TRISTATE CAPITAL HOLDINGS, INC., 10-Q filed on 8/5/2020
Quarterly Report
v3.20.2
Cover Page - shares
 6 Months Ended
Jun. 30, 2020
Jul. 31, 2020
Entity Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Document Transition Report false  
Entity File Number 001-35913  
Entity Registrant Name TRISTATE CAPITAL HOLDINGS, INC.  
Entity Incorporation, State or Country Code PA  
Entity Tax Identification Number 20-4929029  
Entity Address, Address Line One One Oxford Centre  
Entity Address, Address Line Two 301 Grant Street, Suite 2700  
Entity Address, City or Town Pittsburgh,  
Entity Address, State or Province PA  
City Area Code (412)  
Local Phone Number 304-0304  
Entity Address, Postal Zip Code 15219  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   29,857,550
Amendment Flag false  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Document Fiscal Year End Date --12-31  
Entity Central Index Key 0001380846  
Common Stock    
Entity Information [Line Items]    
Title of 12(b) Security Common Stock, no par value  
Trading Symbol TSC  
Security Exchange Name NASDAQ  
Series A depositary share    
Entity Information [Line Items]    
Title of 12(b) Security Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock  
Trading Symbol TSCAP  
Security Exchange Name NASDAQ  
Series B depositary share    
Entity Information [Line Items]    
Title of 12(b) Security Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock  
Trading Symbol TSCBP  
Security Exchange Name NASDAQ  
v3.20.2
Unaudited Condensed Consolidated Statements of Financial Condition - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
ASSETS    
Cash $ 356 $ 357
Interest-earning deposits with other institutions 719,753 395,860
Federal funds sold 4,833 7,638
Cash and cash equivalents 724,942 403,855
Debt securities available-for-sale, at fair value 563,777 248,782
Debt securities held-to-maturity, at cost 235,083 196,044
Federal Home Loan Bank stock 13,280 24,324
Total investment securities 812,140 469,150
Loans and leases held-for-investment 7,170,770 6,577,559
Allowance for loan and lease losses (23,276) (14,108)
Loans and leases held-for-investment, net 7,147,494 6,563,451
Accrued interest receivable 18,534 22,326
Investment management fees receivable, net 6,907 7,560
Goodwill 41,660 41,660
Intangible assets, net of accumulated amortization of $11,425 and $10,437, respectively 23,207 24,194
Office properties and equipment, net of accumulated depreciation of $15,010 and $13,976, respectively 10,818 9,569
Operating lease right-of-use asset 22,178 22,589
Bank owned life insurance 70,901 70,044
Prepaid expenses and other assets 251,060 131,412
Total assets 9,129,841 7,765,810
Liabilities:    
Deposits 7,831,471 6,634,613
Borrowings, net 395,552 355,000
Accrued interest payable on deposits and borrowings 3,771 5,490
Deferred tax liability, net 5,129 6,931
Operating lease liability 23,426 23,644
Other accrued expenses and other liabilities 237,661 118,851
Total liabilities 8,497,010 7,144,529
Shareholders’ Equity:    
Common stock, no par value; Shares authorized - 45,000,000; Shares issued - 32,093,460 and 31,482,408, respectively; Shares outstanding - 29,851,550 and 29,355,986, respectively 295,820 295,349
Additional paid-in capital 25,088 23,095
Retained earnings 237,796 218,449
Accumulated other comprehensive income (loss), net (6,530) 1,132
Treasury stock (2,241,910 and 2,126,422 shares, respectively) (35,422) (32,823)
Total shareholders’ equity 632,831 621,281
Total liabilities and shareholders’ equity 9,129,841 7,765,810
Series A preferred stock    
Shareholders’ Equity:    
Preferred stock, no par value; Shares authorized - 150,000; Series A Shares issued and outstanding - 40,250 and 40,250, respectively, Series B Shares issued and outstanding - 80,500 and 80,500, respectively 38,468 38,468
Series B preferred stock    
Shareholders’ Equity:    
Preferred stock, no par value; Shares authorized - 150,000; Series A Shares issued and outstanding - 40,250 and 40,250, respectively, Series B Shares issued and outstanding - 80,500 and 80,500, respectively $ 77,611 $ 77,611
v3.20.2
Unaudited Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Accumulated amortization $ 11,425 $ 10,437
Accumulated depreciation $ 15,010 $ 13,976
Shares Authorized, Preferred Stock (in shares) 150,000 150,000
Shares Authorized, Common Stock (in shares) 45,000,000 45,000,000
Shares Issued, Common Stock (in shares) 32,093,460 31,482,408
Shares Outstanding, Common Stock (in shares) 29,851,550 29,355,986
Treasury Stock (in shares) 2,241,910 2,126,422
Series A preferred stock    
Shares Issued, Preferred Stock (in shares) 40,250 40,250
Shares Outstanding, Preferred Stock (in shares) 40,250 40,250
Series B preferred stock    
Shares Issued, Preferred Stock (in shares) 80,500 80,500
Shares Outstanding, Preferred Stock (in shares) 80,500 80,500
v3.20.2
Unaudited Condensed Consolidated Statements of Income - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Interest income:        
Loans and leases $ 47,377 $ 60,579 $ 106,295 $ 117,841
Investments 3,940 4,151 7,841 8,504
Interest-earning deposits 344 1,609 1,727 2,896
Total interest income 51,661 66,339 115,863 129,241
Interest expense:        
Deposits 15,953 32,155 43,197 61,488
Borrowings 2,224 2,881 4,260 6,078
Total interest expense 18,177 35,036 47,457 67,566
Net interest income 33,484 31,303 68,406 61,675
Provision (credit) for loan and lease losses 6,005 (712) 8,998 (1,089)
Net interest income after provision for loan and lease losses 27,479 32,015 59,408 62,764
Non-interest income:        
Net gain on the sale and call of debt securities 14 112 71 140
Other income 615 587 1,231 1,734
Total non-interest income 12,997 11,979 26,313 25,048
Non-interest expense:        
Compensation and employee benefits 16,569 16,985 34,015 33,760
Premises and equipment expense 1,515 1,451 2,901 2,445
Professional fees 1,109 1,406 2,579 2,401
FDIC insurance expense 2,560 1,047 4,730 2,468
General insurance expense 278 259 540 553
State capital shares tax 366 380 749 760
Travel and entertainment expense 279 1,040 1,143 1,875
Technology and data services 2,414 2,179 4,717 4,164
Intangible amortization expense 486 502 988 1,004
Marketing and advertising 686 536 1,300 1,144
Other operating expenses 1,834 1,800 3,578 3,683
Total non-interest expense 28,096 27,585 57,240 54,257
Income before tax 12,380 16,409 28,481 33,555
Income tax expense 1,979 1,718 5,185 4,300
Net income 10,401 14,691 23,296 29,255
Preferred stock dividends 1,962 1,150 3,924 1,829
Net income available to common shareholders $ 8,439 $ 13,541 $ 19,372 $ 27,426
Earnings per common share:        
Basic (in usd per share) $ 0.30 $ 0.49 $ 0.69 $ 0.98
Diluted (in usd per share) $ 0.30 $ 0.47 $ 0.68 $ 0.95
Investment management fees        
Non-interest income:        
Total non-interest income $ 7,738 $ 9,254 $ 15,376 $ 18,678
Service charges on deposits        
Non-interest income:        
Total non-interest income 315 78 528 214
Swap fees        
Non-interest income:        
Total non-interest income 3,853 1,692 8,226 3,495
Commitment and other loan fees        
Non-interest income:        
Total non-interest income $ 462 $ 256 $ 881 $ 787
v3.20.2
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net income $ 10,401 $ 14,691 $ 23,296 $ 29,255
Other comprehensive income (loss):        
Unrealized holding gains (losses) on debt securities, net of tax expense (benefit) of $2,791, $427, $(206) and $1,194, respectively 8,375 1,259 (1,048) 3,689
Reclassification adjustment for gains included in net income on debt securities, net of tax expense of $(2), $(26), $(5) and $(30), respectively (5) (83) (16) (96)
Unrealized holding losses on derivatives, net of tax benefit of $(379), $(506), $(2,223) and $(556), respectively (1,200) (1,612) (7,067) (1,769)
Reclassification adjustment for losses (gains) included in net income on derivatives, net of tax benefit (expense) of $111, $(134), $150 and $(268), respectively 349 (426) 469 (853)
Other comprehensive income (loss) 7,519 (862) (7,662) 971
Total comprehensive income $ 17,920 $ 13,829 $ 15,634 $ 30,226
v3.20.2
Unaudited Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Tax expense (benefit) on unrealized holding gains (losses) on debt securities $ 2,791 $ 427 $ (206) $ 1,194
Tax benefit (expense) on debt securities losses (gains) reclassified from other comprehensive income (2) (26) (5) (30)
Tax expense (benefit) on unrealized holding gains (losses) on derivatives (379) (506) (2,223) (556)
Tax benefit (expense) on derivative losses (gains) reclassified from other comprehensive income $ 111 $ (134) $ 150 $ (268)
v3.20.2
Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($)
$ in Thousands
Total
Preferred Stock
Common Stock
Additional Paid-in-Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss), Net
Treasury Stock
Beginning balance at Dec. 31, 2018 $ 479,354 $ 38,468 $ 293,355 $ 15,364 $ 164,009 $ (1,331) $ (30,511)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 29,255       29,255    
Other comprehensive income (loss) 971         971  
Issuance of preferred stock, net of offering costs 77,674 77,674          
Preferred stock dividends (1,829)       (1,829)    
Exercise of stock options 257   482 (225)      
Purchase of treasury stock (744)           (744)
Stock-based compensation 4,043     4,043      
Ending balance at Jun. 30, 2019 588,981 116,142 293,837 19,182 191,435 (360) (31,255)
Beginning balance at Mar. 31, 2019 496,557 38,468 293,697 16,940 177,894 502 (30,944)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 14,691       14,691    
Other comprehensive income (loss) (862)         (862)  
Issuance of preferred stock, net of offering costs 77,674 77,674          
Preferred stock dividends (1,150)       (1,150)    
Exercise of stock options 69   140 (71)      
Purchase of treasury stock (311)           (311)
Stock-based compensation 2,313     2,313      
Ending balance at Jun. 30, 2019 588,981 116,142 293,837 19,182 191,435 (360) (31,255)
Beginning balance at Dec. 31, 2019 621,281 116,079 295,349 23,095 218,449 1,132 (32,823)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 23,296       23,296    
Other comprehensive income (loss) (7,662)         (7,662)  
Preferred stock dividends (3,924)       (3,924)    
Exercise of stock options 211   471 (260)      
Purchase of treasury stock (2,734)           (2,734)
Treasury stock reissuance 110       (25)   135
Cancellation of stock options (2,484)     (2,484)      
Stock-based compensation 4,737     4,737      
Ending balance at Jun. 30, 2020 632,831 116,079 295,820 25,088 237,796 (6,530) (35,422)
Beginning balance at Mar. 31, 2020 614,380 116,079 295,587 22,783 229,382 (14,049) (35,402)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 10,401       10,401    
Other comprehensive income (loss) 7,519         7,519  
Preferred stock dividends (1,962)       (1,962)    
Exercise of stock options 120   233 (113)      
Purchase of treasury stock (155)           (155)
Treasury stock reissuance 110       (25)   135
Cancellation of stock options 0     0      
Stock-based compensation 2,418     2,418      
Ending balance at Jun. 30, 2020 $ 632,831 $ 116,079 $ 295,820 $ 25,088 $ 237,796 $ (6,530) $ (35,422)
v3.20.2
Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2019
Preferred Stock    
Offering costs $ 2,826 $ 2,826
v3.20.2
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash flows from operating activities:    
Net income $ 23,296 $ 29,255
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and intangible amortization expense 2,022 1,807
Amortization of deferred financing costs 33 84
Provision (credit) for loan and lease losses 8,998 (1,089)
Stock-based compensation expense 4,737 4,043
Net gain on the sale or call of debt securities available-for-sale (22) (126)
Net gain on the call of debt securities held-to-maturity (49) (14)
Income from equity securities 0 (850)
Income from debt securities trading (239) 0
Purchase of debt securities trading (20,932) 0
Proceeds from the sale of debt securities trading 21,171 0
Net amortization of premiums and discounts on debt securities 295 21
Decrease (increase) in investment management fees receivable, net 653 (508)
Decrease (increase) in accrued interest receivable 3,792 (1,255)
Increase (decrease) in accrued interest payable (1,719) 2,467
Bank owned life insurance income (857) (855)
Increase in income taxes payable 455 339
Decrease in prepaid income taxes 3,941 9,130
Deferred tax provision 482 464
Decrease in accounts payable and other accrued expenses (9,388) (15,269)
Cash received for reimbursement of leasehold improvements 2,196 0
Other, net (1,701) (1,684)
Net cash provided by operating activities 37,164 25,960
Cash flows from investing activities:    
Purchase of debt securities available-for-sale (400,451) (52,120)
Purchase of debt securities held-to-maturity (287,826) (61,905)
Proceeds from the sale of debt securities available-for-sale 56,038 4,993
Proceeds from the sale of equity securities 0 8,844
Principal repayments and maturities of debt securities available-for-sale 27,993 20,837
Principal repayments and maturities of debt securities held-to-maturity 248,714 118,941
Investment in low income housing and historic tax credits (6,194) (6,193)
Investment in small business investment companies (150) 0
Net redemption of Federal Home Loan Bank stock 11,043 1,547
Net increase in loans and leases (593,041) (530,163)
Proceeds from the sale of other real estate owned 1,527 0
Additions to office properties and equipment (2,285) (2,167)
Net cash used in investing activities (944,632) (497,386)
Cash flows from financing activities:    
Net increase in deposit accounts 1,196,858 736,522
Net decrease in Federal Home Loan Bank advances (55,000) (65,000)
Net decrease in line of credit advances 0  
Net decrease in line of credit advances   (4,250)
Net proceeds from issuance of subordinated notes payable 95,518 0
Net proceeds from issuance of preferred stock 0 77,674
Net proceeds from exercise of stock options 211 257
Cancellation of stock options (2,484) 0
Payment of contingent consideration 0 (2,920)
Purchase of treasury stock, net of reissuance (2,624) (744)
Dividends paid on preferred stock (3,924) (1,829)
Net cash provided by financing activities 1,228,555 739,710
Net change in cash and cash equivalents during the period 321,087 268,284
Cash and cash equivalents at beginning of the period 403,855 189,985
Cash and cash equivalents at end of the period 724,942 458,269
Cash paid (received) during the period for:    
Interest expense 49,274 65,015
Income taxes 307 (5,633)
Other non-cash activity:    
Operating lease right-of-use asset adjustment $ (411) $ 23,778
v3.20.2
Basis of Information and Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
BASIS OF INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATION
TriState Capital Holdings, Inc. (“we,” “us,” “our,” the “holding company,” the “parent company,” or the “Company”) is a registered bank holding company pursuant to the Bank Holding Company Act of 1956, as amended. The Company has three wholly owned subsidiaries: TriState Capital Bank, a Pennsylvania-chartered state bank (the “Bank”); Chartwell Investment Partners, LLC, a registered investment adviser (“Chartwell”); and Chartwell TSC Securities Corp., a registered broker/dealer (“CTSC Securities”).

The Bank was established to serve the commercial banking needs of regionally located middle-market businesses and financial services providers and the private banking needs of high-net-worth individuals nation-wide. The Bank has two wholly owned subsidiaries: TSC Equipment Finance LLC (“TSC Equipment Finance”), established to hold and manage loans and leases of our equipment finance business, and Meadowood Asset Management, LLC (“Meadowood”), established to hold and manage other real estate owned by the bank and/or foreclosed properties for the Bank.

Chartwell provides investment management services primarily to institutional investors, mutual funds and individual investors. CTSC Securities supports marketing efforts for the proprietary investment products provided by Chartwell, including shares of mutual funds advised and/or administered by Chartwell.

The Company and the Bank are subject to regulatory examination by the Federal Deposit Insurance Corporation (“FDIC”), the Pennsylvania Department of Banking and Securities and the Board of Governors of the Federal Reserve System and its Reserve Banks, which we refer to as the Federal Reserve. Chartwell is a registered investment adviser regulated by the Securities and Exchange Commission (“SEC”). CTSC Securities is regulated by the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”).

The Bank conducts business through its main office located in Pittsburgh, Pennsylvania, as well as its four additional representative offices in Cleveland, Ohio; Philadelphia, Pennsylvania; Edison, New Jersey; and New York, New York. Chartwell conducts business through its office located in Berwyn, Pennsylvania, and CTSC Securities conducts business through its office located in Pittsburgh, Pennsylvania.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of related revenues and expenses during the reporting period. Although our current estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than those anticipated in the estimates, which could materially affect the financial results of our operations and financial condition.

Material estimates that are particularly susceptible to significant changes relate to the determination of the allowance for loan and lease losses, valuation of goodwill and other intangible assets and their evaluation for impairment, and deferred income taxes and their related recoverability, each of which is discussed later in this section.

CONSOLIDATION
Our consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank, Chartwell and CTSC Securities, after elimination of inter-company accounts and transactions. The accounts of the Bank, in turn, include its wholly owned subsidiaries, TSC Equipment Finance and Meadowood, after elimination of inter-company accounts and transactions. The unaudited condensed consolidated financial statements of the Company presented herein have been prepared pursuant to SEC rules for Quarterly Reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP for a full year presentation. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited condensed consolidated financial statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the related notes for the fiscal year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2020.

CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, the Company has defined cash and cash equivalents as cash, interest-earning deposits with other institutions, federal funds sold and short-term investments that have an original maturity of 90 days or less.

BUSINESS COMBINATIONS
The Company accounts for business combinations using the acquisition method of accounting. Under this method of accounting, the acquired company’s net assets are recorded at fair value as of the date of acquisition, and the results of operations of the acquired company are combined with our results from that date forward. Acquisition costs are expensed when incurred. The difference between the purchase price, which includes an initial measurement of any contingent earn out, and the fair value of the net assets acquired (including identified intangibles) is recorded as goodwill in the consolidated statements of financial condition. A change in the initial estimate of any contingent earn out amount is recorded to non-interest expense in the consolidated statements of income.

INVESTMENT SECURITIES
The Company’s investments are classified as either: (1) held-to-maturity, which are debt securities that the Company intends to hold until maturity and are reported at amortized cost; (2) trading, which are debt securities bought and held principally for the purpose of selling them in the near term and reported at fair value, with unrealized gains and losses included in non-interest income; (3) available-for-sale, which are debt securities not classified as either held-to-maturity or trading securities and reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss), on an after-tax basis; or (4) equity securities, which are reported at fair value, with unrealized gains and losses included in non-interest income.

The cost of securities sold is determined on a specific identification basis. Amortization of premiums and accretion of discounts are recorded to interest income on investments over the estimated life of the security utilizing the level yield method. We evaluate impaired investment securities quarterly to determine if impairments are temporary or other-than-temporary. For impaired debt and equity securities, management first determines whether it intends to sell or if it is more likely than not that it will be required to sell the impaired securities. This determination considers current and forecasted liquidity requirements, regulatory and capital requirements, and securities portfolio management. If the Company intends to sell a security with a fair value below amortized cost or if it is more likely than not that it will be required to sell such a security before recovery, an other-than-temporary impairment (“OTTI”) charge is recorded through current period earnings for the full decline in fair value below amortized cost. For debt securities that the Company does not intend to sell or it is more likely than not that it will not be required to sell before recovery, an OTTI charge is recorded through current period earnings for the amount of the valuation decline below amortized cost that is attributable to credit losses. The remaining difference between the security’s fair value and amortized cost (that is, the decline in fair value not attributable to credit losses) is recognized in other comprehensive income (loss), in the consolidated statements of comprehensive income and the shareholders’ equity section of the consolidated statements of financial condition, on an after-tax basis.

FEDERAL HOME LOAN BANK STOCK
The Company is a member of the Federal Home Loan Bank (“FHLB”) of Pittsburgh. Member institutions are required to invest in FHLB stock. The stock is carried at cost, which approximates its liquidation value, and it is evaluated for impairment based on the ultimate recoverability of the par value. The following matters are considered by management when evaluating the FHLB stock for impairment: the ability of the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB; the impact of legislative and regulatory changes on the institution and its customer base; and the Company’s intent and ability to hold its FHLB stock for the foreseeable future. Management believes the Company’s holdings in the FHLB stock were recoverable at par value as of June 30, 2020 and December 31, 2019. Cash and stock dividends are reported as interest income on investments in the consolidated statements of income.

LOANS AND LEASES
Loans and leases held-for-investment are stated at unpaid principal balances, net of deferred loan fees and costs. Loans held-for-sale are stated at the lower of cost or fair value. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. Deferred loan fees and costs are amortized to interest income over the estimated life of the loan, taking into consideration scheduled payments and prepayments.

The Company considers a loan to be a troubled debt restructuring (“TDR”) when there is a concession made to a financially troubled borrower without adequate consideration provided to the Company. Once a loan is deemed to be a TDR, the Company considers whether the loan should be placed on non-accrual status. In assessing accrual status, the Company considers the likelihood that repayment and performance according to the original contractual terms will be achieved, as well as the borrower’s historical payment performance. A loan is designated and reported as a TDR until such loan is either paid off or sold, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the remaining principal and interest will be collected according to the restructured agreement.

The recognition of interest income on a loan is discontinued when, in management’s opinion, it is probable the borrower is unable to meet payments as they become due or when the loan becomes 90 days past due, whichever occurs first, at which time the loan is placed on non-accrual status. All accrued and unpaid interest on such loans is then reversed. The interest ultimately collected is applied to reduce principal if there is doubt about the collectability of principal. If a borrower brings a loan current for which accrued
interest has been reversed, then the recognition of interest income on the loan is resumed once the loan has been current for a period of six consecutive months or greater.

The Company is a party to financial instruments with off-balance sheet risk, such as commitments to extend credit, in the normal course of business to meet the financing needs of its customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the lending agreement with such customer. Commitments generally have fixed expiration dates or other termination clauses (i.e., loans due on demand) and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the unfunded commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis using the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The amount of collateral obtained, if deemed necessary by the Company upon extension of a commitment, is based on management’s credit evaluation of the borrower.

OTHER REAL ESTATE OWNED
Real estate owned, other than bank premises, is recorded at fair value less estimated selling costs. Fair value is determined based on an independent appraisal. Expenses related to holding the property are charged against earnings when incurred. Depreciation is not recorded on other real estate owned (“OREO”) properties.

ALLOWANCE FOR LOAN AND LEASE LOSSES
The allowance for loan and lease losses is established through provisions for loan and lease losses that are recorded in the consolidated statements of income. Loans and leases are charged off against the allowance for loan and lease losses when management believes that the principal is uncollectible. If, at a later time, amounts are recovered with respect to loans and leases previously charged off, the recovered amount is credited to the allowance for loan and lease losses.

In management’s judgment, the allowance was appropriate to cover probable losses inherent in the loan and lease portfolio as of June 30, 2020 and December 31, 2019. Management’s judgment takes into consideration general economic conditions, diversification and seasoning of the loan portfolio, historic loss experience, identified credit problems, delinquency levels and adequacy of collateral. Although management believes it has used the best information available to it in making such determinations, and that the present allowance for loan and lease losses is adequate, future adjustments to the allowance may be necessary, and net income may be adversely affected if circumstances differ substantially from the assumptions used in determining the level of the allowance. In addition, as an integral part of their periodic examination, certain regulatory agencies review the adequacy of the Bank’s allowance for loan and lease losses and may direct the Bank to make additions to the allowance based on their judgments about information available to them at the time of their examination.

The two components of the allowance for loan and lease losses represent estimates of general reserves based upon Accounting Standards Codification (“ASC”) Topic 450, Contingencies; and specific reserves based upon ASC Topic 310, Receivables. ASC Topic 450 applies to homogeneous loan pools such as commercial loans, consumer lines of credit and residential mortgages that are not individually evaluated for impairment. ASC Topic 310 is applied to commercial and consumer loans that are individually evaluated for impairment.

In management’s opinion, a loan or lease is impaired, based upon current information and events, when it is probable that the loan or lease will not be repaid according to its original contractual terms, including both principal and interest, or if a loan is designated as a TDR. Management performs individual assessments of impaired loans and leases to determine the existence of loss exposure based upon a discounted cash flows method or where a loan is collateral dependent, based upon the fair value of the collateral less estimated selling costs. During the six months ended June 30, 2020, certain loan modifications were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Accordingly, these loans and leases were not categorized as TDRs.

In estimating probable loan and lease loss of general reserves, management considers numerous factors, including historical charge-offs and subsequent recoveries. Management also considers qualitative factors that influence our credit quality, including, but not limited to, delinquency and non-performing loan trends, changes in loan underwriting guidelines and credit policies, and the results of internal loan reviews. Finally, management considers the impact of changes in current local and regional economic conditions in the markets that we serve.

Management bases the computation of the allowance for loan and lease losses of general reserves on two factors: the primary factor and the secondary factor. The primary factor is based on the inherent risk identified by management within each of the Company’s three loan portfolios based on the historical loss experience of each loan portfolio in addition to the loss emergence period. Management has developed a methodology that is applied to each of the three primary loan portfolios: private banking loans, commercial and industrial (“C&I”) loans and leases, and commercial real estate (“CRE”) loans. As the loan loss history, mix and risk ratings of each loan portfolio change, the primary factor adjusts accordingly. The allowance for loan and lease losses related to the primary factor
is based on our estimates as to probable losses for each loan portfolio. The secondary factor is intended to capture risks related to events and circumstances that management believes have an impact on the future performance of the loan portfolio. Although this factor is more subjective in nature, the methodology focuses on internal and external trends in pre-specified categories, or risk factors, and applies a quantitative percentage that drives the secondary factor. Nine risk factors have been identified and each risk factor is assigned a reserve level based on management’s judgment as to the probable impact of each risk factor on each loan portfolio and is monitored on a quarterly basis. As the trend in any risk factor changes, a corresponding change occurs in the reserve associated with each respective risk factor, such that the secondary factor remains current to changes in each loan portfolio.

The Company also maintains a reserve for losses on unfunded commitments. This reserve is reflected as a component of other liabilities and, in management’s judgment, is sufficient to cover probable losses inherent in the loan commitments. Management tracks the level and trends in unused commitments and takes into consideration the same factors as those considered for purposes of the allowance for loan and lease losses on outstanding loans.

INVESTMENT MANAGEMENT FEES
The Company recognizes investment management fee revenue when advisory services are performed. Fees are based on assets under management and are calculated pursuant to individual client contracts. Investment management fees are generally received on a quarterly basis. Certain incremental costs incurred to acquire some of our investment management contracts are deferred and amortized to non-interest expense over the estimated life of the contract.

