Company Quick10K Filing
Quick10K
Univest of Pennsylvania
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$25.28 29 $740
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 2016-11-08 Quarter: 2016-11-08
10-Q 2016-08-08 Quarter: 2016-08-08
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 2019-06-13 Regulation FD, Exhibits
8-K 2019-05-20 Other Events, Exhibits
8-K 2019-05-14 Regulation FD, Exhibits
8-K 2019-04-25 Earnings, Other Events, Exhibits
8-K 2019-04-17 Shareholder Vote
8-K 2019-03-18 Officers, Exhibits
8-K 2019-01-24 Earnings, Exhibits
8-K 2019-01-24 Earnings, Exhibits
8-K 2018-12-13 Amend Bylaw, Regulation FD, Exhibits
8-K 2018-12-06 Officers
8-K 2018-12-03 Other Events, Exhibits
8-K 2018-11-01 Regulation FD, Exhibits
8-K 2018-10-25 Earnings, Exhibits
8-K 2018-10-01 Officers
8-K 2018-08-27 Other Events, Exhibits
8-K 2018-07-31 Regulation FD, Exhibits
8-K 2018-07-26 Earnings, Regulation FD, Exhibits
8-K 2018-06-12 Regulation FD, Exhibits
8-K 2018-05-31 Regulation FD
8-K 2018-05-21 Other Events, Exhibits
8-K 2018-05-15 Regulation FD, Exhibits
8-K 2018-04-26 Earnings, Other Events, Exhibits
8-K 2018-04-18 Shareholder Vote
8-K 2018-02-28 Officers
8-K 2018-01-24 Earnings, Exhibits
8-K 2018-01-02 Officers
BLD TopBuild 2,820
IPAR Inter Parfums 2,190
SSYS Stratasys 1,290
UNFI United Natural Foods 603
BCML Baycom 259
UROV Urovant Sciences 239
XONE Exone 139
OZSC Ozop Surgical 0
NUVR Nuvera Communications 0
LOXO Loxo Oncology 0
UVSP 2019-03-31
Part I. Financial Information
Item 1. Financial Statements
Note 1. Summary of Significant Accounting Policies
Note 2. Earnings per Share
Note 3. Investment Securities
Note 4. Loans and Leases
Note 5. Goodwill and Other Intangible Assets
Note 6. Deposits
Note 7. Borrowings
Note 8. Retirement Plans and Other Postretirement Benefits
Note 9. Stock-Based Incentive Plan
Note 10. Accumulated Other Comprehensive (Loss) Income
Note 11. Derivative Instruments and Hedging Activities
Note 12. Fair Value Disclosures
Note 13. Segment Reporting
Note 14. Leases
Note 15. Contingencies
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-10.1 uvsp033119ex101.htm
EX-10.2 uvsp033119ex102.htm
EX-10.3 uvsp033119ex103.htm
EX-31.1 uvsp033119ex311.htm
EX-31.2 uvsp033119ex312.htm
EX-32.1 uvsp033119ex321.htm
EX-32.2 uvsp033119ex322.htm

Univest of Pennsylvania Earnings 2019-03-31

UVSP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 uvsp10q033119.htm 10-Q Document

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 Form 10-Q
x
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: 0-7617

 UNIVEST FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Pennsylvania
 
23-1886144
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification No.)
14 North Main Street, Souderton, Pennsylvania 18964
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (215) 721-2400
Securities registered pursuant to Section 12(b) of the Act:
Title of class
Trading symbol
Name of exchange on which registered
Common Stock, $5 par value
UVSP
The NASDAQ Stock Market
Not applicable
(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  x    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  x    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
x
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 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  x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $5 par value
 
29,287,509
(Title of Class)
 
(Number of shares outstanding at April 30, 2019)




UNIVEST FINANCIAL CORPORATION AND SUBSIDIARIES
INDEX
 
 
 
Page Number
Part I.
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
Part II.
 
 
 
 
 
 
Item 1.
 
 
 
 
 
Item 1A.
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
 
Item 5.
 
 
 
 
 
Item 6.
 
 


1


PART I. FINANCIAL INFORMATION
 
Item 1.
Financial Statements
UNIVEST FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(UNAUDITED)
 
 
(Dollars in thousands, except share data)
At March 31, 2019
 
At December 31, 2018
ASSETS
 
Cash and due from banks
$
46,465

 
$
61,573

Interest-earning deposits with other banks
19,676

 
47,847

Cash and cash equivalents
66,141

 
109,420

Investment securities held-to-maturity (fair value $148,960 and $141,575 at March 31, 2019 and December 31, 2018, respectively)
148,470

 
142,634

Investment securities available-for-sale
315,648

 
328,507

Investments in equity securities
2,765

 
2,165

       Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost
32,699

 
28,337

Loans held for sale
921

 
1,754

Loans and leases held for investment
4,067,879

 
4,006,574

Less: Reserve for loan and lease losses
(31,602
)
 
(29,364
)
Net loans and leases held for investment
4,036,277

 
3,977,210

Premises and equipment, net
59,091

 
59,559

Operating lease right-of-use assets
36,099

 

