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FORM 10-K
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number 001-35968
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Iowa
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42-1206172
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification Number)
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Title of each Class
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Name of each exchange on which registered
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Common Stock, $1.00 par value
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The Nasdaq Stock Market LLC
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Large accelerated filer
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¨
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Accelerated filer
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☒
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Non-accelerated filer
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¨
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page No.
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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ITEM 1.
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BUSINESS.
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•
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A ratio of minimum Common Equity Tier 1 Capital equal to 4.5% of risk-weighted assets;
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•
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An increase in the minimum required amount of Tier 1 Capital from 4% to 6% of risk-weighted assets;
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•
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A continuation of the minimum required amount of Total Capital (Tier 1 plus Tier 2) at 8% of risk-weighted assets; and
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•
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A minimum leverage ratio of Tier 1 Capital to total quarterly average assets equal to 4% in all circumstances.
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•
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A Common Equity Tier 1 Capital ratio to risk-weighted assets of 6.5% or more;
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•
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A ratio of Tier 1 Capital to total risk-weighted assets of 8% or more (6% under Basel I);
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•
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A ratio of Total Capital to total risk-weighted assets of 10% or more (the same as Basel I); and
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•
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A leverage ratio of Tier 1 Capital to total adjusted average quarterly assets of 5% or greater.
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•
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credit quality deterioration or pronounced and sustained reduction in real estate market values could cause an increase in our allowance for loan losses and a reduction in net earnings;
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•
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the risks of mergers, including with ATBancorp, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions;
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•
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our management’s ability to reduce and effectively manage interest rate risk and the impact of interest rates in general on the volatility of our net interest income;
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•
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changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing;
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•
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fluctuations in the value of our investment securities;
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•
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governmental monetary and fiscal policies;
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•
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legislative and regulatory changes, including changes in banking, securities, trade and tax laws and regulations and their application by our regulators;
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•
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the ability to attract and retain key executives and employees experienced in banking and financial services;
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•
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the sufficiency of the allowance for loan losses to absorb the amount of actual losses inherent in our existing loan portfolio;
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•
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our ability to adapt successfully to technological changes to compete effectively in the marketplace;
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•
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credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio;
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•
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the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds, and other financial institutions operating in our markets or elsewhere or providing similar services;
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•
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the failure of assumptions underlying the establishment of allowances for loan losses and estimation of values of collateral and various financial assets and liabilities;
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•
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volatility of rate-sensitive deposits;
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•
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operational risks, including data processing system failures or fraud;
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•
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asset/liability matching risks and liquidity risks;
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•
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the costs, effects and outcomes of existing or future litigation;
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•
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changes in general economic or industry conditions, nationally, internationally, or in the communities in which we conduct business;
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•
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changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the FASB;
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•
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war or terrorist activities which may cause deterioration in the economy or cause instability in credit markets;
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•
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the effects of cyber-attacks;
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•
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the imposition of tariffs or other domestic or international government policies impacting the value of agricultural or other products of our borrowers; and
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•
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other factors and risks described under “Risk Factors” herein.
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ITEM 1A.
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RISK FACTORS.
|
•
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the company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;
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•
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the prospective rate of earnings retention is inconsistent with the company’s capital needs and overall current and prospective financial condition; or
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•
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the company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
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•
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integrate the operations of ATBancorp and the Company, including successfully integrating and combining the technology, financial, credit, security and legal reporting systems and controls of the Company and ATBancorp;
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•
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maintain existing relationships with depositors so as to minimize withdrawals of deposits after the merger;
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•
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maintain and enhance existing relationships with borrowers so as to limit unanticipated losses from loans of ATBancorp’s banking subsidiaries and the Bank;
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•
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maintain existing relationships of key employees of ATBancorp;
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•
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control the incremental non-interest expense so as to maintain overall operating efficiencies; and
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•
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compete effectively in the communities served by ATBancorp and the Company.
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•
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We may incur time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions, resulting in our attention being diverted from the operation of our existing business.
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•
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We are exposed to potential asset and credit quality risks and unknown or contingent liabilities of the banks or businesses we acquire. If these issues or liabilities exceed our estimates, our earnings, capital and financial condition may be materially and adversely affected.
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•
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The acquisition of other entities generally requires integration of systems, procedures and personnel of the acquired entity. This integration process is complicated and time consuming and can also be disruptive to the customers and employees of the acquired business and our business. If the integration process is not conducted successfully, we may not realize the anticipated economic benefits of acquisitions within the expected time frame, or ever, and we may lose customers or employees of the acquired business. We may also experience greater than anticipated customer losses even if the integration process is successful.
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•
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To finance an acquisition, we may borrow funds or pursue other forms of financing, such as issuing voting and/or non-voting common stock or convertible preferred stock, which may have high dividend rights or may be highly dilutive to holders of our common stock, thereby increasing our leverage and diminishing our liquidity, or issuing capital stock, which could dilute the interests of our existing shareholders.
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•
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We may be unsuccessful in realizing the anticipated benefits from acquisitions. For example, we may not be successful in realizing anticipated cost savings. We also may not be successful in preventing disruptions in service to existing customer relationships of the acquired institution, which could lead to a loss in revenues.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS.
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ITEM 2.
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PROPERTIES.
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Facility Address
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Facility
Square
Footage
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Owned or
Leased
|
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Iowa Offices
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802 13th Street in Belle Plaine
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5,013
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Owned
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3225 Division Street in Burlington
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10,550
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Owned
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4510 Prairie Parkway in Cedar Falls
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14,500
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Owned
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120 West Center Street in Conrad
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8,382
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Owned
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110 First Avenue in Coralville
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5,000
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Owned
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58 East Burlington Avenue in Fairfield
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5,896
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Owned
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2408 West Burlington Avenue in Fairfield
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3,520
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Owned
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926 Avenue G in Fort Madison
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3,548
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Owned
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102 South Clinton Street in Iowa City (1)
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58,440
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Owned
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500 South Clinton Street in Iowa City (2)
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44,427
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Owned
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1906 Keokuk Street in Iowa City
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6,333
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Owned
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2233 Rochester Avenue in Iowa City
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3,916
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Owned
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202 Main Street in Melbourne
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2,800
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Owned
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10030 Highway 149 in North English
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2,080
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Owned
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465 Highway 965 NE, Suite A in North Liberty
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3,245
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Leased
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124 South First Street in Oskaloosa
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7,160
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Owned
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222 First Avenue East in Oskaloosa
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6,692
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Owned
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1001 Highway 57 in Parkersburg
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7,420
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Owned
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700 Main Street, Suite 100 in Pella
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6,817
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Leased
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500 Oskaloosa Street in Pella
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1,960
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Owned
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112 North Main Street in Sigourney
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4,440
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Owned
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3110 Kimball Avenue in Waterloo
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3,364
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Leased
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305 West Rainbow Drive in West Liberty
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4,791
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Owned
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Minnesota Offices
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7111 21st Avenue N. in Centerville
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3,167
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Owned
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7031 20th Avenue S. in Centerville (3)
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2,400
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Leased
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11151 Lake Boulevard in Chisago City
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2,500
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Owned
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3585 124th Avenue in Coon Rapids
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4,125
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Owned
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6640 Shady Oak Road in Eden Prairie
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4,464
|
Leased
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18233 Carson Court NW in Elk River
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6,393
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Owned
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1650 South Lake Street in Forest Lake
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8,150
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Owned
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945 Winnetka Avenue N. in Golden Valley
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18,078
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Owned
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2120 Hennepin Avenue S. in Minneapolis
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4,360
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Owned
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2104 Hastings Avenue in Newport
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16,600
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Owned
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750 Central Avenue E., Suite 100 in Saint Michael
|
7,378
|
Leased
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930 Southview Boulevard in South Saint Paul
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6,970
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Owned
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2270 Frontage Road W. in Stillwater
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12,730
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Owned
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3670 East County Line N. in White Bear Lake
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5,440
|
Owned
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ITEM 3.
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LEGAL PROCEEDINGS.
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ITEM 4.
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MINE SAFETY DISCLOSURES.
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
|
At
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||||||||||||||||||||||
Index
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
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12/31/2016
|
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12/31/2017
|
|
12/31/2018
|
||||||||||||
MidWestOne Financial Group, Inc.
|
$
|
100.00
|
|
|
$
|
108.38
|
|
|
$
|
116.72
|
|
|
$
|
147.47
|
|
|
$
|
134.05
|
|
|
$
|
101.72
|
|
Nasdaq Composite Index
|
100.00
|
|
|
114.75
|
|
|
122.74
|
|
|
133.62
|
|
|
173.22
|
|
|
168.30
|
|
||||||
SNL-Midwestern Banks Index
|
100.00
|
|
|
108.71
|
|
|
110.36
|
|
|
147.46
|
|
|
158.46
|
|
|
135.31
|
|
ITEM 6.
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SELECTED FINANCIAL DATA.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Selected balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
3,291,480
|
|
|
$
|
3,212,271
|
|
|
$
|
3,079,575
|
|
|
$
|
2,979,975
|
|
|
$
|
1,800,302
|
|
Total loans net of purchase accounting and unearned discounts
|
|
2,369,472
|
|
|
2,286,695
|
|
|
2,165,143
|
|
|
2,151,942
|
|
|
1,132,519
|
|
|||||
Allowance for loan losses
|
|
29,307
|
|
|
28,059
|
|
|
21,850
|
|
|
19,427
|
|
|
16,363
|
|
|||||
Loan pool participations, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,332
|
|
|||||
Total deposits
|
|
2,612,929
|
|
|
2,605,319
|
|
|
2,480,448
|
|
|
2,463,521
|
|
|
1,408,542
|
|
|||||
Federal funds purchased and repurchase agreements
|
|
131,422
|
|
|
97,229
|
|
|
117,871
|
|
|
68,963
|
|
|
78,229
|
|
|||||
Federal Home Loan Bank advances
|
|
136,000
|
|
|
115,000
|
|
|
115,000
|
|
|
87,000
|
|
|
93,000
|
|
|||||
Junior subordinated notes issued to capital trusts
|
|
23,888
|
|
|
23,793
|
|
|
23,692
|
|
|
23,587
|
|
|
15,464
|
|
|||||
Long-term debt
|
|
7,500
|
|
|
12,500
|
|
|
17,500
|
|
|
22,500
|
|
|
—
|
|
|||||
Total equity
|
|
357,067
|
|
|
340,304
|
|
|
305,456
|
|
|
296,178
|
|
|
192,731
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
Economic and business conditions;
|
•
|
Concentration of credit;
|
•
|
Lending management and staff;
|
•
|
Lending policies and procedures;
|
•
|
Collateral type and trends in value;
|
•
|
Nature and volume of the portfolio;
|
•
|
Trends in problem loans, loan delinquencies and nonaccrual loans;
|
•
|
Quality of internal loan review; and
|
•
|
External factors
|
|
|
As of and For the Years Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Return on average assets
|
|
0.93
|
%
|
|
0.60
|
%
|
|
0.68
|
%
|
Return on average shareholders' total equity
|
|
8.78
|
|
|
5.58
|
|
|
6.69
|
|
Return on average tangible equity*
|
|
11.86
|
|
|
8.00
|
|
|
10.13
|
|
Dividend payout ratio
|
|
31.45
|
|
|
43.23
|
|
|
35.96
|
|
Average equity to average assets
|
|
10.64
|
|
|
10.81
|
|
|
10.18
|
|
Equity to assets ratio (at period end)
|
|
10.85
|
|
|
10.59
|
|
|
9.92
|
|
|
Year ended December 31,
|
|||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||||||||
|
Average Balance
|
|
Interest Income/ Expense
|
|
Average Rate/Yield
|
|
Average Balance
|
|
Interest Income/ Expense
|
|
Average Rate/Yield
|
|
Average Balance
|
|
Interest Income/ Expense
|
|
Average Rate/Yield
|
|||||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loans (1)(2)
|
$
|
2,354,354
|
|
|
$
|
112,233
|
|
|
4.77
|
%
|
|
$
|
2,201,364
|
|
|
$
|
104,096
|
|
|
4.73
|
%
|
|
$
|
2,161,376
|
|
|
$
|
99,854
|
|
|
4.62
|
%
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Taxable investments
|
431,478
|
|
|
11,742
|
|
|
2.72
|
|
|
423,678
|
|
|
10,573
|
|
|
2.50
|
|
|
358,727
|
|
|
8,297
|
|
|
2.31
|
|
||||||
Tax exempt investments (2)
|
207,605
|
|
|
7,342
|
|
|
3.54
|
|
|
217,650
|
|
|
9,536
|
|
|
4.38
|
|
|
192,656
|
|
|
8,726
|
|
|
4.53
|
|
||||||
Total investment securities
|
639,083
|
|
|
19,084
|
|
|
2.99
|
|
|
641,328
|
|
|
20,109
|
|
|
3.14
|
|
|
551,383
|
|
|
17,023
|
|
|
3.09
|
|
||||||
Federal funds sold and interest-bearing balances
|
3,372
|
|
|
62
|
|
|
1.84
|
|
|
11,138
|
|
|
142
|
|
|
1.27
|
|
|
34,734
|
|
|
166
|
|
|
0.48
|
|
||||||
Total earning assets
|
$
|
2,996,809
|
|
|
$
|
131,379
|
|
|
4.38
|
%
|
|
$
|
2,853,830
|
|
|
$
|
124,347
|
|
|
4.36
|
%
|
|
$
|
2,747,493
|
|
|
$
|
117,043
|
|
|
4.26
|
%
|
Noninterest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and due from banks
|
36,384
|
|
|
|
|
|
|
35,745
|
|
|
|
|
|
|
37,335
|
|
|
|
|
|
||||||||||||
Premises and equipment
|
77,178
|
|
|
|
|
|
|
75,082
|
|
|
|
|
|
|
75,948
|
|
|
|
|
|
||||||||||||
Allowance for loan losses
|
(30,533
|
)
|
|
|
|
|
|
(23,557
|
)
|
|
|
|
|
|
(20,909
|
)
|
|
|
|
|
||||||||||||
Other assets
|
169,880
|
|
|
|
|
|
|
156,396
|
|
|
|
|
|
|
154,008
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
3,249,718
|
|
|
|
|
|
|
$
|
3,097,496
|
|
|
|
|
|
|
$
|
2,993,875
|
|
|
|
|
|
|||||||||
Average interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Savings and interest-bearing demand deposits
|
$
|
1,429,672
|
|
|
$
|
6,181
|
|
|
0.43
|
%
|
|
$
|
1,357,554
|
|
|
$
|
3,863
|
|
|
0.28
|
%
|
|
$
|
1,282,994
|
|
|
$
|
3,418
|
|
|
0.27
|
%
|
Certificates of deposit
|
723,830
|
|
|
11,150
|
|
|
1.54
|
|
|
674,757
|
|
|
7,626
|
|
|
1.13
|
|
|
649,986
|
|
|
5,961
|
|
|
0.92
|
|
||||||
Total deposits
|
2,153,502
|
|
|
17,331
|
|
|
0.80
|
|
|
2,032,311
|
|
|
11,489
|
|
|
0.57
|
|
|
1,932,980
|
|
|
9,379
|
|
|
0.49
|
|
||||||
Federal funds purchased and repurchase agreements
|
105,094
|
|
|
1,302
|
|
|
1.24
|
|
|
87,763
|
|
|
412
|
|
|
0.47
|
|
|
74,566
|
|
|
205
|
|
|
0.27
|
|
||||||
Federal Home Loan Bank borrowings
|
133,814
|
|
|
2,612
|
|
|
1.95
|
|
|
110,000
|
|
|
1,838
|
|
|
1.67
|
|
|
104,954
|
|
|
1,827
|
|
|
1.74
|
|
||||||
Long-term debt and other
|
35,726
|
|
|
1,596
|
|
|
4.47
|
|
|
40,679
|
|
|
1,406
|
|
|
3.46
|
|
|
45,788
|
|
|
1,311
|
|
|
2.86
|
|
||||||
Total borrowed funds
|
274,634
|
|
|
5,510
|
|
|
2.01
|
|
|
238,442
|
|
|
3,656
|
|
|
1.53
|
|
|
225,308
|
|
|
3,343
|
|
|
1.48
|
|
||||||
Total interest-bearing liabilities
|
$
|
2,428,136
|
|
|
$
|
22,841
|
|
|
0.94
|
%
|
|
$
|
2,270,753
|
|
|
$
|
15,145
|
|
|
0.67
|
%
|
|
$
|
2,158,288
|
|
|
$
|
12,722
|
|
|
0.59
|
%
|
Net interest spread (2)
|
|
|
|
|
3.44
|
%
|
|
|
|
|
|
3.69
|
%
|
|
|
|
|
|
3.67
|
%
|
||||||||||||
Noninterest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Demand deposits
|
$
|
455,223
|
|
|
|
|
|
|
$
|
471,170
|
|
|
|
|
|
|
$
|
512,383
|
|
|
|
|
|
|||||||||
Other liabilities
|
20,625
|
|
|
|
|
|
|
20,607
|
|
|
|
|
|
|
18,534
|
|
|
|
|
|
||||||||||||
Shareholders’ equity
|
345,734
|
|
|
|
|
|
|
334,966
|
|
|
|
|
|
|
304,670
|
|
|
|
|
|
||||||||||||
Total liabilities and shareholders’ equity
|
$
|
3,249,718
|
|
|
|
|
|
|
$
|
3,097,496
|
|
|
|
|
|
|
$
|
2,993,875
|
|
|
|
|
|
|||||||||
Interest income/earning assets (2)
|
$
|
2,996,809
|
|
|
$
|
131,379
|
|
|
4.38
|
%
|
|
$
|
2,853,830
|
|
|
$
|
124,347
|
|
|
4.36
|
%
|
|
$
|
2,747,493
|
|
|
$
|
117,043
|
|
|
4.26
|
%
|
Interest expense/earning assets
|
$
|
2,996,809
|
|
|
$
|
22,841
|
|
|
0.76
|
%
|
|
$
|
2,853,830
|
|
|
$
|
15,145
|
|
|
0.53
|
%
|
|
$
|
2,747,493
|
|
|
$
|
12,722
|
|
|
0.46
|
%
|
Net interest income/margin (2)(3)
|
|
|
$
|
108,538
|
|
|
3.62
|
%
|
|
|
|
$
|
109,202
|
|
|
3.83
|
%
|
|
|
|
$
|
104,321
|
|
|
3.80
|
%
|
||||||
Non-GAAP to GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Tax Equivalent Adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loans
|
|
|
$
|
1,040
|
|
|
|
|
|
|
$
|
1,730
|
|
|
|
|
|
|
$
|
1,692
|
|
|
|
|||||||||
Securities
|
|
|
1,515
|
|
|
|
|
|
|
3,297
|
|
|
|
|
|
|
3,023
|
|
|
|
||||||||||||
Total tax equivalent adjustment
|
|
|
2,555
|
|
|
|
|
|
|
5,027
|
|
|
|
|
|
|
4,715
|
|
|
|
||||||||||||
Net Interest Income
|
|
|
$
|
105,983
|
|
|
|
|
|
|
$
|
104,175
|
|
|
|
|
|
|
$
|
99,606
|
|
|
|
|
(1)
|
Non-accrual loans have been included in average loans, net of unearned income. Amortized net deferred loans and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loans fees was $(407) thousand, $(543) thousand, and $(402) thousand for the years ended December 31, 2018, 2017, and 2016, respectively. Accretion of unearned purchase discounts was $2.7 million, $4.8 million, and $3.2 million for the years ended December 31, 2018, 2017, and 2016, respectively.
|
|
(2)
|
Computed on a tax-equivalent basis, assuming a federal income tax rate of 21% for 2018 and 35% for 2017 and 2016.
|
|
(3)
|
Net interest margin is tax-equivalent net interest income as a percentage of average interest-earning assets.
