Michigan
|
38-2032782
|
|
(State or jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification Number)
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Common stock, no par value
|
22,297,545
|
|
Class
|
Outstanding at November 3, 2015
|
Number(s)
|
||
PART I -
|
Financial Information
|
|
Item 1.
|
3
|
|
4
|
||
5
|
||
6
|
||
7
|
||
8-60
|
||
Item 2.
|
61-87
|
|
Item 3.
|
88
|
|
Item 4.
|
88
|
|
PART II -
|
Other Information
|
|
Item 1A
|
89
|
|
Item 2.
|
89
|
|
Item 6.
|
90
|
•
|
economic, market, operational, liquidity, credit, and interest rate risks associated with our business;
|
•
|
economic conditions generally and in the financial services industry, particularly economic conditions within Michigan and the regional and local real estate markets in which our bank operates;
|
•
|
the failure of assumptions underlying the establishment of, and provisions made to, our allowance for loan losses;
|
•
|
the failure of assumptions underlying our estimate of probable incurred losses from vehicle service contract payment plan counterparty contingencies, including our assumptions regarding future cancellations of vehicle service contracts, the value to us of collateral that may be available to recover funds due from our counterparties, and our ability to enforce the contractual obligations of our counterparties to pay amounts owing to us;
|
•
|
increased competition in the financial services industry, either nationally or regionally;
|
•
|
our ability to achieve loan and deposit growth;
|
•
|
volatility and direction of market interest rates;
|
•
|
the continued services of our management team; and
|
•
|
implementation of new legislation, which may have significant effects on us and the financial services industry.
|
September 30,
2015
|
December 31,
2014
|
|||||||
(unaudited)
|
||||||||
(In thousands, except share amounts)
|
||||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
52,146
|
$
|
48,326
|
||||
Interest bearing deposits
|
53,051
|
25,690
|
||||||
Cash and Cash Equivalents
|
105,197
|
74,016
|
||||||
Interest bearing deposits - time
|
13,029
|
13,561
|
||||||
Trading securities
|
225
|
203
|
||||||
Securities available for sale
|
604,662
|
533,178
|
||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
|
15,286
|
19,919
|
||||||
Loans held for sale, carried at fair value
|
25,462
|
23,662
|
||||||
Loans
|
||||||||
Commercial
|
726,356
|
690,955
|
||||||
Mortgage
|
468,578
|
472,628
|
||||||
Installment
|
235,627
|
206,378
|
||||||
Payment plan receivables
|
37,438
|
40,001
|
||||||
Total Loans
|
1,467,999
|
1,409,962
|
||||||
Allowance for loan losses
|
(24,604
|
)
|
(25,990
|
)
|
||||
Net Loans
|
1,443,395
|
1,383,972
|
||||||
Other real estate and repossessed assets
|
3,851
|
6,454
|
||||||
Property and equipment, net
|
43,359
|
45,948
|
||||||
Bank-owned life insurance
|
54,098
|
53,625
|
||||||
Deferred tax assets, net
|
41,422
|
48,632
|
||||||
Capitalized mortgage loan servicing rights
|
11,630
|
12,106
|
||||||
Vehicle service contract counterparty receivables, net
|
7,324
|
7,237
|
||||||
Other intangibles
|
2,366
|
2,627
|
||||||
Accrued income and other assets
|
23,555
|
23,590
|
||||||
Total Assets
|
$
|
2,394,861
|
$
|
2,248,730
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Deposits
|
||||||||
Non-interest bearing
|
$
|
640,208
|
$
|
576,882
|
||||
Savings and interest-bearing checking
|
987,146
|
943,734
|
||||||
Reciprocal
|
47,918
|
53,668
|
||||||
Time
|
385,690
|
350,018
|
||||||
Total Deposits
|
2,060,962
|
1,924,302
|
||||||
Other borrowings
|
12,070
|
12,470
|
||||||
Subordinated debentures
|
35,569
|
35,569
|
||||||
Vehicle service contract counterparty payables
|
1,950
|
1,977
|
||||||
Accrued expenses and other liabilities
|
31,330
|
24,041
|
||||||
Total Liabilities
|
2,141,881
|
1,998,359
|
||||||
Shareholders’ Equity
|
||||||||
Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 22,548,562 shares at September 30, 2015 and 22,957,323 shares at December 31, 2014
|
343,601
|
352,462
|
||||||
Accumulated deficit
|
(86,125
|
)
|
(96,455
|
)
|
||||
Accumulated other comprehensive loss
|
(4,496
|
)
|
(5,636
|
)
|
||||
Total Shareholders’ Equity
|
252,980
|
250,371
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
2,394,861
|
$
|
2,248,730
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
(In thousands, except per share amounts)
|
||||||||||||||||
Interest Income
|
||||||||||||||||
Interest and fees on loans
|
$
|
17,869
|
$
|
17,818
|
$
|
52,859
|
$
|
54,179
|
||||||||
Interest on securities
|
||||||||||||||||
Taxable
|
1,901
|
1,644
|
5,528
|
4,623
|
||||||||||||
Tax-exempt
|
228
|
281
|
667
|
830
|
||||||||||||
Other investments
|
295
|
325
|
922
|
1,076
|
||||||||||||
Total Interest Income
|
20,293
|
20,068
|
59,976
|
60,708
|
||||||||||||
Interest Expense
|
||||||||||||||||
Deposits
|
987
|
1,236
|
2,961
|
3,789
|
||||||||||||
Other borrowings
|
465
|
649
|
1,382
|
1,720
|
||||||||||||
Total Interest Expense
|
1,452
|
1,885
|
4,343
|
5,509
|
||||||||||||
Net Interest Income
|
18,841
|
18,183
|
55,633
|
55,199
|
||||||||||||
Provision for loan losses
|
(244
|
)
|
(632
|
)
|
(1,037
|
)
|
(2,049
|
)
|
||||||||
Net Interest Income After Provision for Loan Losses
|
19,085
|
18,815
|
56,670
|
57,248
|
||||||||||||
Non-interest Income
|
||||||||||||||||
Service charges on deposit accounts
|
3,294
|
3,579
|
9,261
|
10,166
|
||||||||||||
Interchange income
|
2,169
|
1,984
|
6,551
|
5,992
|
||||||||||||
Net gains (losses) on assets
|
||||||||||||||||
Mortgage loans
|
1,812
|
1,490
|
5,735
|
4,139
|
||||||||||||
Securities
|
45
|
168
|
97
|
334
|
||||||||||||
Other than temporary impairment loss on securities
|
||||||||||||||||
Total impairment loss
|
-
|
(9
|
)
|
-
|
(9
|
)
|
||||||||||
Loss recognized in other comprehensive income
|
-
|
-
|
-
|
-
|
||||||||||||
Net impairment loss recognized in earnings
|
-
|
(9
|
)
|
-
|
(9
|
)
|
||||||||||
Mortgage loan servicing
|
(556
|
)
|
932
|
476
|
1,389
|
|||||||||||
Title insurance fees
|
281
|
243
|
874
|
734
|
||||||||||||
Net gain on branch sale
|
1,193
|
-
|
1,193
|
-
|
||||||||||||
Other
|
1,881
|
2,156
|
5,881
|
6,829
|
||||||||||||
Total Non-interest Income
|
10,119
|
10,543
|
30,068
|
29,574
|
||||||||||||
Non-Interest Expense
|
||||||||||||||||
Compensation and employee benefits
|
12,029
|
11,718
|
35,605
|
34,774
|
||||||||||||
Occupancy, net
|
1,940
|
2,079
|
6,399
|
6,715
|
||||||||||||
Data processing
|
2,001
|
1,790
|
5,958
|
5,653
|
||||||||||||
Loan and collection
|
816
|
1,391
|
2,938
|
4,283
|
||||||||||||
Furniture, fixtures and equipment
|
998
|
1,005
|
2,915
|
3,127
|
||||||||||||
Communications
|
754
|
712
|
2,184
|
2,212
|
||||||||||||
Legal and professional
|
519
|
559
|
1,352
|
1,380
|
||||||||||||
Advertising
|
406
|
427
|
1,338
|
1,547
|
||||||||||||
FDIC deposit insurance
|
350
|
396
|
1,044
|
1,235
|
||||||||||||
Interchange expense
|
279
|
368
|
859
|
1,112
|
||||||||||||
Credit card and bank service fees
|
197
|
226
|
602
|
734
|
||||||||||||
Vehicle service contract counterparty contingencies
|
30
|
28
|
89
|
169
|
||||||||||||
Costs related to unfunded lending commitments
|
26
|
12
|
46
|
27
|
||||||||||||
Provision for loss reimbursement on sold loans
|
(35
|
)
|
-
|
(59
|
)
|
(466
|
)
|
|||||||||
Net (gains) losses on other real estate and repossessed assets
|
5
|
(285
|
)
|
(173
|
)
|
(410
|
)
|
|||||||||
Other
|
1,564
|
1,658
|
4,512
|
4,952
|
||||||||||||
Total Non-interest Expense
|
21,879
|
22,084
|
65,609
|
67,044
|
||||||||||||
Income Before Income Tax
|
7,325
|
7,274
|
21,129
|
19,778
|
||||||||||||
Income tax expense
|
2,278
|
2,345
|
6,682
|
5,659
|
||||||||||||
Net Income
|
$
|
5,047
|
$
|
4,929
|
$
|
14,447
|
$
|
14,119
|
||||||||
Net Income Per Common Share
|
||||||||||||||||
Basic
|
$
|
0.22
|
$
|
0.21
|
$
|
0.63
|
$
|
0.62
|
||||||||
Diluted
|
$
|
0.22
|
$
|
0.21
|
$
|
0.62
|
$
|
0.60
|
||||||||
Dividends Per Common Share
|
||||||||||||||||
Declared
|
$
|
0.06
|
$
|
0.06
|
$
|
0.18
|
$
|
0.12
|
||||||||
Paid
|
$
|
0.06
|
$
|
0.06
|
$
|
0.18
|
$
|
0.12
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
(In thousands)
|
||||||||||||||||
Net income
|
$
|
5,047
|
$
|
4,929
|
$
|
14,447
|
$
|
14,119
|
||||||||
Other comprehensive income, before tax
|
||||||||||||||||
Available for sale securities
|
||||||||||||||||
Unrealized gains arising during period
|
1,366
|
253
|
1,830
|
4,262
|
||||||||||||
Change in unrealized gains for which a portion of other than temporary impairment has been recognized in earnings
|
10
|
94
|
-
|
432
|
||||||||||||
Reclassification adjustment for other than temporary impairment included in earnings
|
-
|
9
|
-
|
9
|
||||||||||||
Reclassification adjustments for gains included in earnings
|
-
|
(121
|
)
|
(75
|
)
|
(123
|
)
|
|||||||||
Unrealized gains recognized in other comprehensive
income on available for sale securities
|
1,376
|
235
|
1,755
|
4,580
|
||||||||||||
Income tax expense
|
482
|
82
|
615
|
1,603
|
||||||||||||
Unrealized gains recognized in other comprehensive
income on available for sale securities, net of tax
|
894
|
153
|
1,140
|
2,977
|
||||||||||||
Derivative instruments
|
||||||||||||||||
Reclassification adjustment for accretion on settled derivatives
|
-
|
95
|
-
|
285
|
||||||||||||
Unrealized gains recognized in other comprehensive
income on derivative instruments
|
-
|
95
|
-
|
285
|
||||||||||||
Income tax expense
|
-
|
33
|
-
|
100
|
||||||||||||
Unrealized gains recognized in other comprehensive
income on derivative instruments, net of tax
|
-
|
62
|
-
|
185
|
||||||||||||
Other comprehensive income
|
894
|
215
|
1,140
|
3,162
|
||||||||||||
Comprehensive income
|
$
|
5,941
|
$
|
5,144
|
$
|
15,587
|
$
|
17,281
|
Nine months ended September 30,
|
||||||||
2015
|
2014
|
|||||||
(unaudited - In thousands)
|
||||||||
Net Income
|
$
|
14,447
|
$
|
14,119
|
||||
Adjustments to Reconcile Net Income to Net Cash From Operating Activities
|
||||||||
Proceeds from sales of loans held for sale
|
227,381
|
160,102
|
||||||
Disbursements for loans held for sale
|
(223,446
|
)
|
(158,410
|
)
|
||||
Provision for loan losses
|
(1,037
|
)
|
(2,049
|
)
|
||||
Deferred federal income tax expense
|
7,210
|
7,218
|
||||||
Net deferred loan costs
|
(1,189
|
)
|
(846
|
)
|
||||
Depreciation, amortization of intangible assets and premiums and accretion of discounts on securities and loans
|
3,345
|
1,856
|
||||||
Net gains on mortgage loans
|
(5,735
|
)
|
(4,139
|
)
|
||||
Net gains on securities
|
(97
|
)
|
(334
|
)
|
||||
Securities impairment recognized in earnings
|
-
|
9
|
||||||
Net gains on other real estate and repossessed assets
|
(173
|
)
|
(410
|
)
|
||||
Vehicle service contract counterparty contingencies
|
89
|
169
|
||||||
Share based compensation
|
1,153
|
891
|
||||||
Gain on branch sale
|
(1,193
|
)
|
-
|
|||||
Net gain on sale of fixed assets
|
(152
|
)
|
-
|
|||||
Increase in accrued income and other assets
|
(359
|
)
|
(6,034
|
)
|
||||
Decrease in accrued expenses and other liabilities
|
(684
|
)
|
(5,874
|
)
|
||||
Total Adjustments
|
5,113
|
(7,851
|
)
|
|||||
Net Cash From Operating Activities
|
19,560
|
6,268
|
||||||
Cash Flow Used in Investing Activities
|
||||||||
Proceeds from the sale of securities available for sale
|
11,786
|
7,630
|
||||||
Proceeds from the maturity of securities available for sale
|
25,458
|
48,624
|
||||||
Principal payments received on securities available for sale
|
94,333
|
62,400
|
||||||
Purchases of securities available for sale
|
(195,623
|
)
|
(184,726
|
)
|
||||
Purchases of interest bearing deposits
|
(4,100
|
)
|
(750
|
)
|
||||
Proceeds from the maturity of interest bearing deposits
|
4,576
|
4,050
|
||||||
Purchase of Federal Reserve Bank stock
|
(272
|
)
|
(151
|
)
|
||||
Redemption of Federal Reserve Bank stock
|
391
|
226
|
||||||
Redemption of Federal Home Loan Bank stock
|
4,514
|
-
|
||||||
Net increase in portfolio loans (loans originated, net of principal payments)
|
(56,407
|
)
|
(23,447
|
)
|
||||
Net cash paid in branch sale
|
(7,229
|
)
|
-
|
|||||
Proceeds from the collection of vehicle service contract counterparty receivables
|
255
|
366
|
||||||
Proceeds from the sale of other real estate and repossessed assets
|
5,619
|
12,435
|
||||||
Proceeds from the sale of property and equipment
|
490
|
-
|
||||||
Capital expenditures
|
(2,925
|
)
|
(2,660
|
)
|
||||
Net Cash Used in Investing Activities
|
(119,134
|
)
|
(76,003
|
)
|
||||
Cash Flow From Financing Activities
|
||||||||
Net increase in total deposits
|
145,313
|
11,089
|
||||||
Net increase (decrease) in other borrowings
|
(1
|
)
|
13,649
|
|||||
Payments of Federal Home Loan Bank advances
|
(399
|
)
|
(4,609
|
)
|
||||
Net decrease in vehicle service contract counterparty payables
|
(27
|
)
|
(1,301
|
)
|
||||
Dividends paid
|
(4,118
|
)
|
(2,752
|
)
|
||||
Proceeds from issuance of common stock
|
103
|
66
|
||||||
Repurchase of common stock
|
(9,025
|
)
|
-
|
|||||
Share based compensation withholding obligation
|
(1,091
|
)
|
-
|
|||||
Net Cash From Financing Activities
|
130,755
|
16,142
|
||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
31,181
|
(53,593
|
)
|
|||||
Cash and Cash Equivalents at Beginning of Period
|
74,016
|
119,081
|
||||||
Cash and Cash Equivalents at End of Period
|
$
|
105,197
|
$
|
65,488
|
||||
Cash paid during the period for
|
||||||||
Interest
|
$
|
4,302
|
$
|
5,450
|
||||
Income taxes
|
229
|
116
|
||||||
Transfers to other real estate and repossessed assets
|
2,843
|
3,118
|
||||||
Transfer of payment plan receivables to vehicle service contract counterparty receivables
|
431
|
105
|
||||||
Purchase of securities available for sale not yet settled
|
7,717
|
1,827
|
Nine months ended
September 30,
|
||||||||
2015
|
2014
|
|||||||
(unaudited)
|
||||||||
(In thousands)
|
||||||||
Balance at beginning of period
|
$
|
250,371
|
$
|
231,581
|
||||
Net income
|
14,447
|
14,119
|
||||||
Cash dividends declared
|
(4,118
|
)
|
(2,752
|
)
|
||||
Issuance of common stock
|
103
|
66
|
||||||
Share based compensation
|
1,153
|
891
|
||||||
Share based compensation withholding obligation
|
(1,091
|
)
|
-
|
|||||
Repurchase of common stock
|
(9,025
|
)
|
-
|
|||||
Net change in accumulated other comprehensive loss, net of related tax effect
|
1,140
|
3,162
|
||||||
Balance at end of period
|
$
|
252,980
|
$
|
247,067
|
1.
