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Section 1: 10-Q (10-Q)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended March 31, 2019
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ________ to ________.
 
Commission File Number 001-35750 
First Internet Bancorp
(Exact Name of Registrant as Specified in Its Charter)
Indiana
 
20-3489991
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
11201 USA Parkway
Fishers, IN
 
46037
(Address of Principal Executive Offices)
 
(Zip Code)
 
(317) 532-7900
 
 
(Registrant’s Telephone Number, Including Area Code)
 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbols
 
Name of each exchange on which registered
Common Stock, without par value
 
INBK
 
The Nasdaq Stock Market LLC
6.0% Fixed to Floating Subordinated Notes due 2026
 
INBKL
 
The Nasdaq Stock Market LLC

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.  Yes þ No ¨
 
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
 
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.
Large Accelerated Filer ¨
Accelerated Filer þ
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 ¨ No þ
 
As of May 3, 2019, the registrant had 10,080,957 shares of common stock issued and outstanding.
Cautionary Note Regarding Forward-Looking Statements
  
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the federal securities laws. These statements are not historical facts, but rather statements based on the current expectations of First Internet Bancorp and its consolidated subsidiaries (“we,” “our,” “us” or the “Company”) regarding its business strategies, intended results and future performance. Forward-looking statements are generally preceded by terms such as “anticipate,” “appears,” “believe,” “can,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “should,” “will” and similar expressions. Such statements are subject to certain risks and uncertainties including: general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products; our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we own or that is the collateral for our loans; failures or breaches of or interruptions in the communication and information systems on which we rely to conduct our business that could reduce our revenues, increase our costs or lead to disruptions in our business; our plans to grow our commercial real estate, commercial and industrial, public finance and healthcare finance loan portfolios which may carry greater risks of non-payment or other unfavorable consequences; our dependence on capital distributions from First Internet Bank of Indiana (the “Bank”); results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require us to increase our allowance for loan losses or to write-down assets; changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, that could lead to restrictions on activities of banks generally, or the Bank in particular; more restrictive regulatory capital requirements; increased costs, including deposit insurance premiums; regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products; changes in market rates and prices that may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our balance sheet; our liquidity requirements being adversely affected by changes in our assets and liabilities; the effect of legislative or regulatory developments, including changes in laws concerning taxes, banking, securities, insurance and other aspects of the financial services industry; competitive factors among financial services organizations, including product and pricing pressures and our ability to attract, develop and retain qualified banking professionals; execution of future acquisition, reorganization or disposition transactions including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; changes in applicable tax laws; the growth and profitability of noninterest or fee income being less than expected; the loss of any key members of senior management; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the “FASB”), the Securities and Exchange Commission (the “SEC”), the Public Company Accounting Oversight Board (the “PCAOB”) and other regulatory agencies; and the effect of fiscal and governmental policies of the United States federal government. Additional factors that may affect our results include those discussed in our most recent Annual Report on Form 10-K under the heading “Risk Factors” and in other reports filed with the SEC. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The factors listed above could affect our financial performance and could cause our actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.
Except as required by law, we do not undertake, and specifically disclaim any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.





PART I

ITEM 1.
FINANCIAL STATEMENTS 

First Internet Bancorp
Condensed Consolidated Balance Sheets
(Amounts in thousands except share data)
 
 
March 31, 2019
 
December 31, 2018
 
 
(Unaudited)
 
 
Assets
 
 

 
 

Cash and due from banks
 
$
5,708

 
$
7,080

Interest-bearing deposits
 
124,786

 
181,632

Total cash and cash equivalents
 
130,494

 
188,712

Securities available-for-sale, at fair value (amortized cost of $530,847 and $499,893 in 2019 and 2018, respectively)
 
520,382

 
481,345

Securities held-to-maturity, at amortized cost (fair value of $31,268 and $22,418 in 2019 and 2018, respectively)
 
31,222

 
22,750

Loans held-for-sale (includes $13,706 and $18,328 at fair value in 2019 and 2018, respectively)
 
13,706

 
18,328

Loans
 
2,839,928

 
2,716,228

Allowance for loan losses
 
(18,841
)
 
(17,896
)
Net loans
 
2,821,087

 
2,698,332

Accrued interest receivable
 
17,217

 
16,822

Federal Home Loan Bank of Indianapolis stock
 
23,625

 
23,625

Cash surrender value of bank-owned life insurance
 
36,293

 
36,059

Premises and equipment, net
 
13,737

 
10,697

Goodwill
 
4,687

 
4,687

Other real estate owned
 
2,619

 
2,619

Accrued income and other assets
 
55,107

 
37,716

Total assets
 
$
3,670,176

 
$
3,541,692

Liabilities and Shareholders’ Equity
 
 

 
 

Liabilities
 
 

 
 

Noninterest-bearing deposits
 
$
45,878

 
$
43,301

Interest-bearing deposits
 
2,765,230

 
2,628,050

Total deposits
 
2,811,108

 
2,671,351

Advances from Federal Home Loan Bank
 
495,146

 
525,153

Subordinated debt, net of unamortized discounts and debt issuance costs of $1,089 and $1,125 in 2019 and 2018, respectively
 
33,911

 
33,875

Accrued interest payable
 
1,549

 
1,108

Accrued expenses and other liabilities
 
34,449

 
21,470

Total liabilities
 
3,376,163

 
3,252,957

Commitments and Contingencies
 


 


