UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Quarterly Period Ended | |
OR | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading symbol(s) |
| Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | ||
Smaller reporting company | |||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes |
The number of shares of common stock outstanding as of October 29, 2024 was
ATLANTIC UNION BANKSHARES CORPORATION
FORM 10-Q
INDEX
Glossary of Acronyms and Defined Terms
In this Quarterly Report on Form 10-Q, unless the context suggests otherwise, the terms “we”, “us”, and “our” refer to Atlantic Union Bankshares Corporation and its direct and indirect subsidiaries, including Atlantic Union Bank.
2023 Form 10-K | – | Annual Report on Form 10-K for the year ended December 31, 2023 |
ACL | – | Allowance for credit losses |
AFS | – | Available for sale |
ALCO | – | Asset liability management committee |
ALLL | – | Allowance for loan and lease losses, a component of ACL |
American National | – | American National Bankshares Inc. |
American National merger | – | The merger of American National Bankshares Inc. with and into Atlantic Union Bankshares Corporation pursuant to the American National merger agreement |
American National merger agreement | – | Agreement and Plan of Merger dated July 24, 2023 by and between Atlantic Union Bankshares Corporation and American National Bankshares Inc. |
AOCI | – | Accumulated other comprehensive income (loss) |
ASC | – | Accounting Standards Codification |
ASU | – | Accounting Standards Update |
AUB | – | Atlantic Union Bankshares Corporation |
the Bank | – | Atlantic Union Bank |
BOLI | – | Bank-owned life insurance |
bps | – | Basis points |
BTFP | – | Bank Term Funding Program |
CDI | – | Core deposit intangibles |
CECL | – | Current expected credit losses |
CFPB | – | Consumer Financial Protection Bureau |
CME SOFR | – | Chicago Mercantile Exchange Secured Overnight Financing Rate |
the Company | – | Atlantic Union Bankshares Corporation and its subsidiaries |
CRE | – | Commercial real estate |
depositary shares | – | Depositary shares, each representing a 1/400th ownership interest in a share of the Company’s Series A preferred stock, with a liquidation preference of $10,000 per share of Series A preferred stock (equivalent to $25 per depositary share) |
EPS | – | Earnings per common share |
Exchange Act | – | Securities Exchange Act of 1934, as amended |
FASB | – | Financial Accounting Standards Board |
FDIC | – | Federal Deposit Insurance Corporation |
Federal Reserve | – | Board of Governors of the Federal Reserve System |
FHLB | – | Federal Home Loan Bank of Atlanta |
FHLMC | – | Federal Home Loan Mortgage Corporation |
FNB | – | FNB Corporation |
FNMA | – | Federal National Mortgage Association |
FOMC | – | Federal Open Market Committee |
FRB | – | Federal Reserve Bank of Richmond |
FR Y9-C | – | Consolidated financial statements for a U.S. bank holding company, a savings and loan holding company, a U.S. intermediate holding company, and a securities holding company |
FTE | – | Fully taxable equivalent |
GAAP | – | Accounting principles generally accepted in the United States |
GNMA | – | Government National Mortgage Association |
HTM | – | Held to maturity |
LHFI | – | Loans held for investment |
LHFS | – | Loans held for sale |
MBS | – | Mortgage-Backed Securities |
merger agreement | – | Agreement and Plan of Merger dated October 21, 2024 by and between Atlantic Union Bankshares Corporation and Sandy Spring Bancorp, Inc. |
merger | – | The merger of Sandy Spring Bancorp, Inc. with and into Atlantic Union Bankshares Corporation pursuant to the merger agreement |
MFC | – | Middleburg Financial Corporation |
NPA | – | Nonperforming assets |
NYSE | – | New York Stock Exchange |
OCI | – | Other comprehensive (loss) income |
PCD | – | Purchased credit deteriorated |
ROU asset | – | Right of Use Asset |
RPAs | – | Risk Participation Agreements |
Sandy Spring | – | Sandy Spring Bancorp, Inc. |
SEC | – | Securities and Exchange Commission |
Series A preferred stock | – | 6.875% Perpetual Non-Cumulative Preferred Stock, Series A, par value $10.00 per share |
SOFR | – | Secured Overnight Financing Rate |
TLM | – | Troubled loan modification |
VFG | – | Virginia Financial Group, Inc. |
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023
(Dollars in thousands, except share data)
September 30, | December 31, | ||||
2024 |
| 2023 | |||
ASSETS | (unaudited) | (audited) | |||
Cash and cash equivalents: | |||||
Cash and due from banks | $ | | $ | | |
Interest-bearing deposits in other banks | | | |||
Federal funds sold | | | |||
Total cash and cash equivalents | | | |||
Securities available for sale, at fair value | | | |||
Securities held to maturity, at carrying value | | | |||
Restricted stock, at cost | | | |||
Loans held for sale | | | |||
Loans held for investment, net of deferred fees and costs | | | |||
Less: allowance for loan and lease losses | | | |||
Total loans held for investment, net | | | |||
Premises and equipment, net | | | |||
Goodwill | | | |||
Amortizable intangibles, net | | | |||
Bank owned life insurance | | | |||
Other assets | | | |||
Total assets | $ | | $ | | |
LIABILITIES | |||||
Noninterest-bearing demand deposits | $ | | $ | | |
Interest-bearing deposits | | | |||
Total deposits | | | |||
Securities sold under agreements to repurchase | | | |||
Other short-term borrowings | | | |||
Long-term borrowings | | | |||
Other liabilities | | | |||
Total liabilities | | | |||
Commitments and contingencies (Note 8) | |||||
STOCKHOLDERS' EQUITY | |||||
Preferred stock, $ | | | |||
Common stock, $ | | | |||
Additional paid-in capital | | | |||
Retained earnings | | | |||
Accumulated other comprehensive loss | ( | ( | |||
Total stockholders' equity | | | |||
Total liabilities and stockholders' equity | $ | | $ | | |
Common shares outstanding | | | |||
Common shares authorized | | | |||
Preferred shares outstanding | | | |||
Preferred shares authorized | | |
See accompanying notes to consolidated financial statements.
