receivable, net of allowance for loan losses
|
2,319,024
|
|
|
2,359,950
|
|
|
—
|
|
|
—
|
|
|
2,359,950
|
|
|||||
Accrued interest receivable
|
9,883
|
|
|
9,883
|
|
|
2
|
|
|
3,061
|
|
|
6,820
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest deposits, NOW accounts, money market accounts and savings accounts
|
$
|
2,485,276
|
|
|
$
|
2,485,276
|
|
|
$
|
2,485,276
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificate of deposit accounts
|
461,211
|
|
|
461,049
|
|
|
—
|
|
|
461,049
|
|
|
—
|
|
|||||
Total deposits
|
$
|
2,946,487
|
|
|
$
|
2,946,325
|
|
|
$
|
2,485,276
|
|
|
$
|
461,049
|
|
|
$
|
—
|
|
Securities sold under agreement to repurchase
|
$
|
20,589
|
|
|
$
|
20,589
|
|
|
$
|
20,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Junior subordinated debentures
|
19,278
|
|
|
19,278
|
|
|
—
|
|
|
—
|
|
|
19,278
|
|
|||||
Accrued interest payable
|
239
|
|
|
239
|
|
|
54
|
|
|
165
|
|
|
20
|
|
|
December 31, 2014
|
||||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Fair Value Measurements Using:
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||||
|
(In thousands)
|
||||||||||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
121,636
|
|
|
$
|
121,636
|
|
|
$
|
121,636
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other interest earning deposits
|
10,126
|
|
|
10,145
|
|
|
—
|
|
|
10,145
|
|
|
—
|
|
|||||
Investment securities available for sale
|
742,846
|
|
|
742,846
|
|
|
1,973
|
|
|
740,873
|
|
|
—
|
|
|||||
Investment securities held to maturity
|
35,814
|
|
|
36,874
|
|
|
—
|
|
|
36,874
|
|
|
—
|
|
|||||
Federal Home Loan Bank stock
|
12,188
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Loans held for sale
|
5,582
|
|
|
5,710
|
|
|
—
|
|
|
5,710
|
|
|
—
|
|
|||||
Loans receivable, net of allowance for loan losses
|
2,223,348
|
|
|
2,279,081
|
|
|
—
|
|
|
—
|
|
|
2,279,081
|
|
|||||
Accrued interest receivable
|
9,836
|
|
|
9,836
|
|
|
3
|
|
|
3,009
|
|
|
6,824
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest deposits, NOW accounts, money market accounts and savings accounts
|
$
|
2,380,934
|
|
|
$
|
2,380,934
|
|
|
$
|
2,380,934
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificate of deposit accounts
|
525,397
|
|
|
525,768
|
|
|
—
|
|
|
525,768
|
|
|
—
|
|
|||||
Total deposits
|
$
|
2,906,331
|
|
|
$
|
2,906,702
|
|
|
$
|
2,380,934
|
|
|
$
|
525,768
|
|
|
$
|
—
|
|
Securities sold under agreement to repurchase
|
$
|
32,181
|
|
|
$
|
32,181
|
|
|
$
|
32,181
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Junior subordinated debentures
|
19,082
|
|
|
19,082
|
|
|
—
|
|
|
—
|
|
|
19,082
|
|
|||||
Accrued interest payable
|
411
|
|
|
411
|
|
|
62
|
|
|
328
|
|
|
21
|
|
(15)
|
Business Combination
|
|
|
Washington Banking
|
||
|
|
(In thousands)
|
||
Consideration transferred
|
|
|
||
Cash paid (1)
|
|
$
|
42,895
|
|
Fair value of common shares issued (2)
|
|
224,151
|
|
|
Fair value of restricted stock unit awards (3)
|
|
2,092
|
|
|
Fair value of common stock options
|
|
481
|
|
|
Total consideration transferred
|
|
$
|
269,619
|
|
(1)
|
Includes
$3,000
of cash paid due to fractional shares and
$27,000
of cash paid from dissenters.
|
(2)
|
Total of
13,870,716
shares issued. Excludes
1,686
shares dissented and paid in cash and
165
fractional shares paid in cash.
|
(3)
|
Total number of converted shares was
129,462
. Fair value includes
26,783
shares which were forfeited by the Washington Banking stockholder to pay applicable taxes, totaling fair value of
$433,000
.
|
|
|
Washington Banking
|
||
|
|
(In thousands)
|
||
Assets
|
|
|
||
Cash and cash equivalents
|
|
$
|
74,947
|
|
Investment securities available for sale
|
|
458,312
|
|
|
Loans held for sale
|
|
3,923
|
|
|
Noncovered loans receivable
|
|
895,978
|
|
|
Covered loans receivable
|
|
107,050
|
|
|
FDIC indemnification asset
|
|
7,174
|
|
|
Other real estate owned ($5,122 covered by FDIC shared-loss agreements)
|
|
7,121
|
|
|
Premises and equipment
|
|
31,776
|
|
|
Federal Home Loan Bank stock
|
|
7,064
|
|
|
Bank owned life insurance
|
|
32,519
|
|
|
Accrued Interest Receivable
|
|
4,943
|
|
|
Other intangible assets
|
|
11,194
|
|
|
Prepaid expenses and other assets
|
|
14,852
|
|
|
Total assets acquired
|
|
1,656,853
|
|
|
Liabilities
|
|
|
||
Deposits
|
|
1,433,894
|
|
|
Junior subordinated debentures
|
|
18,937
|
|
|
Accrued expenses and other liabilities
|
|
24,067
|
|
|
Total liabilities assumed
|
|
1,476,898
|
|
|
Net assets acquired
|
|
$
|
179,955
|
|
|
|
Washington Banking
|
||
|
|
(In thousands)
|
||
Cost basis of net assets on merger date
|
|
$
|
181,782
|
|
Less: Consideration transferred
|
|
(269,619
|
)
|
|
Fair value adjustments:
|
|
|
||
Loans held for sale
|
|
86
|
|
|
Noncovered loans receivable
|
|
(12,811
|
)
|
|
Covered loans receivable
|
|
6,384
|
|
|
FDIC indemnification asset
|
|
357
|
|
|
Other real estate owned
|
|
387
|
|
|
Premises and equipment
|
|
(1,540
|
)
|
|
Other intangible assets
|
|
10,216
|
|
|
Prepaid expenses and other assets
|
|
(6,416
|
)
|
|
Deposits
|
|
(1,737
|
)
|
|
Junior subordinated debentures
|
|
6,837
|
|
|
Accrued expenses and other liabilities
|
|
(3,590
|
)
|
|
Goodwill recognized
|
|
$
|
(89,664
|
)
|
|
|
Three Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2014
|
||||
|
|
(Dollars In Thousands, except per share amounts)
|
||||||
Net interest income
|
|
$
|
34,699
|
|
|
$
|
70,997
|
|
Net income
|
|
$
|
5,161
|
|
|
$
|
16,453
|
|
Basic earnings per common share
|
|
$
|
0.17
|
|
|
$
|
0.55
|
|
Diluted earnings per common share
|
|
$
|
0.17
|
|
|
$
|
0.55
|
|
(16)
|
Subsequent Event
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate
(1)
|
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/ Rate (1) |
