Company Quick10K Filing
Quick10K
NBT Bancorp
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$38.38 44 $1,680
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-21 Shareholder Vote
8-K 2019-05-21 Regulation FD
8-K 2019-05-14 Regulation FD
8-K 2019-05-02 Officers, Exhibits
8-K 2019-04-22 Earnings, Exhibits
8-K 2019-03-25 Regulation FD, Exhibits
8-K 2019-02-14 Regulation FD
8-K 2019-01-28 Earnings, Exhibits
8-K 2019-01-28 Earnings, Exhibits
8-K 2019-01-15 Other Events, Exhibits
8-K 2018-10-22 Earnings, Exhibits
8-K 2018-08-01 Regulation FD
8-K 2018-07-23 Earnings, Exhibits
8-K 2018-05-22 Amend Bylaw, Shareholder Vote, Other Events, Exhibits
8-K 2018-05-15 Regulation FD
8-K 2018-04-23 Earnings, Exhibits
8-K 2018-04-05 Other Events, Exhibits
8-K 2018-03-26 Regulation FD, Exhibits
8-K 2018-01-22 Earnings, Exhibits
LH Laboratory of America 16,340
MAT Mattel 3,990
SGMS Scientific Games 2,040
CHCO City Holding 1,310
PEI Pennsylvania Real Estate Investment Trust 559
KGJI Kingold Jewelry 56
HOS Hornbeck Offshore Services 55
RITO Rito Group 0
CBAK CBAK Energy Technology 0
COBZ Cobiz Financial 0
NBTB 2019-03-31
Part I Financial Information
Item 1 - Financial Statements
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1 - Legal Proceedings
Item 1A - Risk Factors
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 - Defaults Upon Senior Securities
Item 4 - Mine Safety Disclosures
Item 5 - Other Information
Item 6 - Exhibits
EX-31.1 ex31_1.htm
EX-31.2 ex31_2.htm
EX-32.1 ex32_1.htm
EX-32.2 ex32_2.htm

NBT Bancorp Earnings 2019-03-31

NBTB 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 form10q.htm 10-Q  

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
 
(Mark One)
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 0-14703
 
NBT BANCORP INC.
(Exact Name of Registrant as Specified in its Charter)
 
DELAWARE
 
16-1268674
(State of Incorporation)
 
(I.R.S. Employer Identification No.)
 
52 SOUTH BROAD STREET, NORWICH, NEW YORK 13815
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s Telephone Number, Including Area Code: (607) 337-2265
 
None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 
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 (Section 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, 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. (Check One):

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 ☒

Securities registered pursuant to Section 12(b) of the Act: 

Title of class

Trading Symbol(s)

Name of exchange on which registered
Common Stock, par value $0.01 per share
 
NBTB
 
The NASDAQ Stock Market LLC

As of April 30, 2019, there were 43,757,647 shares outstanding of the Registrant’s common stock, $0.01 par value per share.



NBT BANCORP INC.
FORM 10-Q-Quarter Ended March 31, 2019

TABLE OF CONTENTS

 PART I
FINANCIAL INFORMATION

Item 1
Financial Statements
 
     
 
3
     
 
4
     
 
5
     
 
6
     
 
7
     
 
9
     
Item 2
35
     
Item 3
47
     
Item 4
47
     
PART II
OTHER INFORMATION
 
     
Item 1
48
Item 1A
 
Item 2
48
Item 3
48
Item 4
48
Item 5
48
Item 6
49
     
  50

Item 1 – FINANCIAL STATEMENTS

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
 
 
March 31,
   
December 31,
 
   
2019
   
2018
 
(In thousands, except share and per share data)
           
Assets
           
Cash and due from banks
 
$
143,989
   
$
175,550
 
Short-term interest bearing accounts
   
33,130
     
5,405
 
Equity securities, at fair value
   
25,482
     
23,053
 
Securities available for sale, at fair value
   
951,859
     
998,496
 
Securities held to maturity (fair value $782,761 and $778,675, respectively)
   
780,565
     
783,599
 
Federal Reserve and Federal Home Loan Bank stock
   
43,957
     
53,229
 
Loans held for sale
   
8,525
     
6,943
 
Loans
   
6,890,312
     
6,887,709
 
Less allowance for loan losses
   
71,405
     
72,505
 
Net loans
 
$
6,818,907
   
$
6,815,204
 
Premises and equipment, net
   
78,391
     
78,970
 
Goodwill
   
274,769
     
274,769
 
Intangible assets, net
   
14,631
     
15,599
 
Bank owned life insurance
   
178,856
     
177,479
 
Other assets
   
180,449
     
148,067
 
Total assets
 
$
9,533,510
   
$
9,556,363
 
Liabilities
               
Demand (noninterest bearing)
 
$
2,324,981
   
$
2,361,099
 
Savings, NOW and money market
   
4,370,374
     
4,076,434
 
Time
   
922,304
     
930,678
 
Total deposits
 
$
7,617,659
   
$
7,368,211
 
Short-term borrowings
   
544,883
     
871,696
 
Long-term debt
   
73,696
     
73,724
 
Junior subordinated debt
   
101,196
     
101,196
 
Other liabilities
   
162,021
     
123,627
 
Total liabilities
 
$
8,499,455
   
$
8,538,454
 
Stockholders’ equity
               
Preferred stock, $0.01 par value; authorized 2,500,000 shares at March 31, 2019 and December 31, 2018
 