Goodwill
172,559

 
172,559

Other intangibles, net of accumulated amortization
11,530

 
11,990

Bank owned life insurance
112,551

 
111,599

Accrued interest receivable and other assets
40,776

 
38,613

Total assets
$
5,035,527

 
$
4,984,347

LIABILITIES
 
 
 
Noninterest-bearing deposits
$
1,103,674

 
$
1,055,919

Interest-bearing deposits:
 
 
 
Demand deposits
1,441,540

 
1,377,171

Savings deposits
819,255

 
782,766

Time deposits
638,684

 
670,077

Total deposits
4,003,153

 
3,885,933

Short-term borrowings
73,185

 
189,768

Long-term debt
145,263

 
145,330

Subordinated notes
94,635

 
94,574

Operating lease liabilities
39,102

 

Accrued interest payable and other liabilities
42,583

 
44,609

Total liabilities
4,397,921

 
4,360,214

SHAREHOLDERS’ EQUITY
 
 
 
Common stock, $5 par value: 48,000,000 shares authorized at March 31, 2019 and December 31, 2018; 31,556,799 shares issued at March 31, 2019 and December 31, 2018; 29,272,502 and 29,270,852 shares outstanding at March 31, 2019 and December 31, 2018, respectively
157,784

 
157,784

Additional paid-in capital
293,255

 
292,401

Retained earnings
256,746

 
248,167

Accumulated other comprehensive loss, net of tax benefit
(24,238
)
 
(28,416
)
Treasury stock, at cost; 2,284,297 and 2,285,947 shares at March 31, 2019 and December 31, 2018, respectively
(45,941
)
 
(45,803
)
Total shareholders’ equity
637,606

 
624,133

Total liabilities and shareholders’ equity
$
5,035,527

 
$
4,984,347

Note: See accompanying notes to the unaudited condensed consolidated financial statements.

2


UNIVEST FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended 
 March 31,
(Dollars in thousands, except per share data)
2019
 
2018
Interest income
 
Interest and fees on loans and leases:
 
 
 
Taxable
$
45,682

 
$
37,950

Exempt from federal income taxes
2,683

 
2,347

Total interest and fees on loans and leases
48,365

 
40,297

Interest and dividends on investment securities:
 
 
 
Taxable
2,713

 
2,189

Exempt from federal income taxes
431

 
468

Interest on deposits with other banks
269

 
76

Interest and dividends on other earning assets
586

 
504

Total interest income
52,364

 
43,534

Interest expense
 
 
 
Interest on deposits
8,203

 
3,691

Interest on short-term borrowings
638

 
645

Interest on long-term debt and subordinated notes
2,000

 
1,926

Total interest expense
10,841

 
6,262

Net interest income
41,523

 
37,272

Provision for loan and lease losses
2,685

 
2,053

Net interest income after provision for loan and lease losses
38,838

 
35,219

Noninterest income
 
 
 
Trust fee income
1,887

 
1,996

Service charges on deposit accounts
1,435

 
1,327

Investment advisory commission and fee income
3,789

 
3,683

Insurance commission and fee income
5,144

 
4,888

Other service fee income
2,267

 
2,169

Bank owned life insurance income
952

 
669

Net gain on sales of investment securities
1

 
10

Net gain on mortgage banking activities
483

 
716

Other income
339

 
124

Total noninterest income
16,297

 
15,582

Noninterest expense
 
 
 
Salaries, benefits and commissions
21,564

 
20,647

Net occupancy
2,611

 
2,757

Equipment
990

 
1,023

Data processing
2,514

 
2,232

Professional fees
1,264

 
1,355

Marketing and advertising
316

 
381

Deposit insurance premiums
452

 
391

Intangible expenses
426

 
612

Restructuring charges

 
571

Other expense
5,420

 
5,156

Total noninterest expense
35,557

 
35,125

Income before income taxes
19,578

 
15,676

Income tax expense
3,499

 
2,826

Net income
$
16,079

 
$
12,850

Net income per share:
 
 
 
Basic
$
0.55

 
$
0.44

Diluted
0.55

 
0.44

Note: See accompanying notes to the unaudited condensed consolidated financial statements.

3


UNIVEST FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended March 31,
(Dollars in thousands)
2019
 
2018
Before
Tax
Amount
 
Tax
Expense
(Benefit)
 
Net of
Tax
Amount
 
Before
Tax
Amount
 
Tax
Expense
(Benefit)
 
Net of
Tax
Amount
Income
$
19,578

 
$
3,499

 
$
16,079

 
$
15,676

 
$
2,826

 
$
12,850

Other comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) on available-for-sale investment securities:
 
 
 
 
 
 
 
 
 
 
 
Net unrealized holding gains (losses) arising during the period
5,120

 
1,075

 
4,045

 
(6,338
)
 
(1,331
)
 
(5,007
)
Less: reclassification adjustment for net gains on sales realized in net income (1)
(1
)
 

 
(1
)
 
(10
)
 
(2
)
 
(8
)
Total net unrealized gains (losses) on available-for-sale investment securities
5,119

 
1,075

 
4,044

 
(6,348
)
 
(1,333
)
 
(5,015
)
Net unrealized (losses) gains on interest rate swaps used in cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Net unrealized holding (losses) gains arising during the period
(168
)
 