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
Interest Earning Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans, net
|
$
|
2,290,608
|
|
|
$
|
30,554
|
|
|
5.35
|
%
|
|
$
|
1,878,496
|
|
|
$
|
27,446
|
|
|
5.86
|
%
|
Taxable securities
|
555,549
|
|
|
2,328
|
|
|
1.68
|
|
|
343,571
|
|
|
1,812
|
|
|
2.11
|
|
||||
Nontaxable securities
|
198,837
|
|
|
1,048
|
|
|
2.11
|
|
|
131,230
|
|
|
638
|
|
|
1.95
|
|
||||
Other interest earning assets
|
60,297
|
|
|
60
|
|
|
0.40
|
|
|
170,087
|
|
|
127
|
|
|
0.30
|
|
||||
Total interest earning assets
|
3,105,291
|
|
|
33,990
|
|
|
4.39
|
%
|
|
2,523,384
|
|
|
30,023
|
|
|
4.77
|
%
|
||||
Noninterest earning assets
|
375,398
|
|
|
|
|
|
|
290,048
|
|
|
|
|
|
||||||||
Total assets
|
$
|
3,480,689
|
|
|
|
|
|
|
$
|
2,813,432
|
|
|
|
|
|
||||||
Interest Bearing Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit
|
$
|
471,922
|
|
|
$
|
611
|
|
|
0.52
|
%
|
|
$
|
520,269
|
|
|
$
|
777
|
|
|
0.60
|
%
|
Savings accounts
|
383,353
|
|
|
99
|
|
|
0.10
|
|
|
241,461
|
|
|
52
|
|
|
0.09
|
|
||||
Interest bearing demand and money market accounts
|
1,368,955
|
|
|
599
|
|
|
0.18
|
|
|
1,059,953
|
|
|
468
|
|
|
0.18
|
|
||||
Total interest bearing deposits
|
2,224,230
|
|
|
1,309
|
|
|
0.24
|
|
|
1,821,683
|
|
|
1,297
|
|
|
0.29
|
|
||||
FHLB advances and other borrowings
|
6,531
|
|
|
5
|
|
|
0.34
|
|
|
439
|
|
|
—
|
|
|
0.29
|
|
||||
Securities sold under agreement to repurchase
|
20,323
|
|
|
13
|
|
|
0.26
|
|
|
24,409
|
|
|
15
|
|
|
0.26
|
|
||||
Junior subordinated debentures
|
19,237
|
|
|
193
|
|
|
4.02
|
|
|
12,694
|
|
|
115
|
|
|
3.62
|
|
||||
Total interest bearing liabilities
|
2,270,321
|
|
|
1,520
|
|
|
0.27
|
%
|
|
1,859,225
|
|
|
1,427
|
|
|
0.31
|
%
|
||||
Demand and other noninterest bearing deposits
|
710,992
|
|
|
|
|
|
|
553,284
|
|
|
|
|
|
||||||||
Other noninterest bearing liabilities
|
36,873
|
|
|
|
|
|
|
30,259
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
462,503
|
|
|
|
|
|
|
370,664
|
|
|
|
|
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
3,480,689
|
|
|
|
|
|
|
$
|
2,813,432
|
|
|
|
|
|
||||||
Net interest income
|
|
|
$
|
32,470
|
|
|
|
|
|
|
$
|
28,596
|
|
|
|
||||||
Net interest spread
|
|
|
|
|
4.12
|
%
|
|
|
|
|
|
4.46
|
%
|
||||||||
Net interest margin
|
|
|
|
|
4.19
|
%
|
|
|
|
|
|
4.55
|
%
|
||||||||
Average interest earning assets to average interest bearing liabilities
|
|
|
|
|
136.78
|
%
|
|
|
|
|
|
135.72
|
%
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate
(1)
|
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/ Rate (1) |
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
Interest Earning Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans, net
|
$
|
2,265,276
|
|
|
$
|
61,035
|
|
|
5.43
|
%
|
|
$
|
1,543,815
|
|
|
$
|
43,897
|
|
|
5.73
|
%
|
Taxable securities
|
564,232
|
|
|
5,012
|
|
|
1.79
|
|
|
236,313
|
|
|
2,451
|
|
|
2.09
|
|
||||
Nontaxable securities
|
197,961
|
|
|
2,081
|
|
|
2.12
|
|
|
102,324
|
|
|
1,074
|
|
|
2.12
|
|
||||
Other interest earning assets
|
63,182
|
|
|
111
|
|
|
0.35
|
|
|
140,123
|
|
|
214
|
|
|
0.31
|
|
||||
Total interest earning assets
|
3,090,651
|
|
|
68,239
|
|
|
4.45
|
%
|
|
2,022,575
|
|
|
47,636
|
|
|
4.75
|
%
|
||||
Noninterest earning assets
|
369,790
|
|
|
|
|
|
|
213,794
|
|
|
|
|
|
||||||||
Total assets
|
$
|
3,460,441
|
|
|
|
|
|
|
$
|
2,236,369
|
|
|
|
|
|
||||||
Interest Bearing Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit
|
$
|
490,428
|
|
|
1,258
|
|
|
0.52
|
%
|
|
$
|
411,248
|
|
|
$
|
1,330
|
|
|
0.65
|
%
|
|
Savings accounts
|
374,156
|
|
|
198
|
|
|
0.11
|
|
|
209,284
|
|
|
92
|
|
|
0.09
|
|
||||
Interest bearing demand and money market accounts
|
1,345,972
|
|
|
1,170
|
|
|
0.18
|
|
|
817,057
|
|
|
729
|
|
|
0.18
|
|
||||
Total interest bearing deposits
|
2,210,556
|
|
|
2,626
|
|
|
0.24
|
|
|
1,437,589
|
|
|
2,151
|
|
|
0.30
|
|
||||
FHLB advances and other borrowings
|
3,418
|
|
|
6
|
|
|
0.33
|
|
|
221
|
|
|
324
|
|
|
0.30
|
|
||||
Securities sold under agreement to repurchase
|
24,251
|
|
|
31
|
|
|
0.26
|
|
|
26,020
|
|
|
33
|
|
|
0.26
|
|
||||
Junior subordinated debentures
|
19,192
|
|
|
432
|
|
|
4.54
|
|
|
6,382
|
|
|
115
|
|
|
3.62
|
|
||||
Total interest bearing liabilities
|
2,257,417
|
|
|
3,095
|
|
|
0.28
|
%
|
|
1,470,212
|
|
|
2,299
|
|
|
0.32
|
%
|
||||
Demand and other noninterest bearing deposits
|
703,686
|
|
|
|
|
|
|
449,134
|
|
|
|
|
|
||||||||
Other noninterest bearing liabilities
|
37,676
|
|
|
|
|
|
|
22,408
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
461,662
|
|
|
|
|
|
|
294,615
|
|
|
|
|
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
3,460,441
|
|
|
|
|
|
|
$
|
2,236,369
|
|
|
|
|
|
||||||
Net interest income
|
|
|
$
|
65,144
|
|
|
|
|
|
|
$
|
45,337
|
|
|
|
||||||
Net interest spread
|
|
|
|
|
4.17
|
%
|
|
|
|
|
|
4.43
|
%
|
||||||||
Net interest margin
|
|
|
|
|
4.25
|
%
|
|
|
|
|
|
4.52
|
%
|
||||||||
Average interest earning assets to average interest bearing liabilities
|
|
|
|
|
136.91
|
%
|
|
|
|
|
|
137.57
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Net interest margin, excluding incremental accretion on purchased loans
(1)
|
3.84
|
%
|
|
4.12
|
%
|
|
3.86
|
%
|
|
4.15
|
%
|
Impact on net interest margin from incremental accretion on purchased loans
(1)
|
0.35
|
|
|
0.43
|
|
|
0.39
|
|
|
0.37
|
|
Net interest margin
|
4.19
|
%
|
|
4.55
|
%
|
|
4.25
|
%
|
|
4.52
|
%
|
(1)
|
The incremental accretion income represents the amount of income recorded on the purchased loans above the contractual stated interest rate in the individual loan notes. This income results from the discount established at the time these loan portfolios were acquired and modified as a result of quarterly cash flow re-estimation.
