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, 2016
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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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FBCC is an asset-based 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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FBEF 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. FBEF was established in 1998.
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•
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Rimrock Road Investment Fund, LLC (“Rimrock”), established in 2009 and 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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BOC Investment, LLC (“BOC”), is a limited liability company established for the purpose of capturing federal historic tax credits to reduce the cost of borrowing for a FBB client engaged in rehabilitating a historic building in Madison, Wisconsin. BOC was established in 2015.
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•
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Mitchell Street Apartments Investment, LLC (“Mitchell”), is a limited liability company established for the purpose of capturing federal historic tax credits to reduce the cost of borrowing for a FBB client engaged in rehabilitating a historic building in Milwaukee, Wisconsin. Mitchell was established in 2016.
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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. FMIC was established in 1993.
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•
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A ratio of minimum Common Equity Tier 1 Capital equal to 4.5% of risk-weighted assets;
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•
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An increase in the minimum required amount of Tier 1 Capital from 4% to 6% of risk-weighted assets;
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•
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A continuation of the minimum required amount of Total Capital (Tier 1 plus Tier 2) at 8% of risk-weighted assets; and
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•
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A minimum leverage ratio of Tier 1 Capital to total quarterly average assets equal to 4% in all circumstances.
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•
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A Common Equity Tier 1 Capital ratio to risk-weighted assets of 6.5% or more;
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•
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A ratio of Tier 1 Capital to total risk-weighted assets of 8% or more (6% under Basel I);
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•
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A ratio of Total Capital to total risk-weighted assets of 10% or more (the same as Basel I); and
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•
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A leverage ratio of Tier 1 Capital to total adjusted average quarterly assets of 5% or greater.
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•
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Potential exposure to unknown or contingent liabilities of the target company.
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•
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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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•
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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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•
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Difficulty in integrating operations, personnel, technologies, services and products of acquired companies.
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•
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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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||||||
2016
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||||||
4th Quarter
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$
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24.14
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$
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18.76
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$
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0.12
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3rd Quarter
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24.74
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20.96
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0.12
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2nd Quarter
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25.94
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22.19
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0.12
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1st Quarter
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24.70
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20.06
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0.12
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2015
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||||||
4th Quarter
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27.35
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21.90
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0.11
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|||
3rd Quarter
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23.92
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20.62
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0.11
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2nd Quarter
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23.52
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21.40
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0.11
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1st Quarter
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24.12
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18.32
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0.11
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As of December 31,
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||||||||||||||||||||||
Index
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2011
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2012
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2013
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2014
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2015
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|
2016
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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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140.87
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$
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235.22
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$
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305.32
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|
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$
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324.95
|
|
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$
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315.09
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NASDAQ Composite
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100.00
|
|
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117.45
|
|
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164.57
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|
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188.84
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|
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201.98
|
|
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219.89
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||||||
SNL Bank NASDAQ
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100.00
|
|
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119.19
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171.31
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|
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177.42
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|
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191.53
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|
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265.56
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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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||||||
December 1, 2016 - December 31, 2016
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—
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$
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—
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—
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$
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—
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November 1, 2016 - November 30, 2016
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599
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21.50
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|
|
—
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|
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—
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||
October 1, 2016 - October 31, 2016
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—
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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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599
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|
|
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—
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|
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(1)
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The shares in this column represent the shares that were surrendered to us to satisfy income tax withholding obligations in connection with the vesting of restricted shares.
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As of and for the Year Ended December 31,
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||||||||||||||||||
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2016
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2015
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2014
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2013
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|
2012
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||||||||||
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(Dollars in Thousands, Except Share and Per Share Data)
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||||||||||||||||||
INCOME STATEMENT:
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||||||||||
Interest income
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$
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78,117
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$
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72,471
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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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Interest expense
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14,789
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13,831
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11,571
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11,705
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16,885
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|||||
Net interest income
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63,328
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58,640
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46,130
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42,105
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37,881
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|||||
Provision for loan and lease losses
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7,818
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3,386
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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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|
|||||
Non-interest income
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17,988
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17,011
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10,103
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8,442
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|
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8,699
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|||||
Non-interest expense
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56,433
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47,374
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33,775
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30,371
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28,661
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|||||
Income tax expense
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2,156
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8,377
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7,083
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7,389
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|
4,750
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|||||
Net income
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$
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14,909
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$
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16,514
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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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8,926
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|
|
|
|
|
|
|
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||||||||||
Yield on earning assets
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4.50
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%
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4.52
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%
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4.45
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%
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4.52
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%
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4.86
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%
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|||||
Cost of funds
|
|
1.06
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%
|
|
1.04
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%
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|
1.07
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%
|
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1.18
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%
|
|
1.75
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%
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|||||
Interest rate spread
|
|
3.44
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%
|
|
3.48
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%
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|
3.38
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%
|
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3.34
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%
|
|
3.11
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%
|
|||||
Net interest margin
|
|
3.64
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%
|
|
3.66
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%
|
|
3.56
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%
|
|
3.54
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%
|
|
3.36
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%
|
|||||
Return on average assets
|
|
0.82
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%
|
|
0.97
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%
|
|
1.04
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%
|
|
1.10
|
%
|
|
0.75
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%
|
|||||
Return on average equity
|
|
9.40
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%
|
|
11.36
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%
|
|
11.78
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%
|
|
13.12
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%
|
|
12.65
|
%
|
|||||
ENDING BALANCE SHEET:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
1,780,699
|
|
|
$
|
1,782,081
|
|
|
$
|
1,628,505
|
|
|
$
|
1,268,267
|
|
|
$
|
1,225,701
|
|
Securities
|
|
184,505
|
|
|
177,830
|
|
|
186,261
|
|
|
180,118
|
|
|
200,596
|
|
|||||
Loans and leases, net
|
|
1,450,675
|
|
|
1,430,965
|
|
|
1,266,438
|
|
|
967,050
|
|
|
896,560
|
|
|||||
Deposits
|
|
1,538,855
|
|
|
1,577,231
|
|
|
1,438,268
|
|
|
1,129,855
|
|
|
1,092,254
|
|
|||||
FHLB advances and other borrowings
|
|
59,676
|
|
|
34,740
|
|
|
33,451
|
|
|
11,901
|
|
|
12,366
|
|
|||||
Junior subordinated notes
|
|
10,004
|
|
|
9,990
|
|
|
9,976
|
|
|
9,962
|
|
|
9,947
|
|
|||||
Stockholders’ equity
|
|
161,650
|
|
|
150,832
|
|
|
137,748
|
|
|
109,275
|
|
|
99,539
|
|
|||||
FINANCIAL CONDITION ANALYSIS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan and lease losses to year-end loans
|
|
1.44
|
%
|
|
1.14
|
%
|
|
1.12
|
%
|
|
1.42
|
%
|
|
1.69
|
%
|
|||||
Allowance to non-accrual loans and leases
|
|
83.00
|
%
|
|
73.17
|
%
|
|
146.33
|
%
|
|
87.68
|
%
|
|
109.05
|
%
|
|||||
Net charge-offs to average loans and leases
|
|
0.22
|
%
|
|
0.10
|
%
|
|
0.08
|
%
|
|
0.06
|
%
|
|
0.35
|
%
|
|||||
Non-accrual loans to gross loans and leases
|
|
1.74
|
%
|
|
1.56
|
%
|
|
0.76
|
%
|
|
1.61
|
%
|
|
1.55
|
%
|
|||||
Average equity to average assets
|
|
8.75
|
%
|
|
8.54
|
%
|
|
8.80
|
%
|
|
8.39
|
%
|
|
5.96
|
%
|
|||||
STOCKHOLDERS’ DATA:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
(1)
|
|
$
|
1.71
|
|
|
$
|
1.90
|
|
|
$
|
1.76
|
|
|
$
|
1.75
|
|
|
$
|
1.65
|
|
Diluted earnings per common share
(1)
|
|
1.71
|
|
|
1.90
|
|
|
1.75
|
|
|
1.74
|
|
|
1.65
|
|
|||||
Book value per share at end of period
|
|
18.55
|
|
|
17.34
|
|
|
15.88
|
|
|
13.86
|
|
|
12.71
|
|
|||||
Tangible book value per share at end of period
|
|
17.08
|
|
|
15.90
|
|
|
14.51
|
|
|
13.86
|
|
|
12.71
|
|
|||||
Dividend declared per share
|
|
0.48
|
|
|
0.44
|
|
|
0.42
|
|
|
0.28
|
|
|
0.14
|
|
|||||
Dividend payout ratio
|
|
28.01
|
%
|
|
23.93
|
%
|
|
23.93
|
%
|
|
16.05
|
%
|
|
8.51
|
%
|
|||||
Shares outstanding
|
|
8,715,856
|
|
|
8,699,410
|
|
|
8,671,854
|
|
|
7,833,334
|
|
|
5,251,138
|
|
(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. All shares and per share amounts have been adjusted to reflect the 2-for-1 stock split in the form of a 100% stock dividend completed in August 2015.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Competitive pressures among depository and other financial institutions nationally and in our markets.
|
•
|
Adverse changes in the economy or business conditions, either nationally or in our markets.
|
•
|
Increases in defaults by borrowers and other delinquencies.
|
•
|
Our ability to manage growth effectively, including the successful expansion of our client support, administrative infrastructure and internal management systems.
|
•
|
Fluctuations in interest rates and market prices.
|
•
|
The consequences of continued bank acquisitions and mergers in our markets, resulting in fewer but much larger and financially stronger competitors.
|
•
|
Changes in legislative or regulatory requirements applicable to us and our subsidiaries.
|
•
|
Changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations.
|
•
|
Fraud, including client and system failure or breaches of our network security, including with respect to our internet banking activities.
|
•
|
Failure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portion of SBA loans.
|
•
|
Total assets remained relatively flat, declining to
$1.781 billion
as of
December 31, 2016
, a
0.1%
decrease
from
$1.782 billion
at
December 31, 2015
.
|
•
|
Net income for the year ended
December 31, 2016
was
$14.9 million
,
9.7%
lower than the
$16.5 million
earned for the year ended
December 31, 2015
.
|
•
|
Diluted earnings per common share were
$1.71
for the year ended
December 31, 2016
, compared to
$1.90
earned in the prior year.
|
•
|
Net interest margin was
3.64%
for the year ended
December 31, 2016
, declining
two
basis points from
3.66%
for the year ended
December 31, 2015
.
|
•
|
Top line revenue, which consists of net interest income and non-interest income, increased
7.5%
to a record
$81.3 million
for the year ended
December 31, 2016
, compared to
$75.7 million
for the same period in
2015
.
|
•
|
Return on average assets and return on average equity for the year ended
December 31, 2016
were
0.82%
and
9.40%
respectively, compared to
0.97%
and
11.36%
, respectively, for
2015
.
|
•
|
We recorded a
$7.8 million
provision for loan and lease losses for the year ended
December 31, 2016
, compared to
$3.4 million
for the year ended
December 31, 2015
.
|
•
|
Net loans and leases receivable at
December 31, 2016
increased
$19.7 million
, or
1.4%
, to
$1.451 billion
from
$1.431 billion
as of
December 31, 2015
.
|
•
|
Non-performing assets were
$26.7 million
and
1.50%
of total assets as of
December 31, 2016
, compared to
$24.0 million
and
1.35%
of total assets as of
December 31, 2015
.
|
•
|
Net charge-offs as a percentage of average loans increased to
0.22%
for the year ended
December 31, 2016
, compared to
0.10%
for the year ended
December 31, 2015
.
|
•
|
Trust and investment services fee income
increased
by
$402,000
, or
8.1%
, to
$5.4 million
for the year ended
December 31, 2016
compared to
$5.0 million
for the year ended
December 31, 2015
.
|
•
|
Average in-market deposits of
$1.124 billion
, or
70.6%
of total deposits, for the year ended
December 31, 2016
,
increased
7.4%
, compared to
$1.047 billion
, or
69.9%
of total deposits, for the same period in
2015
.
|
|
|
For the Year Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
$ Change 2016
|
|
% Change 2016
|
|
$ Change 2015
|
|
% Change 2015
|
||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||||
Net interest income
|
|
$
|
63,328
|
|
|
$
|
58,640
|
|
|
$
|
46,130
|
|
|
$
|
4,688
|
|
|
8.0
|
%
|
|
$
|
12,510
|
|
|
27.1
|
%
|
Non-interest income
|
|
17,988
|
|
|
17,011
|
|
|
10,103
|
|
|
977
|
|
|
5.7
|
|
|
6,908
|
|
|
68.4
|
|
|||||
Top line revenue
|
|
$
|
81,316
|
|
|
$
|
75,651
|
|
|
$
|
56,233
|
|
|
$
|
5,665
|
|
|
7.5
|
|
|
$
|
19,418
|
|
|
34.5
|
|
|
|
For the Year Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
$ Change 2016
|
|
% Change 2016
|
|
$ Change 2015
|
|
% Change 2015
|
||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||||
Total non-interest expense
|
|
$
|
56,433
|
|
|
$
|
47,374
|
|
|
$
|
33,775
|
|
|
$
|
9,059
|
|
|
19.1
|
%
|
|
$
|
13,599
|
|
|
40.3
|
%
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain) on foreclosed properties
|
|
122
|
|
|
(171
|
)
|
|
(10
|
)
|
|
293
|
|
|
NM
|
|
|
(161
|
)
|
|
NM
|
|
|||||
Amortization of other intangible assets
|
|
62
|
|
|
71
|
|
|
12
|
|
|
(9
|
)
|
|
(12.7
|
)
|
|
59
|
|
|
NM
|
|
|||||
SBA recourse provision
|
|
2,068
|
|
|
—
|
|
|
—
|
|
|
2,068
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||||
Impairment of tax credit investments
|
|
3,691
|
|
|
—
|
|
|
—
|
|
|
3,691
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||||
Deconversion fees
|
|
794
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
794
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||
Total adjusted operating expense
|
|
$
|
49,696
|
|
|
$
|
47,474
|
|
|
$
|
33,773
|
|
|
$
|
2,222
|
|
|
4.7
|
|
|
$
|
13,701
|
|
|
40.6
|
|
Net interest income
|
|
$
|
63,328
|
|
|
$
|
58,640
|
|
|
$
|
46,130
|
|
|
$
|
4,688
|
|
|
8.0
|
|
|
$
|
12,510
|
|
|
27.1
|
|
Total non-interest income
|
|
17,988
|
|
|
17,011
|
|
|
10,103
|
|
|
977
|
|
|
5.7
|
|
|
6,908
|
|
|
68.4
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on sale of securities
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||||
Total adjusted operating revenue
|
|
$
|
81,306
|
|
|
$
|
75,651
|
|
|
$
|
56,233
|
|
|
$
|
5,655
|
|
|
7.5
|
|
|
$
|
19,418
|
|
|
34.5
|
|
Efficiency ratio
|
|
61.12
|
%
|
|
62.75
|
%
|
|
60.06
|
%
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||||
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
(4)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
(4)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
(4)
|
|||||||||||||||
|
|
(Dollars in Thousands)
|
|||||||||||||||||||||||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate and other mortgage loans
(1)
|
|
$
|
938,524
|
|
|
$
|
43,927
|
|
|
4.68
|
%
|
|
$
|
848,213
|
|
|
$
|
40,006
|
|
|
4.72
|
%
|
|
$
|
665,213
|
|
|
$
|
32,066
|
|
|
4.82
|
%
|
Commercial and industrial loans
(1)
|
|
465,736
|
|
|
28,143
|
|
|
6.04
|
%
|
|
445,659
|
|
|
26,668
|
|
|
5.98
|
%
|
|
332,591
|
|
|
19,962
|
|
|
6.00
|
%
|
||||||
Direct financing leases
(1)
|
|
30,379
|
|
|
1,364
|
|
|
4.49
|
%
|
|
30,228
|
|
|
1,394
|
|
|
4.61
|
%
|
|
29,395
|
|
|
1,367
|
|
|
4.65
|
%
|
||||||
Consumer and other loans
(1)
|
|
25,615
|
|
|
1,193
|
|
|
4.66
|
%
|
|
23,996
|
|
|
1,067
|
|
|
4.45
|
%
|
|
16,862
|
|
|
652
|
|
|
3.87
|
%
|
||||||
Total loans and leases receivable
(1)
|
|
1,460,254
|
|
|
74,627
|
|
|
5.11
|
%
|
|
1,348,096
|
|
|
69,135
|
|
|
5.13
|
%
|
|
1,044,061
|
|
|
54,047
|
|
|
5.18
|
%
|
||||||
Mortgage-related securities
(2)
|
|
147,433
|
|
|
2,328
|
|
|
1.58
|
%
|
|
153,182
|
|
|
2,490
|
|
|
1.63
|
%
|
|
156,144
|
|
|
2,894
|
|
|
1.85
|
%
|
||||||
Other investment securities
(3)
|
|
32,995
|
|
|
517
|
|
|
1.57
|
%
|
|
29,686
|
|
|
472
|
|
|
1.59
|
%
|
|
28,458
|
|
|
448
|
|
|
1.57
|
%
|
||||||
FHLB and FRB stock
|
|
2,537
|
|
|
79
|
|
|
3.11
|
%
|
|
2,886
|
|
|
81
|
|
|
2.82
|
%
|
|
1,512
|
|
|
14
|
|
|
0.94
|
%
|
||||||
Short-term investments
|
|
94,548
|
|
|
566
|
|
|
0.60
|
%
|
|
69,264
|
|
|
293
|
|
|
0.42
|
%
|
|
67,281
|
|
|
298
|
|
|
0.44
|
%
|
||||||
Total interest-earning assets
|
|
1,737,767
|
|
|
78,117
|
|
|
4.50
|
%
|
|
1,603,114
|
|
|
72,471
|
|
|
4.52
|
%
|
|
1,297,456
|
|
|
57,701
|
|
|
4.45
|
%
|
||||||
Non-interest-earning assets
|
|
73,905
|
|
|
|
|
|
|
97,932
|
|
|
|
|
|
|
67,160
|
|
|
|
|
|
||||||||||||
Total assets
|
|
$
|
1,811,672
|
|
|
|
|
|
|
$
|
1,701,046
|
|
|
|
|
|
|
$
|
1,364,616
|
|
|
|
|
|
|||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Transaction accounts
|
|
$
|
169,571
|
|
|
456
|
|
|
0.27
|
%
|
|
$
|
125,558
|
|
|
297
|
|
|
0.24
|
%
|
|
$
|
83,508
|
|
|
185
|
|
|
0.22
|
%
|
|||
Money market
|
|
642,784
|
|
|
3,112
|
|
|
0.48
|
%
|
|
602,842
|
|
|
3,331
|
|
|
0.55
|
%
|
|
493,322
|
|
|
2,553
|
|
|
0.52
|
%
|
||||||
Certificates of deposit
|
|
65,608
|
|
|
592
|
|
|
0.90
|
%
|
|
106,177
|
|
|
825
|
|
|
0.78
|
%
|
|
60,284
|
|
|
536
|
|
|
0.89
|
%
|
||||||
Wholesale deposits
|
|
467,826
|
|
|
7,556
|
|
|
1.62
|
%
|
|
450,460
|
|
|
6,424
|
|
|
1.43
|
%
|
|
416,202
|
|
|
6,196
|
|
|
1.49
|
%
|
||||||
Total interest-bearing deposits
|
|
1,345,789
|
|
|
11,716
|
|
|
0.87
|
%
|
|
1,285,037
|
|
|
10,877
|
|
|
0.85
|
%
|
|
1,053,316
|
|
|
9,470
|
|
|
0.90
|
%
|
||||||
FHLB advances
|
|
14,485
|
|
|
140
|
|
|
0.97
|
%
|
|
14,779
|
|
|
110
|
|
|
0.75
|
%
|
|
5,017
|
|
|
22
|
|
|
0.45
|
%
|
||||||
Other borrowings
|
|
26,581
|
|
|
1,818
|
|
|
6.84
|
%
|
|
24,944
|
|
|
1,732
|
|
|
6.94
|
%
|
|
13,688
|
|
|
967
|
|
|
7.06
|
%
|
||||||
Junior subordinated notes
|
|
10,076
|
|
|
1,115
|
|
|
11.07
|
%
|
|
9,982
|
|
|
1,112
|
|
|
11.14
|
%
|
|
9,968
|
|
|
1,112
|
|
|
11.16
|
%
|
||||||
Total interest-bearing liabilities
|
|
1,396,931
|
|
|
14,789
|
|
|
1.06
|
%
|
|
1,334,742
|
|
|
13,831
|
|
|
1.04
|
%
|
|
1,081,989
|
|
|
11,571
|
|
|
1.07
|
%
|
||||||
Non-interest-bearing demand deposit accounts
|
|
246,182
|
|
|
|
|
|
|
211,945
|
|
|
|
|
|
|
154,687
|
|
|
|
|
|
||||||||||||
Other non-interest-bearing liabilities
|
|
10,013
|
|
|
|
|
|
|
9,049
|
|
|
|
|
|
|
7,918
|
|
|
|
|
|
||||||||||||
Total liabilities
|
|
1,653,126
|
|
|
|
|
|
|
1,555,736
|
|
|
|
|
|
|
1,244,594
|
|
|
|
|
|
||||||||||||
Stockholders’ equity
|
|
158,546
|
|
|
|
|
|
|
145,310
|
|
|
|
|
|
|
120,022
|
|
|
|
|
|
||||||||||||
Total liabilities and stockholders’ equity
|
|
$
|
1,811,672
|
|
|
|
|
|
|
$
|
1,701,046
|
|
|
|
|
|
|
$
|
1,364,616
|
|
|
|
|
|
|||||||||
Net interest income
|
|
|
|
$
|
63,328
|
|
|
|
|
|
|
$
|
58,640
|
|
|
|
|
|
|
$
|
46,130
|
|
|
|
|||||||||
Net interest spread
|
|
|
|
|
|
3.44
|
%
|
|
|
|
|
|
3.48
|
%
|
|
|
|
|
|
3.38
|
%
|
||||||||||||
Net interest-earning assets
|
|
$
|
340,836
|
|
|
|
|
|
|
$
|
268,372
|
|
|
|
|
|
|
$
|
215,467
|
|
|
|
|
|
|||||||||
Net interest margin
|
|
|
|
|
|
3.64
|
%
|
|
|
|
|
|
3.66
|
%
|
|
|
|
|
|
3.56
|
%
|
||||||||||||
Average interest-earning assets to average interest-bearing liabilities
|
|
124.40
|
%
|
|
|
|
|
|
120.11
|
%
|
|
|
|
|
|
119.91
|
%
|
|
|
|
|
||||||||||||
Return on average assets
|
|
0.82
|
%
|
|
|
|
|
|
0.97
|
%
|
|
|
|
|
|
1.04
|
%
|
|
|
|
|
||||||||||||
Return on average equity
|
|
9.40
|
%
|
|
|
|
|
|
11.36
|
%
|
|
|
|
|
|
11.78
|
%
|
|
|
|
|
||||||||||||
Average equity to average assets
|
|
8.75
|
%
|
|
|
|
|
|
8.54
|
%
|
|
|
|
|
|
8.80
|
%
|
|
|
|
|
||||||||||||
Non-interest expense to average assets
|
|
3.11
|
%
|
|
|
|
|
|
2.78
|
%
|
|
|
|
|
|
2.48
|
%
|
|
|
|
|
(1)
|
The average balances of loans and leases include non-performing loans and leases and loans held for sale. Interest income related to non-performing loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.