(36
)
 
(132
)
 
212

 
45

 
167

Less: reclassification adjustment for net (gains) losses realized in net income (2)
(16
)
 
(3
)
 
(13
)
 
20

 
4

 
16

Total net unrealized (losses) gains on interest rate swaps used in cash flow hedges
(184
)
 
(39
)
 
(145
)
 
232

 
49

 
183

Defined benefit pension plans:
 
 
 
 
 
 
 
 
 
 
 
Amortization of net actuarial loss included in net periodic pension costs (3)
294

 
62

 
232

 
281

 
59

 
222

Accretion of prior service cost included in net periodic pension costs (3)
(45
)
 
(9
)
 
(36
)
 
(71
)
 
(15
)
 
(56
)
Total defined benefit pension plans
249

 
53

 
196

 
210

 
44

 
166

Other comprehensive income (loss)
5,184

 
1,089

 
4,095

 
(5,906
)
 
(1,240
)
 
(4,666
)
Total comprehensive income
$
24,762

 
$
4,588

 
$
20,174

 
$
9,770

 
$
1,586

 
$
8,184

(1) Included in net gain on sales of investment securities on the consolidated statements of income (before tax amount).
(2) Included in interest expense on deposits on the consolidated statements of income (before tax amount).
(3) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (before tax amount). See Note 8, "Retirement Plans and Other Postretirement Benefits" for additional details.

Note: See accompanying notes to the unaudited condensed consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 


4


UNIVEST FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(Dollars in thousands, except per share data)
Common
Shares
Outstanding
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Treasury
Stock
 
Total
Three Months Ended March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
29,270,852

 
$
157,784

 
$
292,401

 
$
248,167

 
$
(28,416
)
 
$
(45,803
)
 
$
624,133

Adjustment to initially apply ASU No. 2016-02 for leases (1)

 

 

 
(1,525
)
 

 

 
(1,525
)
Adjustment to initially apply ASU No. 2017-12 for derivatives (1)

 

 

 
(83
)
 
83

 

 

Adjustment to initially apply ASU No. 2017-08 for premium amortization on purchased callable debt securities (1)

 

 

 
(39
)
 

 

 
(39
)
Net income

 

 

 
16,079

 

 

 
16,079

Other comprehensive income, net of income tax

 

 

 

 
4,095

 

 
4,095

Cash dividends declared ($0.20 per share)

 

 

 
(5,853
)
 

 

 
(5,853
)
Stock issued under dividend reinvestment and employee stock purchase plans
25,743

 

 
30

 

 

 
541

 
571

Exercise of stock options
30,500

 

 
(91
)
 

 

 
612

 
521

Stock-based compensation

 

 
574

 

 

 

 
574

Purchases of treasury stock
(37,244
)
 

 

 

 

 
(950
)
 
(950
)
Cancellations of performance-based restricted stock awards
(17,349
)
 

 
341

 

 

 
(341
)
 

Balance at March 31, 2019
29,272,502

 
$
157,784

 
$
293,255

 
$
256,746

 
$
(24,238
)
 
$
(45,941
)
 
$
637,606

(Dollars in thousands, except share and per share data)
Common
Shares
Outstanding
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Treasury
Stock
 
Total
Three Months Ended March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
29,334,859

 
$
157,784

 
$
290,133

 
$
216,761

 
$
(17,771
)
 
$
(43,533
)
 
$
603,374

Adjustment to initially apply ASU No. 2016-01 for equity securities measured at fair value

 

 

 
433

 
(433
)
 

 

Adjustment to initially apply ASU No. 2018-02 for reclassification of stranded net tax charges

 

 

 
3,921

 
(3,921
)
 

 

Net income

 

 

 
12,850

 

 

 
12,850

Other comprehensive loss, net of income tax benefit

 

 

 

 
(4,666
)
 

 
(4,666
)
Cash dividends declared ($0.20 per share)

 

 

 
(5,868
)
 

 

 
(5,868
)
Stock issued under dividend reinvestment and employee stock purchase plans
20,253

 

 
44

 

 

 
525

 
569

Exercise of stock options
14,158

 

 
(9
)
 

 

 
277

 
268

Stock-based compensation

 

 
847

 

 

 

 
847

Purchases of treasury stock
(23,539
)
 

 

 

 

 
(655
)
 
(655
)
Restricted stock awards granted, net of cancellations
46,203

 

 
(920
)
 

 

 
920

 

Balance at March 31, 2018
29,391,934

 
$
157,784

 
$
290,095

 
$
228,097

 
$
(26,791
)
 
$
(42,466
)
 
$
606,719

(1) See Note 1, "Summary of Significant Accounting Policies - Accounting Pronouncements Adopted in 2019" for additional information.
Note: See accompanying notes to the unaudited condensed consolidated financial statements.

