2018 Q4 Form 10-Q Financial Statement

#000088734318000150 Filed on November 07, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3
Revenue $129.8M $127.6M $90.30M
YoY Change 19.26% 41.27% 4.09%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development $4.466M $4.122M
YoY Change 8.35% -3.58%
% of Gross Profit
Depreciation & Amortization $7.200M $9.000M $7.500M
YoY Change -25.0% 20.0% -15.73%
% of Gross Profit
Operating Expenses $4.466M $4.122M
YoY Change 8.35% -3.58%
Operating Profit
YoY Change
Interest Expense $5.913M $4.779M $1.374M
YoY Change 125.95% 247.82% 15.85%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income $55.48M $57.82M $59.11M
YoY Change 35.82% -2.18% 49.23%
Income Tax $10.73M $11.41M $18.34M
% Of Pretax Income 19.35% 19.73% 31.03%
Net Earnings $44.75M $46.42M $40.77M
YoY Change 184.51% 13.85% 48.34%
Net Earnings / Revenue 34.47% 36.38% 45.15%
Basic Earnings Per Share $0.61 $0.63 $0.70
Diluted Earnings Per Share $0.61 $0.63 $0.70
COMMON SHARES
Basic Shares Outstanding 73.26M shares 72.43M shares 57.57M shares
Diluted Shares Outstanding 72.43M shares 57.57M shares

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments
YoY Change
Cash & Equivalents $277.6M $242.2M $322.7M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment $168.8M $169.7M $143.4M
YoY Change -0.41% 18.37% -6.25%
Goodwill $765.8M $765.8M $382.8M
YoY Change 0.0% 100.08% 0.0%
Intangibles $45.94M $48.83M $13.85M
YoY Change -21.03% 252.67% -27.33%
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets
YoY Change
TOTAL ASSETS
Total Short-Term Assets
Total Long-Term Assets
Total Assets $13.10B $12.96B $9.815B
YoY Change 2.97% 32.01% 2.38%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable
YoY Change
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $61.00M $62.00M $41.00M
YoY Change -22.78% 51.22% -40.58%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $61.00M $62.00M $41.00M
YoY Change -22.78% 51.22% -40.58%
LONG-TERM LIABILITIES
Long-Term Debt $35.00M $36.00M $0.00
YoY Change -20.45%
Other Long-Term Liabilities $107.0M $107.0M $97.00M
YoY Change 7.0% 10.31% -17.09%
Total Long-Term Liabilities $142.0M $143.0M $97.00M
YoY Change -1.39% 47.42% -17.09%
TOTAL LIABILITIES
Total Short-Term Liabilities $61.00M $62.00M $41.00M
Total Long-Term Liabilities $142.0M $143.0M $97.00M
Total Liabilities $11.06B $10.98B $8.486B
YoY Change 2.74% 29.33% 2.12%
SHAREHOLDERS EQUITY
Retained Earnings $426.7M $411.3M $330.5M
YoY Change 26.45% 24.45% 25.22%
Common Stock $1.642B $1.640B $1.004B
YoY Change 0.46% 63.38% 0.98%
Preferred Stock
YoY Change
Treasury Stock (at cost) $0.00
YoY Change
Treasury Stock Shares 0.000 shares
Shareholders Equity $2.034B $1.981B $1.328B
YoY Change
Total Liabilities & Shareholders Equity $13.10B $12.96B $9.815B
YoY Change 2.97% 32.01% 2.38%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3
OPERATING ACTIVITIES
Net Income $44.75M $46.42M $40.77M
YoY Change 184.51% 13.85% 48.34%
Depreciation, Depletion And Amortization $7.200M $9.000M $7.500M
YoY Change -25.0% 20.0% -15.73%
Cash From Operating Activities $66.00M $56.70M $43.20M
YoY Change 134.88% 31.25% -3.57%
INVESTING ACTIVITIES
Capital Expenditures -$3.000M -$3.300M -$2.500M
YoY Change 42.86% 32.0% 66.67%
Acquisitions
YoY Change
Other Investing Activities -$84.30M -$360.0M -$9.300M
YoY Change -1115.66% 3770.97% -96.03%
Cash From Investing Activities -$87.40M -$363.2M -$11.80M
YoY Change -1509.68% 2977.97% -95.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 56.80M 285.1M 79.20M
YoY Change -494.44% 259.97% -61.29%
NET CHANGE
Cash From Operating Activities 66.00M 56.70M 43.20M
Cash From Investing Activities -87.40M -363.2M -11.80M
Cash From Financing Activities 56.80M 285.1M 79.20M
Net Change In Cash 35.40M -21.40M 110.6M
YoY Change 77.89% -119.35% 713.24%
FREE CASH FLOW
Cash From Operating Activities $66.00M $56.70M $43.20M
Capital Expenditures -$3.000M -$3.300M -$2.500M
Free Cash Flow $69.00M $60.00M $45.70M
YoY Change 128.48% 31.29% -1.3%

Facts In Submission

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0 USD
us-gaap Available For Sale Securities Gross Realized Gains
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0 USD
CY2018Q3 us-gaap Available For Sale Securities Gross Realized Gains
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0 USD
us-gaap Available For Sale Securities Gross Realized Gains
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235000 USD
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us-gaap Available For Sale Securities Gross Realized Losses
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0 USD
CY2018Q3 us-gaap Available For Sale Securities Gross Realized Losses
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0 USD
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129000 USD
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4540000 USD
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0 USD
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158000 USD
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us-gaap Communications And Information Technology
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us-gaap Comprehensive Income Net Of Tax
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us-gaap Comprehensive Income Net Of Tax
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us-gaap Depreciation Amortization And Accretion Net
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25807000 USD
us-gaap Dividends Common Stock Cash
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us-gaap Earnings Per Share Diluted
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us-gaap Equity Securities Fv Ni Unrealized Gain Loss
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us-gaap Federal Deposit Insurance Corporation Premium Expense