-2-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Dollars in thousands, except share and per share data)
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||
2024 |
| 2023 |
| 2024 | 2023 | ||||||
Interest and dividend income: | |||||||||||
Interest and fees on loans | $ | | $ | | $ | | $ | | |||
Interest on deposits in other banks | | | | | |||||||
Interest and dividends on securities: | |||||||||||
Taxable | | | | | |||||||
Nontaxable | | | | | |||||||
Total interest and dividend income | | | | | |||||||
Interest expense: | |||||||||||
Interest on deposits | | | | | |||||||
Interest on short-term borrowings | | | | | |||||||
Interest on long-term borrowings | | | | | |||||||
Total interest expense | | | | | |||||||
Net interest income | | | | | |||||||
Provision for credit losses | | | | | |||||||
Net interest income after provision for credit losses | | | | | |||||||
Noninterest income: | |||||||||||
Service charges on deposit accounts | | | | | |||||||
Other service charges, commissions and fees | | | | | |||||||
Interchange fees | | | | | |||||||
Fiduciary and asset management fees | | | | | |||||||
Mortgage banking income | | | | | |||||||
Gain (loss) on sale of securities | | ( | ( | ( | |||||||
Bank owned life insurance income | | | | | |||||||
Loan-related interest rate swap fees | | | | | |||||||
Other operating income | | | | | |||||||
Total noninterest income | | | | | |||||||
Noninterest expenses: | |||||||||||
Salaries and benefits | | | | | |||||||
Occupancy expenses | | | | | |||||||
Furniture and equipment expenses | | | | | |||||||
Technology and data processing | | | | | |||||||
Professional services | | | | | |||||||
Marketing and advertising expense | | | | | |||||||
FDIC assessment premiums and other insurance | | | | | |||||||
Franchise and other taxes | | | | | |||||||
Loan-related expenses | | | | | |||||||
Amortization of intangible assets | | | | | |||||||
Merger-related costs | | | | | |||||||
Other expenses | | | | | |||||||
Total noninterest expenses | | | | | |||||||
Income before income taxes | | | | | |||||||
Income tax expense | | | | | |||||||
Net Income | $ | | $ | | $ | | $ | | |||
Dividends on preferred stock | | | | | |||||||
Net income available to common shareholders | $ | | $ | | $ | | $ | | |||
Basic earnings per common share | $ | | $ | | $ | | $ | | |||
Diluted earnings per common share | $ | | $ | | $ | | $ | | |||
Dividends declared per common share | $ | | $ | | $ | | $ | | |||
Basic weighted average number of common shares outstanding | | | |||||||||
Diluted weighted average number of common shares outstanding | | |
See accompanying notes to consolidated financial statements.
-3-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Dollars in thousands)
Three Months Ended |
| Nine Months Ended | ||||||||||
September 30, |
| September 30, | ||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Net income | $ | | $ | | $ | | $ | | ||||
Other comprehensive income (loss): |
|
|
|
|
| |||||||
Cash flow hedges: |
|
|
|
|
| |||||||
Change in fair value of cash flow hedges (net of tax, $ |
| |
| ( |
| |
| ( | ||||
AFS securities: |
|
|
|
| ||||||||
Unrealized holding gains (losses) arising during period (net of tax, $ |
| |
| ( |
| |
| ( | ||||
Reclassification adjustment for (gains) losses included in net income (net of tax, $ |
| ( |
| |
| |
| | ||||
HTM securities: |
|
|
|
| ||||||||
Reclassification adjustment for accretion of unrealized gains on AFS securities transferred to HTM (net of tax) (2) |
| |
| ( |
| ( |
| ( | ||||
Bank owned life insurance: |
|
|
| |||||||||
Unrealized holding (losses) gains arising during the period | | | ( | | ||||||||
Reclassification adjustment for gains included in net income (3) |
| ( |
| ( |
| ( |
| ( | ||||
Other comprehensive income (loss): |
| |
| ( |
| |
| ( | ||||
Comprehensive income (loss) | $ | | $ | ( | $ | | $ | |
(1)
(2)
(3)
See accompanying notes to consolidated financial statements.
-4-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Dollars in thousands, except share and per share amounts)
|
|
|
|
| Accumulated |
| ||||||||||||
Additional | Other | |||||||||||||||||
Common | Preferred | Paid-In | Retained | Comprehensive | ||||||||||||||
Stock | Stock | Capital | Earnings | Income (Loss) | Total | |||||||||||||
Balance - December 31, 2023 | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive loss (net of taxes of $ |
| ( |
| ( | ||||||||||||||
Dividends on common stock ($ |
| ( |
| ( | ||||||||||||||
Dividends on preferred stock ($ |
| ( |
| ( | ||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( |
| | ( | ( | ||||||||||||||
Stock-based compensation expense |
| |
| | ||||||||||||||
Balance - March 31, 2024 | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive loss (net of taxes of $ |
| ( |
| ( | ||||||||||||||
Issuance of common stock in regard to acquisition ( | | | | |||||||||||||||
Dividends on common stock ($ |
| ( |
| ( | ||||||||||||||
Dividends on preferred stock ($ |
| ( |
| ( | ||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( |
| | |
| | |||||||||||||
Stock-based compensation expense | | | ||||||||||||||||
Balance - June 30, 2024 | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive income (net of taxes of $ |
| |
| | ||||||||||||||
Dividends on common stock ($ |
| ( |
| ( | ||||||||||||||
Dividends on preferred stock ($ |
| ( |
| ( | ||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( |
| | |
| | |||||||||||||
Stock-based compensation expense | | | ||||||||||||||||
Balance - September 30, 2024 | $ | | $ | | $ | | $ | | $ | ( | $ | |
-5-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Dollars in thousands, except share and per share amounts)
|
|
|
| Accumulated |
| |||||||||||||
Additional | Other | |||||||||||||||||
Common | Preferred | Paid-In | Retained | Comprehensive | ||||||||||||||
Stock | Stock | Capital | Earnings | Income (Loss) | Total | |||||||||||||
Balance - December 31, 2022 | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive income (net of taxes of $ |
| |
| | ||||||||||||||
Dividends on common stock ($ |
| ( |
| ( | ||||||||||||||
Dividends on preferred stock ($ |
| ( |
| ( | ||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( |
| | ( | ( | ||||||||||||||
Stock-based compensation expense |
| |
| | ||||||||||||||
Balance - March 31, 2023 | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive loss (net of taxes of $ | ( |
| ( | |||||||||||||||
Dividends on common stock ($ | ( |
| ( | |||||||||||||||
Dividends on preferred stock ($ | ( |
| ( | |||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( | | |
| | ||||||||||||||
Stock-based compensation expense | | | ||||||||||||||||
Balance - June 30, 2023 | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive loss (net of taxes of $ | ( |
| ( | |||||||||||||||
Dividends on common stock ($ | ( |
| ( | |||||||||||||||
Dividends on preferred stock ($ | ( |
| ( | |||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( | | |
| | ||||||||||||||
Stock-based compensation expense | | | ||||||||||||||||
Balance - September 30, 2023 | $ | | $ | | $ | | $ | | $ | ( | $ | |
See accompanying notes to consolidated financial statements.