5


UNIVEST FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended March 31,
(Dollars in thousands)
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income
$
16,079

 
$
12,850

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Provision for loan and lease losses
2,685

 
2,053

Depreciation of premises and equipment
1,318

 
1,408

Net amortization of investment securities premiums and discounts
379

 
402

Net gain on sales of investment securities
(1
)
 
(10
)
Net gain on mortgage banking activities
(483
)
 
(716
)
Bank owned life insurance income
(952
)
 
(669
)
Net accretion of acquisition accounting fair value adjustments
(60
)
 
(146
)
Stock-based compensation
577

 
847

Intangible expenses
426

 
612

Other adjustments to reconcile net income to cash used in operating activities
(145
)
 
(18
)
Originations of loans held for sale
(30,422
)
 
(35,151
)
Proceeds from the sale of loans held for sale
31,745

 
37,003

Contributions to pension and other postretirement benefit plans
(66
)
 
(67
)
Increase in accrued interest receivable and other assets
(3,709
)
 
(3,307
)
(Decrease) increase in accrued interest payable and other liabilities
(316
)
 
2,805

Net cash provided by operating activities
17,055

 
17,896

Cash flows from investing activities:
 
 
 
Net capital expenditures
(850
)
 
(1,009
)
Proceeds from maturities, calls and principal repayments of securities held-to-maturity
4,288

 
1,721

Proceeds from maturities, calls and principal repayments of securities available-for-sale
17,085

 
19,423

Proceeds from sales of securities available-for-sale
491

 
1,010

Purchases of investment securities held-to-maturity
(10,309
)
 
(30,641
)
Purchases of investment securities available-for-sale

 
(1,487
)
Proceeds from sales of money market mutual funds
10

 
1,016

Purchases of money market mutual funds
(606
)
 
(6,205
)
Net increase in other investments
(4,362
)
 
(5,597
)
Net increase in loans and leases
(61,582
)
 
(69,830
)
Proceeds from sales of other real estate owned
599

 

Purchases of bank owned life insurance

 
(777
)
Net cash used in investing activities
(55,236
)
 
(92,376
)
Cash flows from financing activities:
 
 
 
Net increase (decrease) in deposits
117,239

 
(57,575
)
Net (decrease) increase in short-term borrowings
(116,583
)
 
110,995

Payment of contingent consideration on acquisitions
(33
)
 
(34
)
Purchases of treasury stock
(950
)
 
(655
)
Stock issued under dividend reinvestment and employee stock purchase plans
571

 
569

Proceeds from exercise of stock options
521

 
268

Cash dividends paid
(5,863
)
 
(5,866
)
Net cash (used in) provided by financing activities
(5,098
)
 
47,702

Net decrease in cash and cash equivalents
(43,279
)
 
(26,778
)
Cash and cash equivalents at beginning of year
109,420

 
75,409

Cash and cash equivalents at end of period
$
66,141

 
$
48,631

Supplemental disclosures of cash flow information:
 
 
 
Cash paid for interest
$
10,629

 
$
6,361

Cash paid for income taxes, net of refunds
25

 
145

Note: See accompanying notes to the unaudited condensed consolidated financial statements.

6


UNIVEST FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to the Condensed Unaudited Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
The accompanying unaudited consolidated financial statements include the accounts of Univest Financial Corporation (the Corporation) and its wholly owned subsidiaries. The Corporation’s direct subsidiary is Univest Bank and Trust Co. (the Bank). All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations for interim financial information. The accompanying unaudited consolidated financial statements reflect all adjustments which are of a normal recurring nature and are, in the opinion of management, necessary for a fair presentation of the financial statements for the interim periods presented. Certain prior period amounts have been reclassified to conform to the current-year presentation. Operating results for the three-month period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ended December 31, 2019 or for any other period. It is suggested that these unaudited consolidated financial statements be read in conjunction with the audited financial statements and the notes thereto included in the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019.
Use of Estimates
The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes include fair value measurement of investment securities available-for-sale and reserve for loan and lease losses.
Accounting Pronouncements Adopted in 2019
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, "Leases (Topic 842)" and subsequent related updates to revise the accounting for leases. Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases based on the present value of future lease payments using an estimated incremental borrowing rate. Lessor accounting activities are largely unchanged from existing lease accounting. Disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. This new guidance was effective for the first interim period within annual periods beginning after December 15, 2018, or January 1, 2019 for the Corporation.

The Corporation adopted this guidance, and subsequent related updates, on a modified retrospective basis through a cumulative-effect adjustment to retained earnings, representing the difference between the value of the Corporation’s lease liabilities and related right-of-use assets and the existing deferred rent liability, at January 1, 2019. The Corporation elected the package of practical expedients, which includes a provision which allows for the grandfathering of lease classification, among other items, and the hindsight practical expedient to determine the lease term. All leases in which the Corporation is the lessee were classified as operating leases and continue to be classified as such. On January 1, 2019, the Corporation recorded $39.6 million of operating lease liabilities and $36.6 million of related right-of-use assets and released $1.0 million of existing deferred rent liability. The resulting cumulative effect adjustment of $1.5 million, net of tax, was recorded to retained earnings at January 1, 2019. The initial and continued impact of the recording of operating lease assets had and will continue to have a negative impact on all Corporation and Bank regulatory capital ratios. Additionally, the Corporation early adopted (ASU) No. 2019-01, "Codification Improvements" , as of January 1, 2019, which serves as an an update to (ASU) No. 2016-02, and is effective for the first interim period within annual periods beginning after December 15, 2019, or January 1, 2020, for the Corporation. See Note 4, "Loans and Leases" and Note 14, "Leases" for applicable disclosures including quantitative and qualitative information about the Corporation’s leases.
In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" and subsequent related updates. The amendments in this update expand and refine hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The ASU amends the presentation and disclosure requirements and changes how entities assess effectiveness. The ASU eliminates the requirement to separately measure and report hedge ineffectiveness and requires all items that affect earnings be presented in the same income statement line as the hedged items. The