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us-gaap Federal Deposit Insurance Corporation Premium Expense
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2778000 USD
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0
us-gaap Financing Receivable Modifications Subsequent Default Number Of Contracts1
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0
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0
us-gaap Financing Receivable Modifications Subsequent Default Number Of Contracts1
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0
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CY2018Q3 us-gaap Finite Lived Intangible Assets Amortization Expense Year Five
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12000 USD
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189000 USD
us-gaap Gain Loss On Sale Of Other Assets
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us-gaap Gains Losses On Sales Of Other Real Estate
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us-gaap Gains Losses On Sales Of Other Real Estate
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137132000 USD
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57821000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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156354000 USD
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40032000 USD
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us-gaap Income Tax Expense Benefit
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28220000 USD
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37701000 USD
us-gaap Income Taxes Paid
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12768000 USD
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282336000 USD
us-gaap Increase Decrease In Deposits
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72151000 USD
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us-gaap Increase Decrease In Federal Funds Purchased And Securities Sold Under Agreements To Repurchase Net
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us-gaap Increase Decrease In Interest And Dividends Receivable
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us-gaap Increase Decrease In Interest And Dividends Receivable
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7595000 USD
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618000 USD
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4406000 USD
us-gaap Increase Decrease In Other Operating Assets
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2599000 USD
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us-gaap Increase Decrease In Other Operating Liabilities
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5662000 USD
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919000 USD
CY2018Q3 us-gaap Indefinite Lived Intangible Assets Excluding Goodwill
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919000 USD
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13845000 USD
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us-gaap Interest And Fee Income Loans And Leases
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228340000 USD
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109748000 USD
us-gaap Interest And Fee Income Loans And Leases
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318187000 USD
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5450184000 USD
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5353735000 USD
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us-gaap Interest Expense
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4140000 USD
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1083000 USD
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2778000 USD
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3193000 USD
us-gaap Interest Expense Deposits
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163000 USD
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979000 USD
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966000 USD
us-gaap Interest Expense Federal Home Loan Bank And Federal Reserve Bank Advances Long Term
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2351000 USD
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128000 USD
us-gaap Interest Expense Other Short Term Borrowings
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383000 USD
CY2018Q3 us-gaap Interest Expense Other Short Term Borrowings
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152000 USD
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us-gaap Interest Expense Subordinated Notes And Debentures
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CY2018Q3 us-gaap Interest Expense Subordinated Notes And Debentures
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us-gaap Interest Expense Subordinated Notes And Debentures
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1404000 USD
CY2017Q3 us-gaap Interest Income Deposits With Financial Institutions
InterestIncomeDepositsWithFinancialInstitutions
226000 USD
us-gaap Interest Income Deposits With Financial Institutions
InterestIncomeDepositsWithFinancialInstitutions
268000 USD
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InterestIncomeDepositsWithFinancialInstitutions
104000 USD
us-gaap Interest Income Deposits With Financial Institutions
InterestIncomeDepositsWithFinancialInstitutions
600000 USD
CY2017Q3 us-gaap Interest Income Expense After Provision For Loan Loss
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us-gaap Interest Income Expense After Provision For Loan Loss
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256461000 USD
CY2018Q3 us-gaap Interest Income Expense After Provision For Loan Loss
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119643000 USD
us-gaap Interest Income Expense After Provision For Loan Loss