|
|
Years Ended December 31, 2018, 2017, and 2016
|
||||||||||||||||||||||
|
Year 2018 to 2017 Change due to
|
|
Year 2017 to 2016 Change due to
|
||||||||||||||||||||
|
Volume
|
|
Rate/Yield
|
|
Net
|
|
Volume
|
|
Rate/Yield
|
|
Net
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Increase (decrease) in interest income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans (tax equivalent)(1)
|
$
|
7,287
|
|
|
$
|
850
|
|
|
$
|
8,137
|
|
|
$
|
1,867
|
|
|
$
|
2,375
|
|
|
$
|
4,242
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Taxable investments
|
198
|
|
|
971
|
|
|
1,169
|
|
|
1,585
|
|
|
691
|
|
|
2,276
|
|
||||||
Tax exempt investments (tax equivalent)(1)
|
(424
|
)
|
|
(1,770
|
)
|
|
(2,194
|
)
|
|
1,103
|
|
|
(293
|
)
|
|
810
|
|
||||||
Total investment securities
|
(226
|
)
|
|
(799
|
)
|
|
(1,025
|
)
|
|
2,688
|
|
|
398
|
|
|
3,086
|
|
||||||
Federal funds sold and interest-bearing balances
|
(126
|
)
|
|
46
|
|
|
(80
|
)
|
|
(167
|
)
|
|
143
|
|
|
(24
|
)
|
||||||
Change in interest income
|
6,935
|
|
|
97
|
|
|
7,032
|
|
|
4,388
|
|
|
2,916
|
|
|
7,304
|
|
||||||
Increase (decrease) in interest expense
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Savings and interest-bearing demand deposits
|
215
|
|
|
2,103
|
|
|
2,318
|
|
|
205
|
|
|
240
|
|
|
445
|
|
||||||
Certificates of deposit
|
588
|
|
|
2,936
|
|
|
3,524
|
|
|
235
|
|
|
1,430
|
|
|
1,665
|
|
||||||
Total deposits
|
803
|
|
|
5,039
|
|
|
5,842
|
|
|
440
|
|
|
1,670
|
|
|
2,110
|
|
||||||
Federal funds purchased and repurchase agreements
|
96
|
|
|
794
|
|
|
890
|
|
|
41
|
|
|
166
|
|
|
207
|
|
||||||
Federal Home Loan Bank borrowings
|
436
|
|
|
338
|
|
|
774
|
|
|
86
|
|
|
(75
|
)
|
|
11
|
|
||||||
Other long-term debt
|
(186
|
)
|
|
376
|
|
|
190
|
|
|
(157
|
)
|
|
252
|
|
|
95
|
|
||||||
Total borrowed funds
|
346
|
|
|
1,508
|
|
|
1,854
|
|
|
(30
|
)
|
|
343
|
|
|
313
|
|
||||||
Change in interest expense
|
1,149
|
|
|
6,547
|
|
|
7,696
|
|
|
410
|
|
|
2,013
|
|
|
2,423
|
|
||||||
Change in net interest income
|
$
|
5,786
|
|
|
$
|
(6,450
|
)
|
|
$
|
(664
|
)
|
|
$
|
3,978
|
|
|
$
|
903
|
|
|
$
|
4,881
|
|
Percentage increase (decrease) in net interest income over prior period
|
|
|
|
|
(0.6
|
)%
|
|
|
|
|
|
4.7
|
%
|
|
(1)
|
Computed on a tax-equivalent basis, assuming a federal income tax rate of 21% for 2018 and 35% for 2017 and 2016.
|
|
For the Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Trust, investment, and insurance fees
|
$
|
6,237
|
|
|
$
|
6,189
|
|
|
$
|
48
|
|
|
0.8
|
%
|
|
$
|
6,189
|
|
|
$
|
5,574
|
|
|
$
|
615
|
|
|
11.0
|
%
|
Service charges and fees on deposit accounts
|
4,649
|
|
|
5,126
|
|
|
(477
|
)
|
|
(9.3
|
)
|
|
5,126
|
|
|
5,219
|
|
|
(93
|
)
|
|
(1.8
|
)
|
||||||
Loan origination and servicing fees
|
3,622
|
|
|
3,421
|
|
|
201
|
|
|
5.9
|
|
|
3,421
|
|
|
3,771
|
|
|
(350
|
)
|
|
(9.3
|
)
|
||||||
Other service charges and fees
|
6,215
|
|
|
5,992
|
|
|
223
|
|
|
3.7
|
|
|
5,992
|
|
|
5,951
|
|
|
41
|
|
|
0.7
|
|
||||||
Bank-owned life insurance income
|
1,610
|
|
|
1,388
|
|
|
222
|
|
|
16.0
|
|
|
1,388
|
|
|
1,366
|
|
|
22
|
|
|
1.6
|
|
||||||
Gain on sale or call of debt securities
|
193
|
|
|
241
|
|
|
(48
|
)
|
|
(19.9
|
)
|
|
241
|
|
|
464
|
|
|
(223
|
)
|
|
(48.1
|
)
|
||||||
Other gain
|
262
|
|
|
13
|
|
|
249
|
|
|
NM
|
|
13
|
|
|
1,089
|
|
|
(1,076
|
)
|
|
(98.8
|
)
|
|||||||
Total noninterest income
|
$
|
22,788
|
|
|
$
|
22,370
|
|
|
$
|
418
|
|
|
1.9
|
%
|
|
$
|
22,370
|
|
|
$
|
23,434
|
|
|
$
|
(1,064
|
)
|
|
(4.5
|
)%
|
NM - Percentage change not considered meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Salaries and employee benefits
|
$
|
49,758
|
|
|
$
|
47,864
|
|
|
$
|
1,894
|
|
|
4.0
|
%
|
|
$
|
47,864
|
|
|
$
|
49,621
|
|
|
$
|
(1,757
|
)
|
|
(3.5
|
)%
|
Net occupancy and equipment expense
|
13,037
|
|
|
12,305
|
|
|
732
|
|
|
5.9
|
|
|
12,305
|
|
|
13,066
|
|
|
(761
|
)
|
|
(5.8
|
)
|
||||||
Professional fees
|
4,641
|
|
|
3,962
|
|
|
679
|
|
|
17.1
|
|
|
3,962
|
|
|
4,216
|
|
|
(254
|
)
|
|
(6.0
|
)
|
||||||
Data processing expense
|
2,951
|
|
|
2,674
|
|
|
277
|
|
|
10.4
|
|
|
2,674
|
|
|
4,940
|
|
|
(2,266
|
)
|
|
(45.9
|
)
|
||||||
FDIC insurance expense
|
1,533
|
|
|
1,265
|
|
|
268
|
|
|
21.2
|
|
|
1,265
|
|
|
1,563
|
|
|
(298
|
)
|
|
(19.1
|
)
|
||||||
Amortization of intangible assets
|
2,296
|
|
|
3,125
|
|
|
(829
|
)
|
|
(26.5
|
)
|
|
3,125
|
|
|
3,970
|
|
|
(845
|
)
|
|
(21.3
|
)
|
||||||
Other operating expense
|
9,287
|
|
|
8,941
|
|
|
346
|
|
|
3.9
|
|
|
8,941
|
|
|
10,430
|
|
|
(1,489
|
)
|
|
(14.3
|
)
|
||||||
Total noninterest expense
|
$
|
83,503
|
|
|
$
|
80,136
|
|
|
$
|
3,367
|
|
|
4.2
|
%
|
|
$
|
80,136
|
|
|
$
|
87,806
|
|
|
$
|
(7,670
|
)
|
|
(8.7
|
)%
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
Assets
|
|
|
|
|
|
|
|
|||||||
Investment debt securities available for sale
|
$
|
414,101
|
|
|
$
|
445,324
|
|
|
$
|
(31,223
|
)
|
|
(7.0
|
)%
|
Investment debt securities held to maturity
|
195,822
|
|
|
195,619
|
|
|
203
|
|
|
0.1
|
|
|||
Net loans
|
2,369,472
|
|
|
2,258,636
|
|
|
110,836
|
|
|
4.9
|
|
|||
Premises and equipment
|
75,773
|
|
|
75,969
|
|
|
(196
|
)
|
|
(0.3
|
)
|
|||
Goodwill
|
64,654
|
|
|
64,654
|
|
|
—
|
|
|
NM
|
|
|||
Other intangible assets, net
|
9,875
|
|
|
12,046
|
|
|
(2,171
|
)
|
|
(18.0
|
)
|
|||
Federal Home Loan Bank stock
|
14,678
|
|
|
11,324
|
|
|
3,354
|
|
|
29.6
|
|
|||
Total Assets
|
$
|
3,291,480
|
|
|
$
|
3,212,271
|
|
|
$
|
79,209
|
|
|
2.5
|
%
|
Liabilities
|
|
|
|
|
|
|
|
|||||||
Deposits:
|
|
|
|
|
|
|
|
|||||||
Noninterest bearing
|
$
|
439,133
|
|
|
$
|
461,969
|
|
|
$
|
(22,836
|
)
|
|
(4.9
|
)%
|
Interest bearing
|
2,173,796
|
|
|
2,143,350
|
|
|
30,446
|
|
|
1.4
|
|
|||
Total deposits
|
2,612,929
|
|
|
2,605,319
|
|
|
7,610
|
|
|
0.3
|
|
|||
Federal Home Loan Bank borrowings
|
136,000
|
|
|
115,000
|
|
|
21,000
|
|
|
18.3
|
|
|||
Junior subordinated notes issued to capital trusts
|
23,888
|
|
|
23,793
|
|
|
95
|
|
|
0.4
|
|
|||
Long-term debt
|
7,500
|
|
|
12,500
|
|
|
(5,000
|
)
|
|
(40.0
|
)
|
|||
Total liabilities
|
$
|
2,934,413
|
|
|
$
|
2,871,967
|
|
|
$
|
62,446
|
|
|
2.2
|
%
|
Shareholders’ equity
|
$
|
357,067
|
|
|
$
|
340,304
|
|
|
$
|
16,763
|
|
|
4.9
|
%
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(dollars in thousands)
|
|
|
|
|
|
||||||
Debt securities available for sale
|
|
|
|
|
|
||||||
U.S. Government agencies and corporations
|
$
|
5,495
|
|
|
$
|
15,626
|
|
|
$
|
5,905
|
|
States and political subdivisions
|
121,901
|
|
|
141,839
|
|
|
165,272
|
|
|||
Mortgage-backed securities
|
50,653
|
|
|
48,497
|
|
|
61,354
|
|
|||
Collateralized mortgage obligations
|
169,928
|
|
|
168,196
|
|
|
171,267
|
|
|||
Corporate debt securities
|
66,124
|
|
|
71,166
|
|
|
72,453
|
|
|||
Fair value of debt securities available for sale
|
$
|
414,101
|
|
|
$
|
445,324
|
|
|
$
|
476,251
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(dollars in thousands)
|
|
|
|
|
|
||||||
Held to maturity securities
|
|
|
|
|
|
||||||
U.S. Government agencies and corporations
|
$
|
—
|
|
|
$
|
10,049
|
|
|
$
|
—
|
|
States and political subdivisions
|
131,177
|
|
|
126,413
|
|
|
107,941
|
|
|||
Mortgage-backed securities
|
11,016
|
|
|
1,906
|
|
|
2,398
|
|
|||
Collateralized mortgage obligations
|
18,527
|
|
|
22,115
|
|
|
26,036
|
|
|||
Corporate debt securities
|
35,102
|
|
|
35,136
|
|
|
32,017
|
|
|||
Amortized cost
|
$
|
195,822
|
|
|
$
|
195,619
|
|
|
$
|
168,392
|
|
|
|
|
|
|
|
|
|
|
Total for Loans
|
|
Total for Loans
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Due Within
|
|
Due After
|
||||||||||||||||||||
|
|
|
Due In
|
|
|
|
|
|
One Year Having
|
|
One Year Having
|
||||||||||||||||||||
|
Due Within
|
|
One to
|
|
Due After
|
|
|
|
Fixed
|
|
Variable
|
|
Fixed
|
|
Variable
|
||||||||||||||||
|
One Year
|
|
Five Years
|
|
Five Years
|
|
Total
|
|
Rates
|
|
Rates
|
|
Rates
|
|
Rates
|
||||||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agricultural
|
$
|
68,510
|
|
|
$
|
20,519
|
|
|
$
|
7,927
|
|
|
$
|
96,956
|
|
|
$
|
3,792
|
|
|
$
|
64,718
|
|
|
$
|
19,462
|
|
|
$
|
8,984
|
|
Commercial and industrial
|
133,815
|
|
|
219,989
|
|
|
179,384
|
|
|
533,188
|
|
|
20,250
|
|
|
113,565
|
|
|
213,777
|
|
|
185,596
|
|
||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Construction & development
|
86,034
|
|
|
86,237
|
|
|
45,346
|
|
|
217,617
|
|
|
37,813
|
|
|
48,221
|
|
|
40,049
|
|
|
91,534
|
|
||||||||
Farmland
|
9,612
|
|
|
34,197
|
|
|
44,998
|
|
|
88,807
|
|
|
8,896
|
|
|
716
|
|
|
40,957
|
|
|
38,238
|
|
||||||||
Multifamily
|
11,647
|
|
|
79,176
|
|
|
43,918
|
|
|
134,741
|
|
|
4,331
|
|
|
7,316
|
|
|
79,547
|
|
|
43,547
|
|
||||||||
Commercial real estate-other
|
76,030
|
|
|
400,386
|
|
|
349,747
|
|
|
826,163
|
|
|
64,972
|
|
|
11,058
|
|
|
346,458
|
|
|
403,675
|
|
||||||||
Total commercial real estate
|
183,323
|
|
|
599,996
|
|
|
484,009
|
|
|
1,267,328
|
|
|
116,012
|
|
|
67,311
|
|
|
507,011
|
|
|
576,994
|
|
||||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
One- to four- family first liens
|
19,008
|
|
|
88,121
|
|
|
234,701
|
|
|
341,830
|
|
|
13,202
|
|
|
5,806
|
|
|
144,756
|
|
|
178,066
|
|
||||||||
One- to four- family junior liens
|
10,546
|
|
|
24,550
|
|
|
84,953
|
|
|
120,049
|
|
|
2,075
|
|
|
8,471
|
|
|
50,210
|
|
|
59,293
|
|
||||||||
Total residential real estate
|
29,554
|
|
|
112,671
|
|
|
319,654
|
|
|
461,879
|
|
|
15,277
|
|
|
14,277
|
|
|
194,966
|
|
|
237,359
|
|
||||||||
Consumer
|
6,668
|
|
|
30,697
|
|
|
2,063
|
|
|
39,428
|
|
|
5,416
|
|
|
1,252
|
|
|
32,743
|
|
|
17
|
|
||||||||
Total loans
|
$
|
421,870
|
|
|
$
|
983,872
|
|
|
$
|
993,037
|
|
|
$
|
2,398,779
|
|
|
$
|
160,747
|
|
|
$
|
261,123
|
|
|
$
|
967,959
|
|
|
$
|
1,008,950
|
|
|
December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
90 days or more past due and still accruing interest
|
$
|
365
|
|
|
$
|
207
|
|
|
$
|
485
|
|
|
$
|
284
|
|
|
$
|
848
|
|
Troubled debt restructure(1)
|
5,284
|
|
|
9,815
|
|
|
7,377
|
|
|
7,547
|
|
|
8,918
|
|
|||||
Nonaccrual
|
19,924
|
|
|
14,784
|
|
|
20,668
|
|
|
4,012
|
|
|
3,255
|
|
|||||
Total nonperforming loans
|
25,573
|
|
|
24,806
|
|
|
28,530
|
|
|
11,843
|
|
|
13,021
|
|
|||||
Foreclosed assets, net
|
535
|
|
|
2,010
|
|
|
2,097
|
|
|
8,834
|
|
|
1,916
|
|
|||||
Total nonperforming loans and nonperforming other assets
|
$
|
26,108
|
|
|
$
|
26,816
|
|
|
$
|
30,627
|
|
|
$
|
20,677
|
|
|
$
|
14,937
|
|
Nonperforming loans to loans, before allowance for loan losses
|
1.07
|
%
|
|
1.08
|
%
|
|
1.32
|
%
|
|
0.55
|
%
|
|
1.15
|
%
|
|||||
Nonperforming loans and nonperforming other assets to loans, before allowance for loan losses
|
1.09
|
%
|
|
1.17
|
%
|
|
1.41
|
%
|
|
1.43
|
%
|
|
1.32
|
%
|
|
90 Days or More Past Due and Still Accruing Interest
|
|
Troubled Debt Restructure(1)
|
|
Nonaccrual
|
|
Total
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Agricultural
|
$
|
—
|
|
|
$
|
2,502
|
|
|
$
|
1,622
|
|
|
$
|
4,124
|
|
Commercial and industrial
|
—
|
|
|
492
|
|
|
9,218
|
|
|
9,710
|
|
||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Construction & development
|
—
|
|
|
—
|
|
|
99
|
|
|
99
|
|
||||
Farmland
|
—
|
|
|
—
|
|
|
2,751
|
|
|
2,751
|
|
||||
Commercial real estate-other
|
—
|
|
|
1,227
|
|
|
4,558
|
|
|
5,785
|
|
||||
Total commercial real estate
|
—
|
|
|
1,227
|
|
|
7,408
|
|
|
8,635
|
|
||||
Residential real estate:
|
|
|
|
|
|
|
|
||||||||
One- to four- family first liens
|
341
|
|
|
1,063
|
|
|
1,049
|
|
|
2,453
|
|
||||
One- to four- family junior liens
|
24
|
|
|
—
|
|
|
465
|
|
|
489
|
|
||||
Total residential real estate
|
365
|
|
|
1,063
|
|
|
1,514
|
|
|
2,942
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
162
|
|
|
162
|
|
||||
Total
|
$
|
365
|
|
|
$
|
5,284
|
|
|
$
|
19,924
|
|
|
$
|
25,573
|
|
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Agricultural
|
$
|
—
|
|
|
$
|
2,637
|
|
|
$
|
168
|
|
|
$
|
2,805
|
|
Commercial and industrial
|
—
|
|
|
1,450
|
|
|
7,124
|
|
|
8,574
|
|
||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Construction & development
|
—
|
|
|
—
|
|
|
188
|
|
|
188
|
|
||||
Farmland
|
—
|
|
|
—
|
|
|
386
|
|
|
386
|
|
||||
Commercial real estate-other
|
—
|
|
|
4,641
|
|
|
5,279
|
|
|
9,920
|
|
||||
Total commercial real estate
|
—
|
|
|
4,641
|
|
|
5,853
|
|
|
10,494
|
|
||||
Residential real estate:
|
|
|
|
|
|
|
|
||||||||
One- to four- family first liens
|
205
|
|
|
1,087
|
|
|
1,228
|
|
|
2,520
|
|
||||
One- to four- family junior liens
|
2
|
|
|
—
|
|
|
346
|
|
|
348
|
|
||||
Total residential real estate
|
207
|
|
|
1,087
|
|
|
1,574
|
|
|
2,868
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
65
|
|
|
65
|
|
||||
Total
|
$
|
207
|
|
|
$
|
9,815
|
|
|
$
|
14,784
|
|
|
$
|
24,806
|
|
•
|
The borrower receives a reduction of the stated interest rate for the remaining original life of the debt.
|
•
|
The borrower receives an extension of the maturity date or dates at a stated interest rate lower than the current market interest rate for new debt with similar risk characteristics.
|
•
|
The borrower receives a reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement.
|
•
|
The borrower receives a deferral of required payments (principal and/or interest).
|
•
|
The borrower receives a reduction of the accrued interest.