7


amendments in this guidance permit the use of the Overnight Index Swap rate based on Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes to facilitate the LIBOR to SOFR transition. This guidance was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities, or January 1, 2019 for the Corporation. The amended presentation and disclosure guidance was required only prospectively. The Corporation adopted this guidance on a modified retrospective basis through a cumulative-effect adjustment to retained earnings effective January 1, 2019. The Corporation recorded a cumulative-effect adjustment of $83 thousand related to ineffectiveness on a cash flow hedge, which was reclassified from retained earnings to accumulated other comprehensive income, effective January 1, 2019.
In March 2017, the FASB issued ASU No. 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This ASU shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date rather than the maturity of the security. Securities within the scope of this guidance are those that have explicit, non-contingent call features that are callable at fixed prices and on preset dates. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, or January 1, 2019 for the Corporation. At December 31, 2018, the Corporation had $11.3 million of callable debt securities. The Corporation adopted this guidance on a modified retrospective basis through a cumulative-effect adjustment to retained earnings effective January 1, 2019. The Corporation recorded a cumulative-effect adjustment resulting in a reduction in the unamortized premium balance for certain callable debt securities of $49 thousand and a reduction in retained earnings of approximately $39 thousand, net of tax, for the incremental amortization.     
Recent Accounting Pronouncements Yet to Be Adopted
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires businesses and other organizations to measure the current expected credit losses (CECL) on financial assets, such as loans, net investments in leases, certain debt securities, bond insurance and other receivables. The amendments affect entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. Current GAAP requires an incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The amendments in this ASU replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonableness and supportable information to inform credit loss estimates. An entity should apply the amendments through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (modified-retrospective approach). Acquired credit impaired loans for which the guidance in Accounting Standards Codification (ASC) Topic 310-30 has been previously applied should prospectively apply the guidance in this ASU. A prospective transition approach is required for debt securities for which other-than-temporary impairment has been recognized before the effective date. The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those years for public business entities that are SEC filers, or January 1, 2020 for the Corporation. The Corporation is in the process of evaluating the impact of the adoption of this guidance on the Corporation's financial statements; however, it is anticipated that the reserve for loan and lease losses will increase upon adoption of CECL and that the increased reserve level will decrease shareholders' equity and impact regulatory capital and ratios.
In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement." This ASU applies to all entities that are required, under existing GAAP, to make disclosures about recurring or nonrecurring fair value measurements. Disclosures removed by this ASU are the amount and reasons for transfers between Level 1 and Level 2, the policy for timing of transfers between levels and the valuation processes for Level 3 measurements. This ASU modifies disclosures relating to investments in certain entities that calculate net asset value. Additional disclosures required by this ASU include: 1) change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and 2) range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The prospective method of transition is required for the new disclosure requirements. The other amendments should be applied retrospectively. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years or January 1, 2020 for the Corporation. Early adoption is permitted. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements but will result in revised disclosures for fair value.
In January 2017, the FASB issued ASU No. 2017-04, "Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." This ASU eliminates Step 2 of the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds

8


the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Public business entities that are SEC filers should adopt the amendments in this ASU for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or for the Corporation's goodwill impairment test in 2020. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statements.
In August 2018, the FASB issued ASU No. 2018-14, "Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans." The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit plans or other postretirement plans. Disclosures removed by this ASU include the following: 1) amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year; 2) amount and timing of plan assets expected to be returned to the employer; and 3) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for postretirement health care benefits. Additional disclosures required by this ASU include: 1) the weighted-average interest crediting rates used in an entity's cash balance pension plans and other similar plans and 2) explanations for reasons for significant changes in the benefit obligation or plan assets. All amendments should be applied retrospectively. This ASU is effective for fiscal years ending after December 15, 2020 or December 31, 2020 for the Corporation. The Corporation does not expect the adoption of this ASU will have a material impact on the Corporation's financial statement disclosures but will result in revised disclosures for retirement plans and other postretirement benefits.
Note 2. Earnings per Share
The Corporation uses the two-class method to calculate earnings per share as the unvested restricted stock awards outstanding under the Corporation's equity incentive plans are participating shares with nonforfeitable rights to dividends. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the number of weighted average shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if options on common shares had been exercised, as well as any adjustment to income that would result from the assumed issuance, and if restricted stock units were vested. Potential common shares that may be issued by the Corporation relate to outstanding stock options and restricted stock units, and are determined using the treasury stock method. The effects of options to issue common stock and unvested restricted stock units are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive. Anti-dilutive options are those options with weighted average exercise prices in excess of the weighted average market value. Anti-dilutive restricted stock units are those with hypothetical repurchases of shares, under the treasury stock method, exceeding the average restricted stock units outstanding for the periods presented.
The following table sets forth the computation of basic and diluted earnings per share:
 
