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Section 1: 10-Q (10-Q)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
 
 
 
FORM 10-Q
 
 


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 000-29480 

 
HERITAGE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter) 
 
 
Washington
 
91-1857900
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
 
201 Fifth Avenue SW,
Olympia
WA
 
98501
(Address of principal executive offices)
 
(Zip Code)
(360) 943-1500
(Registrant’s telephone number, including area code) 
 
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common stock, no par value
HFWA
NASDAQ

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      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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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  
 
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  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date:
As of October 30, 2019 there were 36,618,381 shares of the registrant's common stock, no par value per share, outstanding.






HERITAGE FINANCIAL CORPORATION
FORM 10-Q
September 30, 2019
TABLE OF CONTENTS

 
 
 
 
Page
 
 
 
 
 
PART I.
ITEM 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTE 1.
 
 
NOTE 2.
 
 
NOTE 3.
 
 
NOTE 4.
 
 
NOTE 5.
 
 
NOTE 6.
 
 
NOTE 7.
 
 
NOTE 8.
 
 
NOTE 9.
 
 
NOTE 10.
 
 
NOTE 11.
 
 
NOTE 12.
 
 
NOTE 13.
 
 
NOTE 14.
 
 
NOTE 15.
 
 
NOTE 16.
ITEM 2.
 
 
 
 
 
 
 
 
 
 
 

2




 
 
ITEM 3.
ITEM 4.
Part II.
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.
 

3




Glossary of Acronyms, Abbreviations, and Terms

The acronyms, abbreviations, and terms listed below are used in various sections of the Form 10-Q, including “Item 1. Financial Statements” and “Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations".
As used throughout this report, the terms “we”, “our”, or “us” refer to Heritage Financial Corporation and its consolidated subsidiaries, unless the context otherwise requires.
2018 Annual Form 10-K
 
Company's Annual Report on Form 10-K for the year ended December 31, 2018
ALL
 
Allowance for Loan Losses
AOCI
 
Accumulated Other Comprehensive Income (Loss)
ASC
 
Accounting Standards Codification
ASU
 
Accounting Standards Update
Bank
 
Heritage Bank
Basel III
 
A comprehensive capital framework and rules for U.S. banking organizations approved by the Federal Reserve Board and the FDIC in 2013
BOLI
 
Bank owned life insurance
CDI
 
Core Deposit Intangible
CECL
 
Current Expected Credit Loss Model
Company
 
Heritage Financial Corporation
GAAP
 
U.S. Generally Accepted Accounting Principles
Heritage
 
Heritage Financial Corporation
FASB
 
Financial Accounting Standards Board
FDIC
 
Federal Deposit Insurance Corporation
Federal Reserve
 
Board of Governors of the Federal Reserve System
Federal Reserve Bank
 
Federal Reserve Bank of San Francisco
FHLB
 
Federal Home Loan Bank of Des Moines
LIBOR
 
London Interbank Offering Rate
OAEM
 
Other Assets Especially Mentioned
PCI
 
Purchased Credit Impaired; loans purchased with evidence of credit deterioration since origination for which it is probable that not all contractually required payments will be collected; accounted for under FASB ASC 310-30
Premier Merger
 
Merger with Premier Commercial Bancorp & Premier Community Bank completed July 2, 2018
Puget Sound Merger
 
Merger with Puget Sound Bancorp, Inc. & Puget Sound Bank completed January 16, 2018
Premier and Puget Mergers
 
Premier Merger and Puget Sound Mergers, collectively
ROU
 
Right-of-Use
SBA
 
Small Business Administration
SEC
 
Securities and Exchange Commission
TDR
 
Troubled Debt Restructured

FORWARD LOOKING STATEMENTS:
This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated, including but not limited to: customer and employee retention, which might be greater than expected; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be