|
|
December 31,
|
|||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||
|
Allowance Amount
|
|
Percent of Loans to Total Loans
|
|
Allowance Amount
|
|
Percent of Loans to Total Loans
|
|
Allowance Amount
|
|
Percent of Loans to Total Loans
|
|
Allowance Amount
|
|
Percent of Loans to Total Loans
|
|
Allowance Amount
|
|
Percent of Loans to Total Loans
|
|||||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agricultural
|
$
|
3,637
|
|
|
4.1
|
%
|
|
$
|
2,790
|
|
|
4.6
|
%
|
|
$
|
2,003
|
|
|
5.2
|
%
|
|
$
|
1,417
|
|
|
5.7
|
%
|
|
$
|
1,506
|
|
|
9.3
|
%
|
Commercial and industrial
|
7,478
|
|
|
22.2
|
|
|
8,518
|
|
|
22.0
|
|
|
6,274
|
|
|
21.3
|
|
|
5,451
|
|
|
21.9
|
|
|
5,780
|
|
|
26.9
|
|
|||||
Commercial real estate
|
15,635
|
|
|
52.8
|
|
|
13,637
|
|
|
51.3
|
|
|
9,860
|
|
|
49.2
|
|
|
8,556
|
|
|
46.1
|
|
|
4,399
|
|
|
37.6
|
|
|||||
Residential real estate
|
2,349
|
|
|
19.3
|
|
|
2,870
|
|
|
20.5
|
|
|
3,458
|
|
|
22.6
|
|
|
3,968
|
|
|
24.6
|
|
|
3,167
|
|
|
24.1
|
|
|||||
Consumer
|
208
|
|
|
1.6
|
|
|
244
|
|
|
1.6
|
|
|
255
|
|
|
1.7
|
|
|
409
|
|
|
1.7
|
|
|
323
|
|
|
2.1
|
|
|||||
Unallocated
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(374
|
)
|
|
—
|
|
|
1,188
|
|
|
—
|
|
|||||
Total
|
$
|
29,307
|
|
|
100.0
|
%
|
|
$
|
28,059
|
|
|
100.0
|
%
|
|
$
|
21,850
|
|
|
100.0
|
%
|
|
$
|
19,427
|
|
|
100.0
|
%
|
|
$
|
16,363
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||||||||||||||||||||||||
|
Average
|
|
%
|
|
Average
|
|
Average
|
|
%
|
|
Average
|
|
Average
|
|
%
|
|
Average
|
|
Average
|
|
%
|
|
Average
|
|
Average
|
|
%
|
|
Average
|
||||||||||||||||||||
|
Balance
|
|
Total
|
|
Rate
|
|
Balance
|
|
Total
|
|
Rate
|
|
Balance
|
|
Total
|
|
Rate
|
|
Balance
|
|
Total
|
|
Rate
|
|
Balance
|
|
Total
|
|
Rate
|
||||||||||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Non-interest-bearing demand deposits
|
$
|
455,223
|
|
|
17.5
|
%
|
|
NA
|
|
|
$
|
471,170
|
|
|
18.8
|
%
|
|
NA
|
|
|
$
|
512,383
|
|
|
21.0
|
%
|
|
NA
|
|
|
$
|
488,312
|
|
|
21.4
|
%
|
|
NA
|
|
|
$
|
208,071
|
|
|
15.0
|
%
|
|
NA
|
|
Interest-bearing demand (NOW and money market)
|
1,215,428
|
|
|
46.6
|
|
|
0.49
|
%
|
|
1,152,350
|
|
|
46.0
|
|
|
0.32
|
%
|
|
1,087,757
|
|
|
44.5
|
|
|
0.29
|
%
|
|
859,945
|
|
|
37.8
|
|
|
0.31
|
%
|
|
603,812
|
|
|
43.7
|
|
|
0.36
|
%
|
|||||
Savings
|
214,244
|
|
|
8.2
|
|
|
0.12
|
|
|
205,204
|
|
|
8.2
|
|
|
0.10
|
|
|
195,237
|
|
|
8.0
|
|
|
0.14
|
|
|
279,230
|
|
|
12.3
|
|
|
0.13
|
|
|
102,850
|
|
|
7.4
|
|
|
0.14
|
|
|||||
Time deposits
|
723,830
|
|
|
27.7
|
|
|
1.54
|
|
|
674,757
|
|
|
27.0
|
|
|
1.13
|
|
|
649,986
|
|
|
26.5
|
|
|
0.92
|
|
|
648,516
|
|
|
28.5
|
|
|
0.75
|
|
|
469,351
|
|
|
33.9
|
|
|
1.00
|
|
|||||
Total deposits
|
$
|
2,608,725
|
|
|
100.0
|
%
|
|
0.66
|
%
|
|
$
|
2,503,481
|
|
|
100.0
|
%
|
|
0.46
|
%
|
|
$
|
2,445,363
|
|
|
100.0
|
%
|
|
0.38
|
%
|
|
$
|
2,276,003
|
|
|
100.0
|
%
|
|
0.35
|
%
|
|
$
|
1,384,084
|
|
|
100.0
|
%
|
|
0.51
|
%
|
|
December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
|
|
Average
|
|
|
|
Average
|
|
|
|
Average
|
|||||||||
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Federal funds purchased and repurchase agreements
|
$
|
131,422
|
|
|
1.70
|
%
|
|
$
|
97,229
|
|
|
0.47
|
%
|
|
$
|
117,871
|
|
|
0.40
|
%
|
FHLB borrowings
|
136,000
|
|
|
2.45
|
|
|
115,000
|
|
|
1.67
|
|
|
115,000
|
|
|
1.56
|
|
|||
Junior subordinated notes issued to capital trusts
|
23,888
|
|
|
4.97
|
|
|
23,793
|
|
|
4.00
|
|
|
23,692
|
|
|
3.16
|
|
|||
Long-term debt
|
7,500
|
|
|
3.78
|
|
|
12,500
|
|
|
2.85
|
|
|
17,500
|
|
|
2.52
|
|
|||
Total
|
$
|
298,810
|
|
|
2.35
|
%
|
|
$
|
248,522
|
|
|
1.48
|
%
|
|
$
|
274,063
|
|
|
1.26
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Federal funds purchased and repurchase agreements
|
$
|
131,420
|
|
|
$
|
124,952
|
|
|
$
|
117,871
|
|
FHLB borrowings
|
148,000
|
|
|
145,000
|
|
|
115,000
|
|
|||
Junior subordinated notes issued to capital trusts
|
23,888
|
|
|
23,793
|
|
|
23,692
|
|
|||
Long-term debt
|
12,500
|
|
|
17,500
|
|
|
22,500
|
|
|||
Total
|
$
|
315,808
|
|
|
$
|
311,245
|
|
|
$
|
279,063
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Average
|
|
Average
|
|
Average
|
|
Average
|
|
Average
|
|
Average
|
|||||||||
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Federal funds purchased and repurchase agreements
|
$
|
105,094
|
|
|
1.24
|
%
|
|
$
|
87,763
|
|
|
0.47
|
%
|
|
$
|
74,566
|
|
|
0.27
|
%
|
FHLB borrowings
|
133,814
|
|
|
1.95
|
|
|
110,000
|
|
|
1.67
|
|
|
104,954
|
|
|
1.74
|
|
|||
Junior subordinated notes issued to capital trusts
|
23,841
|
|
|
4.97
|
|
|
23,743
|
|
|
4.00
|
|
|
23,641
|
|
|
3.49
|
|
|||
Long-term debt
|
10,596
|
|
|
3.77
|
|
|
15,596
|
|
|
2.75
|
|
|
20,604
|
|
|
2.27
|
|
|||
Total
|
$
|
273,345
|
|
|
2.01
|
%
|
|
$
|
237,102
|
|
|
1.53
|
%
|
|
$
|
223,765
|
|
|
1.48
|
%
|
|
|
|
Less than
|
|
1 to 3
|
|
3 to 5
|
|
More than
|
||||||||||
|
Total
|
|
1 year
|
|
years
|
|
years
|
|
5 years
|
||||||||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Time certificates of deposit
|
$
|
723,647
|
|
|
$
|
413,108
|
|
|
$
|
275,918
|
|
|
$
|
34,621
|
|
|
$
|
—
|
|
Federal funds purchased and repurchase agreements
|
74,522
|
|
|
74,522
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
FHLB borrowings
|
136,000
|
|
|
52,000
|
|
|
84,000
|
|
|
—
|
|
|
—
|
|
|||||
Junior subordinated notes issued to capital trusts
|
23,888
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,888
|
|
|||||
Long-term debt
|
7,500
|
|
|
5,000
|
|
|
2,500
|
|
|
—
|
|
|
—
|
|
|||||
Noncancelable operating leases and capital lease obligations
|
1,338
|
|
|
114
|
|
|
438
|
|
|
389
|
|
|
397
|
|
|||||
Total
|
$
|
966,895
|
|
|
$
|
544,744
|
|
|
$
|
362,856
|
|
|
$
|
35,010
|
|
|
$
|
24,285
|
|
|
|
|
Less than
|
|
1 to 3
|
|
3 to 5
|
|
More than
|
||||||||||
|
Total
|
|
1 year
|
|
years
|
|
years
|
|
5 years
|
||||||||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Commitments to extend credit
|
$
|
521,270
|
|
|
$
|
247,313
|
|
|
$
|
128,388
|
|
|
$
|
63,491
|
|
|
$
|
82,078
|
|
Commitments to sell loans
|
666
|
|
|
666
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Standby letters of credit
|
16,709
|
|
|
13,501
|
|
|
2,190
|
|
|
966
|
|
|
52
|
|
|||||
Total
|
$
|
538,645
|
|
|
$
|
261,480
|
|
|
$
|
130,578
|
|
|
$
|
64,457
|
|
|
$
|
82,130
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(dollars in thousands)
|
|
|
|
|
|
||||||
Cash and due from banks
|
$
|
43,787
|
|
|
$
|
44,818
|
|
|
$
|
41,464
|
|
Interest-bearing deposits
|
1,693
|
|
|
5,474
|
|
|
1,764
|
|
|||
Federal funds sold
|
—
|
|
|
680
|
|
|
—
|
|
|||
Total
|
$
|
45,480
|
|
|
$
|
50,972
|
|
|
$
|
43,228
|
|
Percentage of average total assets
|
1.4
|
%
|
|
1.6
|
%
|
|
1.4
|
%
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
•
|
Federal funds lines;
|
•
|
FHLB borrowings;
|
•
|
Brokered deposits;
|
•
|
Brokered repurchase agreements; and
|
•
|
Federal Reserve Bank Discount Window.
|
|
Immediate Change in Rates
|
||||||||||||||
|
-200
|
|
-100
|
|
+100
|
|
+200
|
||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Dollar change
|
$
|
(529
|
)
|
|
$
|
(568
|
)
|
|
$
|
(1,840
|
)
|
|
$
|
(4,006
|
)
|
Percent change
|
(0.5
|
)%
|
|
(0.5
|
)%
|
|
(1.7
|
)%
|
|
(3.8
|
)%
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Dollar change
|
$
|
(2,873
|
)
|
|
$
|
(729
|
)
|
|
$
|
55
|
|
|
$
|
(361
|
)
|
Percent change
|
(2.8
|
)%
|
|
(0.7
|
)%
|
|
0.1
|
%
|
|
(0.4
|
)%
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Cash and due from banks
|
$
|
43,787
|
|
|
$
|
44,818
|
|
Interest-earning deposits in banks
|
1,693
|
|
|
5,474
|
|
||
Federal funds sold
|
—
|
|
|
680
|
|
||
Total cash and cash equivalents
|
45,480
|
|
|
50,972
|
|
||
Equity securities at fair value
|
2,737
|
|
|
2,336
|
|
||
Debt securities available for sale at fair value
|
414,101
|
|
|
445,324
|
|
||
Held to maturity securities at amortized cost (fair value of $192,564 at December 31, 2018 and $194,343 at December 31, 2017)
|
195,822
|
|
|
195,619
|
|
||
Loans held for sale
|
666
|
|
|
856
|
|
||
Loans held for investment, net of unearned income
|
2,398,779
|
|
|
2,286,695
|
|
||
Allowance for loan losses
|
(29,307
|
)
|
|
(28,059
|
)
|
||
Total loans held for investment, net
|
2,369,472
|
|
|
2,258,636
|
|
||
Premises and equipment, net
|
75,773
|
|
|
75,969
|
|
||
Interest receivable
|
14,736
|
|
|
14,732
|
|
||
Goodwill
|
64,654
|
|
|
64,654
|
|
||
Other intangible assets, net
|
9,875
|
|
|
12,046
|
|
||
Bank-owned life insurance
|
60,989
|
|
|
59,831
|
|
||
Foreclosed assets, net
|
535
|
|
|
2,010
|
|
||
Deferred income taxes, net
|
8,273
|
|
|
6,525
|
|
||
Other assets
|
28,367
|
|
|
22,761
|
|
||
Total assets
|
$
|
3,291,480
|
|
|
$
|
3,212,271
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Noninterest-bearing deposits
|
$
|
439,133
|
|
|
$
|
461,969
|
|
Interest-bearing deposits
|
2,173,796
|
|
|
2,143,350
|
|
||
Total deposits
|
2,612,929
|
|
|
2,605,319
|
|
||
Federal funds purchased
|
56,900
|
|
|
1,000
|
|
||
Securities sold under agreements to repurchase
|
74,522
|
|
|
96,229
|
|
||
Federal Home Loan Bank borrowings
|
136,000
|
|
|
115,000
|
|
||
Junior subordinated notes issued to capital trusts
|
23,888
|
|
|
23,793
|
|
||
Long-term debt
|
7,500
|
|
|
12,500
|
|
||
Deferred compensation liability
|
5,268
|
|
|
5,199
|
|
||
Interest payable
|
1,828
|
|
|
1,428
|
|
||
Other liabilities
|
15,578
|
|
|
11,499
|
|
||
Total liabilities
|
2,934,413
|
|
|
2,871,967
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Preferred stock, no par value; authorized 500,000 shares; no shares issued and outstanding at December 31, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
||
Common stock, $1.00 par value; authorized 30,000,000 shares at December 31, 2018 and December 31, 2017; issued 12,463,481 shares at December 31, 2018 and December 31, 2017; outstanding 12,180,015 shares at December 31, 2018 and 12,219,611 shares at December 31, 2017
|
12,463
|
|
|
12,463
|
|
||
Additional paid-in capital
|
187,813
|
|
|
187,486
|
|
||
Treasury stock at cost, 283,466 shares as of December 31, 2018 and 243,870 shares as of December 31, 2017
|
(6,499
|
)
|
|
(5,121
|
)
|
||
Retained earnings
|
168,951
|
|
|
148,078
|
|
||
Accumulated other comprehensive loss
|
(5,661
|
)
|
|
(2,602
|
)
|
||
Total shareholders' equity
|
357,067
|
|
|
340,304
|
|
||
Total liabilities and shareholders' equity
|
$
|
3,291,480
|
|
|
$
|
3,212,271
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Loans
|
|
$
|
111,193
|
|
|
$
|
102,366
|
|
|
$
|
98,162
|
|
Bank deposits
|
|
59
|
|
|
138
|
|
|
161
|
|
|||
Federal funds sold
|
|
3
|
|
|
4
|
|
|
5
|
|
|||
Taxable securities
|
|
11,742
|
|
|
10,573
|
|
|
8,297
|
|
|||
Tax-exempt securities
|
|
5,827
|
|
|
6,239
|
|
|
5,703
|
|
|||
Total interest income
|
|
128,824
|
|
|
119,320
|
|
|
112,328
|
|
|||
Interest expense:
|
|
|
|
|
|
|
||||||
Deposits
|
|
17,331
|
|
|
11,489
|
|
|
9,379
|
|
|||
Federal funds purchased
|
|
661
|
|
|
171
|
|
|
47
|
|
|||
Securities sold under agreements to repurchase
|
|
641
|
|
|
241
|
|
|
158
|
|
|||
Federal Home Loan Bank borrowings
|
|
2,612
|
|
|
1,838
|
|
|
1,827
|
|
|||
Other borrowings
|
|
13
|
|
|
12
|
|
|
19
|
|
|||
Junior subordinated notes issued to capital trusts
|
|
1,184
|
|
|
949
|
|
|
825
|
|
|||
Long-term debt
|
|
399
|
|
|
445
|
|
|
467
|
|
|||
Total interest expense
|
|
22,841
|
|
|
15,145
|
|
|
12,722
|
|
|||
Net interest income
|
|
105,983
|
|
|
104,175
|
|
|
99,606
|
|
|||
Provision for loan losses
|
|
7,300
|
|
|
17,334
|
|
|
7,983
|
|
|||
Net interest income after provision for loan losses
|
|
98,683
|
|
|
86,841
|
|
|
91,623
|
|
|||
Noninterest income:
|
|
|
|
|
|
|
||||||
Trust, investment, and insurance fees
|
|
6,237
|
|
|
6,189
|
|
|
5,574
|
|
|||
Service charges and fees on deposit accounts
|
|
4,649
|
|
|
5,126
|
|
|
5,219
|
|
|||
Loan origination and servicing fees
|
|
3,622
|
|
|
3,421
|
|
|
3,771
|
|
|||
Other service charges and fees
|
|
6,215
|
|
|
5,992
|
|
|
5,951
|
|
|||
Bank-owned life insurance income
|
|
1,610
|
|
|
1,388
|
|
|
1,366
|
|
|||
Gain on sale or call of debt securities
|
|
193
|
|
|
241
|
|
|
464
|
|
|||
Other gain
|
|
262
|
|
|
13
|
|
|
1,089
|
|
|||
Total noninterest income
|
|
22,788
|
|
|
22,370
|
|
|
23,434
|
|
|||
Noninterest expense:
|
|
|
|
|
|
|
||||||
Salaries and employee benefits
|
|
49,758
|
|
|
47,864
|
|
|
49,621
|
|
|||
Occupancy and equipment, net
|
|
13,037
|
|
|
12,305
|
|
|
13,066
|
|
|||
Professional fees
|
|
4,641
|
|
|
3,962
|
|
|
4,216
|
|
|||
Data processing
|
|
2,951
|
|
|
2,674
|
|
|
4,940
|
|
|||
FDIC insurance
|
|
1,533
|
|
|
1,265
|
|
|
1,563
|
|
|||
Amortization of intangibles
|
|
2,296
|
|
|
3,125
|
|
|
3,970
|
|
|||
Other
|
|
9,287
|
|
|
8,941
|
|
|
10,430
|
|
|||
Total noninterest expense
|
|
83,503
|
|
|
80,136
|
|
|
87,806
|
|
|||
Income before income tax expense
|
|
37,968
|
|
|
29,075
|
|
|
27,251
|
|
|||
Income tax expense
|
|
7,617
|
|
|
10,376
|
|
|
6,860
|
|
|||
Net income
|
|
$
|
30,351
|
|
|
$
|
18,699
|
|
|
$
|
20,391
|
|
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
2.48
|
|
|
$
|
1.55
|
|
|
$
|
1.78
|
|
Diluted
|
|
$
|
2.48
|
|
|
$
|
1.55
|
|
|
$
|
1.78
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
|
$
|
30,351
|
|
|
$
|
18,699
|
|
|
$
|
20,391
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive loss, available for sale securities:
|
|
|
|
|
|
|
||||||
Unrealized holding losses arising during period
|
|
(3,865
|
)
|
|
(1,470
|
)
|
|
(6,906
|
)
|
|||
Reclassification adjustment for gains included in net income
|
|
(197
|
)
|
|
(188
|
)
|
|
(464
|
)
|
|||
Income tax benefit
|
|
1,060
|
|
|
654
|
|
|
2,829
|
|
|||
Other comprehensive loss on available for sale securities
|
|
(3,002
|
)
|
|
(1,004
|
)
|
|
(4,541
|
)
|
|||
Total other comprehensive loss
|
|
$
|
(3,002
|
)
|
|
$
|
(1,004
|
)
|
|
$
|
(4,541
|
)
|
Comprehensive income
|
|
$
|
27,349
|
|
|
$
|
17,695
|
|
|
$
|
15,850
|
|
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||||
Balance at December 31, 2015
|
|
$
|
—
|
|
|
$
|
11,713
|
|
|
$
|
163,487
|
|
|
$
|
(6,331
|
)
|
|
$
|
123,901
|
|
|
$
|
3,408
|
|
|
$
|
296,178
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,391
|
|
|
—
|
|
|
20,391
|
|
|||||||
Dividends paid on common stock ($0.64 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,317
|
)
|
|
—
|
|
|
(7,317
|
)
|
|||||||
Stock options exercised (2,900 shares)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
60
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||||
Release/lapse of restriction on RSUs (26,133 shares)
|
|
—
|
|
|
—
|
|
|
(529
|
)
|
|
505
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
731
|
|
|
—
|
|
|
—
|
|
|
|
|
731
|
|
||||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,541
|
)
|
|
(4,541
|
)
|
|||||||
Balance at December 31, 2016
|
|
$
|
—
|
|
|
$
|
11,713
|
|
|
$
|
163,667
|
|
|
$
|
(5,766
|
)
|
|
$
|
136,975
|
|
|
$
|
(1,133
|
)
|
|
$
|
305,456
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,699
|
|
|
—
|
|
|
18,699
|
|
|||||||
Issuance of common stock (750,000 shares), net of expenses of $1,328
|
|
—
|
|
|
750
|
|
|
23,610
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,360
|
|
|||||||
Dividends paid on common stock ($0.67 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,061
|
)
|
|
—
|
|
|
(8,061
|
)
|
|||||||
Stock options exercised (8,750 shares)
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
183
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|||||||
Release/lapse of restriction on RSUs (27,625 shares)
|
|
—
|
|
|
—
|
|
|
(576
|
)
|
|
462
|
|
|
—
|
|
|
—
|
|
|
(114
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
868
|
|
|
—
|
|
|
—
|
|
|
|
|
868
|
|
||||||||
Reclassified from AOCI to Retained Earnings, tax effect(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
465
|
|
|
(465
|
)
|
|
—
|
|
|||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,004
|
)
|
|
(1,004
|
)
|
|||||||
Balance at December 31, 2017
|
|
$
|
—
|
|
|
$
|
12,463
|
|
|
$
|
187,486
|
|
|
$
|
(5,121
|
)
|
|
$
|
148,078
|
|
|
$
|
(2,602
|
)
|
|
$
|
340,304
|
|
Cumulative effect of changes in accounting principles(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
(57
|
)
|
|
—
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,351
|
|
|
—
|
|
|
30,351
|
|
|||||||
Dividends paid on common stock ($0.78 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,535
|
)
|
|
—
|
|
|
(9,535
|
)
|
|||||||
Stock options exercised (9,700 shares)
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
204
|
|
|
—
|
|
|
—
|
|
|
136
|
|
|||||||
Release/lapse of restriction on RSUs (29,715 shares)
|
|
—
|
|
|
—
|
|
|
(635
|
)
|
|
547
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|||||||
Repurchase of common stock (76,128 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,129
|
)
|
|
—
|
|
|
—
|
|
|
(2,129
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
1,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,030
|
|
|||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,002
|
)
|
|
(3,002
|
)
|
|||||||
Balance at December 31, 2018
|
|
$
|
—
|
|
|
$
|
12,463
|
|
|
$
|
187,813
|
|
|
$
|
(6,499
|
)
|
|
$
|
168,951
|
|
|
$
|
(5,661
|
)
|
|
$
|
357,067
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
30,351
|
|
|
$
|
18,699
|
|
|
$
|
20,391
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for loan losses
|
7,300
|
|
|
17,334
|
|
|
7,983
|
|
|||
Depreciation and amortization of premises and equipment
|
4,232
|
|
|
4,032
|
|
|
4,450
|
|
|||
Amortization of premium on junior subordinated notes issued to capital trusts
|
95
|
|
|
101
|
|
|
105
|
|
|||
Amortization of intangibles
|
2,296
|
|
|
3,125
|
|
|
3,970
|
|
|||
Amortization of premiums and discounts on investment securities, net
|
953
|
|
|
1,176
|
|
|
1,624
|
|
|||
(Gain) loss on sale of premises and equipment
|
(20
|
)
|
|
(2
|
)
|
|
44
|
|
|||
Deferred income tax expense (benefit)
|
(676
|
)
|
|
744
|
|
|
(2,853
|
)
|
|||
Excess tax benefits from share-based award activity
|
(4
|
)
|
|
(92
|
)
|
|
—
|
|
|||
Stock-based compensation
|
1,030
|
|
|
868
|
|
|
731
|
|
|||
Net loss on equity securities
|
83
|
|
|
—
|
|
|
—
|
|
|||
Net gain on sale or call of available for sale securities
|
(197