Three Months Ended 
 March 31,
(Dollars and shares in thousands, except per share data)
2019
 
2018
Numerator:
 
 
 
Net income
$
16,079

 
$
12,850

Net income allocated to unvested restricted stock awards
(67
)
 
(97
)
Net income allocated to common shares
$
16,012

 
$
12,753

Denominator:
 
 
 
Weighted average shares outstanding
29,277

 
29,355

Average unvested restricted stock awards
(131
)
 
(215
)
Denominator for basic earnings per share—weighted-average shares outstanding
29,146

 
29,140

Effect of dilutive securities—employee stock options and restricted stock units
59

 
94

Denominator for diluted earnings per share—adjusted weighted-average shares outstanding
29,205

 
29,234

Basic earnings per share
$
0.55

 
$
0.44

Diluted earnings per share
$
0.55

 
$
0.44

Average anti-dilutive options and restricted stock units excluded from computation of diluted earnings per share
348

 
217



9


Note 3. Investment Securities
The following table shows the amortized cost and the estimated fair value of the held-to-maturity securities and available-for-sale securities at March 31, 2019 and December 31, 2018, by contractual maturity within each type:
 
At March 31, 2019
 
At December 31, 2018
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
Securities Held-to-Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government corporations and agencies:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After 1 year to 5 years
$
6,997

 
$

 
$
(46
)
 
$
6,951

 
$
6,996

 
$

 
$
(104
)
 
$
6,892

 
6,997

 

 
(46
)
 
6,951

 
6,996

 

 
(104
)
 
6,892

Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After 5 years to 10 years
11,005

 
23

 
(54
)
 
10,974

 
11,573

 

 
(135
)
 
11,438

Over 10 years
130,468

 
852

 
(285
)
 
131,035

 
124,065

 
287

 
(1,107
)
 
123,245

 
141,473

 
875

 
(339
)
 
142,009

 
135,638

 
287

 
(1,242
)
 
134,683

Total
$
148,470

 
$
875

 
$
(385
)
 
$
148,960

 
$
142,634

 
$
287

 
$
(1,346
)
 
$
141,575

Securities Available-for-Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government corporations and agencies:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Within 1 year
$
10,067

 
$

 
$
(41
)
 
$
10,026

 
$
15,108

 
$

 
$
(90
)
 
$
15,018

After 1 year to 5 years
302

 

 
(5
)
 
297

 
303

 

 
(6
)
 
297


10,369

 

 
(46
)
 
10,323

 
15,411

 

 
(96
)
 
15,315

State and political subdivisions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Within 1 year
3,483

 
6

 

 
3,489

 
5,900

 
4

 
(6
)
 
5,898

After 1 year to 5 years
17,439

 
83

 
(1
)
 
17,521

 
15,459

 
36

 
(56
)
 
15,439

After 5 years to 10 years
40,506

 
458

 

 
40,964

 
43,923

 
318

 
(163
)
 
44,078


61,428

 
547

 
(1
)
 
61,974

 
65,282

 
358

 
(225
)
 
65,415

Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After 1 year to 5 years
6,204

 
11

 
(75
)
 
6,140

 
5,799

 
3

 
(70
)
 
5,732

After 5 years to 10 years
46,409

 
14

 
(711
)
 
45,712

 
49,904

 
6

 
(1,381
)
 
48,529

Over 10 years
97,524

 
52

 
(1,663
)
 
95,913

 
100,873

 
26

 
(3,398
)
 
97,501


150,137

 
77

 
(2,449
)
 
147,765

 
156,576

 
35

 
(4,849
)
 
151,762

Collateralized mortgage obligations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After 5 years to 10 years
1,589

 

 
(60
)
 
1,529

 
1,677

 

 
(78
)
 
1,599

Over 10 years
1,260

 

 
(3
)
 
1,257

 
1,305

 

 
(16
)
 
1,289


2,849

 

 
(63
)
 
2,786

 
2,982

 

 
(94
)
 
2,888

Corporate bonds:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Within 1 year
8,299

 

 
(42
)
 
8,257

 
7,806

 

 
(68
)
 
7,738

After 1 year to 5 years
16,512

 
7

 
(104
)
 
16,415

 
18,508

 
1

 
(332
)
 
18,177

After 5 years to 10 years
15,139

 

 
(289
)
 
14,850

 
16,146

 

 
(392
)
 
15,754

Over 10 years
60,000

 

 
(6,722
)
 
53,278

 
60,000

 

 
(8,542
)
 
51,458


99,950

 
7

 
(7,157
)
 
92,800

 
102,460

 
1

 
(9,334
)
 
93,127

Total
$
324,733

 
$
631

 
$
(9,716
)
 
$
315,648

 
$
342,711

 
$
394

 
$
(14,598
)
 
$
328,507


Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties and mortgage-backed securities typically prepay at a rate faster than contractually due.
Securities with a carrying value of $374.5 million and $344.5 million at March 31, 2019 and December 31, 2018, respectively, were pledged to secure public deposits and other contractual obligations. In addition, securities of $298 thousand and $296 thousand were pledged to secure credit derivatives and interest rate swaps at March 31, 2019 and December 31, 2018, respectively. See Note 11, "Derivative Instruments and Hedging Activities" for additional information.