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(Dollars in thousands)
|
||||||
General Valuation Allowance:
|
|
|
|
||||
Allowance for loan losses on noncovered loans
|
$
|
20,009
|
|
|
$
|
18,918
|
|
Gross noncovered loans, excluding impaired noncovered loans
|
2,214,300
|
|
|
2,099,658
|
|
||
Percentage
|
0.90
|
%
|
|
0.90
|
%
|
||
|
|
|
|
||||
Specific Valuation Allowance:
|
|
|
|
||||
Allowance for loan losses on noncovered loans
|
$
|
2,770
|
|
|
$
|
3,235
|
|
Gross impaired noncovered loans
|
25,257
|
|
|
26,156
|
|
||
Percentage
|
10.97
|
%
|
|
12.37
|
%
|
||
|
|
|
|
||||
Total Allowance for Loan Losses:
|
|
|
|
||||
Allowance for loan losses on noncovered loans
|
$
|
22,779
|
|
|
$
|
22,153
|
|
Gross noncovered loans
|
2,239,557
|
|
|
2,125,814
|
|
||
Percentage
|
1.02
|
%
|
|
1.04
|
%
|
|
Three Months Ended June 30,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
Percentage Change
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Service charges and other fees
|
$
|
3,687
|
|
|
$
|
2,777
|
|
|
$
|
910
|
|
|
32.8
|
%
|
Merchant Visa income, net
|
194
|
|
|
316
|
|
|
(122
|
)
|
|
(38.6
|
)
|
|||
Change in FDIC indemnification asset
|
(304
|
)
|
|
109
|
|
|
(413
|
)
|
|
(378.9
|
)
|
|||
Gain on sale of investment securities, net
|
425
|
|
|
87
|
|
|
338
|
|
|
388.5
|
|
|||
Gain on sale of loans, net
|
1,282
|
|
|
233
|
|
|
1,049
|
|
|
450.2
|
|
|||
Other income
|
1,597
|
|
|
1,258
|
|
|
339
|
|
|
26.9
|
|
|||
Total noninterest income
|
$
|
6,881
|
|
|
$
|
4,780
|
|
|
$
|
2,101
|
|
|
44.0
|
%
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
Percentage Change
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Service charges and other fees
|
$
|
6,982
|
|
|
$
|
4,175
|
|
|
$
|
2,807
|
|
|
67.2
|
%
|
Merchant Visa income, net
|
392
|
|
|
561
|
|
|
(169
|
)
|
|
(30.1
|
)
|
|||
Change in FDIC indemnification asset
|
(497
|
)
|
|
72
|
|
|
(569
|
)
|
|
(790.3
|
)
|
|||
Gain on sale of investment securities, net
|
969
|
|
|
267
|
|
|
702
|
|
|
262.9
|
|
|||
Gain on sale of loans, net
|
2,417
|
|
|
233
|
|
|
2,184
|
|
|
937.3
|
|
|||
Other income
|
4,963
|
|
|
1,779
|
|
|
3,184
|
|
|
179.0
|
|
|||
Total noninterest income
|
$
|
15,226
|
|
|
$
|
7,087
|
|
|
$
|
8,139
|
|
|
114.8
|
%
|
|
Three Months Ended
June 30, |
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
Percentage Change
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Compensation and employee benefits
|
$
|
13,842
|
|
|
$
|
12,779
|
|
|
$
|
1,063
|
|
|
8.3
|
%
|
Occupancy and equipment
|
3,850
|
|
|
2,816
|
|
|
1,034
|
|
|
36.7
|
|
|||
Data processing
|
1,925
|
|
|
4,003
|
|
|
(2,078
|
)
|
|
(51.9
|
)
|
|||
Marketing
|
1,063
|
|
|
496
|
|
|
567
|
|
|
114.3
|
|
|||
Professional services
|
904
|
|
|
3,230
|
|
|
(2,326
|
)
|
|
(72.0
|
)
|
|||
State and local taxes
|
569
|
|
|
554
|
|
|
15
|
|
|
2.7
|
|
|||
Impairment loss on investment securities, net
|
—
|
|
|
37
|
|
|
(37
|
)
|
|
(100.0
|
)
|
|||
Federal deposit insurance premium
|
523
|
|
|
460
|
|
|
63
|
|
|
13.7
|
|
|||
Other real estate owned, net
|
200
|
|
|
214
|
|
|
(14
|
)
|
|
(6.5
|
)
|
|||
Amortization of intangible assets
|
527
|
|
|
489
|
|
|
38
|
|
|
7.8
|
|
|||
Other expense
|
2,676
|
|
|
1,915
|
|
|
761
|
|
|
39.7
|
|
|||
Total noninterest expense
|
$
|
26,079
|
|
|
$
|
26,993
|
|
|
$
|
(914
|
)
|
|
(3.4
|
)%
|
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
Percentage Change
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Compensation and employee benefits
|
$
|
28,067
|
|
|
$
|
20,790
|
|
|
$
|
7,277
|
|
|
35.0
|
%
|
Occupancy and equipment
|
7,541
|
|
|
5,433
|
|
|
2,108
|
|
|
38.8
|
|
|||
Data processing
|
3,552
|
|
|
4,999
|
|
|
(1,447
|
)
|
|
(28.9
|
)
|
|||
Marketing
|
1,696
|
|
|
1,001
|
|
|
695
|
|
|
69.4
|
|
|||
Professional services
|
1,708
|
|
|
4,060
|
|
|
(2,352
|
)
|
|
(57.9
|
)
|
|||
State and local taxes
|
1,189
|
|
|
803
|
|
|
386
|
|
|
48.1
|
|
|||
Impairment loss on investment securities, net
|
—
|
|
|
45
|
|
|
(45
|
)
|
|
(100.0
|
)
|
|||
Federal deposit insurance premium
|
1,038
|
|
|
712
|
|
|
326
|
|
|
45.8
|
|
|||
Other real estate owned, net
|
859
|
|
|
266
|
|
|
593
|
|
|
222.9
|
|
|||
Amortization of intangible assets
|
1,054
|
|
|
645
|
|
|
409
|
|
|
63.4
|
|
|||
Other expense
|
5,413
|
|
|
3,018
|
|
|
2,395
|
|
|
79.4
|
|
|||
Total noninterest expense
|
$
|
52,117
|
|
|
$
|
41,772
|
|
|
$
|
10,345
|
|
|
24.8
|
%
|
|
June 30, 2015
|
|
December 31, 2014
|
|
Change between June 30, 2015 and
December 31, 2014
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
85,312
|
|
|
$
|
121,636
|
|
|
$
|
(36,324
|
)
|
Other interest earning deposits
|
5,110
|
|
|
10,126
|
|
|
(5,016
|
)
|
|||
Investment securities
|
732,709
|
|
|
778,660
|
|
|
(45,951
|
)
|
|||
Loans held for sale
|
6,939
|
|
|
5,582
|
|
|
1,357
|
|
|||
Noncovered loans receivable, net of allowance for loan losses