|
(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.
|
(4)
|
Represents annualized yields/rates.
|
|
|
Increase (Decrease) for the Year Ended December 31,
|
||||||||||||||||||||||
|
|
2016 Compared to 2015
|
|
2015 Compared to 2014
|
||||||||||||||||||||
|
|
Rate
|
|
Volume
|
|
Net
|
|
Rate
|
|
Volume
|
|
Net
|
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate and other mortgage loans
(1)
|
|
$
|
(308
|
)
|
|
$
|
4,228
|
|
|
$
|
3,920
|
|
|
$
|
(705
|
)
|
|
$
|
8,645
|
|
|
$
|
7,940
|
|
Commercial and industrial loans
(1)
|
|
264
|
|
|
1,211
|
|
|
1,475
|
|
|
(60
|
)
|
|
6,766
|
|
|
6,706
|
|
||||||
Direct financing leases
(1)
|
|
(36
|
)
|
|
7
|
|
|
(29
|
)
|
|
(11
|
)
|
|
39
|
|
|
28
|
|
||||||
Consumer and other loans
(1)
|
|
52
|
|
|
74
|
|
|
126
|
|
|
108
|
|
|
306
|
|
|
414
|
|
||||||
Total loans and leases receivable
(1)
|
|
(28
|
)
|
|
5,520
|
|
|
5,492
|
|
|
(668
|
)
|
|
15,756
|
|
|
15,088
|
|
||||||
Mortgage-related securities
(2)
|
|
(70
|
)
|
|
(91
|
)
|
|
(161
|
)
|
|
(349
|
)
|
|
(54
|
)
|
|
(403
|
)
|
||||||
Other investment securities
|
|
(8
|
)
|
|
52
|
|
|
44
|
|
|
4
|
|
|
19
|
|
|
23
|
|
||||||
FHLB and FRB Stock
|
|
8
|
|
|
(11
|
)
|
|
(3
|
)
|
|
45
|
|
|
21
|
|
|
66
|
|
||||||
Short-term investments
|
|
145
|
|
|
129
|
|
|
274
|
|
|
(13
|
)
|
|
9
|
|
|
(4
|
)
|
||||||
Total net change in income on interest-earning assets
|
|
47
|
|
|
5,599
|
|
|
5,646
|
|
|
(981
|
)
|
|
15,751
|
|
|
14,770
|
|
||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transaction accounts
|
|
44
|
|
|
114
|
|
|
158
|
|
|
14
|
|
|
98
|
|
|
112
|
|
||||||
Money market
|
|
(430
|
)
|
|
212
|
|
|
(218
|
)
|
|
182
|
|
|
596
|
|
|
778
|
|
||||||
Certificates of deposit
|
|
117
|
|
|
(351
|
)
|
|
(234
|
)
|
|
(75
|
)
|
|
364
|
|
|
289
|
|
||||||
Wholesale deposits
|
|
878
|
|
|
255
|
|
|
1,133
|
|
|
(268
|
)
|
|
496
|
|
|
228
|
|
||||||
Total deposits
|
|
609
|
|
|
230
|
|
|
839
|
|
|
(147
|
)
|
|
1,554
|
|
|
1,407
|
|
||||||
FHLB advances
|
|
32
|
|
|
(2
|
)
|
|
30
|
|
|
23
|
|
|
65
|
|
|
88
|
|
||||||
Other borrowings
|
|
(26
|
)
|
|
112
|
|
|
86
|
|
|
(16
|
)
|
|
781
|
|
|
765
|
|
||||||
Junior subordinated notes
|
|
(7
|
)
|
|
10
|
|
|
3
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
||||||
Total net change in expense on interest-bearing liabilities
|
|
608
|
|
|
350
|
|
|
958
|
|
|
(142
|
)
|
|
2,402
|
|
|
2,260
|
|
||||||
Net change in net interest income
|
|
$
|
(561
|
)
|
|
$
|
5,249
|
|
|
$
|
4,688
|
|
|
$
|
(839
|
)
|
|
$
|
13,349
|
|
|
$
|
12,510
|
|
(1)
|
The average balances of loans and leases include non-performing loans and leases and loans held for sale. Interest income related to non-performing loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.
|
(2)
|
Includes amortized cost basis of assets available-for-sale and held-to-maturity.
|
|
Year Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
$ Change 2016
|
|
% Change 2016
|
|
$ Change 2015
|
|
% Change 2015
|
||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||
Trust and investment services fee income
|
$
|
5,356
|
|
|
$
|
4,954
|
|
|
$
|
4,434
|
|
|
$
|
402
|
|
|
8.1
|
%
|
|
$
|
520
|
|
|
11.7
|
%
|
Gain on sale of SBA loans
|
4,400
|
|
|
3,999
|
|
|
318
|
|
|
401
|
|
|
10.0
|
|
|
3,681
|
|
|
NM
|
|
|||||
Gain on sale of residential mortgage loans
|
590
|
|
|
729
|
|
|
74
|
|
|
(139
|
)
|
|
(19.1
|
)
|
|
655
|
|
|
NM
|
|
|||||
Service charges on deposits
|
2,990
|
|
|
2,812
|
|
|
2,469
|
|
|
178
|
|
|
6.3
|
|
|
343
|
|
|
13.9
|
|
|||||
Loan fees
|
2,430
|
|
|
2,187
|
|
|
1,577
|
|
|
243
|
|
|
11.1
|
|
|
610
|
|
|
38.7
|
|
|||||
Increase in cash surrender value of bank-owned life insurance
|
974
|
|
|
960
|
|
|
862
|
|
|
14
|
|
|
1.5
|
|
|
98
|
|
|
11.4
|
|
|||||
Other non-interest income
|
1,248
|
|
|
1,370
|
|
|
369
|
|
|
(122
|
)
|
|
(8.9
|
)
|
|
1,001
|
|
|
NM
|
|
|||||
Total non-interest income
|
$
|
17,988
|
|
|
$
|
17,011
|
|
|
$
|
10,103
|
|
|
$
|
977
|
|
|
5.7
|
|
|
$
|
6,908
|
|
|
68.4
|
|
Fee income ratio
(1)
|
22.1
|
%
|
|
22.5
|
%
|
|
18.0
|
%
|
|
|
|
|
|
|
|
|
(1)
|
Fee income ratio is fee income, per the above table, divided by top line revenue (defined as net interest income plus non-interest income).
|
|
Year Ended December 31,
|
|
Change From Prior Year
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
$ Change 2016
|
|
% Change 2016
|
|
$ Change 2015
|
|
% Change 2015
|
||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||
Compensation
|
$
|
31,545
|
|
|
$
|
28,543
|
|
|
$
|
21,477
|
|
|
$
|
3,002
|
|
|
10.5
|
%
|
|
$
|
7,066
|
|
|
32.9
|
%
|
Occupancy
|
2,019
|
|
|
1,973
|
|
|
1,391
|
|
|
46
|
|
|
2.3
|
|
|
582
|
|
|
41.8
|
|
|||||
Professional fees
|
4,031
|
|
|
4,893
|
|
|
3,405
|
|
|
(862
|
)
|
|
(17.6
|
)
|
|
1,488
|
|
|
43.7
|
|
|||||
Data processing
|
3,298
|
|
|
2,378
|
|
|
1,710
|
|
|
920
|
|
|
38.7
|
|
|
668
|
|
|
39.1
|
|
|||||
Marketing
|
2,338
|
|
|
2,585
|
|
|
1,662
|
|
|
(247
|
)
|
|
(9.6
|
)
|
|
923
|
|
|
55.5
|
|
|||||
Equipment
|
1,189
|
|
|
1,230
|
|
|
650
|
|
|
(41
|
)
|
|
(3.3
|
)
|
|
580
|
|
|
89.2
|
|
|||||
FDIC insurance
|
1,472
|
|
|
920
|
|
|
758
|
|
|
552
|
|
|
60.0
|
|
|
162
|
|
|
21.4
|
|
|||||
Collateral liquidation costs
|
262
|
|
|
472
|
|
|
320
|
|
|
(210
|
)
|
|
(44.5
|
)
|
|
152
|
|
|
47.5
|
|
|||||
Net loss (gain) on foreclosed properties
|
122
|
|
|
(171
|
)
|
|
(10
|
)
|
|
293
|
|
|
NM
|
|
|
(161
|
)
|
|
NM
|
|
|||||
Impairment on tax credit investments
(1)
|
3,691
|
|
|
—
|
|
|
—
|
|
|
3,691
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||||
SBA recourse provision
|
2,068
|
|
|
—
|
|
|
—
|
|
|
2,068
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||||
Other non-interest expense
|
4,398
|
|
|
4,551
|
|
|
2,412
|
|
|
(153
|
)
|
|
(3.4
|
)
|
|
2,139
|
|
|
88.7
|
|
|||||
Total non-interest expense
|
$
|
56,433
|
|
|
$
|
47,374
|
|
|
$
|
33,775
|
|
|
$
|
9,059
|
|
|
19.1
|
|
|
$
|
13,599
|
|
|
40.3
|
|
Compensation expense to total non-interest expense
|
55.9
|
%
|
|
60.3
|
%
|
|
63.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Full-time equivalent employees
|
257
|
|
|
242
|
|
|
215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Corporation recognized $4.2 million of gross tax credit benefits related to the $3.7 million impairment of the underlying tax credit investments.
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
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
|
|
$
|
6,298
|
|
|
$
|
6,295
|
|
|
$
|
8,047
|
|
|
$
|
8,017
|
|
|
$
|
9,046
|
|
|
$
|
8,965
|
|
Municipal obligations
|
|
8,246
|
|
|
8,156
|
|
|
4,278
|
|
|
4,283
|
|
|
573
|
|
|
578
|
|
||||||
Asset-backed securities
|
|
1,116
|
|
|
1,081
|
|
|
1,327
|
|
|
1,269
|
|
|
1,514
|
|
|
1,510
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
30,936
|
|
|
31,213
|
|
|
43,845
|
|
|
44,543
|
|
|
67,740
|
|
|
68,874
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
99,865
|
|
|
99,148
|
|
|
82,707
|
|
|
82,436
|
|
|
64,763
|
|
|
64,771
|
|
||||||
|
|
$
|
146,461
|
|
|
$
|
145,893
|
|
|
$
|
140,204
|
|
|
$
|
140,548
|
|
|
$
|
143,636
|
|
|
$
|
144,698
|
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
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
|
|
$
|
1,497
|
|
|
$
|
1,494
|
|
|
$
|
1,495
|
|
|
$
|
1,485
|
|
|
$
|
1,490
|
|
|
$
|
1,473
|
|
Municipal obligations
|
|
21,173
|
|
|
21,157
|
|
|
16,038
|
|
|
16,365
|
|
|
16,088
|
|
|
16,155
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
9,148
|
|
|
9,127
|
|
|
11,718
|
|
|
11,709
|
|
|
14,505
|
|
|
14,531
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
6,794
|
|
|
6,742
|
|
|
8,031
|
|
|
7,999
|
|
|
9,480
|
|
|
9,535
|
|
||||||
|
|
$
|
38,612
|
|
|
$
|
38,520
|
|
|
$
|
37,282
|
|
|
$
|
37,558
|
|
|
$
|
41,563
|
|
|
$
|
41,694
|
|
|
|
Less than One Year
|
|
One to Five Years
|
|
Five to Ten Years
|
|
Over Ten Years
|
|
|
||||||||||||||||||||||
|
|
Fair Value
|
|
Weighted
Average Yield |
|
Fair Value
|
|
Weighted
Average Yield |
|
Fair Value
|
|
Weighted
Average Yield |
|
Fair Value
|
|
Weighted
Average Yield |
|
Total
|
||||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
3,302
|
|
|
8.80
|
%
|
|
$
|
2,993
|
|
|
1.35
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
6,295
|
|
Municipal obligations
|
|
1,230
|
|
|
0.70
|
|
|
6,633
|
|
|
1.13
|
|
|
293
|
|
|
1.13
|
|
|
—
|
|
|
—
|
|
|
8,156
|
|
|||||
Asset-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,081
|
|
|
1.47
|
|
|
—
|
|
|
—
|
|
|
1,081
|
|
|||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
—
|
|
|
64
|
|
|
4.20
|
|
|
13,159
|
|
|
3.08
|
|
|
17,990
|
|
|
2.41
|
|
|
31,213
|
|
|||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
—
|
|
|
5,555
|
|
|
2.08
|
|
|
52,177
|
|
|
1.83
|
|
|
41,416
|
|
|
1.61
|
|
|
99,148
|
|
|||||
|
|
$
|
4,532
|
|
|
|
|
$
|
15,245
|
|
|
|
|
$
|
66,710
|
|
|
|
|
$
|
59,406
|
|
|
|
|
$
|
145,893
|
|
|
|
Less than One Year
|
|
One to Five Years
|
|
Five to Ten Years
|
|
Over Ten Years
|
|
|
||||||||||||||||||||||
|
|
Amortized Cost
|
|
Weighted
Average Yield |
|
Amortized Cost
|
|
Weighted
Average Yield |
|
Amortized Cost
|
|
Weighted
Average Yield |
|
Amortized Cost
|
|
Weighted
Average Yield |
|
Total
|
||||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,497
|
|
|
1.07
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,497
|
|
Municipal obligations
|
|
—
|
|
|
—
|
|
|
5,614
|
|
|
1.98
|
|
|
13,994
|
|
|
2.10
|
|
|
1,565
|
|
|
2.64
|
|
|
21,173
|
|
|||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,148
|
|
|
1.75
|
|
|
9,148
|
|
|||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,794
|
|
|
1.63
|
|
|
6,794
|
|
|||||
|
|
$
|
—
|
|
|
|
|
$
|
7,111
|
|
|
|
|
$
|
13,994
|
|
|
|
|
$
|
17,507
|
|
|
|
|
$
|
38,612
|
|
|
|
As of December 31,
|
|||||||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||||||||||||
|
|
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
|
|||||||||||||||
|
|
(Dollars in Thousands)
|
|||||||||||||||||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate — owner occupied
|
|
$
|
176,459
|
|
|
12.2
|
%
|
|
$
|
176,322
|
|
|
12.3
|
%
|
|
$
|
163,884
|
|
|
12.8
|
%
|
|
$
|
141,164
|
|
|
14.4
|
%
|
|
$
|
144,988
|
|
|
15.9
|
%
|
Commercial real estate — non-owner occupied
|
|
473,158
|
|
|
32.5
|
|
|
436,901
|
|
|
30.4
|
|
|
417,962
|
|
|
32.6
|
|
|
341,695
|
|
|
34.8
|
|
|
323,660
|
|
|
35.5
|
|
|||||
Land development
|
|
56,638
|
|
|
3.9
|
|
|
59,779
|
|
|
4.2
|
|
|
56,836
|
|
|
4.4
|
|
|
40,946
|
|
|
4.2
|
|
|
29,241
|
|
|
3.2
|
|
|||||
Construction
|
|
101,206
|
|
|
7.0
|
|
|
100,625
|
|
|
7.0
|
|
|
64,324
|
|
|
5.0
|
|
|
27,762
|
|
|
2.8
|
|
|
35,725
|
|
|
3.9
|
|
|||||
Multi-family
|
|
92,762
|
|
|
6.4
|
|
|
80,254
|
|
|
5.6
|
|
|
72,578
|
|
|
5.7
|
|
|
62,758
|
|
|
6.4
|
|
|
58,454
|
|
|
6.4
|
|
|||||
1-4 family
|
|
45,651
|
|
|
3.1
|
|
|
50,304
|
|
|
3.5
|
|
|
36,182
|
|
|
2.8
|
|
|
30,786
|
|
|
3.1
|
|
|
31,943
|
|
|
3.5
|
|
|||||
Total commercial real estate
|
|
945,874
|
|
|
65.1
|
|
|
904,185
|
|
|
63.1
|
|
|
811,766
|
|
|
63.3
|
|
|
645,111
|
|
|
65.7
|
|
|
624,011
|
|
|
68.4
|
|
|||||
Commercial and industrial
|
|
450,298
|
|
|
31.0
|
|
|
472,193
|
|
|
33.0
|
|
|
416,654
|
|
|
32.5
|
|
|
293,552
|
|
|
29.9
|
|
|
256,458
|
|
|
28.1
|
|
|||||
Direct financing leases, net
|
|
30,951
|
|
|
2.2
|
|
|
31,093
|
|
|
2.2
|
|
|
34,165
|
|
|
2.7
|
|
|
26,065
|
|
|
2.7
|
|
|
15,926
|
|
|
1.7
|
|
|||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Home equity and second mortgage
|
|
8,412
|
|
|
0.6
|
|
|
8,237
|
|
|
0.6
|
|
|
7,866
|
|
|
0.6
|
|
|
5,272
|
|
|
0.5
|
|
|
4,642
|
|
|
0.5
|
|
|||||
Other
|
|
16,329
|
|
|
1.1
|
|
|
16,319
|
|
|
1.1
|
|
|
11,341
|
|
|
0.9
|
|
|
11,972
|
|
|
1.2
|
|
|
11,671
|
|
|
1.3
|
|
|||||
Total consumer and other
|
|
24,741
|
|
|
1.7
|
|
|
24,556
|
|
|
1.7
|
|
|
19,207
|
|
|
1.5
|
|
|
17,244
|
|
|
1.8
|
|
|
16,313
|
|
|
1.8
|
|
|||||
Total gross loans and leases receivable
|
|
1,451,864
|
|
|
100.0
|
%
|
|
1,432,027
|
|
|
100.0
|
%
|
|
1,281,792
|
|
|
100.0
|
%
|
|
981,972
|
|
|
100.0
|
%
|
|
912,708
|
|
|
100.0
|
%
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Allowance for loan and lease losses
|
|
20,912
|
|
|
|
|
16,316
|
|
|
|
|
14,329
|
|
|
|
|
13,901
|
|
|
|
|
15,400
|
|
|
|
||||||||||
Deferred loan fees
|
|
1,189
|
|
|
|
|
1,062
|
|
|
|
|
1,025
|
|
|
|
|
1,021
|
|
|
|
|
748
|
|
|
|
||||||||||
Loans and leases receivable, net
|
|
$
|
1,429,763
|
|
|
|
|
$
|
1,414,649
|
|
|
|
|
$
|
1,266,438
|
|
|
|
|
$
|
967,050
|
|
|
|
|
$
|
896,560
|
|
|
|
|
|
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
|
|
$
|
22,312
|
|
|
$
|
98,058
|
|
|
$
|
56,089
|
|
|
$
|
176,459
|
|
|
$
|
111,935
|
|
|
$
|
42,212
|
|
Non-owner occupied
|
|
85,363
|
|
|
276,525
|
|
|
111,270
|
|
|
473,158
|
|
|
288,710
|
|
|
99,085
|
|
||||||
Land development
|
|
34,662
|
|
|
21,976
|
|
|
—
|
|
|
56,638
|
|
|
10,512
|
|
|
11,464
|
|
||||||
Construction
|
|
33,865
|
|
|
27,219
|
|
|
40,122
|
|
|
101,206
|
|
|
9,356
|
|
|
57,985
|
|
||||||
Multi-family
|
|
8,877
|
|
|
64,995
|
|
|
18,890
|
|
|
92,762
|
|
|
62,832
|
|
|
21,053
|
|
||||||
1-4 family
|
|
15,218
|
|
|
22,730
|
|
|
7,703
|
|
|
45,651
|
|
|
29,177
|
|
|
1,256
|
|
||||||
Commercial and industrial
|
|
149,924
|
|
|
231,904
|
|
|
68,470
|
|
|
450,298
|
|
|
104,073
|
|
|
196,301
|
|
||||||
Direct financing leases
|
|
745
|
|
|
26,163
|
|
|
4,043
|
|
|
30,951
|
|
|
30,206
|
|
|
—
|
|
||||||
Consumer and other
|
|
4,332
|
|
|
18,727
|
|
|
1,682
|
|
|
24,741
|
|
|
17,497
|
|
|
2,912
|
|
||||||
|
|
$
|
355,298
|
|
|
$
|
788,297
|
|
|
$
|
308,269
|
|
|
$
|
1,451,864
|
|
|
$
|
664,298
|
|
|
$
|
432,268
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Non-accrual loans and leases
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate – owner occupied
|
|
$
|
2,223
|
|
|
$
|
2,907
|
|
|
$
|
500
|
|
|
$
|
339
|
|
|
$
|
769
|
|
Commercial real estate – non-owner occupied
|
|
1,609
|
|
|
1,678
|
|
|
286
|
|
|
283
|
|
|
2,871
|
|
|||||
Land development
|
|
3,440
|
|
|
4,393
|
|
|
4,932
|
|
|
5,422
|
|
|
4,946
|
|
|||||
Construction
|
|
2,918
|
|
|
397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Multi-family
|
|
—
|
|
|
2
|
|
|
17
|
|
|
31
|
|
|
46
|
|
|||||
1-4 family
|
|
1,937
|
|
|
2,550
|
|
|
690
|
|
|
521
|
|
|
1,006
|
|
|||||
Total non-accrual commercial real estate
|
|
12,127
|
|
|
11,927
|
|
|
6,425
|
|
|
6,596
|
|
|
9,638
|