10


The following table presents information related to sales of securities available-for-sale during the three months ended March 31, 2019 and 2018:
 
Three Months Ended March 31,
(Dollars in thousands)
2019
 
2018
Securities available-for-sale:
 
 
 
Proceeds from sales
$
491

 
$
1,010

Gross realized gains on sales
1

 
10

Tax expense related to net realized gains on sales

 
2

    
At March 31, 2019 and December 31, 2018, there were no reportable investments in any single issuer representing more than 10% of shareholders’ equity.
The following table shows the fair value of securities that were in an unrealized loss position at March 31, 2019 and December 31, 2018 by the length of time those securities were in a continuous loss position. For the investment securities in an unrealized loss position, the Corporation has concluded, based on its analysis, that the unrealized losses are primarily caused by the movement of interest rates and current market conditions and are not other-than temporary impairment of the securities. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the par value of the investment. It is more likely than not that the Corporation will not be required to sell the investments before a recovery of carrying value.
 
Less than
Twelve Months
 
Twelve Months
or Longer
 
Total
(Dollars in thousands)
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
At March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
Securities Held-to-Maturity
 
 
 
 
 
 
 
 
 
 
 
U.S. government corporations and agencies
$

 
$

 
$
6,951

 
$
(46
)
 
$
6,951

 
$
(46
)
Residential mortgage-backed securities
8,054

 
(2
)
 
40,353

 
(337
)
 
48,407

 
(339
)
Total
$
8,054

 
$
(2
)
 
$
47,304

 
$
(383
)
 
$
55,358

 
$
(385
)
Securities Available-for-Sale
 
 
 
 
 
 
 
 
 
 
 
U.S. government corporations and agencies
$

 
$

 
$
10,323

 
$
(46
)
 
$
10,323

 
$
(46
)
State and political subdivisions
1,045

 

 
1,018

 
(1
)
 
2,063

 
(1
)
Residential mortgage-backed securities

 

 
141,650

 
(2,449
)
 
141,650

 
(2,449
)
Collateralized mortgage obligations

 

 
2,786

 
(63
)
 
2,786

 
(63
)
Corporate bonds
1,489

 
(10
)
 
88,304

 
(7,147
)
 
89,793

 
(7,157
)
Total
$
2,534

 
$
(10
)
 
$
244,081

 
$
(9,706
)
 
$
246,615

 
$
(9,716
)
At December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Securities Held-to-Maturity
 
 
 
 
 
 
 
 
 
 
 
U.S. government corporations and agencies
$

 
$

 
$
6,892

 
$
(104
)
 
$
6,892

 
$
(104
)
Residential mortgage-backed securities
48,192

 
(472
)
 
34,501

 
(770
)
 
82,693

 
(1,242
)
Total
$
48,192

 
$
(472
)
 
$
41,393

 
$
(874
)
 
$
89,585

 
$
(1,346
)
Securities Available-for-Sale
 
 
 
 
 
 
 
 
 
 
 
U.S. government corporations and agencies
$

 
$

 
$
15,315

 
$
(96
)
 
$
15,315

 
$
(96
)
State and political subdivisions
9,311

 
(61
)
 
15,302

 
(164
)
 
24,613

 
(225
)
Residential mortgage-backed securities
7,099

 
(106
)
 
141,924

 
(4,743
)
 
149,023

 
(4,849
)
Collateralized mortgage obligations
1,289

 
(16
)
 
1,599

 
(78
)
 
2,888

 
(94
)
Corporate bonds
16,896

 
(235
)
 
75,730

 
(9,099
)
 
92,626

 
(9,334
)
Total
$
34,595

 
$
(418
)
 
$
249,870

 
$
(14,180
)
 
$
284,465

 
$
(14,598
)

At March 31, 2019, gross unrealized losses for securities available-for-sale in an unrealized loss position for twelve months or longer, totaled $9.7 millionThree federal agency bonds, thirty-three investment grade corporate bonds, 122 federal agency residential mortgage securities, two investment grade municipal bonds and two collateralized mortgage obligation bonds had respective unrealized loss positions of $46 thousand, $7.1 million, $2.4 million, $1 thousand and $63 thousand, respectively. The fair value of these 162 securities fluctuate with changes in market conditions which for these underlying securities is primarily due to changes in the interest rate environment. The Corporation does not intend to sell the securities in an unrealized loss position

11


and is unlikely to be required to sell these securities before a recovery of fair value, which may be maturity. Upon review of the attributes of the individual securities, the Corporation concluded these securities were not other-than-temporarily impaired. The Corporation did not recognize any other-than-temporary impairment charges on debt securities for the three months ended March 31, 2019 and 2018.