Investment management fees receivable represent amounts due for contractual investment management services provided to the Company’s clients, primarily institutional investors, mutual funds and individual investors. Management performs credit evaluations of its customers’ financial condition when it is deemed to be necessary and does not require collateral. The Company provides an allowance for uncollectible accounts based on specifically identified receivables. Bad debt expense is recorded to other non-interest expense on the consolidated statements of income and the allowance for uncollectible accounts is recorded to investment management fees receivable, net on the consolidated statements of financial position. Investment management fees receivable are considered delinquent when payment is not received within contractual terms and are charged off against the allowance for uncollectible accounts when management determines that recovery is unlikely and the Company ceases its collection efforts. There was no bad debt expense recorded for the six months ended June 30, 2020, and 2019 and no allowance for uncollectible accounts as of June 30, 2020 and December 31, 2019.

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is not amortized and is subject to at least annual assessments for impairment by applying a fair value based test. The Company reviews goodwill annually and again at any quarter-end if a material event occurs during the quarter that may affect goodwill. If goodwill testing is required, an assessment of qualitative factors can be completed before performing a goodwill impairment test. If an assessment of qualitative factors determines it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, then a goodwill impairment test is not required. Goodwill is evaluated for potential impairment by determining if the fair value has fallen below carrying value.

Other intangible assets represent purchased assets that may lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. The Company has determined that certain of its acquired mutual fund client relationships meet the criteria to be considered indefinite-lived assets because the Company expects both the renewal of these contracts and the cash flows generated by these assets to continue indefinitely. Accordingly, the Company does not amortize these intangible assets, but instead reviews these assets annually or more frequently whenever events or circumstances occur indicating that the recorded indefinite-lived assets may be impaired. Each reporting period, the Company assesses whether events or circumstances have occurred which indicate that the indefinite life criteria are no longer met. If the indefinite life criteria are no longer met, the Company assesses whether the carrying value of these assets exceeds its fair value. If the carrying value exceeds the fair value of the asset, an impairment loss is recorded in an amount equal to any such excess and the assets are reclassified to finite-lived. Other intangible assets that the Company has determined to have finite lives, such as its trade names, client lists and non-compete agreements are amortized over their estimated useful lives. These finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from four to 25 years. Finite-lived intangibles are evaluated for impairment on an annual basis or more frequently whenever events or circumstances occur indicating that the carrying amount may not be recoverable.

OFFICE PROPERTIES AND EQUIPMENT
Office properties and equipment are stated at cost less accumulated depreciation. Office properties include furniture, fixtures and leasehold improvements. Equipment includes computer equipment and internal use software. Depreciation is computed utilizing the straight-line method over the estimated useful lives of the related assets, except for leasehold improvements, which are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Estimated useful lives are dependent upon the nature and condition of the asset and range from three to 10 years. Repairs and maintenance are charged
to expense as incurred, while improvements that extend the useful life are capitalized and depreciated to non-interest expense over the estimated remaining life of the asset.

OPERATING LEASES
The Company is a lessee in noncancellable operating leases, primarily for its office spaces and other office equipment. The Company accounts for leases in accordance with ASC Topic 842, “Leases,” and records operating leases as a right-of-use asset and an offsetting lease liability in the consolidated statements of financial condition at the present value of the unpaid lease payments. The Company generally uses its incremental borrowing rate as the discount rate for operating leases. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

BANK OWNED LIFE INSURANCE
Bank owned life insurance (“BOLI”) policies on certain officers and employees are recorded at net cash surrender value on the consolidated statements of financial condition. Upon termination of a BOLI policy, the Company receives the cash surrender value. BOLI benefits are payable to the Company upon the death of the insured. Changes in net cash surrender value are recognized as non-interest income in the consolidated statements of income.

DEPOSITS
Deposits are stated at principal outstanding. Interest on deposits is accrued and charged to interest expense daily and is paid or credited in accordance with the terms of the respective accounts.

BORROWINGS
The Company records FHLB advances, line of credit borrowings and subordinated notes payable at their principal amount net of debt issuance costs. Interest expense is recognized based on the coupon rate of the obligations. Costs associated with the acquisition of subordinated notes payable are amortized to interest expense over the expected term of the borrowing.

INCOME TAXES
The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the tax effects of differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in income in the period that includes the enactment date. Management assesses all available evidence to determine the amount of deferred tax assets that are more likely than not to be realized. The available evidence used in connection with the assessments includes taxable income in prior periods, projected taxable income, potential tax planning strategies and projected reversals of deferred tax items. These assessments involve a degree of subjectivity and may undergo significant change. Changes to the evidence used in the assessments could have a material adverse effect on the Company’s results of operations in the period in which they occur. The Company considers uncertain tax positions that it has taken or expects to take on a tax return. Any interest and penalties related to unrecognized tax benefits would be recognized in income tax expense in the consolidated statements of income.

EARNINGS PER COMMON SHARE
Earnings per common share (“EPS”) is computed using the two-class method, where net income is reduced by dividends declared on our preferred stock to derive net income available to common shareholders. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, excluding non-vested restricted stock. Diluted EPS reflects the potential dilution upon the exercise of stock options and the vesting of restricted stock awards granted utilizing the treasury stock method.

STOCK-BASED COMPENSATION
The Company accounts for its stock-based compensation awards based on estimated fair values of stock-based awards made to employees and directors. Compensation cost for all stock-based payments is based on the estimated grant-date fair value. The value of the portion of the award that is ultimately expected to vest is included in compensation and employee benefits expense in the consolidated statements of income and recorded as a component of additional paid-in capital. Compensation expense for all awards is recognized on a straight-line basis over the requisite service period for the entire grant.

DERIVATIVES AND HEDGING ACTIVITIES
All derivatives are evaluated at inception as to whether or not they are hedging or non-hedging activities. All derivatives are recognized as either assets or liabilities on the consolidated statements of financial condition and measured at fair value. For derivatives designated
as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. For derivatives designated as cash flow hedges, changes in fair value of the effective portion of the cash flow hedges are reported in accumulated other comprehensive income (loss). When the cash flows associated with the hedged item are realized, the gain or loss included in accumulated other comprehensive income (loss) is recognized in the consolidated statements of income. The Company also has interest rate derivative positions that are not designated as hedging instruments. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

The Company executes interest rate derivatives with its commercial banking customers to facilitate their respective risk management strategies which generate swap fee income. Those derivatives are simultaneously and economically hedged by offsetting derivatives that the Company executes with a third party, such that the Company eliminates its interest rate exposure resulting from such transactions and are not designated as hedging instruments. Swap fees are based on the notional amount and weighted maturity of each individual transaction and are collected and recorded to non-interest income in the consolidated statements of income when the transaction is executed.

FAIR VALUE MEASUREMENT
Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in a principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date, using assumptions market participants would use when pricing such an asset or liability. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Fair value measurement and disclosure guidance provides a three-level hierarchy that prioritizes the inputs of valuation techniques used to measure fair value into three broad categories:

•
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.
•
Level 2 – Observable inputs such as quoted prices for similar assets and liabilities in active markets, quoted prices for similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
•
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

Fair value must be recorded for certain assets and liabilities every reporting period on a recurring basis or, under certain circumstances, on a non-recurring basis.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding gains and the non-credit component of unrealized losses on the Company’s debt securities available-for-sale are included in accumulated other comprehensive income (loss), net of applicable income taxes. Also included in accumulated other comprehensive income (loss) is the remaining unamortized balance of the unrealized holding gains (non-credit losses) net of applicable income taxes, that existed on the transfer date for debt securities reclassified into the held-to-maturity category from the available-for-sale category.

Unrealized holding gains (losses) on the effective portion of the Company’s cash flow hedge derivatives are included in accumulated other comprehensive income (loss), net of applicable income taxes, which will be reclassified to interest expense as interest payments are made on the Company’s debt.

Income tax effects in accumulated other comprehensive income (loss) are released as investments are sold or matured and as liabilities are extinguished.

TREASURY STOCK
The repurchase of the Company’s common stock is recorded at cost. At the time of reissuance, the treasury stock account is reduced using the average cost method. Gains and losses on the reissuance of common stock are recorded in additional paid-in capital, to the extent additional paid-in capital from any previous net gains on treasury share transactions exists. Any net deficiency is charged to retained earnings.

RECLASSIFICATION
Certain items previously reported have been reclassified to conform with the current year’s reporting presentation and are considered immaterial.

During the six months ended June 30, 2020, the Company made changes to certain Non-Interest Expense line items appearing on the Unaudited Condensed Consolidated Statement of Income to better align with and provide additional clarity on how management views the business. All prior periods have been adjusted to conform the changes and provide comparability to the new presentation.

Marketing and Advertising, which was previously a component of Other Operating Expenses, is now presented separately.

Technology and Data Services is also presented separately and includes data processing expense, data and information services and certain software costs. These costs were previously included in Premises and Equipment.

Telephone expense, which was previously reported as Other Operating Expense, is now presented in Premises and Equipment Expense. Finally Premises and Occupancy Costs was renamed to Premise and Equipment Expense.
v3.20.2
Investment Securities
 6 Months Ended
Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES INVESTMENT SECURITIES

Debt securities available-for-sale and held-to-maturity were comprised of the following:
 
June 30, 2020
(Dollars in thousands)
Amortized
Cost
Gross Unrealized
Appreciation
Gross Unrealized
Depreciation
Estimated
Fair Value
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
234,193

$
4,198

$
1,706

$
236,685

Trust preferred securities
18,158

—

1,513

16,645

Agency collateralized mortgage obligations
23,806

13

59

23,760

Agency mortgage-backed securities
276,776

1,133

464

277,445

Agency debentures
8,428

814

—

9,242

Total debt securities available-for-sale
561,361

6,158

3,742

563,777

Debt securities held-to-maturity:
 
 
 
 
Corporate bonds
23,676

637

—

24,313

Agency debentures
193,466

1,127

64

194,529

Municipal bonds
13,606

135

—

13,741

Agency mortgage-backed securities
4,335

753

—

5,088

Total debt securities held-to-maturity
235,083

2,652

64

237,671

Total debt securities
$
796,444

$
8,810

$
3,806

$
801,448


 
December 31, 2019
(Dollars in thousands)
Amortized
Cost
Gross Unrealized
Appreciation
Gross Unrealized
Depreciation
Estimated
Fair Value
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
172,704

$
2,821

$
107

$
175,418

Trust preferred securities
18,092

216

48

18,260

Agency collateralized mortgage obligations
27,262

11

80

27,193

Agency mortgage-backed securities
18,058

451

—

18,509

Agency debentures
8,961

441

—

9,402

Total debt securities available-for-sale
245,077

3,940

235

248,782

Debt securities held-to-maturity:
 
 
 
 
Corporate bonds
24,678

619

—

25,297

Agency debentures
149,912

628

935

149,605

Municipal bonds
17,094

144

—

17,238

Agency mortgage-backed securities
4,360

255

—

4,615

Total debt securities held-to-maturity
196,044

1,646

935

196,755

Total debt securities
$
441,121

$
5,586

$
1,170

$
445,537



Interest income on investment securities was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
Taxable interest income
$
3,609

$
3,641

 
$
7,001

$
7,513

Non-taxable interest income
26

101

 
137

205

Dividend income
305

409

 
703

786

Total interest income on investment securities
$
3,940

$
4,151

 
$
7,841

$
8,504



As of June 30, 2020, the contractual maturities of the debt securities were:
 
June 30, 2020
 
Available-for-Sale
 
Held-to-Maturity
(Dollars in thousands)
Amortized
Cost
Estimated
Fair Value
 
Amortized
Cost
Estimated
Fair Value
Due in less than one year
$
44,006

$
44,343

 
$
4,519

$
4,529

Due from one to five years
113,409

116,540

 
68,692

69,267

Due from five to ten years
105,683

104,054

 
149,165

149,602

Due after ten years
298,263

298,840

 
12,707

14,273

Total debt securities
$
561,361

$
563,777

 
$
235,083

$
237,671



The $298.8 million fair value of debt securities available-for-sale with a contractual maturity due after 10 years as of June 30, 2020, included $33.0 million, or 11.0%, that are floating-rate securities. The $149.2 million amortized cost of debt securities held-to-maturity with a contractual maturity due from five to 10 years as of June 30, 2020, included $17.3 million that have call provisions within the next five years that would either mature, if called, or become floating-rate securities after the call date.

Prepayments may shorten the contractual lives of the collateralized mortgage obligations, mortgage-backed securities and collateralized loan obligations.

Proceeds from the sale and call of debt securities available-for-sale and held-to-maturity and related gross realized gains and losses were:
 
Available-for-Sale
 
Held-to-Maturity
 
Available-for-Sale
 
Held-to-Maturity
 
Three Months Ended June 30,
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
 
2020
2019
 
2020
2019
Proceeds from sales
$
6,071

$
4,993

 
$
—

$
—

 
$
56,038

$
4,993

 
$
—

$
—

Proceeds from calls
3,580

2,858

 
125,405

95,835

 
3,580

4,082

 
247,758

117,295

Total proceeds
$
9,651

$
7,851

 
$
125,405

$
95,835

 
$
59,618

$
9,075


$
247,758

$
117,295

 
 
 
 
 
 
 
 
 
 
 
 
Gross realized gains
$
6

$
109

 
$
8

$
3

 
$
21

$
126

 
$
50

$
14

Gross realized losses
—

—

 
—

—

 
—

—

 
—

—

Net realized gains
$
6

$
109

 
$
8

$
3

 
$
21

$
126

 
$
50

$
14



Debt securities available-for-sale of $2.6 million as of June 30, 2020, were held in safekeeping at the FHLB and were included in the calculation of borrowing capacity. Additionally, there were $35.1 million of debt securities held-to-maturity that were pledged as collateral for certain deposit relationships.

The following tables show the fair value and gross unrealized losses on temporarily impaired debt securities available-for-sale and held-to-maturity, by investment category and length of time that the individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019, respectively:
 
June 30, 2020
 
Less than 12 Months
 
12 Months or More
 
Total
(Dollars in thousands)
Fair value
Unrealized losses
 
Fair value
Unrealized losses
 
Fair value
Unrealized losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
Corporate bonds
$
46,666

$
954

 
$
19,248

$
752

 
$
65,914

$
1,706

Trust preferred securities
16,644

1,513

 
—

—

 
16,644

1,513

Agency collateralized mortgage obligations
1,794

2

 
19,186

57

 
20,980

59

Agency mortgage-backed securities
140,612

464

 
—

—

 
140,612

464

Total debt securities available-for-sale
205,716

2,933

 
38,434

809

 
244,150

3,742

Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
Corporate bonds
—

—

 
—

—

 
—

—

Agency debentures
20,014

64

 
—

—

 
20,014

64

Total debt securities held-to-maturity
20,014

64

 
—

—

 
20,014

64

Total temporarily impaired debt securities (1)
$
225,730

$
2,997

 
$
38,434

$
809

 
$
264,164

$
3,806

(1) 
The number of investment positions with unrealized losses totaled 36 for available-for-sale securities and 1 for held-to-maturity securities.

 
December 31, 2019
 
Less than 12 Months
 
12 Months or More
 
Total
(Dollars in thousands)
Fair value
Unrealized losses
 
Fair value
Unrealized losses
 
Fair value
Unrealized losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
Corporate bonds
$
4,942

$
58

 
$
19,951

$
49

 
$
24,893

$
107

Trust preferred securities
—

—

 
4,417

48

 
4,417

48

Agency collateralized mortgage obligations
22,117

66

 
2,544

14

 
24,661

80

Total debt securities available-for-sale
27,059

124

 
26,912

111

 
53,971

235

Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
Agency debentures
87,879

935

 
—

—

 
87,879

935

Total debt securities held-to-maturity
87,879

935

 
—

—

 
87,879

935

Total temporarily impaired debt securities (1)
$
114,938

$
1,059

 
$
26,912

$
111

 
$
141,850

$
1,170

(1) 
The number of investment positions with unrealized losses totaled 86 for available-for-sale securities and 53 for held-to-maturity securities.

The changes in the fair values of our municipal bonds, agency debentures, agency collateralized mortgage obligations and agency mortgage-backed securities are primarily the result of interest rate fluctuations. To assess for credit impairment, management evaluates the underlying issuer’s financial performance and the related credit rating information through a review of publicly available financial statements and other publicly available information. The most recent assessment for credit impairment did not identify any issues related to the ultimate repayment of principal and interest on these debt securities. In addition, the Company has the ability and intent to hold debt securities in an unrealized loss position until recovery of their amortized cost. Based on this, the Company considers all of the unrealized losses to be temporary.

There were no outstanding debt securities classified as trading as of June 30, 2020 and December 31, 2019.

There was $13.3 million and $24.3 million in FHLB stock outstanding as of June 30, 2020 and December 31, 2019, respectively.
v3.20.2
Loans and Leases
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
LOANS AND LEASES LOANS AND LEASES

The Company generates loans through the private banking and middle-market banking channels. The private banking channel primarily includes loans made to high-net-worth individuals, trusts and businesses that are typically secured by cash, marketable securities and/or cash value life insurance. The middle-market banking channel consists of our C&I loan and lease portfolio and CRE loan portfolio, which serve middle-market businesses and real estate developers in our primary markets and certain financial services companies with whom we have multiple relationship components.

Loans and leases held-for-investment were comprised of the following:
 
June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Loans and leases held-for-investment, before deferred fees and costs
$
4,055,115

$
1,148,137

$
1,959,537

$
7,162,789

Deferred loan costs (fees)
8,001

4,743

(4,763
)
7,981

Loans and leases held-for-investment, net of deferred fees and costs
4,063,116

1,152,880

1,954,774

7,170,770

Allowance for loan and lease losses
(2,151
)
(7,546
)
(13,579
)
(23,276
)
Loans and leases held-for-investment, net
$
4,060,965

$
1,145,334

$
1,941,195

$
7,147,494


 
December 31, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Loans and leases held-for-investment, before deferred fees and costs
$
3,688,779

$
1,080,767

$
1,801,375

$
6,570,921

Deferred loan costs (fees)
6,623

4,942

(4,927
)
6,638

Loans and leases held-for-investment, net of deferred fees and costs
3,695,402

1,085,709

1,796,448

6,577,559

Allowance for loan and lease losses
(1,973
)
(5,262
)
(6,873
)
(14,108
)
Loans and leases held-for-investment, net
$
3,693,429

$
1,080,447

$
1,789,575

$
6,563,451



The Company’s customers have unused loan commitments or other line of credit availability based on the value of eligible collateral or other terms and conditions under their loan agreements. Often these commitments or other line of credit availability are not fully utilized and therefore the total amount does not necessarily represent future cash requirements. The amount of unfunded commitments or other line of credit availability, including standby letters of credit, as of June 30, 2020 and December 31, 2019, was $5.63 billion and $4.91 billion, respectively. These unfunded commitments included $4.50 billion and $3.87 billion of commitments that were due on demand with no stated maturity as of June 30, 2020 and December 31, 2019, respectively. The interest rate for each commitment and demand line of credit is established at origination and may be based on the prevailing index rate market conditions at the time of funding. The reserve for losses on unfunded commitments was $1.0 million and $645,000 as of June 30, 2020 and December 31, 2019, respectively, which includes reserves for probable losses on unfunded loan commitments, including standby letters of credit and also risk participations.

The total unfunded commitments above included loans in the process of origination totaling approximately $37.7 million and $20.7 million as of June 30, 2020 and December 31, 2019, respectively, which extend over varying periods of time.

The Company issues standby letters of credit in the normal course of business. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. The Company would be required to perform under a standby letter of credit when drawn upon by the guaranteed party in the case of non-performance by the Company’s customer. Collateral may be obtained based on management’s credit assessment of the customer. The amount of unfunded commitments related to standby letters of credit as of June 30, 2020 and December 31, 2019, included in the total unfunded commitments above, was $74.1 million and $72.8 million, respectively. Should the Company be obligated to perform under any standby letters of credit, the Company will seek repayment from the customer for amounts paid. During the six months ended June 30, 2020 and 2019, there were draws on letters of credit totaling $45,000 and $85,000, respectively, which were repaid by the borrowers. Most of these commitments are expected to expire without being drawn upon and the total amount does not necessarily represent future cash requirements. The potential liability for losses on standby letters of credit was included in the reserve for losses on unfunded commitments.

The Company has entered into risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which we are a participant. The risk participation agreements provide credit protection to the financial institution counterparties should the customers fail to perform on their interest rate derivative contracts. The potential liability for outstanding obligations was included in the reserve for losses on unfunded commitments.
v3.20.2
Allowance for Loan and Lease Losses
 6 Months Ended
Jun. 30, 2020
Allowance for Loan and Lease Losses [Abstract]  
ALLOWANCE FOR LOAN AND LEASE LOSSES ALLOWANCE FOR LOAN AND LEASE LOSSES

Our allowance for loan and lease losses represents our estimate of probable loan and lease losses inherent in the portfolio at a specific point in time. This estimate includes losses associated with specifically identified loans and leases, as well as estimated probable credit losses inherent in the remainder of the loan and lease portfolio. Additions are made to the allowance through both periodic provisions recorded in the consolidated statements of income and recoveries of losses previously incurred. Reductions to the allowance occur as
loans and leases are charged off or when the credit history of any of the Company’s three loan portfolios (private banking loans, C&I loans and leases, and CRE loans) improves. Management evaluates the adequacy of the allowance quarterly, and in doing so relies on various factors including, but not limited to, assessment of historical loss experience, delinquency and non-accrual trends, portfolio growth, underlying collateral coverage and current economic conditions. This evaluation is subjective and requires material estimates that may change over time. In addition, management evaluates the overall methodology for the allowance for loan and lease losses on an annual basis. The calculation of the allowance for loan and lease losses takes into consideration the inherent risk identified within each of the Company’s three loan portfolios. In addition, management considers the historical loss experience of each loan portfolio to ensure that the allowance for loan and lease losses is sufficient to cover probable losses inherent in such loan portfolios. Refer to Note 1, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements for more details on the Company’s allowance for loan and lease losses policy.

The following discusses key characteristics and risks within each primary loan portfolio:

Private Banking Loans
Our private banking lending activities are conducted on a national basis. This loan portfolio primarily includes loans made to high-net-worth individuals, trusts and businesses that are typically secured by cash, marketable securities and/or cash value life insurance. This portfolio also has some loans that are secured by residential real estate or other financial assets, lines of credit and unsecured loans. The primary sources of repayment for these loans are the income and/or assets of the borrower.

The underlying collateral is the most important indicator of risk for this loan portfolio. The overall lower risk profile of this portfolio is driven by loans secured by cash, marketable securities and/or cash value life insurance, which were 98.0% and 97.4% of total private banking loans as of June 30, 2020 and December 31, 2019, respectively.

Commercial Banking: Commercial and Industrial Loans and Leases
This loan portfolio primarily includes loans and leases made to financial and other service companies or manufacturers generally for the purposes of financing production, operating capacity, accounts receivable, inventory, equipment, acquisitions and recapitalizations. Cash flow from the borrower’s operations is the primary source of repayment for these loans and leases, except for certain commercial loans that are secured by marketable securities.

The borrower’s industry and local and regional economic conditions are important indicators of risk for this loan portfolio. Collateral for these types of loans at times does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt. C&I loans collateralized by marketable securities are treated the same as private banking loans for purposes of the allowance for loan and lease loss calculation.

Commercial Banking: Commercial Real Estate Loans
This loan portfolio includes loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes including office, industrial, multifamily, retail, hospitality, healthcare and self-storage. The primary source of repayment for CRE loans secured by owner-occupied properties is cash flow from the borrower’s operations. Individual project cash flows, global cash flows and liquidity from the developer, or the sale of the property are the primary sources of repayment for CRE loans secured by investment properties. Also included are commercial construction loans to finance the construction or renovation of structures as well as to finance the acquisition and development of raw land for various purposes. The increased level of risk for these loans is generally confined to the construction period. If problems arise, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal.

The underlying purpose and collateral of the loans are important indicators of risk for this loan portfolio. Additional risks exist and are dependent on several factors such as the condition of the local and regional economies, whether or not the project is owner-occupied, the type of project, and the experience and resources of the developer.

On a monthly basis, management monitors various credit quality indicators for the loan portfolio, including delinquency, non-performing status, changes in risk ratings, changes in the underlying performance of the borrowers and other relevant factors. On a daily basis, the Company monitors the collateral of loans secured by cash, marketable securities and/or cash value life insurance within the private banking portfolio, which further reduces the risk profile of that portfolio. Refer to Note 1, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements for the Company’s policy for determining past due status of loans.

Loan risk ratings are assigned based upon the creditworthiness of the borrower and the quality of the collateral for loans secured by marketable securities. Loan risk ratings are reviewed on an ongoing basis according to internal policies. Loans within the pass rating are believed to have a lower risk of loss than loans that are risk rated as special mention, substandard or doubtful, which are believed to have an increasing risk of loss. Our internal risk ratings are consistent with regulatory guidance. Management also monitors the loan
portfolio through a formal periodic review process. All non-pass rated loans are reviewed monthly and higher risk-rated loans within the pass category are reviewed three times a year.

The Company’s risk ratings are consistent with regulatory guidance and are as follows:

Pass – The loan is currently performing in accordance with its contractual terms.

Special Mention – A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in our credit position at some future date. Economic and market conditions beyond the customer’s control may in the future necessitate this classification.

Substandard – A substandard loan is not adequately protected by the net worth and/or paying capacity of the obligor or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – A doubtful loan has all the weaknesses inherent in a loan categorized as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

The following tables present the recorded investment in loans by credit quality indicator:
 
June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Pass
$
4,059,835

$
1,144,623

$
1,933,301

$
7,137,759

Special mention
—

7,798

4,625

12,423

Substandard
3,281

459

16,848

20,588

Loans and leases held-for-investment
$
4,063,116

$
1,152,880

$
1,954,774

$
7,170,770


 
December 31, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Pass
$
3,691,866

$
1,069,932

$
1,780,768

$
6,542,566

Special mention
—

15,777

14,284

30,061

Substandard
3,536

—

1,396

4,932

Loans and leases held-for-investment
$
3,695,402

$
1,085,709

$
1,796,448

$
6,577,559



Changes in the allowance for loan and lease losses were as follows for the three months ended June 30, 2020 and 2019:
 
Three Months Ended June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
2,174

$
6,685

$
8,445

$
17,304

Provision for loan and lease losses
148

723

5,134

6,005

Charge-offs
(171
)
—

—

(171
)
Recoveries
—

138

—

138

Balance, end of period
$
2,151

$
7,546

$
13,579

$
23,276

 
Three Months Ended June 30, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
2,001

$
7,041

$
5,670

$
14,712

Provision (credit) for loan and lease losses
139

(1,146
)
295

(712
)
Charge-offs
—

—

—

—

Recoveries
—

16

—

16

Balance, end of period
$
2,140

$
5,911

$
5,965

$
14,016


Changes in the allowance for loan and lease losses were as follows for the six months ended June 30, 2020 and 2019:
 
Six Months Ended June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
1,973

$
5,262

$
6,873

$
14,108

Provision for loan and lease losses
349

1,943

6,706

8,998

Charge-offs
(171
)
—

—

(171
)
Recoveries
—

341

—

341

Balance, end of period
$
2,151

$
7,546

$
13,579

$
23,276


 
Six Months Ended June 30, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
1,942

$
5,764

$
5,502

$
13,208

Provision (credit) for loan and lease losses
198

(1,750
)
463

(1,089
)
Charge-offs
—

—

—

—

Recoveries
—

1,897

—

1,897

Balance, end of period
$
2,140

$
5,911

$
5,965

$
14,016



The following tables present the age analysis of past due loans and leases segregated by class:
 
June 30, 2020
(Dollars in thousands)
30-59 Days Past Due
60-89 Days Past Due
90 Days or More Past Due
Total Past Due
Current
Total
Private banking
$
—

$
—

$
—

$
—

$
4,063,116

$
4,063,116

Commercial and industrial
—

—

—

—

1,152,880

1,152,880

Commercial real estate
—

—

—

—

1,954,774

1,954,774

Loans and leases held-for-investment
$
—

$
—

$
—

$
—

$
7,170,770

$
7,170,770


 
December 31, 2019
(Dollars in thousands)
30-59 Days Past Due
60-89 Days Past Due
90 Days or More Past Due
Total Past Due
Current
Total
Private banking
$
261

$
—

$
184

$
445

$
3,694,957

$
3,695,402

Commercial and industrial
—

—

—

—

1,085,709

1,085,709

Commercial real estate
—

—

—

—

1,796,448

1,796,448

Loans and leases held-for-investment
$
261

$
—

$
184

$
445

$
6,577,114

$
6,577,559



Non-Performing and Impaired Loans

Management monitors the delinquency status of the Company’s loan portfolio on a monthly basis. Loans are considered non-performing when interest and principal are 90 days or more past due or management has determined that it is probable the borrower is unable to meet payments as they become due. The risk of loss is generally highest for non-performing loans.