-6-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Dollars in thousands)
| 2024 |
| 2023 | |||
Operating activities: |
|
|
|
| ||
Net income | $ | | $ | | ||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
| ||
Provision for credit losses |
| |
| | ||
Depreciation of premises and equipment |
| |
| | ||
Amortization, net |
| |
| | ||
(Accretion) amortization related to acquisitions, net |
| ( |
| | ||
Losses on securities sales, net |
| |
| | ||
BOLI income |
| ( |
| ( | ||
Writedown of ROU assets, foreclosed properties, and equipment |
| |
| | ||
Gain on sale-leaseback transaction |
| |
| ( | ||
Loans held for sale: | ||||||
Originations and purchases | ( | ( | ||||
Proceeds from sales |
| |
| | ||
Changes in operating assets and liabilities: |
|
| ||||
Net decrease (increase) in other assets |
| |
| ( | ||
Net (decrease) increase in other liabilities |
| ( |
| | ||
Net cash provided by operating activities |
| |
| | ||
Investing activities: |
|
|
| |||
Securities AFS and restricted stock: |
| |||||
Purchases |
| ( |
| ( | ||
Proceeds from sales |
| |
| | ||
Proceeds from maturities, calls, and paydowns |
| |
| | ||
Securities HTM: |
| |||||
Purchases | ( | ( | ||||
Proceeds from maturities, calls, and paydowns |
| |
| | ||
Net change in other investments | ( | ( | ||||
Net increase in LHFI |
| ( |
| ( | ||
Net purchases of premises and equipment | ( | ( | ||||
Proceeds from BOLI settlements | | | ||||
Proceeds from sale-leaseback transaction | | | ||||
Proceeds from sales of foreclosed properties and former bank premises | |
| | |||
Net cash received in acquisition |
| |
| | ||
Net cash used in investing activities |
| ( |
| ( | ||
Financing activities: |
|
|
|
| ||
Net increase (decrease) in: |
| |||||
Non-interest-bearing deposits |
| |
| ( | ||
Interest-bearing deposits |
| |
| | ||
Short-term borrowings | ( | ( | ||||
Common stock: |
| |||||
Issuance | | | ||||
Dividends paid |
| ( |
| ( | ||
Vesting of restricted stock, net of shares held for taxes | ( | ( | ||||
Net cash provided by financing activities |
| |
| | ||
Increase in cash and cash equivalents |
| | | |||
Cash, cash equivalents and restricted cash at beginning of the period |
| |
| | ||
Cash, cash equivalents and restricted cash at end of the period | $ | | $ | |
-7-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Dollars in thousands)
| 2024 |
| 2023 | |||
Supplemental Disclosure of Cash Flow Information |
|
|
|
| ||
Cash payments for: |
|
|
|
| ||
Interest | $ | | $ | | ||
Income taxes |
| |
| | ||
Supplemental schedule of noncash investing and financing activities |
|
|
|
| ||
Transfers from loans to foreclosed properties |
| |
| | ||
Transfers from bank premises to foreclosed properties | | | ||||
Issuance of common stock in exchange for net assets in acquisitions |
| |
| | ||
Transactions related to acquisitions |
|
|
|
| ||
Assets acquired |
| |
| | ||
Liabilities assumed |
| |
| |
See accompanying notes to consolidated financial statements.
-8-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank, which provides banking and related financial products and services to consumers and businesses.
Basis of Financial Information
The accounting policies and practices of Atlantic Union Bankshares Corporation and subsidiaries conform to GAAP and follow general practices within the banking industry. The consolidated financial statements include the accounts of the Company, which is a financial holding company and a bank holding company that owns all of the outstanding common stock of its banking subsidiary, Atlantic Union Bank, which owns Union Insurance Group, LLC, Atlantic Union Financial Consultants, LLC, Atlantic Union Bank Investments, Inc., and Atlantic Union Equipment Finance, Inc.
The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the ACL, the fair value of financial instruments, and the fair values associated with assets acquired and liabilities assumed in a business combination. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other period.
On April 1, 2024, the Company completed its acquisition of American National. American National’s results of operations are included in the Company’s consolidated results since the date of acquisition.
The unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s 2023 Form 10-K. Certain prior period amounts have been reclassified to conform to current period presentation. None of these reclassifications had a material effect on the Company’s financial statements. See Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” in the Company’s 2023 Form 10-K and this Note 1 for additional information on the Company’s significant accounting policies. Except as set forth below with respect to acquisition accounting, there have not been any significant changes to the Company’s accounting policies from those disclosed in the Company’s 2023 Form 10-K that could have a material effect on the Company’s financial statements.
Acquisition Accounting
The Company accounts for its mergers and acquisitions that qualify as a business combination under ASC 805, Business Combinations, which requires the use of the acquisition method of accounting, resulting in all identifiable assets acquired and liabilities assumed being recorded at their fair values as of the acquisition date, with the acquisition and merger-related transaction expenses and restructuring costs expensed in the period incurred. The determination of fair values requires management to make estimates about discount rates, future expected cash flows, market conditions, and other future events that are highly subjective in nature and subject to change. The excess of the consideration paid over the fair value of the net assets acquired is recorded as goodwill. The results of operations of the acquired entity are included in the consolidated statement of income from the acquisition date.
The Company evaluates acquired loans at the acquisition date and classifies them as either – (1) loans that have experienced a more-than insignificant amount of credit deterioration since origination (“PCD” loans) or (2) loans that have not experienced a more-than insignificant amount of credit deterioration since origination (“non-PCD” loans). At acquisition, the allowance on PCD loans is booked directly to the ACL using the Company’s existing ACL methodology, but there is no initial impact to net income. Subsequent to acquisition, future changes in estimates of expected credit losses on PCD loans are recognized as provision expense (or reversal of provision expense). The ACL for non-PCD loans is recognized as provision expense in the same reporting period as the business acquisition, using the Company’s existing ACL methodology. See Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 “Financial
-9-
Statements and Supplementary Data” in the Company’s 2023 Form 10-K for additional information on the Company’s accounting policy over acquired loans and ACL.
Under ASC 805, the Company may adjust provisional fair values of assets acquired and liabilities assumed in a business combination for a measurement period of up to one year from the acquisition date if additional information about the facts and circumstances that existed as of the acquisition date becomes available. Any future measurement period adjustments, if necessary, will be recognized in the reporting period in which the adjustment amount is determined.
See also Note 2 “Acquisitions” in this Form 10-Q for additional discussion of the Company’s acquisitions.
-10-
2. ACQUISITIONS
American National Acquisition
On April 1, 2024, the Company completed its previously announced merger with American National, the holding company for American National Bank and Trust Company, headquartered in Danville, Virginia. Under the terms of the American National merger agreement, at the effective time of the American National merger, each outstanding share of American National common stock was converted into
As a result of the American National acquisition, the Company’s associated goodwill at September 30, 2024 totaled $
The following table provides a summary of the consideration transferred and the fair value of the assets acquired and liabilities assumed as of the date of the acquisition, reflecting the aforementioned measurement period and reclassification adjustments (dollars in thousands):
Purchase price consideration |
|
| $ | | ||
Fair value of assets acquired: |
|
|
|
| ||
Cash and cash equivalents | $ | |
|
| ||
Securities AFS |
| |
|
| ||
LHFS |
| |
|
| ||
LHFI | | |||||
Premises and equipment |
| |
|
| ||
CDI and other intangibles |
| |
|
| ||
Bank owned life insurance | | |||||
Other assets |
| |
|
| ||
Total assets | $ | |
|
| ||
Fair value of liabilities assumed: |
|
|
|
| ||
Deposits | $ | |
|
| ||
Short-term borrowings |
| |
|
| ||
Long-term borrowings |
| |
|
| ||
Other liabilities |
| |
|
| ||
Total liabilities | $ | |
|
| ||
Fair value of net assets acquired |
|
| $ | | ||
Preliminary goodwill |
|
| $ | |
-11-
The Company assessed the fair value based on the following methods for the significant assets acquired and liabilities assumed:
Cash and cash equivalents: The fair value was determined to approximate the carrying amount based on the short-term nature of these assets.