4




effected by deterioration in the housing and commercial real estate markets, which may lead to increased losses and nonperforming assets in our loan portfolio, and may result in our allowance for loan losses no longer being adequate to cover actual losses, and require us to increase our allowance for loan losses; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; risks related to acquiring assets in or entering markets in which we have not previously operated and may not be familiar; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; results of examinations of us by the bank regulators, including the possibility that any such regulatory authority may, among other things, initiate an enforcement action against the Company or our bank subsidiary which could require us to increase our allowance for loan losses, write-down assets, change our regulatory capital position, affect our ability to borrow funds or maintain or increase deposits, or impose additional requirements on us, any of which could affect our ability to continue our growth through mergers, acquisitions or similar transactions and adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and implementing regulations, changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules as a result of Basel III; our ability to control operating costs and expenses; increases in premiums for deposit insurance; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risk associated with the loans on our Condensed Consolidated Statements of Financial Condition; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our growth strategies; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames or at all, and any goodwill charges related thereto and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, which might be greater than expected; increased competitive pressures among financial service companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the FASB, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; and other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and other risks detailed from time to time in our filings with the Securities and Exchange Commission including our 2018 Annual Form 10-K.
The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for future periods to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating results and stock price performance.

5




PART I.     FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(In thousands, except shares)
 
 
September 30, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Cash on hand and in banks
 
$
115,500


$
92,704

Interest earning deposits
 
121,468


69,206

Cash and cash equivalents
 
236,968


161,910

Investment securities available for sale, at fair value
 
966,102


976,095

Loans held for sale
 
5,211

 
1,555

Loans receivable, net
 
3,731,343

 
3,654,160

Allowance for loan losses
 
(36,518
)
 
(35,042
)
Total loans receivable, net
 
3,694,825

 
3,619,118

Other real estate owned
 
841


1,983

Premises and equipment, net
 
86,563


81,100

Federal Home Loan Bank stock, at cost
 
6,377


6,076

Bank owned life insurance
 
102,981

 
93,612

Accrued interest receivable
 
14,722


15,403

Prepaid expenses and other assets
 
142,068


98,522

Other intangible assets, net
 
17,588


20,614

Goodwill
 
240,939


240,939

Total assets
 
$
5,515,185


$
5,316,927

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
Deposits
 
$
4,562,257

 
$
4,432,402

Junior subordinated debentures
 
20,522

 
20,302

Securities sold under agreement to repurchase
 
25,883

 
31,487

Accrued expenses and other liabilities
 
102,396

 
72,013

Total liabilities
 
4,711,058

 
4,556,204

Stockholders’ equity:
 
 
 
 
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding at September 30, 2019 and December 31, 2018
 

 

Common stock, no par value, 50,000,000 shares authorized; 36,618,381 and 36,874,055 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
 
585,581

 
591,806

Retained earnings
 
206,021

 
176,372

Accumulated other comprehensive income (loss), net
 
12,525

 
(7,455
)
Total stockholders’ equity
 
804,127

 
760,723

Total liabilities and stockholders’ equity
 
$
5,515,185

 
$
5,316,927

See accompanying Notes to Condensed Consolidated Financial Statements.

6




HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
 
 
Three Months Ended September 30,
 
Nine Months Ended
September 30,
 
 
2019
 
2018
 
2019
 
2018
INTEREST INCOME
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
47,845

 
$
48,301

 
$
142,651

 
$
127,601

Taxable interest on investment securities
 
5,704

 
4,662

 
17,460

 
12,259

Nontaxable interest on investment securities
 
798

 
1,085

 
2,641

 
3,646

Interest on other interest earning assets
 
537

 
558

 
1,155

 
1,016

Total interest income
 
54,884

 
54,606

 
163,907

 
144,522

INTEREST EXPENSE
 
 
 
 
 
 
 
 
Deposits
 
4,250

 
3,014

 
11,870

 
7,169

Junior subordinated debentures
 
332

 
330

 
1,026

 
928

Other borrowings
 
59

 
136

 
444

 
721

Total interest expense
 
4,641

 
3,480

 
13,340

 
8,818

Net interest income
 
50,243

 
51,126

 
150,567

 
135,704

Provision for loan losses
 
466

 
1,065

 
2,753

 
3,967

Net interest income after provision for loan losses
 
49,777

 
50,061

 
147,814

 
131,737

NONINTEREST INCOME
 
 
 