Management determines loans to be impaired when, based upon current information and events, it is probable that the loan will not be repaid according to the original contractual terms of the loan agreement, including both principal and interest, or if a loan is designated as a TDR. Refer to Note 1, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements for the Company’s policy on evaluating loans for impairment and interest income.

The following tables present the Company’s investment in loans considered to be impaired and related information on those impaired loans:
 
As of and for the Six Months Ended June 30, 2020
(Dollars in thousands)
Recorded Investment
Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
With a related allowance recorded:
 
 
 
 
 
Private banking
$
—

$
—

$
—

$
—

$
—

Commercial and industrial
459

457

69

459

—

Commercial real estate
6,311

6,315

947

6,311

—

Total with a related allowance recorded
6,770

6,772

1,016

6,770

—

Without a related allowance recorded:
 
 
 
 
 
Private banking
10

10

—

12

—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total without a related allowance recorded
10

10

—

12

—

Total:
 
 
 
 
 
Private banking
10

10

—

12

—

Commercial and industrial
459

457

69

459

—

Commercial real estate
6,311

6,315

947

6,311

—

Total
$
6,780

$
6,782

$
1,016

$
6,782

$
—


 
As of and for the Twelve Months Ended December 31, 2019
(Dollars in thousands)
Recorded Investment
Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
With a related allowance recorded:
 
 
 
 
 
Private banking
$
171

$
193

$
171

$
171

$
—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total with a related allowance recorded
171

193

171

171

—

Without a related allowance recorded:
 
 
 
 
 
Private banking
13

13

—

13

—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total without a related allowance recorded
13

13

—

13

—

Total:
 
 
 
 
 
Private banking
184

206

171

184

—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total
$
184

$
206

$
171

$
184

$
—



Impaired loans as of June 30, 2020 and December 31, 2019, were $6.8 million and $184,000, respectively. There was no interest income recognized on impaired loans that were also on non-accrual status for the six months ended June 30, 2020, and the twelve months ended December 31, 2019. As of June 30, 2020 and December 31, 2019, there were no loans 90 days or more past due and still accruing interest income.

Impaired loans are evaluated using a discounted cash flow method or based on the fair value of the collateral less estimated selling costs. Based on those evaluations there were specific reserves totaling $1.0 million and $171,000 as of June 30, 2020 and December 31, 2019, respectively.

The following tables present the allowance for loan and lease losses and recorded investment in loans by class:
 
June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Allowance for loan and lease losses:
 
 
 
 
Individually evaluated for impairment
$
—

$
69

$
947

$
1,016

Collectively evaluated for impairment
2,151

7,477

12,632

22,260

Total allowance for loan and lease losses
$
2,151

$
7,546

$
13,579

$
23,276

Loans and leases held-for-investment:
 
 
 
 
Individually evaluated for impairment
$
10

$
459

$
6,311

$
6,780

Collectively evaluated for impairment
4,063,106

1,152,421

1,948,463

7,163,990

Loans and leases held-for-investment
$
4,063,116

$
1,152,880

$
1,954,774

$
7,170,770


 
December 31, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Allowance for loan and lease losses:
 
 
 
 
Individually evaluated for impairment
$
171

$
—

$
—

$
171

Collectively evaluated for impairment
1,802

5,262

6,873

13,937

Total allowance for loan and lease losses
$
1,973

$
5,262

$
6,873

$
14,108

Loans and leases held-for-investment:
 
 
 
 
Individually evaluated for impairment
$
184

$
—

$
—

$
184

Collectively evaluated for impairment
3,695,218

1,085,709

1,796,448

6,577,375

Loans and leases held-for-investment
$
3,695,402

$
1,085,709

$
1,796,448

$
6,577,559



Troubled Debt Restructuring

The aggregate recorded investment of impaired loans with terms modified through a TDR was $0 and $171,000 as of June 30, 2020 and December 31, 2019, respectively, which were also on non-accrual. There were no unused commitments on loans designated as TDRs as of June 30, 2020 and December 31, 2019.

The modifications made to restructured loans typically consist of an extension of the payment terms or the deferral of principal payments. There were no loans modified as TDRs within 12 months of the corresponding balance sheet date with a payment default during the three and six months ended June 30, 2020 and 2019.

There were no loans newly designated as TDRs during the three and six months ended June 30, 2020 and 2019.

Other Real Estate Owned

As of June 30, 2020 and December 31, 2019, the balance of the OREO was $2.7 million and $4.3 million, respectively. During the six months ended June 30, 2020, a property was sold from OREO for $1.5 million with a net gain of $65,000. There were no residential mortgage loans in the process of foreclosure as of June 30, 2020.
v3.20.2
Deposits
 6 Months Ended
Jun. 30, 2020
Deposits [Abstract]  
DEPOSITS DEPOSITS

As of June 30, 2020 and December 31, 2019, deposits were comprised of the following:
 
Interest Rate
Range
 
Weighted Average
Interest Rate
 
Balance
(Dollars in thousands)
June 30,
2020
 
June 30,
2020
December 31,
2019
 
June 30,
2020
December 31,
2019
Demand and savings accounts:
 
 
 
 
 
 
 
Noninterest-bearing checking accounts
—
 
—
—
 
$
422,341

$
356,102

Interest-bearing checking accounts
0.05 to 1.70%
 
0.44%
1.57%
 
2,664,864

1,398,264

Money market deposit accounts
0.10 to 3.25%
 
0.71%
1.84%
 
3,547,518

3,426,745

Total demand and savings accounts
 
 
 
 
 
6,634,723

5,181,111

Certificates of deposit
0.15 to 3.25%
 
1.51%
2.24%
 
1,196,748

1,453,502

Total deposits
 
 
 
 
 
$
7,831,471

$
6,634,613

Weighted average rate on interest-bearing accounts
 
 
0.74%
1.87%
 
 
 


As of June 30, 2020 and December 31, 2019, the Bank had total brokered deposits of $812.1 million and $766.6 million, respectively. Reciprocal deposits through Certificate of Deposit Account Registry Service® (“CDARS®”) and Insured Cash Sweep® (“ICS®”) totaled $1.33 billion and $857.9 million as of June 30, 2020 and December 31, 2019, respectively, and were considered non-brokered.

As of June 30, 2020 and December 31, 2019, certificates of deposit with balances of $100,000 or more, excluding brokered and reciprocal deposits, totaled $516.2 million and $551.5 million, respectively. As of June 30, 2020 and December 31, 2019, certificates of deposit with balances of $250,000 or more, excluding brokered and reciprocal deposits, totaled $185.1 million and $233.5 million.

The contractual maturity of certificates of deposit was as follows:
(Dollars in thousands)
June 30,
2020
December 31,
2019
12 months or less
$
1,083,693

$
1,244,838

12 months to 24 months
96,517

168,437

24 months to 36 months
16,538

40,227

Total
$
1,196,748

$
1,453,502



Interest expense on deposits was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
Interest-bearing checking accounts
$
2,719

$
4,965

 
$
7,933

$
9,508

Money market deposit accounts
7,377

18,200

 
22,031

34,739

Certificates of deposit
5,857

8,990

 
13,233

17,241

Total interest expense on deposits
$
15,953

$
32,155

 
$
43,197

$
61,488
v3.20.2
Borrowings
 6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
BORROWINGS BORROWINGS

As of June 30, 2020 and December 31, 2019, borrowings were comprised of the following:
 
June 30, 2020
 
December 31, 2019
(Dollars in thousands)
Interest Rate
Ending Balance
Maturity Date
 
Interest Rate
Ending Balance
Maturity Date
FHLB borrowings:
 
 
 
 
 
 
 
FHLB line of credit
—%
$
—

 
 
1.81%
$
55,000

5/1/2020
Issued 4/8/2020
0.60%
50,000

7/8/2020
 
—%
—

 
Issued 6/1/2020
0.46%
150,000

9/1/2020
 
—%
—

 
Issued 6/2/2020
0.46%
50,000

9/2/2020
 
—%
—

 
Issued 6/22/2020
0.47%
50,000

9/21/2020
 
—%
—

 
Issued 12/12/2019
—%
—

 
 
1.85%
100,000

1/13/2020
Issued 12/2/2019
—%
—

 
 
1.91%
150,000

3/2/2020
Issued 10/8/2019
—%
—

 
 
2.00%
50,000

1/8/2020
Subordinated notes payable (net of debt issuance costs of $1,948 and $0, respectively)
5.75%
95,552

5/15/2030
 
—%
—

 
Total borrowings, net
 
$
395,552

 
 
 
$
355,000

 


During the three months ended June 30, 2020, the Company completed a private placement of subordinated notes payable, raising aggregate proceeds of $97.5 million. The subordinated notes have a term of 10 years at a fixed-to-floating rate of 5.75%. The subordinated notes qualify under federal regulatory rules as Tier 2 capital for the holding company.

The Bank’s FHLB borrowing capacity is based on the collateral value of certain securities held in safekeeping at the FHLB and loans pledged to the FHLB. The Bank submits a quarterly Qualifying Collateral Report (“QCR”) to the FHLB to update the value of the loans pledged. As of June 30, 2020, the Bank’s borrowing capacity is based on the information provided in the March 31, 2020, QCR filing. As of June 30, 2020, the Bank had securities held in safekeeping at the FHLB with a fair value of $2.6 million, combined with pledged loans of $1.17 billion, for a gross borrowing capacity of $837.5 million, of which $300.0 million was outstanding in advances. As of December 31, 2019, there was $355.0 million outstanding in advances from the FHLB. When the Bank borrows from the FHLB, interest is charged at the FHLB’s posted rates at the time of the borrowing.

The Bank maintains an unsecured line of credit of $10.0 million with M&T Bank and an unsecured line of credit of $20.0 million with Texas Capital Bank. As of June 30, 2020 and December 31, 2019, there were no outstanding borrowings under these lines of credit and they are available to the Bank at the lenders’ discretion. In addition, the Bank maintains an $8.0 million unsecured line of credit with PNC Bank for private label credit card facilities for certain existing commercial clients of the Bank, of which $3.2 million in notional value of credit cards have been issued. The clients of the Bank are responsible for repaying any balances due on these credit cards directly to PNC, however if the customer fails to repay PNC, the Bank could be required to satisfy the obligation to PNC and initiate collection from our customer as part of the existing credit facility of that customer.

The holding company maintains an unsecured line of credit of $75.0 million with Texas Capital Bank. As of June 30, 2020 and December 31, 2019, there was no outstanding balance under this line of credit.

Interest expense on borrowings was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
FHLB borrowings
$
1,284

$
2,334

 
$
3,319

$
4,920

Line of credit borrowings
260

10

 
261

68

Subordinated notes payable
680

537

 
680

1,090

Total interest expense on borrowings
$
2,224

$
2,881

 
$
4,260

$
6,078
v3.20.2
Stock Transactions
 6 Months Ended
Jun. 30, 2020
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract]  
STOCK TRANSACTIONS STOCK TRANSACTIONS

In May 2019, the Company completed the issuance and sale of a registered, underwritten public offering of 3,220,000 depositary shares, each representing a 1/40th interest in a share of its 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock, no par value (the “Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depository share). The Company received net proceeds of $77.6 million from the sale of 80,500 shares of its Series B Preferred Stock (equivalent to 3,220,000 depositary shares), after deducting underwriting discounts, commissions and direct offering expenses. The preferred stock provides Tier 1 capital for the holding company under federal regulatory capital rules.

When, as, and if declared by the board of directors (the “Board”) of the Company, dividends will be payable on the Series B Preferred Stock from the date of issuance to, but excluding July 1, 2026, at a rate of 6.375% per annum, payable quarterly, in arrears, and from and including July 1, 2026, dividends will accrue and be payable at a floating rate equal to three-month LIBOR plus a spread of 408.8 basis points per annum (subject to potential adjustment as provided in the definition of three-month LIBOR), payable quarterly, in arrears. The Company may redeem the Series B Preferred Stock at its option, subject to regulatory approval, on or after July 1, 2024, as described in the prospectus supplement relating to the offering filed with the SEC on May 23, 2019.

In March 2018, the Company completed the issuance and sale of a registered, underwritten public offering of 1,610,000 depositary shares, each representing a 1/40th interest in a share of its 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock, no par value (the “Series A Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depository share). The Company received net proceeds of $38.5 million from the sale of 40,250 shares of its Series A Preferred Stock (equivalent to 1,610,000 depositary shares), after deducting underwriting discounts, commissions and direct offering expenses. The preferred stock provides Tier 1 capital for the holding company under federal regulatory capital rules.

When, as, and if declared by the Board, dividends will be payable on the Series A Preferred Stock from the date of issuance to, but excluding April 1, 2023, at a rate of 6.75% per annum, payable quarterly, in arrears, and from and including April 1, 2023, dividends will accrue and be payable at a floating rate equal to three-month LIBOR plus a spread of 398.5 basis points per annum (subject to potential adjustment), payable quarterly, in arrears. The Company may redeem the Series A Preferred Stock at its option, subject to regulatory approval, on or after April 1, 2023, as described in the prospectus supplement relating to the offering filed with the SEC on March 19, 2018.

During the six months ended June 30, 2020, the Company paid dividends of $1.4 million on its Series A Preferred Stock and $2.6 million on its Series B Preferred Stock. During the six months ended June 30, 2019, the Company paid dividends of $1.4 million on its Series A Preferred Stock and $471,000 on its Series B Preferred Stock.

Under authorization by the Board, the Company was permitted to repurchase its common stock up to prescribed amounts, of which $9.8 million remained available as of June 30, 2020. The Board also authorized the Company to utilize some of the share repurchase program authorizations to cancel certain options to purchase shares of its common stock granted by the Company. During the six months ended June 30, 2020, the Company repurchased 40,000 shares for approximately $670,000, at an average cost of $16.76 per share, which are held as treasury stock. During the six months ended June 30, 2019, the Company repurchased 35,000 shares for approximately $744,000, at an average cost of $21.26 per share, which are held as treasury stock.

In addition to the shares purchased in the market, treasury shares increased 83,988, or approximately $2.1 million, in connection with the net settlement of equity awards exercised or vested during the six months ended June 30, 2020. The Company also reissued 8,500 shares of treasury stock for approximately $135,000 during the six months ended June 30, 2020.

Under prior authorization of the Board, stock option cancellation programs were approved to allow for certain outstanding and vested stock option awards to be canceled by the option holder at a price based on the closing day’s stock price less the option exercise price. During the six months ended June 30, 2020, there were 212,447 options canceled for approximately $2.5 million, which was recorded as a reduction to additional paid-in capital.

The tables below show the changes in the Company’s preferred and common shares outstanding during the periods indicated:
 
Number of
Preferred Shares Outstanding
Number of
Common Shares
Outstanding
Number of
Treasury Shares
Balance, December 31, 2018
40,250

28,878,674

2,014,910

Issuance of preferred stock
80,500

—

—

Issuance of restricted common stock
—

542,703

—

Forfeitures of restricted common stock
—

(69,605
)
—

Exercise of stock options
—

22,380

—

Purchase of treasury stock through open market transactions
—

(35,000
)
35,000

Increase in treasury stock related to equity awards
—

—

—

Balance, June 30, 2019
120,750

29,339,152

2,049,910

 
 
 
 
Balance, December 31, 2019
120,750

29,355,986

2,126,422

Issuance of restricted common stock
—

597,070

—

Forfeitures of restricted common stock
—

(11,018
)
—

Exercise of stock options
—

25,000

—

Purchase of treasury stock through open market transactions
—

(40,000
)
40,000

Increase in treasury stock related to equity awards
—

(83,988
)
83,988

Reissuance of treasury stock
—

8,500

(8,500
)
Balance, June 30, 2020
120,750

29,851,550

2,241,910
v3.20.2
Regulatory Capital
 6 Months Ended
Jun. 30, 2020
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]  
REGULATORY CAPITAL REGULATORY CAPITAL

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the tables below) of Common Equity Tier 1 (“CET 1”), Tier 1 and Total risk-based capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). As of June 30, 2020 and December 31, 2019, TriState Capital Holdings, Inc. and TriState Capital Bank exceeded all capital adequacy requirements to which they were subjected.

Financial depository institutions are categorized as well capitalized if they meet minimum capital ratios as set forth in the tables below. The Bank exceeded the capital ratios necessary to be well capitalized under the regulatory framework for prompt corrective action. There have been no conditions or events since the filing of the most recent Call Report that management believes have changed the Bank’s capital, as presented in the tables below.

A banking organization is also subject to certain limitations on capital distributions and discretionary bonus payments to executive officers if the organization does not maintain the necessary capital conservation buffer - a common equity tier 1 risk-based capital ratio of 2.5% or more, in addition to the minimum capital adequacy levels shown in the tables below. Both the Company and the Bank were above the levels required to avoid limitations on capital distributions and discretionary bonus payments.

The following tables set forth certain information concerning the Company’s and the Bank’s regulatory capital as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
 
Actual
 
For Capital Adequacy Purposes
 
To be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)
Amount
Ratio
 
Amount
Ratio
 
Amount
Ratio
Total risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
699,015

12.89
%
 
$
433,732

8.00
%
 
 N/A

N/A

Bank
$
677,080

12.52
%
 
$
432,764

8.00
%
 
$
540,955

10.00
%
Tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
579,146

10.68
%
 
$
325,299

6.00
%
 
 N/A

N/A

Bank
$
652,763

12.07
%
 
$
324,573

6.00
%
 
$
432,764

8.00
%
Common equity tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
463,067

8.54
%
 
$
243,975

4.50
%
 
 N/A

N/A

Bank
$
652,763

12.07
%
 
$
243,430

4.50
%
 
$
351,621

6.50
%
Tier 1 leverage ratio
 
 
 
 
 
 
 
 
Company
$
579,146

6.30
%
 
$
367,538

4.00
%
 
 N/A

N/A

Bank
$
652,763

7.11
%
 
$
367,000

4.00
%
 
$
458,750

5.00
%

 
December 31, 2019
 
Actual
 
For Capital Adequacy Purposes
 
To be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)
Amount
Ratio
 
Amount
Ratio
 
Amount
Ratio
Total risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
572,221

12.05
%
 
$
379,911

8.00
%
 
 N/A

N/A

Bank
$
547,532

11.57
%
 
$
378,623

8.00
%
 
$
473,279

10.00
%
Tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
558,068

11.75
%
 
$
284,933

6.00
%
 
 N/A

N/A

Bank
$
532,779

11.26
%
 
$
283,967

6.00
%
 
$
378,623

8.00
%
Common equity tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
442,385

9.32
%
 
$
213,700

4.50
%
 
 N/A

N/A

Bank
$
532,779

11.26
%
 
$
212,975

4.50
%
 
$
307,631

6.50
%
Tier 1 leverage ratio
 
 
 
 
 
 
 
 
Company
$
558,068

7.54
%
 
$
296,038

4.00
%
 
 N/A

N/A

Bank
$
532,779

7.22
%
 
$
295,277

4.00
%
 
$
369,097

5.00
%
v3.20.2
Earnings Per Common Share
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
EARNINGS PER COMMON SHARE EARNINGS PER COMMON SHARE

The computation of basic and diluted earnings per common share for the periods presented was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands, except per share data)
2020
2019
 
2020
2019
 
 
 
 
 
 
Net income available to common shareholders
$
8,439

$
13,541

 
$
19,372

$
27,426

Weighted average common shares outstanding:
 
 
 
 
 
Basic
28,223,085

27,887,599

 
28,201,837

27,860,370

Restricted stock - dilutive
221,456

562,226

 
324,498

550,903

Stock options - dilutive
83,420

340,848

 
161,469

336,445

Diluted
28,527,961

28,790,673

 
28,687,804

28,747,718

 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
Basic
$
0.30

$
0.49

 
$
0.69

$
0.98

Diluted
$
0.30

$
0.47

 
$
0.68

$
0.95


 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
2019
 
2020
2019
Anti-dilutive shares (1)
869,746

6,000

 
566,498

13,000

(1) 
Includes stock options and/or restricted stock not considered for the calculation of diluted EPS as their inclusion would have been anti-dilutive.
v3.20.2
Derivatives and Hedging Activity
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES AND HEDGING ACTIVITY DERIVATIVES AND HEDGING ACTIVITY

RISK MANAGEMENT OBJECTIVE OF USING DERIVATIVES

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments related to certain of the Company’s FHLB borrowings and to manage the volatility of the change in fair value related to certain of the Company’s equity investments. The Company also has derivatives that are a result of a service the Company provides to certain qualifying customers while at the same time the Company enters into an offsetting derivative transaction in order to eliminate its interest rate risk exposure resulting from such transactions.

FAIR VALUES OF DERIVATIVE INSTRUMENTS ON THE STATEMENTS OF FINANCIAL CONDITION

The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the unaudited condensed consolidated statements of financial condition as of June 30, 2020 and December 31, 2019:
 
Asset Derivatives
 
Liability Derivatives
 
as of June 30, 2020
 
as of June 30, 2020
(Dollars in thousands)
Balance Sheet Location
Fair Value
 
Balance Sheet Location
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
$
—

 
Other liabilities
$
11,161

 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
171,967

 
Other liabilities
172,091

 
 
 
 
 
 
Total
Other assets
$
171,967

 
Other liabilities
$
183,252


 
Asset Derivatives
 
Liability Derivatives
 
as of December 31, 2019
 
as of December 31, 2019
(Dollars in thousands)
Balance Sheet Location
Fair Value
 
Balance Sheet Location
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
$
—

 
Other liabilities
$
2,184

 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
55,241

 
Other liabilities
55,289

 
 
 
 
 
 
Total
Other assets
$
55,241

 
Other liabilities
$
57,473



The following tables show the impact legally enforceable master netting agreements had on the Company’s derivative financial instruments as of June 30, 2020 and December 31, 2019:
 
Offsetting of Derivative Assets
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Assets
presented in the Statement of Financial Position
 
Gross Amounts Not Offset in the Statement of Financial Position
 
Net Amount
 
 
 
 
 
(Dollars in thousands)
 
 
 
Financial Instruments
 
Cash Collateral Received
 
June 30, 2020
$
171,967

 
$
—

 
$
171,967

 
$
—

 
$
—

 
$
171,967

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
$
55,241

 
$
—

 
$
55,241

 
$
(850
)
 
$
—

 
$
54,391



 
Offsetting of Derivative Liabilities
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Liabilities
presented in the Statement of Financial Position
 
Gross Amounts Not Offset in the Statement of Financial Position
 
Net Amount
 
 
 
 
 
(Dollars in thousands)
 
 
 
Financial Instruments
 
Cash Collateral Posted
 
June 30, 2020
$
183,252

 
$
—

 
$
183,252

 
$
—

 
$
(183,227
)
 
$
25

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
$
57,473

 
$
—

 
$
57,473

 
$
(850
)
 
$
(55,753
)
 
$
870



CASH FLOW HEDGES OF INTEREST RATE RISK

The Company’s objectives in using certain interest rate derivatives are to add stability to net interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. The Company has entered into derivative contracts to hedge the variable cash flows associated with certain FHLB borrowings. These interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company effectively making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company’s cash flow hedge derivatives did not have any hedge ineffectiveness recognized in earnings during the six months ended June 30, 2020.

Characteristics of the Company’s interest rate derivative transactions designated as cash flow hedges of interest rate risk as of June 30, 2020, were as follows:
(Dollars in thousands)
Notional
Amount
Effective
Rate (1)
Estimated Increase/
(Decrease) to Interest
Expense in the Next
Twelve Months
Maturity
Date
Remaining Term
(in Months)
Interest rate products:
 
 
 
 
 
Issued 1/8/2018
$
50,000

2.21%
$
501

1/8/2021
6
Issued 5/30/2019
50,000

2.05%
903

6/1/2022
23
Issued 5/30/2019
50,000

2.03%
895

6/1/2023
35
Issued 5/30/2019
50,000

2.04%
901

6/1/2024
47
Issued 3/2/2020
50,000

0.98%
364

3/2/2025
56
Issued 3/20/2020
50,000

0.60%
174

3/20/2025
57
Total
$
300,000

 
$
3,738

 
 

(1) 
The effective rate is adjusted for the difference between the three-month FHLB advance rate and three-month LIBOR.

The tables below present the effective portion of the Company’s cash flow hedge instruments in the unaudited condensed consolidated statements of income and accumulated other comprehensive income (loss):
 
 
 
Three Months Ended June 30,
 
Three Months Ended June 30,
(Dollars in thousands)
 
 
2020
2019
 
2020
2019
Derivatives designated as hedging instruments:
Location of Gain (Loss) Recognized in Income on Derivatives
 
Realized Gain (Loss) Recognized in Income on Derivatives
 
Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives
Interest rate products
Interest expense
 
$
(460
)
$
560

 
$
(1,578
)
$
(2,118
)

 
 
 
Six Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
 
 
2020
2019
 
2020
2019
Derivatives designated as hedging instruments:
Location of Gain (Loss) Recognized in Income on Derivatives
 
Realized Gain (Loss) Recognized in Income on Derivatives
 
Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives
Interest rate products
Interest expense
 
$
(619
)
$
1,121

 
$
(9,290
)
$
(2,325
)


NON-DESIGNATED HEDGES

The Company does not use derivatives for trading or speculative purposes. Derivatives not designated as hedges are not speculative and primarily result from a service the Company provides to certain customers. The Company executes interest rate derivatives with its commercial banking customers to facilitate their respective risk management strategies. Those derivatives are simultaneously and economically hedged by offsetting derivatives that the Company executes with a third party, such that the Company eliminates its interest rate exposure resulting from such transactions. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of June 30, 2020, the Company had interest rate derivative transactions with an aggregate notional amount of $3.29 billion related to this program.