|
2,216,842
|
|
|
2,102,724
|
|
|
114,118
|
|
|||
Covered loans receivable, net of allowance for loan losses
|
102,182
|
|
|
120,624
|
|
|
(18,442
|
)
|
|||
FDIC indemnification asset
|
388
|
|
|
1,116
|
|
|
(728
|
)
|
|||
Other real estate owned
|
3,017
|
|
|
3,355
|
|
|
(338
|
)
|
|||
Premises and equipment, net
|
63,968
|
|
|
64,938
|
|
|
(970
|
)
|
|||
Federal Home Loan Bank stock, at cost
|
4,148
|
|
|
12,188
|
|
|
(8,040
|
)
|
|||
Bank owned life insurance
|
60,579
|
|
|
35,176
|
|
|
25,403
|
|
|||
Accrued interest receivable
|
9,883
|
|
|
9,836
|
|
|
47
|
|
|||
Prepaid expenses and other assets
|
60,383
|
|
|
61,871
|
|
|
(1,488
|
)
|
|||
Other intangible assets, net
|
9,835
|
|
|
10,889
|
|
|
(1,054
|
)
|
|||
Goodwill
|
119,029
|
|
|
119,029
|
|
|
—
|
|
|||
Total assets
|
$
|
3,480,324
|
|
|
$
|
3,457,750
|
|
|
$
|
22,574
|
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Deposits
|
$
|
2,946,487
|
|
|
$
|
2,906,331
|
|
|
$
|
40,156
|
|
Junior subordinated debentures
|
19,278
|
|
|
19,082
|
|
|
196
|
|
|||
Securities sold under agreement to repurchase
|
20,589
|
|
|
32,181
|
|
|
(11,592
|
)
|
|||
Accrued expenses and other liabilities
|
34,842
|
|
|
45,650
|
|
|
(10,808
|
)
|
|||
Total liabilities
|
3,021,196
|
|
|
3,003,244
|
|
|
17,952
|
|
|||
Stockholders' equity
|
|
|
|
|
|
||||||
Common stock
|
358,365
|
|
|
364,741
|
|
|
(6,376
|
)
|
|||
Retained earnings
|
98,565
|
|
|
86,387
|
|
|
12,178
|
|
|||
Accumulated other comprehensive income, net
|
2,198
|
|
|
3,378
|
|
|
(1,180
|
)
|
|||
Total stockholders' equity
|
459,128
|
|
|
454,506
|
|
|
4,622
|
|
|||
Total liabilities and stockholders' equity
|
$
|
3,480,324
|
|
|
$
|
3,457,750
|
|
|
$
|
22,574
|
|
|
June 30, 2015
|
|
% of Total
Noncovered
|
|
December 31, 2014
|
|
% of Total
Noncovered |
||||||
|
(Dollars in thousands)
|
||||||||||||
Noncovered loans receivable
|
|
|
|
|
|
|
|
||||||
Commercial business:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
$
|
551,989
|
|
|
24.6
|
%
|
|
$
|
551,343
|
|
|
26.0
|
%
|
Owner-occupied commercial real estate
|
565,721
|
|
|
25.3
|
|
|
535,742
|
|
|
25.2
|
|
||
Non-owner occupied commercial real estate
|
676,872
|
|
|
30.2
|
|
|
616,757
|
|
|
29.0
|
|
||
Total commercial business
|
1,794,582
|
|
|
80.1
|
|
|
1,703,842
|
|
|
80.2
|
|
||
One-to-four family residential
|
67,083
|
|
|
3.0
|
|
|
63,540
|
|
|
3.0
|
|
||
Real estate construction and land development:
|
|
|
|
|
|
|
|
||||||
One-to-four family residential
|
41,693
|
|
|
1.9
|
|
|
46,749
|
|
|
2.2
|
|
||
Five or more family residential and commercial properties
|
66,024
|
|
|
2.9
|
|
|
61,360
|
|
|
2.9
|
|
||
Total real estate construction and land development
|
107,717
|
|
|
4.8
|
|
|
108,109
|
|
|
5.1
|
|
||
Consumer
|
270,175
|
|
|
12.1
|
|
|
250,323
|
|
|
11.8
|
|
||
Gross noncovered loans
|
2,239,557
|
|
|
100.0
|
|
|
2,125,814
|
|
|
100.1
|
|
||
Net deferred loan fees
|
64
|
|
|
—
|
|
|
(937
|
)
|
|
(0.1
|
)
|
||
Noncovered loans receivable, net
|
2,239,621
|
|
|
100.0
|
%
|
|
2,124,877
|
|
|
100.0
|
%
|
||
Covered loans receivable
|
107,681
|
|
|
|
|
126,200
|
|
|
|
||||
Total loans receivable, net of net deferred loan fees
|
$
|
2,347,302
|
|
|
|
|
$
|
2,251,077
|
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(Dollars in thousands)
|
||||||
Nonaccrual noncovered loans:
|
|
||||||
Commercial business
|
$
|
4,490
|
|
|
$
|
4,719
|
|
Real estate construction and land development
|
2,489
|
|
|
2,652
|
|
||
Consumer
|
19
|
|
|
139
|
|
||
Total nonaccrual noncovered loans (1)(2)
|
6,998
|
|
|
7,510
|
|
||
Other real estate owned, noncovered
|
259
|
|
|
2,178
|
|
||
Total nonperforming noncovered assets
|
$
|
7,257
|
|
|
$
|
9,688
|
|
Performing TDR noncovered loans:
|
|
|
|
||||
Commercial business
|
$
|
16,511
|
|
|
$
|
14,408
|
|
One-to-four family residential
|
241
|
|
|
245
|
|
||
Real estate construction and land development
|
2,928
|
|
|
3,927
|
|
||
Consumer
|
103
|
|
|
184
|
|
||
Total performing TDR noncovered loans (3)
|
$
|
19,783
|
|
|
$
|
18,764
|
|
Accruing noncovered loans past due 90 days or more (4)
|
$
|
—
|
|
|
$
|
—
|
|
Noncovered potential problem loans (5)
|
86,152
|
|
|
117,250
|
|
||
Allowance for loan losses on noncovered loans
|
22,779
|
|
|
22,153
|
|
||
Allowance for loan losses on noncovered loans to total noncovered loans, net
|
1.02
|
%
|
|
1.04
|
%
|
||
Allowance for loan losses on noncovered loans to nonperforming noncovered loans
|
325.51
|
%
|
|
294.98
|
%
|
||
Nonperforming noncovered loans to total noncovered loans
|
0.31
|
%
|
|
0.35
|
%
|
||
Nonperforming noncovered assets to total noncovered assets
|
0.21
|
%
|
|
0.29
|
%
|
(1)
|
At
June 30, 2015
and
December 31, 2014
,
$4.3 million
and
$4.1 million
of nonperforming noncovered loans, respectively, were considered troubled debt restructurings.