|
Preparation of Financial Statements
|
2.
|
New Accounting Standards
|
3.
|
Securities
|
Amortized
Cost
|
Unrealized
|
Fair Value
|
||||||||||||||
Gains
|
Losses
|
|||||||||||||||
(In thousands)
|
||||||||||||||||
September 30, 2015
|
||||||||||||||||
U.S. agency
|
$
|
50,447
|
$
|
344
|
$
|
56
|
$
|
50,735
|
||||||||
U.S. agency residential mortgage-backed
|
206,387
|
2,116
|
213
|
208,290
|
||||||||||||
U.S. agency commercial mortgage-backed
|
35,109
|
246
|
17
|
35,338
|
||||||||||||
Private label residential mortgage-backed
|
5,295
|
176
|
342
|
5,129
|
||||||||||||
Other asset backed
|
131,911
|
110
|
249
|
131,772
|
||||||||||||
Obligations of states and political subdivisions
|
136,508
|
1,161
|
937
|
136,732
|
||||||||||||
Corporate
|
34,088
|
52
|
34
|
34,106
|
||||||||||||
Trust preferred
|
2,914
|
-
|
354
|
2,560
|
||||||||||||
Total
|
$
|
602,659
|
$
|
4,205
|
$
|
2,202
|
$
|
604,662
|
||||||||
December 31, 2014
|
||||||||||||||||
U.S. agency
|
$
|
34,936
|
$
|
133
|
$
|
63
|
$
|
35,006
|
||||||||
U.S. agency residential mortgage-backed
|
256,387
|
1,838
|
667
|
257,558
|
||||||||||||
U.S. agency commercial mortgage-backed
|
33,779
|
68
|
119
|
33,728
|
||||||||||||
Private label residential mortgage-backed
|
6,216
|
187
|
390
|
6,013
|
||||||||||||
Other asset backed
|
32,314
|
77
|
38
|
32,353
|
||||||||||||
Obligations of states and political subdivisions
|
143,698
|
961
|
1,244
|
143,415
|
||||||||||||
Corporate
|
22,690
|
53
|
79
|
22,664
|
||||||||||||
Trust preferred
|
2,910
|
-
|
469
|
2,441
|
||||||||||||
Total
|
$
|
532,930
|
$
|
3,317
|
$
|
3,069
|
$
|
533,178
|
Less Than Twelve Months
|
Twelve Months or More
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Losses |
Fair Value
|
Unrealized
Losses |
Fair Value
|
Unrealized
Losses |
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||||||
U.S. agency
|
$
|
19,021
|
$
|
50
|
$
|
1,170
|
$
|
6
|
$
|
20,191
|
$
|
56
|
||||||||||||
U.S. agency residential mortgage-backed
|
26,884
|
94
|
16,024
|
119
|
42,908
|
213
|
||||||||||||||||||
U.S. agency commercial mortgage-backed
|
4,389
|
16
|
1,396
|
1
|
5,785
|
17
|
||||||||||||||||||
Private label residential mortgage-backed
|
-
|
-
|
3,542
|
342
|
3,542
|
342
|
||||||||||||||||||
Other asset backed
|
57,799
|
131
|
5,414
|
118
|
63,213
|
249
|
||||||||||||||||||
Obligations of states and political subdivisions
|
27,995
|
422
|
12,393
|
515
|
40,388
|
937
|
||||||||||||||||||
Corporate
|
11,098
|
34
|
-
|
-
|
11,098
|
34
|
||||||||||||||||||
Trust preferred
|
-
|
-
|
2,560
|
354
|
2,560
|
354
|
||||||||||||||||||
Total
|
$
|
147,186
|
$
|
747
|
$
|
42,499
|
$
|
1,455
|
$
|
189,685
|
$
|
2,202
|
||||||||||||
December 31, 2014
|
||||||||||||||||||||||||
U.S. agency
|
$
|
12,851
|
$
|
58
|
$
|
606
|
$
|
5
|
$
|
13,457
|
$
|
63
|
||||||||||||
U.S. agency residential mortgage-backed
|
89,547
|
531
|
15,793
|
136
|
105,340
|
667
|
||||||||||||||||||
U.S. agency commercial mortgage-backed
|
21,325
|
119
|
-
|
-
|
21,325
|
119
|
||||||||||||||||||
Private label residential mortgage-backed
|
208
|
1
|
4,013
|
389
|
4,221
|
390
|
||||||||||||||||||
Other asset backed
|
2,960
|
15
|
8,729
|
23
|
11,689
|
38
|
||||||||||||||||||
Obligations of states and political subdivisions
|
28,114
|
106
|
37,540
|
1,138
|
65,654
|
1,244
|
||||||||||||||||||
Corporate
|
8,660
|
79
|
-
|
-
|
8,660
|
79
|
||||||||||||||||||
Trust preferred
|
-
|
-
|
2,441
|
469
|
2,441
|
469
|
||||||||||||||||||
Total
|
$
|
163,665
|
$
|
909
|
$
|
69,122
|
$
|
2,160
|
$
|
232,787
|
$
|
3,069
|
September 30, 2015
|
December 31, 2014
|
|||||||||||||||
Fair
Value
|
Net
Unrealized
Loss
|
Fair
Value
|
Net
Unrealized
Loss
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Trust preferred securities
|
||||||||||||||||
Rated issues
|
$
|
1,788
|
$
|
(127
|
)
|
$
|
1,643
|
$
|
(267
|
)
|
||||||
Unrated issues
|
772
|
(227
|
)
|
798
|
(202
|
)
|
Senior
Security
|
Super
Senior
Security
|
Senior
Support
Security
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
As of September 30, 2015
|
||||||||||||||||
Fair value
|
$
|
1,690
|
$
|
1,394
|
$
|
91
|
$
|
3,175
|
||||||||
Amortized cost
|
1,722
|
1,309
|
-
|
3,031
|
||||||||||||
Non-credit unrealized loss
|
32
|
-
|
-
|
32
|
||||||||||||
Unrealized gain
|
-
|
85
|
91
|
176
|
||||||||||||
Cumulative credit related OTTI
|
757
|
457
|
380
|
1,594
|
||||||||||||
Credit related OTTI recognized in our Condensed Consolidated Statements of Operations
|
||||||||||||||||
For the three months ended September 30,
|
||||||||||||||||
2015
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
2014
|
9
|
-
|
-
|
9
|
||||||||||||
For the nine months ended September 30,
|
||||||||||||||||
2015
|
-
|
-
|
-
|
-
|
||||||||||||
2014
|
9
|
-
|
-
|
9
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
1,844
|
$
|
1,835
|
$
|
1,844
|
$
|
1,835
|
||||||||
Additions to credit losses on securities for which no previous OTTI was recognized
|
-
|
-
|
-
|
-
|
||||||||||||
Increases to credit losses on securities for which OTTI was previously recognized
|
-
|
9
|
-
|
9
|
||||||||||||
Balance at end of period
|
$
|
1,844
|
$
|
1,844
|
$
|
1,844
|
$
|
1,844
|
Amortized
Cost
|
Fair
Value
|
|||||||
(In thousands)
|
||||||||
Maturing within one year
|
$
|
29,195
|
$
|
29,231
|
||||
Maturing after one year but within five years
|
69,021
|
69,252
|
||||||
Maturing after five years but within ten years
|
45,618
|
45,985
|
||||||
Maturing after ten years
|
80,123
|
79,665
|
||||||
223,957
|
224,133
|
|||||||
U.S. agency residential mortgage-backed
|
206,387
|
208,290
|
||||||
U.S. agency commercial mortgage-backed
|
35,109
|
35,338
|
||||||
Private label residential mortgage-backed
|
5,295
|
5,129
|
||||||
Other asset backed
|
131,911
|
131,772
|
||||||
Total
|
$
|
602,659
|
$
|
604,662
|
Proceeds
|
Realized
Gains (1)
|
Losses
|
||||||||||
(In thousands)
|
||||||||||||
2015
|
$
|
11,786
|
$
|
75
|
$
|
-
|
||||||
2014
|
7,630
|
123
|
-
|
(1)
|
Gains in 2014 exclude $0.179 million of unrealized gain related to a U.S. Treasury short position.
|
4.
|
Loans
|
Commercial
|
Mortgage
|
Installment
|
Payment
Plan
Receivables
|
Subjective
Allocation
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
2015
|
||||||||||||||||||||||||
Balance at beginning of period
|
$
|
6,707
|
$
|
11,465
|
$
|
1,461
|
$
|
65
|
$
|
4,888
|
$
|
24,586
|
||||||||||||
Additions (deductions)
|
||||||||||||||||||||||||
Provision for loan losses
|
(26
|
)
|
(47
|
)
|
(49
|
)
|
(5
|
)
|
(117
|
)
|
(244
|
)
|
||||||||||||
Recoveries credited to allowance
|
637
|
286
|
250
|
-
|
-
|
1,173
|
||||||||||||||||||
Loans charged against the allowance
|
(190
|
)
|
(379
|
)
|
(342
|
)
|
-
|
-
|
(911
|
)
|
||||||||||||||
Balance at end of period
|
$
|
7,128
|
$
|
11,325
|
$
|
1,320
|
$
|
60
|
$
|
4,771
|
$
|
24,604
|
||||||||||||
2014
|
||||||||||||||||||||||||
Balance at beginning of period
|
$
|
5,175
|
$
|
15,542
|
$
|
1,988
|
$
|
80
|
$
|
5,412
|
$
|
28,197
|
||||||||||||
Additions (deductions)
|
||||||||||||||||||||||||
Provision for loan losses
|
(601
|
)
|
(9
|
)
|
32
|
(8
|
)
|
(46
|
)
|
(632
|
)
|
|||||||||||||
Recoveries credited to allowance
|
999
|
197
|
283
|
-
|
-
|
1,479
|
||||||||||||||||||
Loans charged against the allowance
|
(385
|
)
|
(729
|
)
|
(422
|
)
|
-
|
-
|
(1,536
|
)
|
||||||||||||||
Balance at end of period
|
$
|
5,188
|
$
|
15,001
|
$
|
1,881
|
$
|
72
|
$
|
5,366
|
$
|
27,508
|
Commercial
|
Mortgage
|
Installment
|
Payment
Plan
Receivables
|
Subjective
Allocation
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
2015
|
||||||||||||||||||||||||
Balance at beginning of period
|
$
|
5,445
|
$
|
13,444
|
$
|
1,814
|
$
|
64
|
$
|
5,223
|
$
|
25,990
|
||||||||||||
Additions (deductions)
|
||||||||||||||||||||||||
Provision for loan losses
|
479
|
(881
|
)
|
(179
|
)
|
(4
|
)
|
(452
|
)
|
(1,037
|
)
|
|||||||||||||
Recoveries credited to allowance
|
1,722
|
843
|
853
|
-
|
-
|
3,418
|
||||||||||||||||||
Loans charged against the allowance
|
(518
|
)
|
(2,081
|
)
|
(1,168
|
)
|
-
|
-
|
(3,767
|
)
|
||||||||||||||
Balance at end of period
|
$
|
7,128
|
$
|
11,325
|
$
|
1,320
|
$
|
60
|
$
|
4,771
|
$
|
24,604
|
||||||||||||
2014
|
||||||||||||||||||||||||
Balance at beginning of period
|
$
|
6,827
|
$
|
17,195
|
$
|
2,246
|
$
|
97
|
$
|
5,960
|
$
|
32,325
|
||||||||||||
Additions (deductions)
|
||||||||||||||||||||||||
Provision for loan losses
|
(1,164
|
)
|
(395
|
)
|
132
|
(28
|
)
|
(594
|
)
|
(2,049
|
)
|
|||||||||||||
Recoveries credited to allowance
|
3,492
|
1,055
|
886
|
5
|
-
|
5,438
|
||||||||||||||||||
Loans charged against the allowance
|
(3,967
|
)
|
(2,854
|
)
|
(1,383
|
)
|
(2
|
)
|
-
|
(8,206
|
)
|
|||||||||||||
Balance at end of period
|
$
|
5,188
|
$
|
15,001
|
$
|
1,881
|
$
|
72
|
$
|
5,366
|
$
|
27,508
|
|
Commercial
|
Mortgage
|
Installment
|
Payment
Plan
Receivables
|
Subjective
Allocation
|
Total
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||||||
Allowance for loan losses
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
4,048
|
$
|
8,244
|
$
|
484
|
$
|
-
|
$
|
-
|
$
|
12,776
|
||||||||||||
Collectively evaluated for impairment
|
3,080
|
3,081
|
836
|
60
|
4,771
|
11,828
|
||||||||||||||||||
Total ending allowance balance
|
$
|
7,128
|
$
|
11,325
|
$
|
1,320
|
$
|
60
|
$
|
4,771
|
$
|
24,604
|
||||||||||||
|
||||||||||||||||||||||||
Loans
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
30,328
|
$
|
67,871
|
$
|
6,005
|
$
|
-
|
$
|
104,204
|
||||||||||||||
Collectively evaluated for impairment
|
697,528
|
402,934
|
230,310
|
37,438
|
1,368,210
|
|||||||||||||||||||
Total loans recorded investment
|
727,856
|
470,805
|
236,315
|
37,438
|
1,472,414
|
|||||||||||||||||||
Accrued interest included in recorded investment
|
1,500
|
2,227
|
688
|
-
|
4,415
|
|||||||||||||||||||
Total loans
|
$
|
726,356
|
$
|
468,578
|
$
|
235,627
|
$
|
37,438
|
$
|
1,467,999
|
||||||||||||||
|
||||||||||||||||||||||||
December 31, 2014
|
||||||||||||||||||||||||
Allowance for loan losses
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
3,194
|
$
|
9,311
|
$
|
728
|
$
|
-
|
$
|
-
|
$
|
13,233
|
||||||||||||
Collectively evaluated for impairment
|
2,251
|
4,133
|
1,086
|
64
|
5,223
|
12,757
|
||||||||||||||||||
Total ending allowance balance
|
$
|
5,445
|
$
|
13,444
|
$
|
1,814
|
$
|
64
|
$
|
5,223
|
$
|
25,990
|
||||||||||||
|
||||||||||||||||||||||||
Loans
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
34,147
|
$
|
72,340
|
$
|
6,679
|
$
|
-
|
$
|
113,166
|
||||||||||||||
Collectively evaluated for impairment
|
658,423
|
402,458
|
200,368
|
40,001
|
1,301,250
|
|||||||||||||||||||
Total loans recorded investment
|
692,570
|
474,798
|
207,047
|
40,001
|
1,414,416
|
|||||||||||||||||||
Accrued interest included in recorded investment
|
1,615
|
2,170
|
669
|
-
|
4,454
|
|||||||||||||||||||
Total loans
|
$
|
690,955
|
$
|
472,628
|
$
|
206,378
|
$
|
40,001
|
$
|
1,409,962
|
90+ and
Still
Accruing
|
Non-
Accrual
|
Total Non-
Performing
Loans
|
||||||||||
(In thousands)
|
||||||||||||
September 30, 2015
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
$
|
-
|
$
|
5,135
|
$
|
5,135
|
||||||
Land, land development and construction - real estate
|
-
|
533
|
533
|
|||||||||
Commercial and industrial
|
-
|
2,318
|
2,318
|
|||||||||
Mortgage
|
||||||||||||
1-4 family
|
-
|
5,095
|
5,095
|
|||||||||
Resort lending
|
-
|
1,301
|
1,301
|
|||||||||
Home equity - 1st lien
|
-
|
191
|
191
|
|||||||||
Home equity - 2nd lien
|
-
|
189
|
189
|
|||||||||
Installment
|
||||||||||||
Home equity - 1st lien
|
-
|
175
|
175
|
|||||||||
Home equity - 2nd lien
|
-
|
445
|
445
|
|||||||||
Loans not secured by real estate
|
-
|
430
|
430
|
|||||||||
Other
|
-
|
2
|
2
|
|||||||||
Payment plan receivables
|
||||||||||||
Full refund
|
-
|
6
|
6
|
|||||||||
Partial refund
|
-
|
10
|
10
|
|||||||||
Other
|
-
|
4
|
4
|
|||||||||