 
 
 
 
 
Service charges and other fees
 
4,779

 
4,824

 
14,109

 
14,062

Gain on sale of investment securities, net
 
281

 
82

 
329

 
135

Gain on sale of loans, net
 
993

 
706

 
1,613

 
2,286

Interest rate swap fees
 
152

 

 
313

 
360

Other income
 
2,253

 
2,438

 
7,087

 
6,330

Total noninterest income
 
8,458

 
8,050

 
23,451

 
23,173

NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
Compensation and employee benefits
 
21,733

 
23,804

 
65,629

 
64,492

Occupancy and equipment
 
5,268

 
5,020

 
16,177

 
14,457

Data processing
 
2,333

 
2,343

 
6,615

 
7,455

Marketing
 
816

 
876

 
3,020

 
2,507

Professional services
 
1,434

 
2,119

 
3,912

 
8,485

State/municipal business and use taxes
 
1,370

 
795

 
2,977

 
2,199

Federal deposit insurance premium
 
9

 
375

 
720

 
1,105

Other real estate owned, net
 
(35
)
 
18

 
340

 
18

Amortization of intangible assets
 
975

 
1,114

 
3,026

 
2,705

Other expense
 
2,816

 
2,997

 
8,375

 
8,491

Total noninterest expense
 
36,719

 
39,461

 
110,791

 
111,914

Income before income taxes
 
21,516

 
18,650

 
60,474

 
42,996

Income tax expense
 
3,621

 
3,146

 
10,043

 
6,548

Net income
 
$
17,895

 
$
15,504

 
$
50,431

 
$
36,448

Basic earnings per common share
 
$
0.49

 
$
0.42

 
$
1.37

 
$
1.04

Diluted earnings per common share
 
$
0.48

 
$
0.42

 
$
1.36

 
$
1.04

Dividends declared per common share
 
$
0.19

 
$
0.15

 
$
0.55

 
$
0.45

See accompanying Notes to Condensed Consolidated Financial Statements.

7




HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In thousands)

 
 
Three Months Ended September 30,
 
Nine Months Ended
September 30,
 
 
2019
 
2018
 
2019
 
2018
Net income
 
$
17,895

 
$
15,504

 
$
50,431

 
$
36,448

Change in fair value of investment securities available for sale, net of tax of $799, $(887), $5,407, and $(3,525), respectively
 
2,993

 
(3,319
)
 
20,240

 
(13,193
)
Reclassification adjustment for net gain from sale of investment securities available for sale included in income, net of tax of $(59), $(17), $(69), and $(29), respectively
 
(222
)
 
(65
)
 
(260
)
 
(106
)
Other comprehensive income (loss)
 
2,771

 
(3,384
)
 
19,980

 
(13,299
)
Comprehensive income
 
$
20,666

 
$
12,120

 
$
70,411

 
$
23,149

See accompanying Notes to Condensed Consolidated Financial Statements.


8




HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In thousands, except per share amounts)
 
Three Months Ended September 30, 2019
 
Number of
common
shares
 
Common
stock
 
Retained
earnings
 
Accumulated
other
comprehensive income, net
 
Total
stockholders’
equity
Balance at June 30, 2019
36,883

 
$
591,703

 
$
195,168

 
$
9,754

 
$
796,625

Restricted stock units vested, net of forfeitures of restricted stock awards
1

 

 

 

 

Exercise of stock options
1

 
2

 

 

 
2

Stock-based compensation expense

 
830

 

 

 
830

Common stock repurchased
(267
)
 
(6,954
)
 

 

 
(6,954
)
Net income

 

 
17,895

 

 
17,895

Other comprehensive income, net of tax

 

 

 
2,771

 
2,771

Cash dividends declared on common stock ($0.19 per share)

 

 
(7,042
)
 