|
|||||
Commercial and industrial
|
|
12,463
|
|
|
9,136
|
|
|
2,318
|
|
|
8,011
|
|
|
2,842
|
|
|||||
Direct financing leases, net
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgage
|
|
—
|
|
|
542
|
|
|
329
|
|
|
453
|
|
|
612
|
|
|||||
Other
|
|
604
|
|
|
655
|
|
|
720
|
|
|
795
|
|
|
1,030
|
|
|||||
Total non-accrual consumer and other loans
|
|
604
|
|
|
1,197
|
|
|
1,049
|
|
|
1,248
|
|
|
1,642
|
|
|||||
Total non-accrual loans and leases
|
|
25,194
|
|
|
22,298
|
|
|
9,792
|
|
|
15,855
|
|
|
14,122
|
|
|||||
Foreclosed properties, net
|
|
1,472
|
|
|
1,677
|
|
|
1,693
|
|
|
333
|
|
|
1,574
|
|
|||||
Total non-performing assets
|
|
26,666
|
|
|
23,975
|
|
|
11,485
|
|
|
16,188
|
|
|
15,696
|
|
|||||
Performing troubled debt restructurings
|
|
717
|
|
|
1,735
|
|
|
2,003
|
|
|
371
|
|
|
1,105
|
|
|||||
Total impaired assets
|
|
$
|
27,383
|
|
|
$
|
25,710
|
|
|
$
|
13,488
|
|
|
$
|
16,559
|
|
|
$
|
16,801
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total non-accrual loans and leases to gross loans and leases
|
|
1.74
|
%
|
|
1.56
|
%
|
|
1.61
|
%
|
|
1.55
|
%
|
|
2.56
|
%
|
|||||
Total non-performing assets to gross loans and leases plus foreclosed properties, net
|
|
1.83
|
%
|
|
1.67
|
%
|
|
1.65
|
%
|
|
1.72
|
%
|
|
2.81
|
%
|
|||||
Total non-performing assets to total assets
|
|
1.50
|
%
|
|
1.35
|
%
|
|
1.28
|
%
|
|
1.28
|
%
|
|
2.04
|
%
|
|||||
Allowance for loan and lease losses to gross loans and leases
|
|
1.44
|
%
|
|
1.14
|
%
|
|
1.42
|
%
|
|
1.69
|
%
|
|
1.66
|
%
|
|||||
Allowance for loan and lease losses to non-accrual loans and leases
|
|
83.00
|
%
|
|
73.17
|
%
|
|
87.68
|
%
|
|
109.05
|
%
|
|
65.03
|
%
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Impaired loans and leases with no impairment reserves
|
|
$
|
14,033
|
|
|
$
|
15,175
|
|
|
$
|
11,270
|
|
|
$
|
8,200
|
|
|
$
|
11,006
|
|
Impaired loans and leases with impairment reserves required
|
|
11,878
|
|
|
8,858
|
|
|
525
|
|
|
8,026
|
|
|
4,221
|
|
|||||
Total impaired loans and leases
|
|
25,911
|
|
|
24,033
|
|
|
11,795
|
|
|
16,226
|
|
|
15,227
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment reserve (included in allowance for loan and lease losses)
|
|
5,599
|
|
|
1,113
|
|
|
290
|
|
|
402
|
|
|
1,517
|
|
|||||
Net impaired loans and leases
|
|
$
|
20,312
|
|
|
$
|
22,920
|
|
|
$
|
11,505
|
|
|
$
|
15,824
|
|
|
$
|
13,710
|
|
Average impaired loans and leases
|
|
$
|
22,986
|
|
|
$
|
11,443
|
|
|
$
|
14,474
|
|
|
$
|
12,084
|
|
|
$
|
17,945
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
For the years ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Interest income attributable to impaired loans and leases
|
|
$
|
1,617
|
|
|
$
|
750
|
|
|
$
|
870
|
|
|
$
|
887
|
|
|
$
|
1,432
|
|
Less: Interest income recognized on impaired loans and leases
|
|
614
|
|
|
87
|
|
|
740
|
|
|
221
|
|
|
321
|
|
|||||
Net foregone interest income on impaired loans and leases
|
|
$
|
1,003
|
|
|
$
|
663
|
|
|
$
|
130
|
|
|
$
|
666
|
|
|
$
|
1,111
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Balance at the beginning of the period
|
|
$
|
1,677
|
|
|
$
|
1,693
|
|
|
$
|
333
|
|
Foreclosed properties acquired in acquisition, at fair value
|
|
—
|
|
|
—
|
|
|
1,605
|
|
|||
Transfer of loans to foreclosed properties, at lower of cost or fair value
|
|
—
|
|
|
341
|
|
|
—
|
|
|||
Impairment adjustments
|
|
(7
|
)
|
|
(36
|
)
|
|
(4
|
)
|
|||
Net book value of properties sold
|
|
(198
|
)
|
|
(321
|
)
|
|
(241
|
)
|
|||
Balance at the end of the period
|
|
$
|
1,472
|
|
|
$
|
1,677
|
|
|
$
|
1,693
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Allowance at beginning of period
|
|
$
|
16,316
|
|
|
$
|
14,329
|
|
|
$
|
13,901
|
|
|
$
|
15,400
|
|
|
$
|
14,155
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|||||
Commercial real estate — non-owner occupied
|
|
—
|
|
|
(653
|
)
|
|
(631
|
)
|
|
(792
|
)
|
|
—
|
|
|||||
Construction and land development
|
|
(948
|
)
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
(47
|
)
|
|||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|||||
1-4 family
|
|
(205
|
)
|
|
(120
|
)
|
|
—
|
|
|
(33
|
)
|
|
(322
|
)
|
|||||
Commercial and industrial
|
|
(2,273
|
)
|
|
(701
|
)
|
|
(600
|
)
|
|
(14
|
)
|
|
(2,739
|
)
|
|||||
Direct financing leases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consumer and other
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgage
|
|
(114
|
)
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|||||
Other
|
|
(13
|
)
|
|
(7
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(56
|
)
|
|||||
Total charge-offs
|
|
(3,594
|
)
|
|
(1,513
|
)
|
|
(1,233
|
)
|
|
(914
|
)
|
|
(3,479
|
)
|
|||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
—
|
|
|
2
|
|
|
8
|
|
|
1
|
|
|
5
|
|
|||||
Commercial real estate — non-owner occupied
|
|
74
|
|
|
—
|
|
|
5
|
|
|
61
|
|
|
192
|
|
|||||
Construction and land development
|
|
129
|
|
|
70
|
|
|
—
|
|
|
281
|
|
|
101
|
|
|||||
Multi-family
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|||||
1-4 family
|
|
71
|
|
|
32
|
|
|
17
|
|
|
10
|
|
|
77
|
|
|||||
Commercial and industrial
|
|
91
|
|
|
5
|
|
|
369
|
|
|
11
|
|
|
66
|
|
|||||
Direct financing leases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|||||
Consumer and other
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgage
|
|
4
|
|
|
4
|
|
|
12
|
|
|
5
|
|
|
11
|
|
|||||
Other
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Total recoveries
|
|
372
|
|
|
114
|
|
|
425
|
|
|
374
|
|
|
481
|
|
|||||
Net charge-offs
|
|
(3,222
|
)
|
|
(1,399
|
)
|
|
(808
|
)
|
|
(540
|
)
|
|
(2,998
|
)
|
|||||
Provision for loan and lease losses
|
|
7,818
|
|
|
3,386
|
|
|
1,236
|
|
|
(959
|
)
|
|
4,243
|
|
|||||
Allowance at end of period
|
|
$
|
20,912
|
|
|
$
|
16,316
|
|
|
$
|
14,329
|
|
|
$
|
13,901
|
|
|
$
|
15,400
|
|
Net charge-offs as a percent of average gross loans and leases
|
|
0.22
|
%
|
|
0.10
|
%
|
|
0.08
|
%
|
|
0.06
|
%
|
|
0.35
|
%
|
|
|
As of December 31,
|
|||||||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||||||||||||
|
|
Allowance
for Loan
and Lease
Losses
|
|
% of
Loans in
Each
Category to Total Loans
|
|
Allowance
for Loan
and Lease
Losses
|
|
% of
Loans in
Each
Category to Total Loans
|
|
Allowance
for Loan and Lease Losses |
|
% of
Loans in Each Category to Total Loans |
|
Allowance
for Loan
and Lease
Losses
|
|
% of
Loans in
Each
Category to Total Loans
|
|
Allowance
for Loan
and Lease
Losses
|
|
% of
Loans in
Each
Category to Total Loans
|
|||||||||||||||
|
|
(Dollars in Thousands)
|
|||||||||||||||||||||||||||||||||
Loan and lease segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate
|
|
$
|
12,384
|
|
|
65.1
|
%
|
|
$
|
11,220
|
|
|
63.1
|
%
|
|
$
|
8,619
|
|
|
63.3
|
%
|
|
$
|
9,055
|
|
|
65.7
|
%
|
|
$
|
10,693
|
|
|
68.4
|
%
|
Commercial and industrial
|
|
7,970
|
|
|
33.2
|
%
|
|
4,387
|
|
|
35.2
|
%
|
|
5,492
|
|
|
35.2
|
%
|
|
4,573
|
|
|
32.5
|
%
|
|
4,336
|
|
|
29.8
|
%
|
|||||
Consumer and other
|
|
558
|
|
|
1.7
|
%
|
|
709
|
|
|
1.7
|
%
|
|
218
|
|
|
1.5
|
%
|
|
273
|
|
|
1.7
|
%
|
|
371
|
|
|
1.8
|
%
|
|||||
Total
|
|
$
|
20,912
|
|
|
100.0
|
%
|
|
$
|
16,316
|
|
|
100.0
|
%
|
|
$
|
14,329
|
|
|
100.0
|
%
|
|
$
|
13,901
|
|
|
100.0
|
%
|
|
$
|
15,400
|
|
|
100.0
|
%
|
|
|
As of December 31,
|
|||||||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||||||||||||
|
|
Balance
|
|
% of Total Deposits
|
|
Balance
|
|
% of Total Deposits
|
|
Balance
|
|
% of Total Deposits
|
|
Balance
|
|
% of Total Deposits
|
|
Balance
|
|
% of Total Deposits
|
|||||||||||||||
|
|
(Dollars in Thousands)
|
|||||||||||||||||||||||||||||||||
Non-interest-bearing transaction accounts
|
|
$
|
252,638
|
|
|
16.4
|
%
|
|
$
|
231,199
|
|
|
14.7
|
%
|
|
$
|
204,328
|
|
|
14.2
|
%
|
|
$
|
151,275
|
|
|
13.4
|
%
|
|
$
|
161,985
|
|
|
14.8
|
%
|
Interest-bearing transaction accounts
|
|
183,992
|
|
|
12.0
|
|
|
165,921
|
|
|
10.5
|
|
|
104,199
|
|
|
7.2
|
|
|
77,004
|
|
|
6.8
|
|
|
43,542
|
|
|
4.0
|
|
|||||
Money market accounts
|
|
627,090
|
|
|
40.7
|
|
|
612,642
|
|
|
38.8
|
|
|
575,766
|
|
|
40.0
|
|
|
456,065
|
|
|
40.4
|
|
|
443,743
|
|
|
40.6
|
|
|||||
Certificates of deposit
|
|
58,454
|
|
|
3.8
|
|
|
79,986
|
|
|
5.1
|
|
|
126,635
|
|
|
8.8
|
|
|
51,979
|
|
|
4.6
|
|
|
68,599
|
|
|
6.3
|
|
|||||
Wholesale deposits
|
|
416,681
|
|
|
27.1
|
|
|
487,483
|
|
|
30.9
|
|
|
427,340
|
|
|
29.8
|
|
|
393,532
|
|
|
34.8
|
|
|
374,385
|
|
|
34.3
|
|
|||||
Total deposits
|
|
1,538,855
|
|
|
100.0
|
%
|
|
1,577,231
|
|
|
100.0
|
%
|
|
1,438,268
|
|
|
100.0
|
%
|
|
1,129,855
|
|
|
100.0
|
%
|
|
1,092,254
|
|
|
100.0
|
%
|
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%
|
|
$
|
28,145
|
|
|
$
|
18,825
|
|
|
$
|
27,848
|
|
|
$
|
9,664
|
|
|
$
|
84,482
|
|
1.00% to 1.99%
|
|
9,275
|
|
|
22,662
|
|
|
34,060
|
|
|
255,644
|
|
|
321,641
|
|
|||||
2.00% to 2.99%
|
|
—
|
|
|
4,800
|
|
|
—
|
|
|
64,212
|
|
|
69,012
|
|
|||||
|
|
$
|
37,420
|
|
|
$
|
46,287
|
|
|
$
|
61,908
|
|
|
$
|
329,520
|
|
|
$
|
475,135
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
|||||||||||||||||||||||||||
|
|
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
|
|
$
|
—
|
|
|
$
|
178
|
|
|
0.92
|
%
|
|
$
|
—
|
|
|
$
|
237
|
|
|
0.86
|
%
|
|
$
|
—
|
|
|
$
|
237
|
|
|
0.82
|
%
|
FHLB advances
|
|
33,578
|
|
|
14,485
|
|
|
0.97
|
|
|
8,198
|
|
|
14,779
|
|
|
0.75
|
|
|
9,383
|
|
|
5,017
|
|
|
0.45
|
|
||||||
Other borrowings
|
|
2,590
|
|
|
1,739
|
|
|
7.64
|
|
|
1,592
|
|
|
678
|
|
|
9.66
|
|
|
675
|
|
|
76
|
|
|
7.91
|
|
||||||
Line of credit
|
|
1,010
|
|
|
2,079
|
|
|
3.26
|
|
|
2,510
|
|
|
1,619
|
|
|
3.18
|
|
|
1,010
|
|
|
13
|
|
|
3.30
|
|
||||||
Subordinated notes payable
|
|
22,498
|
|
|
22,467
|
|
|
7.13
|
|
|
22,440
|
|
|
22,410
|
|
|
7.14
|
|
|
22,383
|
|
|
13,058
|
|
|
7.40
|
|
||||||
Junior subordinated notes
|
|
10,004
|
|
|
9,997
|
|
|
11.07
|
|
|
9,990
|
|
|
9,982
|
|
|
11.14
|
|
|
9,976
|
|
|
9,968
|
|
|
11.16
|
|
||||||
|
|
$
|
69,680
|
|
|
$
|
50,945
|
|
|
6.03
|
|
|
$
|
44,730
|
|
|
$
|
49,705
|
|
|
5.94
|
|
|
$
|
43,427
|
|
|
$
|
28,369
|
|
|
6.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Short-term borrowings
|
|
$
|
20,588
|
|
|
|
|
|
|
$
|
7,010
|
|
|
|
|
|
|
$
|
2,010
|
|
|
|
|
|
|||||||||
Long-term borrowings
|
|
49,092
|
|
|
|
|
|
|
37,720
|
|
|
|
|
|
|
42,299
|
|
|
|
|
|
||||||||||||
|
|
$
|
69,680
|
|
|
|
|
|
|
$
|
44,730
|
|
|
|
|
|
|
$
|
44,309
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Maximum month-end balance:
|
|
|
|
|
|
|
||||||
FHLB advances
|
|
$
|
45,500
|
|
|
$
|
29,000
|
|
|
$
|
26,000
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Less than
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
More than 5 Years
|
|
Total
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Operating lease obligations
|
|
$
|
1,253
|
|
|
$
|
2,116
|
|
|
$
|
1,964
|
|
|
$
|
4,932
|
|
|
$
|
10,265
|
|
Time deposits
|
|
145,615
|
|
|
191,224
|
|
|
106,649
|
|
|
31,647
|
|
|
475,135
|
|
|||||
Line of credit
|
|
1,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,010
|
|
|||||
Subordinated notes payable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,498
|
|
|
22,498
|
|
|||||
Junior subordinated notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,004
|
|
|
10,004
|
|
|||||
FHLB advances
|
|
19,500
|
|
|
14,078
|
|
|
—
|
|
|
—
|
|
|
33,578
|
|
|||||
Other borrowings
|
|
—
|
|
|
1,915
|
|
|
—
|
|
|
675
|
|
|
2,590
|
|
|||||
Total contractual obligations
|
|
$
|
167,378
|
|
|
$
|
209,333
|
|
|
$
|
108,613
|
|
|
$
|
69,756
|
|
|
$
|
555,080
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
•
|
the behavior of interest rates and pricing spreads;
|
•
|
the changes in product balances; and
|
•
|
the behavior of loan and deposit clients in different rate environments.
|
|
|
Impact on Net Interest Income as of December 31,
|
||||
Instantaneous Rate Change in Basis Points
|
|
2016
|
|
2015
|
||
Down 50
|
|
0.01
|
%
|
|
(2.82
|
)%
|
No Change
|
|
—
|
%
|
|
—
|
%
|
Up 100
|
|
5.34
|
%
|
|
2.30
|
%
|
Up 200
|
|
10.95
|
%
|
|
8.22
|
%
|
|
|
Estimated Maturity or Repricing at December 31, 2016
|
||||||||||||||||||
|
|
Within 3 Months
|
|
3-12 Months
|
|
1-5 Years
|
|
After 5 Years
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
|
$
|
61,941
|
|
|
$
|
—
|
|
|
$
|
980
|
|
|
$
|
—
|
|
|
$
|
62,921
|
|
Investment securities
|
|
8,395
|
|
|
16,536
|
|
|
143,267
|
|
|
16,148
|
|
|
184,346
|
|
|||||
Commercial loans
|
|
211,799
|
|
|
28,226
|
|
|
83,867
|
|
|
10,296
|
|
|
334,188
|
|
|||||
Real estate loans
|
|
343,584
|
|
|
92,890
|
|
|
365,379
|
|
|
120,853
|
|
|
922,706
|
|
|||||
Asset-based loans
|
|
151,872
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
151,872
|
|
|||||
Lease receivables
|
|
829
|
|
|
3,864
|
|
|
13,907
|
|
|
1,216
|
|
|
19,816
|
|
|||||
Consumer loans
|
|
1,217
|
|
|
337
|
|
|
655
|
|
|
—
|
|
|
2,209
|
|
|||||
Total earning assets
(1)
|
|
$
|
779,637
|
|
|
$
|
141,853
|
|
|
$
|
608,055
|
|
|
$
|
148,513
|
|
|
$
|
1,678,058
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing transaction
|
|
$
|
183,992
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
183,992
|
|
Money market accounts
|
|
627,090
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
627,090
|
|
|||||
Time deposits under $250,000
|
|
23,611
|
|
|
116,461
|
|
|
295,313
|
|
|
31,647
|
|
|
467,032
|
|
|||||
Time deposits $250,000 and over
|
|
2,516
|
|
|
2,554
|
|
|
3,033
|
|
|
—
|
|
|
8,103
|
|
|||||
FHLB advances
|
|
78
|
|
|
19,500
|
|
|
14,000
|
|
|
—
|
|
|
33,578
|
|
|||||
Short-term borrowings
|
|
1,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,010
|
|
|||||
Long-term debt
(2)
|
|
9,841
|
|
|
—
|
|
|
15,675
|
|
|
10,315
|
|
|
35,831
|
|
|||||
Total interest-bearing liabilities
|
|
$
|
848,138
|
|
|
$
|
138,515
|
|
|
$
|
328,021
|
|
|
$
|
41,962
|
|
|
$
|
1,356,636
|
|
Interest rate gap
|
|
$
|
(68,501
|
)
|
|
$
|
3,338
|
|
|
$
|
280,034
|
|
|
$
|
106,551
|
|
|
$
|
321,422
|
|
Cumulative interest rate gap
|
|
$
|
(68,501
|
)
|
|
$
|
(65,163
|
)
|
|
$
|
214,871
|
|
|
$
|
321,422
|
|
|
|
||
Cumulative interest rate gap to total earning assets
|
|
(4.08
|
)%
|
|
(3.88
|
)%
|
|
12.80
|
%
|
|
19.15
|
%
|
|
|
(1)
|
Excludes non-interest sensitive balances and balances with indeterminate maturities.
|
(2)
|
Excludes debt issuance costs.