Securities AFS: The fair value of the investment portfolio was based on quoted market prices and dealer quotes and pricing obtained from independent pricing services.
LHFS: The LHFS portfolio was recorded at fair value based on quotes or bids from third parties.
LHFI: Fair values for LHFI were estimated using a discounted cash flow analysis that considered factors including loan type, interest rate type, prepayment speeds, duration, and current discount rates. The discount rates used for loans were based on current market rates for new originations of comparable loans and factored in adjustments for any expected liquidity events. Expected cash flows were derived using inputs that considered estimated credit losses and prepayments.
Premises and equipment: The fair value of bank premises and equipment held for use was valued by obtaining recent market data for similar property types with adjustments for characteristics of individual properties.
CDI and other intangibles: CDI represents the future economic benefit of acquired customer deposits. The fair value of the CDI asset was estimated based on a discounted cash flow methodology that incorporated expected customer attrition rates, cost of deposit base, net maintenance cost associated with customer deposits, and the cost for alternative funding sources. The discount rates used were based on market rates. Other intangibles include customer relationship intangible assets and non-compete intangible assets. Customer relationship intangible assets represent the value associated with customer relationships related to the wealth management business that was acquired. Non-compete intangible assets represent the value associated with non-compete agreements for former employees in place at the date of the acquisition.
BOLI: The fair value of BOLI is carried at its current cash surrender value, which is the most reasonable estimate of fair value.
Deposits: The fair value of interest bearing and non-interest bearing deposits is the amount payable on demand at the acquisition date. The fair value of time deposits was estimated using a discounted cash flow calculation that includes a market rate analysis of the current rates offered by market participants for certificates of deposits that mature in the same period.
Short-Term Borrowings: Acquired short term borrowings consist of FHLB overnight borrowings and borrowings under repurchase agreements. The fair value of the short-term borrowings was determined to approximate the carrying amounts.
Long-Term Borrowings: The fair values of the Company’s long-term borrowings, including trust preferred securities, were estimated using discounted cash flow analyses, based on the current incremental borrowing rates for similar types of borrowing arrangements.
-12-
The following table presents for illustrative purposes only certain pro forma information as if the Company had acquired American National on January 1, 2023. These results combine the historical results of American National in the Company's Consolidated Statements of Income and while certain adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place on January 1, 2023. No adjustments have been made to the pro forma results regarding possible revenue enhancements, provision for credit losses, or expense efficiencies. Pro forma adjustments below include the net impact of American National’s accretion and the elimination of American National merger-related costs, as disclosed below. The Company expects to achieve further operating cost savings and other business synergies, including branch closures, as a result of the acquisition, which are not reflected in the pro forma amounts below (dollars in thousands):
Pro forma | Pro forma | |||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
| 2024 (2) |
| 2023 (3) |
| 2024 (2) |
| 2023 (3) | |||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
Total revenues (1) |
| $ | |
| $ | |
| $ | |
| $ | |
Net income available to common shareholders (4) |
| $ | |
| $ | |
| $ | |
| $ | |
(1) Includes net interest income and noninterest income.
(2) Includes the net impact of American National’s accretion adjustments of $
(3) Includes the net impact of American National’s accretion adjustments of $
(4) For the three and nine months ended September 30, 2024 and 2023, excludes American National merger-related costs as noted below.
Merger-related costs associated with the acquisition of American National were $
The Company’s operating results for the three and nine months ended September 30, 2024 include the operating results of the acquired assets and assumed liabilities of American National subsequent to the acquisition on April 1, 2024. Due to the merging of certain processes and the conversion of American National’s systems during the second quarter of 2024, historical reporting for the former American National operations is impracticable and thus disclosures of the revenue from the assets acquired and income before income taxes is impracticable for the period subsequent to acquisition.
-13-
3. SECURITIES AND OTHER INVESTMENTS
Available for Sale
The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of September 30, 2024 are as follows (dollars in thousands):
Amortized | Gross Unrealized | Estimated | ||||||||||
| Cost |
| Gains |
| (Losses) |
| Fair Value | |||||
September 30, 2024 |
|
|
|
|
|
|
| |||||
U.S. government and agency securities | $ | | $ | | $ | ( | $ | | ||||
Obligations of states and political subdivisions |
| |
| |
| ( |
| | ||||
Corporate and other bonds (1) |
| |
| |
| ( |
| | ||||
Commercial MBS |
|
| ||||||||||
Agency | |
| |
| ( | | ||||||
Non-agency | |
| |
| ( | | ||||||
Total commercial MBS | |
| |
| ( | | ||||||
Residential MBS | ||||||||||||
Agency | |
| |
| ( | | ||||||
Non-agency | |
| |
| ( | | ||||||
Total residential MBS | |
| |
| ( | | ||||||
Other securities |
| |
| |
| |
| | ||||
Total AFS securities | $ | | $ | | $ | ( | $ | |
(1) Other bonds include asset-backed securities.
The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, 2023 are as follows (dollars in thousands):
Amortized | Gross Unrealized | Estimated | ||||||||||
| Cost |
| Gains |
| (Losses) |
| Fair Value | |||||
December 31, 2023 | ||||||||||||
U.S. government and agency securities | $ | | $ | | $ | ( | $ | | ||||
Obligations of states and political subdivisions | |
| |
| ( |
| | |||||
Corporate and other bonds (1) |
| |
| |
| ( |
| | ||||
Commercial MBS |
|
| ||||||||||
Agency | |
| |
| ( | | ||||||
Non-agency | |
| |
| ( | | ||||||
Total commercial MBS | |
| |
| ( | | ||||||
Residential MBS | ||||||||||||
Agency | |
| |
| ( | | ||||||
Non-agency | |
| |
| ( | | ||||||
Total residential MBS | |
| |
| ( | | ||||||
Other securities |
| |
| |
| |
| | ||||
Total AFS securities | $ | | $ | | $ | ( | $ | |
(1) Other bonds include asset-backed securities.
-14-
The following table shows the gross unrealized losses and fair value of the Company’s AFS securities with unrealized losses, which are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position for the following periods ended (dollars in thousands).
