FORM10-Q
☒ | QUARTERLY 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 |
(§ Non-accelerated filer ☐
Indicate
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Item 1. | FINANCIAL STATEMENTS (UNAUDITED) |
(Dollars in thousands, except par value) | September 30 2018 | December 31 2017 | ||||||
(Unaudited) | (Note 1) | |||||||
Assets | ||||||||
Cash and due from banks | $ | 191,809 | $ | 196,742 | ||||
Interest-bearing deposits with other banks | 1,062,078 | 1,468,636 | ||||||
Federal funds sold | 799 | 789 | ||||||
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Total cash and cash equivalents | 1,254,686 | 1,666,167 | ||||||
Securities available for sale at estimated fair value (amortized cost-$2,230,884 at September 30, 2018 and $1,900,684 at December 31, 2017) | 2,178,567 | 1,888,756 | ||||||
Securities held to maturity (estimated fair value-$19,619 at September 30, 2018 and $20,018 at December 31, 2017) | 20,351 | 20,428 | ||||||
Equity securities at estimated fair value | 9,845 | 0 | ||||||
Other investment securities | 166,749 | 162,461 | ||||||
Loans held for sale (at fair value-$231,310 at September 30, 2018 and $263,308 at December 31, 2017) | 234,196 | 265,955 | ||||||
Loans | 13,286,711 | 13,027,337 | ||||||
Less: Unearned income | (9,971 | ) | (15,916 | ) | ||||
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Loans net of unearned income | 13,276,740 | 13,011,421 | ||||||
Less: Allowance for loan losses | (76,941 | ) | (76,627 | ) | ||||
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Net loans | 13,199,799 | 12,934,794 | ||||||
Bank premises and equipment | 99,748 | 104,894 | ||||||
Goodwill | 1,478,014 | 1,478,380 | ||||||
Accrued interest receivable | 60,057 | 52,815 | ||||||
Other assets | 485,631 | 484,309 | ||||||
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TOTAL ASSETS | $ | 19,187,643 | $ | 19,058,959 | ||||
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Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 4,470,815 | $ | 4,294,687 | ||||
Interest-bearing | 9,620,357 | 9,535,904 | ||||||
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Total deposits | 14,091,172 | 13,830,591 | ||||||
Borrowings: | ||||||||
Federal funds purchased | 25,790 | 16,235 | ||||||
Securities sold under agreements to repurchase | 153,718 | 311,352 | ||||||
Federal Home Loan Bank borrowings | 1,284,781 | 1,271,531 | ||||||
Other long-term borrowings | 234,590 | 242,446 | ||||||
Reserve for lending-related commitments | 1,144 | 679 | ||||||
Accrued expenses and other liabilities | 145,320 | 145,595 | ||||||
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TOTAL LIABILITIES | 15,936,515 | 15,818,429 | ||||||
Shareholders’ Equity | ||||||||
Preferred stock, $1.00 par value;Authorized-50,000,000 shares, none issued | 0 | 0 | ||||||
Common stock, $2.50 par value;Authorized-200,000,000 shares;issued-105,226,986 and 105,069,821 at September 30, 2018 and December 31, 2017, respectively, including 1,421,150 and 29,173 shares in treasury at September 30, 2018 and December 31, 2017, respectively | 263,068 | 262,675 | ||||||
Surplus | 2,133,157 | 2,129,077 | ||||||
Retained earnings | 984,062 | 891,816 | ||||||
Accumulated other comprehensive loss | (76,660 | ) | (42,025 | ) | ||||
Treasury stock, at cost | (52,499 | ) | (1,013 | ) | ||||
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TOTAL SHAREHOLDERS’ EQUITY | 3,251,128 | 3,240,530 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 19,187,643 | $ | 19,058,959 | ||||
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June 30 2019 | December 31 2018 | |||||||
(Unaudited) | (Note 1) | |||||||
Assets | ||||||||
Cash and due from banks | $ | 198,171 | $ | 187,886 | ||||
Interest-bearing deposits with other banks | 1,054,589 | 831,707 | ||||||
Federal funds sold | 813 | 803 | ||||||
Total cash and cash equivalents | 1,253,573 | 1,020,396 | ||||||
Securities available for sale at estimated fair value (amortized cost-$2,324,286 at June 30, 2019 and $2,360,884 at December 31, 2018) | 2,345,791 | 2,337,039 | ||||||
Securities held to maturity (estimated fair value-$6,483 at June 30, 2019 and $18,655 at December 31, 2018) | 6,461 | 19,999 | ||||||
Equity securities at estimated fair value | 9,098 | 9,734 | ||||||
Other investment securities | 201,912 | 176,955 | ||||||
Loans held for sale (at fair value-$365,440 at June 30, 2019 and $247,104 at December 31, 2018) | 370,593 | 249,846 | ||||||
Loans | 13,639,946 | 13,429,532 | ||||||
Less: Unearned income | (4,680 | ) | (7,310 | ) | ||||
Loans net of unearned income | 13,635,266 | 13,422,222 | ||||||
Less: Allowance for loan losses | (76,400 | ) | (76,703 | ) | ||||
Net loans | 13,558,866 | 13,345,519 | ||||||
Bank premises and equipment | 94,545 | 95,245 | ||||||
Operating lease right-of-use assets | 63,113 | 0 | ||||||
Goodwill | 1,478,014 | 1,478,014 | ||||||
Accrued interest receivable | 60,934 | 60,597 | ||||||
Other assets | 439,639 | 457,154 | ||||||
TOTAL ASSETS | $ | 19,882,539 | $ | 19,250,498 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 4,330,665 | $ | 4,416,815 | ||||
Interest-bearing | 10,073,420 | 9,577,934 | ||||||
Total deposits | 14,404,085 | 13,994,749 | ||||||
Borrowings: | ||||||||
Federal funds purchased | 0 | 23,400 | ||||||
Securities sold under agreements to repurchase | 122,159 | 152,927 | ||||||
Federal Home Loan Bank (FHLB) borrowings | 1,548,032 | 1,439,198 | ||||||
Other long-term borrowings | 235,535 | 234,905 | ||||||
Reserve for lending-related commitments | 1,752 | 1,389 | ||||||
Operating lease liabilities | 66,821 | 0 | ||||||
Accrued expenses and other liabilities | 170,297 | 152,306 | ||||||
TOTAL LIABILITIES | 16,548,681 | 15,998,874 | ||||||
Shareholders’ Equity | ||||||||
Preferred stock, $1.00 par value; Authorized-50,000,000 shares, none issued | 0 | 0 | ||||||
Common stock, $2.50 par value; Authorized-200,000,000 shares;issued-105,413,508 and 105,239,121 at June 30, 2019 and December 31, 2018, respectively, including 3,450,478 and 2,915,633 shares in treasury at June 30, 2019 and December 31, 2018, respectively | 263,534 | 263,098 | ||||||
Surplus | 2,137,459 | 2,134,462 | ||||||
Retained earnings | 1,073,390 | 1,013,037 | ||||||
Accumulated other comprehensive loss | (20,367 | ) | (57,019 | ) | ||||
Treasury stock, at cost | (120,158 | ) | (101,954 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 3,333,858 | 3,251,624 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 19,882,539 | $ | 19,250,498 | ||||
(Dollars in thousands, except per share data) | Three Months Ended | Nine Months Ended | ||||||||||||||
September 30 | September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Interest income | ||||||||||||||||
Interest and fees on loans | $ | 164,229 | $ | 155,819 | $ | 472,451 | $ | 405,660 | ||||||||
Interest on federal funds sold and other short-term investments | 5,485 | 4,874 | 13,867 | 11,345 | ||||||||||||
Interest and dividends on securities: | ||||||||||||||||
Taxable | 13,994 | 9,406 | 39,679 | 26,226 | ||||||||||||
Tax-exempt | 1,322 | 1,484 | 4,218 | 4,057 | ||||||||||||
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Total interest income | 185,030 | 171,583 | 530,215 | 447,288 | ||||||||||||
Interest expense | ||||||||||||||||
Interest on deposits | 26,368 | 14,227 | 61,101 | 35,281 | ||||||||||||
Interest on short-term borrowings | 618 | 430 | 1,503 | 1,149 | ||||||||||||
Interest on long-term borrowings | 9,269 | 6,650 | 25,671 | 16,717 | ||||||||||||
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Total interest expense | 36,255 | 21,307 | 88,275 | 53,147 | ||||||||||||
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Net interest income | 148,775 | 150,276 | 441,940 | 394,141 | ||||||||||||
Provision for loan losses | 4,808 | 7,279 | 16,190 | 21,429 | ||||||||||||
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Net interest income after provision for loan losses | 143,967 | 142,997 | 425,750 | 372,712 | ||||||||||||
Other income | ||||||||||||||||
Fees from trust services | 3,350 | 2,972 | 9,545 | 8,865 | ||||||||||||
Fees from brokerage services | 2,787 | 2,080 | 6,964 | 5,818 | ||||||||||||
Fees from deposit services | 8,673 | 8,744 | 25,323 | 24,978 | ||||||||||||
Bankcard fees and merchant discounts | 1,549 | 1,332 | 4,384 | 3,432 | ||||||||||||
Other service charges, commissions, and fees | 532 | 535 | 1,640 | 1,533 | ||||||||||||
Income from bank-owned life insurance | 1,251 | 1,403 | 3,776 | 3,878 | ||||||||||||
Income from mortgage banking activities | 13,277 | 20,385 | 46,539 | 43,597 | ||||||||||||
Net investment securities (losses) gains | (152 | ) | 467 | (692 | ) | 5,154 | ||||||||||
Other income | 419 | 311 | 1,406 | 1,626 | ||||||||||||
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Total other income | 31,686 | 38,229 | 98,885 | 98,881 | ||||||||||||
Other expense | ||||||||||||||||
Employee compensation | 41,312 | 44,882 | 125,268 | 124,945 | ||||||||||||
Employee benefits | 8,645 | 9,004 | 27,514 | 25,667 | ||||||||||||
Net occupancy expense | 9,273 | 9,364 | 27,776 | 30,061 | ||||||||||||
Other real estate owned (OREO) expense | 921 | 2,713 | 2,423 | 4,651 | ||||||||||||
Equipment expense | 3,892 | 3,057 | 10,328 | 7,493 | ||||||||||||
Data processing expense | 6,068 | 5,597 | 17,735 | 14,971 | ||||||||||||
Bankcard processing expense | 485 | 449 | 1,431 | 1,356 | ||||||||||||
FDIC insurance expense | 3,530 | 1,540 | 8,220 | 5,062 | ||||||||||||
Other expense | 19,189 | 20,046 | 56,482 | 57,425 | ||||||||||||
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Total other expense | 93,315 | 96,652 | 277,177 | 271,631 | ||||||||||||
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Income before income taxes | 82,338 | 84,574 | 247,458 | 199,962 | ||||||||||||
Income taxes | 17,926 | 27,836 | 55,066 | 67,356 | ||||||||||||
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Net income | $ | 64,412 | $ | 56,738 | $ | 192,392 | $ | 132,606 | ||||||||
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Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Interest income | ||||||||||||||||
Interest and fees on loans | $ | 175,130 | $ | 159,294 | $ | 340,001 | $ | 308,222 | ||||||||
Interest on federal funds sold and other short-term investments | 5,405 | 3,465 | 11,242 | 8,382 | ||||||||||||
Interest and dividends on securities: | ||||||||||||||||
Taxable | 17,748 | 13,810 | 35,111 | 25,685 | ||||||||||||
Tax-exempt | 962 | 1,431 | 1,988 | 2,896 | ||||||||||||
Total interest income | 199,245 | 178,000 | 388,342 | 345,185 | ||||||||||||
Interest expense | ||||||||||||||||
Interest on deposits | 35,455 | 19,076 | 68,093 | 34,733 | ||||||||||||
Interest on short-term borrowings | 608 | 464 | 1,299 | 885 | ||||||||||||
Interest on long-term borrowings | 12,629 | 9,338 | 24,229 | 16,402 | ||||||||||||
Total interest expense | 48,692 | 28,878 | 93,621 | 52,020 | ||||||||||||
Net interest income | 150,553 | 149,122 | 294,721 | 293,165 | ||||||||||||
Provision for loan losses | 5,417 | 6,204 | 10,413 | 11,382 | ||||||||||||
Net interest income after provision for loan losses | 145,136 | 142,918 | 284,308 | 281,783 | ||||||||||||
Other income | ||||||||||||||||
Fees from trust services | 3,438 | 3,104 | 6,702 | 6,195 | ||||||||||||
Fees from brokerage services | 2,766 | 1,953 | 5,290 | 4,177 | ||||||||||||
Fees from deposit services | 8,464 | 8,420 | 16,517 | 16,650 | ||||||||||||
Bankcard fees and merchant discounts | 1,102 | 1,479 | 2,258 | 2,835 | ||||||||||||
Other service charges, commissions, and fees | 576 | 599 | 1,097 | 1,108 | ||||||||||||
Income from bank-owned life insurance | 1,326 | 1,271 | 3,153 | 2,525 | ||||||||||||
Income from mortgage banking activities | 21,704 | 18,692 | 35,385 | 33,262 | ||||||||||||
Net investment securities gains(losses) | 109 | (55 | ) | (50 | ) | (540 | ) | |||||||||
Other income | 310 | 544 | 666 | 987 | ||||||||||||
Total other income | 39,795 | 36,007 | 71,018 | 67,199 | ||||||||||||
Other expense | ||||||||||||||||
Employee compensation | 44,301 | 43,120 | 83,250 | 83,956 | ||||||||||||
Employee benefits | 8,578 | 9,298 | 18,009 | 18,869 | ||||||||||||
Net occupancy expense | 8,667 | 9,076 | 17,418 | 18,503 | ||||||||||||
Other real estate owned (OREO) expense | 633 | 556 | 2,049 | 1,502 | ||||||||||||
Equipment expense | 3,675 | 3,279 | 6,990 | 6,436 | ||||||||||||
Data processing expense | 5,567 | 5,817 | 10,729 | 11,667 | ||||||||||||
Bankcard processing expense | 448 | 480 | 928 | 946 | ||||||||||||
FDIC insurance expense | 3,300 | 2,842 | 6,600 | 4,690 | ||||||||||||
FHLB prepayment penalties | 5,105 | 0 | 5,105 | 0 | ||||||||||||
Other expense | 19,921 | 18,942 | 38,542 | 37,293 | ||||||||||||
Total other expense | 100,195 | 93,410 | 189,620 | 183,862 | ||||||||||||
Income before income taxes | 84,736 | 85,515 | 165,706 | 165,120 | ||||||||||||
Income taxes | 17,529 | 19,241 | 34,857 | 37,140 | ||||||||||||
Net income | $ | 67,207 | $ | 66,274 | $ | 130,849 | $ | 127,980 | ||||||||
(Dollars in thousands, except per share data) | Three Months Ended | Nine Months Ended | ||||||||||||||
September 30 | September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.62 | $ | 0.54 | $ | 1.84 | $ | 1.39 | ||||||||
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Diluted | $ | 0.62 | $ | 0.54 | $ | 1.83 | $ | 1.39 | ||||||||
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Dividends per common share | $ | 0.34 | $ | 0.33 | $ | 1.02 | $ | 0.99 | ||||||||
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Average outstanding shares: | ||||||||||||||||
Basic | 103,617,590 | 104,760,153 | 104,382,094 | 95,040,664 | ||||||||||||
Diluted | 103,933,959 | 105,068,122 | 104,679,876 | 95,450,626 |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.66 | $ | 0.63 | $ | 1.28 | $ | 1.22 | ||||||||
Diluted | $ | 0.66 | $ | 0.63 | $ | 1.28 | $ | 1.22 | ||||||||
Average outstanding shares: | ||||||||||||||||
Basic | 101,773,643 | 104,682,910 | 101,833,880 | 104,770,681 | ||||||||||||
Diluted | 102,047,845 | 104,952,788 | 102,099,809 | 105,058,014 |
(Dollars in thousands) | Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 64,412 | $ | 56,738 | $ | 192,392 | $ | 132,606 | ||||||||
Change in net unrealized (loss) gain onavailable-for-sale (AFS) securities, net of tax | (7,579 | ) | 1,964 | (30,853 | ) | 8,443 | ||||||||||
Accretion of the net unrealized loss on the transfer of AFS securities toheld-to-maturity (HTM) securities, net of tax | 2 | 2 | 4 | 4 | ||||||||||||
Change in pension plan assets, net of tax | 918 | 717 | 2,703 | 2,107 | ||||||||||||
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Comprehensive income, net of tax | $ | 57,753 | $ | 59,421 | $ | 164,246 | $ | 143,160 | ||||||||
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Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income | $ | 67,207 | $ | 66,274 | $ | 130,849 | $ | 127,980 | ||||||||
Change in net unrealized gain (loss) on available-for-sale (AFS) securities, net of tax | 17,994 | (6,501 | ) | 34,783 | (23,274 | ) | ||||||||||
Accretion of the net unrealized loss on the transfer of AFS securities to held-to-maturity (HTM) securities, net of tax | 0 | 1 | 0 | 2 | ||||||||||||
Change in pension plan assets, net of tax | 909 | 1,052 | 1,819 | 1,785 | ||||||||||||
Comprehensive income, net of tax | $ | 86,110 | $ | 60,826 | $ | 167,451 | $ | 106,493 | ||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||||
Accumulated | |||||||||||||||||||||||||||||
Common Stock | Other | Total | |||||||||||||||||||||||||||
Par | Retained | Comprehensive | Treasury | Shareholders’ | |||||||||||||||||||||||||
Shares | Value | Surplus | Earnings | Income (Loss) | Stock | Equity | |||||||||||||||||||||||
Balance at January 1, 2019 | 105,239,121 | $ | 263,098 | $ | 2,134,462 | $ | 1,013,037 | $ | (57,019 | ) | $ | (101,954 | ) | $ | 3,251,624 | ||||||||||||||
Cumulative effect of adopting Accounting Standard Update 2016-02 | 0 | 0 | 0 | (1,049 | ) | 0 | 0 | (1,049 | ) | ||||||||||||||||||||
Reclass due to adopting Accounting Standard Update 2017-12 | 0 | 0 | 0 | 0 | 50 | 0 | 50 | ||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||
Net income | 0 | 0 | 0 | 63,642 | 0 | 0 | 63,642 | ||||||||||||||||||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | 17,699 | 0 | 17,699 | ||||||||||||||||||||||
Total comprehensive income, net of tax | 81,341 | ||||||||||||||||||||||||||||
Stock based compensation expense | 0 | 0 | 1,113 | 0 | 0 | 0 | 1,113 | ||||||||||||||||||||||
Purchase of treasury stock (365,702 shares) | 0 | 0 | 0 | 0 | 0 | (12,072 | ) | (12,072 | ) | ||||||||||||||||||||
Cash dividends ($0.34 per share) | 0 | 0 | 0 | (34,759 | ) | 0 | 0 | (34,759 | ) | ||||||||||||||||||||
Grant of restricted stock (126,427 shares) | 126,427 | 316 | (316 | ) | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Common stock options exercised (33,816 shares) | 33,816 | 84 | 559 | 0 | 0 | 0 | 643 | ||||||||||||||||||||||