$
-
   
$
-
 
Common stock, $0.01 par value; authorized 100,000,000 shares at March 31, 2019 and December 31, 2018; issued 49,651,493 at March 31, 2019 and December 31, 2018
   
497
     
497
 
Additional paid-in-capital
   
575,944
     
575,466
 
Retained earnings
   
627,556
     
621,203
 
Accumulated other comprehensive loss
   
(34,932
)
   
(43,174
)
Common stock in treasury, at cost, 5,911,607 and 5,978,527 shares at March 31, 2019 and December 31, 2018, respectively
   
(135,010
)
   
(136,083
)
Total stockholders’ equity
 
$
1,034,055
   
$
1,017,909
 
Total liabilities and stockholders’ equity
 
$
9,533,510
   
$
9,556,363
 
 
See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)
   
Three Months Ended
March 31,
 
   
2019
   
2018
 
(In thousands, except per share data)
           
Interest, fee and dividend income
           
Interest and fees on loans
 
$
79,321
   
$
70,443
 
Securities available for sale
   
5,922
     
6,926
 
Securities held to maturity
   
5,217
     
2,625
 
Other
   
884
     
766
 
Total interest, fee and dividend income
 
$
91,344
   
$
80,760
 
Interest expense
               
Deposits
 
$
8,826
   
$
3,931
 
Short-term borrowings
   
3,237
     
1,966
 
Long-term debt
   
422
     
476
 
Junior subordinated debt
   
1,168
     
901
 
Total interest expense
 
$
13,653
   
$
7,274
 
Net interest income
 
$
77,691
   
$
73,486
 
Provision for loan losses
   
5,807
     
7,496
 
Net interest income after provision for loan losses
 
$
71,884
   
$
65,990
 
Noninterest income
               
Insurance and other financial services revenue
 
$
6,756
   
$
6,504
 
Service charges on deposit accounts
   
4,236
     
3,972
 
ATM and debit card fees
   
5,525
     
5,273
 
Retirement plan administration fees
   
7,734
     
5,339
 
Trust
   
4,551
     
4,878
 
Bank owned life insurance
   
1,377
     
1,347
 
Net securities gains
   
57
     
72
 
Other
   
3,585
     
3,892
 
Total noninterest income
 
$
33,821
   
$
31,277
 
Noninterest expense
               
Salaries and employee benefits
 
$
39,356
   
$
36,567
 
Occupancy
   
6,275
     
6,119
 
Data processing and communications
   
4,414
     
4,279
 
Professional fees and outside services
   
3,668
     
3,492
 
Equipment
   
4,757
     
4,038
 
Office supplies and postage
   
1,591
     
1,573
 
FDIC expenses
   
1,017
     
1,201
 
Advertising
   
503
     
337
 
Amortization of intangible assets
   
968
     
914
 
Loan collection and other real estate owned, net
   
785
     
1,337
 
Other
   
5,126
     
4,415
 
Total noninterest expense
 
$
68,460
   
$
64,272
 
Income before income tax expense
 
$
37,245
   
$
32,995
 
Income tax expense
   
8,118
     
7,009
 
Net income
 
$
29,127
   
$
25,986
 
Earnings per share
               
Basic
 
$
0.67
   
$
0.60
 
Diluted
 
$
0.66
   
$
0.59
 
 
See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (unaudited)
   
Three Months Ended
March 31,
 
   
2019
   
2018
 
(In thousands)
           
Net income
 
$
29,127
   
$
25,986
 
Other comprehensive income (loss), net of tax:
               
                 
Securities available for sale:
               
Unrealized net holding gains (losses) arising during the period, gross
 
$
11,036
   
$
(15,454
)
Tax effect
   
(2,759
)
   
3,864
 
Unrealized net holding gains (losses) arising during the period, net
 
$
8,277
   
$
(11,590
)
                 
Reclassification adjustment for net losses in net income, gross
 
$
99
   
$
-
 
Tax effect
   
(25
)
   
-
 
Reclassification adjustment for net losses in net income, net
 
$
74
   
$
-
 
                 
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross
 
$
167
   
$
188
 
Tax effect
   
(42
)
   
(47
)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net
 
$
125
   
$
141
 
                 
Total securities available for sale, net
 
$
8,476
   
$
(11,449
)
                 
Cash flow hedges:
               
Unrealized (losses) gains on derivatives (cash flow hedges), gross
 
$
(170
)
 
$
1,048
 
Tax effect
   
43
     
(262
)
Unrealized (losses) gains on derivatives (cash flow hedges), net
 
$
(127
)
 
$
786
 
                 
Reclassification of net unrealized (gains) on cash flow hedges to interest (income), gross
 
$
(799
)
 
$
(359
)
Tax effect
   
200
     
90
 
Reclassification of net unrealized (gains) on cash flow hedges to interest (income), net
 
$
(599
)
 
$
(269
)
                 
Total cash flow hedges, net
 
$
(726
)
 
$
517
 
                 
Pension and other benefits:
               
Amortization of prior service cost and actuarial losses, gross
 
$
656
   
$
295
 
Tax effect
   
(164
)
   
(74
)
Amortization of prior service cost and actuarial losses, net
 
$
492
   
$
221
 
                 
Total pension and other benefits, net
 
$
492
   
$
221
 
                 
Total other comprehensive income (loss)
 
$
8,242
   
$
(10,711
)
Comprehensive income
 
$
37,369
   
$
15,275
 

See accompanying notes to unaudited interim consolidated financial statements.
 