Total recorded investment
|
$
|
-
|
$
|
15,834
|
$
|
15,834
|
||||||
Accrued interest included in recorded investment
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
December 31, 2014
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
$
|
-
|
$
|
1,233
|
$
|
1,233
|
||||||
Land, land development and construction - real estate
|
-
|
594
|
594
|
|||||||||
Commercial and industrial
|
-
|
2,746
|
2,746
|
|||||||||
Mortgage
|
||||||||||||
1-4 family
|
7
|
5,945
|
5,952
|
|||||||||
Resort lending
|
-
|
2,168
|
2,168
|
|||||||||
Home equity - 1st lien
|
-
|
331
|
331
|
|||||||||
Home equity - 2nd lien
|
-
|
605
|
605
|
|||||||||
Installment
|
||||||||||||
Home equity - 1st lien
|
-
|
576
|
576
|
|||||||||
Home equity - 2nd lien
|
-
|
517
|
517
|
|||||||||
Loans not secured by real estate
|
-
|
454
|
454
|
|||||||||
Other
|
-
|
48
|
48
|
|||||||||
Payment plan receivables
|
||||||||||||
Full refund
|
-
|
2
|
2
|
|||||||||
Partial refund
|
-
|
12
|
12
|
|||||||||
Other
|
-
|
-
|
-
|
|||||||||
Total recorded investment
|
$
|
7
|
$
|
15,231
|
$
|
15,238
|
||||||
Accrued interest included in recorded investment
|
$
|
-
|
$
|
-
|
$
|
-
|
Loans Past Due
|
Loans not
Past Due
|
Total
Loans
|
||||||||||||||||||||||
30-59 days
|
60-89 days
|
90+ days
|
Total
|
|||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Income producing - real estate
|
$
|
183
|
$
|
-
|
$
|
660
|
$
|
843
|
$
|
274,107
|
$
|
274,950
|
||||||||||||
Land, land development and construction - real estate
|
-
|
119
|
204
|
323
|
41,899
|
42,222
|
||||||||||||||||||
Commercial and industrial
|
2,315
|
320
|
368
|
3,003
|
407,681
|
410,684
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family
|
2,513
|
662
|
5,095
|
8,270
|
271,130
|
279,400
|
||||||||||||||||||
Resort lending
|
309
|
150
|
1,301
|
1,760
|
116,528
|
118,288
|
||||||||||||||||||
Home equity - 1st lien
|
39
|
23
|
191
|
253
|
22,252
|
22,505
|
||||||||||||||||||
Home equity - 2nd lien
|
331
|
-
|
189
|
520
|
50,092
|
50,612
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Home equity - 1st lien
|
286
|
65
|
175
|
526
|
17,954
|
18,480
|
||||||||||||||||||
Home equity - 2nd lien
|
191
|
53
|
445
|
689
|
21,616
|
22,305
|
||||||||||||||||||
Loans not secured by real estate
|
474
|
132
|
430
|
1,036
|
192,321
|
193,357
|
||||||||||||||||||
Other
|
6
|
2
|
2
|
10
|
2,163
|
2,173
|
||||||||||||||||||
Payment plan receivables
|
||||||||||||||||||||||||
Full refund
|
563
|
115
|
6
|
684
|
22,848
|
23,532
|
||||||||||||||||||
Partial refund
|
710
|
249
|
10
|
969
|
7,459
|
8,428
|
||||||||||||||||||
Other
|
112
|
16
|
4
|
132
|
5,346
|
5,478
|
||||||||||||||||||
Total recorded investment
|
$
|
8,032
|
$
|
1,906
|
$
|
9,080
|
$
|
19,018
|
$
|
1,453,396
|
$
|
1,472,414
|
||||||||||||
Accrued interest included in recorded investment
|
$
|
113
|
$
|
18
|
$
|
-
|
$
|
131
|
$
|
4,284
|
$
|
4,415
|
||||||||||||
December 31, 2014
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Income producing - real estate
|
$
|
89
|
$
|
-
|
$
|
214
|
$
|
303
|
$
|
252,763
|
$
|
253,066
|
||||||||||||
Land, land development and construction - real estate
|
131
|
-
|
223
|
354
|
33,984
|
34,338
|
||||||||||||||||||
Commercial and industrial
|
2,391
|
279
|
209
|
2,879
|
402,287
|
405,166
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family
|
1,877
|
1,638
|
5,952
|
9,467
|
269,719
|
279,186
|
||||||||||||||||||
Resort lending
|
226
|
-
|
2,168
|
2,394
|
126,342
|
128,736
|
||||||||||||||||||
Home equity - 1st lien
|
39
|
50
|
331
|
420
|
19,782
|
20,202
|
||||||||||||||||||
Home equity - 2nd lien
|
711
|
89
|
605
|
1,405
|
45,269
|
46,674
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Home equity - 1st lien
|
466
|
37
|
576
|
1,079
|
20,995
|
22,074
|
||||||||||||||||||
Home equity - 2nd lien
|
369
|
81
|
517
|
967
|
28,125
|
29,092
|
||||||||||||||||||
Loans not secured by real estate
|
589
|
231
|
454
|
1,274
|
152,115
|
153,389
|
||||||||||||||||||
Other
|
15
|
3
|
48
|
66
|
2,426
|
2,492
|
||||||||||||||||||
Payment plan receivables
|
||||||||||||||||||||||||
Full refund
|
838
|
214
|
2
|
1,054
|
26,799
|
27,853
|
||||||||||||||||||
Partial refund
|
409
|
123
|
12
|
544
|
6,550
|
7,094
|
||||||||||||||||||
Other
|
96
|
24
|
-
|
120
|
4,934
|
5,054
|
||||||||||||||||||
Total recorded investment
|
$
|
8,246
|
$
|
2,769
|
$
|
11,311
|
$
|
22,326
|
$
|
1,392,090
|
$
|
1,414,416
|
||||||||||||
Accrued interest included in recorded investment
|
$
|
55
|
$
|
29
|
$
|
-
|
$
|
84
|
$
|
4,370
|
$
|
4,454
|
September 30,
2015
|
December 31,
2014
|
|||||||
Impaired loans with no allocated allowance
|
(In thousands)
|
|||||||
TDR
|
$
|
6,416
|
$
|
9,325
|
||||
Non - TDR
|
204
|
299
|
||||||
Impaired loans with an allocated allowance
|
||||||||
TDR - allowance based on collateral
|
3,970
|
5,879
|
||||||
TDR - allowance based on present value cash flow
|
86,985
|
94,970
|
||||||
Non - TDR - allowance based on collateral
|
6,281
|
2,296
|
||||||
Non - TDR - allowance based on present value cash flow
|
-
|
-
|
||||||
Total impaired loans
|
$
|
103,856
|
$
|
112,769
|
||||
Amount of allowance for loan losses allocated
|
||||||||
TDR - allowance based on collateral
|
$
|
1,575
|
$
|
2,025
|
||||
TDR - allowance based on present value cash flow
|
8,952
|
10,188
|
||||||
Non - TDR - allowance based on collateral
|
2,249
|
1,020
|
||||||
Non - TDR - allowance based on present value cash flow
|
-
|
-
|
||||||
Total amount of allowance for loan losses allocated
|
$
|
12,776
|
$
|
13,233
|
September 30, 2015
|
December 31, 2014
|
|||||||||||||||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
|||||||||||||||||||
With no related allowance recorded:
|
(In thousands)
|
|||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Income producing - real estate
|
$
|
4,778
|
$
|
4,977
|
$
|
-
|
$
|
5,868
|
$
|
6,077
|
$
|
-
|
||||||||||||
Land, land development & construction-real estate
|
851
|
1,425
|
-
|
1,051
|
1,606
|
-
|
||||||||||||||||||
Commercial and industrial
|
985
|
982
|
-
|
2,685
|
2,667
|
-
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family
|
23
|
166
|
-
|
-
|
49
|
-
|
||||||||||||||||||
Resort lending
|
-
|
-
|
-
|
48
|
397
|
-
|
||||||||||||||||||
Home equity - 1st lien
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Home equity - 1st lien
|
-
|
36
|
-
|
-
|
40
|
-
|
||||||||||||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Loans not secured by real estate
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
6,637
|
7,586
|
-
|
9,652
|
10,836
|
-
|
|||||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Income producing - real estate
|
16,414
|
17,414
|
1,357
|
12,836
|
13,797
|
689
|
||||||||||||||||||
Land, land development & construction-real estate
|
2,061
|
2,140
|
421
|
3,456
|
3,528
|
499
|
||||||||||||||||||
Commercial and industrial
|
5,239
|
5,549
|
2,270
|
8,251
|
8,486
|
2,006
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family
|
49,245
|
51,392
|
5,437
|
53,206
|
56,063
|
6,195
|
||||||||||||||||||
Resort lending
|
18,328
|
18,591
|
2,786
|
18,799
|
18,963
|
3,075
|
||||||||||||||||||
Home equity - 1st lien
|
155
|
172
|
11
|
162
|
177
|
14
|
||||||||||||||||||
Home equity - 2nd lien
|
120
|
201
|
10
|
125
|
205
|
27
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Home equity - 1st lien
|
2,434
|
2,610
|
145
|
2,744
|
2,930
|
219
|
||||||||||||||||||
Home equity - 2nd lien
|
2,931
|
2,942
|
285
|
3,212
|
3,215
|
419
|
||||||||||||||||||
Loans not secured by real estate
|
631
|
689
|
53
|
711
|
835
|
89
|
||||||||||||||||||
Other
|
9
|
9
|
1
|
12
|
12
|
1
|
||||||||||||||||||
97,567
|
101,709
|
12,776
|
103,514
|
108,211
|
13,233
|
|||||||||||||||||||
Total
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Income producing - real estate
|
21,192
|
22,391
|
1,357
|
18,704
|
19,874
|
689
|
||||||||||||||||||
Land, land development & construction-real estate
|
2,912
|
3,565
|
421
|
4,507
|
5,134
|
499
|
||||||||||||||||||
Commercial and industrial
|
6,224
|
6,531
|
2,270
|
10,936
|
11,153
|
2,006
|
||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family
|
49,268
|
51,558
|
5,437
|
53,206
|
56,112
|
6,195
|
||||||||||||||||||
Resort lending
|
18,328
|
18,591
|
2,786
|
18,847
|
19,360
|
3,075
|
||||||||||||||||||
Home equity - 1st lien
|
155
|
172
|
11
|
162
|
177
|
14
|
||||||||||||||||||
Home equity - 2nd lien
|
120
|
201
|
10
|
125
|
205
|
27
|
||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Home equity - 1st lien
|
2,434
|
2,646
|
145
|
2,744
|
2,970
|
219
|
||||||||||||||||||
Home equity - 2nd lien
|
2,931
|
2,942
|
285
|
3,212
|
3,215
|
419
|
||||||||||||||||||
Loans not secured by real estate
|
631
|
689
|
53
|
711
|
835
|
89
|
||||||||||||||||||
Other
|
9
|
9
|
1
|
12
|
12
|
1
|
||||||||||||||||||
Total
|
$
|
104,204
|
$
|
109,295
|
$
|
12,776
|
$
|
113,166
|
$
|
119,047
|
$
|
13,233
|
||||||||||||
Accrued interest included in recorded investment
|
$
|
348
|
$
|
397
|
(1)
|
There were no impaired payment plan receivables at September 30, 2015 or December 31, 2014.
|
2015
|
2014
|
|||||||||||||||
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||||||||
With no related allowance recorded:
|
(In thousands)
|
|||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
$
|
5,133
|
$
|
45
|
$
|
8,255
|
$
|
103
|
||||||||
Land, land development & construction-real estate
|
932
|
14
|
859
|
15
|
||||||||||||
Commercial and industrial
|
1,922
|
68
|
3,397
|
63
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family
|
24
|
3
|
66
|
-
|
||||||||||||
Resort lending
|
-
|
-
|
42
|
1
|
||||||||||||
Home equity - 1st lien
|
-
|
-
|
-
|
-
|
||||||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
-
|
||||||||||||
Installment
|
||||||||||||||||
Home equity - 1st lien
|
-
|
-
|
-
|
-
|
||||||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
-
|
||||||||||||
Loans not secured by real estate
|
-
|
-
|
-
|
-
|
||||||||||||
Other
|
-
|
-
|
-
|
-
|
||||||||||||
8,011
|
130
|
12,619
|
182
|
|||||||||||||
With an allowance recorded:
|
||||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
14,655
|
154
|
11,486
|
136
|
||||||||||||
Land, land development & construction-real estate
|
1,993
|
2
|
4,092
|
38
|
||||||||||||
Commercial and industrial
|
6,431
|
37
|
7,936
|
51
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family
|
49,706
|
554
|
55,633
|
558
|
||||||||||||
Resort lending
|
18,414
|
163
|
19,351
|
195
|
||||||||||||
Home equity - 1st lien
|
157
|
2
|
165
|
2
|
||||||||||||
Home equity - 2nd lien
|
185
|
-
|
39
|
-
|
||||||||||||
Installment
|
||||||||||||||||
Home equity - 1st lien
|
2,474
|
47
|
2,801
|
43
|
||||||||||||
Home equity - 2nd lien
|
2,999
|
47
|
3,375
|
46
|
||||||||||||
Loans not secured by real estate
|
645
|
10
|
699
|
9
|
||||||||||||
Other
|
10
|
-
|
14
|
-
|
||||||||||||
97,669
|
1,016
|
105,591
|
1,078
|
|||||||||||||
Total
|
||||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
19,788
|
199
|
19,741
|
239
|
||||||||||||
Land, land development & construction-real estate
|
2,925
|
16
|
4,951
|
53
|
||||||||||||
Commercial and industrial
|
8,353
|
105
|
11,333
|
114
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family
|
49,730
|
557
|
55,699
|
558
|
||||||||||||
Resort lending
|
18,414
|
163
|
19,393
|
196
|
||||||||||||
Home equity - 1st lien
|
157
|
2
|
165
|
2
|
||||||||||||
Home equity - 2nd lien
|
185
|
-
|
39
|
-
|
||||||||||||
Installment
|
||||||||||||||||
Home equity - 1st lien
|
2,474
|
47
|
2,801
|
43
|
||||||||||||
Home equity - 2nd lien
|
2,999
|
47
|
3,375
|
46
|
||||||||||||
Loans not secured by real estate
|
645
|
10
|
699
|
9
|
||||||||||||
Other
|
10
|
-
|
14
|
-
|
||||||||||||
Total
|
$
|
105,680
|
$
|
1,146
|
$
|
118,210
|
$
|
1,260
|
(1)
|
There were no impaired payment plan receivables during the three month periods ended September 30, 2015 and 2014, respectively.