Shareholders’ Equity
 
 

 
 

Preferred stock, no par value; 4,913,779 shares authorized; issued and outstanding - none
 

 

Voting common stock, no par value; 45,000,000 shares authorized; 10,128,587 and 10,170,778 shares issued and outstanding in 2019 and 2018, respectively
 
226,235

 
227,587

Nonvoting common stock, no par value; 86,221 shares authorized; issued and outstanding - none
 

 

Retained earnings
 
81,946

 
77,689

Accumulated other comprehensive loss
 
(14,168
)
 
(16,541
)
Total shareholders’ equity
 
294,013

 
288,735

Total liabilities and shareholders’ equity
 
$
3,670,176

 
$
3,541,692


See Notes to Condensed Consolidated Financial Statements

1



First Internet Bancorp
Condensed Consolidated Statements of Income – Unaudited
(Amounts in thousands except share and per share data)
 
 
Three Months Ended
 
 
March 31, 2019
 
March 31, 2018
Interest Income
 
 

 
 

Loans
 
$
29,218

 
$
22,115

Securities – taxable
 
3,324

 
2,488

Securities – non-taxable
 
684

 
711

Other earning assets
 
1,773

 
665

Total interest income
 
34,999

 
25,979

Interest Expense
 
 

 
 

Deposits
 
15,386

 
8,270

Other borrowed funds
 
3,369

 
2,294

Total interest expense
 
18,755

 
10,564

Net Interest Income
 
16,244

 
15,415

Provision for Loan Losses
 
1,285

 
850

Net Interest Income After Provision for Loan Losses
 
14,959

 
14,565

Noninterest Income
 
 

 
 

Service charges and fees
 
236

 
230

Mortgage banking activities
 
1,617

 
1,578

(Loss) gain on sale of loans
 
(104
)
 
414

Other
 
623

 
320

Total noninterest income
 
2,372

 
2,542

Noninterest Expense
 
 

 
 

Salaries and employee benefits
 
6,321

 
5,905

Marketing, advertising and promotion
 
469

 
716

Consulting and professional services
 
814

 
851

Data processing
 
317

 
263

Loan expenses
 
314

 
237

Premises and equipment
 
1,500

 
1,214

Deposit insurance premium
 
555

 
465

Other
 
819

 
566

Total noninterest expense
 
11,109

 
10,217

Income Before Income Taxes
 
6,222

 
6,890

Income Tax Provision
 
526

 
862

Net Income
 
$
5,696

 
$
6,028

Income Per Share of Common Stock
 
 

 
 

Basic
 
$
0.56

 
$
0.71

Diluted
 
$
0.56

 
$
0.71

Weighted-Average Number of Common Shares Outstanding
 
 

 
 

Basic
 
10,217,637

 
8,499,196

Diluted
 
10,230,531

 
8,542,363

Dividends Declared Per Share
 
$
0.06

 
$
0.06


See Notes to Condensed Consolidated Financial Statements

2



First Internet Bancorp
Condensed Consolidated Statements of Comprehensive Income – Unaudited
(Amounts in thousands)
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Net income
 
$
5,696

 
$
6,028

Other comprehensive income
 
 
 
 
Net unrealized holding gains (losses) on securities available-for-sale recorded within other comprehensive income before income tax
 
6,910

 
(7,665
)
Net unrealized holding losses on cash flow hedging derivatives recorded within other comprehensive income before tax
 
(3,572
)
 

Other comprehensive income (loss) before income tax
 
3,338

 
(7,665
)
Income tax provision (benefit)
 
965

 
(2,473
)
Other comprehensive income (loss)
 
2,373

 
(5,192
)
Comprehensive income
 
$
8,069

 
$
836

 
 See Notes to Condensed Consolidated Financial Statements

3



First Internet Bancorp
Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited
Three Months Ended March 31, 2019 and 2018
(Amounts in thousands except per share data)
 
 
Voting and
Nonvoting
Common
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Shareholders’
Equity
Balance, January 1, 2019
 
$
227,587

 
$
77,689

 
$
(16,541
)
 
$
288,735

Impact of adoption of new accounting standards (1)
 

 
(821
)
 

 
(821
)
Net income
 

 
5,696

 

 
5,696

Other comprehensive income
 

 

 
2,373

 
2,373

Dividends declared ($0.06 per share)
 

 
(618
)
 

 
(618
)
Recognition of the fair value of share-based compensation
 
478

 

 

 
478

Repurchase of common stock
 
(1,746
)
 

 

 
(1,746
)
Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units
 
10

 

 

 
10

Common stock redeemed for the net settlement of share-based awards
 
(94
)
 

 

 
(94
)
Balance, March 31, 2019
 
$
226,235

 
$
81,946

 
$
(14,168
)
 
$
294,013

 
 
 
 
 
 
 
 
 
Balance, January 1, 2018
 
$
172,043

 
$
57,103

 
$
(5,019
)
 
$
224,127

Impact of adoption of new accounting standards (2)
 

 
1,063

 
(1,063
)
 

Net income
 

 
6,028

 

 
6,028

Other comprehensive loss
 

 

 
(5,192
)
 
(5,192
)
Dividends declared ($0.06 per share)
 

 
(517
)
 

 
(517
)
Recognition of the fair value of share-based compensation
 
579

 

 

 
579

Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units
 
9

 

 

 
9

Common stock redeemed for the net settlement of share-based awards
 
(210
)
 

 

 
(210
)
Balance, March 31, 2018
 
$
172,421

 
$
63,677

 
$
(11,274
)
 
$
224,824


(1) Represents the impact of adopting Accounting Standards Update (“ASU”) 2017-08.
(2) Represents the impact of adopting ASU 2018-02 and ASU 2016-01. ASU 2018-02 increased retained earnings and accumulated other comprehensive loss by $1.1 million. ASU 2016-01 decreased retained earnings and accumulated other comprehensive loss by $0.1 million. See Note 13 to the condensed consolidated financial statements for more information.
 