Balance at March 31, 2019 | 105,399,364 | 263,498 | 2,135,818 | 1,040,871 | (39,270 | ) | (114,026 | ) | 3,286,891 | ||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||
Net income | 0 | 0 | 0 | 67,207 | 0 | 0 | 67,207 | ||||||||||||||||||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | 18,903 | 0 | 18,903 | ||||||||||||||||||||||
Total comprehensive income, net of tax | 86,110 | ||||||||||||||||||||||||||||
Stock based compensation expense | 0 | 0 | 1,198 | 0 | 0 | 0 | 1,198 | ||||||||||||||||||||||
Purchase of treasury stock (166,604 shares) | 0 | 0 | 0 | 0 | 0 | (6,032 | ) | (6,032 | ) | ||||||||||||||||||||
Cash dividends ($0.34 per share) | 0 | 0 | 0 | (34,688 | ) | 0 | 0 | (34,688 | ) | ||||||||||||||||||||
Forfeiture of restricted stock (2,539 shares) | 0 | 0 | 100 | 0 | 0 | (100 | ) | 0 | |||||||||||||||||||||
Common stock options exercised (14,144 shares) | 14,144 | 36 | 343 | 0 | 0 | 0 | 379 | ||||||||||||||||||||||
Balance at June 30, 2019 | 105,413,508 | $ | 263,534 | $ | 2,137,459 | $ | 1,073,390 | $ | (20,367 | ) | $ | (120,158 | ) | $ | 3,333,858 | ||||||||||||||
- continued
Nine Months Ended September 30, 2018 | ||||||||||||||||||||||||||||
Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||
Shares | Par Value | |||||||||||||||||||||||||||
Balance at January 1, 2018 | 105,069,821 | $ | 262,675 | $ | 2,129,077 | $ | 891,816 | ($ | 42,025 | ) | ($ | 1,013 | ) | $ | 3,240,530 | |||||||||||||
Cumulative effect of adopting Accounting Standard Update2016-01 | 136 | (136 | ) | 0 | ||||||||||||||||||||||||
Reclass due to adopting Accounting Standard Update2018-02 | 6,353 | (6,353 | ) | 0 | ||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||
Net income | 0 | 0 | 0 | 192,392 | 0 | 0 | 192,392 | |||||||||||||||||||||
Other comprehensive income, net of tax: | 0 | 0 | 0 | 0 | (28,146 | ) | 0 | (28,146 | ) | |||||||||||||||||||
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Total comprehensive income, net of tax | 164,246 | |||||||||||||||||||||||||||
Stock based compensation expense | 0 | 0 | 3,016 | 0 | 0 | 0 | 3,016 | |||||||||||||||||||||
Purchase of treasury stock (1,387,750 shares) | 0 | 0 | 0 | 0 | 0 | (51,323 | ) | (51,323 | ) | |||||||||||||||||||
Distribution of treasury stock from deferred compensation plan (26 shares) | 0 | 0 | 0 | 0 | 0 | 1 | 1 | |||||||||||||||||||||
Cash dividends ($1.02 per share) | 0 | (106,635 | ) | 0 | 0 | (106,635 | ) | |||||||||||||||||||||
Grant of restricted stock (97,004 shares) | 97,004 | 243 | (243 | ) | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Forfeiture of restricted stock (4,253 shares) | 0 | 0 | 164 | 0 | 0 | (164 | ) | 0 | ||||||||||||||||||||
Common stock options exercised (60,161 shares) | 60,161 | 150 | 1,143 | 0 | 0 | 0 | 1,293 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance at September 30, 2018 | 105,226,986 | $ | 263,068 | $ | 2,133,157 | $ | 984,062 | ($ | 76,660 | ) | ($ | 52,499 | ) | $ | 3,251,128 | |||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018 | |||||||||||||||||||||||||||||
Accumulated | |||||||||||||||||||||||||||||
Common Stock | Other | Total | |||||||||||||||||||||||||||
Par | Retained | Comprehensive | Treasury | Shareholders’ | |||||||||||||||||||||||||
Shares | Value | Surplus | Earnings | Income (Loss) | Stock | Equity | |||||||||||||||||||||||
Balance at January 1, 2018 | 105,069,821 | $ | 262,675 | $ | 2,129,077 | $ | 891,816 | ($ | 42,025 | ) | ($ | 1,013 | ) | $ | 3,240,530 | ||||||||||||||
Cumulative effect of adopting Accounting Standard Update 2016-01 | 0 | 0 | 0 | 136 | (136 | ) | 0 | 0 | |||||||||||||||||||||
Reclass due to adopting Accounting Standard Update 2018-02 | 0 | 0 | 0 | 6,353 | (6,353 | ) | 0 | 0 | |||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||
Net income | 0 | 0 | 0 | 61,706 | 0 | 0 | 61,706 | ||||||||||||||||||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | (16,039 | ) | 0 | (16,039 | ) | ||||||||||||||||||||
Total comprehensive income, net of tax | 45,667 | ||||||||||||||||||||||||||||
Stock based compensation expense | 0 | 0 | 968 | 0 | 0 | 0 | 968 | ||||||||||||||||||||||
Purchase of treasury stock (10,842 shares) | 0 | 0 | 0 | 0 | 0 | (404 | ) | (404 | ) | ||||||||||||||||||||
Cash dividends ($0.34 per share) | 0 | (35,748 | ) | 0 | 0 | (35,748 | ) | ||||||||||||||||||||||
Grant of restricted stock (97,004 shares) | 97,004 | 243 | (243 | ) | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Forfeiture of restricted stock (683 shares) | 0 | 0 | 27 | 0 | 0 | (27 | ) | 0 | |||||||||||||||||||||
Common stock options exercised (15,043 shares) | 15,043 | 37 | 263 | 0 | 0 | 0 | 300 | ||||||||||||||||||||||
Balance at March 31, 2018 | 105,181,868 | 262,955 | 2,130,092 | 924,263 | (64,553 | ) | (1,444 | ) | 3,251,313 | ||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||
Net income | 0 | 0 | 0 | 66,274 | 0 | 0 | 66,274 | ||||||||||||||||||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | (5,448 | ) | 0 | (5,448 | ) | ||||||||||||||||||||
Total comprehensive income, net of tax | 60,826 | ||||||||||||||||||||||||||||
Stock based compensation expense | 0 | 0 | 1,024 | 0 | 0 | 0 | 1,024 | ||||||||||||||||||||||
Purchase of treasury stock (962,504 shares) | 0 | 0 | 0 | 0 | 0 | (35,580 | ) | (35,580 | ) | ||||||||||||||||||||
Cash dividends ($0.34 per share) | 0 | 0 | 0 | (35,584 | ) | 0 | 0 | (35,584 | ) | ||||||||||||||||||||
Forfeiture of restricted stock (2,170 shares) | 0 | 0 | 82 | 0 | 0 | (82 | ) | 0 | |||||||||||||||||||||
Common stock options exercised (27,046 shares) | 27,046 | 67 | 499 | 0 | 0 | 0 | 566 | ||||||||||||||||||||||
Balance at June 30, 2018 | 105,208,914 | $ | 263,022 | $ | 2,131,697 | $ | 954,953 | $ | (70,001 | ) | ($ | 37,106 | ) | $ | 3,242,565 | ||||||||||||||
Nine Months Ended September 30 | ||||||||
2018 | 2017 | |||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ | 218,771 | $ | 125,151 | ||||
INVESTING ACTIVITIES | ||||||||
Proceeds from maturities and calls of securities held to maturity | 2 | 12,929 | ||||||
Proceeds from sales of securities available for sale | 86,061 | 245,065 | ||||||
Proceeds from maturities and calls of securities available for sale | 201,107 | 386,496 | ||||||
Purchases of securities available for sale | (629,760 | ) | (630,061 | ) | ||||
Proceeds from sales of equity securities | 1,825 | 0 | ||||||
Purchases of equity securities | (598 | ) | 0 | |||||
Proceeds from sales and redemptions of other investment securities | 35,987 | 14,393 | ||||||
Purchases of other investment securities | (45,075 | ) | (51,941 | ) | ||||
Purchases of bank premises and equipment | (4,439 | ) | (11,115 | ) | ||||
Proceeds from sales of bank premises and equipment | 2,171 | 13 | ||||||
Proceeds from the sales of OREO properties | 9,105 | 4,908 | ||||||
Acquisition of subsidiaries, net of cash paid | 0 | 44,531 | ||||||
Net change in loans | (248,623 | ) | 369,233 | |||||
|
|
|
| |||||
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (592,237 | ) | 384,451 | |||||
|
|
|
| |||||
FINANCING ACTIVITIES | ||||||||
Cash dividends paid | (107,046 | ) | (86,709 | ) | ||||
Acquisition of treasury stock | (51,323 | ) | (1 | ) | ||||
Proceeds from exercise of stock options | 1,277 | 3,296 | ||||||
Repayment of long-term Federal Home Loan Bank borrowings | (635,000 | ) | (845,207 | ) | ||||
Proceeds from issuance of long-term Federal Home Loan Bank borrowings | 650,000 | 815,000 | ||||||
Repayment of trust preferred issuance | (9,374 | ) | 0 | |||||
Distribution of treasury stock for deferred compensation plan | 1 | 1 | ||||||
Changes in: | ||||||||
Deposits | 261,529 | (269,742 | ) | |||||
Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings | (148,079 | ) | 186,270 | |||||
|
|
|
| |||||
NET CASH USED IN FINANCING ACTIVITIES | (38,015 | ) | (197,092 | ) | ||||
|
|
|
| |||||
(Decrease) Increase in cash and cash equivalents | (411,481 | ) | 312,510 | |||||
Cash and cash equivalents at beginning of year | 1,666,167 | 1,434,527 | ||||||
|
|
|
| |||||
Cash and cash equivalents at end of period | $ | 1,254,686 | $ | 1,747,037 | ||||
|
|
|
| |||||
Supplemental information | ||||||||
Noncash investing activities: | ||||||||
Transfers of loans to OREO | $ | 1,809 | $ | 3,829 |
Six Months Ended | ||||||||
June 30 | ||||||||
2019 | 2018 | |||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ | 31,786 | $ | 98,498 | ||||
INVESTING ACTIVITIES | ||||||||
Proceeds from maturities and calls of securities held to maturity | 2,000 | 2 | ||||||
Proceeds from sales of securities available for sale | 248,187 | 53,179 | ||||||
Proceeds from maturities and calls of securities available for sale | 136,576 | 124,894 | ||||||
Purchases of securities available for sale | (338,983 | ) | (391,186 | ) | ||||
Proceeds from sales of equity securities | 1,497 | 1,826 | ||||||
Purchases of equity securities | (618 | ) | (380 | ) | ||||
Proceeds from sales and redemptions of other investment securities | 50,271 | 15,606 | ||||||
Purchases of other investment securities | (75,228 | ) | (33,279 | ) | ||||
Redemption of bank-owned life insurance policies | 2,829 | 0 | ||||||
Purchases of bank premises and equipment | (4,110 | ) | (2,159 | ) | ||||
Proceeds from sales of bank premises and equipment | 251 | 2,123 | ||||||
Proceeds from the sales of OREO properties | 3,870 | 4,658 | ||||||
Net change in loans | (203,898 | ) | (493,787 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (177,356 | ) | (718,503 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Cash dividends paid | (69,732 | ) | (71,461 | ) | ||||
Acquisition of treasury stock | (18,104 | ) | (35,984 | ) | ||||
Proceeds from exercise of stock options | 1,020 | 851 | ||||||
Repayment of long-term Federal Home Loan Bank borrowings | (1,115,000 | ) | (625,000 | ) | ||||
Proceeds from issuance of long-term Federal Home Loan Bank borrowings | 1,400,000 | 1,115,000 | ||||||
Repayment of trust preferred issuance | 0 | (9,374 | ) | |||||
Changes in: | ||||||||
Deposits | 409,731 | 812 | ||||||
Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings | (229,168 | ) | (328,080 | ) | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 378,747 | 46,764 | ||||||
Increase (Decrease) in cash and cash equivalents | 233,177 | (573,241 | ) | |||||
Cash and cash equivalents at beginning of year | 1,020,396 | 1,666,167 | ||||||
Cash and cash equivalents at end of period | $ | 1,253,573 | $ | 1,092,926 | ||||
Supplemental information | ||||||||
Noncash investing activities: | ||||||||
Transfers of loans to OREO | $ | 3,133 | $ | 527 | ||||
Transfer of held to maturity debt securities to available for sale debt securities | 11,544 | 0 |
In June 2018, the FASB issued Accounting Standards Update (ASU)No. “Compensation-Stock is not expected to have a material impactthe Company’s financial condition or results of operations.
In February 2018, the FASB issued ASU No. 2018-03, “Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU2018-03 clarifies that entities that use the measurement alternative for equity securities without readily determinable fair values can change its measurement approach to fair value. This election is irrevocable and will apply to all future purchases of identical or similar investments of the same issuer.January 1, 2019. The amended guidance also clarifies that adjustments made under the measurement alternative should reflect the fair value of the security as of the date that an observable transaction took place rather than the current reporting date. Entities will use the prospective transition approach only for securities they elect to measure using the measurement alternative. ASUNo. 2018-03 is effective for interim and annual reporting periods beginning after December 15, 2017; early adoption is permitted. ASUNo. 2018-03 did not have a material impact on the Company’s financial condition or results of operations.
In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” to help organizations address certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the Tax Cuts and Jobs Act (the “Tax Act”). This ASU provides financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act (or portion thereof) is recorded. The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. United adopted ASUNo. 2018-02 in the first quarter of 2018 and reclassified $6,353 of stranded income tax effected amounts in AOCI to retained earnings.
$11,544, which resulted in a decrease of $1,098 to AOCI.
the guidance in ASC 480, “Distinguishing Liabilities from Equity”, due to the existence of extensive pending content in the Codification. ASUNo. 2017-11 is effective for interim and annual reporting periods beginning after December 15, 2018. ASUNo. 2017-11 is not expected to have a material impact was adopted by United on the Company’s financial condition or results of operations.
January 1, 2019.
In March 2017, the FASB issued ASUNo. 2017-07, “Improving the Presentation
In January 2017, the FASB issued ASUNo. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASUNo. 2017-01 changes the definition of a business to assist entities with evaluation when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. ASUNo. 2017-01 was effective for United on January 1, 2018 and did not have a material impact on the Company’s financial condition or results of operations.
In August 2016, the FASB issued ASUNo. 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” ASUNo. 2016-15 amends ASC Topic 230 to add and clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows as a result of diversity in practice and in certain circumstances, financial statement restatements. Entities should apply ASUNo. 2016-15 using a retrospective transition method to each period presented. ASUNo. 2016-15 was effective for United on January 1, 2018 and did not have a material impact on the Company’s financial condition or results of operations.
In June 2016, the FASB issued ASUNo. 2016-13, “Financial Instruments – Credit Losses.” ASUNo. 2016-13 changes the impairment model for most financial assets and certain other instruments that aren’t measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost and require entities to record allowances foravailable-for-sale available for sale debt securities rather than reduce the carrying amount under the current other-than-temporary impairment (OTTI) model. ASUNo. 2016-13 also simplifies the accounting model for purchased credit-impaired debt securities and loans. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. ASUIn May 2019, the FASB issued Accounting Standards Update (ASU) No. 2019-05 “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief.” ASU 2019-05 amends ASU 2016-13 to allow companies to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that were previously recorded at amortized cost and are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC 825-10. The fair value option election does not apply to held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis. ASU No. 2019-05 is effective for United on the same date as ASU No. 2016-13, which is January 1, 2020 for United, with early adoption permitted,permitted. United has completed an initial data gap assessment and managementloan segmentation procedures and is currently evaluating the various forecasting and modeling assumptions that will be used to estimate the initial current expected credit loss allowance. In addition, United is currently working through the implementation plan which includes documentation of methodologies, processes, data sources, internal controls and policies, as well as model development, documentation and validation. United has engaged a third-party service provider to assist with the implementation of the new accounting standard. Management is currently evaluating the possible impact this standard may have on the Company’s financial condition or results of operations.
In March 2016, the FASB issued ASUNo. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASUNo. 2016-09 will change certain aspects of accounting for share-based payments to employees. The new guidance will, amongst other things, require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. The requirement to report those income tax effects in earnings was applied to settlements occurring on or after January 1, 2017 and the impact of applying that guidance reduced reporting income tax expense by $1,048 for the year of 2017. ASUNo. 2016-09 also allows an employer to repurchase more of an employee’s shares than it could previously for tax withholding purposes without triggering liability accounting and make a policy election to account for forfeitures as they occur. The Company will continue to estimate the number of awards expected to be forfeited and adjust the estimate when it is no longer probable that the employee will fulfill the service condition, as was previously required. ASUNo. 2016-09 also requires that all incometax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award’s vesting period. The adoption of ASUNo. 2016-09 did not have a material impact on the Company’s financial condition or results of operations.