|
2015
|
2014
|
|||||||||||||||
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||||||||
With no related allowance recorded:
|
(In thousands)
|
|||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
$
|
5,490
|
$
|
170
|
$
|
8,109
|
$
|
289
|
||||||||
Land, land development & construction-real estate
|
986
|
57
|
1,168
|
43
|
||||||||||||
Commercial and industrial
|
2,345
|
195
|
3,517
|
129
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family
|
18
|
5
|
37
|
-
|
||||||||||||
Resort lending
|
15
|
-
|
38
|
1
|
||||||||||||
Home equity line of credit - 1st lien
|
-
|
-
|
-
|
-
|
||||||||||||
Home equity line of credit - 2nd lien
|
-
|
-
|
-
|
-
|
||||||||||||
Installment
|
||||||||||||||||
Home equity installment - 1st lien
|
-
|
1
|
-
|
1
|
||||||||||||
Home equity installment - 2nd lien
|
-
|
-
|
-
|
-
|
||||||||||||
Loans not secured by real estate
|
-
|
-
|
-
|
-
|
||||||||||||
Other
|
-
|
-
|
-
|
-
|
||||||||||||
8,854
|
428
|
12,869
|
463
|
|||||||||||||
With an allowance recorded:
|
||||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
13,752
|
452
|
12,756
|
417
|
||||||||||||
Land, land development & construction-real estate
|
2,351
|
35
|
4,059
|
120
|
||||||||||||
Commercial and industrial
|
7,304
|
117
|
8,562
|
209
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family
|
51,078
|
1,644
|
56,545
|
1,777
|
||||||||||||
Resort lending
|
18,523
|
507
|
19,623
|
581
|
||||||||||||
Home equity line of credit - 1st lien
|
159
|
6
|
159
|
5
|
||||||||||||
Home equity line of credit - 2nd lien
|
154
|
6
|
40
|
1
|
||||||||||||
Installment
|
||||||||||||||||
Home equity installment - 1st lien
|
2,582
|
141
|
2,860
|
132
|
||||||||||||
Home equity installment - 2nd lien
|
3,086
|
147
|
3,396
|
143
|
||||||||||||
Loans not secured by real estate
|
669
|
29
|
721
|
26
|
||||||||||||
Other
|
11
|
1
|
15
|
1
|
||||||||||||
99,669
|
3,085
|
108,736
|
3,412
|
|||||||||||||
Total
|
||||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
19,242
|
622
|
20,865
|
706
|
||||||||||||
Land, land development & construction-real estate
|
3,337
|
92
|
5,227
|
163
|
||||||||||||
Commercial and industrial
|
9,649
|
312
|
12,079
|
338
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 family
|
51,096
|
1,649
|
56,582
|
1,777
|
||||||||||||
Resort lending
|
18,538
|
507
|
19,661
|
582
|
||||||||||||
Home equity line of credit - 1st lien
|
159
|
6
|
159
|
5
|
||||||||||||
Home equity line of credit - 2nd lien
|
154
|
6
|
40
|
1
|
||||||||||||
Installment
|
||||||||||||||||
Home equity installment - 1st lien
|
2,582
|
142
|
2,860
|
133
|
||||||||||||
Home equity installment - 2nd lien
|
3,086
|
147
|
3,396
|
143
|
||||||||||||
Loans not secured by real estate
|
669
|
29
|
721
|
26
|
||||||||||||
Other
|
11
|
1
|
15
|
1
|
||||||||||||
Total
|
$
|
108,523
|
$
|
3,513
|
$
|
121,605
|
$
|
3,875
|
(1)
|
There were no impaired payment plan receivables during the nine month periods ended September 30, 2015 and 2014, respectively.
|
September 30, 2015
|
||||||||||||
Commercial
|
Retail
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDRs
|
$
|
22,257
|
$
|
69,726
|
$
|
91,983
|
||||||
Non-performing TDRs(1)
|
1,501
|
3,887
|
(2)
|
5,388
|
||||||||
Total
|
$
|
23,758
|
$
|
73,613
|
$
|
97,371
|
||||||
December 31, 2014
|
||||||||||||
Commercial
|
Retail
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDRs
|
$
|
29,475
|
$
|
73,496
|
$
|
102,971
|
||||||
Non-performing TDRs(1)
|
1,978
|
5,225
|
(2)
|
7,203
|
||||||||
Total
|
$
|
31,453
|
$
|
78,721
|
$
|
110,174
|
(1) | Included in non-performing loans table above. |
(2) | Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis. |
Number of
Contracts
|
Pre-modification
Recorded
Balance
|
Post-modification
Recorded
Balance
|
||||||||||
(Dollars in thousands) | ||||||||||||
2015
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
-
|
$
|
-
|
$
|
-
|
|||||||
Land, land development & construction-real estate
|
-
|
-
|
-
|
|||||||||
Commercial and industrial
|
1
|
48
|
26
|
|||||||||
Mortgage
|
||||||||||||
1-4 family
|
3
|
343
|
344
|
|||||||||
Resort lending
|
-
|
-
|
-
|
|||||||||
Home equity - 1st lien
|
-
|
-
|
-
|
|||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
|||||||||
Installment
|
||||||||||||
Home equity - 1st lien
|
-
|
-
|
-
|
|||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
|||||||||
Loans not secured by real estate
|
1
|
19
|
19
|
|||||||||
Other
|
-
|
-
|
-
|
|||||||||
Total
|
5
|
$
|
410
|
$
|
389
|
|||||||
2014
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
-
|
$
|
-
|
$
|
-
|
|||||||
Land, land development & construction-real estate
|
1
|
40
|
36
|
|||||||||
Commercial and industrial
|
5
|
716
|
693
|
|||||||||
Mortgage
|
||||||||||||
1-4 family
|
1
|
87
|
87
|
|||||||||
Resort lending
|
1
|
378
|
367
|
|||||||||
Home equity - 1st lien
|
-
|
-
|
-
|
|||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
|||||||||
Installment
|
||||||||||||
Home equity - 1st lien
|
3
|
118
|
96
|
|||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
|||||||||
Loans not secured by real estate
|
1
|
55
|
53
|
|||||||||
Other
|
-
|
-
|
-
|
|||||||||
Total
|
12
|
$
|
1,394
|
$
|
1,332
|
Number of
Contracts
|
Pre-modification
Recorded
Balance
|
Post-modification
Recorded
Balance
|
||||||||||
(Dollars in thousands)
|
||||||||||||
2015
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
2
|
$
|
229
|
$
|
234
|
|||||||
Land, land development & construction-real estate
|
-
|
-
|
-
|
|||||||||
Commercial and industrial
|
4
|
301
|
273
|
|||||||||
Mortgage
|
||||||||||||
1-4 family
|
9
|
1,373
|
1,189
|
|||||||||
Resort lending
|
1
|
313
|
309
|
|||||||||
Home equity - 1st lien
|
-
|
-
|
-
|
|||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
|||||||||
Installment
|
||||||||||||
Home equity - 1st lien
|
5
|
190
|
164
|
|||||||||
Home equity - 2nd lien
|
3
|
58
|
58
|
|||||||||
Loans not secured by real estate
|
2
|
19
|
25
|
|||||||||
Other
|
-
|
-
|
-
|
|||||||||
Total
|
26
|
$
|
2,483
|
$
|
2,252
|
|||||||
2014
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
3
|
$
|
354
|
$
|
326
|
|||||||
Land, land development & construction-real estate
|
2
|
55
|
50
|
|||||||||
Commercial and industrial
|
11
|
2,083
|
1,524
|
|||||||||
Mortgage
|
||||||||||||
1-4 family
|
8
|
1,037
|
1,049
|
|||||||||
Resort lending
|
4
|
1,011
|
997
|
|||||||||
Home equity - 1st lien
|
1
|
17
|
13
|
|||||||||
Home equity - 2nd lien
|
-
|
-
|
-
|
|||||||||
Installment
|
||||||||||||
Home equity - 1st lien
|
8
|
538
|
465
|
|||||||||
Home equity - 2nd lien
|
5
|
294
|
284
|
|||||||||
Loans not secured by real estate
|
3
|
88
|
80
|
|||||||||
Other
|
-
|
-
|
-
|
|||||||||
Total
|
45
|
$
|
5,477
|
$
|
4,788
|
Number of
Contracts
|
Recorded
Balance
|
|||||||
(Dollars in thousands)
|
||||||||
2015
|
||||||||
Commercial
|
||||||||
Income producing - real estate
|
-
|
$
|
-
|
|||||
Land, land development & construction-real estate
|
-
|
-
|
||||||
Commercial and industrial
|
-
|
-
|
||||||
Mortgage
|
||||||||
1-4 family
|
1
|
54
|
||||||
Resort lending
|
-
|
-
|
||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Installment
|
||||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Loans not secured by real estate
|
-
|
-
|
||||||
Other
|
-
|
-
|
||||||
1
|
$
|
54
|
||||||
2014
|
||||||||
Commercial
|
||||||||
Income producing - real estate
|
-
|
$
|
-
|
|||||
Land, land development & construction-real estate
|
-
|
-
|
||||||
Commercial and industrial
|
1
|
66
|
||||||
Mortgage
|
||||||||
1-4 family
|
1
|
125
|
||||||
Resort lending
|
-
|
-
|
||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Installment
|
||||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Loans not secured by real estate
|
-
|
-
|
||||||
Other
|
-
|
-
|
||||||
2
|
$
|
191
|
Number of
Contracts
|
Recorded
Balance
|
|||||||
(Dollars in thousands)
|
||||||||
2015
|
||||||||
Commercial
|
||||||||
Income producing - real estate
|
-
|
$
|
-
|
|||||
Land, land development & construction-real estate
|
-
|
-
|
||||||
Commercial and industrial
|
2
|
157
|
||||||
Mortgage
|
||||||||
1-4 family
|
1
|
54
|
||||||
Resort lending
|
-
|
-
|
||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Installment
|
||||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Loans not secured by real estate
|
1
|
4
|
||||||
Other
|
-
|
-
|
||||||
4
|
$
|
215
|
||||||
2014
|
||||||||
Commercial
|
||||||||
Income producing - real estate
|
-
|
$
|
-
|
|||||
Land, land development & construction-real estate
|
-
|
-
|
||||||
Commercial and industrial
|
2
|
319
|
||||||
Mortgage
|
||||||||
1-4 family
|
1
|
125
|
||||||
Resort lending
|
-
|
-
|
||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Installment
|
||||||||
Home equity - 1st lien
|
-
|
-
|
||||||
Home equity - 2nd lien
|
-
|
-
|
||||||
Loans not secured by real estate
|
-
|
-
|
||||||
Other
|
-
|
-
|
||||||
3
|
$
|
444
|
Commercial
|
||||||||||||||||||||
Non-watch
1-6 |
Watch
7-8 |
Substandard
Accrual |
Non-
Accrual |
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||
Income producing - real estate
|
$
|
261,676
|
$
|
7,013
|
$
|
1,126
|
$
|
5,135
|
$
|
274,950
|
||||||||||
Land, land development and construction - real estate
|
38,135
|
3,307
|
247
|
533
|
42,222
|
|||||||||||||||
Commercial and industrial
|
371,193
|
29,285
|
7,888
|
2,318
|
410,684
|
|||||||||||||||
Total
|
$
|
671,004
|
$
|
39,605
|
$
|
9,261
|
$
|
7,986
|
$
|
727,856
|
||||||||||
Accrued interest included in total
|
$
|
1,304
|
$
|
189
|
$
|
7
|
$
|
-
|
$
|
1,500
|
||||||||||
December 31, 2014
|
||||||||||||||||||||
Income producing - real estate
|
$
|
241,266
|
$
|
8,649
|
$
|
1,918
|
$
|
1,233
|
$
|
253,066
|
||||||||||
Land, land development and construction - real estate
|
30,869
|
2,485
|
390
|
594
|
34,338
|
|||||||||||||||
Commercial and industrial
|
372,947
|
23,475
|
5,998
|
2,746
|
405,166
|
|||||||||||||||
Total
|
$
|
645,082
|
$
|
34,609
|
$
|
8,306
|
$
|
4,573
|
$
|
692,570
|
||||||||||
Accrued interest included in total
|
$
|
1,479
|
$
|
111
|
$
|
25
|
$
|
-
|
$
|
1,615
|
Mortgage (1)
|
||||||||||||||||||||
1-4 Family
|
Resort
Lending
|
Home
Equity
1st Lien
|
Home
Equity
2nd Lien
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||
800 and above
|
$
|
27,538
|
$
|
12,627
|
$
|
4,859
|
$
|
6,717
|
$
|
51,741
|
||||||||||
750-799
|
77,238
|
42,522
|
6,280
|
16,387
|
142,427
|
|||||||||||||||
700-749
|
50,309
|
33,785
|
4,076
|
11,985
|
100,155
|
|||||||||||||||
650-699
|
52,898
|
16,771
|
3,565
|
8,022
|
81,256
|
|||||||||||||||
600-649
|
28,698
|
5,666
|
1,872
|
3,639
|
39,875
|
|||||||||||||||
550-599
|
16,809
|
2,546
|
647
|
1,957
|
21,959
|
|||||||||||||||
500-549
|
13,983
|
1,253
|
758
|
1,089
|
17,083
|
|||||||||||||||
Under 500
|
4,098
|
992
|
210
|
404
|
5,704
|
|||||||||||||||
Unknown
|
7,829
|
2,126
|
238
|
412
|
10,605
|
|||||||||||||||
Total
|
$
|
279,400
|
$
|
118,288
|
$
|
22,505
|
$
|
50,612
|
$
|
470,805
|
||||||||||
Accrued interest included in total
|
$
|
1,427
|
$
|
508
|
$
|
92
|
$
|
200
|
$
|
2,227
|
||||||||||
December 31, 2014
|
||||||||||||||||||||
800 and above
|
$
|
27,918
|
$
|
14,484
|
$
|
3,863
|
$
|
6,225
|
$
|
52,490
|
||||||||||
750-799
|
72,674
|
45,950
|
6,128
|
14,323
|
139,075
|
|||||||||||||||
700-749
|
52,843
|
32,660
|
3,054
|
9,642
|
98,199
|
|||||||||||||||
650-699
|
51,664
|
20,250
|
3,257
|
8,194
|
83,365
|
|||||||||||||||
600-649
|
27,770
|
6,538
|
1,704
|
3,862
|
39,874
|
|||||||||||||||
550-599
|
21,361
|
3,639
|
994
|
1,721
|
27,715
|
|||||||||||||||
500-549
|
14,575
|
2,156
|
699
|
1,401
|
18,831
|
|||||||||||||||
Under 500
|
6,306
|
875
|
261
|
632
|
8,074
|
|||||||||||||||
Unknown
|
4,075
|
2,184
|
242
|
674
|
7,175
|
|||||||||||||||
Total
|
$
|
279,186
|
$
|
128,736
|
$
|
20,202
|
$
|
46,674
|
$
|
474,798
|
||||||||||
Accrued interest included in total
|
$
|
1,311
|
$
|
562
|
$
|
88
|
$
|
209
|
$
|
2,170
|
(1)
|
Credit scores have been updated within the last twelve months.