|
)
|
|
(188
|
)
|
|
(464
|
)
|
|||
Net (gain) loss on sale or call of held to maturity securities
|
4
|
|
|
(53
|
)
|
|
—
|
|
|||
Net gain on sale of foreclosed assets, net
|
(241
|
)
|
|
(28
|
)
|
|
(795
|
)
|
|||
Net gain on sale of loans held for sale
|
(1,725
|
)
|
|
(1,794
|
)
|
|
(2,475
|
)
|
|||
Writedown of foreclosed assets
|
22
|
|
|
58
|
|
|
675
|
|
|||
Origination of loans held for sale
|
(66,180
|
)
|
|
(87,579
|
)
|
|
(132,003
|
)
|
|||
Proceeds from sales of loans held for sale
|
68,108
|
|
|
92,758
|
|
|
133,424
|
|
|||
Increase in accrued interest receivable
|
(4
|
)
|
|
(861
|
)
|
|
(135
|
)
|
|||
Increase in cash value of bank-owned life insurance
|
(1,610
|
)
|
|
(1,388
|
)
|
|
(1,366
|
)
|
|||
(Increase) decrease in other assets
|
(5,606
|
)
|
|
(4,448
|
)
|
|
3,496
|
|
|||
Increase in deferred compensation liability
|
69
|
|
|
19
|
|
|
48
|
|
|||
Increase (decrease) in interest payable and other liabilities
|
4,479
|
|
|
(1,501
|
)
|
|
1,334
|
|
|||
Net cash provided by operating activities
|
$
|
42,759
|
|
|
$
|
40,980
|
|
|
$
|
38,184
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of equity securities
|
$
|
(509
|
)
|
|
$
|
—
|
|
|
$
|
(1,007
|
)
|
Proceeds from sales of available for sale securities
|
14,490
|
|
|
22,538
|
|
|
23,381
|
|
|||
Proceeds from maturities and calls of available for sale securities
|
73,719
|
|
|
67,743
|
|
|
84,612
|
|
|||
Purchases of available for sale securities
|
(61,512
|
)
|
|
(62,849
|
)
|
|
(165,611
|
)
|
|||
Proceeds from sales of held to maturity securities
|
—
|
|
|
1,153
|
|
|
—
|
|
|||
Proceeds from maturities and calls of held to maturity securities
|
5,509
|
|
|
15,477
|
|
|
12,080
|
|
|||
Purchases of held to maturity securities
|
(6,008
|
)
|
|
(44,024
|
)
|
|
(62,231
|
)
|
|||
Increase in loans, net
|
(118,710
|
)
|
|
(133,836
|
)
|
|
(20,648
|
)
|
|||
Purchases of premises and equipment
|
(5,568
|
)
|
|
(4,988
|
)
|
|
(5,634
|
)
|
|||
Proceeds from sale of foreclosed assets, net
|
2,268
|
|
|
1,216
|
|
|
8,744
|
|
|||
Proceeds from sale of premises and equipment
|
657
|
|
|
32
|
|
|
2,299
|
|
|||
Proceeds from sale of assets held for sale
|
895
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from bank-owned life insurance death benefit
|
452
|
|
|
—
|
|
|
430
|
|
|||
Purchases of bank-owned life insurance
|
—
|
|
|
(11,212
|
)
|
|
—
|
|
|||
Payments to acquire intangible assets
|
(125
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
$
|
(94,442
|
)
|
|
$
|
(148,750
|
)
|
|
$
|
(123,585
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net increase in deposits
|
$
|
7,610
|
|
|
$
|
124,871
|
|
|
$
|
16,927
|
|
Net increase (decrease) in federal funds purchased
|
55,900
|
|
|
(34,684
|
)
|
|
34,184
|
|
|||
Net increase (decrease) in securities sold under agreements to repurchase
|
(21,707
|
)
|
|
14,042
|
|
|
14,724
|
|
|||
Proceeds from Federal Home Loan Bank borrowings
|
110,000
|
|
|
215,000
|
|
|
50,000
|
|
|||
Repayment of Federal Home Loan Bank borrowings
|
(89,000
|
)
|
|
(215,000
|
)
|
|
(22,000
|
)
|
|||
Proceeds from share-based award activity
|
137
|
|
|
8
|
|
|
14
|
|
|||
Excess tax benefits from share-based award activity
|
4
|
|
|
92
|
|
|
—
|
|
|||
Taxes paid relating to net share settlement of equity awards
|
(89
|
)
|
|
(114
|
)
|
|
—
|
|
|||
Payments on long-term debt
|
(5,000
|
)
|
|
(5,000
|
)
|
|
(5,000
|
)
|
|||
Dividends paid
|
(9,535
|
)
|
|
(8,061
|
)
|
|
(7,317
|
)
|
|||
Issuance of common stock
|
—
|
|
|
25,688
|
|
|
—
|
|
|||
Expenses incurred in stock issuance
|
—
|
|
|
(1,328
|
)
|
|
—
|
|
|||
Repurchase of common stock for the treasury
|
(2,129
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
$
|
46,191
|
|
|
$
|
115,514
|
|
|
$
|
81,532
|
|
Net increase (decrease) in cash and cash equivalents
|
$
|
(5,492
|
)
|
|
$
|
7,744
|
|
|
$
|
(3,869
|
)
|
Cash and cash equivalents:
|
|
|
|
|
|
||||||
Beginning of period
|
50,972
|
|
|
$
|
43,228
|
|
|
$
|
47,097
|
|
|
Ending balance
|
$
|
45,480
|
|
|
$
|
50,972
|
|
|
$
|
43,228
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
22,441
|
|
|
$
|
15,189
|
|
|
$
|
12,757
|
|
Cash paid during the period for income taxes
|
6,245
|
|
|
13,199
|
|
|
7,957
|
|
|||
Supplemental schedule of non-cash investing activities:
|
|
|
|
|
|
||||||
Transfer of loans to foreclosed assets
|
$
|
574
|
|
|
$
|
1,159
|
|
|
$
|
1,887
|
|
Transfer of premises and equipment to assets held for sale
|
895
|
|
|
—
|
|
|
—
|
|
|||
Supplemental schedule of non-cash operating activities:
|
|
|
|
|
|
||||||
Transfer due to Tax Cuts and Jobs Act of 2017, reclassified from AOCI to Retained Earnings, tax effect
|
$
|
—
|
|
|
$
|
465
|
|
|
$
|
—
|
|
Transfer due to adoption of ASU 2016-01, reclassified from AOCI to Retained Earnings.
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Note 1.
|
Nature of Business and Significant Accounting Policies
|
|
Years
|
|
|
||
Type of Assets
|
Minimum
|
|
Maximum
|
|
Depreciation Method
|
|
|
|
|
|
|
Buildings and leasehold improvements
|
10
|
-
|
39
|
|
Straight-line
|
Furniture and equipment
|
3
|
-
|
10
|
|
Straight-line
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Unrealized losses on securities available for sale
|
|
$
|
(7,660
|
)
|
|
$
|
(3,530
|
)
|
|
$
|
(1,872
|
)
|
Less: Tax effect
|
|
(1,999
|
)
|
|
(928
|
)
|
|
(739
|
)
|
|||
Accumulated other comprehensive loss, net of tax
|
|
$
|
(5,661
|
)
|
|
$
|
(2,602
|
)
|
|
$
|
(1,133
|
)
|
Note 2.
|
Investment Securities
|
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Estimated
|
||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
U.S. Government agencies and corporations
|
$
|
5,522
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
5,495
|
|
State and political subdivisions
|
121,403
|
|
|
877
|
|
|
379
|
|
|
121,901
|
|
||||
Mortgage-backed securities
|
51,625
|
|
|
100
|
|
|
1,072
|
|
|
50,653
|
|
||||
Collateralized mortgage obligations
|
176,134
|
|
|
220
|
|
|
6,426
|
|
|
169,928
|
|
||||
Corporate debt securities
|
67,077
|
|
|
64
|
|
|
1,017
|
|
|
66,124
|
|
||||
Total debt securities
|
$
|
421,761
|
|
|
$
|
1,261
|
|
|
$
|
8,921
|
|
|
$
|
414,101
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
U.S. Government agencies and corporations
|
$
|
15,716
|
|
|
$
|
—
|
|
|
$
|
90
|
|
|
$
|
15,626
|
|
State and political subdivisions
|
139,561
|
|
|
2,475
|
|
|
197
|
|
|
141,839
|
|
||||
Mortgage-backed securities
|
48,744
|
|
|
181
|
|
|
428
|
|
|
48,497
|
|
||||
Collateralized mortgage obligations
|
173,339
|
|
|
29
|
|
|
5,172
|
|
|
168,196
|
|
||||
Corporate debt securities
|
71,562
|
|
|
31
|
|
|
427
|
|
|
71,166
|
|
||||
Total debt securities
|
$
|
448,922
|
|
|
$
|
2,716
|
|
|
$
|
6,314
|
|
|
$
|
445,324
|
|
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Estimated
|
||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
State and political subdivisions
|
$
|
131,177
|
|
|
$
|
314
|
|
|
$
|
2,437
|
|
|
$
|
129,054
|
|
Mortgage-backed securities
|
11,016
|
|
|
1
|
|
|
331
|
|
|
10,686
|
|
||||
Collateralized mortgage obligations
|
18,527
|
|
|
—
|
|
|
669
|
|
|
17,858
|
|
||||
Corporate debt securities
|
35,102
|
|
|
331
|
|
|
467
|
|
|
34,966
|
|
||||
Total debt securities
|
$
|
195,822
|
|
|
$
|
646
|
|
|
$
|
3,904
|
|
|
$
|
192,564
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
U.S. Government agencies and corporations
|
$
|
10,049
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,049
|
|
State and political subdivisions
|
126,413
|
|
|
804
|
|
|
1,631
|
|
|
125,586
|
|
||||
Mortgage-backed securities
|
1,906
|
|
|
4
|
|
|
13
|
|
|
1,897
|
|
||||
Collateralized mortgage obligations
|
22,115
|
|
|
—
|
|
|
707
|
|
|
21,408
|
|
||||
Corporate debt securities
|
35,136
|
|
|
548
|
|
|
281
|
|
|
35,403
|
|
||||
Total debt securities
|
$
|
195,619
|
|
|
$
|
1,356
|
|
|
$
|
2,632
|
|
|
$
|
194,343
|
|
|
|
|
As of December 31, 2018
|
|||||||||||||||||||||||
Number
of
Securities
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||||
Available for Sale
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||||
(in thousands, except number of securities)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. Government agencies and corporations
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,495
|
|
|
$
|
27
|
|
|
$
|
5,495
|
|
|
$
|
27
|
|
State and political subdivisions
|
75
|
|
|
27,508
|
|
|
121
|
|
|
12,140
|
|
|
258
|
|
|
39,648
|
|
|
379
|
|
||||||
Mortgage-backed securities
|
24
|
|
|
1,893
|
|
|
15
|
|
|
44,882
|
|
|
1,057
|
|
|
46,775
|
|
|
1,072
|
|
||||||
Collateralized mortgage obligations
|
40
|
|
|
3,906
|
|
|
75
|
|
|
134,742
|
|
|
6,351
|
|
|
138,648
|
|
|
6,426
|
|
||||||
Corporate debt securities
|
11
|
|
|
—
|
|
|
—
|
|
|
58,040
|
|
|
1,017
|
|
|
58,040
|
|
|
1,017
|
|
||||||
Total
|
152
|
|
|
$
|
33,307
|
|
|
$
|
211
|
|
|
$
|
255,299
|
|
|
$
|
8,710
|
|
|
$
|
288,606
|
|
|
$
|
8,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
As of December 31, 2017
|
|||||||||||||||||||||||
|
Number
of
Securities
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||||||
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||||
(in thousands, except number of securities)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. Government agencies and corporations
|
3
|
|
|
$
|
15,626
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,626
|
|
|
$
|
90
|
|
State and political subdivisions
|
34
|
|
|
11,705
|
|
|
167
|
|
|
1,800
|
|
|
30
|
|
|
13,505
|
|
|
197
|
|
||||||
Mortgage-backed securities
|
20
|
|
|
37,964
|
|
|
359
|
|
|
3,961
|
|
|
69
|
|
|
41,925
|
|
|
428
|
|
||||||
Collateralized mortgage obligations
|
35
|
|
|
37,881
|
|
|
489
|
|
|
122,757
|
|
|
4,683
|
|
|
160,638
|
|
|
5,172
|
|
||||||
Corporate debt securities
|
12
|
|
|
55,340
|
|
|
298
|
|
|
8,778
|
|
|
129
|
|
|
64,118
|
|
|
427
|
|
||||||
Total
|
104
|
|
|
$
|
158,516
|
|
|
$
|
1,403
|
|
|
$
|
137,296
|
|
|
$
|
4,911
|
|
|
$
|
295,812
|
|
|
$
|
6,314
|
|
|
|
|
As of December 31, 2018
|
|||||||||||||||||||||||
Number
of
Securities
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||||
Held to Maturity
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||||
(in thousands, except number of securities)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
State and political subdivisions
|
223
|
|
|
$
|
20,905
|
|
|
$
|
130
|
|
|
$
|
56,154
|
|
|
$
|
2,307
|
|
|
$
|
77,059
|
|
|
$
|
2,437
|
|
Mortgage-backed securities
|
6
|
|
|
9,486
|
|
|
298
|
|
|
1,138
|
|
|
33
|
|
|
10,624
|
|
|
331
|
|
||||||
Collateralized mortgage obligations
|
8
|
|
|
—
|
|
|
—
|
|
|
17,849
|
|
|
669
|
|
|
17,849
|
|
|
669
|
|
||||||
Corporate debt securities
|
5
|
|
|
8,177
|
|
|
181
|
|
|
5,685
|
|
|
286
|
|
|
13,862
|
|
|
467
|
|
||||||
Total
|
242
|
|
|
$
|
38,568
|
|
|
$
|
609
|
|
|
$
|
80,826
|
|
|
$
|
3,295
|
|
|
$
|
119,394
|
|
|
$
|
3,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
As of December 31, 2017
|
|||||||||||||||||||||||
|
Number
of
Securities
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|||||||||||||||||||
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||||
(in thousands, except number of securities)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
State and political subdivisions
|
167
|
|
|
$
|
33,237
|
|
|
$
|
393
|
|
|
$
|
25,843
|
|
|
$
|
1,238
|
|
|
$
|
59,080
|
|
|
$
|
1,631
|
|
Mortgage-backed securities
|
4
|
|
|
349
|
|
|
2
|
|
|
887
|
|
|
11
|
|
|
1,236
|
|
|
13
|
|
||||||
Collateralized mortgage obligations
|
7
|
|
|
5,221
|
|
|
90
|
|
|
16,168
|
|
|
617
|
|
|
21,389
|
|
|
707
|
|
||||||
Corporate debt securities
|
3
|
|
|
3,093
|
|
|
4
|
|
|
2,617
|
|
|
277
|
|
|
5,710
|
|
|
281
|
|
||||||
Total
|
181
|
|
|
$
|
41,900
|
|
|
$
|
489
|
|
|
$
|
45,515
|
|
|
$
|
2,143
|
|
|
$
|
87,415
|
|
|
$
|
2,632
|
|
|
Available For Sale
|
|
Held to Maturity
|
||||||||||||
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
23,370
|
|
|
$
|
23,346
|
|
|
$
|
733
|
|
|
$
|
733
|
|
Due after one year through five years
|
100,859
|
|
|
100,040
|
|
|
24,503
|
|
|
24,195
|
|
||||
Due after five years through ten years
|
64,135
|
|
|
64,506
|
|
|
104,117
|
|
|
102,836
|
|
||||
Due after ten years
|
5,638
|
|
|
5,628
|
|
|
36,926
|
|
|
36,256
|
|
||||
Debt securities without a single maturity date
|
227,759
|
|
|
220,581
|
|
|
29,543
|
|
|
28,544
|
|
||||
Total
|
$
|
421,761
|
|
|
$
|
414,101
|
|
|
$
|
195,822
|
|
|
$
|
192,564
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Debt securities available for sale:
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
203
|
|
|
$
|
199
|
|
|
$
|
469
|
|
Gross realized losses
|
(6
|
)
|
|
(11
|
)
|
|
(5
|
)
|
|||
Net realized gain
|
$
|
197
|
|
|
$
|
188
|
|
|
$
|
464
|
|
Debt securities held to maturity:
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
Gross realized losses
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Net realized gain (loss)
|
$
|
(4
|
)
|
|
$
|
53
|
|
|
$
|
—
|
|
Total net realized gain on sale or call of debt securities
|
$
|
193
|
|
|
$
|
241
|
|
|
$
|
464
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net losses recognized
|
$
|
(83
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: Net gains and losses recognized due to sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
Unrealized losses on securities still held at the reporting date
|
$
|
(83
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Note 3.
|
Loans Receivable and the Allowance for Loan Losses
|
|
Recorded Investment in Loan Receivables and Allowance for Loan Losses
|
||||||||||||||||||||||
|
As of December 31, 2018
|
||||||||||||||||||||||
(in thousands)
|
Agricultural
|
|
Commercial and Industrial
|
|
Commercial Real Estate
|
|
Residential Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Loans receivable
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Individually evaluated for impairment
|
$
|
4,090
|
|
|
$
|
8,957
|
|
|
$
|
7,957
|
|
|
$
|
1,760
|
|
|
$
|
24
|
|
|
$
|
22,788
|
|
Collectively evaluated for impairment
|
92,866
|
|
|
524,182
|
|
|
1,246,589
|
|
|
455,941
|
|
|
39,404
|
|
|
2,358,982
|
|
||||||
Purchased credit impaired loans
|
—
|
|
|
49
|
|
|
12,782
|
|
|
4,178
|
|
|
—
|
|
|
17,009
|
|
||||||
Total
|
$
|
96,956
|
|
|
$
|
533,188
|
|
|
$
|
1,267,328
|
|
|
$
|
461,879
|
|
|
$
|
39,428
|
|
|
$
|
2,398,779
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Individually evaluated for impairment
|
$
|
322
|
|
|
$
|
2,159
|
|
|
$
|
2,683
|
|
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
5,284
|
|
Collectively evaluated for impairment
|
3,315
|
|
|
5,318
|
|
|
12,232
|
|
|
1,753
|
|
|
208
|
|
|
22,826
|
|
||||||
Purchased credit impaired loans
|
—
|
|
|
1
|
|
|
720
|
|
|
476
|
|
|
—
|
|
|
1,197
|
|
||||||
Total
|
$
|
3,637
|
|
|
$
|
7,478
|
|
|
$
|
15,635
|
|
|
$
|
2,349
|
|
|
$
|
208
|
|
|
$
|
29,307
|
|
|
As of December 31, 2017
|
||||||||||||||||||||||
(in thousands)
|
Agricultural
|
|
Commercial and Industrial
|
|
Commercial Real Estate
|
|
Residential Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Loans receivable
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Individually evaluated for impairment
|
$
|
2,969
|
|
|
$
|
9,734
|
|
|
$
|
10,386
|
|
|
$
|
3,722
|
|
|
$
|
—
|
|
|
$
|
26,811
|
|
Collectively evaluated for impairment
|
102,543
|
|
|
493,844
|
|
|
1,147,133
|
|
|
460,475
|
|
|
36,158
|
|
|
2,240,153
|
|
||||||
Purchased credit impaired loans
|
—
|
|
|
46
|
|
|
14,452
|
|
|
5,233
|
|
|
—
|
|
|
19,731
|
|
||||||
Total
|
$
|
105,512
|
|
|
$
|
503,624
|
|
|
$
|
1,171,971
|
|
|
$
|
469,430
|
|
|
$
|
36,158
|
|
|
$
|
2,286,695
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Individually evaluated for impairment
|
$
|
140
|
|
|
$
|
1,126
|
|
|
$
|
2,157
|
|
|
$
|
226
|
|
|
$
|
—
|
|
|
$
|
3,649
|
|
Collectively evaluated for impairment
|
2,650
|
|
|
7,392
|
|
|
11,144
|
|
|
2,182
|
|
|
244
|
|
|
23,612
|
|
||||||
Purchased credit impaired loans
|
—
|
|
|
—
|
|
|
336
|
|
|
462
|
|
|
—
|
|
|
798
|
|
||||||
Total
|
$
|
2,790
|
|
|
$
|
8,518
|
|
|
$
|
13,637
|
|
|
$
|
2,870
|
|
|
$
|
244
|
|
|
$
|
28,059
|
|
|
Allowance for Loan Loss Activity
|
||||||||||||||||||||||||||
|
For the Years Ended December 31, 2018, 2017, and 2016
|
||||||||||||||||||||||||||
(in thousands)
|
Agricultural
|
|
Commercial and Industrial
|
|
Commercial Real Estate
|
|
Residential Real Estate
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance
|
$
|
2,790
|
|
|
$
|
8,518
|
|
|
$
|
13,637
|
|
|
$
|
2,870
|
|
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
28,059
|
|
Charge-offs
|
(656
|
)
|
|
(2,752
|
)
|
|
(2,901
|
)
|
|
(113
|
)
|
|
(618
|
)
|
|
—
|
|
|
(7,040
|
)
|
|||||||
Recoveries
|
67
|
|
|
291
|
|
|
290
|
|
|
288
|
|
|
52
|
|
|
—
|
|
|
988
|
|
|||||||
Provision (negative provision)
|
1,436
|
|
|
1,421
|
|
|
4,609
|
|
|
(696
|
)
|
|
530
|
|
|
—
|
|
|
7,300
|
|
|||||||
Ending balance
|
$
|
3,637
|
|
|
$
|
7,478
|
|
|
$
|
15,635
|
|
|
$
|
2,349
|
|
|
$
|
208
|
|
|
$
|
—
|
|
|
$
|
29,307
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance
|
$
|
2,003
|
|
|
$
|
6,274
|
|
|
$
|
9,860
|
|
|
$
|
3,458
|
|
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
21,850
|
|
Charge-offs
|
(1,202
|
)
|
|
(2,338
|
)
|
|
(7,931
|
)
|
|
(305
|
)
|
|
(257
|
)
|
|
—
|
|
|
(12,033
|
)
|
|||||||
Recoveries
|
187
|
|
|
232
|
|
|
291
|
|
|
180
|
|
|
18
|
|
|
—
|
|
|
908
|
|
|||||||
Provision (negative provision)
|
1,802
|
|
|
4,350
|
|
|
11,417
|
|
|
(463
|
)
|
|
228
|
|
|
—
|
|
|
17,334
|
|
|||||||
Ending balance
|
$
|
2,790
|
|
|
$
|
8,518
|
|
|
$
|
13,637
|
|
|
$
|
2,870
|
|
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
28,059
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance
|
$
|
1,417
|
|
|
$
|
5,451
|
|
|
$
|
8,556
|
|
|
$
|
3,968
|
|
|
$
|
409
|
|
|
$
|
(374
|
)
|
|
$
|
19,427
|
|
Charge-offs
|
(1,204
|
)
|
|
(3,066
|
)
|
|
(931
|
)
|
|
(782
|
)
|
|
(98
|
)
|
|
—
|
|
|
(6,081
|
)
|
|||||||
Recoveries
|
33
|
|
|
124
|
|
|
192
|
|
|
157
|
|
|
15
|
|
|
—
|
|
|
521
|
|
|||||||
Provision (negative provision)
|
1,757
|
|
|
3,765
|
|
|
2,043
|
|
|
115
|
|
|
(71
|
)
|
|
374
|
|
|
7,983
|
|
|||||||
Ending balance
|
$
|
2,003
|
|
|
$
|
6,274
|
|
|
$
|
9,860
|
|
|
$
|
3,458
|
|
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
21,850
|
|
•
|
The debtor is currently in default on any of its debt.