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
|
|
Consolidated Financial Statements
|
|
Page No.
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
(In Thousands, Except Share Data)
|
|||||||
Assets
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
14,596
|
|
|
$
|
14,640
|
|
Short-term investments
|
|
62,921
|
|
|
98,924
|
|
||
Cash and cash equivalents
|
|
77,517
|
|
|
113,564
|
|
||
Securities available-for-sale, at fair value
|
|
145,893
|
|
|
140,548
|
|
||
Securities held-to-maturity, at amortized cost
|
|
38,612
|
|
|
37,282
|
|
||
Loans held for sale
|
|
1,111
|
|
|
2,702
|
|
||
Loans and leases receivable, net of allowance for loan and lease losses of $20,912 and $16,316, respectively
|
|
1,429,763
|
|
|
1,414,649
|
|
||
Premises and equipment, net
|
|
3,772
|
|
|
3,954
|
|
||
Foreclosed properties
|
|
1,472
|
|
|
1,677
|
|
||
Bank-owned life insurance
|
|
39,048
|
|
|
28,298
|
|
||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
|
|
2,131
|
|
|
2,843
|
|
||
Goodwill and other intangible assets
|
|
12,773
|
|
|
12,493
|
|
||
Accrued interest receivable and other assets
|
|
28,607
|
|
|
24,071
|
|
||
Total assets
|
|
$
|
1,780,699
|
|
|
$
|
1,782,081
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Deposits
|
|
$
|
1,538,855
|
|
|
$
|
1,577,231
|
|
Federal Home Loan Bank advances and other borrowings
|
|
59,676
|
|
|
34,740
|
|
||
Junior subordinated notes
|
|
10,004
|
|
|
9,990
|
|
||
Accrued interest payable and other liabilities
|
|
10,514
|
|
|
9,288
|
|
||
Total liabilities
|
|
1,619,049
|
|
|
1,631,249
|
|
||
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, 8,959,239 and 8,922,375 shares issued, 8,715,856 and 8,699,410 shares outstanding at December 31, 2016 and 2015, respectively
|
|
90
|
|
|
89
|
|
||
Additional paid-in capital
|
|
77,542
|
|
|
76,549
|
|
||
Retained earnings
|
|
91,317
|
|
|
80,584
|
|
||
Accumulated other comprehensive loss
|
|
(522
|
)
|
|
(80
|
)
|
||
Treasury stock (243,383 and 222,965 shares at December 31, 2016 and 2015, respectively), at cost
|
|
(6,777
|
)
|
|
(6,310
|
)
|
||
Total stockholders’ equity
|
|
161,650
|
|
|
150,832
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,780,699
|
|
|
$
|
1,782,081
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands, Except Share Data)
|
||||||||||
Interest income
|
|
|
|
|
|
|
||||||
Loans and leases
|
|
$
|
74,627
|
|
|
$
|
69,135
|
|
|
$
|
54,047
|
|
Securities income
|
|
2,845
|
|
|
2,962
|
|
|
3,342
|
|
|||
Short-term investments
|
|
645
|
|
|
374
|
|
|
312
|
|
|||
Total interest income
|
|
78,117
|
|
|
72,471
|
|
|
57,701
|
|
|||
Interest expense
|
|
|
|
|
|
|
||||||
Deposits
|
|
11,716
|
|
|
10,877
|
|
|
9,470
|
|
|||
Federal Home Loan Bank advances and other borrowings
|
|
1,958
|
|
|
1,842
|
|
|
989
|
|
|||
Junior subordinated notes
|
|
1,115
|
|
|
1,112
|
|
|
1,112
|
|
|||
Total interest expense
|
|
14,789
|
|
|
13,831
|
|
|
11,571
|
|
|||
Net interest income
|
|
63,328
|
|
|
58,640
|
|
|
46,130
|
|
|||
Provision for loan and lease losses
|
|
7,818
|
|
|
3,386
|
|
|
1,236
|
|
|||
Net interest income after provision for loan and lease losses
|
|
55,510
|
|
|
55,254
|
|
|
44,894
|
|
|||
Non-interest income
|
|
|
|
|
|
|
||||||
Trust and investment services fee income
|
|
5,356
|
|
|
4,954
|
|
|
4,434
|
|
|||
Gain on sale of Small Business Administration loans
|
|
4,400
|
|
|
3,999
|
|
|
318
|
|
|||
Gain on sale of residential mortgage loans
|
|
590
|
|
|
729
|
|
|
74
|
|
|||
Service charges on deposits
|
|
2,990
|
|
|
2,812
|
|
|
2,469
|
|
|||
Loan fees
|
|
2,430
|
|
|
2,187
|
|
|
1,577
|
|
|||
Increase in cash surrender value of bank-owned life insurance
|
|
974
|
|
|
960
|
|
|
862
|
|
|||
Other non-interest income
|
|
1,248
|
|
|
1,370
|
|
|
369
|
|
|||
Total non-interest income
|
|
17,988
|
|
|
17,011
|
|
|
10,103
|
|
|||
Non-interest expense
|
|
|
|
|
|
|
||||||
Compensation
|
|
31,545
|
|
|
28,543
|
|
|
21,477
|
|
|||
Occupancy
|
|
2,019
|
|
|
1,973
|
|
|
1,391
|
|
|||
Professional fees
|
|
4,031
|
|
|
4,893
|
|
|
3,405
|
|
|||
Data processing
|
|
3,298
|
|
|
2,378
|
|
|
1,710
|
|
|||
Marketing
|
|
2,338
|
|
|
2,585
|
|
|
1,662
|
|
|||
Equipment
|
|
1,189
|
|
|
1,230
|
|
|
650
|
|
|||
FDIC insurance
|
|
1,472
|
|
|
920
|
|
|
758
|
|
|||
Collateral liquidation costs
|
|
262
|
|
|
472
|
|
|
320
|
|
|||
Net loss (gain) on foreclosed properties
|
|
122
|
|
|
(171
|
)
|
|
(10
|
)
|
|||
Impairment of tax credit investments
|
|
3,691
|
|
|
—
|
|
|
—
|
|
|||
SBA recourse provision
|
|
2,068
|
|
|
—
|
|
|
—
|
|
|||
Other non-interest expense
|
|
4,398
|
|
|
4,551
|
|
|
2,412
|
|
|||
Total non-interest expense
|
|
56,433
|
|
|
47,374
|
|
|
33,775
|
|
|||
Income before income tax expense
|
|
17,065
|
|
|
24,891
|
|
|
21,222
|
|
|||
Income tax expense
|
|
2,156
|
|
|
8,377
|
|
|
7,083
|
|
|||
Net income
|
|
$
|
14,909
|
|
|
$
|
16,514
|
|
|
$
|
14,139
|
|
Earnings per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.71
|
|
|
$
|
1.90
|
|
|
$
|
1.76
|
|
Diluted
|
|
1.71
|
|
|
1.90
|
|
|
1.75
|
|
|||
Dividends declared per share
|
|
0.48
|
|
|
0.44
|
|
|
0.42
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Net income
|
|
$
|
14,909
|
|
|
$
|
16,514
|
|
|
$
|
14,139
|
|
Other comprehensive (loss) income, before tax
|
|
|
|
|
|
|
||||||
Securities available-for-sale:
|
|
|
|
|
|
|
||||||
Unrealized securities (losses) gains arising during the period
|
|
(912
|
)
|
|
(719
|
)
|
|
1,619
|
|
|||
Securities held-to-maturity:
|
|
|
|
|
|
|
||||||
Unrealized losses transferred during the period
|
|
—
|
|
|
—
|
|
|
(874
|
)
|
|||
Amortization of net unrealized losses transferred from available-for-sale
|
|
159
|
|
|
233
|
|
|
167
|
|
|||
Income tax benefit (expense)
|
|
311
|
|
|
188
|
|
|
(352
|
)
|
|||
Total other comprehensive (loss) income
|
|
(442
|
)
|
|
(298
|
)
|
|
560
|
|
|||
Comprehensive income
|
|
$
|
14,467
|
|
|
$
|
16,216
|
|
|
$
|
14,699
|
|
|
|
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, 2013
|
|
7,887,994
|
|
|
$
|
41
|
|
|
$
|
56,002
|
|
|
$
|
57,143
|
|
|
$
|
(342
|
)
|
|
$
|
(3,569
|
)
|
|
$
|
109,275
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,139
|
|
|
—
|
|
|
—
|
|
|
14,139
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
560
|
|
|
—
|
|
|
560
|
|
||||||
Issuance of common stock
|
|
720,162
|
|
|
3
|
|
|
16,554
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,557
|
|
||||||
Exercise of stock options
|
|
78,000
|
|
|
1
|
|
|
936
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
937
|
|
||||||
Share-based compensation - restricted shares
|
|
64,522
|
|
|
—
|
|
|
887
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
887
|
|
||||||
Share-based compensation - tax benefits
|
|
—
|
|
|
—
|
|
|
584
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
584
|
|
||||||
Cash dividends ($0.42 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,396
|
)
|
|
—
|
|
|
—
|
|
|
(3,396
|
)
|
||||||
Treasury stock purchased
|
|
(78,824
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,795
|
)
|
|
(1,795
|
)
|
||||||
Balance at December 31, 2014
|
|
8,671,854
|
|
|
$
|
45
|
|
|
$
|
74,963
|
|
|
$
|
67,886
|
|
|
$
|
218
|
|
|
$
|
(5,364
|
)
|
|
$
|
137,748
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,514
|
|
|
—
|
|
|
—
|
|
|
16,514
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(298
|
)
|
|
—
|
|
|
(298
|
)
|
||||||
Common stock dividends
|
|
—
|
|
|
44
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Exercise of stock options
|
|
24,000
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300
|
|
||||||
Share-based compensation - restricted shares
|
|
45,347
|
|
|
—
|
|
|
1,063
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,063
|
|
||||||
Share-based compensation - tax benefits
|
|
—
|
|
|
—
|
|
|
267
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
267
|
|
||||||
Cash dividends ($0.44 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,816
|
)
|
|
—
|
|
|
—
|
|
|
(3,816
|
)
|
||||||
Treasury stock purchased
|
|
(41,791
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(946
|
)
|
|
(946
|
)
|
||||||
Balance at December 31, 2015
|
|
8,699,410
|
|
|
$
|
89
|
|
|
$
|
76,549
|
|
|
$
|
80,584
|
|
|
$
|
(80
|
)
|
|
$
|
(6,310
|
)
|
|
$
|
150,832
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,909
|
|
|
—
|
|
|
—
|
|
|
14,909
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(442
|
)
|
|
—
|
|
|
(442
|
)
|
||||||
Share-based compensation - restricted shares
|
|
36,864
|
|
|
1
|
|
|
993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
994
|
|
||||||
Cash dividends ($0.48 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,176
|
)
|
|
—
|
|
|
—
|
|
|
(4,176
|
)
|
||||||
Treasury stock purchased
|
|
(20,418
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(467
|
)
|
|
(467
|
)
|
||||||
Balance at December 31, 2016
|
|
8,715,856
|
|
|
$
|
90
|
|
|
$
|
77,542
|
|
|
$
|
91,317
|
|
|
$
|
(522
|
)
|
|
$
|
(6,777
|
)
|
|
$
|
161,650
|
|
First Business Financial Services, Inc.
Consolidated Statements of Cash Flows
|
||||||||||||
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
14,909
|
|
|
$
|
16,514
|
|
|
$
|
14,139
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Deferred income taxes, net
|
|
(1,108
|
)
|
|
1,158
|
|
|
1,389
|
|
|||
Impairment of tax credit investments
|
|
3,691
|
|
|
—
|
|
|
—
|
|
|||
Provision for loan and lease losses
|
|
7,818
|
|
|
3,386
|
|
|
1,236
|
|
|||
Depreciation, amortization and accretion, net
|
|
1,515
|
|
|
(90
|
)
|
|
1,870
|
|
|||
Share-based compensation
|
|
994
|
|
|
1,063
|
|
|
887
|
|
|||
Gain on sale of available-for-sale securities
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|||
Increase in value of bank-owned life insurance policies
|
|
(974
|
)
|
|
(960
|
)
|
|
(862
|
)
|
|||
Origination of loans for sale
|
|
(71,965
|
)
|
|
(70,254
|
)
|
|
(9,392
|
)
|
|||
Sale of loans originated for sale
|
|
78,546
|
|
|
77,333
|
|
|
6,651
|
|
|||
Gain on sale of loans originated for sale
|
|
(4,990
|
)
|
|
(4,728
|
)
|
|
(392
|
)
|
|||
Net loss (gain) on foreclosed properties, including impairment valuation
|
|
122
|
|
|
(171
|
)
|
|
(10
|
)
|
|||
Excess tax benefit from share-based compensation
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
|||
Returns on investments in limited partnerships
|
|
250
|
|
|
—
|
|
|
—
|
|
|||
Increase in accrued interest receivable and other assets
|
|
(3,861
|
)
|
|
(1,033
|
)
|
|
(5,448
|
)
|
|||
Increase in accrued interest payable and other liabilities
|
|
1,367
|
|
|
1,002
|
|
|
1,806
|
|
|||
Net cash provided by operating activities
|
|
26,162
|
|
|
23,220
|
|
|
11,874
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Proceeds from maturities, redemptions and paydowns of available-for-sale securities
|
|
43,745
|
|
|
42,899
|
|
|
44,148
|
|
|||
Proceeds from maturities, redemptions and paydowns of held-to-maturity securities
|
|
3,882
|
|
|
4,349
|
|
|
2,211
|
|
|||
Proceeds from sale of available-for-sale securities
|
|
5,227
|
|
|
—
|
|
|
—
|
|
|||
Purchases of available-for-sale and held-to-maturity securities
|
|
(61,547
|
)
|
|
(40,721
|
)
|
|
(52,947
|
)
|
|||
Proceeds from sale of foreclosed properties
|
|
83
|
|
|
528
|
|
|
255
|
|
|||
Net increase in loans and leases
|
|
(22,385
|
)
|
|
(155,204
|
)
|
|
(299,095
|
)
|
|||
Net cash associated with the Alterra Bank acquisition
|
|
—
|
|
|
—
|
|
|
(11,957
|
)
|
|||
Investments in limited partnerships
|
|
(750
|
)
|
|
—
|
|
|
(1,000
|
)
|
|||
Returns of investments in limited partnerships
|
|
541
|
|
|
459
|
|
|
722
|
|
|||
Investment in community development entity
|
|
—
|
|
|
—
|
|
|
(7,500
|
)
|
|||
Investment in historic development entities
|
|
(3,456
|
)
|
|
(578
|
)
|
|
—
|
|
|||
Investment in Federal Home Loan Bank and Federal Reserve Bank Stock
|
|
(1,308
|
)
|
|
(1,352
|
)
|
|
(1,459
|
)
|
|||
Proceeds from the sale of Federal Home Loan Bank Stock
|
|
2,020
|
|
|
849
|
|
|
373
|
|
|||
Purchases of leasehold improvements and equipment, net
|
|
(584
|
)
|
|
(789
|
)
|
|
(3,190
|
)
|
|||
Purchases of bank owned life insurance policies
|
|
(9,750
|
)
|
|
—
|
|
|
(3,285
|
)
|
|||
Premium payment on bank owned life insurance policies
|
|
(26
|
)
|
|
(25
|
)
|
|
(25
|
)
|
|||
Net cash used in investing activities
|
|
(44,308
|
)
|
|
(149,585
|
)
|
|
(332,749
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Net (decrease) increase in deposits
|
|
(38,256
|
)
|
|
139,469
|
|
|
308,413
|
|
|||
Repayment of Federal Home Loan Bank advances
|
|
(4,500
|
)
|
|
(1,000
|
)
|
|
—
|
|
|||
Proceeds from Federal Home Loan Bank advances
|
|
30,000
|
|
|
—
|
|
|
9,383
|
|
|||
Net (decrease) increase in short-term borrowed funds
|
|
(1,500
|
)
|
|
1,500
|
|
|
1,000
|
|
|||
Net increase in long-term borrowed funds
|
|
998
|
|
|
918
|
|
|
675
|
|
|||
Proceeds from issuance of subordinated notes payable, net of issuance costs
|
|
—
|
|
|
—
|
|
|
14,469
|
|
|||
Repayment of subordinated notes payable
|
|
—
|
|
|
—
|
|
|
(4,000
|
)
|
|||
Excess tax benefit from share-based compensation
|
|
—
|
|
|
267
|
|
|
584
|
|
|||
Common stock issuance
|
|
—
|
|
|
—
|
|
|
16,557
|
|
|||
Cash dividends paid
|
|
(4,176
|
)
|
|
(3,816
|
)
|
|
(3,396
|
)
|
First Business Financial Services, Inc.