|
Installment (1)
|
||||||||||||||||||||
Home
Equity
1st Lien
|
Home
Equity
2nd Lien
|
Loans not
Secured by
Real Estate
|
Other
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||
800 and above
|
$
|
1,953
|
$
|
1,840
|
$
|
40,348
|
$
|
59
|
$
|
44,200
|
||||||||||
750-799
|
4,411
|
6,624
|
89,310
|
568
|
100,913
|
|||||||||||||||
700-749
|
2,685
|
4,667
|
38,237
|
617
|
46,206
|
|||||||||||||||
650-699
|
3,783
|
4,138
|
15,224
|
479
|
23,624
|
|||||||||||||||
600-649
|
2,161
|
2,254
|
4,758
|
260
|
9,433
|
|||||||||||||||
550-599
|
1,919
|
1,547
|
2,080
|
124
|
5,670
|
|||||||||||||||
500-549
|
760
|
851
|
976
|
50
|
2,637
|
|||||||||||||||
Under 500
|
744
|
280
|
461
|
11
|
1,496
|
|||||||||||||||
Unknown
|
64
|
104
|
1,963
|
5
|
2,136
|
|||||||||||||||
Total
|
$
|
18,480
|
$
|
22,305
|
$
|
193,357
|
$
|
2,173
|
$
|
236,315
|
||||||||||
Accrued interest included in total
|
$
|
70
|
$
|
82
|
$
|
519
|
$
|
17
|
$
|
688
|
||||||||||
December 31, 2014
|
||||||||||||||||||||
800 and above
|
$
|
2,272
|
$
|
2,835
|
$
|
31,507
|
$
|
60
|
$
|
36,674
|
||||||||||
750-799
|
5,677
|
8,557
|
66,558
|
583
|
81,375
|
|||||||||||||||
700-749
|
3,111
|
6,358
|
28,179
|
689
|
38,337
|
|||||||||||||||
650-699
|
3,963
|
5,477
|
16,152
|
615
|
26,207
|
|||||||||||||||
600-649
|
3,434
|
2,408
|
5,128
|
255
|
11,225
|
|||||||||||||||
550-599
|
2,019
|
1,913
|
1,896
|
134
|
5,962
|
|||||||||||||||
500-549
|
1,128
|
1,036
|
1,672
|
84
|
3,920
|
|||||||||||||||
Under 500
|
393
|
427
|
455
|
28
|
1,303
|
|||||||||||||||
Unknown
|
77
|
81
|
1,842
|
44
|
2,044
|
|||||||||||||||
Total
|
$
|
22,074
|
$
|
29,092
|
$
|
153,389
|
$
|
2,492
|
$
|
207,047
|
||||||||||
Accrued interest included in total
|
$
|
93
|
$
|
112
|
$
|
445
|
$
|
19
|
$
|
669
|
(1)
|
Credit scores have been updated within the last twelve months.
|
Payment Plan Receivables
|
||||||||||||||||
Full
Refund
|
Partial
Refund
|
Other
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
September 30, 2015
|
||||||||||||||||
AM Best rating
|
||||||||||||||||
A+
|
$
|
-
|
$
|
8
|
$
|
-
|
$
|
8
|
||||||||
A
|
3,711
|
7,572
|
-
|
11,283
|
||||||||||||
A-
|
3,226
|
753
|
5,470
|
9,449
|
||||||||||||
Not rated
|
16,595
|
95
|
8
|
16,698
|
||||||||||||
Total
|
$
|
23,532
|
$
|
8,428
|
$
|
5,478
|
$
|
37,438
|
||||||||
December 31, 2014
|
||||||||||||||||
AM Best rating
|
||||||||||||||||
A+
|
$
|
-
|
$
|
43
|
$
|
-
|
$
|
43
|
||||||||
A
|
10,007
|
6,190
|
-
|
16,197
|
||||||||||||
A-
|
1,989
|
685
|
5,054
|
7,728
|
||||||||||||
Not rated
|
15,857
|
176
|
-
|
16,033
|
||||||||||||
Total
|
$
|
27,853
|
$
|
7,094
|
$
|
5,054
|
$
|
40,001
|
5.
|
Segments
|
IB
|
Mepco
|
Other (1)
|
Elimination (2)
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Total assets
|
||||||||||||||||||||
September 30, 2015
|
$
|
2,323,629
|
$
|
60,018
|
$
|
288,708
|
$
|
(277,494
|
)
|
$
|
2,394,861
|
|||||||||
December 31, 2014
|
2,174,536
|
63,378
|
286,158
|
(275,342
|
)
|
2,248,730
|
||||||||||||||
For the three months ended September 30,
|
||||||||||||||||||||
2015
|
||||||||||||||||||||
Interest income
|
$
|
18,973
|
$
|
1,320
|
$
|
20
|
$
|
(20
|
)
|
$
|
20,293
|
|||||||||
Net interest income
|
17,964
|
1,115
|
(238
|
)
|
-
|
18,841
|
||||||||||||||
Provision for loan losses
|
(238
|
)
|
(6
|
)
|
-
|
-
|
(244
|
)
|
||||||||||||
Income (loss) before income tax
|
7,961
|
(254
|
)
|
(358
|
)
|
(24
|
)
|
7,325
|
||||||||||||
Net income (loss)
|
5,455
|
(168
|
)
|
(224
|
)
|
(16
|
)
|
5,047
|
||||||||||||
2014
|
||||||||||||||||||||
Interest income
|
$
|
18,444
|
$
|
1,624
|
$
|
25
|
$
|
(25
|
)
|
$
|
20,068
|
|||||||||
Net interest income
|
17,254
|
1,338
|
(409
|
)
|
-
|
18,183
|
||||||||||||||
Provision for loan losses
|
(623
|
)
|
(9
|
)
|
-
|
-
|
(632
|
)
|
||||||||||||
Income (loss) before income tax
|
7,459
|
247
|
(408
|
)
|
(24
|
)
|
7,274
|
|||||||||||||
Net income (loss)
|
5,048
|
163
|
(266
|
)
|
(16
|
)
|
4,929
|
|||||||||||||
For the nine months ended September 30,
|
||||||||||||||||||||
2015
|
||||||||||||||||||||
Interest income
|
$
|
55,895
|
$
|
4,081
|
$
|
60
|
$
|
(60
|
)
|
$
|
59,976
|
|||||||||
Net interest income
|
52,864
|
3,468
|
(699
|
)
|
-
|
55,633
|
||||||||||||||
Provision for loan losses
|
(1,032
|
)
|
(5
|
)
|
-
|
-
|
(1,037
|
)
|
||||||||||||
Income (loss) before income tax
|
23,063
|
(766
|
)
|
(1,097
|
)
|
(71
|
)
|
21,129
|
||||||||||||
Net income (loss)
|
15,623
|
(437
|
)
|
(693
|
)
|
(46
|
)
|
14,447
|
||||||||||||
2014
|
||||||||||||||||||||
Interest income
|
$
|
55,153
|
$
|
5,555
|
$
|
41
|
$
|
(41
|
)
|
$
|
60,708
|
|||||||||
Net interest income
|
51,721
|
4,500
|
(1,022
|
)
|
-
|
55,199
|
||||||||||||||
Provision for loan losses
|
(2,018
|
)
|
(31
|
)
|
-
|
-
|
(2,049
|
)
|
||||||||||||
Income (loss) before income tax
|
20,151
|
908
|
(1,210
|
)
|
(71
|
)
|
19,778
|
|||||||||||||
Net income (loss)
|
14,345
|
607
|
(665
|
)
|
(168
|
)
|
14,119
|
(1) | Includes amounts relating to our parent company and certain insignificant operations. |
(2) | Includes parent company's investment in subsidiaries and cash balances maintained at subsidiary. |
6.
|
Shareholders’ Equity and Earnings Per Common Share
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(In thousands, except per share amounts)
|
||||||||||||||||
Net income
|
$
|
5,047
|
$
|
4,929
|
$
|
14,447
|
$
|
14,119
|
||||||||
Weighted average shares outstanding (1)
|
22,673
|
22,940
|
22,852
|
22,919
|
||||||||||||
Restricted stock units
|
230
|
306
|
283
|
305
|
||||||||||||
Effect of stock options
|
118
|
123
|
120
|
126
|
||||||||||||
Stock units for deferred compensation plan for non-employee directors
|
112
|
109
|
111
|
114
|
||||||||||||
Weighted average shares outstanding for calculation of diluted earnings per share
|
23,133
|
23,478
|
23,366
|
23,464
|
||||||||||||
Net income per common share
|
||||||||||||||||
Basic (1)
|
$
|
0.22
|
$
|
0.21
|
$
|
0.63
|
$
|
0.62
|
||||||||
Diluted
|
$
|
0.22
|
$
|
0.21
|
$
|
0.62
|
$
|
0.60
|
7.
|
Derivative Financial Instruments
|
September 30, 2015
|
||||||||||||
Notional
Amount
|
Average
Maturity
(years)
|
Fair
Value
|
||||||||||
(Dollars in thousands)
|
||||||||||||
No hedge designation
|
||||||||||||
Rate-lock mortgage loan commitments
|
$
|
24,746
|
0.1
|
$
|
823
|
|||||||
Mandatory commitments to sell mortgage loans
|
49,791
|
0.1
|
(409
|
)
|
||||||||
Pay-fixed interest rate swap agreements
|
19,616
|
7.3
|
(674
|
)
|
||||||||
Pay-variable interest rate swap agreements
|
19,616
|
7.3
|
674
|
|||||||||
Purchased options
|
1,681
|
5.9
|
126
|
|||||||||
Written options
|
1,681
|
5.9
|
(126
|
)
|
||||||||
Total
|
$
|
117,131
|
2.7
|
$
|
414
|
|||||||
December 31, 2014
|
||||||||||||
Notional
Amount
|
Average
Maturity
(years)
|
Fair
Value
|
||||||||||
(Dollars in thousands)
|
||||||||||||
No hedge designation
|
||||||||||||
Rate-lock mortgage loan commitments
|
$
|
16,759
|
0.1
|
$
|
437
|
|||||||
Mandatory commitments to sell mortgage loans
|
38,600
|
0.1
|
(184
|
)
|
||||||||
Pay-fixed interest rate swap agreements
|
3,300
|
9.4
|
(182
|
)
|
||||||||
Pay-variable interest rate swap agreements
|
3,300
|
9.4
|
182
|
|||||||||
Total
|
$
|
61,959
|
1.1
|
$
|
253
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||||||||||||
September 30,
2015
|
December 31,
2014
|
September 30,
2015
|
December 31,
2014
|
|||||||||||||||||||||||||
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
|||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments
|
||||||||||||||||||||||||||||
Rate-lock mortgage loan commitments
|
Other assets
|
$
|
823
|
Other assets
|
$
|
437
|
Other liabilities
|
$
|
-
|
Other liabilities
|
$
|
-
|
||||||||||||||||
Mandatory commitments to sell mortgage loans
|
Other assets
|
-
|
Other assets
|
-
|
Other liabilities
|
409
|
Other liabilities
|
184
|
||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
Other assets
|
-
|
Other assets
|
-
|
Other liabilities
|
674
|
Other liabilities
|
182
|
||||||||||||||||||||
Pay-variable interest rate swap agreements
|
Other assets
|
674
|
Other assets
|
182
|
Other liabilities
|
-
|
Other liabilities
|
-
|
||||||||||||||||||||
Purchased options
|
Other assets
|
126
|
Other assets
|
-
|
Other liabilities
|
-
|
Other liabilities
|
-
|
||||||||||||||||||||
Written options
|
Other assets
|
-
|
Other assets
|
-
|
Other liabilities
|
126
|
Other liabilities
|
-
|
||||||||||||||||||||
Total derivatives
|
$
|
1,623
|
$
|
619
|
$
|
1,209
|
$
|
366
|
Three Month Periods Ended September 30,
|
||||||||||||||||||||||||||
Gain (Loss)
Recognized in
Other
Comprehensive
Income
(Effective Portion)
|
Location of
Gain (Loss)
Reclassified
from
Accumulated
Other
Comprehensive
Loss into
Income
(Effective
|
Gain (Loss)
Reclassified from
Accumulated Other
Comprehensive
Loss into Income
(Effective Portion)
|
Location of
Gain (Loss)
Recognized
|
Gain (Loss)
Recognized
in Income
|
||||||||||||||||||||||
2015 | 2014 |
Portion)
|
2015 | 2014 |
in Income (1)
|
2015 | 2014 | |||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||
Cash Flow Hedges
|
||||||||||||||||||||||||||
Pay-fixed interest rate swap agreements (2)
|
$
|
-
|
$
|
-
|
Interest expense
|
$
|
-
|
$
|
(95
|
)
|
$
|
-
|
$
|
-
|
||||||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(95
|
)
|
$
|
-
|
$
|
-
|
|||||||||||||
No hedge designation
|
||||||||||||||||||||||||||
Rate-lock mortgage loan commitments
|
Net mortgage loan gains
|
$
|
281
|
$
|
(77
|
)
|
||||||||||||||||||||
Mandatory commitments to sell mortgage loans
|
Net mortgage loan gains
|
(745
|
)
|
220
|
||||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
Interest income
|
(452
|
)
|
7
|
||||||||||||||||||||||
Pay-variable interest rate swap agreements
|
Interest income
|
452
|
(7
|
)
|
||||||||||||||||||||||
Purchased options
|
Interest expense
|
126
|
-
|
|||||||||||||||||||||||
Written options
|
Interest expense
|
(126
|
)
|
-
|
||||||||||||||||||||||
U.S. Treasury short position
|
Gain on securities
|
-
|
127
|
|||||||||||||||||||||||
Total
|
$
|
(464
|
)
|
$
|
270
|
(1)
|
For cash flow hedges, this location and amount refers to the ineffective portion.
|
(2)
|
Relates to a terminated pay-fixed interest rate swap whose termination fee was included in accumulated other comprehensive loss and was being amortized into earnings through December 31, 2014.
|
|
Nine Month Periods Ended September 30,
|
|||||||||||||||||||||||||
|
Gain (Loss)
Recognized in
Other
Comprehensive
Income
(Effective Portion)
|
Location of
Gain (Loss)
Reclassified
from
Accumulated
Other
Comprehensive
Loss into
Income
(Effective
|
Gain (Loss)
Reclassified from
Accumulated Other
Comprehensive
Loss into Income
(Effective Portion)
|
Location of
Gain (Loss)
Recognized
|
Gain (Loss)
Recognized
in Income
|
|||||||||||||||||||||
|
2015
|
2014
|
Portion)
|
2015
|
2014
|
in Income (1)
|
2015
|
2014
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||||
Cash Flow Hedges
|
|
|
||||||||||||||||||||||||
Pay-fixed interest rate swap agreements (2)
|
$
|
-
|
$
|
-
|
Interest expense
|
$
|
-
|
$
|
(285
|
)
|
|
$
|
-
|
$
|
-
|
|||||||||||
Total
|
$
|
-
|
$
|
-
|
|
$
|
-
|
$
|
(285
|
)
|
|
$
|
-
|
$
|
-
|
|||||||||||
|
|
|
||||||||||||||||||||||||
No hedge designation
|
|
|
||||||||||||||||||||||||
Rate-lock mortgage loan commitments
|
|
Net mortgage loan gains
|
$
|
386
|
$
|
147
|
||||||||||||||||||||
Mandatory commitments to sell mortgage loans
|
|
Net mortgage loan gains
|
(225
|
)
|
(134
|
)
|
||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
|
Interest income
|
(492
|
)
|
(92
|
)
|
||||||||||||||||||||
Pay-variable interest rate swap agreements
|
|
Interest income
|
492
|
92
|
||||||||||||||||||||||
Purchased options
|
|
Interest expense
|
126
|
-
|
||||||||||||||||||||||
Written options
|
|
Interest expense
|
(126
|
)
|
-
|
|||||||||||||||||||||
U.S. Treasury short position
|
|
Gain on securities
|
-
|
179
|
||||||||||||||||||||||
Total
|
|
|
$
|
161
|
$
|
192
|
(1) | For cash flow hedges, this location and amount refers to the ineffective portion. |
(2) | Relates to a terminated pay-fixed interest rate swap whose termination fee was included in accumulated other comprehensive loss and was being amortized into earnings through December 31, 2014. |
8.