InterestIncomeExpenseAfterProvisionForLoanLoss
341971000 USD
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88929000 USD
us-gaap Interest Income Expense Net
InterestIncomeExpenseNet
261765000 USD
CY2018Q3 us-gaap Interest Income Expense Net
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us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Sale Of Securities Net Of Tax
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us-gaap Payments To Acquire Available For Sale Securities
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us-gaap Payments To Acquire Federal Home Loan Bank Stock
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us-gaap Payments To Acquire Federal Home Loan Bank Stock
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us-gaap Payments To Acquire Property Plant And Equipment
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us-gaap Payments To Acquire Property Plant And Equipment
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us-gaap Proceeds From Federal Home Loan Bank Borrowings
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us-gaap Proceeds From Life Insurance Policies
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us-gaap Proceeds From Life Insurance Policies
ProceedsFromLifeInsurancePolicies
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us-gaap Proceeds From Maturities Prepayments And Calls Of Available For Sale Securities
ProceedsFromMaturitiesPrepaymentsAndCallsOfAvailableForSaleSecurities
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us-gaap Proceeds From Sale And Maturity Of Available For Sale Securities
ProceedsFromSaleAndMaturityOfAvailableForSaleSecurities
0 USD
us-gaap Proceeds From Sale And Maturity Of Available For Sale Securities
ProceedsFromSaleAndMaturityOfAvailableForSaleSecurities
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0 USD
us-gaap Proceeds From Sale Of Available For Sale Securities Debt
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CY2018Q3 us-gaap Proceeds From Sale Of Available For Sale Securities Debt
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us-gaap Proceeds From Sale Of Loans Held For Sale
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182000 USD
us-gaap Proceeds From Sale Of Wholly Owned Real Estate And Real Estate Acquired In Settlement Of Loans
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CY2018Q3 us-gaap Proceeds From Sale Of Wholly Owned Real Estate And Real Estate Acquired In Settlement Of Loans
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us-gaap Proceeds From Sale Of Wholly Owned Real Estate And Real Estate Acquired In Settlement Of Loans
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1980000 USD
us-gaap Proceeds From Stock Options Exercised
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us-gaap Professional Fees
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us-gaap Professional Fees
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us-gaap Provision For Loan And Lease Losses
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CY2017Q3 us-gaap Real Estate Acquired Through Foreclosure
RealEstateAcquiredThroughForeclosure
3682000 USD
CY2017Q4 us-gaap Real Estate Acquired Through Foreclosure
RealEstateAcquiredThroughForeclosure
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CY2018Q3 us-gaap Real Estate Acquired Through Foreclosure
RealEstateAcquiredThroughForeclosure
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us-gaap Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax
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CY2018Q3 us-gaap Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax
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us-gaap Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax
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10000 USD
us-gaap Repayments Of Federal Home Loan Bank Borrowings
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5010000 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
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CY2018Q3 us-gaap Retained Earnings Accumulated Deficit
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1000000 USD
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0 USD
CY2018Q3 us-gaap Secured Borrowings Gross Including Not Subject To Master Netting Arrangement
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CY2018Q3 us-gaap Securities Sold Under Agreements To Repurchase
SecuritiesSoldUnderAgreementsToRepurchase
62197000 USD
CY2017Q4 us-gaap Securities Sold Under Agreements To Repurchase Collateral Right To Reclaim Securities
SecuritiesSoldUnderAgreementsToRepurchaseCollateralRightToReclaimSecurities
79059000 USD
CY2018Q3 us-gaap Securities Sold Under Agreements To Repurchase Collateral Right To Reclaim Securities
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62197000 USD
us-gaap Share Based Compensation
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us-gaap Share Based Compensation
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6231000 USD
us-gaap Stock Issued During Period Value Restricted Stock Award Net Of Forfeitures
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5915000 USD
us-gaap Stock Issued During Period Value Restricted Stock Award Net Of Forfeitures
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6231000 USD
us-gaap Stock Issued During Period Value Stock Options Exercised
StockIssuedDuringPeriodValueStockOptionsExercised
1980000 USD
us-gaap Stock Issued During Period Value Stock Options Exercised
StockIssuedDuringPeriodValueStockOptionsExercised
1857000 USD
us-gaap Stock Repurchased And Retired During Period Value
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2246000 USD
us-gaap Stock Repurchased And Retired During Period Value
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2660000 USD
CY2016Q4 us-gaap Stockholders Equity