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity (unaudited)
   
Common Stock
   
Additional Paid-in- Capital
   
Retained Earnings
   
Accumulated Other Comprehensive (Loss) Income
   
Common Stock in Treasury
   
Total
 
(In thousands, except share and per share data)
                                   
Balance at December 31, 2017
 
$
497
   
$
574,209
   
$
543,713
   
$
(22,077
)
 
$
(138,165
)
 
$
958,177
 
Net income
   
-
     
-
     
25,986
     
-
     
-
     
25,986
 
Cumulative effect adjustment for ASU 2016-01 implementation
   
-
     
-
     
1,475
     
(2,628
)
   
-
     
(1,153
)
Cumulative effect adjustment for ASU 2018-02 implementation
   
-
     
-
     
5,575
     
(5,575
)
   
-
     
-
 
Cash dividends - $0.48 per share
   
-
     
-
     
(20,966
)
   
-
     
-
     
(20,966
)
Net issuance of 72,844 shares to employee and other stock plans
   
-
     
(2,037
)
   
-
     
-
     
980
     
(1,057
)
Stock-based compensation
   
-
     
2,454
     
-
     
-
     
-
     
2,454
 
Other comprehensive loss
   
-
     
-
     
-
     
(10,711
)
   
-
     
(10,711
)
Balance at March 31, 2018
 
$
497
   
$
574,626
   
$
555,783
   
$
(40,991
)
 
$
(137,185
)
 
$
952,730
 
 
                                               
Balance at December 31, 2018
 
$
497
   
$
575,466
   
$
621,203
   
$
(43,174
)
 
$
(136,083
)
 
$
1,017,909
 
Net income
   
-
     
-
     
29,127
     
-
     
-
     
29,127
 
Cash dividends - $0.52 per share
   
-
     
-
     
(22,774
)
   
-
     
-
     
(22,774
)
Net issuance of 66,920 shares to employee and other stock plans
   
-
     
(2,099
)
   
-
     
-
     
1,073
     
(1,026
)
Stock-based compensation
   
-
     
2,577
     
-
     
-
     
-
     
2,577
 
Other comprehensive income
   
-
     
-
     
-
     
8,242
     
-
     
8,242
 
Balance at March 31, 2019
 
$
497
   
$
575,944
   
$
627,556
   
$
(34,932
)
 
$
(135,010
)
 
$
1,034,055
 
 
See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
   
Three Months Ended
March 31,
 
   
2019
   
2018
 
(In thousands)
           
Operating activities
           
Net income
 
$
29,127
   
$
25,986
 
Adjustments to reconcile net income to net cash provided by operating activities
               
Provision for loan losses
   
5,807
     
7,496
 
Depreciation and amortization of premises and equipment
   
2,357
     
2,327
 
Net amortization on securities
   
797
     
1,081
 
Amortization of operating lease right-of-use asset
   
1,799
     
-
 
Amortization of intangible assets
   
968
     
914
 
Excess tax benefit on stock-based compensation
   
(260
)
   
(407
)
Stock-based compensation expense
   
2,577
     
2,454
 
Bank owned life insurance income
   
(1,377
)
   
(1,347
)
Proceeds from sale of loans held for sale
   
25,232
     
23,977
 
Originations and purchases of loans held for sale
   
(26,586
)
   
(24,188
)
Net gain on sale of loans held for sale
   
(88
)
   
(57
)
Net security gains
   
(57
)
   
(72
)
Net gains on sale of other real estate owned
   
(157
)
   
(174
)
Net change in other assets and other liabilities
   
(926
)
   
2,061
 
Net cash provided by operating activities
 
$
39,213
   
$
40,051
 
Investing activities
               
Securities available for sale:
               
Proceeds from maturities, calls and principal paydowns
 
$
94,488
   
$
51,122
 
Proceeds from sales
   
26,203
     
-
 
Purchases
   
(63,579
)
   
(91,520
)
Securities held to maturity:
               
Proceeds from maturities, calls and principal paydowns
   
30,999
     
18,242
 
Purchases
   
(28,034
)
   
(21,333
)
Equity securities:
               
Proceeds from sales
   
-
     
2,623
 
Purchases
   
(21
)
   
-
 
Other:
               
Net increase in loans
   
(9,975
)
   
(69,659
)
Proceeds from Federal Home Loan Bank stock redemption
   
48,444
     
71,081
 
Purchases of Federal Home Loan Bank stock
   
(39,172
)
   
(68,153
)
Purchases of premises and equipment, net
   
(1,910
)
   
(1,186
)
Proceeds from sales of other real estate owned
   
701
     
534
 
Net cash provided by (used in) investing activities
 
$
58,144
   
$
(108,249
)
Financing activities
               
Net increase in deposits
 
$
249,448
   
$
223,292
 
Net decrease in short-term borrowings
   
(326,814
)
   
(133,111
)
Proceeds from issuance of long-term debt
   
-
     
25,000
 
Repayments of long-term debt
   
(27
)
   
(25,045
)
Proceeds from the issuance of shares to employee and other stock plans
   
204
     
672
 
Cash paid by employer for tax-withholding on stock issuance
   
(1,230
)
   
(1,729
)
Cash dividends
   
(22,774
)
   
(20,966
)
Net cash (used in) provided by financing activities
 
$
(101,193
)
 
$
68,113
 
Net decrease in cash and cash equivalents
 
$
(3,836
)
 