|
Intangible Assets
|
September 30, 2015
|
December 31, 2014
|
|||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Amortized intangible assets - core deposits
|
$
|
6,118
|
$
|
3,752
|
$
|
6,118
|
$
|
3,491
|
(In thousands)
|
||||
Three months ending December 31, 2015
|
$
|
86
|
||
2016
|
347
|
|||
2017
|
346
|
|||
2018
|
346
|
|||
2019
|
346
|
|||
2020 and thereafter
|
895
|
|||
Total
|
$
|
2,366
|
9.
|
Share Based Compensation
|
Number of
Shares
|
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term (Years)
|
Aggregated
Intrinsic
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Outstanding at January 1, 2015
|
281,820
|
$
|
4.69
|
|||||||||||||
Granted
|
-
|
|||||||||||||||
Exercised
|
(31,450
|
)
|
3.35
|
|||||||||||||
Forfeited
|
(2,096
|
)
|
4.77
|
|||||||||||||
Expired
|
(1,924
|
)
|
6.79
|
|||||||||||||
Outstanding at September 30, 2015
|
246,350
|
$
|
4.85
|
6.35
|
$
|
2,472
|
||||||||||
Vested and expected to vest at
|
||||||||||||||||
September 30, 2015
|
245,298
|
$
|
4.84
|
6.35
|
$
|
2,463
|
||||||||||
Exercisable at September 30, 2015
|
222,742
|
$
|
4.70
|
6.22
|
$
|
2,271
|
Number
of Shares
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||
Outstanding at January 1, 2015
|
407,130
|
$
|
6.31
|
|||||
Granted
|
108,422
|
13.06
|
||||||
Vested
|
(249,526
|
)
|
3.92
|
|||||
Forfeited
|
(4,384
|
)
|
12.88
|
|||||
Outstanding at September 30, 2015
|
261,642
|
$
|
11.28
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Intrinsic value
|
$
|
71
|
$
|
123
|
$
|
314
|
$
|
231
|
||||||||
Cash proceeds received
|
$
|
23
|
$
|
30
|
$
|
105
|
$
|
66
|
||||||||
Tax benefit realized
|
$
|
25
|
$
|
44
|
$
|
110
|
$
|
81
|
10.
|
Income Tax
|
11.
|
Regulatory Matters
|
Actual
|
Minimum for
Adequately Capitalized
Institutions
|
Minimum for
Well-Capitalized
Institutions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
276,230
|
16.98
|
%
|
$
|
130,163
|
8.00
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
253,647
|
15.61
|
130,004
|
8.00
|
$
|
162,506
|
10.00
|
%
|
||||||||||||||||
Tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
255,613
|
15.71
|
%
|
$
|
97,622
|
6.00
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
233,123
|
14.35
|
97,503
|
6.00
|
$
|
130,005
|
8.00
|
%
|
||||||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
238,884
|
14.68
|
%
|
$
|
73,216
|
4.50
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
233,123
|
14.35
|
73,128
|
4.50
|
$
|
105,629
|
6.50
|
%
|
||||||||||||||||
Tier 1 capital to average assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
255,613
|
11.16
|
%
|
$
|
91,582
|
4.00
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
233,123
|
10.19
|
91,509
|
4.00
|
$
|
114,387
|
5.00
|
%
|
||||||||||||||||
December 31, 2014
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
265,163
|
18.06
|
%
|
$
|
117,427
|
8.00
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
247,883
|
16.90
|
117,374
|
8.00
|
$
|
146,718
|
10.00
|
%
|
||||||||||||||||
Tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
246,628
|
16.80
|
%
|
$
|
58,714
|
4.00
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
229,361
|
15.63
|
58,687
|
4.00
|
$
|
88,031
|
6.00
|
%
|
||||||||||||||||
Tier 1 capital to average assets
|
||||||||||||||||||||||||
Consolidated
|
$
|
246,628
|
11.18
|
%
|
$
|
88,206
|
4.00
|
%
|
NA
|
NA
|
||||||||||||||
Independent Bank
|
229,361
|
10.46
|
87,687
|
4.00
|
$
|
109,609
|
5.00
|
%
|
Consolidated
|
Independent Bank
|
|||||||||||||||
September 30,
2015
|
December 31,
2014
|
September 30,
2015
|
December 31,
2014
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Total shareholders' equity
|
$
|
252,980
|
$
|
250,371
|
$
|
255,659
|
$
|
257,832
|
||||||||
Add (deduct)
|
||||||||||||||||
Accumulated other comprehensive (gain) loss for regulatory purposes
|
(1,302
|
)
|
5,636
|
(1,302
|
)
|
5,636
|
||||||||||
Intangible assets
|
(946
|
)
|
(2,627
|
)
|
(946
|
)
|
(2,627
|
)
|
||||||||
Disallowed deferred tax assets
|
(11,848
|
)
|
(40,500
|
)
|
(20,288
|
)
|
(30,728
|
)
|
||||||||
Disallowed capitalized mortgage loan servicing rights
|
-
|
(752
|
)
|
-
|
(752
|
)
|
||||||||||
Common equity tier 1 capital
|
238,884
|
212,128
|
233,123
|
229,361
|
||||||||||||
Qualifying trust preferred securities
|
34,500
|
34,500
|
-
|
-
|
||||||||||||
Disallowed deferred tax assets
|
(17,771
|
)
|
-
|
-
|
-
|
|||||||||||
Tier 1 capital
|
255,613
|
246,628
|
233,123
|
229,361
|
||||||||||||
Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets
|
20,617
|
18,535
|
20,524
|
18,522
|
||||||||||||
Total risk-based capital
|
$
|
276,230
|
$
|
265,163
|
$
|
253,647
|
$
|
247,883
|
12.
|
Fair Value Disclosures
|
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
Measure-
ments
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Un-
observable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
September 30, 2015:
|
||||||||||||||||
Measured at Fair Value on a Recurring Basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Trading securities
|
$
|
225
|
$
|
225
|
$
|
-
|
$
|
-
|
||||||||
Securities available for sale
|
||||||||||||||||
U.S. agency
|
50,735
|
-
|
50,735
|
-
|
||||||||||||
U.S. agency residential mortgage-backed
|
208,290
|
-
|
208,290
|
-
|
||||||||||||
U.S. agency commercial mortgage-backed
|
35,338
|
-
|
35,338
|
-
|
||||||||||||
Private label residential mortgage-backed
|
5,129
|
-
|
5,129
|
-
|
||||||||||||
Other asset backed
|
131,772
|
-
|
131,772
|
-
|
||||||||||||
Obligations of states and political subdivisions
|
136,732
|
-
|
136,732
|
-
|
||||||||||||
Corporate
|
34,106
|
-
|
34,106
|
-
|
||||||||||||
Trust preferred
|
2,560
|
-
|
2,560
|
-
|
||||||||||||
Loans held for sale
|
25,462
|
-
|
25,462
|
-
|
||||||||||||
Derivatives (1)
|
1,623
|
-
|
1,623
|
-
|
||||||||||||
Liabilities
|
||||||||||||||||
Derivatives (2)
|
1,209
|
-
|
1,209
|
-
|
||||||||||||
Measured at Fair Value on a Non-recurring basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Capitalized mortgage loan servicing rights (3)
|
7,931
|
-
|
-
|
7,931
|
||||||||||||
Impaired loans (4)
|
||||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
4,083
|
-
|
-
|
4,083
|
||||||||||||
Land, land development & construction-real estate
|
203
|
-
|
-
|
203
|
||||||||||||
Commercial and industrial
|
1,426
|
-
|
-
|
1,426
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 Family
|
577
|
-
|
-
|
577
|
||||||||||||
Resort Lending
|
138
|
-
|
-
|
138
|
||||||||||||
Other real estate (5)
|
||||||||||||||||
Commercial
|
||||||||||||||||
Land, land development & construction-real estate
|
639
|
-
|
-
|
639
|
||||||||||||
Commercial and industrial
|
165
|
-
|
-
|
165
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 Family
|
51
|
-
|
-
|
51
|
||||||||||||
Resort Lending
|
107
|
-
|
-
|
107
|
||||||||||||
Installment
|
||||||||||||||||
Home equity - 1st lien
|
36
|
-
|
-
|
36
|
(1) | Included in accrued income and other assets |
(2) | Included in accrued expenses and other liabilities |
(3) | Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance. |
(4) | Only includes impaired loans with specific loss allocations based on collateral value. |
(5) | Only includes other real estate with subsequent write downs to fair value. |
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
Measure-
ments
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Un-
observable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2014:
|
||||||||||||||||
Measured at Fair Value on a Recurring Basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Trading securities
|
$
|
203
|
$
|
203
|
$
|
-
|
$
|
-
|
||||||||
Securities available for sale
|
||||||||||||||||
U.S. agency
|
35,006
|
-
|
35,006
|
-
|
||||||||||||
U.S. agency residential mortgage-backed
|
257,558
|
-
|
257,558
|
-
|
||||||||||||
U.S. agency commercial mortgage-backed
|
33,728
|
-
|
33,728
|
-
|
||||||||||||
Private label residential mortgage-backed
|
6,013
|
-
|
6,013
|
-
|
||||||||||||
Other asset backed
|
32,353
|
-
|
32,353
|
-
|
||||||||||||
Obligations of states and political subdivisions
|
143,415
|
-
|
143,415
|
-
|
||||||||||||
Corporate
|
22,664
|
-
|
22,664
|
-
|
||||||||||||
Trust preferred
|
2,441
|
-
|
2,441
|
-
|
||||||||||||
Loans held for sale
|
23,662
|
-
|
23,662
|
-
|
||||||||||||
Derivatives (1)
|
619
|
-
|
619
|
-
|
||||||||||||
Liabilities
|
||||||||||||||||
Derivatives (2)
|
366
|
-
|
366
|
-
|
||||||||||||
Measured at Fair Value on a Non-recurring basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Capitalized mortgage loan servicing rights (3)
|
9,197
|
-
|
-
|
9,197
|
||||||||||||
Impaired loans (4)
|
||||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
869
|
-
|
-
|
869
|
||||||||||||
Land, land development & construction-real estate
|
354
|
-
|
-
|
354
|
||||||||||||
Commercial and industrial
|
2,601
|
-
|
-
|
2,601
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 Family
|
1,306
|
-
|
-
|
1,306
|
||||||||||||
Other real estate (5)
|
||||||||||||||||
Commercial
|
||||||||||||||||
Income producing - real estate
|
479
|
-
|
-
|
479
|
||||||||||||
Land, land development & construction-real estate
|
737
|
-
|
-
|
737
|
||||||||||||
Mortgage
|
||||||||||||||||
1-4 Family
|
102
|
-
|
-
|
102
|
||||||||||||
Resort Lending
|
575
|
-
|
-
|
575
|
||||||||||||
Installment
|
||||||||||||||||
Home equity - 1st lien
|
13
|
-
|
-
|
13
|
(1) | Included in accrued income and other assets |
(2) | Included in accrued expenses and other liabilities |
(3) | Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance. |
(4) | Only includes impaired loans with specific loss allocations based on collateral value. |
(5) | Only includes other real estate with subsequent write downs to fair value. |
Changes in Fair Values for the Nine-Month
Periods Ended September 30 for Items Measured at
Fair Value Pursuant to Election of the Fair Value Option
|
||||||||||||||||||||||||
2015
|
2014
|
|||||||||||||||||||||||
Net Gains (Losses)
on Assets
|
Total
Change
in Fair
Values
Included
in Current
Period
|
Net Gains (Losses)
on Assets
|
Total
Change
in Fair
Values
Included
in Current
Period
|
|||||||||||||||||||||
Securities
|
Loans
|
Earnings
|
Securities
|
Loans
|
Earnings
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Trading securities
|
$
|
22
|
$
|
-
|
$
|
22
|
$
|
32
|
$
|
-
|
$
|
32
|
||||||||||||
Loans held for sale
|
-
|
311
|
311
|
-
|
127
|
127
|
·
|
Capitalized mortgage loan servicing rights, whose individual strata are measured at fair value, had a carrying amount of $7.9 million which is net of a valuation allowance of $4.1 million at September 30, 2015, and had a carrying amount of $9.2 million which is net of a valuation allowance of $3.8 million at December 31, 2014. A recovery (charge) of $(0.9) million and $(0.3) million was included in our results of operations for the three and nine month periods ending September 30, 2015, respectively and $0.5 million and $0.04 million during the same periods in 2014.
|
·
|
Loans which are measured for impairment using the fair value of collateral for collateral dependent loans had a carrying amount of $10.3 million, with a valuation allowance of $3.8 million at September 30, 2015, and had a carrying amount of $8.2 million, with a valuation allowance of $3.1 million at December 31, 2014. The provision for loan losses included in our results of operations relating to impaired loans was an expense of $1.0 million and $0.5 million for the three month periods ending September 30, 2015 and 2014, respectively, and an expense of $1.9 million and $1.4 million for the nine month periods ending September 30, 2015 and 2014, respectively.
|
·
|
Other real estate, which is measured using the fair value of the property, had a carrying amount of $1.0 million which is net of a valuation allowance of $1.7 million at September 30, 2015, and a carrying amount of $1.9 million which is net of a valuation allowance of $2.5 million at December 31, 2014. An additional charge relating to other real estate measured at fair value of $0.03 million and $0.30 million was included in our results of operations during the three and nine month periods ended September 30, 2015, respectively and $0.3 million and $0.4 million during the same periods in 2014.
|
Asset
(Liability)
Fair
Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Weighted
Average
|
||||||||
(In thousands)
|
|||||||||||
September 30, 2015
|
|||||||||||
Capitalized mortgage loan servicing rights
|
$
|
7,931
|
Present value of net servicing revenue
|
Discount rate
|
10.03
|
%
|
|||||
Cost to service
|
$
|
80
|
|||||||||
Ancillary income
|
24
|
||||||||||
Float rate
|
1.38
|
%
|
|||||||||
Impaired loans
|
|||||||||||
Commercial (1)
|
5,309
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(7.2
|
)%
|
||||||
Income approach
|
Capitalization rate
|
9.3
|
|||||||||
Mortgage
|
715
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
4.1
|
|||||||
Other real estate
|
|||||||||||
Commercial
|
804
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(3.9
|
)
|
||||||
Mortgage and installment
|
194
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
75.6
|
|||||||
December 31, 2014
|
|||||||||||
Capitalized mortgage loan servicing rights
|
$
|
9,197
|
Present value of net servicing revenue
|
Discount rate
|
10.07
|
%
|
|||||
Cost to service
|
$
|
82
|
|||||||||
Ancillary income
|
25
|
||||||||||
Float rate
|
1.77
|
%
|
|||||||||
Impaired loans
|
|||||||||||
Commercial (1)
|
2,751
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(3.8
|
)%
|
||||||
Income approach
|
Capitalization rate
|
9.3
|
|||||||||
Mortgage
|
1,306
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
8.6
|
|||||||
Other real estate
|
|||||||||||
Commercial
|
1,216
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
(9.0
|
)
|
||||||
Mortgage and installment
|
690
|
Sales comparison approach
|
Adjustment for differences between comparable sales
|
34.3
|
(1)
|
In addition to the valuation techniques and unobservable inputs discussed above, at September 30, 2015 and December 31, 2014, we had an impaired collateral dependent commercial relationship that totaled $0.4 million and $1.1 million, respectively that was primarily secured by collateral other than real estate. Collateral securing this relationship primarily included machinery and equipment and inventory at September 30, 2015 and also included accounts receivable at December 31, 2014. Valuation techniques at September 30, 2015, included discounting restructuring firm valuations based on estimates of value recovery of each particular asset type. Discount rates used ranged from 0% to 100% of stated values. Valuation techniques at December 31, 2014, included discounting cost and financial statement value approaches based on estimates of value recovery of each particular asset type. Discount rates used ranged from 35% to 100% of stated values.