Consolidated Statements of Cash Flows
|
||||||||||||
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Exercise of stock options
|
|
—
|
|
|
300
|
|
|
936
|
|
|||
Purchase of treasury stock
|
|
(467
|
)
|
|
(946
|
)
|
|
(1,795
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(17,901
|
)
|
|
136,692
|
|
|
342,826
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(36,047
|
)
|
|
10,327
|
|
|
21,951
|
|
|||
Cash and cash equivalents at the beginning of the period
|
|
113,564
|
|
|
103,237
|
|
|
81,286
|
|
|||
Cash and cash equivalents at the end of the period
|
|
$
|
77,517
|
|
|
$
|
113,564
|
|
|
$
|
103,237
|
|
Supplementary cash flow information
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest paid on deposits and borrowings
|
|
$
|
14,790
|
|
|
$
|
13,639
|
|
|
$
|
11,048
|
|
Income taxes paid
|
|
5,554
|
|
|
5,668
|
|
|
7,221
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
||||||
Transfer of securities from available-for-sale to held-to-maturity
|
|
—
|
|
|
—
|
|
|
44,587
|
|
|||
Transfer of loans from held-to-maturity to held-for-sale
|
|
11,504
|
|
|
4,336
|
|
|
—
|
|
|||
Unrealized loss on transfer of securities from available-for-sale to held-to-maturity
|
|
—
|
|
|
—
|
|
|
(874
|
)
|
|
|
For the Three Months Ended
|
||||||||||||||||||||||
|
|
September 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
||||||||||||||||||
|
|
As Reported
|
|
As Adjusted
|
|
As Reported
|
|
As Adjusted
|
|
As Reported
|
|
As Adjusted
|
||||||||||||
|
|
(Dollars in Thousands, Except Share Data)
|
||||||||||||||||||||||
Income tax (benefit) expense
|
|
$
|
(2,895
|
)
|
|
$
|
(3,020
|
)
|
|
$
|
1,628
|
|
|
$
|
1,621
|
|
|
$
|
2,362
|
|
|
$
|
2,356
|
|
Net income
|
|
2,540
|
|
|
2,665
|
|
|
3,716
|
|
|
3,723
|
|
|
4,547
|
|
|
4,553
|
|
||||||
Effective tax rate
|
|
NM
|
|
|
NM
|
|
|
30.5
|
%
|
|
30.3
|
%
|
|
34.2
|
%
|
|
34.1
|
%
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
0.29
|
|
|
$
|
0.31
|
|
|
$
|
0.43
|
|
|
$
|
0.43
|
|
|
$
|
0.52
|
|
|
$
|
0.52
|
|
Diluted
|
|
0.29
|
|
|
0.31
|
|
|
0.43
|
|
|
0.43
|
|
|
0.52
|
|
|
0.52
|
|
||||||
Additional paid-in capital
|
|
77,544
|
|
|
77,419
|
|
|
77,127
|
|
|
77,120
|
|
|
76,851
|
|
|
76,845
|
|
||||||
Retained earnings
|
|
88,255
|
|
|
88,380
|
|
|
86,760
|
|
|
86,767
|
|
|
84,089
|
|
|
84,095
|
|
||||||
Return on average assets (annualized)
|
|
0.56
|
%
|
|
0.59
|
%
|
|
0.81
|
%
|
|
0.82
|
%
|
|
1.00
|
%
|
|
1.00
|
%
|
||||||
Return on average equity (annualized)
|
|
6.38
|
%
|
|
6.69
|
%
|
|
9.43
|
%
|
|
9.45
|
%
|
|
11.68
|
%
|
|
11.70
|
%
|
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
6,298
|
|
|
$
|
7
|
|
|
$
|
(10
|
)
|
|
$
|
6,295
|
|
Municipal obligations
|
|
8,246
|
|
|
2
|
|
|
(92
|
)
|
|
8,156
|
|
||||
Asset-backed securities
|
|
1,116
|
|
|
—
|
|
|
(35
|
)
|
|
1,081
|
|
||||
Collateralized mortgage obligations - government issued
|
|
30,936
|
|
|
423
|
|
|
(146
|
)
|
|
31,213
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
99,865
|
|
|
252
|
|
|
(969
|
)
|
|
99,148
|
|
||||
|
|
$
|
146,461
|
|
|
$
|
684
|
|
|
$
|
(1,252
|
)
|
|
$
|
145,893
|
|
|
|
As of December 31, 2015
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
8,047
|
|
|
$
|
2
|
|
|
$
|
(32
|
)
|
|
$
|
8,017
|
|
Municipal obligations
|
|
4,278
|
|
|
12
|
|
|
(7
|
)
|
|
4,283
|
|
||||
Asset-backed securities
|
|
1,327
|
|
|
—
|
|
|
(58
|
)
|
|
1,269
|
|
||||
Collateralized mortgage obligations - government issued
|
|
43,845
|
|
|
814
|
|
|
(116
|
)
|
|
44,543
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
82,707
|
|
|
145
|
|
|
(416
|
)
|
|
82,436
|
|
||||
|
|
$
|
140,204
|
|
|
$
|
973
|
|
|
$
|
(629
|
)
|
|
$
|
140,548
|
|
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
1,497
|
|
|
$
|
2
|
|
|
$
|
(5
|
)
|
|
$
|
1,494
|
|
Municipal obligations
|
|
21,173
|
|
|
62
|
|
|
(78
|
)
|
|
21,157
|
|
||||
Collateralized mortgage obligations - government issued
|
|
9,148
|
|
|
17
|
|
|
(38
|
)
|
|
9,127
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
6,794
|
|
|
6
|
|
|
(58
|
)
|
|
6,742
|
|
||||
|
|
$
|
38,612
|
|
|
$
|
87
|
|
|
$
|
(179
|
)
|
|
$
|
38,520
|
|
|
|
As of December 31, 2015
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
1,495
|
|
|
$
|
1
|
|
|
$
|
(11
|
)
|
|
$
|
1,485
|
|
Municipal obligations
|
|
16,038
|
|
|
332
|
|
|
(5
|
)
|
|
16,365
|
|
||||
Collateralized mortgage obligations - government issued
|
|
11,718
|
|
|
32
|
|
|
(41
|
)
|
|
11,709
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
8,031
|
|
|
12
|
|
|
(44
|
)
|
|
7,999
|
|
||||
|
|
$
|
37,282
|
|
|
$
|
377
|
|
|
$
|
(101
|
)
|
|
$
|
37,558
|
|
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
||||||||||||
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Due in one year or less
|
|
$
|
4,532
|
|
|
$
|
4,532
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Due in one year through five years
|
|
15,308
|
|
|
15,245
|
|
|
7,111
|
|
|
7,100
|
|
||||
Due in five through ten years
|
|
66,396
|
|
|
66,710
|
|
|
13,994
|
|
|
13,978
|
|
||||
Due in over ten years
|
|
60,225
|
|
|
59,406
|
|
|
17,507
|
|
|
17,442
|
|
||||
|
|
$
|
146,461
|
|
|
$
|
145,893
|
|
|
$
|
38,612
|
|
|
$
|
38,520
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
|
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
|
|
$
|
1,991
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,991
|
|
|
$
|
10
|
|
Municipal obligations
|
|
7,207
|
|
|
89
|
|
|
406
|
|
|
3
|
|
|
7,613
|
|
|
92
|
|
||||||
Asset-backed securities
|
|
—
|
|
|
—
|
|
|
1,081
|
|
|
35
|
|
|
1,081
|
|
|
35
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
10,552
|
|
|
130
|
|
|
493
|
|
|
16
|
|
|
11,045
|
|
|
146
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
54,843
|
|
|
931
|
|
|
1,819
|
|
|
38
|
|
|
56,662
|
|
|
969
|
|
||||||
|
|
$
|
74,593
|
|
|
$
|
1,160
|
|
|
$
|
3,799
|
|
|
$
|
92
|
|
|
$
|
78,392
|
|
|
$
|
1,252
|
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
|
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
|
|
$
|
3,536
|
|
|
$
|
13
|
|
|
$
|
1,981
|
|
|
$
|
19
|
|
|
$
|
5,517
|
|
|
$
|
32
|
|
Municipal obligations
|
|
2,403
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
2,403
|
|
|
7
|
|
||||||
Asset-backed securities
|
|
1,269
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
1,269
|
|
|
58
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
3,373
|
|
|
19
|
|
|
5,687
|
|
|
97
|
|
|
9,060
|
|
|
116
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
59,992
|
|
|
373
|
|
|
1,717
|
|
|
43
|
|
|
61,709
|
|
|
416
|
|
||||||
|
|
$
|
70,573
|
|
|
$
|
470
|
|
|
$
|
9,385
|
|
|
$
|
159
|
|
|
$
|
79,958
|
|
|
$
|
629
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized
Losses |
|
Fair Value
|
|
Unrealized
Losses |
|
Fair Value
|
|
Unrealized
Losses |
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
1,000
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
5
|
|
Municipal obligations
|
|
9,472
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
9,472
|
|
|
78
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
6,980
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
6,980
|
|
|
38
|
|
||||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
4,682
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
4,682
|
|
|
58
|
|
||||||
|
|
$
|
22,134
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,134
|
|
|
$
|
179
|
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized
Losses |
|
Fair Value
|
|
Unrealized
Losses |
|
Fair Value
|
|
Unrealized
Losses |
||||||||||||
|
|
(In Thousands)
|
||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
11
|
|
|
$
|
1,000
|
|
|
$
|
11
|
|
Municipal obligations
|
|
436
|
|
|
4
|
|
|
199
|
|
|
1
|
|
|
635
|
|
|
5
|
|
||||||
Collateralized mortgage obligations - government issued
|
|
6,518
|
|
|
$
|
41
|
|
|
—
|
|
|
—
|
|
|
6,518
|
|
|
41
|
|
|||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
5,168
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
5,168
|
|
|
44
|
|
||||||
|
|
$
|
12,122
|
|
|
$
|
89
|
|
|
$
|
1,199
|
|
|
$
|
12
|
|
|
$
|
13,321
|
|
|
$
|
101
|
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
|
(In Thousands)
|
||||||
Commercial real estate:
|
|
|
|
|
||||
Commercial real estate — owner occupied
|
|
$
|
176,459
|
|
|
$
|
176,322
|
|
Commercial real estate — non-owner occupied
|
|
473,158
|
|
|
436,901
|
|
||
Land development
|
|
56,638
|
|
|
59,779
|
|
||
Construction
|
|
101,206
|
|
|
100,625
|
|
||
Multi-family
|
|
92,762
|
|
|
80,254
|
|
||
1-4 family
|
|
45,651
|
|
|
50,304
|
|
||
Total commercial real estate
|
|
945,874
|
|
|
904,185
|
|
||
Commercial and industrial
|
|
450,298
|
|
|
472,193
|
|
||
Direct financing leases, net
|
|
30,951
|
|
|
31,093
|
|
||
Consumer and other:
|
|
|
|
|
||||
Home equity and second mortgages
|
|
8,412
|
|
|
8,237
|
|
||
Other
|
|
16,329
|
|
|
16,319
|
|
||
Total consumer and other
|
|
24,741
|
|
|
24,556
|
|
||
Total gross loans and leases receivable
|
|
1,451,864
|
|
|
1,432,027
|
|
||
Less:
|
|
|
|
|
||||
Allowance for loan and lease losses
|
|
20,912
|
|
|
16,316
|
|
||
Deferred loan fees
|
|
1,189
|
|
|
1,062
|
|
||
Loans and leases receivable, net
|
|
$
|
1,429,763
|
|
|
$
|
1,414,649
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
(In Thousands)
|
||||||
Contractually required payments
|
$
|
3,265
|
|
|
$
|
5,291
|
|
Fair value of purchased credit-impaired loans
|
1,432
|
|
|
3,250
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
(In Thousands)
|
||||||
Accretable yield, beginning of period
|
$
|
414
|
|
|
$
|
676
|
|
Accretion recognized in interest income
|
(129
|
)
|
|
(50
|
)
|
||
Reclassification to nonaccretable difference for loans with changing cash flows
(1)
|
(244
|
)
|
|
(60
|
)
|
||
Changes in accretable yield for non-credit related changes in expected cash flows
(2)
|
94
|
|
|
(152
|
)
|
||
Accretable yield, end of period
|
$
|
135
|
|
|
$
|
414
|
|
(1)
|
Represents changes in accretable yield for those loans that are driven primarily by credit performance.
|
(2)
|
Represents changes in accretable yield for those loans that are driven primarily by changes in actual and estimated payments.
|
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Category
|
|
|
||||||||||||||||
|
|
I
|
|
II
|
|
III
|
|
IV
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
$
|
142,704
|
|
|
$
|
20,294
|
|
|
$
|
11,174
|
|
|
$
|
2,287
|
|
|
$
|
176,459
|
|
Commercial real estate — non-owner occupied
|
|
447,895
|
|
|
20,933
|
|
|
2,721
|
|
|
1,609
|
|
|
473,158
|
|
|||||
Land development
|
|
52,082
|
|
|
823
|
|
|
293
|
|
|
3,440
|
|
|
56,638
|
|
|||||
Construction
|
|
93,510
|
|
|
3,154
|
|
|
1,624
|
|
|
2,918
|
|
|
101,206
|
|
|||||
Multi-family
|
|
87,418
|
|
|
1,937
|
|
|
3,407
|
|
|
—
|
|
|
92,762
|
|
|||||
1-4 family
|
|
38,504
|
|
|
3,144
|
|
|
1,431
|
|
|
2,572
|
|
|
45,651
|
|
|||||
Total commercial real estate
|
|
862,113
|
|
|
50,285
|
|
|
20,650
|
|
|
12,826
|
|
|
945,874
|
|
|||||
Commercial and industrial
|
|
348,201
|
|
|
42,949
|
|
|
46,675
|
|
|
12,473
|
|
|
450,298
|
|
|||||
Direct financing leases, net
|
|
29,351
|
|
|
1,600
|
|
|
—
|
|
|
—
|
|
|
30,951
|
|
|||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgages
|
|
8,271
|
|
|
121
|
|
|
12
|
|
|
8
|
|
|
8,412
|
|
|||||
Other
|
|
15,714
|
|
|
—
|
|
|
11
|
|
|
604
|
|
|
16,329
|
|
|||||
Total consumer and other
|
|
23,985
|
|
|
121
|
|
|
23
|
|
|
612
|
|
|
24,741
|
|
|||||
Total gross loans and leases receivable
|
|
$
|
1,263,650
|
|
|
$
|
94,955
|
|
|
$
|
67,348
|
|
|
$
|
25,911
|
|
|
$
|
1,451,864
|
|
Category as a % of total portfolio
|
|
87.04
|
%
|
|
6.54
|
%
|
|
4.64
|
%
|
|
1.78
|
%
|
|
100.00
|
%
|
|
|
December 31, 2015
|
||||||||||||||||||
|
|
Category
|
|
|
||||||||||||||||
|
|
I
|
|
II
|
|
III
|
|
IV
|
|
Total
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate — owner occupied
|
|
$
|
156,379
|
|
|
$
|
7,654
|
|
|
$
|
9,311
|
|
|
$
|
2,978
|
|
|
$
|
176,322
|
|
Commercial real estate — non-owner occupied
|
|
410,517
|
|
|
20,662
|
|
|
3,408
|
|
|
2,314
|
|
|
436,901
|
|
|||||
Land development
|
|
52,817
|
|
|
2,241
|
|
|
309
|
|
|
4,412
|
|
|
59,779
|
|
|||||
Construction
|
|
98,693
|
|
|
851
|
|
|
564
|
|
|
517
|
|
|
100,625
|
|
|||||
Multi-family
|
|
79,368
|
|
|
884
|
|
|
—
|
|
|
2
|
|
|
80,254
|
|
|||||
1-4 family
|
|
41,086
|
|
|
3,985
|
|
|
1,865
|
|
|
3,368
|
|
|
50,304
|
|
|||||
Total commercial real estate
|
|
838,860
|
|
|
36,277
|
|
|
15,457
|
|
|
13,591
|
|
|
904,185
|
|
|||||
Commercial and industrial
|
|
430,199
|
|
|
7,139
|
|
|
25,706
|
|
|
9,149
|
|
|
472,193
|
|
|||||
Direct financing leases, net
|
|
29,514
|
|
|
1,013
|
|
|
528
|
|
|
38
|
|
|
31,093
|
|
|||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity and second mortgages
|
|
7,497
|
|
|
—
|
|
|
141
|
|
|
599
|
|
|
8,237
|
|
|||||
Other
|
|
15,616
|
|
|
48
|
|
|
—
|
|
|
655
|
|
|
16,319
|
|
|||||
Total consumer and other
|
|
23,113
|
|
|
48
|
|
|
141
|
|
|
1,254
|
|
|
24,556
|
|
|||||
Total gross loans and leases receivable
|
|
$
|
1,321,686
|
|
|
$
|
44,477
|
|
|
$
|
41,832
|
|
|
$
|
24,032
|
|
|
$
|
1,432,027
|
|
Category as a % of total portfolio
|
|
92.29
|
%
|
|
3.11
|
%
|
|
2.92
|
%
|
|
1.68
|
%
|
|
100.00
|
%
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
|
30-59
Days Past Due |
|
60-89
Days Past Due |
|
Greater
than 90 Days Past Due |
|
Total Past Due
|
|
Current
|
|
Total
|
||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||
Accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
174,236
|
|
|
$
|
174,236
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
471,549
|
|
|
471,549
|
|
||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,198
|
|
|
53,198
|
|
||||||
Construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,288
|
|
|
98,288
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,762
|
|
|
92,762
|
|
||||||
1-4 family
|
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
43,639
|
|
|
43,714
|
|
||||||
Commercial and industrial
|
|
55
|
|
|
468
|
|
|
—
|
|
|
523
|
|
|
437,312
|
|
|
437,835
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,951
|
|
|
30,951
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,412
|
|
|
8,412
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,725
|
|
|
15,725
|
|
||||||
Total
|
|
$
|
130
|
|
|
$
|
468
|
|
|
$
|
—
|
|
|
$
|
598
|
|
|
$
|
1,426,072
|
|
|
$
|
1,426,670
|
|
Non-accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,183
|
|
|
$
|
1,183
|
|
|
$
|
1,040
|
|
|
$
|
2,223
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,609
|
|
|
1,609
|
|
||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,440
|
|
|
3,440
|
|
||||||
Construction
|
|
2,482
|
|
|
—
|
|
|
436
|
|
|
2,918
|
|
|
—
|
|
|
2,918
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
1-4 family
|
|
—
|
|
|
—
|
|
|
1,240
|
|
|
1,240
|
|
|
697
|
|
|
1,937
|
|
||||||
Commercial and industrial
|
|
3,345
|
|
|
168
|
|
|
6,740
|
|
|
10,253
|
|
|
2,210
|
|
|
12,463
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
186
|
|
|
—
|
|
|
378
|
|
|
564
|
|
|
40
|
|
|
604
|
|
||||||
Total
|
|
$
|
6,013
|
|
|
$
|
168
|
|
|
$
|
9,977
|
|
|
$
|
16,158
|
|
|
$
|
9,036
|
|
|
$
|
25,194
|
|
Total loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,183
|
|
|
$
|
1,183
|
|
|
$
|
175,276
|
|
|
$
|
176,459
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
473,158
|
|
|
473,158
|
|
||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,638
|
|
|
56,638
|
|
||||||
Construction
|
|
2,482
|
|
|
—
|
|
|
436
|
|
|
2,918
|
|
|
98,288
|
|
|
101,206
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,762
|
|
|
92,762
|
|
||||||
1-4 family
|
|
75
|
|
|
—
|
|
|
1,240
|
|
|
1,315
|
|
|
44,336
|
|
|
45,651
|
|
||||||
Commercial and industrial
|
|
3,400
|
|
|
636
|
|
|
6,740
|
|
|
10,776
|
|
|
439,522
|
|
|
450,298
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,951
|
|
|
30,951
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,412
|
|
|
8,412
|
|
||||||
Other
|
|
186
|
|
|
—
|
|
|
378
|
|
|
564
|
|
|
15,765
|
|
|
16,329
|
|
||||||
Total
|
|
$
|
6,143
|
|
|
$
|
636
|
|
|
$
|
9,977
|
|
|
$
|
16,756
|
|
|
$
|
1,435,108
|
|
|
$
|
1,451,864
|
|
Percent of portfolio
|
|
0.42
|
%
|
|
0.04
|
%
|
|
0.69
|
%
|
|
1.15
|
%
|
|
98.85
|
%
|
|
100.00
|
%
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
|
30-59
Days Past Due |
|
60-89
Days Past Due |
|
Greater
than 90 Days Past Due |
|
Total Past Due
|
|
Current
|
|
Total
|
||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||
Accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
173,416
|
|
|
$
|
173,416
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
435,222
|
|
|
435,222
|
|
||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,386
|
|
|
55,386
|
|
||||||
Construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,228
|
|
|
100,228
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,252
|
|
|
80,252
|
|
||||||
1-4 family
|
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
47,676
|
|
|
47,754
|
|
||||||
Commercial and industrial
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
463,057
|
|
|
463,057
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,055
|
|
|
31,055
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,695
|
|
|
7,695
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,664
|
|
|
15,664
|
|
||||||
Total
|
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78
|
|
|
$
|
1,409,651
|
|
|
$
|
1,409,729
|
|
Non-accruing loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
473
|
|
|
$
|
—
|
|
|
$
|
473
|
|
|
$
|
2,433
|
|
|
$
|
2,906
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,679