2019. The Company is currently assessing the impact of the adoption of ASUNo. 2016-02 on the Company’s results of operations, financial position and cash flows. The Company has evaluated and plans to electelected the package of practical expedients, which would allowallows for existing leases to be accounted for consistent with current guidance, with the exception of the balance sheet recognition for lessees. AsThe Company has also elected the practical expedient on not separating lease and nonlease components and instead treating them as a lessee, United had $69,844 in total future minimumsingle lease payments for operating leases as
In January 2016, the FASB issued ASUNo. 2016-01, “Financial Instruments Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU2016-01 makes changes to the classification and measurement of investments in equity securities, the presentation of certain fair value changes for financial liabilities measured at fair value under the fair value option and disclosure of fair value of instruments. In addition, ASUNo. 2016-01 clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses onavailable-for-sale debt securities. ASUNo. 2016-01 was adopted by United on January 1, 2018 and did not have a significant impact on the Company’s financial condition or results of operations.
In May 2014, the FASB issued ASUNo. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASUNo. 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the ASC. The amendments require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new revenue recognition standard sets forth a five-step principle-based approach for determining revenue recognition. For United, revenue is comprised of net interest income and noninterest income. As the standard does not apply to revenue associated with financial instruments, net interest income, gains and losses from securities, income from bank-owned life insurance (BOLI) and income from mortgage banking activities are not impacted by the standard. Based on a review and evaluation of a number of revenue contracts, United’s management determined that ASUNo. 2014-09 impacts certain recurring revenue streams related to noninterest income such as fees from trust and brokerage services. However, based on an assessment of these revenue streams under the standard, management concluded that ASUNo. 2014-09 does not have a material impact on the Company’s financial condition or results of operations. In addition, in the Company’s evaluation of the nature of its contracts with customers, United has determined that further disaggregation of revenue from contracts with customers into more granular categories beyond those presented in the Consolidated Statements of Income was not necessary. ASUNo. 2014-09 was adopted by United on January 1, 2018 using the modified-retrospective transition method. No cumulative effect adjustment was made to the opening balance of retained earnings because the amount was considered immaterial. The impact of ASUNo. 2014-09 for the first nine months of 2018 was also immaterial to United’s consolidated financial position, results of operations, shareholders’ equity, cash flows and disclosures.
Descriptions of our revenue-generating activities that are within the scope of ASC Topic 606, which are presented in our Consolidated Statements of Income as components of Other Income are discussed below. There are no significant judgements relating to the amount and timing of revenue recognition for those revenue streams under the scope of ASC Topic 606.
Fees from Trust Services
Revenue from trust services primarily is comprised of fees earned from the management and administration of trusts and other customer assets. Trust services include custody of assets, investment management, escrow services, and similar fiduciary activities. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon themonth-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts.
Fees from Brokerage Services
Revenue from brokerage services are recorded as the income is earned at the time the related service is performed. In return for such services, the Company charges a commission for the sales of various securities products primarily consisting of investment company shares, annuity products, and corporate debt and equity securities, for its selling and administrative efforts. For account supervision, advisory and administrative services, revenue is recognized over a period of time as earned based on customer account balances and activity.
Fees from Deposit Services
Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, ATM activity fees, debit card fees, and other deposit account related fees. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (ATM or debit card activity).
Bankcard Fees and Merchant Discounts
Bankcard fees and merchant discounts are primarily comprised of credit card income and merchant services income. Credit card income is primarily comprised of interchange fees earned whenever the Company’s credit cards are processed through card payment networks such as Visa. Merchant services income mainly represents fees charged to merchants to process their credit card transactions. The Company’s performance obligation for bankcard fees and exchange are largely satisfied, and related revenue recognized at the time services are rendered. Payment is typically received immediately or in the following month.
2. MERGERS AND ACQUISITIONS
Cardinal Financial Corporation
On April 21, 2017 (Cardinal Acquisition Date), United acquired 100% of the outstanding common stock of Cardinal Financial Corporation (Cardinal), headquartered in Tysons Corner, Virginia. The acquisition of Cardinal expands United’s existing footprint in the Washington, D.C. Metropolitan Statistical Area. At consummation, Cardinal had assets of $4,136,008, loans of $3,313,033 and deposits of $3,344,740. Cardinal also operated George Mason Mortgage, LLC (George Mason), a residential mortgage lending company based in Fairfax, Virginia with offices located in Virginia, Maryland, North Carolina, South Carolina and the District of Columbia. As a result of the merger, George Mason became an indirectly-owned subsidiary of United.
The merger was accounted for under the acquisition method of accounting. The results of operations of Cardinal are included in the consolidated results of operations from the Cardinal Acquisition Date.
The aggregate purchase price was approximately $975,254, including common stock valued at $972,499, stock options assumed valued at $2,741, and cash paid for fractional shares of $14. The number of shares issued in the transaction was 23,690,589, which were valued based on the closing market price of $41.05 for United’s common shares on April 21, 2017. The purchase price has been allocated to the identifiable tangible and intangible assets
resulting in additions to goodwill, core deposit intangibles and the George Mason trade name intangible of $612,920, $28,724 and $1,080, respectively. The core deposit intangibles are being amortized over ten years. The George Mason trade name provides a source of market recognition to attract potential clients and retain existing relationships. United believes the George Mason trade name provides a competitive advantage and is likely going to be used into perpetuity and thus will not be subject to amortization, but rather be evaluated for impairment.
Because the consideration paid was greater than the net fair value of the acquired assets and liabilities, the Company recorded goodwill as part of the acquisition. None of the goodwill from the Cardinal acquisition is deductible for tax purposes. United used an independent third party to help determine the fair values of the assets and liabilities acquired from Cardinal. As a result of the merger, United recorded fair value discounts of $144,434 on the loans acquired, $2,281 on leases and $8,738 on trust preferred issuances, respectively, and premiums of $4,408 on land acquired, $5,072 on interest-bearing deposits and $10,740 on long-term FHLB advances, respectively. The remaining discount and premium amounts are being accreted or amortized on an accelerated or straight-line basis over each asset’s or liability’s estimated remaining life at the time of acquisition except for loans and land. The discount on loans will be accreted into income based on the effective yield method. The premium on land will not be amortized. At September 30, 2018, the discounts on leases and trust preferred issuances had an average estimated remaining life of 5.00 years and 15.97 years, respectively, and the premiums on the interest-bearing deposits and the FHLB advances each had an average estimated remaining life of 4.00 years and 3.81 years, respectively. United assumed approximately $1,825 of liabilities to provide severance benefits to terminated employees of Cardinal, which has no remaining balance as of September 30, 2018. The estimated fair values of the acquired assets and assumed liabilities, including identifiable intangible assets and goodwill are considered final as of April 21, 2018.
In many cases, determining the estimated fair value of the acquired assets and assumed liabilities required United to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest. The most significant of those determinations related to the fair value of acquired loans. The fair value of the acquired loans was based on the present value of the expected cash flows. Periodic principal and interest cash flows were adjusted for expected losses and prepayments, then discounted to determine the present value and summed to arrive at the estimated fair value. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and other factors, such as prepayments. In accordance with GAAP, there was no carry-over of Cardinal’s previously established allowance for loan losses.
The acquired loans were divided into loans with evidence of credit quality deterioration, which are accounted for under ASC Topic310-30 (acquired impaired) and loans that do not meet this criteria, which are accounted for under ASC Topic310-20 (acquired performing). Acquired impaired loans have experienced a deterioration of credit quality from origination to acquisition for which it is probable that United will be unable to collect all contractually required payments receivable, including both principal and interest. Subsequent decreases in the expected cash flows require United to evaluate the need for additions to the Company’s allowance for credit losses. Subsequent improvements in expected cash flows generally resultresulted in the recognition of additional interest income over the then remaining lives of the loans.
In conjunction with the Cardinal merger, the acquired loan portfolio was accounted for at fair value as follows:
April 21, 2017 | ||||
Contractually required principal and interest at acquisition | $ | 4,211,734 | ||
Contractual cash flows not expected to be collected | (56,176 | ) | ||
|
| |||
Expected cash flows at acquisition | 4,155,558 | |||
Interest component of expected cash flows | (986,959 | ) | ||
|
| |||
Basis in acquired loans at acquisition – estimated fair value | $ | 3,168,599 | ||
|
|
Included in the above table is information related to acquired impaired loans. Specifically, contractually required principal and interest, cash flows expected to be collected and estimated fair value of acquired impaired loans were $132,837, $108,275, and $86,696, respectively.
The consideration paid for Cardinal’s common equity and the amounts of acquired identifiablenet lease assets and lease liabilities assumedof $
Purchase price: | ||||
Value of common shares issued (23,690,589 shares) | $ | 972,499 | ||
Fair value of stock options assumed | 2,741 | |||
Cash for fractional shares | 14 | |||
|
| |||
Total purchase price | 975,254 | |||
|
| |||
Identifiable assets: | ||||
Cash and cash equivalents | 44,545 | |||
Investment securities | 395,829 | |||
Loans held for sale | 271,301 | |||
Loans | 3,168,599 | |||
Premises and equipment | 24,774 | |||
Core deposit intangibles | 28,724 | |||
George Mason trade name intangible | 1,080 | |||
Other assets | 135,383 | |||
|
| |||
Total identifiable assets | $ | 4,070,235 | ||
Identifiable liabilities: | ||||
Deposits | $ | 3,349,812 | ||
Short-term borrowings | 96,215 | |||
Long-term borrowings | 220,119 | |||
Unfavorable lease liability | 2,281 | |||
Other liabilities | 39,474 | |||
|
| |||
Total identifiable liabilities | 3,707,901 | |||
|
| |||
Fair value of net assets acquired including identifiable intangible assets | 362,334 | |||
|
| |||
Resulting goodwill | $ | 612,920 | ||
|
|
The operating results of United for the nine months ended September 30, 2018 include operating results of acquired assets and assumed liabilities. The operations of United’s metropolitan Washington D.C. geographic area, which primarily includes the acquired operations of Cardinal, provided $519,747 in total revenues, which represents net interest income plus other income, and $270,914 in net income from the period from the Cardinal Acquisition Datean adjustment to September 30, 2018. These amounts are included in United’s consolidated financial statements as of and for the nine months ended September 30, 2018. Cardinal’s results of operations prior to the Cardinal Acquisition Date are not included in United’s consolidated financial statements.
3.
September 30, 2018 | ||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cumulative OTTI in AOCI (1) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 103,237 | $ | 0 | $ | 1,672 | $ | 101,565 | $ | 0 | ||||||||||
State and political subdivisions | 258,656 | 440 | 6,850 | 252,246 | 0 | |||||||||||||||
Residential mortgage-backed securities | ||||||||||||||||||||
Agency | 973,307 | 541 | 30,201 | 943,647 | 0 | |||||||||||||||
Non-agency | 4,086 | 486 | 0 | 4,572 | 86 | |||||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||||||
Agency | 557,211 | 71 | 13,630 | 543,652 | 0 | |||||||||||||||
Asset-backed securities | 223,350 | 638 | 386 | 223,602 | 0 | |||||||||||||||
Trust preferred collateralized debt obligations | 6,176 | 253 | 275 | 6,154 | 2,586 | |||||||||||||||
Single issue trust preferred securities | 8,748 | 127 | 771 | 8,104 | 0 | |||||||||||||||
Other corporate securities | 96,113 | 51 | 1,139 | 95,025 | 0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 2,230,884 | $ | 2,607 | $ | 54,924 | $ | 2,178,567 | $ | 2,672 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2017 | ||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cumulative OTTI in AOCI (1) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 114,735 | $ | 385 | $ | 362 | $ | 114,758 | $ | 0 | ||||||||||
State and political subdivisions | 303,101 | 3,197 | 2,429 | 303,869 | 0 | |||||||||||||||
Residential mortgage-backed securities | ||||||||||||||||||||
Agency | 821,857 | 2,096 | 9,360 | 814,593 | 0 | |||||||||||||||
Non-agency | 4,969 | 543 | 0 | 5,512 | 86 | |||||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||||||
Agency | 457,107 | 1,059 | 3,309 | 454,857 | 0 | |||||||||||||||
Asset-backed securities | 109,829 | 148 | 7 | 109,970 | 0 | |||||||||||||||
Trust preferred collateralized debt obligations | 37,856 | 542 | 4,129 | 34,269 | 20,770 | |||||||||||||||
Single issue trust preferred securities | 13,417 | 368 | 1,225 | 12,560 | 0 | |||||||||||||||
Other corporate securities | 28,101 | 407 | 18 | 28,490 | 0 | |||||||||||||||
Marketable equity securities | 9,712 | 179 | 13 | 9,878 | 0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 1,900,684 | $ | 8,924 | $ | 20,852 | $ | 1,888,756 | $ | 20,856 | ||||||||||
|
|
|
|
|
|
|
|
|
|
June 30, 2019 | ||||||||||||||||||||
Gross | Gross | Estimated | Cumulative | |||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | OTTI in | ||||||||||||||||
Cost | Gains | Losses | Value | AOCI (1) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 73,369 | $ | 1,116 | $ | 1 | $ | 74,484 | $ | 0 | ||||||||||
State and political subdivisions | 178,833 | 2,968 | 542 | 181,259 | 0 | |||||||||||||||
Residential mortgage-backed securities | ||||||||||||||||||||
Agency | 866,597 | 12,539 | 1,569 | 877,567 | 0 | |||||||||||||||
Non-agency | 3,598 | 380 | 0 | 3,978 | 86 | |||||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||||||
Agency | 566,366 | 8,738 | 383 | 574,721 | 0 | |||||||||||||||
Asset-backed securities | 272,423 | 0 | 3,569 | 268,854 | 0 | |||||||||||||||
Trust preferred collateralized debt obligations | 6,136 | 0 | 723 | 5,413 | 398 | |||||||||||||||
Single issue trust preferred securities | 18,180 | 175 | 1,511 | 16,844 | 0 | |||||||||||||||
Other corporate securities | 338,784 | 3,900 | 13 | 342,671 | 0 | |||||||||||||||
Total | $ | 2,324,286 | $ | 29,816 | $ | 8,311 | $ | 2,345,791 | $ | 484 | ||||||||||
December 31, 2018 | ||||||||||||||||||||
Gross | Gross | Estimated | Cumulative | |||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | OTTI in | ||||||||||||||||
Cost | Gains | Losses | Value | AOCI (1) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 86,285 | $ | 35 | $ | 430 | $ | 85,890 | $ | 0 | ||||||||||
State and political subdivisions | 212,670 | 439 | 4,121 | 208,988 | 0 | |||||||||||||||
Residential mortgage-backed securities | ||||||||||||||||||||
Agency | 1,047,345 | 3,235 | 14,930 | 1,035,650 | 0 | |||||||||||||||
Non-agency | 3,927 | 332 | 0 | 4,259 | 86 | |||||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||||||
Agency | 560,634 | 996 | 7,030 | 554,600 | 0 | |||||||||||||||
Asset-backed securities | 272,459 | 450 | 939 | 271,970 | 0 | |||||||||||||||
Trust preferred collateralized debt obligations | 6,176 | 91 | 350 | 5,917 | 2,586 | |||||||||||||||
Single issue trust preferred securities | 8,754 | 169 | 561 | 8,362 | 0 | |||||||||||||||
Other corporate securities | 162,634 | 118 | 1,349 | 161,403 | 0 | |||||||||||||||
Total | $ | 2,360,884 | $ | 5,865 | $ | 29,710 | $ | 2,337,039 | $ | 2,672 | ||||||||||
(1) |
|
Less than 12 months | 12 months or longer | |||||||||||||||
September 30, 2018 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 89,255 | $ | 1,233 | $ | 12,311 | $ | 439 | ||||||||
State and political subdivisions | 127,202 | 2,166 | 80,886 | 4,684 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 612,343 | 15,591 | 300,669 | 14,610 | ||||||||||||
Non-agency | 0 | 0 | 0 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 318,487 | 7,693 | 209,241 | 5,937 | ||||||||||||
Asset-backed securities | 92,432 | 386 | 0 | 0 | ||||||||||||
Trust preferred collateralized debt obligations | 0 | 0 | 2,225 | 275 | ||||||||||||
Single issue trust preferred securities | 0 | 0 | 4,950 | 771 | ||||||||||||
Other corporate securities | 78,095 | 1,139 | 0 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,317,814 | $ | 28,208 | $ | 610,282 | $ | 26,716 | ||||||||
|
|
|
|
|
|
|
|
Less than 12 months | 12 months or longer | |||||||||||||||
December 31, 2017 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 36,678 | $ | 230 | $ | 22,920 | $ | 132 | ||||||||
State and political subdivisions | 82,896 | 566 | 59,432 | 1,863 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 460,414 | 4,621 | 182,482 | 4,739 | ||||||||||||
Non-agency | 0 | 0 | 0 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 282,858 | 2,386 | 70,763 | 923 | ||||||||||||
Asset-backed securities | 27,931 | 7 | 0 | 0 | ||||||||||||
Trust preferred collateralized debt obligations | 0 | 0 | 28,629 | 4,129 | ||||||||||||
Single issue trust preferred securities | 0 | 0 | 4,485 | 1,225 | ||||||||||||
Other corporate securities | 6,975 | 18 | 0 | 0 | ||||||||||||
Marketable equity securities | 0 | 0 | 363 | 13 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 897,752 | $ | 7,828 | $ | 369,074 | $ | 13,024 | ||||||||
|
|
|
|
|
|
|
|
2018.