|
Aggregate
Fair Value
|
Difference
|
Contractual
Principal
|
||||||||||
(In thousands)
|
||||||||||||
Loans held for sale
|
||||||||||||
September 30, 2015
|
$
|
25,462
|
$
|
935
|
$
|
24,527
|
||||||
December 31, 2014
|
23,662
|
624
|
23,038
|
13.
|
Fair Values of Financial Instruments
|
Fair Value Using
|
||||||||||||||||||||
Recorded
Book
Balance
|
Fair Value
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Un-
observable
Inputs
(Level 3)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
September 30, 2015
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
52,146
|
$
|
52,146
|
$
|
52,146
|
$
|
-
|
$
|
-
|
||||||||||
Interest bearing deposits
|
53,051
|
53,051
|
53,051
|
-
|
-
|
|||||||||||||||
Interest bearing deposits - time
|
13,029
|
13,053
|
-
|
13,053
|
-
|
|||||||||||||||
Trading securities
|
225
|
225
|
225
|
-
|
-
|
|||||||||||||||
Securities available for sale
|
604,662
|
604,662
|
-
|
604,662
|
-
|
|||||||||||||||
Federal Home Loan Bank and Federal
|
||||||||||||||||||||
Reserve Bank Stock
|
15,286
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||||
Net loans and loans held for sale
|
1,468,857
|
1,435,597
|
-
|
25,462
|
1,410,135
|
|||||||||||||||
Accrued interest receivable
|
6,473
|
6,473
|
8
|
2,068
|
4,397
|
|||||||||||||||
Derivative financial instruments
|
1,623
|
1,623
|
-
|
1,623
|
-
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Deposits with no stated maturity (1)
|
$
|
1,639,402
|
$
|
1,639,402
|
$
|
1,639,402
|
$
|
-
|
$
|
-
|
||||||||||
Deposits with stated maturity (1)
|
421,560
|
419,803
|
-
|
419,803
|
-
|
|||||||||||||||
Other borrowings
|
12,070
|
13,474
|
-
|
13,474
|
-
|
|||||||||||||||
Subordinated debentures
|
35,569
|
22,885
|
-
|
22,885
|
-
|
|||||||||||||||
Accrued interest payable
|
420
|
420
|
20
|
400
|
-
|
|||||||||||||||
Derivative financial instruments
|
1,209
|
1,209
|
-
|
1,209
|
-
|
|||||||||||||||
December 31, 2014
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
48,326
|
$
|
48,326
|
$
|
48,326
|
$
|
-
|
$
|
-
|
||||||||||
Interest bearing deposits
|
25,690
|
25,690
|
25,690
|
-
|
-
|
|||||||||||||||
Interest bearing deposits - time
|
13,561
|
13,585
|
-
|
13,585
|
-
|
|||||||||||||||
Trading securities
|
203
|
203
|
203
|
-
|
-
|
|||||||||||||||
Securities available for sale
|
533,178
|
533,178
|
-
|
533,178
|
-
|
|||||||||||||||
Federal Home Loan Bank and Federal
|
||||||||||||||||||||
Reserve Bank Stock
|
19,919
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||||
Net loans and loans held for sale
|
1,407,634
|
1,394,424
|
-
|
23,662
|
1,370,762
|
|||||||||||||||
Accrued interest receivable
|
5,995
|
5,995
|
2
|
1,599
|
4,394
|
|||||||||||||||
Derivative financial instruments
|
619
|
619
|
-
|
619
|
-
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Deposits with no stated maturity (1)
|
$
|
1,534,175
|
$
|
1,534,175
|
$
|
1,534,175
|
$
|
-
|
$
|
-
|
||||||||||
Deposits with stated maturity (1)
|
390,127
|
389,139
|
-
|
389,139
|
-
|
|||||||||||||||
Other borrowings
|
12,470
|
14,560
|
-
|
14,560
|
-
|
|||||||||||||||
Subordinated debentures
|
35,569
|
23,328
|
-
|
23,328
|
-
|
|||||||||||||||
Accrued interest payable
|
380
|
380
|
21
|
359
|
-
|
|||||||||||||||
Derivative financial instruments
|
366
|
366
|
-
|
366
|
-
|
(1)
|
Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $12.0 million and $13.6 million at September 30, 2015 and December 31, 2014, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $35.9 million and $40.1 million at September 30, 2015 and December 31, 2014, respectively.
|
15.
|
Accumulated Other Comprehensive Loss (“AOCL”)
|
Unrealized
Gains
(Losses) on
Available
for Sale
Securities
|
Dispropor-
tionate
Tax Effects
from
Securities
Available
for Sale
|
Unrealized
Losses on
Settled
Derivatives
|
Total
|
|||||||||||||
For the three months ended September 30,
|
||||||||||||||||
2015
|
||||||||||||||||
Balances at beginning of period
|
$
|
408
|
$
|
(5,798
|
)
|
$
|
-
|
$
|
(5,390
|
)
|
||||||
Other comprehensive loss before reclassifications
|
894
|
-
|
-
|
894
|
||||||||||||
Amounts reclassified from AOCL
|
-
|
-
|
-
|
-
|
||||||||||||
Net current period other comprehensive income
|
894
|
-
|
-
|
894
|
||||||||||||
Balances at end of period
|
$
|
1,302
|
$
|
(5,798
|
)
|
$
|
-
|
$
|
(4,496
|
)
|
||||||
2014
|
||||||||||||||||
Balances at beginning of period
|
$
|
(376
|
)
|
$
|
(5,798
|
)
|
$
|
(124
|
)
|
$
|
(6,298
|
)
|
||||
Other comprehensive income before reclassifications
|
226
|
-
|
-
|
226
|
||||||||||||
Amounts reclassified from AOCL
|
(73
|
)
|
-
|
62
|
(11
|
)
|
||||||||||
Net current period other comprehensive income
|
153
|
-
|
62
|
215
|
||||||||||||
Balances at end of period
|
$
|
(223
|
)
|
$
|
(5,798
|
)
|
$
|
(62
|
)
|
$
|
(6,083
|
)
|
||||
For the nine months ended September 30,
|
||||||||||||||||
2015
|
||||||||||||||||
Balances at beginning of period
|
$
|
162
|
$
|
(5,798
|
)
|
$
|
-
|
$
|
(5,636
|
)
|
||||||
Other comprehensive income before reclassifications
|
1,189
|
-
|
-
|
1,189
|
||||||||||||
Amounts reclassified from AOCL
|
(49
|
)
|
-
|
-
|
(49
|
)
|
||||||||||
Net current period other comprehensive income
|
1,140
|
-
|
-
|
1,140
|
||||||||||||
Balances at end of period
|
$
|
1,302
|
$
|
(5,798
|
)
|
$
|
-
|
$
|
(4,496
|
)
|
||||||
2014
|
||||||||||||||||
Balances at beginning of period
|
$
|
(3,200
|
)
|
$
|
(5,798
|
)
|
$
|
(247
|
)
|
$
|
(9,245
|
)
|
||||
Other comprehensive income before reclassifications
|
3,051
|
-
|
-
|
3,051
|
||||||||||||
Amounts reclassified from AOCL
|
(74
|
)
|
-
|
185
|
111
|
|||||||||||
Net current period other comprehensive income
|
2,977
|
-
|
185
|
3,162
|
||||||||||||
Balances at end of period
|
$
|
(223
|
)
|
$
|
(5,798
|
)
|
$
|
(62
|
)
|
$
|
(6,083
|
)
|
AOCL Component
|
Amount
Reclassified
From
AOCL
|
Affected Line Item in Condensed
Consolidated Statements of Operations
|
|||
(In thousands)
|
|||||
2015
|
|||||
Unrealized gains on available for sale securities
|
|||||
$
|
-
|
Net gains on securities
|
|||
-
|
Net impairment loss recognized in earnings
|
||||
-
|
Total reclassifications before tax
|
||||
-
|
Tax expense
|
||||
$
|
-
|
Reclassifications, net of tax
|
|||
2014
|
|||||
Unrealized gains on available for sale securities
|
|||||
$
|
121
|
Net gains on securities
|
|||
(9
|
)
|
Net impairment loss recognized in earnings
|
|||
112
|
Total reclassifications before tax
|
||||
39
|
Tax expense
|
||||
$
|
73
|
Reclassifications, net of tax
|
|||
Unrealized gains on settled derivatives
|
|||||
$
|
(95
|
)
|
Interest expense
|
||
(33
|
)
|
Tax benefit
|
|||
$
|
(62
|
)
|
Reclassification, net of tax
|
||
$
|
11
|
Total reclassifications for the period, net of tax
|
AOCL Component
|
Amount
Reclassified
From
AOCL
|
Affected Line Item in Condensed
Consolidated Statements of Operations
|
|||
(In thousands)
|
|||||
2015
|
|||||
Unrealized gains on available for sale securities
|
|||||
$
|
75
|
Net gains on securities
|
|||
-
|
Net impairment loss recognized in earnings
|
||||
75
|
Total reclassifications before tax
|
||||
26
|
Tax expense
|
||||
$
|
49
|
Reclassifications, net of tax
|
|||
2014
|
|||||
Unrealized gains on available for sale securities
|
|||||
$
|
123
|
Net gains on securities
|
|||
(9
|
)
|
Net impairment loss recognized in earnings
|
|||
114
|
Total reclassifications before tax
|
||||
40
|
Tax expense
|
||||
$
|
74
|
Reclassifications, net of tax
|
|||
Unrealized gains on settled derivatives
|
|||||
$
|
(285
|
)
|
Interest expense
|
||
(100
|
)
|
Tax benefit
|
|||
$
|
(185
|
)
|
Reclassification, net of tax
|
||
$
|
(111
|
)
|
Total reclassifications for the period, net of tax
|
Key performance ratios
|
||||||||||||||||
Three months ended
September 30,
|
Nine months ended
September 30
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net income (annualized) to
|
||||||||||||||||
Average assets
|
0.86
|
%
|
0.87
|
%
|
0.84
|
%
|
0.84
|
%
|
||||||||
Average common shareholders’ equity
|
7.84
|
7.95
|
7.59
|
7.86
|
||||||||||||
Net income per common share
|
||||||||||||||||
Basic
|
$
|
0.22
|
$
|
0.21
|
$
|
0.63
|
$
|
0.62
|
||||||||
Diluted
|
0.22
|
0.21
|
0.62
|
0.60
|
Average Balances and Tax Equivalent Rates
|
||||||||||||||||||||||||
Three Months Ended
September 30,
|
||||||||||||||||||||||||
2015
|
2014
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Rate (3)
|
Average
Balance
|
Interest
|
Rate (3)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets (1)
|
||||||||||||||||||||||||
Taxable loans
|
$
|
1,470,529
|
$
|
17,834
|
4.83
|
%
|
$
|
1,390,811
|
$
|
17,768
|
5.08
|
%
|
||||||||||||
Tax-exempt loans (2)
|
3,740
|
54
|
5.73
|
4,803
|
77
|
6.36
|
||||||||||||||||||
Taxable securities
|
520,805
|
1,901
|
1.46
|
484,687
|
1,644
|
1.35
|
||||||||||||||||||
Tax-exempt securities (2)
|
33,104
|
347
|
4.19
|
40,613
|
430
|
4.20
|
||||||||||||||||||
Interest bearing cash and repurchase agreement
|
68,972
|
70
|
0.40
|
76,529
|
61
|
0.32
|
||||||||||||||||||
Other investments
|
15,231
|
225
|
5.86
|
23,415
|
264
|
4.47
|
||||||||||||||||||
Interest Earning Assets
|
2,112,381
|
20,431
|
3.85
|
2,020,858
|
20,244
|
3.98
|
||||||||||||||||||
Cash and due from banks
|
45,477
|
46,643
|
||||||||||||||||||||||
Other assets, net
|
164,253
|
179,861
|
||||||||||||||||||||||
Total Assets
|
$
|
2,322,111
|
$
|
2,247,362
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest-bearing checking
|
$
|
990,229
|
266
|
0.11
|
$
|
949,039
|
270
|
0.11
|
||||||||||||||||
Time deposits
|
371,501
|
721
|
0.77
|
402,951
|
966
|
0.95
|
||||||||||||||||||
Other borrowings
|
47,769
|
465
|
3.86
|
67,114
|
649
|
3.84
|
||||||||||||||||||
Interest Bearing Liabilities
|
1,409,499
|
1,452
|
0.41
|
1,419,104
|
1,885
|
0.53
|
||||||||||||||||||
Non-interest bearing deposits
|
633,305
|
551,617
|
||||||||||||||||||||||
Other liabilities
|
23,844
|
30,734
|
||||||||||||||||||||||
Shareholders’ equity
|
255,463
|
245,907
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
2,322,111
|
$
|
2,247,362
|
||||||||||||||||||||
Net Interest Income
|
$
|
18,979
|
$
|
18,359
|
||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.58
|
%
|
3.61
|
%
|
(1) | All domestic. |
(2) | Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35% |
(3) | Annualized |
Nine Months Ended
September 30,
|
||||||||||||||||||||||||
2015
|
2014
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Rate (3)
|
Average
Balance
|
Interest
|
Rate (3)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets (1)
|
||||||||||||||||||||||||
Taxable loans
|
$
|
1,446,857
|
$
|
52,736
|
4.87
|
%
|
$
|
1,377,884
|
$
|
54,024
|
5.24
|
%
|
||||||||||||
Tax-exempt loans (2)
|
4,097
|
189
|
6.17
|
5,028
|
239
|
6.36
|
||||||||||||||||||
Taxable securities
|
518,906
|
5,528
|
1.42
|
470,995
|
4,623
|
1.31
|
||||||||||||||||||
Tax-exempt securities (2)
|
32,790
|
1,021
|
4.15
|
41,493
|
1,268
|
4.09
|
||||||||||||||||||
Interest bearing cash and repurchase agreement
|
64,913
|
194
|
0.40
|
87,511
|
219
|
0.33
|
||||||||||||||||||
Other investments
|
17,772
|
728
|
5.48
|
23,416
|
857
|
4.89
|
||||||||||||||||||
Interest Earning Assets
|
2,085,335
|
60,396
|
3.87
|
2,006,327
|
61,230
|
4.08
|
||||||||||||||||||
Cash and due from banks
|
44,829
|
45,137
|
||||||||||||||||||||||
Other assets, net
|
167,849
|
184,709
|
||||||||||||||||||||||
Total Assets
|
$
|
2,298,013
|
$
|
2,236,173
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest- bearing checking
|
$
|
988,594
|
792
|
0.11
|
$
|
953,008
|
799
|
0.11
|
||||||||||||||||
Time deposits
|
373,235
|
2,169
|
0.78
|
421,775
|
2,990
|
0.95
|
||||||||||||||||||
Other borrowings
|
47,930
|
1,382
|
3.86
|
59,362
|
1,720
|
3.87
|
||||||||||||||||||
Interest Bearing Liabilities
|
1,409,759
|
4,343
|
0.41
|
1,434,145
|
5,509
|
0.51
|
||||||||||||||||||
Non-interest bearing deposits
|
609,192
|
529,654
|
||||||||||||||||||||||
Other liabilities
|
24,581
|
32,226
|
||||||||||||||||||||||
Shareholders’ equity
|
254,481
|
240,148
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
2,298,013
|
$
|
2,236,173
|
||||||||||||||||||||
Net Interest Income
|
$
|
56,053
|
$
|
55,721
|
||||||||||||||||||||