|
•
|
The debtor has declared or is in the process of declaring bankruptcy.
|
•
|
There is significant doubt as to whether the debtor will continue to be a going concern.
|
•
|
Currently, the debtor has securities being held as collateral that have been delisted, are in the process of being delisted, or are under threat of being delisted from an exchange.
|
•
|
Based on estimates and projections that only encompass the current business capabilities, the debtor forecasts that its entity-specific cash flows will be insufficient to service the debt (both interest and principal) in accordance with the contractual terms of the existing agreement through maturity.
|
•
|
Absent the current modification, the debtor cannot obtain funds from sources other than the existing creditors at an effective interest rate equal to the current market interest rate for similar debt for a non-troubled debtor.
|
•
|
The borrower receives a reduction of the stated interest rate for the remaining original life of the debt.
|
•
|
The borrower receives an extension of the maturity date or dates at a stated interest rate lower that the current market interest rate for new debt with similar risk characteristics.
|
•
|
The borrower receives a reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement.
|
•
|
The borrower receives a deferral of required payments (principal and/or interest).
|
•
|
The borrower receives a reduction of the accrued interest.
|
|
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
Number of Contracts
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Number of Contracts
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Number of Contracts
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Troubled Debt Restructurings(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Extended maturity date
|
0
|
|
$
|
—
|
|
|
$
|
—
|
|
|
0
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1
|
|
$
|
25
|
|
|
$
|
25
|
|
Commercial and industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Extended maturity date
|
0
|
|
—
|
|
|
—
|
|
|
6
|
|
2,037
|
|
|
2,083
|
|
|
0
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Farmland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Extended maturity date
|
1
|
|
86
|
|
|
86
|
|
|
2
|
|
176
|
|
|
176
|
|
|
0
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate-other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Extended maturity date
|
0
|
|
—
|
|
|
—
|
|
|
2
|
|
4,276
|
|
|
4,276
|
|
|
0
|
|
—
|
|
|
—
|
|
||||||
Other
|
0
|
|
—
|
|
|
—
|
|
|
1
|
|
10,546
|
|
|
10,923
|
|
|
1
|
|
1,000
|
|
|
700
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate reduction
|
0
|
|
—
|
|
|
—
|
|
|
0
|
|
—
|
|
|
—
|
|
|
2
|
|
394
|
|
|
394
|
|
||||||
Extended maturity date
|
1
|
|
39
|
|
|
46
|
|
|
0
|
|
—
|
|
|
—
|
|
|
0
|
|
—
|
|
|
—
|
|
||||||
One- to four- family junior liens
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate reduction
|
0
|
|
—
|
|
|
—
|
|
|
0
|
|
—
|
|
|
—
|
|
|
1
|
|
71
|
|
|
71
|
|
||||||
Total
|
2
|
|
$
|
125
|
|
|
$
|
132
|
|
|
11
|
|
$
|
17,035
|
|
|
$
|
17,458
|
|
|
5
|
|
$
|
1,490
|
|
|
$
|
1,190
|
|
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||
|
Number of Contracts
|
|
Recorded Investment
|
|
Number of Contracts
|
|
Recorded Investment
|
|
Number of Contracts
|
|
Recorded Investment
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Troubled Debt Restructurings(1) That Subsequently Defaulted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Extended maturity date
|
0
|
|
$
|
—
|
|
|
4
|
|
$
|
1,504
|
|
|
0
|
|
$
|
—
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate-other
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Extended maturity date
|
1
|
|
46
|
|
|
1
|
|
968
|
|
|
0
|
|
—
|
|
|||
Total
|
1
|
|
$
|
46
|
|
|
5
|
|
$
|
2,472
|
|
|
0
|
|
$
|
—
|
|
•
|
Changes in national and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments.
|
•
|
Changes in the quality and experience of lending staff and management.
|
•
|
Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses.
|
•
|
Changes in the volume and severity of past due loans, classified loans and non-performing loans.
|
•
|
The existence and potential impact of any concentrations of credit.
|
•
|
Changes in the nature and terms of loans such as growth rates and utilization rates.
|
•
|
Changes in the value of underlying collateral for collateral-dependent loans, considering the Company’s disposition bias.
|
•
|
The effect of other external factors such as the legal and regulatory environment.
|
|
Pass
|
|
Special Mention/Watch
|
|
Substandard
|
|
Doubtful
|
|
Loss
|
|
Total
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
74,126
|
|
|
$
|
12,960
|
|
|
$
|
9,870
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
96,956
|
|
Commercial and industrial
|
499,042
|
|
|
13,583
|
|
|
20,559
|
|
|
4
|
|
|
—
|
|
|
533,188
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
215,625
|
|
|
1,069
|
|
|
923
|
|
|
—
|
|
|
—
|
|
|
217,617
|
|
||||||
Farmland
|
72,924
|
|
|
4,818
|
|
|
11,065
|
|
|
—
|
|
|
—
|
|
|
88,807
|
|
||||||
Multifamily
|
133,310
|
|
|
1,431
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134,741
|
|
||||||
Commercial real estate-other
|
766,702
|
|
|
38,275
|
|
|
21,186
|
|
|
—
|
|
|
—
|
|
|
826,163
|
|
||||||
Total commercial real estate
|
1,188,561
|
|
|
45,593
|
|
|
33,174
|
|
|
—
|
|
|
—
|
|
|
1,267,328
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
335,233
|
|
|
2,080
|
|
|
4,256
|
|
|
261
|
|
|
—
|
|
|
341,830
|
|
||||||
One- to four- family junior liens
|
118,146
|
|
|
426
|
|
|
1,477
|
|
|
—
|
|
|
—
|
|
|
120,049
|
|
||||||
Total residential real estate
|
453,379
|
|
|
2,506
|
|
|
5,733
|
|
|
261
|
|
|
—
|
|
|
461,879
|
|
||||||
Consumer
|
39,357
|
|
|
22
|
|
|
24
|
|
|
25
|
|
|
—
|
|
|
39,428
|
|
||||||
Total
|
$
|
2,254,465
|
|
|
$
|
74,664
|
|
|
$
|
69,360
|
|
|
$
|
290
|
|
|
$
|
—
|
|
|
$
|
2,398,779
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
80,377
|
|
|
$
|
21,989
|
|
|
$
|
3,146
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105,512
|
|
Commercial and industrial
|
453,363
|
|
|
23,153
|
|
|
27,102
|
|
|
6
|
|
|
—
|
|
|
503,624
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
162,968
|
|
|
1,061
|
|
|
1,247
|
|
|
—
|
|
|
—
|
|
|
165,276
|
|
||||||
Farmland
|
76,740
|
|
|
10,357
|
|
|
771
|
|
|
—
|
|
|
—
|
|
|
87,868
|
|
||||||
Multifamily
|
131,507
|
|
|
2,498
|
|
|
501
|
|
|
—
|
|
|
—
|
|
|
134,506
|
|
||||||
Commercial real estate-other
|
731,231
|
|
|
34,056
|
|
|
19,034
|
|
|
—
|
|
|
—
|
|
|
784,321
|
|
||||||
Total commercial real estate
|
1,102,446
|
|
|
47,972
|
|
|
21,553
|
|
|
—
|
|
|
—
|
|
|
1,171,971
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
340,446
|
|
|
2,776
|
|
|
9,004
|
|
|
—
|
|
|
—
|
|
|
352,226
|
|
||||||
One- to four- family junior liens
|
114,763
|
|
|
952
|
|
|
1,489
|
|
|
—
|
|
|
—
|
|
|
117,204
|
|
||||||
Total residential real estate
|
455,209
|
|
|
3,728
|
|
|
10,493
|
|
|
—
|
|
|
—
|
|
|
469,430
|
|
||||||
Consumer
|
36,059
|
|
|
—
|
|
|
68
|
|
|
31
|
|
|
—
|
|
|
36,158
|
|
||||||
Total
|
$
|
2,127,454
|
|
|
$
|
96,842
|
|
|
$
|
62,362
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
2,286,695
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
1,999
|
|
|
$
|
2,511
|
|
|
$
|
—
|
|
|
$
|
1,523
|
|
|
$
|
2,023
|
|
|
$
|
—
|
|
Commercial and industrial
|
2,761
|
|
|
2,977
|
|
|
—
|
|
|
7,588
|
|
|
7,963
|
|
|
—
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
84
|
|
|
84
|
|
|
—
|
|
|
84
|
|
|
84
|
|
|
—
|
|
||||||
Farmland
|
110
|
|
|
110
|
|
|
—
|
|
|
287
|
|
|
287
|
|
|
—
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate-other
|
1,533
|
|
|
2,046
|
|
|
—
|
|
|
5,746
|
|
|
6,251
|
|
|
—
|
|
||||||
Total commercial real estate
|
1,727
|
|
|
2,240
|
|
|
—
|
|
|
6,117
|
|
|
6,622
|
|
|
—
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
617
|
|
|
644
|
|
|
—
|
|
|
2,449
|
|
|
2,482
|
|
|
—
|
|
||||||
One- to four- family junior liens
|
292
|
|
|
293
|
|
|
—
|
|
|
26
|
|
|
26
|
|
|
—
|
|
||||||
Total residential real estate
|
909
|
|
|
937
|
|
|
—
|
|
|
2,475
|
|
|
2,508
|
|
|
—
|
|
||||||
Consumer
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
7,420
|
|
|
$
|
8,689
|
|
|
$
|
—
|
|
|
$
|
17,703
|
|
|
$
|
19,116
|
|
|
$
|
—
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
2,091
|
|
|
$
|
2,097
|
|
|
$
|
322
|
|
|
$
|
1,446
|
|
|
$
|
1,446
|
|
|
$
|
140
|
|
Commercial and industrial
|
6,196
|
|
|
8,550
|
|
|
2,159
|
|
|
2,146
|
|
|
2,177
|
|
|
1,126
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Farmland
|
2,123
|
|
|
2,123
|
|
|
662
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate-other
|
4,107
|
|
|
4,365
|
|
|
2,021
|
|
|
4,269
|
|
|
11,536
|
|
|
2,157
|
|
||||||
Total commercial real estate
|
6,230
|
|
|
6,488
|
|
|
2,683
|
|
|
4,269
|
|
|
11,536
|
|
|
2,157
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
851
|
|
|
851
|
|
|
120
|
|
|
979
|
|
|
979
|
|
|
185
|
|
||||||
One- to four- family junior liens
|
—
|
|
|
—
|
|
|
—
|
|
|
268
|
|
|
268
|
|
|
41
|
|
||||||
Total residential real estate
|
851
|
|
|
851
|
|
|
120
|
|
|
1,247
|
|
|
1,247
|
|
|
226
|
|
||||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
15,368
|
|
|
$
|
17,986
|
|
|
$
|
5,284
|
|
|
$
|
9,108
|
|
|
$
|
16,406
|
|
|
$
|
3,649
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
4,090
|
|
|
$
|
4,608
|
|
|
$
|
322
|
|
|
$
|
2,969
|
|
|
$
|
3,469
|
|
|
$
|
140
|
|
Commercial and industrial
|
8,957
|
|
|
11,527
|
|
|
2,159
|
|
|
9,734
|
|
|
10,140
|
|
|
1,126
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
84
|
|
|
84
|
|
|
—
|
|
|
84
|
|
|
84
|
|
|
—
|
|
||||||
Farmland
|
2,233
|
|
|
2,233
|
|
|
662
|
|
|
287
|
|
|
287
|
|
|
—
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate-other
|
5,640
|
|
|
6,411
|
|
|
2,021
|
|
|
10,015
|
|
|
17,787
|
|
|
2,157
|
|
||||||
Total commercial real estate
|
7,957
|
|
|
8,728
|
|
|
2,683
|
|
|
10,386
|
|
|
18,158
|
|
|
2,157
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
1,468
|
|
|
1,495
|
|
|
120
|
|
|
3,428
|
|
|
3,461
|
|
|
185
|
|
||||||
One- to four- family junior liens
|
292
|
|
|
293
|
|
|
—
|
|
|
294
|
|
|
294
|
|
|
41
|
|
||||||
Total residential real estate
|
1,760
|
|
|
1,788
|
|
|
120
|
|
|
3,722
|
|
|
3,755
|
|
|
226
|
|
||||||
Consumer
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
22,788
|
|
|
$
|
26,675
|
|
|
$
|
5,284
|
|
|
$
|
26,811
|
|
|
$
|
35,522
|
|
|
$
|
3,649
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
1,608
|
|
|
$
|
53
|
|
|
$
|
1,585
|
|
|
$
|
66
|
|
|
$
|
3,815
|
|
|
$
|
88
|
|
Commercial and industrial
|
2,607
|
|
|
94
|
|
|
7,588
|
|
|
230
|
|
|
6,540
|
|
|
79
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
84
|
|
|
—
|
|
|
364
|
|
|
2
|
|
|
390
|
|
|
54
|
|
||||||
Farmland
|
66
|
|
|
—
|
|
|
1,012
|
|
|
58
|
|
|
2,389
|
|
|
97
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate-other
|
1,328
|
|
|
41
|
|
|
5,682
|
|
|
233
|
|
|
2,243
|
|
|
60
|
|
||||||
Total commercial real estate
|
1,478
|
|
|
41
|
|
|
7,058
|
|
|
293
|
|
|
5,022
|
|
|
211
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
404
|
|
|
—
|
|
|
2,406
|
|
|
84
|
|
|
2,430
|
|
|
101
|
|
||||||
One- to four- family junior liens
|
287
|
|
|
—
|
|
|
27
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Total residential real estate
|
691
|
|
|
—
|
|
|
2,433
|
|
|
86
|
|
|
2,430
|
|
|
101
|
|
||||||
Consumer
|
5
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
6,389
|
|
|
$
|
189
|
|
|
$
|
18,664
|
|
|
$
|
675
|
|
|
$
|
17,807
|
|
|
$
|
479
|
|
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
1,876
|
|
|
$
|
56
|
|
|
$
|
1,457
|
|
|
$
|
44
|
|
|
$
|
1,678
|
|
|
$
|
46
|
|
Commercial and industrial
|
4,991
|
|
|
59
|
|
|
2,189
|
|
|
103
|
|
|
5,277
|
|
|
74
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|
3
|
|
||||||
Farmland
|
1,692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate-other
|
2,146
|
|
|
190
|
|
|
4,275
|
|
|
34
|
|
|
6,515
|
|
|
—
|
|
||||||
Total commercial real estate
|
3,838
|
|
|
190
|
|
|
4,275
|
|
|
34
|
|
|
6,778
|
|
|
3
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
861
|
|
|
32
|
|
|
1,030
|
|
|
35
|
|
|
1,559
|
|
|
41
|
|
||||||
One- to four- family junior liens
|
—
|
|
|
—
|
|
|
267
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||||
Total residential real estate
|
861
|
|
|
32
|
|
|
1,297
|
|
|
40
|
|
|
1,559
|
|
|
41
|
|
||||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
11,566
|
|
|
$
|
337
|
|
|
$
|
9,218
|
|
|
$
|
221
|
|
|
$
|
15,292
|
|
|
$
|
164
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
3,484
|
|
|
$
|
109
|
|
|
$
|
3,042
|
|
|
$
|
110
|
|
|
$
|
5,493
|
|
|
$
|
134
|
|
Commercial and industrial
|
7,598
|
|
|
153
|
|
|
9,777
|
|
|
333
|
|
|
11,817
|
|
|
153
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
84
|
|
|
—
|
|
|
364
|
|
|
2
|
|
|
653
|
|
|
57
|
|
||||||
Farmland
|
1,758
|
|
|
—
|
|
|
1,012
|
|
|
58
|
|
|
2,389
|
|
|
97
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate-other
|
3,474
|
|
|
231
|
|
|
9,957
|
|
|
267
|
|
|
8,758
|
|
|
60
|
|
||||||
Total commercial real estate
|
5,316
|
|
|
231
|
|
|
11,333
|
|
|
327
|
|
|
11,800
|
|
|
214
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
1,265
|
|
|
32
|
|
|
3,436
|
|
|
119
|
|
|
3,989
|
|
|
142
|
|
||||||
One- to four- family junior liens
|
287
|
|
|
—
|
|
|
294
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||||
Total residential real estate
|
1,552
|
|
|
32
|
|
|
3,730
|
|
|
126
|
|
|
3,989
|
|
|
142
|
|
||||||
Consumer
|
5
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
17,955
|
|
|
$
|
526
|
|
|
$
|
27,882
|
|
|
$
|
896
|
|
|
$
|
33,099
|
|
|
$
|
643
|
|
|
30 - 59 Days Past Due
|
|
60 - 89 Days Past Due
|
|
90 Days or More Past Due
|
|
Total Past Due
|
|
Current
|
|
Total Loans Receivable
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
97
|
|
|
$
|
130
|
|
|
$
|
248
|
|
|
$
|
475
|
|
|
$
|
96,481
|
|
|
$
|
96,956
|
|
Commercial and industrial
|
2,467
|
|
|
9
|
|
|
4,475
|
|
|
6,951
|
|
|
526,237
|
|
|
533,188
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
42
|
|
|
—
|
|
|
93
|
|
|
135
|
|
|
217,482
|
|
|
217,617
|
|
||||||
Farmland
|
44
|
|
|
—
|
|
|
529
|
|
|
573
|
|
|
88,234
|
|
|
88,807
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134,741
|
|
|
134,741
|
|
||||||
Commercial real estate-other
|
436
|
|
|
2,655
|
|
|
1,327
|
|
|
4,418
|
|
|
821,745
|
|
|
826,163
|
|
||||||
Total commercial real estate
|
522
|
|
|
2,655
|
|
|
1,949
|
|
|
5,126
|
|
|
1,262,202
|
|
|
1,267,328
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
1,876
|
|
|
1,332
|
|
|
977
|
|
|
4,185
|
|
|
337,645
|
|
|
341,830
|
|
||||||
One- to four- family junior liens
|
406
|
|
|
114
|
|
|
474
|
|
|
994
|
|
|
119,055
|
|
|
120,049
|
|
||||||
Total residential real estate
|
2,282
|
|
|
1,446
|
|
|
1,451
|
|
|
5,179
|
|
|
456,700
|
|
|
461,879
|
|
||||||
Consumer
|
47
|
|
|
16
|
|
|
24
|
|
|
87
|
|
|
39,341
|
|
|
39,428
|
|
||||||
Total
|
$
|
5,415
|
|
|
$
|
4,256
|
|
|
$
|
8,147
|
|
|
$
|
17,818
|
|
|
$
|
2,380,961
|
|
|
$
|
2,398,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in the totals above are the following purchased credit impaired loans
|
$
|
295
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
295
|
|
|
$
|
16,714
|
|
|
$
|
17,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agricultural
|
$
|
95
|
|
|
$
|
118
|
|
|
$
|
168
|
|
|
$
|
381
|
|
|
$
|
105,131
|
|
|
$
|
105,512
|
|
Commercial and industrial
|
1,434
|
|
|
1,336
|
|
|
1,576
|
|
|
4,346
|
|
|
499,278
|
|
|
503,624
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction & development
|
57
|
|
|
97
|
|
|
82
|
|
|
236
|
|
|
165,040
|
|
|
165,276
|
|
||||||
Farmland
|
217
|
|
|
—
|
|
|
373
|
|
|
590
|
|
|
87,278
|
|
|
87,868
|
|
||||||
Multifamily
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|
134,481
|
|
|
134,506
|
|
||||||
Commercial real estate-other
|
74
|
|
|
—
|
|
|
1,852
|
|
|
1,926
|
|
|
782,395
|
|
|
784,321
|
|
||||||
Total commercial real estate
|
348
|
|
|
122
|
|
|
2,307
|
|
|
2,777
|
|
|
1,169,194
|
|
|
1,171,971
|
|
||||||
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One- to four- family first liens
|
3,854
|
|
|
756
|
|
|
1,019
|
|
|
5,629
|
|
|
346,597
|
|
|
352,226
|
|
||||||
One- to four- family junior liens
|
325
|
|
|
770
|
|
|
271
|
|
|
1,366
|
|
|
115,838
|
|
|
117,204
|
|
||||||
Total residential real estate
|
4,179
|
|
|
1,526
|
|
|
1,290
|
|
|
6,995
|
|
|
462,435
|
|
|
469,430
|
|
||||||
Consumer
|
79
|
|
|
15
|
|
|
29
|
|
|
123
|
|
|
36,035
|
|
|
36,158
|
|
||||||
Total
|
$
|
6,135
|
|
|
$
|
3,117
|
|
|
$
|
5,370
|
|
|
$
|
14,622
|
|
|
$
|
2,272,073
|
|
|
$
|
2,286,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in the totals above are the following purchased credit impaired loans
|
164
|
|
|
756
|
|
|
553
|
|
|
1,473
|
|
|
18,258
|
|
|
19,731
|
|
|
As of December 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Non-Accrual
|
|
Loans Past Due 90 Days or More and Still Accruing
|
|
Non-Accrual
|
|
Loans Past Due 90 Days or More and Still Accruing
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
Agricultural
|
$
|
1,622
|
|
|
$
|
—
|
|
|
$
|
168
|
|
|
$
|
—
|
|
Commercial and industrial
|
9,218
|
|
|
—
|
|
|
7,124
|
|
|
—
|
|
||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Construction & development
|
99
|
|
|
—
|
|
|
188
|
|
|
—
|
|
||||
Farmland
|
2,751
|
|
|
—
|
|
|
386
|
|
|
—
|
|
||||
Multifamily
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial real estate-other
|
4,558
|
|
|
—
|
|
|
5,279
|
|
|
—
|
|
||||
Total commercial real estate
|
7,408
|
|
|
—
|
|
|
5,853
|
|
|
—
|
|
||||
Residential real estate:
|
|
|
|
|
|
|
|
||||||||
One- to four- family first liens
|
1,049
|
|
|
341
|
|
|
1,228
|
|
|
205
|
|
||||
One- to four- family junior liens
|
465
|
|
|
24
|
|
|
346
|
|
|
2
|
|
||||
Total residential real estate
|
1,514
|
|
|
365
|
|
|
1,574
|
|
|
207
|
|
||||
Consumer
|
162
|
|
|
—
|
|
|
65
|
|
|
—
|
|
||||
Total
|
$
|
19,924
|
|
|
$
|
365
|
|
|
$
|
14,784
|
|
|
$
|
207
|
|
•
|
Purchased non-credit impaired loans are accounted for in accordance with ASC 310-20 “Nonrefundable Fees and Other Costs” as these loans do not have evidence of significant credit deterioration since origination and it is probable all contractually required payments will be received from the borrower.