Less than 12 months | 12 months or longer | |||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||
Value | Losses | Value | Losses | |||||||||||||
June 30, 2019 | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 0 | $ | 0 | $ | 2,621 | $ | 1 | ||||||||
State and political subdivisions | 1,127 | 6 | 50,689 | 536 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 9,460 | 9 | 180,352 | 1,560 | ||||||||||||
Non-agency | 0 | 0 | 0 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 42,489 | 47 | 110,943 | 336 | ||||||||||||
Asset-backed securities | 261,566 | 3,462 | 7,288 | 107 | ||||||||||||
Trust preferred collateralized debt obligations | 0 | 0 | 5,412 | 723 | ||||||||||||
Single issue trust preferred securities | 0 | 0 | 13,633 | 1,511 | ||||||||||||
Other corporate securities | 12,679 | 13 | 0 | 0 | ||||||||||||
Total | $ | 327,321 | $ | 3,537 | $ | 370,938 | $ | 4,774 | ||||||||
Less than 12 months | 12 months or longer | |||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||
Value | Losses | Value | Losses | |||||||||||||
December 31, 2018 | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 66,072 | $ | 250 | $ | 7,374 | $ | 180 | ||||||||
State and political subdivisions | 53,421 | 544 | 94,337 | 3,577 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 195,009 | 1,597 | 508,041 | 13,333 | ||||||||||||
Non-agency | 0 | 0 | 0 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 107,443 | 1,124 | 294,129 | 5,906 | ||||||||||||
Asset-backed securities | 151,427 | 939 | 0 | 0 | ||||||||||||
Trust preferred collateralized debt obligations | 0 | 0 | 2,150 | 350 | ||||||||||||
Single issue trust preferred securities | 0 | 0 | 5,163 | 561 | ||||||||||||
Other corporate securities | 129,709 | 1,233 | 6,879 | 116 | ||||||||||||
Total | $ | 703,081 | $ | 5,687 | $ | 918,073 | $ | 24,023 | ||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Proceeds from sales and calls | $ | 109,093 | $ | 64,257 | $ | 283,953 | $ | 631,561 | ||||||||
Gross realized gains | 93 | 1,781 | 1,314 | 2,840 | ||||||||||||
Gross realized losses | 207 | 1,314 | 1,604 | 1,396 |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Proceeds from sales and calls | $ | 188,432 | $ | 75,157 | $ | 384,763 | $ | 174,860 | ||||||||
Gross realized gains | 739 | 58 | 754 | 1,221 | ||||||||||||
Gross realized losses | 608 | 85 | 972 | 1,397 |
The single issue trust preferred securities relate to securities of financial institutions.
2019.
2019.
2019. The total amount of OTTI recognized in earnings on this security during the second quarter of 2019 was $21.
quarter of 2018, it was determined that none of the single issue trust preferred securities were other-than-temporarily impaired. All single issue trust preferred securities are currently receiving interest payments. The amortized cost of available for sale single issue trust preferred securities as of SeptemberJune 30, 20182019 consisted of $3,028$4,036 in investment grade bonds, $5,935 in split rated bonds, $2,480 in below investment grade rated bonds, and $5,720$5,729 in unrated bonds. The investment grade bonds were ratedBBB-. AllManagement reviews each issuer’s current and projected earnings trends, asset quality, capitalization levels, and other key factors. Upon completing the review for the second quarter of 2019, it was determined that none of the unrated bondssingle issue trust preferred securities were in an unrealized loss position for twelve months or longer as of September 30, 2018.
other-than-temporarily impaired.
2019. The total amount of OTTI recognized in earnings on this security during the second quarter of 2019 was $54.
2019.
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Balance of cumulative credit losses at beginning of period | $ | 3,199 | $ | 22,162 | $ | 18,060 | $ | 22,162 | ||||||||
Reductions for securities sold or paid off during the period | 0 | (4,102 | ) | (14,861 | ) | (4,102 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Balance of cumulative credit losses at end of period | $ | 3,199 | $ | 18,060 | $ | 3,199 | $ | 18,060 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Balance of cumulative credit losses at beginning of period | $ | 3,138 | $ | 3,199 | $ | 3,138 | $ | 18,060 | ||||||||
Additional credit losses on securities for which OTTI was previously recognized | 54 | 0 | 54 | 0 | ||||||||||||
Reductions for securities sold or paid off during the period | 0 | 0 | 0 | (14,861 | ) | |||||||||||
Balance of cumulative credit losses at end of period | $ | 3,192 | $ | 3,199 | $ | 3,192 | $ | 3,199 | ||||||||
September 30, 2018 | December 31, 2017 | |||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Due in one year or less | $ | 76,698 | $ | 76,346 | $ | 50,311 | $ | 50,212 | ||||||||
Due after one year through five years | 500,052 | 490,797 | 386,039 | 384,585 | ||||||||||||
Due after five years through ten years | 466,155 | 451,981 | 400,129 | 398,208 | ||||||||||||
Due after ten years | 1,187,979 | 1,159,443 | 1,054,493 | 1,045,873 | ||||||||||||
Marketable equity securities | 0 | 0 | 9,712 | 9,878 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 2,230,884 | $ | 2,178,567 | $ | 1,900,684 | $ | 1,888,756 | ||||||||
|
|
|
|
|
|
|
|
June 30, 2019 | December 31, 2018 | |||||||||||||||
Estimated | Estimated | |||||||||||||||
Amortized | Fair | Amortized | Fair | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
Due in one year or less | $ | 150,318 | $ | 150,304 | $ | 77,534 | $ | 77,266 | ||||||||
Due after one year through five years | 560,933 | 567,674 | 518,975 | 514,734 | ||||||||||||
Due after five years through ten years | 519,370 | 527,238 | 483,567 | 477,135 | ||||||||||||
Due after ten years | 1,093,665 | 1,100,575 | 1,280,808 | 1,267,904 | ||||||||||||
Total | $ | 2,324,286 | $ | 2,345,791 | $ | 2,360,884 | $ | 2,337,039 | ||||||||
September 30, 2018 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 5,103 | $ | 132 | $ | 0 | $ | 5,235 | ||||||||
State and political subdivisions | 5,798 | 8 | 1 | 5,805 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 21 | 2 | 0 | 23 | ||||||||||||
Single issue trust preferred securities | 9,409 | 0 | 873 | 8,536 | ||||||||||||
Other corporate securities | 20 | 0 | 0 | 20 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 20,351 | $ | 142 | $ | 874 | $ | 19,619 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2017 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 5,187 | $ | 308 | $ | 0 | $ | 5,495 | ||||||||
State and political subdivisions | 5,797 | 10 | 0 | 5,807 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 23 | 3 | 0 | 26 | ||||||||||||
Single issue trust preferred securities | 9,401 | 0 | 731 | 8,670 | ||||||||||||
Other corporate securities | 20 | 0 | 0 | 20 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 20,428 | $ | 321 | $ | 731 | $ | 20,018 | ||||||||
|
|
|
|
|
|
|
|
June 30, 2019 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 5,015 | $ | 21 | $ | 0 | $ | 5,036 | ||||||||
State and political subdivisions | 1,426 | 1 | 0 | 1,427 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 0 | 0 | 0 | 0 | ||||||||||||
Single issue trust preferred securities | 0 | 0 | 0 | 0 | ||||||||||||
Other corporate securities | 20 | 0 | 0 | 20 | ||||||||||||
Total | $ | 6,461 | $ | 22 | $ | 0 | $ | 6,483 | ||||||||
December 31, 2018 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 5,074 | $ | 90 | $ | 0 | $ | 5,164 | ||||||||
State and political subdivisions | 5,473 | 7 | 1 | 5,479 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 20 | 2 | 0 | 22 | ||||||||||||
Single issue trust preferred securities | 9,412 | 0 | 1,442 | 7,970 | ||||||||||||
Other corporate securities | 20 | 0 | 0 | 20 | ||||||||||||
Total | $ | 19,999 | $ | 99 | $ | 1,443 | $ | 18,655 | ||||||||
2018.
September 30, 2018 | December 31, 2017 | |||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Due in one year or less | $ | 7,103 | $ | 7,235 | $ | 0 | $ | 0 | ||||||||
Due after one year through five years | 2,158 | 2,163 | 9,344 | 9,660 | ||||||||||||
Due after five years through ten years | 8,093 | 7,610 | 5,663 | 5,343 | ||||||||||||
Due after ten years | 2,997 | 2,611 | 5,421 | 5,015 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 20,351 | $ | 19,619 | $ | 20,428 | $ | 20,018 | ||||||||
|
|
|
|
|
|
|
|
June 30, 2019 | December 31, 2018 | |||||||||||||||
Estimated | Estimated | |||||||||||||||
Amortized | Fair | Amortized | Fair | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
Due in one year or less | $ | 5,225 | $ | 5,246 | $ | 7,913 | $ | 8,005 | ||||||||
Due after one year through five years | 216 | 217 | 1,059 | 1,061 | ||||||||||||
Due after five years through ten years | 0 | 0 | 8,030 | 7,134 | ||||||||||||
Due after ten years | 1,020 | 1,020 | 2,997 | 2,455 | ||||||||||||
Total | $ | 6,461 | $ | 6,483 | $ | 19,999 | $ | 18,655 | ||||||||
Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||||
Net losses recognized during the period | $ | (38 | ) | $ | (102 | ) | ||
Net losses recognized during the period on equity securities sold | (2 | ) | (4 | ) | ||||
Unrealized gains recognized during the period on equity securities still held at period end | 0 | 50 | ||||||
Unrealized losses recognized during the period on equity securities still held at period end | 36 | 148 |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net gains (losses) recognized during the period | $ | 55 | $ | (28 | ) | $ | 244 | $ | (64 | ) | ||||||
Net gains (losses) recognized during the period on equity securities sold | 2 | (4 | ) | 134 | (2 | ) | ||||||||||
Unrealized gains recognized during the period on equity securities still held at period end | 64 | 11 | 122 | 50 | ||||||||||||
Unrealized losses recognized during the period on equity securities still held at period end | 11 | 35 | 12 | 112 |
4.
September 30, 2018 | December 31, 2017 | |||||||
Commercial, financial and agricultural: | ||||||||
Owner-occupied commercial real estate | $ | 1,336,434 | $ | 1,361,629 | ||||
Nonowner-occupied commercial real estate | 4,341,501 | 4,451,298 | ||||||
Other commercial loans | 1,932,919 | 1,998,979 | ||||||
|
|
|
| |||||
Total commercial, financial & agricultural | 7,610,854 | 7,811,906 | ||||||
Residential real estate | 3,387,268 | 2,996,171 | ||||||
Construction & land development | 1,379,985 | 1,504,907 | ||||||
Consumer: | ||||||||
Bankcard | 9,530 | 10,314 | ||||||
Other consumer | 899,074 | 704,039 | ||||||
|
|
|
| |||||
Total gross loans | $ | 13,286,711 | $ | 13,027,337 | ||||
|
|
|
|
June 30, 2019 | December 31, 2018 | |||||||
Commercial, financial and agricultural: | ||||||||
Owner-occupied commercial real estate | $ | 1,239,954 | $ | 1,291,790 | ||||
Nonowner-occupied commercial real estate | 4,194,064 | 4,303,613 | ||||||
Other commercial loans | 2,021,953 | 1,957,641 | ||||||
Total commercial, financial & agricultural | 7,455,971 | 7,553,044 | ||||||
Residential real estate | 3,674,005 | 3,501,393 | ||||||
Construction & land development | 1,464,064 | 1,410,468 | ||||||
Consumer: | ||||||||
Bankcard | 9,380 | 10,203 | ||||||
Other consumer | 1,036,526 | 954,424 | ||||||
Total gross loans | $ | 13,639,946 | $ | 13,429,532 | ||||
Accretable yield at the beginning of the period | $ | 39,098 | ||
Accretion (including cash recoveries) | (8,371 | ) | ||
Additions | 691 | |||
Net reclassifications to accretable fromnon-accretable | 9,112 | |||
Disposals (including maturities, foreclosures, and charge-offs) | (3,323 | ) | ||
|
| |||
Accretable yield at the end of the period | $ | 37,207 | ||
|
|
Accretable yield at the beginning of the period | $ | 26,289 | ||
Accretion (including cash recoveries) | (5,850 | ) | ||
Additions | 0 | |||
Net reclassifications to accretable from non-accretable | 7,051 | |||
Disposals (including maturities, foreclosures, and charge-offs) | (4,335 | ) | ||
Accretable yield at the end of the period | $ | 23,155 | ||
5.
Troubled Debt Restructurings For the Three Months Ended | ||||||||||||
September 30, 2018 | ||||||||||||
Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | ||||||||||
Commercial real estate: | ||||||||||||
Owner-occupied | 0 | $ | 0 | $ | 0 | |||||||
Nonowner-occupied | 0 | 0 | 0 | |||||||||
Other commercial | 5 | 7,420 | 7,364 | |||||||||
Residential real estate | 1 | 272 | 272 | |||||||||
Construction & land development | 0 | 0 | 0 | |||||||||
Consumer: | ||||||||||||
Bankcard | 0 | 0 | 0 | |||||||||
Other consumer | 0 | 0 | 0 | |||||||||
|
|
|
|
|
| |||||||
Total | 6 | $ | 7,692 | $ | 7,636 | |||||||
|
|
|
|
|
|
Troubled Debt Restructurings For the Three Months Ended | ||||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||
Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | 1 | $ | 150 | $ | 150 | 0 | $ | 0 | $ | 0 | ||||||||||||||
Nonowner-occupied | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other commercial | 1 | 559 | 559 | 4 | 9,571 | 9,571 | ||||||||||||||||||
Residential real estate | 2 | 1,845 | 1,832 | 2 | 6,953 | 6,953 | ||||||||||||||||||
Construction & land development | 3 | 2,242 | 2,202 | 0 | 0 | 0 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total | 7 | $ | 4,796 | $ | 4,743 | 6 | $ | 16,524 | $ | 16,524 | ||||||||||||||
Troubled Debt Restructurings For the Nine Months Ended | ||||||||||||||||||||||||
September 30, 2018 | September 30, 2017 | |||||||||||||||||||||||
Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | 0 | $ | 0 | $ | 0 | 1 | $ | 5,333 | $ | 5,333 | ||||||||||||||
Nonowner-occupied | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other commercial | 9 | 16,992 | 16,890 | 8 | 24,102 | 22,291 | ||||||||||||||||||
Residential real estate | 3 | 7,225 | 7,225 | 0 | 0 | 0 | ||||||||||||||||||
Construction & land development | 0 | 0 | 0 | 1 | 1,456 | 1,400 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | 12 | $ | 24,217 | $ | 24,115 | 10 | $ | 30,891 | $ | 29,024 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Troubled Debt Restructurings For the Six Months Ended | ||||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||
Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | 1 | $ | 150 | $ | 150 | 0 | $ | 0 | $ | 0 | ||||||||||||||
Nonowner-occupied | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other commercial | 2 | 824 | 811 | 4 | 9,571 | 9,571 | ||||||||||||||||||
Residential real estate | 3 | 2,258 | 2,234 | 2 | 6,953 | 6,953 | ||||||||||||||||||
Construction & land development | 3 | 2,242 | 2,202 | 0 | 0 | 0 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total | 9 | $ | 5,474 | $ | 5,397 | 6 | $ | 16,524 | $ | 16,524 | ||||||||||||||
Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||||||||||||
(In thousands) | Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | ||||||||||||
Troubled Debt Restructurings | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
Nonowner-occupied | 0 | 0 | 0 | 0 | ||||||||||||
Other commercial | 1 | 622 | 1 | 622 | ||||||||||||
Residential real estate | 0 | 0 | 0 | 0 | ||||||||||||
Construction & land development | 0 | 0 | 0 | 0 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 0 | 0 | 0 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 1 | $ | 622 | 1 | $ | 622 | ||||||||||
|
|
|
|
|
|
|
|
2019. No troubled debt restructurings had charge-offs during the second quarter of 2019.
Six Months Ended June 30, 2019 | ||||||||
(In thousands) | Number of Contracts | Recorded Investment | ||||||
Troubled Debt Restructurings | ||||||||
Commercial real estate: | ||||||||
Owner-occupied | 0 | $ | 0 | |||||
Nonowner-occupied | 0 | 0 | ||||||
Other commercial | 1 | 1,321 | ||||||
Residential real estate | 0 | 0 | ||||||
Construction & land development | 0 | 0 | ||||||
Consumer: | ||||||||
Bankcard | 0 | 0 | ||||||
Other consumer | 0 | 0 | ||||||
Total | 1 | $ | 1,321 | |||||
Age Analysis of Past Due Loans As of September 30, 2018 | ||||||||||||||||||||||||
30-89 Days Past Due | 90 Days or more Past Due | Total Past Due | Current & Other (1) | Total Financing Receivables | Recorded Investment >90 Days & Accruing | |||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 11,089 | $ | 18,009 | $ | 29,098 | $ | 1,307,336 | $ | 1,336,434 | $ | 1,431 | ||||||||||||
Nonowner-occupied | 17,182 | 17,557 | 34,739 | 4,306,762 | 4,341,501 | 2,015 | ||||||||||||||||||
Other commercial | 7,413 | 49,467 | 56,880 | 1,876,039 | 1,932,919 | 1,326 | ||||||||||||||||||
Residential real estate | 35,646 | 30,519 | 66,165 | 3,321,103 | 3,387,268 | 9,941 | ||||||||||||||||||
Construction & land development | 3,406 | 17,069 | 20,475 | 1,359,510 | 1,379,985 | 642 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 649 | 177 | 826 | 8,704 | 9,530 | 177 | ||||||||||||||||||
Other consumer | 7,874 | 763 | 8,637 | 890,437 | 899,074 | 502 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 83,259 | $ | 133,561 | $ | 216,820 | $ | 13,069,891 | $ | 13,286,711 | $ | 16,034 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
30-89 Days Past Due | 90 Days or more Past Due | Total Past Due | Current & Other (1) | Total Financing Receivables | Recorded Investment >90 Days & Accruing | |||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 11,074 | $ | 17,603 | $ | 28,677 | $ | 1,211,277 | $ | 1,239,954 | $ | 1,136 | ||||||||||||
Nonowner-occupied | 7,572 | 19,678 | 27,250 | 4,166,814 | 4,194,064 | 2,713 | ||||||||||||||||||
Other commercial | 10,075 | 44,843 | 54,918 | 1,967,035 | 2,021,953 | 745 | ||||||||||||||||||
Residential real estate | 33,514 | 32,418 | 65,932 | 3,608,073 | 3,674,005 | 7,069 | ||||||||||||||||||
Construction & land development | 4,233 | 17,083 | 21,316 | 1,442,748 | 1,464,064 | 495 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 450 | 129 | 579 | 8,801 | 9,380 | 129 | ||||||||||||||||||
Other consumer | 8,011 | 684 | 8,695 | 1,027,831 | 1,036,526 | 442 | ||||||||||||||||||
Total | $ | 74,929 | $ | 132,438 | $ | 207,367 | $ | 13,432,579 | $ | 13,639,946 | $ | 12,729 | ||||||||||||
(1) | Other includes loans with a recorded investment of 111,611 acquired and accounted for under ASC Topic310-30 “Loans and Debt Securities Acquired with Deteriorated Credit Quality”. |
30-89 Days Past Due | 90 Days or more Past Due | Total Past Due | Current & Other (1) | Total Financing Receivables | Recorded Investment >90 Days & Accruing | |||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 9,224 | $ | 17,742 | $ | 26,966 | $ | 1,264,824 | $ | 1,291,790 | $ | 629 | ||||||||||||
Nonowner-occupied | 16,108 | 18,092 | 34,200 | 4,269,413 | 4,303,613 | 1,171 | ||||||||||||||||||
Other commercial | 13,556 | 46,040 | 59,596 | 1,898,045 | 1,957,641 | 2,850 | ||||||||||||||||||
Residential real estate | 37,111 | 30,278 | 67,389 | 3,434,004 | 3,501,393 | 9,141 | ||||||||||||||||||
Construction & land development | 8,462 | 19,412 | 27,874 | 1,382,594 | 1,410,468 | 680 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 657 | 177 | 834 | 9,369 | 10,203 | 177 | ||||||||||||||||||
Other consumer | 8,909 | 1,243 | 10,152 | 944,272 | 954,424 | 893 | ||||||||||||||||||
Total | $ | 94,027 | $ | 132,984 | $ | 227,011 | $ | 13,202,521 | $ | 13,429,532 | $ | 15,541 | ||||||||||||
(1) | Other includes loans with a recorded investment of $149,737 acquired and accounted for under ASC Topic 310-30 “Loans and Debt Securities Acquired with Deteriorated Credit Quality”. |
Age Analysis of Past Due Loans | ||||||||||||||||||||||||
As of December 31, 2017 | ||||||||||||||||||||||||
(In thousands) | 30-89 Days Past Due | 90 Days or more Past Due | Total Past Due | Current & Other (1) | Total Financing Receivables | Recorded Investment >90 Days & Accruing | ||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 7,968 | $ | 13,663 | $ | 21,631 | $ | 1,339,998 | $ | 1,361,629 | $ | 458 | ||||||||||||
Nonowner-occupied | 10,398 | 20,448 | 30,846 | 4,420,452 | 4,451,298 | 634 | ||||||||||||||||||
Other commercial | 11,533 | 68,476 | 80,009 | 1,918,970 | 1,998,979 | 940 | ||||||||||||||||||
Residential real estate | 35,300 | 28,637 | 63,937 | 2,932,234 | 2,996,171 | 6,519 | ||||||||||||||||||
Construction & land development | 1,615 | 17,190 | 18,805 | 1,486,102 | 1,504,907 | 385 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 449 | 186 | 635 | 9,679 | 10,314 | 186 | ||||||||||||||||||
Other consumer | 9,288 | 968 | 10,256 | 693,783 | 704,039 | 775 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 76,551 | $ | 149,568 | $ | 226,119 | $ | 12,801,218 | $ | 13,027,337 | $ | 9,897 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans on Nonaccrual Status | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
Commercial real estate: | ||||||||
Owner-occupied | $ | 16,578 | $ | 13,205 | ||||
Nonowner-occupied | 15,542 | 19,814 | ||||||
Other commercial | 48,141 | 67,536 | ||||||
Residential real estate | 20,578 | 22,118 | ||||||
Construction & land development | 16,427 | 16,805 | ||||||
Consumer: | ||||||||
Bankcard | 0 | 0 | ||||||
Other consumer | 261 | 193 | ||||||
|
|
|
| |||||
Total | $ | 117,527 | $ | 139,671 | ||||
|
|
|
|
June 30, 2019 | December 31, 2018 | |||||||
Commercial real estate: | ||||||||
Owner-occupied | $ | 16,467 | $ | 17,113 | ||||
Nonowner-occupied | 16,965 | 16,921 | ||||||
Other commercial | 44,098 | 43,190 | ||||||
Residential real estate | 25,349 | 21,137 | ||||||
Construction & land development | 16,588 | 18,732 | ||||||
Consumer: | ||||||||
Bankcard | 0 | 0 | ||||||
Other consumer | 242 | 350 | ||||||
Total | $ | 119,709 | $ | 117,443 | ||||
As of September 30, 2018 | ||||||||||||||||
Commercial Real Estate | ||||||||||||||||
Owner- occupied | Nonowner- occupied | Other Commercial | Construction & Land Development | |||||||||||||
Grade: | ||||||||||||||||
Pass | $ | 1,266,769 | $ | 4,197,966 | $ | 1,827,465 | $ | 1,302,968 | ||||||||
Special mention | 15,221 | 60,293 | 13,528 | 4,715 | ||||||||||||
Substandard | 54,444 | 83,242 | 90,023 | 72,302 | ||||||||||||
Doubtful | 0 | 0 | 1,903 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,336,434 | $ | 4,341,501 | $ | 1,932,919 | $ | 1,379,985 | ||||||||
|
|
|
|
|
|
|
|
As of December 31, 2017 | ||||||||||||||||
Commercial Real Estate | ||||||||||||||||
Owner- occupied | Nonowner- occupied | Other Commercial | Construction & Land Development | |||||||||||||
Grade: | ||||||||||||||||
Pass | $ | 1,276,088 | $ | 4,312,985 | $ | 1,848,868 | $ | 1,413,706 | ||||||||
Special mention | 20,165 | 57,618 | 55,564 | 5,196 | ||||||||||||
Substandard | 65,376 | 80,695 | 90,625 | 86,005 | ||||||||||||
Doubtful | 0 | 0 | 3,922 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,361,629 | $ | 4,451,298 | $ | 1,998,979 | $ | 1,504,907 | ||||||||
|
|
|
|
|
|
|
|
As of June 30, 2019 | |||||||||||||||||
Commercial Real Estate | Other Commercial | Construction & Land Development | |||||||||||||||
Owner- occupied | Nonowner- occupied | ||||||||||||||||
Grade: | |||||||||||||||||
Pass | $ | 1,146,018 | $ | 4,080,814 | $ | 1,892,676 | $ | 1,377,072 | |||||||||
Special mention | 33,082 | 37,946 | 55,345 | 11,038 | |||||||||||||
Substandard | 60,854 | 75,304 | 73,497 | 75,954 | |||||||||||||
Doubtful | 0 | 0 | 435 | 0 | |||||||||||||
Total | $ | 1,239,954 | $ | 4,194,064 | $ | 2,021,953 | $ | 1,464,064 | |||||||||
As of December 31, 2018 | |||||||||||||||||
Commercial Real Estate | Other Commercial | Construction & Land Development | |||||||||||||||
Owner- occupied | Nonowner- occupied | ||||||||||||||||
Grade: | |||||||||||||||||
Pass | $ | 1,201,387 | $ | 4,161,149 | $ | 1,858,821 | $ | 1,330,899 | |||||||||
Special mention | 34,487 | 46,442 | 14,424 | 28,629 | |||||||||||||
Substandard | 55,916 | 96,022 | 81,946 | 50,940 | |||||||||||||
Doubtful | 0 | 0 | 2,450 | 0 | |||||||||||||
Total | $ | 1,291,790 | $ | 4,303,613 | $ | 1,957,641 | $ | 1,410,468 | |||||||||
As of September 30, 2018 | ||||||||||||
Residential Real Estate | Bankcard | Other Consumer | ||||||||||
Grade: | ||||||||||||
Pass | $ | 3,322,863 | $ | 8,704 | $ | 890,411 | ||||||
Special mention | 17,309 | 649 | 7,879 | |||||||||
Substandard | 47,096 | 177 | 784 | |||||||||
Doubtful | 0 | 0 | 0 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 3,387,268 | $ | 9,530 | $ | 899,074 | ||||||
|
|
|
|
|
| |||||||
As of December 31, 2017 | ||||||||||||
Residential Real Estate | Bankcard | Other Consumer | ||||||||||
Grade: | ||||||||||||
Pass | $ | 2,945,266 | $ | 9,679 | $ | 693,727 | ||||||
Special mention | 18,025 | 449 | 9,334 | |||||||||
Substandard | 32,880 | 186 | 978 | |||||||||
Doubtful | 0 | 0 | 0 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 2,996,171 | $ | 10,314 | $ | 704,039 | ||||||
|
|
|
|
|
|
As of June 30, 2019 | ||||||||||||
Residential Real Estate | Bankcard | Other Consumer | ||||||||||
Grade: | ||||||||||||
Pass | $ | 3,611,502 | $ | 8,801 | $ | 1,027,772 | ||||||
Special mention | 15,833 | 450 | 8,015 | |||||||||
Substandard | 46,670 | 129 | 739 | |||||||||
Doubtful | 0 | 0 | 0 | |||||||||
Total | $ | 3,674,005 | $ | 9,380 | $ | 1,036,526 | ||||||
As of December 31, 2018 | ||||||||||||
Residential Real Estate | Bankcard | Other Consumer | ||||||||||
Grade: | ||||||||||||
Pass | $ | 3,436,584 | $ | 9,369 | $ | 944,241 | ||||||
Special mention | 19,051 | 657 | 8,914 | |||||||||
Substandard | 45,758 | 177 | 1,269 | |||||||||
Doubtful | 0 | 0 | 0 | |||||||||
Total | $ | 3,501,393 | $ | 10,203 | $ | 954,424 | ||||||
consider loans for impairment unless a sustained period of delinquency (i.e. 90 days or more) is noted or there are subsequent events that impact repayment probability (i.e. negative financial trends, bankruptcy filings, eminent
Impaired Loans | ||||||||||||||||||||||||
September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | |||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 58,367 | $ | 58,532 | $ | 0 | $ | 78,117 | $ | 78,419 | $ | 0 | ||||||||||||
Nonowner-occupied | 98,912 | 98,971 | 0 | 134,136 | 134,195 | 0 | ||||||||||||||||||
Other commercial | 60,602 | 63,069 | 0 | 46,993 | 49,552 | 0 | ||||||||||||||||||
Residential real estate | 33,190 | 34,041 | 0 | 26,751 | 28,202 | 0 | ||||||||||||||||||
Construction & land development | 36,576 | 40,673 | 0 | 52,279 | 59,691 | 0 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 23 | 23 | 0 | 15 | 15 | 0 | ||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 9,990 | $ | 9,990 | $ | 2,560 | $ | 9,132 | $ | 9,132 | $ | 2,251 | ||||||||||||
Nonowner-occupied | 14,468 | 14,468 | 2,683 | 7,797 | 7,797 | 1,592 | ||||||||||||||||||
Other commercial | 50,454 | 59,052 | 16,500 | 60,512 | 70,396 | 16,721 | ||||||||||||||||||
Residential real estate | 17,853 | 19,295 | 3,115 | 9,813 | 10,418 | 1,552 | ||||||||||||||||||
Construction & land development | 16,816 | 19,470 | 2,494 | 1,383 | 1,383 | 229 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total: | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 68,357 | $ | 68,522 | $ | 2,560 | $ | 87,249 | $ | 87,551 | $ | 2,251 | ||||||||||||
Nonowner-occupied | 113,380 | 113,439 | 2,683 | 141,933 | 141,992 | 1,592 | ||||||||||||||||||
Other commercial | 111,056 | 122,121 | 16,500 | 107,505 | 119,948 | 16,721 | ||||||||||||||||||
Residential real estate | 51,043 | 53,336 | 3,115 | 36,564 | 38,620 | 1,552 | ||||||||||||||||||
Construction & land development | 53,392 | 60,143 | 2,494 | 53,662 | 61,074 | 229 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 23 | 23 | 0 | 15 | 15 | 0 |
Impaired Loans | ||||||||||||||||||||||||
June 30, 2019 | December 31, 2018 | |||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | |||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 71,948 | $ | 73,267 | $ | 0 | $ | 63,633 | $ | 63,798 | $ | 0 | ||||||||||||
Nonowner-occupied | 50,228 | 50,294 | 0 | 98,845 | 98,904 | 0 | ||||||||||||||||||
Other commercial | 63,121 | 68,326 | 0 | 40,291 | 50,459 | 0 | ||||||||||||||||||
Residential real estate | 34,972 | 35,174 | 0 | 28,207 | 29,279 | 0 | ||||||||||||||||||
Construction & land development | 36,868 | 43,318 | 0 | 37,174 | 40,459 | 0 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 31 | 31 | 0 | 27 | 27 | 0 | ||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 4,942 | $ | 4,942 | $ | 1,390 | $ | 10,004 | $ | 10,004 | $ | 2,542 | ||||||||||||
Nonowner-occupied | 10,371 | 10,371 | 1,524 | 15,720 | 15,720 | 2,715 | ||||||||||||||||||
Other commercial | 35,166 | 37,403 | 7,805 | 61,266 | 62,812 | 17,581 | ||||||||||||||||||
Residential real estate | 12,013 | 13,618 | 1,390 | 19,623 | 22,064 | 3,265 | ||||||||||||||||||
Construction & land development | 14,085 | 16,135 | 1,954 | 14,742 | 19,446 | 2,254 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total: | ||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||
Owner-occupied | $ | 76,890 | $ | 78,209 | $ | 1,390 | $ | 73,637 | $ | 73,802 | $ | 2,542 | ||||||||||||
Nonowner-occupied | 60,599 | 60,665 | 1,524 | 114,565 | 114,624 | 2,715 | ||||||||||||||||||
Other commercial | 98,287 | 105,729 | 7,805 | 101,557 | 113,271 | 17,581 | ||||||||||||||||||
Residential real estate | 46,985 | 48,792 | 1,390 | 47,830 | 51,343 | 3,265 | ||||||||||||||||||
Construction & land development | 50,953 | 59,453 | 1,954 | 51,916 | 59,905 | 2,254 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other consumer | 31 | 31 | 0 | 27 | 27 | 0 |
Impaired Loans | ||||||||||||||||
For the Three Months Ended | ||||||||||||||||
September 30, 2018 | September 30, 2017 | |||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 65,625 | $ | 365 | $ | 74,111 | $ | 374 | ||||||||
Nonowner-occupied | 99,005 | 311 | 148,753 | 178 | ||||||||||||
Other commercial | 56,489 | 313 | 57,302 | 148 | ||||||||||||
Residential real estate | 28,753 | 144 | 21,772 | 58 | ||||||||||||
Construction & land development | 41,036 | 278 | 42,240 | 348 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 23 | 0 | 25 | 0 | ||||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 7,378 | $ | 6 | $ | 11,442 | $ | 78 | ||||||||
Nonowner-occupied | 12,465 | 189 | 13,111 | 10 | ||||||||||||
Other commercial | 47,563 | 305 | 71,886 | 42 | ||||||||||||
Residential real estate | 14,975 | 57 | 15,276 | 16 | ||||||||||||
Construction & land development | 9,408 | 20 | 1,602 | 21 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 0 | 0 | 0 | 0 | ||||||||||||
Total: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 73,003 | $ | 371 | $ | 85,553 | $ | 452 | ||||||||
Nonowner-occupied | 111,470 | 500 | 161,864 | 188 | ||||||||||||
Other commercial | 104,052 | 618 | 129,188 | 190 | ||||||||||||
Residential real estate | 43,728 | 201 | 37,048 | 74 | ||||||||||||
Construction & land development | 50,444 | 298 | 43,842 | 369 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 23 | 0 | 25 | 0 |
Impaired Loans | ||||||||||||||||
For the Nine Months Ended | ||||||||||||||||
September 30, 2018 | September 30, 2017 | |||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 69,009 | $ | 1,101 | $ | 70,477 | $ | 1,227 | ||||||||
Nonowner-occupied | 105,199 | 928 | 121,811 | 551 | ||||||||||||
Other commercial | 55,124 | 1,020 | 57,047 | 632 | ||||||||||||
Residential real estate | 27,210 | 501 | 21,397 | 219 | ||||||||||||
Construction & land development | 43,464 | 707 | 40,344 | 1,046 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 29 | 0 | 29 | 0 | ||||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 6,876 | $ | 18 | $ | 12,141 | $ | 393 | ||||||||
Nonowner-occupied | 11,158 | 251 | 13,492 | 108 | ||||||||||||
Other commercial | 47,736 | 380 | 71,736 | 685 | ||||||||||||
Residential real estate | 13,946 | 247 | 14,904 | 58 | ||||||||||||
Construction & land development | 6,944 | 60 | 2,195 | 63 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 0 | 0 | 0 | 0 | ||||||||||||
Total: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 75,885 | $ | 1,119 | $ | 82,618 | $ | 1,620 | ||||||||
Nonowner-occupied | 116,357 | 1,179 | 135,303 | 659 | ||||||||||||
Other commercial | 102,860 | 1,400 | 128,783 | 1,317 | ||||||||||||
Residential real estate | 41,156 | 748 | 36,301 | 277 | ||||||||||||
Construction & land development | 50,408 | 767 | 42,539 | 1,109 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 29 | 0 | 29 | 0 |
Impaired Loans | ||||||||||||||||
For the Three Months Ended | ||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 70,051 | $ | 467 | $ | 74,330 | $ | 354 | ||||||||
Nonowner-occupied | 68,371 | 354 | 108,343 | 159 | ||||||||||||
Other commercial | 52,659 | 327 | 52,384 | 246 | ||||||||||||
Residential real estate | 32,287 | 158 | 24,220 | 85 | ||||||||||||
Construction & land development | 36,654 | 199 | 46,909 | 98 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 29 | 0 | 32 | 0 |
Impaired Loans | ||||||||||||||||
For the Three Months Ended | ||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 5,212 | $ | 0 | $ | 5,319 | $ | 6 | ||||||||
Nonowner-occupied | 12,210 | 39 | 9,503 | 60 | ||||||||||||
Other commercial | 41,641 | 9 | 46,376 | 10 | ||||||||||||
Residential real estate | 14,451 | 48 | 11,992 | 11 | ||||||||||||
Construction & land development | 14,413 | 20 | 2,008 | 20 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 0 | 0 | 0 | 0 | ||||||||||||
Total: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 75,263 | $ | 467 | $ | 79,649 | $ | 360 | ||||||||
Nonowner-occupied | 80,581 | 393 | 117,846 | 219 | ||||||||||||
Other commercial | 94,300 | 336 | 98,760 | 256 | ||||||||||||
Residential real estate | 46,738 | 206 | 36,212 | 96 | ||||||||||||
Construction & land development | 51,067 | 219 | 48,917 | 118 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 29 | 0 | 32 | 0 |
Impaired Loans | ||||||||||||||||
For the Six Months Ended | ||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 67,911 | $ | 911 | $ | 75,592 | $ | 739 | ||||||||
Nonowner-occupied | 78,529 | 708 | 116,941 | 328 | ||||||||||||
Other commercial | 48,536 | 614 | 50,587 | 470 | ||||||||||||
Residential real estate | 30,927 | 342 | 25,064 | 180 | ||||||||||||
Construction & land development | 36,828 | 417 | 48,699 | 197 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 28 | 0 | 26 | 0 | ||||||||||||
With an allowance recorded: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 6,809 | $ | 0 | $ | 6,590 | $ | 31 | ||||||||
Nonowner-occupied | 13,380 | 84 | 8,934 | 119 | ||||||||||||
Other commercial | 48,183 | 49 | 51,088 | 28 | ||||||||||||
Residential real estate | 16,175 | 140 | 11,266 | 21 | ||||||||||||
Construction & land development | 14,522 | 40 | 1,800 | 40 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 0 | 0 | 0 | 0 | ||||||||||||
Total: | ||||||||||||||||
Commercial real estate: | ||||||||||||||||
Owner-occupied | $ | 74,720 | $ | 911 | $ | 82,182 | $ | 770 | ||||||||
Nonowner-occupied | 91,909 | 792 | 125,875 | 447 | ||||||||||||
Other commercial | 96,719 | 663 | 101,675 | 498 | ||||||||||||
Residential real estate | 47,102 | 482 | 36,330 | 201 | ||||||||||||
Construction & land development | 51,350 | 457 | 50,499 | 237 | ||||||||||||
Consumer: | ||||||||||||||||
Bankcard | 0 | 0 | 0 | 0 | ||||||||||||
Other consumer | 28 | 0 | 26 | 0 |
6.
consumer loan on which a principal or interest payment has not been made within 90 days is reviewed monthly for appropriate action. For a
2018.
Allowance for Loan Losses For the Three Months Ended September 30, 2018 | ||||||||||||||||||||||||||||||||
Commercial Real Estate | Other Commercial | Residential Real Estate | Construction & Land Development | Consumer | Allowance for Estimated Imprecision | Total | ||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | |||||||||||||||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 3,213 | $ | 6,183 | $ | 48,191 | $ | 10,380 | $ | 6,592 | $ | 2,419 | $ | 157 | $ | 77,135 | ||||||||||||||||
Charge-offs | 1,478 | 0 | 4,432 | 365 | 110 | 659 | 0 | 7,044 | ||||||||||||||||||||||||
Recoveries | 415 | 395 | 394 | 558 | 134 | 146 | 0 | 2,042 | ||||||||||||||||||||||||
Provision | 2,391 | 22 | 291 | 1,067 | 480 | 575 | (18 | ) | 4,808 | |||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Ending balance | $ | 4,541 | $ | 6,600 | $ | 44,444 | $ | 11,640 | $ | 7,096 | $ | 2,481 | $ | 139 | $ | 76,941 | ||||||||||||||||
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|
|
Allowance for Loan Losses and Carrying Amount of Loans For the Nine Months Ended September 30, 2018 | ||||||||||||||||||||||||||||||||
Commercial Real Estate | Other Commercial | Residential Real Estate | Construction & Land Development | Consumer | Allowance for Estimated Imprecision | Total | ||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | |||||||||||||||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,401 | $ | 6,369 | $ | 45,189 | $ | 9,927 | $ | 7,187 | $ | 2,481 | $ | 73 | $ | 76,627 | ||||||||||||||||
Charge-offs | 3,221 | 314 | 13,095 | 1,357 | 642 | 1,985 | 0 | 20,614 | ||||||||||||||||||||||||
Recoveries | 1,160 | 548 | 1,484 | 916 | 145 | 485 | 0 | 4,738 | ||||||||||||||||||||||||
Provision | 1,201 | (3 | ) | 10,866 | 2,154 | 406 | 1,500 | 66 | 16,190 | |||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Ending balance | $ | 4,541 | $ | 6,600 | $ | 44,444 | $ | 11,640 | $ | 7,096 | $ | 2,481 | $ | 139 | $ | 76,941 | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 2,560 | $ | 2,683 | $ | 16,500 | $ | 3,116 | $ | 2,494 | $ | 0 | $ | 0 | $ | 27,353 | ||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 1,981 | $ | 3,917 | $ | 27,944 | $ | 8,524 | $ | 4,602 | $ | 2,481 | $ | 139 | $ | 49,588 | ||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Financing receivables: | ||||||||||||||||||||||||||||||||
Ending balance | $ | 1,336,434 | $ | 4,341,501 | $ | 1,932,919 | $ | 3,387,268 | $ | 1,379,985 | $ | 908,604 | $ | 0 | $ | 13,286,711 | ||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 29,391 | $ | 22,768 | $ | 73,544 | $ | 19,994 | $ | 16,875 | $ | 0 | $ | 0 | $ | 162,572 | ||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 1,284,114 | $ | 4,250,305 | $ | 1,830,646 | $ | 3,351,837 | $ | 1,343,130 | $ | 908,581 | $ | 0 | $ | 12,968,613 | ||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 22,929 | $ | 68,428 | $ | 28,729 | $ | 15,437 | $ | 19,980 | $ | 23 | $ | 0 | $ | 155,526 |
Allowance for Loan Losses and Carrying Amount of Loans For the Year Ended December 31, 2017 | ||||||||||||||||||||||||||||||||
Commercial Real Estate | Other Commercial | Residential Real Estate | Construction & Land Development | Consumer | Allowance for Estimated Imprecision | Total | ||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | |||||||||||||||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,273 | $ | 6,883 | $ | 33,087 | $ | 13,770 | $ | 10,606 | $ | 2,805 | $ | 347 | $ | 72,771 | ||||||||||||||||
Charge-offs | 2,246 | 296 | 21,189 | 2,973 | 3,337 | 2,822 | 0 | 32,863 | ||||||||||||||||||||||||
Recoveries | 2,599 | 244 | 3,395 | 601 | 726 | 748 | 0 | 8,313 | ||||||||||||||||||||||||
Provision | (225 | ) | (462 | ) | 29,896 | (1,471 | ) | (808 | ) | 1,750 | (274 | ) | 28,406 | |||||||||||||||||||
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| |||||||||||||||||
Ending balance | $ | 5,401 | $ | 6,369 | $ | 45,189 | $ | 9,927 | $ | 7,187 | $ | 2,481 | $ | 73 | $ | 76,627 | ||||||||||||||||
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| |||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 2,251 | $ | 1,592 | $ | 16,721 | $ | 1,552 | $ | 229 | $ | 0 | $ | 0 | $ | 22,345 | ||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 3,150 | $ | 4,777 | $ | 28,468 | $ | 8,375 | $ | 6,958 | $ | 2,481 | $ | 73 | $ | 54,282 | ||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Financing receivables: | ||||||||||||||||||||||||||||||||
Ending balance | $ | 1,361,629 | $ | 4,451,298 | $ | 1,998,979 | $ | 2,996,171 | $ | 1,504,907 | $ | 714,353 | $ | 0 | $ | 13,027,337 | ||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 36,721 | $ | 21,851 | $ | 78,715 | $ | 14,316 | $ | 16,921 | $ | 0 | $ | 0 | $ | 168,524 | ||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 1,291,379 | $ | 4,320,997 | $ | 1,892,706 | $ | 2,967,666 | $ | 1,461,206 | $ | 714,338 | $ | 0 | $ | 12,648,292 | ||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 33,529 | $ | 108,450 | $ | 27,558 | $ | 14,189 | $ | 26,780 | $ | 15 | $ | 0 | $ | 210,521 |
7.
Commercial Real Estate | Construction | Allowance for | |||||||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | Other Commercial | Residential Real Estate | & Land Development | Consumer | Estimated Imprecision | Total | ||||||||||||||||||||||||||
Allowance for Loan Losses: | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 6,164 | $ | 6,718 | $ | 40,664 | $ | 13,022 | $ | 7,186 | $ | 2,748 | $ | 384 | $ | 76,886 | |||||||||||||||||
Charge-offs | 2,784 | 69 | 3,645 | 309 | 8 | 773 | 0 | 7,588 | |||||||||||||||||||||||||
Recoveries | 714 | 22 | 420 | 269 | 39 | 221 | 0 | 1,685 | |||||||||||||||||||||||||
Provision | 1,503 | (630 | ) | 7,270 | (2,810 | ) | (292 | ) | 527 | (151 | ) | 5,417 | |||||||||||||||||||||
Ending balance | $ | 5,597 | $ | 6,041 | $ | 44,709 | $ | 10,172 | $ | 6,925 | $ | 2,723 | $ | 233 | $ | 76,400 | |||||||||||||||||
Commercial Real Estate | Construction | Allowance for | |||||||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | Other Commercial | Residential Real Estate | & Land Development | Consumer | Estimated Imprecision | Total | ||||||||||||||||||||||||||
Allowance for Loan Losses: | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,063 | $ | 6,919 | $ | 41,341 | $ | 12,448 | $ | 7,992 | $ | 2,695 | $ | 245 | $ | 76,703 | |||||||||||||||||
Charge-offs | 6,521 | 69 | 4,579 | 750 | 573 | 1,510 | 0 | 14,002 | |||||||||||||||||||||||||
Recoveries | 1,618 | 41 | 717 | 354 | 152 | 404 | 0 | 3,286 | |||||||||||||||||||||||||
Provision | 5,437 | (850 | ) | 7,230 | (1,880 | ) | (646 | ) | 1,134 | (12 | ) | 10,413 | |||||||||||||||||||||
Ending balance | $ | 5,597 | $ | 6,041 | $ | 44,709 | $ | 10,172 | $ | 6,925 | $ | 2,723 | $ | 233 | $ | 76,400 | |||||||||||||||||
Commercial Real Estate | Construction | Allowance for | ||||||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | Other Commercial | Residential Real Estate | & Land Development | Consumer | Estimated Imprecision | Total | |||||||||||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 1,390 | $ | 1,524 | $ | 7,805 | $ | 1,390 | $ | 1,954 | $ | 0 | $ | 0 | $ | 14,063 | ||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 4,207 | $ | 4,517 | $ | 36,904 | $ | 8,782 | $ | 4,971 | $ | 2,723 | $ | 233 | $ | 62,337 | ||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Financing receivables: | ||||||||||||||||||||||||||||||||
Ending balance | $ | 1,239,954 | $ | 4,194,064 | $ | 2,021,953 | $ | 3,674,005 | $ | 1,464,064 | $ | 1,045,906 | $ | 0 | $ | 13,639,946 | ||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 27,882 | $ | 29,559 | $ | 54,549 | $ | 20,267 | $ | 14,085 | $ | 0 | $ | 0 | $ | 146,342 | ||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 1,185,613 | $ | 4,147,831 | $ | 1,930,570 | $ | 3,642,859 | $ | 1,429,245 | $ | 1,045,906 | $ | 0 | $ | 13,381,993 | ||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 26,459 | $ | 16,674 | $ | 36,834 | $ | 10,879 | $ | 20,734 | $ | 31 | $ | 0 | $ | 111,611 |
Commercial Real Estate | Construction | Allowance for | |||||||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | Other Commercial | Residential Real Estate | & Land Development | Consumer | Estimated Imprecision | Total | ||||||||||||||||||||||||||
Allowance for Loan Losses: | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,401 | $ | 6,369 | $ | 45,189 | $ | 9,927 | $ | 7,187 | $ | 2,481 | $ | 73 | $ | 76,627 | |||||||||||||||||
Charge-offs | 3,225 | 314 | 16,424 | 3,162 | 2,731 | 2,750 | 0 | 28,606 | |||||||||||||||||||||||||
Recoveries | 1,189 | 563 | 2,944 | 1,114 | 197 | 662 | 0 | 6,669 | |||||||||||||||||||||||||
Provision | 1,698 | 301 | 9,632 | 4,569 | 3,339 | 2,302 | 172 | 22,013 | |||||||||||||||||||||||||
Ending balance | $ | 5,063 | $ | 6,919 | $ | 41,341 | $ | 12,448 | $ | 7,992 | $ | 2,695 | $ | 245 | $ | 76,703 | |||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 2,543 | $ | 2,715 | $ | 17,581 | $ | 3,265 | $ | 2,254 | $ | 0 | $ | 0 | $ | 28,358 | |||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 2,520 | $ | 4,204 | $ | 23,760 | $ | 9,183 | $ | 5,738 | $ | 2,695 | $ | 245 | $ | 48,345 |
Commercial Real Estate | Construction | Allowance for | ||||||||||||||||||||||||||||||
Owner- occupied | Nonowner- occupied | Other Commercial | Residential Real Estate | & Land Development | Consumer | Estimated Imprecision | Total | |||||||||||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Financing receivables: | ||||||||||||||||||||||||||||||||
Ending balance | $ | 1,291,790 | $ | 4,303,613 | $ | 1,957,641 | $ | 3,501,393 | $ | 1,410,468 | $ | 964,627 | $ | 0 | $ | 13,429,532 | ||||||||||||||||
Ending Balance: individually evaluated for impairment | $ | 27,599 | $ | 25,231 | $ | 72,300 | $ | 21,998 | $ | 14,807 | $ | 0 | $ | 0 | $ | 161,935 | ||||||||||||||||
Ending Balance: collectively evaluated for impairment | $ | 1,234,919 | $ | 4,215,060 | $ | 1,860,085 | $ | 3,468,356 | $ | 1,374,840 | $ | 964,600 | $ | 0 | $ | 13,117,860 | ||||||||||||||||
Ending Balance: loans acquired with deteriorated credit quality | $ | 29,272 | $ | 63,322 | $ | 25,256 | $ | 11,039 | $ | 20,821 | $ | 27 | $ | 0 | $ | 149,737 |
September 30, 2018 | ||||||||||||||||||||||||
Community Banking | Mortgage Banking | Total | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
Amortized intangible assets: | ||||||||||||||||||||||||
Core deposit intangible assets | $ | 98,359 | ($ | 60,482 | ) | $ | 0 | ($ | 0 | ) | $ | 98,359 | ($ | 60,482 | ) | |||||||||
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Non-amortized intangible assets: | ||||||||||||||||||||||||
George Mason trade name | $ | 0 | $ | 1,080 | $ | 1,080 | ||||||||||||||||||
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Goodwill not subject to amortization | $ | 1,472,699 | $ | 5,315 | $ | 1,478,014 | ||||||||||||||||||
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�� | ||||||||||||||||||||||||
June 30, 2019 | ||||||||||||||||||||||||
Community Banking | Mortgage Banking | Total | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
Amortized intangible assets: | ||||||||||||||||||||||||
Core deposit intangible assets | $ | 98,359 | $ | ( 66,000 | ) | $ | 0 | $ | 0 | $ | 98,359 | $ | ( 66,000 | ) | ||||||||||
Non-amortized intangible assets: | ||||||||||||||||||||||||
George Mason trade name | $ | 0 | $ | 1,080 | $ | 1,080 | ||||||||||||||||||
Goodwill not subject to amortization | $ | 1,472,699 | $ | 5,315 | $ | 1,478,014 | ||||||||||||||||||
December 31, 2017 | ||||||||||||||||||||||||
Community Banking | Mortgage Banking | Total | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
Amortized intangible assets: | ||||||||||||||||||||||||
Core deposit intangible assets | $ | 98,359 | ($ | 54,453 | ) | $ | 0 | $ | 0 | $ | 98,359 | ($ | 54,453 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Non-amortized intangible assets: | ||||||||||||||||||||||||
George Mason trade name | $ | 0 | $ | 1,080 | $ | 1,080 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Goodwill not subject to amortization | $ | 1,473,265 | $ | 5,115 | $ | 1,478,380 | ||||||||||||||||||
|
|
|
|
|
|
December 31, 2018 | ||||||||||||||||||||||||
Community Banking | Mortgage Banking | Total | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
Amortized intangible assets: | ||||||||||||||||||||||||
Core deposit intangible assets | $ | 98,359 | $ | ( 62,492 | ) | $ | 0 | $ | 0 | $ | 98,359 | $ | ( 62,492 | ) | ||||||||||
Non-amortized intangible assets: | ||||||||||||||||||||||||
George Mason trade name | $ | 0 | $ | 1,080 | $ | 1,080 | ||||||||||||||||||
Goodwill not subject to amortization | $ | 1,472,699 | $ | 5,315 | $ | 1,478,014 | ||||||||||||||||||
Community Banking | Mortgage Banking | Total | ||||||||||
Goodwill at December 31, 2017 | $ | 1,473,265 | $ | 5,115 | $ | 1,478,380 | ||||||
Addition to goodwill from Cardinal acquisition | (566 | ) | 200 | (366 | ) | |||||||
|
|
|
|
|
| |||||||
Goodwill at September 30, 2018 | $ | 1,472,699 | $ | 5,315 | $ | 1,478,014 | ||||||
|
|
|
|
|
|
Community Banking | Mortgage Banking | Total | ||||||||||
Goodwill at December 31, 2018 | $ | 1,472,699 | $ | 5,315 | $ | 1,478,014 | ||||||
Additions to goodwill | 0 | 0 | 0 | |||||||||
Goodwill at June 30, 2019 | $ | 1,472,699 | $ | 5,315 | $ | 1,478,014 | ||||||
Year | Amount | |||
2018 | $ | 8,039 | ||
2019 | 7,016 | |||
2020 | 6,309 | |||
2021 | 5,369 | |||
2022 and thereafter | 17,173 |
Year | Amount | |||
2019 | $ | 7,016 | ||
2020 | 6,309 | |||
2021 | 5,369 | |||
2022 | 4,581 | |||
2023 and thereafter | 12,592 |
Three Months Ended | Six Months Ended | |||||||||||
Classification | June 30, 2019 | June 30, 2019 | ||||||||||
Operating lease cost | Net occupancy expense | $ | 4,886 | $ | 9,707 | |||||||
Sublease income | Net occupancy expense | (197 | ) | (473 | ) | |||||||
Net lease cost | $ | 4,689 | $ | 9,234 | ||||||||
Classification | June 30, 2019 | |||||||
Operating lease right-of-use assets | Operating lease right-of-use assets | $ | 63,113 | |||||
Operating lease liabilities | Operating lease liabilities | $ | 66,821 |
June 30, 2019 | ||||
Weighted-average remaining lease term: | ||||
Operating leases | 5.0 years | |||
Weighted-average discount rate: | ||||
Operating leases | 3.25 | % |
Three Months Ended | Six Months Ended | |||||||
June 30, 2019 | June 30, 2019 | |||||||
Cash paid for amounts in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | 4,931 | $ | 9,649 | ||||
ROU assets obtained in the exchange for lease liabilities | 4,214 | 4,416 |
Amount | ||||||||
Year | As of June 30, 2019 | As of December 31, 2018 | ||||||
2019 | $ | 9,618 | $ | 18,590 | ||||
2020 | 17,249 | 16,359 | ||||||
2021 | 14,672 | 13,850 | ||||||
2022 | 11,008 | 10,269 | ||||||
2023 | 8,231 | 7,600 | ||||||
Thereafter | 11,966 | 10,640 | ||||||
Total lease payments | 72,744 | 77,308 | ||||||
Less: imputed interest | (5,923 | ) | (0 | ) | ||||
Total | $ | 66,821 | $ | 77,308 | ||||
Year | Amount | |||
2018 | $ | 970,890 | ||
2019 | 187,224 | |||
2020 | 41,779 | |||
2021 | 52,667 | |||
2022 and thereafter | 32,221 | |||
|
| |||
Total | $ | 1,284,781 | ||
|
|
Year | Amount | |||
2019 | $ | 471,000 | ||
2020 | 442,000 | |||
2021 | 602,845 | |||
2022 | 21,000 | |||
2023 and thereafter | 11,187 | |||
Total | $ | 1,548,032 | ||
For reporting periods prior to June 30, 2017,
basis.
2019.
Asset Derivatives | ||||||||||||||||||||||||
September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
Balance Sheet Location | Notional Amount | Fair Value | Balance Sheet Location | Notional Amount | Fair Value | |||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||
Fair Value Hedges: | ||||||||||||||||||||||||
Interest rate swap contracts (hedging commercial loans) | Other assets | $ | 86,655 | $ | 4,042 | Other assets | $ | 71,831 | $ | 538 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total derivatives designated as hedging instruments | $ | 86,655 | $ | 4,042 | $ | 71,831 | $ | 538 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||
Forward loan sales commitments | Other assets | $ | 0 | $ | 0 | Other assets | $ | 31,024 | $ | 2 | ||||||||||||||
TBA mortgage-backed securities | Other assets | 223,500 | 1,161 | 0 | 0 | |||||||||||||||||||
Interest rate lock commitments | Other assets | 135,069 | 3,991 | Other assets | 148,866 | 4,559 | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 358,569 | $ | 5,152 | $ | 179,890 | $ | 4,561 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total asset derivatives | $ | 445,224 | $ | 9,194 | $ | 251,721 | $ | 5,099 | ||||||||||||||||
|
|
|
|
|
|
|
|
Asset Derivatives | ||||||||||||||||||||||||
June 30, 2019 | December 31, 2018 | |||||||||||||||||||||||
Balance Sheet Location | Notional Amount | Fair Value | Balance Sheet Location | Notional Amount | Fair Value | |||||||||||||||||||
Derivatives designated as hedging instruments Fair Value Hedges: | ||||||||||||||||||||||||
Interest rate swap contracts (hedging commercial loans) | Other assets | $ | 0 | $ | 0 | Other assets | $ | 85,623 | $ | 1,859 | ||||||||||||||
Total derivatives designated as hedging instruments | $ | 0 | $ | 0 | $ | 85,623 | $ | 1,859 | ||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||
Interest rate swap contracts | Other assets | $ | 0 | $ | 0 | Other assets | $ | 0 | $ | 0 | ||||||||||||||
Forward loan sales commitments | Other assets | 48,488 | 492 | Other assets | 21,604 | 542 | ||||||||||||||||||
Interest rate lock commitments | Other assets | 250,487 | 8,127 | Other assets | 93,955 | 4,103 | ||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 298,975 | $ | 8,619 | $ | 115,559 | $ | 4,645 | ||||||||||||||||
Total asset derivatives | $ | 298,975 | $ | 8,619 | $ | 201,182 | $ | 6,504 | ||||||||||||||||
Liability Derivatives | ||||||||||||||||||||||||
September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
Balance Sheet Location | Notional Amount | Fair Value | Balance Sheet Location | Notional Amount | Fair Value | |||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||
Fair Value Hedges: | ||||||||||||||||||||||||
Interest rate swap contracts (hedging commercial loans) | Other liabilities | $ | 0 | $ | 0 | Other liabilities | $ | 18,795 | $ | 165 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total derivatives designated as hedging instruments | $ | 0 | $ | 0 | $ | 18,795 | $ | 165 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||
Forward loan sales commitments | Other liabilities | $ | 22,521 | $ | 197 | Other liabilities | $ | 0 | $ | 0 | ||||||||||||||
TBA mortgage-backed securities | Other liabilities | $ | 0 | $ | 0 | Other liabilities | 236,500 | 312 | ||||||||||||||||
Interest rate lock commitments | Other liabilities | 0 | 0 | Other liabilities | 0 | 0 | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 22,521 | $ | 197 | $ | 236,500 | $ | 312 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total liability derivatives | $ | 22,521 | $ | 197 | $ | 255,295 | $ | 477 | ||||||||||||||||
|
|
|
|
|
|
|
|
Liability Derivatives | |||||||||||||||||||||||||
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||
Balance Sheet Location | Notional Amount | Fair Value | Balance Sheet Location | Notional Amount | Fair Value | ||||||||||||||||||||
Derivatives designated as hedging instruments Fair Value Hedges: | |||||||||||||||||||||||||
Interest rate swap contracts (hedging commercial loans) | Other liabilities | $ | 84,397 | $ | 2,146 | Other liabilities | $ | 0 | $ | 0 | |||||||||||||||
Total derivatives designated as hedging instruments | $ | 84,397 | $ | 2,146 | $ | 0 | $ | 0 | |||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||||
Interest rate swap contracts | Other liabilities | $ | 0 | $ | 0 | Other liabilities | $ | 0 | $ | 0 | |||||||||||||||
TBA mortgage-backed securities | Other liabilities | 405,299 | 3,476 | Other liabilities | 200,281 | 3,002 | |||||||||||||||||||
Interest rate lock commitments | Other liabilities | 0 | 0 | Other liabilities | 0 | 0 | |||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 405,299 | $ | 3,476 | $ | 200,281 | $ | 3,002 | |||||||||||||||||
Total liability derivatives | $ | 489,696 | $ | 5,622 | $ | 200,281 | $ | 3,002 | |||||||||||||||||
Derivatives in Fair Value Hedging Relationships | Location in the Statement of Condition | June 30, 2019 | ||||||||||||||
Carrying Amount of the Hedged Assets/(Liabilities) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities) | Cumulative Amount of Fair Value Hedging Adjustment Remaining for any Hedged Assets/ (Liabilities) for which Hedge Accounting has been Discontinued | ||||||||||||||
Interest rate swaps | Loans, net of unearned income | $ | 83,527 | $ | (2,146 | ) | $ | 0 |
Three Months Ended | ||||||||||||
Income Statement Location | September 30, 2018 | September 30, 2017 | ||||||||||
Derivatives in hedging relationships | ||||||||||||
Fair Value Hedges: | ||||||||||||
Interest rate swap contracts | Interest income/(expense) | $ | (24 | ) | $ | (208 | ) | |||||
|
|
|
| |||||||||
Total derivatives in hedging relationships | $ | (24 | ) | $ | (208 | ) | ||||||
|
|
|
| |||||||||
Derivatives not designated as hedging instruments | ||||||||||||
Forward loan sales commitments | | Income from Mortgage Banking Activities | | (197 | ) | (257 | ) | |||||
TBA mortgage-backed securities | | Income from Mortgage Banking Activities | | 2,583 | 123 | |||||||
Interest rate lock commitments | | Income from Mortgage Banking Activities | | (3,262 | ) | (4,484 | ) | |||||
|
|
|
| |||||||||
Total derivatives not designated as hedging instruments | $ | (876 | ) | $ | (4,618 | ) | ||||||
|
|
|
| |||||||||
Total derivatives | $ | (900 | ) | $ | (4,826 | ) | ||||||
|
|
|
|
Nine Months Ended | Three Months Ended | |||||||||||||||||||||
Income Statement Location | September 30, 2018 | September 30, 2017 | Income Statement Location | June 30, 2019 | June 30, 2018 | |||||||||||||||||
Derivatives in fair value hedging relationships | ||||||||||||||||||||||
Fair Value Hedges: | ||||||||||||||||||||||
Derivatives in hedging relationships Fair Value Hedges: | ||||||||||||||||||||||
Interest rate swap contracts | Interest income/(expense) | $ | (68 | ) | $ | 24 | ||||||||||||||||
Total derivatives in hedging relationships | $ | (68 | ) | $ | 24 | |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||
Forward loan sales commitments | Income from Mortgage Banking Activities | 492 | 112 | |||||||||||||||||||
TBA mortgage-backed securities | Income from Mortgage Banking Activities | (962 | ) | (660 | ) | |||||||||||||||||
Interest rate lock commitments | Income from Mortgage Banking Activities | 3,833 | 2,888 | |||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 3,363 | $ | 2,340 | ||||||||||||||||||
Total derivatives | $ | 3,295 | $ | 2,364 | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||
Income Statement Location | June 30, 2019 | June 30, 2018 | ||||||||||||||||||||
Derivatives in fair value hedging relationships Fair Value Hedges: | ||||||||||||||||||||||
Interest rate swap contracts | Interest income/(expense) | $ | (42 | ) | $ | (648 | ) | Interest income/(expense) | $ | (98 | ) | $ | (18 | ) | ||||||||
Cash Flow Hedges: | ||||||||||||||||||||||
Forward loan sales commitments | Other income | 0 | 0 | Other income | 0 | 0 | ||||||||||||||||
|
| |||||||||||||||||||||
Total derivatives in hedging relationships | $ | (42 | ) | $ | (648 | ) | $ | (98 | ) | $ | (18 | ) | ||||||||||
|
| |||||||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||
Forward loan sales commitments | | Income from Mortgage Banking Activities | | (12 | ) | (427 | ) | Income from Mortgage Banking Activities | 872 | 185 | ||||||||||||
TBA mortgage-backed securities | | Income from Mortgage Banking Activities | | 1,473 | 2,907 | Income from Mortgage Banking Activities | (474 | ) | (1,110 | ) | ||||||||||||
Interest rate lock commitments | | Income from Mortgage Banking Activities | | (1,643 | ) | (3,465 | ) | Income from Mortgage Banking Activities | 5,870 | 1,619 | ||||||||||||
|
| |||||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | (182 | ) | $ | (985 | ) | $ | 6,268 | $ | 694 | ||||||||||||
|
| |||||||||||||||||||||
Total derivatives | $ | (224 | ) | $ | (1,633 | ) | $ | 6,170 | $ | 676 | ||||||||||||
|
|
M
Level 1 | - | Valuation is based on quoted prices in active markets for identical assets and liabilities. |
Level 2 | - | Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. | ||||
Level 3 | - | Valuation is based on prices, inputs and model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. |
considered Level 3.
investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, George Mason enters into either a forward sales contract to sell loans to investors when using best efforts or a TBA mortgage-backed security under mandatory delivery. As TBA mortgage-backed securities are actively traded in an open market, TBA mortgage-backed securities fall into a Level 12 category. The forward sales contracts lock in an interest rate and price for the sale of loans similar to the specific rate lock commitments. Under the Company’s best efforts model, the rate lock commitments to borrowers and the forward sales contracts to investors through to the date the loan closes are undesignated derivatives and accordingly, are marked to fair value through earnings. These valuations fall into a Level 2 category. For residential mortgage loans sold in the mortgage banking segment, the interest rate lock commitments are recorded at fair value which is measured using valuations from investors for loans with similar characteristics adjusted for the Company’s actual sales experience versus the investor’s indicated pricing. These valuations fall into the Level 3 category. The unobservable input is the Company’s historical sales prices. The range of historical sales prices increased the investor’s indicated pricing by a range of 0.12%0.16% to 0.49%0.71% with a weighted average increase of 0.28%0.33%.