$
(85
)
Cash and cash equivalents at beginning of period
   
180,955
     
159,664
 
Cash and cash equivalents at end of period
 
$
177,119
   
$
159,579
 

   
Three Months Ended
March 31,
 
   
2019
   
2018
 
Supplemental disclosure of cash flow information
           
Cash paid during the period for:
           
Interest expense
 
$
13,329
   
$
7,677
 
Income taxes paid, net of refund
   
1,817
     
3,199
 
Noncash investing activities:
               
Loans transferred to other real estate owned
 
$
325
   
$
780
 
 
See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Notes to Unaudited Interim Consolidated Financial Statements
March 31, 2019
 
1.
Description of Business
 
NBT Bancorp Inc. (the “Registrant” or the “Company”) is a registered financial holding company incorporated in the state of Delaware in 1986, with its principal headquarters located in Norwich, New York. The principal assets of the Registrant consist of all of the outstanding shares of common stock of its subsidiaries, including: NBT Bank, National Association (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”), NBT Holdings, Inc. (“NBT Holdings”), CNBF Capital Trust I, NBT Statutory Trust I, NBT Statutory Trust II, Alliance Financial Capital Trust I and Alliance Financial Capital Trust II (collectively, the “Trusts”). The Company’s principal sources of revenue are the management fees and dividends it receives from the Bank, NBT Financial and NBT Holdings.
 
The Company’s business, primarily conducted through the Bank, consists of providing commercial banking, retail banking and wealth management services primarily to customers in its market area, which includes central and upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont and the southern coastal Maine area. The Company has been, and intends to continue to be, a community-oriented financial institution offering a variety of financial services. The Company’s business philosophy is to operate as a community bank with local decision-making, providing a broad array of banking and financial services to retail, commercial and municipal customers.

2.
Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of the Registrant and its wholly-owned subsidiaries, the Bank, NBT Financial and NBT Holdings. Collectively, the Registrant and its subsidiaries are referred to herein as “the Company.” The interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods in accordance with generally accepted accounting principles in the United States of America (“GAAP”). These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2018 Annual Report on Form 10-K. 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 interim period. All material intercompany transactions have been eliminated in consolidation. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation. The Company has evaluated subsequent events for potential recognition and/or disclosure and there were none identified.

3.
Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale (“AFS”) securities are as follows:

(In thousands)
 
Amortized
Cost
   
Unrealized
Gains
   
Unrealized
Losses
   
Estimated
Fair Value
 
As of March 31, 2019
                       
Federal agency
 
$
29,990
   
$
10
   
$
364
   
$
29,636
 
State & municipal
   
598
     
-
     
-
     
598
 
Mortgage-backed:
                               
Government-sponsored enterprises
   
482,357
     
1,155
     
4,022
     
479,490
 
U.S. government agency securities
   
36,601
     
384
     
308
     
36,677
 
Collateralized mortgage obligations:
                               
Government-sponsored enterprises
   
333,838
     
623
     
4,568
     
329,893
 
U.S. government agency securities
   
76,469
     
166
     
1,070
     
75,565
 
Total AFS securities
 
$
959,853
   
$
2,338
   
$
10,332
   
$
951,859
 
As of December 31, 2018
                               
Federal agency
 
$
84,982
   
$
10
   
$
693
   
$
84,299
 
State & municipal
   
30,136
     
16
     
237
     
29,915
 
Mortgage-backed:
                               
Government-sponsored enterprises
   
493,225
     
439
     
10,354
     
483,310
 
U.S. government agency securities
   
29,190
     
270
     
475
     
28,985
 
Collateralized mortgage obligations:
                               
Government-sponsored enterprises
   
332,409
     
344
     
7,211
     
325,542
 
U.S. government agency securities
   
47,684
     
137
     
1,376
     
46,445
 
Total AFS securities
 
$
1,017,626
   
$
1,216
   
$
20,346
   
$
998,496
 

The components of net realized gains (losses) on the sale of AFS securities are as follows. These amounts were reclassified out of AOCI and into earnings:

   
Three Months Ended
March 31,
 
(In thousands)
 
2019
   
2018
 
Gross realized gains
 
$
53
   
$
-
 
Gross realized (losses)
   
(152
)
   
-
 
Net AFS realized (losses)
 
$
(99
)
 
$
-
 

Included in net gains (losses) from sale transactions, the Company recorded gains from calls on AFS securities of approximately $4 thousand for the three months ended March 31, 2019. There were no recorded gains from calls on AFS securities included in net gains (losses) from sales transactions for the three months ended March 31, 2018.
  
The amortized cost, estimated fair value and unrealized gains (losses) of securities held to maturity (“HTM”) are as follows:

(In thousands)
 
Amortized
Cost
   
Unrealized
Gains
   
Unrealized
Losses
   
Estimated
Fair Value
 
As of March 31, 2019
                       
Federal agency
 
$
19,995
   
$
55
   
$
-
   
$
20,050
 
Mortgage-backed:
                               
Government-sponsored enterprises
   
160,566
     
1,281
     
981
     
160,866
 
U.S. government agency securities
   
14,545
     
460
     
-
     
15,005
 
Collateralized mortgage obligations:
                               