 
(7,042
)
Balance at September 30, 2019
36,618

 
$
585,581

 
$
206,021

 
$
12,525

 
$
804,127


 
Nine Months Ended September 30, 2019
 
Number of
common
shares
 
Common
stock
 
Retained
earnings
 
Accumulated
other
comprehensive (loss) income, net
 
Total
stockholders’
equity
Balance at December 31, 2018
36,874

 
$
591,806

 
$
176,372

 
$
(7,455
)
 
$
760,723

Effects of implementation of accounting change related to operating leases

 

 
(399
)
 

 
(399
)
Restricted stock units vested, net of forfeitures of restricted stock awards
63

 

 

 

 

Exercise of stock options
4

 
44

 

 

 
44

Stock-based compensation expense

 
2,366

 

 

 
2,366

Common stock repurchased
(323
)
 
(8,635
)
 

 

 
(8,635
)
Net income

 

 
50,431

 

 
50,431

Other comprehensive income, net of tax

 

 

 
19,980

 
19,980

Cash dividends declared on common stock ($0.55 per share)

 

 
(20,383
)
 

 
(20,383
)
Balance at September 30, 2019
36,618

 
$
585,581

 
$
206,021

 
$
12,525

 
$
804,127



9




 
Three Months Ended September 30, 2018
 
Number of
common
shares
 
Common
stock
 
Retained
earnings
 
Accumulated
other
comprehensive loss, net
 
Total
stockholders’
equity
Balance at June 30, 2018
34,021

 
$
491,026

 
$
159,803

 
$
(11,306
)
 
$
639,523

Forfeitures of restricted stock awards, net of restricted stock units vested
(1
)
 

 

 

 

Exercise of stock options
6

 
71

 

 

 
71

Stock-based compensation expense

 
709

 

 

 
709

Common stock repurchased
(1
)
 
(14
)
 

 

 
(14
)
Net income

 

 
15,504

 

 
15,504

Other comprehensive loss, net of tax

 

 

 
(3,384
)
 
(3,384
)
Common stock issued in business combination
2,848

 
99,273

 

 

 
99,273

Cash dividends declared on common stock ($0.15 per share)

 

 
(5,549
)
 

 
(5,549
)
Balance at September 30, 2018
36,873

 
$
591,065

 
$
169,758

 
$
(14,690
)
 
$
746,133


 
Nine Months Ended September 30, 2018
 
Number of
common
shares
 
Common
stock
 
Retained
earnings
 
Accumulated
other
comprehensive loss, net
 
Total
stockholders’
equity
Balance at December 31, 2017
29,928

 
$
360,590

 
$
149,013

 
$
(1,298
)
 
$
508,305

Effects of implementation of accounting change related to equity investments, net

 

 
93

 
(93
)
 

Restricted stock units vested, net of forfeitures of restricted stock awards
29

 

 

 

 

Exercise of stock options
9

 
118

 

 

 
118

Stock-based compensation expense

 
2,016

 

 

 
2,016

Common stock repurchased
(53
)
 
(1,702
)
 

 

 
(1,702
)
Net income

 

 
36,448

 

 
36,448

Other comprehensive loss, net of tax

 

 

 
(13,299
)
 
(13,299
)
Common stock issued in business combination
6,960

 
230,043

 

 

 
230,043

Cash dividends declared on common stock ($0.45 per share)

 

 
(15,796
)
 

 
(15,796
)
Balance at September 30, 2018
36,873

 
$
591,065

 
$
169,758

 
$
(14,690
)
 
$
746,133

See accompanying Notes to Condensed Consolidated Financial Statements.