|
•
|
Purchased credit impaired loans are accounted for in accordance with ASC 310-30 “Loans and Debt Securities Acquired with Deteriorated Credit Quality” as they display significant credit deterioration since origination and it is probable, as of the acquisition date, that the Company will be unable to collect all contractually required payments from the borrower.
|
|
For the Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Balance at beginning of period
|
$
|
840
|
|
|
$
|
1,961
|
|
Purchases
|
—
|
|
|
—
|
|
||
Accretion
|
(802
|
)
|
|
(1,711
|
)
|
||
Reclassification from nonaccretable difference (1)
|
118
|
|
|
590
|
|
||
Balance at end of period
|
$
|
156
|
|
|
$
|
840
|
|
Note 4.
|
Derivatives and Hedging Activities
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||
|
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||
(in thousands)
|
|
Notional
Amount
|
|
Derivative
Assets
|
|
Derivative
Liabilities
|
|
Notional
Amount
|
|
Derivative
Assets
|
|
Derivative
Liabilities
|
||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
8,927
|
|
|
$
|
—
|
|
|
$
|
223
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
13,830
|
|
|
$
|
321
|
|
|
$
|
359
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Risk participation agreements (RPAs)
|
|
10,112
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
$
|
23,942
|
|
|
$
|
321
|
|
|
$
|
444
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Location and Amount of Gain or Loss Recognized in Income on Fair Value Hedging Relationships
|
||||||||||||||||||||||
|
For the Years Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
(in thousands)
|
Interest Income (Expense)
|
|
Other Gain (Loss)
|
|
Interest Income (Expense)
|
|
Other Gain (Loss)
|
|
Interest Income (Expense)
|
|
Other Gain (Loss)
|
||||||||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value hedges are recorded
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
The effects of fair value hedging:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain (Loss) on fair value hedging relationships in subtopic 815-20:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Hedged items
|
221
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Derivative designated as hedging instruments
|
(223
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Line Item in the Balance
Sheet in Which the
Hedged Item is Included
|
|
Carrying Amount of the
Hedged Assets
|
|
Cumulative Amount of Fair Value
Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
|
||||
(in thousands)
|
|
|
|
|
||||
Loans
|
|
$
|
9,148
|
|
|
$
|
221
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Customer Counterparties
|
|
Financial Counterparties
|
||||||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||
(in thousands)
|
Notional Amount
|
|
Assets
|
|
Liabilities
|
|
Notional Amount
|
|
Assets
|
|
Liabilities
|
||||||||||||
Swaps
|
$
|
6,915
|
|
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
6,915
|
|
|
$
|
—
|
|
|
$
|
359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
December 31, 2017
|
||||||||||||||||||||||
|
Customer Counterparties
|
|
Financial Counterparties
|
||||||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||
(in thousands)
|
Notional Amount
|
|
Assets
|
|
Liabilities
|
|
Notional Amount
|
|
Assets
|
|
Liabilities
|
||||||||||||
Swaps
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||
(in thousands)
|
Notional Amount
|
|
Assets
|
|
Liabilities
|
|
Notional Amount
|
|
Assets
|
|
Liabilities
|
||||||||||||
RPAs - protection purchased
|
$
|
10,112
|
|
|
$
|
—
|
|
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Location in the Consolidated Statements of Income
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|||||||
Interest rate swaps
|
Other gain (loss)
|
|
$
|
(38
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
RPAs
|
Other gain (loss)
|
|
115
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheet
|
|
|
|||||||||||||||
(in thousands)
|
Gross Amounts of Recognized Assets (Liabilities)
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Amounts of Assets (Liabilities) presented in the Balance Sheet
|
|
Financial Instruments
|
|
Cash Collateral Received (Paid)
|
|
Net Assets (Liabilities)
|
||||||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset Derivatives
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liability Derivatives
|
(667
|
)
|
|
—
|
|
|
(667
|
)
|
|
—
|
|
|
(530
|
)
|
|
(137
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liability Derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Note 5.
|
Premises and Equipment
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Land
|
$
|
12,464
|
|
|
$
|
13,175
|
|
Buildings and leasehold improvements
|
75,775
|
|
|
71,057
|
|
||
Furniture and equipment
|
17,752
|
|
|
16,535
|
|
||
Construction in process
|
95
|
|
|
2,658
|
|
||
Premises and equipment
|
106,086
|
|
|
103,425
|
|
||
Accumulated depreciation and amortization
|
30,313
|
|
|
27,456
|
|
||
Premises and equipment, net
|
$
|
75,773
|
|
|
$
|
75,969
|
|
Note 6.
|
Goodwill and Intangible Assets
|
|
Insurance Agency Intangible
|
|
Core Deposit Intangible
|
|
Indefinite-Lived Trade Name Intangible
|
|
Finite-Lived Trade Name Intangible
|
|
Customer List Intangible
|
|
Total
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, beginning of period
|
$
|
148
|
|
|
$
|
4,011
|
|
|
$
|
7,040
|
|
|
$
|
744
|
|
|
$
|
103
|
|
|
$
|
12,046
|
|
Intangible assets acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
125
|
|
||||||
Amortization expense
|
(38
|
)
|
|
(2,038
|
)
|
|
—
|
|
|
(188
|
)
|
|
(32
|
)
|
|
(2,296
|
)
|
||||||
Balance at end of period
|
$
|
110
|
|
|
$
|
1,973
|
|
|
$
|
7,040
|
|
|
$
|
556
|
|
|
$
|
196
|
|
|
$
|
9,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross carrying amount
|
$
|
1,320
|
|
|
$
|
18,206
|
|
|
$
|
7,040
|
|
|
$
|
1,380
|
|
|
$
|
455
|
|
|
$
|
28,401
|
|
Accumulated amortization
|
(1,210
|
)
|
|
(16,233
|
)
|
|
—
|
|
|
(824
|
)
|
|
(259
|
)
|
|
(18,526
|
)
|
||||||
Net book value
|
$
|
110
|
|
|
$
|
1,973
|
|
|
$
|
7,040
|
|
|
$
|
556
|
|
|
$
|
196
|
|
|
$
|
9,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Remaining weighted average useful life (years)
|
6
|
|
|
2
|
|
|
|
|
6
|
|
|
5
|
|
|
|
|
Insurance Agency Intangible
|
|
Core Deposit Intangible
|
|
Indefinite-Lived Trade Name Intangible
|
|
Finite-Lived Trade Name Intangible
|
|
Customer List Intangible
|
|
Total
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, beginning of period
|
$
|
203
|
|
|
$
|
6,846
|
|
|
$
|
7,040
|
|
|
$
|
960
|
|
|
$
|
122
|
|
|
$
|
15,171
|
|
Amortization expense
|
(55
|
)
|
|
(2,835
|
)
|
|
—
|
|
|
(216
|
)
|
|
(19
|
)
|
|
(3,125
|
)
|
||||||
Balance at end of period
|
$
|
148
|
|
|
$
|
4,011
|
|
|
$
|
7,040
|
|
|
$
|
744
|
|
|
$
|
103
|
|
|
$
|
12,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross carrying amount
|
$
|
1,320
|
|
|
$
|
18,206
|
|
|
$
|
7,040
|
|
|
$
|
1,380
|
|
|
$
|
330
|
|
|
$
|
28,276
|
|
Accumulated amortizations
|
(1,172
|
)
|
|
(14,195
|
)
|
|
—
|
|
|
(636
|
)
|
|
(227
|
)
|
|
(16,230
|
)
|
||||||
Net book value
|
$
|
148
|
|
|
$
|
4,011
|
|
|
$
|
7,040
|
|
|
$
|
744
|
|
|
$
|
103
|
|
|
$
|
12,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Remaining weighted average useful life (years)
|
6
|
|
|
4
|
|
|
|
|
7
|
|
|
6
|
|
|
|
|
Insurance
|
|
Core
|
|
Trade
|
|
Customer
|
|
|
||||||||||
|
Agency
|
|
Deposit
|
|
Name
|
|
List
|
|
|
||||||||||
|
Intangible
|
|
Premium
|
|
Intangible
|
|
Intangible
|
|
Totals
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ending December 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
21
|
|
|
$
|
1,312
|
|
|
$
|
161
|
|
|
$
|
42
|
|
|
$
|
1,536
|
|
2020
|
20
|
|
|
612
|
|
|
133
|
|
|
41
|
|
|
806
|
|
|||||
2021
|
19
|
|
|
49
|
|
|
106
|
|
|
40
|
|
|
214
|
|
|||||
2022
|
18
|
|
|
—
|
|
|
79
|
|
|
39
|
|
|
136
|
|
|||||
2023
|
17
|
|
|
—
|
|
|
51
|
|
|
25
|
|
|
93
|
|
|||||
Thereafter
|
15
|
|
|
—
|
|
|
26
|
|
|
9
|
|
|
50
|
|
|||||
Total
|
$
|
110
|
|
|
$
|
1,973
|
|
|
$
|
556
|
|
|
$
|
196
|
|
|
$
|
2,835
|
|
Note 7.
|
Other Assets
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Federal Home Loan Bank Stock
|
$
|
14,678
|
|
|
$
|
11,324
|
|
Prepaid expenses
|
1,951
|
|
|
2,992
|
|
||
Mortgage servicing rights
|
2,803
|
|
|
2,316
|
|
||
Federal and state taxes, current
|
2,361
|
|
|
3,120
|
|
||
Accounts receivable & other miscellaneous assets
|
6,574
|
|
|
3,009
|
|
||
|
$
|
28,367
|
|
|
$
|
22,761
|
|
Note 8.
|
Loans Serviced for Others
|
Note 9.
|
Deposits
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Non-interest-bearing demand
|
$
|
439,133
|
|
|
$
|
461,969
|
|
NOW and money market
|
1,239,733
|
|
|
1,228,112
|
|
||
Savings
|
210,416
|
|
|
213,430
|
|
||
Certificates of deposit under $250,000
|
532,395
|
|
|
482,940
|
|
||
Certificates of deposit of $250,000 or more
|
191,252
|
|
|
218,868
|
|
||
Total deposits
|
$
|
2,612,929
|
|
|
$
|
2,605,319
|
|
Note 10.
|
Short-Term Borrowings
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
(dollars in thousands)
|
|
Weighted Average Cost
|
|
Balance
|
|
Weighted Average Cost
|
|
Balance
|
||||||
Federal funds purchased
|
|
2.60
|
%
|
|
$
|
56,900
|
|
|
1.77
|
%
|
|
$
|
1,000
|
|
Securities sold under agreements to repurchase
|
|
1.00
|
|
|
74,522
|
|
|
0.71
|
|
|
96,229
|
|
||
Total
|
|
1.69
|
%
|
|
$
|
131,422
|
|
|
0.73
|
%
|
|
$
|
97,229
|
|
Note 11.
|
Junior Subordinated Notes Issued to Capital Trusts
|
|
|
Face Value
|
|
Book Value
|
|
Interest Rate
|
|
Year-end
Interest Rate
|
|
Maturity Date
|
|
Callable Date
|
|||||
(in thousands)
|
|
|
|
|
|
|
|||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Central Bancshares Capital Trust II
|
|
$
|
7,217
|
|
|
$
|
6,730
|
|
|
Three-month LIBOR + 3.50%
|
|
6.29
|
%
|
|
03/15/2038
|
|
03/15/2013
|
Barron Investment Capital Trust I
|
|
2,062
|
|
|
1,694
|
|
|
Three-month LIBOR + 2.15%
|
|
4.97
|
%
|
|
09/23/2036
|
|
09/23/2011
|
||
MidWestOne Statutory Trust II
|
|
15,464
|
|
|
15,464
|
|
|
Three-month LIBOR + 1.59%
|
|
4.38
|
%
|
|
12/15/2037
|
|
12/15/2012
|
||
Total
|
|
$
|
24,743
|
|
|
$
|
23,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Central Bancshares Capital Trust II
|
|
$
|
7,217
|
|
|
$
|
6,674
|
|
|
Three-month LIBOR + 3.50%
|
|
5.09
|
%
|
|
3/15/2038
|
|
3/15/2013
|
Barron Investment Capital Trust I
|
|
2,062
|
|
|
1,655
|
|
|
Three-month LIBOR + 2.15%
|
|
3.82
|
%
|
|
9/23/2036
|
|
9/23/2011
|
||
MidWestOne Statutory Trust II
|
|
15,464
|
|
|
15,464
|
|
|
Three-month LIBOR + 1.59%
|
|
3.18
|
%
|
|
12/15/2037
|
|
12/15/2012
|
||
Total
|
|
$
|
24,743
|
|
|
$
|
23,793
|
|
|
|
|
|
|
|
|
|
Note 12.
|
Federal Home Loan Bank Borrowings and Long-Term Debt
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
(dollars in thousands)
|
|
Weighted Average Cost
|
|
Balance
|
|
Weighted Average Cost
|
|
Balance
|
||||||
FHLB Borrowings
|
|
2.45
|
%
|
|
$
|
136,000
|
|
|
1.72
|
%
|
|
$
|
115,000
|
|
Note payable to unaffiliated bank
|
|
4.13
|
|
|
7,500
|
|
|
3.32
|
|
|
12,500
|
|
||
Total
|
|
2.54
|
%
|
|
$
|
143,500
|
|
|
1.88
|
%
|
|
$
|
127,500
|
|
|
Rates
|
|
Amount
|
||||||||||
|
Minimum
|
|
Maximum
|
|
2018
|
|
2017
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
Due in 2018
|
1.30
|
%
|
|
1.60
|
%
|
|
—
|
|
|
19,000
|
|
||
Due in 2019
|
1.42
|
%
|
to
|
2.48
|
%
|
|
52,000
|
|
|
27,000
|
|
||
Due in 2020
|
1.52
|
%
|
to
|
2.68
|
%
|
|
47,000
|
|
|
47,000
|
|
||
Due in 2021
|
1.93
|
%
|
to
|
2.74
|
%
|
|
37,000
|
|
|
22,000
|
|
||
Total
|
|
|
|
|
$
|
136,000
|
|
|
$
|
115,000
|
|
Note 13.
|
Income Taxes
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal tax expense
|
$
|
5,293
|
|
|
$
|
7,289
|
|
|
$
|
7,410
|
|
State tax expense
|
3,004
|
|
|
2,435
|
|
|
2,303
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Deferred income tax expense
|
(676
|
)
|
|
744
|
|
|
(2,853
|
)
|
|||
Excess tax benefit from share-based award activity
|
(4
|
)
|
|
(92
|
)
|
|
—
|
|
|||
Total income tax provision
|
$
|
7,617
|
|
|
$
|
10,376
|
|
|
$
|
6,860
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(dollars in thousands)
|
Amount
|
|
% of Pretax Income
|
|
Amount
|
|
% of Pretax Income
|
|
Amount
|
|
% of Pretax Income
|
|||||||||
Expected provision
|
$
|
7,973
|
|
|
21.0
|
%
|
|
$
|
10,176
|
|
|
35.0
|
%
|
|
$
|
9,538
|
|
|
35.0
|
%
|
Tax-exempt interest
|
(1,876
|
)
|
|
(4.9
|
)
|
|
(3,182
|
)
|
|
(10.9
|
)
|
|
(3,011
|
)
|
|
(11.0
|
)
|
|||
Bank-owned life insurance
|
(337
|
)
|
|
(0.9
|
)
|
|
(485
|
)
|
|
(1.7
|
)
|
|
(477
|
)
|
|
(1.8
|
)
|
|||
State income taxes, net of federal income tax benefit
|
2,040
|
|
|
5.4
|
|
|
1,307
|
|
|
4.5
|
|
|
1,257
|
|
|
4.6
|
|
|||
Non-deductible acquisition expenses
|
122
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
0.3
|
|
|||
General business credits
|
(343
|
)
|
|
(0.9
|
)
|
|
(466
|
)
|
|
(1.6
|
)
|
|
(537
|
)
|
|
(2.0
|
)
|
|||
Federal income tax rate change
|
—
|
|
|
—
|
|
|
3,212
|
|
|
11.1
|
|
|
—
|
|
|
—
|
|
|||
Other
|
38
|
|
|
0.1
|
|
|
(186
|
)
|
|
(0.7
|
)
|
|
7
|
|
|
0.1
|
|
|||
Total income tax provision
|
$
|
7,617
|
|
|
20.1
|
%
|
|
$
|
10,376
|
|
|
35.7
|
%
|
|
$
|
6,860
|
|
|
25.2
|
%
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Deferred income tax assets:
|
|
|
|
||||
Allowance for loan losses
|
$
|
7,636
|
|
|
$
|
7,311
|
|
Deferred compensation
|
1,361
|
|
|
1,344
|
|
||
Net operating losses (state net operating loss carryforwards)
|
4,283
|
|
|
4,131
|
|
||
Unrealized losses on investment securities
|
1,999
|
|
|
928
|
|
||
Foreclosed assets
|
119
|
|
|
175
|
|
||
Deferred loan fees
|
124
|
|
|
143
|
|
||
Other
|
1,988
|
|
|
1,777
|
|
||
Gross deferred tax assets
|
17,510
|
|
|
15,809
|
|
||
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Premises and equipment depreciation and amortization
|
2,947
|
|
|
2,604
|
|
||
Federal Home Loan Bank stock
|
91
|
|
|
91
|
|
||
Purchase accounting adjustments
|
769
|
|
|
1,179
|
|
||
Mortgage servicing rights
|
730
|
|
|
603
|
|
||
Prepaid expenses
|
243
|
|
|
523
|
|
||
Other
|
174
|
|
|
153
|
|
||
Gross deferred tax liabilities
|
4,954
|
|
|
5,153
|
|
||
Net deferred income tax asset
|
12,556
|
|
|
10,656
|
|
||
Valuation allowance
|
4,283
|
|
|
4,131
|
|
||
Net deferred tax asset
|
$
|
8,273
|
|
|
$
|
6,525
|
|
Note 14.
|
Employee Benefit Plans
|
Note 15.
|
Stock Compensation Plans
|
|
|
|
|
|
Weighted-
|
|
|
|||||
|
|
|
|
|
Average
|
|
|
|||||
|
|
|
Weighted-
|
|
Remaining
|
|
Aggregate
|
|||||
|
|
|
Average
|
|
Contractual
|
|
Intrinsic
|
|||||
|
|
|
Exercise
|
|
Term in
|
|
Value
|
|||||
|
Shares
|
|
Price
|
|
Years
|
|
($000)
|
|||||
Outstanding at December 31, 2017
|
9,700
|
|
|
$
|
13.98
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(9,700
|
)
|
|
13.98
|
|
|
|
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|||
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
0.00
|
|
$
|
—
|
|
Exercisable at December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
0.00
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|||
|
|
|
Average
|
|||
|
|
|
Grant-Date
|
|||
|
Shares
|
|
Fair Value
|
|||
Nonvested at December 31, 2017
|
68,200
|
|
|
$
|
31.39
|
|
Granted
|
49,960
|
|
|
31.35
|
|
|
Vested
|
(29,715
|
)
|
|
30.66
|
|
|
Forfeited
|
(4,695
|
)
|
|
31.23
|
|
|
Nonvested at December 31, 2018
|
83,750
|
|
|
$
|
31.63
|
|
Note 16.
|
Earnings per Share
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(dollars in thousands, except per share amounts)
|
|
|
|
|
|
||||||
Basic earnings per common share computation
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
30,351
|
|
|
$
|
18,699
|
|
|
$
|
20,391
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
12,219,725
|
|
|
12,038,499
|
|
|
11,430,087
|
|
|||
Basic earnings per common share
|
$
|
2.48
|
|
|
$
|
1.55
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share computation
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
30,351
|
|
|
$
|
18,699
|
|
|
$
|
20,391
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding, included all dilutive potential shares
|
12,237,153
|
|
|
12,062,577
|
|
|
11,456,324
|
|
|||
Diluted earnings per common share
|
$
|
2.48
|
|
|
$
|
1.55
|
|
|
$
|
1.78
|
|
Note 17.
|
Regulatory Capital Requirements and Restrictions on Subsidiary Cash
|
|
Actual
|
|
For Capital Adequacy Purposes
|
|
To Be Well Capitalized Under Prompt Corrective Action Provisions
|
|||||||||||||||
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio(1)
|
|
Amount
|
|
Ratio
|
|||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
At December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital/risk weighted assets
|
$
|
342,054
|
|
|
12.23
|
%
|
|
$
|
276,283
|
|
|
9.875
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Tier 1 capital/risk weighted assets
|
312,747
|
|
|
11.18
|
|
|
220,327
|
|
|
7.875
|
|
|
N/A
|
|
|
N/A
|
|
|||
Common equity tier 1 capital/risk weighted assets
|
288,859
|
|
|
10.32
|
|
|
178,360
|
|
|
6.375
|
|
|
N/A
|
|
|
N/A
|
|
|||
Tier 1 leverage capital/average assets
|
312,747
|
|
|
9.73
|
|
|
128,531
|
|
|
4.000
|
|
|
N/A
|
|
|
N/A
|
|
|||
MidWestOne Bank:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital/risk weighted assets
|
$
|
333,074
|
|
|
11.94
|
%
|
|
$
|
275,468
|
|
|
9.875
|
%
|
|
$
|
278,955
|
|
|
10.00
|
%
|
Tier 1 capital/risk weighted assets
|
303,767
|
|
|
10.89
|
|
|
219,677
|
|
|
7.875
|
|
|
223,164
|
|
|
8.00
|
|
|||
Common equity tier 1 capital/risk weighted assets
|
303,767
|
|
|
10.89
|
|
|
177,833
|
|
|
6.375
|
|
|
181,320
|
|
|
6.50
|
|
|||
Tier 1 leverage capital/average assets
|
303,767
|
|
|
9.47
|
|
|
128,259
|
|
|
4.000
|
|
|
160,324
|
|
|
5.00
|
|
|||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital/risk weighted assets
|
$
|
321,459
|
|
|
12.00
|
%
|
|
$
|
247,689
|
|
|
9.250
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Tier 1 capital/risk weighted assets
|
293,359
|
|
|
10.96
|
|
|
194,135
|
|
|
7.250
|
|
|
N/A
|
|
|
N/A
|
|
|||
Common equity tier 1 capital/risk weighted assets
|
269,566
|
|
|
10.07
|
|
|
153,969
|
|
|
5.750
|
|
|
N/A
|
|
|
N/A
|
|
|||
Tier 1 leverage capital/average assets
|
293,359
|
|
|
9.48
|
|
|
123,831
|
|
|
4.000
|
|
|
N/A
|
|
|
N/A
|
|
|||
MidWestOne Bank:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital/risk weighted assets
|
$
|
322,679
|
|
|
12.08
|
%
|
|
$
|
247,010
|
|
|
9.250
|
%
|
|
$
|
267,038
|
|
|
10.00
|
%
|
Tier 1 capital/risk weighted assets
|
294,620
|
|
|
11.03
|
|
|
193,603
|
|
|
7.250
|
|
|
213,631
|
|
|
8.00
|
|
|||
Common equity tier 1 capital/risk weighted assets
|
294,620
|
|
|
11.03
|
|
|
153,547
|
|
|
5.750
|
|
|
173,575
|
|
|
6.50
|
|
|||
Tier 1 leverage capital/average assets
|
294,620
|
|
|
9.53
|
|
|
123,678
|
|
|
4.000
|
|
|
154,598
|
|
|
5.00
|
|
Note 18.
|
Commitments and Contingencies
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Commitments to extend credit
|
$
|
521,270
|
|
|
$
|
563,305
|
|
Commitments to sell loans
|
666
|
|
|
856
|
|
||
Standby letters of credit
|
16,709
|
|
|
10,260
|
|
||
Total
|
$
|
538,645
|
|
|
$
|
574,421
|
|
Note 19.
|
Related Party Transactions
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Balance, beginning
|
$
|
14,131
|
|
|
$
|
10,856
|
|
Net decrease due to change in related parties
|
(2,518
|
)
|
|
—
|
|
||
Advances
|
2,059
|
|
|
6,487
|
|
||
Collections
|
(1,017
|
)
|
|
(3,212
|
)
|
||
Balance, ending
|
$
|
12,655
|
|
|
$
|
14,131
|
|
Note 20.
|
Estimated Fair Value of Financial Instruments and Fair Value Measurements
|
•
|
Level 1 Inputs – Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available. A contractually binding sales price also provides reliable evidence of fair value.
|
•
|
Level 2 Inputs – Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that utilize model-based techniques for which all significant assumptions are observable in the market.
|
•
|
Level 3 Inputs – Inputs to the valuation methodology are unobservable and significant to the fair value measurement; inputs to the valuation methodology that utilize model-based techniques for which significant assumptions are not observable in the market; or inputs to the valuation methodology that require significant management judgment or estimation, some of which may be internally developed.
|
|
Fair Value Measurement at December 31, 2018 Using
|
||||||||||||||
(in thousands)
|
Total
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available for sale debt securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Government agencies and corporations
|
$
|
5,495
|
|
|
$
|
—
|
|
|
$
|
5,495
|
|
|
$
|
—
|
|
State and political subdivisions
|
121,901
|
|
|
—
|
|
|
121,901
|
|
|
—
|
|
||||
Mortgage-backed securities
|
50,653
|
|
|
—
|
|
|
50,653
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
169,928
|
|
|
—
|
|
|
169,928
|
|
|
—
|
|
||||
Corporate debt securities
|
66,124
|
|
|
—
|
|
|
66,124
|
|
|
—
|
|
||||
Total available for sale debt securities
|
$
|
414,101
|
|
|
$
|
—
|
|
|
$
|
414,101
|
|
|
$
|
—
|
|
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
321
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
582
|
|
|
$
|
—
|
|
|
$
|
582
|
|
|
$
|
—
|
|
RPAs
|
85
|
|
|
—
|
|
|
85
|
|
|
—
|
|
||||
Total derivative liabilities
|
$
|
667
|
|
|
$
|
—
|
|
|
$
|
667
|
|
|
$
|
—
|
|
|
Fair Value Measurement at December 31, 2017 Using
|
||||||||||||||
(in thousands)
|
Fair Value
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available for sale debt securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Government agencies and corporations
|
$
|
15,626
|
|
|
$
|
—
|
|
|
$
|
15,626
|
|
|
$
|
—
|
|
State and political subdivisions
|
141,839
|
|
|
—
|
|
|
141,839
|
|
|
—
|
|
||||
Mortgage-backed securities
|
48,497
|
|
|
—
|
|
|
48,497
|
|
|
—
|
|
||||
Collateralized mortgage obligations
|
168,196
|
|
|
—
|
|
|
168,196
|
|
|
—
|
|
||||
Corporate debt securities
|
71,166
|
|
|
—
|
|
|
71,166
|
|
|
—
|
|
||||
Total available for sale debt securities
|
$
|
445,324
|
|
|
$
|
—
|
|
|
$
|
445,324
|
|
|
$
|
—
|
|
|
Fair Value Measurement at December 31, 2018 Using
|
||||||||||||||
(in thousands)
|
Total
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Collateral dependent impaired loans
|
$
|
8,328
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,328
|
|
Foreclosed assets, net
|
$
|
535
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
535
|
|
|
Fair Value Measurement at December 31, 2017 Using
|
||||||||||||||
(in thousands)
|
Total
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Collateral dependent impaired loans
|
$
|
3,927
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,927
|
|
Foreclosed assets, net
|
$
|
2,010
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,010
|
|
|
Quantitative Information About Level 3 Fair Value Measurements
|
|
|
|
|
||||||||
(dollars in thousands)
|
Fair Value at December 31, 2018
|
|
Valuation Techniques(s)
|
|
Unobservable Input
|
|
Range of Inputs
|
|
Weighted Average
|
||||
Collateral dependent impaired loans
|
$
|
8,328
|
|
|
Modified appraised value
|
|
Third party appraisal
|
|
NM *
|
|
NM *
|
|
NM *
|
|
|
|
|
|
Appraisal discount
|
|
NM *
|
|
NM *
|
|
NM *
|
||
Foreclosed assets, net
|
$
|
535
|
|
|
Modified appraised value
|
|
Third party appraisal
|
|
NM *
|
|
NM *
|
|
NM *
|
|
|
|
|
|
Appraisal discount
|
|
NM *
|
|
NM *
|
|
NM *
|
|
December 31, 2018
|
||||||||||||||||||
(in thousands)
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Quoted
Prices in Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
45,480
|
|
|
$
|
45,480
|
|
|
$
|
45,480
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
2,737
|
|
|
2,737
|
|
|
2,737
|
|
|
—
|
|
|
—
|
|
|||||
Debt securities available for sale
|
414,101
|
|
|
414,101
|
|
|
—
|
|
|
414,101
|
|
|
—
|
|
|||||
Debt securities held to maturity
|
195,822
|
|
|
192,564
|
|
|
—
|
|
|
192,564
|
|
|
—
|
|
|||||
Total investment securities
|
612,660
|
|
|
609,402
|
|
|
2,737
|
|
|
606,665
|
|
|
—
|
|
|||||
Loans held for sale
|
666
|
|
|
678
|
|
|
—
|
|
|
678
|
|
|
—
|
|
|||||
Loans held for investment, net
|
2,369,472
|
|
|
2,343,654
|
|
|
—
|
|
|
—
|
|
|
2,343,654
|
|
|||||
Federal Home Loan Bank stock
|
14,678
|
|
|
14,678
|
|
|
—
|
|
|
14,678
|
|
|
—
|
|
|||||
Derivative assets
|
321
|
|
|
321
|
|
|
—
|
|
|
321
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest bearing
|
439,133
|
|
|
439,133
|
|
|
439,133
|
|
|
—
|
|
|
—
|
|
|||||
Interest-bearing
|
2,173,796
|
|
|
2,166,518
|
|
|
1,450,149
|
|
|
716,369
|
|
|
—
|
|
|||||
Total deposits
|
2,612,929
|
|
|
2,605,651
|
|
|
1,889,282
|
|
|
716,369
|
|
|
—
|
|
|||||
Federal funds purchased and securities sold under agreements to repurchase
|
131,422
|
|
|
131,422
|
|
|
131,422
|
|
|
—
|
|
|
—
|
|
|||||
Federal Home Loan Bank borrowings
|
136,000
|
|
|
134,995
|
|
|
—
|
|
|
134,995
|
|
|
—
|
|
|||||
Junior subordinated notes issued to capital trusts
|
23,888
|
|
|
21,215
|
|
|
—
|
|
|
21,215
|
|
|
—
|
|
|||||
Long-term debt
|
7,500
|
|
|
7,500
|
|
|
—
|
|
|
7,500
|
|
|
—
|
|
|||||
Derivative liabilities
|
667
|
|
|
667
|
|
|
—
|
|
|
667
|
|
|
—
|
|
|
December 31, 2017
|
||||||||||||||||||
(in thousands)
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Quoted
Prices in
Active
Markets for
Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
50,972
|
|
|
$
|
50,972
|
|
|
$
|
50,972
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
2,336
|
|
|
2,336
|
|
|
2,336
|
|
|
—
|
|
|
—
|
|
|||||
Debt securities available for sale
|
445,324
|
|
|
445,324
|
|
|
—
|
|
|
445,324
|
|
|
—
|
|
|||||
Debt securities held to maturity
|
195,619
|
|
|
194,343
|
|
|
—
|
|
|
194,343
|
|
|
—
|
|
|||||
Total investment securities
|
643,279
|
|
|
642,003
|
|
|
2,336
|
|
|
639,667
|
|
|
—
|
|
|||||
Loans held for sale
|
856
|
|
|
871
|
|
|
—
|
|
|
—
|
|
|
871
|
|
|||||
Loans held for investment, net
|
2,258,636
|
|
|
2,256,726
|
|
|
—
|
|
|
2,256,726
|
|
|
—
|
|
|||||
Federal Home Loan Bank stock
|
11,324
|
|
|
11,324
|
|
|
—
|
|
|
11,324
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest bearing
|
461,969
|
|
|
461,969
|
|
|
461,969
|
|
|
—
|
|
|
—
|
|
|||||
Interest-bearing
|
2,143,350
|
|
|
2,137,424
|
|
|
1,441,542
|
|
|
695,882
|
|
|
—
|
|
|||||
Total deposits
|
2,605,319
|
|
|
2,599,393
|
|
|
1,903,511
|
|
|
695,882
|
|
|
—
|
|
|||||
Federal funds purchased and securities sold under agreements to repurchase
|
97,229
|
|
|
97,229
|
|
|
97,229
|
|
|
—
|
|
|
—
|
|
|||||
Federal Home Loan Bank borrowings
|
115,000
|
|
|
114,945
|
|
|
—
|
|
|
114,945
|
|
|
—
|
|
|||||
Junior subordinated notes issued to capital trusts
|
23,793
|
|
|
19,702
|
|
|
—
|
|
|
19,702
|
|
|
—
|
|
|||||
Long-term debt
|
12,500
|
|
|
12,500
|
|
|
—
|
|
|
12,500
|
|
|
—
|
|
Note 21.
|
Revenue Recognition
|
Note 22.
|
Operating Segments
|
Note 23.
|
Proposed Merger
|
Note 24.
|
Branch Sales
|
Note 25.
|
Parent Company Only Financial Information
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
|
|
||||
Balance Sheets
|
|
|
|
||||
Assets
|
|
|
|
||||
Cash
|
$
|
9,611
|
|
|
$
|
4,200
|
|
Investment in subsidiaries
|
372,595
|
|
|
366,672
|
|
||
Equity securities, at fair value
|
340
|
|
|
392
|
|
||
Debt securities held to maturity
|
743
|
|
|
743
|
|
||
Income tax receivable
|
117
|
|
|
—
|
|
||
Deferred income taxes
|
44
|
|
|
—
|
|
||
Bank-owned life insurance
|
4,999
|
|
|
4,872
|
|
||
Other assets
|
399
|
|
|
176
|
|
||
Total assets
|
$
|
388,848
|
|
|
$
|
377,055
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Junior subordinated notes issued to capital trusts
|
$
|
23,888
|
|
|
$
|
23,793
|
|
Long-term debt
|
7,500
|
|
|
12,500
|
|
||
Deferred income taxes
|
—
|
|
|
11
|
|
||
Other liabilities
|
393
|
|
|
447
|
|
||
Total liabilities
|
31,781
|
|
|
36,751
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Capital stock, preferred
|
—
|
|
|
—
|
|
||
Capital stock, common
|
12,463
|
|
|
12,463
|
|
||
Additional paid-in capital
|
187,813
|
|
|
187,486
|
|
||
Treasury stock
|
(6,499
|
)
|
|
(5,121
|
)
|
||
Retained earnings
|
168,951
|
|
|
148,078
|
|
||
Accumulated other comprehensive loss
|
(5,661
|
)
|
|
(2,602
|
)
|
||
Total shareholders’ equity
|
357,067
|
|
|
340,304
|
|
||
Total liabilities and shareholders’ equity
|
$
|
388,848
|
|
|
$
|
377,055
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Statements of Income
|
|
|
|
|
|
||||||
Dividends received from subsidiaries
|
$
|
25,017
|
|
|
$
|
6,500
|
|
|
$
|
12,508
|
|
Interest income and dividends on investment securities
|
43
|
|
|
47
|
|
|
31
|
|
|||
Investment securities gains
|
(48
|
)
|
|
—
|
|
|
—
|
|
|||
Interest on debt
|
(1,596
|
)
|
|
(1,406
|
)
|
|
(1,305
|
)
|
|||
Bank-owned life insurance income
|
127
|
|
|
126
|
|
|
128
|
|
|||
Operating expenses
|
(2,940
|
)
|
|
(2,281
|
)
|
|
(2,094
|
)
|
|||
Income before income taxes and equity in subsidiaries’ undistributed income
|
20,603
|
|
|
2,986
|
|
|
9,268
|
|
|||
Income tax benefit
|
(823
|
)
|
|
(1,137
|
)
|
|
(1,245
|
)
|
|||
Income before equity in subsidiaries’ undistributed income
|
21,426
|
|
|
4,123
|
|
|
10,513
|
|
|||
Equity in subsidiaries’ undistributed income
|
8,925
|
|
|
14,576
|
|
|
9,878
|
|
|||
Net income
|
$
|
30,351
|
|
|
$
|
18,699
|
|
|
$
|
20,391
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Statements of Cash Flows
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
30,351
|
|
|
$
|
18,699
|
|
|
$
|
20,391
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Undistributed income of subsidiaries, net of dividends and distributions
|
(8,925
|
)
|
|
(14,576
|
)
|
|
(9,878
|
)
|
|||
Amortization of premium on junior subordinated notes issued to capital trusts
|
95
|
|
|
101
|
|
|
105
|
|
|||
Deferred income taxes, net, benefit
|
(42
|
)
|
|
(93
|
)
|
|
(35
|
)
|
|||
Investment securities loss
|
48
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit from share-based award activity
|
(4
|
)
|
|
(92
|
)
|
|
—
|
|
|||
Stock-based compensation
|
1,030
|
|
|
868
|
|
|
731
|
|
|||
Increase in cash value of bank-owned life insurance
|
(127
|
)
|
|
(126
|
)
|
|
(128
|
)
|
|||
(Increase) decrease in other assets
|
(453
|
)
|
|
1,617
|
|
|
(751
|
)
|
|||
Increase in other liabilities
|
59
|
|
|
13
|
|
|
8
|
|
|||
Net cash provided by operating activities
|
22,032
|
|
|
6,411
|
|
|
10,443
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Proceeds from sales of available for sale securities
|
1
|
|
|
1
|
|
|
1
|
|
|||
Purchase of available for sale securities
|
(10
|
)
|
|
(10
|
)
|
|
(9
|
)
|
|||
Investment in subsidiary
|
—
|
|
|
(16,200
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(9
|
)
|
|
(16,209
|
)
|
|
(8
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from share-based award activity
|
137
|
|
|
100
|
|
|
14
|
|
|||
Excess tax benefits from share-based award activity
|
4
|
|
|
92
|
|
|
—
|
|
|||
Taxes paid relating to net share settlement of equity awards
|
(89
|
)
|
|
(114
|
)
|
|
—
|
|
|||
Repurchase of common stock
|
(2,129
|
)
|
|
—
|
|
|
—
|
|
|||
Payments on long-term debt
|
(5,000
|
)
|
|
(5,000
|
)
|
|
(5,000
|
)
|
|||
Issuance of common stock
|
—
|
|
|
25,688
|
|
|
—
|
|
|||
Expenses incurred in stock issuance
|
—
|
|
|
(1,328
|
)
|
|
—
|
|
|||
Dividends paid
|
(9,535
|
)
|
|
(8,061
|
)
|
|
(7,317
|
)
|
|||
Net cash provided by (used in) financing activities
|
(16,612
|
)
|
|
11,377
|
|
|
(12,303
|
)
|
|||
Net increase (decrease) in cash
|
5,411
|
|
|
1,579
|
|
|
(1,868
|
)
|
|||
Cash Balance:
|
|
|
|
|
|
||||||
Beginning
|
4,200
|
|
|
2,621
|
|
|
4,489
|
|
|||
Ending
|
$
|
9,611
|
|
|
$
|
4,200
|
|
|
$
|
2,621
|
|
Note 26.