Less than 12 months | More than 12 months | Total | ||||||||||||||||
| Fair |
| Unrealized |
| Fair |
| Unrealized |
| Fair |
| Unrealized | |||||||
Value | Losses | Value(2) | Losses | Value | Losses | |||||||||||||
September 30, 2024 |
|
|
|
|
|
| ||||||||||||
U.S. government and agency securities | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||
Obligations of states and political subdivisions | | ( | | ( | | ( | ||||||||||||
Corporate and other bonds(1) |
| |
| ( |
| |
| ( |
| |
| ( | ||||||
Commercial MBS |
| |||||||||||||||||
Agency | | ( | | ( | | ( | ||||||||||||
Non-agency | | ( | | ( | | ( | ||||||||||||
Total commercial MBS | | ( | | ( | | ( | ||||||||||||
Residential MBS | ||||||||||||||||||
Agency | | ( | | ( | | ( | ||||||||||||
Non-agency | | ( | | ( | | ( | ||||||||||||
Total residential MBS | | ( | | ( | | ( | ||||||||||||
Total AFS securities | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( | ||||||
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
U.S. government and agency securities | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||
Obligations of states and political subdivisions | | ( | | ( | | ( | ||||||||||||
Corporate and other bonds(1) |
| |
| ( |
| |
| ( |
| |
| ( | ||||||
Commercial MBS |
| |||||||||||||||||
Agency | | ( | | ( | | ( | ||||||||||||
Non-agency | | | | ( | | ( | ||||||||||||
Total commercial MBS | | ( | | ( | | ( | ||||||||||||
Residential MBS | ||||||||||||||||||
Agency | | ( | | ( | | ( | ||||||||||||
Non-agency | | ( | | ( | | ( | ||||||||||||
Total residential MBS | | ( | | ( | | ( | ||||||||||||
Total AFS securities | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( |
(1) Other bonds include asset-backed securities.
(2) Comprised of
The Company has evaluated AFS securities in an unrealized loss position for credit related impairment at September 30, 2024 and December 31, 2023 and concluded
Additionally, the majority of the Company’s MBS are issued by FNMA, FHLMC, and GNMA and do not have credit risk given the implicit and explicit government guarantees associated with these agencies. In addition, the non-agency mortgage-backed and asset-backed securities generally received a
-15-
The following table presents the amortized cost and estimated fair value of AFS securities as of the periods ended, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
September 30, 2024 | December 31, 2023 | |||||||||||
| Amortized |
| Estimated |
| Amortized |
| Estimated | |||||
Cost | Fair Value | Cost | Fair Value | |||||||||
Due in one year or less | $ | | $ | | $ | | $ | | ||||
Due after one year through five years |
| |
| |
| |
| | ||||
Due after five years through ten years |
| |
| |
| |
| | ||||
Due after ten years |
| |
| |
| |
| | ||||
Total AFS securities | $ | | $ | | $ | | $ | |
Refer to Note 8 “Commitments and Contingencies” within this Item 1 of this Quarterly Report for information regarding the estimated fair value of AFS securities that were pledged to secure public deposits, repurchase agreements and for other purposes as permitted or required by law as of September 30, 2024 and December 31, 2023.
Accrued interest receivable on AFS securities totaled $
Held to Maturity
The Company reports HTM securities on the Company’s Consolidated Balance Sheets at carrying value. Carrying value is amortized cost, which includes any unamortized unrealized gains and losses recognized in AOCI prior to reclassifying the securities from AFS securities to HTM securities. The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of September 30, 2024 are as follows (dollars in thousands):
Carrying | Gross Unrealized | Estimated | ||||||||||
| Value |
| Gains |
| (Losses) | Fair Value | ||||||
September 30, 2024 |
|
|
|
|
|
| ||||||
Obligations of states and political subdivisions | $ | | $ | | $ | ( | $ | | ||||
Corporate and other bonds(1) | | | ( | | ||||||||
Commercial MBS |
| |||||||||||
Agency | | | ( | | ||||||||
Non-agency | | | ( | | ||||||||
Total commercial MBS | | | ( | | ||||||||
Residential MBS | ||||||||||||
Agency | | | ( | | ||||||||
Non-agency | | | ( | | ||||||||
Total residential MBS | | | ( | | ||||||||
Total HTM securities | $ | | $ | | $ | ( | $ | |
(1) Other bonds include asset-backed securities.
-16-
The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, 2023 are as follows (dollars in thousands):
Carrying | Gross Unrealized | Estimated | ||||||||||
| Value |
| Gains |
| (Losses) |
| Fair Value | |||||
December 31, 2023 |
|
|
|
|
|
|
|
| ||||
Obligations of states and political subdivisions | $ | | $ | | $ | ( | $ | | ||||
Corporate and other bonds(1) | | | ( | | ||||||||
Commercial MBS | ||||||||||||
Agency | | | ( | | ||||||||
Non-agency | | | ( | | ||||||||
Total commercial MBS | | | ( | | ||||||||
Residential MBS | ||||||||||||
Agency | | | ( | | ||||||||
Non-agency | | | ( | | ||||||||
Total residential MBS | | | ( | | ||||||||
Total HTM securities | $ | | $ | | $ | ( | $ | |
(1) Other bonds include asset-backed securities.
The following table presents the amortized cost of HTM securities as of the periods ended, by security type and credit rating (dollars in thousands):
| Obligations of states and political |
| Corporate and other |
| Mortgage-backed |
| Total HTM | |||||
subdivisions | bonds | securities | securities | |||||||||
September 30, 2024 | ||||||||||||
Credit Rating: |
|
| ||||||||||
AAA/AA/A | $ | | $ | | $ | | $ | | ||||
BBB/BB/B | | | | | ||||||||
Not Rated – Agency(1) | | | | | ||||||||
Not Rated – Non-Agency(2) |
| |
| | | | ||||||
Total | $ | | $ | | $ | | $ | | ||||
December 31, 2023 | ||||||||||||
Credit Rating: |
|
| ||||||||||
AAA/AA/A | $ | | $ | | $ | | $ | | ||||
BBB/BB/B | | | | | ||||||||
Not Rated – Agency(1) | | | | | ||||||||
Not Rated – Non-Agency(2) |
| |
| | | | ||||||
Total | $ | | $ | | $ | | $ | |
(1) Generally considered not to have credit risk given the government guarantees associated with these agencies.
(2) Non-agency mortgage-backed and asset-backed securities have limited credit risk, supported by most receiving a
-17-
The following table presents the amortized cost and estimated fair value of HTM securities as of the periods ended, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
September 30, 2024 | December 31, 2023 | |||||||||||
| Carrying |
| Estimated |
| Carrying |
| Estimated | |||||
Value | Fair Value | Value | Fair Value | |||||||||
Due in one year or less | $ | | $ | | $ | | $ | | ||||
Due after one year through five years |
| |
| |
| |
| | ||||
Due after five years through ten years |
| |
| |
| |
| | ||||
Due after ten years |
| |
| |
| |
| | ||||
Total HTM securities | $ | | $ | | $ | | $ | |
Refer to Note 8 “Commitments and Contingencies” within this Item 1 of this Quarterly Report for information regarding the estimated fair value of HTM securities that were pledged to secure public deposits as permitted or required by law as of September 30, 2024 and December 31, 2023.