|
|
|
1,679
|
|
||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,393
|
|
|
4,393
|
|
||||||
Construction
|
|
397
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
—
|
|
|
397
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
1-4 family
|
|
430
|
|
|
34
|
|
|
895
|
|
|
1,359
|
|
|
1,191
|
|
|
2,550
|
|
||||||
Commercial and industrial
|
|
2,077
|
|
|
—
|
|
|
564
|
|
|
2,641
|
|
|
6,495
|
|
|
9,136
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
38
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
250
|
|
|
250
|
|
|
292
|
|
|
542
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
655
|
|
|
655
|
|
|
—
|
|
|
655
|
|
||||||
Total
|
|
$
|
2,904
|
|
|
$
|
507
|
|
|
$
|
2,364
|
|
|
$
|
5,775
|
|
|
$
|
16,523
|
|
|
$
|
22,298
|
|
Total loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied
|
|
$
|
—
|
|
|
$
|
473
|
|
|
$
|
—
|
|
|
$
|
473
|
|
|
$
|
175,849
|
|
|
$
|
176,322
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
436,901
|
|
|
436,901
|
|
||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,779
|
|
|
59,779
|
|
||||||
Construction
|
|
397
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
100,228
|
|
|
100,625
|
|
||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,254
|
|
|
80,254
|
|
||||||
1-4 family
|
|
508
|
|
|
34
|
|
|
895
|
|
|
1,437
|
|
|
48,867
|
|
|
50,304
|
|
||||||
Commercial and industrial
|
|
2,077
|
|
|
—
|
|
|
564
|
|
|
2,641
|
|
|
469,552
|
|
|
472,193
|
|
||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,093
|
|
|
31,093
|
|
||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
250
|
|
|
250
|
|
|
7,987
|
|
|
8,237
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
655
|
|
|
655
|
|
|
15,664
|
|
|
16,319
|
|
||||||
Total
|
|
$
|
2,982
|
|
|
$
|
507
|
|
|
$
|
2,364
|
|
|
$
|
5,853
|
|
|
$
|
1,426,174
|
|
|
$
|
1,432,027
|
|
Percent of portfolio
|
|
0.21
|
%
|
|
0.04
|
%
|
|
0.16
|
%
|
|
0.41
|
%
|
|
99.59
|
%
|
|
100.00
|
%
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
|
(In Thousands)
|
||||||
Non-accrual loans and leases
|
|
|
|
|
||||
Commercial real estate:
|
|
|
|
|
||||
Commercial real estate — owner occupied
|
|
$
|
2,223
|
|
|
$
|
2,907
|
|
Commercial real estate — non-owner occupied
|
|
1,609
|
|
|
1,678
|
|
||
Land development
|
|
3,440
|
|
|
4,393
|
|
||
Construction
|
|
2,918
|
|
|
397
|
|
||
Multi-family
|
|
—
|
|
|
2
|
|
||
1-4 family
|
|
1,937
|
|
|
2,550
|
|
||
Total non-accrual commercial real estate
|
|
12,127
|
|
|
11,927
|
|
||
Commercial and industrial
|
|
12,463
|
|
|
9,136
|
|
||
Direct financing leases, net
|
|
—
|
|
|
38
|
|
||
Consumer and other:
|
|
|
|
|
||||
Home equity and second mortgages
|
|
—
|
|
|
542
|
|
||
Other
|
|
604
|
|
|
655
|
|
||
Total non-accrual consumer and other loans
|
|
604
|
|
|
1,197
|
|
||
Total non-accrual loans and leases
|
|
25,194
|
|
|
22,298
|
|
||
Foreclosed properties, net
|
|
1,472
|
|
|
1,677
|
|
||
Total non-performing assets
|
|
26,666
|
|
|
23,975
|
|
||
Performing troubled debt restructurings
|
|
717
|
|
|
1,735
|
|
||
Total impaired assets
|
|
$
|
27,383
|
|
|
$
|
25,710
|
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||
Total non-accrual loans and leases to gross loans and leases
|
|
1.74
|
%
|
|
1.56
|
%
|
Total non-performing assets to total gross loans and leases plus foreclosed properties, net
|
|
1.83
|
|
|
1.67
|
|
Total non-performing assets to total assets
|
|
1.50
|
|
|
1.35
|
|
Allowance for loan and lease losses to gross loans and leases
|
|
1.44
|
|
|
1.14
|
|
Allowance for loan and lease losses to non-accrual loans and leases
|
|
83.00
|
|
|
73.17
|
|
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||
|
|
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)
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial real estate — owner occupied
|
|
3
|
|
$
|
1,065
|
|
|
$
|
930
|
|
|
3
|
|
$
|
1,209
|
|
|
$
|
1,188
|
|
Commercial real estate — non-owner occupied
|
|
1
|
|
158
|
|
|
39
|
|
|
5
|
|
1,150
|
|
|
904
|
|
||||
Land development
|
|
1
|
|
5,745
|
|
|
3,440
|
|
|
2
|
|
5,853
|
|
|
4,393
|
|
||||
Construction
|
|
2
|
|
331
|
|
|
314
|
|
|
1
|
|
181
|
|
|
200
|
|
||||
Multi-family
|
|
—
|
|
—
|
|
|
—
|
|
|
1
|
|
184
|
|
|
2
|
|
||||
1-4 family
|
|
11
|
|
1,391
|
|
|
1,393
|
|
|
15
|
|
2,035
|
|
|
1,869
|
|
||||
Commercial and industrial
|
|
10
|
|
8,094
|
|
|
7,058
|
|
|
10
|
|
7,572
|
|
|
8,330
|
|
||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home equity and second mortgage
|
|
1
|
|
37
|
|
|
8
|
|
|
4
|
|
461
|
|
|
349
|
|
||||
Other
|
|
1
|
|
2,076
|
|
|
378
|
|
|
1
|
|
2,076
|
|
|
655
|
|
||||
Total
|
|
30
|
|
$
|
18,897
|
|
|
$
|
13,560
|
|
|
42
|
|
$
|
20,721
|
|
|
$
|
17,890
|
|
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||||||
|
|
Number of Loans
|
|
Post-Modification
Recorded Investment
|
|
Number of Loans
|
|
Post-Modification
Recorded Investment
|
||||||
|
|
(Dollars in Thousands)
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
||||||
Extension of term
|
|
1
|
|
|
$
|
8
|
|
|
1
|
|
|
$
|
24
|
|
Interest rate concession
|
|
1
|
|
|
52
|
|
|
1
|
|
|
55
|
|
||
Combination of extension of term and interest rate concession
|
|
16
|
|
|
6,056
|
|
|
25
|
|
|
8,477
|
|
||
Commercial and industrial:
|
|
|
|
|
|
|
|
|
||||||
Combination of extension of term and interest rate concession
|
|
10
|
|
|
7,058
|
|
|
10
|
|
|
8,330
|
|
||
Consumer and other:
|
|
|
|
|
|
|
|
|
||||||
Extension of term
|
|
1
|
|
|
378
|
|
|
1
|
|
|
655
|
|
||
Combination of extension of term and interest rate concession
|
|
1
|
|
|
8
|
|
|
4
|
|
|
349
|
|
||
Total
|
|
30
|
|
|
$
|
13,560
|
|
|
42
|
|
|
$
|
17,890
|
|
|
|
As of and for the Year Ended December 31, 2016
|
||||||||||||||||||||||||||
|
|
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
|
|
$
|
1,788
|
|
|
$
|
1,788
|
|
|
$
|
—
|
|
|
$
|
3,577
|
|
|
$
|
328
|
|
|
$
|
118
|
|
|
$
|
210
|
|
Non-owner occupied
|
|
1,609
|
|
|
1,647
|
|
|
—
|
|
|
1,318
|
|
|
91
|
|
|
79
|
|
|
12
|
|
|||||||
Land development
|
|
3,440
|
|
|
6,111
|
|
|
—
|
|
|
3,898
|
|
|
107
|
|
|
—
|
|
|
107
|
|
|||||||
Construction
|
|
436
|
|
|
438
|
|
|
—
|
|
|
291
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
134
|
|
|
(133
|
)
|
|||||||
1-4 family
|
|
2,379
|
|
|
2,379
|
|
|
—
|
|
|
2,755
|
|
|
125
|
|
|
94
|
|
|
31
|
|
|||||||
Commercial and industrial
|
|
3,769
|
|
|
3,769
|
|
|
—
|
|
|
918
|
|
|
143
|
|
|
62
|
|
|
81
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
8
|
|
|
8
|
|
|
—
|
|
|
307
|
|
|
16
|
|
|
127
|
|
|
(111
|
)
|
|||||||
Other
|
|
604
|
|
|
1,270
|
|
|
—
|
|
|
529
|
|
|
71
|
|
|
—
|
|
|
71
|
|
|||||||
Total
|
|
$
|
14,033
|
|
|
$
|
17,410
|
|
|
$
|
—
|
|
|
$
|
13,599
|
|
|
$
|
902
|
|
|
$
|
614
|
|
|
$
|
288
|
|
With impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
499
|
|
|
$
|
499
|
|
|
$
|
70
|
|
|
$
|
111
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
28
|
|
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Construction
|
|
2,482
|
|
|
2,482
|
|
|
1,790
|
|
|
834
|
|
|
45
|
|
|
—
|
|
|
45
|
|
|||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
1-4 family
|
|
193
|
|
|
199
|
|
|
39
|
|
|
203
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||||
Commercial and industrial
|
|
8,704
|
|
|
8,704
|
|
|
3,700
|
|
|
8,239
|
|
|
637
|
|
|
—
|
|
|
637
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
11,878
|
|
|
$
|
11,884
|
|
|
$
|
5,599
|
|
|
$
|
9,387
|
|
|
$
|
715
|
|
|
$
|
—
|
|
|
$
|
715
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied
|
|
$
|
2,287
|
|
|
$
|
2,287
|
|
|
$
|
70
|
|
|
$
|
3,688
|
|
|
$
|
356
|
|
|
$
|
118
|
|
|
$
|
238
|
|
Non-owner occupied
|
|
1,609
|
|
|
1,647
|
|
|
—
|
|
|
1,318
|
|
|
91
|
|
|
79
|
|
|
12
|
|
|||||||
Land development
|
|
3,440
|
|
|
6,111
|
|
|
—
|
|
|
3,898
|
|
|
107
|
|
|
—
|
|
|
107
|
|
|||||||
Construction
|
|
2,918
|
|
|
2,920
|
|
|
1,790
|
|
|
1,125
|
|
|
65
|
|
|
—
|
|
|
65
|
|
|||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
134
|
|
|
(133
|
)
|
|||||||
1-4 family
|
|
2,572
|
|
|
2,578
|
|
|
39
|
|
|
2,958
|
|
|
130
|
|
|
94
|
|
|
36
|
|
|||||||
Commercial and industrial
|
|
12,473
|
|
|
12,473
|
|
|
3,700
|
|
|
9,157
|
|
|
780
|
|
|
62
|
|
|
718
|
|
|||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity and second mortgages
|
|
8
|
|
|
8
|
|
|
—
|
|
|
307
|
|
|
16
|
|
|
127
|
|
|
(111
|
)
|
|||||||
Other
|
|
604
|
|
|
1,270
|
|
|
—
|
|
|
529
|
|
|
71
|
|
|
—
|
|
|
71
|
|
|||||||
Grand total
|
|
$
|
25,911
|
|
|
$
|
29,294
|
|
|
$
|
5,599
|
|
|
$
|
22,986
|
|
|
$
|
1,617
|
|
|
$
|
614
|
|
|
$
|
1,003
|
|
(1)
|
Average recorded investment is calculated primarily using daily average balances.
|
|
|
As of and for the Year Ended December 31, 2015
|
||||||||||||||||||||||||||||||
|
|
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
|
|
$
|
2,164
|
|
|
$
|
2,164
|
|
|
$
|
—
|
|
|
$
|
712
|
|
|
$
|
53
|
|
|
$
|
12
|
|
|
$
|
41
|
|
||||
Non-owner occupied
|
|
2,314
|
|
|
2,355
|
|
|
—
|
|
|
962
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|||||||||||
Land development
|
|
4,413
|
|
|
7,083
|
|
|
—
|
|
|
4,333
|
|
|
133
|
|
|
—
|
|
|
133
|
|
|||||||||||
Construction
|
|
120
|
|
|
120
|
|
—
|
|
—
|
|
—
|
|
474
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|||||||
Multi-family
|
|
2
|
|
|
369
|
|
|
—
|
|
|
10
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|||||||||||
1-4 family
|
|
2,423
|
|
|
2,486
|
|
|
—
|
|
|
1,604
|
|
|
82
|
|
|
4
|
|
|
78
|
|
|||||||||||
Commercial and industrial
|
|
2,546
|
|
|
2,590
|
|
|
—
|
|
|
544
|
|
|
172
|
|
|
6
|
|
|
166
|
|
|||||||||||
Direct financing leases, net
|
|
38
|
|
|
38
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Home equity and second mortgages
|
|
500
|
|
|
500
|
|
|
—
|
|
|
390
|
|
|
23
|
|
|
63
|
|
|
(40
|
)
|
|||||||||||
Other
|
|
655
|
|
|
1,321
|
|
|
—
|
|
|
688
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|||||||||||
Total
|
|
$
|
15,175
|
|
|
$
|
19,026
|
|
|
$
|
—
|
|
|
$
|
9,721
|
|
|
$
|
597
|
|
|
$
|
85
|
|
|
$
|
512
|
|
||||
With impairment reserve recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Owner occupied
|
|
$
|
814
|
|
|
$
|
814
|
|
|
$
|
20
|
|
|
$
|
215
|
|
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
5
|
|
||||
Non-owner occupied
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Land development
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|||||||
Construction
|
|
397
|
|
|
397
|
|
—
|
|
48
|
|
—
|
|
34
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|||||||
Multi-family
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
1-4 family
|
|
945
|
|
|
950
|
|
|
173
|
|
|
605
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|||||||||||
Commercial and industrial
|
|
6,603
|
|
|
6,603
|
|
|
847
|
|
|
810
|
|
|
102
|
|
|
—
|
|
|
102
|
|
|||||||||||
Direct financing leases, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Home equity and second mortgages
|
|
99
|
|
|
99
|
|
|
25
|
|
|
58
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Total
|
|
$
|
8,858
|
|
|
$
|
8,863
|
|
|
$
|
1,113
|
|
|
$
|
1,722
|
|
|
$
|
153
|
|
|
$
|
2
|
|
|
$
|
151
|
|
||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Owner occupied
|
|
$
|
2,978
|
|
|
$
|
2,978
|
|
|
$
|
20
|
|
|
$
|
927
|
|
|
$
|
60
|
|
|
$
|
14
|
|
|
$
|
46
|
|
||||
Non-owner occupied
|
|
2,314
|
|
|
2,355
|
|
|
—
|
|
|
962
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|||||||||||
Land development
|
|
4,413
|
|
|
7,083
|
|
|
—
|
|
|
4,333
|
|
|
133
|
|
|
—
|
|
|
133
|
|
|||||||||||
Construction
|
|
517
|
|
|
517
|
|
|
48
|
|
|
508
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Multi-family
|
|
2
|
|
|
369
|
|
|
—
|
|
|
10
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|||||||||||
1-4 family
|
|
3,368
|
|
|
3,436
|
|
|
173
|
|
|
2,209
|
|
|
116
|
|
|
4
|
|
|
112
|
|
|||||||||||
Commercial and industrial
|
|
9,149
|
|
|
9,193
|
|
|
847
|
|
|
1,354
|
|
|
274
|
|
|
6
|
|
|
268
|
|
|||||||||||
Direct financing leases, net
|
|
38
|
|
|
38
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Consumer and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Home equity and second mortgages
|
|
599
|
|
|
599
|
|
|
25
|
|
|
448
|
|
|
33
|
|
|
63
|
|
|
(30
|
)
|
|||||||||||
Other
|
|
655
|
|
|
1,321
|
|
|
—
|
|
|
688
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|||||||||||
Grand total
|
|
$
|
24,033
|
|
|
$
|
27,889
|
|
|
$
|
1,113
|
|
|
$
|
11,443
|
|
|
$
|
750
|
|
|
$
|
87
|
|
|
$
|
663
|
|
(1)
|
Average recorded investment is calculated primarily using daily average balances.
|
|
|
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
|
|
|||||||
Land development
|
|
4,962
|
|
|
7,633
|
|
|
—
|
|
|
5,253
|
|
|
155
|
|
|
—
|
|
|
155
|
|
|||||||
Construction
|
|
195
|
|
|
195
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
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
|
|
|||||||
Land development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
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
|
|
|||||||
Land development
|
|
4,962
|
|
|
7,633
|
|
|
—
|
|
|
5,253
|
|
|
155
|
|
|
—
|
|
|
155
|
|
|||||||
Construction
|
|
195
|
|
|
195
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
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.
|
|
|
As of and for the Year Ended December 31, 2016
|
||||||||||||||
|
|
Commercial
Real Estate
|
|
Commercial
and Industrial
|
|
Consumer
and Other
|
|
Total
|
||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||
Allowance for loan and lease losses:
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
11,220
|
|
|
$
|
4,387
|
|
|
$
|
709
|
|
|
$
|
16,316
|
|
Charge-offs
|
|
(1,194
|
)
|
|
(2,273
|
)
|
|
(127
|
)
|
|
(3,594
|
)
|
||||
Recoveries
|
|
274
|
|
|
91
|
|
|
7
|
|
|
372
|
|
||||
Provision
|
|
2,084
|
|
|
5,765
|
|
|
(31
|
)
|
|
7,818
|
|
||||
Ending balance
|
|
$
|
12,384
|
|
|
$
|
7,970
|
|
|
$
|
558
|
|
|
$
|
20,912
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
1,899
|
|
|
$
|
3,700
|
|
|
$
|
—
|
|
|
$
|
5,599
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
10,485
|
|
|
$
|
4,270
|
|
|
$
|
558
|
|
|
$
|
15,313
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans and lease receivables:
|
|
|
|
|
|
|
|
|
||||||||
Ending balance, gross
|
|
$
|
945,874
|
|
|
$
|
481,249
|
|
|
$
|
24,741
|
|
|
$
|
1,451,864
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
11,222
|
|
|
$
|
12,452
|
|
|
$
|
612
|
|
|
$
|
24,286
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
933,048
|
|
|
$
|
468,776
|
|
|
$
|
24,129
|
|
|
$
|
1,425,953
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
1,604
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
1,625
|
|
Allowance as percent of gross loans and leases
|
|
1.31
|
%
|
|
1.66
|
%
|
|
2.26
|
%
|
|
1.44
|
%
|
|
|
As of and for the Year Ended December 31, 2015
|
||||||||||||||
|
|
Commercial
Real Estate
|
|
Commercial
and Industrial
|
|
Consumer
and Other
|
|
Total
|
||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||
Allowance for loan and lease losses:
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
8,619
|
|
|
$
|
5,492
|
|
|
$
|
218
|
|
|
$
|
14,329
|
|
Charge-offs
|
|
(793
|
)
|
|
(711
|
)
|
|
(9
|
)
|
|
(1,513
|
)
|
||||
Recoveries
|
|
104
|
|
|
6
|
|
|
4
|
|
|
114
|
|
||||
Provision
|
|
3,290
|
|
|
(400
|
)
|
|
496
|
|
|
3,386
|
|
||||
Ending balance
|
|
$
|
11,220
|
|
|
$
|
4,387
|
|
|
$
|
709
|
|
|
$
|
16,316
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
240
|
|
|
$
|
847
|
|
|
$
|
26
|
|
|
$
|
1,113
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
10,980
|
|
|
$
|
3,540
|
|
|
$
|
683
|
|
|
$
|
15,203
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loans and lease receivables:
|
|
|
|
|
|
|
|
|
||||||||
Ending balance, gross
|
|
$
|
904,185
|
|
|
$
|
503,286
|
|
|
$
|
24,556
|
|
|
$
|
1,432,027
|
|
Ending balance: individually evaluated for impairment
|
|
$
|
10,849
|
|
|
$
|
8,942
|
|
|
$
|
1,061
|
|
|
$
|
20,852
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
890,594
|
|
|
$
|
494,098
|
|
|
$
|
23,495
|
|
|
$
|
1,408,187
|
|
Ending balance: loans acquired with deteriorated credit quality
|
|
$
|
2,742
|
|
|
$
|
246
|
|
|
$
|
193
|
|
|
$
|
3,181
|
|
Allowance as percent of gross loans and leases
|
|
1.24
|
%
|
|
0.87
|
%
|
|
2.89
|
%
|
|
1.14
|
%
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In Thousands)
|
||||||
Minimum lease payments receivable
|
|
$
|
26,096
|
|
|
$
|
27,361
|
|
Estimated unguaranteed residual values in leased property
|
|
7,625
|
|
|
7,036
|
|
||
Initial direct costs
|
|
106
|
|
|
158
|
|
||
Unearned lease and residual income
|
|
(2,876
|
)
|
|
(3,462
|
)
|
||
Investment in commercial direct financing leases
|
|
$
|
30,951
|
|
|
$
|
31,093
|
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In Thousands)
|
||||||
Land
|
|
$
|
650
|
|
|
$
|
650
|
|
Building and leasehold improvements
|
|
3,019
|
|
|
2,879
|
|
||
Furniture and equipment
|
|
5,366
|
|
|
4,921
|
|
||
|
|
9,035
|
|
|
8,450
|
|
||
Less: accumulated depreciation
|
|
(5,263
|
)
|
|
(4,496
|
)
|
||
Total premises and equipment, net
|
|
$
|
3,772
|
|
|
$
|
3,954
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In Thousands)
|
||||||||||
Gross carrying amount
|
$
|
347
|
|
|
$
|
347
|
|
|
$
|
347
|
|
Less: accumulated amortization
|
145
|
|
|
83
|
|
|
12
|
|
|||
Net book value
|
$
|
202
|
|
|
$
|
264
|
|
|
$
|
335
|
|
Amortization during the period
|
$
|
62
|
|
|
$
|
71
|
|
|
$
|
12
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
|
(In Thousands)
|
||||||
Accrued interest receivable
|
|
$
|
4,677
|
|
|
$
|
4,412
|
|