|
(2)
|
At
June 30, 2015
and
December 31, 2014
,
$1.7 million
and
$1.6 million
of nonperforming noncovered loans, respectively, were guaranteed by government agencies.
|
(3)
|
At
June 30, 2015
and
December 31, 2014
,
$456,000
and
$751,000
of performing TDR noncovered loans, respectively, were guaranteed by government agencies.
|
(4)
|
There were
no
accruing noncovered loans past due 90 days or more that were guaranteed by government agencies at
June 30, 2015
or
December 31, 2014
.
|
(5)
|
At
June 30, 2015
and
December 31, 2014
,
$501,000
and
$2.0 million
of noncovered potential problem loans, respectively, were guaranteed by government agencies.
|
•
|
Effects of changes in risk selection and underwriting standards, and other changes in lending policies, procedures and practices;
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Noncovered loans receivable, net at the end of the period
|
$
|
2,239,621
|
|
|
$
|
2,069,532
|
|
|
$
|
2,239,621
|
|
|
$
|
2,069,532
|
|
Average noncovered loans receivable during the period
|
$
|
2,183,539
|
|
|
$
|
1,774,269
|
|
|
$
|
2,153,688
|
|
|
$
|
1,455,134
|
|
Allowance for loan losses on noncovered loans at the beginning of the period
|
$
|
22,317
|
|
|
$
|
22,820
|
|
|
$
|
22,153
|
|
|
$
|
22,657
|
|
Provision for loan losses on noncovered loans
|
1,189
|
|
|
370
|
|
|
2,474
|
|
|
349
|
|
||||
Charge-offs:
|
|
|
|
|
|
|
|
||||||||
Commercial business
|
(662
|
)
|
|
(628
|
)
|
|
(1,510
|
)
|
|
(628
|
)
|
||||
Real estate construction and land development
|
—
|
|
|
(345
|
)
|
|
(106
|
)
|
|
(345
|
)
|
||||
Consumer
|
(448
|
)
|
|
(179
|
)
|
|
(929
|
)
|
|
(242
|
)
|
||||
Total charge-offs
|
(1,110
|
)
|
|
(1,152
|
)
|
|
(2,545
|
)
|
|
(1,215
|
)
|
||||
Recoveries:
|
|
|
|
|
|
|
|
||||||||
Commercial business
|
187
|
|
|
269
|
|
|
388
|
|
|
501
|
|
||||
One-to-four family residential
|
—
|
|
|
—
|
|
|
1
|
|
|
|
|||||
Real estate construction and land development
|
100
|
|
|
43
|
|
|
100
|
|
|
43
|
|
||||
Consumer
|
96
|
|
|
19
|
|
|
208
|
|
|
34
|
|
||||
Total recoveries
|
383
|
|
|
331
|
|
|
697
|
|
|
578
|
|
||||
Net (charge-offs) recoveries
|
(727
|
)
|
|
(821
|
)
|
|
(1,848
|
)
|
|
(637
|
)
|
||||
Allowance for loan losses on noncovered loans at end of period
|
$
|
22,779
|
|
|
$
|
22,369
|
|
|
$
|
22,779
|
|
|
$
|
22,369
|
|
Allowance for loan losses on noncovered loans to total noncovered loans receivable, net
|
1.02
|
%
|
|
1.08
|
%
|
|
1.02
|
%
|
|
1.08
|
%
|
||||
Ratio of net charge-offs (recoveries) during period to average noncovered loans receivable (annualized)
|
0.13
|
%
|
|
0.19
|
%
|
|
0.17
|
%
|
|
0.18
|
%
|
|
June 30, 2015
|
|
% of Total
|
|
December 31, 2014
|
|
% of Total
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Non-interest bearing demand deposits
|
$
|
728,260
|
|
|
24.7
|
%
|
|
$
|
709,673
|
|
|
24.4
|
%
|
NOW accounts
|
840,251
|
|
|
28.5
|
|
|
793,362
|
|
|
27.3
|
|
||
Money market accounts
|
513,117
|
|
|
17.4
|
|
|
520,065
|
|
|
17.9
|
|
||
Savings accounts
|
403,648
|
|
|
13.7
|
|
|
357,834
|
|
|
12.3
|
|
||
Total non-maturity deposits
|
2,485,276
|
|
|
84.3
|
|
|
2,380,934
|
|
|
81.9
|
|
||
Certificates of deposit
|
461,211
|
|
|
15.7
|
|
|
525,397
|
|
|
18.1
|
|
||
Total deposits
|
$
|
2,946,487
|
|
|
100.0
|
%
|
|
$
|
2,906,331
|
|
|
100.0
|
%
|
|
|
Minimum Requirements
|
|
Well-Capitalized Requirements
|
|
Actual
|
|||||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||
|
|
(Dollars in thousands)
|
|||||||||||||||||
As of June 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
The Company consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common equity Tier 1 capital to risk-weighted assets
|
|
$
|
122,192
|
|
|
4.5
|
%
|
|
N/A
|
|
|
N/A
|
|
$
|
335,394
|
|
|
12.4
|
%
|
Tier 1 leverage capital to average assets
|
|
134,006
|
|
|
4.0
|
|
|
N/A
|
|
|
N/A
|
|
354,672
|
|
|
10.6
|
|
||
Tier 1 capital to risk-weighted assets
|
|
162,923
|
|
|
6.0
|
|
|
N/A
|
|
|
N/A
|
|
354,672
|
|
|
13.1
|
|
||
Total capital to risk-weighted assets
|
|
217,231
|
|
|
8.0
|
|
|
N/A
|
|
|
N/A
|
|
383,136
|
|
|
14.1
|
|
||
Heritage Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common equity Tier 1 capital to risk-weighted assets
|
|
122,135
|
|
|
4.5
|
|
|
176,417
|
|
|
6.5
|
|
348,109
|
|
|
12.8
|
|
||
Tier 1 leverage capital to average assets
|
|
133,938
|
|
|
4.0
|
|
|
167,423
|
|
|
5.0
|
|
348,109
|
|
|
10.4
|
|
||
Tier 1 capital to risk-weighted assets
|
|
162,846
|
|
|
6.0
|
|
|
217,128
|
|
|
8.0
|
|
348,109
|
|
|
12.8
|
|
||
Total capital to risk-weighted assets
|
|
217,128
|
|
|
8.0
|
|
|
271,410
|
|
|
10.0
|
|
376,557
|
|
|
13.9
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
The Company consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Tier 1 leverage capital to average assets
|
|
$
|
132,881
|
|
|
4.0
|
%
|
|
N/A
|
|
|
N/A
|
|
$
|
340,292
|
|
|
10.2
|
%
|
Tier 1 capital to risk-weighted assets
|
|
97,620
|
|
|
4.0
|
|
|
N/A
|
|
|
N/A
|
|
340,292
|
|
|
13.9
|
|
||
Total capital to risk-weighted assets
|
|
195,240
|
|
|
8.0
|
|
|
N/A
|
|
|
N/A
|
|
368,198
|
|
|
15.1
|
|
||
Heritage Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Tier 1 leverage capital to average assets