See Notes to Condensed Consolidated Financial Statements

4



First Internet Bancorp
Condensed Consolidated Statements of Cash Flows – Unaudited
(Amounts in thousands)
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Operating Activities
 
 

 
 

Net income
 
$
5,696

 
$
6,028

Adjustments to reconcile net income to net cash (used in) provided by operating activities:
 
 

 
 

Depreciation and amortization
 
2,271

 
1,425

Increase in cash surrender value of bank-owned life insurance
 
(234
)
 
(237
)
Provision for loan losses
 
1,285

 
850

Share-based compensation expense
 
478

 
579

Loans originated for sale
 
(75,239
)
 
(82,483
)
Proceeds from sale of loans
 
81,048

 
90,841

Gain on loans sold
 
(1,369
)
 
(2,086
)
Gain on sale of other real estate owned
 

 
(105
)
Decrease in fair value of loans held-for-sale
 
182

 
233

Gain on derivatives
 
(314
)
 
(142
)
Amortization of operating lease right-of-use assets
 
176

 

Net change in accrued income and other assets
 
(20,833
)
 
941

Net change in accrued expenses and other liabilities
 
1,570

 
(924
)
Net cash (used in) provided by operating activities
 
(5,283
)
 
14,920

Investing Activities
 
 
 
 
Net loan activity, excluding purchases
 
(73,783
)
 
(68,991
)
Proceeds from sale of other real estate owned
 

 
332

Maturities and calls of securities available-for-sale
 
13,840

 
12,422

Purchase of securities available-for-sale
 
(46,562
)
 
(14,458
)
Purchase of securities held-to-maturity
 
(8,500
)
 

Purchase of Federal Home Loan Bank of Indianapolis stock
 

 
(675
)
Purchase of premises and equipment
 
(1,564
)
 
(448
)
Loans purchased
 
(79,343
)
 
(47,516
)
Net proceeds from sale of portfolio loans
 
35,673

 
25,717

Net cash used in investing activities
 
(160,239
)
 
(93,617
)
Financing Activities
 
 
 
 
Net increase in deposits
 
139,757

 
92,180

Cash dividends paid
 
(613
)
 
(507
)
Repurchase of common stock
 
(1,746
)
 

Proceeds from advances from Federal Home Loan Bank
 
165,000

 
55,000

Repayment of advances from Federal Home Loan Bank
 
(195,000
)
 
(52,000
)
Other, net
 
(94
)
 
(210
)
Net cash provided by financing activities
 
107,304

 
94,463

Net (Decrease) Increase in Cash and Cash Equivalents
 
(58,218
)
 
15,766

Cash and Cash Equivalents, Beginning of Period
 
188,712

 
47,981

Cash and Cash Equivalents, End of Period
 
$
130,494

 
$
63,747

Supplemental Disclosures
 
 
 
 
Initial recognition of right-of-use asset
 
$
2,096

 
$

Initial recognition of operating lease liabilities
 
2,096

 

Cash paid during the period for interest
 
18,314

 
10,465

Cash paid during the period for taxes
 

 
1,700

Loans transferred to other real estate owned
 

 
227

Loans transferred to held-for-sale from portfolio
 
35,599

 

Cash dividends declared, paid in subsequent period
 
606

 
504

Transfer of other equity investments from securities available-for-sale to other assets in accordance with adoption of ASU 2016-01
 

 
2,932

See Notes to Condensed Consolidated Financial Statements

5



First Internet Bancorp
Notes to Condensed Consolidated Financial Statements – Unaudited
(Table amounts in thousands except share and per share data)
  
Note 1:        Basis of Presentation
 
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information or footnotes necessary for a complete presentation of financial condition, results of operations, or cash flows in accordance with GAAP. In our opinion, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the year ending December 31, 2019 or any other period. The March 31, 2019 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the First Internet Bancorp Annual Report on Form 10-K for the year ended December 31, 2018.
 
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, or assumptions that could have a material effect on the carrying value of certain assets and liabilities. These estimates, judgments, and assumptions affect the amounts reported in the condensed consolidated financial statements and the disclosures provided. The determination of the allowance for loan losses, valuations and impairments of investment securities, and the accounting for income tax expense are highly dependent upon management’s estimates, judgments, and assumptions where changes in any of these could have a significant impact on the financial statements.

The condensed consolidated financial statements include the accounts of First Internet Bancorp (the “Company”), its wholly owned subsidiary, First Internet Bank of Indiana (the “Bank”), and the Bank’s three wholly-owned subsidiaries, First Internet Public Finance Corp., JKH Realty Services, LLC and SPF15, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.
 
The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations, and cash flows of the Company.
 
Certain reclassifications have been made to the 2018 financial statements to conform to the presentation of the 2019 financial statements. These reclassifications had no effect on net income.