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CY2017Q3 us-gaap Stockholders Equity
StockholdersEquity
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CY2017Q4 us-gaap Stockholders Equity
StockholdersEquity
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CY2018Q3 us-gaap Stockholders Equity
StockholdersEquity
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us-gaap Subordinated Borrowing Interest Rate
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CY2017Q4 us-gaap Subordinated Debt
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CY2018Q3 us-gaap Subordinated Debt
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us-gaap Transfer To Other Real Estate
TransferToOtherRealEstate
74000 USD
us-gaap Transfer To Other Real Estate
TransferToOtherRealEstate
1200000 USD
CY2017Q3 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
5000 shares
us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
6000 shares
CY2018Q3 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
5000 shares
us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
4000 shares
CY2017Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
57571000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
57465000 shares
CY2018Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
72432000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
72374000 shares
CY2017Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
57566000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
57459000 shares
CY2018Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
72427000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
72370000 shares
us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Accounting Pronouncements Recently Issued</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2018, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2018-15, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Customer&#8217;s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract</font><font style="font-family:inherit;font-size:10pt;">. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments also require the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, including reasonably certain renewal periods. </font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">The amendments in ASU 2018-15 are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The Company is assessing the impact that this guidance will have on its Consolidated Financial Statements.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2016, the FASB issued ASU 2016-15, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Classification of Certain Cash Receipts and Cash Payments</font><font style="font-family:inherit;font-size:10pt;">. The amendments in this ASU provide specific guidance on several statement of cash flow classification issues to reduce diversity in practice. The amendments in ASU 2016-15 are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company has reclassified items in the Statement of Cash Flows for the </font><font style="font-family:inherit;font-size:10pt;">nine</font><font style="font-family:inherit;font-size:10pt;"> months ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;"> to conform with its current presentation based on its adoption of ASU 2016-15.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued ASU 2016-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Measurement of Credit Losses on Financial Instruments</font><font style="font-family:inherit;font-size:10pt;">. The amendments included in this ASU require an entity to reflect its current estimate of all expected credit losses for assets held at an amortized cost basis. For available for sale debt securities, credit losses will be measured in a manner similar to current GAAP, however, this ASU will require that credit losses be presented as an allowance rather than as a write-down. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and are required to be adopted through a modified retrospective approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is effective.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Currently, the Company cannot reasonably estimate the impact that adoption of ASU 2016-13 will have on its Consolidated Financial Statements; however, the impact may be significant. That assessment is based upon the fact that, unlike the incurred loss models in existing GAAP, the current expected credit loss (&#8220;CECL&#8221;) model in ASU 2016-13 does not specify a threshold for the recognition of an impairment allowance. Rather, the Company will recognize an impairment allowance equal to its estimate of lifetime expected credit losses, adjusted for prepayments, for in-scope financial instruments as of the end of the reporting period. Accordingly, the impairment allowance measured under the CECL model could increase significantly from the impairment allowance measured under the Company&#8217;s existing incurred loss model. The Company has engaged a third-party vendor to assist in the CECL calculation and has developed an internal governance framework to oversee the CECL implementation. Other significant CECL implementation matters being addressed by the Company include selecting loss estimation methodologies, identifying, sourcing and storing data, addressing data gaps, defining a reasonable and supportable forecast period, selecting historical loss information which will be reverted to, documenting the CECL estimation process, assessing the impact to internal controls over financial reporting, capital planning and seeking process approval from audit and regulatory stakeholders.