|
|
132,853
|
|
|
4.0
|
|
|
166,066
|
|
|
5.0
|
|
332,147
|
|
|
10.0
|
|
||
Tier 1 capital to risk-weighted assets
|
|
97,585
|
|
|
4.0
|
|
|
146,378
|
|
|
6.0
|
|
332,147
|
|
|
13.6
|
|
||
Total capital to risk-weighted assets
|
|
195,171
|
|
|
8.0
|
|
|
243,964
|
|
|
10.0
|
|
360,053
|
|
|
14.8
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Plan Total (1)
|
||||||||||
Tenth Plan
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchased shares
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
704,975
|
|
||||||
Stock repurchase average share price
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
15.85
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||
Eleventh Plan
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchased shares
|
304,600
|
|
|
—
|
|
|
441,966
|
|
|
—
|
|
|
441,966
|
|
|||||
Stock repurchase average share price
|
$
|
16.88
|
|
|
$
|
—
|
|
|
$
|
16.64
|
|
|
$
|
—
|
|
|
$
|
16.64
|
|
Period
|
|
Total Number
of Shares
Purchased(1)
|
|
Average Price
Paid Per
Share(1)
|
|
Total Number of Shares Purchased as
Part of Publicly
Announced Plans or Programs
|
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs
|
|||||
April 1, 2015— April 30, 2015
|
|
14,114
|
|
|
$
|
17.12
|
|
|
7,464,789
|
|
|
1,361,634
|
|
May 1, 2015— May 31, 2015
|
|
290,600
|
|
|
16.87
|
|
|
7,755,389
|
|
|
1,071,034
|
|
|
June 1, 2015—June 30, 2015
|
|
11,573
|
|
|
17.69
|
|
7,755,389
|
|
|
1,073,034
|
|
||
Total
|
|
316,287
|
|
|
$
|
16.91
|
|
|
7,755,389
|
|
|
1,073,034
|
|
(1)
|
Common shares repurchased by the Company between April 1, 2015 and June 30, 2015 included the cancellation of
11,687
shares of restricted stock to pay withholding taxes at an average price per share of
$17.37
.
|
Exhibit No.
|
|
Description of Exhibit
|
|
2.1
|
|
|
Purchase and Assumption Agreement for Cowlitz Acquisition (1)
|
|
|
|
|
2.2
|
|
|
Purchase and Assumption Agreement for Pierce Acquisition (2)
|
|
|
|
|
2.3
|
|
|
Definitive Agreement for Valley Acquisition (3)
|
|
|
|
|
2.4
|
|
|
Agreement and Plan of Merger with Washington Banking Company (4)
|
|
|
|
|
3.1
|
|
|
Articles of Incorporation (5)
|
|
|
|
|
3.2
|
|
|
Amended and Restated Bylaws of the Company (6)
|
|
|
|
|
10.1
|
|
|
1998 Stock Option and Restricted Stock Award Plan (7)
|
|
|
|
|
10.2
|
|
|
1997 Stock Option and Restricted Stock Award Plan (8)
|
|
|
|
|
10.3
|
|
|
2002 Incentive Stock Option Plan, Director Nonqualified Stock Option Plan, and Restricted Stock Option Plan (9)
|
|
|
|
|
10.4
|
|
|
2006 Incentive Stock Option Plan, Director Nonqualified Stock Option Plan, and Restricted Stock Option Plan (10)
|
|
|
|
|
10.5
|
|
|
Annual Incentive Compensation Plan (11)
|
|
|
|
|
10.6
|
|
|
2010 Omnibus Equity Plan (12)
|
|
|
|
|
10.7
|
|
|
2014 Omnibus Equity Plan (13)
|
|
|
|
|
10.8
|
|
|
Form of Nonqualified Stock Option Award Agreement under the Heritage Financial Corporation 2014 Omnibus Equity Plan (14)
|
|
|
|
|
10.9
|
|
|
Form of Restricted Stock Award Agreement under the Heritage Financial Corporation 2014 Omnibus Equity Plan (14)
|
|
|
|
|
10.10
|
|
|
Form of Restricted Stock Unit Award Agreement under the Heritage Financial Corporation 2014 Omnibus Equity Plan (14)
|
|
|
|
|
10.11
|
|
|
Deferred Compensation Plan and Participation Agreements by and between Heritage and each of Brian L. Vance, Jeffrey J. Deuel and Donald J. Hinson (15)
|
|
|
|
10.12
|
|
|
Employment Agreements by and between Heritage and each of Brian L. Vance, Jeffrey J. Deuel and Donald J. Hinson (15)
|
|
|
|
|
10.13
|
|
|
Employment Agreement and Deferred Compensation Participation Agreement by and between Heritage and David A. Spurling (16)
|
|
|
|
|
10.14
|
|
|
Employment Agreement by and between Heritage and Bryan McDonald (17)
|
|
|
|
|
10.15
|
|
|
Employment Agreements by and between Heritage and Edward Eng (17)
|
|
|
|
|
10.16
|
|
|
Deferred Compensation Plan and Participation Agreement by and between Heritage and Bryan D. McDonald (18)
|
|
|
|
|
10.17
|
|
|
Form of Split Dollar Agreements, dated August 3, 2015, by and between Heritage and Brian L. Vance, Jeffrey J. Deuel, Donald J. Hinson, Bryan D. McDonald and David A. Spurling
|
|
|
|
|
11
|
|
|
Statement regarding computation of earnings per share (19)
|
|
|
|
|
14.0
|
|
|
Code of Ethics and Conduct Policy (20)
|
|
|
|
|
31.1
|
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
31.2
|
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
32.1
|
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101
|
|
|
The following materials from Heritage Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in Extensible Business Reporting Language (“XBRL”): (i) Unaudited Condensed Consolidated Statements of Financial Condition, (ii) Unaudited Condensed Consolidated Statements of Income; (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income, (iv) Unaudited Condensed Consolidated Statements of Stockholders' Equity; (v) Unaudited Condensed Consolidated Statements of Cash Flows, and (vi) Unaudited Notes to Condensed Consolidated Financial Statements (21)
|
(1)
|
Incorporated by reference to the Current Report on Form 8-K dated July 30, 2010.