The table below presents the effect of the Company’s non-designated hedge instruments in the unaudited condensed consolidated statements of income:
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
 
 
2020
2019
 
2020
2019
Derivatives not designated as hedging instruments:
Location of Gain (Loss) Recognized in Income on Derivatives
 
Amount of Gain (Loss) Recognized in Income on Derivatives
 
Amount of Gain (Loss) Recognized in Income on Derivatives
Interest rate products
Non-interest income
 
$
(4
)
$
(22
)
 
$
(66
)
$
(42
)
Equity products
Non-interest income
 
—

(77
)
 
—

(77
)
Total
 
 
$
(4
)
$
(99
)
 
$
(66
)
$
(119
)

CREDIT-RISK-RELATED CONTINGENT FEATURES

The Company has agreements with each of its derivative counterparties that contain a provision where, if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company has agreements with certain of its derivative counterparties that contain a provision where, if either the Company or the counterparty fails to maintain its status as a well/adequately capitalized institution, then the Company or the counterparty could be required to terminate any outstanding derivative positions and settle its obligations under the agreement.

As of June 30, 2020, the termination value of derivatives for which the Company had master netting arrangements with the counterparty and in a net liability position was $183.3 million, including accrued interest. As of June 30, 2020, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral of $184.9 million. If the Company had breached any of these provisions as of June 30, 2020, it could have been required to settle its obligations under the agreements at their termination value.
v3.20.2
Disclosures About Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates of financial instruments are based on the present value of expected future cash flows, quoted market prices of similar financial instruments, if available, and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions and risk assumptions used. Therefore, fair value estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realized in an immediate settlement of instruments. Accordingly, the aggregate fair value amounts presented below do not represent the underlying value of the Company.

FAIR VALUE MEASUREMENTS

In accordance with U.S. GAAP, the Company must account for certain financial assets and liabilities at fair value on a recurring and non-recurring basis. The Company utilizes a three-level fair value hierarchy of valuation techniques to estimate the fair value of its financial assets and liabilities based on whether the inputs to those valuation techniques are observable or unobservable. The fair value hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within multiple levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques:

•
Level 1 – Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities.
•
Level 2 – Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded. Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing.
•
Level 3 – Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include assumptions of a source independent of the reporting entity or the reporting entity’s own assumptions that are supported by little or no market activity or observable inputs.

The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs used or how the data was calculated or derived and corroborates the reasonableness of external inputs in the valuation process.

RECURRING FAIR VALUE MEASUREMENTS

The following tables represent assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets /
Liabilities
at Fair Value
Financial assets:
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
—

$
236,685

$
—

$
236,685

Trust preferred securities
—

16,645

—

16,645

Agency collateralized mortgage obligations
—

23,760

—

23,760

Agency mortgage-backed securities
—

277,445

—

277,445

Agency debentures
—

9,242

—

9,242

Interest rate swaps
—

171,967

—

171,967

Total financial assets
—

735,744

—

735,744

 
 
 
 
 
Financial liabilities:
 
 
 
 
Interest rate swaps
—

183,252

—

183,252

Total financial liabilities
$
—

$
183,252

$
—

$
183,252


 
December 31, 2019
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets /
Liabilities
at Fair Value
Financial assets:
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
—

$
175,418

$
—

$
175,418

Trust preferred securities
—

18,260

—

18,260

Agency collateralized mortgage obligations
—

27,193

—

27,193

Agency mortgage-backed securities
—

18,509

—

18,509

Agency debentures
—

9,402

—

9,402

Interest rate swaps
—

55,241

—

55,241

Total financial assets
—

304,023

—

304,023

 
 
 
 
 
Financial liabilities:
 
 
 
 
Interest rate swaps
—

57,473

—

57,473

Total financial liabilities
$
—

$
57,473

$
—

$
57,473


INVESTMENT SECURITIES
Generally, debt securities are valued using pricing for similar securities, recently executed transactions, and other pricing models utilizing observable inputs and therefore are classified as Level 2.

INTEREST RATE SWAPS
The fair value of interest rate swaps is estimated using inputs that are observable or that can be corroborated by observable market data and therefore are classified as Level 2. These fair value estimations include primarily market observable inputs such as the forward LIBOR swap curve or its ongoing replacement.

NON-RECURRING FAIR VALUE MEASUREMENTS

Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

The following tables represent the balances of assets measured at fair value on a non-recurring basis as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets
at Fair Value
Loans measured for impairment, net
$
—

$
—

$
5,764

$
5,764

Other real estate owned
—

—

2,724

2,724

Total assets
$
—

$
—

$
8,488

$
8,488


 
December 31, 2019
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets
at Fair Value
Loans measured for impairment, net
$
—

$
—

$
13

$
13

Other real estate owned
—

—

4,250

4,250

Total assets
$
—

$
—

$
4,263

$
4,263



As of June 30, 2020 and December 31, 2019, the Company recorded $1.0 million and $171,000, respectively, of specific reserves to allowance for loan and lease losses as a result of adjusting the fair value of impaired loans.

IMPAIRED LOANS
A loan is considered impaired when management determines it is probable that all of the principal and interest due under the original terms of the loan may not be collected or if a loan is designated as a TDR. Impairment is measured based on a discounted cash flow of ongoing operations, discounted at the loan’s original effective interest rate, or a calculation of the fair value of the underlying collateral less estimated selling costs. Our policy is to obtain appraisals on collateral supporting impaired loans on an annual basis, unless circumstances dictate a shorter time frame. Appraisals are reduced by estimated costs to sell the collateral, and, under certain circumstances, additional factors that may arise and cause us to believe our recoverable value may be less than the independent appraised value. Accordingly, impaired loans are classified as Level 3. The Company measures impairment on all loans as part of the allowance for loan and lease losses.

OTHER REAL ESTATE OWNED
OREO is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at fair value, less estimated disposition costs, with the fair value being determined by appraisal. Our policy is to obtain appraisals on collateral supporting OREO on an annual basis, unless circumstances dictate a shorter time frame. Appraisals are reduced by estimated costs to sell the collateral and, under certain circumstances, additional factors that may arise and cause us to believe our recoverable value may be less than the independent appraised value. Accordingly, OREO is classified as Level 3.

LEVEL 3 VALUATION

The following tables present additional quantitative information about assets measured at fair value on a recurring and non-recurring basis and for which we have utilized Level 3 inputs to determine fair value as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
(Dollars in thousands)
Fair Value
 
Valuation Techniques (1)
 
Significant Unobservable Inputs
 
Weighted Average Discount Rate
Loans measured for impairment, net
$
5,764

 
Collateral
 
Appraisal value and discount due to salability conditions
 
27%
 
 
 
 
 
 
 
 
Other real estate owned
$
2,724

 
Collateral
 
Appraisal value and discount due to salability conditions
 
20%
(1) 
Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent.
 
December 31, 2019
(Dollars in thousands)
Fair Value
 
Valuation Techniques (1)
 
Significant Unobservable Inputs
 
Weighted Average Multiple/
Discount Rate
Loans measured for impairment, net
$
13

 
Collateral
 
Appraisal value and discount due to salability conditions
 
—%
 
 
 
 
 
 
 
 
Other real estate owned
$
4,250

 
Collateral
 
Appraisal value and discount due to salability conditions
 
17%
(1) 
Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table summarizes of the carrying amounts and estimated fair values of financial instruments:
 
 
 
June 30, 2020
 
December 31, 2019
(Dollars in thousands)
Fair Value
Level
 
Carrying
Amount
Estimated
Fair Value
 
Carrying
Amount
Estimated
Fair Value
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
1
 
$
724,942

$
724,942

 
$
403,855

$
403,855

Debt securities available-for-sale
2
 
563,777

563,777

 
248,782

248,782

Debt securities held-to-maturity
2
 
235,083

237,671

 
196,044

196,755

Federal Home Loan Bank stock
2
 
13,280

13,280

 
24,324

24,324

Loans and leases held-for-investment, net
3
 
7,147,494

7,198,597

 
6,563,451

6,548,432

Accrued interest receivable
2
 
18,534

18,534

 
22,326

22,326

Investment management fees receivable, net
2
 
6,907

6,907

 
7,560

7,560

Bank owned life insurance
2
 
70,901

70,901

 
70,044

70,044

Other real estate owned
3
 
2,724

2,724

 
4,250

4,250

Interest rate swaps
2
 
171,967

171,967

 
55,241

55,241

 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
Deposits
2
 
$
7,831,471

$
7,861,737

 
$
6,634,613

$
6,648,546

Borrowings, net
2
 
395,552

397,608

 
355,000

355,003

Interest rate swaps
2
 
183,252

183,252

 
57,473

57,473



During the six months ended June 30, 2020 and 2019, there were no transfers between fair value Levels 1, 2 or 3.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments as of June 30, 2020 and December 31, 2019:

CASH AND CASH EQUIVALENTS
The carrying amount approximates fair value.

INVESTMENT SECURITIES
The fair values of debt securities available-for-sale, debt securities held-to-maturity, debt securities trading and equity securities are based on quoted market prices for the same or similar securities, recently executed transactions and pricing models.

FEDERAL HOME LOAN BANK STOCK
The carrying value of our FHLB stock, which is carried at cost, approximates fair value.

LOANS AND LEASES HELD-FOR-INVESTMENT
The fair value of loans and leases held-for-investment is estimated by discounting the future cash flows using market rates (utilizing both unobservable and certain observable inputs when applicable) at which similar loans would be made to borrowers with similar credit ratings over the estimated remaining maturities. Impaired loans are generally valued at the fair value of the associated collateral.

ACCRUED INTEREST RECEIVABLE
The carrying amount approximates fair value.

INVESTMENT MANAGEMENT FEES RECEIVABLE
The carrying amount approximates fair value.

BANK OWNED LIFE INSURANCE
The fair value of the general account BOLI is based on the insurance contract net cash surrender value.

OTHER REAL ESTATE OWNED
OREO is recorded at fair value, less estimated disposition costs, with the fair value being determined by appraisal.

DEPOSITS
The fair value of demand deposits is the amount payable on demand as of the reporting date, i.e., their carrying amounts. The fair value of fixed maturity deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

BORROWINGS
The fair value of borrowings is calculated by discounting scheduled cash flows through the estimated maturity using period end market rates for borrowings of similar remaining maturities.

INTEREST RATE SWAPS
The fair value of interest rate swaps is estimated through the assistance of an independent third party and compared to the fair value determined by the swap counterparty to establish reasonableness.

OFF-BALANCE SHEET INSTRUMENTS
Fair values for the Company’s off-balance sheet instruments, which consist of unfunded lending commitments, demand lines of credit, standby letters of credit and risk participation agreements related to interest rate swap agreements, are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Management believes that the fair value of these off-balance sheet instruments is not significant.
v3.20.2
Changes in Accumulated Other Comprehensive Income (Loss)
 6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables show the changes in accumulated other comprehensive income (loss) net of tax, for the periods presented:
 
Three Months Ended June 30,
 
2020
 
2019
(Dollars in thousands)
Debt Securities
Derivatives
Total
 
Debt Securities
Derivatives
Total
Balance, beginning of period
$
(6,678
)
$
(7,371
)
$
(14,049
)
 
$
54

$
448

$
502

Change in unrealized holding gains (losses)
8,375

(1,200
)
7,175

 
1,259

(1,612
)
(353
)
Losses (gains) reclassified from other comprehensive income
(5
)
349

344

 
(83
)
(426
)
(509
)
Net other comprehensive income (loss)
8,370

(851
)
7,519

 
1,176

(2,038
)
(862
)
Balance, end of period
$
1,692

$
(8,222
)
$
(6,530
)
 
$
1,230

$
(1,590
)
$
(360
)


 
Six Months Ended June 30,
 
2020
 
2019
(Dollars in thousands)
Debt Securities
Derivatives
Total
 
Debt Securities
Derivatives
Total
Balance, beginning of period
$
2,756

$
(1,624
)
$
1,132

 
$
(2,363
)
$
1,032

$
(1,331
)
Change in unrealized holding gains (losses)
(1,048
)
(7,067
)
(8,115
)
 
3,689

(1,769
)
1,920

Losses (gains) reclassified from other comprehensive income
(16
)
469

453

 
(96
)
(853
)
(949
)
Net other comprehensive income (loss)
(1,064
)
(6,598
)
(7,662
)
 
3,593

(2,622
)
971

Balance, end of period
$
1,692

$
(8,222
)
$
(6,530
)
 
$
1,230

$
(1,590
)
$
(360
)
v3.20.2
Contingent Liabilities
 6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
CONTINGENT LIABILITIES CONTINGENT LIABILITIES

From time to time the Company is a party to various litigation matters incidental to the conduct of its business. The Company is not aware of any material unasserted claims. In the opinion of management, there are no potential claims that would have a material adverse effect on the Company’s financial position, liquidity or results of operations.
v3.20.2
Segments
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
SEGMENTS SEGMENTS

The Company operates two reportable segments: Bank and Investment Management.

•
The Bank segment provides commercial banking services to middle-market businesses and private banking services to high-net-worth individuals through the Bank subsidiary.

•
The Investment Management segment provides advisory and sub-advisory investment management services primarily to institutional investors, mutual funds and individual investors through the Chartwell subsidiary. It also supports marketing efforts for Chartwell’s proprietary investment products through the CTSC Securities subsidiary.

The following tables provide financial information for the two segments of the Company as of and for the periods indicated. The information provided under the caption “Parent and Other” represents general operating activity of the Company not considered to be a reportable segment, which includes parent company activity as well as eliminations and adjustments that are necessary for purposes of reconciliation to the consolidated amounts.
(Dollars in thousands)
June 30,
2020
December 31,
2019
Assets:
 
Bank
$
9,057,476

$
7,686,981

Investment management
82,966

83,295

Parent and other
(10,601
)
(4,466
)
Total assets
$
9,129,841

$
7,765,810


 
Three Months Ended June 30, 2020
 
Three Months Ended June 30, 2019
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
Interest income
$
51,661

$
—

$
—

$
51,661

 
$
66,311

$
—

$
28

$
66,339

Interest expense
17,251

—

926

18,177

 
34,517

—

519

35,036

Net interest income (loss)
34,410

—

(926
)
33,484

 
31,794

—

(491
)
31,303

Provision (credit) for loan and lease losses
6,005

—

—

6,005

 
(712
)
—

—

(712
)
Net interest income (loss) after provision for loan and lease losses
28,405

—

(926
)
27,479

 
32,506

—

(491
)
32,015

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees
—

7,897

(159
)
7,738

 
—

9,364

(110
)
9,254

Net gain on the sale and call of debt securities
14

—

—

14

 
112

—

—

112

Other non-interest income
5,215

30

—

5,245

 
2,478

4

131

2,613

Total non-interest income (loss)
5,229

7,927

(159
)
12,997

 
2,590

9,368

21

11,979

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense
—

486

—

486

 
—

502

—

502

Other non-interest expense
19,967

7,003

640

27,610

 
18,903

7,930

250

27,083

Total non-interest expense
19,967

7,489

640

28,096

 
18,903

8,432

250

27,585

Income (loss) before tax
13,667

438

(1,725
)
12,380

 
16,193

936

(720
)
16,409

Income tax expense (benefit)
2,173

102

(296
)
1,979

 
1,658

264

(204
)
1,718

Net income (loss)
$
11,494

$
336

$
(1,429
)
$
10,401

 
$
14,535

$
672

$
(516
)
$
14,691

 
Six Months Ended June 30, 2020
 
Six Months Ended June 30, 2019
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
Interest income
$
115,863

$
—

$
—

$
115,863

 
$
129,142

$
—

$
99

$
129,241

Interest expense
46,547

—

910

47,457

 
66,436

—

1,130

67,566

Net interest income (loss)
69,316

—

(910
)
68,406

 
62,706

—

(1,031
)
61,675

Provision (credit) for loan and lease losses
8,998

—

—

8,998

 
(1,089
)
—

—

(1,089
)
Net interest income (loss) after provision for loan and lease losses
60,318

—

(910
)
59,408

 
63,795

—

(1,031
)
62,764

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees
—

15,662

(286
)
15,376

 
—

18,896

(218
)
18,678

Net gain on the sale and call of debt securities
71

—

—

71

 
140

—

—

140

Other non-interest income
10,866

—

—

10,866

 
5,355

25

850

6,230

Total non-interest income (loss)
10,937

15,662

(286
)
26,313

 
5,495

18,921

632

25,048

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense
—

988

—

988

 
—

1,004

—

1,004

Other non-interest expense
41,000

13,630

1,622

56,252

 
37,923

14,987

343

53,253

Total non-interest expense
41,000

14,618

1,622

57,240

 
37,923

15,991

343

54,257

Income (loss) before tax
30,255

1,044

(2,818
)
28,481

 
31,367

2,930

(742
)
33,555

Income tax expense (benefit)
5,521

130

(466
)
5,185

 
3,683

827

(210
)
4,300

Net income (loss)
$
24,734

$
914

$
(2,352
)
$
23,296

 
$
27,684

$
2,103

$
(532
)
$
29,255
v3.20.2
Subsequent Events
 6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS

On July 13, 2020, the Board declared a dividend payable of approximately $679,000, or $0.42 per depositary share, on the Company’s Series A Preferred Stock and a dividend payable of approximately $1.3 million, or $0.40 per depositary share, on the Company’s Series B Preferred Stock, each of which is payable on October 1, 2020, to preferred shareholders of record as of the close of business on September 15, 2020.
v3.20.2
Basis of Information and Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Nature of operation

NATURE OF OPERATION
TriState Capital Holdings, Inc. (“we,” “us,” “our,” the “holding company,” the “parent company,” or the “Company”) is a registered bank holding company pursuant to the Bank Holding Company Act of 1956, as amended. The Company has three wholly owned subsidiaries: TriState Capital Bank, a Pennsylvania-chartered state bank (the “Bank”); Chartwell Investment Partners, LLC, a registered investment adviser (“Chartwell”); and Chartwell TSC Securities Corp., a registered broker/dealer (“CTSC Securities”).

The Bank was established to serve the commercial banking needs of regionally located middle-market businesses and financial services providers and the private banking needs of high-net-worth individuals nation-wide. The Bank has two wholly owned subsidiaries: TSC Equipment Finance LLC (“TSC Equipment Finance”), established to hold and manage loans and leases of our equipment finance business, and Meadowood Asset Management, LLC (“Meadowood”), established to hold and manage other real estate owned by the bank and/or foreclosed properties for the Bank.

Chartwell provides investment management services primarily to institutional investors, mutual funds and individual investors. CTSC Securities supports marketing efforts for the proprietary investment products provided by Chartwell, including shares of mutual funds advised and/or administered by Chartwell.

The Company and the Bank are subject to regulatory examination by the Federal Deposit Insurance Corporation (“FDIC”), the Pennsylvania Department of Banking and Securities and the Board of Governors of the Federal Reserve System and its Reserve Banks, which we refer to as the Federal Reserve. Chartwell is a registered investment adviser regulated by the Securities and Exchange Commission (“SEC”). CTSC Securities is regulated by the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”).

The Bank conducts business through its main office located in Pittsburgh, Pennsylvania, as well as its four additional representative offices in Cleveland, Ohio; Philadelphia, Pennsylvania; Edison, New Jersey; and New York, New York. Chartwell conducts business through its office located in Berwyn, Pennsylvania, and CTSC Securities conducts business through its office located in Pittsburgh, Pennsylvania.
Use of estimates
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of related revenues and expenses during the reporting period. Although our current estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than those anticipated in the estimates, which could materially affect the financial results of our operations and financial condition.

Material estimates that are particularly susceptible to significant changes relate to the determination of the allowance for loan and lease losses, valuation of goodwill and other intangible assets and their evaluation for impairment, and deferred income taxes and their related recoverability, each of which is discussed later in this section.
Consolidation
CONSOLIDATION
Our consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank, Chartwell and CTSC Securities, after elimination of inter-company accounts and transactions. The accounts of the Bank, in turn, include its wholly owned subsidiaries, TSC Equipment Finance and Meadowood, after elimination of inter-company accounts and transactions. The unaudited condensed consolidated financial statements of the Company presented herein have been prepared pursuant to SEC rules for Quarterly Reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP for a full year presentation. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited condensed consolidated financial statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the related notes for the fiscal year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2020.
Cash and cash equivalents
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, the Company has defined cash and cash equivalents as cash, interest-earning deposits with other institutions, federal funds sold and short-term investments that have an original maturity of 90 days or less.
Business combinations
BUSINESS COMBINATIONS
The Company accounts for business combinations using the acquisition method of accounting. Under this method of accounting, the acquired company’s net assets are recorded at fair value as of the date of acquisition, and the results of operations of the acquired company are combined with our results from that date forward. Acquisition costs are expensed when incurred. The difference between the purchase price, which includes an initial measurement of any contingent earn out, and the fair value of the net assets acquired (including identified intangibles) is recorded as goodwill in the consolidated statements of financial condition. A change in the initial estimate of any contingent earn out amount is recorded to non-interest expense in the consolidated statements of income.
Investment securities
INVESTMENT SECURITIES
The Company’s investments are classified as either: (1) held-to-maturity, which are debt securities that the Company intends to hold until maturity and are reported at amortized cost; (2) trading, which are debt securities bought and held principally for the purpose of selling them in the near term and reported at fair value, with unrealized gains and losses included in non-interest income; (3) available-for-sale, which are debt securities not classified as either held-to-maturity or trading securities and reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss), on an after-tax basis; or (4) equity securities, which are reported at fair value, with unrealized gains and losses included in non-interest income.

The cost of securities sold is determined on a specific identification basis. Amortization of premiums and accretion of discounts are recorded to interest income on investments over the estimated life of the security utilizing the level yield method. We evaluate impaired investment securities quarterly to determine if impairments are temporary or other-than-temporary. For impaired debt and equity securities, management first determines whether it intends to sell or if it is more likely than not that it will be required to sell the impaired securities. This determination considers current and forecasted liquidity requirements, regulatory and capital requirements, and securities portfolio management. If the Company intends to sell a security with a fair value below amortized cost or if it is more likely than not that it will be required to sell such a security before recovery, an other-than-temporary impairment (“OTTI”) charge is recorded through current period earnings for the full decline in fair value below amortized cost. For debt securities that the Company does not intend to sell or it is more likely than not that it will not be required to sell before recovery, an OTTI charge is recorded through current period earnings for the amount of the valuation decline below amortized cost that is attributable to credit losses. The remaining difference between the security’s fair value and amortized cost (that is, the decline in fair value not attributable to credit losses) is recognized in other comprehensive income (loss), in the consolidated statements of comprehensive income and the shareholders’ equity section of the consolidated statements of financial condition, on an after-tax basis.
Federal Home Loan Bank stock
FEDERAL HOME LOAN BANK STOCK
The Company is a member of the Federal Home Loan Bank (“FHLB”) of Pittsburgh. Member institutions are required to invest in FHLB stock. The stock is carried at cost, which approximates its liquidation value, and it is evaluated for impairment based on the ultimate recoverability of the par value. The following matters are considered by management when evaluating the FHLB stock for impairment: the ability of the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB; the impact of legislative and regulatory changes on the institution and its customer base; and the Company’s intent and ability to hold its FHLB stock for the foreseeable future. Management believes the Company’s holdings in the FHLB stock were recoverable at par value as of June 30, 2020 and December 31, 2019. Cash and stock dividends are reported as interest income on investments in the consolidated statements of income.
Loans and leases
LOANS AND LEASES
Loans and leases held-for-investment are stated at unpaid principal balances, net of deferred loan fees and costs. Loans held-for-sale are stated at the lower of cost or fair value. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. Deferred loan fees and costs are amortized to interest income over the estimated life of the loan, taking into consideration scheduled payments and prepayments.

The Company considers a loan to be a troubled debt restructuring (“TDR”) when there is a concession made to a financially troubled borrower without adequate consideration provided to the Company. Once a loan is deemed to be a TDR, the Company considers whether the loan should be placed on non-accrual status. In assessing accrual status, the Company considers the likelihood that repayment and performance according to the original contractual terms will be achieved, as well as the borrower’s historical payment performance. A loan is designated and reported as a TDR until such loan is either paid off or sold, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the remaining principal and interest will be collected according to the restructured agreement.

The recognition of interest income on a loan is discontinued when, in management’s opinion, it is probable the borrower is unable to meet payments as they become due or when the loan becomes 90 days past due, whichever occurs first, at which time the loan is placed on non-accrual status. All accrued and unpaid interest on such loans is then reversed. The interest ultimately collected is applied to reduce principal if there is doubt about the collectability of principal. If a borrower brings a loan current for which accrued
interest has been reversed, then the recognition of interest income on the loan is resumed once the loan has been current for a period of six consecutive months or greater.

The Company is a party to financial instruments with off-balance sheet risk, such as commitments to extend credit, in the normal course of business to meet the financing needs of its customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the lending agreement with such customer. Commitments generally have fixed expiration dates or other termination clauses (i.e., loans due on demand) and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the unfunded commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis using the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The amount of collateral obtained, if deemed necessary by the Company upon extension of a commitment, is based on management’s credit evaluation of the borrower.
Other real estate owned
OTHER REAL ESTATE OWNED
Real estate owned, other than bank premises, is recorded at fair value less estimated selling costs. Fair value is determined based on an independent appraisal. Expenses related to holding the property are charged against earnings when incurred. Depreciation is not recorded on other real estate owned (“OREO”) properties.
Allowance for loan and lease losses
ALLOWANCE FOR LOAN AND LEASE LOSSES
The allowance for loan and lease losses is established through provisions for loan and lease losses that are recorded in the consolidated statements of income. Loans and leases are charged off against the allowance for loan and lease losses when management believes that the principal is uncollectible. If, at a later time, amounts are recovered with respect to loans and leases previously charged off, the recovered amount is credited to the allowance for loan and lease losses.

In management’s judgment, the allowance was appropriate to cover probable losses inherent in the loan and lease portfolio as of June 30, 2020 and December 31, 2019. Management’s judgment takes into consideration general economic conditions, diversification and seasoning of the loan portfolio, historic loss experience, identified credit problems, delinquency levels and adequacy of collateral. Although management believes it has used the best information available to it in making such determinations, and that the present allowance for loan and lease losses is adequate, future adjustments to the allowance may be necessary, and net income may be adversely affected if circumstances differ substantially from the assumptions used in determining the level of the allowance. In addition, as an integral part of their periodic examination, certain regulatory agencies review the adequacy of the Bank’s allowance for loan and lease losses and may direct the Bank to make additions to the allowance based on their judgments about information available to them at the time of their examination.

The two components of the allowance for loan and lease losses represent estimates of general reserves based upon Accounting Standards Codification (“ASC”) Topic 450, Contingencies; and specific reserves based upon ASC Topic 310, Receivables. ASC Topic 450 applies to homogeneous loan pools such as commercial loans, consumer lines of credit and residential mortgages that are not individually evaluated for impairment. ASC Topic 310 is applied to commercial and consumer loans that are individually evaluated for impairment.