Net deferred tax asset
|
|
4,052
|
|
|
2,633
|
|
||
Investment in limited partnerships
|
|
3,963
|
|
|
3,215
|
|
||
Investment in a CDE
|
|
7,106
|
|
|
7,500
|
|
||
Investment in historic development entities
|
|
737
|
|
|
578
|
|
||
Investment in Trust II
|
|
315
|
|
|
315
|
|
||
Fair value of interest rate swaps
|
|
352
|
|
|
552
|
|
||
Prepaid expenses
|
|
3,074
|
|
|
3,330
|
|
||
Other assets
|
|
4,331
|
|
|
1,536
|
|
||
Total accrued interest receivable and other assets
|
|
$
|
28,607
|
|
|
$
|
24,071
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
|
Balance
|
|
Average Balance
|
|
Average Rate
|
|
Balance
|
|
Average Balance
|
|
Average Rate
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||
Non-interest-bearing transaction accounts
|
|
$
|
252,638
|
|
|
$
|
246,182
|
|
|
—
|
%
|
|
$
|
231,199
|
|
|
$
|
211,945
|
|
|
—
|
%
|
Interest-bearing transaction accounts
|
|
183,992
|
|
|
169,571
|
|
|
0.27
|
|
|
165,921
|
|
|
125,558
|
|
|
0.24
|
|
||||
Money market accounts
|
|
627,090
|
|
|
642,784
|
|
|
0.48
|
|
|
612,642
|
|
|
602,842
|
|
|
0.55
|
|
||||
Certificates of deposit
|
|
58,454
|
|
|
65,608
|
|
|
0.90
|
|
|
79,986
|
|
|
106,177
|
|
|
0.78
|
|
||||
Wholesale deposits
|
|
416,681
|
|
|
467,826
|
|
|
1.62
|
|
|
487,483
|
|
|
450,460
|
|
|
1.43
|
|
||||
Total deposits
|
|
$
|
1,538,855
|
|
|
$
|
1,591,971
|
|
|
0.74
|
|
|
$
|
1,577,231
|
|
|
$
|
1,496,982
|
|
|
0.73
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
|
Balance
|
|
Weighted
Average
Balance
|
|
Weighted
Average
Rate
|
|
Balance
|
|
Weighted
Average
Balance
|
|
Weighted
Average
Rate
|
||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||
Federal funds purchased
|
|
$
|
—
|
|
|
$
|
178
|
|
|
0.92
|
%
|
|
$
|
—
|
|
|
$
|
237
|
|
|
0.86
|
%
|
FHLB advances
|
|
33,578
|
|
|
14,485
|
|
|
0.97
|
|
|
8,198
|
|
|
14,779
|
|
|
0.75
|
|
||||
Other borrowings
|
|
2,590
|
|
|
1,739
|
|
|
7.64
|
|
|
1,592
|
|
|
678
|
|
|
9.66
|
|
||||
Line of credit
|
|
1,010
|
|
|
2,079
|
|
|
3.26
|
|
|
2,510
|
|
|
1,619
|
|
|
3.18
|
|
||||
Subordinated notes payable
|
|
22,498
|
|
|
22,467
|
|
|
7.13
|
|
|
22,440
|
|
|
22,410
|
|
|
7.14
|
|
||||
Junior subordinated notes
|
|
10,004
|
|
|
9,997
|
|
|
11.07
|
|
|
9,990
|
|
|
9,982
|
|
|
11.14
|
|
||||
|
|
$
|
69,680
|
|
|
$
|
50,945
|
|
|
6.03
|
|
|
$
|
44,730
|
|
|
$
|
49,705
|
|
|
5.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
$
|
20,588
|
|
|
|
|
|
|
$
|
7,010
|
|
|
|
|
|
||||||
Long-term borrowings
|
|
49,092
|
|
|
|
|
|
|
37,720
|
|
|
|
|
|
||||||||
|
|
$
|
69,680
|
|
|
|
|
|
|
$
|
44,730
|
|
|
|
|
|
|
|
Actual
|
|
Minimum Required for Capital Adequacy Purposes
|
|
For Capital Adequacy Purposes Plus Capital Conservation Buffer
|
|
Minimum Required to Be Well Capitalized Under Prompt Corrective Action
Requirements
|
||||||||||||||||||||
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated
|
|
$
|
204,117
|
|
|
11.74
|
%
|
|
$
|
139,101
|
|
|
8.00
|
%
|
|
$
|
149,968
|
|
|
8.625
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
147,811
|
|
|
11.55
|
|
|
102,362
|
|
|
8.00
|
|
|
110,360
|
|
|
8.625
|
|
|
$
|
127,953
|
|
|
10.00
|
%
|
|||
First Business Bank – Milwaukee
|
|
24,347
|
|
|
11.02
|
|
|
17,680
|
|
|
8.00
|
|
|
19,062
|
|
|
8.625
|
|
|
22,101
|
|
|
10.00
|
|
||||
Alterra Bank
|
|
31,699
|
|
|
13.27
|
|
|
19,106
|
|
|
8.00
|
|
|
20,599
|
|
|
8.625
|
|
|
23,882
|
|
|
10.00
|
|
||||
Tier 1 capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated
|
|
$
|
160,964
|
|
|
9.26
|
|
|
$
|
104,326
|
|
|
6.00
|
|
|
$
|
115,193
|
|
|
6.625
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
134,208
|
|
|
10.49
|
|
|
76,772
|
|
|
6.00
|
|
|
84,769
|
|
|
6.625
|
|
|
$
|
102,362
|
|
|
8.00
|
|
|||
First Business Bank – Milwaukee
|
|
22,323
|
|
|
10.10
|
|
|
13,260
|
|
|
6.00
|
|
|
14,642
|
|
|
6.625
|
|
|
17,680
|
|
|
8.00
|
|
||||
Alterra Bank
|
|
28,685
|
|
|
12.01
|
|
|
14,329
|
|
|
6.00
|
|
|
15,822
|
|
|
6.625
|
|
|
19,106
|
|
|
8.00
|
|
||||
Common equity tier 1 capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated
|
|
$
|
150,960
|
|
|
8.68
|
|
|
$
|
78,244
|
|
|
4.50
|
|
|
$
|
89,111
|
|
|
5.125
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
134,208
|
|
|
10.49
|
|
|
57,579
|
|
|
4.50
|
|
|
65,576
|
|
|
5.125
|
|
|
$
|
83,170
|
|
|
6.50
|
|
|||
First Business Bank – Milwaukee
|
|
22,323
|
|
|
10.10
|
|
|
9,945
|
|
|
4.50
|
|
|
11,327
|
|
|
5.125
|
|
|
14,365
|
|
|
6.50
|
|
||||
Alterra Bank
|
|
28,685
|
|
|
12.01
|
|
|
10,747
|
|
|
4.50
|
|
|
12,240
|
|
|
5.125
|
|
|
15,524
|
|
|
6.50
|
|
||||
Tier 1 leverage capital
(to adjusted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated
|
|
$
|
160,964
|
|
|
9.07
|
|
|
$
|
70,985
|
|
|
4.00
|
|
|
$
|
70,985
|
|
|
4.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
134,208
|
|
|
10.40
|
|
|
51,600
|
|
|
4.00
|
|
|
51,600
|
|
|
4.00
|
|
|
$
|
64,500
|
|
|
5.00
|
|
|||
First Business Bank – Milwaukee
|
|
22,323
|
|
|
9.15
|
|
|
9,758
|
|
|
4.00
|
|
|
9,758
|
|
|
4.00
|
|
|
12,198
|
|
|
5.00
|
|
||||
Alterra Bank
|
|
28,685
|
|
|
10.58
|
|
|
10,842
|
|
|
4.00
|
|
|
10,842
|
|
|
4.00
|
|
|
13,552
|
|
|
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, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
189,163
|
|
|
11.11
|
%
|
|
$
|
136,208
|
|
|
8.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
141,388
|
|
|
11.12
|
|
|
101,754
|
|
|
8.00
|
|
|
$
|
127,193
|
|
|
10.00
|
%
|
||
First Business Bank – Milwaukee
|
|
20,931
|
|
|
12.03
|
|
|
13,914
|
|
|
8.00
|
|
|
17,392
|
|
|
10.00
|
|
|||
Alterra Bank
|
|
30,300
|
|
|
11.39
|
|
|
21,279
|
|
|
8.00
|
|
|
26,598
|
|
|
10.00
|
|
|||
Tier 1 capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
149,920
|
|
|
8.81
|
%
|
|
$
|
102,156
|
|
|
6.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
128,852
|
|
|
10.13
|
|
|
76,316
|
|
|
6.00
|
|
|
$
|
101,754
|
|
|
8.00
|
%
|
||
First Business Bank – Milwaukee
|
|
19,172
|
|
|
11.02
|
|
|
10,435
|
|
|
6.00
|
|
|
13,914
|
|
|
8.00
|
|
|||
Alterra Bank
|
|
28,278
|
|
|
10.63
|
|
|
15,959
|
|
|
6.00
|
|
|
21,279
|
|
|
8.00
|
|
|||
Common equity tier 1 capital
(to risk-weighted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
139,920
|
|
|
8.22
|
%
|
|
$
|
76,617
|
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
128,852
|
|
|
10.13
|
|
|
57,237
|
|
|
4.50
|
|
|
$
|
110,669
|
|
|
6.50
|
%
|
||
First Business Bank – Milwaukee
|
|
19,172
|
|
|
11.02
|
|
|
7,826
|
|
|
4.50
|
|
|
82,675
|
|
|
6.50
|
|
|||
Alterra Bank
|
|
28,278
|
|
|
10.63
|
|
|
11,969
|
|
|
4.50
|
|
|
11,305
|
|
|
6.50
|
|
|||
Tier 1 leverage capital
(to adjusted assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated
|
|
$
|
149,920
|
|
|
8.63
|
%
|
|
$
|
69,466
|
|
|
4.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
First Business Bank
|
|
128,852
|
|
|
10.44
|
|
|
49,359
|
|
|
4.00
|
|
|
$
|
61,698
|
|
|
5.00
|
%
|
||
First Business Bank – Milwaukee
|
|
19,172
|
|
|
7.81
|
|
|
9,821
|
|
|
4.00
|
|
|
12,276
|
|
|
5.00
|
|
|||
Alterra Bank
|
|
28,278
|
|
|
9.89
|
|
|
11,441
|
|
|
4.00
|
|
|
14,301
|
|
|
5.00
|
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In Thousands)
|
||||||
Stockholders’ equity of the Corporation
|
|
$
|
161,650
|
|
|
$
|
150,832
|
|
Net unrealized and accumulated losses on specific items
|
|
522
|
|
|
80
|
|
||
Disallowed servicing assets
|
|
(652
|
)
|
|
(370
|
)
|
||
Disallowed goodwill and other intangibles
|
|
(10,560
|
)
|
|
(10,622
|
)
|
||
Junior subordinated notes
|
|
10,004
|
|
|
10,000
|
|
||
Tier 1 capital
|
|
160,964
|
|
|
149,920
|
|
||
Allowable general valuation allowances and subordinated debt
|
|
43,153
|
|
|
39,243
|
|
||
Total capital
|
|
$
|
204,117
|
|
|
$
|
189,163
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Dollars in Thousands, Except Share Data)
|
|||||||||||
Basic earnings per common share
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
14,909
|
|
|
$
|
16,514
|
|
|
$
|
14,139
|
|
Less: earnings allocated to participating securities
|
|
219
|
|
|
273
|
|
|
294
|
|
|||
Basic earnings allocated to common shareholders
|
|
$
|
14,690
|
|
|
$
|
16,241
|
|
|
$
|
13,845
|
|
Weighted-average common shares outstanding, excluding participating securities
|
|
8,573,722
|
|
|
8,549,176
|
|
|
7,869,956
|
|
|||
Basic earnings per common share
|
|
$
|
1.71
|
|
|
$
|
1.90
|
|
|
$
|
1.76
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share
|
|
|
|
|
|
|
||||||
Earnings allocated to common shareholders
|
|
$
|
14,690
|
|
|
$
|
16,241
|
|
|
$
|
13,845
|
|
Reallocation of undistributed earnings
|
|
—
|
|
|
—
|
|
|
1
|
|
|||
Diluted earnings allocated to common shareholders
|
|
$
|
14,690
|
|
|
$
|
16,241
|
|
|
$
|
13,846
|
|
Weighted-average common shares outstanding, excluding participating securities
|
|
8,573,722
|
|
|
8,549,176
|
|
|
7,869,956
|
|
|||
Dilutive effect of share-based awards
|
|
—
|
|
|
1,146
|
|
|
36,811
|
|
|||
Weighted-average diluted common shares outstanding, excluding participating securities
|
|
8,573,722
|
|
|
8,550,322
|
|
|
7,906,767
|
|
|||
Diluted earnings per common share
|
|
$
|
1.71
|
|
|
$
|
1.90
|
|
|
$
|
1.75
|
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
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
|
|
135,471
|
|
|
$
|
20.13
|
|
|
154,998
|
|
|
$
|
16.97
|
|
|
169,418
|
|
|
$
|
11.55
|
|
Granted
|
|
60,415
|
|
|
22.74
|
|
|
53,790
|
|
|
22.52
|
|
|
64,522
|
|
|
22.49
|
|
|||
Vested
|
|
(56,090
|
)
|
|
18.71
|
|
|
(64,874
|
)
|
|
15.23
|
|
|
(78,942
|
)
|
|
9.86
|
|
|||
Forfeited
|
|
(23,551
|
)
|
|
20.90
|
|
|
(8,443
|
)
|
|
15.03
|
|
|
—
|
|
|
—
|
|
|||
Nonvested balance as of end of year
|
|
116,245
|
|
|
21.13
|
|
|
135,471
|
|
|
20.13
|
|
|
154,998
|
|
|
16.97
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Share-based compensation expense
|
|
$
|
994
|
|
|
$
|
1,063
|
|
|
$
|
887
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
General and administrative expenses
|
|
$
|
1,545
|
|
|
$
|
1,759
|
|
|
$
|
1,024
|
|
Travel and other employee expenses
|
|
1,354
|
|
|
1,277
|
|
|
1,069
|
|
|||
Computer software expenses
|
|
2,160
|
|
|
1,649
|
|
|
886
|
|
|||
Partnership income
|
|
(790
|
)
|
|
(481
|
)
|
|
(774
|
)
|
|||
Foreclosed properties expenses
|
|
25
|
|
|
52
|
|
|
5
|
|
|||
Other expenses
|
|
104
|
|
|
295
|
|
|
202
|
|
|||
Total other non-interest expense
|
|
$
|
4,398
|
|
|
$
|
4,551
|
|
|
$
|
2,412
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
2,839
|
|
|
$
|
5,881
|
|
|
$
|
4,235
|
|
State
|
|
425
|
|
|
1,338
|
|
|
1,459
|
|
|||
Current tax expense
|
|
3,264
|
|
|
7,219
|
|
|
5,694
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(1,000
|
)
|
|
1,036
|
|
|
1,299
|
|
|||
State
|
|
(108
|
)
|
|
122
|
|
|
90
|
|
|||
Deferred tax (benefit) expense
|
|
(1,108
|
)
|
|
1,158
|
|
|
1,389
|
|
|||
Total income tax expense
|
|
$
|
2,156
|
|
|
$
|
8,377
|
|
|
$
|
7,083
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
|
(In Thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
||||
Allowance for loan and lease losses
|
|
$
|
8,177
|
|
|
$
|
6,422
|
|
SBA recourse reserve
|
|
720
|
|
|
—
|
|
||
Excess book basis over tax basis for net assets acquired
|
|
336
|
|
|
697
|
|
||
Deferred compensation
|
|
951
|
|
|
1,305
|
|
||
State net operating loss carryforwards
|
|
548
|
|
|
666
|
|
||
Non-accrual loan interest
|
|
815
|
|
|
813
|
|
||
Capital loss carryforwards
|
|
32
|
|
|
33
|
|
||
Unrealized losses on securities
|
|
349
|
|
|
50
|
|
||
Other
|
|
394
|
|
|
342
|
|
||
Total deferred tax assets before valuation allowance
|
|
12,322
|
|
|
10,328
|
|
||
Valuation allowance
|
|
—
|
|
|
(68
|
)
|
||
Total deferred tax assets
|
|
12,322
|
|
|
10,260
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Leasing and fixed asset activities
|
|
7,389
|
|
|
6,878
|
|
||
Loan servicing asset
|
|
780
|
|
|
612
|
|
||
Other
|
|
101
|
|
|
137
|
|
||
Total deferred tax liabilities
|
|
8,270
|
|
|
7,627
|
|
||
Net deferred tax asset
|
|
$
|
4,052
|
|
|
$
|
2,633
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Change in net deferred tax assets
|
|
$
|
1,419
|
|
|
$
|
(970
|
)
|
|
$
|
(119
|
)
|
Deferred taxes allocated to other comprehensive income
|
|
(311
|
)
|
|
(188
|
)
|
|
352
|
|
|||
Acquired deferred tax assets
|
|
—
|
|
|
—
|
|
|
(1,622
|
)
|
|||
Deferred income tax benefit (expense)
|
|
$
|
1,108
|
|
|
$
|
(1,158
|
)
|
|
$
|
(1,389
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(Dollars in Thousands)
|
||||||||||
Income before income tax expense
|
|
$
|
17,065
|
|
|
$
|
24,891
|
|
|
$
|
21,222
|
|
Tax expense at statutory federal rate of 35%, 34.42% and 34% applied to income before income tax expense, respectively
|
|
$
|
5,973
|
|
|
$
|
8,568
|
|
|
$
|
7,305
|
|
State income tax, net of federal effect
|
|
206
|
|
|
968
|
|
|
1,000
|
|
|||
Tax-exempt security and loan income, net of TEFRA adjustments
|
|
(1,114
|
)
|
|
(879
|
)
|
|
(736
|
)
|
|||
Bank-owned life insurance
|
|
(341
|
)
|
|
(330
|
)
|
|
(296
|
)
|
|||
Non-deductible transaction costs
|
|
—
|
|
|
—
|
|
|
124
|
|
|||
Tax credits, net
|
|
(2,696
|
)
|
|
(246
|
)
|
|
(375
|
)
|
|||
Other
|
|
128
|
|
|
296
|
|
|
61
|
|
|||
Total income tax expense
|
|
$
|
2,156
|
|
|
$
|
8,377
|
|
|
$
|
7,083
|
|
Effective tax rate
|
|
12.63
|
%
|
|
33.65
|
%
|
|
33.38
|
%
|
|
|
At December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In Thousands)
|
||||||
Commitments to extend credit, primarily commercial loans
|
|
$
|
539,146
|
|
|
$
|
512,627
|
|
Standby letters of credit
|
|
11,771
|
|
|
18,622
|
|
|
|
At December 31,
|
||
|
|
2016
|
||
|
|
(In Thousands)
|
||
Balance at the beginning of the period
|
|
$
|
—
|
|
SBA recourse provision
|
|
2,068
|
|
|
Charge-offs, net
|
|
(318
|
)
|
|
Balance at the end of the period
|
|
$
|
1,750
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
—
|
|
|
$
|
6,295
|
|
|
$
|
—
|
|
|
$
|
6,295
|
|
Municipal obligations
|
|
—
|
|
|
8,156
|
|
|
—
|
|
|
8,156
|
|
||||
Asset backed securities
|
|
—
|
|
|
1,081
|
|
|
—
|
|
|
1,081
|
|
||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
31,213
|
|
|
—
|
|
|
31,213
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
99,148
|
|
|
—
|
|
|
99,148
|
|
||||
Interest rate swaps
|
|
—
|
|
|
352
|
|
|
—
|
|
|
352
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
—
|
|
|
352
|
|
|
—
|
|
|
352
|
|
|
|
December 31, 2015
|
||||||||||||||
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency obligations - government-sponsored enterprises
|
|
$
|
—
|
|
|
$
|
8,017
|
|
|
$
|
—
|
|
|
$
|
8,017
|
|
Municipal obligations
|
|
—
|
|
|
4,283
|
|
|
—
|
|
|
4,283
|
|
||||
Asset backed securities
|
|
—
|
|
|
1,269
|
|
|
—
|
|
|
1,269
|
|
||||
Collateralized mortgage obligations - government issued
|
|
—
|
|
|
44,543
|
|
|
—
|
|
|
44,543
|
|
||||
Collateralized mortgage obligations - government-sponsored enterprises
|
|
—
|
|
|
82,436
|
|
|
—
|
|
|
82,436
|
|
||||
Interest rate swaps
|
|
—
|
|
|
552
|
|
|
—
|
|
|
552
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
—
|
|
|
552
|
|
|
—
|
|
|
552
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Impaired loans
|
|
$
|
—
|
|
|
$
|
12,268
|
|
|
$
|
1,097
|
|
|
$
|
13,365
|
|
Foreclosed properties
|
|
—
|
|
|
1,473
|
|
|
—
|
|
|
1,473
|
|
||||
Loan servicing rights
|
|
—
|
|
|
—
|
|
|
1,906
|
|
|
1,906
|
|
|
|
December 31, 2015
|
||||||||||||||
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In Thousands)
|
||||||||||||||
Impaired loans
|
|
$
|
—
|
|
|
$
|
11,518
|
|
|
$
|
6,245
|
|
|
$
|
17,763
|
|
Foreclosed properties
|
|
—
|
|
|
1,677
|
|
|
—
|
|
|
1,677
|
|
||||
Loan servicing rights
|
|
—
|
|
|
—
|
|
|
1,563
|
|
|
1,563
|
|
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Carrying
Amount |
|
Fair Value
|
||||||||||||||||
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
77,517
|
|
|
$
|
77,517
|
|
|
$
|
55,622
|
|
|
$
|
21,895
|
|
|
$
|
—
|
|
Securities available-for-sale
|
|
145,893
|
|
|
145,893
|
|
|
—
|
|
|
145,893
|
|
|
—
|
|
|||||
Securities held-to-maturity
|
|
38,612
|
|
|
38,520
|
|
|
—
|
|
|
38,520
|
|
|
—
|
|
|||||
Loans held for sale
|
|
1,111
|
|
|
1,111
|
|
|
—
|
|
|
1,111
|
|
|
—
|
|
|||||
Loans and lease receivables, net
|
|
1,429,763
|
|
|
1,447,044
|
|
|
—
|
|
|
12,268
|
|
|
1,434,776
|
|
|||||
Bank-owned life insurance
|
|
39,048
|
|
|
39,048
|
|
|
—
|
|
|
39,048
|
|
|
—
|
|
|||||
Federal Home Loan Bank and Federal Reserve Bank stock
|
|
2,131
|
|
|
2,131
|
|
|
—
|
|
|
2,131
|
|
|
—
|
|
|||||
Accrued interest receivable
|
|
4,677
|
|
|
4,677
|
|
|
4,677
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
352
|
|
|
352
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
|
1,538,855
|
|
|
1,539,413
|
|
|
$
|
1,063,720
|
|
|
475,693
|
|
|
—
|
|
||||
Federal Home Loan Bank advances and other borrowings
|
|
59,676
|
|
|
60,893
|
|
|
—
|
|
|
60,893
|
|
|
—
|
|
|||||
Junior subordinated notes
|
|
10,004
|
|
|
9,072
|
|
|
—
|
|
|
—
|
|
|
9,072
|
|
|||||
Accrued interest payable
|
|
1,765
|
|
|
1,765
|
|
|
1,765
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
352
|
|
|
352
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|||||
Off balance sheet items:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
|
58
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
|
December 31, 2015
|
||||||||||||||||||
|
|
Carrying
Amount |
|
Fair Value
|
||||||||||||||||
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
|
(In Thousands)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
113,564
|
|
|
$
|
113,564
|
|
|
$
|
100,063
|
|
|
$
|
13,501
|
|
|
$
|
—
|
|
Securities available-for-sale
|
|
140,548
|
|
|
140,548
|
|
|
—