10




HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
 
 
Nine Months Ended
September 30,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
 
$
50,431

 
$
36,448

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation of premises and equipment, amortization of securities available for sale, and amortization of discount of junior subordinated debentures
 
6,220

 
7,538

Changes in net deferred loan costs, net of amortization
 
1,122

 
(38
)
Provision for loan losses
 
2,753

 
3,967

Net change in accrued interest receivable, prepaid expenses and other assets, and accrued expenses and other liabilities
 
303

 
4,231

Stock-based compensation expense
 
2,366

 
2,016

Amortization of intangible assets
 
3,026

 
2,705

Origination of mortgage loans held for sale
 
(45,852
)
 
(60,994
)
Proceeds from sale of mortgage loans
 
43,544

 
63,330

Earnings on bank owned life insurance
 
(1,578
)
 
(1,079
)
Valuation adjustment on other real estate owned
 
51

 

Loss on sale of other real estate owned, net
 
227

 

Gain on sale of loans, net
 
(1,613
)
 
(2,286
)
Gain on sale of investment securities, net
 
(329
)
 
(135
)
Gain on sale of assets held for sale
 

 
(382
)
Impairment of assets held for sale
 

 
75

Impairment of right of use asset
 
117

 

(Gain) loss on sale of premises and equipment, net
 
(14
)
 
31

Net cash provided by operating activities
 
60,774

 
55,427

Cash flows from investing activities:
 
 
 
 
Loans originated, net of principal payments
 
(82,879
)
 
(93,047
)
Maturities, calls and payments of investment securities available for sale
 
145,778

 
64,625

Purchase of investment securities available for sale
 
(156,501
)
 
(262,429
)
Proceeds from sales of investment securities available for sale
 
43,872

 
156,946

Purchase of premises and equipment
 
(10,526
)
 
(21,468
)
Proceeds from sale of other loans
 
3,562

 
9,993

Proceeds from sale of other real estate owned
 
864

 
198

Proceeds from sale of assets held for sale
 

 
603

Proceeds from redemption of Federal Home Loan Bank stock
 
18,032

 
26,010

Purchases of Federal Home Loan Bank stock
 
(18,333
)
 
(21,996
)
Proceeds from sales of premises and equipment
 
35

 
26

Purchase of bank owned life insurance
 
(8,000
)
 

Capital contributions to low-income housing tax credit partnerships and new market tax credit partnerships, net
 
(16,992
)
 
(8,269
)
Net cash received from acquisitions
 

 
105,974

Net cash used in investing activities
 
(81,088
)
 
(42,834
)

11




 
 
Nine Months Ended
September 30,
 
 
2019
 
2018
Cash flows from financing activities:
 
 
 
 
Net increase in deposits
 
129,855

 
180,465

Federal Home Loan Bank advances
 
445,800

 
541,450

Repayment of Federal Home Loan Bank advances
 
(445,800
)
 
(649,950
)
Common stock cash dividends paid
 
(20,288
)
 
(15,796
)
Net decrease in securities sold under agreement to repurchase
 
(5,604
)
 
(50
)
Proceeds from exercise of stock options
 
44

 
118

Repurchase of common stock
 
(8,635
)
 
(1,702
)
Net cash provided by financing activities
 
95,372

 
54,535

Net increase in cash and cash equivalents
 
75,058

 
67,128

Cash and cash equivalents at beginning of period
 
161,910

 
103,015

Cash and cash equivalents at end of period
 
$
236,968

 
$
170,143

 
 
 
 
 
Supplemental disclosures of cash flow information:
 
 
 
 
Cash paid for interest
 
$
13,099

 
$
8,497

Cash paid for income taxes
 
7,098

 
4,647

 
 
 
 
 
Supplemental non-cash disclosures of cash flow information:
 
 
 
 
Transfers of loans receivable to other real estate owned
 
$

 
$
434

Transfers of properties held for sale recorded in premises and equipment, net to prepaid expenses and other assets
 
1,533

 
1,835

Investment in low income housing tax credit partnership and related funding commitment
 
15,254

 

Purchase of investment securities available for sale not settled
 

 
5,454

Transfer of bank owned life insurance to prepaid expenses and other assets
 
209

 

     Business Combinations:
 
 
 
 
Common stock issued for business combinations
 

 
230,043

Assets acquired (liabilities assumed) in acquisitions:
 
 
 
 
Investment securities available for sale