Government-sponsored enterprises
   
247,418
     
1,388
     
2,230
     
246,576
 
    U.S. government agency securities
   
103,741
     
1,329
     
-
     
105,070
 
State & municipal
   
234,300
     
1,254
     
360
     
235,194
 
Total HTM securities
 
$
780,565
   
$
5,767
   
$
3,571
   
$
782,761
 
As of December 31,2018
                               
Federal agency
 
$
19,995
   
$
52
   
$
-
   
$
20,047
 
Mortgage-backed:
                               
Government-sponsored enterprises
   
164,618
     
712
     
2,773
     
162,557
 
U.S. government agency securities
   
15,230
     
403
     
-
     
15,633
 
Collateralized mortgage obligations:
                               
Government-sponsored enterprises
   
257,475
     
1,097
     
3,897
     
254,675
 
   U.S. government agency securities
   
83,148
     
767
     
-
     
83,915
 
State & municipal
   
243,133
     
331
     
1,616
     
241,848
 
Total HTM securities
 
$
783,599
   
$
3,362
   
$
8,286
   
$
778,675
 

AFS and HTM securities with amortized costs totaling $1.5 billion at March 31, 2019 and December 31, 2018 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at March 31, 2019 and December 31, 2018, AFS and HTM securities with an amortized cost of $207.5 million and $215.3 million, respectively, were pledged as collateral for securities sold under the repurchase agreements.

The following table sets forth information with regard to investment securities with unrealized losses segregated according to the length of time the securities had been in a continuous unrealized loss position:
 
 
 
Less than 12 months
   
12 months or longer
   
Total
 
(In thousands)
 
Fair Value
   
Unrealized Losses
   
Number of Positions
   
Fair Value
   
Unrealized Losses
   
Number of Positions
   
Fair Value
   
Unrealized Losses
   
Number of Positions
 
As of March 31, 2019
                                                     
AFS securities:
                                                     
Federal agency
 
$
-
   
$
-
     
-
   
$
9,636
   
$
(364
)
   
1
   
$
9,636
   
$
(364
)
   
1
 
Mortgage-backed
   
234
     
(2
)
   
2
     
352,339
     
(4,328
)
   
90
     
352,573
     
(4,330
)
   
92
 
Collateralized mortgage obligations
   
36,739
     
(166
)
   
5
     
311,623
     
(5,472
)
   
64
     
348,362
     
(5,638
)
   
69
 
Total securities with unrealized losses
 
$
36,973
   
$
(168
)
   
7
   
$
673,598
   
$
(10,164
)
   
155
   
$
710,571
   
$
(10,332
)
   
162
 
 
                                                                       
HTM securities:
                                                                       
Mortgaged-backed
 
$
-
   
$
-
     
-
   
$
82,204
   
$
(981
)
   
6
   
$
82,204
   
$
(981
)
   
6
 
Collateralized mortgage obligations
   
-
     
-
     
-
     
125,486
     
(2,230
)
   
24
     
125,486
     
(2,230
)
   
24
 
State & municipal
   
-
     
-
     
-
     
19,302
     
(360
)
   
30
     
19,302
     
(360
)
   
30
 
Total securities with unrealized losses
 
$
-
   
$
-
     
-
   
$
226,992
   
$
(3,571
)
   
60
   
$
226,992
   
$
(3,571
)
   
60
 
                                                                         
As of December 31, 2018
                                                                       
AFS securities:
                                                                       
Federal agency
 
$
-
   
$
-
     
-
   
$
64,294
   
$
(693
)
   
6
   
$
64,294
   
$
(693
)
   
6
 
State & municipal
   
1,715
     
(3
)
   
3
     
22,324
     
(234
)
   
35
     
24,039
     
(237
)
   
38
 
Mortgage-backed
   
18,462
     
(65
)
   
12
     
428,440
     
(10,764
)
   
101
     
446,902
     
(10,829
)
   
113
 
Collateralized mortgage obligations
   
12,118
     
(69
)
   
5
     
320,908
     
(8,518
)
   
62
     
333,026
     
(8,587
)
   
67
 
Total securities with unrealized losses
 
$
32,295
   
$
(137
)
   
20
   
$
835,966
   
$
(20,209
)
   
204
   
$
868,261
   
$
(20,346
)
   
224
 
 
                                                                       
HTM securities:
                                                                       
Mortgage -backed
 
$
-
   
$
-
     
-
   
$
82,579
   
$
(2,773
)
   
6
   
$
82,579
   
$
(2,773
)
   
6
 
Collateralized mortgage obligations
   
4,386
     
(7
)
   
2
     
145,396
     
(3,890
)
   
26
     
149,782
     
(3,897
)
   
28
 
State & municipal
   
18,907
     
(84
)
   
30
     
58,258
     
(1,532
)
   
86
     
77,165
     
(1,616
)
   
116
 
Total securities with unrealized losses
 
$
23,293
   
$
(91
)
   
32
   
$
286,233
   
$
(8,195
)
   
118
   
$
309,526
   
$
(8,286
)
   
150
 
 
Declines in the fair value of AFS and HTM securities below their amortized cost, less any current period credit loss, that are deemed to be other-than-temporary are reflected in earnings as realized losses or in other comprehensive income (“OCI”). The classification is dependent upon whether the Company intends to sell the security, or whether it is more likely than not, that the Company will be required to sell the security before recovery. The other-than-temporary impairment (“OTTI”) shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the OTTI shall be separated into (a) the amount representing the credit loss and (b) the amount related to all other factors. The amount of the total OTTI related to the credit loss shall be recognized in earnings. The amount of the total OTTI related to other factors shall be recognized in OCI, net of applicable taxes.
 