The Corporation recognized a $4 thousand net gain and $4 thousand net loss on equity securities during the three months ended March 31, 2019 and 2018, respectively, in other noninterest income. There were no sales of equity securities during the three months ended March 31, 2019 or March 31, 2018.
Note 4. Loans and Leases
Summary of Major Loan and Lease Categories
 
At March 31, 2019
(Dollars in thousands)
Originated
 
Acquired
 
Total
Commercial, financial and agricultural
$
910,493

 
$
17,145

 
$
927,638

Real estate-commercial
1,576,250

 
222,955

 
1,799,205

Real estate-construction
216,964

 

 
216,964

Real estate-residential secured for business purpose
304,574

 
56,348

 
360,922

Real estate-residential secured for personal purpose
361,488

 
47,652

 
409,140

Real estate-home equity secured for personal purpose
172,587

 
8,311

 
180,898

Loans to individuals
32,462

 
141

 
32,603

Lease financings
140,509

 

 
140,509

Total loans and leases held for investment, net of deferred income
$
3,715,327

 
$
352,552

 
$
4,067,879

Imputed interest on lease financings, included in the above table
$
(15,082
)
 
$

 
$
(15,082
)
Net deferred costs, included in the above table
4,426

 

 
4,426

Overdraft deposits included in the above table
208

 

 
208


 
At December 31, 2018
(Dollars in thousands)
Originated
 
Acquired
 
Total
Commercial, financial and agricultural
$
913,166

 
$
24,519

 
$
937,685

Real estate-commercial
1,507,579

 
233,625

 
1,741,204

Real estate-construction
215,513

 

 
215,513

Real estate-residential secured for business purpose
302,393

 
60,403

 
362,796

Real estate-residential secured for personal purpose
338,451

 
49,959

 
388,410

Real estate-home equity secured for personal purpose
177,523

 
8,728

 
186,251

Loans to individuals
32,617

 
142

 
32,759

Lease financings
141,956

 

 
141,956

Total loans and leases held for investment, net of deferred income
$
3,629,198

 
$
377,376

 
$
4,006,574

Imputed interest on lease financings, included in the above table
$
(15,118
)
 
$

 
$
(15,118
)
Net deferred costs, included in the above table
3,930

 

 
3,930

Overdraft deposits included in the above table
139

 

 
139

Overdraft deposits are re-classified as loans and are included in the total loans and leases on the balance sheet.
The carrying amount of acquired loans at March 31, 2019 totaled $352.6 million, including $301.3 million of loans from the Fox Chase acquisition and $51.3 million from the Valley Green Bank acquisition. At March 31, 2019, loans acquired with deteriorated credit quality, or acquired credit impaired loans, totaled $693 thousand representing $62 thousand from the Fox Chase acquisition and $631 thousand from the Valley Green Bank acquisition. Acquired credit impaired loans are accounted for in accordance with Accounting Standards Codification (ASC) Topic 310-30.

12


The outstanding principal balance and carrying amount for acquired credit impaired loans at March 31, 2019 and December 31, 2018 were as follows:
(Dollars in thousands)
At March 31, 2019
 
At December 31, 2018
Outstanding principal balance
$
871

 
$
893

Carrying amount
693

 
695

Reserve for loan losses

 

The following table presents the changes in accretable yield on acquired credit impaired loans:
 
Three Months Ended March 31,
(Dollars in thousands)
2019
 
2018
Beginning of period
$

 
$
11

Reclassification from nonaccretable discount
142

 
81

Accretable yield amortized to interest income
(142
)
 
(87
)
End of period
$

 
$
5




13


Age Analysis of Past Due Loans and Leases
The following presents, by class of loans and leases, an aging of past due loans and leases, loans and leases which are current and the recorded investment in loans and leases 90 days or more past due which are accruing interest at March 31, 2019 and December 31, 2018:
(Dollars in thousands)
30-59
Days
Past Due
 
60-89
Days
Past Due
 
90 Days
or more
Past Due
 
Total
Past Due
 
Current
 
Acquired Credit Impaired
 
Total Loans
and Leases
Held for
Investment
 
Recorded
Investment 90
Days or more
Past Due and
Accruing
Interest
At March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
$
1,661

 
$
210

 
$
1,952

 
$
3,823

 
$
923,815

 
$

 
$
927,638

 
$

Real estate—commercial real estate and construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
2,133

 
647

 
5,518

 
8,298

 
1,790,701

 
206

 
1,799,205

 

Construction
341

 

 
106

 
447

 
216,517

 

 
216,964

 

Real estate—residential and home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential secured for business purpose
1,521

 
515

 
1,138

 
3,174

 
357,323

 
425

 
360,922

 

Residential secured for personal purpose
3,346

 

 
1,811

 
5,157

 
403,921

 
62

 
409,140

 
325

Home equity secured for personal purpose
304

 
90

 
1,389

 
1,783

 
179,115

 

 
180,898

 

Loans to individuals
173

 
94

 
54

 
321

 
32,282

 

 
32,603

 
54

Lease financings
723

 
438

 
477

 
1,638

 
138,871

 

 
140,509

 
257

Total
$
10,202

 
$
1,994

 
$
12,445

 
$
24,641

 
$
4,042,545

 
$
693

 
$
4,067,879

 
$
636

At December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
$
1,043

 
$
270

 
$
2,228

 
$
3,541

 
$
934,144

 
$

 
$
937,685

 
$

Real estate—commercial real estate and construction: