þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2014
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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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For the transition period from to
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Wisconsin
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39-1576570
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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401 Charmany Drive, Madison, WI
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53719
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(Address of principal executive offices)
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(Zip Code)
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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, $0.01 par value
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The NASDAQ Stock Market LLC
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Common Share Purchase Rights
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The NASDAQ Stock Market LLC
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Large Accelerated Filer
o
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Accelerated Filer
þ
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Non-accelerated filer
o
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Smaller Reporting Company
o
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(Do not check if a smaller reporting company)
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•
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First Business Capital Corp., is an asset-based commercial lending company specializing in providing lines of credit, factored receivable financing and term loans secured by accounts receivable, inventory, equipment and real estate assets, primarily to manufacturers and wholesale distribution companies located throughout the country, with a concentration in the Midwest. FBCC was established in 1995 and has sales offices in several states.
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•
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First Business Equipment Finance, LLC is a commercial equipment finance company offering a full array of finance and leasing options to commercial clients of which the largest percentage are currently located in Wisconsin. It offers new and replacement equipment loans and leases, debt restructuring, consolidation, and sale-lease-back transactions through its primary banking locations in Wisconsin.
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•
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Rimrock Road Investment Fund, LLC (“Rimrock”), formerly known as FBB Real Estate, LLC, is a limited liability company originally established for the purpose of holding and liquidating real estate and other assets acquired by FBB through foreclosure or other legal proceedings. In 2014, Rimrock’s purpose was changed to reflect its qualified equity investment in a Madison, Wisconsin community development project, including the financing and ownership of a property that generates federal new market tax credits.
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•
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First Madison Investment Corp. (“FMIC”) is located in and formed under the laws of the state of Nevada, and was organized for the purpose of managing a portion of FBB’s investment portfolio.
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•
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A leverage requirement, consisting of a minimum ratio of Tier 1 Capital to total adjusted book assets of 3% for the most highly-rated banks with a minimum requirement of at least 4% for all others, and
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•
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A risk-based capital requirement, consisting of a minimum ratio of Total Capital to total risk-weighted assets of 8% and a minimum ratio of Tier 1 Capital to total risk-weighted assets of 4%.
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•
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A leverage ratio of Tier 1 Capital to total assets of 5% or greater,
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•
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A ratio of Tier 1 Capital to total risk-weighted assets of 6% or greater, and
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•
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A ratio of Total Capital to total risk-weighted assets of 10% or greater.
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A new minimum ratio of Common Equity Tier 1 Capital to risk-weighted assets of 4.5%;
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•
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An increase in the minimum required amount of Tier 1 Capital to 6% of risk-weighted assets;
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•
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A continuation of the current 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 assets equal to 4% in all circumstances.
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•
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Potential exposure to unknown or contingent liabilities of the target company.
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Exposure to potential asset quality issues of the target company.
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Potential disruption to our business.
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•
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Potential diversion of our management’s time and attention.
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•
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Possible loss of key employees and clients of the target company.
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Difficulty in estimating the value of the target company.
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•
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Potential changes in banking or tax laws or regulations that may affect the target company.
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actual or anticipated variations in our quarterly results of operations;
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•
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recommendations by securities analysts;
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•
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operating and stock price performance of other companies that investors deem comparable to us;
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•
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news reports relating to trends, concerns and other issues in the financial services industry;
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•
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perceptions in the marketplace regarding us or our competitors and other financial services companies;
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•
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new technology used, or services offered, by competitors; and
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•
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changes in government regulations.
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Location
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Function
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Expiration
Date
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401 Charmany Drive, Madison, WI
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Full service banking location of FBB and office of FBFS
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2028
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18500 W. Corporate Drive, Brookfield, WI
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Full service banking location of FBB - Milwaukee
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2020
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11300 Tomahawk Creek Pkwy, Leawood, KS
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Full service banking location of Alterra Bank
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2023
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High
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Low
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Dividend Declared
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||||||
2014
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||||||
1st Quarter
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$
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48.14
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$
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36.79
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$
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0.21
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2nd Quarter
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49.13
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39.96
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0.21
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3rd Quarter
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48.01
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40.52
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0.21
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4th Quarter
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48.03
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42.73
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0.21
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2013
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||||||
1st Quarter
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$
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27.99
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$
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22.84
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$
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0.14
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2nd Quarter
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30.10
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25.51
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0.14
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3rd Quarter
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33.95
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29.03
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0.14
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4th Quarter
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38.65
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29.97
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0.14
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Year Ended December 31,
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||||||||||||||||||||||
Index
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2009
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2010
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2011
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2012
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2013
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2014
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||||||||||||
First Business Financial Services, Inc.
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$
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100.00
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$
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143.37
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$
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179.74
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$
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253.20
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$
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422.79
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|
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$
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548.80
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NASDAQ Composite
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100.00
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118.15
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117.22
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|
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138.02
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|
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193.47
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|
|
222.16
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||||||
SNL Bank NASDAQ
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100.00
|
|
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117.98
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|
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104.68
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|
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124.77
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|
|
179.33
|
|
|
185.73
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Plan category
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Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
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Weighted-average
exercise price of
outstanding options,
warrants and rights
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Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
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||||
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(a)
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(b)
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(c)
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||||
Equity compensation plans approved by security holders
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12,000
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$
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25.00
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174,769
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Equity compensation plans not approved by security holders
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—
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—
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—
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Period
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Total Number of Shares Purchased
(1)
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
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||||||
October 1, 2014 - October 31, 2014
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22,936
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$
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45.94
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|
—
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$
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—
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November 1, 2014 - November 30, 2014
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6,208
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45.40
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—
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—
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||
December 1, 2014 - December 31, 2014
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—
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—
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—
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—
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||
Total
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29,144
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—
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(1)
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All of the shares in this column represent: (i) the
10,860
shares that were surrendered to us to satisfy income tax withholding obligations in connection with the vesting of restricted shares; and (ii)
18,284
shares used to exercise stock options as part of a cashless exercise.
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As of and for the Year Ended December 31,
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||||||||||||||||||
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2014
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2013
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2012
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2011
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2010
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||||||||||
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(Dollars In Thousands, Except Per Share Data)
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||||||||||||||||||
INCOME STATEMENT:
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||||||||||
Interest income
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$
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57,701
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$
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53,810
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$
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54,766
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$
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56,217
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$
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56,626
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Interest expense
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11,571
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|
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11,705
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16,885
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20,756
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24,675
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|||||
Net interest income
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46,130
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42,105
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37,881
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35,461
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31,951
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|||||
Provision for loan and lease losses
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1,236
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(959
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)
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4,243
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4,250
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7,044
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|||||
Non-interest income
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10,103
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8,442
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8,699
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7,060
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6,743
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|||||
Non-interest expense
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33,785
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29,188
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28,076
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25,977
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25,465
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|||||
Endowment to First Business Charitable Foundation
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—
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1,300
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—
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|
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—
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—
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|||||
Goodwill impairment
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—
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|
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—
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—
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—
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2,689
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|||||
Net (gain) loss on foreclosed properties
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(10
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)
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(117
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)
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585
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|
|
420
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|
|
206
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|
|||||
Income tax expense
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7,083
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|
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7,389
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4,750
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|
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3,449
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|
|
2,349
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|||||
Net income
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$
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14,139
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|
|
$
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13,746
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|
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$
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8,926
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|
|
$
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8,425
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|
$
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941
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|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Yield on earning assets
|
|
4.45
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%
|
|
4.52
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%
|
|
4.86
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%
|
|
5.22
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%
|
|
5.39
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%
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|||||
Cost of funds
|
|
1.07
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%
|
|
1.18
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%
|
|
1.75
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%
|
|
2.20
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%
|
|
2.57
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%
|
|||||
Interest rate spread
|
|
3.38
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%
|
|
3.34
|
%
|
|
3.11
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%
|
|
3.02
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%
|
|
2.82
|
%
|
|||||
Net interest margin
|
|
3.56
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%
|
|
3.54
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%
|
|
3.36
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%
|
|
3.29
|
%
|
|
3.04
|
%
|
|||||
Return on average assets
|
|
1.04
|
%
|
|
1.10
|
%
|
|
0.75
|
%
|
|
0.75
|
%
|
|
0.09
|
%
|
|||||
Return on average equity
|
|
11.78
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%
|
|
13.12
|
%
|
|
12.65
|
%
|
|
14.03
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%
|
|
1.67
|
%
|
|||||
ENDING BALANCE SHEET:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
1,629,387
|
|
|
$
|
1,268,655
|
|
|
$
|
1,226,108
|
|
|
$
|
1,177,165
|
|
|
$
|
1,107,057
|
|
Securities
|
|
186,261
|
|
|
180,118
|
|
|
200,596
|
|
|
170,386
|
|
|
153,379
|
|
|||||
Loans and leases, net
|
|
1,266,438
|
|
|
967,050
|
|
|
896,560
|
|
|
836,687
|
|
|
860,935
|
|
|||||
Deposits
|
|
1,438,268
|
|
|
1,129,855
|
|
|
1,092,254
|
|
|
1,051,312
|
|
|
988,298
|
|
|||||
FHLB advances and other borrowings
|
|
33,994
|
|
|
11,936
|
|
|
12,405
|
|
|
40,292
|
|
|
41,504
|
|
|||||
Junior subordinated notes
|
|
10,315
|
|
|
10,315
|
|
|
10,315
|
|
|
10,315
|
|
|
10,315
|
|
|||||
Stockholders’ equity
|
|
137,748
|
|
|
109,275
|
|
|
99,539
|
|
|
64,214
|
|
|
55,335
|
|
|||||
FINANCIAL CONDITION ANALYSIS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan and lease losses to year-end loans
|
|
1.12
|
%
|
|
1.42
|
%
|
|
1.69
|
%
|
|
1.66
|
%
|
|
1.85
|
%
|
|||||
Allowance to non-accrual loans and leases
|
|
146.33
|
%
|
|
87.68
|
%
|
|
109.05
|
%
|
|
65.03
|
%
|
|
42.37
|
%
|
|||||
Net charge-offs to average loans and leases
|
|
0.08
|
%
|
|
0.06
|
%
|
|
0.35
|
%
|
|
0.74
|
%
|
|
0.57
|
%
|
|||||
Non-accrual loans to gross loans and leases
|
|
0.76
|
%
|
|
1.61
|
%
|
|
1.55
|
%
|
|
2.56
|
%
|
|
4.37
|
%
|
|||||
Average equity to average assets
|
|
8.79
|
%
|
|
8.39
|
%
|
|
5.96
|
%
|
|
5.32
|
%
|
|
5.11
|
%
|
|||||
STOCKHOLDERS’ DATA:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
(1)
|
|
$
|
3.52
|
|
|
$
|
3.50
|
|
|
$
|
3.30
|
|
|
$
|
3.23
|
|
|
0.37
|
|
|
Diluted earnings per common share
(1)
|
|
3.51
|
|
|
3.49
|
|
|
3.29
|
|
|
3.23
|
|
|
0.37
|
|
|||||
Book value per share at end of period
|
|
31.77
|
|
|
27.71
|
|
|
25.41
|
|
|
24.46
|
|
|
21.30
|
|
|||||
Tangible book value per share at end of period
|
|
29.01
|
|
|
27.71
|
|
|
25.41
|
|
|
24.46
|
|
|
21.29
|
|
|||||
Dividend declared per share
|
|
0.84
|
|
|
0.56
|
|
|
0.28
|
|
|
0.28
|
|
|
0.28
|
|
|||||
Dividend payout ratio
|
|
23.93
|
%
|
|
16.05
|
%
|
|
8.51
|
%
|
|
8.67
|
%
|
|
75.68
|
%
|
|||||
Shares outstanding
|
|
4,335,927
|
|
|
3,943,997
|
|
|
3,916,667
|
|
|
2,625,569
|
|
|
2,597,820
|
|
(1)
|
Basic and diluted earnings per share reflect earnings per common share as calculated under the two-class method due to the existence of participating securities.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Our total assets increased to
$1.629 billion
as of
December 31, 2014
, a
28.4%
increase
from
$1.269 billion
at
December 31, 2013
.
|
•
|
Net income for the year ended
December 31, 2014
was a record
$14.1 million
,
2.9%
higher than the previous record of
$13.7 million
earned for the year ended
December 31, 2013
.
|
•
|
Diluted earnings per common share were
$3.51
for the year ended
December 31, 2014
compared to
$3.49
earned in the prior year.
|
•
|
Net interest margin was
3.56%
for the year ended
December 31, 2014
, improving
2
basis points compared to the year ended
December 31, 2013
.
|
•
|
Top line revenue, which consists of net interest income and non-interest income, of
$56.2 million
for the year ended
December 31, 2014
increased
11.2%
compared to
$50.5 million
for the same period in
2013
.
|
•
|
Return on average assets and return on average equity for the year ended
December 31, 2014
were
1.04%
and
11.78%
respectively, compared to
1.10%
and
13.12%
for
2013
.
|
•
|
Non-GAAP pre-tax adjusted earnings, defined as pre-tax income excluding the effects of provision for loan and lease losses, other identifiable costs of credit and other discrete items unrelated to our primary business activities,
increased
5.1%
to a record level of
$22.4 million
for the year ended
December 31, 2014
as compared to
$21.4 million
for the year ended
December 31, 2013
.
|
•
|
We recorded a
$1.2 million
provision for loan and lease losses for the year ended
December 31, 2014
as compared to a negative provision of
$959,000
for the year ended
December 31, 2013
.
|
•
|
Net loans and leases at
December 31, 2014
increased
$299.4 million
, or
31.0%
, to
$1.266 billion
from
$967.1 million
as of
December 31, 2013
.
|
•
|
Non-performing assets were
$11.5 million
and
0.70%
of total assets as of
December 31, 2014
, compared to
$16.2 million
and
1.28%
of total assets as of
December 31, 2013
.
|
•
|
Net charge-offs as a percentage of average loans was
0.08%
for the year ended
December 31, 2014
compared to
0.06%
for the year ended
December 31, 2013
.
|
•
|
Trust and investment services fee income
increased
by
$678,000
, or
18.1%
, to
$4.4 million
for the year ended
December 31, 2014
compared to
$3.8 million
for the year ended
December 31, 2013
.
|
•
|
Average in-market deposits of
$791.8 million
, or
65.5%
of total deposits, for the year ended
December 31, 2014
increased
11.2%
, compared to
$712.3 million
, or
64.4%
of total deposits, for the same period in
2013
.
|
•
|
Effective November 1, 2014, we completed the acquisition of the Aslin Group and its banking subsidiary Alterra with approximately
$260 million
in assets,
$200 million
in gross loans and
$210 million
in deposits.
|
|
|
For the Year Ended December 31,
|
|||||||||
|
|
2014
|
|
2013
|
|
Change
|
|||||
|
|
(Dollars In Thousands)
|
|||||||||
Net interest income
|
|
$
|
46,130
|
|
|
$
|
42,105
|
|
|
9.6
|
%
|
Non-interest income
|
|
10,103
|
|
|
8,442
|
|
|
19.7
|
|
||
Total top line revenue
|
|
$
|
56,233
|
|
|
$
|
50,547
|
|
|
11.2
|
|
|
|
For the Year Ended December 31,
|
|||||||||
|
|
2013
|
|
2012
|
|
Change
|
|||||
|
|
(Dollars In Thousands)
|
|||||||||
Net interest income
|
|
$
|
42,105
|
|
|
$
|
37,881
|
|
|
11.2
|
%
|
Non-interest income
|
|
8,442
|
|
|
8,699
|
|
|
(3.0
|
)
|
||
Total top line revenue
|
|
$
|
50,547
|
|
|
$
|
46,580
|
|
|
8.5
|
|
|
|
For the Year Ended December 31,
|
|||||||||
|
|
2014
|
|
2013
|
|
Change
|
|||||
|
|
(Dollars in Thousands)
|
|||||||||
Net income before taxes
|
|
$
|
21,222
|
|
|
$
|
21,135
|
|
|
0.4
|
%
|
Add back:
|
|
|
|
|
|
|
|||||
Provision for loan and lease losses
|
|
1,236
|
|
|
(959
|
)
|
|
NM
|
|
||
Net gain on foreclosed properties
|
|
(10
|
)
|
|
(117
|
)
|
|
NM
|
|
||
Endowment to First Business Charitable Foundation
|
|
—
|
|
|
1,300
|
|
|
NM
|
|
||
Non-GAAP pre-tax adjusted earnings
|
|
$
|
22,448
|
|
|
$
|
21,359
|
|
|
5.1
|
%
|
|
|
For the Year Ended December 31,
|
|||||||||
|
|
2013
|
|
2012
|
|
Change
|
|||||
|
|
(Dollars in Thousands)
|
|||||||||
Net income before taxes
|
|
$
|
21,135
|
|
|
$
|
13,676
|
|
|
54.5
|
%
|
Add back:
|
|
|
|
|
|
|
|||||
Provision for loan and lease losses
|
|
(959
|
)
|
|
4,243
|
|
|
NM
|
|
||
Net (gain) loss on foreclosed properties
|
|
(117
|
)
|
|
585
|
|
|
NM
|
|
||
Endowment to First Business Charitable Foundation
|
|
1,300
|
|
|
—
|
|
|
NM
|
|
||
Non-GAAP pre-tax adjusted earnings
|
|
$
|
21,359
|
|
|
$
|
18,504
|
|
|
15.4
|
%
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||||||||||||||
|
|
Average
balance
|
|
Interest
|
|
Average
yield/
cost
|
|
Average
balance
|
|
Interest
|
|
Average
yield/
cost
|
|
Average
balance
|
|
Interest
|
|
Average
yield/
cost
|
|||||||||||||||
|
|
(Dollars In Thousands)
|
|||||||||||||||||||||||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate and other mortgage loans
(1)
|
|
$
|
665,213
|
|
|
$
|
32,066
|
|
|
4.82
|
%
|
|
$
|
633,605
|
|
|
$
|
32,021
|
|
|
5.05
|
%
|
|
$
|
583,594
|
|
|
$
|
31,667
|
|
|
5.43
|
%
|
Commercial and industrial loans
(1)
|
|
332,591
|
|
|
19,962
|
|
|
6.00
|
%
|
|
268,376
|
|
|
16,739
|
|
|
6.24
|
%
|
|
245,706
|
|
|
17,916
|
|
|
7.29
|
%
|
||||||
Direct financing leases
(1)
|
|
29,395
|
|
|
1,367
|
|
|
4.65
|
%
|
|
17,413
|
|
|
844
|
|
|
4.85
|
%
|
|
15,873
|
|
|
888
|
|
|
5.59
|
%
|
||||||
Consumer and other loans
(1)
|
|
16,862
|
|
|
652
|
|
|
3.87
|
%
|
|
16,446
|
|
|
634
|
|
|
3.86
|
%
|
|
16,899
|
|
|
654
|
|
|
3.87
|
%
|
||||||
Total loans and leases receivable
(1)
|
|
1,044,061
|
|
|
54,047
|
|
|
5.18
|
%
|
|
935,840
|
|
|
50,238
|
|
|
5.37
|
%
|
|
862,072
|
|
|
51,125
|
|
|
5.93
|
%
|
||||||
Mortgage-related securities
(2)
|
|
156,144
|
|
|
2,894
|
|
|
1.85
|
%
|
|
159,188
|
|
|
2,841
|
|
|
1.78
|
%
|
|
171,043
|
|
|
3,168
|
|
|
1.85
|
%
|
||||||
Other investment securities
(3)
|
|
28,458
|
|
|
448
|
|
|
1.57
|
%
|
|
33,990
|
|
|
474
|
|
|
1.39
|
%
|
|
17,532
|
|
|
249
|
|
|
1.42
|
%
|
||||||
FHLB and FRB stock
|
|
1,512
|
|
|
14
|
|
|
0.94
|
%
|
|
1,402
|
|
|
4
|
|
|
0.29
|
%
|
|
1,537
|
|
|
4
|
|
|
0.28
|
%
|
||||||
Short-term investments
|
|
67,281
|
|
|
298
|
|
|
0.44
|
%
|
|
59,737
|
|
|
253
|
|
|
0.42
|
%
|
|
74,493
|
|
|
220
|
|
|
0.30
|
%
|
||||||
Total interest-earning assets
|
|
1,297,456
|
|
|
57,701
|
|
|
4.45
|
%
|
|
1,190,157
|
|
|
53,810
|
|
|
4.52
|
%
|
|
1,126,677
|
|
|
54,766
|
|
|
4.86
|
%
|
||||||
Non-interest-earning assets
|
|
67,507
|
|
|
|
|
|
|
58,536
|
|
|
|
|
|
|
56,313
|
|
|
|
|
|
||||||||||||
Total assets
|
|
$
|
1,364,963
|
|
|
|
|
|
|
$
|
1,248,693
|
|
|
|
|
|
|
$
|
1,182,990
|
|
|
|
|
|
|||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Transaction accounts
|
|
$
|
83,508
|
|
|
185
|
|
|
0.22
|
%
|
|
$
|
62,578
|
|
|
126
|
|
|
0.20
|
%
|
|
$
|
34,180
|
|
|
94
|
|
|
0.28
|
%
|
|||
Money market
|
|
493,322
|
|
|
2,553
|
|
|
0.52
|
%
|
|
450,558
|
|
|
2,398
|
|
|
0.53
|
%
|
|
395,259
|
|
|
3,023
|
|
|
0.76
|
%
|
||||||
Certificates of deposit
|
|
60,284
|
|
|
536
|
|
|
0.89
|
%
|
|
60,276
|
|
|
611
|
|
|
1.01
|
%
|
|
82,430
|
|
|
968
|
|
|
1.17
|
%
|
||||||
Wholesale deposits
|
|
416,202
|
|
|
6,196
|
|
|
1.49
|
%
|
|
393,726
|
|
|
6,604
|
|
|
1.68
|
%
|
|
400,695
|
|
|
8,941
|
|
|
2.23
|
%
|
||||||
Total interest-bearing deposits
|
|
1,053,316
|
|
|
9,470
|
|
|
0.90
|
%
|
|
967,138
|
|
|
9,739
|
|
|
1.01
|
%
|
|
912,564
|
|
|
13,026
|
|
|
1.43
|
%
|
||||||
FHLB advances
|
|
5,017
|
|
|
22
|
|
|
0.45
|
%
|
|
6,471
|
|
|
13
|
|
|
0.19
|
%
|
|
2,034
|
|
|
32
|
|
|
1.59
|
%
|
||||||
Other borrowings
|
|
13,688
|
|
|
967
|
|
|
7.06
|
%
|
|
12,196
|
|
|
842
|
|
|
6.90
|
%
|
|
39,384
|
|
|
2,712
|
|
|
6.89
|
%
|
||||||
Junior subordinated notes
|
|
10,315
|
|
|
1,112
|
|
|
10.78
|
%
|
|
10,315
|
|
|
1,111
|
|
|
10.78
|
%
|
|
10,315
|
|
|
1,115
|
|
|
10.81
|
%
|
||||||
Total interest-bearing liabilities
|
|
1,082,336
|
|
|
11,571
|
|
|
1.07
|
%
|
|
996,120
|
|
|
11,705
|
|
|
1.18
|
%
|
|
964,297
|
|
|
16,885
|
|
|
1.75
|
%
|
||||||
Non-interest-bearing demand deposit accounts
|
|
154,687
|
|
|
|
|
|
|
138,920
|
|
|
|
|
|
|
137,117
|
|
|
|
|
|
||||||||||||
Other non-interest-bearing liabilities
|
|
7,918
|
|
|
|
|
|
|
8,909
|
|
|
|
|
|
|
11,019
|
|
|
|
|
|
||||||||||||
Total liabilities
|
|
1,244,941
|
|
|
|
|
|
|
1,143,949
|
|
|
|
|
|
|
1,112,433
|
|
|
|
|
|
||||||||||||
Stockholders’ equity
|
|
120,022
|
|
|
|
|
|
|
104,744
|
|
|
|
|
|
|
70,557
|
|
|
|
|
|
||||||||||||
Total liabilities and stockholders’ equity
|
|
$
|
1,364,963
|
|
|
|
|
|
|
$
|
1,248,693
|
|
|
|
|
|
|
$
|
1,182,990
|
|
|
|
|
|
|||||||||
Net interest income
|
|
|
|
$
|
46,130
|
|
|
|
|
|
|
$
|
42,105
|
|
|
|
|
|
|
$
|
37,881
|
|
|
|
|||||||||
Net interest spread
|
|
|
|
|
|
3.38
|
%
|
|
|
|
|
|
3.34
|
%
|
|
|
|
|
|
3.11
|
%
|
||||||||||||
Net interest-earning assets
|
|
$
|
215,120
|
|
|
|
|
|
|
$
|
194,037
|
|
|
|
|
|
|
162,380
|
|
|
|
|
|
||||||||||
Net interest margin
|
|
|
|
|
|
3.56
|
%
|
|
|
|
|
|
3.54
|
%
|
|
|
|
|
|
3.36
|
%
|
||||||||||||
Average interest-earning assets to average interest-bearing liabilities
|
|
119.88
|
%
|
|
|
|
|
|
119.48
|
%
|
|
|
|
|
|
116.84
|
%
|
|
|
|
|
||||||||||||
Return on average assets
|
|
1.04
|
%
|
|
|
|
|
|
1.10
|
%
|
|
|
|
|
|
0.75
|
%
|
|
|
|
|
||||||||||||
Return on average equity
|
|
11.78
|
%
|
|
|
|
|
|
13.12
|
%
|
|
|
|
|
|
12.65
|
%
|
|
|
|
|
||||||||||||
Average equity to average assets
|
|
8.79
|
%
|
|
|
|
|
|
8.39
|
%
|
|
|
|
|
|
5.96
|
%
|
|
|
|
|
||||||||||||
Non-interest expense to average assets
|
|
2.47
|
%
|
|
|
|
|
|
2.43
|
%
|
|
|
|
|
|
2.42
|
%
|
|
|
|
|
(1)
|
The average balances of loans and leases include non-performing loans and leases. Interest income related to non-performing loans and leases is recognized when collected.