    




6



Note 2:        Earnings Per Share
 
Earnings per share of common stock are based on the weighted-average number of basic shares and dilutive shares outstanding during the period.
 
The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations for the three months ended March 31, 2019 and 2018
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Basic earnings per share
 
 

 
 

Net income
 
$
5,696

 
$
6,028

Weighted-average common shares
 
10,217,637

 
8,499,196

Basic earnings per common share
 
$
0.56

 
$
0.71

Diluted earnings per share
 
 

 
 

Net income
 
$
5,696

 
$
6,028

Weighted-average common shares
 
10,217,637

 
8,499,196

Dilutive effect of equity compensation
 
12,894

 
43,167

     Weighted-average common and incremental shares
 
10,230,531

 
8,542,363

Diluted earnings per common share
 
$
0.56

 
$
0.71

  
Note 3:         Securities
 
The following tables summarize securities available-for-sale and securities held-to-maturity as of March 31, 2019 and December 31, 2018.
 
 
March 31, 2019
 
 
Amortized
 
Gross Unrealized
 
Fair
 
 
Cost
 
Gains
 
Losses
 
Value
Securities available-for-sale
 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
102,749

 
$
41

 
$
(1,918
)
 
$
100,872

Municipal securities
 
96,328

 
388

 
(1,271
)
 
95,445

Mortgage-backed securities
 
288,120

 
674

 
(6,023
)
 
282,771

Asset-backed securities
 
5,000

 

 
(72
)
 
4,928

Corporate securities
 
38,650

 
33

 
(2,317
)
 
36,366

Total available-for-sale
 
$
530,847

 
$
1,136

 
$
(11,601
)
 
$
520,382

 
 
March 31, 2019
 
 
Amortized
 
Gross Unrealized
 
Fair
 
 
Cost
 
Gains
 
Losses
 
Value
Securities held-to-maturity
 
 

 
 

 
 

 
 

Municipal securities
 
$
10,150

 
$
27

 
$
(115
)
 
$
10,062

Corporate securities
 
21,072

 
167

 
(33
)
 
21,206

Total held-to-maturity
 
$
31,222

 
$
194

 
$
(148
)
 
$
31,268


7



 
 
December 31, 2018
 
 
Amortized
 
Gross Unrealized
 
Fair
 
 
Cost
 
Gains
 
Losses
 
Value
Securities available-for-sale
 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
109,631

 
$
20

 
$
(2,066
)
 
$
107,585

Municipal securities
 
97,090

 
90

 
(4,674
)
 
92,506

Mortgage-backed securities
 
251,492

 
162

 
(8,742
)
 
242,912

Asset-backed securities
 
5,002

 

 
(143
)
 
4,859

Corporate securities
 
36,678

 

 
(3,195
)
 
33,483

Total available-for-sale
 
$
499,893

 
$
272

 
$
(18,820
)
 
$
481,345

 
 
December 31, 2018
 
 
Amortized
 
Gross Unrealized
 
Fair
 
 
Cost
 
Gains
 
Losses
 
Value
Securities held-to-maturity
 
 

 
 

 
 

 
 

Municipal securities
 
$
10,157

 
$

 
$
(356
)
 
$
9,801

Corporate securities
 
12,593

 
80

 
(56
)
 
12,617

Total held-to-maturity
 
$
22,750

 
$
80

 
$
(412
)
 
$
22,418


The carrying value of securities at March 31, 2019 is shown below by their contractual maturity date. Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
Available-for-Sale
 
 
Amortized
Cost
 
Fair
Value
One to five years
 
$
1,570

 
$
1,577

Five to ten years
 
69,418

 
68,066

After ten years
 
166,739

 
163,040

 
 
237,727

 
232,683

Mortgage-backed securities
 
288,120

 
282,771

Asset-backed securities
 
5,000

 
4,928

Total
 
$
530,847

 
$
520,382

 
 
Held-to-Maturity
 
 
Amortized
Cost
 
Fair
Value
One to five years
 
497

 
488

Five to ten years
 
$
24,817

 
$
24,880

After ten years
 
5,908

 
5,900

Total
 
$
31,222

 
$
31,268


There were no gross gains or losses resulting from sales of available-for-sale securities during the three months ended March 31, 2019 and 2018.
 
Certain investments in debt securities are reported in the condensed consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at March 31, 2019 and December 31, 2018 was $417.5 million and $469.8 million, which was approximately 76% and 93%, respectively, of the Company’s available-for-sale and held-to-maturity securities portfolios. These declines resulted primarily from fluctuations in market interest rates after purchase. Management believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced with the resulting loss recognized in net income in the period the other-than-temporary impairment (“OTTI”) is identified.


8



U. S. Government-Sponsored Agencies, Municipal Securities and Corporate Securities

The unrealized losses on the Company’s investments in securities issued by U.S. Government-sponsored agencies, municipal organizations and corporate entities were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be upon maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2019.
 
Mortgage-Backed Securities
 
The unrealized losses on the Company’s investments in mortgage-backed securities were caused by interest rate changes. The Company expects to recover the amortized cost bases over the term of the securities. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be upon maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2019.

The following tables show the securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2019 and December 31, 2018.
 