In estimating OTTI losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer and (iii) the historical and implied volatility of the fair value of the security.
 
Management has the intent to hold the securities classified as HTM until they mature, at which time it is believed the Company will receive full value for the securities. The unrealized losses on HTM debt securities are due to increases in market interest rates over yields at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. The fair value is expected to recover as the bonds approach their respective maturity date or repricing date or if market yields for such investments decline.

Management also has the intent to hold and will not be required to sell, the debt securities classified as AFS for a period of time sufficient for a recovery of cost, which may be at maturity. The unrealized losses on AFS debt securities are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. For AFS debt securities, OTTI losses are recognized in earnings if the Company intends to sell the security. In other cases the Company considers the relevant factors noted above, as well as the Company’s intent and ability to retain its investment for a period of time sufficient to allow for any anticipated recovery in market value and whether evidence exists to support a realizable value equal to or greater than the cost basis. Any impairment loss on an equity security is equal to the full difference between the cost basis and the fair value of the security.

As of March 31, 2019 and December 31, 2018, management believes the impairments detailed in the table above are temporary. There were no OTTI losses realized in the Company’s consolidated statements of income for the three months ended March 31, 2019, and March 31, 2018.
 
The following table sets forth information with regard to gains and losses on equity securities:

   
Three Months Ended
March 31,
 
(In thousands)
 
2019
   
2018
 
Net gains and losses recognized on equity securities
 
$
156
   
$
72
 
Less: Net gains and losses recognized during the period on equity securities sold during the period
   
-
     
44
 
Unrealized gains and losses recognized on equity securities still held
 
$
156
   
$
28
 

As of March 31, 2019 and December 31, 2018, the carrying value of equity securities without readily determinable fair values was $4.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of March 31, 2019 and March 31, 2018. There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the quarters ended March 31, 2019 and March 31, 2018.

The following table sets forth information with regard to contractual maturities of debt securities at March 31, 2019:
 
(In thousands)
 
Amortized
Cost
   
Estimated
Fair Value
 
AFS debt securities:
           
Within one year
 
$
610
   
$
610
 
From one to five years
   
51,922
     
51,573
 
From five to ten years
   
161,292
     
160,434
 
After ten years
   
746,029
     
739,242
 
Total AFS debt securities
 
$
959,853
   
$
951,859
 
HTM debt securities:
               
Within one year
 
$
78,118
   
$
78,118
 
From one to five years
   
64,632
     
64,930
 
From five to ten years
   
204,726
     
204,881
 
After ten years
   
433,089
     
434,832
 
Total HTM debt securities
 
$
780,565
   
$
782,761
 
 
Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
 
Except for U.S. Government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at March 31, 2019 and December 31, 2018.

4.          Allowance for Loan Losses and Credit Quality of Loans

Allowance for Loan Losses

The allowance for loan losses is maintained at a level estimated by management to provide adequately for probable incurred losses inherent in the current loan portfolio. The appropriateness of the allowance for loan losses is continuously monitored. It is assessed for appropriateness using a methodology designed to ensure the level of the allowance reasonably reflects the loan portfolio’s risk profile and can absorb all reasonably estimable credit losses inherent in the current loan portfolio.

To develop and document a systematic methodology for determining the allowance for loan losses, the Company has divided the loan portfolio into three segments, each with different risk characteristics and methodologies for assessing risk. Those segments are further segregated between our loans accounted for under the amortized cost method (referred to as “originated” loans) and loans acquired in a business combination (referred to as “acquired” loans). Each portfolio segment is broken down into class segments where appropriate. Class segments contain unique measurement attributes, risk characteristics and methods for monitoring and assessing risk that are necessary to develop the allowance for loan losses. Unique characteristics such as borrower type, loan type, collateral type and risk characteristics define each class segment. The following table illustrates the portfolio and class segments for the Company’s loan portfolio:

Portfolio
Class
Commercial Loans
Commercial and Industrial
 
Commercial Real Estate
 
Business Banking
Consumer Loans
Dealer Finance
 
Specialty Lending
 
Direct
Residential Real Estate
 

Commercial Loans

The Company offers a variety of Commercial loan products. The Company’s underwriting analysis for commercial loans typically includes credit verification, independent appraisals, a review of the borrower’s financial condition and a detailed analysis of the borrower’s underlying cash flows.

Commercial and Industrial (“C&I”)The Company offers a variety of loan options to meet the specific needs of our C&I customers including term loans, time notes and lines of credit. Such loans are made available to businesses for working capital needs such as inventory and receivables, business expansion, equipment purchases, livestock purchase and seasonal crop expenses. Generally, a collateral lien is placed on equipment or other assets owned by the borrower. These loans typically carry a higher risk than Commercial Real Estate loans due to the nature of the underlying collateral, which can be business assets such as equipment, accounts receivable and perishable agricultural products, which are exposed to industry price volatility. To reduce these risks, management also attempts to obtain personal guarantees of the owners or obtain government loan guarantees to provide further support.

Commercial Real Estate (“CRE”) – The Company offers CRE loans to finance real estate purchases, refinancings, expansions and improvements to commercial and agricultural properties. CRE loans are made to finance the purchases and improvements of real property, which generally consists of real estate with completed structures. These CRE loans are secured by liens on the real estate, which may include both owner occupied and non-owner-occupied properties, such as apartments, commercial structures, health care facilities and other facilities. These loans are typically less risky than C&I loans, since they are secured by real estate. The Company’s underwriting analysis includes credit verification, independent appraisals, a review of the borrower’s financial condition and a detailed analysis of the borrower’s underlying cash flows. These loans are typically originated in amounts of no more than 80% of the appraised value of the property and no more than 75% of the appraised value of the agricultural property. Government loan guarantees may be obtained to provide further support for agricultural property.
 