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued ASU 2016-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases</font><font style="font-family:inherit;font-size:10pt;">. The amendments included in this ASU create a new accounting model for both lessees and lessors. The new guidance requires lessees to recognize lease liabilities, initially measured as the present value of future lease payments, and corresponding right-of-use assets for all leases with lease terms greater than 12 months. This model differs from the current lease accounting model, which does not require such lease liabilities and corresponding right-of-use assets to be recorded for operating leases. The amendments in ASU 2016-02 must be adopted using the modified retrospective approach and will be effective for the first interim or annual period beginning after December 15, 2018. The FASB subsequently issued ASU 2018-11, which allows for an additional (optional) transition method. Early adoption is permitted. During 2017, the Company selected a third-party lease accounting application to assist in the implementation of this new guidance. Significant implementation matters to be addressed by the Company include assessing the impact to our internal controls over financial reporting and documenting the new lease accounting process. At September 30, 2018 the Company&#8217;s estimate of right-of-use assets and lease liabilities that would be recorded on its January 1, 2019 Consolidated Balance Sheet upon adoption of ASU 2016-02 was between </font><font style="font-family:inherit;font-size:10pt;">$40.0 million</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$50.0 million</font><font style="font-family:inherit;font-size:10pt;">. This estimate may change depending on the Company&#8217;s lease activity. Additionally, the Company expects to recognize a cumulative effect adjustment upon adoption to increase the beginning balance of retained earnings as of January 1, 2019 for any remaining deferred gains on sale-leaseback transactions which occurred prior to the date of adoption. The Company had </font><font style="font-family:inherit;font-size:10pt;">$1.0 million</font><font style="font-family:inherit;font-size:10pt;"> of deferred gains on sale-leaseback transactions as of September 30, 2018. We do not expect a material impact to our Consolidated Statement of Income as a result of this ASU. </font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2016, the FASB issued ASU 2016-01, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Recognition and Measurement of Financial Assets and Financial Liabilities</font><font style="font-family:inherit;font-size:10pt;">. The amendments in ASU 2016-01 require all equity investments to be measured at fair value with changes in the fair value recognized through net income. The amendments in ASU 2016-01 also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in ASU 2016-01 are effective for the first interim or annual period beginning after December 15, 2017. The Company adopted the amendments of ASU 2016-01 effective January 1, 2018 and recorded a cumulative effect adjustment of </font><font style="font-family:inherit;font-size:10pt;">$157 thousand</font><font style="font-family:inherit;font-size:10pt;"> to retained earnings related to the unrealized holding losses on equity securities with readily determinable fair value included in accumulated other comprehensive loss. The Company also added a separate line item on the Consolidated Balance Sheet for equity securities at fair value and reclassified amounts previously included in securities available for sale at fair value to conform to current period presentation. In addition, as required by the ASU, the fair value disclosure for loans is computed using an exit price notion and deposits with no stated maturity are no longer included in the fair value disclosures in </font><a style="font-family:inherit;font-size:10pt;" href="#sAB1B3D2C9437580BA597FFAF26D1D379"><font style="font-family:inherit;font-size:10pt;">Note 15, &#8220;Fair Value Accounting and Measurement.&#8221;</font></a></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the FASB issued ASU 2014-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;">, which provides revenue recognition guidance that is intended to create greater consistency with respect to how and when revenue from contracts with customers is shown in the income statement. The guidance requires that revenue from contracts with customers be recognized when transfer of control over goods or services is passed to customers in the amount of consideration expected to be received. Subsequent Accounting Standard Updates have been issued clarifying the original pronouncement (ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20). The majority of the Company&#8217;s revenue is comprised of interest income from financial assets, which is specifically outside the scope of ASU 2014-09.</font></div><div style="line-height:120%;padding-top:12px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 1, 2018, we adopted the accounting guidance in ASU 2014-09 and all the related amendments (&#8220;Topic 606&#8221;) using the modified retrospective method for all contracts that have not been completed (i.e. open contracts). Therefore, the comparative information has not been adjusted and continues to be reported under Topic 605. There was no cumulative effect adjustment as of January 1, 2018, and there were no material changes to the timing or amount of revenue recognized for the nine months ended September 30, 2018; however, additional disclosures were incorporated in the footnotes upon adoption. See </font><a style="font-family:inherit;font-size:10pt;" href="#sF784076ECBA657FAB2600BE08037C65C"><font style="font-family:inherit;font-size:10pt;">Note 17, &#8220;Revenue from Contracts with Customers,&#8221;</font></a><font style="font-family:inherit;font-size:10pt;"> for more information.</font></div></div>

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