In management’s opinion, a loan or lease is impaired, based upon current information and events, when it is probable that the loan or lease will not be repaid according to its original contractual terms, including both principal and interest, or if a loan is designated as a TDR. Management performs individual assessments of impaired loans and leases to determine the existence of loss exposure based upon a discounted cash flows method or where a loan is collateral dependent, based upon the fair value of the collateral less estimated selling costs. During the six months ended June 30, 2020, certain loan modifications were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Accordingly, these loans and leases were not categorized as TDRs.

In estimating probable loan and lease loss of general reserves, management considers numerous factors, including historical charge-offs and subsequent recoveries. Management also considers qualitative factors that influence our credit quality, including, but not limited to, delinquency and non-performing loan trends, changes in loan underwriting guidelines and credit policies, and the results of internal loan reviews. Finally, management considers the impact of changes in current local and regional economic conditions in the markets that we serve.

Management bases the computation of the allowance for loan and lease losses of general reserves on two factors: the primary factor and the secondary factor. The primary factor is based on the inherent risk identified by management within each of the Company’s three loan portfolios based on the historical loss experience of each loan portfolio in addition to the loss emergence period. Management has developed a methodology that is applied to each of the three primary loan portfolios: private banking loans, commercial and industrial (“C&I”) loans and leases, and commercial real estate (“CRE”) loans. As the loan loss history, mix and risk ratings of each loan portfolio change, the primary factor adjusts accordingly. The allowance for loan and lease losses related to the primary factor
is based on our estimates as to probable losses for each loan portfolio. The secondary factor is intended to capture risks related to events and circumstances that management believes have an impact on the future performance of the loan portfolio. Although this factor is more subjective in nature, the methodology focuses on internal and external trends in pre-specified categories, or risk factors, and applies a quantitative percentage that drives the secondary factor. Nine risk factors have been identified and each risk factor is assigned a reserve level based on management’s judgment as to the probable impact of each risk factor on each loan portfolio and is monitored on a quarterly basis. As the trend in any risk factor changes, a corresponding change occurs in the reserve associated with each respective risk factor, such that the secondary factor remains current to changes in each loan portfolio.

The Company also maintains a reserve for losses on unfunded commitments. This reserve is reflected as a component of other liabilities and, in management’s judgment, is sufficient to cover probable losses inherent in the loan commitments. Management tracks the level and trends in unused commitments and takes into consideration the same factors as those considered for purposes of the allowance for loan and lease losses on outstanding loans.
Investment management fees
INVESTMENT MANAGEMENT FEES
The Company recognizes investment management fee revenue when advisory services are performed. Fees are based on assets under management and are calculated pursuant to individual client contracts. Investment management fees are generally received on a quarterly basis. Certain incremental costs incurred to acquire some of our investment management contracts are deferred and amortized to non-interest expense over the estimated life of the contract.

Investment management fees receivable represent amounts due for contractual investment management services provided to the Company’s clients, primarily institutional investors, mutual funds and individual investors. Management performs credit evaluations of its customers’ financial condition when it is deemed to be necessary and does not require collateral. The Company provides an allowance for uncollectible accounts based on specifically identified receivables. Bad debt expense is recorded to other non-interest expense on the consolidated statements of income and the allowance for uncollectible accounts is recorded to investment management fees receivable, net on the consolidated statements of financial position. Investment management fees receivable are considered delinquent when payment is not received within contractual terms and are charged off against the allowance for uncollectible accounts when management determines that recovery is unlikely and the Company ceases its collection efforts.
Goodwill and other intangible assets
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is not amortized and is subject to at least annual assessments for impairment by applying a fair value based test. The Company reviews goodwill annually and again at any quarter-end if a material event occurs during the quarter that may affect goodwill. If goodwill testing is required, an assessment of qualitative factors can be completed before performing a goodwill impairment test. If an assessment of qualitative factors determines it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, then a goodwill impairment test is not required. Goodwill is evaluated for potential impairment by determining if the fair value has fallen below carrying value.

Other intangible assets represent purchased assets that may lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. The Company has determined that certain of its acquired mutual fund client relationships meet the criteria to be considered indefinite-lived assets because the Company expects both the renewal of these contracts and the cash flows generated by these assets to continue indefinitely. Accordingly, the Company does not amortize these intangible assets, but instead reviews these assets annually or more frequently whenever events or circumstances occur indicating that the recorded indefinite-lived assets may be impaired. Each reporting period, the Company assesses whether events or circumstances have occurred which indicate that the indefinite life criteria are no longer met. If the indefinite life criteria are no longer met, the Company assesses whether the carrying value of these assets exceeds its fair value. If the carrying value exceeds the fair value of the asset, an impairment loss is recorded in an amount equal to any such excess and the assets are reclassified to finite-lived. Other intangible assets that the Company has determined to have finite lives, such as its trade names, client lists and non-compete agreements are amortized over their estimated useful lives. These finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from four to 25 years. Finite-lived intangibles are evaluated for impairment on an annual basis or more frequently whenever events or circumstances occur indicating that the carrying amount may not be recoverable.
Office properties and equipment
OFFICE PROPERTIES AND EQUIPMENT
Office properties and equipment are stated at cost less accumulated depreciation. Office properties include furniture, fixtures and leasehold improvements. Equipment includes computer equipment and internal use software. Depreciation is computed utilizing the straight-line method over the estimated useful lives of the related assets, except for leasehold improvements, which are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Estimated useful lives are dependent upon the nature and condition of the asset and range from three to 10 years. Repairs and maintenance are charged
to expense as incurred, while improvements that extend the useful life are capitalized and depreciated to non-interest expense over the estimated remaining life of the asset.
Operating leases
OPERATING LEASES
The Company is a lessee in noncancellable operating leases, primarily for its office spaces and other office equipment. The Company accounts for leases in accordance with ASC Topic 842, “Leases,” and records operating leases as a right-of-use asset and an offsetting lease liability in the consolidated statements of financial condition at the present value of the unpaid lease payments. The Company generally uses its incremental borrowing rate as the discount rate for operating leases. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Bank owned life insurance
BANK OWNED LIFE INSURANCE
Bank owned life insurance (“BOLI”) policies on certain officers and employees are recorded at net cash surrender value on the consolidated statements of financial condition. Upon termination of a BOLI policy, the Company receives the cash surrender value. BOLI benefits are payable to the Company upon the death of the insured. Changes in net cash surrender value are recognized as non-interest income in the consolidated statements of income.
Deposits
DEPOSITS
Deposits are stated at principal outstanding. Interest on deposits is accrued and charged to interest expense daily and is paid or credited in accordance with the terms of the respective accounts.
Borrowings
BORROWINGS
The Company records FHLB advances, line of credit borrowings and subordinated notes payable at their principal amount net of debt issuance costs. Interest expense is recognized based on the coupon rate of the obligations. Costs associated with the acquisition of subordinated notes payable are amortized to interest expense over the expected term of the borrowing.
Income taxes
INCOME TAXES
The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the tax effects of differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in income in the period that includes the enactment date. Management assesses all available evidence to determine the amount of deferred tax assets that are more likely than not to be realized. The available evidence used in connection with the assessments includes taxable income in prior periods, projected taxable income, potential tax planning strategies and projected reversals of deferred tax items. These assessments involve a degree of subjectivity and may undergo significant change. Changes to the evidence used in the assessments could have a material adverse effect on the Company’s results of operations in the period in which they occur. The Company considers uncertain tax positions that it has taken or expects to take on a tax return. Any interest and penalties related to unrecognized tax benefits would be recognized in income tax expense in the consolidated statements of income.
Earnings per common share
EARNINGS PER COMMON SHARE
Earnings per common share (“EPS”) is computed using the two-class method, where net income is reduced by dividends declared on our preferred stock to derive net income available to common shareholders. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, excluding non-vested restricted stock. Diluted EPS reflects the potential dilution upon the exercise of stock options and the vesting of restricted stock awards granted utilizing the treasury stock method.
Stock-based compensation
STOCK-BASED COMPENSATION
The Company accounts for its stock-based compensation awards based on estimated fair values of stock-based awards made to employees and directors. Compensation cost for all stock-based payments is based on the estimated grant-date fair value. The value of the portion of the award that is ultimately expected to vest is included in compensation and employee benefits expense in the consolidated statements of income and recorded as a component of additional paid-in capital. Compensation expense for all awards is recognized on a straight-line basis over the requisite service period for the entire grant.
Derivatives and hedging activities
DERIVATIVES AND HEDGING ACTIVITIES
All derivatives are evaluated at inception as to whether or not they are hedging or non-hedging activities. All derivatives are recognized as either assets or liabilities on the consolidated statements of financial condition and measured at fair value. For derivatives designated
as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. For derivatives designated as cash flow hedges, changes in fair value of the effective portion of the cash flow hedges are reported in accumulated other comprehensive income (loss). When the cash flows associated with the hedged item are realized, the gain or loss included in accumulated other comprehensive income (loss) is recognized in the consolidated statements of income. The Company also has interest rate derivative positions that are not designated as hedging instruments. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

The Company executes interest rate derivatives with its commercial banking customers to facilitate their respective risk management strategies which generate swap fee income. Those derivatives are simultaneously and economically hedged by offsetting derivatives that the Company executes with a third party, such that the Company eliminates its interest rate exposure resulting from such transactions and are not designated as hedging instruments. Swap fees are based on the notional amount and weighted maturity of each individual transaction and are collected and recorded to non-interest income in the consolidated statements of income when the transaction is executed.
Fair value measurement
FAIR VALUE MEASUREMENT
Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in a principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date, using assumptions market participants would use when pricing such an asset or liability. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Fair value measurement and disclosure guidance provides a three-level hierarchy that prioritizes the inputs of valuation techniques used to measure fair value into three broad categories:

•
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.
•
Level 2 – Observable inputs such as quoted prices for similar assets and liabilities in active markets, quoted prices for similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
•
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

Fair value must be recorded for certain assets and liabilities every reporting period on a recurring basis or, under certain circumstances, on a non-recurring basis.
Accumulated other comprehensive income (loss)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding gains and the non-credit component of unrealized losses on the Company’s debt securities available-for-sale are included in accumulated other comprehensive income (loss), net of applicable income taxes. Also included in accumulated other comprehensive income (loss) is the remaining unamortized balance of the unrealized holding gains (non-credit losses) net of applicable income taxes, that existed on the transfer date for debt securities reclassified into the held-to-maturity category from the available-for-sale category.

Unrealized holding gains (losses) on the effective portion of the Company’s cash flow hedge derivatives are included in accumulated other comprehensive income (loss), net of applicable income taxes, which will be reclassified to interest expense as interest payments are made on the Company’s debt.

Income tax effects in accumulated other comprehensive income (loss) are released as investments are sold or matured and as liabilities are extinguished.
Treasury stock
TREASURY STOCK
The repurchase of the Company’s common stock is recorded at cost. At the time of reissuance, the treasury stock account is reduced using the average cost method. Gains and losses on the reissuance of common stock are recorded in additional paid-in capital, to the extent additional paid-in capital from any previous net gains on treasury share transactions exists. Any net deficiency is charged to retained earnings.
Reclassification
RECLASSIFICATION
Certain items previously reported have been reclassified to conform with the current year’s reporting presentation and are considered immaterial.

During the six months ended June 30, 2020, the Company made changes to certain Non-Interest Expense line items appearing on the Unaudited Condensed Consolidated Statement of Income to better align with and provide additional clarity on how management views the business. All prior periods have been adjusted to conform the changes and provide comparability to the new presentation.

Marketing and Advertising, which was previously a component of Other Operating Expenses, is now presented separately.

Technology and Data Services is also presented separately and includes data processing expense, data and information services and certain software costs. These costs were previously included in Premises and Equipment.

Telephone expense, which was previously reported as Other Operating Expense, is now presented in Premises and Equipment Expense. Finally Premises and Occupancy Costs was renamed to Premise and Equipment Expense.
v3.20.2
Investment Securities (Tables)
 6 Months Ended
Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
Schedule of investment securities available-for-sale

Debt securities available-for-sale and held-to-maturity were comprised of the following:
 
June 30, 2020
(Dollars in thousands)
Amortized
Cost
Gross Unrealized
Appreciation
Gross Unrealized
Depreciation
Estimated
Fair Value
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
234,193

$
4,198

$
1,706

$
236,685

Trust preferred securities
18,158

—

1,513

16,645

Agency collateralized mortgage obligations
23,806

13

59

23,760

Agency mortgage-backed securities
276,776

1,133

464

277,445

Agency debentures
8,428

814

—

9,242

Total debt securities available-for-sale
561,361

6,158

3,742

563,777

Debt securities held-to-maturity:
 
 
 
 
Corporate bonds
23,676

637

—

24,313

Agency debentures
193,466

1,127

64

194,529

Municipal bonds
13,606

135

—

13,741

Agency mortgage-backed securities
4,335

753

—

5,088

Total debt securities held-to-maturity
235,083

2,652

64

237,671

Total debt securities
$
796,444

$
8,810

$
3,806

$
801,448


 
December 31, 2019
(Dollars in thousands)
Amortized
Cost
Gross Unrealized
Appreciation
Gross Unrealized
Depreciation
Estimated
Fair Value
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
172,704

$
2,821

$
107

$
175,418

Trust preferred securities
18,092

216

48

18,260

Agency collateralized mortgage obligations
27,262

11

80

27,193

Agency mortgage-backed securities
18,058

451

—

18,509

Agency debentures
8,961

441

—

9,402

Total debt securities available-for-sale
245,077

3,940

235

248,782

Debt securities held-to-maturity:
 
 
 
 
Corporate bonds
24,678

619

—

25,297

Agency debentures
149,912

628

935

149,605

Municipal bonds
17,094

144

—

17,238

Agency mortgage-backed securities
4,360

255

—

4,615

Total debt securities held-to-maturity
196,044

1,646

935

196,755

Total debt securities
$
441,121

$
5,586

$
1,170

$
445,537
Schedule of investment securities held-to-maturity

Debt securities available-for-sale and held-to-maturity were comprised of the following:
 
June 30, 2020
(Dollars in thousands)
Amortized
Cost
Gross Unrealized
Appreciation
Gross Unrealized
Depreciation
Estimated
Fair Value
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
234,193

$
4,198

$
1,706

$
236,685

Trust preferred securities
18,158

—

1,513

16,645

Agency collateralized mortgage obligations
23,806

13

59

23,760

Agency mortgage-backed securities
276,776

1,133

464

277,445

Agency debentures
8,428

814

—

9,242

Total debt securities available-for-sale
561,361

6,158

3,742

563,777

Debt securities held-to-maturity:
 
 
 
 
Corporate bonds
23,676

637

—

24,313

Agency debentures
193,466

1,127

64

194,529

Municipal bonds
13,606

135

—

13,741

Agency mortgage-backed securities
4,335

753

—

5,088

Total debt securities held-to-maturity
235,083

2,652

64

237,671

Total debt securities
$
796,444

$
8,810

$
3,806

$
801,448


 
December 31, 2019
(Dollars in thousands)
Amortized
Cost
Gross Unrealized
Appreciation
Gross Unrealized
Depreciation
Estimated
Fair Value
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
172,704

$
2,821

$
107

$
175,418

Trust preferred securities
18,092

216

48

18,260

Agency collateralized mortgage obligations
27,262

11

80

27,193

Agency mortgage-backed securities
18,058

451

—

18,509

Agency debentures
8,961

441

—

9,402

Total debt securities available-for-sale
245,077

3,940

235

248,782

Debt securities held-to-maturity:
 
 
 
 
Corporate bonds
24,678

619

—

25,297

Agency debentures
149,912

628

935

149,605

Municipal bonds
17,094

144

—

17,238

Agency mortgage-backed securities
4,360

255

—

4,615

Total debt securities held-to-maturity
196,044

1,646

935

196,755

Total debt securities
$
441,121

$
5,586

$
1,170

$
445,537
Interest income on investment securities
Interest income on investment securities was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
Taxable interest income
$
3,609

$
3,641

 
$
7,001

$
7,513

Non-taxable interest income
26

101

 
137

205

Dividend income
305

409

 
703

786

Total interest income on investment securities
$
3,940

$
4,151

 
$
7,841

$
8,504
Schedule of contractual maturities of debt securities
As of June 30, 2020, the contractual maturities of the debt securities were:
 
June 30, 2020
 
Available-for-Sale
 
Held-to-Maturity
(Dollars in thousands)
Amortized
Cost
Estimated
Fair Value
 
Amortized
Cost
Estimated
Fair Value
Due in less than one year
$
44,006

$
44,343

 
$
4,519

$
4,529

Due from one to five years
113,409

116,540

 
68,692

69,267

Due from five to ten years
105,683

104,054

 
149,165

149,602

Due after ten years
298,263

298,840

 
12,707

14,273

Total debt securities
$
561,361

$
563,777

 
$
235,083

$
237,671
Schedule of proceeds and realized gains and losses from investments securities
Proceeds from the sale and call of debt securities available-for-sale and held-to-maturity and related gross realized gains and losses were:
 
Available-for-Sale
 
Held-to-Maturity
 
Available-for-Sale
 
Held-to-Maturity
 
Three Months Ended June 30,
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
 
2020
2019
 
2020
2019
Proceeds from sales
$
6,071

$
4,993

 
$
—

$
—

 
$
56,038

$
4,993

 
$
—

$
—

Proceeds from calls
3,580

2,858

 
125,405

95,835

 
3,580

4,082

 
247,758

117,295

Total proceeds
$
9,651

$
7,851

 
$
125,405

$
95,835

 
$
59,618

$
9,075


$
247,758

$
117,295

 
 
 
 
 
 
 
 
 
 
 
 
Gross realized gains
$
6

$
109

 
$
8

$
3

 
$
21

$
126

 
$
50

$
14

Gross realized losses
—

—

 
—

—

 
—

—

 
—

—

Net realized gains
$
6

$
109

 
$
8

$
3

 
$
21

$
126

 
$
50

$
14
Schedule of fair value and gross unrealized losses on investment debt securities
The following tables show the fair value and gross unrealized losses on temporarily impaired debt securities available-for-sale and held-to-maturity, by investment category and length of time that the individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019, respectively:
 
June 30, 2020
 
Less than 12 Months
 
12 Months or More
 
Total
(Dollars in thousands)
Fair value
Unrealized losses
 
Fair value
Unrealized losses
 
Fair value
Unrealized losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
Corporate bonds
$
46,666

$
954

 
$
19,248

$
752

 
$
65,914

$
1,706

Trust preferred securities
16,644

1,513

 
—

—

 
16,644

1,513

Agency collateralized mortgage obligations
1,794

2

 
19,186

57

 
20,980

59

Agency mortgage-backed securities
140,612

464

 
—

—

 
140,612

464

Total debt securities available-for-sale
205,716

2,933

 
38,434

809

 
244,150

3,742

Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
Corporate bonds
—

—

 
—

—

 
—

—

Agency debentures
20,014

64

 
—

—

 
20,014

64

Total debt securities held-to-maturity
20,014

64

 
—

—

 
20,014

64

Total temporarily impaired debt securities (1)
$
225,730

$
2,997

 
$
38,434

$
809

 
$
264,164

$
3,806

(1) 
The number of investment positions with unrealized losses totaled 36 for available-for-sale securities and 1 for held-to-maturity securities.

 
December 31, 2019
 
Less than 12 Months
 
12 Months or More
 
Total
(Dollars in thousands)
Fair value
Unrealized losses
 
Fair value
Unrealized losses
 
Fair value
Unrealized losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
Corporate bonds
$
4,942

$
58

 
$
19,951

$
49

 
$
24,893

$
107

Trust preferred securities
—

—

 
4,417

48

 
4,417

48

Agency collateralized mortgage obligations
22,117

66

 
2,544

14

 
24,661

80

Total debt securities available-for-sale
27,059

124

 
26,912

111

 
53,971

235

Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
Agency debentures
87,879

935

 
—

—

 
87,879

935

Total debt securities held-to-maturity
87,879

935

 
—

—

 
87,879

935

Total temporarily impaired debt securities (1)
$
114,938

$
1,059

 
$
26,912

$
111

 
$
141,850

$
1,170

(1) 
The number of investment positions with unrealized losses totaled 86 for available-for-sale securities and 53 for held-to-maturity securities.
v3.20.2
Loans and Leases (Tables)
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Schedule of loans receivable
Loans and leases held-for-investment were comprised of the following:
 
June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Loans and leases held-for-investment, before deferred fees and costs
$
4,055,115

$
1,148,137

$
1,959,537

$
7,162,789

Deferred loan costs (fees)
8,001

4,743

(4,763
)
7,981

Loans and leases held-for-investment, net of deferred fees and costs
4,063,116

1,152,880

1,954,774

7,170,770

Allowance for loan and lease losses
(2,151
)
(7,546
)
(13,579
)
(23,276
)
Loans and leases held-for-investment, net
$
4,060,965

$
1,145,334

$
1,941,195

$
7,147,494


 
December 31, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Loans and leases held-for-investment, before deferred fees and costs
$
3,688,779

$
1,080,767

$
1,801,375

$
6,570,921

Deferred loan costs (fees)
6,623

4,942

(4,927
)
6,638

Loans and leases held-for-investment, net of deferred fees and costs
3,695,402

1,085,709

1,796,448

6,577,559

Allowance for loan and lease losses
(1,973
)
(5,262
)
(6,873
)
(14,108
)
Loans and leases held-for-investment, net
$
3,693,429

$
1,080,447

$
1,789,575

$
6,563,451
v3.20.2
Allowance for Loan and Lease Losses (Tables)
 6 Months Ended
Jun. 30, 2020
Allowance for Loan and Lease Losses [Abstract]  
Schedule of investment in loans by credit quality indicator
The following tables present the recorded investment in loans by credit quality indicator:
 
June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Pass
$
4,059,835

$
1,144,623

$
1,933,301

$
7,137,759

Special mention
—

7,798

4,625

12,423

Substandard
3,281

459

16,848

20,588

Loans and leases held-for-investment
$
4,063,116

$
1,152,880

$
1,954,774

$
7,170,770


 
December 31, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Pass
$
3,691,866

$
1,069,932

$
1,780,768

$
6,542,566

Special mention
—

15,777

14,284

30,061

Substandard
3,536

—

1,396

4,932

Loans and leases held-for-investment
$
3,695,402

$
1,085,709

$
1,796,448

$
6,577,559
Schedule of change in allowance for loan losses
Changes in the allowance for loan and lease losses were as follows for the three months ended June 30, 2020 and 2019:
 
Three Months Ended June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
2,174

$
6,685

$
8,445

$
17,304

Provision for loan and lease losses
148

723

5,134

6,005

Charge-offs
(171
)
—

—

(171
)
Recoveries
—

138

—

138

Balance, end of period
$
2,151

$
7,546

$
13,579

$
23,276

 
Three Months Ended June 30, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
2,001

$
7,041

$
5,670

$
14,712

Provision (credit) for loan and lease losses
139

(1,146
)
295

(712
)
Charge-offs
—

—

—

—

Recoveries
—

16

—

16

Balance, end of period
$
2,140

$
5,911

$
5,965

$
14,016


Changes in the allowance for loan and lease losses were as follows for the six months ended June 30, 2020 and 2019:
 
Six Months Ended June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
1,973

$
5,262

$
6,873

$
14,108

Provision for loan and lease losses
349

1,943

6,706

8,998

Charge-offs
(171
)
—

—

(171
)
Recoveries
—

341

—

341

Balance, end of period
$
2,151

$
7,546

$
13,579

$
23,276


 
Six Months Ended June 30, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Balance, beginning of period
$
1,942

$
5,764

$
5,502

$
13,208

Provision (credit) for loan and lease losses
198

(1,750
)
463

(1,089
)
Charge-offs
—

—

—

—

Recoveries
—

1,897

—

1,897

Balance, end of period
$
2,140

$
5,911

$
5,965

$
14,016
Schedule of past due loans segregated by class of loan
The following tables present the age analysis of past due loans and leases segregated by class:
 
June 30, 2020
(Dollars in thousands)
30-59 Days Past Due
60-89 Days Past Due
90 Days or More Past Due
Total Past Due
Current
Total
Private banking
$
—

$
—

$
—

$
—

$
4,063,116

$
4,063,116

Commercial and industrial
—

—

—

—

1,152,880

1,152,880

Commercial real estate
—

—

—

—

1,954,774

1,954,774

Loans and leases held-for-investment
$
—

$
—

$
—

$
—

$
7,170,770

$
7,170,770


 
December 31, 2019
(Dollars in thousands)
30-59 Days Past Due
60-89 Days Past Due
90 Days or More Past Due
Total Past Due
Current
Total
Private banking
$
261

$
—

$
184

$
445

$
3,694,957

$
3,695,402

Commercial and industrial
—

—

—

—

1,085,709

1,085,709

Commercial real estate
—

—

—

—

1,796,448

1,796,448

Loans and leases held-for-investment
$
261

$
—

$
184

$
445

$
6,577,114

$
6,577,559
Schedule of investment in loans considered to be impaired
The following tables present the Company’s investment in loans considered to be impaired and related information on those impaired loans:
 
As of and for the Six Months Ended June 30, 2020
(Dollars in thousands)
Recorded Investment
Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
With a related allowance recorded:
 
 
 
 
 
Private banking
$
—

$
—

$
—

$
—

$
—

Commercial and industrial
459

457

69

459

—

Commercial real estate
6,311

6,315

947

6,311

—

Total with a related allowance recorded
6,770

6,772

1,016

6,770

—

Without a related allowance recorded:
 
 
 
 
 
Private banking
10

10

—

12

—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total without a related allowance recorded
10

10

—

12

—

Total:
 
 
 
 
 
Private banking
10

10

—

12

—

Commercial and industrial
459

457

69

459

—

Commercial real estate
6,311

6,315

947

6,311

—

Total
$
6,780

$
6,782

$
1,016

$
6,782

$
—


 
As of and for the Twelve Months Ended December 31, 2019
(Dollars in thousands)
Recorded Investment
Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
With a related allowance recorded:
 
 
 
 
 
Private banking
$
171

$
193

$
171

$
171

$
—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total with a related allowance recorded
171

193

171

171

—

Without a related allowance recorded:
 
 
 
 
 
Private banking
13

13

—

13

—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total without a related allowance recorded
13

13

—

13

—

Total:
 
 
 
 
 
Private banking
184

206

171

184

—

Commercial and industrial
—

—

—

—

—

Commercial real estate
—

—

—

—

—

Total
$
184

$
206

$
171

$
184

$
—
Schedule of allowance for credit losses and investment in loans by class
The following tables present the allowance for loan and lease losses and recorded investment in loans by class:
 
June 30, 2020
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Allowance for loan and lease losses:
 
 
 
 
Individually evaluated for impairment
$
—

$
69

$
947

$
1,016

Collectively evaluated for impairment
2,151

7,477

12,632

22,260

Total allowance for loan and lease losses
$
2,151

$
7,546

$
13,579

$
23,276

Loans and leases held-for-investment:
 
 
 
 
Individually evaluated for impairment
$
10

$
459

$
6,311

$
6,780

Collectively evaluated for impairment
4,063,106

1,152,421

1,948,463

7,163,990

Loans and leases held-for-investment
$
4,063,116

$
1,152,880

$
1,954,774

$
7,170,770


 
December 31, 2019
(Dollars in thousands)
Private
Banking
Commercial
and
Industrial
Commercial
Real Estate
Total
Allowance for loan and lease losses:
 
 
 
 
Individually evaluated for impairment
$
171

$
—

$
—

$
171

Collectively evaluated for impairment
1,802

5,262

6,873

13,937

Total allowance for loan and lease losses
$
1,973

$
5,262

$
6,873

$
14,108

Loans and leases held-for-investment:
 
 
 
 
Individually evaluated for impairment
$
184

$
—

$
—

$
184

Collectively evaluated for impairment
3,695,218

1,085,709

1,796,448

6,577,375

Loans and leases held-for-investment
$
3,695,402

$
1,085,709

$
1,796,448

$
6,577,559
v3.20.2
Deposits (Tables)
 6 Months Ended
Jun. 30, 2020
Deposits [Abstract]  
Schedule of deposits

As of June 30, 2020 and December 31, 2019, deposits were comprised of the following:
 
Interest Rate
Range
 
Weighted Average
Interest Rate
 
Balance
(Dollars in thousands)
June 30,
2020
 
June 30,
2020
December 31,
2019
 
June 30,
2020
December 31,
2019
Demand and savings accounts:
 
 
 
 
 
 
 
Noninterest-bearing checking accounts
—
 
—
—
 
$
422,341

$
356,102

Interest-bearing checking accounts
0.05 to 1.70%
 
0.44%
1.57%
 
2,664,864

1,398,264

Money market deposit accounts
0.10 to 3.25%
 
0.71%
1.84%
 
3,547,518

3,426,745

Total demand and savings accounts
 
 
 
 
 
6,634,723

5,181,111

Certificates of deposit
0.15 to 3.25%
 
1.51%
2.24%
 
1,196,748

1,453,502

Total deposits
 
 
 
 
 
$
7,831,471

$
6,634,613

Weighted average rate on interest-bearing accounts
 
 
0.74%
1.87%
 
 
 
Schedule of maturities of time deposits
The contractual maturity of certificates of deposit was as follows:
(Dollars in thousands)
June 30,
2020
December 31,
2019
12 months or less
$
1,083,693

$
1,244,838

12 months to 24 months
96,517

168,437

24 months to 36 months
16,538

40,227

Total
$
1,196,748

$
1,453,502
Schedule of interest expense on deposits by type of deposit
Interest expense on deposits was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
Interest-bearing checking accounts
$
2,719

$
4,965

 
$
7,933

$
9,508

Money market deposit accounts
7,377

18,200

 
22,031

34,739

Certificates of deposit
5,857

8,990

 
13,233

17,241

Total interest expense on deposits
$
15,953

$
32,155

 
$
43,197

$
61,488
v3.20.2
Borrowings (Tables)
 6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Schedule of borrowings

As of June 30, 2020 and December 31, 2019, borrowings were comprised of the following:
 
June 30, 2020
 
December 31, 2019
(Dollars in thousands)
Interest Rate
Ending Balance
Maturity Date
 
Interest Rate
Ending Balance
Maturity Date
FHLB borrowings:
 
 
 
 
 
 
 
FHLB line of credit
—%
$
—

 
 
1.81%
$
55,000

5/1/2020
Issued 4/8/2020
0.60%
50,000

7/8/2020
 
—%
—

 
Issued 6/1/2020
0.46%
150,000

9/1/2020
 
—%
—

 
Issued 6/2/2020
0.46%
50,000

9/2/2020
 
—%
—

 
Issued 6/22/2020
0.47%
50,000

9/21/2020
 
—%
—

 
Issued 12/12/2019
—%
—

 
 
1.85%
100,000

1/13/2020
Issued 12/2/2019
—%
—

 
 
1.91%
150,000

3/2/2020
Issued 10/8/2019
—%
—

 
 
2.00%
50,000

1/8/2020
Subordinated notes payable (net of debt issuance costs of $1,948 and $0, respectively)
5.75%
95,552

5/15/2030
 
—%
—

 
Total borrowings, net
 
$
395,552

 
 
 
$
355,000

 
Schedule of interest expense on borrowings
Interest expense on borrowings was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
2019
 
2020
2019
FHLB borrowings
$
1,284

$
2,334

 
$
3,319

$
4,920

Line of credit borrowings
260

10

 
261

68

Subordinated notes payable
680

537

 
680

1,090

Total interest expense on borrowings
$
2,224

$
2,881

 
$
4,260

$
6,078
v3.20.2
Stock Transactions (Tables)
 6 Months Ended
Jun. 30, 2020
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract]  
Schedule of preferred and common shares, activity
The tables below show the changes in the Company’s preferred and common shares outstanding during the periods indicated:
 
Number of
Preferred Shares Outstanding
Number of
Common Shares
Outstanding
Number of
Treasury Shares
Balance, December 31, 2018
40,250

28,878,674

2,014,910

Issuance of preferred stock
80,500

—

—

Issuance of restricted common stock
—

542,703

—

Forfeitures of restricted common stock
—

(69,605
)
—

Exercise of stock options
—

22,380

—

Purchase of treasury stock through open market transactions
—

(35,000
)
35,000

Increase in treasury stock related to equity awards
—

—

—

Balance, June 30, 2019
120,750

29,339,152

2,049,910

 
 
 
 
Balance, December 31, 2019
120,750

29,355,986

2,126,422

Issuance of restricted common stock
—

597,070

—

Forfeitures of restricted common stock
—

(11,018
)
—

Exercise of stock options
—

25,000

—

Purchase of treasury stock through open market transactions
—

(40,000
)
40,000

Increase in treasury stock related to equity awards
—

(83,988
)
83,988

Reissuance of treasury stock
—

8,500

(8,500
)
Balance, June 30, 2020
120,750

29,851,550

2,241,910
v3.20.2
Regulatory Capital (Tables)
 6 Months Ended
Jun. 30, 2020
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]  
Schedule of compliance with regulatory capital requirements under banking regulations
The following tables set forth certain information concerning the Company’s and the Bank’s regulatory capital as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
 
Actual
 
For Capital Adequacy Purposes
 
To be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)
Amount
Ratio
 
Amount
Ratio
 
Amount
Ratio
Total risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
699,015

12.89
%
 
$
433,732

8.00
%
 
 N/A

N/A

Bank
$
677,080

12.52
%
 
$
432,764

8.00
%
 
$
540,955

10.00
%
Tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
579,146

10.68
%
 
$
325,299

6.00
%
 
 N/A

N/A

Bank
$
652,763

12.07
%
 
$
324,573

6.00
%
 
$
432,764

8.00
%
Common equity tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
463,067

8.54
%
 
$
243,975

4.50
%
 
 N/A

N/A

Bank
$
652,763

12.07
%
 
$
243,430

4.50
%
 
$
351,621

6.50
%
Tier 1 leverage ratio
 
 
 
 
 
 
 
 
Company
$
579,146

6.30
%
 
$
367,538

4.00
%
 
 N/A

N/A

Bank
$
652,763

7.11
%
 
$
367,000

4.00
%
 
$
458,750

5.00
%

 
December 31, 2019
 
Actual
 
For Capital Adequacy Purposes
 
To be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)
Amount
Ratio
 
Amount
Ratio
 
Amount
Ratio
Total risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
572,221

12.05
%
 
$
379,911

8.00
%
 
 N/A

N/A

Bank
$
547,532

11.57
%
 
$
378,623

8.00
%
 
$
473,279

10.00
%
Tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
558,068

11.75
%
 
$
284,933

6.00
%
 
 N/A

N/A

Bank
$
532,779

11.26
%
 
$
283,967

6.00
%
 
$
378,623

8.00
%
Common equity tier 1 risk-based capital ratio
 
 
 
 
 
 
 
 
Company
$
442,385

9.32
%
 
$
213,700

4.50
%
 
 N/A

N/A

Bank
$
532,779

11.26
%
 
$
212,975

4.50
%
 
$
307,631

6.50
%
Tier 1 leverage ratio
 
 
 
 
 
 
 
 
Company
$
558,068

7.54
%
 
$
296,038

4.00
%
 
 N/A

N/A

Bank
$
532,779

7.22
%
 
$
295,277

4.00
%
 
$
369,097

5.00
%
v3.20.2
Earnings Per Common Share (Tables)
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Schedule of earnings per share, basic and diluted

The computation of basic and diluted earnings per common share for the periods presented was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands, except per share data)
2020
2019
 
2020
2019
 
 
 
 
 
 
Net income available to common shareholders
$
8,439

$
13,541

 
$
19,372

$
27,426

Weighted average common shares outstanding:
 
 
 
 
 
Basic
28,223,085

27,887,599

 
28,201,837

27,860,370

Restricted stock - dilutive
221,456

562,226

 
324,498

550,903

Stock options - dilutive
83,420

340,848

 
161,469

336,445

Diluted
28,527,961

28,790,673

 
28,687,804

28,747,718

 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
Basic
$
0.30

$
0.49

 
$
0.69

$
0.98

Diluted
$
0.30

$
0.47

 
$
0.68

$
0.95
Schedule of antidilutive securities excluded from computation of earnings per share
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
2019
 
2020
2019
Anti-dilutive shares (1)
869,746

6,000

 
566,498

13,000

(1) 
Includes stock options and/or restricted stock not considered for the calculation of diluted EPS as their inclusion would have been anti-dilutive.
v3.20.2
Derivatives and Hedging Activity (Tables)
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of derivative instruments in statement of financial position, fair value
The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the unaudited condensed consolidated statements of financial condition as of June 30, 2020 and December 31, 2019:
 
Asset Derivatives
 
Liability Derivatives
 
as of June 30, 2020
 
as of June 30, 2020
(Dollars in thousands)
Balance Sheet Location
Fair Value
 
Balance Sheet Location
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
$
—

 
Other liabilities
$
11,161

 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
171,967

 
Other liabilities
172,091

 
 
 
 
 
 
Total
Other assets
$
171,967

 
Other liabilities
$
183,252


 
Asset Derivatives
 
Liability Derivatives
 
as of December 31, 2019
 
as of December 31, 2019
(Dollars in thousands)
Balance Sheet Location
Fair Value
 
Balance Sheet Location
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
$
—

 
Other liabilities
$
2,184

 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
Interest rate products
Other assets
55,241

 
Other liabilities
55,289

 
 
 
 
 
 
Total
Other assets
$
55,241

 
Other liabilities
$
57,473
Schedule of offsetting derivative assets
The following tables show the impact legally enforceable master netting agreements had on the Company’s derivative financial instruments as of June 30, 2020 and December 31, 2019:
 
Offsetting of Derivative Assets
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Assets
presented in the Statement of Financial Position
 
Gross Amounts Not Offset in the Statement of Financial Position
 
Net Amount
 
 
 
 
 
(Dollars in thousands)
 
 
 
Financial Instruments
 
Cash Collateral Received
 
June 30, 2020
$
171,967

 
$
—

 
$
171,967

 
$
—

 
$
—

 
$
171,967

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
$
55,241

 
$
—

 
$
55,241

 
$
(850
)
 
$
—

 
$
54,391
Schedule of offsetting derivative liabilities
 
Offsetting of Derivative Liabilities
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amounts of Liabilities
presented in the Statement of Financial Position
 
Gross Amounts Not Offset in the Statement of Financial Position
 
Net Amount
 
 
 
 
 
(Dollars in thousands)
 
 
 
Financial Instruments
 
Cash Collateral Posted
 
June 30, 2020
$
183,252

 
$
—

 
$
183,252

 
$
—

 
$
(183,227
)
 
$
25

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
$
57,473

 
$
—

 
$
57,473

 
$
(850
)
 
$
(55,753
)
 
$
870
Schedule of interest rate derivative transactions
Characteristics of the Company’s interest rate derivative transactions designated as cash flow hedges of interest rate risk as of June 30, 2020, were as follows:
(Dollars in thousands)
Notional
Amount
Effective
Rate (1)
Estimated Increase/
(Decrease) to Interest
Expense in the Next
Twelve Months
Maturity
Date
Remaining Term
(in Months)
Interest rate products:
 
 
 
 
 
Issued 1/8/2018
$
50,000

2.21%
$
501

1/8/2021
6
Issued 5/30/2019
50,000

2.05%
903

6/1/2022
23
Issued 5/30/2019
50,000

2.03%
895

6/1/2023
35
Issued 5/30/2019
50,000

2.04%
901

6/1/2024
47
Issued 3/2/2020
50,000

0.98%
364

3/2/2025
56
Issued 3/20/2020
50,000

0.60%
174

3/20/2025
57
Total
$
300,000

 
$
3,738

 
 

(1) 
The effective rate is adjusted for the difference between the three-month FHLB advance rate and three-month LIBOR.
Schedule of derivative instruments, gain (loss) in statement of financial performance
The tables below present the effective portion of the Company’s cash flow hedge instruments in the unaudited condensed consolidated statements of income and accumulated other comprehensive income (loss):
 
 
 
Three Months Ended June 30,
 
Three Months Ended June 30,
(Dollars in thousands)
 
 
2020
2019
 
2020
2019
Derivatives designated as hedging instruments:
Location of Gain (Loss) Recognized in Income on Derivatives
 
Realized Gain (Loss) Recognized in Income on Derivatives
 
Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives
Interest rate products
Interest expense
 
$
(460
)
$
560

 
$
(1,578
)
$
(2,118
)

 
 
 
Six Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
 
 
2020
2019
 
2020
2019
Derivatives designated as hedging instruments:
Location of Gain (Loss) Recognized in Income on Derivatives
 
Realized Gain (Loss) Recognized in Income on Derivatives
 
Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives
Interest rate products
Interest expense
 
$
(619
)
$
1,121

 
$
(9,290
)
$
(2,325
)

The table below presents the effect of the Company’s non-designated hedge instruments in the unaudited condensed consolidated statements of income:
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
 
 
2020
2019
 
2020
2019
Derivatives not designated as hedging instruments:
Location of Gain (Loss) Recognized in Income on Derivatives
 
Amount of Gain (Loss) Recognized in Income on Derivatives
 
Amount of Gain (Loss) Recognized in Income on Derivatives
Interest rate products
Non-interest income
 
$
(4
)
$
(22
)
 
$
(66
)
$
(42
)
Equity products
Non-interest income
 
—

(77
)
 
—

(77
)
Total
 
 
$
(4
)
$
(99
)
 
$
(66
)
$
(119
)
v3.20.2
Disclosures About Fair Value of Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Schedule of fair value, assets and liabilities measured on recurring basis
The following tables represent assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets /
Liabilities
at Fair Value
Financial assets:
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
—

$
236,685

$
—

$
236,685

Trust preferred securities
—

16,645

—

16,645

Agency collateralized mortgage obligations
—

23,760

—

23,760

Agency mortgage-backed securities
—

277,445

—

277,445

Agency debentures
—

9,242

—

9,242

Interest rate swaps
—

171,967

—

171,967

Total financial assets
—

735,744

—

735,744

 
 
 
 
 
Financial liabilities:
 
 
 
 
Interest rate swaps
—

183,252

—

183,252

Total financial liabilities
$
—

$
183,252

$
—

$
183,252


 
December 31, 2019
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets /
Liabilities
at Fair Value
Financial assets:
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
Corporate bonds
$
—

$
175,418

$
—

$
175,418

Trust preferred securities
—

18,260

—

18,260

Agency collateralized mortgage obligations
—

27,193

—

27,193

Agency mortgage-backed securities
—

18,509

—

18,509

Agency debentures
—

9,402

—

9,402

Interest rate swaps
—

55,241

—

55,241

Total financial assets
—

304,023

—

304,023

 
 
 
 
 
Financial liabilities:
 
 
 
 
Interest rate swaps
—

57,473

—

57,473

Total financial liabilities
$
—

$
57,473

$
—

$
57,473
Schedule of fair value measurements, nonrecurring
The following tables represent the balances of assets measured at fair value on a non-recurring basis as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets
at Fair Value
Loans measured for impairment, net
$
—

$
—

$
5,764

$
5,764

Other real estate owned
—

—

2,724

2,724

Total assets
$
—

$
—

$
8,488

$
8,488


 
December 31, 2019
(Dollars in thousands)
Level 1
Level 2
Level 3
Total Assets
at Fair Value
Loans measured for impairment, net
$
—

$
—

$
13

$
13

Other real estate owned
—

—

4,250

4,250

Total assets
$
—

$
—

$
4,263

$
4,263
Schedule of fair value inputs, assets, quantitative information
The following tables present additional quantitative information about assets measured at fair value on a recurring and non-recurring basis and for which we have utilized Level 3 inputs to determine fair value as of June 30, 2020 and December 31, 2019:
 
June 30, 2020
(Dollars in thousands)
Fair Value
 
Valuation Techniques (1)
 
Significant Unobservable Inputs
 
Weighted Average Discount Rate
Loans measured for impairment, net
$
5,764

 
Collateral
 
Appraisal value and discount due to salability conditions
 
27%
 
 
 
 
 
 
 
 
Other real estate owned
$
2,724

 
Collateral
 
Appraisal value and discount due to salability conditions
 
20%
(1) 
Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent.
 
December 31, 2019
(Dollars in thousands)
Fair Value
 
Valuation Techniques (1)
 
Significant Unobservable Inputs
 
Weighted Average Multiple/
Discount Rate
Loans measured for impairment, net
$
13

 
Collateral
 
Appraisal value and discount due to salability conditions
 
—%
 
 
 
 
 
 
 
 
Other real estate owned
$
4,250

 
Collateral
 
Appraisal value and discount due to salability conditions
 
17%
(1) 
Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow of ongoing operations if the loan is not collateral dependent.
Schedule of fair and carrying value of financial assets and liabilities
The following table summarizes of the carrying amounts and estimated fair values of financial instruments:
 
 
 
June 30, 2020
 
December 31, 2019
(Dollars in thousands)
Fair Value
Level
 
Carrying
Amount
Estimated
Fair Value
 
Carrying
Amount
Estimated
Fair Value
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
1
 
$
724,942

$
724,942

 
$
403,855

$
403,855

Debt securities available-for-sale
2
 
563,777

563,777

 
248,782

248,782

Debt securities held-to-maturity
2
 
235,083

237,671

 
196,044

196,755

Federal Home Loan Bank stock
2
 
13,280

13,280

 
24,324

24,324

Loans and leases held-for-investment, net
3
 
7,147,494

7,198,597

 
6,563,451

6,548,432

Accrued interest receivable
2
 
18,534

18,534

 
22,326

22,326

Investment management fees receivable, net
2
 
6,907

6,907

 
7,560

7,560

Bank owned life insurance
2
 
70,901

70,901

 
70,044

70,044

Other real estate owned
3
 
2,724

2,724

 
4,250

4,250

Interest rate swaps
2
 
171,967

171,967

 
55,241

55,241

 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
Deposits
2
 
$
7,831,471

$
7,861,737

 
$
6,634,613

$
6,648,546

Borrowings, net
2
 
395,552

397,608

 
355,000

355,003

Interest rate swaps
2
 
183,252

183,252

 
57,473

57,473
v3.20.2
Changes in Accumulated Other Comprehensive Income (Loss) (Tables)
 6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Schedule of changes in accumulated other comprehensive income (loss)

The following tables show the changes in accumulated other comprehensive income (loss) net of tax, for the periods presented:
 
Three Months Ended June 30,
 
2020
 
2019
(Dollars in thousands)
Debt Securities
Derivatives
Total
 
Debt Securities
Derivatives
Total
Balance, beginning of period
$
(6,678
)
$
(7,371
)
$
(14,049
)
 
$
54

$
448

$
502

Change in unrealized holding gains (losses)
8,375

(1,200
)
7,175

 
1,259

(1,612
)
(353
)
Losses (gains) reclassified from other comprehensive income
(5
)
349

344

 
(83
)
(426
)
(509
)
Net other comprehensive income (loss)
8,370

(851
)
7,519

 
1,176

(2,038
)
(862
)
Balance, end of period
$
1,692

$
(8,222
)
$
(6,530
)
 
$
1,230

$
(1,590
)
$
(360
)


 
Six Months Ended June 30,
 
2020
 
2019
(Dollars in thousands)
Debt Securities
Derivatives
Total
 
Debt Securities
Derivatives
Total
Balance, beginning of period
$
2,756

$
(1,624
)
$
1,132

 
$
(2,363
)
$
1,032

$
(1,331
)
Change in unrealized holding gains (losses)
(1,048
)
(7,067
)
(8,115
)
 
3,689

(1,769
)
1,920

Losses (gains) reclassified from other comprehensive income
(16
)
469

453

 
(96
)
(853
)
(949
)
Net other comprehensive income (loss)
(1,064
)
(6,598
)
(7,662
)
 
3,593

(2,622
)
971

Balance, end of period
$
1,692

$
(8,222
)
$
(6,530
)
 
$
1,230

$
(1,590
)
$
(360
)
v3.20.2
Segments (Tables)
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Schedule of segment reporting information, by segment
The following tables provide financial information for the two segments of the Company as of and for the periods indicated. The information provided under the caption “Parent and Other” represents general operating activity of the Company not considered to be a reportable segment, which includes parent company activity as well as eliminations and adjustments that are necessary for purposes of reconciliation to the consolidated amounts.
(Dollars in thousands)
June 30,
2020
December 31,
2019
Assets:
 
Bank
$
9,057,476

$
7,686,981

Investment management
82,966

83,295

Parent and other
(10,601
)
(4,466
)
Total assets
$
9,129,841

$
7,765,810


 
Three Months Ended June 30, 2020
 
Three Months Ended June 30, 2019
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
Interest income
$
51,661

$
—

$
—

$
51,661

 
$
66,311

$
—

$
28

$
66,339

Interest expense
17,251

—

926

18,177

 
34,517

—

519

35,036

Net interest income (loss)
34,410

—

(926
)
33,484

 
31,794

—

(491
)
31,303

Provision (credit) for loan and lease losses
6,005

—

—

6,005

 
(712
)
—

—

(712
)
Net interest income (loss) after provision for loan and lease losses
28,405

—

(926
)
27,479

 
32,506

—

(491
)
32,015

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees
—

7,897

(159
)
7,738

 
—

9,364

(110
)
9,254

Net gain on the sale and call of debt securities
14

—

—

14

 
112

—

—

112

Other non-interest income
5,215

30

—

5,245

 
2,478

4

131

2,613

Total non-interest income (loss)
5,229

7,927

(159
)
12,997

 
2,590

9,368

21

11,979

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense
—

486

—

486

 
—

502

—

502

Other non-interest expense
19,967

7,003

640

27,610

 
18,903

7,930

250

27,083

Total non-interest expense
19,967

7,489

640

28,096

 
18,903

8,432

250

27,585

Income (loss) before tax
13,667

438

(1,725
)
12,380

 
16,193

936

(720
)
16,409

Income tax expense (benefit)
2,173

102

(296
)
1,979

 
1,658

264

(204
)
1,718

Net income (loss)
$
11,494

$
336

$
(1,429
)
$
10,401

 
$
14,535

$
672

$
(516
)
$
14,691

 
Six Months Ended June 30, 2020
 
Six Months Ended June 30, 2019
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
Interest income
$
115,863

$
—

$
—

$
115,863

 
$
129,142

$
—

$
99

$
129,241

Interest expense
46,547

—

910

47,457

 
66,436

—

1,130

67,566

Net interest income (loss)
69,316

—

(910
)
68,406

 
62,706

—

(1,031
)
61,675

Provision (credit) for loan and lease losses
8,998

—

—

8,998

 
(1,089
)
—

—

(1,089
)
Net interest income (loss) after provision for loan and lease losses
60,318