Business Banking - The Company offers a variety of loan options to meet the specific needs of our Business Banking customers including term loans, Business Banking mortgages and lines of credit. Such loans are generally less than $750 thousand and are made available to businesses for working capital such as inventory and receivables, business expansion, equipment purchases and agricultural needs. Generally, a collateral lien is placed on assets owned by the borrower and can include real estate, equipment, inventory, receivables or other business assets. These loans carry a higher risk than C&I and CRE loans due to the smaller size of the borrower and lower levels of capital. To reduce these risks, the Company obtains personal guarantees of the owners for a majority of the loans.

Consumer Loans

The Company offers a variety of Consumer loan products including Dealer Finance, Specialty Lending and Direct loans.

Dealer Finance – The Company maintains relationships with many dealers primarily in the communities that we serve. Through these relationships, the Company primarily finances the purchases of automobiles indirectly through dealer relationships. Approximately 95% of the Dealer Finance relationships represent automobile financing. Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging from three to six years, based upon the nature of the collateral and the size of the loan. The majority of Dealer Finance Consumer loans are underwritten on a secured basis using the underlying collateral being financed.

Specialty Lending – The Company offers unsecured Consumer loans across a national footprint originated through our relationship with national technology-driven consumer lending companies to finance such things as dental and medical procedures, K-12 tuition, solar energy installations and other consumer purpose loans. Advances of credit through this specialty lending business line are subject to the Company’s underwriting standards including criteria such as FICO score and debt to income thresholds.
 
Direct – The Company offers a variety of consumer installment loans to finance vehicle purchases, mobile home purchases and personal expenditures. In addition to installment loans, the Company also offers personal lines of credit, overdraft protection, home equity lines of credit and second mortgage loans (loans secured by a lien position on one-to-four family residential real estate) to finance home improvements, debt consolidation, education and other uses. Most of the consumer installment loans carry a fixed rate of interest with principal repayment terms typically ranging from one to ten years, based upon the nature of the collateral and the size of the loan. For home equity loans, consumers are able to borrow up to 85% of the equity in their homes. These loans carry a higher risk than first mortgage residential loans as they are often in a second position with respect to collateral. Consumer installment loans are often secured with collateral consisting of a perfected lien on the asset being purchased or a perfected lien on a consumer’s deposit account. Risk is reduced through underwriting criteria, which include credit verification, appraisals, a review of the borrower’s financial condition and personal cash flows. A security interest, with title insurance when necessary, is taken in the underlying real estate.
  
Residential Real Estate

Residential real estate loans consist primarily of loans secured by a first or second mortgage on primary residences. We originate adjustable-rate and fixed-rate, one-to-four-family residential real estate loans for the construction, purchase or refinancing of a mortgage. These loans are collateralized by owner-occupied properties located in the Company’s market area. When market conditions are favorable, for longer term, fixed-rate residential real estate mortgages without escrow, the Company retains the servicing, but sells the right to receive principal and interest to Government-sponsored enterprises. This practice allows the Company to manage interest rate risk, liquidity risk and credit risk. Loans on one-to-four-family residential real estate are generally originated in amounts of no more than 85% of the purchase price or appraised value (whichever is lower) or have private mortgage insurance. Mortgage title insurance and hazard insurance are normally required. Construction loans have a unique risk because they are secured by an incomplete dwelling. This risk is reduced through periodic site inspections, including one at each loan draw period.
 
Allowance for Loan Loss Calculation

For purposes of evaluating the adequacy of the allowance, the Company considers a number of significant factors that affect the collectability of the portfolio. For individually impaired loans, these include estimates of impairment, if any, which reflect the facts and circumstances that affect the likelihood of repayment of such loans as of the evaluation date. For homogeneous pools of loans, estimates of the Company’s exposure to credit loss reflect a current assessment of a number of factors, which could affect collectability. These factors include: past loss experience, size, trend, composition and nature of loans; changes in lending policies and procedures, including underwriting standards and collection, charge-offs and recoveries; trends experienced in nonperforming and delinquent loans; current economic conditions in the Company’s market; portfolio concentrations that may affect loss experienced across one or more components of the portfolio; the effect of external factors such as competition, legal and regulatory requirements; and the experience, ability and depth of lending management and staff. In addition, various regulatory agencies, as an integral component of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to make loan grade changes as well as recognize additions to the allowance based on their examinations.

After a thorough consideration of the factors discussed above, any required additions or reductions to the allowance for loan losses are made periodically by charges or credits to the provision for loan losses. These charges are necessary to maintain the allowance at a level which management believes is reflective of overall level of incurred loss in the portfolio. While management uses available information to recognize losses on loans, additions and reductions of the allowance may fluctuate from one reporting period to another. These fluctuations are reflective of changes in risk associated with portfolio content or changes in management’s assessment of any or all of the determining factors discussed above.