|
(2)
|
Includes amortized cost basis of assets available for sale and held to maturity.
|
(3)
|
Yields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
Increase (Decrease) for the Year Ended December 31,
|
||||||||||||||||||||||||||||||
|
|
2014 compared to 2013
|
|
2013 compared to 2012
|
||||||||||||||||||||||||||||
|
|
Rate
|
|
Volume
|
|
Rate/
Volume
|
|
Net
|
|
Rate
|
|
Volume
|
|
Rate/
Volume
|
|
Net
|
||||||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial real estate and other mortgage loans
|
|
$
|
(1,479
|
)
|
|
$
|
1,597
|
|
|
$
|
(73
|
)
|
|
$
|
45
|
|
|
$
|
(2,173
|
)
|
|
$
|
2,714
|
|
|
$
|
(187
|
)
|
|
$
|
354
|
|
Commercial and industrial loans
|
|
(631
|
)
|
|
4,005
|
|
|
(151
|
)
|
|
3,223
|
|
|
(2,591
|
)
|
|
1,653
|
|
|
(239
|
)
|
|
(1,177
|
)
|
||||||||
Direct financing leases
|
|
(34
|
)
|
|
581
|
|
|
(24
|
)
|
|
523
|
|
|
(119
|
)
|
|
86
|
|
|
(11
|
)
|
|
(44
|
)
|
||||||||
Consumer and other loans
|
|
2
|
|
|
16
|
|
|
—
|
|
|
18
|
|
|
(3
|
)
|
|
(18
|
)
|
|
1
|
|
|
(20
|
)
|
||||||||
Total loans and leases receivable
|
|
(2,142
|
)
|
|
6,199
|
|
|
(248
|
)
|
|
3,809
|
|
|
(4,886
|
)
|
|
4,435
|
|
|
(436
|
)
|
|
(887
|
)
|
||||||||
Mortgage-related securities
|
|
109
|
|
|
(54
|
)
|
|
(2
|
)
|
|
53
|
|
|
(117
|
)
|
|
(220
|
)
|
|
10
|
|
|
(327
|
)
|
||||||||
Other investment securities
|
|
61
|
|
|
(77
|
)
|
|
(10
|
)
|
|
(26
|
)
|
|
(5
|
)
|
|
234
|
|
|
(4
|
)
|
|
225
|
|
||||||||
FHLB and FRB Stock
|
|
9
|
|
|
—
|
|
|
1
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Short-term investments
|
|
12
|
|
|
32
|
|
|
1
|
|
|
45
|
|
|
94
|
|
|
(44
|
)
|
|
(17
|
)
|
|
33
|
|
||||||||
Total net change in income on interest-earning assets
|
|
(1,951
|
)
|
|
6,100
|
|
|
(258
|
)
|
|
3,891
|
|
|
(4,914
|
)
|
|
4,405
|
|
|
(447
|
)
|
|
(956
|
)
|
||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Transaction accounts
|
|
13
|
|
|
42
|
|
|
4
|
|
|
59
|
|
|
(25
|
)
|
|
78
|
|
|
(21
|
)
|
|
32
|
|
||||||||
Money market
|
|
(66
|
)
|
|
228
|
|
|
(7
|
)
|
|
155
|
|
|
(919
|
)
|
|
423
|
|
|
(129
|
)
|
|
(625
|
)
|
||||||||
Certificates of deposit
|
|
(75
|
)
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
(132
|
)
|
|
(260
|
)
|
|
35
|
|
|
(357
|
)
|
||||||||
Wholesale deposits
|
|
(743
|
)
|
|
377
|
|
|
(42
|
)
|
|
(408
|
)
|
|
(2,220
|
)
|
|
(156
|
)
|
|
39
|
|
|
(2,337
|
)
|
||||||||
Total deposits
|
|
(871
|
)
|
|
647
|
|
|
(45
|
)
|
|
(269
|
)
|
|
(3,296
|
)
|
|
85
|
|
|
(76
|
)
|
|
(3,287
|
)
|
||||||||
FHLB advances
|
|
15
|
|
|
(3
|
)
|
|
(3
|
)
|
|
9
|
|
|
(28
|
)
|
|
70
|
|
|
(61
|
)
|
|
(19
|
)
|
||||||||
Other borrowings
|
|
20
|
|
|
103
|
|
|
2
|
|
|
125
|
|
|
4
|
|
|
(1,872
|
)
|
|
(2
|
)
|
|
(1,870
|
)
|
||||||||
Junior subordinated notes
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||||
Total net change in expense on interest-bearing liabilities
|
|
(835
|
)
|
|
747
|
|
|
(46
|
)
|
|
(134
|
)
|
|
(3,320
|
)
|
|
(1,717
|
)
|
|
(143
|
)
|
|
(5,180
|
)
|
||||||||
Net change in net interest income
|
|
$
|
(1,116
|
)
|
|
$
|
5,353
|
|
|
$
|
(212
|
)
|
|
$
|
4,025
|
|
|
$
|
(1,594
|
)
|
|
$
|
6,122
|
|
|
$
|
(304
|
)
|
|
$
|
4,224
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Changes in the provision for loan and lease losses associated with:
|
|
|
|
|
|
|
||||||
(Release) addition of specific reserves on impaired loans, net
|
|
$
|
(19
|
)
|
|
$
|
(381
|
)
|
|
$
|
1,901
|
|
Net decrease in allowance for loan and lease loss reserve due to subjective factor changes
|
|
(878
|
)
|
|
(492
|
)
|
|
—
|
|
|||
Charge-offs in excess of specific reserves
|
|
1,233
|
|
|
180
|
|
|
2,206
|
|
|||
Recoveries
|
|
(425
|
)
|
|
(374
|
)
|
|
(481
|
)
|
|||
Change in inherent risk of the loan and lease portfolio
|
|
1,325
|
|
|
108
|
|
|
617
|
|
|||
Total provision for loan and lease losses
|
|
$
|
1,236
|
|
|
$
|
(959
|
)
|
|
$
|
4,243
|
|
|
|
For the Year Ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
Statutory federal tax rate
|
|
34.4
|
%
|
|
34.4
|
%
|
|
34.0
|
%
|
State taxes, net of federal benefit
|
|
4.7
|
|
|
4.6
|
|
|
4.7
|
|
Bank owned life insurance
|
|
(1.4
|
)
|
|
(1.4
|
)
|
|
(1.7
|
)
|
Tax-exempt security and loan income, net of TEFRA adjustments
|
|
(3.5
|
)
|
|
(3.2
|
)
|
|
(3.2
|
)
|
Federal new market tax credit
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
Non-deductible transaction costs
|
|
0.6
|
|
|
—
|
|
|
—
|
|
Discrete items
|
|
(0.2
|
)
|
|
0.1
|
|
|
0.3
|
|
Other
|
|
0.6
|
|
|
0.5
|
|
|
0.6
|
|
|
|
33.4
|
%
|
|
35.0
|
%
|
|
34.7
|
%
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||||
|
|
Amortized cost
|
|
Fair value
|
|
Amortized cost
|
|
Fair value
|
|
Amortized cost
|
|
Fair value
|
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
9,046
|
|
|
$
|
8,965
|
|
|
$
|
16,380
|
|
|
$
|
16,244
|
|
|
$
|
19,667
|
|
|
$
|
19,721
|
|
Municipal obligations
|
|
573
|
|
|
578
|
|
|
16,207
|
|
|
15,489
|
|
|
11,897
|
|
|
12,033
|
|
||||||
Asset-backed securities
|
|
1,514
|
|
|
1,510
|
|
|
$
|
1,517
|
|
|
$
|
1,494
|
|
|
—
|
|
|
—
|
|
||||
Collateralized mortgage obligations - government issued
|
|
67,740
|
|
|
68,874
|
|
|
111,010
|
|
|
111,969
|
|
|
148,369
|
|
|
151,645
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
64,763
|
|
|
64,771
|
|
|
35,561
|
|
|
34,922
|
|
|
17,128
|
|
|
17,197
|
|
||||||
|
|
$
|
143,636
|
|
|
$
|
144,698
|
|
|
$
|
180,675
|
|
|
$
|
180,118
|
|
|
$
|
197,061
|
|
|
$
|
200,596
|
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||||
|
|
Amortized cost
|
|
Fair value
|
|
Amortized cost
|
|
Fair value
|
|
Amortized cost
|
|
Fair value
|
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
1,490
|
|
|
$
|
1,473
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Municipal obligations
|
|
16,088
|
|
|
16,155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
14,505
|
|
|
14,531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
9,480
|
|
|
9,535
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
41,563
|
|
|
$
|
41,694
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Less than One Year
|
|
One to Five Years
|
|
Five to Ten Years
|
|
Over Ten Years
|
|
|
||||||||||||||||||||||
|
|
Balance
|
|
Weighted
Average Yield |
|
Balance
|
|
Weighted
Average Yield |
|
Balance
|
|
Weighted
Average Yield |
|
Balance
|
|
Weighted
Average Yield |
|
Total
|
||||||||||||||
|
|
(Dollars In Thousands)
|
||||||||||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
7,971
|
|
|
0.84
|
%
|
|
$
|
994
|
|
|
2.04
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
8,965
|
|
Municipal obligations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
578
|
|
|
1.67
|
|
|
—
|
|
|
—
|
|
|
578
|
|
|||||
Asset-backed securities
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1,510
|
|
|
0.91
|
%
|
|
—
|
|
|
—
|
%
|
|
1,510
|
|
|||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
—
|
|
|
198
|
|
|
3.94
|
|
|
18,793
|
|
|
2.41
|
|
|
49,883
|
|
|
2.21
|
|
|
68,874
|
|
|||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
—
|
|
|
651
|
|
|
0.93
|
|
|
49,969
|
|
|
1.68
|
|
|
14,151
|
|
|
1.33
|
|
|
64,771
|
|
|||||
|
|
$
|
—
|
|
|
|
|
$
|
8,820
|
|
|
|
|
$
|
71,844
|
|
|
|
|
$
|
64,034
|
|
|
|
|
$
|
144,698
|
|
|
|
Less than One Year
|
|
One to Five Years
|
|
Five to Ten Years
|
|
Over Ten Years
|
|
|
||||||||||||||||||||||
|
|
Balance
|
|
Weighted
Average Yield |
|
Balance
|
|
Weighted
Average Yield |
|
Balance
|
|
Weighted
Average Yield |
|
Balance
|
|
Weighted
Average Yield |
|
Total
|
||||||||||||||
|
|
(Dollars In Thousands)
|
||||||||||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,490
|
|
|
1.07
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,490
|
|
Municipal obligations
|
|
—
|
|
|
—
|
|
|
799
|
|
|
1.99
|
|
|
14,314
|
|
|
1.93
|
|
|
975
|
|
|
2.19
|
|
|
16,088
|
|
|||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,505
|
|
|
1.57
|
|
|
14,505
|
|
|||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,480
|
|
|
1.63
|
|
|
9,480
|
|
|||||
|
|
$
|
—
|
|
|
|
|
$
|
2,289
|
|
|
|
|
$
|
14,314
|
|
|
|
|
$
|
24,960
|
|
|
|
|
$
|
41,563
|
|
|
|
As of December 31,
|
|||||||||||||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||||||||||||
|
|
(Dollars in Thousands)
|
|||||||||||||||||||||||||||||||||
|
|
Amount Outstanding
|
|
% of Total Loans and Leases
|
|
Amount Outstanding
|
|
% of Total Loans and Leases
|
|
Amount Outstanding
|
|
% of Total Loans and Leases
|
|
Amount Outstanding
|
|
% of Total Loans and Leases
|
|
Amount Outstanding
|
|
% of Total Loans and Leases
|
|||||||||||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate — owner occupied
|
|
$
|
163,884
|
|
|
12.8
|
%
|
|
$
|
141,164
|
|
|
14.4
|
%
|
|
$
|
144,988
|
|
|
15.9
|
%
|
|
$
|
150,528
|
|
|
17.7
|
%
|
|
$
|
152,560
|
|
|
17.4
|
%
|
Commercial real estate — non-owner occupied
|
|
417,962
|
|
|
32.5
|
|
|
341,695
|
|
|
34.8
|
|
|
323,660
|
|
|
35.5
|
|
|
304,597
|
|
|
35.8
|
|
|
307,307
|
|
|
35.0
|
|
|||||
Construction and land development
|
|
121,160
|
|
|
9.5
|
|
|
68,708
|
|
|
7.0
|
|
|
64,966
|
|
|
7.1
|
|
|
38,124
|
|
|
4.5
|
|
|
61,645
|
|
|
7.0
|
|
|||||
Multi-family
|
|
72,578
|
|
|
5.7
|
|
|
62,758
|
|
|
6.4
|
|
|
58,454
|
|
|
6.4
|
|
|
43,905
|
|
|
5.2
|
|
|
43,012
|
|
|
4.9
|
|
|||||
1-4 family
|
|
36,182
|
|
|
2.8
|
|
|
30,786
|
|
|
3.1
|
|
|
31,943
|
|
|
3.5
|
|
|
43,513
|
|
|
5.1
|
|
|
53,849
|
|
|
6.1
|
|
|||||
Total commercial real estate loans
|
|
811,766
|
|
|
63.3
|
|
|
645,111
|
|
|
65.7
|
|
|
624,011
|
|
|
68.4
|
|
|
580,667
|
|
|
68.2
|
|
|
618,373
|
|
|
70.4
|
|
|||||
Commercial and industrial loans
|
|
416,654
|
|
|
32.5
|
|
|
293,552
|
|
|
29.9
|
|
|
256,458
|
|
|
28.1
|
|
|
237,099
|
|
|
27.8
|
|
|
225,921
|
|
|
25.7
|
|
|||||
Direct financing leases, net
|
|
34,165
|
|
|
2.7
|
|
|
26,065
|
|
|
2.7
|
|
|
15,926
|
|
|
1.7
|
|
|
17,128
|
|
|
2.0
|
|
|
19,288
|
|
|
2.2
|
|
|||||
Consumer and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Home equity loans and second mortgage loans
|
|
7,866
|
|
|
0.6
|
|
|
5,272
|
|
|
0.5
|
|
|
4,642
|
|
|
0.5
|
|
|
4,970
|
|
|
0.6
|
|
|
5,091
|
|
|
0.6
|
|
|||||
Other
|
|
11,341
|
|
|
0.9
|
|
|
11,972
|
|
|
1.2
|
|
|
11,671
|
|
|
1.3
|
|
|
11,682
|
|
|
1.4
|
|
|
9,315
|
|
|
1.1
|
|
|||||
Total consumer and other
|
|
19,207
|
|
|
1.5
|
|
|
17,244
|
|
|
1.7
|
|
|
16,313
|
|
|
1.8
|
|
|
16,652
|
|
|
2.0
|
|
|
14,406
|
|
|
1.6
|
|
|||||
Total gross loans and lease receivables
|
|
1,281,792
|
|
|
100.0
|
%
|
|
981,972
|
|
|
100.0
|
%
|
|
912,708
|
|
|
100.0
|
%
|
|
851,546
|
|
|
100.0
|
%
|
|
877,988
|
|
|
100.0
|
%
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Allowance for loan and lease losses
|
|
14,329
|
|
|
|
|
13,901
|
|
|
|
|
15,400
|
|
|
|
|
14,155
|
|
|
|
|
16,271
|
|
|
|
||||||||||
Deferred loan fees
|
|
1,025
|
|
|
|
|
1,021
|
|
|
|
|
748
|
|
|
|
|
704
|
|
|
|
|
782
|
|
|
|
||||||||||
Loans and lease receivables, net
|
|
$
|
1,266,438
|
|
|
|
|
$
|
967,050
|
|
|
|
|
$
|
896,560
|
|
|
|
|
$
|
836,687
|
|
|
|
|
$
|
860,935
|
|
|
|
|
|
Amounts Due
|
|
Interest Terms On Amounts Due
after One Year
|
||||||||||||||||||||
|
|
In One Year
or Less
|
|
After One
Year through
Five Years
|
|
After Five
Years
|
|
Total
|
|
Fixed Rate
|
|
Variable Rate
|
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner-occupied
|
|
$
|
23,384
|
|
|
$
|
100,911
|
|
|
$
|
39,589
|
|
|
$
|
163,884
|
|
|
$
|
101,918
|
|
|
$
|
38,582
|
|
Non-owner occupied
|
|
81,901
|
|
|
212,037
|
|
|
124,024
|
|
|
417,962
|
|
|
284,133
|
|
|
51,928
|
|
||||||
Construction and land development
|
|
53,332
|
|
|
51,949
|
|
|
15,879
|
|
|
121,160
|
|
|
22,688
|
|
|
45,140
|
|
||||||
Multi-family
|
|
12,435
|
|
|
34,010
|
|
|
26,133
|
|
|
72,578
|
|
|
51,453
|
|
|
8,690
|
|
||||||
1-4 family
|
|
14,771
|
|
|
21,406
|
|
|
5
|
|
|
36,182
|
|
|
19,184
|
|
|
2,227
|
|
||||||
Commercial and industrial
|
|
149,012
|
|
|
219,349
|
|
|
48,293
|
|
|
416,654
|
|
|
86,370
|
|
|
181,272
|
|
||||||
Direct financing leases
|
|
1,297
|
|
|
22,921
|
|
|
9,947
|
|
|
34,165
|
|
|
32,868
|
|
|
—
|
|
||||||
Consumer and other
|
|
9,751
|
|
|
9,456
|
|
|
—
|
|
|
19,207
|
|
|
8,593
|
|
|
863
|
|
||||||
|
|
$
|
345,883
|
|
|
$
|
672,039
|
|
|
$
|
263,870
|
|
|
$
|
1,281,792
|
|
|
$
|
607,207
|
|
|
$
|
328,702
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
(Dollars In Thousands)
|
||||||||||||||||||
Non-accrual loans and leases
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate – owner occupied
|
|
$
|
500
|
|
|
$
|
339
|
|
|
$
|
769
|
|
|
$
|
2,972
|
|
|
$
|
6,283
|
|
Commercial real estate – non-owner occupied
|
|
286
|
|
|
283
|
|
|
2,871
|
|
|
2,249
|
|
|
5,144
|
|
|||||
Construction and land development
|
|
4,932
|
|
|
5,422
|
|
|
4,946
|
|
|
7,229
|
|
|
9,275
|
|
|||||
Multi-family
|
|
17
|
|
|
31
|
|
|
46
|
|
|
2,009
|
|
|
4,186
|
|
|||||
1-4 family
|
|
690
|
|
|
521
|
|
|
1,006
|
|
|
3,506
|
|
|
4,237
|
|
|||||
Total non-accrual commercial real estate
|
|
6,425
|
|
|
6,596
|
|
|
9,638
|
|
|
17,965
|
|
|
29,125
|
|
|||||
Commercial and industrial
|
|
2,318
|
|
|
8,011
|
|
|
2,842
|
|
|
1,558
|
|
|
6,436
|
|
|||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|||||
Other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgage
|
|
329
|
|
|
453
|
|
|
612
|
|
|
1,002
|
|
|
939
|
|
|||||
Other
|
|
720
|
|
|
795
|
|
|
1,030
|
|
|
1,223
|
|
|
1,906
|
|
|||||
Total non-accrual other loans
|
|
1,049
|
|
|
1,248
|
|
|
1,642
|
|
|
2,225
|
|
|
2,845
|
|
|||||
Total non-accrual loans and leases
|
|
9,792
|
|
|
15,855
|
|
|
14,122
|
|
|
21,766
|
|
|
38,406
|
|
|||||
Foreclosed properties, net
|
|
1,693
|
|
|
333
|
|
|
1,574
|
|
|
2,236
|
|
|
1,750
|
|
|||||
Total non-performing assets
|
|
11,485
|
|
|
16,188
|
|
|
15,696
|
|
|
24,002
|
|
|
40,156
|
|
|||||
Performing troubled debt restructurings
|
|
2,003
|
|
|
371
|
|
|
1,105
|
|
|
111
|
|
|
718
|
|
|||||
Total impaired assets
|
|
$
|
13,488
|
|
|
$
|
16,559
|
|
|
$
|
16,801
|
|
|
$
|
24,113
|
|
|
$
|
40,874
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total non-accrual loans and leases to gross loans and leases
|
|
0.76
|
%
|
|
1.61
|
%
|
|
1.55
|
%
|
|
2.56
|
%
|
|
4.37
|
%
|
|||||
Total non-performing assets to gross loans and leases plus foreclosed properties, net
|
|
0.89
|
%
|
|
1.65
|
%
|
|
1.72
|
%
|
|
2.81
|
%
|
|
4.57
|
%
|
|||||
Total non-performing assets to total assets
|
|
0.70
|
%
|
|
1.28
|
%
|
|
1.28
|
%
|
|
2.04
|
%
|
|
3.63
|
%
|
|||||
Allowance for loan and lease losses to gross loans and leases
|
|
1.12
|
%
|
|
1.42
|
%
|
|
1.69
|
%
|
|
1.66
|
%
|
|
1.85
|
%
|
|||||
Allowance for loan and lease losses to non-accrual loans and leases
|
|
146.33
|
%
|
|
87.68
|
%
|
|
109.05
|
%
|
|
65.03
|
%
|
|
42.37
|
%
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Impaired loans and leases with no impairment reserves
|
|
$
|
11,270
|
|
|
$
|
8,200
|
|
|
$
|
11,006
|
|
|
$
|
18,888
|
|
|
$
|
19,749
|
|
Impaired loans and leases with impairment reserves required
|
|
525
|
|
|
8,026
|
|
|
4,221
|
|
|
2,989
|
|
|
19,375
|
|
|||||
Total impaired loans and leases
|
|
11,795
|
|
|
16,226
|
|
|
15,227
|
|
|
21,877
|
|
|
39,124
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment reserve (included in allowance for loan and lease losses)
|
|
290
|
|
|
402
|
|
|
1,517
|
|
|
888
|
|
|
3,459
|
|
|||||
Net impaired loans and leases
|
|
$
|
11,505
|
|
|
$
|
15,824
|
|
|
$
|
13,710
|
|
|
$
|
20,989
|
|
|
$
|
35,665
|
|
Average impaired loans and leases
|
|
$
|
14,474
|
|
|
$
|
12,084
|
|
|
$
|
17,945
|
|
|
$
|
33,793
|
|
|
$
|
29,714
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
For the years ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Interest income attributable to impaired loans and leases
|
|
$
|
870
|
|
|
$
|
887
|
|
|
$
|
1,432
|
|
|
$
|
2,682
|
|
|
$
|
2,702
|
|
Less: Interest income recognized on impaired loans and leases
|
|
740
|
|
|
221
|
|
|
321
|
|
|
787
|
|
|
102
|
|
|||||
Net foregone interest income on impaired loans and leases
|
|
$
|
130
|
|
|
$
|
666
|
|
|
$
|
1,111
|
|
|
$
|
1,895
|
|
|
$
|
2,600
|
|
|
|
For the Year Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Balance at the beginning of the period
|
|
$
|
333
|
|
|
$
|
1,574
|
|
Foreclosed properties acquired in acquisition, at fair value
|
|
1,605
|
|
|
—
|
|
||
Transfer of loans to foreclosed properties, at lower of cost or fair value
|
|
—
|
|
|
1,381
|
|
||
Impairment adjustments
|
|
(4
|
)
|
|
(59
|
)
|
||
Net book value of properties sold
|
|
(241
|
)
|
|
(2,563
|
)
|
||
Balance at the end of the period
|
|
$
|
1,693
|
|
|
$
|
333
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
(Dollars In Thousands)
|
||||||||||||||||||
Allowance at beginning of period
|
|
$
|
13,901
|
|
|
$
|
15,400
|
|
|
$
|
14,155
|
|
|
$
|
16,271
|
|
|
$
|
14,124
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
(1,376
|
)
|
|
(258
|
)
|
|||||
Commercial real estate — non-owner occupied
|
|
(631
|
)
|
|
(792
|
)
|
|
—
|
|
|
(1,612
|
)
|
|
—
|
|
|||||
Construction and land development
|
|
—
|
|
|
(71
|
)
|
|
(47
|
)
|
|
(2,091
|
)
|
|
(2,110
|
)
|
|||||
Multi-family
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|
(312
|
)
|
|
(1,059
|
)
|
|||||
1-4 family
|
|
—
|
|
|
(33
|
)
|
|
(322
|
)
|
|
(942
|
)
|
|
(596
|
)
|
|||||
Commercial and industrial
|
|
(600
|
)
|
|
(14
|
)
|
|
(2,739
|
)
|
|
(475
|
)
|
|
(352
|
)
|
|||||
Direct financing leases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consumer and other
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgage
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
(113
|
)
|
|
(142
|
)
|
|||||
Other
|
|
(2
|
)
|
|
(4
|
)
|
|
(56
|
)
|
|
(309
|
)
|
|
(693
|
)
|
|||||
Total charge-offs
|
|
(1,233
|
)
|
|
(914
|
)
|
|
(3,479
|
)
|
|
(7,230
|
)
|
|
(5,210
|
)
|
|||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
8
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||
Commercial real estate — non-owner occupied
|
|
5
|
|
|
61
|
|
|
192
|
|
|
—
|
|
|
—
|
|
|||||
Construction and land development
|
|
—
|
|
|
281
|
|
|
101
|
|
|
13
|
|
|
23
|
|
|||||
Multi-family
|
|
14
|
|
|
—
|
|
|
—
|
|
|
289
|
|
|
—
|
|
|||||
1-4 family
|
|
17
|
|
|
10
|
|
|
77
|
|
|
—
|
|
|
16
|
|
|||||
Commercial and industrial
|
|
369
|
|
|
11
|
|
|
66
|
|
|
473
|
|
|
265
|
|
|||||
Direct financing leases
|
|
—
|
|
|
5
|
|
|
—
|
|
|
19
|
|
|
8
|
|
|||||
Consumer and other
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgage
|
|
12
|
|
|
5
|
|
|
11
|
|
|
68
|
|
|
1
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
29
|
|
|
2
|
|
|
—
|
|
|||||
Total recoveries
|
|
425
|
|
|
374
|
|
|
481
|
|
|
864
|
|
|
313
|
|
|||||
Net charge-offs
|
|
(808
|
)
|
|
(540
|
)
|
|
(2,998
|
)
|
|
(6,366
|
)
|
|
(4,897
|
)
|
|||||
Provision for loan and lease losses
|
|
1,236
|
|
|
(959
|
)
|
|
4,243
|
|
|
4,250
|
|
|
7,044
|
|
|||||
Allowance at end of period
|
|
$
|
14,329
|
|
|
$
|
13,901
|
|
|
$
|
15,400
|
|
|
$
|
14,155
|
|
|
$
|
16,271
|
|
Net charge-offs as a % of average gross loans and leases
|
|
0.08
|
%
|
|
0.06
|
%
|
|
0.35
|
%
|
|
0.74
|
%
|
|
0.57
|
%
|
|
|
As of December 31,
|
|||||||||||||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||||||||||||
|
|
Allowance
for loan
and lease
losses
|
|
Percent of
loans in
each
category to
total loans
|
|
Allowance
for loan
and lease
losses
|
|
Percent of
loans in
each
category to
total loans
|
|
Allowance
for loan
and lease
losses
|
|
Percent of
loans in
each
category to
total loans
|
|
Allowance
for loan and lease losses |
|
Percent of
loans in each category to total loans |
|
Allowance
for loan
and lease
losses
|
|
Percent of
loans in
each
category to
total loans
|
|||||||||||||||
|
|
(Dollars In Thousands)
|
|||||||||||||||||||||||||||||||||
Loan segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate
|
|
$
|
8,619
|
|
|
63.33
|
%
|
|
$
|
9,055
|
|
|
65.70
|
%
|
|
$
|
10,693
|
|
|
68.37
|
%
|
|
$
|
9,554
|
|
|
68.19
|
%
|
|
$
|
11,267
|
|
|
70.43
|
%
|
Commercial and industrial
|
|
5,067
|
|
|
32.50
|
%
|
|
4,235
|
|
|
29.89
|
%
|
|
4,129
|
|
|
28.10
|
%
|
|
3,977
|
|
|
27.84
|
%
|
|
4,277
|
|
|
25.73
|
%
|
|||||
Direct financing leases, net
|
|
425
|
|
|
2.67
|
%
|
|
338
|
|
|
2.65
|
%
|
|
207
|
|
|
1.74
|
%
|
|
240
|
|
|
2.01
|
%
|
|
245
|
|
|
2.20
|
%
|
|||||
Consumer and other
|
|
218
|
|
|
1.50
|
%
|
|
273
|
|
|
1.76
|
%
|
|
371
|
|
|
1.79
|
%
|
|
384
|
|
|
1.96
|
%
|
|
482
|
|
|
1.64
|
%
|
|||||
Total
|
|
$
|
14,329
|
|
|
100.00
|
%
|
|
$
|
13,901
|
|
|
100.00
|
%
|
|
$
|
15,400
|
|
|
100.00
|
%
|
|
$
|
14,155
|
|
|
100.00
|
%
|
|
$
|
16,271
|
|
|
100.00
|
%
|
Interest rate
|
|
Three months and less
|
|
Over three months through six months
|
|
Over six months through twelve months
|
|
Over twelve months
|
|
Total
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
0.00% to 0.99%
|
|
$
|
26,529
|
|
|
$
|
41,172
|
|
|
$
|
77,810
|
|
|
$
|
95,482
|
|
|
$
|
240,993
|
|
1.00% to 1.99%
|
|
14,622
|
|
|
14,149
|
|
|
40,931
|
|
|
131,967
|
|
|
201,669
|
|
|||||
2.00% to 2.99%
|
|
7,538
|
|
|
12,860
|
|
|
5,930
|
|
|
78,217
|
|
|
104,545
|
|
|||||
3.00% to 3.99%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,768
|
|
|
6,768
|
|
|||||
4.00% to 4.99%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
5.00% and greater
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
48,689
|
|
|
$
|
68,181
|
|
|
$
|
124,671
|
|
|
$
|
312,434
|
|
|
$
|
553,975
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
|
December 31, 2012
|
|||||||||||||||||||||||||||
|
|
Balance
|
|
Weighted
average balance |
|
Weighted
average rate |
|
Balance
|
|
Weighted
average balance |
|
Weighted
average rate |
|
Balance
|
|
Weighted
average balance |
|
Weighted
average rate |
|||||||||||||||
|
|
(Dollars In Thousands)
|
|||||||||||||||||||||||||||||||
Federal funds purchased
|
|
$
|
—
|
|
|
$
|
237
|
|
|
0.82
|
%
|
|
$
|
—
|
|
|
$
|
260
|
|
|
0.74
|
%
|
|
$
|
—
|
|
|
$
|
237
|
|
|
0.82
|
%
|
FHLB advances and other borrowings
|
|
10,058
|
|
|
5,093
|
|
|
0.56
|
|
|
—
|
|
|
6,471
|
|
|
0.19
|
|
|
469
|
|
|
2,034
|
|
|
1.59
|
%
|
||||||
Line of credit
|
|
1,010
|
|
|
13
|
|
|
3.30
|
|
|
10
|
|
|
10
|
|
|
3.41
|
|
|
10
|
|
|
1,666
|
|
|
4.07
|
%
|
||||||
Subordinated notes payable
|
|
22,926
|
|
|
13,362
|
|
|
7.07
|
|
|
11,926
|
|
|
11,926
|
|
|
6.92
|
|
|
11,926
|
|
|
37,481
|
|
|
7.02
|
%
|
||||||
Junior subordinated notes
|
|
10,315
|
|
|
10,315
|
|
|
10.78
|
|
|
10,315
|
|
|
10,315
|
|
|
10.78
|
|
|
10,315
|
|
|
10,315
|
|
|
10.81
|
%
|
||||||
|
|
$
|
44,309
|
|
|
$
|
29,020
|
|
|
7.24
|
|
|
$
|
22,251
|
|
|
$
|
28,982
|
|
|
6.78
|
|
|
$
|
22,720
|
|
|
$
|
51,733
|
|
|
7.46
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Short-term borrowings
|
|
$
|
2,010
|
|
|
|
|
|
|
$
|
10
|
|
|
|
|
|
|
$
|
479
|
|
|
|
|
|
|||||||||
Long-term borrowings
|
|
42,299
|
|
|
|
|
|
|
22,241
|
|
|
|
|
|
|
22,241
|
|
|
|
|
|
||||||||||||
|
|
$
|
44,309
|
|
|
|
|
|
|
$
|
22,251
|
|
|
|
|
|
|
$
|
22,720
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Maximum month-end balance:
|
|
|
|
|
|
|
||||||
FHLB advances
|
|
$
|
26,000
|
|
|
$
|
26,500
|
|
|
$
|
15,474
|
|
Federal funds purchased
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
4-5 Years
|
|
More than 5
Years
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Operating lease obligations
|
|
$
|
11,995
|
|
|
$
|
1,198
|
|
|
$
|
2,194
|
|
|
$
|
2,056
|
|
|
$
|
6,547
|
|
Time deposits
|
|
553,975
|
|
|
241,541
|
|
|
177,006
|
|
|
68,872
|
|
|
66,556
|
|
|||||
Line of credit
|
|
1,010
|
|
|
1,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Subordinated notes
|
|
22,926
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,926
|
|
|||||
Junior subordinated notes
|
|
10,315
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,315
|
|
|||||
FHLB advances and other borrowings
|
|
10,058
|
|
|
1,000
|
|
|
8,383
|
|
|
—
|
|
|
675
|
|
|||||
Total contractual obligations
|
|
$
|
610,279
|
|
|
$
|
244,749
|
|
|
$
|
187,583
|
|
|
$
|
70,928
|
|
|
$
|
107,019
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Change in interest rates in basis points
|
|
Down 50
|
|
No Change
|
|
Up 100
|
|
Up 200
|
|
Up 300
|
|
Up 400
|
||||||
Impact on net interest income
|
|
(1.27
|
)%
|
|
—
|
|
|
0.72
|
%
|
|
4.19
|
%
|
|
2.38
|
%
|
|
4.40
|
%
|
|
|
Estimated Maturity or Repricing at December 31, 2014
|
||||||||||||||||||
|
|
Within 3 months
|
|
3-12 months
|
|
1-5 years
|
|
After 5 years
|
|
Total
|
||||||||||
|
|
(Dollars In Thousands)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
|
$
|
81,801
|
|
|
$
|
2,695
|
|
|
$
|
3,860
|
|
|
$
|
—
|
|
|
$
|
88,356
|
|
Investment securities
|
|
14,835
|
|
|
32,875
|
|
|
95,351
|
|
|
40,193
|
|
|
183,254
|
|
|||||
Commercial loans
|
|
185,429
|
|
|
31,379
|
|
|
77,228
|
|
|
4,344
|
|
|
298,380
|
|
|||||
Real estate loans
|
|
303,149
|
|
|
88,151
|
|
|
310,808
|
|
|
93,136
|
|
|
795,244
|
|
|||||
Asset-based loans
|
|
162,985
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162,985
|
|
|||||
Lease receivables
|
|
1,304
|
|
|
2,586
|
|
|
14,317
|
|
|
—
|
|
|
18,207
|
|
|||||
Consumer loans
|
|
864
|
|
|
590
|
|
|
92
|
|
|
—
|
|
|
1,546
|
|
|||||
Total earning assets
|
|
$
|
750,367
|
|
|
$
|
158,276
|
|
|
$
|
501,656
|
|
|
$
|
137,673
|
|
|
$
|
1,547,972
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing transaction
|
|
$
|
104,199
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104,199
|
|
Money market accounts
|
|
575,766
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
575,766
|
|
|||||
Time deposits under $250,000
|
|
26,006
|
|
|
199,143
|
|
|
241,202
|
|
|
66,556
|
|
|
532,907
|
|
|||||
Time deposits $250,000 and over
|
|
2,895
|
|
|
11,423
|
|
|
6,088
|
|
|
—
|
|
|
20,406
|
|
|||||
FHLB advances
|
|
—
|
|
|
1,000
|
|
|
8,000
|
|
|
—
|
|
|
9,000
|
|
|||||
Short-term borrowings
|
|
1,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,010
|
|
|||||
Long-term debt
|
|
1,711
|
|
|
—
|
|
|
15,000
|
|
|
17,205
|
|
|
33,916
|
|
|||||
Total interest-bearing liabilities
|
|
$
|
711,587
|
|
|
$
|
211,566
|
|
|
$
|
270,290
|
|
|
$
|
83,761
|
|
|
$
|
1,277,204
|
|
Interest rate gap
|
|
$
|
38,780
|
|
|
$
|
(53,290
|
)
|
|
$
|
231,366
|
|
|
$
|
53,912
|
|
|
$
|
270,768
|
|
Cumulative interest rate gap
|
|
$
|
38,780
|
|
|
$
|
(14,510
|
)
|
|
$
|
216,856
|
|
|
$
|
270,768
|
|
|
|
||
Cumulative interest rate gap to total earning assets
|
|
2.51
|
%
|
|
(0.94
|
)%
|
|
14.01
|
%
|
|
17.49
|
%
|
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
|
|
Consolidated Financial Statements
|
|
Page No.
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
|
(In Thousands, Except Share Data)
|
|||||||
Assets
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
14,881
|
|
|
$
|
13,219
|
|
Short-term investments
|
|
88,356
|
|
|
68,067
|
|
||
Cash and cash equivalents
|
|
103,237
|
|
|
81,286
|
|
||
Securities available-for-sale, at fair value
|
|
144,698
|
|
|
180,118
|
|
||
Securities held-to-maturity, at amortized cost
|
|
41,563
|
|
|
—
|
|
||
Loans and leases receivable, net of allowance for loan and lease losses of $14,329 and $13,901, respectively
|
|
1,266,438
|
|
|
967,050
|
|
||
Premises and equipment, net
|
|
3,943
|
|
|
1,155
|
|
||
Foreclosed properties
|
|
1,693
|
|
|
333
|
|
||
Cash surrender value of bank-owned life insurance
|
|
27,314
|
|
|
23,142
|
|
||
Investment in Federal Home Loan Bank and Federal Reserve Bank stock, at cost
|
|
2,340
|
|
|
1,255
|
|
||
Accrued interest receivable and other assets
|
|
26,217
|
|
|
14,316
|
|
||
Goodwill and other intangible assets
|
|
11,944
|
|
|
—
|
|
||
Total assets
|
|
$
|
1,629,387
|
|
|
$
|
1,268,655
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Deposits
|
|
$
|
1,438,268
|
|
|
$
|
1,129,855
|
|
Federal Home Loan Bank and other borrowings
|
|
33,994
|
|
|
11,936
|
|
||
Junior subordinated notes
|
|
10,315
|
|
|
10,315
|
|
||
Accrued interest payable and other liabilities
|
|
9,062
|
|
|
7,274
|
|
||
Total liabilities
|
|
1,491,639
|
|
|
1,159,380
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value, 2,500,000 shares authorized, none issued or outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 25,000,000 shares authorized, 4,537,426 and 4,106,084 shares issued, 4,335,927 and 3,943,997 shares outstanding at December 31, 2014 and 2013, respectively
|
|
45
|
|
|
41
|
|
||
Additional paid-in capital
|
|
74,963
|
|
|
56,002
|
|
||
Retained earnings
|
|
67,886
|
|
|
57,143
|
|
||
Accumulated other comprehensive income (loss)
|
|
218
|
|
|
(342
|
)
|
||
Treasury stock (201,499 and 162,087 shares at December 31, 2014 and 2013, respectively), at cost
|
|
(5,364
|
)
|
|
(3,569
|
)
|
||
Total stockholders’ equity
|
|
137,748
|
|
|
109,275
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,629,387
|
|
|
$
|
1,268,655
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands, Except Share Data)
|
||||||||||
Interest income
|
|
|
|
|
|
|
||||||
Loans and leases
|
|
$
|
54,047
|
|
|
$
|
50,238
|
|
|
$
|
51,125
|
|
Securities income
|
|
3,342
|
|
|
3,315
|
|
|
3,417
|
|
|||
Short-term investments
|
|
312
|
|
|
257
|
|
|
224
|
|
|||
Total interest income
|
|
57,701
|
|
|
53,810
|
|
|
54,766
|
|
|||
Interest expense
|
|
|
|
|
|
|
||||||
Deposits
|
|
9,470
|
|
|
9,739
|
|
|
13,026
|
|
|||
Notes payable and other borrowings
|
|
989
|
|
|
855
|
|
|
2,744
|
|
|||
Junior subordinated notes
|
|
1,112
|
|
|
1,111
|
|
|
1,115
|
|
|||
Total interest expense
|
|
11,571
|
|
|
11,705
|
|
|
16,885
|
|
|||
Net interest income
|
|
46,130
|
|
|
42,105
|
|
|
37,881
|
|
|||
Provision for loan and lease losses
|
|
1,236
|
|
|
(959
|
)
|
|
4,243
|
|
|||
Net interest income after provision for loan and lease losses
|
|
44,894
|
|
|
43,064
|
|
|
33,638
|
|
|||
Non-interest income
|
|
|
|
|
|
|
||||||
Trust and investment services fee income
|
|
4,434
|
|
|
3,756
|
|
|
2,927
|
|
|||
Service charges on deposits
|
|
2,469
|
|
|
2,150
|
|
|
2,028
|
|
|||
Loan fees
|
|
1,577
|
|
|
1,295
|
|
|
2,026
|
|
|||
Increase in cash surrender value of bank-owned life insurance
|
|
862
|
|
|
845
|
|
|
703
|
|
|||
Gain on sale of loans and leases
|
|
392
|
|
|
—
|
|
|
147
|
|
|||
Other
|
|
369
|
|
|
396
|
|
|
868
|
|
|||
Total non-interest income
|
|
10,103
|
|
|
8,442
|
|
|
8,699
|
|
|||
Non-interest expense
|
|
|
|
|
|
|
||||||
Compensation
|
|
21,477
|
|
|
18,278
|
|
|
17,018
|
|
|||
Occupancy
|
|
1,391
|
|
|
1,268
|
|
|
1,270
|
|
|||
Professional fees
|
|
3,405
|
|
|
1,968
|
|
|
1,634
|
|
|||
Data processing
|
|
1,710
|
|
|
1,500
|
|
|
1,319
|
|
|||
Marketing
|
|
1,662
|
|
|
1,355
|
|
|
1,224
|
|
|||
Equipment
|
|
650
|
|
|
528
|
|
|
490
|
|
|||
FDIC insurance
|
|
758
|
|
|
741
|
|
|
1,732
|
|
|||
Collateral liquidation costs
|
|
320
|
|
|
196
|
|
|
655
|
|
|||
Net (gain) loss on foreclosed properties
|
|
(10
|
)
|
|
(117
|
)
|
|
585
|
|
|||
Other
|
|
2,412
|
|
|
4,654
|
|
|
2,734
|
|
|||
Total non-interest expense
|
|
33,775
|
|
|
30,371
|
|
|
28,661
|
|
|||
Income before income tax expense
|
|
21,222
|
|
|
21,135
|
|
|
13,676
|
|
|||
Income tax expense
|
|
7,083
|
|
|
7,389
|
|
|
4,750
|
|
|||
Net income
|
|
$
|
14,139
|
|
|
$
|
13,746
|
|
|
$
|
8,926
|
|
Earnings per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
3.52
|
|
|
$
|
3.50
|
|
|
$
|
3.30
|
|
Diluted
|
|
3.51
|
|
|
3.49
|
|
|
3.29
|
|
|||
Dividends declared per share
|
|
0.84
|
|
|
0.56
|
|
|
0.28
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
||||||||
Net income
|
|
$
|
14,139
|
|
|
$
|
13,746
|
|
|
$
|
8,926
|
|
Other comprehensive loss, before tax
|
|
|
|
|
|
|
||||||
Securities available-for-sale:
|
|
|
|
|
|
|
||||||
Unrealized securities losses arising during the period
|
|
1,619
|
|
|
(4,092
|
)
|
|
(503
|
)
|
|||
Securities held-to-maturity:
|
|
|
|
|
|
|
||||||
Unrealized losses transferred during the period
|
|
(874
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of net unrealized losses transferred during the period
|
|
167
|
|
|
—
|
|
|
—
|
|
|||
Income tax (expense) benefit
|
|
(352
|
)
|
|
1,567
|
|
|
195
|
|
|||
Comprehensive income
|
|
$
|
14,699
|
|
|
$
|
11,221
|
|
|
$
|
8,618
|
|
|
|
Common shares outstanding
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Treasury
stock
|
|
Total
|
|||||||||||||
|
|
(In Thousands, Except Share Data)
|
|||||||||||||||||||||||||
Balance at December 31, 2011
|
|
2,625,569
|
|
|
$
|
27
|
|
|
$
|
25,843
|
|
|
$
|
37,501
|
|
|
$
|
2,491
|
|
|
$
|
(1,648
|
)
|
|
$
|
64,214
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,926
|
|
|
—
|
|
|
—
|
|
|
8,926
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
|
—
|
|
|
(308
|
)
|
||||||
Issuance of common stock
|
|
1,265,000
|
|
|
13
|
|
|
27,061
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,074
|
|
||||||
Exercise of stock options
|
|
1,000
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||
Share-based compensation - restricted shares
|
|
30,385
|
|
|
—
|
|
|
548
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
548
|
|
||||||
Share-based compensation - tax benefits
|
|
—
|
|
|
—
|
|
|
107
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
||||||
Cash dividends ($0.28 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(828
|
)
|
|
—
|
|
|
—
|
|
|
(828
|
)
|
||||||
Treasury stock purchased
|
|
(9,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(216
|
)
|
|
(216
|
)
|
||||||
Treasury stock re-issued
|
|
4,158
|
|
|
—
|
|
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
77
|
|
|
—
|
|
||||||
Balance at December 31, 2012
|
|
3,916,667
|
|
|
$
|
40
|
|
|
$
|
53,504
|
|
|
$
|
45,599
|
|
|
$
|
2,183
|
|
|
$
|
(1,787
|
)
|
|
$
|
99,539
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,746
|
|
|
—
|
|
|
—
|
|
|
13,746
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,525
|
)
|
|
—
|
|
|
(2,525
|
)
|
||||||
Exercise of stock options
|
|
69,684
|
|
|
1
|
|
|
1,473
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,474
|
|
||||||
Share-based compensation - restricted shares
|
|
25,030
|
|
|
—
|
|
|
660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
660
|
|
||||||
Share-based compensation - tax benefits
|
|
—
|
|
|
—
|
|
|
365
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
365
|
|
||||||
Cash dividends ($0.56 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,202
|
)
|
|
—
|
|
|
—
|
|
|
(2,202
|
)
|
||||||
Treasury stock purchased
|
|
(67,384
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,782
|
)
|
|
(1,782
|
)
|
||||||
Balance at December 31, 2013
|
|
3,943,997
|
|
|
$
|
41
|
|
|
$
|
56,002
|
|
|
$
|
57,143
|
|
|
$
|
(342
|
)
|
|
$
|
(3,569
|
)
|
|
$
|
109,275
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,139
|
|
|
—
|
|
|
—
|
|
|
14,139
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
560
|
|
|
—
|
|
|
560
|
|
||||||
Issuance of common stock
|
|
360,081
|
|
|
3
|
|
|
16,554
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,557
|
|
||||||
Exercise of stock options
|
|
39,000
|
|
|
1
|
|
|
936
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
937
|
|
||||||
Share-based compensation - restricted shares
|
|
32,261
|
|
|
—
|
|
|
887
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
887
|
|
||||||
Share-based compensation - tax benefits
|
|
—
|
|
|
—
|
|
|
584
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
584
|
|
||||||
Cash dividends ($0.84 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,396
|
)
|
|
—
|
|
|
—
|
|
|
(3,396
|
)
|
||||||
Treasury stock purchased
|
|
(39,412
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,795
|
)
|
|
(1,795
|
)
|
||||||
Balance at December 31, 2014
|
|
4,335,927
|
|
|
$
|
45
|
|
|
$
|
74,963
|
|
|
$
|
67,886
|
|
|
$
|
218
|
|
|
$
|
(5,364
|
)
|
|
$
|
137,748
|
|
First Business Financial Services, Inc.
Consolidated Statements of Cash Flows
|
||||||||||||
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
14,139
|
|
|
$
|
13,746
|
|
|
$
|
8,926
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Deferred income taxes, net
|
|
1,389
|
|
|
2,428
|
|
|
(1,906
|
)
|
|||
Provision for loan and lease losses
|
|
1,236
|
|
|
(959
|
)
|
|
4,243
|
|
|||
Depreciation, amortization and accretion, net
|
|
1,870
|
|
|
2,322
|
|
|
3,054
|
|
|||
Share-based compensation
|
|
887
|
|
|
660
|
|
|
548
|
|
|||
Increase in cash surrender value of bank-owned life insurance
|
|
(862
|
)
|
|
(845
|
)
|
|
(703
|
)
|
|||
Origination of loans for sale
|
|
(9,392
|
)
|
|
—
|
|
|
(1,548
|
)
|
|||
Sale of loans originated for sale
|
|
6,651
|
|
|
—
|
|
|
1,695
|
|
|||
Gain on sale of loans originated for sale
|
|
(392
|
)
|
|
—
|
|
|
(147
|
)
|
|||
Net (gain) loss on foreclosed properties, including impairment valuation
|
|
(10
|
)
|
|
(117
|
)
|
|
585
|
|
|||
Excess tax benefit from share-based compensation
|
|
(584
|
)
|
|
(365
|
)
|
|
(107
|
)
|
|||
(Increase) decrease in accrued interest receivable and other assets
|
|
(5,448
|
)
|
|
2,713
|
|
|
646
|
|
|||
Increase (decrease) in accrued interest payable and other liabilities
|
|
2,390
|
|
|
(3,681
|
)
|
|
712
|
|
|||
Net cash provided by operating activities
|
|
11,874
|
|
|
15,902
|
|
|
15,998
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Proceeds from maturities, redemptions and paydowns of available-for-sale securities
|
|
44,148
|
|
|
62,520
|
|
|
56,992
|
|
|||
Proceeds from maturities, redemptions and paydowns of held-to-maturity securities
|
|
2,211
|
|
|
—
|
|
|
—
|
|
|||
Purchases of available-for-sale securities
|
|
(52,947
|
)
|
|
(48,048
|
)
|
|
(90,407
|
)
|
|||
Proceeds from sale of foreclosed properties
|
|
255
|
|
|
2,739
|
|
|
1,955
|
|
|||
Payments to priority lien holders of foreclosed properties
|
|
—
|
|
|
—
|
|
|
(367
|
)
|
|||
Net increase in loans and leases
|
|
(299,095
|
)
|
|
(70,912
|
)
|
|
(65,628
|
)
|
|||
Net cash associated with the Alterra Bank acquisition
|
|
(11,957
|
)
|
|
—
|
|
|
—
|
|
|||
Investment in community development entity
|
|
(7,500
|
)
|
|
—
|
|
|
—
|
|
|||
Investments in limited partnerships
|
|
(1,000
|
)
|
|
(1,250
|
)
|
|
—
|
|
|||
Distributions from limited partnerships
|
|
722
|
|
|
672
|
|
|
893
|
|
|||
Investment in FHLB and FRB Stock
|
|
(1,459
|
)
|
|
(1,185
|
)
|
|
—
|
|
|||
Proceeds from sale of FHLB Stock
|
|
373
|
|
|
1,074
|
|
|
1,223
|
|
|||
Purchases of leasehold improvements and equipment, net
|
|
(3,190
|
)
|
|
(531
|
)
|
|
(561
|
)
|
|||
Proceeds from sale of leasehold improvements and equipment, net
|
|
—
|
|
|
30
|
|
|
—
|
|
|||
Increase in bank owned life insurance policies
|
|
(3,285
|
)
|
|
—
|
|
|
(4,000
|
)
|
|||
Premium payment on bank owned life insurance policies
|
|
(25
|
)
|
|
(25
|
)
|
|
(25
|
)
|
|||
Proceeds from surrender of bank owned life insurance policies
|
|
—
|
|
|
—
|
|
|
116
|
|
|||
Net cash used in investing activities
|
|
(332,749
|
)
|
|
(54,916
|
)
|
|
(99,809
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Net increase in deposits
|
|
308,413
|
|
|
37,601
|
|
|
40,942
|
|
|||
Repayment of FHLB advances
|
|
—
|
|
|
(469
|
)
|
|
(13
|
)
|
|||
Increase in FHLB advances
|
|
9,383
|
|
|
—
|
|
|
—
|
|
|||
Net increase (decrease) in short-term borrowed funds
|
|
1,000
|
|
|
—
|
|
|
(800
|
)
|
|||
Net increase in long-term borrowed funds
|
|
675
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of subordinated notes payable, net of issuance costs
|
|
14,469
|
|
|
—
|
|
|
6,215
|
|
|||
Repayment of subordinated notes payable
|
|
(4,000
|
)
|
|
—
|
|
|
(33,289
|
)
|
|||
Excess tax benefit from share-based compensation
|
|
584
|
|
|
365
|
|
|
107
|
|
|||
Common stock issuance
|
|
16,557
|
|
|
—
|
|
|
27,074
|
|
|||
Cash dividends paid
|
|
(3,396
|
)
|
|
(2,475
|
)
|
|
(738
|
)
|
|||
Exercise of stock options
|
|
936
|
|
|
1,474
|
|
|
22
|
|
|||
Purchase of treasury stock
|
|
(1,795
|
)
|
|
(1,782
|
)
|
|
(216
|
)
|
First Business Financial Services, Inc.
Consolidated Statements of Cash Flows
|
||||||||||||
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Net cash provided by financing activities
|
|
342,826
|
|
|
34,714
|
|
|
39,304
|
|
|||
Net decrease in cash and cash equivalents
|
|
21,951
|
|
|
(4,300
|
)
|
|
(44,507
|
)
|
|||
Cash and cash equivalents at the beginning of the period
|
|
81,286
|
|
|
85,586
|
|
|
130,093
|
|
|||
Cash and cash equivalents at the end of the period
|
|
$
|
103,237
|
|
|
$
|
81,286
|
|
|
$
|
85,586
|
|
Supplementary cash flow information
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest paid on deposits and borrowings
|
|
$
|
11,048
|
|
|
$
|
12,365
|
|
|
$
|
17,800
|
|
Income taxes paid
|
|
7,221
|
|
|
6,089
|
|
|
5,716
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
||||||
Transfer of securities from available-for-sale to held-to-maturity
|
|
44,587
|
|
|
—
|
|
|
—
|
|
|||
Unrealized loss on transfer from available-for-sale to held-to-maturity
|
|
(874
|
)
|
|
—
|
|
|
—
|
|
|||
Foreclosed properties acquired in acquisition, at fair value
|
|
1,605
|
|
|
—
|
|
|
—
|
|
|||
Transfer to foreclosed properties
|
|
—
|
|
|
1,381
|
|
|
1,511
|
|
|||
Reissuance of treasury stock
|
|
—
|
|
|
—
|
|
|
77
|
|
|
As of November 1, 2014
|
||||||||||
|
As Recorded by Alterra Bank
|
|
Fair Value Adjustments
|
|
Fair Value
|
||||||
|
(In Thousands)
|
||||||||||
Consideration paid:
|
|
|
|
|
|
||||||
Cash
|
|
|
|
|
$
|
13,548
|
|
||||
Common stock
|
|
|
|
|
16,557
|
|
|||||
Fair value of total consideration transferred
|
|
|
|
|
|
$
|
30,105
|
|
|||
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
30,945
|
|
|
$
|
—
|
|
|
$
|
30,945
|
|
Securities available for sale
|
3,379
|
|
|
—
|
|
|
3,379
|
|
|||
Loans
|
199,507
|
|
|
(4,038
|
)
|
|
195,469
|
|
|||
FHLB and FRB stock
|
988
|
|
|
—
|
|
|
988
|
|
|||
Premises and equipment, net
|
2,160
|
|
|
140
|
|
|
2,300
|
|
|||
Foreclosed properties
|
1,391
|
|
|
214
|
|
|
1,605
|
|
|||
Bank-owned life insurance
|
3,285
|
|
|
—
|
|
|
3,285
|
|
|||
Loan servicing asset
|
933
|
|
|
—
|
|
|
933
|
|
|||
Core deposit intangible
|
—
|
|
|
347
|
|
|
347
|
|
|||
Accrued interest receivable and other assets
|
3,579
|
|
|
—
|
|
|
3,579
|
|
|||
Total assets acquired
|
246,167
|
|
|
(3,337
|
)
|
|
242,830
|
|
|||
Demand deposits
|
71,886
|
|
|
—
|
|
|
71,886
|
|
|||
Time deposits
|
138,933
|
|
|
786
|
|
|
139,719
|
|
|||
FHLB and other borrowings
|
9,000
|
|
|
414
|
|
|
9,414
|
|
|||
Accrued interest payable and other liabilities
|
2,373
|
|
|
—
|
|
|
2,373
|
|
|||
Total liabilities assumed
|
222,192
|
|
|
1,200
|
|
|
223,392
|
|
|||
Total identifiable net assets
|
$
|
23,975
|
|
|
$
|
(4,537
|
)
|
|
19,438
|
|
|
Goodwill
|
|
|
|
|
$
|
10,667
|
|
|
|
As of December 31, 2014
|
||||||||||||||
|
|
Amortized cost
|
|
Gross
unrealized
holding gains
|
|
Gross
unrealized
holding losses
|
|
Estimated
fair value
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
9,046
|
|
|
$
|
—
|
|
|
$
|
(81
|
)
|
|
$
|
8,965
|
|
Municipal obligations
|
|
573
|
|
|
5
|
|
|
—
|
|
|
578
|
|
||||
Asset-backed securities
|
|
1,514
|
|
|
—
|
|
|
(4
|
)
|
|
1,510
|
|
||||
Collateralized mortgage obligations - government issued
|
|
67,740
|
|
|
1,390
|
|
|
(256
|
)
|
|
68,874
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
64,763
|
|
|
234
|
|
|
(226
|
)
|
|
64,771
|
|
||||
|
|
$
|
143,636
|
|
|
$
|
1,629
|
|
|
$
|
(567
|
)
|
|
$
|
144,698
|
|
|
|
As of December 31, 2013
|
||||||||||||||
|
|
Amortized cost
|
|
Gross
unrealized
holding gains
|
|
Gross
unrealized
holding losses
|
|
Estimated
fair value
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
16,380
|
|
|
$
|
9
|
|
|
$
|
(145
|
)
|
|
$
|
16,244
|
|
Municipal obligations
|
|
16,207
|
|
|
35
|
|
|
(753
|
)
|
|
15,489
|
|
||||
Asset-backed securities
|
|
1,517
|
|
|
—
|
|
|
(23
|
)
|
|
1,494
|
|
||||
Collateralized mortgage obligations - government issued
|
|
111,010
|
|
|
2,238
|
|
|
(1,279
|
)
|
|
111,969
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
35,561
|
|
|
57
|
|
|
(696
|
)
|
|
34,922
|
|
||||
|
|
$
|
180,675
|
|
|
$
|
2,339
|
|
|
$
|
(2,896
|
)
|
|
$
|
180,118
|
|
|
|
As of December 31, 2014
|
||||||||||||||
|
|
Amortized cost
|
|
Gross
unrecognized holding gains |
|
Gross
unrecognized holding losses |
|
Estimated
fair value |
||||||||
|
|
(In Thousands)
|
||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
1,490
|
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
1,473
|
|
Municipal obligations
|
|
16,088
|
|
|
85
|
|
|
(18
|
)
|
|
16,155
|
|
||||
Asset-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Collateralized mortgage obligations - government issued
|
|
14,505
|
|
|
57
|
|
|
(31
|
)
|
|
14,531
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
9,480
|
|
|
74
|
|
|
(19
|
)
|
|
9,535
|
|
||||
|
|
$
|
41,563
|
|
|
$
|
216
|
|
|
$
|
(85
|
)
|
|
$
|
41,694
|
|
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
||||||||||||
|
|
Amortized Cost
|
|
Estimated
Fair Value
|
|
Amortized Cost
|
|
Estimated
Fair Value |
||||||||
|
|
(In Thousands)
|
||||||||||||||
Due in one year or less
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Due in one year through five years
|
|
8,869
|
|
|
8,820
|
|
|
2,289
|
|
|
2,270
|
|
||||
Due in five through ten years
|
|
71,255
|
|
|
71,845
|
|
|
14,314
|
|
|
14,379
|
|
||||
Due in over ten years
|
|
63,512
|
|
|
64,033
|
|
|
24,960
|
|
|
25,045
|
|
||||
|
|
$
|
143,636
|
|
|
$
|
144,698
|
|
|
$
|
41,563
|
|
|
$
|
41,694
|
|
|
|
As of December 31, 2014
|
||||||||||||||||||||||
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
|
|
Fair value
|
|
Unrealized
losses |
|
Fair value
|
|
Unrealized
losses |
|
Fair value
|
|
Unrealized
losses |
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
3,486
|
|
|
$
|
12
|
|
|
$
|
5,479
|
|
|
$
|
69
|
|
|
$
|
8,965
|
|
|
$
|
81
|
|
Municipal obligations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Asset-backed securities
|
|
—
|
|
|
—
|
|
|
1,510
|
|
|
4
|
|
|
1,510
|
|
|
4
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
9,201
|
|
|
50
|
|
|
9,536
|
|
|
206
|
|
|
18,737
|
|
|
256
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
29,498
|
|
|
97
|
|
|
4,993
|
|
|
129
|
|
|
34,491
|
|
|
226
|
|
||||||
|
|
$
|
42,185
|
|
|
$
|
159
|
|
|
$
|
21,518
|
|
|
$
|
408
|
|
|
$
|
63,703
|
|
|
$
|
567
|
|
|
|
As of December 31, 2013
|
||||||||||||||||||||||
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
|
|
Fair value
|
|
Unrealized
losses |
|
Fair value
|
|
Unrealized
losses |
|
Fair value
|
|
Unrealized
losses |
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
10,608
|
|
|
$
|
145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,608
|
|
|
$
|
145
|
|
Municipal obligations
|
|
12,001
|
|
|
650
|
|
|
981
|
|
|
103
|
|
|
12,982
|
|
|
753
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
34,021
|
|
|
997
|
|
|
6,146
|
|
|
282
|
|
|
40,167
|
|
|
1,279
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
20,628
|
|
|
506
|
|
|
5,418
|
|
|
190
|
|
|
26,046
|
|
|
696
|
|
||||||
|
|
$
|
78,752
|
|
|
$
|
2,321
|
|
|
$
|
12,545
|
|
|
$
|
575
|
|
|
$
|
91,297
|
|
|
$
|
2,896
|
|
|
|
As of December 31, 2014
|
||||||||||||||||||||||
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
|
|
Fair value
|
|
Unrecognized
losses |
|
Fair value
|
|
Unrecognized
losses |
|
Fair value
|
|
Unrecognized
losses |
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
1,490
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,490
|
|
|
$
|
17
|
|
Municipal obligations
|
|
2,222
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
2,222
|
|
|
18
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
3,247
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
3,247
|
|
|
31
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
3,076
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
3,076
|
|
|
19
|
|
||||||
|
|
$
|
10,035
|
|
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,035
|
|
|
$
|
85
|
|
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
|
|
(In Thousands)
|
||||||
Commercial real estate
|
|
|
|
|
||||
Commercial real estate — owner occupied
|
|
$
|
163,884
|
|
|
$
|
141,164
|
|
Commercial real estate — non-owner occupied
|
|
417,962
|
|
|
341,695
|
|
||
Construction and land development
|
|
121,160
|
|
|
68,708
|
|
||
Multi-family
|
|
72,578
|
|
|
62,758
|
|
||
1-4 family
|
|
36,182
|
|
|
30,786
|
|
||
Total commercial real estate
|
|
811,766
|
|
|
645,111
|
|
||
Commercial and industrial
|
|
416,654
|
|
|
293,552
|
|
||
Direct financing leases, net
|
|
34,165
|
|
|
26,065
|
|
||
Consumer and other
|
|
|
|
|
||||
Home equity and second mortgages
|
|
7,866
|
|
|
5,272
|
|
||
Other
|
|
11,341
|
|
|
11,972
|
|
||
Total consumer and other
|
|
19,207
|
|
|
17,244
|
|
||
Total gross loans and leases receivable
|
|
1,281,792
|
|
|
981,972
|
|
||
Less:
|
|
|
|
|
||||
Allowance for loan and lease losses
|
|
14,329
|
|
|
13,901
|
|
||
Deferred loan fees
|
|
1,025
|
|
|
1,021
|
|
||
Loans and leases receivable, net
|
|
$
|
1,266,438
|
|
|
$
|
967,050
|
|
|
As of November 1, 2014
|
||
|
(In Thousands)
|
||
Contractually required payments
|
$
|
4,109
|
|
Less: nonaccretable difference
|
(528
|
)
|
|
Cash flows expected to be collected
|
3,581
|
|
|
Less: accretable yield
|
(683
|
)
|
|
Fair value of credit impaired loans acquired
|
$
|
2,898
|
|
|
December 31,
2014 |
||
|
(In Thousands)
|
||
Alterra Transaction:
|
|
||
Impact of acquisition on November 1, 2014
|
$
|
683
|
|
Accretion
|
(7
|
)
|
|
Reclassification from nonaccretable difference
|
—
|
|
|
Outstanding accretable yield
|
$
|
676
|
|
|
|
Category
|
|
|
||||||||||||||||
As of December 31, 2014
|
|
I
|
|
II
|
|
III
|
|
IV
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
$
|
131,094
|
|
|
$
|
15,592
|
|
|
$
|
16,621
|
|
|
$
|
577
|
|
|
$
|
163,884
|
|
Commercial real estate — non-owner occupied
|
|
378,671
|
|
|
20,823
|
|
|
17,498
|
|
|
970
|
|
|
417,962
|
|
|||||
Construction and land development
|
|
100,934
|
|
|
8,193
|
|
|
6,876
|
|
|
5,157
|
|
|
121,160
|
|
|||||
Multi-family
|
|
70,897
|
|
|
751
|
|
|
913
|
|
|
17
|
|
|
72,578
|
|
|||||
1-4 family
|
|
25,997
|
|
|
5,278
|
|
|
3,336
|
|
|
1,571
|
|
|
36,182
|
|
|||||
Total commercial real estate
|
|
707,593
|
|
|
50,637
|
|
|
45,244
|
|
|
8,292
|
|
|
811,766
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
|
383,755
|
|
|
18,524
|
|
|
12,026
|
|
|
2,349
|
|
|
416,654
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct financing leases, net
|
|
32,756
|
|
|
1,120
|
|
|
289
|
|
|
—
|
|
|
34,165
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgages
|
|
7,039
|
|
|
205
|
|
|
189
|
|
|
433
|
|
|
7,866
|
|
|||||
Other
|
|
10,570
|
|
|
50
|
|
|
—
|
|
|
721
|
|
|
11,341
|
|
|||||
Total consumer and other
|
|
17,609
|
|
|
255
|
|
|
189
|
|
|
1,154
|
|
|
19,207
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total gross loans and leases receivable
|
|
$
|
1,141,713
|
|
|
$
|
70,536
|
|
|
$
|
57,748
|
|
|
$
|
11,795
|
|
|
$
|
1,281,792
|
|
Category as a % of total portfolio
|
|
89.07
|
%
|
|
5.50
|
%
|
|
4.51
|
%
|
|
0.92
|
%
|
|
100.00
|
%
|
|
|
Category
|
|
|
||||||||||||||||
As of December 31, 2013
|
|
I
|
|
II
|
|
III
|
|
IV
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
$
|
118,764
|
|
|
$
|
11,259
|
|
|
$
|
10,802
|
|
|
$
|
339
|
|
|
$
|
141,164
|
|
Commercial real estate — non-owner occupied
|
|
290,865
|
|
|
29,444
|
|
|
21,103
|
|
|
283
|
|
|
341,695
|
|
|||||
Construction and land development
|
|
53,493
|
|
|
1,972
|
|
|
7,754
|
|
|
5,489
|
|
|
68,708
|
|
|||||
Multi-family
|
|
57,049
|
|
|
5,678
|
|
|
—
|
|
|
31
|
|
|
62,758
|
|
|||||
1-4 family
|
|
19,197
|
|
|
7,611
|
|
|
3,312
|
|
|
666
|
|
|
30,786
|
|
|||||
Total commercial real estate
|
|
539,368
|
|
|
55,964
|
|
|
42,971
|
|
|
6,808
|
|
|
645,111
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
|
268,109
|
|
|
11,688
|
|
|
5,712
|
|
|
8,043
|
|
|
293,552
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct financing leases, net
|
|
23,171
|
|
|
2,421
|
|
|
473
|
|
|
—
|
|
|
26,065
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgages
|
|
4,408
|
|
|
134
|
|
|
150
|
|
|
580
|
|
|
5,272
|
|
|||||
Other
|
|
11,177
|
|
|
—
|
|
|
—
|
|
|
795
|
|
|
11,972
|
|
|||||
Total consumer and other
|
|
15,585
|
|
|
134
|
|
|
150
|
|
|
1,375
|
|
|
17,244
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total gross loans and leases receivable
|
|
$
|
846,233
|
|
|
$
|
70,207
|
|
|
$
|
49,306
|
|
|
$
|
16,226
|
|
|
$
|
981,972
|
|
Category as a % of total portfolio
|
|
86.18
|
%
|
|
7.15
|
%
|
|
5.02
|
%
|
|
1.65
|
%
|
|
100.00
|
%
|
As of December 31, 2014
|
|
30-59
days past due |
|
60-89
days past due |
|
Greater
than 90 days past due |
|
Total past due
|
|
Current
|
|
Total loans
|
||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||
Accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,384
|
|
|
$
|
163,384
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
417,676
|
|
|
417,676
|
|
||||||
Construction and land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
116,228
|
|
|
116,228
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,561
|
|
|
72,561
|
|
||||||
1-4 family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,492
|
|
|
35,492
|
|
||||||
Commercial & industrial
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
414,336
|
|
|
414,336
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,165
|
|
|
34,165
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,537
|
|
|
7,537
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,621
|
|
|
10,621
|
|
||||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,272,000
|
|
|
$
|
1,272,000
|
|
Non-accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
500
|
|
Non-owner occupied
|
|
—
|
|
|
215
|
|
|
—
|
|
|
215
|
|
|
71
|
|
|
286
|
|
||||||
Construction and land development
|
|
—
|
|
|
193
|
|
|
—
|
|
|
193
|
|
|
4,739
|
|
|
4,932
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
||||||
1-4 family
|
|
—
|
|
|
106
|
|
|
306
|
|
|
412
|
|
|
278
|
|
|
690
|
|
||||||
Commercial & industrial
|
|
364
|
|
|
146
|
|
|
736
|
|
|
1,246
|
|
|
1,072
|
|
|
2,318
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
329
|
|
|
329
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
720
|
|
|
720
|
|
|
—
|
|
|
720
|
|
||||||
Total
|
|
$
|
364
|
|
|
$
|
660
|
|
|
$
|
1,762
|
|
|
$
|
2,786
|
|
|
$
|
7,006
|
|
|
$
|
9,792
|
|
Total loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,884
|
|
|
$
|
163,884
|
|
Non-owner occupied
|
|
—
|
|
|
215
|
|
|
—
|
|
|
215
|
|
|
417,747
|
|
|
417,962
|
|
||||||
Construction and land development
|
|
—
|
|
|
193
|
|
|
—
|
|
|
193
|
|
|
120,967
|
|
|
121,160
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,578
|
|
|
72,578
|
|
||||||
1-4 family
|
|
—
|
|
|
106
|
|
|
306
|
|
|
412
|
|
|
35,770
|
|
|
36,182
|
|
||||||
Commercial & industrial
|
|
364
|
|
|
146
|
|
|
736
|
|
|
1,246
|
|
|
415,408
|
|
|
416,654
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,165
|
|
|
34,165
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,866
|
|
|
7,866
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
720
|
|
|
720
|
|
|
10,621
|
|
|
11,341
|
|
||||||
Total
|
|
$
|
364
|
|
|
$
|
660
|
|
|
$
|
1,762
|
|
|
$
|
2,786
|
|
|
$
|
1,279,006
|
|
|
$
|
1,281,792
|
|
Percent of portfolio
|
|
0.03
|
%
|
|
0.05
|
%
|
|
0.14
|
%
|
|
0.22
|
%
|
|
99.78
|
%
|
|
100.00
|
%
|
As of December 31, 2013
|
|
30-59
days past due |
|
60-89
days past due |
|
Greater
than 90 days past due |
|
Total past due
|
|
Current
|
|
Total loans
|
||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||
Accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140,825
|
|
|
$
|
140,825
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
341,412
|
|
|
341,412
|
|
||||||
Construction and land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,286
|
|
|
63,286
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,727
|
|
|
62,727
|
|
||||||
1-4 family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,265
|
|
|
30,265
|
|
||||||
Commercial & industrial
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
285,541
|
|
|
285,541
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,065
|
|
|
26,065
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,819
|
|
|
4,819
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,177
|
|
|
11,177
|
|
||||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
966,117
|
|
|
$
|
966,117
|
|
Non-accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
254
|
|
|
$
|
254
|
|
|
$
|
85
|
|
|
$
|
339
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
283
|
|
|
283
|
|
||||||
Construction and land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,422
|
|
|
5,422
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
||||||
1-4 family
|
|
—
|
|
|
180
|
|
|
123
|
|
|
303
|
|
|
218
|
|
|
521
|
|
||||||
Commercial & industrial
|
|
1,944
|
|
|
1,407
|
|
|
53
|
|
|
3,404
|
|
|
4,607
|
|
|
8,011
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
85
|
|
|
85
|
|
|
368
|
|
|
453
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
795
|
|
|
795
|
|
|
—
|
|
|
795
|
|
||||||
Total
|
|
$
|
1,944
|
|
|
$
|
1,587
|
|
|
$
|
1,310
|
|
|
$
|
4,841
|
|
|
$
|
11,014
|
|
|
$
|
15,855
|
|
Total loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
254
|
|
|
$
|
254
|
|
|
$
|
140,910
|
|
|
$
|
141,164
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
341,695
|
|
|
341,695
|
|
||||||
Construction and land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,708
|
|
|
68,708
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,758
|
|
|
62,758
|
|
||||||
1-4 family
|
|
—
|
|
|
180
|
|
|
123
|
|
|
303
|
|
|
30,483
|
|
|
30,786
|
|
||||||
Commercial & industrial
|
|
1,944
|
|
|
1,407
|
|
|
53
|
|
|
3,404
|
|
|
290,148
|
|
|
293,552
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,065
|
|
|
26,065
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
85
|
|
|
85
|
|
|
5,187
|
|
|
5,272
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
795
|
|
|
795
|
|
|
11,177
|
|
|
11,972
|
|
||||||
Total
|
|
$
|
1,944
|
|
|
$
|
1,587
|
|
|
$
|
1,310
|
|
|
$
|
4,841
|
|
|
$
|
977,131
|
|
|
$
|
981,972
|
|
Percent of portfolio
|
|
0.20
|
%
|
|
0.16
|
%
|
|
0.13
|
%
|
|
0.49
|
%
|
|
99.51
|
%
|
|
100.00
|
%
|
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
|
|
(Dollars in Thousands)
|
||||||
Non-accrual loans and leases
|
|
|
|
|
||||
Commercial real estate:
|
|
|
|
|
||||
Commercial real estate — owner occupied
|
|
$
|
500
|
|
|
$
|
339
|
|
Commercial real estate — non-owner occupied
|
|
286
|
|
|
283
|
|
||
Construction and land development
|
|
4,932
|
|
|
5,422
|
|
||
Multi-family
|
|
17
|
|
|
31
|
|
||
1-4 family
|
|
690
|
|
|
521
|
|
||
Total non-accrual commercial real estate
|
|
6,425
|
|
|
6,596
|
|
||
Commercial and industrial
|
|
2,318
|
|
|
8,011
|
|
||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
||
Consumer and other:
|
|
|
|
|
||||
Home equity and second mortgages
|
|
329
|
|
|
453
|
|
||
Other
|
|
720
|
|
|
795
|
|
||
Total non-accrual consumer and other loans
|
|
1,049
|
|
|
1,248
|
|
||
Total non-accrual loans and leases
|
|
9,792
|
|
|
15,855
|
|
||
Foreclosed properties, net
|
|
1,693
|
|
|
333
|
|
||
Total non-performing assets
|
|
11,485
|
|
|
16,188
|
|
||
Performing troubled debt restructurings
|
|
2,003
|
|
|
371
|
|
||
Total impaired assets
|
|
$
|
13,488
|
|
|
$
|
16,559
|
|
|
|
December 31,
2014 |
|
December 31,
2013 |
||
Total non-accrual loans and leases to gross loans and leases
|
|
0.76
|
%
|
|
1.61
|
%
|
Total non-performing assets to total gross loans and leases plus foreclosed properties, net
|
|
0.89
|
|
|
1.65
|
|
Total non-performing assets to total assets
|
|
0.70
|
|
|
1.28
|
|
Allowance for loan and lease losses to gross loans and leases
|
|
1.12
|
|
|
1.42
|
|
Allowance for loan and lease losses to non-accrual loans and leases
|
|
146.33
|
|
|
87.68
|
|
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||||||||||||||
|
|
Number
of
Loans
|
|
Pre-Modification
Recorded
Investment
|
|
Post-Modification
Recorded
Investment
|
|
Number
of
Loans
|
|
Pre-Modification
Recorded
Investment
|
|
Post-Modification
Recorded
Investment
|
||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Troubled debt restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial real estate — owner occupied
|
|
2
|
|
$
|
624
|
|
|
$
|
577
|
|
|
1
|
|
$
|
110
|
|
|
$
|
84
|
|
Commercial real estate — non-owner occupied
|
|
5
|
|
1,095
|
|
|
970
|
|
|
3
|
|
385
|
|
|
283
|
|
||||
Construction and land development
|
|
4
|
|
6,260
|
|
|
5,157
|
|
|
3
|
|
6,060
|
|
|
5,489
|
|
||||
Multi-family
|
|
1
|
|
184
|
|
|
17
|
|
|
1
|
|
184
|
|
|
31
|
|
||||
1-4 family
|
|
16
|
|
2,119
|
|
|
1,368
|
|
|
10
|
|
911
|
|
|
666
|
|
||||
Commercial and industrial
|
|
4
|
|
361
|
|
|
155
|
|
|
5
|
|
1,935
|
|
|
565
|
|
||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home equity and second mortgage
|
|
6
|
|
772
|
|
|
431
|
|
|
6
|
|
752
|
|
|
580
|
|
||||
Other
|
|
2
|
|
2,080
|
|
|
721
|
|
|
1
|
|
2,076
|
|
|
795
|
|
||||
Total
|
|
40
|
|
$
|
13,495
|
|
|
$
|
9,396
|
|
|
30
|
|
$
|
12,413
|
|
|
$
|
8,493
|
|
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||||||||
|
|
Number
of
Loans
|
|
Recorded Investment
|
|
Number
of
Loans
|
|
Recorded Investment
|
||||||
|
|
(Dollars in Thousands)
|
||||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
||||||
Extension of term
|
|
1
|
|
|
$
|
39
|
|
|
1
|
|
|
$
|
55
|
|
Interest rate concession
|
|
1
|
|
|
65
|
|
|
—
|
|
|
—
|
|
||
Combination of extension and interest rate concession
|
|
26
|
|
|
7,984
|
|
|
17
|
|
|
6,498
|
|
||
Commercial and industrial
|
|
|
|
|
|
|
|
|
||||||
Extension of term
|
|
—
|
|
|
—
|
|
|
1
|
|
|
49
|
|
||
Combination of extension and interest rate concession
|
|
4
|
|
|
155
|
|
|
4
|
|
|
516
|
|
||
Consumer and other
|
|
|
|
|
|
|
|
|
||||||
Extension of term
|
|
3
|
|
|
753
|
|
|
2
|
|
|
880
|
|
||
Combination of extension and interest rate concession
|
|
5
|
|
|
400
|
|
|
5
|
|
|
495
|
|
||
Total
|
|
40
|
|
|
$
|
9,396
|
|
|
30
|
|
|
$
|
8,493
|
|
|
|
Year ended December 31, 2014
|
||||
|
|
Number
of
Loans
|
|
Recorded Investment
|
||
|
|
(Dollars in Thousands)
|
||||
Commercial real estate:
|
|
|
|
|
||
Commercial real estate — owner occupied
|
|
—
|
|
$
|
—
|
|
Commercial real estate — non-owner occupied
|
|
2
|
|
215
|
|
|
Construction and land development
|
|
—
|
|
—
|
|
|
Multi-family
|
|
—
|
|
—
|
|
|
1-4 family
|
|
—
|
|
—
|
|
|
Commercial and industrial
|
|
1
|
|
117
|
|
|
Direct financing leases, net
|
|
—
|
|
—
|
|
|
Consumer and other:
|
|
|
|
|
||
Home equity and second mortgage
|
|
—
|
|
—
|
|
|
Other
|
|
—
|
|
—
|
|
|
Total
|
|
3
|
|
$
|
332
|
|
|
|
Impaired Loans and Leases
|
||||||||||||||||||||||||||
|
|
As of and for the Year Ended December 31, 2014
|
||||||||||||||||||||||||||
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Impairment
reserve
|
|
Average
recorded
investment
(1)
|
|
Foregone
interest
income
|
|
Interest
income
recognized
|
|
Net
foregone
interest
income
|
||||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||||||
With no impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
577
|
|
|
$
|
577
|
|
|
$
|
—
|
|
|
$
|
484
|
|
|
$
|
30
|
|
|
$
|
79
|
|
|
$
|
(49
|
)
|
Non-owner occupied
|
|
921
|
|
|
921
|
|
|
—
|
|
|
349
|
|
|
22
|
|
|
—
|
|
|
22
|
|
|||||||
Construction and land development
|
|
5,157
|
|
|
7,828
|
|
|
—
|
|
|
5,285
|
|
|
155
|
|
|
—
|
|
|
155
|
|
|||||||
Multi-family
|
|
17
|
|
|
384
|
|
|
—
|
|
|
24
|
|
|
53
|
|
|
—
|
|
|
53
|
|
|||||||
1-4 family
|
|
1,181
|
|
|
1,218
|
|
|
—
|
|
|
380
|
|
|
15
|
|
|
12
|
|
|
3
|
|
|||||||
Commercial and industrial
|
|
2,316
|
|
|
2,926
|
|
|
—
|
|
|
6,141
|
|
|
463
|
|
|
649
|
|
|
(186
|
)
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
380
|
|
|
380
|
|
|
—
|
|
|
495
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||||
Other
|
|
721
|
|
|
1,389
|
|
|
—
|
|
|
768
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|||||||
Total
|
|
$
|
11,270
|
|
|
$
|
15,623
|
|
|
$
|
—
|
|
|
$
|
13,926
|
|
|
$
|
843
|
|
|
$
|
740
|
|
|
$
|
103
|
|
With impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-owner occupied
|
|
49
|
|
|
89
|
|
|
49
|
|
|
52
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Construction and land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
1-4 family
|
|
390
|
|
|
390
|
|
|
155
|
|
|
405
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||||
Commercial and industrial
|
|
33
|
|
|
33
|
|
|
33
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
53
|
|
|
53
|
|
|
53
|
|
|
57
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
525
|
|
|
$
|
565
|
|
|
$
|
290
|
|
|
$
|
548
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
27
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
577
|
|
|
$
|
577
|
|
|
$
|
—
|
|
|
$
|
484
|
|
|
$
|
30
|
|
|
$
|
79
|
|
|
$
|
(49
|
)
|
Non-owner occupied
|
|
970
|
|
|
1,010
|
|
|
49
|
|
|
401
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|||||||
Construction and land development
|
|
5,157
|
|
|
7,828
|
|
|
—
|
|
|
5,285
|
|
|
155
|
|
|
—
|
|
|
155
|
|
|||||||
Multi-family
|
|
17
|
|
|
384
|
|
|
—
|
|
|
24
|
|
|
53
|
|
|
—
|
|
|
53
|
|
|||||||
1-4 family
|
|
1,571
|
|
|
1,608
|
|
|
155
|
|
|
785
|
|
|
33
|
|
|
12
|
|
|
21
|
|
|||||||
Commercial and industrial
|
|
2,349
|
|
|
2,959
|
|
|
33
|
|
|
6,175
|
|
|
463
|
|
|
649
|
|
|
(186
|
)
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
433
|
|
|
433
|
|
|
53
|
|
|
552
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||||
Other
|
|
721
|
|
|
1,389
|
|
|
—
|
|
|
768
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|||||||
Grand total
|
|
$
|
11,795
|
|
|
$
|
16,188
|
|
|
$
|
290
|
|
|
$
|
14,474
|
|
|
$
|
870
|
|
|
$
|
740
|
|
|
$
|
130
|
|
(1)
|
Average recorded investment is calculated primarily using daily average balances.
|
|
|
Impaired Loans and Leases
|
||||||||||||||||||||||||||
|
|
As of and for the Year Ended December 31, 2013
|
||||||||||||||||||||||||||
|
|
Recorded
investment |
|
Unpaid
principal balance |
|
Impairment
reserve |
|
Average
recorded investment (1) |
|
Foregone
interest income |
|
Interest
income recognized |
|
Net
foregone Interest Income |
||||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||||||
With no impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
339
|
|
|
$
|
339
|
|
|
$
|
—
|
|
|
$
|
715
|
|
|
$
|
57
|
|
|
$
|
50
|
|
|
$
|
7
|
|
Non-owner occupied
|
|
229
|
|
|
229
|
|
|
—
|
|
|
1,586
|
|
|
198
|
|
|
17
|
|
|
181
|
|
|||||||
Construction and land development
|
|
5,489
|
|
|
8,160
|
|
|
—
|
|
|
5,777
|
|
|
203
|
|
|
3
|
|
|
200
|
|
|||||||
Multi-family
|
|
31
|
|
|
398
|
|
|
—
|
|
|
366
|
|
|
93
|
|
|
—
|
|
|
93
|
|
|||||||
1-4 family
|
|
244
|
|
|
244
|
|
|
—
|
|
|
405
|
|
|
31
|
|
|
34
|
|
|
(3
|
)
|
|||||||
Commercial and industrial
|
|
555
|
|
|
766
|
|
|
—
|
|
|
434
|
|
|
97
|
|
|
114
|
|
|
(17
|
)
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
518
|
|
|
518
|
|
|
—
|
|
|
593
|
|
|
37
|
|
|
3
|
|
|
34
|
|
|||||||
Other
|
|
795
|
|
|
1,461
|
|
|
—
|
|
|
942
|
|
|
100
|
|
|
—
|
|
|
100
|
|
|||||||
Total
|
|
$
|
8,200
|
|
|
$
|
12,115
|
|
|
$
|
—
|
|
|
$
|
10,824
|
|
|
$
|
816
|
|
|
$
|
221
|
|
|
$
|
595
|
|
With impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-owner occupied
|
|
54
|
|
|
94
|
|
|
54
|
|
|
88
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||||
Construction and land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
1-4 family
|
|
422
|
|
|
422
|
|
|
155
|
|
|
437
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||||
Commercial and industrial
|
|
7,488
|
|
|
7,488
|
|
|
131
|
|
|
670
|
|
|
42
|
|
|
—
|
|
|
42
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
62
|
|
|
62
|
|
|
62
|
|
|
65
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
8,026
|
|
|
$
|
8,066
|
|
|
$
|
402
|
|
|
$
|
1,260
|
|
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
71
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
339
|
|
|
$
|
339
|
|
|
$
|
—
|
|
|
$
|
715
|
|
|
$
|
57
|
|
|
$
|
50
|
|
|
$
|
7
|
|
Non-owner occupied
|
|
283
|
|
|
323
|
|
|
54
|
|
|
1,674
|
|
|
204
|
|
|
17
|
|
|
187
|
|
|||||||
Construction and land development
|
|
5,489
|
|
|
8,160
|
|
|
—
|
|
|
5,777
|
|
|
203
|
|
|
3
|
|
|
200
|
|
|||||||
Multi-family
|
|
31
|
|
|
398
|
|
|
—
|
|
|
366
|
|
|
93
|
|
|
—
|
|
|
93
|
|
|||||||
1-4 family
|
|
666
|
|
|
666
|
|
|
155
|
|
|
842
|
|
|
49
|
|
|
34
|
|
|
15
|
|
|||||||
Commercial and industrial
|
|
8,043
|
|
|
8,254
|
|
|
131
|
|
|
1,104
|
|
|
139
|
|
|
114
|
|
|
25
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
580
|
|
|
580
|
|
|
62
|
|
|
658
|
|
|
42
|
|
|
3
|
|
|
39
|
|
|||||||
Other
|
|
795
|
|
|
1,461
|
|
|
—
|
|
|
942
|
|
|
100
|
|
|
—
|
|
|
100
|
|
|||||||
Grand total
|
|
$
|
16,226
|
|
|
$
|
20,181
|
|
|
$
|
402
|
|
|
$
|
12,084
|
|
|
$
|
887
|
|
|
$
|
221
|
|
|
$
|
666
|
|
(1)
|
Average recorded investment is calculated primarily using daily average balances.
|
|
|
Impaired Loans and Leases
|
||||||||||||||||||||||||||
|
|
As of and for the Year Ended December 31, 2012
|
||||||||||||||||||||||||||
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Impairment
reserve
|
|
Average
recorded
investment
(1)
|
|
Foregone
interest
income
|
|
Interest
income
recognized
|
|
Net
foregone
interest
income
|
||||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||||||
With no impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
741
|
|
|
$
|
741
|
|
|
$
|
—
|
|
|
$
|
1,482
|
|
|
$
|
142
|
|
|
$
|
2
|
|
|
$
|
140
|
|
Non-owner occupied
|
|
648
|
|
|
648
|
|
|
—
|
|
|
1,239
|
|
|
222
|
|
|
207
|
|
|
15
|
|
|||||||
Construction and land development
|
|
4,946
|
|
|
8,537
|
|
|
—
|
|
|
5,834
|
|
|
246
|
|
|
24
|
|
|
222
|
|
|||||||
Multi-family
|
|
47
|
|
|
414
|
|
|
—
|
|
|
313
|
|
|
69
|
|
|
60
|
|
|
9
|
|
|||||||
1-4 family
|
|
544
|
|
|
677
|
|
|
—
|
|
|
2,213
|
|
|
151
|
|
|
—
|
|
|
151
|
|
|||||||
Commercial and industrial
|
|
2,394
|
|
|
2,404
|
|
|
—
|
|
|
1,987
|
|
|
163
|
|
|
25
|
|
|
138
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
656
|
|
|
657
|
|
|
—
|
|
|
913
|
|
|
55
|
|
|
1
|
|
|
54
|
|
|||||||
Other
|
|
1,030
|
|
|
1,620
|
|
|
—
|
|
|
1,150
|
|
|
113
|
|
|
1
|
|
|
112
|
|
|||||||
Total
|
|
$
|
11,006
|
|
|
$
|
15,698
|
|
|
$
|
—
|
|
|
$
|
15,135
|
|
|
$
|
1,161
|
|
|
$
|
321
|
|
|
$
|
840
|
|
With impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
28
|
|
|
$
|
28
|
|
|
$
|
16
|
|
|
$
|
30
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Non-owner occupied
|
|
2,582
|
|
|
2,582
|
|
|
829
|
|
|
162
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|||||||
Construction and land development
|
|
465
|
|
|
465
|
|
|
174
|
|
|
528
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
1-4 family
|
|
614
|
|
|
614
|
|
|
224
|
|
|
637
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|||||||
Commercial and industrial
|
|
447
|
|
|
3,137
|
|
|
187
|
|
|
1,350
|
|
|
178
|
|
|
—
|
|
|
178
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
85
|
|
|
85
|
|
|
87
|
|
|
103
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
4,221
|
|
|
$
|
6,911
|
|
|
$
|
1,517
|
|
|
$
|
2,810
|
|
|
$
|
271
|
|
|
$
|
—
|
|
|
$
|
271
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
769
|
|
|
$
|
769
|
|
|
$
|
16
|
|
|
$
|
1,512
|
|
|
$
|
144
|
|
|
$
|
2
|
|
|
$
|
142
|
|
Non-owner occupied
|
|
3,230
|
|
|
3,230
|
|
|
829
|
|
|
1,401
|
|
|
255
|
|
|
207
|
|
|
48
|
|
|||||||
Construction and land development
|
|
5,411
|
|
|
9,002
|
|
|
174
|
|
|
6,362
|
|
|
261
|
|
|
24
|
|
|
237
|
|
|||||||
Multi-family
|
|
47
|
|
|
414
|
|
|
—
|
|
|
313
|
|
|
69
|
|
|
60
|
|
|
9
|
|
|||||||
1-4 family
|
|
1,158
|
|
|
1,291
|
|
|
224
|
|
|
2,850
|
|
|
187
|
|
|
—
|
|
|
187
|
|
|||||||
Commercial and industrial
|
|
2,841
|
|
|
5,541
|
|
|
187
|
|
|
3,337
|
|
|
341
|
|
|
25
|
|
|
316
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
741
|
|
|
742
|
|
|
87
|
|
|
1,016
|
|
|
62
|
|
|
1
|
|
|
61
|
|
|||||||
Other
|
|
1,030
|
|
|
1,620
|
|
|
—
|
|
|
1,150
|
|
|
113
|
|
|
1
|
|
|
112
|
|
|||||||
Grand total
|
|
$
|
15,227
|
|
|
$
|
22,609
|
|
|
$
|
1,517
|
|
|
$
|
17,945
|
|
|
$
|
1,432
|
|
|
$
|
321
|
|
|
$
|
1,111
|
|
(1)
|
Average recorded investment is calculated primarily using daily average balances.
|
|
|
As of and for the Year Ended December 31, 2014
|
||||||||||||||||||
|
|
Commercial
real estate
|
|
Commercial
and
industrial
|
|
Consumer
and other
|
|
Direct
financing
leases, net
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
9,055
|
|
|
$
|
4,235
|
|
|
$
|
273
|
|
|
$
|
338
|
|
|
$
|
13,901
|
|
Charge-offs
|
|
(631
|
)
|
|
(600
|
)
|
|
(2
|
)
|
|
—
|
|
|
(1,233
|
)
|
|||||
Recoveries
|
|
44
|
|
|
369
|
|
|
12
|
|
|
—
|
|
|
425
|
|
|||||
Provision
|
|
151
|
|
|
1,063
|
|
|
(65
|
)
|
|
87
|
|
|
1,236
|
|
|||||
Ending balance
|
|
$
|
8,619
|
|
|
$
|
5,067
|
|
|
$
|
218
|
|
|
$
|
425
|
|
|
$
|
14,329
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
204
|
|
|
$
|
33
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
290
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
8,414
|
|
|
$
|
4,943
|
|
|
$
|
165
|
|
|
$
|
425
|
|
|
$
|
13,947
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
1
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92
|
|
Loans and lease receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance, gross
|
|
$
|
811,766
|
|
|
$
|
416,654
|
|
|
$
|
19,207
|
|
|
$
|
34,165
|
|
|
$
|
1,281,792
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
4,877
|
|
|
$
|
1,669
|
|
|
$
|
1,154
|
|
|
$
|
—
|
|
|
$
|
7,700
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
803,475
|
|
|
$
|
414,304
|
|
|
$
|
18,053
|
|
|
$
|
34,165
|
|
|
$
|
1,269,997
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
3,414
|
|
|
$
|
681
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,095
|
|
Allowance as % of gross loans
|
|
1.06
|
%
|
|
1.22
|
%
|
|
1.14
|
%
|
|
1.24
|
%
|
|
1.12
|
%
|
|
|
As of and for the Year Ended December 31, 2013
|
||||||||||||||||||
|
|
Commercial
real estate
|
|
Commercial
and
industrial
|
|
Consumer
and other
|
|
Direct
financing
leases, net
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
10,693
|
|
|
$
|
4,129
|
|
|
$
|
371
|
|
|
$
|
207
|
|
|
$
|
15,400
|
|
Charge-offs
|
|
(896
|
)
|
|
(14
|
)
|
|
(4
|
)
|
|
—
|
|
|
(914
|
)
|
|||||
Recoveries
|
|
353
|
|
|
11
|
|
|
5
|
|
|
5
|
|
|
374
|
|
|||||
Provision
|
|
(1,095
|
)
|
|
109
|
|
|
(99
|
)
|
|
126
|
|
|
(959
|
)
|
|||||
Ending balance
|
|
$
|
9,055
|
|
|
$
|
4,235
|
|
|
$
|
273
|
|
|
$
|
338
|
|
|
$
|
13,901
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
209
|
|
|
$
|
131
|
|
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
402
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
8,846
|
|
|
$
|
4,104
|
|
|
$
|
211
|
|
|
$
|
338
|
|
|
$
|
13,499
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans and lease receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance, gross
|
|
$
|
645,111
|
|
|
$
|
293,552
|
|
|
$
|
17,244
|
|
|
$
|
26,065
|
|
|
$
|
981,972
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
5,379
|
|
|
$
|
8,043
|
|
|
$
|
1,375
|
|
|
$
|
—
|
|
|
$
|
14,797
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
638,303
|
|
|
$
|
285,509
|
|
|
$
|
15,869
|
|
|
$
|
26,065
|
|
|
$
|
965,746
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
1,429
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,429
|
|
Allowance as % of gross loans
|
|
1.40
|
%
|
|
1.44
|
%
|
|
1.58
|
%
|
|
1.30
|
%
|
|
1.42
|
%
|
|
|
As of and for the Year Ended December 31, 2012
|
||||||||||||||||||
|
|
Commercial
real estate
|
|
Commercial
and
industrial
|
|
Consumer
and other
|
|
Direct
financing
leases, net
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
9,554
|
|
|
$
|
3,977
|
|
|
$
|
384
|
|
|
$
|
240
|
|
|
$
|
14,155
|
|
Charge-offs
|
|
(612
|
)
|
|
(2,739
|
)
|
|
(128
|
)
|
|
—
|
|
|
(3,479
|
)
|
|||||
Recoveries
|
|
375
|
|
|
66
|
|
|
40
|
|
|
—
|
|
|
481
|
|
|||||
Provision
|
|
1,376
|
|
|
2,825
|
|
|
75
|
|
|
(33
|
)
|
|
4,243
|
|
|||||
Ending balance
|
|
$
|
10,693
|
|
|
$
|
4,129
|
|
|
$
|
371
|
|
|
$
|
207
|
|
|
$
|
15,400
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
1,244
|
|
|
$
|
186
|
|
|
$
|
87
|
|
|
$
|
—
|
|
|
$
|
1,517
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
9,449
|
|
|
$
|
3,943
|
|
|
$
|
284
|
|
|
$
|
207
|
|
|
$
|
13,883
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans and lease receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance, gross
|
|
$
|
624,011
|
|
|
$
|
256,458
|
|
|
$
|
16,313
|
|
|
$
|
15,926
|
|
|
$
|
912,708
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
10,614
|
|
|
$
|
2,842
|
|
|
$
|
1,771
|
|
|
$
|
—
|
|
|
$
|
15,227
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
613,397
|
|
|
$
|
253,616
|
|
|
$
|
14,542
|
|
|
$
|
15,926
|
|
|
$
|
897,481
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Allowance as % of gross loans
|
|
1.71
|
%
|
|
1.61
|
%
|
|
2.27
|
%
|
|
1.30
|
%
|
|
1.69
|
%
|
|
|
As of December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Minimum lease payments receivable
|
|
$
|
31,204
|
|
|
$
|
24,658
|
|
Estimated unguaranteed residual values in leased property
|
|
7,053
|
|
|
4,546
|
|
||
Initial direct costs
|
|
208
|
|
|
226
|
|
||
Less unearned lease and residual income
|
|
(4,300
|
)
|
|
(3,365
|
)
|
||
Investment in commercial direct financing leases
|
|
$
|
34,165
|
|
|
$
|
26,065
|
|
|
|
As of December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Land
|
|
$
|
650
|
|
|
$
|
—
|
|
Building and leasehold improvements
|
|
2,776
|
|
|
1,547
|
|
||
Furniture and equipment
|
|
4,339
|
|
|
3,257
|
|
||
Construction and purchases in progress
|
|
52
|
|
|
—
|
|
||
|
|
7,817
|
|
|
4,804
|
|
||
Less: accumulated depreciation
|
|
(3,874
|
)
|
|
(3,649
|
)
|
||
Total premises and equipment, net
|
|
$
|
3,943
|
|
|
$
|
1,155
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In Thousands)
|
||||||||||
Core deposit intangibles:
|
|
|
|
|
|
||||||
Gross carrying amount
|
$
|
347
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: accumulated amortization
|
(12
|
)
|
|
—
|
|
|
—
|
|
|||
Net book value
|
$
|
335
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization during the period
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Accrued interest receivable
|
|
$
|
3,932
|
|
|
$
|
3,231
|
|
Deferred tax assets, net
|
|
3,603
|
|
|
3,722
|
|
||
Investment in limited partnerships
|
|
3,193
|
|
|
2,141
|
|
||
Investment in community development entity
|
|
7,500
|
|
|
—
|
|
||
Investment in Trust II
|
|
315
|
|
|
315
|
|
||
Fair value of interest rate swaps
|
|
575
|
|
|
946
|
|
||
Prepaid expenses
|
|
2,217
|
|
|
1,224
|
|
||
Other
|
|
4,882
|
|
|
2,737
|
|
||
Total accrued interest receivable and other assets
|
|
$
|
26,217
|
|
|
$
|
14,316
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||
|
|
Balance
|
|
Weighted
average
balance
|
|
Weighted
average rate
|
|
Balance
|
|
Weighted
average
balance
|
|
Weighted
average rate
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||
Non-interest-bearing transaction accounts
|
|
$
|
204,328
|
|
|
$
|
154,687
|
|
|
—
|
%
|
|
$
|
151,275
|
|
|
$
|
138,920
|
|
|
—
|
%
|
Interest-bearing transaction accounts
|
|
104,199
|
|
|
83,508
|
|
|
0.22
|
|
|
77,004
|
|
|
62,578
|
|
|
0.20
|
|
||||
Money market accounts
|
|
575,766
|
|
|
493,322
|
|
|
0.52
|
|
|
456,065
|
|
|
450,558
|
|
|
0.53
|
|
||||
Certificates of deposit
|
|
126,635
|
|
|
60,284
|
|
|
0.89
|
|
|
51,979
|
|
|
60,276
|
|
|
1.01
|
|
||||
Wholesale deposits
|
|
427,340
|
|
|
416,202
|
|
|
1.49
|
|
|
393,532
|
|
|
393,726
|
|
|
1.68
|
|
||||
Total deposits
|
|
$
|
1,438,268
|
|
|
$
|
1,208,003
|
|
|
0.78
|
|
|
$
|
1,129,855
|
|
|
$
|
1,106,058
|
|
|
0.88
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||
|
|
Balance
|
|
Weighted
average
balance
|
|
Weighted
average
rate
|
|
Balance
|
|
Weighted
average
balance
|
|
Weighted
average
rate
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||
Federal funds purchased
|
|
$
|
—
|
|
|
$
|
237
|
|
|
0.82
|
%
|
|
$
|
—
|
|
|
$
|
260
|
|
|
0.74
|
%
|
FHLB advances and other borrowings
|
|
10,058
|
|
|
5,093
|
|
|
0.56
|
|
|
—
|
|
|
6,471
|
|
|
0.19
|
|
||||
Line of credit
|
|
1,010
|
|
|
13
|
|
|
3.30
|
|
|
10
|
|
|
10
|
|
|
3.41
|
|
||||
Subordinated notes payable
|
|
22,926
|
|
|
13,362
|
|
|
7.07
|
|
|
11,926
|
|
|
11,926
|
|
|
6.92
|
|
||||
Junior subordinated notes
|
|
10,315
|
|
|
10,315
|
|
|
10.78
|
|
|
10,315
|
|
|
10,315
|
|
|
10.78
|
|
||||
|
|
$
|
44,309
|
|
|
$
|
29,020
|
|
|
7.24
|
|
|
$
|
22,251
|
|
|
$
|
28,982
|
|
|
6.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
$
|
2,010
|
|
|
|
|
|
|
$
|
10
|
|
|
|
|
|
||||||
Long-term borrowings
|
|
42,299
|
|
|
|
|
|
|
22,241
|
|
|
|
|
|
||||||||
|
|
$
|
44,309
|
|
|
|
|
|
|
$
|
22,251
|
|
|
|
|
|
|
|
Actual
|
|
Minimum Required for Capital
Adequacy Purposes
|
|
Minimum Required to Be Well
Capitalized Under Prompt
Corrective Action
Requirements
|
|||||||||||||||
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
(Dollars In Thousands)
|
|||||||||||||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
173,263
|
|
|
12.13
|
%
|
|
$
|
114,253
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
131,411
|
|
|
12.19
|
|
|
86,272
|
|
|
8.00
|
|
|
$
|
107,841
|
|
|
10.00
|
%
|
||
First Business Bank – Milwaukee
|
|
19,128
|
|
|
12.47
|
|
|
12,274
|
|
|
8.00
|
|
|
15,343
|
|
|
10.00
|
|
|||
Alterra Bank
|
|
22,657
|
|
|
10.90
|
|
|
16,628
|
|
|
8.00
|
|
|
20,785
|
|
|
10.00
|
|
|||
Tier 1 capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
136,008
|
|
|
9.52
|
|
|
$
|
57,127
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
118,907
|
|
|
11.03
|
|
|
43,136
|
|
|
4.00
|
|
|
$
|
64,704
|
|
|
6.00
|
|
||
First Business Bank – Milwaukee
|
|
17,641
|
|
|
11.50
|
|
|
6,137
|
|
|
4.00
|
|
|
9,206
|
|
|
6.00
|
|
|||
Alterra Bank
|
|
22,320
|
|
|
10.74
|
|
|
8,314
|
|
|
4.00
|
|
|
12,471
|
|
|
6.00
|
|
|||
Tier 1 capital
(to average assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
136,008
|
|
|
8.71
|
|
|
$
|
62,490
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
118,907
|
|
|
10.13
|
|
|
46,960
|
|
|
4.00
|
|
|
$
|
58,700
|
|
|
5.00
|
|
||
First Business Bank – Milwaukee
|
|
17,641
|
|
|
7.90
|
|
|
8,935
|
|
|
4.00
|
|
|
11,169
|
|
|
5.00
|
|
|||
Alterra Bank
|
|
22,320
|
|
|
9.01
|
|
|
9,910
|
|
|
4.00
|
|
|
12,388
|
|
|
5.00
|
|
|
|
Actual
|
|
Minimum Required for Capital
Adequacy Purposes
|
|
Minimum Required to Be Well
Capitalized Under Prompt
Corrective Action
Requirements
|
|||||||||||||||
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
(Dollars In Thousands)
|
|||||||||||||||||||
As of December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
145,352
|
|
|
13.16
|
%
|
|
$
|
88,373
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
123,331
|
|
|
12.57
|
|
|
78,516
|
|
|
8.00
|
|
|
$
|
98,145
|
|
|
10.00
|
%
|
||
First Business Bank – Milwaukee
|
|
17,944
|
|
|
14.66
|
|
|
9,790
|
|
|
8.00
|
|
|
12,238
|
|
|
10.00
|
|
|||
Tier 1 capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
119,617
|
|
|
10.83
|
|
|
$
|
44,186
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
111,062
|
|
|
11.32
|
|
|
39,258
|
|
|
4.00
|
|
|
$
|
58,887
|
|
|
6.00
|
|
||
First Business Bank – Milwaukee
|
|
16,414
|
|
|
13.41
|
|
|
4,895
|
|
|
4.00
|
|
|
7,343
|
|
|
6.00
|
|
|||
Tier 1 capital
(to average assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
119,617
|
|
|
9.35
|
|
|
$
|
51,153
|
|
|
4.00
|
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
111,062
|
|
|
10.35
|
|
|
42,913
|
|
|
4.00
|
|
|
$
|
53,641
|
|
|
5.00
|
|
||
First Business Bank – Milwaukee
|
|
16,414
|
|
|
7.64
|
|
|
8,595
|
|
|
4.00
|
|
|
10,744
|
|
|
5.00
|
|
|
|
As of December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Stockholders’ equity of the Corporation
|
|
$
|
137,748
|
|
|
$
|
109,275
|
|
Unrealized and accumulated (gains) losses on specific items
|
|
(652
|
)
|
|
342
|
|
||
Disallowed servicing assets and purchased credit card relationships
|
|
(94
|
)
|
|
—
|
|
||
Disallowed goodwill and other intangibles
|
|
(10,994
|
)
|
|
—
|
|
||
Trust preferred securities
|
|
10,000
|
|
|
10,000
|
|
||
Tier 1 capital
|
|
136,008
|
|
|
119,617
|
|
||
Allowable general valuation allowances and subordinated debt
|
|
37,255
|
|
|
25,735
|
|
||
Risk-based capital
|
|
$
|
173,263
|
|
|
$
|
145,352
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(Dollars in Thousands, Except Share Data)
|
|||||||||||
Basic earnings per common share
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
14,139
|
|
|
$
|
13,746
|
|
|
$
|
8,926
|
|
Less: earnings allocated to participating securities
|
|
294
|
|
|
331
|
|
|
329
|
|
|||
Basic earnings allocated to common shareholders
|
|
$
|
13,845
|
|
|
$
|
13,415
|
|
|
$
|
8,597
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding, excluding participating securities
|
|
3,929,969
|
|
|
3,832,296
|
|
|
2,608,961
|
|
|||
|
|
|
|
|
|
|
||||||
Basic earnings per common share
|
|
$
|
3.52
|
|
|
$
|
3.50
|
|
|
$
|
3.30
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share
|
|
|
|
|
|
|
||||||
Earnings allocated to common shareholders
|
|
$
|
13,845
|
|
|
$
|
13,415
|
|
|
$
|
8,597
|
|
Reallocation of undistributed earnings
|
|
1
|
|
|
2
|
|
|
—
|
|
|||
Diluted earnings allocated to common shareholders
|
|
$
|
13,846
|
|
|
$
|
13,417
|
|
|
$
|
8,597
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding, excluding participating securities
|
|
3,929,969
|
|
|
3,832,296
|
|
|
2,608,961
|
|
|||
Dilutive effect of share-based awards
|
|
18,403
|
|
|
15,314
|
|
|
1,911
|
|
|||
Weighted-average diluted common shares outstanding, excluding participating securities
|
|
3,948,372
|
|
|
3,847,610
|
|
|
2,610,872
|
|
|||
|
|
|
|
|
|
|
||||||
Diluted earnings per common share
|
|
$
|
3.51
|
|
|
$
|
3.49
|
|
|
$
|
3.29
|
|
|
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
|
Options
|
|
Weighted
average price
|
|
Options
|
|
Weighted
average price
|
|
Options
|
|
Weighted
average price |
|||||||||
Outstanding at beginning of year
|
|
51,000
|
|
|
$
|
24.24
|
|
|
124,034
|
|
|
$
|
22.43
|
|
|
125,034
|
|
|
$
|
22.43
|
|
Granted
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
|
(39,000
|
)
|
|
24.00
|
|
|
(69,684
|
)
|
|
21.13
|
|
|
(1,000
|
)
|
|
22.00
|
|
|||
Expired
|
|
—
|
|
|
—
|
|
|
(3,350
|
)
|
|
22.00
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at end of year
|
|
12,000
|
|
|
25.00
|
|
|
51,000
|
|
|
24.24
|
|
|
124,034
|
|
|
22.43
|
|
|||
Options exercisable at end of year
|
|
12,000
|
|
|
25.00
|
|
|
51,000
|
|
|
24.24
|
|
|
124,034
|
|
|
22.43
|
|
|
|
Options Outstanding
|
|
Exercisable
|
||||||||||||
Range of exercise prices
|
|
Shares
|
|
Weighted
average
remaining
contractual
life (years)
|
|
Weighted
average
exercise
price
|
|
Shares
|
|
Weighted
average
exercise
price
|
||||||
$25.00 - $25.99
|
|
12,000
|
|
|
0.13
|
|
$
|
25.00
|
|
|
12,000
|
|
|
$
|
25.00
|
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
|
Number of
restricted
shares
|
|
Weighted
average
grant-date
fair value
|
|
Number of
restricted
shares
|
|
Weighted
average
grant-date
fair value
|
|
Number of
restricted shares |
|
Weighted
average grant-date fair value |
|||||||||
Nonvested balance at beginning of year
|
|
84,709
|
|
|
$
|
23.10
|
|
|
94,506
|
|
|
$
|
18.19
|
|
|
95,868
|
|
|
$
|
15.15
|
|
Granted
|
|
32,261
|
|
|
44.98
|
|
|
25,030
|
|
|
33.00
|
|
|
37,123
|
|
|
23.03
|
|
|||
Vested
|
|
(39,471
|
)
|
|
19.71
|
|
|
(34,827
|
)
|
|
16.88
|
|
|
(35,905
|
)
|
|
15.06
|
|
|||
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,580
|
)
|
|
18.32
|
|
|||
Nonvested balance as of end of year
|
|
77,499
|
|
|
33.94
|
|
|
84,709
|
|
|
23.10
|
|
|
94,506
|
|
|
18.19
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Share-based compensation expense
|
|
$
|
887
|
|
|
$
|
660
|
|
|
$
|
548
|
|
(In Thousands)
|
|
||
2015
|
$
|
1,198
|
|
2016
|
1,118
|
|
|
2017
|
1,076
|
|
|
2018
|
1,022
|
|
|
2019
|
1,034
|
|
|
Thereafter
|
6,547
|
|
|
|
$
|
11,995
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Endowment to First Business Charitable Foundation
|
|
$
|
—
|
|
|
$
|
1,300
|
|
|
$
|
—
|
|
General and administrative expenses
|
|
1,024
|
|
|
938
|
|
|
912
|
|
|||
Travel and other employee expenses
|
|
1,069
|
|
|
877
|
|
|
903
|
|
|||
Computer software expenses
|
|
886
|
|
|
677
|
|
|
446
|
|
|||
Partnership (income) loss
|
|
(774
|
)
|
|
437
|
|
|
(678
|
)
|
|||
Foreclosed properties expenses
|
|
5
|
|
|
185
|
|
|
589
|
|
|||
Other expenses
|
|
202
|
|
|
240
|
|
|
562
|
|
|||
Total other operating expenses
|
|
$
|
2,412
|
|
|
$
|
4,654
|
|
|
$
|
2,734
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
4,235
|
|
|
$
|
3,605
|
|
|
$
|
5,473
|
|
State
|
|
1,459
|
|
|
1,356
|
|
|
1,183
|
|
|||
Current tax expense
|
|
5,694
|
|
|
4,961
|
|
|
6,656
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
1,299
|
|
|
2,257
|
|
|
(1,756
|
)
|
|||
State
|
|
90
|
|
|
171
|
|
|
(150
|
)
|
|||
Deferred tax expense (benefit)
|
|
1,389
|
|
|
2,428
|
|
|
(1,906
|
)
|
|||
|
|
|
|
|
|
|
||||||
Total income tax expense
|
|
$
|
7,083
|
|
|
$
|
7,389
|
|
|
$
|
4,750
|
|
|
|
At December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
||||
Allowance for loan and lease losses
|
|
$
|
5,501
|
|
|
$
|
5,372
|
|
Excess book basis over tax basis for net assets acquired
|
|
2,082
|
|
|
—
|
|
||
Deferred compensation
|
|
1,332
|
|
|
1,144
|
|
||
State net operating loss carryforwards
|
|
694
|
|
|
730
|
|
||
Write-down of foreclosed properties
|
|
1
|
|
|
—
|
|
||
Non-accrual loan interest
|
|
751
|
|
|
733
|
|
||
Capital loss carryforwards
|
|
32
|
|
|
35
|
|
||
Unrealized loss on securities
|
|
—
|
|
|
215
|
|
||
Other
|
|
305
|
|
|
486
|
|
||
Total deferred tax assets before valuation allowance
|
|
10,698
|
|
|
8,715
|
|
||
Valuation allowance
|
|
(68
|
)
|
|
(67
|
)
|
||
Total deferred tax assets
|
|
10,630
|
|
|
8,648
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Leasing and fixed asset activities
|
|
6,393
|
|
|
4,803
|
|
||
Loan servicing asset
|
|
364
|
|
|
—
|
|
||
Unrealized gain on securities
|
|
137
|
|
|
—
|
|
||
Other
|
|
133
|
|
|
123
|
|
||
Total deferred tax liabilities
|
|
7,027
|
|
|
4,926
|
|
||
|
|
|
|
|
||||
Net deferred tax asset
|
|
$
|
3,603
|
|
|
$
|
3,722
|
|
|
|
At December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Change in net deferred tax assets
|
|
$
|
(119
|
)
|
|
$
|
(861
|
)
|
|
$
|
2,101
|
|
Deferred taxes allocated to other comprehensive income
|
|
352
|
|
|
(1,567
|
)
|
|
(195
|
)
|
|||
Acquired deferred tax assets
|
|
(1,622
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income tax (expense) benefit
|
|
$
|
(1,389
|
)
|
|
$
|
(2,428
|
)
|
|
$
|
1,906
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(Dollars In Thousands)
|
||||||||||
Income before income tax expense
|
|
$
|
21,222
|
|
|
$
|
21,135
|
|
|
$
|
13,676
|
|
Tax expense at statutory federal rate of 34.42% and 34% applied to income before income tax expense, respectively
|
|
$
|
7,305
|
|
|
$
|
7,275
|
|
|
$
|
4,650
|
|
State income tax, net of federal effect
|
|
1,000
|
|
|
906
|
|
|
647
|
|
|||
Tax-exempt security and loan income, net of TEFRA adjustments
|
|
(736
|
)
|
|
(682
|
)
|
|
(431
|
)
|
|||
Change in valuation allowance
|
|
(1
|
)
|
|
59
|
|
|
(3
|
)
|
|||
Bank-owned life insurance
|
|
(296
|
)
|
|
(291
|
)
|
|
(239
|
)
|
|||
Non-deductible transaction costs
|
|
124
|
|
|
—
|
|
|
—
|
|
|||
Federal new market tax credit
|
|
(375
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
62
|
|
|
122
|
|
|
126
|
|
|||
Total income tax expense
|
|
$
|
7,083
|
|
|
$
|
7,389
|
|
|
$
|
4,750
|
|
Effective tax rate
|
|
33.38
|
%
|
|
34.96
|
%
|
|
34.73
|
%
|
|
|
Interest Rate Swap Contracts
|
||||||||||
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
|
|
(In Thousands)
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||
December 31, 2014
|
|
Other assets
|
|
$
|
575
|
|
|
Other liabilities
|
|
$
|
575
|
|
December 31, 2013
|
|
Other assets
|
|
$
|
946
|
|
|
Other liabilities
|
|
$
|
946
|
|
|
|
At December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Commitments to extend credit, primarily commercial loans
|
|
$
|
406,183
|
|
|
$
|
282,581
|
|
Standby letters of credit
|
|
17,555
|
|
|
19,602
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
December 31, 2014
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
Municipal obligations
|
|
$
|
—
|
|
|
$
|
578
|
|
|
$
|
—
|
|
|
$
|
578
|
|
Asset backed securities
|
|
—
|
|
|
1,510
|
|
|
—
|
|
|
1,510
|
|
||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
—
|
|
|
8,965
|
|
|
—
|
|
|
8,965
|
|
||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
68,874
|
|
|
—
|
|
|
68,874
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
64,771
|
|
|
—
|
|
|
64,771
|
|
||||
Interest rate swaps
|
|
—
|
|
|
575
|
|
|
—
|
|
|
575
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
—
|
|
|||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
575
|
|
|
$
|
—
|
|
|
$
|
575
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
December 31, 2013
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
Municipal obligations
|
|
$
|
—
|
|
|
$
|
15,489
|
|
|
$
|
—
|
|
|
$
|
15,489
|
|
Asset backed securities
|
|
—
|
|
|
1,494
|
|
|
—
|
|
|
1,494
|
|
||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
—
|
|
|
16,244
|
|
|
—
|
|
|
16,244
|
|
||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
111,969
|
|
|
—
|
|
|
111,969
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
34,922
|
|
|
—
|
|
|
34,922
|
|
||||
Interest rate swaps
|
|
—
|
|
|
946
|
|
|
—
|
|
|
946
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
946
|
|
|
$
|
—
|
|
|
$
|
946
|
|
|
|
|
|
As of and for the Year Ended December 31, 2014
|
||||||||||||||||
|
|
|
|
Fair Value Measurements Using
|
|
Total
Gains
(Losses)
|
||||||||||||||
|
|
Balance at December 31, 2014
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Impaired loans
|
|
$
|
8,565
|
|
|
$
|
—
|
|
|
$
|
7,025
|
|
|
$
|
1,540
|
|
|
$
|
—
|
|
Foreclosed properties
|
|
1,693
|
|
|
—
|
|
|
1,693
|
|
|
—
|
|
|
(4
|
)
|
|
|
|
|
As of and for the Year Ended December 31, 2013
|
||||||||||||||||
|
|
|
|
Fair Value Measurements Using
|
|
Total
Gains
(Losses)
|
||||||||||||||
|
|
Balance at December 31, 2013
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Impaired loans
|
|
$
|
13,719
|
|
|
$
|
—
|
|
|
$
|
13,666
|
|
|
$
|
53
|
|
|
$
|
—
|
|
Foreclosed properties
|
|
333
|
|
|
—
|
|
|
333
|
|
|
—
|
|
|
(59
|
)
|
|
As of and for the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In Thousands)
|
||||||
Foreclosed properties at the beginning of the period
|
$
|
333
|
|
|
$
|
1,574
|
|
Foreclosed properties acquired in acquisition, at fair value
|
1,605
|
|
|
—
|
|
||
Loans transferred to foreclosed properties, at lower of cost or fair value
|
—
|
|
|
1,381
|
|
||
Payments to priority lien holders of foreclosed properties
|
—
|
|
|
—
|
|
||
Proceeds from sale of foreclosed properties
|
(255
|
)
|
|
(2,739
|
)
|
||
Net gain on sale of foreclosed properties
|
14
|
|
|
176
|
|
||
Impairment valuation
|
(4
|
)
|
|
(59
|
)
|
||
Foreclosed properties at the end of the period
|
$
|
1,693
|
|
|
$
|
333
|
|
|
|
December 31, 2014
|
||||||||||||||||||
|
|
Carrying
Amount |
|
Fair Value
|
||||||||||||||||
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
103,237
|
|
|
$
|
103,227
|
|
|
$
|
85,937
|
|
|
$
|
6,890
|
|
|
$
|
10,400
|
|
Securities available-for-sale
|
|
144,698
|
|
|
144,698
|
|
|
—
|
|
|
144,698
|
|
|
—
|
|
|||||
Loans and lease receivables, net
|
|
1,266,438
|
|
|
1,286,502
|
|
|
—
|
|
|
7,025
|
|
|
1,279,477
|
|
|||||
Federal Home Loan Bank stock
|
|
2,340
|
|
|
2,340
|
|
|
—
|
|
|
—
|
|
|
2,340
|
|
|||||
Cash surrender value of life insurance
|
|
27,314
|
|
|
27,314
|
|
|
27,314
|
|
|
—
|
|
|
—
|
|
|||||
Accrued interest receivable
|
|
3,932
|
|
|
3,932
|
|
|
3,932
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
575
|
|
|
575
|
|
|
—
|
|
|
575
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
|
$
|
1,438,268
|
|
|
$
|
1,440,248
|
|
|
$
|
884,292
|
|
|
$
|
555,956
|
|
|
$
|
—
|
|
Federal Home Loan Bank and other borrowings
|
|
33,994
|
|
|
34,590
|
|
|
—
|
|
|
34,590
|
|
|
—
|
|
|||||
Junior subordinated notes
|
|
10,315
|
|
|
7,101
|
|
|
—
|
|
|
—
|
|
|
7,101
|
|
|||||
Interest rate swaps
|
|
575
|
|
|
575
|
|
|
—
|
|
|
575
|
|
|
—
|
|
|||||
Accrued interest payable
|
|
1,574
|
|
|
1,574
|
|
|
1,574
|
|
|
—
|
|
|
—
|
|
|||||
Off balance sheet items:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
|
192
|
|
|
192
|
|
|
—
|
|
|
—
|
|
|
192
|
|
|||||
Commitments to extend credit
|
|
—
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
|
December 31, 2013
|
||||||||||||||||||
|
|
Carrying
Amount |
|
Fair Value
|
||||||||||||||||
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
81,286
|
|
|
$
|
81,295
|
|
|
$
|
66,266
|
|
|
$
|
4,029
|
|
|
$
|
11,000
|
|
Securities available-for-sale
|
|
180,118
|
|
|
180,118
|
|
|
—
|
|
|
180,118
|
|
|
—
|
|
|||||
Loans and lease receivables, net
|
|
967,050
|
|
|
963,937
|
|
|
—
|
|
|
13,666
|
|
|
950,271
|
|
|||||
Federal Home Loan Bank stock
|
|
1,255
|
|
|
1,255
|
|
|
—
|
|
|
—
|
|
|
1,255
|
|
|||||
Cash surrender value of life insurance
|
|
23,142
|
|
|
23,142
|
|
|
23,142
|
|
|
—
|
|
|
—
|
|
|||||
Accrued interest receivable
|
|
3,231
|
|
|
3,231
|
|
|
3,231
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
946
|
|
|
946
|
|
|
—
|
|
|
946
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
|
$
|
1,129,855
|
|
|
$
|
1,131,002
|
|
|
$
|
684,344
|
|
|
$
|
446,658
|
|
|
$
|
—
|
|
Federal Home Loan Bank and other borrowings
|
|
11,936
|
|
|
11,979
|
|
|
—
|
|
|
11,979
|
|
|
—
|
|
|||||
Junior subordinated notes
|
|
10,315
|
|
|
7,084
|
|
|
—
|
|
|
—
|
|
|
7,084
|
|
|||||
Interest rate swaps
|
|
946
|
|
|
946
|
|
|
—
|
|
|
946
|
|
|
—
|
|
|||||
Accrued interest payable
|
|
1,052
|
|
|
1,052
|
|
|
1,052
|
|
|
—
|
|
|
—
|
|
|||||
Off balance sheet items:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
|
219
|
|
|
219
|
|
|
—
|
|
|
—
|
|
|
219
|
|
|||||
Commitments to extend credit
|
|
—
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
|
As of December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(In Thousands)
|
||||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,179
|
|
|
$
|
4,855
|
|
Investments in subsidiaries, at equity
|
|
170,923
|
|
|
127,450
|
|
||
Leasehold improvements and equipment, net
|
|
1,388
|
|
|
789
|
|
||
Other assets
|
|
2,695
|
|
|
1,921
|
|
||
Total assets
|
|
$
|
176,185
|
|
|
$
|
135,015
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Borrowed funds
|
|
$
|
34,251
|
|
|
$
|
22,251
|
|
Other liabilities
|
|
4,186
|
|
|
3,489
|
|
||
Total liabilities
|
|
38,437
|
|
|
25,740
|
|
||
Stockholders’ equity
|
|
137,748
|
|
|
109,275
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
176,185
|
|
|
$
|
135,015
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Interest income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest expense
|
|
2,071
|
|
|
1,952
|
|
|
3,825
|
|
|||
Net interest expense
|
|
(2,071
|
)
|
|
(1,952
|
)
|
|
(3,825
|
)
|
|||
Non-interest income
|
|
|
|
|
|
|
||||||
Consulting and rental income from consolidated subsidiaries
|
|
10,776
|
|
|
9,738
|
|
|
8,904
|
|
|||
Other
|
|
34
|
|
|
34
|
|
|
34
|
|
|||
Total non-interest income
|
|
10,810
|
|
|
9,772
|
|
|
8,938
|
|
|||
Non-interest expense
|
|
13,444
|
|
|
10,558
|
|
|
9,615
|
|
|||
Loss before income tax benefit and equity in undistributed net income of consolidated subsidiaries
|
|
(4,705
|
)
|
|
(2,738
|
)
|
|
(4,502
|
)
|
|||
Income tax benefit
|
|
(1,659
|
)
|
|
(1,050
|
)
|
|
(1,722
|
)
|
|||
Loss before equity in undistributed net income of consolidated subsidiaries
|
|
(3,046
|
)
|
|
(1,688
|
)
|
|
(2,780
|
)
|
|||
Equity in undistributed net income of consolidated subsidiaries
|
|
17,185
|
|
|
15,434
|
|
|
11,706
|
|
|||
Net income
|
|
$
|
14,139
|
|
|
$
|
13,746
|
|
|
$
|
8,926
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In Thousands)
|
||||||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
14,139
|
|
|
$
|
13,746
|
|
|
$
|
8,926
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
|
||||||
Equity in undistributed earnings of consolidated subsidiaries
|
|
(17,185
|
)
|
|
(15,434
|
)
|
|
(11,706
|
)
|
|||
Share-based compensation
|
|
416
|
|
|
311
|
|
|
254
|
|
|||
Excess tax benefit from share-based compensation
|
|
(305
|
)
|
|
(145
|
)
|
|
(47
|
)
|
|||
Increase (decrease) in other liabilities
|
|
1,002
|
|
|
867
|
|
|
(1,131
|
)
|
|||
Other, net
|
|
(842
|
)
|
|
(34
|
)
|
|
(297
|
)
|
|||
Net cash used in operating activities
|
|
(2,775
|
)
|
|
(689
|
)
|
|
(4,001
|
)
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Dividends received from subsidiaries
|
|
8,000
|
|
|
8,000
|
|
|
6,000
|
|
|||
Capital contributions to subsidiaries
|
|
(32,980
|
)
|
|
(850
|
)
|
|
—
|
|
|||
Net cash (used in) provided by investing activities
|
|
(24,980
|
)
|
|
7,150
|
|
|
6,000
|
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Net decrease in short-term borrowed funds
|
|
1,000
|
|
|
—
|
|
|
(800
|
)
|
|||
Proceeds from issuance of long-term debt, net of issuance costs
|
|
14,469
|
|
|
—
|
|
|
6,215
|
|
|||
Repayment of long-term debt
|
|
(4,000
|
)
|
|
—
|
|
|
(33,289
|
)
|
|||
Proceeds from issuance of common stock
|
|
16,560
|
|
|
—
|
|
|
27,074
|
|
|||
Proceeds from exercise of stock options
|
|
936
|
|
|
1,474
|
|
|
22
|
|
|||
Purchase of treasury stock
|
|
(1,795
|
)
|
|
(1,782
|
)
|
|
(216
|
)
|
|||
Excess tax benefit from share-based compensation
|
|
305
|
|
|
145
|
|
|
47
|
|
|||
Dividends paid
|
|
(3,396
|
)
|
|
(2,475
|
)
|
|
(738
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
24,079
|
|
|
(2,638
|
)
|
|
(1,685
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
|
(3,676
|
)
|
|
3,823
|
|
|
314
|
|
|||
Cash and cash equivalents at the beginning of the period
|
|
4,855
|
|
|
1,032
|
|
|
718
|
|
|||
Cash and cash equivalents at the end of the period
|
|
$
|
1,179
|
|
|
$
|
4,855
|
|
|
$
|
1,032
|
|
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||||||||||
|
|
(Dollars in Thousands, Except per share data)
|
||||||||||||||||||||||||||||||
Interest income
|
|
$
|
13,402
|
|
|
$
|
13,565
|
|
|
$
|
13,871
|
|
|
$
|
16,863
|
|
|
$
|
13,319
|
|
|
$
|
13,142
|
|
|
$
|
13,586
|
|
|
$
|
13,763
|
|
Interest expense
|
|
(2,601
|
)
|
|
(2,766
|
)
|
|
(2,936
|
)
|
|
(3,268
|
)
|
|
(3,090
|
)
|
|
(2,949
|
)
|
|
(2,887
|
)
|
|
(2,779
|
)
|
||||||||
Net interest income
|
|
10,801
|
|
|
10,799
|
|
|
10,935
|
|
|
13,595
|
|
|
10,229
|
|
|
10,193
|
|
|
10,699
|
|
|
10,984
|
|
||||||||
Provision for loan losses
|
|
(180
|
)
|
|
91
|
|
|
89
|
|
|
(1,236
|
)
|
|
(80
|
)
|
|
(54
|
)
|
|
(109
|
)
|
|
1,202
|
|
||||||||
Non-interest income
|
|
2,321
|
|
|
2,358
|
|
|
2,459
|
|
|
2,965
|
|
|
1,953
|
|
|
2,174
|
|
|
2,124
|
|
|
2,191
|
|
||||||||
Non-interest expense
|
|
(7,852
|
)
|
|
(7,749
|
)
|
|
(8,047
|
)
|
|
(10,127
|
)
|
|
(7,178
|
)
|
|
(7,490
|
)
|
|
(7,147
|
)
|
|
(8,556
|
)
|
||||||||
Income before income tax expense
|
|
5,090
|
|
|
5,499
|
|
|
5,436
|
|
|
5,197
|
|
|
4,924
|
|
|
4,823
|
|
|
5,567
|
|
|
5,821
|
|
||||||||
Income taxes
|
|
(1,753
|
)
|
|
(1,994
|
)
|
|
(1,883
|
)
|
|
(1,453
|
)
|
|
(1,680
|
)
|
|
(1,690
|
)
|
|
(1,958
|
)
|
|
(2,061
|
)
|
||||||||
Net income
|
|
$
|
3,337
|
|
|
$
|
3,505
|
|
|
$
|
3,553
|
|
|
$
|
3,744
|
|
|
$
|
3,244
|
|
|
$
|
3,133
|
|
|
$
|
3,609
|
|
|
$
|
3,760
|
|
Per common share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings per common share
|
|
$
|
0.85
|
|
|
$
|
0.89
|
|
|
$
|
0.90
|
|
|
$
|
0.89
|
|
|
$
|
0.83
|
|
|
$
|
0.80
|
|
|
$
|
0.92
|
|
|
$
|
0.95
|
|
Diluted earnings per common share
|
|
0.84
|
|
|
0.88
|
|
|
0.89
|
|
|
0.89
|
|
|
0.83
|
|
|
0.80
|
|
|
0.91
|
|
|
0.95
|
|
||||||||
Dividends declared per share
|
|
0.21
|
|
|
0.21
|
|
|
0.21
|
|
|
0.21
|
|
|
0.14
|
|
|
0.14
|
|
|
0.14
|
|
|
0.14
|
|
(a)
|
Directors of the Registrant
. The information included in the definitive Proxy Statement for the Annual Meeting of the Shareholders to be held on
May 18, 2015
under the captions “Item 1 - Election of Directors,” “Corporate Governance Principles and Practices” and “Section 16(a) Beneficial Ownership Reporting Compliance” is incorporated herein by reference.
|
(b)
|
Executive Officers of the Registrant
. The information presented in Item 1 of this document is incorporated herein by reference.
|
(c)
|
Code of Ethics
. The Corporation has adopted a code of ethics applicable to all employees, including the principal executive officer, principal financial officer and principal accounting officer of the Corporation. The FBFS Code of Ethics is posted on the Corporation’s website at www.firstbusiness.com. The Corporation intends to satisfy the disclosure requirements under Item 5.05(c) of Form 8-K regarding any amendment to or waiver of the code with respect to its Chief Executive Officer and Chief Financial Officer, principal accounting officer, and persons performing similar functions, by posting such information to the Corporation’s website.
|
FIRST BUSINESS FINANCIAL SERVICES, INC.
|
|
|
|
|
|
|
|
|
|
/s/ Corey A. Chambas
|
|
|
|
|
Corey A. Chambas
|
|
Chief Executive Officer
|
|
March 6, 2015
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Corey A. Chambas
|
|
Chief Executive Officer
|
|
March 6, 2015
|
Corey A. Chambas
|
|
|
|
|
|
|
|
|
|
/s/ James F. Ropella
|
|
Chief Financial Officer
|
|
March 6, 2015
|
James F. Ropella
|
|
|
|
|
|
|
|
|
|
/s/ Jerome J. Smith
|
|
Chairman of the Board of Directors
|
|
March 6, 2015
|
Jerome J. Smith
|
|
|
|
|
|
|
|
|
|
/s/ Mark D. Bugher
|
|
Director
|
|
March 6, 2015
|
Mark D. Bugher
|
|
|
|
|
|
|
|
|
|
/s/ Jan A. Eddy
|
|
Director
|
|
March 6, 2015
|
Jan A. Eddy
|
|
|
|
|
|
|
|
|
|
/s/ John J. Harris
|
|
Director
|
|
March 6, 2015
|
John J. Harris
|
|
|
|
|
|
|
|
|
|
/s/ Gerald L. Kilcoyne
|
|
Director
|
|
March 6, 2015
|
Gerald L. Kilcoyne
|
|
|
|
|
|
|
|
|
|
/s/ John M. Silseth
|
|
Director
|
|
March 6, 2015
|
John M. Silseth
|
|
|
|
|
|
|
|
|
|
/s/ Barbara H. Stephens
|
|
Director
|
|
March 6, 2015
|
Barbara H. Stephens
|
|
|
|
|
|
|
|
|
|
/s/ Dean W. Voeks
|
|
Director
|
|
March 6, 2015
|
Dean W. Voeks
|
|
|
|
|
|
|
Exhibit No.
|
Exhibit Name
|
|
|
2.1
|
Agreement and Plan of Merger by and among Aslin Group, Inc., AGI Acquisition Corp. and First Business Financial Services, Inc., dated as of May 22, 2014 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on May 23, 2014.
|
|
|
2.2
|
Voting Agreement by and among First Business Financial Services, Inc. and the persons and entities listed on Schedule I attached thereto dated as of May 22, 2014 (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed on May 23, 2014.
|
|
|
3.1
|
Amended and Restated Articles of Incorporation of First Business Financial Services, Inc., as amended (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed on March 13, 2009)
|
|
|
3.2
|
Amended and Restated Bylaws of First Business Financial Services, Inc., as amended (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on January 31, 2012)
|
|
|
4.1
|
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Registrant agrees to furnish to the Securities and Exchange Commission, upon request, any instrument defining the rights of holders of long-term debt not being registered that is not filed as an exhibit to this Annual Report on Form 10-K. No such instrument authorizes securities in excess of 10% of the total assets of the Registrant.
|
|
|
4.2
|
Rights Agreement, dated as of June 5, 2008, between the Registrant and Computershare Investor Services, Inc. (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A filed on June 6, 2008)
|
|
|
4.3
|
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.3 to Amendment No. 1 to the Registration Statement on Form S-1 filed on November 26, 2012)
|
|
|
4.4
|
Form of Fixed Rate Subordinated Note due September 1, 2014 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on August 26, 2014)
|
|
|
4.5
|
Form of Subordinated Note Purchase Agreement (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on August 26, 2014)
|
|
|
10.1
|
2001 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Amended Registration Statement on Form 10 filed on April 28, 2005)
|
|
|
10.2
|
Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Amended Registration Statement on Form 10 filed on April 28, 2005)
|
|
|
10.3
|
2006 Equity Incentive Plan (incorporated by reference to Appendix B to the Corporation’s Proxy Statement for the 2006 Annual Meeting of Shareholders filed on March 31, 2006)
|
|
|
10.4
|
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-8 filed on September 28, 2006)
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10.5
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2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on July 27, 2012)
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10.6
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Form of Restricted Stock Agreement (incorporated by reference to Exhibit 4.5 to the Registration Statement on Form S-8 filed on August 13, 2012)
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10.7
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Form of Executive Change-in-Control and Severance Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 10, 2006)
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10.8
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Amended and Restated Agreement effective December 22, 2014 between the Registrant and Corey A. Chambas +
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10.9
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Annual Incentive Bonus Program, as amended, dated March 6, 2015 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 6, 2015)
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10.10
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Offer Letter between the Company and David R. Papritz accepted September 5, 2014 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on September 9, 2014)
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10.11
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Employment Agreement, dated as of April 22, 2014, by and among First Business Financial Services, Inc. and Pamela Berneking +
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21
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Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Amended Registration Statement on Form 10 filed on April 28, 2005)
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23
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Consent of KPMG LLP +
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31.1
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Certification of the Chief Executive Officer +
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31.2
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Certification of the Senior Vice President and Chief Financial Officer +
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32
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Certification of the Chief Executive Officer and Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 +
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99
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Proxy Statement for the Annual Meeting of the Shareholders (to be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after December 31, 2014; except to the extent specifically incorporated by reference, the Proxy Statement for the Annual Meeting of the Shareholders shall not be deemed to be filed with the Securities and Exchange Commission as part of this Annual Report on Form 10-K)
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101
|
The following financial information from First Business Financial Services, Inc.’s Annual Report on Form 10-K for the years ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013, (ii) Consolidated Statements of Income for the years ended December 31, 2014, 2013 and 2012, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012, (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2014, 2013 and 2012, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012, and (vi) the Notes to Consolidated Financial Statements +
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+
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Submitted electronically with this Annual Report.
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BY:
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/s/ Gerald L. Kilcoyne
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Gerald L. Kilcoyne
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Chair of the Board
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|
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/s/ Corey A. Chambas
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Corey A. Chambas
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Chief Executive Officer of First Business Financial Services, Inc.
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|
|
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ATTESTED BY:
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/s/ Jerome J. Smith
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|
Jerome J. Smith
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Chair of First Business Financial Services, Inc.
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11.
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Confidentiality.
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If to Executive, to:
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Pamela Berneking
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12422 NE 117th Street
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|
Kearney, Missouri 64060
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|
|
With a copy to:
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Kimberly A. Jones
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Seyferth Blumenthal & Harris LLC
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|
4801 Main Street, Suite 310
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|
Kansas City, Missouri 64112
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|
|
If to FBIZ:
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First Business Financial Services, Inc.
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401 Charmany Drive
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|
Madison, WI 53719
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Attn: General Counsel
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|
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With a copy to:
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Peter Wilder
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Godfrey & Kahn, S.C.
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780 N. Water Street
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Milwaukee, WI 53202
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|
FIRST BUSINESS FINANCIAL SERVICES, INC.
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|
EXECUTIVE
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BY:
|
/s/ Corey A. Chambas
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/s/ Pamela Berneking
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|
Corey A. Chambas
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|
Pamela Berneking
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|
President and CEO
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|
|
1.
|
I have reviewed this Annual Report on Form 10-K of First Business Financial Services, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Corey A. Chambas
|
|
Corey A. Chambas
|
|
Chief Executive Officer
|
|
March 6, 2015
|
1.
|
I have reviewed this Annual Report on Form 10-K of First Business Financial Services, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ James F. Ropella
|
|
James F. Ropella
|
|
Chief Financial Officer
|
|
March 6, 2015
|
|
/s/ Corey A. Chambas
|
|
Corey A. Chambas
|
|
Chief Executive Officer
|
|
March 6, 2015
|
|
|
|
/s/ James F. Ropella
|
|
James F. Ropella
|
|
Chief Financial Officer
|
|
March 6, 2015
|