—

(910
)
59,408

 
63,795

—

(1,031
)
62,764

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees
—

15,662

(286
)
15,376

 
—

18,896

(218
)
18,678

Net gain on the sale and call of debt securities
71

—

—

71

 
140

—

—

140

Other non-interest income
10,866

—

—

10,866

 
5,355

25

850

6,230

Total non-interest income (loss)
10,937

15,662

(286
)
26,313

 
5,495

18,921

632

25,048

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense
—

988

—

988

 
—

1,004

—

1,004

Other non-interest expense
41,000

13,630

1,622

56,252

 
37,923

14,987

343

53,253

Total non-interest expense
41,000

14,618

1,622

57,240

 
37,923

15,991

343

54,257

Income (loss) before tax
30,255

1,044

(2,818
)
28,481

 
31,367

2,930

(742
)
33,555

Income tax expense (benefit)
5,521

130

(466
)
5,185

 
3,683

827

(210
)
4,300

Net income (loss)
$
24,734

$
914

$
(2,352
)
$
23,296

 
$
27,684

$
2,103

$
(532
)
$
29,255
v3.20.2
Basis of Information and Summary of Significant Accounting Policies - Narrative (Details)
 6 Months Ended
Jun. 30, 2020
USD ($)
offices
portfolio
subsidiary
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Significant Accounting Policies [Line Items]      
Number of wholly owned subsidiaries | subsidiary 3    
Number of loan portfolios | portfolio 3    
Bad debt expense | $ $ 0 $ 0  
Allowance for uncollectible accounts | $ $ 0   $ 0
Maximum      
Significant Accounting Policies [Line Items]      
Original maturity of short-term investments (in days) 90 days    
Estimated useful lives of intangible assets (in years) 25 years    
Estimated useful lives of office properties and equipment (in years) 10 years    
Minimum      
Significant Accounting Policies [Line Items]      
Past due period for loans (in days) 90 days    
Consecutive period loan is current (in months) 6 months    
Estimated useful lives of intangible assets (in years) 4 years    
Estimated useful lives of office properties and equipment (in years) 3 years    
Bank      
Significant Accounting Policies [Line Items]      
Number of wholly owned subsidiaries | subsidiary 2    
Number of representative offices, additional to main office | offices 4    
v3.20.2
Investment Securities - Investment Types (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Debt securities available-for-sale:    
Amortized Cost $ 561,361 $ 245,077
Gross Unrealized Appreciation 6,158 3,940
Gross Unrealized Depreciation 3,742 235
Debt securities available-for-sale 563,777 248,782
Debt securities held-to-maturity:    
Amortized Cost 235,083 196,044
Gross Unrealized Appreciation 2,652 1,646
Gross Unrealized Depreciation 64 935
Estimated Fair Value 237,671 196,755
Amortized Cost 796,444 441,121
Gross Unrealized Appreciation 8,810 5,586
Gross Unrealized Depreciation 3,806 1,170
Estimated Fair Value 801,448 445,537
Corporate bonds    
Debt securities available-for-sale:    
Amortized Cost 234,193 172,704
Gross Unrealized Appreciation 4,198 2,821
Gross Unrealized Depreciation 1,706 107
Debt securities available-for-sale 236,685 175,418
Debt securities held-to-maturity:    
Amortized Cost 23,676 24,678
Gross Unrealized Appreciation 637 619
Gross Unrealized Depreciation 0 0
Estimated Fair Value 24,313 25,297
Trust preferred securities    
Debt securities available-for-sale:    
Amortized Cost 18,158 18,092
Gross Unrealized Appreciation 0 216
Gross Unrealized Depreciation 1,513 48
Debt securities available-for-sale 16,645 18,260
Agency collateralized mortgage obligations    
Debt securities available-for-sale:    
Amortized Cost 23,806 27,262
Gross Unrealized Appreciation 13 11
Gross Unrealized Depreciation 59 80
Debt securities available-for-sale 23,760 27,193
Agency mortgage-backed securities    
Debt securities available-for-sale:    
Amortized Cost 276,776 18,058
Gross Unrealized Appreciation 1,133 451
Gross Unrealized Depreciation 464 0
Debt securities available-for-sale 277,445 18,509
Debt securities held-to-maturity:    
Amortized Cost 4,335 4,360
Gross Unrealized Appreciation 753 255
Gross Unrealized Depreciation 0 0
Estimated Fair Value 5,088 4,615
Agency debentures    
Debt securities available-for-sale:    
Amortized Cost 8,428 8,961
Gross Unrealized Appreciation 814 441
Gross Unrealized Depreciation 0 0
Debt securities available-for-sale 9,242 9,402
Debt securities held-to-maturity:    
Amortized Cost 193,466 149,912
Gross Unrealized Appreciation 1,127 628
Gross Unrealized Depreciation 64 935
Estimated Fair Value 194,529 149,605
Municipal bonds    
Debt securities held-to-maturity:    
Amortized Cost 13,606 17,094
Gross Unrealized Appreciation 135 144
Gross Unrealized Depreciation 0 0
Estimated Fair Value $ 13,741 $ 17,238
v3.20.2
Investment Securities - Interest Income on Investment Securities (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]        
Taxable interest income $ 3,609 $ 3,641 $ 7,001 $ 7,513
Non-taxable interest income 26 101 137 205
Dividend income 305 409 703 786
Total interest income on investment securities $ 3,940 $ 4,151 $ 7,841 $ 8,504
v3.20.2
Investment Securities - Contractual Maturities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Available-for-sale Securities, Debt Maturities, Amortized Cost    
Due in less than one year $ 44,006  
Due from one to five years 113,409  
Due from five to ten years 105,683  
Due after ten years 298,263  
Amortized Cost 561,361 $ 245,077
Available-for-sale Securities, Debt Maturities, Estimated Fair Value    
Due in less than one year 44,343  
Due from one to five years 116,540  
Due from five to ten years 104,054  
Due after ten years 298,840  
Estimated Fair Value 563,777 248,782
Held-to-maturity Securities, Debt Maturities, Amortized Cost    
Due in less than one year 4,519  
Due from one to five years 68,692  
Due from five to ten years 149,165  
Due after ten years 12,707  
Amortized Cost 235,083 196,044
Held-to-maturity Securities, Debt Maturities, Estimated Fair Value    
Due in less than one year 4,529  
Due from one to five years 69,267  
Due from five to ten years 149,602  
Due after ten years 14,273  
Estimated Fair Value $ 237,671 $ 196,755
v3.20.2
Investment Securities - Narrative (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale securities with a contractual maturity due after ten years $ 298,840,000  
Floating rate available-for-sale securities with a contractual maturity due after ten years $ 33,000,000.0  
Percent of floating rate available-for-sale securities with a contractual maturity due after ten years 11.00%  
Held-to-maturity securities, debt maturities due from five to ten years $ 149,165,000  
Held-to-maturity securities, debt maturities due from five to ten years, callable 17,300,000  
Held-to-maturity securities pledged as collateral 35,100,000  
Debt securities trading 0 $ 0
Federal Home Loan Bank stock 13,280,000 $ 24,324,000
Federal Home Loan Bank    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale securities available to be pledged as collateral for borrowings $ 2,600,000  
v3.20.2
Investment Securities - Gains and Losses on Sales and Calls of Investment Securities (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]        
Proceeds from sale of available-for-sale securities $ 6,071 $ 4,993 $ 56,038 $ 4,993
Proceeds from call of available-for-sale securities 3,580 2,858 3,580 4,082
Total proceeds from sale and call of available-for-sale securities 9,651 7,851 59,618 9,075
Gross realized gains on available-for-sale securities 6 109 21 126
Gross realized losses on available-for-sale securities 0 0 0 0
Net realized gains on sale and call of available-for-sale securities 6 109 21 126
Proceeds from sale of held-to-maturity securities 0 0 0 0
Proceeds from call of held-to-maturity securities 125,405 95,835 247,758 117,295
Total proceeds from sale and call of held-to-maturity securities 125,405 95,835 247,758 117,295
Gross realized gains on held-to-maturity securities 8 3 50 14
Gross realized losses on held-to-maturity securities 0 0 0 0
Net realized gains on sale and call of held-to-maturity securities $ 8 $ 3 $ 50 $ 14
v3.20.2
Investment Securities - Unrealized Losses (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
position
Dec. 31, 2019
USD ($)
position
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months $ 205,716 $ 27,059
12 Months or More 38,434 26,912
Total 244,150 53,971
Unrealized losses, Debt securities available-for-sale    
Less than 12 Months 2,933 124
12 Months or More 809 111
Total 3,742 235
Fair value, Debt securities held-to-maturity    
Less than 12 Months 20,014 87,879
12 Months or More 0 0
Total 20,014 87,879
Unrealized losses, Debt securities held-to-maturity    
Less than 12 Months 64 935
12 Months or More 0 0
Total 64 935
Less than 12 months, fair value, total impaired securities 225,730 114,938
Less than 12 months, unrealized losses, total impaired securities 2,997 1,059
12 months or more, fair value, total impaired securities 38,434 26,912
12 months or more, unrealized losses, total impaired securities 809 111
Total, fair value, total impaired securities 264,164 141,850
Total, unrealized losses, total impaired securities $ 3,806 $ 1,170
Available-for-sale, number of positions in an unrealized loss position | position 36 86
Held-to-maturity, number of positions in an unrealized loss position | position 1 53
Corporate bonds    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months $ 46,666 $ 4,942
12 Months or More 19,248 19,951
Total 65,914 24,893
Unrealized losses, Debt securities available-for-sale    
Less than 12 Months 954 58
12 Months or More 752 49
Total 1,706 107
Fair value, Debt securities held-to-maturity    
Less than 12 Months 0  
12 Months or More 0  
Total 0  
Unrealized losses, Debt securities held-to-maturity    
Less than 12 Months 0  
12 Months or More 0  
Total 0  
Trust preferred securities    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months 16,644 0
12 Months or More 0 4,417
Total 16,644 4,417
Unrealized losses, Debt securities available-for-sale    
Less than 12 Months 1,513 0
12 Months or More 0 48
Total 1,513 48
Agency collateralized mortgage obligations    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months 1,794 22,117
12 Months or More 19,186 2,544
Total 20,980 24,661
Unrealized losses, Debt securities available-for-sale    
Less than 12 Months 2 66
12 Months or More 57 14
Total 59 80
Agency mortgage-backed securities    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months 140,612  
12 Months or More 0  
Total 140,612  
Unrealized losses, Debt securities available-for-sale    
Less than 12 Months 464  
12 Months or More 0  
Total 464  
Agency debentures    
Fair value, Debt securities held-to-maturity    
Less than 12 Months 20,014 87,879
12 Months or More 0 0
Total 20,014 87,879
Unrealized losses, Debt securities held-to-maturity    
Less than 12 Months 64 935
12 Months or More 0 0
Total $ 64 $ 935
v3.20.2
Loans and Leases - Loans and Leases by Class (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, net of deferred fees and costs $ 7,170,770   $ 6,577,559      
Allowance for loan and lease losses (23,276) $ (17,304) (14,108) $ (14,016) $ (14,712) $ (13,208)
Loans and leases held-for-investment, net 7,147,494   6,563,451      
Loans receivable            
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, before deferred fees and costs 7,162,789   6,570,921      
Deferred loan costs (fees) 7,981   6,638      
Loans and leases held-for-investment, net of deferred fees and costs 7,170,770   6,577,559      
Allowance for loan and lease losses (23,276)   (14,108)      
Loans and leases held-for-investment, net 7,147,494   6,563,451      
Private Banking            
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, net of deferred fees and costs 4,063,116   3,695,402      
Allowance for loan and lease losses (2,151) (2,174) (1,973) (2,140) (2,001) (1,942)
Private Banking | Loans receivable            
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, before deferred fees and costs 4,055,115   3,688,779      
Deferred loan costs (fees) 8,001   6,623      
Loans and leases held-for-investment, net of deferred fees and costs 4,063,116   3,695,402      
Allowance for loan and lease losses (2,151)   (1,973)      
Loans and leases held-for-investment, net 4,060,965   3,693,429      
Commercial and Industrial            
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, net of deferred fees and costs 1,152,880   1,085,709      
Allowance for loan and lease losses (7,546) (6,685) (5,262) (5,911) (7,041) (5,764)
Commercial and Industrial | Loans receivable            
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, before deferred fees and costs 1,148,137   1,080,767      
Deferred loan costs (fees) 4,743   4,942      
Loans and leases held-for-investment, net of deferred fees and costs 1,152,880   1,085,709      
Allowance for loan and lease losses (7,546)   (5,262)      
Loans and leases held-for-investment, net 1,145,334   1,080,447      
Commercial Real Estate            
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, net of deferred fees and costs 1,954,774   1,796,448      
Allowance for loan and lease losses (13,579) $ (8,445) (6,873) $ (5,965) $ (5,670) $ (5,502)
Commercial Real Estate | Loans receivable            
Accounts, Notes, Loans and Financing Receivable [Line Items]            
Loans and leases held-for-investment, before deferred fees and costs 1,959,537   1,801,375      
Deferred loan costs (fees) (4,763)   (4,927)      
Loans and leases held-for-investment, net of deferred fees and costs 1,954,774   1,796,448      
Allowance for loan and lease losses (13,579)   (6,873)      
Loans and leases held-for-investment, net $ 1,941,195   $ 1,789,575      
v3.20.2
Loans and Leases - Narrative (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Unused commitments $ 5,630,000   $ 4,910,000
Unused commitments, due on demand 4,500,000   3,870,000
Reserve for losses on unfunded commitments 1,000   645
Loans in the process of origination 37,700   20,700
Standby letters of credit      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Unused commitments 74,100   $ 72,800
Standby letters of credit drawn $ 45 $ 85  
v3.20.2
Allowance for Loan and Lease Losses - Narrative (Details)
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2020
USD ($)
portfolio
loans
Jun. 30, 2019
USD ($)
loans
Jun. 30, 2020
USD ($)
portfolio
contract
Jun. 30, 2019
USD ($)
loans
Dec. 31, 2019
USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]          
Number of loan portfolios | portfolio 3   3    
Impaired loans $ 6,780,000   $ 6,780,000   $ 184,000
Interest income on impaired loans     0   0
Loans 90 days or more past due and still accruing 0   0   0
Related allowance on impaired loans 1,016,000   1,016,000   171,000
Unused commitments for loans modified as TDRs 0   0   0
Payment defaults for loans modified as TDRs $ 0 $ 0 $ 0 $ 0  
Loans newly designated as TDRs 0 0 0 0  
Real estate acquired through foreclosure $ 2,700,000   $ 2,700,000   4,300,000
Proceeds from sale of property from other real estate owned     1,500,000    
Gain on sale of property from other real estate owned     65,000    
Mortgage loans in process of foreclosure 0   0    
Non-accrual loans          
Financing Receivable, Credit Quality Indicator [Line Items]          
Recorded investment 0   $ 0   171,000
Minimum          
Financing Receivable, Credit Quality Indicator [Line Items]          
Past due period for loans (in days)     90 days    
Private Banking          
Financing Receivable, Credit Quality Indicator [Line Items]          
Impaired loans 10,000   $ 10,000   184,000
Related allowance on impaired loans $ 0   $ 0   $ 171,000
Concentration risk, percentage | Cash, marketable securities or cash value life insurance collateral risk | Private Banking          
Financing Receivable, Credit Quality Indicator [Line Items]          
Percentage of private banking loans secured by cash and marketable securities     98.00%   97.40%
v3.20.2
Allowance for Loan and Lease Losses - Credit Quality Indicator (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment $ 7,170,770 $ 6,577,559
Private Banking    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 4,063,116 3,695,402
Commercial and Industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 1,152,880 1,085,709
Commercial Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 1,954,774 1,796,448
Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 7,137,759 6,542,566
Pass | Private Banking    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 4,059,835 3,691,866
Pass | Commercial and Industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 1,144,623 1,069,932
Pass | Commercial Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 1,933,301 1,780,768
Special mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 12,423 30,061
Special mention | Private Banking    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 0 0
Special mention | Commercial and Industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 7,798 15,777
Special mention | Commercial Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 4,625 14,284
Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 20,588 4,932
Substandard | Private Banking    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 3,281 3,536
Substandard | Commercial and Industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment 459 0
Substandard | Commercial Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
Loans and leases held-for-investment $ 16,848 $ 1,396
v3.20.2
Allowance for Loan and Lease Losses - Changes in Allowance (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Allowance for Loan and Lease Losses [Roll Forward]        
Balance, beginning of period $ 17,304 $ 14,712 $ 14,108 $ 13,208
Provision (credit) for loan and lease losses 6,005 (712) 8,998 (1,089)
Charge-offs (171) 0 (171) 0
Recoveries 138 16 341 1,897
Balance, end of period 23,276 14,016 23,276 14,016
Private Banking        
Allowance for Loan and Lease Losses [Roll Forward]        
Balance, beginning of period 2,174 2,001 1,973 1,942
Provision (credit) for loan and lease losses 148 139 349 198
Charge-offs (171) 0 (171) 0
Recoveries 0 0 0 0
Balance, end of period 2,151 2,140 2,151 2,140
Commercial and Industrial        
Allowance for Loan and Lease Losses [Roll Forward]        
Balance, beginning of period 6,685 7,041 5,262 5,764
Provision (credit) for loan and lease losses 723 (1,146) 1,943 (1,750)
Charge-offs 0 0 0 0
Recoveries 138 16 341 1,897
Balance, end of period 7,546 5,911 7,546 5,911
Commercial Real Estate        
Allowance for Loan and Lease Losses [Roll Forward]        
Balance, beginning of period 8,445 5,670 6,873 5,502
Provision (credit) for loan and lease losses 5,134 295 6,706 463
Charge-offs 0 0 0 0
Recoveries 0 0 0 0
Balance, end of period $ 13,579 $ 5,965 $ 13,579 $ 5,965
v3.20.2
Allowance for Loan and Lease Losses - Analysis of Past Due Loans (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due $ 0 $ 445
Current 7,170,770 6,577,114
Loans and leases held-for-investment, net of deferred fees and costs 7,170,770 6,577,559
Private Banking    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 445
Current 4,063,116 3,694,957
Loans and leases held-for-investment, net of deferred fees and costs 4,063,116 3,695,402
Commercial and Industrial    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
Current 1,152,880 1,085,709
Loans and leases held-for-investment, net of deferred fees and costs 1,152,880 1,085,709
Commercial Real Estate    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
Current 1,954,774 1,796,448
Loans and leases held-for-investment, net of deferred fees and costs 1,954,774 1,796,448
30-59 Days Past Due    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 261
30-59 Days Past Due | Private Banking    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 261
30-59 Days Past Due | Commercial and Industrial    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
30-59 Days Past Due | Commercial Real Estate    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
60-89 Days Past Due    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
60-89 Days Past Due | Private Banking    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
60-89 Days Past Due | Commercial and Industrial    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
60-89 Days Past Due | Commercial Real Estate    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
90 Days or More Past Due    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 184
90 Days or More Past Due | Private Banking    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 184
90 Days or More Past Due | Commercial and Industrial    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due 0 0
90 Days or More Past Due | Commercial Real Estate    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Total Past Due $ 0 $ 0
v3.20.2
Allowance for Loan and Lease Losses - Impaired Loans (Details) - USD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Recorded Investment    
With a related allowance $ 6,770 $ 171
Without a related allowance 10 13
Total 6,780 184
Unpaid Principal Balance    
With a related allowance 6,772 193
Without a related allowance 10 13
Total 6,782 206
Related Allowance 1,016 171
Average Recorded Investment    
With a related allowance 6,770 171
Without a related allowance 12 13
Total 6,782 184
Interest Income Recognized    
With a related allowance 0 0
Without a related allowance 0 0
Total 0 0
Private Banking    
Recorded Investment    
With a related allowance 0 171
Without a related allowance 10 13
Total 10 184
Unpaid Principal Balance    
With a related allowance 0 193
Without a related allowance 10 13
Total 10 206
Related Allowance 0 171
Average Recorded Investment    
With a related allowance 0 171
Without a related allowance 12 13
Total 12 184
Interest Income Recognized    
With a related allowance 0 0
Without a related allowance 0 0
Total 0 0
Commercial and Industrial    
Recorded Investment    
With a related allowance 459 0
Without a related allowance 0 0
Total 459 0
Unpaid Principal Balance    
With a related allowance 457 0
Without a related allowance 0 0
Total 457 0
Related Allowance 69 0
Average Recorded Investment    
With a related allowance 459 0
Without a related allowance 0 0
Total 459 0
Interest Income Recognized    
With a related allowance 0 0
Without a related allowance 0 0
Total 0 0
Commercial Real Estate    
Recorded Investment    
With a related allowance 6,311 0
Without a related allowance 0 0
Total 6,311 0
Unpaid Principal Balance    
With a related allowance 6,315 0
Without a related allowance 0 0
Total 6,315 0
Related Allowance 947 0
Average Recorded Investment    
With a related allowance 6,311 0
Without a related allowance 0 0
Total 6,311 0
Interest Income Recognized    
With a related allowance 0 0
Without a related allowance 0 0
Total $ 0 $ 0
v3.20.2
Allowance for Loan and Lease Losses - Allowance (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Allowance for loan and lease losses:    
Individually evaluated for impairment $ 1,016 $ 171
Collectively evaluated for impairment 22,260 13,937
Total allowance for loan and lease losses 23,276 14,108
Loans and leases held-for-investment:    
Individually evaluated for impairment 6,780 184
Collectively evaluated for impairment 7,163,990 6,577,375
Loans and leases held-for-investment, net of deferred fees and costs 7,170,770 6,577,559
Private Banking    
Allowance for loan and lease losses:    
Individually evaluated for impairment 0 171
Collectively evaluated for impairment 2,151 1,802
Total allowance for loan and lease losses 2,151 1,973
Loans and leases held-for-investment:    
Individually evaluated for impairment 10 184
Collectively evaluated for impairment 4,063,106 3,695,218
Loans and leases held-for-investment, net of deferred fees and costs 4,063,116 3,695,402
Commercial and Industrial    
Allowance for loan and lease losses:    
Individually evaluated for impairment 69 0
Collectively evaluated for impairment 7,477 5,262
Total allowance for loan and lease losses 7,546 5,262
Loans and leases held-for-investment:    
Individually evaluated for impairment 459 0
Collectively evaluated for impairment 1,152,421 1,085,709
Loans and leases held-for-investment, net of deferred fees and costs 1,152,880 1,085,709
Commercial Real Estate    
Allowance for loan and lease losses:    
Individually evaluated for impairment 947 0
Collectively evaluated for impairment 12,632 6,873
Total allowance for loan and lease losses 13,579 6,873
Loans and leases held-for-investment:    
Individually evaluated for impairment 6,311 0
Collectively evaluated for impairment 1,948,463 1,796,448
Loans and leases held-for-investment, net of deferred fees and costs $ 1,954,774 $ 1,796,448
v3.20.2
Deposits - Schedule of Deposits by Type (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Interest Rate Range Domestic Deposit Liabilities [Abstract]    
Interest-bearing checking accounts, interest rate minimum 0.05%  
Interest-bearing checking accounts, interest rate maximum 1.70%  
Money market deposit accounts, interest rate minimum 0.10%  
Money market deposit accounts, interest rate maximum 3.25%  
Certificates of deposit, interest rate minimum 0.15%  
Certificates of deposit, interest rate maximum 3.25%  
Weighted Average Interest Rate    
Interest-bearing checking accounts 0.44% 1.57%
Money market deposit accounts 0.71% 1.84%
Certificates of deposit 1.51% 2.24%
Weighted average rate on interest-bearing accounts 0.74% 1.87%
Demand and savings accounts:    
Noninterest-bearing checking accounts $ 422,341 $ 356,102
Interest-bearing checking accounts 2,664,864 1,398,264
Money market deposit accounts 3,547,518 3,426,745
Total demand and savings accounts 6,634,723 5,181,111
Certificates of deposit 1,196,748 1,453,502
Total deposits $ 7,831,471 $ 6,634,613
v3.20.2
Deposits - Narrative (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Deposits [Abstract]    
Brokered deposits $ 812.1 $ 766.6
Reciprocal non-brokered 1,330.0 857.9
Certificates of deposit, $100,000 or more, excluding brokered and reciprocal 516.2 551.5
Certificates of deposit, $250,000 or more, excluding brokered and reciprocal $ 185.1 $ 233.5
v3.20.2
Deposits - Contractual Maturities of Time Deposits (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Time Deposits, Rolling Year Maturity [Abstract]    
12 months or less $ 1,083,693 $ 1,244,838
12 months to 24 months 96,517 168,437
24 months to 36 months 16,538 40,227
Total $ 1,196,748 $ 1,453,502
v3.20.2
Deposits - Interest Expense on Deposits by Type (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Interest Expense, Deposits [Abstract]        
Interest-bearing checking accounts $ 2,719 $ 4,965 $ 7,933 $ 9,508
Money market deposit accounts 7,377 18,200 22,031 34,739
Certificates of deposit 5,857 8,990 13,233 17,241
Total interest expense on deposits $ 15,953 $ 32,155 $ 43,197 $ 61,488
v3.20.2
Borrowings - Schedule of Borrowings (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
May 31, 2020
Dec. 31, 2019
Debt Instrument [Line Items]      
Total debt $ 395,552   $ 355,000
Subordinated Notes Payable 5.75 Percent | Subordinated notes payable      
Debt Instrument [Line Items]      
Long term debt interest rate 5.75% 5.75%  
Long-term debt $ 95,552    
Debt issuance costs $ 1,948   $ 0
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 4/08/2020, Maturity 7/08/2020      
Debt Instrument [Line Items]      
Short term debt interest rate 0.60%    
Short-term debt $ 50,000    
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 6/01/2020, Maturity 9/1/2020      
Debt Instrument [Line Items]      
Short term debt interest rate 0.46%    
Short-term debt $ 150,000    
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 6/02/2020, Maturity 9/2/2020      
Debt Instrument [Line Items]      
Short term debt interest rate 0.46%    
Short-term debt $ 50,000    
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 6/22/2020, Maturity 9/21/2020      
Debt Instrument [Line Items]      
Short term debt interest rate 0.47%    
Short-term debt $ 50,000    
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Maturity 5/1/2020      
Debt Instrument [Line Items]      
Short term debt interest rate     1.81%
Short-term debt     $ 55,000
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 12/12/2019, Maturity 1/13/2020      
Debt Instrument [Line Items]      
Short term debt interest rate     1.85%
Short-term debt     $ 100,000
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 12/02/2019, Maturity 3/2/2020      
Debt Instrument [Line Items]      
Short term debt interest rate     1.91%
Short-term debt     $ 150,000
Federal Home Loan Bank advances | Federal Home Loan Bank Borrowings, Issued 10/08/2019, Maturity 1/8/2020      
Debt Instrument [Line Items]      
Short term debt interest rate     2.00%
Short-term debt     $ 50,000
v3.20.2
Borrowings - Narrative (Details) - USD ($)
 1 Months Ended 6 Months Ended
May 31, 2020
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Short-term Debt [Line Items]        
Net proceeds from issuance of subordinated notes payable   $ 95,518,000 $ 0  
Line of credit borrowings        
Short-term Debt [Line Items]        
Short-term debt   0   $ 0
Federal Home Loan Bank        
Short-term Debt [Line Items]        
Pledged securities, for Federal Home Loan Bank   2,600,000    
Texas Capital Bank | Line of credit borrowings        
Short-term Debt [Line Items]        
Line of credit facility, current borrowing capacity   75,000,000.0    
Bank subsidiary | Federal Home Loan Bank advances        
Short-term Debt [Line Items]        
Short-term debt   300,000,000.0   355,000,000.0
Bank subsidiary | Federal Home Loan Bank        
Short-term Debt [Line Items]        
Pledged securities, for Federal Home Loan Bank   2,600,000    
Pledged loans receivable, for Federal Home Loan Bank   1,170,000,000    
Bank subsidiary | Federal Home Loan Bank | Line of credit borrowings        
Short-term Debt [Line Items]        
Line of credit facility, current borrowing capacity   837,500,000    
Bank subsidiary | M&T Bank | Line of credit borrowings        
Short-term Debt [Line Items]        
