☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2019
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Texas | 75-0944023 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
400 Pine Street ,Abilene , Texas | 79601 | |
(Address of Principal Executive Offices) | (Zip Code) |
(325)(Classeach class Exchange exchangeWhich Registeredwhich registered Global SelectStock Market LLCand posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulationand post suchIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K. ☐☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐ 2017,2019, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s voting and$2.78$16, 2018,1 67,574,990
2019.
30 30 30 30 30 6.7. Selected Financial Data33ITEM 7. 34 49 49 51 9A.9B. 51 ITEM 9B.Other Information 53 54 54 54 54 54 55 56 57
ITEM 1. | BUSINESS |
Bridgeport and Wise County | 13.5% | Weatherford, Willow Park, Aledo and Parker County | 23.6% | |||||||
Fort Worth and Tarrant County | 21.5% | Stephenville and Erath County | 18.0% | |||||||
Cleburne and Johnson County | 11.7% | Conroe and Montgomery County | 41.3% | |||||||
Granbury and Hood County | 31.1% | *Source: U. S. Census Bureau |
2008-2018*
Bridgeport and Wise County | 21.4 | % | ||
Fort Worth and Tarrant County | 18.2 | % | ||
Cleburne and Johnson County | 15.2 | % | ||
Granbury and Hood County | 16.8 | % | ||
Weatherford, Willow Park, Aledo and Parker County | 34.1 | % |
Stephenville and Erath County | 15.6 | % | ||
Conroe and Montgomery County | 43.3 | % | ||
Bryan/College Station | 27.4 | % |
* | Source: U. S. Census Bureau |
Association operates as a subsidiary of First Financial Bankshares, Inc. and First Technology Services, Inc. operates as a subsidiary of First Financial Bank, National Association, Abilene, Texas. Looking ahead, we intend to continue to grow organically by better serving the needs of our customers and putting them first in all of our decisions. We continually look for new branch locations, such as our newest branch in Spring, Texas which opened in January 2019, so we can provide more convenient service to our customers, and wecustomers. We are actively pursuing acquisition opportunities by calling on banks that we are interested in possibly acquiring.
National Banking Associations.
our subsidiary bank. In September 2018, the reserve ratio reached 1.36% at which time banks with assets of less than $10 billion were awarded assessment credits for their portion of their assessments that contributed to the growth in the reserve ratio from 1.15% to 1.35%. When the reserve ratio reached 1.40% in June 2019, the FDIC applied these credits to the September 30, 2019 assessment invoice and then again to the December 31, 2019 assessment invoice. Our subsidiary’s bank’s assessment credit totaled $1.84 million of which $522 thousand and $525 thousand, respectively, were used to zero out the September 30, 2019 and December 31, 2019 assessment invoices. As of December 31, 2019, $791 thousand remains in available credits, which our subsidiary bank expects to be applied to the March 31, 2020 and June 30, 2020 assessment invoices.$250,000$250 thousand per depositor). that are members of the Bank Insurance Fund pay insurance premiums at rates based on their risk classification. Institutions assigned to higher risk classifications (i.e., institutions that pose a greater risk of loss to the DIF) pay assessments at higher rates than institutions assigned to lower risk classifications. An institution’s risk classification is assigned based on its capital levels and the level of supervisory concern the institution poses to bank regulators. Through June 30, 2017,December 31, 2019, the assessment rate for our subsidiary bank was at the lowest risk-based premium available, which was 3.00% of the assessment base per annum. In addition, the FDIC can impose special assessments to cover shortages in the DIF and has imposed special assessments in the past.AsThe fund reserve ratio reached 1.15% effective as of June 30, 2016, the FDIC announced that the fund reserve ratio had reached 1.15%.2016. As a result, the Company’sour subsidiary bank’s assessment rate was decreased to the rate stated above.above effective July 1, 2016. The Dodd-Frank Act also eliminated the requirement that the FDIC pay dividends to insured depository institutions when the reserve ratio exceeds certain thresholds.requiresrequired the FDIC to offset the effect of increasing the reserve ratio on insured depository institutions with total consolidated assets of less than $10 billion, such as the Company.
At December 31, 2018, final regulations for the Tax Cuts and Jobs Act were still pending; however, the Company updated its estimate of the impact to our deferred tax balances based on the proposed regulations issued to date and recorded an additional reduction of income tax expense for the year ended December 31, 2018 of $664 thousand. No additional adjustment amounts were recorded for the year ended December 31, 2019, and the Company does not anticipate significant revision will be necessary.
Rules.
2019.
enforcement authority with respect to depository institutions with $10 billion or more in assets. Smaller institutions are subject to rules promulgated by the CFPB but continue to be examined and supervised by federal banking regulators for consumer compliance purposes. The CFPB has authority to prevent unfair, deceptive or abusive practices in connection with the offering of consumer financial products. The Dodd-Frank Act permits states to adopt consumer protection laws and standards that are more stringent than those adopted at the federal level and, in certain circumstances, permits the state attorney general to enforce compliance with both the state and federal laws and regulations.
ITEM 1A. | RISK FACTORS |
condition.
Changes in economic conditions could cause an increase in delinquencies andnon-performing assets, including loan charge-offs, which could depress our net income and growth.
Our loan portfolio includes many real estate secured loans, demand for which may decrease during economic downturns as a result
The repeal of prohibitions on paying interest on demand deposits could increase our interest expense.
Effective July 2011, all federal prohibitions on financial institutions paying interest on demand deposit accounts were repealed as part of the Dodd-Frank Act. As a result, some financial institutions have commenced and are considering offering interest on demand deposits to compete for customers. If interest rates begin to rise, our interest expense could increase and our net interest margin could decrease if we begin offering interest on demand deposits to maintain current customers or attract new customers, which could have a material adverse effect on our financial condition and results of operations.
On July 2, 2013, the
capital. The final rule became effective for us on January 1, 2015. As of December 31, 2017,2019, we met all of these new requirements, including the full capital conservation buffer.
products;
In addition, as approximately 13% of trust fees comes from management of oil and gas properties, a decline in the prices of oil and gas could lead to a loss of material amounts of our trust income.
A newAct.
In June 2016,
The new CECL standard will become effective for us for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. We are currently evaluating the impact the CECL model will have on our accounting, but we expect to recognize aone-time cumulative-effect adjustment to our allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, consistent with regulatory expectations set forth in interagency guidance issued at the end of 2016. We cannot yet determine the magnitude of any suchone-time cumulative adjustment or of the overall impact of the new standard on our business, financial condition and results of operations.
resources, larger lending limits, larger branch networks, enhanced technology and less regulatory oversight than we do, and are able to offer a broader range of products and services than we can. Failure to compete effectively for deposit, loan and other banking customers in our markets could cause us to lose market share, slow our growth rate and may have an adverse effect on our financial condition, results of operations and liquidity.
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Period Ending | ||||||||||||||||||||||||
Index | 12/31/12 | 12/31/13 | 12/31/14 | 12/31/15 | 12/31/16 | 12/31/17 | ||||||||||||||||||
First Financial Bankshares, Inc. | 100.00 | 172.67 | 158.94 | 163.76 | 250.31 | 253.94 | ||||||||||||||||||
Russell 3000 | 100.00 | 133.55 | 150.32 | 151.04 | 170.28 | 206.26 | ||||||||||||||||||
SNL Bank$5B-$10B Index | 100.00 | 154.28 | 158.92 | 181.04 | 259.37 | 258.40 |
Source : SNL Financial, an offering of S&P Global Market Intelligence
© 2017
www.snl.com
Inc
Period Ending | ||||||||||||||||||||||||
Index | 12/31/14 | 12/31/15 | 12/31/16 | 12/31/17 | 12/31/18 | 12/31/19 | ||||||||||||||||||
First Financial Bankshares, Inc. | 100.00 | 103.03 | 157.49 | 159.77 | 207.64 | 256.36 | ||||||||||||||||||
Russell 3000 | 100.00 | 100.48 | 113.27 | 137.21 | 130.02 | 170.35 | ||||||||||||||||||
SNL Bank $5B-$10B Index | 100.00 | 113.92 | 163.20 | 162.59 | 147.15 | 182.34 |
Source : SNL Financial, an offering of S&P Global Market Intelligence |
© 2020 |
www.snl.com |
ITEM 6. | SELECTED FINANCIAL DATA |
Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||
Summary Income Statement Information: | ||||||||||||||||||||
Interest income | $ | 245,975 | $ | 232,288 | $ | 221,623 | $ | 198,539 | $ | 176,369 | ||||||||||
Interest expense | 9,288 | 5,451 | 4,088 | 4,181 | 4,088 | |||||||||||||||
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Net interest income | 236,687 | 226,837 | 217,535 | 194,358 | 172,281 | |||||||||||||||
Provision for loan losses | 6,530 | 10,212 | 9,685 | 4,465 | 3,753 | |||||||||||||||
Noninterest income | 91,017 | 85,132 | 73,432 | 66,624 | 62,052 | |||||||||||||||
Noninterest expense | 173,986 | 165,830 | 149,464 | 137,925 | 126,012 | |||||||||||||||
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Earnings before income taxes | 147,188 | 135,927 | 131,818 | 118,592 | 104,568 | |||||||||||||||
Income tax expense | 26,817 | 31,153 | 31,437 | 29,033 | 25,700 | |||||||||||||||
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Net earnings | $ | 120,371 | $ | 104,774 | $ | 100,381 | $ | 89,559 | $ | 78,868 | ||||||||||
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Per Share Data: | ||||||||||||||||||||
Earnings per share, basic | $ | 1.82 | $ | 1.59 | $ | 1.55 | $ | 1.40 | $ | 1.24 | ||||||||||
Earnings per share, assuming dilution | 1.81 | 1.59 | 1.54 | 1.39 | 1.24 | |||||||||||||||
Cash dividends declared | 0.75 | 0.70 | 0.62 | 0.55 | 0.52 | |||||||||||||||
Book value atperiod-end | 13.93 | 12.68 | 12.20 | 10.63 | 9.18 | |||||||||||||||
Earnings performance ratios: | ||||||||||||||||||||
Return on average assets | 1.72 | % | 1.59 | % | 1.61 | % | 1.65 | % | 1.64 | % | ||||||||||
Return on average equity | 13.63 | 12.36 | 13.60 | 14.00 | 13.75 | |||||||||||||||
Summary Balance Sheet Data(Period-end): | ||||||||||||||||||||
Securities | $ | 3,087,473 | $ | 2,860,958 | $ | 2,734,177 | $ | 2,416,297 | $ | 2,058,407 | ||||||||||
Loans | 3,500,699 | 3,384,205 | 3,350,593 | 2,937,991 | 2,689,448 | |||||||||||||||
Total assets | 7,254,715 | 6,809,931 | 6,665,070 | 5,848,202 | 5,222,208 | |||||||||||||||
Deposits | 5,962,961 | 5,478,539 | 5,190,169 | 4,750,255 | 4,135,075 | |||||||||||||||
Total liabilities | 6,331,947 | 5,972,046 | 5,860,084 | 5,166,665 | 4,634,561 | |||||||||||||||
Total shareholders’ equity | 922,768 | 837,885 | 804,986 | 681,537 | 587,647 | |||||||||||||||
Asset quality ratios: | ||||||||||||||||||||
Allowance for loanlosses/period-end loans | 1.38 | % | 1.35 | % | 1.25 | % | 1.25 | % | 1.26 | % | ||||||||||
Nonperformingassets/period-end loans plus foreclosed assets | 0.57 | 0.86 | 0.89 | 0.74 | 1.16 | |||||||||||||||
Net charge offs/average loans | 0.12 | 0.19 | 0.15 | 0.06 | 0.15 | |||||||||||||||
Capital ratios: | ||||||||||||||||||||
Average shareholders’ equity/average assets | 12.65 | % | 12.85 | % | 11.86 | % | 11.78 | % | 11.95 | % | ||||||||||
Leverage ratio (1) | 11.09 | 10.71 | 9.96 | 9.89 | 9.84 | |||||||||||||||
Tier 1 risk-based capital (2) | 18.66 | 17.30 | 15.90 | 16.05 | 15.82 | |||||||||||||||
Common equity tier 1 capital (3) | 18.66 | 17.30 | 15.90 | — | — | |||||||||||||||
Total risk-based capital (4) | 19.85 | 18.45 | 16.97 | 17.16 | 16.92 | |||||||||||||||
Dividend payout ratio | 41.24 | 44.14 | 40.20 | 39.34 | 41.62 |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||
Summary Income Statement Information: | ||||||||||||||||||||
Interest income | $ | 319,192 | $ | 291,690 | $ | 245,975 | $ | 232,288 | $ | 221,623 | ||||||||||
Interest expense | 30,102 | 18,930 | 9,288 | 5,451 | 4,088 | |||||||||||||||
Net interest income | 289,090 | 272,760 | 236,687 | 226,837 | 217,535 | |||||||||||||||
Provision for loan losses | 2,965 | 5,665 | 6,530 | 10,212 | 9,685 | |||||||||||||||
Noninterest income | 108,428 | 101,764 | 91,017 | 85,132 | 73,432 | |||||||||||||||
Noninterest expense | 196,521 | 190,684 | 173,986 | 165,830 | 149,464 | |||||||||||||||
Earnings before income taxes | 198,032 | 178,175 | 147,188 | 135,927 | 131,818 | |||||||||||||||
Income tax expense | 33,220 | 27,537 | 26,817 | 31,153 | 31,437 | |||||||||||||||
Net earnings | $ | 164,812 | $ | 150,638 | $ | 120,371 | $ | 104,774 | $ | 100,381 | ||||||||||
Per Share Data: | ||||||||||||||||||||
Earnings per share, basic | $ | 1.22 | $ | 1.11 | $ | 0.91 | $ | 0.80 | $ | 0.78 | ||||||||||
Earnings per share, assuming dilution | 1.21 | 1.11 | 0.91 | 0.80 | 0.77 | |||||||||||||||
Cash dividends declared | 0.47 | 0.41 | 0.38 | 0.35 | 0.31 | |||||||||||||||
Book value at period-end | 9.03 | 7.77 | 6.97 | 6.34 | 6.10 | |||||||||||||||
Earnings performance ratios: | ||||||||||||||||||||
Return on average assets | 2.08 | % | 1.98 | % | 1.72 | % | 1.59 | % | 1.61 | % | ||||||||||
Return on average equity | 14.37 | 15.37 | 13.63 | 12.36 | 13.60 | |||||||||||||||
Summary Balance Sheet Data (Period-end): | ||||||||||||||||||||
Securities | $ | 3,413,317 | $ | 3,158,777 | $ | 3,087,473 | $ | 2,860,958 | $ | 2,734,177 | ||||||||||
Loans | 4,223,197 | 3,975,308 | 3,500,699 | 3,384,205 | 3,350,593 | |||||||||||||||
Total assets | 8,262,227 | 7,731,854 | 7,254,715 | 6,809,931 | 6,665,070 | |||||||||||||||
Deposits | 6,603,806 | 6,180,389 | 5,962,961 | 5,478,539 | 5,190,169 | |||||||||||||||
Total liabilities | 7,035,030 | 6,678,559 | 6,331,947 | 5,972,046 | 5,860,084 | |||||||||||||||
Total shareholders’ equity | 1,227,197 | 1,053,295 | 922,768 | 837,885 | 804,986 | |||||||||||||||
Asset quality ratios: | ||||||||||||||||||||
Allowance for loan losses/period-end loans | 1.24 | % | 1.29 | % | 1.38 | % | 1.35 | % | 1.25 | % | ||||||||||
Nonperforming assets/period-end loans plus foreclosed assets | 0.61 | 0.75 | 0.57 | 0.86 | 0.89 | |||||||||||||||
Net charge offs/average loans | 0.04 | 0.07 | 0.12 | 0.19 | 0.15 | |||||||||||||||
Capital ratios: | ||||||||||||||||||||
Average shareholders’ equity/average assets | 14.44 | % | 12.89 | % | 12.65 | % | 12.85 | % | 11.86 | % | ||||||||||
Leverage ratio (1) | 12.60 | 11.85 | 11.09 | 10.71 | 9.96 | |||||||||||||||
Tier 1 risk-based capital (2) | 20.06 | 19.47 | 18.66 | 17.30 | 15.90 | |||||||||||||||
Common equity tier 1 capital (3) | 20.06 | 19.47 | 18.66 | 17.30 | 15.90 | |||||||||||||||
Total risk-based capital (4) | 21.13 | 20.61 | 19.85 | 18.45 | 16.97 | |||||||||||||||
Dividend payout ratio | 38.31 | 36.84 | 41.24 | 44.14 | 40.20 |
(1) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by fourth quarter average assets less intangible assets. |
(2) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by risk-adjusted assets. |
(3) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets by risk-adjusted assets. |
(4) | Calculated by dividing at period-end, shareholders’ equity (before accumulated other comprehensive earnings/loss) less intangible assets plus allowance for loan losses to the extent allowed under regulatory guidelines by risk-adjusted assets. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Hurricane Harvey
Houston and the surrounding Gulf Coast region were significantly affected by Hurricane Harvey beginning in late August 2017 and continuing into the fourth quarter of 2017. Our Company has locations (i) north of Houston in Conroe, Willis, Tomball, Huntsville, Montgomery, Magnolia, New Waverly and Cut and Shoot and (ii) in Southeast Texas in Orange, Beaumont, Vidor, Newton, Mauriceville and Port Arthur. We continue to evaluate the effect of the hurricane on our branch facilities and our loan and investment portfolios. Our initial assessment of our physical buildings and equipment indicates damage primarily at our Mauriceville branch, and amounts not covered by insurance do not appear to be significant. At December 31, 2017, we had loans totaling $446.62 million in our Conroe region and $396.55 million in the Southeast Texas/Orange region. We are evaluating these loans and the related collateral and business operations underlying such loans. At December 31, 2017, we provided additional
allowance for loan losses as deemed appropriate based on this analysis. We continue to evaluate these loans as we learn more information about the damage caused by the hurricane. Our tax exempt municipal bonds in the counties of Texas effected by the hurricane have been evaluated, including insurance on the bonds. At December 31, 2017, our municipal bonds in these counties totaled $458.16 million, but only $92.75 million do not have bond insurance. Based on analysis of these bonds and the related municipality, at December 31, 2017, we do not believe we have any credit related losses other than temporary impairment.
The balance sheet and results of operations of TB&T Bancshares, Inc. will be included in the financial statements of the Company effective January 1, 2020. At December 31, 2019, The Bank & Trust of Bryan/College Station had gross loans totaling $455.40 million, total deposits of $551.90 million and total assets of $631.10 million.
Company’s financial statements.
income and the increase in net earnings for 2018 over 2017 was primarily attributable to the change in income tax rates.
investment securities. Our liabilities to fund those assets consist primarily of noninterest-bearing and interest-bearing deposits.
points.
2017 Compared to 2016 | 2016 Compared to 2015 | |||||||||||||||||||||||
Change Attributable to | Total Change | Change Attributable to | Total Change | |||||||||||||||||||||
Volume | Rate | Volume | Rate | |||||||||||||||||||||
Short-term investments | $ | 443 | $ | 899 | $ | 1,342 | $ | 23 | $ | 111 | $ | 134 | ||||||||||||
Taxable investment securities | 3,464 | 1,735 | 5,199 | (1,218 | ) | (829 | ) | (2,047 | ) | |||||||||||||||
Tax-exempt investment securities (1) | 1,173 | 677 | 1,850 | 6,548 | (1,687 | ) | 4,861 | |||||||||||||||||
Loans (1) (2) | 4,998 | 851 | 5,849 | 12,037 | (2,320 | ) | 9,717 | |||||||||||||||||
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Interest income | 10,078 | 4,162 | 14,240 | 17,390 | (4,725 | ) | 12,665 | |||||||||||||||||
Interest-bearing deposits | 409 | 3,300 | 3,709 | 219 | 643 | 862 | ||||||||||||||||||
Short-term borrowings | (223 | ) | 351 | 128 | 24 | 477 | 501 | |||||||||||||||||
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Interest expense | 186 | 3,651 | 3,837 | 243 | 1,120 | 1,363 | ||||||||||||||||||
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Net interest income | $ | 9,892 | $ | 511 | $ | 10,403 | $ | 17,147 | $ | (5,845 | ) | $ | 11,302 | |||||||||||
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2019 Compared to 2018 | 2018 Compared to 2017 | |||||||||||||||||||||||
Change Attributable to | Total Change | Change Attributable to | Total Change | |||||||||||||||||||||
Volume | Rate | Volume | Rate | |||||||||||||||||||||
Short-term investments | $ | (106 | ) | $ | 367 | $ | 261 | $ | (636 | ) | $ | 583 | $ | (53 | ) | |||||||||
Taxable investment securities | 4,045 | 1,573 | 5,618 | 10,082 | 7,145 | 17,227 | ||||||||||||||||||
Tax-exempt investment securities (1) | (2,634 | ) | (2,203 | ) | (4,837 | ) | (10,184 | ) | (10,433 | ) | (20,617 | ) | ||||||||||||
Loans (1) (2) | 12,983 | 11,276 | 24,259 | 19,293 | 13,362 | 32,655 | ||||||||||||||||||
Interest income | 14,288 | 11,013 | 25,301 | 18,555 | 10,657 | 29,212 | ||||||||||||||||||
Interest-bearing deposits | 654 | 9,523 | 10,177 | 583 | 8,149 | 8,732 | ||||||||||||||||||
Short-term borrowings | (99 | ) | 1,095 | 996 | (8 | ) | 917 | 909 | ||||||||||||||||
Interest expense | 555 | 10,618 | 11,173 | 575 | 9,066 | 9,641 | ||||||||||||||||||
Net interest income | $ | 13,733 | $ | 395 | $ | 14,128 | $ | 17,980 | $ | 1,591 | $ | 19,571 | ||||||||||||
(1) | Computed on tax-equivalent basis assuming marginal tax rate of 21% for 2019 and 2018 and 35% |
(2) | Non-accrual loans are included in loans. |
by 75 basis points during 2019.
2019.
2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||
Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Short-term investments (1) | $ | 144,464 | $ | 1,684 | 1.17 | % | $ | 63,882 | $ | 342 | 0.54 | % | $ | 57,500 | $ | 208 | 0.36 | % | ||||||||||||||||||
Taxable investment securities (2) | 1,479,698 | 32,825 | 2.22 | 1,314,820 | 27,626 | 2.10 | 1,371,110 | 29,673 | 2.16 | |||||||||||||||||||||||||||
Tax-exempt investment securities (2)(3) | 1,484,952 | 68,118 | 4.59 | 1,459,121 | 66,268 | 4.54 | 1,318,531 | 61,407 | 4.66 | |||||||||||||||||||||||||||
Loans (3)(4) | 3,435,447 | 168,843 | 4.91 | 3,333,241 | 162,994 | 4.89 | 3,090,538 | 153,277 | 4.96 | |||||||||||||||||||||||||||
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Total earning assets | 6,544,561 | $ | 271,470 | 4.15 | % | 6,171,064 | $ | 257,230 | 4.17 | % | 5,837,679 | $ | 244,565 | 4.19 | % | |||||||||||||||||||||
Cash and due from banks | 162,255 | 152,648 | 148,369 | |||||||||||||||||||||||||||||||||
Bank premises and equipment, net | 123,595 | 120,538 | 109,725 | |||||||||||||||||||||||||||||||||
Other assets | 56,007 | 55,694 | 49,647 | |||||||||||||||||||||||||||||||||
Goodwill and other intangible assets, net | 142,473 | 143,986 | 117,491 | |||||||||||||||||||||||||||||||||
Allowance for loan losses | (47,380 | ) | (44,811 | ) | (39,107 | ) | ||||||||||||||||||||||||||||||
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Total assets | $ | 6,981,511 | $ | 6,599,119 | $ | 6,223,804 | ||||||||||||||||||||||||||||||
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Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 3,783,960 | $ | 8,213 | 0.22 | % | $ | 3,469,005 | $ | 4,504 | 0.13 | % | $ | 3,272,150 | $ | 3,642 | 0.11 | % | ||||||||||||||||||
Short-term borrowings | 422,285 | 1,075 | 0.25 | 552,041 | 947 | 0.17 | 524,365 | 446 | 0.08 | |||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total interest-bearing liabilities | 4,206,245 | $ | 9,288 | 0.22 | % | 4,021,046 | $ | 5,451 | 0.14 | % | 3,796,515 | $ | 4,088 | 0.11 | % | |||||||||||||||||||||
Noninterest-bearing deposits | 1,843,973 | 1,666,598 | 1,634,669 | |||||||||||||||||||||||||||||||||
Other liabilities | 48,480 | 63,609 | 54,331 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total liabilities | 6,098,698 | 5,751,253 | 5,485,515 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 882,813 | 847,866 | 738,289 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,981,511 | $ | 6,599,119 | $ | 6,223,804 | ||||||||||||||||||||||||||||||
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|
|
|
|
| |||||||||||||||||||||||||||||||
Net interest income | $ | 262,182 | $ | 251,779 | $ | 240,477 | ||||||||||||||||||||||||||||||
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|
|
|
| |||||||||||||||||||||||||||||||
Rate Analysis: | ||||||||||||||||||||||||||||||||||||
Interest income/earning assets | 4.15 | % | 4.17 | % | 4.19 | % | ||||||||||||||||||||||||||||||
Interest expense/earning assets | 0.14 | 0.09 | 0.07 | |||||||||||||||||||||||||||||||||
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|
|
|
|
| |||||||||||||||||||||||||||||||
Net yield on earning assets | 4.01 | % | 4.08 | % | 4.12 | % | ||||||||||||||||||||||||||||||
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|
|
|
|
|
2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | Average Balance | Income/ Expense | Yield/ Rate | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Short-term investments (1) | $ | 84,430 | $ | 1,892 | 2.24 | % | $ | 90,374 | $ | 1,631 | 1.80 | % | $ | 144,464 | $ | 1,684 | 1.17 | % | ||||||||||||||||||
Taxable investment securities (2) | 2,090,490 | 55,670 | 2.66 | 1,934,160 | 50,052 | 2.59 | 1,479,698 | 32,825 | 2.22 | |||||||||||||||||||||||||||
Tax-exempt investment securities (2)(3) | 1,192,908 | 42,664 | 3.58 | 1,262,947 | 47,501 | 3.76 | 1,484,952 | 68,118 | 4.59 | |||||||||||||||||||||||||||
Loans (3)(4) | 4,074,667 | 225,757 | 5.54 | 3,828,040 | 201,498 | 5.26 | 3,435,447 | 168,843 | 4.91 | |||||||||||||||||||||||||||
Total earning assets | 7,442,495 | $ | 325,983 | 4.38 | % | 7,115,521 | $ | 300,682 | 4.23 | % | 6,544,561 | $ | 271,470 | 4.15 | % | |||||||||||||||||||||
Cash and due from banks | 175,417 | 176,799 | 162,255 | |||||||||||||||||||||||||||||||||
Bank premises and equipment, net | 133,239 | 129,715 | 123,595 | |||||||||||||||||||||||||||||||||
Other assets | 66,003 | 62,595 | 56,007 | |||||||||||||||||||||||||||||||||
Goodwill and other intangible assets, net | 174,138 | 172,425 | 142,473 | |||||||||||||||||||||||||||||||||
Allowance for loan losses | (52,170 | ) | (50,323 | ) | (47,380 | ) | ||||||||||||||||||||||||||||||
Total assets | $ | 7,939,122 | $ | 7,606,732 | $ | 6,981,511 | ||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 4,208,666 | $ | 27,122 | 0.64 | % | $ | 4,052,614 | $ | 16,945 | 0.42 | % | $ | 3,783,960 | $ | 8,213 | 0.22 | % | ||||||||||||||||||
Short-term borrowings | 398,142 | 2,980 | 0.75 | 418,977 | 1,984 | 0.47 | 422,285 | 1,075 | 0.25 | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 4,606,808 | $ | 30,102 | 0.65 | % | 4,471,591 | $ | 18,929 | 0.42 | % | 4,206,245 | $ | 9,288 | 0.22 | % | |||||||||||||||||||||
Noninterest-bearing deposits | 2,137,089 | 2,124,004 | 1,843,973 | |||||||||||||||||||||||||||||||||
Other liabilities | 48,658 | 30,931 | 48,480 | |||||||||||||||||||||||||||||||||
Total liabilities | 6,792,555 | 6,626,526 | 6,098,698 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 1,146,567 | 980,206 | 882,813 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,939,122 | $ | 7,606,732 | $ | 6,981,511 | ||||||||||||||||||||||||||||||
Net interest income | $ | 295,881 | $ | 281,753 | $ | 262,182 | ||||||||||||||||||||||||||||||
Rate Analysis: | ||||||||||||||||||||||||||||||||||||
Interest income/earning assets | 4.38 | % | 4.23 | % | 4.15 | % | ||||||||||||||||||||||||||||||
Interest expense/earning assets | 0.40 | 0.27 | 0.14 | |||||||||||||||||||||||||||||||||
Net yield on earning assets | 3.98 | % | 3.96 | % | 4.01 | % | ||||||||||||||||||||||||||||||
(1) | Short-term investments are comprised of Fed Funds sold, interest bearing deposits in banks and interest bearing time deposits in banks. |
(2) | Average balances include unrealized gains and losses on available-for-sale securities. |
(3) | Computed on tax-equivalent basis assuming |
(4) | Nonaccrual loans are included in loans. |
20172019 was $91.02$108.43 million, an increase of $5.89$6.66 million, or 6.91%6.55%, as compared to 2016.2018. Increases in certain categories of noninterest income included (1) trust fees (1) real estate mortgage operations income of $4.06$2.99 million, (2) ATM, interchange and credit card fees of $1.78$1.33 million, (3) interest on loan recoveries of $1.15 million, (4) service charges on deposit accounts of $376 thousand, and (5) trust fees of $220 thousand when compared to 2018. The increase in real estate mortgage fees was a result of an increase in the volume of loans originated and the Company’s decision to move to mandatory delivery. The increase in ATM, interchange and credit card fees was primarily due to the continued growth in the number of debit cards issued. Interest on loan recoveries increased as a result of several larger loan recoveries in 2019. The increase in service charges on deposit accounts was primarily due to the continued growth in net new accounts. The increase in trust fees resulted from an increase in assets under management over the prior year; however, this was mostly offset by a decrease in income derived from oil and gas production activity when compared to 2018. The fair value of our trust assets managed, which are not reflected in our consolidated balance sheets, totaled $6.75 billion at December 31, 2019, as compared to $5.60 billion at December 31, 2018. Offsetting these increases was a decrease in net gains on sales of$1.03$2.25 million when compared to 2016.2017. The increase in trust fees resulted from an increase in assets under management over the prior year and higheran increase in oil and gas pricesproduction and lease fees for the majority of 2018 that increased related to trust fees by $364 thousand$2.61 million over 2016.2017. The fair value of our trust assets managed, which are not reflected in our consolidated balance
Noninterest income for 2016 was $85.13 million, an increase of $11.70 million, or 15.93%, as compared to 2015. Increases in certain categories of noninterest income included(1) real estate mortgage fees of $5.68 million, (2) ATM, interchange and credit card fees of $2.05 million, (3) service charges on deposit accounts of $1.22 million and (4) trust fees of $384 thousand when compared to 2015. The increase in real estate mortgage fees primarily resulted from a stronger mortgage market and the 4Trust asset purchase on June 1, 2015. The increases in ATM, interchange and credit card fees and service charges are primarily a result of increases in the number of net new accounts and debit cards boosted by the Conroe acquisition on July 31, 2015. The increase in trust fees resulted from an increase in assets under management over the prior year offsetting the effect of the decline in oil and gas prices that reduced related trust fees by $296 thousand in 2016 compared to 2015. The fair value of our trust assets managed, which are not reflected in our consolidated balance sheets, totaled $4.37 billion at December 31, 2016 as compared to $3.87 billion at December 31, 2015.
2017 | Increase (Decrease) | 2016 | Increase (Decrease) | 2015 | ||||||||||||||||
Trust fees | $ | 23,694 | $ | 4,058 | $ | 19,636 | $ | 384 | $ | 19,252 | ||||||||||
Service charges on deposit accounts | 19,416 | 1,030 | 18,386 | 1,215 | 17,171 | |||||||||||||||
ATM, interchange and credit card fees | 25,686 | 1,776 | 23,910 | 2,050 | 21,860 | |||||||||||||||
Real estate mortgage operations | 15,109 | (977 | ) | 16,086 | 5,677 | 10,409 | ||||||||||||||
Net gain on sale ofavailable-for-sale securities | 1,828 | 558 | 1,270 | 838 | 432 | |||||||||||||||
Net gain (loss) on sale of foreclosed assets | (50 | ) | (506 | ) | 456 | (82 | ) | 538 | ||||||||||||
Net gain (loss) on sale of assets | (396 | ) | (564 | ) | 168 | 988 | (820 | ) | ||||||||||||
Interest on loan recoveries | 1,128 | (984 | ) | 2,112 | 1,062 | 1,050 | ||||||||||||||
Other: | ||||||||||||||||||||
Check printing fees | 173 | (17 | ) | 190 | (40 | ) | 230 | |||||||||||||
Safe deposit rental fees | 529 | (2 | ) | 531 | 7 | 524 | ||||||||||||||
Credit life and debt protection fees | 617 | (2 | ) | 619 | (44 | ) | 663 | |||||||||||||
Brokerage commissions | 1,290 | 717 | 573 | (190 | ) | 763 | ||||||||||||||
Miscellaneous income | 1,993 | 798 | 1,195 | (165 | ) | 1,360 | ||||||||||||||
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|
| |||||||||||
Total other | 4,602 | 1,494 | 3,108 | (432 | ) | 3,540 | ||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||
Total Noninterest Income | $ | 91,017 | $ | 5,885 | $ | 85,132 | $ | 11,700 | $ | 73,432 | ||||||||||
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|
|
|
|
|
|
|
2019 | Increase (Decrease) | 2018 | Increase (Decrease) | 2017 | ||||||||||||||||
Trust fees | $ | 28,401 | $ | 220 | $ | 28,181 | $ | 4,487 | $ | 23,694 | ||||||||||
Service charges on deposit accounts | 22,039 | 376 | 21,663 | 2,247 | 19,416 | |||||||||||||||
ATM, interchange and credit card fees | 29,863 | 1,331 | 28,532 | 2,846 | 25,686 | |||||||||||||||
Real estate mortgage operations | 18,144 | 2,987 | 15,157 | 48 | 15,109 | |||||||||||||||
Net gain on sale of available-for-sale securities | 733 | (621 | ) | 1,354 | (474 | ) | 1,828 | |||||||||||||
Net gain (loss) on sale of foreclosed assets | 274 | 158 | 116 | 166 | (50 | ) | ||||||||||||||
Net gain (loss) on sale of assets | 319 | 466 | (147 | ) | 249 | (396 | ) | |||||||||||||
Interest on loan recoveries | 2,092 | 1,154 | 938 | (190 | ) | 1,128 | ||||||||||||||
Other: | ||||||||||||||||||||
Wire transfer fees | 1,012 | 110 | 902 | 390 | 512 | |||||||||||||||
Check printing fees | 211 | (5 | ) | 216 | 43 | 173 | ||||||||||||||
Safe deposit rental fees | 535 | (9 | ) | 544 | 15 | 529 | ||||||||||||||
Credit life and debt protection fees | 978 | 237 | 741 | 124 | 617 | |||||||||||||||
Brokerage commissions | 1,581 | (126 | ) | 1,707 | 417 | 1,290 | ||||||||||||||
Miscellaneous income | 2,246 | 386 | 1,860 | 379 | 1,481 | |||||||||||||||
Total other | 6,563 | 593 | 5,970 | 1,368 | 4,602 | |||||||||||||||
Total Noninterest Income | $ | 108,428 | $ | 6,664 | $ | 101,764 | $ | 10,747 | $ | 91,017 | ||||||||||
2017.
Kingwood acquisition.
Salaries and employee benefits for 2016 totaled $90.74 million, an increase of $9.74 million, or 12.02%, as compared to 2015. The increase was primarily driven by the addition of employees from the Conroe acquisition and the 4Trust asset purchase, annual merit pay increases and increases in healthcare claims. Offsetting these increases was a reduction in profit sharing and officer bonus expenses in 2016 when compared to 2015, which was caused by less netbefore income growth in 2016 when compared to the prior year.
All other categories of noninterest expense for 2016 totaled $75.09 million, an increase of $6.63 million, or 9.68%, as compared to 2015. The increase in noninterest expense was largely attributable to increases in equipment expense of $1.26 million, largelytax, resulting from the Company’s acquisitionpartial settlement of Conroe. Telephoneits frozen defined benefit pension plan. Other notable increases in noninterest expense included a $1.83 million increase in ATM, interchange and credit card expenses increased $1.05 million due to costs to improve our technology infrastructure and professional and service fees increased $2.05 million due primarily to outsourcinga $652 thousand increase in net occupancy expense. In addition, included in other miscellaneous expenses for certain2018 were technology providers, which offset salary costs. Offsetting these increases in 2016 were a decrease of $473 thousand in FDIC insurance duecontract termination and conversion related costs totaling $1.75 million related to the lower rate charged by the FDIC beginning in the third quarter of 2016.
Kingwood acquisition.
2017 | Increase (Decrease) | 2016 | Increase (Decrease) | 2015 | ||||||||||||||||
Salaries | $ | 72,132 | $ | 2,135 | $ | 69,997 | $ | 7,294 | $ | 62,703 | ||||||||||
Medical | 8,585 | (174 | ) | 8,759 | 3,066 | 5,693 | ||||||||||||||
Profit sharing | 4,735 | 1,514 | 3,221 | (2,234 | ) | 5,455 | ||||||||||||||
Pension | 127 | (232 | ) | 359 | 342 | 17 | ||||||||||||||
401(k) match expense | 2,392 | 61 | 2,331 | 288 | 2,043 | |||||||||||||||
Payroll taxes | 5,009 | 200 | 4,809 | 427 | 4,382 | |||||||||||||||
Stock option expense | 1,745 | 863 | 882 | 238 | 644 | |||||||||||||||
Restricted stock expense | 562 | 181 | 381 | 319 | 62 | |||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Total salaries and employee benefits | 95,287 | 4,548 | 90,739 | 9,740 | 80,999 | |||||||||||||||
Loss from partial settlement of pension plan | — | (267 | ) | 267 | 267 | — | ||||||||||||||
Net occupancy expense | 10,521 | 101 | 10,420 | 106 | 10,314 | |||||||||||||||
Equipment expense | 13,765 | 286 | 13,479 | 1,257 | 12,222 | |||||||||||||||
FDIC insurance premiums | 2,217 | (463 | ) | 2,680 | (473 | ) | 3,153 | |||||||||||||
ATM, interchange and credit card expenses | 7,452 | 221 | 7,231 | 847 | 6,384 | |||||||||||||||
Professional and service fees | 8,063 | 1,186 | 6,877 | 2,046 | 4,831 | |||||||||||||||
Printing, stationery and supplies | 1,989 | (104 | ) | 2,093 | (185 | ) | 2,278 | |||||||||||||
Amortization of intangible assets | 613 | (125 | ) | 738 | 177 | 561 | ||||||||||||||
Other: | ||||||||||||||||||||
Data processing fees | 1,119 | 656 | 463 | 63 | 400 | |||||||||||||||
Postage | 1,663 | (1 | ) | 1,664 | (41 | ) | 1,705 | |||||||||||||
Advertising | 3,515 | (21 | ) | 3,536 | 353 | 3,183 | ||||||||||||||
Correspondent bank service charges | 868 | (96 | ) | 964 | 39 | 925 | ||||||||||||||
Telephone | 3,108 | (145 | ) | 3,253 | 1,053 | 2,200 | ||||||||||||||
Public relations and business development | 2,819 | 71 | 2,748 | 48 | 2,700 | |||||||||||||||
Directors’ fees | 1,553 | 233 | 1,320 | 218 | 1,102 | |||||||||||||||
Audit and accounting fees | 1,629 | (83 | ) | 1,712 | 55 | 1,657 | ||||||||||||||
Legal fees | 1,780 | (316 | ) | 2,096 | 95 | 2,001 | ||||||||||||||
Regulatory exam fees | 1,177 | 46 | 1,131 | 43 | 1,088 | |||||||||||||||
Travel | 1,210 | (32 | ) | 1,242 | 28 | 1,214 | ||||||||||||||
Courier expense | 879 | 31 | 848 | 39 | 809 | |||||||||||||||
Operational and other losses | 3,192 | 1,022 | 2,170 | 281 | 1,889 | |||||||||||||||
Other real estate | 188 | 6 | 182 | 58 | 124 | |||||||||||||||
Software amortization and expense | 3,294 | 1,288 | 2,006 | (116 | ) | 2,122 | ||||||||||||||
Other miscellaneous expense | 6,085 | 114 | 5,971 | 368 | 5,603 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total other | 34,079 | 2,773 | 31,306 | 2,584 | 28,722 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Noninterest Expense | $ | 173,986 | $ | 8,156 | $ | 165,830 | $ | 16,366 | $ | 149,464 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2019 | Increase (Decrease) | 2018 | Increase (Decrease) | 2017 | ||||||||||||||||
Salaries | $ | 84,281 | $ | 4,807 | $ | 79,474 | $ | 7,342 | $ | 72,132 | ||||||||||
Medical | 9,125 | 426 | 8,699 | 114 | 8,585 | |||||||||||||||
Profit sharing | 7,661 | 612 | 7,049 | 2,314 | 4,735 | |||||||||||||||
Pension | 351 | 529 | (178 | ) | (305 | ) | 127 | |||||||||||||
401(k) match expense | 2,759 | 171 | 2,588 | 196 | 2,392 | |||||||||||||||
Payroll taxes | 5,675 | 306 | 5,369 | 360 | 5,009 | |||||||||||||||
Stock option expense | 1,489 | (19 | ) | 1,508 | (237 | ) | 1,745 | |||||||||||||
Restricted stock expense | 995 | 315 | 680 | 118 | 562 | |||||||||||||||
Total salaries and employee benefits | 112,336 | 7,147 | 105,189 | 9,902 | 95,287 | |||||||||||||||
Cost related to termination of pension plan | 2,673 | 1,127 | 1,546 | 1,546 | — | |||||||||||||||
Net occupancy expense | 11,156 | (17 | ) | 11,173 | 652 | 10,521 | ||||||||||||||
Equipment expense | 9,052 | (1,066 | ) | 10,118 | (2 | ) | 10,120 | |||||||||||||
FDIC insurance premiums | 1,091 | (1,242 | ) | 2,333 | 116 | 2,217 | ||||||||||||||
ATM, interchange and credit card expenses | 9,856 | 574 | 9,282 | 1,830 | 7,452 | |||||||||||||||
Professional and service fees | 7,853 | (1,041 | ) | 8,894 | 831 | 8,063 | ||||||||||||||
Printing, stationery and supplies | 1,812 | (185 | ) | 1,997 | 8 | 1,989 | ||||||||||||||
Amortization of intangible assets | 1,016 | (256 | ) | 1,272 | 659 | 613 | ||||||||||||||
Other: | ||||||||||||||||||||
Data processing fees | 1,550 | 88 | 1,462 | 343 | 1,119 | |||||||||||||||
Postage | 1,547 | (202 | ) | 1,749 | 86 | 1,663 | ||||||||||||||
Advertising | 3,607 | 4 | 3,603 | 88 | 3,515 | |||||||||||||||
Correspondent bank service charges | 707 | (65 | ) | 772 | (96 | ) | 868 | |||||||||||||
Telephone | 3,678 | 116 | 3,562 | 454 | 3,108 | |||||||||||||||
Public relations and business development | 3,206 | 145 | 3,061 | 242 | 2,819 | |||||||||||||||
Directors’ fees | 1,972 | 227 | 1,745 | 192 | 1,553 | |||||||||||||||
Audit and accounting fees | 1,460 | (165 | ) | 1,625 | (4 | ) | 1,629 | |||||||||||||
Legal fees | 1,214 | 66 | 1,148 | (632 | ) | 1,780 | ||||||||||||||
Regulatory exam fees | 1,179 | (96 | ) | 1,275 | 98 | 1,177 | ||||||||||||||
Travel | 1,641 | 176 | 1,465 | 255 | 1,210 | |||||||||||||||
Courier expense | 858 | 28 | 830 | (49 | ) | 879 | ||||||||||||||
Operational and other losses | 1,879 | (309 | ) | 2,188 | (1,004 | ) | 3,192 | |||||||||||||
Other real estate | 202 | 73 | 129 | (59 | ) | 188 | ||||||||||||||
Software amortization and expense | 7,305 | 1,285 | 6,020 | (920 | ) | 6,940 | ||||||||||||||
Other miscellaneous expense | 7,671 | (575 | ) | 8,246 | 2,162 | 6,084 | ||||||||||||||
Total other | 39,676 | 796 | 38,880 | 1,156 | 37,724 | |||||||||||||||
Total Noninterest Expense | $ | 196,521 | $ | 5,837 | $ | 190,684 | $ | 16,698 | $ | 173,986 | ||||||||||
At December 31, 2018, final regulations for the Tax Cuts and Jobs Act were still pending; however, the Company updated its estimate of the impact to our deferred tax balances based on the proposed regulations issued to date and recorded an additional reduction of income tax expense for the year ended December 31, 2018 of $664 thousand. No additional adjustment amounts were recorded for the year ended December 31, 2019, and the Company does not anticipate significant revision will be necessary in the future.
December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Commercial | $ | 684,099 | $ | 674,410 | $ | 696,163 | $ | 639,954 | $ | 596,730 | ||||||||||
Agricultural | 94,543 | 84,021 | 102,351 | 105,694 | 75,928 | |||||||||||||||
Real estate | 2,302,998 | 2,189,844 | 2,136,233 | 1,822,854 | 1,678,514 | |||||||||||||||
Consumer | 403,929 | 409,032 | 382,303 | 360,686 | 333,113 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total loansheld-for-investment | $ | 3,485,569 | $ | 3,357,307 | $ | 3,317,050 | $ | 2,929,188 | $ | 2,684,285 | ||||||||||
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|
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|
|
December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Commercial | $ | 856,326 | $ | 844,953 | $ | 684,099 | $ | 674,410 | $ | 696,163 | ||||||||||
Agricultural | 103,640 | 96,677 | 94,543 | 84,021 | 102,351 | |||||||||||||||
Real estate | 2,823,372 | 2,639,346 | 2,302,998 | 2,189,844 | 2,136,233 | |||||||||||||||
Consumer | 411,631 | 372,660 | 403,929 | 409,032 | 382,303 | |||||||||||||||
Total loans held-for-investment | $ | 4,194,969 | $ | 3,953,636 | $ | 3,485,569 | $ | 3,357,307 | $ | 3,317,050 | ||||||||||
fair value, and the remaining amount is valued under the fair value option.
the Company’s real estate portfolio are generally diverse in terms of type and geographic location within Texas. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry. Generally, real estate loans are owner-occupied which further reduces the Company’s risk.
One Year or less | After One Year Through Five Years | After Five Years | Total | |||||||||||||
Commercial and agricultural | $ | 348,129 | $ | 222,342 | $ | 208,171 | $ | 778,642 | ||||||||
Real estate — construction | 133,621 | 64,896 | 210,911 | 409,428 |
Maturities After One Year | ||||
Loans with fixed interest rates | $ | 414,091 | ||
Loans with floating or adjustable interest rates | 292,229 |
2019:
One Year or less | After One Year Through Five Years | After Five Years | Total | |||||||||||||
Commercial and agricultural | $ | 390,668 | $ | 320,303 | $ | 248,995 | $ | 959,966 | ||||||||
Real estate - construction | 241,748 | 60,565 | 143,743 | 446,056 |
Maturities After One Year | ||||
Loans with fixed interest rates | $ | 407,307 | ||
Loans with floating or adjustable interest rates | 366,299 |
2019.
Oil and gas related loans Oil and gas related loans as a % of total loans Classified oil and gas related loans Nonaccrual oil and gas related loans Net charge-offs for oil and gas related loans Allowance for oil and gas related loans as a % of oil and gas loans 2018:2017,2019, the Company’s exposure to the oil and gas industry was 1.72%2.84% of gross loans, or $60.16$119.79 million, down 23.34% fromcompared to 2.86% of gross loans, or $113.54 million at December 31, 2016year-end levels,2018. These oil and gas loans consisted (based on collateral supporting the loan) of (i) development and production loans of 2.72%11.26%, (ii) oil and gas field servicing loans of 7.51%15.10%, (iii) real estate loans of 47.28%39.37%, (iv) accounts receivable and inventory of 24.47%3.74%, (v) automobile of 23.53% and (v)(vi) other of 18.02%7.00%. These loans have experienced increased stress due to lowerwarranted additional scrutiny because of fluctuating oil and gas prices although such prices improved in 2017.prices. The Company instituted additional monitoring procedures for these loans and has classified and downgraded andcharged-off loans as appropriate. The following oil and gas information is as of and for the years ended December 31, 20172019 and 2016: December 31, 2017 2016 $ 60,164 $ 78,483 1.72 % 2.32 % $ 20,346 $ 32,518 1,414 4,092 50 1,145 7.90 % 6.28 %
December 31, | ||||||||
2019 | 2018 | |||||||
Oil and gas related loans | $ | 119,789 | $ | 113,536 | ||||
Oil and gas related loans as a % of total loans | 2.84 | % | 2.86 | % | ||||
Classified oil and gas related loans | $ | 7,041 | $ | 3,894 | ||||
Nonaccrual oil and gas related loans | $ | 481 | $ | 1,048 | ||||
Net charge-offs for oil and gas related loans | — | — | ||||||
Allowance for oil and gas related loans as a % of oil and gas loans | 2.54 | % | 3.23 | % |
At December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Nonaccrual loans* | $ | 17,670 | $ | 27,371 | $ | 28,601 | $ | 20,194 | $ | 27,926 | ||||||||||
Loans still accruing and past due 90 days or more | 288 | 284 | 341 | 261 | 133 | |||||||||||||||
Troubled debt restructured loans** | 627 | 701 | 199 | 226 | — | |||||||||||||||
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Nonperforming loans | 18,585 | 28,356 | 29,141 | 20,681 | 28,059 | |||||||||||||||
Foreclosed assets | 1,532 | 644 | 627 | 1,035 | 3,069 | |||||||||||||||
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| |||||||||||
Total nonperforming assets | $ | 20,117 | $ | 29,000 | $ | 29,768 | $ | 21,716 | $ | 31,128 | ||||||||||
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| |||||||||||
As a % of loans and foreclosed assets | 0.57 | % | 0.86 | % | 0.89 | % | 0.74 | % | 1.16 | % | ||||||||||
As a % of total assets | 0.28 | 0.43 | 0.45 | 0.37 | 0.60 |
At December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Nonaccrual loans* | $ | 24,582 | $ | 27,534 | $ | 17,670 | $ | 27,371 | $ | 28,601 | ||||||||||
Loans still accruing and past due 90 days or more | 153 | 1,008 | 288 | 284 | 341 | |||||||||||||||
Troubled debt restructured loans** | 26 | 513 | 627 | 701 | 199 | |||||||||||||||
Nonperforming loans | 24,761 | 29,055 | 18,585 | 28,356 | 29,141 | |||||||||||||||
Foreclosed assets | 1,009 | 577 | 1,532 | 644 | 627 | |||||||||||||||
Total nonperforming assets | $ | 25,770 | $ | 29,632 | $ | 20,117 | $ | 29,000 | $ | 29,768 | ||||||||||
As a % of loans and foreclosed assets | 0.61 | % | 0.75 | % | 0.57 | % | 0.86 | % | 0.89 | % | ||||||||||
As a % of total assets | 0.31 | 0.38 | 0.28 | 0.43 | 0.45 |
* | Includes $251 thousand, $827 thousand, $618 thousand, $1.26 million |
** | Troubled debt restructured loans of $4.79 million, $3.84 million, $4.63 million, $6.86 million non-accrual loans as of December 31, 2019, 2018, 2017, 2016 |
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Balance at January 1, | $ | 45,779 | $ | 41,877 | $ | 36,824 | $ | 33,900 | $ | 34,839 | ||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial | 3,018 | 6,990 | 3,734 | 583 | 1,283 | |||||||||||||||
Agricultural | 71 | 219 | 164 | 2 | 100 | |||||||||||||||
Real estate | 1,215 | 682 | 441 | 1,075 | 1,970 | |||||||||||||||
Consumer | 1,517 | 1,925 | 1,700 | 1,222 | 1,268 | |||||||||||||||
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Total charge-offs | 5,821 | 9,816 | 6,039 | 2,882 | 4,621 | |||||||||||||||
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Recoveries: | ||||||||||||||||||||
Commercial | 942 | 952 | 344 | 346 | 402 | |||||||||||||||
Agricultural | 33 | 25 | 55 | 18 | 39 | |||||||||||||||
Real estate | 192 | 2,021 | 558 | 505 | 239 | |||||||||||||||
Consumer | 501 | 508 | 450 | 472 | 337 | |||||||||||||||
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| |||||||||||
Total recoveries | 1,668 | 3,506 | 1,407 | 1,341 | 1,017 | |||||||||||||||
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Net charge-offs | 4,153 | 6,310 | 4,632 | 1,541 | 3,604 | |||||||||||||||
Transfer ofoff-balance sheet exposure to other liabilities | — | — | — | — | (1,088 | ) | ||||||||||||||
Provision for loan losses | 6,530 | 10,212 | 9,685 | 4,465 | 3,753 | |||||||||||||||
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| |||||||||||
Balance at December 31, | $ | 48,156 | $ | 45,779 | $ | 41,877 | $ | 36,824 | $ | 33,900 | ||||||||||
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Loans atyear-end | $ | 3,500,699 | $ | 3,384,205 | $ | 3,350,593 | $ | 2,937,991 | $ | 2,689,448 | ||||||||||
Average loans | 3,435,447 | 3,333,241 | 3,090,538 | 2,786,011 | 2,431,872 | |||||||||||||||
Net charge-offs/average loans | 0.12 | % | 0.19 | % | 0.15 | % | 0.06 | % | 0.15 | % | ||||||||||
Allowance for loanlosses/year-end loans* | 1.38 | 1.35 | 1.25 | 1.25 | 1.26 | |||||||||||||||
Allowance for loan losses/nonaccrual, past due 90 days still accruing and restructured loans | 259.11 | 161.44 | 143.70 | 178.06 | 120.82 |
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Balance at January 1, | $ | 51,202 | $ | 48,156 | $ | 45,779 | $ | 41,877 | $ | 36,824 | ||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial | 1,545 | 1,418 | 3,018 | 6,990 | 3,734 | |||||||||||||||
Agricultural | 319 | — | 71 | 219 | 164 | |||||||||||||||
Real estate | 1,335 | 1,479 | 1,215 | 682 | 441 | |||||||||||||||
Consumer | 927 | 1,550 | 1,517 | 1,925 | 1,700 | |||||||||||||||
Total charge-offs | 4,126 | 4,447 | 5,821 | 9,816 | 6,039 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial | 1,364 | 839 | 942 | 952 | 344 | |||||||||||||||
Agricultural | 158 | 15 | 33 | 25 | 55 | |||||||||||||||
Real estate | 404 | 462 | 192 | 2,021 | 558 | |||||||||||||||
Consumer | 532 | 512 | 501 | 508 | 450 | |||||||||||||||
Total recoveries | 2,458 | 1,828 | 1,668 | 3,506 | 1,407 | |||||||||||||||
Net charge-offs | 1,668 | 2,619 | 4,153 | 6,310 | 4,632 | |||||||||||||||
Provision for loan losses | 2,965 | 5,665 | 6,530 | 10,212 | 9,685 | |||||||||||||||
Balance at December 31, | $ | 52,499 | $ | 51,202 | $ | 48,156 | $ | 45,779 | $ | 41,877 | ||||||||||
Loans at year-end | $ | 4,223,197 | $ | 3,975,308 | $ | 3,500,699 | $ | 3,384,205 | $ | 3,350,593 | ||||||||||
Average loans | 4,074,667 | 3,828,040 | 3,435,447 | 3,333,241 | 3,090,538 | |||||||||||||||
Net charge-offs/average loans | 0.04 | % | 0.07 | % | 0.12 | % | 0.19 | % | 0.15 | % | ||||||||||
Allowance for loan losses/year-end loans* | 1.24 | 1.29 | 1.38 | 1.35 | 1.25 | |||||||||||||||
Allowance for loan losses/nonaccrual, past due 90 days still accruing and restructured loans | 212.02 | 176.22 | 259.11 | 161.44 | 143.70 |
* | Reflects the impact of loans acquired in the |
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Allocation Amount | Allocation Amount | Allocation Amount | Allocation Amount | Allocation Amount | ||||||||||||||||
Commercial | $ | 10,865 | $ | 11,707 | $ | 12,644 | $ | 7,990 | $ | 6,440 | ||||||||||
Agricultural | 1,305 | 1,101 | 1,191 | 527 | 383 | |||||||||||||||
Real estate | 29,896 | 26,864 | 24,375 | 26,657 | 24,940 | |||||||||||||||
Consumer | 6,090 | 6,107 | 3,667 | 1,650 | 2,137 | |||||||||||||||
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Total | $ | 48,156 | $ | 45,779 | $ | 41,877 | $ | 36,824 | $ | 33,900 | ||||||||||
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At December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Allocation Amount | Allocation Amount | Allocation Amount | Allocation Amount | Allocation Amount | ||||||||||||||||
Commercial | $ | 12,122 | $ | 11,948 | $ | 10,865 | $ | 11,707 | $ | 12,644 | ||||||||||
Agricultural | 1,206 | 1,446 | 1,305 | 1,101 | 1,191 | |||||||||||||||
Real estate | 33,974 | 32,342 | 29,896 | 26,864 | 24,375 | |||||||||||||||
Consumer | 5,197 | 5,466 | 6,090 | 6,107 | 3,667 | |||||||||||||||
Total | $ | 52,499 | $ | 51,202 | $ | 48,156 | $ | 45,779 | $ | 41,877 | ||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Commercial | 19.63 | % | 20.09 | % | 20.99 | % | 21.84 | % | 22.23 | % | ||||||||||
Agricultural | 2.71 | 2.50 | 3.09 | 3.61 | 2.83 | |||||||||||||||
Real estate | 66.07 | 65.23 | 64.40 | 62.23 | 62.53 | |||||||||||||||
Consumer | 11.59 | 12.18 | 11.52 | 12.32 | 12.41 |
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Commercial | 23.09 | % | 23.34 | % | 19.63 | % | 20.09 | % | 20.99 | % | ||||||||||
Agricultural | 2.30 | 2.82 | 2.71 | 2.50 | 3.09 | |||||||||||||||
Real estate | 64.71 | 63.17 | 66.07 | 65.23 | 64.40 | |||||||||||||||
Consumer | 9.90 | 10.67 | 11.59 | 12.18 | 11.52 |
2019.
Available-for-Sale andHeld-to-Maturity Securities
2018.
Maturing | ||||||||||||||||||||||||||||||||||||||||
One Year or Less | After One Year Through Five Years | After Five Years Through Ten Years | After Ten Years | Total | ||||||||||||||||||||||||||||||||||||
Available-for-Sale: | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||
Obligations of U.S. government sponsored enterprises and agencies | $ | 34,981 | 1.30 | % | $ | 25,349 | 1.51 | % | $ | — | — | % | $ | — | — | % | $ | 60,330 | 1.39 | % | ||||||||||||||||||||
Obligations of states and political subdivisions | 139,568 | 5.03 | 628,506 | 5.13 | 650,699 | 4.74 | 2,077 | 6.68 | 1,420,850 | 4.94 | ||||||||||||||||||||||||||||||
Corporate bonds and other securities | 10,998 | 2.96 | 237 | 1.15 | 224 | 2.64 | — | — | 11,459 | 2.92 | ||||||||||||||||||||||||||||||
Mortgage-backed securities | 55,430 | 1.66 | 1,027,515 | 2.31 | 459,286 | 2.69 | 52,603 | 2.93 | 1,594,834 | 2.42 | ||||||||||||||||||||||||||||||
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| |||||||||||||||||||||
Total | $ | 240,977 | 3.62 | % | $ | 1,681,607 | 3.35 | % | $ | 1,110,209 | 3.89 | % | $ | 54,680 | 3.08 | % | $ | 3,087,473 | 3.56 | % | ||||||||||||||||||||
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|
|
Amounts forheld-to-maturity securities are not included herein due to insignificance.
Maturing | ||||||||||||||||||||||||||||||||||||||||
One Year or Less | After One Year Through Five Years | After Five Years Through Ten Years | After Ten Years | Total | ||||||||||||||||||||||||||||||||||||
Available-for-Sale: | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||
U. S. Treasury securities | $ | 10,019 | 2.52 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 10,019 | 2.52 | % | ||||||||||||||||||||
Obligations of states and political subdivisions | 137,948 | 4.92 | 510,553 | 4.23 | 638,239 | 3.61 | 2,243 | 5.66 | 1,288,983 | 4.00 | ||||||||||||||||||||||||||||||
Corporate bonds and other securities | 4,478 | 2.40 | 230 | 2.65 | — | — | — | — | 4,708 | 2.41 | ||||||||||||||||||||||||||||||
Mortgage-backed securities | 46,651 | 2.03 | 1,678,066 | 2.67 | 321,287 | 2.77 | 63,603 | 2.72 | 2,109,607 | 2.67 | ||||||||||||||||||||||||||||||
Total | $ | 199,096 | 4.06 | % | $ | 2,188,849 | 3.03 | % | $ | 959,526 | 3.33 | % | $ | 65,846 | 2.82 | % | $ | 3,413,317 | 3.17 | % | ||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||||
Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | |||||||||||||||||||
Noninterest-bearing deposits | $ | 1,843,973 | — | $ | 1,666,598 | — | $ | 1,634,669 | — | |||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||
Interest-bearing checking | 1,902,699 | 0.27 | % | 1,713,498 | 0.12 | % | 1,622,331 | 0.09 | % | |||||||||||||||
Savings and money market accounts | 1,401,804 | 0.13 | 1,195,671 | 0.09 | 1,021,222 | 0.05 | ||||||||||||||||||
Time deposits under $100,000 | 267,754 | 0.13 | 237,419 | 0.18 | 261,255 | 0.20 | ||||||||||||||||||
Time deposits of $100,000 or more | 211,703 | 0.40 | 322,417 | 0.31 | 367,342 | 0.31 | ||||||||||||||||||
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|
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|
|
|
|
|
|
|
| |||||||||||||
Total interest-bearing deposits | 3,783,960 | 0.22 | % | 3,469,005 | 0.13 | % | 3,272,150 | 0.11 | % | |||||||||||||||
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|
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|
|
|
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|
|
| |||||||||||||
Total average deposits | $ | 5,627,933 | $ | 5,135,603 | $ | 4,906,819 | ||||||||||||||||||
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|
|
|
|
As of December 31, 2017 | ||||
Three months or less | $ | 81,918 | ||
Over three through six months | 64,396 | |||
Over six through twelve months | 70,470 | |||
Over twelve months | 33,670 | |||
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| |||
Total time deposits of $100,000 or more | $ | 250,454 | ||
|
|
2019 | 2018 | 2017 | ||||||||||||||||||||||
Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | |||||||||||||||||||
Noninterest-bearing deposits | $ | 2,137,089 | — | $ | 2,124,005 | — | $ | 1,843,973 | — | |||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||
Interest-bearing checking | 2,097,109 | 0.68 | % | 2,025,810 | 0.53 | % | 1,902,699 | 0.27 | % | |||||||||||||||
Savings and money market accounts | 1,679,168 | 0.54 | % | 1,558,889 | 0.28 | 1,401,804 | 0.13 | |||||||||||||||||
Time deposits under $100,000 | 186,709 | 0.70 | % | 204,929 | 0.25 | 267,754 | 0.13 | |||||||||||||||||
Time deposits of $100,000 or more | 245,680 | 1.04 | % | 262,986 | 0.48 | 211,703 | 0.40 | |||||||||||||||||
Total interest-bearing deposits | 4,208,666 | 0.64 | % | 4,052,614 | 0.42 | % | 3,783,960 | 0.22 | % | |||||||||||||||
Total average deposits | $ | 6,345,755 | $ | 6,176,619 | $ | 5,627,933 | ||||||||||||||||||
As of December 31, 2019 | ||||
Three months or less | $ | 88,562 | ||
Over three through six months | 51,351 | |||
Over six through twelve months | 64,700 | |||
Over twelve months | 33,672 | |||
Total time deposits of $100,000 or more | $ | 238,285 | ||
2018.
We performed a preliminary assessment using the regulatory capital estimation tool made available by the OCC and believe the Company and Bank are prepared to meet the new requirements upon full implementation of the Basel III rules that will be effective December 31, 2019.
instantaneous and sustained across the yield curve regardless of duration of pricing characteristics on specific assets or liabilities. Also, this analysis does not contemplate any actions that we might undertake in response to changes in market interest rates. We believe these estimates are not necessarily indicative of what actually could occur in the event of immediate interest rate increases or decreases of this magnitude. As interest-bearing assets and liabilities
2018.
Payment Due by Period | ||||||||||||||||||||
Total Amounts | Less than 1 year | More than 1 year but less than 3 years | More than 3 year but less than 5 years | Over 5 years | ||||||||||||||||
Deposits with stated maturity dates | $ | 451,255 | $ | 384,668 | $ | 52,638 | $ | 13,949 | $ | — | ||||||||||
Pension obligation | 10,567 | 1,064 | 2,054 | 2,140 | 5,309 | |||||||||||||||
Operating leases | 909 | 385 | 476 | 48 | — | |||||||||||||||
Outsourcing service contracts | 3,610 | 2,077 | 1,533 | — | — | |||||||||||||||
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|
|
|
|
|
|
| |||||||||||
Total Contractual Obligations | $ | 466,341 | $ | 388,194 | $ | 56,701 | $ | 16,137 | $ | 5,309 | ||||||||||
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|
Payment Due by Period | ||||||||||||||||||||
Total Amounts | Less than 1 year | More than 1 year but less than 3 years | More than 3 years but less than 5 years | Over 5 years | ||||||||||||||||
Deposits with stated maturity dates | $ | 420,013 | $ | 351,818 | $ | 53,196 | $ | 14,999 | $ | — | ||||||||||
Operating leases | 1,101 | 557 | 487 | 57 | — | |||||||||||||||
Outsourcing service contracts | 14,782 | 6,039 | 6,097 | 2,646 | — | |||||||||||||||
Total Contractual Obligations | $ | 435,896 | $ | 358,414 | $ | 59,780 | $ | 17,702 | $ | — | ||||||||||
Total Notional Amounts Committed | Less than 1 year | More than 1 year but less than 3 years | More than 3 year but less than 5 years | Over 5 years | ||||||||||||||||
Unfunded lines of credit | $ | 534,468 | $ | 492,138 | $ | 24,394 | $ | 13,327 | $ | 4,609 | ||||||||||
Unfunded commitments to extend credit | 244,658 | 147,735 | 18,401 | 11,781 | 66,741 | |||||||||||||||
Standby letters of credit | 28,858 | 22,245 | 6,613 | — | — | |||||||||||||||
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|
|
| |||||||||||
Total Commercial Commitments | $ | 807,984 | $ | 662,118 | $ | 49,408 | $ | 25,108 | $ | 71,350 | ||||||||||
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|
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Total Notional Amounts Committed | Less than 1 year | More than 1 year but less than 3 years | More than 3 years but less than 5 years | Over 5 years | ||||||||||||||||
Unfunded lines of credit | $ | 743,595 | $ | 258,655 | $ | 399,740 | $ | 20,981 | $ | 64,219 | ||||||||||
Unfunded commitments to extend credit | 374,158 | 177,064 | 33,311 | 10,408 | 153,375 | |||||||||||||||
Standby letters of credit | 38,364 | 32,240 | 5,614 | 480 | 30 | |||||||||||||||
Total Commercial Commitments | $ | 1,156,117 | $ | 467,959 | $ | 438,665 | $ | 31,869 | $ | 217,624 | ||||||||||
2018.
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. | FINANCIAL STATEMENTS ANDSUPPLEMENTARY DATA |
2017 | ||||||||||||||||
4th | 3rd | 2nd | 1st | |||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||
Summary Income Statement Information: | ||||||||||||||||
Interest income | $ | 63,456 | $ | 62,554 | $ | 61,182 | $ | 58,783 | ||||||||
Interest expense | 2,562 | 2,866 | 2,097 | 1,763 | ||||||||||||
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| |||||||||
Net interest income | 60,894 | 59,688 | 59,085 | 57,020 | ||||||||||||
Provision for loan losses | 1,440 | 1,415 | 1,725 | 1,950 | ||||||||||||
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| |||||||||
Net interest income after provision for loan losses | 59,454 | 58,273 | 57,360 | 55,070 | ||||||||||||
Noninterest income | 22,298 | 23,185 | 22,423 | 21,283 | ||||||||||||
Net gain on securities transactions | 3 | 1,075 | 747 | 3 | ||||||||||||
Noninterest expense | 44,095 | 43,964 | 43,775 | 42,152 | ||||||||||||
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|
|
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| |||||||||
Earnings before income taxes | 37,660 | 38,569 | 36,755 | 34,204 | ||||||||||||
Income tax expense | 1,517 | 9,195 | 8,500 | 7,605 | ||||||||||||
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|
|
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| |||||||||
Net earnings | $ | 36,143 | $ | 29,374 | $ | 28,255 | $ | 26,599 | ||||||||
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Per Share Data: | ||||||||||||||||
Earnings per share, basic | $ | 0.55 | $ | 0.44 | $ | 0.43 | $ | 0.40 | ||||||||
Earnings per share, assuming dilution | 0.54 | 0.44 | 0.43 | 0.40 | ||||||||||||
Cash dividends declared | 0.19 | 0.19 | 0.19 | 0.18 | ||||||||||||
Book value atperiod-end | 13.93 | 13.69 | 13.41 | 12.99 | ||||||||||||
Common stock sales price: | ||||||||||||||||
High | $ | 48.85 | $ | 46.00 | $ | 44.80 | $ | 46.45 | ||||||||
Low | 43.05 | 37.31 | 36.85 | 37.55 | ||||||||||||
Close | 45.05 | 45.20 | 44.20 | 40.10 |
2019 | ||||||||||||||||
4 th | 3 rd | 2 nd | 1 st | |||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||
Summary Income Statement Information: | ||||||||||||||||
Interest income | $ | 82,123 | $ | 80,591 | $ | 79,576 | $ | 76,901 | ||||||||
Interest expense | 6,801 | 7,953 | 7,961 | 7,387 | ||||||||||||
Net interest income | 75,322 | 72,638 | 71,615 | 69,514 | ||||||||||||
Provision for loan losses | 950 | 450 | 600 | 965 | ||||||||||||
Net interest income after provision for loan losses | 74,372 | 72,188 | 71,015 | 68,549 | ||||||||||||
Noninterest income | 27,342 | 28,617 | 27,300 | 24,437 | ||||||||||||
Net gain on securities transactions | 5 | 52 | 676 | — | ||||||||||||
Noninterest expense | 51,938 | 48,910 | 48,304 | 47,367 | ||||||||||||
Earnings before income taxes | 49,781 | 51,947 | 50,687 | 45,619 | ||||||||||||
Income tax expense | 8,393 | 8,867 | 8,594 | 7,367 | ||||||||||||
Net earnings | $ | 41,388 | $ | 43,080 | $ | 42,093 | $ | 38,252 | ||||||||
Per Share Data: | ||||||||||||||||
Earnings per share, basic | $ | 0.30 | $ | 0.32 | $ | 0.31 | $ | 0.28 | ||||||||
Earnings per share, assuming dilution | 0.30 | 0.32 | 0.31 | 0.28 | ||||||||||||
Cash dividends declared | 0.12 | 0.12 | 0.12 | 0.11 | ||||||||||||
Book value at period-end | 9.03 | 8.87 | 8.58 | 8.16 | ||||||||||||
Common stock sales price: | ||||||||||||||||
High | $ | 36.45 | $ | 33.97 | $ | 31.54 | $ | 32.65 | ||||||||
Low | 32.01 | 29.50 | 28.00 | 27.13 | ||||||||||||
Close | 35.10 | 33.33 | 30.79 | 28.89 |
2016 | ||||||||||||||||
4th | 3rd | 2nd | 1st | |||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||
Summary Income Statement Information: | ||||||||||||||||
Interest income | $ | 57,979 | $ | 58,093 | $ | 57,881 | $ | 58,335 | ||||||||
Interest expense | 1,443 | 1,366 | 1,330 | 1,312 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income | 56,536 | 56,727 | 56,551 | 57,023 | ||||||||||||
Provision for loan losses | 1,993 | 3,833 | 2,058 | 2,328 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income after provision for loan losses | 54,543 | 52,894 | 54,493 | 54,695 | ||||||||||||
Noninterest income | 21,604 | 21,913 | 20,526 | 19,819 | ||||||||||||
Net gain (loss) on securities transactions | 117 | 239 | 912 | 2 | ||||||||||||
Noninterest expense | 41,990 | 42,003 | 40,756 | 41,081 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings before income taxes | 34,274 | 33,043 | 35,175 | 33,435 | ||||||||||||
Income tax expense | 7,608 | 7,440 | 8,366 | 7,739 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net earnings | $ | 26,666 | $ | 25,603 | $ | 26,809 | $ | 25,696 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Per Share Data: | ||||||||||||||||
Earnings per share, basic | $ | 0.40 | $ | 0.39 | $ | 0.41 | $ | 0.39 | ||||||||
Earnings per share, assuming dilution | 0.40 | 0.39 | 0.41 | 0.39 | ||||||||||||
Cash dividends declared | 0.18 | 0.18 | 0.18 | 0.16 | ||||||||||||
Book value atperiod-end | 12.68 | 13.14 | 13.11 | 12.70 | ||||||||||||
Common stock sales price: | ||||||||||||||||
High | $ | 46.70 | $ | 37.06 | $ | 34.50 | $ | 30.75 | ||||||||
Low | 35.05 | 30.95 | 27.72 | 24.12 | ||||||||||||
Close | 45.20 | 36.44 | 32.79 | 29.58 |
2018 | ||||||||||||||||
4 th | 3 rd | 2 nd | 1 st | |||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||
Summary Income Statement Information: | ||||||||||||||||
Interest income | $ | 76,481 | $ | 74,049 | $ | 72,078 | $ | 69,082 | ||||||||
Interest expense | 6,207 | 4,623 | 4,467 | 3,633 | ||||||||||||
Net interest income | 70,274 | 69,426 | 67,611 | 65,449 | ||||||||||||
Provision for loan losses | 1,800 | 1,450 | 1,105 | 1,310 | ||||||||||||
Net interest income after provision for loan losses | 68,474 | 67,976 | 66,506 | 64,139 | ||||||||||||
Noninterest income | 24,789 | 26,997 | 25,421 | 23,202 | ||||||||||||
Net gain on securities transactions | 8 | 58 | 67 | 1,221 | ||||||||||||
Noninterest expense | 48,235 | 47,506 | 47,144 | 47,798 | ||||||||||||
Earnings before income taxes | 45,036 | 47,525 | 44,850 | 40,764 | ||||||||||||
Income tax expense | 6,599 | 7,475 | 7,217 | 6,245 | ||||||||||||
Net earnings | $ | 38,437 | $ | 40,050 | $ | 37,633 | $ | 34,519 | ||||||||
Per Share Data: | ||||||||||||||||
Earnings per share, basic | $ | 0.28 | $ | 0.30 | $ | 0.28 | $ | 0.26 | ||||||||
Earnings per share, assuming dilution | 0.28 | 0.29 | 0.28 | 0.25 | ||||||||||||
Cash dividends declared | 0.11 | 0.11 | 0.11 | 0.10 | ||||||||||||
Book value at period-end | 7.77 | 7.35 | 7.28 | 7.17 | ||||||||||||
Common stock sales price: | ||||||||||||||||
High | $ | 33.42 | $ | 30.93 | $ | 28.18 | $ | 24.80 | ||||||||
Low | 26.73 | 25.28 | 27.53 | 22.03 | ||||||||||||
Close | 28.85 | 29.55 | 25.45 | 23.15 |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
due to error or fraud may occur and not be detected. Our principal executive officer and principal financial officer have concluded, based on our evaluation of our disclosure controls and procedures, that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2017.
2019.
REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
2019.
and Subsidiaries
ITEM 9B. | OTHER INFORMATION |
None.
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Number of Securities To be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Far Left Column) | ||||||||||
Equity compensation plans approved by security holders | 1,325,965 | $ | 33.01 | 2,267,193 | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | 1,325,965 | $ | 33.01 | 2,267,193 | ||||||||
|
|
|
|
|
|
2019.
Number of Securities To be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Far Left Column) | ||||||||||
Equity compensation plans approved by security holders | 2,138,196 | $ | 20.12 | 4,220,767 | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 2,138,196 | $ | 20.12 | 4,220,767 |
ITEM 13. | CERTAIN RELATIONSHIPS ANDRELATED TRANSACTIONS, ANDDIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
2019.
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
(a) | The following documents are filed as part of this report: |
(1) | Financial Statements: |
2018
2017
2017
2017
2017
(2) | Financial Statement Schedules: |
(3) | Exhibits: |
The information required by this Item 15(a)(3) is set forth in the Exhibit Index immediately following our signature pages. The exhibits listed herein will be furnished upon written request to J. Bruce Hildebrand, Executive Vice President, First Financial Bankshares, Inc., 400 Pine Street, Abilene, Texas 79601, and payment of a reasonable fee that will be limited to our reasonable expense in furnishing such exhibits.
| ||||||
2.1 | — | |||||
| ||||||
2.2 | ||||||
3.1 | — | |||||
| ||||||
3.2 | — | |||||
| ||||||
3.3 | — | |||||
4.1 | — | |||||
| ||||||
4.2 | — | |||||
10.1 | — | |||||
| ||||||
10.2 | — | |||||
| ||||||
10.3 | — | |||||
| ||||||
10.4 | — | |||||
| ||||||
10.5 | — | |||||
| ||||||
10.6 | ||||||
10.7 | — | |||||
| ||||||
10.8 | — | |||||
| ||||||
21.1 | — | |||||
| ||||||
23.1 | — | |||||
| ||||||
24.1 | — | |||||
| ||||||
31.1 | — | |||||
| ||||||
31.2 | — | |||||
| ||||||
32.1 | — | |||||
| ||||||
32.2 | — | |||||
101.INS | — | XBRL Instance Document. – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL Document.* | ||||
101.SCH | — | XBRL Taxonomy Extension Schema Document.* | ||||
101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document.* | ||||
101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document.* | ||||
101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document.* | ||||
101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document.* |
* | Filed herewith. |
+ | Furnished herewith. This Exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section, and shall not be deemed to be incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. |
++ | Management contract or compensatory plan on arrangement. |
ITEM 16.
FIRST FINANCIAL BANKSHARES, INC. | ||||||
Date: February | By: | /s/ F. | ||||
F. SCOTT DUESER | ||||||
Chairman of the Board, Director, President and Chief Executive Officer | ||||||
(Principal Executive Officer) |
|
|
| ||
Name | Title | Date | ||
/s/ F. Scott Dueser F. Scott Dueser | Chairman of the Board, Director, President, and Chief Executive Officer (Principal Executive Officer) | February | ||
/s/ J. Bruce Hildebrand J. Bruce Hildebrand | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | February | ||
/s/ April K. Anthony April K. Anthony | Director | February | ||
| ||||
/s/ Vianei Lopez Braun Vianei Lopez Braun | Director | February 14, 2020 | ||
/s/ Tucker S. Bridwell Tucker S. Bridwell | Director | February | ||
|
/s/ David Copeland David Copeland |
Director |
February 14, 2020 |
| ||||
Name | Title | Date | ||
| ||||
/s/ Mike Denny Mike Denny | Director | February 14, 2020 | ||
/s/ Murray Edwards Murray Edwards | Director | February 14, 2020 | ||
/s/ Ron Giddiens Ron Giddiens | Director | February 14, 2020 | ||
/s/ Tim Lancaster Tim Lancaster | Director | February 14, 2020 | ||
/s/ Kade L. Matthews Kade L. Matthews | Director | February | ||
/s/ Robert Nickles Robert Nickles | Director | February 14, 2020 | ||
/s/ Ross H. Smith, Jr. Ross H. Smith, Jr. | Director | February | ||
| ||||
/s/ Johnny Trotter Johnny Trotter | Director | February |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
and Subsidiaries
Allowance for Loan Losses | ||
Description of the Matter | The Company’s loan portfolio totaled $4.2 billion as of December 31, 2019, and the allowance for loan losses (ALL) was $52.5 million. As discussed in Note 1 and Note 3 to the consolidated financial statements, the ALL is an amount which represents management’s best estimate of probable losses that are inherent in the Company’s loan portfolio as of the balance sheet date. The ALL is comprised of specific reserves determined based on probable losses on specific classified loans, a historical valuation reserve component that considers historical loss rates and estimated loss emergence periods, and qualitative reserves. Management applies judgment in estimating the ALL and, in particular, in identifying and quantifying qualitative reserves included within the ALL. The qualitative reserves represent additional losses inherent in the loan portfolio that are not reflected in the historical loss rates and are based upon general economic conditions and other qualitative risk factors both internal and external to the Company, such as changes in trends in volume and terms of loans and changes in credit concentrations. Auditing management’s estimate of the allowance for loan losses involved a high degree of subjectivity due to the qualitative reserves included in the ALL. Management’s identification and measurement of the qualitative reserves is highly judgmental and could have a significant effect on the ALL. |
How We Addressed the Matter in Our Audit | We obtained an understanding of the Company’s process for establishing the allowance for loan losses, including the qualitative reserves included in the ALL. We evaluated the design and tested the operating effectiveness of the controls and governance over the appropriateness of the qualitative reserve methodology, including the identification and the assessment for the need for qualitative reserves, the reliability and accuracy of data used to estimate the various components of the qualitative reserves, and management’s review and approval of the qualitative reserves. To test the qualitative reserves, we evaluated the identification and measurement of the qualitative reserves, including the basis for concluding the qualitative reserves were warranted when considering historical loss rates utilized in the historical valuation reserve, tested the completeness and accuracy of data used by the Company to estimate the qualitative reserves, recalculated the analyses used by management to determine the qualitative reserves, and analyzed the changes in assumptions and components of the qualitative reserves relative to changes in the Company’s loan portfolio. For example, we evaluated the data and information utilized by management to estimate the qualitative reserves by independently obtaining and comparing such data and information to historical loan data and third-party macroeconomic data to assess the appropriateness of the information and to consider whether new or contradictory information existed. Additionally, we evaluated the Company’s analysis of the overall ALL amount, inclusive of the qualitative reserves, giving consideration to the Company’s loan portfolio, economic trends, and historical loss factors. |
/s/ Ernst & Young LLP
14, 2020
2018
ASSETS | 2017 | 2016 | ||||||
CASH AND DUE FROM BANKS | $ | 209,583 | $ | 204,782 | ||||
FEDERAL FUNDS SOLD | — | 3,130 | ||||||
INTEREST-BEARING DEPOSITS IN BANKS | 162,764 | 48,574 | ||||||
|
|
|
| |||||
Total cash and cash equivalents | 372,347 | 256,486 | ||||||
INTEREST-BEARING TIME DEPOSITS IN BANKS | 1,458 | 1,707 | ||||||
SECURITIESAVAILABLE-FOR-SALE, at fair value | 3,087,473 | 2,860,837 | ||||||
SECURITIESHELD-TO-MATURITY (fair value of $- and $124 at December 31, 2017 and 2016, respectively) | — | 121 | ||||||
LOANS: | ||||||||
Held for investment | 3,485,569 | 3,357,307 | ||||||
Less — allowance for loan losses | (48,156 | ) | (45,779 | ) | ||||
|
|
|
| |||||
Net loans held for investment | 3,437,413 | 3,311,528 | ||||||
Held for sale | 15,130 | 26,898 | ||||||
|
|
|
| |||||
Net loans | 3,452,543 | 3,338,426 | ||||||
BANK PREMISES AND EQUIPMENT, net | 124,026 | 122,685 | ||||||
INTANGIBLE ASSETS | 141,143 | 143,603 | ||||||
OTHER ASSETS | 75,725 | 86,066 | ||||||
|
|
|
| |||||
Total assets | $ | 7,254,715 | $ | 6,809,931 | ||||
|
|
|
| |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
NONINTEREST-BEARING DEPOSITS | $ | 2,041,650 | $ | 1,717,722 | ||||
INTEREST-BEARING DEPOSITS | 3,921,311 | 3,760,817 | ||||||
|
|
|
| |||||
Total deposits | 5,962,961 | 5,478,539 | ||||||
DIVIDENDS PAYABLE | 12,589 | 11,897 | ||||||
BORROWINGS | 331,000 | 445,770 | ||||||
OTHER LIABILITIES | 25,397 | 35,840 | ||||||
|
|
|
| |||||
Total liabilities | 6,331,947 | 5,972,046 | ||||||
|
|
|
| |||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS’ EQUITY: | ||||||||
Common stock — $0.01 par value; authorized 120,000,000 shares; 66,260,444 and 66,094,695 shares issued at December 31, 2017 and 2016, respectively | 663 | 661 | ||||||
Capital surplus | 378,062 | 372,245 | ||||||
Retained earnings | 517,257 | 446,534 | ||||||
Treasury stock (shares at cost: 495,964 and 507,409 at December 31, 2017 and 2016, respectively) | (7,148 | ) | (6,671 | ) | ||||
Deferred Compensation | 7,148 | 6,671 | ||||||
Accumulated other comprehensive earnings | 26,786 | 18,445 | ||||||
|
|
|
| |||||
Total shareholders’ equity | 922,768 | 837,885 | ||||||
|
|
|
| |||||
Total liabilities and shareholders’ equity | $ | 7,254,715 | $ | 6,809,931 | ||||
|
|
|
|
2019 | 2018 | |||||||
ASSETS | ||||||||
CASH AND DUE FROM BANKS | $ | 231,534 | $ | 207,835 | ||||
FEDERAL FUNDS SOLD | 3,150 | — | ||||||
INTEREST-BEARING DEPOSITS IN BANKS | 47,920 | 40,812 | ||||||
Total cash and cash equivalents | 282,604 | 248,647 | ||||||
INTEREST-BEARING TIME DEPOSITS IN BANKS | — | 1,458 | ||||||
SECURITIES AVAILABLE-FOR-SALE, at fair value | 3,413,317 | 3,158,777 | ||||||
LOANS: | ||||||||
Held-for-investment | 4,194,969 | 3,953,636 | ||||||
Less – allowance for loan losses | (52,499 | ) | (51,202 | ) | ||||
Net loans held for investment | 4,142,470 | 3,902,434 | ||||||
Held-for-sale ($23,076 and $19,185 at fair value option at December 31, 2019 and December 31, 2018) | 28,228 | 21,672 | ||||||
Net loans | 4,170,698 | 3,924,106 | ||||||
BANK PREMISES AND EQUIPMENT, net | 131,022 | 133,421 | ||||||
INTANGIBLE ASSETS | 173,667 | 174,683 | ||||||
OTHER ASSETS | 90,919 | 90,762 | ||||||
Total assets | $ | 8,262,227 | $ | 7,731,854 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
NONINTEREST-BEARING DEPOSITS | $ | 2,065,128 | $ | 2,116,107 | ||||
INTEREST-BEARING DEPOSITS | 4,538,678 | 4,064,282 | ||||||
Total deposits | 6,603,806 | 6,180,389 | ||||||
DIVIDENDS PAYABLE | 16,306 | 14,227 | ||||||
BORROWINGS | 381,356 | 468,706 | ||||||
OTHER LIABILITIES | 33,562 | 15,237 | ||||||
Total liabilities | 7,035,030 | 6,678,559 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS’ EQUITY: | ||||||||
Common stock - $0.01 par value; authorized 200,000,000 shares; 135,891,755 and 67,753,133 shares issued at December 31, 2019 and 2018, respectively | 1,359 | 678 | ||||||
Capital surplus | 450,676 | 443,114 | ||||||
Retained earnings | 707,656 | 606,658 | ||||||
Treasury stock (shares at cost: 927,408 and 467,811 at December 31, 2019 and 2018, respectively) | (8,222 | ) | (7,507 | ) | ||||
Deferred Compensation | 8,222 | 7,507 | ||||||
Accumulated other comprehensive earnings | 67,506 | 2,845 | ||||||
Total shareholders’ equity | 1,227,197 | 1,053,295 | ||||||
Total liabilities and shareholders’ equity | $ | 8,262,227 | $ | 7,731,854 | ||||
F-2
2017
2017 | 2016 | 2015 | ||||||||||
INTEREST INCOME: | ||||||||||||
Interest and fees on loans | $ | 166,807 | $ | 161,018 | $ | 151,662 | ||||||
Interest on investment securities: | ||||||||||||
Taxable | 32,825 | 27,626 | 29,673 | |||||||||
Exempt from federal income tax | 44,659 | 43,302 | 40,080 | |||||||||
Interest on federal funds sold and interest-bearing deposits in banks | 1,684 | 342 | 208 | |||||||||
|
|
|
|
|
| |||||||
Total interest income | 245,975 | 232,288 | 221,623 | |||||||||
|
|
|
|
|
| |||||||
INTEREST EXPENSE: | ||||||||||||
Interest on deposits | 8,213 | 4,503 | 3,642 | |||||||||
Other | 1,075 | 948 | 446 | |||||||||
|
|
|
|
|
| |||||||
Total interest expense | 9,288 | 5,451 | 4,088 | |||||||||
|
|
|
|
|
| |||||||
Net interest income | 236,687 | 226,837 | 217,535 | |||||||||
PROVISION FOR LOAN LOSSES | 6,530 | 10,212 | 9,685 | |||||||||
|
|
|
|
|
| |||||||
Net interest income after provision for loan losses | 230,157 | 216,625 | 207,850 | |||||||||
|
|
|
|
|
| |||||||
NONINTEREST INCOME: | ||||||||||||
Trust fees | 23,694 | 19,636 | 19,252 | |||||||||
Service charges on deposit accounts | 19,416 | 18,386 | 17,171 | |||||||||
ATM, interchange and credit card fees | 25,686 | 23,910 | 21,860 | |||||||||
Real estate mortgage operations | 15,109 | 16,086 | 10,409 | |||||||||
Net gain on sale ofavailable-for-sale securities (includes $1,828, $1,270 and $432 for the years ended December 31, 2017, 2016 and 2015, respectively, related to accumulated comprehensive earnings reclassifications) | 1,828 | 1,270 | 432 | |||||||||
Net gain (loss) on sale of foreclosed assets | (50 | ) | 456 | 538 | ||||||||
Net gain (loss) on sale of assets | (396 | ) | 168 | (820 | ) | |||||||
Interest on loan recoveries | 1,128 | 2,112 | 1,050 | |||||||||
Other | 4,602 | 3,108 | 3,540 | |||||||||
|
|
|
|
|
| |||||||
Total noninterest income | 91,017 | 85,132 | 73,432 | |||||||||
|
|
|
|
|
| |||||||
NONINTEREST EXPENSE: | ||||||||||||
Salaries and employee benefits | 95,287 | 90,739 | 80,999 | |||||||||
Loss from partial settlement of pension plan | — | 267 | — | |||||||||
Net occupancy expense | 10,521 | 10,420 | 10,314 | |||||||||
Equipment expense | 13,765 | 13,479 | 12,222 | |||||||||
FDIC insurance premiums | 2,217 | 2,680 | 3,153 | |||||||||
ATM, interchange and credit card expenses | 7,452 | 7,231 | 6,384 | |||||||||
Professional and service fees | 8,063 | 6,877 | 4,831 | |||||||||
Printing, stationery and supplies | 1,989 | 2,093 | 2,278 | |||||||||
Operational and other losses | 3,192 | 2,170 | 1,889 | |||||||||
Amortization of intangible assets | 613 | 738 | 561 | |||||||||
Other | 30,887 | 29,136 | 26,833 | |||||||||
|
|
|
|
|
| |||||||
Total noninterest expense | 173,986 | 165,830 | 149,464 | |||||||||
|
|
|
|
|
| |||||||
EARNINGS BEFORE INCOME TAXES | 147,188 | 135,927 | 131,818 | |||||||||
INCOME TAX EXPENSE (includes $640, $445 and $151 for the years ended December 31, 2017, 2016 and 2015, respectively, related to income tax expense from reclassification items) | 26,817 | 31,153 | 31,437 | |||||||||
|
|
|
|
|
| |||||||
NET EARNINGS | $ | 120,371 | $ | 104,774 | $ | 100,381 | ||||||
|
|
|
|
|
| |||||||
NET EARNINGS PER SHARE, BASIC | $ | 1.82 | $ | 1.59 | $ | 1.55 | ||||||
|
|
|
|
|
| |||||||
NET EARNINGS PER SHARE, ASSUMING DILUTION | $ | 1.81 | $ | 1.59 | $ | 1.54 | ||||||
|
|
|
|
|
|
2019 | 2018 | 2017 | ||||||||||
INTEREST INCOME: | ||||||||||||
Interest and fees on loans | $ | 224,556 | $ | 200,347 | $ | 166,807 | ||||||
Interest on investment securities: | ||||||||||||
Taxable | 55,670 | 50,052 | 32,825 | |||||||||
Exempt from federal income tax | 37,075 | 39,661 | 44,659 | |||||||||
Interest on federal funds sold and interest-bearing deposits in banks | 1,891 | 1,630 | 1,684 | |||||||||
Total interest income | 319,192 | 291,690 | 245,975 | |||||||||
INTEREST EXPENSE: | ||||||||||||
Interest on deposits | 27,122 | 16,946 | 8,213 | |||||||||
Other | 2,980 | 1,984 | 1,075 | |||||||||
Total interest expense | 30,102 | 18,930 | 9,288 | |||||||||
Net interest income | 289,090 | 272,760 | 236,687 | |||||||||
PROVISION FOR LOAN LOSSES | 2,965 | 5,665 | 6,530 | |||||||||
Net interest income after provision for loan losses | 286,125 | 267,095 | 230,157 | |||||||||
NONINTEREST INCOME: | ||||||||||||
Trust fees | 28,401 | 28,181 | 23,694 | |||||||||
Service charges on deposit accounts | 22,039 | 21,663 | 19,416 | |||||||||
ATM, interchange and credit card fees | 29,863 | 28,532 | 25,686 | |||||||||
Real estate mortgage operations | 18,144 | 15,157 | 15,109 | |||||||||
Net gain on sale of available-for-sale securities (includes $733, $1,354 and $1,828 for the years ended December 31, 2019, 2018 and 2017, respectively, related to accumulated comprehensive earnings reclassifications) | 733 | 1,354 | 1,828 | |||||||||
Net gain (loss) on sale of foreclosed assets | 274 | 116 | (50 | ) | ||||||||
Net gain (loss) on sale of assets | 319 | (147 | ) | (396 | ) | |||||||
Interest on loan recoveries | 2,092 | 938 | 1,128 | |||||||||
Other | 6,563 | 5,970 | 4,602 | |||||||||
Total noninterest income | 108,428 | 101,764 | 91,017 | |||||||||
NONINTEREST EXPENSE: | ||||||||||||
Salaries and employee benefits | 112,336 | 105,189 | 95,287 | |||||||||
Cost related to termination of pension plan | 2,673 | 1,546 | — | |||||||||
Net occupancy expense | 11,156 | 11,173 | 10,521 | |||||||||
Equipment expense | 9,052 | 10,118 | 10,120 | |||||||||
FDIC insurance premiums | 1,091 | 2,333 | 2,217 | |||||||||
ATM, interchange and credit card expenses | 9,856 | 9,282 | 7,452 | |||||||||
Professional and service fees | 7,853 | 8,894 | 8,063 | |||||||||
Printing, stationery and supplies | 1,812 | 1,997 | 1,989 | |||||||||
Operational and other losses | 1,879 | 2,188 | 3,192 | |||||||||
Software amortization and expense | 7,305 | 6,020 | 6,940 | |||||||||
Amortization of intangible assets | 1,016 | 1,272 | 613 | |||||||||
Other | 30,492 | 30,672 | 27,592 | |||||||||
Total noninterest expense | 196,521 | 190,684 | 173,986 | |||||||||
EARNINGS BEFORE INCOME TAXES | 198,032 | 178,175 | 147,188 | |||||||||
INCOME TAX EXPENSE (includes $154, $284 and $640 for the years ended December 31, 2019, 2018 and 2017, related to income tax expense from reclassification items) | 33,220 | 27,537 | 26,817 | |||||||||
NET EARNINGS | $ | 164,812 | $ | 150,638 | $ | 120,371 | ||||||
NET EARNINGS PER SHARE, BASIC | $ | 1.22 | $ | 1.11 | $ | 0.91 | ||||||
NET EARNINGS PER SHARE, ASSUMING DILUTION | $ | 1.21 | $ | 1.11 | $ | 0.91 | ||||||
F-3
2017
2017 | 2016 | 2015 | ||||||||||
NET EARNINGS | $ | 120,371 | $ | 104,774 | $ | 100,381 | ||||||
OTHER ITEMS OF COMPREHENSIVE EARNINGS (LOSS): | ||||||||||||
Change in unrealized gain (loss) on investment securitiesavailable-for-sale, before income tax | 23,266 | (44,679 | ) | 2,273 | ||||||||
Reclassification adjustment for realized losses (gains) on investment securities included in net earnings, before income tax | (1,828 | ) | (1,270 | ) | (432 | ) | ||||||
Minimum liability pension adjustment, before income tax | 257 | 1,410 | (1,986 | ) | ||||||||
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|
| |||||||
Total other items of comprehensive earnings (losses) | 21,695 | (44,539 | ) | (145 | ) | |||||||
Income tax benefit (expense) related to: | ||||||||||||
Investment securities | (13,774 | ) | 16,082 | (644 | ) | |||||||
Minimum liability pension adjustment | 420 | (493 | ) | 695 | ||||||||
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| |||||||
Total income tax benefit (expense) | (13,354 | ) | 15,589 | 51 | ||||||||
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| |||||||
COMPREHENSIVE EARNINGS | $ | 128,712 | $ | 75,824 | $ | 100,287 | ||||||
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|
|
2019 | 2018 | 2017 | ||||||||||
NET EARNINGS | $ | 164,812 | $ | 150,638 | $ | 120,371 | ||||||
OTHER ITEMS OF COMPREHENSIVE EARNINGS (LOSS): | ||||||||||||
Change in unrealized gain (loss) on investment securities available-for-sale, before income tax | 80,906 | (38,185 | ) | 23,266 | ||||||||
Reclassification adjustment for realized losses (gains) on investment securities included in net earnings, before income tax | (733 | ) | (1,354 | ) | (1,828 | ) | ||||||
Minimum liability pension adjustment, before income tax | 1,676 | 1,970 | 257 | |||||||||
Total other items of comprehensive earnings (losses) | 81,849 | (37,569 | ) | 21,695 | ||||||||
Income tax benefit (expense) related to: | ||||||||||||
Investment securities | (16,836 | ) | 8,303 | (13,774 | ) | |||||||
Minimum liability pension adjustment | (352 | ) | (414 | ) | 420 | |||||||
Total income tax benefit (expense) | (17,188 | ) | 7,889 | (13,354 | ) | |||||||
COMPREHENSIVE EARNINGS | $ | 229,473 | $ | 120,958 | $ | 128,712 | ||||||
F-4
2017
Common Stock | Capital Surplus | Retained Earnings |
Treasury Stock | Deferred Compensation | Accumulated Other Comprehensive Earnings (Losses) | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amounts | |||||||||||||||||||||||||||||||||
BALANCE, December 31, 2014 | 64,089,921 | $ | 641 | $ | 305,429 | $ | 327,978 | (529,563 | ) | $ | (5,878 | ) | $ | 5,878 | $ | 47,489 | $ | 681,537 | ||||||||||||||||||
Net earnings | — | — | — | 100,381 | — | — | — | — | 100,381 | |||||||||||||||||||||||||||
Stock issued in acquisition of FBC Bancshares, Inc. | 1,755,374 | 18 | 59,630 | — | — | — | — | — | 59,648 | |||||||||||||||||||||||||||
Stock option exercises | 105,121 | 1 | 1,544 | — | — | — | — | — | 1,545 | |||||||||||||||||||||||||||
Restricted Stock grant | 39,818 | — | 1,350 | — | — | — | — | — | 1,350 | |||||||||||||||||||||||||||
Cash dividends declared, $0.62 per share | — | — | — | (40,353 | ) | — | — | — | — | (40,353 | ) | |||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes | — | — | — | — | — | — | — | (1,291 | ) | (1,291 | ) | |||||||||||||||||||||||||
Change in unrealized gain (loss) in investment securitiesavailable-for-sale, net of related income taxes | — | — | — | — | — | — | — | 1,197 | 1,197 | |||||||||||||||||||||||||||
Additional tax benefit related to directors’ deferred compensation plan | — | — | 328 | — | — | — | — | — | 328 | |||||||||||||||||||||||||||
Shares purchased in connection with directors’ deferred compensation plan, net | — | — | — | — | 8,912 | (418 | ) | 418 | — | — | ||||||||||||||||||||||||||
Stock option expense | — | — | 644 | — | — | — | — | — | 644 | |||||||||||||||||||||||||||
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BALANCE, December 31, 2015 | 65,990,234 | $ | 660 | $ | 368,925 | $ | 388,006 | (520,651 | ) | $ | (6,296 | ) | $ | 6,296 | $ | 47,395 | $ | 804,986 | ||||||||||||||||||
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| |||||||||||||||||||
Net earnings | — | — | — | 104,774 | — | — | — | — | 104,774 | |||||||||||||||||||||||||||
Stock option exercises | 82,871 | 1 | 1,259 | — | — | — | — | — | 1,260 | |||||||||||||||||||||||||||
Restricted Stock grant | 21,590 | — | 809 | — | — | — | — | — | 809 | |||||||||||||||||||||||||||
Cash dividends declared, $0.70 per share | — | — | — | (46,246 | ) | — | — | — | — | (46,246 | ) | |||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes | — | — | — | — | — | — | — | 917 | 917 | |||||||||||||||||||||||||||
Change in unrealized gain (loss) in investment securitiesavailable-for-sale, net of related income taxes | — | — | — | — | — | — | — | (29,867 | ) | (29,867 | ) | |||||||||||||||||||||||||
Additional tax benefit related to directors’ deferred compensation plan | — | — | 370 | — | — | — | — | — | 370 | |||||||||||||||||||||||||||
Shares purchased in connection with directors’ deferred compensation plan, net | — | — | — | — | 13,242 | (375 | ) | 375 | — | — | ||||||||||||||||||||||||||
Stock option expense | — | — | 882 | — | — | — | — | — | 882 | |||||||||||||||||||||||||||
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BALANCE, December 31, 2016 | 66,094,695 | $ | 661 | $ | 372,245 | $ | 446,534 | (507,409 | ) | $ | (6,671 | ) | $ | 6,671 | $ | 18,445 | $ | 837,885 | ||||||||||||||||||
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| |||||||||||||||||||
Net earnings | — | — | — | 120,371 | — | — | — | — | 120,371 | |||||||||||||||||||||||||||
Stock option exercises | 140,250 | 2 | 2,933 | — | — | — | — | 2,935 | ||||||||||||||||||||||||||||
Restricted Stock grant | 25,499 | — | 1,139 | — | — | — | — | 1,139 | ||||||||||||||||||||||||||||
Cash dividends declared, $0.75 per share | — | — | — | (49,648 | ) | — | — | — | — | (49,648 | ) | |||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes | — | — | — | — | — | — | — | 677 | 677 | |||||||||||||||||||||||||||
Change in unrealized gain (loss) in investment securitiesavailable-for-sale, net of related income taxes | — | — | — | — | — | — | — | 7,664 | 7,664 | |||||||||||||||||||||||||||
Shares purchased (redeemed) in connection with directors’ deferred compensation plan, net | — | — | — | — | 11,445 | (477 | ) | 477 | — | — | ||||||||||||||||||||||||||
Stock option expense | — | — | 1,745 | — | — | — | — | — | 1,745 | |||||||||||||||||||||||||||
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BALANCE, December 31, 2017 | 66,260,444 | $ | 663 | $ | 378,062 | $ | 517,257 | (495,964 | ) | $ | (7,148 | ) | $ | 7,148 | $ | 26,786 | $ | 922,768 | ||||||||||||||||||
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Accumulated Other Total Comprehensive | ||||||||||||||||||||||||||||||||||||
Common Stock | Capital | Retained | Treasury Stock | Deferred | Earnings | Shareholders’ | ||||||||||||||||||||||||||||||
Shares | Amount | Surplus | Earnings | Shares | Amounts | Compensation | (Losses) | Equity | ||||||||||||||||||||||||||||
BALANCE, December 31, 2016 | 66,094,695 | $ | 661 | $ | 372,245 | $ | 446,534 | (507,409 | ) | $ | (6,671 | ) | $ | 6,671 | $ | 18,445 | $ | 837,885 | ||||||||||||||||||
Net earnings | — | — | — | 120,371 | — | — | — | — | 120,371 | |||||||||||||||||||||||||||
Stock option exercises | 140,250 | 2 | 2,933 | — | — | — | 2,935 | |||||||||||||||||||||||||||||
Restricted Stock grant | 25,499 | — | 1,139 | — | — | — | — | 1,139 | ||||||||||||||||||||||||||||
Cash dividends declared, $0.38 per share | — | — | — | (49,648 | ) | — | — | — | — | (49,648 | ) | |||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes | — | — | — | — | — | — | — | 677 | 677 | |||||||||||||||||||||||||||
Change in unrealized gain (loss) in investment securities available-for-sale, net of related income taxes | — | — | — | — | — | — | — | 7,664 | 7,664 | |||||||||||||||||||||||||||
Shares purchased (redeemed) in connection with directors’ deferred compensation plan, net | — | — | — | — | 11,445 | (477 | ) | 477 | — | — | ||||||||||||||||||||||||||
Stock option expense | — | — | 1,745 | — | — | — | — | — | 1,745 | |||||||||||||||||||||||||||
BALANCE, December 31, 2017 | 66,260,444 | $ | 663 | $ | 378,062 | $ | 517,257 | (495,964 | ) | $ | (7,148 | ) | $ | 7,148 | $ | 26,786 | $ | 922,768 | ||||||||||||||||||
Net earnings | — | — | — | 150,638 | — | — | — | — | 150,638 | |||||||||||||||||||||||||||
Stock option exercises | 173,822 | 2 | 3,861 | — | — | — | — | — | 3,863 | |||||||||||||||||||||||||||
Restricted stock grant, net | 29,496 | — | 1,609 | — | — | — | — | — | 1,609 | |||||||||||||||||||||||||||
Cash dividends declared, $0.41 per share | — | — | — | (55,499 | ) | — | — | — | — | (55,499 | ) | |||||||||||||||||||||||||
Stock issued in acquisition of Commercial Bancshares, Inc. | 1,289,371 | 13 | 58,074 | — | — | — | — | — | 58,087 | |||||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes | — | — | — | — | — | — | — | 1,556 | 1,556 | |||||||||||||||||||||||||||
Change in unrealized gain (loss) in investment securities available-for-sale, net of related income taxes | — | — | — | — | — | — | — | (31,235 | ) | (31,235 | ) | |||||||||||||||||||||||||
Shares purchased (redeemed) in connection with directors’ deferred compensation plan, net | — | — | — | — | 28,153 | (359 | ) | 359 | — | — | ||||||||||||||||||||||||||
Stock option expense | — | — | 1,508 | — | — | — | — | — | 1,508 | |||||||||||||||||||||||||||
Reclassification of certain income tax effects related to the change in the U.S. statutory federal income tax rate under the Tax Cuts and Jobs Acts to retained earnings | — | — | — | (5,759 | ) | — | — | — | 5,759 | — | ||||||||||||||||||||||||||
Reclassification of unrealized gain in equity securities at December 31, 2017 from accumulated other comprehensive earnings to retained earnings | — | — | — | 21 | — | — | — | (21 | ) | — | ||||||||||||||||||||||||||
BALANCE, December 31, 2018 | 67,753,133 | $ | 678 | $ | 443,114 | $ | 606,658 | (467,811 | ) | $ | (7,507 | ) | $ | 7,507 | $ | 2,845 | $ | 1,053,295 | ||||||||||||||||||
Net earnings | — | — | — | 164,812 | — | — | — | — | 164,812 | |||||||||||||||||||||||||||
Stock option exercises | 241,725 | 2 | 4,291 | — | — | — | — | — | 4,293 | |||||||||||||||||||||||||||
Restricted stock grant, net | 56,687 | — | 1,782 | — | — | — | — | — | 1,782 | |||||||||||||||||||||||||||
Cash dividends declared, $ 0.47 per share | — | — | — | (63,135 | ) | — | — | — | — | (63,135 | ) | |||||||||||||||||||||||||
Minimum liability pension adjustment, net of related income taxes | — | — | — | — | — | — | — | 1,324 | 1,324 | |||||||||||||||||||||||||||
Change in unrealized gain (loss) in investment securities available-for-sale, net of relatedincome taxes | — | — | — | — | — | — | — | 63,337 | 63,337 | |||||||||||||||||||||||||||
Shares purchased (redeemed) in connection with directors’ deferred compensation plan, net | — | — | — | — | 4,742 | (715 | ) | 715 | — | — | ||||||||||||||||||||||||||
Stock option expense | — | — | 1,489 | — | — | — | — | — | 1,489 | |||||||||||||||||||||||||||
Two-for-one stock split in the form of100 % stock dividend | 67,840,210 | 679 | — | ( 679 | ) | (464,339 | ) | — | — | — | — | |||||||||||||||||||||||||
BALANCE, December 31, 2019 | 135,891,755 | $ | 1,359 | $ | 450,676 | $ | 707,656 | (927,408 | ) | $ | (8,222 | ) | $ | 8,222 | $ | 67,506 | $ | 1,227,197 | ||||||||||||||||||
2017
2017 | 2016 | 2015 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net earnings | $ | 120,371 | $ | 104,774 | $ | 100,381 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 12,916 | 11,573 | 11,145 | |||||||||
Provision for loan losses | 6,530 | 10,212 | 9,685 | |||||||||
Securities premium amortization, net | 30,310 | 29,005 | 27,705 | |||||||||
Gain on sale of assets, net | (1,167 | ) | (1,894 | ) | (150 | ) | ||||||
Deferred federal income tax expense (benefit) | (53 | ) | 673 | 320 | ||||||||
Change in loans held for sale | 11,769 | 6,645 | (24,739 | ) | ||||||||
Change in other assets | 9,313 | 2,397 | (16,919 | ) | ||||||||
Change in other liabilities | 285 | (2,643 | ) | 1,664 | ||||||||
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| |||||||
Total adjustments | 69,903 | 55,968 | 8,711 | |||||||||
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| |||||||
Net cash provided by operating activities | 190,274 | 160,742 | 109,092 | |||||||||
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CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Cash paid for asset acquisition of 4Trust Mortgage, Inc., net | — | — | (1,931 | ) | ||||||||
Cash received in acquisition of FBC Bancshares, Inc., net | — | — | 65,197 | |||||||||
Net decrease in interest-bearing time deposits in banks | 249 | 1,788 | 13,507 | |||||||||
Activity inavailable-for-sale securities: | ||||||||||||
Sales | 120,576 | 40,510 | 35,580 | |||||||||
Maturities | 4,392,131 | 3,509,113 | 2,717,724 | |||||||||
Purchases | (4,768,420 | ) | (3,737,865 | ) | (3,055,117 | ) | ||||||
Activity inheld-to-maturity securities — maturities | 124 | 157 | 163 | |||||||||
Net increase in loans | (134,627 | ) | (48,836 | ) | (144,320 | ) | ||||||
Purchases of bank premises and equipment and other assets | (14,162 | ) | (20,399 | ) | (17,433 | ) | ||||||
Proceeds from sale of bank premises and equipment and other assets | 6,085 | 3,572 | 2,405 | |||||||||
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|
|
| |||||||
Net cash used in investing activities | (398,044 | ) | (251,960 | ) | (384,225 | ) | ||||||
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| |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Net increase (decrease) in noninterest-bearing deposits | 323,928 | (28,230 | ) | 23,473 | ||||||||
Net increase in interest-bearing deposits | 160,494 | 316,600 | 72,857 | |||||||||
Net increase (decrease) in borrowings | (114,770 | ) | (169,905 | ) | 235,440 | |||||||
Common stock transactions: | ||||||||||||
Proceeds from stock issuances | 2,934 | 1,260 | 1,545 | |||||||||
Dividends paid | (48,955 | ) | (44,907 | ) | (38,767 | ) | ||||||
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| |||||||
Net cash provided by financing activities | 323,631 | 74,818 | 294,548 | |||||||||
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| |||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 115,861 | (16,400 | ) | 19,415 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of year | 256,486 | 272,886 | 253,471 | |||||||||
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| |||||||
CASH AND CASH EQUIVALENTS, end of year | $ | 372,347 | $ | 256,486 | $ | 272,886 | ||||||
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|
2019 | 2018 | 2017 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net earnings | $ | 164,812 | $ | 150,638 | $ | 120,371 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 11,665 | 12,549 | 12,916 | |||||||||
Provision for loan losses | 2,965 | 5,665 | 6,530 | |||||||||
Securities premium amortization, net | 25,788 | 27,467 | 30,310 | |||||||||
Gain on sale of assets, net | (1,477 | ) | (1,216 | ) | (1,167 | ) | ||||||
Deferred federal income tax expense (benefit) | (29 | ) | (250 | ) | (53 | ) | ||||||
Change in loans held for sale | (5,830 | ) | (5,791 | ) | 11,769 | |||||||
Change in other assets | 1,851 | (1,697 | ) | 9,313 | ||||||||
Change in other liabilities | 4,374 | 1,621 | 285 | |||||||||
Total adjustments | 39,307 | 38,348 | 69,903 | |||||||||
Net cash provided by operating activities | 204,119 | 188,986 | 190,274 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Cash received in acquisition of Commercial Bancshares, Inc., net | — | 18,653 | — | |||||||||
Net decrease in interest-bearing time deposits in banks | 1,458 | — | 249 | |||||||||
Activity in available-for-sale securities: | ||||||||||||
Sales | 67,414 | 220,259 | 120,576 | |||||||||
Maturities | 4,460,703 | 3,439,028 | 4,392,131 | |||||||||
Purchases | (4,727,430 | ) | (3,731,821 | ) | (4,768,420 | ) | ||||||
Activity in held-to-maturity securities – maturities | — | — | 124 | |||||||||
Net increase in loans | (245,190 | ) | (205,238 | ) | (134,627 | ) | ||||||
Purchases of bank premises and equipment and other assets | (8,671 | ) | (17,646 | ) | (14,162 | ) | ||||||
Proceeds from sale of bank premises and equipment and other assets | 2,249 | 844 | 6,085 | |||||||||
Net cash used in investing activities | (449,467 | ) | (275,921 | ) | (398,044 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Net increase (decrease) in noninterest-bearing deposits | (50,979 | ) | (87,583 | ) | 323,928 | |||||||
Net increase (decrease) in interest-bearing deposits | 474,396 | (36,891 | ) | 160,494 | ||||||||
Net increase (decrease) in borrowings | (87,350 | ) | 137,706 | (114,770 | ) | |||||||
Common stock transactions: | ||||||||||||
Proceeds from stock issuances | 4,294 | 3,864 | 2,934 | |||||||||
Dividends paid | (61,056 | ) | (53,861 | ) | (48,955 | ) | ||||||
Net cash provided by (used in) financing activities | 279,305 | (36,765 | ) | 323,631 | ||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 33,957 | (123,700 | ) | 115,861 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of year | 248,647 | 372,347 | 256,486 | |||||||||
CASH AND CASH EQUIVALENTS, end of year | $ | 282,604 | $ | 248,647 | $ | 372,347 | ||||||
Statement
2017
Acquisitions and Asset Purchase
On June 1, 2015, the Company completed the asset purchase of 4Trust Mortgage, Inc. The results of operation of 4Trust Mortgage Inc. subsequent to the asset purchase date, are included in the consolidated earnings of the Company. See Note 18 for additional information.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
Increase in Authorized Shares
On April 28, 2015, the Company’s shareholders approved an amendment to the Company’s Amended and Restated Certificate of Formation to increase the number of authorized common shares to 120,000,000.
sources on a quarterly basis.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
the principal amounts outstanding. The Company defers and amortizes net loan origination fees and costs as an adjustment to yield. The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes the collectability of the principal is unlikely.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
longer term to maturity. For all impaired loans, including the Company’s troubled debt restructurings, the Company performs a periodic, well-documented credit evaluation of the borrower’s financial condition and prospects for repayment to assess the likelihood that all principal and interest payments required under the terms of the agreement will be collected in full. When doubt exists about the ultimate collectability of principal and interest, the troubled debt restructuring remains on20172019 and 2016,2018, substantially all of the Company’s troubled debt restructured loans are included in the
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
2017.
Also included in other intangible assets are
There were 0 amounts under the minimum pension liability at December 31, 2019 (see note 14).
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
respectively.
Net Earnings (in thousands) | Weighted Average Shares | Per Share Amount | ||||||||||
For the year ended December 31, 2017: | ||||||||||||
Net earnings per share, basic | $ | 120,371 | 66,126,863 | $ | 1.82 | |||||||
Effect of stock options and stock grants | — | 197,467 | (0.01 | ) | ||||||||
|
|
|
|
|
| |||||||
Net earnings per share, assuming dilution | $ | 120,371 | 66,324,330 | $ | 1.81 | |||||||
|
|
|
|
|
| |||||||
For the year ended December 31, 2016: | ||||||||||||
Net earnings per share, basic | $ | 104,774 | 66,013,004 | $ | 1.59 | |||||||
Effect of stock options and stock grants | — | 89,882 | — | |||||||||
|
|
|
|
|
| |||||||
Net earnings per share, assuming dilution | $ | 104,774 | 66,102,886 | $ | 1.59 | |||||||
|
|
|
|
|
| |||||||
For the year ended December 31, 2015: | ||||||||||||
Net earnings per share, basic | $ | 100,381 | 64,892,934 | $ | 1.55 | |||||||
Effect of stock options and stock grants | — | 175,096 | (0.01 | ) | ||||||||
|
|
|
|
|
| |||||||
Net earnings per share, assuming dilution | $ | 100,381 | 65,068,030 | $ | 1.54 | |||||||
|
|
|
|
|
|
Net Earnings (in thousands) | Weighted Average Shares | | Per Amount | |||||||||
For the year ended December 31, 2019: | ||||||||||||
Net earnings per share, basic | $ | 164,812 | 135,647,354 | $ | 1.22 | |||||||
Effect of stock options and stock grants | — | 698,665 | (0.01 | ) | ||||||||
Net earnings per share, assuming dilution | $ | 164,812 | 136,346,019 | $ | 1.21 | |||||||
For the year ended December 31, 2018: | ||||||||||||
Net earnings per share, basic | $ | 150,638 | 135,218,734 | $ | 1.11 | |||||||
Effect of stock options and stock grants | — | 747,294 | — | |||||||||
Net earnings per share, assuming dilution | $ | 150,638 | 135,966,028 | $ | 1.11 | |||||||
For the year ended December 31, 2017: | ||||||||||||
Net earnings per share, basic | $ | 120,371 | 132,253,726 | $ | 0.91 | |||||||
Effect of stock options and stock grants | — | 394,934 | — | |||||||||
Net earnings per share, assuming dilution | $ | 120,371 | 132,648,660 | $ | 0.91 | |||||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
ASU2014-15, “Presentation of Financial Statements — Going Concern.”ASU2014-15 requires management to evaluate an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management must evaluate whether conditions and events raise substantial doubt about an entity’s ability to continue as a going concern and then whether its plans alleviate that doubt. ASU2014-15 was effective in 2016 and management has performed and continues to perform such required evaluation and has concluded there were no such conditions or events that raised substantial doubt about the Company’s ability to continue as a going concern.
ASU2015-01, “Income Statement — Extraordinary and Unusual Items.” ASU2015-01 eliminated from U.S. GAAP the concept of extraordinary items, which, among other things, required an entity to show the item separately in the income statement, net of tax, after income from continuing operations. The new guidance became effective for the Company beginning January 1, 2016, and2018 did not have a significant impact on the Company’s financial statements.
ASU2015-05, “Intangibles — Goodwillstatements and Other —Internal-Use Software — Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.”ASU2015-05 addresses accounting for fees paid by a customer in cloud computing arrangements such as (i) software as a service, (ii) platform as a service, (iii) infrastructure as a service and (iv) other similar hosting arrangements. ASU2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU2015-05 became effective on January 1, 2016 and did not have a significant impact on the Company’s financial statements.
ASU2015-16, “Business Combinations — Simplifying the Accounting Measurement Period Adjustments.” ASU2015-16 amended business combination guidance to require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period’s financial statements, the effect of earnings on changes in depreciation, amortization, or other income effects, if any, as a result of the changes to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Additionally, the entity is required to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if theno adjustment to the provisional amounts had been recognized as of the acquisition date. The amended guidance became effective for the Company on January 1, 2016, and did not have a significant impact on the Company’s financial statements.
opening retained earnings was recorded.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
specified asset for the lease term. ASU doeswill bewas effective in the first quarter of 2019 and will requirerequired transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company continues to evaluateevaluated the provision of the new lease standard but,and, due to the small dollar amounts and number of lease agreements, presently inall considered operating leases, the effect for the Company doeson January 1, 2019 was not expect the new guidance will have a significant impact on the Company’s financial statements.
significant.
ASU2017-04, “Intangibles — Goodwill and Other.”ASU2017-04 will amend and simplify current goodwill impairment testing to eliminate Step 2 from the current provisions. Under the new guidance, an entity should perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the quantitative assessment for a reporting unit to determine if a quantitative impairment test is necessary. ASU2017-04 will be
ASU2017-08, “Receivables —– Nonrefundable Fees and Other Cost:Costs: Premium Amortization on Purchased Callable Debt Securities.”
earnings.
2017
2018. There were 0
such balances at December 31, 2019.December 31, 2017 | ||||||||||||||||
Amortized Cost Basis | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Estimated Fair Value | |||||||||||||
Securitiesavailable-for-sale: | ||||||||||||||||
Obligations of U.S. government sponsored enterprises and agencies | $ | 60,516 | $ | — | $ | (186 | ) | $ | 60,330 | |||||||
Obligations of state and political subdivisions | 1,369,295 | 52,491 | (936 | ) | 1,420,850 | |||||||||||
Corporate bonds and other | 11,421 | 43 | (5 | ) | 11,459 | |||||||||||
Residential mortgage-backed securities | 1,223,452 | 4,561 | (8,916 | ) | 1,219,097 | |||||||||||
Commercial mortgage-backed securities | 377,934 | 263 | (2,460 | ) | 375,737 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securitiesavailable-for-sale | $ | 3,042,618 | $ | 57,358 | $ | (12,503 | ) | $ | 3,087,473 | |||||||
|
|
|
|
|
|
|
| |||||||||
December 31, 2016 | ||||||||||||||||
Amortized Cost Basis | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Estimated Fair Value | |||||||||||||
Securitiesavailable-for-sale: | ||||||||||||||||
U.S. Treasury securities | $ | 10,649 | $ | 19 | $ | — | $ | 10,668 | ||||||||
Obligations of U.S. government sponsored enterprises and agencies | 113,450 | 253 | — | 113,703 | ||||||||||||
Obligations of state and political subdivisions | 1,534,095 | 40,194 | (10,013 | ) | 1,564,276 | |||||||||||
Corporate bonds and other | 51,920 | 476 | (3 | ) | 52,393 | |||||||||||
Residential mortgage-backed securities | 848,614 | 8,260 | (5,513 | ) | 851,361 | |||||||||||
Commercial mortgage-backed securities | 269,044 | 622 | (1,230 | ) | 268,436 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total securitiesavailable-for-sale | $ | 2,827,772 | $ | 49,824 | $ | (16,759 | ) | $ | 2,860,837 | |||||||
|
|
|
|
|
|
|
|
Disclosures related to the Company’sheld-to-maturity securities, which totaled $121,000 at December 31, 2016, have not been presented due to insignificance. There were noheld-to-maturity securities owned by the Company at December 31, 2017.
December 31, 2019 | ||||||||||||||||
Amortized Cost Basis | Gross Unrealized Holding | Gross Unrealized Holding | Estimated Fair Value | |||||||||||||
Securities available-for-sale: | ||||||||||||||||
U.S. Treasury securities | $ | 9,997 | $ | 22 | $ | — | $ | 10,019 | ||||||||
Obligations of state and political subdivisions | 1,231,619 | 57,764 | (400 | ) | 1,288,983 | |||||||||||
Corporate bonds and other | 4,643 | 65 | — | 4,708 | ||||||||||||
Residential mortgage-backed | 1,586,872 | 23,139 | (1,148 | ) | 1,608,863 | |||||||||||
Commercial mortgage-backed securities | 494,674 | 6,356 | (286 | ) | 500,744 | |||||||||||
Total securities available-for-sale | $ | 3,327,805 | $ | 87,346 | $ | (1,834 | ) | $ | 3,413,317 | |||||||
December 31, 201 8 | ||||||||||||||||
Gross Amortized Cost Basis | Gross Unrealized Holding Gains | Unrealized Holding Losses | Estimated Fair Value | |||||||||||||
Securities available-for-sale: | ||||||||||||||||
U.S. Treasury securities | $ | 9,970 | $ | — | $ | (8 | ) | $ | 9,962 | |||||||
Obligations of U.S. government sponsored enterprises and agencies | 301 | — | — | 301 | ||||||||||||
Obligations of state and political subdivisions | 1,229,828 | 30,013 | (1,970 | ) | 1,257,871 | |||||||||||
Corporate bonds and other | 4,875 | — | (77 | ) | 4,798 | |||||||||||
Residential mortgage-backed securities | 1,472,228 | 3,928 | (21,611 | ) | 1,454,545 | |||||||||||
Commercial mortgage-backed securities | 436,366 | 670 | (5,736 | ) | 431,300 | |||||||||||
Total securities available-for-sale | $ | 3,153,568 | $ | 34,611 | $ | (29,402 | ) | $ | 3,158,777 | |||||||
2017
Amortized Cost Basis | Estimated Fair Value | |||||||
Due within one year | $ | 184,538 | $ | 185,547 | ||||
Due after one year through five years | 631,376 | 654,092 | ||||||
Due after five years through ten years | 623,628 | 650,923 | ||||||
Due after ten years | 1,690 | 2,077 | ||||||
Mortgage-backed securities | 1,601,386 | 1,594,834 | ||||||
|
|
|
| |||||
Total | $ | 3,042,618 | $ | 3,087,473 | ||||
|
|
|
|
Amortized Cost Basis | Estimated Fair Value | |||||||
Due within one year | $ | 150,912 | $ | 152,445 | ||||
Due after one year through five years | 485,838 | 510,783 | ||||||
Due after five years through ten years | 607,770 | 638,239 | ||||||
Due after ten years | 1,739 | 2,243 | ||||||
Mortgage-backed securities | 2,081,546 | 2,109,607 | ||||||
Total | $ | 3,327,805 | $ | 3,413,317 | ||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
December 31, 2017 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Obligations of U.S. government sponsored enterprises and agencies | $ | 60,329 | $ | 186 | $ | — | $ | — | $ | 60,329 | $ | 186 | ||||||||||||
Obligations of state and political subdivisions | 66,361 | 219 | 44,938 | 717 | 111,299 | 936 | ||||||||||||||||||
Corporate bonds and other | 224 | 2 | 237 | 3 | 461 | 5 | ||||||||||||||||||
Residential mortgage-backed securities | 701,252 | 3,988 | 239,641 | 4,928 | 940,893 | 8,916 | ||||||||||||||||||
Commercial mortgage-backed securities | 239,548 | 1,500 | 92,549 | 960 | 332,097 | 2,460 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 1,067,714 | $ | 5,895 | $ | 377,365 | $ | 6,608 | $ | 1,445,079 | $ | 12,503 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
December 31, 2016 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Obligations of state and political subdivisions | $ | 446,052 | $ | 9,997 | $ | 1,209 | $ | 16 | $ | 447,261 | $ | 10,013 | ||||||||||||
Corporate bonds and other | 244 | 3 | — | — | 244 | 3 | ||||||||||||||||||
Residential mortgage-backed securities | 372,331 | 4,532 | 33,227 | 981 | 405,558 | 5,513 | ||||||||||||||||||
Commercial mortgage-backed securities | 193,495 | 1,180 | 13,263 | 50 | 206,758 | 1,230 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 1,012,122 | $ | 15,712 | $ | 47,699 | $ | 1,047 | $ | 1,059,821 | $ | 16,759 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
December 31, 2019 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Obligations of state and political subdivisions | $ | 65,787 | $ | 400 | $ | 326 | $ | — | $ | 66,113 | $ | 400 | ||||||||||||
Residential mortgage-backed securities | 100,004 | 306 | 103,983 | 842 | 203,987 | 1,148 | ||||||||||||||||||
Commercial mortgage-backed securities | 74,560 | 178 | 35,178 | 108 | 109,738 | 286 | ||||||||||||||||||
Total | $ | 240,351 | $ | 884 | $ | 139,487 | $ | 950 | $ | 379,838 | $ | 1,834 | ||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
December 31, 2018 | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
U.S. Treasury securities | $ | 9,962 | $ | 8 | $ | — | $ | — | $ | 9,962 | $ | 8 | ||||||||||||
Obligations of U.S. government sponsored enterprises and agencies | — | — | 301 | — | 301 | — | ||||||||||||||||||
Obligations of state and political subdivisions | 27,489 | 107 | 114,461 | 1,863 | 141,950 | 1,970 | ||||||||||||||||||
Corporate bonds and other | 4,348 | 68 | 450 | 9 | 4,798 | 77 | ||||||||||||||||||
Residential mortgage-backed securities | 119,584 | 483 | 922,289 | 21,128 | 1,041,873 | 21,611 | ||||||||||||||||||
Commercial mortgage-backed securities | 1,994 | 5 | 343,015 | 5,731 | 345,009 | 5,736 | ||||||||||||||||||
Total | $ | 163,377 | $ | 671 | $ | 1,380,516 | $ | 28,731 | $ | 1,543,893 | $ | 29,402 | ||||||||||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
less than cost is not indicative of recoverability. The unrealized losses noted are interest rate related due to the level of interest rates at December 31, 20172019 compared to the time of purchase. We have reviewed the ratings of the issuers and have not identified any issues related to the ultimate repayment of principal as a result of credit concerns on these securities. Our mortgage related securities are backed by GNMA, FNMA and FHLMC or are collateralized by securities backed by these agencies. At December 31, 2017, 82.98% 2019
December 31, | ||||||||
2017 | 2016 | |||||||
Commercial | $ | 684,099 | $ | 674,410 | ||||
Agricultural | 94,543 | 84,021 | ||||||
Real estate | 2,302,998 | 2,189,844 | ||||||
Consumer | 403,929 | 409,032 | ||||||
|
|
|
| |||||
Total loansheld-for-investment | $ | 3,485,569 | $ | 3,357,307 | ||||
|
|
|
|
Loansheld-for-sale totaled $15,130,000 and $26,898,000 at December 31, 2017 and 2016, respectively, which are valued using the lower of cost or fair value.
December 31, | ||||||||
2019 | 2018 | |||||||
Commercial | $ | 856,326 | $ | 844,953 | ||||
Agricultural | 103,640 | 96,677 | ||||||
Real estate | 2,823,372 | 2,639,346 | ||||||
Consumer | 411,631 | 372,660 | ||||||
Total loans held-for-investment | $ | 4,194,969 | $ | 3,953,636 | ||||
December 31, | ||||||||
2017 | 2016 | |||||||
Non-accrual loans* | $ | 17,670 | $ | 27,371 | ||||
Loans still accruing and past due 90 days or more | 288 | 284 | ||||||
Troubled debt restructured loans** | 627 | 701 | ||||||
|
|
|
| |||||
Total | $ | 18,585 | $ | 28,356 | ||||
|
|
|
|
December 31, | ||||||||
2019 | 2018 | |||||||
Non-accrual loans* | $ | 24,582 | $ | 27,534 | ||||
Loans still accruing and past due 90 days or more | 153 | 1,008 | ||||||
Troubled debt restructured loans** | 26 | 513 | ||||||
Total | $ | 24,761 | $ | 29,055 | ||||
* | Includes |
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
** | Our troubled debt restructured loans of non-accrual loans as of December 31, |
December 31, 2017 | December 31, 2016 | |||||||||||||
Recorded Investment | Valuation Allowance | Recorded Investment | Valuation Allowance | |||||||||||
$17,670 | $ | 3,996 | $ | 27,371 | $ | 5,012 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2019 | December 31, 2018 | |||||||||||||
Recorded Investment | Valuation Allowance | Recorded Investment | Valuation Allowance | |||||||||||
$ | 24,582 | $ | 3,228 | $ | 27,534 | $ | 4,069 | |||||||
December 31, | ||||||||
2017 | 2016 | |||||||
Commercial | $ | 3,612 | $ | 7,284 | ||||
Agricultural | 134 | 99 | ||||||
Real Estate | 12,838 | 18,754 | ||||||
Consumer | 1,086 | 1,234 | ||||||
|
|
|
| |||||
Total | $ | 17,670 | $ | 27,371 | ||||
|
|
|
|
No
December 31, | ||||||||
2019 | 2018 | |||||||
Commercial | $ | 3,093 | $ | 9,334 | ||||
Agricultural | 1,376 | 759 | ||||||
Real Estate | 19,787 | 16,714 | ||||||
Consumer | 326 | 727 | ||||||
Total | $ | 24,582 | $ | 27,534 | ||||
2019.
December 31, 2017 | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance* | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | 12 Month Average Recorded Investment | ||||||||||||||||||
Commercial | $ | 5,597 | $ | 518 | $ | 3,094 | $ | 3,612 | $ | 1,194 | $ | 4,849 | ||||||||||||
Agricultural | 147 | — | 134 | 134 | 31 | 120 | ||||||||||||||||||
Real Estate | 16,823 | 2,348 | 10,490 | 12,838 | 2,316 | 13,835 | ||||||||||||||||||
Consumer | 1,284 | 143 | 943 | 1,086 | 455 | 1,258 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 23,851 | $ | 3,009 | $ | 14,661 | $ | 17,670 | $ | 3,996 | $ | 20,062 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance* | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | 12 Month Average Recorded Investment | ||||||||||||||||||
Commercial | $ | 4,511 | $ | 630 | $ | 2,463 | $ | 3,093 | $ | 1,042 | $ | 3,488 | ||||||||||||
Agricultural | 1,603 | 658 | 718 | 1,376 | 235 | 1,644 | ||||||||||||||||||
Real Estate | 27,366 | 7,081 | 12,706 | 19,787 | 1,950 | 21,726 | ||||||||||||||||||
Consumer | 469 | — | 326 | 326 | 1 | 449 | ||||||||||||||||||
Total | $ | 33,949 | $ | 8,369 | $ | 16,213 | $ | 24,582 | $ | 3,228 | $ | 27,307 | ||||||||||||
* | Includes |
December 31, 2016 | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance* | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | 12 Month Average Recorded Investment | ||||||||||||||||||
Commercial | $ | 13,389 | $ | 1,148 | $ | 6,136 | $ | 7,284 | $ | 2,128 | $ | 4,921 | ||||||||||||
Agricultural | 103 | — | 99 | 99 | 25 | 50 | ||||||||||||||||||
Real Estate | 23,466 | 6,229 | 12,525 | 18,754 | 2,428 | 16,170 | ||||||||||||||||||
Consumer | 1,421 | 280 | 954 | 1,234 | 431 | 914 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 38,379 | $ | 7,657 | $ | 19,714 | $ | 27,371 | $ | 5,012 | $ | 22,055 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance* | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | 12 Month Average Recorded Investment | ||||||||||||||||||
Commercial | $ | 10,808 | $ | 6,728 | $ | 2,606 | $ | 9,334 | $ | 1,133 | $ | 7,986 | ||||||||||||
Agricultural | 799 | 213 | 546 | 759 | 170 | 842 | ||||||||||||||||||
Real Estate | 24,072 | 6,699 | 10,015 | 16,714 | 2,409 | 16,042 | ||||||||||||||||||
Consumer | 935 | 101 | 626 | 727 | 357 | 914 | ||||||||||||||||||
Total | $ | 36,614 | $ | 13,741 | $ | 13,793 | $ | 27,534 | $ | 4,069 | $ | 25,784 | ||||||||||||
* | Includes |
2017
December 31, 2017 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 649,166 | $ | 6,282 | $ | 28,651 | $ | — | $ | 684,099 | ||||||||||
Agricultural | 90,457 | 1,527 | 2,559 | — | 94,543 | |||||||||||||||
Real Estate | 2,227,302 | 29,089 | 46,607 | — | 2,302,998 | |||||||||||||||
Consumer | 401,434 | 181 | 2,314 | — | 403,929 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 3,368,359 | $ | 37,079 | $ | 80,131 | $ | — | $ | 3,485,569 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2016 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 629,756 | $ | 5,769 | $ | 38,885 | $ | — | $ | 674,410 | ||||||||||
Agricultural | 81,620 | 715 | 1,686 | — | 84,021 | |||||||||||||||
Real Estate | 2,111,947 | 18,091 | 59,806 | — | 2,189,844 | |||||||||||||||
Consumer | 406,182 | 212 | 2,638 | — | 409,032 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 3,229,505 | $ | 24,787 | $ | 103,015 | $ | — | $ | 3,357,307 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 201 9 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 825,775 | $ | 20,971 | $ | 9,580 | $ | — | $ | 856,326 | ||||||||||
Agricultural | 101,614 | 64 | 1,962 | — | 103,640 | |||||||||||||||
Real Estate | 2,717,227 | 42,036 | 64,109 | — | 2,823,372 | |||||||||||||||
Consumer | 409,698 | 300 | 1,633 | — | 411,631 | |||||||||||||||
Total | $ | 4,054,314 | $ | 63,371 | $ | 77,284 | $ | — | $ | 4,194,969 | ||||||||||
December 31, 2018 | Pass | Special Mention | Substandard | Doubtful | Total | |||||||||||||||
Commercial | $ | 804,584 | $ | 23,392 | $ | 16,977 | $ | — | $ | 844,953 | ||||||||||
Agricultural | 92,864 | 46 | 3,767 | — | 96,677 | |||||||||||||||
Real Estate | 2,559,379 | 26,626 | 53,341 | — | 2,639,346 | |||||||||||||||
Consumer | 370,510 | 315 | 1,835 | — | 372,660 | |||||||||||||||
Total | $ | 3,827,337 | $ | 50,379 | $ | 75,920 | $ | — | $ | 3,953,636 | ||||||||||
2017
December 31, 2017 | 15-59 Days Past Due* | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Total Current | Total Loans | Total 90 Days Past Due Still Accruing | |||||||||||||||||||||
Commercial | $ | 2,039 | $ | 1,104 | $ | 1,081 | $ | 4,224 | $ | 679,875 | $ | 684,099 | $ | 7 | ||||||||||||||
Agricultural | 640 | — | — | 640 | 93,903 | 94,543 | — | |||||||||||||||||||||
Real Estate | 12,308 | 511 | 1,198 | 14,017 | 2,288,981 | 2,302,998 | 216 | |||||||||||||||||||||
Consumer | 1,360 | 361 | 135 | 1,856 | 402,073 | 403,929 | 65 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | 16,347 | $ | 1,976 | $ | 2,414 | $ | 20,737 | $ | 3,464,832 | $ | 3,485,569 | $ | 288 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 | 15-59 Days Past Due* | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Total Current | Total Loans | Total 90 Days Past Due Still Accruing | |||||||||||||||||||||
Commercial | $ | 3,908 | $ | 1,122 | $ | 2,220 | $ | 7,250 | $ | 667,160 | $ | 674,410 | $ | 10 | ||||||||||||||
Agricultural | 185 | — | — | 185 | 83,836 | 84,021 | — | |||||||||||||||||||||
Real Estate | 13,172 | 1,301 | 5,268 | 19,741 | 2,170,103 | 2,189,844 | 272 | |||||||||||||||||||||
Consumer | 1,845 | 368 | 122 | 2,335 | 406,697 | 409,032 | 2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | 19,110 | $ | 2,791 | $ | 7,610 | $ | 29,511 | $ | 3,327,796 | $ | 3,357,307 | $ | 284 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | 15-59 Days Past Due* | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Total Current | Total Loans | Total 90 Days Past Due Still Accruing | |||||||||||||||||||||
Commercial | $ | 3,257 | $ | 557 | $ | 722 | $ | 4,536 | $ | 851,790 | $ | 856,326 | $ | 112 | ||||||||||||||
Agricultural | 183 | 44 | 400 | 627 | 103,013 | 103,640 | — | |||||||||||||||||||||
Real Estate | 12,890 | 288 | 195 | 13,373 | 2,809,999 | 2,823,372 | — | |||||||||||||||||||||
Consumer | 572 | 151 | 45 | 768 | 410,863 | 411,631 | 41 | |||||||||||||||||||||
Total | $ | 16,902 | $ | 1,040 | $ | 1,362 | $ | 19,304 | $ | 4,175,665 | $ | 4,194,969 | $ | 153 | ||||||||||||||
December 31, 2018 | 15-59 Days Past Due* | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Total Current | Total Loans | Total 90 Days Past Due Still Accruing | |||||||||||||||||||||
Commercial | $ | 3,546 | $ | 682 | $ | 677 | $ | 4,905 | $ | 840,048 | $ | 844,953 | $ | — | ||||||||||||||
Agricultural | 791 | 19 | 26 | 836 | 95,841 | 96,677 | — | |||||||||||||||||||||
Real Estate | 13,185 | 881 | 2,020 | 16,086 | 2,623,260 | 2,639,346 | 960 | |||||||||||||||||||||
Consumer | 782 | 263 | 54 | 1,099 | 371,561 | 372,660 | 48 | |||||||||||||||||||||
Total | $ | 18,304 | $ | 1,845 | $ | 2,777 | $ | 22,926 | $ | 3,930,710 | $ | 3,953,636 | $ | 1,008 | ||||||||||||||
* | The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due. |
December 31, 2017 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 1,194 | $ | 31 | $ | 2,316 | $ | 455 | $ | 3,996 | ||||||||||
Loan collectively evaluated for impairment | 9,671 | 1,274 | 27,580 | 5,635 | 44,160 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 10,865 | $ | 1,305 | $ | 29,896 | $ | 6,090 | $ | 48,156 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2016 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 2,128 | $ | 25 | $ | 2,428 | $ | 431 | $ | 5,012 | ||||||||||
Loan collectively evaluated for impairment | 9,579 | 1,076 | 24,436 | 5,676 | 40,767 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 11,707 | $ | 1,101 | $ | 26,864 | $ | 6,107 | $ | 45,779 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 1,042 | $ | 235 | $ | 1,950 | $ | 1 | $ | 3,228 | ||||||||||
Loan collectively evaluated for impairment | 11,080 | 971 | 32,024 | 5,196 | 49,271 | |||||||||||||||
Total | $ | 12,122 | $ | 1,206 | $ | 33,974 | $ | 5,197 | $ | 52,499 | ||||||||||
December 31, 2018 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 1,133 | $ | 170 | $ | 2,409 | $ | 357 | $ | 4,069 | ||||||||||
Loan collectively evaluated for impairment | 10,815 | 1,276 | 29,933 | 5,109 | 47,133 | |||||||||||||||
Total | $ | 11,948 | $ | 1,446 | $ | 32,342 | $ | 5,466 | $ | 51,202 | ||||||||||
December 31, 2017 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Beginning balance | $ | 11,707 | $ | 1,101 | $ | 26,864 | $ | 6,107 | $ | 45,779 | ||||||||||
Provision for loan losses | 1,233 | 243 | 4,055 | 999 | 6,530 | |||||||||||||||
Recoveries | 943 | 32 | 192 | 501 | 1,668 | |||||||||||||||
Charge-offs | (3,018 | ) | (71 | ) | (1,215 | ) | (1,517 | ) | (5,821 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ending balance | $ | 10,865 | $ | 1,305 | $ | 29,896 | $ | 6,090 | $ | 48,156 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Beginning balance | $ | 11,948 | $ | 1,446 | $ | 32,342 | $ | 5,466 | $ | 51,202 | ||||||||||
Provision for loan losses | 398 | (79 | ) | 2,520 | 126 | 2,965 | ||||||||||||||
Recoveries | 1,364 | 158 | 404 | 532 | 2,458 | |||||||||||||||
Charge-offs | (1,588 | ) | (319 | ) | (1,292 | ) | (927 | ) | (4,126 | ) | ||||||||||
Ending balance | $ | 12,122 | $ | 1,206 | $ | 33,974 | $ | 5,197 | $ | 52,499 | ||||||||||
December 31, 2018 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Beginning balance | $ | 10,865 | $ | 1,305 | $ | 29,896 | $ | 6,090 | $ | 48,156 | ||||||||||
Provision for loan losses | 1,662 | 126 | 3,463 | 414 | 5,665 | |||||||||||||||
Recoveries | 839 | 15 | 462 | 512 | 1,828 | |||||||||||||||
Charge-offs | (1,418 | ) | — | (1,479 | ) | (1,550 | ) | (4,447 | ) | |||||||||||
Ending balance | $ | 11,948 | $ | 1,446 | $ | 32,342 | $ | 5,466 | $ | 51,202 | ||||||||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
December 31, 2016 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Beginning balance | $ | 12,644 | $ | 1,191 | $ | 24,375 | $ | 3,667 | $ | 41,877 | ||||||||||
Provision for loan losses | 5,101 | 104 | 1,150 | 3,857 | 10,212 | |||||||||||||||
Recoveries | 952 | 25 | 2,021 | 508 | 3,506 | |||||||||||||||
Charge-offs | (6,990 | ) | (219 | ) | (682 | ) | (1,925 | ) | (9,816 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ending balance | $ | 11,707 | $ | 1,101 | $ | 26,864 | $ | 6,107 | $ | 45,779 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2017 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 3,612 | $ | 134 | $ | 12,838 | $ | 1,086 | $ | 17,670 | ||||||||||
Loan collectively evaluated for impairment | 680,487 | 94,409 | 2,290,160 | 402,843 | 3,467,899 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 684,099 | $ | 94,543 | $ | 2,302,998 | $ | 403,929 | $ | 3,485,569 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2016 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 7,284 | $ | 99 | $ | 18,754 | $ | 1,234 | $ | 27,371 | ||||||||||
Loan collectively evaluated for impairment | 667,126 | 83,922 | 2,171,090 | 407,798 | 3,329,936 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 674,410 | $ | 84,021 | $ | 2,189,844 | $ | 409,032 | $ | 3,357,307 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 3,093 | $ | 1,376 | $ | 19,787 | $ | 326 | $ | 24,582 | ||||||||||
Loan collectively evaluated for impairment | 853,233 | 102,264 | 2,803,585 | 411,305 | 4,170,387 | |||||||||||||||
Total | $ | 856,326 | $ | 103,640 | $ | 2,823,372 | $ | 411,631 | $ | 4,194,969 | ||||||||||
December 31, 2018 | Commercial | Agricultural | Real Estate | Consumer | Total | |||||||||||||||
Loans individually evaluated for impairment | $ | 9,334 | $ | 759 | $ | 16,714 | $ | 727 | $ | 27,534 | ||||||||||
Loan collectively evaluated for impairment | 835,619 | 95,918 | 2,622,632 | 371,933 | 3,926,102 | |||||||||||||||
Total | $ | 844,953 | $ | 96,677 | $ | 2,639,346 | $ | 372,660 | $ | 3,953,636 | ||||||||||
Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||||||||||||
Number | Pre-Modification Recorded Investment | Post- Modification Recorded Investment | Number | Pre-Modification Recorded Investment | Post- Modification Recorded Investment | |||||||||||||||||||
Commercial | 11 | $ | 895 | $ | 895 | 15 | $ | 3,208 | $ | 3,208 | ||||||||||||||
Agricultural | — | — | — | — | — | — | ||||||||||||||||||
Real Estate | 5 | 625 | 625 | 6 | 1,460 | 1,460 | ||||||||||||||||||
Consumer | 1 | 25 | 25 | 7 | 189 | 189 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | 17 | $ | 1,545 | $ | 1,545 | 28 | $ | 4,857 | $ | 4,857 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||
Number | Pre-Modification Recorded Investment | Post- Modification Recorded Investment | Number | Pre-Modification Recorded Investment | Post- Modification Recorded Investment | |||||||||||||||||||
Commercial | 7 | $ | 551 | $ | 551 | 4 | $ | 864 | $ | 864 | ||||||||||||||
Agricultural | 11 | 812 | 812 | 1 | 4 | 4 | ||||||||||||||||||
Real Estate | 7 | 1,397 | 1,397 | 5 | 643 | 643 | ||||||||||||||||||
Consumer | — | — | — | 8 | 209 | 209 | ||||||||||||||||||
Total | 25 | $ | 2,760 | $ | 2,760 | 18 | $ | 1,720 | $ | 1,720 | ||||||||||||||
Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||||||||||||
Adjusted Interest Rate | Extended Maturity | Combined Rate and Maturity | Adjusted Interest Rate | Extended Maturity | Combined Rate and Maturity | |||||||||||||||||||
Commercial | $ | — | $ | 195 | $ | 700 | $ | — | $ | 2,560 | $ | 648 | ||||||||||||
Agricultural | — | — | — | — | — | — | ||||||||||||||||||
Real Estate | — | 312 | 313 | — | 298 | 1,162 | ||||||||||||||||||
Consumer | — | 25 | — | — | 70 | 119 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | — | $ | 532 | $ | 1,013 | $ | — | $ | 2,928 | $ | 1,929 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||
Adjusted Interest Rate | Extended Maturity | Combined Rate and Maturity | Adjusted Interest Rate | Extended Maturity | Combined Rate and Maturity | |||||||||||||||||||
Commercial | $ | — | $ | 389 | $ | 162 | $ | — | $ | 529 | $ | 335 | ||||||||||||
Agricultural | — | 354 | 458 | — | — | 4 | ||||||||||||||||||
Real Estate | — | 494 | 903 | — | 280 | 363 | ||||||||||||||||||
Consumer | — | — | — | — | — | 209 | ||||||||||||||||||
Total | $ | — | $ | 1,237 | $ | 1,523 | $ | — | $ | 809 | $ | 911 | ||||||||||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||||
Number | Balance | Number | Balance | |||||||||||||
Commercial | 2 | $ | 88 | 4 | $ | 1,690 | ||||||||||
Agriculture | — | — | — | — | ||||||||||||
Real Estate | — | — | 3 | 921 | ||||||||||||
Consumer | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 2 | $ | 88 | 7 | $ | 2,611 | ||||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||
Number | Balance | Number | Balance | |||||||||||||
Commercial | — | $ | — | 1 | $ | 491 | ||||||||||
Agriculture | 7 | 267 | — | — | ||||||||||||
Real Estate | — | — | — | — | ||||||||||||
Consumer | — | — | — | — | ||||||||||||
Total | 7 | $ | 267 | 1 | $ | 491 | ||||||||||
Beginning Balance | Additional Loans | Payments | Ending Balance | |||||
Year ended December 31, 2017 | $44,429 | $58,420 | $46,945 | $55,904 |
Beginning Balance | Additional Loans | Payments | Ending Balance | |||||||||||||
Year ended December 31, 2019 | $ | 67,394 | $ | 92,031 | $ | 74,061 | $ | 85,364 |
4.
December 31, 2019: | Outstanding Notional Balance | Asset Derivative Fair Value | Liability Derivative Fair Value | |||||||||
IRLCs | $ | 47,415 | $ | 886 | $ | — | ||||||
Forward mortgage-backed securities trades | 78,500 | — | 152 |
December 31, 2018: | Outstanding Notional Balance | Asset Derivative Fair Value | Liability Derivative Fair Value | |||||||||
IRLCs | $ | 37,088 | $ | 765 | $ | — | ||||||
Forward mortgage-backed securities trades | 45,500 | — | 403 |
Useful Life | December 31, | |||||||||
2017 | 2016 | |||||||||
Land | — | $ | 29,508 | $ | 28,266 | |||||
Buildings | 20 to 40 years | 119,728 | 115,566 | |||||||
Furniture and equipment | 3 to 10 years | 58,672 | 58,145 | |||||||
Leasehold improvements | Lesser of lease term or 5 to 15 years | 4,118 | 4,783 | |||||||
|
|
|
| |||||||
212,026 | 206,760 | |||||||||
Less-accumulated depreciation and amortization | (88,000 | ) | (84,075 | ) | ||||||
|
|
|
| |||||||
Total Bank Premises and Equipment | $ | 124,026 | $ | 122,685 | ||||||
|
|
|
|
Useful Life | December 31, | |||||||||
2019 | 2018 | |||||||||
Land | — | $ | 30,800 | $ | 31,190 | |||||
Buildings | 20 to 40 years | 138,110 | 135,335 | |||||||
Furniture and equipment | 3 to 10 years | 60,200 | 58,969 | |||||||
Leasehold improvements | Lesser of lease term or 5 to 15 years | 3,364 | 3,557 | |||||||
232,474 | 229,051 | |||||||||
Less- accumulated depreciation and amortization | (101,452 | ) | (95,630 | ) | ||||||
Total Bank Premises and Equipment | $ | 131,022 | $ | 133,421 | ||||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
During the years ended December 31, 2017, 2016 and 2015, the Company recorded gains (losses) on sale of the bank premises and equipment totaling ($396,000), $168,000 and ($820,000). In 2017, the Company sold its San Angelo main region branch building for $1,586,000 and recorded a gain of $210,000 and cancelled its San Angelo grocery store branch lease and recorded a write off of leasehold improvements of $360,000. In 2016, the Company sold its Weatherford and Orange main region branch building for $1,385,000 and $2,000,000 and recorded a gain of $560,000 and a loss of $31,000, respectively. The Company recorded a write down of $1,000,000 in 2015 in anticipation of the Orange branch building sale.
5.
Year ending December 31, | ||||
2018 | $ | 384,668 | ||
2019 | 38,031 | |||
2020 | 14,607 | |||
2021 | 6,645 | |||
2022 | 7,304 | |||
Thereafter | — | |||
|
| |||
$ | 451,255 | |||
|
|
Year ending December 31, | ||||
2020 | 351,818 | |||
2021 | 42,445 | |||
2022 | 10,751 | |||
2023 | 7,058 | |||
2024 | 7,941 | |||
Thereafter | — | |||
$ | 420,013 | |||
December 31, | ||||||||
2017 | 2016 | |||||||
Securities sold under agreements with customers to repurchase | $ | 320,450 | $ | 360,820 | ||||
Federal funds purchased | 10,550 | 9,950 | ||||||
Advances from Federal Home Loan Bank of Dallas | — | 75,000 | ||||||
|
|
|
| |||||
Total | $ | 331,000 | $ | 445,770 | ||||
|
|
|
|
December 31, | ||||||||
2019 | 2018 | |||||||
Securities sold under agreements with customers to repurchase. | $ | 375,106 | $ | 409,631 | ||||
Federal funds purchased | 6,250 | 4,075 | ||||||
Advances from Federal Home Loan Bank of Dallas | — | 55,000 | ||||||
Total | $ | 381,356 | $ | 468,706 | ||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
6.2019.
7.2018.
At December 31, 2018, final regulations for the Tax Cuts and Jobs Act were still pending; however, the Company updated its estimate of the impact to our deferred tax balances based on the proposed regulations issued to date and recorded an additional reduction of income tax expense for the year ended December 31, 2018 of $
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Current federal income tax | $ | 34,421 | $ | 30,381 | $ | 31,014 | ||||||
Current state income tax | 99 | 99 | 103 | |||||||||
Deferred federal income tax expense (benefit) | (53 | ) | 673 | 320 | ||||||||
Restatement of net deferred tax liability due to change in income tax rate | (7,650 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Income tax expense | $ | 26,817 | $ | 31,153 | $ | 31,437 | ||||||
|
|
|
|
|
|
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Current federal income tax | $ | 33,099 | $ | 28,359 | $ | 34,421 | ||||||
Current state income tax | 150 | 92 | 99 | |||||||||
Deferred federal income tax expense (benefit) | (29 | ) | (250 | ) | (53 | ) | ||||||
Restatement of net deferred tax liability due to change in income tax rate | — | (664 | ) | (7,650 | ) | |||||||
Income tax expense | $ | 33,220 | $ | 27,537 | $ | 26,817 | ||||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
As a Percent of Pretax Earnings | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Statutory federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
Restatement of net deferred tax liability due to change in income tax rate | (5.3 | ) | — | — | ||||||||
Reductions in tax rate resulting from interest income exempt from federal income tax | (11.5 | ) | (12.1 | ) | (11.4 | ) | ||||||
Effect of state income tax | 0.1 | 0.1 | 0.1 | |||||||||
ESOP tax deduction | (0.2 | ) | (0.2 | ) | (0.2 | ) | ||||||
Other | 0.1 | 0.1 | 0.3 | |||||||||
|
|
|
|
|
| |||||||
Effective income tax rate | 18.2 | % | 22.9 | % | 23.8 | % | ||||||
|
|
|
|
|
|
As a Percent of Pretax Earnings | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Statutory federal income tax rate | 21.0 | % | 21.0 | % | 35.0 | % | ||||||
Restatement of net deferred tax liability due to change in income tax rate | — | (0.4 | ) | (5.3 | ) | |||||||
Reductions in tax rate resulting from interest income exempt from federal income tax | (4.5 | ) | (5.2 | ) | (11.5 | ) | ||||||
Effect of state income tax | 0.1 | 0.1 | 0.1 | |||||||||
ESOP tax deduction | (0.1 | ) | (0.1 | ) | (0.2 | ) | ||||||
Other | 0.3 | 0.1 | 0.1 | |||||||||
Effective income tax rate | 16.8 | % | 15.5 | % | 18.2 | % | ||||||
2017 | 2016 | |||||||
Deferred tax assets: | ||||||||
Tax basis of loans in excess of financial statement basis | $ | 10,550 | $ | 17,006 | ||||
Minimum liability in defined benefit plan | 766 | 1,641 | ||||||
Recognized for financial reporting purposes but not yet for tax purposes: | ||||||||
Deferred compensation | 1,818 | 2,807 | ||||||
Write-downs and adjustments to other real estate owned and repossessed assets | 11 | 9 | ||||||
Other deferred tax assets | 79 | 226 | ||||||
|
|
|
| |||||
Total deferred tax assets | $ | 13,224 | $ | 21,689 | ||||
|
|
|
| |||||
Deferred tax liabilities: | ||||||||
Financial statement basis of fixed assets in excess of tax basis | $ | 3,343 | 5,870 | |||||
Intangible asset amortization deductible for tax purposes, but not for financial reporting purposes | 9,926 | 15,191 | ||||||
Recognized for financial reporting purposes but not yet for tax purposes: | ||||||||
Accretion on investment securities | 1,039 | 1,788 | ||||||
Pension plan contributions | 1,086 | 1,799 | ||||||
Net unrealized gain on investment securitiesavailable-for-sale | 9,420 | 11,573 | ||||||
Other deferred tax liabilities | 31 | 83 | ||||||
|
|
|
| |||||
Total deferred tax liabilities | $ | 24,845 | $ | 36,304 | ||||
|
|
|
| |||||
Net deferred tax asset (liability) | $ | (11,621 | ) | $ | (14,615 | ) | ||
|
|
|
|
2019 | 2018 | |||||||
Deferred tax assets: | ||||||||
Tax basis of loans in excess of financial statement basis | $ | 12,245 | $ | 12,010 | ||||
Minimum liability in defined benefit plan | — | 352 | ||||||
Recognized for financial reporting purposes but not yet for tax purposes: | ||||||||
Deferred compensation | 2,254 | 2,056 | ||||||
Write-downs and adjustments to other real estate owned and repossessed assets | 48 | 49 | ||||||
Other deferred tax assets | 157 | 208 | ||||||
Total deferred tax assets | $ | 14,704 | $ | 14,675 | ||||
Deferred tax liabilities: | ||||||||
Financial statement basis of fixed assets in excess of tax basis | $ | 4,651 | $ | 4,182 | ||||
Intangible asset amortization deductible for tax purposes, but not for financial reporting purposes | 11,935 | 11,263 | ||||||
Recognized for financial reporting purposes but not yet for tax purposes: | ||||||||
Accretion on investment securities | 755 | 745 | ||||||
Pension plan contributions | — | 816 | ||||||
Net unrealized gain on investment securities available-for-sale | 17,945 | 1,111 | ||||||
Other deferred tax liabilities | 51 | 34 | ||||||
Total deferred tax liabilities | $ | 35,337 | $ | 18,151 | ||||
Net deferred tax asset (liability) | $ | (20,633 | ) | $ | (3,476 | ) | ||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
recognized tax positions that no longer meet theseveral U.S. state jurisdictions.margin tax returns in the state of Texas. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 20142012013.20120172019 and 2016,2018, the Company believes that there are no
8.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
value. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
2017.
December 31, 2017 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
Obligations of U.S. government sponsored enterprises and agencies | $ | — | $ | 60,330 | $ | — | $ | 60,330 | ||||||||
Obligations of state and political subdivisions | — | 1,420,850 | — | 1,420,850 | ||||||||||||
Corporate bonds | — | 7,031 | — | 7,031 | ||||||||||||
Residential mortgage-backed securities | — | 1,219,097 | — | 1,219,097 | ||||||||||||
Commercial mortgage-backed securities | — | 375,737 | — | 375,737 | ||||||||||||
Other securities | 4,428 | — | — | 4,428 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 4,428 | $ | 3,083,045 | $ | — | $ | 3,087,473 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2016 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
U.S. Treasury securities | $ | 10,668 | $ | — | $ | — | $ | 10,668 | ||||||||
Obligations of U.S. government sponsored enterprises and agencies | — | 113,703 | — | 113,703 | ||||||||||||
Obligations of state and political subdivisions | — | 1,564,276 | — | 1,564,276 | ||||||||||||
Corporate bonds | — | 47,965 | — | 47,965 | ||||||||||||
Residential mortgage-backed securities | — | 851,361 | — | 851,361 | ||||||||||||
Commercial mortgage-backed securities | — | 268,436 | — | 268,436 | ||||||||||||
Other securities | 4,428 | — | — | 4,428 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 15,096 | $ | 2,845,741 | $ | — | $ | 2,860,837 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2019 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
U.S Treasury securities | $ | 10,019 | $ | — | $ | — | $ | 10,019 | ||||||||
Obligations of state and political subdivisions | — | 1,288,983 | — | 1,288,983 | ||||||||||||
Corporate bonds | — | 230 | — | 230 | ||||||||||||
Residential mortgage-backed securities | — | 1,608,863 | — | 1,608,863 | ||||||||||||
Commercial mortgage-backed securities | — | 500,744 | — | 500,744 | ||||||||||||
Other securities | 4,478 | — | — | 4,478 | ||||||||||||
Total | $ | 14,497 | $ | 3,398,820 | $ | — | $ | 3,413,317 | ||||||||
Loans held-for-sale | $ | — | $ | 23,076 | $ | — | $ | 23,076 | ||||||||
IRLCs | $ | — | $ | 886 | $ | — | $ | 886 | ||||||||
Forward mortgage-backed securities traded | $ | — | $ | (152 | ) | $ | — | $ | (152 | ) |
December 31, 2018 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
U.S Treasury securities | $ | 9,962 | $ | — | $ | — | $ | 9,962 | ||||||||
Obligations of U. S. government sponsored enterprises and agencies | — | 301 | — | 301 | ||||||||||||
Obligations of state and political subdivisions | — | 1,257,871 | — | 1,257,871 | ||||||||||||
Corporate bonds | — | 450 | — | 450 | ||||||||||||
Residential mortgage-backed securities | — | 1,454,545 | — | 1,454,545 | ||||||||||||
Commercial mortgage-backed securities | — | 431,300 | — | 431,300 | ||||||||||||
Other securities | 4,348 | — | — | 4,348 | ||||||||||||
Total | $ | 14,310 | $ | 3,144,467 | $ | — | $ | 3,158,777 | ||||||||
Loans held-for-sale | $ | — | $ | 19,185 | $ | — | $ | 19,185 | ||||||||
IRLCs | $ | — | $ | 765 | $ | — | $ | 765 | ||||||||
Forward mortgage-backed securities traded | $ | — | $ | (403 | ) | $ | — | $ | (403 | ) |
Impaired Loans — Impaired loans are reported at the fair value of the underlying collateral less selling costs if repayment is expected solely from the collateral. Collateral values are estimated using Level 2 inputs based on observable market data. At December 31, 2017,2019, impaired loans with a carrying value of $17,670,000$16,213,000 were reduced by specific valuation reserves totaling $3,996,000$3,228,000 resulting in a net fair value of $13,674,000.
LoansHeld-for-Sale — Loansheld-for-sale are reported at the lower of cost or fair value. The Company originates conforming loans that are sold in the secondary market in which loan pricing is available. In
$12,985,000.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
determining whether the fair value of loansheld-for-sale is less than cost and quoted prices are available for similar assets. These loans are considered Level 2 of the fair value hierarchy. At December 31, 2017, the Company’s mortgage loansheld-for-sale was recorded at cost as fair value exceeded cost.
Certainnon-financialassets and20172019 and 20162018 include other real estate owned which, subsequent to their initial transfer to other real estate owned from loans, were
Year Ended December 31, | ||||||||
2017 | 2016 | |||||||
Carrying value of other real estate owned prior tore-measurement | $ | 1,067 | $ | — | ||||
Write-downs included in gain (loss) on sale of other real estate owned | (306 | ) | — | |||||
|
|
|
| |||||
Fair value | $ | 761 | $ | — | ||||
|
|
|
|
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Carrying value of other real estate owned prior to re-measurement | $ | — | $ | 1,046 | ||||
Write-downs included in gain (loss) on sale of other real estate owned | — | (236 | ) | |||||
Fair value | $ | — | $ | 810 | ||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
The carrying value and the estimated fair value of the Company’s contractual
2017 | 2016 | Fair Value Hierarchy | ||||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||||||
Cash and due from banks | $ | 209,583 | $ | 209,583 | $ | 204,782 | $ | 204,782 | Level 1 | |||||||||
Federal funds sold | — | — | 3,130 | 3,130 | Level 1 | |||||||||||||
Interest-bearing deposits in banks | 162,764 | 162,764 | 48,574 | 48,574 | Level 1 | |||||||||||||
Interest-bearing time deposits in banks | 1,458 | 1,458 | 1,707 | 1,709 | Level 2 | |||||||||||||
Available-for-sale securities | 3,087,473 | 3,087,473 | 2,860,837 | 2,860,837 | Levels 1 and 2 | |||||||||||||
Held-to-maturity securities | — | — | 121 | 124 | Level 2 | |||||||||||||
Loans | 3,452,543 | 3,470,133 | 3,338,426 | 3,361,735 | Level 3 | |||||||||||||
Accrued interest receivable | 36,081 | 36,081 | 36,469 | 36,469 | Level 2 | |||||||||||||
Deposits with stated maturities | 451,255 | 452,000 | 508,996 | 510,304 | Level 2 | |||||||||||||
Deposits with no stated maturities | 5,511,706 | 5,511,706 | 4,969,543 | 4,969,543 | Level 1 | |||||||||||||
Borrowings | 331,000 | 331,000 | 445,770 | 445,770 | Level 2 | |||||||||||||
Accrued interest payable | 197 | 197 | 225 | 225 | Level 2 |
9.
2019 | 2018 | |||||||||||||||||||
Carrying | Estimated | Carrying | Estimated | Fair Value | ||||||||||||||||
Value | Fair Value | Value | Fair Value | Hierarchy | ||||||||||||||||
Cash and due from banks | $ | 231,534 | $ | 231,534 | $ | 207,835 | $ | 207,835 | Level 1 | |||||||||||
Federal Funds Sold | 3,150 | 3,150 | — | — | Level 1 | |||||||||||||||
Interest-bearing deposits in banks | 47,920 | 47,920 | 40,812 | 40,812 | Level 1 | |||||||||||||||
Interest-bearing time deposits in banks | — | — | 1,458 | 1,458 | Level 2 | |||||||||||||||
Available-for-sale securities | 3,413,317 | 3,413,317 | 3,158,777 | 3,158,777 | Levels 1 and 2 | |||||||||||||||
Loans held-for-investment | 4,194,969 | 4,209,826 | 3,902,434 | 3,947,391 | Level 3 | |||||||||||||||
Loans held-for-sale | 28,228 | 28,343 | 21,672 | 21,779 | Level 2 | |||||||||||||||
Accrued interest receivable | 36,894 | 36,894 | 36,765 | 36,765 | Level 2 | |||||||||||||||
Deposits with stated maturities | 420,013 | 421,397 | 442,161 | 441,727 | Level 2 | |||||||||||||||
Deposits with no stated maturities | 6,183,793 | 6,183,793 | 5,738,228 | 5,738,228 | Level 1 | |||||||||||||||
Borrowings | 381,356 | 381,356 | 468,706 | 468,706 | Level 2 | |||||||||||||||
Accrued interest payable | 628 | 628 | 408 | 408 | Level 2 | |||||||||||||||
IRLCs | 886 | 886 | 765 | 765 | Level 2 | |||||||||||||||
Forward mortgage-backed securities traded | 152 | 152 | 403 | 403 | Level 2 |
10.2023 and thereafter - $57,000.
2017
Total Notional Amounts Committed December 31, 2017 (in thousands) | ||||
Financial instruments whose contract amounts represent credit risk: | ||||
Unfunded lines of credit | $ | 534,468 | ||
Unfunded commitments to extend credit | 244,658 | |||
Standby letters of credit | 28,858 | |||
|
| |||
Total commercial commitments | $ | 807,984 | ||
|
|
December 31, 2019 (in thousands) | ||||
Financial instruments whose contract amounts represent credit risk: | ||||
Unfunded lines of credit | $ | 743,595 | ||
Unfunded commitments to extend credit | 374,158 | |||
Standby letters of credit | 38,364 | |||
Total commercial commitments | $ | 1,156,117 | ||
11.
12.
2017
2017 | 2016 | |||||||
Reconciliation of benefit obligations: | ||||||||
Benefit obligation at January 1 | $ | 15,453 | $ | 16,002 | ||||
Interest cost on projected benefit obligation | 635 | 665 | ||||||
Actuarial loss | 486 | 139 | ||||||
Benefits paid, including partial settlement of certain participant balances | (1,043 | ) | (1,353 | ) | ||||
|
|
|
| |||||
Benefit obligation at December 31 | $ | 15,531 | $ | 15,453 | ||||
|
|
|
| |||||
Reconciliation of fair value of plan assets: | ||||||||
Fair value of plan assets at January 1 | $ | 15,787 | $ | 14,820 | ||||
Actual return on plan assets | 2,302 | 1,820 | ||||||
Employer contributions | — | 500 | ||||||
Benefits paid, including partial settlement of certain participant balances | (1,043 | ) | (1,353 | ) | ||||
|
|
|
| |||||
Fair value of plan assets at December 31 | 17,046 | 15,787 | ||||||
|
|
|
| |||||
Funded status | $ | 1,515 | $ | 334 | ||||
|
|
|
|
2019 | 2018 | |||||||
Reconciliation of benefit obligations: | ||||||||
Benefit obligation at January 1 | $ | 6,613 | $ | 15,531 | ||||
Transfer liability from multiple employer plan | 2,929 | — | ||||||
Interest cost on projected benefit obligation | 393 | 523 | ||||||
Actuarial (gain) loss, including settlement of all participants balances | 1,257 | (811 | ) | |||||
Benefits paid, including settlement of participant balances | (11,192 | ) | (8,630 | ) | ||||
Benefit obligation at December 31 | $ | — | $ | 6,613 | ||||
Reconciliation of fair value of plan assets: | ||||||||
Fair value of plan assets at January 1 | $ | 8,781 | $ | 17,046 | ||||
Transfer of assets from multiple employer plan | 1,829 | — | ||||||
Actual return on plan assets | 582 | 365 | ||||||
Employer contributions | — | — | ||||||
Benefits paid, including settlement of certain participant balances | (11,192 | ) | (8,630 | ) | ||||
Fair value of plan assets at December 31 | — | 8,781 | ||||||
Funded status | $ | — | $ | 2,168 | ||||
2017 | 2016 | |||||||
Net actuarial loss | $ | (3,597 | ) | $ | (4,688 | ) | ||
Deferred tax benefit | 1,227 | 1,641 | ||||||
|
|
|
| |||||
Amounts included in accumulated other comprehensive earnings, net of tax | $ | (2,370 | ) | $ | (3,047 | ) | ||
|
|
|
|
2019 | 2018 | |||||||
Net actuarial loss | $ | — | $ | (1,717 | ) | |||
Deferred tax benefit | — | 393 | ||||||
Amounts included in accumulated other comprehensive earnings, net of tax | $ | — | $ | (1,324 | ) | |||
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Service cost — benefits earned during the period | $ | — | $ | — | $ | — | ||||||
Interest cost on projected benefit obligation | 635 | 665 | 622 | |||||||||
Expected return on plan assets | (974 | ) | (912 | ) | (948 | ) | ||||||
Amortization of unrecognized net loss | 249 | 375 | 222 | |||||||||
Recognized loss on partial settlement of certain participant balances | — | 267 | — | |||||||||
|
|
|
|
|
| |||||||
Net periodic pension benefit expense (benefit) | $ | (90 | ) | $ | 395 | $ | (104 | ) | ||||
|
|
|
|
|
|
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Service cost - benefits earned during the period | $ | — | $ | — | $ | — | ||||||
Interest cost on projected benefit obligation | 393 | 523 | 635 | |||||||||
Expected return on plan assets | (227 | ) | (1,028 | ) | (974 | ) | ||||||
Amortization of unrecognized net loss | 185 | 186 | 249 | |||||||||
Recognized loss on partial settlement of certain participant balances | 2,673 | 1,546 | — | |||||||||
Net pension expense (benefit) | $ | 3,024 | $ | 1,227 | $ | (90 | ) | |||||
2017 | 2016 | 2015 | ||||||||||
Weighted average discount rate | 3.50 | % | 4.25 | % | 4.25 | % | ||||||
Expected long-term rate of return on assets | 6.25 | % | 6.25 | % | 6.25 | % |
2019 | 2018 | 2017 | ||||||||||
Weighted average discount rate | 4.25 | % | 4.25 | % | 3.50 | % | ||||||
Expected long-term rate of return on assets | 2.20 | % | 6.25 | % | 6.25 | % |
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
The major type of plan assets in the pension plan and the targeted allocation percentage as of December 31, 2017 and 2016 is as follows:
December 31, 2017 Allocation | December 31, 2016 Allocation | Targeted Allocation | ||||||||||
Equity securities | 75 | % | 77 | % | 75 | % | ||||||
Debt securities | 24 | % | 22 | % | 25 | % | ||||||
Cash and equivalents | 1 | % | 1 | % | — |
The range and weighted average final maturities of debt securities held in the pension plan as of December 31, 2017 are 1.52 to 19.76 years and approximately 5.64 years, respectively. Assets held in the pension plan are considered either Level 1 consisting of the money market funds, publicly traded common stocks and publicly traded mutual funds or Level 2 consisting of obligations of state and political subdivisions, corporate bonds and mortgage-backed securities. There were no Level 3 securities. See note 8 for a discussion of the fair value hierarchy. The breakdown by level is as follows (dollars in thousands):
Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||||||
Money market fund | $ | 274 | $ | — | $ | — | $ | 274 | ||||||||
U.S. Treasury notes | — | 149 | — | 149 | ||||||||||||
Obligations of state and political subdivisions | — | 634 | — | 634 | ||||||||||||
Corporate bonds | — | 868 | — | 868 | ||||||||||||
Mortgage-backed securities | — | 1,130 | — | 1,130 | ||||||||||||
Corporate stocks and mutual funds | 13,991 | — | — | 13,991 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 14,265 | $ | 2,781 | — | $ | 17,046 | |||||||||
|
|
|
|
|
|
|
|
An estimate of the undiscounted projected future payments to eligible participants for the next five years and the following five years in the aggregate is as follows (in thousands):
Year Ending December 31, | ||||
2018 | $ | 1,064 | ||
2019 | $ | 1,018 | ||
2020 | $ | 1,036 | ||
2021 | $ | 1,077 | ||
2022 | $ | 1,063 | ||
2023 forward | $ | 5,309 |
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
$3,373,000.