Accrued interest receivable on HTM securities totaled $
The Company’s HTM investment portfolio primarily consists of highly-rated municipal securities. At September 30, 2024 and December 31, 2023, the Company’s HTM securities were all current, with
Restricted Stock, at cost
The FHLB required the Bank to maintain stock in an amount equal to
-18-
Realized Gains and Losses
The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the three and nine months ended September 30, (dollars in thousands):
| Three Months Ended |
| Nine Months Ended | |||
2024 | 2024 | |||||
Realized gains (losses)(1): |
|
|
|
| ||
Gross realized gains | $ | | $ | | ||
Gross realized losses |
| |
| ( | ||
Net realized gains (losses) | $ | | $ | ( | ||
Proceeds from sales of securities | $ | | $ | |
| Three Months Ended |
| Nine Months Ended | |||
2023 | 2023 | |||||
Realized gains (losses)(1): |
|
|
|
| ||
Gross realized gains | $ | | $ | | ||
Gross realized losses |
| ( |
| ( | ||
Net realized losses | $ | ( | $ | ( | ||
Proceeds from sales of securities | $ | | $ | |
(1) Includes gains (losses) on sales and calls of securities.
4. LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES
The following tables exclude LHFS. The Company’s LHFI are stated at their face amount, net of deferred fees and costs and includes loan balances as of September 30, 2024, acquired through the American National acquisition that closed on April 1, 2024, and consisted of the following as of the periods ended (dollars in thousands):
September 30, 2024 | December 31, 2023 | ||||||
Construction and Land Development | $ | | $ | | |||
CRE – Owner Occupied |
| |
| | |||
CRE – Non-Owner Occupied |
| |
| | |||
Multifamily Real Estate |
| |
| | |||
Commercial & Industrial |
| |
| | |||
Residential 1-4 Family – Commercial |
| |
| | |||
Residential 1-4 Family – Consumer |
| |
| | |||
Residential 1-4 Family – Revolving |
| |
| | |||
Auto |
| |
| | |||
Consumer |
| |
| | |||
Other Commercial |
| |
| | |||
Total LHFI, net of deferred fees and costs(1) | | | |||||
Allowance for loan and lease losses | ( | ( | |||||
Total LHFI, net | $ | | $ | |
(1) Total loans included unamortized premiums and discounts, and unamortized deferred fees and costs totaling $
Refer to Note 1 “Summary of Significant Accounting Policies” and Note 2 “Acquisitions” within Item 1 of this Quarterly Report for further information about the American National acquisition.
Accrued interest receivable on LHFI totaled $75.2 million and $72.5 million at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable write-offs were not material to the Company’s consolidated financial statements for the three and nine months ended September 30, 2024 and 2023.
-19-
The following table shows the aging of the Company’s LHFI portfolio by class at September 30, 2024 (dollars in thousands):
|
|
|
| Greater than |
|
| |||||||||||||
30-59 Days |
| 60-89 Days |
| 90 Days and |
|
| |||||||||||||
Current | Past Due |
| Past Due |
| still Accruing |
| Nonaccrual |
| Total Loans | ||||||||||
Construction and Land Development | $ | | $ | |
| $ | |
| $ | |
| $ | |
| $ | | |||
CRE – Owner Occupied |
| |
| |
|
| |
|
| |
|
| |
|
| | |||
CRE – Non-Owner Occupied |
| |
| |
|
| |
|
| |
|
| |
|
| | |||
Multifamily Real Estate |
| |
| |
|
| |
|
| |
|
| |
|
| | |||
Commercial & Industrial |
| |
| |
|
| |
|
| |
|
| |
|
| | |||
Residential 1-4 Family – Commercial |
| |
| |
|
| |
|
| |
|
| |
|
| | |||
Residential 1-4 Family – Consumer |
| |
| |
|
| |
|
| |
|
| |
|
| | |||
Residential 1-4 Family – Revolving |
| |
| |
| |
|
| |
|
| |
|
| | ||||
Auto |
| |
| |
| |
| |
|
| |
|
| | |||||
Consumer |
| |
| |
| |
| |
| |
| | |||||||
Other Commercial | | | | | | | |||||||||||||
Total LHFI, net of deferred fees and costs | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
% of total loans | % | % | % | % | % | % |
The following table shows the aging of the Company’s LHFI portfolio by class at December 31, 2023 (dollars in thousands):
|
|
|
| Greater than |
|
|
| ||||||||||||
30-59 Days | 60-89 Days | 90 Days and |
| ||||||||||||||||
Current | Past Due | Past Due | still Accruing | Nonaccrual | Total Loans |
| |||||||||||||
Construction and Land Development | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
CRE – Owner Occupied |
| |
| |
| |
| |
| |
| | |||||||
CRE – Non-Owner Occupied |
| |
| |
| |
| |
| |
| | |||||||
Multifamily Real Estate |
| |
| |
| |
| |
| |
| | |||||||
Commercial & Industrial |
| |
| |
| |
| |
| |
| | |||||||
Residential 1-4 Family – Commercial |
| |
| |
| |
| |
| |
| | |||||||
Residential 1-4 Family – Consumer |
| |
| |
| |
| |
| |
| | |||||||
Residential 1-4 Family – Revolving |
| |
| |
| |
| |
| |
| | |||||||
Auto |
| |
| |
| |
| |
| |
| | |||||||
Consumer |
| |
| |
| |
| |
| |
| | |||||||
Other Commercial | | | | | | | |||||||||||||
Total LHFI, net of deferred fees and costs | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
% of total loans | % | % | % | % | % | % |
-20-
The following table shows the Company’s amortized cost basis of loans on nonaccrual status with no related ALLL as of the periods ended (dollars in thousands):
September 30, | December 31, | |||||
2024 | 2023 | |||||
CRE – Owner Occupied | $ | | $ | | ||
CRE – Non-Owner Occupied | | | ||||
Total LHFI | $ | | $ | |
There was
Troubled Loan Modifications
See Note 1 “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2023 Form 10-K for loan modifications to borrowers experiencing financial difficulty and how the Company defines TLMs.