Line of credit facility, current borrowing capacity   10,000,000.0    
Short-term debt   0   0
Bank subsidiary | Texas Capital Bank | Line of credit borrowings        
Short-term Debt [Line Items]        
Line of credit facility, current borrowing capacity   20,000,000.0    
Short-term debt   0   $ 0
Bank subsidiary | PNC Bank | Financial Guarantee        
Short-term Debt [Line Items]        
Credit cards issued, notional amount   3,200,000    
Bank subsidiary | PNC Bank | Line of credit borrowings        
Short-term Debt [Line Items]        
Line of credit facility, current borrowing capacity   $ 8,000,000.0    
Subordinated notes payable | Subordinated Notes Payable 5.75 Percent        
Short-term Debt [Line Items]        
Net proceeds from issuance of subordinated notes payable $ 97,500,000      
Debt term 10 years      
Long term debt interest rate 5.75% 5.75%    
v3.20.2
Borrowings - Interest Expense on Borrowings by Type (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Debt Instrument [Line Items]        
Interest expense on borrowings $ 2,224 $ 2,881 $ 4,260 $ 6,078
Subordinated notes payable        
Debt Instrument [Line Items]        
Interest expense on borrowings 680 537 680 1,090
FHLB borrowings        
Debt Instrument [Line Items]        
Interest expense on borrowings 1,284 2,334 3,319 4,920
Line of credit borrowings        
Debt Instrument [Line Items]        
Interest expense on borrowings $ 260 $ 10 $ 261 $ 68
v3.20.2
Stock Transactions - Narrative (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended 3 Months Ended 6 Months Ended
May 31, 2019
USD ($)
$ / shares
shares
Mar. 31, 2018
USD ($)
$ / shares
shares
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
$ / shares
shares
Jun. 30, 2019
USD ($)
$ / shares
shares
Class of Stock [Line Items]            
Net proceeds from issuance of preferred stock         $ 0 $ 77,674
Dividends paid         $ 3,924 1,829
Shares repurchased (shares) | shares         83,988  
Cost of shares repurchased     $ 155 $ 311 $ 2,734 744
Cost of shares repurchased in connection with exercise, net settlement or vesting of equity awards         $ 2,100  
Shares canceled in period (in shares) | shares         212,447  
Treasury stock reissuance     110   $ 110  
Payments for cancellation of stock options         2,484 0
Series B depositary share            
Class of Stock [Line Items]            
Issuance of shares (in shares) | shares 3,220,000          
Conversion from depository to preferred shares 0.025          
Liquidation preference (usd per share) | $ / shares $ 25          
Series B depositary share | Public offering            
Class of Stock [Line Items]            
Issuance of shares (in shares) | shares 3,220,000          
Series B preferred stock            
Class of Stock [Line Items]            
Issuance of shares (in shares) | shares 80,500          
Dividend rate 6.375%          
Liquidation preference (usd per share) | $ / shares $ 1,000          
Net proceeds from issuance of preferred stock $ 77,600          
Basis spread 4.088%          
Dividends paid         2,600 $ 471
Series A depositary share            
Class of Stock [Line Items]            
Issuance of shares (in shares) | shares   1,610,000        
Conversion from depository to preferred shares   0.025        
Liquidation preference (usd per share) | $ / shares   $ 25        
Series A depositary share | Public offering            
Class of Stock [Line Items]            
Issuance of shares (in shares) | shares   1,610,000        
Series A preferred stock            
Class of Stock [Line Items]            
Issuance of shares (in shares) | shares   40,250        
Dividend rate   6.75%        
Liquidation preference (usd per share) | $ / shares   $ 1,000        
Net proceeds from issuance of preferred stock   $ 38,500        
Basis spread       3.985%   3.985%
Dividends paid         $ 1,400 $ 1,400
Common Stock            
Class of Stock [Line Items]            
Shares repurchased (shares) | shares         40,000 35,000
Reissuance of treasury stock (in shares) | shares         (8,500)  
Common Stock | Share Repurchase Program            
Class of Stock [Line Items]            
Stock repurchase program, remaining authorized repurchase amount     9,800   $ 9,800  
Shares repurchased (shares) | shares         40,000 35,000
Cost of shares repurchased         $ 670 $ 744
Average cost per share (usd per share) | $ / shares         $ 16.76 $ 21.26
Treasury Stock            
Class of Stock [Line Items]            
Shares repurchased (shares) | shares         (40,000) (35,000)
Cost of shares repurchased     155 $ 311 $ 2,734 $ 744
Reissuance of treasury stock (in shares) | shares         8,500  
Treasury stock reissuance     $ 135   $ 135  
v3.20.2
Stock Transactions - Shares Outstanding Activity (Details) - shares
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Number of Shares Outstanding [Rollforward]    
Purchase of treasury stock through open market transactions (83,988)  
Treasury Stock    
Number of Shares Outstanding [Rollforward]    
Balance, beginning of period (shares) 2,126,422 2,014,910
Purchase of treasury stock through open market transactions 40,000 35,000
Increase in treasury stock related to equity awards 83,988  
Reissuance of treasury stock (8,500)  
Balance, ending of period (shares) 2,241,910 2,049,910
Preferred Shares    
Number of Shares Outstanding [Rollforward]    
Balance, beginning of period (shares) 120,750 40,250
Issuance of preferred stock   80,500
Balance, ending of period (shares) 120,750 120,750
Common Stock    
Number of Shares Outstanding [Rollforward]    
Balance, beginning of period (shares) 29,355,986 28,878,674
Issuance of restricted common stock 597,070 542,703
Forfeitures of restricted common stock (11,018) (69,605)
Exercise of stock options 25,000 22,380
Purchase of treasury stock through open market transactions (40,000) (35,000)
Increase in treasury stock related to equity awards (83,988)  
Reissuance of treasury stock 8,500  
Balance, ending of period (shares) 29,851,550 29,339,152
v3.20.2
Regulatory Capital - Narrative (Details)
 6 Months Ended
Jun. 30, 2020
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]  
Percentage conservation buffer required for capital adequacy to risk weighted assets, fully phased-in 2.50%
v3.20.2
Regulatory Capital - Regulatory Capital Requirements (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
Dec. 31, 2019
USD ($)
Total risk-based capital (Amount)    
Total risk-based capital $ 699,015 $ 572,221
Total risk-based capital required for capital adequacy $ 433,732 $ 379,911
Total risk-based capital (Ratio)    
Total risk-based capital, ratio 0.1289 0.1205
Total risk-based capital required for capital adequacy, ratio 0.0800 0.0800
Tier 1 risk-based capital (Amount)    
Tier 1 risk-based capital $ 579,146 $ 558,068
Tier 1 risk-based capital required for capital adequacy $ 325,299 $ 284,933
Tier 1 risk-based capital (Ratio)    
Tier 1 risk-based capital, ratio 0.1068 0.1175
Tier 1 risk-based capital required for capital adequacy, ratio 0.0600 0.0600
Common Equity Tier One Risk Based Capital (Amount)    
Common equity tier 1 risk-based capital $ 463,067 $ 442,385
Common equity tier 1 risk-based capital required for capital adequacy $ 243,975 $ 213,700
Common Equity Tier One Risk Based Capital (Ratio)    
Common equity tier 1 risk-based capital, ratio 0.0854 0.0932
Common equity tier 1 risk-based capital required for capital adequacy, ratio 4.50% 4.50%
Tier 1 leverage (Amount)    
Tier 1 leverage capital $ 579,146 $ 558,068
Tier 1 leverage capital required for capital adequacy $ 367,538 $ 296,038
Tier 1 leverage (Ratio)    
Tier 1 leverage capital, ratio 0.0630 0.0754
Tier 1 leverage capital required for capital adequacy, ratio 0.0400 0.0400
Bank subsidiary    
Total risk-based capital (Amount)    
Total risk-based capital $ 677,080 $ 547,532
Total risk-based capital required for capital adequacy 432,764 378,623
Total risk-based capital required to be well capitalized $ 540,955 $ 473,279
Total risk-based capital (Ratio)    
Total risk-based capital, ratio 0.1252 0.1157
Total risk-based capital required for capital adequacy, ratio 0.0800 0.0800
Total risk-based capital required to be well capitalized, ratio 0.1000 0.1000
Tier 1 risk-based capital (Amount)    
Tier 1 risk-based capital $ 652,763 $ 532,779
Tier 1 risk-based capital required for capital adequacy 324,573 283,967
Tier 1 risk-based capital required to be well capitalized $ 432,764 $ 378,623
Tier 1 risk-based capital (Ratio)    
Tier 1 risk-based capital, ratio 0.1207 0.1126
Tier 1 risk-based capital required for capital adequacy, ratio 0.0600 0.0600
Tier 1 risk-based capital required to be well capitalized, ratio 0.0800 0.0800
Common Equity Tier One Risk Based Capital (Amount)    
Common equity tier 1 risk-based capital $ 652,763 $ 532,779
Common equity tier 1 risk-based capital required for capital adequacy 243,430 212,975
Common equity tier 1 risk-based capital required to be well capitalized $ 351,621 $ 307,631
Common Equity Tier One Risk Based Capital (Ratio)    
Common equity tier 1 risk-based capital, ratio 0.1207 0.1126
Common equity tier 1 risk-based capital required for capital adequacy, ratio 4.50% 4.50%
Common equity tier 1 risk-based capital required to be well capitalized, ratio 6.50% 6.50%
Tier 1 leverage (Amount)    
Tier 1 leverage capital $ 652,763 $ 532,779
Tier 1 leverage capital required for capital adequacy 367,000 295,277
Tier 1 leverage capital required to be well capitalized $ 458,750 $ 369,097
Tier 1 leverage (Ratio)    
Tier 1 leverage capital, ratio 0.0711 0.0722
Tier 1 leverage capital required for capital adequacy, ratio 0.0400 0.0400
Tier 1 leverage capital required to be well capitalized, ratio 0.0500 0.0500
v3.20.2
Earnings Per Common Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share [Abstract]        
Net income available to common shareholders $ 8,439 $ 13,541 $ 19,372 $ 27,426
Weighted Average Number of Shares Outstanding, Diluted [Abstract]        
Basic weighted average common shares outstanding (shares) 28,223,085 27,887,599 28,201,837 27,860,370
Restricted stock - dilutive (shares) 221,456 562,226 324,498 550,903
Stock options - dilutive (shares) 83,420 340,848 161,469 336,445
Diluted weighted average common shares outstanding (shares) 28,527,961 28,790,673 28,687,804 28,747,718
Earnings per common share:        
Earnings per common share, basic (in usd per share) $ 0.30 $ 0.49 $ 0.69 $ 0.98
Earnings per common share, diluted (in usd per share) $ 0.30 $ 0.47 $ 0.68 $ 0.95
Anti-dilutive shares (shares) 869,746 6,000 566,498 13,000
v3.20.2
Derivatives and Hedging Activity - Financial Position, Fair Value (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Derivatives, Fair Value [Line Items]    
Asset derivatives, fair value $ 171,967 $ 55,241
Liability derivatives, fair value 183,252 57,473
Other assets    
Derivatives, Fair Value [Line Items]    
Asset derivatives, fair value 171,967 55,241
Other liabilities    
Derivatives, Fair Value [Line Items]    
Liability derivatives, fair value 183,252 57,473
Designated as hedging instrument | Other assets | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Asset derivatives, fair value 0 0
Designated as hedging instrument | Other liabilities | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Liability derivatives, fair value 11,161 2,184
Not designated as hedging instrument | Other assets | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Asset derivatives, fair value 171,967 55,241
Not designated as hedging instrument | Other liabilities | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Liability derivatives, fair value $ 172,091 $ 55,289
v3.20.2
Derivatives and Hedging Activity - Offsetting of Derivative Assets (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]    
Gross Amounts of Recognized Assets $ 171,967 $ 55,241
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amounts of Assets presented in the Statement of Financial Position 171,967 55,241
Financial Instruments 0 (850)
Cash Collateral Received 0 0
Net Amount $ 171,967 $ 54,391
v3.20.2
Derivatives and Hedging Activity - Offsetting of Derivative Liabilities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]    
Gross Amounts of Recognized Liabilities $ 183,252 $ 57,473
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amounts of Liabilities presented in the Statement of Financial Position 183,252 57,473
Financial Instruments 0 (850)
Cash Collateral Posted (183,227) (55,753)
Net Amount $ 25 $ 870
v3.20.2
Derivatives and Hedging Activity - Interest Rate Derivative Transactions (Details) - Cash flow hedging - Interest rate swaps - Designated as hedging instrument
$ in Thousands
 6 Months Ended
Jun. 30, 2020
USD ($)
Derivative [Line Items]  
Notional Amount $ 300,000
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months 3,738
Issued 1/8/2018, Maturity 1/8/2021  
Derivative [Line Items]  
Notional Amount $ 50,000
Effective Rate 2.21%
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months $ 501
Remaining Term (in Months) 6 months
Issued 5/30/2019, Maturity 6/1/2022  
Derivative [Line Items]  
Notional Amount $ 50,000
Effective Rate 2.05%
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months $ 903
Remaining Term (in Months) 23 months
Issued 5/30/2019, Maturity 6/1/2023  
Derivative [Line Items]  
Notional Amount $ 50,000
Effective Rate 2.03%
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months $ 895
Remaining Term (in Months) 35 months
Issued 5/30/2019, Maturity 6/1/2024  
Derivative [Line Items]  
Notional Amount $ 50,000
Effective Rate 2.04%
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months $ 901
Remaining Term (in Months) 47 months
Issued 3/2/2020, Maturity 3/2/2025  
Derivative [Line Items]  
Notional Amount $ 50,000
Effective Rate 0.98%
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months $ 364
Remaining Term (in Months) 56 months
Issued 3/20/2020, Maturity 3/20/2025  
Derivative [Line Items]  
Notional Amount $ 50,000
Effective Rate 0.60%
Estimated Increase/ (Decrease) to Interest Expense in the Next Twelve Months $ 174
Remaining Term (in Months) 57 months
v3.20.2
Derivatives and Hedging Activity - Gain (Loss) in Statement of Financial Performance (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Not designated as hedging instrument        
Derivatives, Fair Value [Line Items]        
Amount of Gain (Loss) Recognized in Income on Derivatives $ (4) $ (99) $ (66) $ (119)
Interest rate swaps | Not designated as hedging instrument | Non-interest income        
Derivatives, Fair Value [Line Items]        
Amount of Gain (Loss) Recognized in Income on Derivatives (4) (22) (66) (42)
Equity swap | Not designated as hedging instrument | Non-interest income        
Derivatives, Fair Value [Line Items]        
Amount of Gain (Loss) Recognized in Income on Derivatives 0 (77) 0 (77)
Cash flow hedging | Interest rate swaps | Designated as hedging instrument | Interest expense        
Derivatives, Fair Value [Line Items]        
Amount of Gain (Loss) Recognized in Income on Derivatives (460) 560 (619) 1,121
Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income on Derivatives $ (1,578) $ (2,118) $ (9,290) $ (2,325)
v3.20.2
Derivatives and Hedging Activity - Narrative (Details) - Interest rate swaps
$ in Millions
Jun. 30, 2020
USD ($)
Derivatives, Fair Value [Line Items]  
Termination value of derivatives, including accrued interest, in a net liability position $ 183.3
Collateral already posted amount 184.9
Not designated as hedging instrument  
Derivatives, Fair Value [Line Items]  
Derivative, aggregate notional amount $ 3,290.0
v3.20.2
Disclosures About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financial assets:    
Debt securities available-for-sale $ 563,777 $ 248,782
Level 2    
Financial assets:    
Debt securities available-for-sale 563,777 248,782
Fair value, measurements, recurring    
Financial assets:    
Total financial assets 735,744 304,023
Financial liabilities:    
Total financial liabilities 183,252 57,473
Fair value, measurements, recurring | Level 1    
Financial assets:    
Total financial assets 0 0
Financial liabilities:    
Total financial liabilities 0 0
Fair value, measurements, recurring | Level 2    
Financial assets:    
Total financial assets 735,744 304,023
Financial liabilities:    
Total financial liabilities 183,252 57,473
Fair value, measurements, recurring | Level 3    
Financial assets:    
Total financial assets 0 0
Financial liabilities:    
Total financial liabilities 0 0
Fair value, measurements, recurring | Interest rate swaps    
Financial assets:    
Interest rate swaps 171,967 55,241
Financial liabilities:    
Interest rate swaps 183,252 57,473
Fair value, measurements, recurring | Interest rate swaps | Level 1    
Financial assets:    
Interest rate swaps 0 0
Financial liabilities:    
Interest rate swaps 0 0
Fair value, measurements, recurring | Interest rate swaps | Level 2    
Financial assets:    
Interest rate swaps 171,967 55,241
Financial liabilities:    
Interest rate swaps 183,252 57,473
Fair value, measurements, recurring | Interest rate swaps | Level 3    
Financial assets:    
Interest rate swaps 0 0
Financial liabilities:    
Interest rate swaps 0 0
Fair value, measurements, recurring | Corporate bonds    
Financial assets:    
Debt securities available-for-sale 236,685 175,418
Fair value, measurements, recurring | Corporate bonds | Level 1    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Corporate bonds | Level 2    
Financial assets:    
Debt securities available-for-sale 236,685 175,418
Fair value, measurements, recurring | Corporate bonds | Level 3    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Trust preferred securities    
Financial assets:    
Debt securities available-for-sale 16,645 18,260
Fair value, measurements, recurring | Trust preferred securities | Level 1    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Trust preferred securities | Level 2    
Financial assets:    
Debt securities available-for-sale 16,645 18,260
Fair value, measurements, recurring | Trust preferred securities | Level 3    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Agency collateralized mortgage obligations    
Financial assets:    
Debt securities available-for-sale 23,760 27,193
Fair value, measurements, recurring | Agency collateralized mortgage obligations | Level 1    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Agency collateralized mortgage obligations | Level 2    
Financial assets:    
Debt securities available-for-sale 23,760 27,193
Fair value, measurements, recurring | Agency collateralized mortgage obligations | Level 3    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Agency mortgage-backed securities    
Financial assets:    
Debt securities available-for-sale 277,445 18,509
Fair value, measurements, recurring | Agency mortgage-backed securities | Level 1    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Agency mortgage-backed securities | Level 2    
Financial assets:    
Debt securities available-for-sale 277,445 18,509
Fair value, measurements, recurring | Agency mortgage-backed securities | Level 3    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Agency debentures    
Financial assets:    
Debt securities available-for-sale 9,242 9,402
Fair value, measurements, recurring | Agency debentures | Level 1    
Financial assets:    
Debt securities available-for-sale 0 0
Fair value, measurements, recurring | Agency debentures | Level 2    
Financial assets:    
Debt securities available-for-sale 9,242 9,402
Fair value, measurements, recurring | Agency debentures | Level 3    
Financial assets:    
Debt securities available-for-sale $ 0 $ 0
v3.20.2
Disclosures About Fair Value of Financial Instruments - Fair Value Measurements, Nonrecurring (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Level 3    
Financial assets:    
Other real estate owned $ 2,724 $ 4,250
Fair value, measurements, nonrecurring    
Financial assets:    
Loans measured for impairment, net 5,764 13
Other real estate owned 2,724 4,250
Total assets 8,488 4,263
Fair value, measurements, nonrecurring | Level 1    
Financial assets:    
Loans measured for impairment, net 0 0
Other real estate owned 0 0
Total assets 0 0
Fair value, measurements, nonrecurring | Level 2    
Financial assets:    
Loans measured for impairment, net 0 0
Other real estate owned 0 0
Total assets 0 0
Fair value, measurements, nonrecurring | Level 3    
Financial assets:    
Loans measured for impairment, net 5,764 13
Other real estate owned 2,724 4,250
Total assets $ 8,488 $ 4,263
v3.20.2
Disclosures About Fair Value of Financial Instruments - Narrative (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Fair Value Disclosures [Abstract]    
Specific allowance for loan losses $ 1,016 $ 171
v3.20.2
Disclosures About Fair Value of Financial Instruments - Fair Value Inputs, Assets, Quantitative Information (Details) - Collateral - Level 3
$ in Thousands
Jun. 30, 2020
USD ($)
Dec. 31, 2019
USD ($)
Loans measured for impairment, net    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair Value $ 5,764 $ 13
Loans measured for impairment, net | Appraisal value and discount due to salability conditions    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Loans measured for impairment, net 0.27 0
Other real estate owned    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair Value $ 2,724 $ 4,250
Other real estate owned | Appraisal value and discount due to salability conditions    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Other real estate owned 0.20 0.17
v3.20.2
Disclosures About Fair Value of Financial Instruments - Financial Assets and Liabilities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financial assets:    
Debt securities available-for-sale $ 563,777 $ 248,782
Debt securities held-to-maturity 237,671 196,755
Investment management fees receivable, net 6,907 7,560
Interest rate swaps 171,967 55,241
Financial liabilities:    
Derivative liability 183,252 57,473
Level 1    
Financial assets:    
Cash and cash equivalents 724,942 403,855
Level 2    
Financial assets:    
Debt securities available-for-sale 563,777 248,782
Debt securities held-to-maturity 237,671 196,755
Federal Home Loan Bank stock 13,280 24,324
Accrued interest receivable 18,534 22,326
Investment management fees receivable, net 6,907 7,560
Bank owned life insurance 70,901 70,044
Financial liabilities:    
Deposits 7,861,737 6,648,546
Borrowings, net 397,608 355,003
Level 2 | Interest rate swaps    
Financial assets:    
Interest rate swaps 171,967 55,241
Financial liabilities:    
Derivative liability 183,252 57,473
Level 3    
Financial assets:    
Loans and leases held-for-investment, net 7,198,597 6,548,432
Other real estate owned 2,724 4,250
Carrying amount | Level 1    
Financial assets:    
Cash and cash equivalents 724,942 403,855
Carrying amount | Level 2    
Financial assets:    
Debt securities available-for-sale 563,777 248,782
Debt securities held-to-maturity 235,083 196,044
Federal Home Loan Bank stock 13,280 24,324
Accrued interest receivable 18,534 22,326
Investment management fees receivable, net 6,907 7,560
Bank owned life insurance 70,901 70,044
Financial liabilities:    
Deposits 7,831,471 6,634,613
Borrowings, net 395,552 355,000
Carrying amount | Level 2 | Interest rate swaps    
Financial assets:    
Interest rate swaps 171,967 55,241
Financial liabilities:    
Derivative liability 183,252 57,473
Carrying amount | Level 3    
Financial assets:    
Loans and leases held-for-investment, net 7,147,494 6,563,451
Other real estate owned $ 2,724 $ 4,250
v3.20.2
Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Accumulated Other Comprehensive Income [Roll Forward]        
Beginning balance $ 614,380 $ 496,557 $ 621,281 $ 479,354
Change in unrealized holding gains (losses) 7,175 (353) (8,115) 1,920
Losses (gains) reclassified from other comprehensive income 344 (509) 453 (949)
Net other comprehensive income (loss) 7,519 (862) (7,662) 971
Ending balance 632,831 588,981 632,831 588,981
Debt Securities        
Accumulated Other Comprehensive Income [Roll Forward]        
Beginning balance (6,678) 54 2,756 (2,363)
Change in unrealized holding gains (losses) 8,375 1,259 (1,048) 3,689
Losses (gains) reclassified from other comprehensive income (5) (83) (16) (96)
Net other comprehensive income (loss) 8,370 1,176 (1,064) 3,593
Ending balance 1,692 1,230 1,692 1,230
Derivatives        
Accumulated Other Comprehensive Income [Roll Forward]        
Beginning balance (7,371) 448 (1,624) 1,032
Change in unrealized holding gains (losses) (1,200) (1,612) (7,067) (1,769)
Losses (gains) reclassified from other comprehensive income 349 (426) 469 (853)
Net other comprehensive income (loss) (851) (2,038) (6,598) (2,622)
Ending balance (8,222) (1,590) (8,222) (1,590)
Total        
Accumulated Other Comprehensive Income [Roll Forward]        
Beginning balance (14,049) 502 1,132 (1,331)
Net other comprehensive income (loss) 7,519 (862) (7,662) 971
Ending balance $ (6,530) $ (360) $ (6,530) $ (360)
v3.20.2
Segments - Schedule of Segment Reporting Information (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
segment
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Segment Reporting Information [Line Items]          
Number of reportable segments | segment     2    
Assets $ 9,129,841   $ 9,129,841   $ 7,765,810
Income statement data:          
Interest income 51,661 $ 66,339 115,863 $ 129,241  
Interest expense 18,177 35,036 47,457 67,566  
Net interest income 33,484 31,303 68,406 61,675  
Provision (credit) for loan and lease losses 6,005 (712) 8,998 (1,089)  
Net interest income after provision for loan and lease losses 27,479 32,015 59,408 62,764  
Non-interest income:          
Net gain on the sale and call of debt securities 14 112 71 140  
Other non-interest income 5,245 2,613 10,866 6,230  
Total non-interest income 12,997 11,979 26,313 25,048  
Non-interest expense:          
Intangible amortization expense 486 502 988 1,004  
Other non-interest expense 27,610 27,083 56,252 53,253  
Total non-interest expense 28,096 27,585 57,240 54,257  
Income before tax 12,380 16,409 28,481 33,555  
Income tax expense (benefit) 1,979 1,718 5,185 4,300  
Net income 10,401 14,691 23,296 29,255  
Investment management fees          
Non-interest income:          
Total non-interest income 7,738 9,254 15,376 18,678  
Parent and other          
Segment Reporting Information [Line Items]          
Assets (10,601)   (10,601)   (4,466)
Income statement data:          
Interest income 0 28 0 99  
Interest expense 926 519 910 1,130  
Net interest income (926) (491) (910) (1,031)  
Provision (credit) for loan and lease losses 0 0 0 0  
Net interest income after provision for loan and lease losses (926) (491) (910) (1,031)  
Non-interest income:          
Net gain on the sale and call of debt securities 0 0 0 0  
Other non-interest income 0 131 0 850  
Total non-interest income (159) 21 (286) 632  
Non-interest expense:          
Intangible amortization expense 0 0 0 0  
Other non-interest expense 640 250 1,622 343  
Total non-interest expense 640 250 1,622 343  
Income before tax (1,725) (720) (2,818) (742)  
Income tax expense (benefit) (296) (204) (466) (210)  
Net income (1,429) (516) (2,352) (532)  
Parent and other | Investment management fees          
Non-interest income:          
Total non-interest income (159) (110) (286) (218)  
Bank | Operating segments          
Segment Reporting Information [Line Items]          
Assets 9,057,476   9,057,476   7,686,981
Income statement data:          
Interest income 51,661 66,311 115,863 129,142  
Interest expense 17,251 34,517 46,547 66,436  
Net interest income 34,410 31,794 69,316 62,706  
Provision (credit) for loan and lease losses 6,005 (712) 8,998 (1,089)  
Net interest income after provision for loan and lease losses 28,405 32,506 60,318 63,795  
Non-interest income:          
Net gain on the sale and call of debt securities 14 112 71 140  
Other non-interest income 5,215 2,478 10,866 5,355  
Total non-interest income 5,229 2,590 10,937 5,495  
Non-interest expense:          
Intangible amortization expense 0 0 0 0  
Other non-interest expense 19,967 18,903 41,000 37,923  
Total non-interest expense 19,967 18,903 41,000 37,923  
Income before tax 13,667 16,193 30,255 31,367  
Income tax expense (benefit) 2,173 1,658 5,521 3,683  
Net income 11,494 14,535 24,734 27,684  
Bank | Operating segments | Investment management fees          
Non-interest income:          
Total non-interest income 0 0 0 0  
Investment management | Operating segments          
Segment Reporting Information [Line Items]          
Assets 82,966   82,966   $ 83,295
Income statement data:          
Interest income 0 0 0 0  
Interest expense 0 0 0 0  
Net interest income 0 0 0 0  
Provision (credit) for loan and lease losses 0 0 0 0  
Net interest income after provision for loan and lease losses 0 0 0 0  
Non-interest income:          
Net gain on the sale and call of debt securities 0 0 0 0  
Other non-interest income 30 4 0 25  
Total non-interest income 7,927 9,368 15,662 18,921  
Non-interest expense:          
Intangible amortization expense 486 502 988 1,004  
Other non-interest expense 7,003 7,930 13,630 14,987  
Total non-interest expense 7,489 8,432 14,618 15,991  
Income before tax 438 936 1,044 2,930  
Income tax expense (benefit) 102 264 130 827  
Net income 336 672 914 2,103  
Investment management | Operating segments | Investment management fees          
Non-interest income:          
Total non-interest income $ 7,897 $ 9,364 $ 15,662 $ 18,896  
v3.20.2
Subsequent Events (Details) - Subsequent Event
$ / shares in Units, $ in Thousands
Jul. 13, 2020
USD ($)
$ / shares
Series A preferred stock  
Subsequent Event [Line Items]  
Dividend payable | $ $ 679
Series A depositary share  
Subsequent Event [Line Items]  
Dividends payable (usd per share) | $ / shares $ 0.42
Series B preferred stock  
Subsequent Event [Line Items]  
Dividend payable | $ $ 1,300
Series B depositary share  
Subsequent Event [Line Items]  
Dividends payable (usd per share) | $ / shares $ 0.40