|
(2)
|
Incorporated by reference to the Current Report on Form 8-K dated November 5, 2010.
|
(3)
|
Incorporated by reference to the Current Report on Form 8-K dated March 11, 2013.
|
(4)
|
Incorporated by reference to the Current Report on Form 8-K dated October 23, 2013.
|
(5)
|
Incorporated by reference to the Registration Statement on Form S-1 (Reg. No. 333-35573) declared effective on November 12, 1997; as amended, said Amendment being incorporated by reference to the Amendment to the Articles of Incorporation of Heritage Financial Corporation filed with the Current Report on Form 8-K dated November 25, 2008.
|
(6)
|
Incorporated by reference to the Current Report on Form 8-K dated April 30, 2014.
|
(7)
|
Incorporated by reference to the Registration Statement on Form S-8 (Reg. No. 333-71415).
|
(8)
|
Incorporated by reference to the Registration Statement on Form S-8 (Reg. No. 333-57513).
|
(9)
|
Incorporated by reference to the Registration Statements on Form S-8 (Reg. No. 333-88980; 333-88982; 333-88976).
|
(10)
|
Incorporated by reference to the Registration Statements on Form S-8 (Reg. No. 333-134473; 333-134474; 333-134475).
|
(11)
|
Incorporated by reference to the Annual Report on Form 10-K dated March 2, 2010.
|
(12)
|
Incorporated by reference to the Registration Statement on Form S-8 (Reg. No. 33-167146).
|
(13)
|
Incorporated by reference to Heritage Financial Corporation's definitive proxy statement dated June 11, 2014.
|
(14)
|
Incorporated by reference to the Current Report on Form 10-Q dated August 6, 2014.
|
(15)
|
Incorporated by reference to the Current Report on Form 8-K dated September 7, 2012.
|
(16)
|
Incorporated by reference to the Current Report on Form 8-K dated January 6, 2014.
|
(17)
|
Incorporated by reference to the Registration Statement on Form S-4 (Reg. No. 333-192985).
|
(18)
|
Incorporated by reference to the Annual Report on Form 10-K dated March 10, 2015.
|
(19)
|
Reference is made to Note 10—Stockholders' Equity in the Notes to Condensed Consolidated Financial Statements under Part 1. Item 1. herein.
|
(20)
|
Registrant elects to satisfy Regulation S-K §229.406(c) by posting its Code of Ethics on its website at
www.HF-WA.com
in the section titled Investor Information: Corporate Governance.
|
(21)
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under those sections.
|
|
|
HERITAGE FINANCIAL CORPORATION
|
|
|
|
Date:
|
|
|
August 6, 2015
|
|
/S/ BRIAN L. VANCE
|
|
|
Brian L. Vance
|
|
|
President and Chief Executive Officer
|
|
|
(Duly Authorized Officer)
|
|
|
|
Date:
|
|
|
August 6, 2015
|
|
/S/ DONALD J. HINSON
|
|
|
Donald J. Hinson
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
10.17
|
|
Form of Split Dollar Agreements, dated August 3, 2015, by and between Heritage and Brian L. Vance, Jeffrey J. Deuel, Donald J. Hinson, Bryan D. McDonald and David A. Spurling
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101
|
|
The following financial information from Heritage Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 is formatted in XBRL: (i) the Unaudited Condensed Consolidated Statements of Financial Condition, (ii) the Unaudited Condensed Consolidated Statements of Income, (iii) the Unaudited Condensed Consolidated Statements Comprehensive Income, (iv) the Unaudited Condensed Consolidated Statements of Stockholders’ Equity, (v) the Unaudited Condensed Consolidated Statements of Cash Flows, and (vi) the Unaudited Notes to Condensed Consolidated Financial Statements.
|
Insurer/Policy:
|
|
|
|
|
|
|
|
|
Employer/Bank:
|
|
HERITAGE BANK
|
|
|
|
Insured:
|
|
|
|
|
|
Relationship of Insured to Bank:
|
|
Executive
|
|
|
|
Effective Date:
|
|
______, 2015
|
1.
|
DEFINITIONS
.
|
A.
|
Accelerated Benefit. The term “Accelerated Benefit” shall mean amounts requested and received pursuant to any Policy(ies) rider permitting the policyowner or Insured access to portions of the eligible death benefit in the event the Insured is diagnosed with a chronic or terminal illness as required by the individual Policy(ies).
|
B.
|
Beneficiary. The term “Beneficiary” shall mean that person or those persons, trusts, estates or other entities, designated in accordance with the terms of Paragraph 3 below that are entitled to receive benefits under this Agreement upon the death of Insured.
|
C.
|
Beneficiary Designation Form. The “Beneficiary Designation Form” means the form established from time to time by the Bank and the Administrator, which an Insured completes, signs and returns in order to designate one or more Beneficiaries.
|
D.
|
Board. The term “Board” shall mean the Board of Directors of the Bank.
|
E.
|
Claimant. The term “Claimant” shall have the meaning assigned to an individual who makes a claim pursuant to the provisions of Paragraph 11 below.
|
F.
|
Code. The “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
|
G.
|
ERISA. The term "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.
|
H.
|
Final Base Salary. The term “Final Base Salary" shall mean the Insured’s annual rate of salary on the date of death, including salary Insured could have received in cash in lieu of (i) contributions made on Insured's behalf to a qualified plan maintained by the Bank or to any cafeteria plan under Section 125 of the Code maintained by the Bank and (ii) deferrals of compensation made at the Insured's election pursuant to a plan or arrangement of the Bank or an affiliate, but excluding any bonuses, incentive pay or special awards.
|
I.
|
Insurer. The term “Insurer” shall mean each life insurance carrier that has issued a Policy that has been made part of and is subject to this Agreement.
|
J.
|
NEO. The term “NEO” shall mean each named executive officer set forth in Heritage Financial Corporation’s annual proxy statement for the applicable year.
|
K.
|
Net Amount-at-Risk. The term “Net Amount-at-Risk” (hereinafter “NAR”) shall be defined as the total proceeds of the Policy(ies) less the cash value of the Policy(ies).
|
L.
|
Plan. The term “Plan” refers to this arrangement, as evidenced by this Agreement, whereby Insured (or Insured’s Beneficiary) is entitled to receive a benefit.
|
M.
|
Policy(ies). The term “Policy(ies)” shall mean that life insurance policy or those policies referenced above and have been made part of, and are subject to, this Agreement.
|
N.
|
Separation From Service. The term “Separation from Service” (or “Separates From Service”) shall be read and interpreted so as to be consistent with Code Section 409A and any future notices or guidance related thereto. Furthermore, in the event Insured serves as both an Executive and Director, then whether a Separation From Service has occurred shall be determined in accordance with the Code Section 409A specifications regarding “dual status” participants.
|
2.
|
POLICY(IES) TITLE AND OWNERSHIP
.
|
3.
|
BENEFICIARY DESIGNATION RIGHTS
.