As of September 30, 2024 and 2023, the Company had TLMs with an amortized cost basis of $
The following table presents the amortized cost basis of TLMs for the three and nine months ended September 30, (dollars in thousands):
Three Months Ended | Nine Months Ended | |||||||||||
2024 | 2024 | |||||||||||
| Amortized Cost | % of Total Class of Financing Receivable |
| Amortized Cost | % of Total Class of Financing Receivable |
| ||||||
Combination - Other-Than-Insignificant Payment Delay and Term Extension | ||||||||||||
Commercial and Industrial | $ | | | % | $ | | | % | ||||
CRE – Non-Owner Occupied |
| | | % |
| | | % | ||||
Total Combination - Other-Than-Insignificant Payment Delay and Term Extension | $ | | $ | | ||||||||
Term Extension |
|
| ||||||||||
Construction and Land Development | $ | | NM | % | $ | | NM | % | ||||
Commercial and Industrial | | NM | % | | NM | % | ||||||
CRE – Owner Occupied | | | % | | | % | ||||||
Residential 1-4 Family – Consumer | | | % | | | % | ||||||
Total Term Extension | $ | | $ | | ||||||||
Combination - Term Extension and Interest Rate Reduction | ||||||||||||
Residential 1-4 Family – Consumer | $ | | | % | $ | | | % | ||||
Total Combination - Term Extension and Interest Rate Reduction | $ | | $ | | ||||||||
Combination - Interest Rate Reduction, Term Extension and Other-Than-Insignificant Payment Delay | ||||||||||||
Commercial and Industrial | $ | | | % | $ | | NM | % | ||||
Total Combination - Interest Rate Reduction, Term Extension and Other-Than-Insignificant Payment Delay | $ | | $ | | ||||||||
Total | $ | | $ | |
NM = Not Meaningful
-21-
Three Months Ended | Nine Months Ended | |||||||||||
2023 | 2023 | |||||||||||
| Amortized Cost | % of Total Class of Financing Receivable | Amortized Cost | % of Total Class of Financing Receivable |
| |||||||
Term Extension |
|
| ||||||||||
Commercial and Industrial | $ | | NM | $ | | | % | |||||
CRE – Non-Owner Occupied | | | % | | | % | ||||||
CRE – Owner Occupied | | | % | | | % | ||||||
Residential 1-4 Family – Consumer | | NM | | | % | |||||||
Total Term Extension | $ | | $ | | ||||||||
Combination - Term Extension and Interest Rate Reduction | ||||||||||||
Residential 1-4 Family – Consumer | $ | | | % | $ | | | % | ||||
Residential 1-4 Family – Revolving |
| | — | % |
| | NM | |||||
Total Combination - Term Extension and Interest Rate Reduction | $ | | $ | | ||||||||
Principal Forgiveness | ||||||||||||
CRE – Non-Owner Occupied | | | % | | | % | ||||||
Total Principal Forgiveness | $ | | $ | | ||||||||
Total | $ | | $ | |
NM = Not Meaningful
-22-
The following table describes the financial effects of TLMs on a weighted average basis for TLMs within that loan type for the three and nine months ended September 30,:
Three Months Ended | ||||||||
2024 | ||||||||
Term Extension | ||||||||
Loan Type | Financial Effect | |||||||
CRE – Owner Occupied | Added a weighted-average | |||||||
Nine Months Ended | ||||||||
2024 | ||||||||
Other-Than-Insignificant Payment Delay and Term Extension | ||||||||
Loan Type | Financial Effect | |||||||
Commercial and Industrial | Added a weighted-average | |||||||
CRE – Non-Owner Occupied | Added a weighted-average | |||||||
Term Extension | ||||||||
Loan Type | Financial Effect | |||||||
CRE – Owner Occupied | Added a weighted-average | |||||||
Three Months Ended | ||||||||
2023 | ||||||||
Term Extension | ||||||||
Loan Type | Financial Effect | |||||||
CRE – Owner Occupied | Added a weighted-average | |||||||
Nine Months Ended | ||||||||
2023 | ||||||||
Term Extension | ||||||||
Loan Type | Financial Effect | |||||||
Commercial and Industrial | Added a weighted-average | |||||||
CRE – Owner Occupied | Added a weighted-average | |||||||
CRE – Non-Owner Occupied | Added a weighted-average | |||||||
Residential 1-4 Family – Consumer | Added a weighted-average | |||||||
Combination - Term Extension and Interest Rate Reduction | ||||||||
Loan Type | Financial Effect | |||||||
Residential 1-4 Family – Consumer | Added a weighted-average | |||||||
Residential 1-4 Family – Revolving | Added a weighted-average | |||||||
Principal Forgiveness | ||||||||
Loan Type | Financial Effect | |||||||
CRE – Non-Owner Occupied | Reduced the amortized cost basis of loans by $ |
-23-
The Company considers a default of a TLM to occur when the borrower is 90 days past due following the modification or a foreclosure and repossession of the applicable collateral occurs. During the three and nine months ended September 30, 2024 and 2023, the Company did
The Company monitors the performance of TLMs to determine the effectiveness of the modifications. During the three and nine months ended September 30, 2024 and 2023, the Company did
As of September 30, 2024, there were
Allowance for Loan and Lease Losses
ALLL on the loan portfolio is a material estimate for the Company. The Company estimates its ALLL on its loan portfolio on a quarterly basis. The Company models the ALLL using
● | Commercial: Construction and Land Development, CRE – Owner Occupied, CRE – Non-Owner Occupied, Multifamily Real Estate, Commercial & Industrial, Residential 1-4 Family – Commercial, and Other Commercial |
● | Consumer: Residential 1-4 Family – Consumer, Residential 1-4 Family – Revolving, Auto, and Consumer |
The following tables show the ALLL activity by loan segment for the three and nine months ended September 30, (dollars in thousands):
Three Months Ended | Nine Months Ended | |||||||||||||||||
2024 | 2024 | |||||||||||||||||
Commercial | Consumer | Total |
| Commercial | Consumer | Total | ||||||||||||
Balance at beginning of period | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Initial Allowance on PCD American National loans | | | | | | | ||||||||||||
Loans charged-off |
| ( |
| ( |
| ( |
|
| ( |
| ( |
| ( | |||||
Recoveries credited to allowance |
| |
| |
| |
| |
| |
| | ||||||
Initial Provision - Non-PCD American National loans | | | | | | | ||||||||||||
Provision charged to operations |
| |
| |
| |
|
| |
| ( |
| | |||||
Balance at end of period | $ | | $ | | $ | |
| $ | | $ | | $ | |
Three Months Ended | Nine Months Ended | |||||||||||||||||
2023 | 2023 | |||||||||||||||||
Commercial | Consumer | Total |
| Commercial | Consumer | Total | ||||||||||||
Balance at beginning of period | $ | | $ | | $ | |
| $ | | $ | | $ | | |||||
Loans charged-off |
| ( |
| ( |
| ( |
|
| ( |
| ( |
| ( | |||||
Recoveries credited to allowance |
| |
| |
| |
|
| |
| |
| | |||||
Provision charged to operations |
| |
| ( |
| |
|
| |
| ( |
| | |||||
Balance at end of period | $ | | $ | | $ | | $ | | $ | | $ | |
-24-
The following table presents additional information related to the acquired American National loan portfolio at the acquisition date, including the initial ACL at acquisition on the PCD loans (dollars in thousands):
April 1, 2024 | |||
PCD Loans: | |||
Book value of acquired loans at acquisition |
| $ | |
Initial ACL at acquisition |
| ( | |
Non-credit discount at acquisition |
| ( | |
Purchase Price | $ | | |
Non-PCD Loans: | |||
Fair Value | $ | | |
Gross contractual amounts receivable | | ||
Estimate of contractual cash flows not expected to be collected | |
Credit Quality Indicators
Credit quality indicators are used to help estimate the collectability of each loan class within the Commercial and Consumer loan segments. For classes of loans within the Commercial segment, the primary credit quality indicator used for evaluating credit quality and estimating the ALLL is risk rating categories of Pass, Watch, Special Mention, Substandard, and Doubtful. For classes of loans within the Consumer segment, the primary credit quality indicator used for evaluating credit quality and estimating ALLL is delinquency bands of current, 30-59, 60-89, 90+, and nonaccrual. While other credit quality indicators are evaluated and analyzed as part of the Company’s credit risk management activities, these indicators are primarily used in estimating the ALLL. The Company evaluates the credit risk of its loan portfolio on at least a quarterly basis.