13.
14.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
Actual | Minimum Capital Required Under Basel IIIPhase-In | Minimum Capital Required-Basel III FullyPhased-In | Required to be Considered Well- Capitalized | |||||||||||||||||||||||||||||
As of December 31, 2017: | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 814,634 | 19.85 | % | $ | 379,578 | 9.250 | % | $ | 430,872 | 10.50 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 723,563 | 17.68 | % | $ | 378,614 | 9.250 | % | $ | 429,777 | 10.50 | % | $ | 409,312 | 10.00 | % | ||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 765,882 | 18.66 | % | $ | 297,507 | 7.250 | % | $ | 348,801 | 8.50 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 674,811 | 16.49 | % | $ | 296,751 | 7.250 | % | $ | 347,915 | 8.50 | % | $ | 327,450 | 8.00 | % | ||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 765,882 | 18.66 | % | $ | 235,954 | 5.750 | % | $ | 287,248 | 7.00 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 674,811 | 16.49 | % | $ | 235,354 | 5.750 | % | $ | 286,518 | 7.00 | % | $ | 266,053 | 6.50 | % | ||||||||||||||||
Leverage Ratio: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 765,882 | 11.09 | % | $ | 276,296 | 4.000 | % | $ | 276,296 | 4.00 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 674,811 | 9.80 | % | $ | 275,320 | 4.000 | % | $ | 275,320 | 4.00 | % | $ | 344,151 | 5.00 | % |
Actual | Minimum Capital Required Under Basel IIIPhase-In | Minimum Capital Required-Basel III FullyPhased-In | Required to be Considered Well- Capitalized | |||||||||||||||||||||||||||||
As of December 31, 2016: | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 739,959 | 18.45 | % | $ | 345,827 | 8.625 | % | $ | 421,007 | 10.50 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 633,403 | 15.84 | % | $ | 344,930 | 8.625 | % | $ | 419,915 | 10.50 | % | $ | 399,919 | 10.00 | % | ||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 693,584 | 17.30 | % | $ | 265,635 | 6.625 | % | $ | 340,815 | 8.50 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 587,028 | 14.68 | % | $ | 264,946 | 6.625 | % | $ | 339,931 | 8.50 | % | $ | 319,935 | 8.00 | % | ||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 693,584 | 17.30 | % | $ | 205,491 | 5.125 | % | $ | 280,671 | 7.00 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 587,028 | 14.68 | % | $ | 204,959 | 5.125 | % | $ | 279,943 | 7.00 | % | $ | 259,947 | 6.50 | % | ||||||||||||||||
Leverage Ratio: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 693,584 | 10.71 | % | $ | 258,978 | 4.00 | % | $ | 258,978 | 4.00 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 587,028 | 9.10 | % | $ | 257,941 | 4.00 | % | $ | 257,941 | 4.00 | % | $ | 322,426 | 5.00 | % |
We have performed a preliminary assessment using the regulatory capital estimation tool made available by the OCC and believe the Company and Bank are prepared
Actual | Minimum Capital Required-Basel III Fully Phased-In* | Required to be Considered Well- Capitalized | ||||||||||||||||||||||
As of December 31, 2019: | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
Total Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||
Consolidated | $ | 1,051,029 | 21.13 | % | $ | 522,275 | 10.50 | % | — | N/A | ||||||||||||||
First Financial Bank, N.A | $ | 908,778 | 18.31 | % | $ | 521,081 | 10.50 | % | $ | 496,268 | 10.00 | % | ||||||||||||
Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||
Consolidated | $ | 997,721 | 20.06 | % | $ | 422,794 | 8.50 | % | — | N/A | ||||||||||||||
First Financial Bank, N.A | $ | 855,470 | 17.24 | % | $ | 421,828 | 8.50 | % | $ | 397,014 | 8.00 | % | ||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||
Consolidated | $ | 997,721 | 20.06 | % | $ | 348,184 | 7.00 | % | — | N/A | ||||||||||||||
First Financial Bank, N.A | $ | 855,470 | 17.24 | % | $ | 347,388 | 7.00 | % | $ | 322,574 | 6.50 | % | ||||||||||||
Leverage Ratio: | ||||||||||||||||||||||||
Consolidated | $ | 997,721 | 12.60 | % | $ | 316,850 | 4.00 | % | — | N/A | ||||||||||||||
First Financial Bank, N.A | $ | 855,470 | 10.84 | % | $ | 315,570 | 4.00 | % | $ | 394,463 | 5.00 | % |
* | At December 31, 2019 the Capital Conservative Buffer Basel III has been fully phased-in. |
2019, 2018 and 2017
Actual | Minimum Capital Required Under Basel III Phase-In | Minimum Capital Required-Basel III Fully Phased-In | Required to be Considered Well- Capitalized | |||||||||||||||||||||||||||||
As of December 31, 2018: | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 940,026 | 20.61 | % | $ | 450,459 | 9.875 | % | $ | 478,969 | 10.50 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 824,428 | 18.12 | % | $ | 449,350 | 9.875 | % | $ | 477,790 | 10.50 | % | $ | 455,038 | 10.00 | % | ||||||||||||||||
Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 888,015 | 19.47 | % | $ | 359,226 | 7.875 | % | $ | 387,737 | 8.50 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 772,417 | 16.97 | % | $ | 358,342 | 7.875 | % | $ | 386,782 | 8.50 | % | $ | 364,030 | 8.00 | % | ||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 888,015 | 19.47 | % | $ | 290,802 | 6.375 | % | $ | 319,312 | 7.00 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 772,417 | 16.97 | % | $ | 290,087 | 6.375 | % | $ | 318,526 | 7.00 | % | $ | 295,775 | 6.50 | % | ||||||||||||||||
Leverage Ratio: | ||||||||||||||||||||||||||||||||
Consolidated | $ | 888,015 | 11.85 | % | $ | 299,682 | 4.00 | % | $ | 299,682 | 4.00 | % | — | N/A | ||||||||||||||||||
First Financial Bank, N.A | $ | 772,417 | 10.35 | % | $ | 298,576 | 4.00 | % | $ | 298,576 | 4.00 | % | $ | 373,220 | 5.00 | % |
$28,550,000.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
15.
Shares | Weighted- Average Ex. Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value ($000) | |||||||||||||
Outstanding, beginning of year | 1,094,035 | $ | 27.40 | |||||||||||||
Granted | 452,450 | 42.35 | ||||||||||||||
Exercised | (140,250 | ) | 20.92 | |||||||||||||
Cancelled | (80,270 | ) | 30.33 | |||||||||||||
|
|
|
| |||||||||||||
Outstanding, end of year | 1,325,965 | 33.01 | 7.12 | $ | 15,966 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Exercisable at end of year | 458,715 | $ | 23.94 | 4.66 | $ | 9,684 | ||||||||||
|
|
|
|
|
|
|
|
Shares | Weighted- Average Ex. Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value ($000) | |||||||||||||
Outstanding, beginning of year | 2,171,086 | $ | 17.27 | |||||||||||||
Granted | 398,850 | 29.70 | ||||||||||||||
Exercised | (328,802 | ) | 13.06 | |||||||||||||
Cancelled | (102,938 | ) | 19.84 | |||||||||||||
Outstanding, end of year | 2,138,196 | 20.12 | 6.39 | $ | 32,040 | |||||||||||
Exercisable at end of year | 885,206 | $ | 16.08 | 4.88 | $ | 16,836 | ||||||||||
Exercise Price | Number Outstanding | Remaining Contracted Life (Years) | Number Vested | |||||||
$16.78 | 87,640 | 1.4 | 87,640 | |||||||
15.73 | 142,620 | 3.8 | 142,620 | |||||||
30.85 | 270,505 | 5.8 | 156,225 | |||||||
33.89 | 382,750 | 7.8 | 72,230 | |||||||
$42.35 | 442,450 | 9.5 | — |
2019:
Exercise Price | Number Outstanding | Remaining Contracted Life (Years) | Number Vested | |||||||||||
$ | 7.87 | 97,456 | 1.8 | 97,456 | ||||||||||
$ | 15.43 | 336,500 | 3.8 | 336,500 | ||||||||||
$ | 16.95 | 564,440 | 5.8 | 303,160 | ||||||||||
$ | 21.18 | 747,450 | 7.5 | 148,090 | ||||||||||
$ | 29.70 | 392,350 | 9.5 | — |
$1,246,000.
$14,234,000.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
On April 28, 2015, shareholders of the Company approved a restricted stock plan for selected employees, officers,2017,2019, the Company had allocated 413,000686,000 shares of stock for issuance under the plan.
On July 21, 2015, 7,070 shares were granted to the tennon-employee directors. Total value of these shares totaled $250,000 and was expensed over the period from grant date to April 26, 2016, the next scheduled annual shareholders’ meeting at which the directors’ current term expired.
is being expensed over the period from grant day to April 28, 2020, the Company’s next shareholders’ meeting at which directors’ term expires.
16.2017.
2017 | 2016 | |||||||
ASSETS | ||||||||
Cash in subsidiary bank | $ | 14,272 | $ | 15,070 | ||||
Cash in unaffiliated banks | 2 | 2 | ||||||
Interest-bearing deposits in subsidiary bank | 64,195 | 78,179 | ||||||
|
|
|
| |||||
Total cash and cash equivalents | 78,469 | 93,251 | ||||||
Securitiesavailable-for-sale, at fair value | 8,515 | 11,593 | ||||||
Investment in and advances to subsidiaries, at equity | 847,445 | 744,971 | ||||||
Intangible assets | 723 | 723 | ||||||
Other assets | 2,654 | 2,668 | ||||||
|
|
|
| |||||
Total assets | $ | 937,806 | $ | 853,206 | ||||
|
|
|
| |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Total liabilities | $ | 15,038 | $ | 15,321 | ||||
Shareholders’ equity: | ||||||||
Common stock | 663 | 661 | ||||||
Capital surplus | 378,062 | 372,245 | ||||||
Retained earnings | 517,257 | 446,534 | ||||||
Treasury stock | (7,148 | ) | (6,671 | ) | ||||
Deferred compensation | 7,148 | 6,671 | ||||||
Accumulated other comprehensive earnings | 26,786 | 18,445 | ||||||
|
|
|
| |||||
Total shareholders’ equity | 922,768 | 837,885 | ||||||
|
|
|
| |||||
Total liabilities and shareholders’ equity | $ | 937,806 | $ | 853,206 | ||||
|
|
|
|
2018
2019 | 2018 | |||||||
ASSETS | ||||||||
Cash in subsidiary bank | $ | 44,422 | $ | 16,981 | ||||
Cash in unaffiliated banks | 2 | 2 | ||||||
Interest-bearing deposits in subsidiary bank | 80,652 | 84,279 | ||||||
Total cash and cash equivalents | 125,076 | 101,262 | ||||||
Securities available-for-sale, at fair value | 6,297 | 6,276 | ||||||
Investment in and advances to subsidiaries, at equity | 1,111,955 | 959,352 | ||||||
Intangible assets | 723 | 723 | ||||||
Other assets | 2,701 | 2,647 | ||||||
Total assets | $ | 1,246,752 | $ | 1,070,260 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Total liabilities | $ | 19,555 | $ | 16,965 | ||||
Shareholders’ equity: | ||||||||
Common stock | 1,359 | 678 | ||||||
Capital surplus | 450,676 | 443,114 | ||||||
Retained earnings | 707,656 | 606,658 | ||||||
Treasury stock | (8,222 | ) | (7,507 | ) | ||||
Deferred compensation | 8,222 | 7,507 | ||||||
Accumulated other comprehensive earnings | 67,506 | 2,845 | ||||||
Total shareholders’ equity | 1,227,197 | 1,053,295 | ||||||
Total liabilities and shareholders’ equity | $ | 1,246,752 | $ | 1,070,260 | ||||
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
2017 | 2016 | 2015 | ||||||||||
Income: | ||||||||||||
Cash dividends from subsidiaries | $ | 30,800 | $ | 48,800 | $ | 51,200 | ||||||
Excess of earnings over dividends of subsidiaries | 92,929 | 58,809 | 52,911 | |||||||||
Other | 6,590 | 4,184 | 4,185 | |||||||||
|
|
|
|
|
| |||||||
Total Income | 130,319 | 111,793 | 108,296 | |||||||||
|
|
|
|
|
| |||||||
Expenses: | ||||||||||||
Salaries and employee benefits | 8,606 | 5,655 | 6,067 | |||||||||
Other operating expenses | 3,871 | 3,531 | 4,439 | |||||||||
|
|
|
|
|
| |||||||
Total Expense | 12,477 | 9,186 | 10,506 | |||||||||
|
|
|
|
|
| |||||||
Earnings before income taxes | 117,842 | 102,607 | 97,790 | |||||||||
Income tax benefit | 2,529 | 2,167 | 2,591 | |||||||||
|
|
|
|
|
| |||||||
Net earnings | $ | 120,371 | $ | 104,774 | $ | 100,381 | ||||||
|
|
|
|
|
|
2017
2019 | 2018 | 2017 | ||||||||||
Income: | ||||||||||||
Cash dividends from subsidiaries | $ | 84,500 | $ | 74,100 | $ | 30,800 | ||||||
Excess of earnings over dividends of subsidiaries | 86,956 | 82,323 | 92,929 | |||||||||
Other | 7,937 | 7,269 | 6,590 | |||||||||
Total income | 179,393 | 163,692 | 130,319 | |||||||||
Expenses: | ||||||||||||
Salaries and employee benefits | 11,963 | 9,966 | 8,606 | |||||||||
Other operating expenses | 4,756 | 4,781 | 3,871 | |||||||||
Total expense | 16,719 | 14,747 | 12,477 | |||||||||
Earnings before income taxes | 162,674 | 148,945 | 117,842 | |||||||||
Income tax benefit | 2,138 | 1,693 | 2,529 | |||||||||
Net earnings | $ | 164,812 | $ | 150,638 | $ | 120,371 | ||||||
2017
2017 | 2016 | 2015 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net earnings | $ | 120,371 | $ | 104,774 | $ | 100,381 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Excess of earnings over dividends of subsidiary bank | (92,929 | ) | (58,809 | ) | (52,911 | ) | ||||||
Depreciation and amortization, net | 207 | 208 | 197 | |||||||||
Decrease (increase) in other assets | 438 | 1,702 | 507 | |||||||||
Increase (decrease) in other liabilities | 183 | (1,374 | ) | 3,743 | ||||||||
Other | 2 | 8 | — | |||||||||
|
|
|
|
|
| |||||||
Net cash provided by operating activities | 28,272 | 46,509 | 51,917 | |||||||||
|
|
|
|
|
| |||||||
Cash flows from investing activities: | ||||||||||||
Cash received in connection with acquisition of banks | — | — | 13,125 | |||||||||
Maturity ofavailable-for-sale security | 2,997 | — | — | |||||||||
Purchases of bank premises and equipment | (30 | ) | (94 | ) | (107 | ) | ||||||
Repayment from investment in and advances to subsidiaries, net | — | — | 5,800 | |||||||||
Other | — | 10 | — | |||||||||
|
|
|
|
|
| |||||||
Net cash used in (provided by) investing activities | 2,967 | (84 | ) | 18,818 | ||||||||
|
|
|
|
|
| |||||||
Cash flows from financing activities: | ||||||||||||
Repayment of subordinated debt | — | — | (13,125 | ) | ||||||||
Proceeds of stock issuances | 2,934 | 1,260 | 1,545 | |||||||||
Cash dividends paid | (48,955 | ) | (44,907 | ) | (38,767 | ) | ||||||
|
|
|
|
|
| |||||||
Net cash used in financing activities | (46,021 | ) | (43,647 | ) | (50,347 | ) | ||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in cash and cash equivalents | (14,782 | ) | 2,778 | 20,388 | ||||||||
Cash and cash equivalents, beginning of year | 93,251 | 90,473 | 70,085 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents, end of year | $ | 78,469 | $ | 93,251 | $ | 90,473 | ||||||
|
|
|
|
|
|
2017
2019 | 2018 | 2017 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net earnings | $ | 164,812 | $ | 150,638 | $ | 120,371 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Excess of earnings over dividends of subsidiary bank | (86,956 | ) | (82,323 | ) | (92,929 | ) | ||||||
Depreciation and amortization, net | 246 | 331 | 207 | |||||||||
Decrease (increase) in other assets | 1,508 | 560 | 438 | |||||||||
Increase (decrease) in other liabilities | 990 | 1,932 | 183 | |||||||||
Other | — | (2 | ) | 2 | ||||||||
Net cash provided by operating activities | 80,600 | 71,136 | 28,272 | |||||||||
Cash flows from investing activities: | ||||||||||||
Cash received in connection with acquisition of banks | — | — | — | |||||||||
Maturity of available-for-sale security | — | 2,000 | 2,997 | |||||||||
Purchases of bank premises and equipment and software | (24 | ) | (346 | ) | (30 | ) | ||||||
Net cash provided by (used in) investing activities | (24 | ) | 1,654 | 2,967 | ||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds of stock issuances | 4,294 | 3,864 | 2,934 | |||||||||
Cash dividends paid | (61,056 | ) | (53,861 | ) | (48,955 | ) | ||||||
Net cash used in financing activities | (56,762 | ) | (49,997 | ) | (46,021 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 23,814 | 22,793 | (14,782 | ) | ||||||||
Cash and cash equivalents, beginning of year | 101,262 | 78,469 | 93,251 | |||||||||
Cash and cash equivalents, end of year | $ | 125,076 | $ | 101,262 | $ | 78,469 | ||||||
17.2017
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Supplemental cash flow information: | ||||||||||||
Interest paid | $ | 9,316 | $ | 5,465 | $ | 4,085 | ||||||
Federal income taxes paid | 29,695 | 28,348 | 29,674 | |||||||||
Schedule of noncash investing and financing activities: | ||||||||||||
Assets acquired through foreclosure | 2,211 | 2,269 | 203 | |||||||||
Investment securities purchased but not settled | — | 12,381 | — | |||||||||
Restricted stock grant to officers and directors | 1,139 | 810 | 1,310 |
18.ACQUISITIONS AND ASSET PURCHASE:
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Supplemental cash flow information: | ||||||||||||
Interest paid | $ | 29,882 | $ | 18,709 | $ | 9,316 | ||||||
Federal income taxes paid | 30,726 | 26,578 | 29,695 | |||||||||
Schedule of noncash investing and financing activities: | ||||||||||||
Assets acquired through foreclosure | 1,463 | 126 | 2,211 | |||||||||
Investment securities purchased but not settled | — | — | — | |||||||||
Restricted stock grant to officers and directors | 1,781 | 1,609 | 1,139 |
The assets acquired and liabilities assumed were recorded on the consolidated balance sheet at estimated fair value on the acquisition date. The acquisition was not considered to be a significant business combination. The following table presents the amounts recorded on the consolidated balance sheet on the acquisition date (dollars in thousands):
Fair value of consideration paid: | ||||
Common stock issued (1,755,374 shares) | $ | 59,648 | ||
|
| |||
Fair value of identifiable assets acquired: | ||||
Cash and cash equivalents | 65,197 | |||
Securitiesavailable-for-sale | 42,903 | |||
Loans | 248,380 | |||
Identifiable intangible assets | 2,343 | |||
Other assets | 15,262 | |||
|
| |||
Total identifiable assets acquired | 374,085 | |||
|
| |||
Fair value of liabilities assumed: | ||||
Deposits | 343,583 | |||
Subordinated debt | 13,125 | |||
Other liabilities | 1,651 | |||
|
| |||
Total liabilities assumed | 358,359 | |||
|
| |||
Fair value of net identifiable assets acquired | 15,726 | |||
|
| |||
Goodwill resulting from acquisition | $ | 43,922 | ||
|
|
Goodwill recorded in the acquisition was accounted for in accordance with the authoritative business combination guidance. Accordingly, goodwill will not be amortized, but will be tested for impairment annually. The goodwill recorded is not deductible for federal income tax purposes.
FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2017, 2016 and 2015
The subordinated debt of $13,125,000 was paid off August 3, 2015, subsequent to closing.
The fair value of total loans acquired was $248,380,000 at acquisition compared to contractual amounts of $252,458,000. The fair value of purchased credit impaired loans at acquisition was $1,398,000 compared to contractual amounts of $1,704,000. Additional purchased credit impaired loan disclosures were omitted due to immateriality. All other acquired loans were considered performing loans.
First Bank, N.A. had branches in Conroe, Magnolia, Tomball, Willis, Cut and Shoot and Huntsville, all located north of Houston, Texas. In February 2016, the Company closed First Bank’s Huntsville location and consolidated the branch with the Company’s existing Huntsville location.
On April 8, 2015, the Company announced that it had entered into an asset purchase agreement with 4Trust Mortgage, Inc. for a cash purchase price of $1,900,000. The asset purchase was finalized on June 1, 2015. The total asset purchase price exceeded the estimated fair value of assets purchased by approximately $1,750,000 and the Company recorded such excess as goodwill.
19.SUBSEQUENT EVENT
On January 1, 2018, the Company acquired 100% of the outstanding capital stock of Commercial Bancshares, Inc. through the merger of a wholly owned subsidiary with and into Commercial Bancshares, Inc. Following such merger, Commercial Bancshares, Inc. and its wholly owned subsidiary, Commercial State Bank, Kingwood, Texas, were merged into the Company and First Financial Bank, National Association, respectively. Considerations paid to the shareholders of Commercial Bancshares, Inc. totaled 1,289,371 shares of the company’s common stock with an aggregate value of $59,400,000 at January 1, 2018.
In addition, Commercial Bancshares, Inc. made a $22,075,000 special dividend to its shareholders prior to closing of the transaction, which was increased for the amount by which Commercial Bancshares, Inc.’s consolidated shareholders’ equity as of January 1, 2018 exceeded $42,402,000, after certain adjustments per the merger agreement.
Fair value of consideration paid: | ||||
Common stock issued ( 1,289,371 shares) | $ | 58,087 | ||
Fair value of identifiable assets acquired: | ||||
Cash and cash equivalents | 18,653 | |||
Securities available-for-sale | 64,501 | |||
Loans | 266,327 | |||
Identifiable intangible assets | 3,167 | |||
Other assets | 15,375 | |||
Total identifiable assets acquired | 368,023 | |||
Fair value of liabilities assumed: | ||||
Deposits | 341,902 | |||
Other liabilities | (373 | ) | ||
Total liabilities assumed | 341,529 | |||
Fair value of net identifiable assets acquired | 26,494 | |||
Goodwill resulting from acquisition | $ | 31,593 | ||
F-40