|
|
|
140,548
|
|
|
—
|
|
|||||
Securities held-to-maturity
|
|
37,282
|
|
|
37,558
|
|
|
—
|
|
|
37,558
|
|
|
—
|
|
|||||
Loans held for sale
|
|
2,702
|
|
|
2,702
|
|
|
—
|
|
|
2,702
|
|
|
—
|
|
|||||
Loans and lease receivables, net
|
|
1,414,649
|
|
|
1,445,773
|
|
|
—
|
|
|
11,518
|
|
|
1,434,255
|
|
|||||
Bank-owned life insurance
|
|
28,298
|
|
|
28,298
|
|
|
—
|
|
|
28,298
|
|
|
—
|
|
|||||
Federal Home Loan Bank and Federal Reserve Bank stock
|
|
2,843
|
|
|
2,843
|
|
|
—
|
|
|
2,843
|
|
|
—
|
|
|||||
Accrued interest receivable
|
|
4,412
|
|
|
4,412
|
|
|
4,412
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
552
|
|
|
552
|
|
|
—
|
|
|
552
|
|
|
—
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
|
1,577,231
|
|
|
1,577,838
|
|
|
1,009,762
|
|
|
$
|
568,076
|
|
|
—
|
|
||||
Federal Home Loan Bank advances and other borrowings
|
|
34,740
|
|
|
35,353
|
|
|
—
|
|
|
35,353
|
|
|
—
|
|
|||||
Junior subordinated notes
|
|
9,990
|
|
|
6,614
|
|
|
—
|
|
|
—
|
|
|
6,614
|
|
|||||
Accrued interest payable
|
|
1,766
|
|
|
1,766
|
|
|
1,766
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swaps
|
|
552
|
|
|
552
|
|
|
—
|
|
|
552
|
|
|
—
|
|
|||||
Off balance sheet items:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
|
183
|
|
|
183
|
|
|
—
|
|
|
—
|
|
|
183
|
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In Thousands)
|
||||||
Assets
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
127
|
|
|
$
|
1,099
|
|
Investments in subsidiaries, at equity
|
|
196,221
|
|
|
187,530
|
|
||
Leasehold improvements and equipment, net
|
|
1,605
|
|
|
1,519
|
|
||
Other assets
|
|
4,738
|
|
|
2,849
|
|
||
Total assets
|
|
$
|
202,691
|
|
|
$
|
192,997
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Borrowed funds
|
|
$
|
33,512
|
|
|
$
|
35,751
|
|
Other liabilities
|
|
7,529
|
|
|
6,414
|
|
||
Total liabilities
|
|
41,041
|
|
|
42,165
|
|
||
Stockholders’ equity
|
|
161,650
|
|
|
150,832
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
202,691
|
|
|
$
|
192,997
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Net interest expense
|
|
2,799
|
|
|
2,777
|
|
|
2,071
|
|
|||
Non-interest income
|
|
|
|
|
|
|
||||||
Consulting and rental income from consolidated subsidiaries
|
|
16,036
|
|
|
13,398
|
|
|
10,776
|
|
|||
Other
|
|
33
|
|
|
35
|
|
|
34
|
|
|||
Total non-interest income
|
|
16,069
|
|
|
13,433
|
|
|
10,810
|
|
|||
Non-interest expense
|
|
19,250
|
|
|
16,854
|
|
|
13,444
|
|
|||
Loss before income tax benefit and equity in undistributed net income of consolidated subsidiaries
|
|
5,980
|
|
|
6,198
|
|
|
4,705
|
|
|||
Income tax benefit
|
|
2,170
|
|
|
2,527
|
|
|
1,659
|
|
|||
Loss before equity in undistributed net income of consolidated subsidiaries
|
|
3,810
|
|
|
3,671
|
|
|
3,046
|
|
|||
Equity in undistributed net income of consolidated subsidiaries
|
|
18,719
|
|
|
20,185
|
|
|
17,185
|
|
|||
Net income
|
|
$
|
14,909
|
|
|
$
|
16,514
|
|
|
$
|
14,139
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In Thousands)
|
||||||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
14,909
|
|
|
$
|
16,514
|
|
|
$
|
14,139
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
|
||||||
Equity in undistributed earnings of consolidated subsidiaries
|
|
(18,719
|
)
|
|
(20,185
|
)
|
|
(17,185
|
)
|
|||
Share-based compensation
|
|
994
|
|
|
448
|
|
|
416
|
|
|||
Excess tax benefit from share-based compensation
|
|
(83
|
)
|
|
—
|
|
|
—
|
|
|||
Increase in other liabilities
|
|
1,198
|
|
|
2,390
|
|
|
1,002
|
|
|||
Other, net
|
|
(3,162
|
)
|
|
(481
|
)
|
|
(1,147
|
)
|
|||
Net cash used in operating activities
|
|
(4,863
|
)
|
|
(1,314
|
)
|
|
(2,775
|
)
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Dividends received from subsidiaries
|
|
13,534
|
|
|
7,034
|
|
|
8,000
|
|
|||
Capital contributions to subsidiaries
|
|
(3,500
|
)
|
|
(3,000
|
)
|
|
(32,980
|
)
|
|||
Net cash provided by (used in) investing activities
|
|
10,034
|
|
|
4,034
|
|
|
(24,980
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Net (decrease) increase in short-term borrowed funds
|
|
(1,500
|
)
|
|
1,500
|
|
|
1,000
|
|
|||
Proceeds from issuance of long-term debt, net of issuance costs
|
|
—
|
|
|
—
|
|
|
14,469
|
|
|||
Repayment of long-term debt
|
|
—
|
|
|
—
|
|
|
(4,000
|
)
|
|||
Proceeds from issuance of common stock
|
|
—
|
|
|
—
|
|
|
16,560
|
|
|||
Proceeds from exercise of stock options
|
|
—
|
|
|
300
|
|
|
936
|
|
|||
Purchase of treasury stock
|
|
(467
|
)
|
|
(946
|
)
|
|
(1,795
|
)
|
|||
Excess tax benefit from share-based compensation
|
|
—
|
|
|
162
|
|
|
305
|
|
|||
Cash dividends paid
|
|
(4,176
|
)
|
|
(3,816
|
)
|
|
(3,396
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(6,143
|
)
|
|
(2,800
|
)
|
|
24,079
|
|
|||
Decrease in cash and cash equivalents
|
|
(972
|
)
|
|
(80
|
)
|
|
(3,676
|
)
|
|||
Cash and due from banks at the beginning of the period
|
|
1,099
|
|
|
1,179
|
|
|
4,855
|
|
|||
Cash and due from banks at the end of the period
|
|
$
|
127
|
|
|
$
|
1,099
|
|
|
$
|
1,179
|
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||
|
Fourth
Quarter |
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
||||||||||||||||
|
(Dollars in Thousands, Except Share Data)
|
||||||||||||||||||||||||||||||
Interest income
|
$
|
20,321
|
|
|
$
|
18,898
|
|
|
$
|
19,555
|
|
|
$
|
19,343
|
|
|
$
|
18,600
|
|
|
$
|
18,135
|
|
|
$
|
17,520
|
|
|
$
|
18,216
|
|
Interest expense
|
3,568
|
|
|
3,603
|
|
|
3,814
|
|
|
3,804
|
|
|
3,688
|
|
|
3,525
|
|
|
3,332
|
|
|
3,286
|
|
||||||||
Net interest income
|
16,753
|
|
|
15,295
|
|
|
15,741
|
|
|
15,539
|
|
|
14,912
|
|
|
14,610
|
|
|
14,188
|
|
|
14,930
|
|
||||||||
Provision for loan and lease losses
|
994
|
|
|
3,537
|
|
|
2,762
|
|
|
525
|
|
|
1,895
|
|
|
287
|
|
|
520
|
|
|
684
|
|
||||||||
Non-interest income
|
3,931
|
|
|
3,640
|
|
|
5,823
|
|
|
4,594
|
|
|
4,935
|
|
|
4,102
|
|
|
4,126
|
|
|
3,848
|
|
||||||||
Non-interest expense
|
14,523
|
|
|
15,753
|
|
|
13,458
|
|
|
12,699
|
|
|
11,684
|
|
|
11,984
|
|
|
11,974
|
|
|
11,732
|
|
||||||||
Income (loss) before income tax expense
|
5,167
|
|
|
(355
|
)
|
|
5,344
|
|
|
6,909
|
|
|
6,268
|
|
|
6,441
|
|
|
5,820
|
|
|
6,362
|
|
||||||||
Income tax expense (benefit)
(1)
|
1,199
|
|
|
(3,020
|
)
|
|
1,621
|
|
|
2,356
|
|
|
2,185
|
|
|
2,060
|
|
|
1,962
|
|
|
2,170
|
|
||||||||
Net income
(1)
|
$
|
3,968
|
|
|
$
|
2,665
|
|
|
$
|
3,723
|
|
|
$
|
4,553
|
|
|
$
|
4,083
|
|
|
$
|
4,381
|
|
|
$
|
3,858
|
|
|
$
|
4,192
|
|
Per common share
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings
(1)
|
$
|
0.46
|
|
|
$
|
0.31
|
|
|
$
|
0.43
|
|
|
$
|
0.52
|
|
|
$
|
0.47
|
|
|
$
|
0.50
|
|
|
$
|
0.45
|
|
|
$
|
0.48
|
|
Diluted earnings
(1)
|
0.46
|
|
|
0.31
|
|
|
0.43
|
|
|
0.52
|
|
|
0.47
|
|
|
0.50
|
|
|
0.45
|
|
|
0.48
|
|
||||||||
Dividends declared
|
0.12
|
|
|
0.12
|
|
|
0.12
|
|
|
0.12
|
|
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
(1)
|
Results for the third quarter, second quarter and first quarter 2016 have been adjusted to reflect early adoption of ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” See Note 1 for additional details related to the adjustments.
|
(2)
|
All per share amounts have been adjusted to reflect the 2-for-1 stock split in the form of a 100% stock dividend completed in August 2015.
|
(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 23, 2017
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.
|
Plan category
|
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
|
—
|
|
|
$
|
—
|
|
|
274,581
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
FIRST BUSINESS FINANCIAL SERVICES, INC.
|
|
|
|
|
March 10, 2017
|
|
|
/s/ Corey A. Chambas
|
|
|
|
Corey A. Chambas
|
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Corey A. Chambas
|
|
Chief Executive Officer
|
|
March 10, 2017
|
Corey A. Chambas
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ Edward G. Sloane, Jr.
|
|
Chief Financial Officer
|
|
March 10, 2017
|
Edward G. Sloane, Jr.
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/s/ Michael J. Murphy
|
|
Chief Accounting Officer
|
|
March 10, 2017
|
Michael J. Murphy
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
/s/ Jerome J. Smith
|
|
Chairman of the Board of Directors
|
|
March 10, 2017
|
Jerome J. Smith
|
|
|
|
|
|
|
|
|
|
/s/ Mark D. Bugher
|
|
Director
|
|
March 10, 2017
|
Mark D. Bugher
|
|
|
|
|
|
|
|
|
|
/s/ Jan A. Eddy
|
|
Director
|
|
March 10, 2017
|
Jan A. Eddy
|
|
|
|
|
|
|
|
|
|
/s/ John J. Harris
|
|
Director
|
|
March 10, 2017
|
John J. Harris
|
|
|
|
|
|
|
|
|
|
/s/ Gerald L. Kilcoyne
|
|
Director
|
|
March 10, 2017
|
Gerald L. Kilcoyne
|
|
|
|
|
|
|
|
|
|
/s/ John M. Silseth
|
|
Director
|
|
March 10, 2017
|
John M. Silseth
|
|
|
|
|
|
|
|
|
|
/s/ Carol P. Sanders
|
|
Director
|
|
March 10, 2017
|
Carol P. Sanders
|
|
|
|
|
|
|
|
|
|
/s/ Dean W. Voeks
|
|
Director
|
|
March 10, 2017
|
Dean W. Voeks
|
|
|
|
|
|
|
Exhibit No.
|
Exhibit Name
|
|
|
3.1
|
Amended and Restated Articles of Incorporation of First Business Financial Services, Inc. (Previously filed as Exhibit 3.1 to the Annual Report on Form 10-K filed on March 13, 2009, and refiled herewith in accordance with Item 10(d) of Regulation S-K)
|
|
|
3.2
|
Amended and Restated Bylaws of First Business Financial Services, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on January 31, 2012)
|
|
|
|
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.
|
|
|
4.1
|
Rights Agreement, dated as of June 5, 2008, between the Registrant and Computershare Investor Services, Inc. (Previously filed as Exhibit 4.1 to the Registration Statement on Form 8-A filed on June 6, 2008, and refiled herewith in accordance with Item 10(d) of Regulation S-K)
|
|
|
4.2
|
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)
|
|
|
10.1
*
|
2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on July 27, 2012)
|
|
|
10.2
*
|
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)
|
|
|
10.3
*
|
Form of Executive Change-in-Control and Severance Agreement (Previously filed as Exhibit 10.1 to the Current Report on Form 8-K filed on February 10, 2006, and refiled herewith in accordance with Item 10(d) of Regulation S-K)
|
|
|
10.4
*
|
Amended and Restated Agreement effective December 22, 2014 between First Business Bank and Corey A. Chambas (incorporated by reference to Exhibit 10.8 of the Registrant’s Annual Report on Form 10-K filed on March 16, 2015)
|
|
|
10.5
*
|
First Amendment of Agreement by and between First Business Bank and Corey Chambas (Amended and Restated December 22, 2014)(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 29, 2016)
|
|
|
10.6
*
|
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)
|
|
|
10.7
*
|
Offer Letter between the Company and David R. Seiler. accepted March 25, 2016 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on April 8, 2016)
|
|
|
21
|
Subsidiaries of the Registrant
|
|
|
23
|
Consent of KPMG LLP
|
|
|
31.1
|
Certification of the Chief Executive Officer
|
|
|
31.2
|
Certification of the Chief Financial Officer
|
|
|
32
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
|
|
101
|
The following financial information from First Business Financial Services, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, (ii) Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014, (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014, and (vi) the Notes to Consolidated Financial Statements
|
|
|
*
|
Management contract or compensatory plan.
|
1.
|
Certain Definitions
|
2
|
2.
|
Appointment of Rights Agent
|
3
|
3.
|
Issue of Right Certificates
|
3
|
4.
|
Form of Right Certificates
|
4
|
5.
|
Countersignature and Registration
|
4
|
6.
|
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
|
4
|
7.
|
Exercise of Rights; Purchase Price; Expiration Date of Rights
|
5
|
8.
|
Cancellation and Destruction of Right Certificates
|
5
|
9.
|
Reservation and Availability of Common Shares
|
5
|
10.
|
Common Shares Record Date
|
6
|
11.
|
Adjustment of Purchase Price, Number of Shares or Number of Rights
|
6
|
12.
|
Certificate of Adjusted Purchase Price or Number of Shares
|
9
|
13.
|
Consolidation, Merger, Share Exchange or Sale or Transfer of Assets or Earning Power
|
9
|
14.
|
Fractional Rights and Fractional Shares
|
10
|
15.
|
Rights of Action
|
11
|
16.
|
Agreement of Right Holders
|
11
|
17.
|
Right Certificate Holder Not Deemed a Shareholder
|
11
|
18.
|
Concerning the Rights Agent
|
11
|
19.
|
Merger or Consolidation or Change of Name of Rights Agent
|
12
|
20.
|
Duties of Rights Agent
|
12
|
21.
|
Change of Rights Agent
|
13
|
22.
|
Issuance of New Right Certificates
|
13
|
23.
|
Redemption
|
13
|
24.
|
Exchange
|
14
|
25.
|
Notice of Certain Events
|
14
|
26.
|
Notices
|
15
|
27.
|
Supplements and Amendments
|
15
|
28.
|
Determinations and Actions by the Board of Directors
|
15
|
29.
|
Successors
|
16
|
30.
|
Benefits of this Agreement
|
16
|
31.
|
Severability
|
16
|
32.
|
Governing Law
|
16
|
33.
|
Counterparts
|
16
|
34.
|
Descriptive Headings
|
16
|
35.
|
Force Majeure
|
16
|
|
This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between First Business Financial Services, Inc. and Computershare Trust Company, N.A., dated as of June 5, 2008, and as such agreement may be amended (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of First Business Financial Services, Inc. Under certain circumstances set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. First Business Financial Services, Inc. will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, such Rights issued to, or held by, an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether held by such person or any subsequent holder, shall become null and void.
|
|
First Business Financial Services, Inc.
|
|
PO Box 44961
|
|
Madison, WI 53744-4961
|
|
Attention: Secretary
|
|
Computershare Trust Company, N.A.
|
|
2 North LaSalle Street
|
|
Chicago, IL 60602
|
|
Attention: Client Services
|
|
|
FIRST BUSINESS FINANCIAL
|
|
|
SERVICES, INC.
|
|
|
|
Attest: /s/ Steven R. Barth
|
|
/s/ Corey Chambas
|
By: Steven R. Barth
|
|
By: Corey Chambas
|
Title: Foley & Lardner LLP
|
|
Title: President and Chief Executive Officer
|
|
|
|
|
|
COMPUTERSHARE TRUST COMPANY,
|
|
|
N.A.
|
|
|
|
Attest: /s/ David L. Adamson
|
|
/s/ Robert A. Buckley, Jr.
|
By: David L. Adamson
|
|
By: Robert A. Buckley Jr.
|
Title: Manager, Investor Services
|
|
Title: Sr. Vice President
|
Certificate No. R-
|
_______ Rights
|
|
NOT EXERCISABLE AFTER JUNE 5, 2018 (SUBJECT TO EXTENSION) OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
|
|
FIRST BUSINESS FINANCIAL
|
|
SERVICES, INC.
|
|
|
Attest:_______________________________
|
____________________________________________________
|
By:__________________________________
|
By:__________________________________
|
Title:_________________________________
|
Title:_________________________________
|
By:
|
_______________________________
|
|
Authorized Signature
|
|
_____________________________________
|
|
Signature
|
|
_____________________________________
|
|
Signature
|
|
(Please print name and address)
|
|
(Please print name and address)
|
|
_____________________________________
|
|
Signature
|
|
_____________________________________
|
|
Signature
|
Form of Executive Change-in-Control
|
Severance Agreement for
|
[Executive]
|
[Subsidiary]
|
______________, 20__
|
Article 1. Definitions
|
3
|
|
|
|
|
Article 2. Severance Benefits
|
5
|
|
|
|
|
Article 3. Restrictive Covenants
|
7
|
|
|
|
|
Article 4. Treatment of Excise Taxes
|
8
|
|
|
|
|
Article 5. Contractual Rights and Legal Remedies
|
8
|
|
|
|
|
Article 6. Term of Agreement
|
9
|
|
|
|
|
Article 7. Successors
|
9
|
|
|
|
|
Article 8. Miscellaneous
|
9
|
|
By:
|
_________________________________
|
Subsidiary
|
State of Incorporation or Organization
|
First Business Bank
|
Wisconsin
|
First Business Capital Corp.
|
Wisconsin
|
First Business Equipment Finance, LLC
|
Wisconsin
|
Rimrock Road Investment Fund, LLC
|
Wisconsin
|
BOC Investment, LLC
|
Wisconsin
|
Mitchell Street Apartments Investment, LLC
|
Wisconsin
|
First Madison Investment Corp.
|
Nevada
|
|
|
First Business Bank - Milwaukee
|
Wisconsin
|
FBB-Milwaukee Real Estate, LLC
|
Wisconsin
|
|
|
Alterra Bank
|
Kansas
|
|
|
FBFS Statutory Trust II
|
Delaware
|
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.
|
Any 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 10, 2017
|
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):
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a.
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Any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Edward G. Sloane, Jr.
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Edward G. Sloane, Jr.
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Chief Financial Officer
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March 10, 2017
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/s/ Corey A. Chambas
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Corey A. Chambas
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Chief Executive Officer
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March 10, 2017
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/s/ Edward G. Sloane, Jr.
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Edward G. Sloane, Jr.
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Chief Financial Officer
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March 10, 2017
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