 
March 31, 2019
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities available-for-sale
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
36,230

 
$
(452
)
 
$
57,511

 
$
(1,466
)
 
$
93,741

 
$
(1,918
)
Municipal securities
 

 

 
63,267

 
(1,271
)
 
63,267

 
(1,271
)
Mortgage-backed securities
 
34,412

 
(185
)
 
174,828

 
(5,838
)
 
209,240

 
(6,023
)
Asset-backed securities
 
4,928

 
(72
)
 

 

 
4,928

 
(72
)
Corporate securities
 
10,040

 
(104
)
 
22,306

 
(2,213
)
 
32,346

 
(2,317
)
Total
 
$
85,610

 
$
(813
)
 
$
317,912

 
$
(10,788
)
 
$
403,522

 
$
(11,601
)
 
 
March 31, 2019
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities held-to-maturity
 
 

 
 

 
 

 
 

 
 

 
 

Municipal securities
 
$
8,486

 
$
(115
)
 
$

 
$

 
$
8,486

 
$
(115
)
Corporate securities
 
5,492

 
(33
)
 

 

 
5,492

 
(33
)
Total
 
$
13,978

 
$
(148
)
 
$

 
$

 
$
13,978

 
$
(148
)

 
 
 
December 31, 2018
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities available-for-sale
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Government-sponsored agencies
 
$
69,798

 
$
(893
)
 
$
33,511

 
$
(1,173
)
 
$
103,309

 
$
(2,066
)
Municipal securities
 
23,747

 
(710
)
 
59,938

 
(3,964
)
 
83,685

 
(4,674
)
Mortgage-backed securities
 
56,177

 
(529
)
 
172,442

 
(8,213
)
 
228,619

 
(8,742
)
Asset-backed securities
 
4,859

 
(143
)
 

 

 
4,859

 
(143
)
Corporate securities
 
14,092

 
(586
)
 
19,391

 
(2,609
)
 
33,483

 
(3,195
)
Total
 
$
168,673

 
$
(2,861
)
 
$
285,282

 
$
(15,959
)
 
$
453,955

 
$
(18,820
)

9



 
 
December 31, 2018
 
 
Less Than 12 Months
 
12 Months or Longer
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Securities held-to-maturity
 
 

 
 

 
 

 
 

 
 

 
 

Municipal securities
 
$
9,801

 
$
(356
)
 
$

 
$

 
$
9,801

 
$
(356
)
Corporate securities
 
6,037

 
(56
)
 

 

 
6,037

 
(56
)
Total
 
$
15,838

 
$
(412
)
 
$

 
$

 
$
15,838

 
$
(412
)

There were no amounts reclassified from accumulated other comprehensive loss to the condensed consolidated statements of income during the three months ended March 31, 2019 and 2018.

Note 4:        Loans
 
Loans that management intends to hold until maturity are reported at their outstanding principal balance adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans, and unamortized premiums or discounts on purchased loans.
 
For loans recorded at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.
 
Categories of loans include:
 
 
March 31, 2019
 
December 31, 2018
Commercial loans
 
 

 
 

Commercial and industrial
 
$
112,146

 
$
114,382

Owner-occupied commercial real estate
 
87,482

 
87,962

Investor commercial real estate
 
11,188

 
5,391

Construction
 
42,319

 
39,916

Single tenant lease financing
 
975,841

 
919,440

Public finance
 
708,816

 
706,342

Healthcare finance
 
158,796

 
117,007

Total commercial loans
 
2,096,588

 
1,990,440

Consumer loans
 
 
 
 
Residential mortgage
 
404,869

 
399,898

Home equity
 
27,794

 
28,735

Other consumer
 
285,259

 
279,771

Total consumer loans
 
717,922

 
708,404

Total commercial and consumer loans
 
2,814,510

 
2,698,844

Net deferred loan origination costs and premiums and discounts on purchased loans and other(1)
 
25,418

 
17,384

Total loans
 
2,839,928

 
2,716,228

Allowance for loan losses
 
(18,841
)
 
(17,896
)
Net loans
 
$
2,821,087

 
$
2,698,332


(1) Includes carrying value adjustments of $11.5 million and $5.0 million as of March 31, 2019 and December 31, 2018, respectively, related
to interest rate swaps associated with public finance loans. 

10




The risk characteristics of each loan portfolio segment are as follows:

Commercial and Industrial: Commercial and industrial loans’ sources of repayment are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Loans are made for working capital, equipment purchases, or other purposes. Most commercial and industrial loans are secured by the assets being financed and may incorporate a personal guarantee. This portfolio segment is generally concentrated in Central Indiana and adjacent markets and the greater Phoenix, Arizona market.

Owner-Occupied Commercial Real Estate: The primary source of repayment is the cash flow from the ongoing operations and activities conducted by the borrower, or an affiliate of the borrower, who owns the property. This portfolio segment is generally concentrated in the Central Indiana and the adjacent markets and the greater Phoenix, Arizona market and its loans are often secured by manufacturing and service facilities, as well as office buildings.

Investor Commercial Real Estate: These loans are underwritten primarily based on the cash flow expected to be generated from the property and are secondarily supported by the value of the real estate. These loans typically incorporate a personal guarantee from the primary sponsor or sponsors. This portfolio segment generally involves larger loan amounts, with repayment primarily dependent on the successful leasing and operation of the property securing the loan or the business conducted on the property securing the loan. Investor commercial real estate loans may be more adversely affected by changing economic conditions in the real estate markets, industry dynamics, or the overall health of the local economy where the property is located. The properties securing the Company’s investor commercial real estate portfolio tend to be diverse in terms of property type and are typically located in the state of Indiana or markets immediately adjacent to Indiana. Management monitors and evaluates commercial real estate loans based on property financial performance, collateral value, guarantor strength, economic and industry conditions together with other risk grade criteria. The Company generally avoids financing special use projects or properties outside of its designated market areas unless other underwriting factors are present to mitigate these additional risks.