|
Subsequent Events
|
Note 27.
|
Quarterly Results of Operations (unaudited)
|
|
Three Months Ended
|
||||||||||||||
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
||||||||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
33,399
|
|
|
$
|
32,460
|
|
|
$
|
31,973
|
|
|
$
|
30,992
|
|
Interest expense
|
6,671
|
|
|
6,099
|
|
|
5,392
|
|
|
4,679
|
|
||||
Net interest income
|
26,728
|
|
|
26,361
|
|
|
26,581
|
|
|
26,313
|
|
||||
Provision for loan losses
|
3,250
|
|
|
950
|
|
|
1,250
|
|
|
1,850
|
|
||||
Noninterest income
|
5,645
|
|
|
5,984
|
|
|
5,487
|
|
|
5,672
|
|
||||
Noninterest expense
|
19,803
|
|
|
22,811
|
|
|
20,531
|
|
|
20,358
|
|
||||
Income before income taxes
|
9,320
|
|
|
8,584
|
|
|
10,287
|
|
|
9,777
|
|
||||
Income tax expense
|
1,696
|
|
|
1,806
|
|
|
2,131
|
|
|
1,984
|
|
||||
Net income
|
$
|
7,624
|
|
|
$
|
6,778
|
|
|
$
|
8,156
|
|
|
$
|
7,793
|
|
Net income per common share - basic
|
$
|
0.62
|
|
|
$
|
0.55
|
|
|
$
|
0.67
|
|
|
$
|
0.64
|
|
Net income per common share - diluted
|
$
|
0.62
|
|
|
$
|
0.55
|
|
|
$
|
0.67
|
|
|
$
|
0.64
|
|
2017
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
30,538
|
|
|
$
|
30,361
|
|
|
$
|
29,854
|
|
|
$
|
28,567
|
|
Interest expense
|
4,127
|
|
|
3,869
|
|
|
3,663
|
|
|
3,486
|
|
||||
Net interest income
|
26,411
|
|
|
26,492
|
|
|
26,191
|
|
|
25,081
|
|
||||
Provision for loan losses
|
10,669
|
|
|
4,384
|
|
|
1,240
|
|
|
1,041
|
|
||||
Noninterest income
|
5,534
|
|
|
5,916
|
|
|
5,383
|
|
|
5,537
|
|
||||
Noninterest expense
|
20,093
|
|
|
19,744
|
|
|
19,964
|
|
|
20,335
|
|
||||
Income before income taxes
|
1,183
|
|
|
8,280
|
|
|
10,370
|
|
|
9,242
|
|
||||
Income tax expense
|
2,773
|
|
|
1,938
|
|
|
3,136
|
|
|
2,529
|
|
||||
Net income (loss)
|
$
|
(1,590
|
)
|
|
$
|
6,342
|
|
|
$
|
7,234
|
|
|
$
|
6,713
|
|
Net income (loss) per common share - basic
|
$
|
(0.13
|
)
|
|
$
|
0.52
|
|
|
$
|
0.59
|
|
|
$
|
0.58
|
|
Net income (loss) per common share - diluted
|
$
|
(0.13
|
)
|
|
$
|
0.52
|
|
|
$
|
0.59
|
|
|
$
|
0.58
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
ITEM 9B.
|
OTHER INFORMATION.
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
Incorporated by Reference to:
|
|
|
|
|
|
|
Agreement and Plan of Merger, dated
|
|
Exhibit 2.1 to the Company’s Current Report on Form 8-K
|
|
|
|
November 20, 2014, between MidWestOne Financial
|
|
filed with the SEC on November 21, 2014
|
|
|
Group, Inc. and Central Bancshares, Inc.+
|
|
|
|
|
|
|
|
|
Agreement and Plan of Merger, dated
|
|
Exhibit 2.1 to the Company’s Current Report on Form 8-K
|
|
|
|
August 21, 2018, between MidWestOne Financial
|
|
filed with the SEC on August 22, 2018
|
|
|
Group, Inc. and ATBancorp+
|
|
|
|
|
|
|
|
|
Amended and Restated Articles of Incorporation of
|
|
Exhibit 3.3 to the Company’s Amendment No. 1 to
|
|
|
|
MidWestOne Financial Group, Inc. filed with the
|
|
Registration Statement on Form S-4 (File No. 333-147628)
|
|
|
Secretary of State of the State of Iowa on March 14, 2008
|
|
filed with the SEC on January 14, 2008
|
|
|
|
|
|
|
Articles of Amendment (First Amendment) to the
|
|
Exhibit 3.1 to the Company’s Current Report on Form 8-K
|
|
|
|
Amended and Restated Articles of Incorporation of
|
|
filed with the SEC on January 23, 2009
|
|
|
MidWestOne Financial Group, Inc. filed with the
|
|
|
|
|
Secretary of State of the State of Iowa on
|
|
|
|
|
January 23, 2009
|
|
|
|
|
|
|
|
|
Articles of Amendment (Second Amendment) to the
|
|
Exhibit 3.1 to the Company’s Current Report on Form 8-K
|
|
|
|
Amended and Restated Articles of Incorporation of
|
|
filed with the SEC on February 6, 2009
|
|
|
MidWestOne Financial Group, Inc. filed with the
|
|
|
|
|
Secretary of State of the State of Iowa on
|
|
|
|
|
February 4, 2009 (containing the Certificate of
|
|
|
|
|
Designations for the Company’s Fixed Rate
|
|
|
|
|
Cumulative Perpetual Preferred Stock, Series A)
|
|
|
|
|
|
|
|
|
Articles of Amendment (Third Amendment) to the
|
|
Exhibit 3.1 to the Company’s Form 10-Q for the quarter
|
|
|
|
Amended and Restated Articles of Incorporation of
|
|
ended March 31, 2017, filed with the SEC on May 4, 2017
|
|
|
MidWestOne Financial Group, Inc., filed with the Secretary
|
|
|
|
|
of State of the State of Iowa on April 21, 2017
|
|
|
|
|
|
|
|
|
Second Amended and Restated Bylaws of MidWestOne
|
|
Exhibit 3.1 to the Company’s Current Report on Form 8-K
|
|
|
|
Financial Group, Inc.
|
|
filed with the SEC on February 1, 2017
|
|
|
|
|
|
4.1
|
|
Reference is made to Exhibits 3.1 through 3.5 hereof
|
|
N/A
|
|
|
|
|
|
|
Shareholder Agreement, by and among MidWestOne
|
|
Exhibit 99.1 to the Company’s Current Report on Form 8-K
|
|
|
|
Financial Group, Inc., Riverbank Insurance Center, Inc.,
|
|
filed with the SEC on November 21, 2014
|
|
|
CBS LLC, John M. Morrison Revocable Trust #4 and
|
|
|
|
|
John M. Morrison, dated November 20, 2014
|
|
|
|
|
|
|
|
|
MidWestOne Financial Group, Inc. Employee Stock
|
|
Exhibit 10.1 of former MidWestOne Financial Group, Inc.’s
|
|
|
|
Ownership Plan and Trust (Restated as of January 1,
|
|
Form 10-K (File No. 000-24630) for the year ended
|
|
|
2006)*
|
|
December 31, 2006, filed with the SEC on March 23, 2007
|
|
|
|
|
|
|
ISB Financial Corp. (now known as MidWestOne
|
|
Appendix F of the Joint Proxy Statement-Prospectus
|
|
|
|
Financial Group, Inc.) 2008 Equity Incentive Plan*
|
|
constituting part of the Company’s Amendment No. 2 to
|
|
|
|
|
Registration Statement on Form S-4 (File No. 333-147628)
|
|
|
|
|
filed with the SEC on January 22, 2008
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
Incorporated by Reference to:
|
|
|
|
|
|
|
MidWestOne Financial Group, Inc. 2017 Equity
|
|
Appendix A of the Company’s Definitive Proxy Statement on
|
|
|
|
Incentive Plan*
|
|
Schedule 14A filed with the SEC on March 10, 2017
|
|
|
|
|
|
|
Form of MidWestOne Financial Group, Inc. 2017 Equity
|
|
Exhibit 4.7 to the Company’s Registration Statement on Form
|
|
|
|
Incentive Plan Incentive Stock Option Award Agreement*
|
|
S-8 (File No. 333-217718) filed with the SEC on May 5, 2017
|
|
|
|
|
|
|
Form of MidWestOne Financial Group, Inc. 2017 Equity
|
|
Exhibit 4.8 to the Company’s Registration Statement on Form
|
|
|
|
Incentive Plan Restricted Stock Unit Award Agreement*
|
|
S-8 (File No. 333-217718) filed with the SEC on May 5, 2017
|
|
|
|
|
|
|
Employment Agreement between MidWestOne Financial
|
|
Exhibit 10.1 to the Company’s Current Report on
|
|
|
|
Group, Inc. and Charles N. Funk, dated October 18, 2017*
|
|
Form 8-K filed with the SEC on October 18, 2017
|
|
|
|
|
|
|
Employment Agreement between MidWestOne Financial
|
|
Exhibit 10.3 to the Company’s Current Report on
|
|
|
|
Group, Inc. and Kent L. Jehle, dated October 18, 2017*
|
|
Form 8-K filed with the SEC on October 18, 2017
|
|
|
|
|
|
|
Supplemental Retirement Agreement between Iowa State
|
|
Exhibit 10.13 of the Company’s Registration Statement on
|
|
|
|
Bank & Trust Company (now known as MidWestOne
|
|
Form S-4 (File No. 333-147628) filed with the SEC on
|
|
|
Bank) and Charles N. Funk, dated November 1, 2001*
|
|
November 27, 2007
|
|
|
|
|
|
|
Supplemental Retirement Agreement between Iowa State
|
|
Exhibit 10.16 of the Company’s Amendment No. 1 to
|
|
|
|
Bank & Trust Company (now known as MidWestOne
|
|
Registration Statement on Form S-4 (File No. 333-147628)
|
|
|
Bank) and Kent L. Jehle, dated January 1, 1998, as
|
|
filed with the SEC on January 14, 2008
|
|
|
amended by the First Amendment to the Supplemental
|
|
|
|
|
Retirement Agreement, dated January 1, 2003*
|
|
|
|
|
|
|
|
|
Second Supplemental Retirement Agreement between
|
|
Exhibit 10.17 of the Company’s Amendment No. 1 to
|
|
|
|
Iowa State Bank & Trust Company (now known as
|
|
Registration Statement on Form S-4 (File No. 333-147628)
|
|
|
MidWestOne Bank) and Kent L. Jehle, dated January 1,
|
|
filed with the SEC on January 14, 2008
|
|
|
2002*
|
|
|
|
|
|
|
|
|
Employment Agreement between MidWestOne Financial
|
|
Exhibit 10.5 to the Company’s Current Report on
|
|
|
|
Group, Inc. and James M. Cantrell, dated October 18,
|
|
Form 8-K filed with the SEC on October 18, 2017
|
|
|
2017*
|
|
|
|
|
|
|
|
|
Employment Agreement between MidWestOne Financial
|
|
Exhibit 10.1 to the Company’s Current Report on
|
|
|
|
Group, Inc. and Kurt Weise, dated December 12, 2014*
|
|
Form 8-K filed with the SEC on October 3, 2016
|
|
|
|
|
|
|
Letter Amendment to Employment Agreement between
|
|
Exhibit 10.2 to the Company’s Current Report on
|
|
|
|
MidWestOne Financial Group, Inc. and Kurt Weise
|
|
Form 8-K filed with the SEC on October 3, 2016
|
|
|
effective as of September 30, 2016*
|
|
|
|
|
|
|
|
|
Employment Agreement between MidWestOne Financial
|
|
Exhibit 10.2 to the Company’s Current Report on
|
|
|
|
Group, Inc. and Kevin Kramer, dated October 18, 2017*
|
|
Form 8-K filed with the SEC on October 18, 2017
|
|
|
|
|
|
|
Employment Agreement between MidWestOne Financial
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K
|
|
|
|
Group, Inc. and Mitch Cook, dated May 11, 2017*
|
|
filed with the SEC on May 15, 2017
|
|
|
|
|
|
|
Central Bank Supplemental Retirement Agreement 2008
|
|
Exhibit 10.19 to the Company’s Form 10-K for the year
|
|
|
|
Restatement between Central Bank (now known as
|
|
ended December 31, 2016 filed with the SEC on March 2,
|
|
|
MidWestOne Bank) and Kurt Weise, dated December 30,
|
|
2017
|
|
|
2008*
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
Incorporated by Reference to:
|
|
|
|
|
|
|
First Amendment to the Central Bank Supplemental
|
|
Exhibit 10.20 to the Company’s Form 10-K for the year
|
|
|
|
Retirement Agreement (2008 Restatement) for Kurt
|
|
ended December 31, 2016 filed with the SEC on March 2,
|
|
|
Weise between Central Bank (now known as MidWestOne
|
|
2017
|
|
|
Bank) and Kurt Weise, dated April 23, 2014*
|
|
|
|
|
|
|
|
|
Central Bank 2014 Supplemental Retirement Agreement
|
|
Exhibit 10.21 to the Company’s Form 10-K for the year
|
|
|
|
between Central Bank (now known as MidWestOne Bank)
|
|
ended December 31, 2016 filed with the SEC on March 2,
|
|
|
and Mitch Cook, dated September 30, 2014*
|
|
2017
|
|
|
|
|
|
|
Credit Agreement by and between MidWestOne
|
|
Exhibit 10.1 to the Company’s Form 10-Q for the quarter
|
|
|
|
Financial Group, Inc. and U.S. Bank National Association
|
|
ended June 30, 2015 filed with the SEC on August 10, 2015
|
|
|
dated April 30, 2015
|
|
|
|
|
|
|
|
|
Employment Agreement between MidWestOne Financial
|
|
Exhibit 10.1 to the Company’s Current Report on
|
|
|
|
Group, Inc. and Barry S. Ray, effective June 4, 2018*
|
|
Form 8-K filed with the SEC on May 4, 2018
|
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Employment Agreement between MidWestOne Financial
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Exhibit 10.1 to the Company’s Current Report on
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Group, Inc. and Gary L. Sims, effective June 25, 2018*
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Form 8-K filed with the SEC on June 11, 2018
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Release and Waiver of Claims between MidWestOne
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Exhibit 10.1 to the Company’s Current Report on
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Financial Group, Inc. and Kent L. Jehle, dated August 31,
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Form 8-K filed with the SEC on September 4, 2018
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2018*
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Change of Control Agreement between MidWestOne
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Filed herewith
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Financial Group, Inc. and David Lindstrom, effective
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February 21, 2018*
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Subsidiaries of MidWestOne Financial Group, Inc.
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Filed herewith
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Consent of RSM US LLP
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Filed herewith
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Certification of Chief Executive Officer pursuant to
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Filed herewith
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Rule 13a-14(a) and Rule 15d-14(a)
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Certification of Chief Financial Officer pursuant to
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Filed herewith
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Rule 13a-14(a) and Rule 15d-14(a)
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Certification of Chief Executive Officer pursuant to
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Filed herewith
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18 U.S.C. Section 1350, as adopted pursuant to
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Section 906 of the Sarbanes-Oxley Act of 2002
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Certification of Chief Financial Officer pursuant to
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Filed herewith
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18 U.S.C. Section 1350, as adopted pursuant to
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Section 906 of the Sarbanes-Oxley Act of 2002
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101.SCH
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XBRL Taxonomy Extension Schema Document
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Filed herewith
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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Filed herewith
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Document
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ITEM 16.
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FORM 10-K SUMMARY.
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MIDWESTONE FINANCIAL GROUP, INC.
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Dated:
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March 8, 2019
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By:
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/s/ CHARLES N. FUNK
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Charles N. Funk
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President and Chief Executive Officer
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(Principal Executive Officer)
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By:
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/s/ BARRY S. RAY
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Barry S. Ray
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Senior Vice President and Chief Financial Officer
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(Principal Financial and Accounting Officer)
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Signature
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Title
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Date
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/s/ CHARLES N. FUNK
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President and Chief Executive Officer;
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March 8, 2019
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Charles N. Funk
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Director (Principal Executive Officer)
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Senior Vice President
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/s/ BARRY S. RAY
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and Chief Financial Officer
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March 8, 2019
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Barry S. Ray
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(Principal Financial and Accounting
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Officer)
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/s/ KEVIN W. MONSON
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Chairman of the Board
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March 8, 2019
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Kevin W. Monson
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/s/ LARRY D. ALBERT
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Director
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March 8, 2019
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Larry D. Albert
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/s/ RICHARD R. DONOHUE
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Director
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March 8, 2019
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Richard R. Donohue
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JENNIFER L. HAUSCHILDT
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Director
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March 8, 2019
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Jennifer L. Hauschildt
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/s/ NATHANIEL J. KAEDING
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Director
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March 8, 2019
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Nathaniel J. Kaeding
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/s/ TRACY S. MCCORMICK
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Director
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March 8, 2019
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Tracy S. McCormick
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/s/ RICHARD J. SCHWAB
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Director
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March 8, 2019
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Richard J. Schwab
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/s/ RUTH E. STANOCH
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Director
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March 8, 2019
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Ruth E. Stanoch
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/s/ DOUGLAS K. TRUE
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Director
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March 8, 2019
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Douglas K. True
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/s/ KURT R. WEISE
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Director
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March 8, 2019
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Kurt R. Weise
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/s/ R. SCOTT ZAISER
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Director
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March 8, 2019
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R. Scott Zaiser
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MidWestOne Financial Group, Inc.
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OFFICER NAME – DAVID LINDSTROM
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By:
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/s/ SONDRA J. HARNEY
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/s/ DAVID LINDSTROM
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(Signature)
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Name:
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Sondra J. Harney
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(Address)
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Its:
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Senior Vice President
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(Address)
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(i)
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The United States and State of Iowa Constitutions,
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(ii)
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The Iowa Civil Rights Act of 1965,
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(iii)
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The Iowa Wage Payment Collection Law,
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(iv)
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The Civil Rights Act of 1964,
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(v)
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The Civil Rights Act of 1991,
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(vi)
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The Equal Pay Act,
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(vii)
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The Employee Retirement Income Security Act of 1974,
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(viii)
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The Age Discrimination in Employment Act (the “ADEA”),
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(ix)
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The Older Workers Benefit Protection Act,
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(x)
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The Worker Adjustment and Retraining Notification Act,
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(xi)
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The Americans with Disabilities Act,
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(xii)
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The Family and Medical Leave Act,
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(xiii)
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The Occupational Safety and Health Act,
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(xiv)
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The Fair Labor Standards Act,
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(xv)
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The National Labor Relations Act,
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(xvi)
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The Genetic Information Nondiscrimination Act,
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(xvii)
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The Rehabilitation Act,
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(xviii)
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The Fair Credit Reporting Act,
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(xix)
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Executive Order 11246,
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(xx)
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Executive Order 11141, and
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(xxi)
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Each other federal, state, and local statute, ordinance, and regulation relating to employment;
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Subsidiaries of the Company
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Organized Under the Laws of
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Percent Owned by the Company
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MidWestOne Bank
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State of Iowa
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100%
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MidWestOne Insurance Services, Inc.
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State of Iowa
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100%
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MidWestOne Statutory Trust II
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State of Delaware
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100% of common securities
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Central Bancshares Capital Trust II
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State of Delaware
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100% of common securities
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Barron Investment Capital Trust I
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State of Delaware
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100% of common securities
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1)
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I have reviewed this Annual Report on Form 10-K of MidWestOne Financial Group, Inc.;
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2)
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Based on my knowledge, this Annual 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 Annual Report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this Annual 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 Annual Report;
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4)
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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:
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a)
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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 Annual Report is being prepared;
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b)
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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;
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c)
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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
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d)
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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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and
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5)
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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):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
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b)
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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.
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/s/ Charles N. Funk
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Charles N. Funk
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President and Chief Executive Officer
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Date:
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March 8, 2019
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1)
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I have reviewed this Annual Report on Form 10-K of MidWestOne Financial Group, Inc.;
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2)
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Based on my knowledge, this Annual 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 Annual Report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this Annual 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 Annual Report;
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4)
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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:
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a)
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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 Annual Report is being prepared;
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b)
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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;
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c)
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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
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d)
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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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and
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5)
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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):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
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b)
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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.
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/s/ Barry S. Ray
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Barry S. Ray
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Senior Vice President and Chief Financial Officer
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Date:
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March 8, 2019
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(a)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(b)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of MidWestOne Financial Group, Inc.
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/s/ Charles N. Funk
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Charles N. Funk
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President and Chief Executive Officer
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Date:
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March 8, 2019
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(a)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(b)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of MidWestOne Financial Group, Inc.
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/s/ Barry S. Ray
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Barry S. Ray
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Senior Vice President and Chief Financial Officer
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Date:
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March 8, 2019
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