The following table illustrates the changes in the allowance for loan losses by our portfolio segments:

(In thousands)
 
Commercial Loans
   
Consumer Loans
   
Residential Real Estate
   
Total
 
Balance as of December 31, 2018
 
$
32,759
   
$
37,178
   
$
2,568
   
$
72,505
 
Charge-offs
   
(747
)
   
(7,433
)
   
(274
)
   
(8,454
)
Recoveries
   
94
     
1,399
     
54
     
1,547
 
Provision
   
53
     
5,660
     
94
     
5,807
 
Ending Balance as of March 31, 2019
 
$
32,159
   
$
36,804
   
$
2,442
   
$
71,405
 
 
                               
Balance as of December 31, 2017
 
$
27,606
   
$
36,830
   
$
5,064
   
$
69,500
 
Charge-offs
   
(805
)
   
(7,687
)
   
(182
)
   
(8,674
)
Recoveries
   
187
     
1,644
     
47
     
1,878
 
Provision
   
1,202
     
6,186
     
108
     
7,496
 
Ending Balance as of March 31, 2018
 
$
28,190
   
$
36,973
   
$
5,037
   
$
70,200
 

For acquired loans, to the extent that we experience deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to acquisition of the loans, an allowance for loan losses would be established based on our estimate of incurred losses at the balance sheet date. There was no allowance for loan losses for the acquired loan portfolio as of March 31, 2019 and December 31, 2018. There were no net charge-offs related to acquired loans during the three months ended March 31, 2019 and approximately $0.1 million during the three months ended March 31, 2018, and are included in the table above.

The following table illustrates the allowance for loan losses and the recorded investment by portfolio segments:

 
(In thousands)
 
Commercial Loans
   
Consumer Loans
   
Residential Real Estate
   
Total
 
As of March 31, 2019
                       
Allowance for loan losses
 
$
32,159
   
$
36,804
   
$
2,442
   
$
71,405
 
Allowance for loans individually evaluated for impairment
   
25
     
-
     
-
     
25
 
Allowance for loans collectively evaluated for impairment
 
$
32,134
   
$
36,804
   
$
2,442
   
$
71,380
 
Ending balance of loans
 
$
3,250,482
   
$
2,249,419
   
$
1,390,411
   
$
6,890,312
 
Ending balance of originated loans individually evaluated for impairment
   
6,009
     
7,813
     
7,220
     
21,042
 
Ending balance of acquired loans collectively evaluated for impairment
   
140,103
     
29,626
     
142,814
     
312,543
 
Ending balance of originated loans collectively evaluated for impairment
 
$
3,104,370
   
$
2,211,980
   
$
1,240,377
   
$
6,556,727
 
 
                               
As of December 31, 2018
                               
Allowance for loan losses
 
$
32,759
   
$
37,178
   
$
2,568
   
$
72,505
 
Allowance for loans individually evaluated for impairment
   
25
     
-
     
-
     
25
 
Allowance for loans collectively evaluated for impairment
 
$
32,734
   
$
37,178
   
$
2,568
   
$
72,480
 
Ending balance of loans
 
$
3,222,310
   
$
2,284,563
   
$
1,380,836
   
$
6,887,709
 
Ending balance of originated loans individually evaluated for impairment
   
5,786
     
7,887
     
6,905
     
20,578
 
Ending balance of acquired loans collectively evaluated for impairment
   
143,690
     
31,624
     
147,277
     
322,591
 
Ending balance of originated loans collectively evaluated for impairment
 
$
3,072,834
   
$
2,245,052
   
$
1,226,654
   
$
6,544,540
 
 
Credit Quality of Loans

For all loan classes within the Company’s loan portfolio, loans are placed on nonaccrual status when timely collection of principal and/or interest in accordance with contractual terms is in doubt. Loans are transferred to nonaccrual status generally when principal or interest payments become ninety days delinquent, unless the loan is well-secured and in the process of collection or sooner when management concludes circumstances indicate that borrowers may be unable to meet contractual principal or interest payments. When a loan is transferred to a nonaccrual status, all interest previously accrued in the current period but not collected is reversed against interest income in that period. Interest accrued in a prior period and not collected is charged-off against the allowance for loan losses.
 
If ultimate repayment of a nonaccrual loan is expected, any payments received are applied in accordance with contractual terms. If ultimate repayment of principal is not expected, any payment received on a nonaccrual loan is applied to principal until ultimate repayment becomes expected. For all loan classes within the Company’s loan portfolio, nonaccrual loans are returned to accrual status when they become current as to principal and interest and demonstrate a period of performance under the contractual terms and, in the opinion of management, are fully collectible as to principal and interest. For loans in all portfolios, the principal amount is charged off in full or in part as soon as management determines, based on available facts, that the collection of principal in full or in part is improbable. For Commercial loans, management considers specific facts and circumstances relative to individual credits in making such a determination. For Consumer and Residential Real Estate loan classes, management uses specific guidance and thresholds from the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy.

The following tables set forth information with regard to past due and nonperforming loans by loan class:
 
(In thousands)
 
31-60 Days Past Due Accruing
   
61-90 Days Past Due Accruing
   
Greater Than 90 Days Past Due Accruing
   
Total Past Due Accruing
   
Nonaccrual
   
Current
   
Recorded Total Loans
 
As of March 31, 2019
                                         
Originated
                                         
Commercial Loans:
                                         
C&I
 
$
74
   
$
-
   
$
-
   
$
74
   
$
899
   
$
858,653
   
$
859,626
 
CRE
   
5,794
     
420
     
-
     
6,214
     
4,818
     
1,753,079
     
1,764,111
 
Business Banking
   
1,149
     
235
     
-
     
1,384
     
5,970
     
479,288
 </