Construction: Construction loans are secured by land and related improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, multi-family) properties or single family residential properties offered for sale by the builder. These loans generally finance a variety of project costs, including land, site preparation, architectural services, construction, closing and soft costs and interim financing needs. The cash flows of builders, while initially predictable, may fluctuate with market conditions, and the value of the collateral securing these loans may be subject to fluctuations based on general economic changes. This portfolio segment is generally concentrated in Central Indiana.
Single Tenant Lease Financing: These loans are made on a nationwide basis to property owners of real estate subject to long-term lease arrangements with single tenant operators. The real estate is typically operated by regionally, nationally or globally branded businesses.  The loans are underwritten based on the financial strength of the borrower, characteristics of the real estate, cash flows generated from the lease arrangements and the financial strength of the tenant.  Similar to the other loan portfolio segments, management monitors and evaluates these loans based on borrower and tenant financial performance, collateral value, industry trends and other risk grade criteria.

Public Finance: These loans are made on a nationwide basis to governmental and not-for-profit entities to provide both tax-exempt and taxable loans for a variety of purposes including: short term cash-flow needs; debt refinancing; economic development; quality of life projects; infrastructure improvements; and equipment financing. The primary sources of repayment for public finance loans include pledged revenue sources including but not limited to: general obligations; property taxes; income taxes; tax increment revenue; utility revenue; gaming revenue; sales tax; and pledged general revenue. Certain loans may also include an additional collateral pledge of mortgaged property or a security interest in financed equipment.

Healthcare Finance: These loans are made to healthcare providers, primarily dentists, for refinancing or acquiring practices, refinancing or acquiring owner-occupied commercial real estate, and equipment purchases. The sources of repayment for these loans are primarily based on the identified cash flows of the borrower (including ongoing operations and activities conducted by the borrower, or an affiliate of the borrower, who owns the property) and secondarily on the underlying collateral provided by the borrower. This portfolio segment is generally concentrated in the Western United States with plans to continue expanding nationwide.


11



Residential Mortgage: With respect to residential loans that are secured by 1 to 4 family residences and are generally owner occupied, the Company typically establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Repayment of these loans is primarily dependent on the financial circumstances of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in residential property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country.
Home Equity: Home equity loans and lines of credit are typically secured by a subordinate interest in 1 to 4 family residences. The properties securing the Company's home equity portfolio segment are generally geographically diverse as the Company offers these products on a nationwide basis. Repayment of these loans and lines of credit is primarily dependent on the financial circumstances of the borrowers and may be impacted by changes in unemployment levels and property values on residential properties, among other economic conditions in the market.
Other Consumer: These loans primarily consist of consumer loans and credit cards. Consumer loans may be secured by consumer assets such as horse trailers or recreational vehicles. Some consumer loans are unsecured, such as small installment loans, home improvement loans and certain lines of credit. Repayment of consumer loans is primarily dependent upon the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country.
Allowance for Loan Losses Methodology
 
Company policy is designed to maintain an adequate allowance for loan losses (“ALLL”). The portfolio is segmented by loan type, and the required ALLL for types of performing homogeneous loans which do not have a specific reserve is determined by applying a factor based on average historical losses, adjusted for current economic factors and portfolio trends. Management believes the historical loss experience methodology is appropriate in the current economic environment as it captures loss rates that are comparable to the current period being analyzed. Management adds qualitative factors for observable trends, changes in internal practices, changes in delinquencies and impairments, and external factors. Observable factors include changes in the composition and size of portfolios, as well as loan terms or concentration levels. The Company evaluates the impact of internal changes such as management and staff experience levels or modification to loan underwriting processes. Delinquency trends are scrutinized for both volume and severity of past due, nonaccrual, or classified loans as well as any changes in the value of underlying collateral. Finally, the Company considers the effect of other external factors such as national, regional, and local economic and business conditions, as well as competitive, legal, and regulatory requirements. Loans that are considered to be impaired are evaluated to determine the need for a specific allowance by applying at least one of three methodologies: present value of future cash flows; fair value of collateral less costs to sell; or the loan’s observable market price. All troubled debt restructurings (“TDR”) are considered impaired loans. Loans evaluated for impairment are removed from other pools to prevent double-counting. Accounting Standards Codification (“ASC”) Topic 310, Receivables, requires that impaired loans be measured based on the present value of expected future cash flows discounted at the loans’ effective interest rates or the fair value of the underlying collateral less costs to sell and allows existing methods for recognizing interest income.
 
Provision for Loan Losses
 
A provision for estimated losses on loans is charged to income based upon management’s evaluation of the potential losses. Such an evaluation, which includes a review of all loans for which full repayment may not be reasonably assured, considers, among other matters, the estimated net realizable value of the underlying collateral, as applicable, economic conditions, loan loss experience, and other factors that are particularly susceptible to changes that could result in a material adjustment in the near term. While management attempts to use the best information available in making its evaluations, future allowance adjustments may be necessary if economic conditions change substantially from the assumptions used in making the evaluations.
 