Net Interest Income as a Percentof Average Interest Earning Assets
|
3.59
|
%
|
3.71
|
%
|
(1) | All domestic. |
(2) | Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35% |
(3) | Annualized |
Non-Interest Income
|
||||||||||||||||
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Service charges on deposit accounts
|
$
|
3,294
|
$
|
3,579
|
$
|
9,261
|
$
|
10,166
|
||||||||
Interchange income
|
2,169
|
1,984
|
6,551
|
5,992
|
||||||||||||
Net gains (losses) on assets:
|
||||||||||||||||
Mortgage loans
|
1,812
|
1,490
|
5,735
|
4,139
|
||||||||||||
Securities
|
45
|
168
|
97
|
334
|
||||||||||||
Other than temporary loss on securities available for sale:
|
||||||||||||||||
Total impairment loss
|
-
|
(9
|
)
|
-
|
(9
|
)
|
||||||||||
Recognized in other comprehensive loss
|
-
|
-
|
-
|
-
|
||||||||||||
Net impairment loss in earnings
|
-
|
(9
|
)
|
-
|
(9
|
)
|
||||||||||
Mortgage loan servicing
|
(556
|
)
|
932
|
476
|
1,389
|
|||||||||||
Investment and insurance commissions
|
447
|
404
|
1,380
|
1,305
|
||||||||||||
Bank owned life insurance
|
304
|
361
|
979
|
1,021
|
||||||||||||
Title insurance fees
|
281
|
243
|
874
|
734
|
||||||||||||
Gain on branch sale
|
1,193
|
-
|
1,193
|
-
|
||||||||||||
Other
|
1,130
|
1,391
|
3,522
|
4,503
|
||||||||||||
Total non-interest income
|
$
|
10,119
|
$
|
10,543
|
$
|
30,068
|
$
|
29,574
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Mortgage loans originated
|
$
|
79,648
|
$
|
77,501
|
$
|
260,744
|
$
|
187,172
|
||||||||
Mortgage loans sold
|
71,063
|
62,007
|
221,957
|
156,090
|
||||||||||||
Mortgage loans sold with servicing rights released
|
872
|
11,229
|
4,314
|
27,447
|
||||||||||||
Net gains on the sale of mortgage loans
|
1,812
|
1,490
|
5,735
|
4,139
|
||||||||||||
Net gains as a percent of mortgage loans sold (“Loan Sales Margin”)
|
2.55
|
%
|
2.40
|
%
|
2.58
|
%
|
2.65
|
%
|
||||||||
Fair value adjustments included in the Loan
|
||||||||||||||||
Sales Margin
|
(0.05
|
)
|
(0.13
|
)
|
0.21
|
0.09
|
Capitalized Mortgage Loan Servicing Rights
|
||||||||||||||||
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
12,535
|
$
|
12,796
|
$
|
12,106
|
$
|
13,710
|
||||||||
Originated servicing rights capitalized
|
678
|
489
|
2,128
|
1,253
|
||||||||||||
Amortization
|
(700
|
)
|
(628
|
)
|
(2,259
|
)
|
(1,827
|
)
|
||||||||
Change in valuation allowance
|
(883
|
)
|
523
|
(345
|
)
|
44
|
||||||||||
Balance at end of period
|
$
|
11,630
|
$
|
13,180
|
$
|
11,630
|
$
|
13,180
|
||||||||
Valuation allowance at end of period
|
$
|
4,118
|
$
|
2,811
|
$
|
4,118
|
$
|
2,811
|
Non-Interest Expense | ||||||||||||||||
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
Compensation
|
$
|
8,419
|
$
|
8,574
|
$
|
24,880
|
$
|
25,321
|
||||||||
Performance-based compensation
|
1,572
|
1,203
|
4,604
|
3,348
|
||||||||||||
Payroll taxes and employee benefits
|
2,038
|
1,941
|
6,121
|
6,105
|
||||||||||||
Compensation and employee benefits
|
12,029
|
11,718
|
35,605
|
34,774
|
||||||||||||
Occupancy, net
|
1,940
|
2,079
|
6,399
|
6,715
|
||||||||||||
Data processing
|
2,001
|
1,790
|
5,958
|
5,653
|
||||||||||||
Loan and collection
|
816
|
1,391
|
2,938
|
4,283
|
||||||||||||
Furniture, fixtures and equipment
|
998
|
1,005
|
2,915
|
3,127
|
||||||||||||
Communications
|
754
|
712
|
2,184
|
2,212
|
||||||||||||
Legal and professional fees
|
519
|
559
|
1,352
|
1,380
|
||||||||||||
Advertising
|
406
|
427
|
1,338
|
1,547
|
||||||||||||
FDIC deposit insurance
|
350
|
396
|
1,044
|
1,235
|
||||||||||||
Interchange expense
|
279
|
368
|
859
|
1,112
|
||||||||||||
Supplies
|
190
|
249
|
619
|
746
|
||||||||||||
Credit card and bank service fees
|
197
|
226
|
602
|
734
|
||||||||||||
Amortization of intangible assets
|
86
|
134
|
260
|
402
|
||||||||||||
Vehicle service contract counterparty contingencies
|
30
|
28
|
89
|
169
|
||||||||||||
Costs related to unfunded lending commitments
|
26
|
12
|
46
|
27
|
||||||||||||
Provision for loss reimbursement on sold loans
|
(35
|
)
|
-
|
(59
|
)
|
(466
|
)
|
|||||||||
Net (gains) losses on ORE and repossessed assets
|
5
|
(285
|
)
|
(173
|
)
|
(410
|
)
|
|||||||||
Other
|
1,288
|
1,275
|
3,633
|
3,804
|
||||||||||||
Total non-interest expense
|
$
|
21,879
|
$
|
22,084
|
$
|
65,609
|
$
|
67,044
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Independent Bank
|
$
|
5,455
|
$
|
5,048
|
$
|
15,623
|
$
|
14,345
|
||||||||
Mepco
|
(168
|
)
|
163
|
(437
|
)
|
607
|
||||||||||
Other(1)
|
(224
|
)
|
(266
|
)
|
(693
|
)
|
(665
|
)
|
||||||||
Elimination
|
(16
|
)
|
(16
|
)
|
(46
|
)
|
(168
|
)
|
||||||||
Net income (loss)
|
$
|
5,047
|
$
|
4,929
|
$
|
14,447
|
$
|
14,119
|
(1)
|
Includes amounts relating to our parent company and certain insignificant operations.
|
Unrealized | ||||||||||||||||
Amortized
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||||||||||||
(In thousands) | ||||||||||||||||
Securities available for sale
|
||||||||||||||||
September 30, 2015
|
$
|
602,659
|
$
|
4,205
|
$
|
2,202
|
$
|
604,662
|
||||||||
December 31, 2014
|
532,930
|
3,317
|
3,069
|
533,178
|
|
|
Nine months ended
September 30,
|
|
|||||
|
|
2015
|
|
|
2014
|
|
||
|
|
(In thousands)
|
|
|||||
|
|
|
|
|
||||
Proceeds
|
|
$
|
11,786
|
|
|
$
|
7,630
|
|
|
|
|
|
|
|
|
|
|
Gross gains
|
|
$
|
75
|
|
|
$
|
123
|
|
Gross losses
|
|
|
-
|
|
|
|
-
|
|
Net impairment charges
|
|
|
-
|
|
|
|
(9
|
)
|
Fair value adjustments
|
|
|
22
|
|
|
|
211
|
|
Net gains
|
|
$
|
97
|
|
|
$
|
325
|
|
|
September 30,
2015
|
December 31,
2014
|
||||||
|
(Dollars in thousands)
|
|||||||
Non-accrual loans
|
$
|
15,834
|
$
|
15,231
|
||||
Loans 90 days or more past due and still accruing interest
|
-
|
7
|
||||||
Total non-performing loans
|
15,834
|
15,238
|
||||||
Other real estate and repossessed assets
|
3,851
|
6,454
|
||||||
Total non-performing assets
|
$
|
19,685
|
$
|
21,692
|
||||
|
||||||||
As a percent of Portfolio Loans
|
||||||||
Non-performing loans
|
1.08
|
%
|
1.08
|
%
|
||||
Allowance for loan losses
|
1.68
|
1.84
|
||||||
Non-performing assets to total assets
|
0.82
|
0.96
|
||||||
Allowance for loan losses as a percent of non-performing loans
|
155.39
|
170.56
|
(1)
|
Excludes loans classified as "trouble debt restructured" that are not past due and vehicle service contract counterparty receivables, net.
|
September 30, 2015
|
||||||||||||
Commercial
|
Retail
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDRs
|
$
|
22,257
|
$
|
69,726
|
$
|
91,983
|
||||||
Non-performing TDRs(1)
|
1,501
|
3,887
|
(2)
|
5,388
|
||||||||
Total
|
$
|
23,758
|
$
|
73,613
|
$
|
97,371
|
December 31, 2014
|
||||||||||||
Commercial
|
Retail
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDRs
|
$
|
29,475
|
$
|
73,496
|
$
|
102,971
|
||||||
Non-performing TDRs(1)
|
1,978
|
5,225
|
(2)
|
7,203
|
||||||||
Total
|
$
|
31,453
|
$
|
78,721
|
$
|
110,174
|
(1)
|
Included in non-performing assets table above.
|
(2)
|
Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.
|
|
Nine months ended
September 30,
|
|||||||||||||||
|
2015
|
2014
|
||||||||||||||
|
Loans
|
Unfunded
Commitments
|
Loans
|
Unfunded
Commitments
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Balance at beginning of period
|
$
|
25,990
|
$
|
539
|
$
|
32,325
|
$
|
508
|
||||||||
Additions (deductions)
|
||||||||||||||||
Provision for loan losses
|
(1,037
|
)
|
-
|
(2,049
|
)
|
-
|
||||||||||
Recoveries credited to allowance
|
3,418
|
-
|
5,438
|
-
|
||||||||||||
Loans charged against the allowance
|
(3,767
|
)
|
-
|
(8,206
|
)
|
-
|
||||||||||
Additions (deductions) included in non-interest expense
|
-
|
46
|
-
|
27
|
||||||||||||
Balance at end of period
|
$
|
24,604
|
$
|
585
|
$
|
27,508
|
$
|
535
|
||||||||
|
||||||||||||||||
Net loans charged against the allowance to average Portfolio Loans (annualized)
|
0.03
|
%
|
0.27
|
%
|
|
September 30,
2015
|
December 31,
2014
|
||||||
|
(In thousands)
|
|||||||
Specific allocations
|
$
|
12,776
|
$
|
13,233
|
||||
Other adversely rated commercial loans
|
1,259
|
761
|
||||||
Historical loss allocations
|
5,798
|
6,773
|
||||||
Additional allocations based on subjective factors
|
4,771
|
5,223
|
||||||
Total
|
$
|
24,604
|
$
|
25,990
|
|
September 30,
2015
|
December 31,
2014
|
||||||
|
(In thousands)
|
|||||||
Subordinated debentures
|
$
|
35,569
|
$
|
35,569
|
||||
Amount not qualifying as regulatory capital
|
(1,069
|
)
|
(1,069
|
)
|
||||
Amount qualifying as regulatory capital
|
34,500
|
34,500
|
||||||
Shareholders’ equity
|
||||||||
Common stock
|
343,601
|
352,462
|
||||||
Accumulated deficit
|
(86,125
|
)
|
(96,455
|
)
|
||||
Accumulated other comprehensive loss
|
(4,496
|
)
|
(5,636
|
)
|
||||
Total shareholders’ equity
|
252,980
|
250,371
|
||||||
Total capitalization
|
$
|
287,480
|
$
|
284,871
|
Change in Interest
Rates
|
Market Value
Of Portfolio
Equity(1)
|
Percent
Change
|
Net Interest
Income(2)
|
Percent
Change
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
September 30, 2015
|
||||||||||||||||
200 basis point rise
|
$
|
420,900
|
8.93
|
%
|
$
|
78,400
|
6.52
|
%
|
||||||||
100 basis point rise
|
407,500
|
5.46
|
76,300
|
3.67
|
||||||||||||
Base-rate scenario
|
386,400
|
-
|
73,600
|
-
|
||||||||||||
100 basis point decline
|
357,600
|
(7.45
|
)
|
70,900
|
(3.67
|
)
|
||||||||||
|
||||||||||||||||
December 31, 2014
|
||||||||||||||||
200 basis point rise
|
$
|
421,700
|
9.56
|
%
|
$
|
75,600
|
6.03
|
%
|
||||||||
100 basis point rise
|
406,800
|
5.69
|
73,600
|
3.23
|
||||||||||||
Base-rate scenario
|
384,900
|
-
|
71,300
|
-
|
||||||||||||
100 basis point decline
|
355,000
|
(7.77
|
)
|
69,200
|
(2.95
|
)
|
(1) | Simulation analyses calculate the change in the net present value of our assets and liabilities, including debt and related financial derivative instruments, under parallel shifts in interest rates by discounting the estimated future cash flows using a market-based discount rate. Cash flow estimates incorporate anticipated changes in prepayment speeds and other embedded options. |
(2) | Simulation analyses calculate the change in net interest income under immediate parallel shifts in interest rates over the next twelve months, based upon a static statement of financial condition, which includes debt and related financial derivative instruments, and do not consider loan fees. |
(a) | Evaluation of Disclosure Controls and Procedures. |
(b) | Changes in Internal Controls. |
Period
|
Total Number of
Shares Purchased(1)
|
Average Price
Paid Per Share
|
Total Number of
Shares Purchased
as Part of a
Publicly
Announced Plan
|
Remaining
Number of
Shares Authorized
for Purchase
Under the Plan
|
||||||||||||
July 2015
|
-
|
$
|
-
|
-
|
870,515
|
|||||||||||
August 2015
|
299,923
|
14.08
|
227,500
|
643,015
|
||||||||||||
September 2015
|
154,247
|
14.00
|
154,247
|
488,768
|
||||||||||||
Total
|
454,170
|
$
|
14.05
|
381,747
|
488,768
|
(1)
|
Represents (i) 72,423 shares withheld from the shares that would otherwise have been issued to certain officers in order to satisfy tax withholding obligations resulting from vesting of restricted stock units and (ii) 381,747 shares purchased in the open market pursuant to a publicly announced plan.
|
(a)
|
The following exhibits (listed by number corresponding to the Exhibit Table as Item 601 in Regulation S-K) are filed with this report:
|
11. | Computation of Earnings Per Share. |
31.1 | Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). |
31.2 | Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). |
32.1 | Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). |
Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
101.
|
INS Instance Document
|
101.
|
SCH XBRL Taxonomy Extension Schema Document
|
101.
|
CAL XBRL Taxonomy Extension Calculation Linkbase Document
|
101.
|
DEF XBRL Taxonomy Extension Definition Linkbase Document
|
101. |
LAB XBRL Taxonomy Extension Label Linkbase Document
|
101.
|
PRE XBRL Taxonomy Extension Presentation Linkbase Document
|
Date
|
November 4, 2015
|
By
|
/s/ Robert N. Shuster
|
||
Robert N. Shuster, Principal Financial Officer
|
|||||
Date
|
November 4, 2015
|
By
|
/s/ James J. Twarozynski
|
||
James J. Twarozynski, Principal Accounting Officer
|