The Company presents loan and lease portfolio segments and classes by credit quality indicator and vintage year. The Company defines the vintage date for the purpose of this disclosure as the date of the most recent credit decision. Renewals are categorized as new credit decisions and reflect the renewal date as the vintage date, except for renewals of loans modified for borrowers experiencing financial difficulty or TLMs, which are presented in the original vintage.
Refer to Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” in the Company’s 2023 Form 10-K for additional information on the Company’s policies and for further information on the Company’s credit quality indicators.
Commercial Loans
The Company uses a risk rating system as the primary credit quality indicator for classes of loans within the Commercial segment. The Company defines pass loans as risk rated 1-5 and criticized loans as risk rated 6-9. See Note 3 “Loans and
Allowance For Loan and Lease Losses” in the “Notes to Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2023 Form 10-K for information on the Company’s risk rating system.
-25-
The table below details the amortized cost and gross write-offs of the classes of loans within the Commercial segment by risk level and year of origination as of September 30, (dollars in thousands):
2024 | ||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||
2024 | 2023 | 2022 | 2021 | 2020 | Prior | Loans | Total | |||||||||||||||||
Construction and Land Development | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Construction and Land Development | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | ( | $ | | $ | | $ | | $ | | $ | ( | ||||||||
CRE – Owner Occupied | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total CRE – Owner Occupied | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
CRE – Non-Owner Occupied | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total CRE – Non-Owner Occupied | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | ( | ||||||||
Commercial & Industrial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Commercial & Industrial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||
Multifamily Real Estate | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Multifamily Real Estate | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Residential 1-4 Family – Commercial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Residential 1-4 Family – Commercial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Other Commercial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Other Commercial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
Total Commercial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Commercial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Total current period gross write-off | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
-26-
The table below details the amortized cost and gross write-offs of the classes of loans within the Commercial segment by risk level and year of origination as of December 31, (dollars in thousands):
2023 | ||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Loans | Total | |||||||||||||||||
Construction and Land Development | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Construction and Land Development | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
CRE – Owner Occupied | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total CRE – Owner Occupied | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
CRE – Non-Owner Occupied | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total CRE – Non-Owner Occupied | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
Commercial & Industrial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Commercial & Industrial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | ( | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||
Multifamily Real Estate | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Multifamily Real Estate | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Residential 1-4 Family – Commercial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Residential 1-4 Family – Commercial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Other Commercial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Total Other Commercial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | ( | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
Total Commercial | ||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Watch | | | | | | | | | ||||||||||||||||
Special Mention | | | | | | | | | ||||||||||||||||
Substandard | | | | | | | | | ||||||||||||||||
Total Commercial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Total current period gross write-off | $ | | $ | ( | $ | ( | $ | | $ | | $ | ( | $ | ( | $ | ( |
-27-
Consumer Loans
For Consumer loans, the Company evaluates credit quality based on the delinquency status of the loan. The following table details the amortized cost and gross write-offs of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of September 30, (dollars in thousands):
2024 | ||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||
2024 | 2023 | 2022 | 2021 | 2020 | Prior | Loans | Total | |||||||||||||||||
Residential 1-4 Family – Consumer | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Residential 1-4 Family – Consumer | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | ( | $ | ( | $ | | $ | | $ | ( | $ | | $ | ( | ||||||||
Residential 1-4 Family – Revolving | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Residential 1-4 Family – Revolving | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | ( | $ | ( | ||||||||
Auto | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Auto | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | | $ | ( | ||||||||
Consumer | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Consumer | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||
Total Consumer | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Consumer | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Total current period gross write-off | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
-28-
The following table details the amortized cost and gross write-offs of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of December 31, (dollars in thousands):
2023 | ||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Loans | Total | |||||||||||||||||
Residential 1-4 Family – Consumer | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Residential 1-4 Family – Consumer | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | ( | $ | ( | $ | | $ | ( | $ | ( | $ | | $ | ( | ||||||||
Residential 1-4 Family – Revolving | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Residential 1-4 Family – Revolving | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | | $ | | $ | ( | $ | | $ | | $ | | $ | ( | $ | ( | ||||||||
Auto | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Auto | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | | $ | ( | ||||||||
Consumer | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Total Consumer | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||
Total Consumer | ||||||||||||||||||||||||
Current | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
30-59 Days Past Due | | | | | | | | | ||||||||||||||||
60-89 Days Past Due | | | | | | | | | ||||||||||||||||
90+ Days Past Due | | | | | | | | | ||||||||||||||||
Nonaccrual | | | | | | | | | ||||||||||||||||
Total Consumer | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
Current period gross write-off | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
As of September 30, 2024 and December 31, 2023, the Company did not have any significant revolving loans convert to term.
-29-
5. GOODWILL AND INTANGIBLE ASSETS
The Company’s intangible assets consist of core deposits, goodwill, and other intangibles arising from previous acquisitions. The Company has determined that CDI have finite lives and amortizes them over their estimated useful lives. CDI are being amortized over the period of expected benefit, which ranges from
As a result of the American National acquisition, the Company’s associated goodwill at September 30, 2024 totaled $
The following table provides information on the significant components of goodwill and other acquired intangible assets as of the periods ended (dollars in thousands).
| Gross |
| Additions: |
|
| Net | ||||||
Carrying | American National | Accumulated | Carrying | |||||||||
Value | Acquisition (1) | Amortization | Value | |||||||||
September 30, 2024 |
|
|
|
|
|
|
|
| ||||
Goodwill | $ | | $ | | $ | | $ | | ||||
CDI | | | ( | | ||||||||
Other amortizable intangibles | | | ( | | ||||||||
December 31, 2023 |
|
|
|
|
|
|
|
| ||||
Goodwill | $ | | $ | | $ | | $ | | ||||
CDI | | | ( | | ||||||||
Other amortizable intangibles |
| |
| |
| ( |
| |
(1) Includes initial goodwill of $
The following table presents the Company’s goodwill and intangible assets by operating segment as of the periods ended (dollars in thousands):
Wholesale Banking | Consumer Banking | Corporate Other | Total | |||||||||
September 30, 2024 |
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|
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|
|
|
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Goodwill (1) | $ | | $ | | $ | | $ | | ||||
Intangible Assets (2) |
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| |
| |
| | ||||
December 31, 2023 |
|
|
|
|
|
|
|
| ||||
Goodwill | $ | | $ | | $ | | $ | | ||||
Intangible Assets |
| |
| |
| |
| |
(1) Wholesale Banking and Consumer Banking includes gross carrying values of $
(2) Wholesale Banking and Corporate Other includes gross carrying values of $
-30-
Amortization expense of intangibles for the three months ended September 30, 2024 and 2023 totaled $
For the remaining three months of 2024 |
| $ | |
2025 | |