Policy for Charging Off Loans
 
The Company’s policy is to charge off a loan at any point in time when it no longer can be considered a bankable asset, meaning collectible within the parameters of policy. A secured loan is generally charged down to the estimated fair value of the collateral, less costs to sell, no later than when it is 120 days past due as to principal or interest. An unsecured loan generally is charged off no later than when it is 180 days past due as to principal or interest. A home improvement loan generally is charged off no later than when it is 90 days past due as to principal or interest.


12



The following tables present changes in the balance of the ALLL during the three months ended March 31, 2019 and 2018

 
Three Months Ended March 31, 2019
Allowance for loan losses:
Balance, Beginning of Period
 
Provision (Credit) Charged to Expense
 
Losses
Charged Off
 
Recoveries
 
Balance,
End of Period
Commercial and industrial
$
1,479

 
$
77

 
$
(112
)
 
$

 
$
1,444

Owner-occupied commercial real estate
891

 
(44
)
 

 

 
847

Investor commercial real estate
61

 
42

 

 

 
103

Construction
251

 
16

 

 

 
267

Single tenant lease financing
8,827

 
541

 

 

 
9,368

Public finance
1,670

 
(20
)
 

 

 
1,650

Healthcare finance
1,264

 
467

 

 

 
1,731

Residential mortgage
1,079

 
(36
)
 

 
1

 
1,044

Home equity
53

 
(6
)
 

 
2

 
49

Other consumer
2,321

 
248

 
(317
)
 
86

 
2,338

Total
$
17,896

 
$
1,285

 
$
(429
)
 
$
89

 
$
18,841




 
Three Months Ended March 31, 2018
Allowance for loan losses:
Balance, Beginning of Period
 
Provision (Credit) Charged to Expense
 
Losses
Charged Off
 
Recoveries
 
Balance,
End of Period
Commercial and industrial
$
1,738

 
$
(102
)
 
$

 
$

 
$
1,636

Owner-occupied commercial real estate
803

 
58

 

 

 
861

Investor commercial real estate
85

 
(14
)
 

 

 
71

Construction
423

 
(56
)
 

 

 
367

Single tenant lease financing
7,872

 
221

 

 

 
8,093

Public finance
959

 
159

 

 

 
1,118

Healthcare finance
313

 
171

 

 

 
484

Residential mortgage
956

 
36

 
(9
)
 
1

 
984

Home equity
70

 
(16
)
 

 
4

 
58

Other consumer
1,751

 
393

 
(296
)
 
40

 
1,888

Total
$
14,970

 
$
850

 
$
(305
)
 
$
45

 
$
15,560





13



The following tables present the recorded investment in loans based on portfolio segment and impairment method as of March 31, 2019 and December 31, 2018
 
Loans
 
Allowance for Loan Losses
March 31, 2019
Ending Balance:  
Collectively Evaluated for Impairment
 
Ending Balance:  
Individually Evaluated for Impairment
 
Ending Balance
 
Ending Balance:  
Collectively Evaluated for Impairment
 
Ending Balance:  
Individually Evaluated for Impairment
 
Ending Balance
Commercial and industrial
$
108,564

 
$
3,582

 
$
112,146

 
$
1,444

 
$

 
$
1,444

Owner-occupied commercial real estate
85,528

 
1,954

 
87,482

 
847

 

 
847

Investor commercial real estate
11,188

 

 
11,188

 
103

 

 
103

Construction
42,319

 

 
42,319

 
267

 

 
267

Single tenant lease financing
975,841

 

 
975,841

 
9,368

 

 
9,368

Public finance
708,816

 

 
708,816

 
1,650

 

 
1,650

Healthcare finance
158,796

 

 
158,796

 
1,731

 

 
1,731

Residential mortgage
401,316

 
3,553

 
404,869

 
1,044

 

 
1,044

Home equity
27,794

 

 
27,794

 
49

 

 
49

Other consumer
285,177

 
82

 
285,259

 
2,338

 

 
2,338

Total
$
2,805,339

 
$
9,171

 
$
2,814,510

 
$
18,841

 
$

 
$
18,841

 
Loans
 
Allowance for Loan Losses
December 31, 2018
Ending Balance:  
Collectively Evaluated for Impairment
 
Ending Balance:  
Individually Evaluated for Impairment
 
Ending Balance
 
Ending Balance:  
Collectively Evaluated for Impairment
 
Ending Balance:  
Individually Evaluated for Impairment
 
Ending Balance
Commercial and industrial
$
108,742

 
$
5,640

 
$
114,382

 
$
1,479

 
$

 
$
1,479

Owner-occupied commercial real estate
85,653

 
2,309

 
87,962

 
891

 

 
891

Investor commercial real estate
5,391

 

 
5,391

 
61

 

 
61

Construction
39,916

 

 
39,916

 
251

 

 
251

Single tenant lease financing
919,440

 

 
919,440

 
8,827

 

 
8,827

Public finance
706,342

 

 
706,342

 
1,670

 

 
1,670

Healthcare finance
117,007

 

 
117,007

 
1,264

 

 
1,264

Residential mortgage
399,328

 
570

 
399,898

 
1,079

 

 
1,079

Home equity
28,680

 
55

 
28,735

 
53

 

 
53

Other consumer
279,714

 
57

 
279,771

 
2,321

 

 
2,321

Total
$
2,690,213

 
$
8,631

 
$
2,698,844

 
$
17,896

 
$

 
$
17,896



14



The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans. A description of the general characteristics of the risk grades is as follows:
 
“Pass” - Higher quality loans that do not fit any of the other categories described below.