|
4.
|
PREMIUM PAYMENT METHOD
.
|
5.
|
TAXABLE BENEFIT/REPORTING REQUIREMENTS
.
|
6.
|
DIVISION OF DEATH PROCEEDS
.
|
A.
|
In the event Insured has not yet Separated From Service at the time of death, then, upon the death of Insured, Insured’s Beneficiary(ies) shall be entitled to receive an amount equal to the lesser of one hundred percent (100%) NAR or one (1) times the Final Base Salary.
|
B.
|
Should the Insured Separate From Service for any reason other than death (the circumstances of which are governed by Paragraph 6A, then neither the Insured nor the Insured’s Beneficiary(ies) shall be entitled to receive any amount of the Policy(ies) proceeds pursuant to this Agreement.
|
C.
|
The Bank may select which Policy(ies) shall be used to pay benefits due under this Agreement.
|
D.
|
The Bank shall be entitled to the proceeds of any Policy(ies) payable after payment to the Insured’s Beneficiary(ies) under Paragraph 6A.
|
E.
|
The Bank and the Insured (or assignees) shall share in any interest due on the death proceeds on a pro rata basis as the proceeds due each respectively bears to the total proceeds, excluding any such interest.
|
F.
|
Any refund of unearned premium as provided in any Policy(ies) shall be paid to the Bank.
|
7.
|
ACCELERATED BENEFIT IN THE EVENT OF TERMINAL OR CHRONIC ILLNESS (AS APPLICABLE) AND DIVISION OF CASH SURRENDER VALUE OF THE POLICY(IES)
.
|
8.
|
TERMINATION OF AGREEMENT
.
|
9.
|
INSURED’S OR ASSIGNEE’S ASSIGNMENT RIGHTS
.
|
10.
|
AGREEMENT BINDING UPON THE PARTIES
.
|
11.
|
ADMINISTRATIVE AND CLAIMS PROVISIONS
.
|
A.
|
Named Fiduciary and Plan Administrator
.
|
B.
|
Powers and Duties of Administrator.
|
(i)
|
Construe and interpret the provisions of this Agreement;
|
(ii)
|
Adopt, amend or revoke rules and regulations for the administration of this Agreement, provided they are not inconsistent with the provisions of this Agreement;
|
(iii)
|
Provide appropriate parties with such returns, reports, descriptions and statements as may be required by law, within the times prescribed by law and to make them available to the Insured (or the Insured’s Beneficiary) when required by law;
|
(iv)
|
Take such other action as may be reasonably required to administer this Agreement in accordance with its terms or as may be required by law;
|
(v)
|
Withhold applicable taxes and file with the Internal Revenue Service appropriate information returns with respect to any payments and/or benefits provided hereunder;
|
(vi)
|
Appoint and retain such persons as may be necessary to carry out its duties as administrator.
|
C.
|
Dispute Over Benefits
.
|
(i)
|
Written Claim
. Claimant may file a written request for such benefit to the Administrator.
|
(ii)
|
Claim Decision
. Upon receipt of such claim, the Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional ninety (90) days for reasonable cause by notifying Claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.
|
(a)
|
The specific reasons for the denial;
|
(b)
|
The specific reference to pertinent provisions of the Agreement on which the denial is based;
|
(c)
|
A description of any additional information or material necessary for Claimant to perfect the claim and an explanation of why such material or information is necessary;
|
(d)
|
Appropriate information as to the steps to be taken if Claimant wishes to submit the claim for review and the time limits applicable to such procedures; and
|
(e)
|
A statement of Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.
|
(iii)
|
Request for Review
. Within sixty (60) days after receiving notice from the Administrator that a claim has been denied (in part or all of the claim), then Claimant (or their duly authorized representative) may file with the Administrator, a written request for a review of the denial of the claim.
|
(iv)
|
Decision on Review.
The Administrator shall respond in writing to Claimant within sixty (60) days after receiving the request for review. If the Administrator determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to Claimant prior to the termination of the initial sixty (60) day period. In no event shall such extension exceed a period of sixty (60) days from the end of the initial period. The notice of extension must set forth the special circumstances requiring an extension of time and the date by which the Administrator expects to render its decision.
|
(a)
|
The specific reasons for the denial;
|
(b)
|
A reference to the specific provisions of the Agreement on which the denial is based;
|
(c)
|
A statement that Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to Claimant’s claim for benefits; and
|
(d)
|
A statement of Claimant’s right to bring a civil action under ERISA Section 502(a).
|
(v)
|
Special Timing and Rules for Disability Claims.
In the event a claim above is a claim for disability benefits, then the applicable time periods for notifying Claimant regarding benefit determinations shall be reduced as required by 29 CFR 2560.503-1. Thus, the Administrator shall provide notice to Claimant, within a reasonable period of time, but not later than forty five (45) days after receipt of the claim. This period may be extended by up to thirty (30) days, provided that the Administrator both determines that such an extension is necessary due to matters beyond the control of the plan and notifies Claimant, prior to the expiration of the initial forty five (45) day period, of the circumstances requiring the extension of time and the date by which the plan expects to render a decision. If, prior to the end of the first thirty (30) day extension period, the Administrator determines that, due to matters beyond the control of the plan, a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to an additional thirty (30) days, provided that the Administrator notifies Claimant, prior to the expiration of the first thirty (30) day extension period, of the circumstances requiring the extension and the date as of which the plan expects to render a decision. In the case of any extension under this paragraph, the notice of extension shall specifically explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and Claimant shall be afforded at least forty five (45) days within which to provide the specified information. In addition to complying with such timing rules, a claim under this paragraph shall comply with all procedural requirements under ERISA.
|
12.
|
GENDER
.
|
13.
|
INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT
.
|
14.
|
SEVERABILITY AND INTERPRETATION
.
|
15.
|
APPLICABLE LAW
.
|
16.
|
EFFECT OF THE LIFE INSURANCE POLICY’S CONTESTABILITY CLAUSES
.
|
17.
|
OTHER AGREEMENTS.
|
18.
|
WITHHOLDING.
|
19.
|
COUNTERPARTS.
|
20.
|
ASSIGNMENT OF RIGHTS.
|
21.
|
NOTICE.
|
22.
|
AMENDMENT
.
|
I.
|
PRIMARY DESIGNATION
|
1.
|
I have reviewed the quarterly report on Form 10-Q of Heritage Financial Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Brian L. Vance
|
Brian L. Vance
|
President and Chief Executive Officer
Principal Executive Officer
|
1.
|
I have reviewed the quarterly report on Form 10-Q of Heritage Financial Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Donald J. Hinson
|
Donald J. Hinson
|
Executive Vice President and Chief Financial Officer
Principal Financial and Accounting Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report.
|
August 6, 2015
|
/s/ Brian L. Vance
|
|
Brian L. Vance
|
|
President and Chief Executive Officer
Principal Executive Officer
|
|
|
August 6, 2015
|
/s/ Donald J. Hinson
|
|
Donald J. Hinson
|
|
Executive Vice President and Chief Financial Officer
Principal Financial and Accounting Officer
|