“Special Mention” - Loans that possess some credit deficiency or potential weakness, which deserve close attention.

“Substandard” - Loans that possess a defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.

“Doubtful” - Such loans have been placed on nonaccrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event that lacks clear certainty. These loans have all of the weaknesses of those classified as Substandard; however, based on existing conditions, these weaknesses make full collection of the principal balance highly improbable.

“Loss” - Loans that are considered uncollectible and of such little value that continuing to carry them as assets is not warranted.

Nonaccrual Loans
 
Any loan which becomes 90 days delinquent or for which the full collection of principal and interest may be in doubt will be considered for nonaccrual status. At the time a loan is placed on nonaccrual status, all accrued but unpaid interest will be reversed from interest income. Placing the loan on nonaccrual status does not relieve the borrower of the obligation to repay interest. A loan placed on nonaccrual status may be restored to accrual status when all delinquent principal and interest has been brought current, and the Company expects full payment of the remaining contractual principal and interest.

15




The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios based on rating category and payment activity as of March 31, 2019 and December 31, 2018
 
March 31, 2019
 
Pass
 
Special Mention
 
Substandard
 
Total
Commercial and industrial
$
105,096

 
$
3,611

 
$
3,439

 
$
112,146

Owner-occupied commercial real estate
73,947

 
11,581

 
1,954

 
87,482

Investor commercial real estate
11,188

 

 

 
11,188

Construction
42,319

 

 

 
42,319

Single tenant lease financing
971,304

 
4,537

 

 
975,841

Public finance
708,816

 

 

 
708,816

Healthcare finance
158,796

 

 

 
158,796

Total commercial loans
$
2,071,466

 
$
19,729

 
$
5,393

 
$
2,096,588

 
March 31, 2019
 
Performing
 
Nonaccrual
 
Total
Residential mortgage
$
401,706

 
$
3,163

 
$
404,869

Home equity
27,794

 

 
27,794

Other consumer
285,191

 
68

 
285,259

Total consumer loans
$
714,691

 
$
3,231

 
$
717,922

 
December 31, 2018
 
Pass
 
Special Mention
 
Substandard
 
Total
Commercial and industrial
$
107,666

 
$
1,076

 
$
5,640

 
$
114,382

Owner-occupied commercial real estate
81,264

 
4,389

 
2,309

 
87,962

Investor commercial real estate
5,391

 

 

 
5,391

Construction
39,916

 

 

 
39,916

Single tenant lease financing
913,984

 
5,456

 

 
919,440

Public finance
706,342

 

 

 
706,342

Healthcare finance
117,007

 

 

 
117,007

Total commercial loans
$
1,971,570

 
$
10,921

 
$
7,949

 
$
1,990,440

 
December 31, 2018
 
Performing
 
Nonaccrual
 
Total
Residential mortgage
$
399,723

 
$
175

 
$
399,898

Home equity
28,680

 
55

 
28,735

Other consumer
279,729

 
42

 
279,771

Total consumer loans
$
708,132

 
$
272

 
$
708,404

  

16



The following tables present the Company’s loan portfolio delinquency analysis as of March 31, 2019 and December 31, 2018

 
 
March 31, 2019
 
 
30-59
Days
Past Due
 
60-89
Days
Past Due
 
90 Days 
or More
Past Due
 
Total 
Past Due
 
Current
 
Total
Loans
 
Non-
accrual
Loans
 
Total Loans
90 Days or
More Past
Due and
Accruing
Commercial and industrial
 
$

 
$

 
$

 
$

 
$
112,146

 
$
112,146

 
$
192

 
$

Owner-occupied commercial real estate
 

 

 

 

 
87,482

 
87,482

 

 

Investor commercial real estate
 

 

 

 

 
11,188

 
11,188

 

 

Construction
 

 

 

 

 
42,319

 
42,319

 

 

Single tenant lease financing
 
1,563

 

 

 
1,563

 
974,278

 
975,841

 

 

Public finance
 

 

 

 

 
708,816

 
708,816

 

 

Healthcare finance
 

 

 

 

 
158,796

 
158,796

 

 

Residential mortgage
 

 

 
3,118

 
3,118

 
401,751

 
404,869

 
3,163

 

Home equity
 

 

 

 

 
27,794

 
27,794

 

 

Other consumer
 
227

 
172

 
32

 
431

 
284,828

 
285,259

 
68

 
9

Total
 
$
1,790

 
$
172

 
$
3,150

 
$
5,112

 
$
2,809,398

 
$
2,814,510

 
$
3,423

 
$
9

 
 
December 31, 2018
 
 
30-59
Days
Past Due
 
60-89
Days
Past Due
 
90 Days 
or More
Past Due
 
Total 
Past Due
 
Current
 
Total
Loans
 
Non-
accrual
Loans
 
Total Loans
90 Days or
More Past
Due and
Accruing
Commercial and industrial
 
$
9

 
$

 
$

 
$
9

 
$
114,373

 
$
114,382

 
$
195

 
$

Owner-occupied commercial real estate
 
92

 
234

 

 
326

 
87,636

 
87,962

 
325

 

Investor commercial real estate
 

 

 

 
<