Fair Value at September 30, 2018 Using | ||||||||||||||||
Description | Balance as of September 30, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets | ||||||||||||||||
Available for sale securities: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 101,565 | $ | 0 | $ | 101,565 | $ | 0 | ||||||||
State and political subdivisions | 252,246 | 0 | 252,246 | 0 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 943,647 | 0 | 943,647 | 0 | ||||||||||||
Non-agency | 4,572 | 0 | 4,572 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 543,652 | 0 | 543,652 | 0 | ||||||||||||
Asset-backed securities | 223,602 | 0 | 223,602 | 0 | ||||||||||||
Trust preferred collateralized debt obligations | 6,154 | 0 | 0 | 6,154 | ||||||||||||
Single issue trust preferred securities | 8,104 | 0 | 8,104 | 0 | ||||||||||||
Other corporate securities | 95,025 | 6,879 | 88,146 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total available for sale securities | 2,178,567 | 6,879 | 2,165,534 | 6,154 | ||||||||||||
Equity securities: | ||||||||||||||||
Financial services industry | 173 | 173 | 0 | 0 | ||||||||||||
Equity mutual funds (1) | 5,073 | 5,073 | 0 | 0 | ||||||||||||
Other equity securities | 4,599 | 4,599 | 0 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total equity securities | 9,845 | 9,845 | 0 | 0 | ||||||||||||
Loans held for sale | 231,310 | 0 | 0 | 231,310 | ||||||||||||
Derivative financial assets: | ||||||||||||||||
Interest rate swap contracts | 4,042 | 0 | 4,042 | 0 | ||||||||||||
Forward sales commitments | 0 | 0 | 0 | 0 | ||||||||||||
Interest rate lock commitments | 3,991 | 0 | 0 | 3,991 | ||||||||||||
TBA mortgage-backed securities | 1,161 | 0 | 1,161 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total derivative financial assets | 9,194 | 0 | 5,203 | 3,991 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative financial liabilities: | ||||||||||||||||
Forward sales commitments | 197 | 0 | 197 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total derivative financial liabilities | 197 | 0 | 197 | 0 |
Fair Value at June 30, 2019 Using | ||||||||||||||||
Description | Balance as of June 30, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets | ||||||||||||||||
Available for sale debt securities: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 74,484 | $ | 0 | $ | 74,484 | $ | 0 | ||||||||
State and political subdivisions | 181,259 | 0 | 181,259 | 0 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 877,567 | 0 | 877,567 | 0 | ||||||||||||
Non-agency | 3,978 | 0 | 3,978 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 574,721 | 0 | 574,721 | 0 | ||||||||||||
Asset-backed securities | 268,854 | 0 | 268,854 | 0 | ||||||||||||
Trust preferred collateralized debt obligations | 5,413 | 0 | 0 | 5,413 | ||||||||||||
Single issue trust preferred securities | 16,844 | 0 | 16,844 | 0 | ||||||||||||
Other corporate securities | 342,671 | 6,712 | 335,959 | 0 | ||||||||||||
Total available for sale securities | 2,345,791 | 6,712 | 2,333,666 | 5,413 | ||||||||||||
Equity securities: | ||||||||||||||||
Financial services industry | 133 | 133 | 0 | 0 | ||||||||||||
Equity mutual funds (1) | 4,209 | 4,209 | 0 | 0 | ||||||||||||
Other equity securities | 4,756 | 4,756 | 0 | 0 | ||||||||||||
Total equity securities | 9,098 | 9,098 | 0 | 0 |
Fair Value at June 30, 2019 Using | ||||||||||||||||
Description | Balance as of June 30, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Loans held for sale | 365,440 | 0 | 0 | 365,440 | ||||||||||||
Derivative financial assets: | ||||||||||||||||
Interest rate swap contracts | 0 | 0 | 0 | 0 | ||||||||||||
Forward sales commitments | 492 | 0 | 492 | 0 | ||||||||||||
Interest rate lock commitments | 8,127 | 0 | �� | 0 | 8,127 | |||||||||||
Total derivative financial assets | 8,619 | 0 | 492 | 8,127 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative financial liabilities: | ||||||||||||||||
Interest rate swap contracts | 2,146 | 0 | 2,146 | 0 | ||||||||||||
TBA mortgage-backed securities | 3,476 | 0 | 3,476 | 0 | ||||||||||||
Total derivative financial liabilities | 5,622 | 0 | 5,622 | 0 |
(1) | The equity mutual funds are within a rabbi trust for the payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries. |
Fair Value at December 31, 2017 Using | ||||||||||||||||
Description | Balance as of December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets | ||||||||||||||||
Available for sale debt securities: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 114,758 | $ | 0 | $ | 114,758 | $ | 0 | ||||||||
State and political subdivisions | 303,869 | 0 | 303,869 | 0 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 814,593 | 0 | 814,593 | 0 | ||||||||||||
Non-agency | 5,512 | 0 | 5,512 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 454,857 | 0 | 454,857 | 0 | ||||||||||||
Asset-backed securities | 109,970 | 0 | 109,970 | 0 | ||||||||||||
Trust preferred collateralized debt obligations | 34,269 | 0 | 0 | 34,269 | ||||||||||||
Single issue trust preferred securities | 12,560 | 0 | 12,560 | 0 | ||||||||||||
Other corporate securities | 28,490 | 0 | 28,490 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total available for sale debt securities | 1,878,878 | 0 | 1,844,609 | 34,269 | ||||||||||||
Available for sale equity securities: | ||||||||||||||||
Financial services industry | 3,545 | 331 | 3,214 | 0 | ||||||||||||
Equity mutual funds (1) | 6,332 | 6,332 | 0 | 0 | ||||||||||||
Other equity securities | 1 | 1 | 0 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total available for sale equity securities | 9,878 | 6,664 | 3,214 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total available for sale securities | 1,888,756 | 6,664 | 1,847,823 | 34,269 | ||||||||||||
Loans held for sale | 263,308 | 0 | 0 | 263,308 | ||||||||||||
Derivative financial assets: | ||||||||||||||||
Interest rate swap contracts | 538 | 0 | 538 | 0 | ||||||||||||
Interest rate lock commitments | 4,561 | 0 | 2 | 4,559 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total derivative financial assets | 5,099 | 0 | 540 | 4,559 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative financial liabilities: | ||||||||||||||||
Interest rate swap contracts | 165 | 0 | 165 | 0 | ||||||||||||
TBA mortgage-backed securities | 312 | 0 | 312 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total derivative financial liabilities | 477 | 0 | 477 | 0 |
Fair Value at December 31, 2018 Using | ||||||||||||||||
Description | Balance as of December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets | ||||||||||||||||
Available for sale debt securities: | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 85,890 | $ | 0 | $ | 85,890 | $ | 0 | ||||||||
State and political subdivisions | 208,988 | 0 | 208,988 | 0 | ||||||||||||
Residential mortgage-backed securities | ||||||||||||||||
Agency | 1,035,650 | 0 | 1,035,650 | 0 | ||||||||||||
Non-agency | 4,259 | 0 | 4,259 | 0 | ||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Agency | 554,600 | 0 | 554,600 | 0 | ||||||||||||
Asset-backed securities | 271,970 | 0 | 271,970 | 0 | ||||||||||||
Trust preferred collateralized debt obligations | 5,917 | 0 | 0 | 5,917 | ||||||||||||
Single issue trust preferred securities | 8,362 | 0 | 8,362 | 0 | ||||||||||||
Other corporate securities | 161,403 | 6,822 | 154,581 | 0 | ||||||||||||
Total available for sale securities | 2,337,039 | 6,822 | 2,324,300 | 5,917 | ||||||||||||
Equity securities: | ||||||||||||||||
Financial services industry | 140 | 140 | 0 | 0 | ||||||||||||
Equity mutual funds (1) | 4,954 | 4,954 | 0 | 0 | ||||||||||||
Other equity securities | 4,640 | 4,640 | 0 | 0 | ||||||||||||
Total equity securities | 9,734 | 9,734 | 0 | 0 | ||||||||||||
Loans held for sale | 247,104 | 0 | 0 | 247,104 | ||||||||||||
Derivative financial assets: | ||||||||||||||||
Interest rate swap contracts | 1,859 | 0 | 1,859 | 0 | ||||||||||||
Forward sales commitments | 542 | 0 | 542 | 0 | ||||||||||||
Interest rate lock commitments | 4,103 | 0 | 0 | 4,103 | ||||||||||||
Total derivative financial assets | 6,504 | 0 | 2,401 | 4,103 |
Fair Value at December 31, 2018 Using | ||||||||||||||||
Description | Balance as of December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Liabilities | ||||||||||||||||
Derivative financial liabilities: | ||||||||||||||||
TBA mortgage-backed securities | 3,002 | 0 | 3,002 | 0 | ||||||||||||
Total derivative financial liabilities | 3,002 | 0 | 3,002 | 0 |
(1) | The equity mutual funds are within a rabbi trust for the payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries. |
officers of United and its subsidiaries.
The following table presents additional information about financial assets and liabilities measured at fair value at SeptemberJune 30, 20182019 and December 31, 20172018 on a recurring basis and for which United has utilized Level 3 inputs to determine fair value:
Available-for-sale Securities | ||||||||
Trust preferred collateralized debt obligations | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
Balance, beginning of period | $ | 34,269 | $ | 33,552 | ||||
Total gains or losses (realized/unrealized): | ||||||||
Included in earnings (or changes in net assets) | 28 | 9 | ||||||
Included in other comprehensive income | 1,157 | 8,757 | ||||||
Purchases, issuances, and settlements | 0 | 0 | ||||||
Sales | (29,300 | ) | (8,049 | ) | ||||
Transfers in and/or out of Level 3 | 0 | 0 | ||||||
|
|
|
| |||||
Balance, end of period | $ | 6,154 | $ | 34,269 | ||||
|
|
|
| |||||
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date | $ | 0 | $ | 0 |
Loans held for sale | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
Balance, beginning of period | $ | 263,308 | $ | 0 | ||||
Acquired in Cardinal merger | 0 | 271,301 | ||||||
Originations | 2,089,366 | 2,333,927 | ||||||
Sales | (2,148,777 | ) | (2,408,945 | ) | ||||
Total gains or losses during the period recognized in earnings | 54,829 | 58,132 | ||||||
Transfers in and/or out of Level 3 | (27,416 | ) | 8,893 | |||||
|
|
|
| |||||
Balance, end of period | $ | 231,310 | $ | 263,308 | ||||
|
|
|
| |||||
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date | $ | 0 | $ | 0 |
Derivative Financial Assets Interest Rate Lock Commitments | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
Balance, beginning of period | $ | 4,559 | $ | 0 | ||||
Acquired in Cardinal merger | 0 | 10,393 | ||||||
Transfers other | (568 | ) | (5,834 | ) | ||||
|
|
|
| |||||
Balance, end of period | $ | 3,991 | $ | 4,559 | ||||
|
|
|
| |||||
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date | $ | 0 | $ | 0 |
Available for sale Securities | ||||||||
Trust preferred collateralized debt obligations | ||||||||
June 30, 2019 | December 31, 2018 | |||||||
Balance, beginning of period | $ | 5,917 | $ | 34,269 | ||||
Total gains or losses (realized/unrealized): | ||||||||
Included in earnings (or changes in net assets) | (53 | ) | 28 | |||||
Included in other comprehensive income | (451 | ) | 920 | |||||
Purchases, issuances, and settlements | 0 | 0 | ||||||
Sales | 0 | (29,300 | ) | |||||
Transfers in and/or out of Level 3 | 0 | 0 | ||||||
Balance, end of period | $ | 5,413 | $ | 5,917 | ||||
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date | $ | 0 | $ | 0 | ||||
Loans held for sale | ||||||||
June 30, 2019 | December 31, 2018 | |||||||
Balance, beginning of period | $ | 247,104 | $ | 263,308 | ||||
Originations | 1,256,514 | 2,619,454 | ||||||
Sales | (1,177,754 | ) | (2,676,797 | ) | ||||
Total gains or losses during the period recognized in earnings | 39,576 | 68,555 | ||||||
Transfers in and/or out of Level 3 | 0 | (27,416 | ) | |||||
Balance, end of period | $ | 365,440 | $ | 247,104 | ||||
Available for sale Securities | ||||||||
Trust preferred collateralized debt obligations | ||||||||
June 30, 2019 | December 31, 2018 | |||||||
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date | $ | 0 | $ | 0 | ||||
Derivative Financial Assets Interest Rate Lock Commitments | ||||||||
June 30, 2019 | December 31, 2018 | |||||||
Balance, beginning of period | $ | 4,103 | $ | 4,559 | ||||
Transfers other | 4,024 | (456 | ) | |||||
Balance, end of period | $ | 8,127 | $ | 4,103 | ||||
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date | $ | 0 | $ | 0 |
Description | Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | ||||||
Assets | ||||||||
Loans held for sale | ||||||||
Income from mortgage banking activities | $ | (5,929 | ) | $ | (5,090 | ) |
Description | Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | ||||||
Assets | ||||||||
Loans held for sale | ||||||||
Income from mortgage banking activities | $ | (2,838 | ) | $ | (7,529 | ) |
Description | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||
Assets | ||||||||
Loans held for sale | ||||||||
Income from mortgage banking activities | $ | 4,578 | $ | 3,929 | ||||
Description | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | ||||||
Assets | ||||||||
Loans held for sale | ||||||||
Income from mortgage banking activities | $ | 6,542 | $ | 3,092 |
September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||
Description | Unpaid Principal Balance | Fair Value | Fair Value Over/(Under) Unpaid Principal Balance | Unpaid Principal Balance | Fair Value | Fair Value Over/(Under) Unpaid Principal Balance | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Loans held for sale | $ | 227,943 | $ | 231,310 | $ | 3,367 | $ | 257,674 | $ | 263,308 | $ | 5,634 |
June 30, 2019 | December 31, 2018 | |||||||||||||||||||||||
Description | Unpaid Principal Balance | Fair Value | Fair Value Over/(Under) Unpaid Principal Balance | Unpaid Principal Balance | Fair Value | Fair Value Over/(Under) Unpaid Principal Balance | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Loans held for sale | $ | 357,112 | $ | 365,440 | $ | 8,328 | $ | 241,293 | $ | 247,104 | $ | 5,811 |
and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an appraisal conducted by an independent, licensed appraiser outside of the Company using comparable property sales (Level 2). However, if the collateral is a house or building in the process of construction or if an appraisal of the real estate property is over two years old, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable business’ financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). For impaired loans, a specific reserve is established through the Allowance for Loan Losses, if necessary, by estimating the fair value of the underlying collateral on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for credit losses expense on the Consolidated Statements of Income.
Description | Balance as of September 30, 2018 | Carrying value at September 30, 2018 | YTD Losses | |||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||
Assets | ||||||||||||||||||||
Loans held for sale | $ | 2,886 | $ | 0 | $ | 2,886 | $ | 0 | $ | 0 | ||||||||||
Impaired Loans | 109,582 | 0 | 98,171 | 11,411 | 4,177 | |||||||||||||||
OREO | 18,786 | 0 | 18,786 | 0 | 796 | |||||||||||||||
Description | Balance as of December 31, 2017 | Carrying value at December 31, 2017 | YTD Losses | |||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||
Assets | ||||||||||||||||||||
Loans held for sale | $ | 2,647 | $ | 0 | $ | 2,647 | $ | 0 | $ | 14 | ||||||||||
Impaired Loans | 88,637 | 0 | 70,950 | 17,687 | 12,291 | |||||||||||||||
OREO | 24,348 | 0 | 24,151 | 197 | 4,200 |
Carrying value at June 30, 2019 | |||||||||||||||||||||
Description | Balance as of June 30, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | YTD Gains (Losses) | ||||||||||||||||
Assets | |||||||||||||||||||||
Loans held for sale | $ | 5,153 | $ | 0 | $ | 5,153 | $ | 0 | $ | (4 | ) | ||||||||||
Impaired Loans | 76,577 | 0 | 65,604 | 10,973 | 4,781 | ||||||||||||||||
OREO | 14,469 | 0 | 14,391 | 78 | (340 | ) |
Carrying value at December 31, 2018 | |||||||||||||||||||||
Description | Balance as of December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | YTD Gains (Losses) | ||||||||||||||||
Assets | |||||||||||||||||||||
Loans held for sale | $ | 2,742 | $ | 0 | $ | 2,742 | $ | 0 | $ | (3 | ) | ||||||||||
Impaired Loans | 121,355 | 0 | 108,899 | 12,456 | (12,301 | ) | |||||||||||||||
OREO | 16,865 | 0 | 16,865 | 0 | (910 | ) |
Loans: For September 30, 2018, fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors. This is not comparable with the fair values disclosed for December 31, 2017, which were based on an entrance price basis. For that date, the
Deposits:
Fair Value Measurements | ||||||||||||||||||||
Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
September 30, 2018 | ||||||||||||||||||||
Cash and cash equivalents | $ | 1,254,686 | $ | 1,254,686 | $ | 0 | $ | 1,254,686 | $ | 0 | ||||||||||
Securities available for sale | 2,178,567 | 2,178,567 | 6,879 | 2,165,534 | 6,154 | |||||||||||||||
Securities held to maturity | 20,351 | 19,619 | 0 | 16,599 | 3,020 | |||||||||||||||
Equity securities | 9,845 | 9,845 | 9,845 | 0 | 0 | |||||||||||||||
Other securities | 166,749 | 166,749 | 0 | 0 | 166,749 | |||||||||||||||
Loans held for sale | 234,196 | 234,196 | 0 | 2,886 | 231,310 | |||||||||||||||
Loans | 13,199,799 | 12,488,175 | 0 | 0 | 12,488,175 | |||||||||||||||
Derivative financial assets | 9,194 | 9,194 | 0 | 5,203 | 3,991 | |||||||||||||||
Deposits | 14,091,172 | 14,052,668 | 0 | 14,052,668 | 0 | |||||||||||||||
Short-term borrowings | 379,508 | 379,508 | 0 | 379,508 | 0 | |||||||||||||||
Long-term borrowings | 1,319,371 | 1,293,611 | 0 | 1,293,611 | 0 | |||||||||||||||
Derivative financial liabilities | 197 | 197 | 0 | 197 | 0 | |||||||||||||||
December 31, 2017 | ||||||||||||||||||||
Cash and cash equivalents | $ | 1,666,167 | $ | 1,666,167 | $ | 0 | $ | 1,666,167 | $ | 0 | ||||||||||
Securities available for sale | 1,888,756 | 1,888,756 | 6,664 | 1,847,823 | 34,269 | |||||||||||||||
Securities held to maturity | 20,428 | 20,018 | 0 | 16,998 | 3,020 | |||||||||||||||
Other securities | 162,461 | 154,338 | 0 | 0 | 154,338 | |||||||||||||||
Loans held for sale | 265,955 | 265,955 | 0 | 2,647 | 263,308 | |||||||||||||||
Loans | 12,934,794 | 12,437,797 | 0 | 0 | 12,437,797 | |||||||||||||||
Derivative financial assets | 5,099 | 5,099 | 0 | 540 | 4,559 | |||||||||||||||
Deposits | 13,830,591 | 14,024,720 | 0 | 14,024,720 | 0 | |||||||||||||||
Short-term borrowings | 477,587 | 477,587 | 0 | 477,587 | 0 | |||||||||||||||
Long-term borrowings | 1,363,977 | 1,338,754 | 0 | 1,338,754 | 0 | |||||||||||||||
Derivative financial liabilities | 477 | 477 | 0 | 477 | 0 |
Fair Value Measurements | ||||||||||||||||||||
Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
June 30, 2019 | ||||||||||||||||||||
Cash and cash equivalents | $ | 1,253,573 | $ | 1,253,573 | $ | 0 | $ | 1,253,573 | $ | 0 | ||||||||||
Securities available for sale | 2,345,791 | 2,345,791 | 6,712 | 2,333,666 | 5,413 | |||||||||||||||
Securities held to maturity | 6,461 | 6,483 | 0 | 5,463 | 1,020 | |||||||||||||||
Equity securities | 9,098 | 9,098 | 9,098 | 0 | 0 | |||||||||||||||
Other securities | 201,912 | 200,367 | 0 | 0 | 200,367 | |||||||||||||||
Loans held for sale | 370,593 | 370,593 | 0 | 5,153 | 365,440 | |||||||||||||||
Loans | 13,558,866 | 13,076,745 | 0 | 0 | 13,076,745 |
Fair Value Measurements | ||||||||||||||||||||
Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
Derivative financial assets | 8,619 | 8,619 | 0 | 492 | 8,127 | |||||||||||||||
Deposits | 14,404,085 | 14,372,448 | 0 | 14,372,448 | 0 | |||||||||||||||
Short-term borrowings | 122,159 | 122,159 | 0 | 122,159 | 0 | |||||||||||||||
Long-term borrowings | 1,783,567 | 1,762,173 | 0 | 1,762,173 | 0 | |||||||||||||||
Derivative financial liabilities | 5,622 | 5,622 | 0 | 5,622 | 0 | |||||||||||||||
December 31, 2018 | ||||||||||||||||||||
Cash and cash equivalents | $ | 1,020,396 | $ | 1,020,396 | $ | 0 | $ | 1,020,396 | $ | 0 | ||||||||||
Securities available for sale | 2,337,039 | 2,337,039 | 6,822 | 2,324,300 | 5,917 | |||||||||||||||
Securities held to maturity | 19,999 | 18,655 | 0 | 15,635 | 3,020 | |||||||||||||||
Equity securities | 9,734 | 9,734 | 9,734 | 0 | 0 | |||||||||||||||
Other securities | 176,955 | 168,107 | 0 | 0 | 168,107 | |||||||||||||||
Loans held for sale | 249,846 | 249,846 | 0 | 2,742 | 247,104 | |||||||||||||||
Loans | 13,422,222 | 12,657,073 | 0 | 0 | 12,657,073 | |||||||||||||||
Derivative financial assets | 6,504 | 6,504 | 0 | 2,401 | 4,103 | |||||||||||||||
Deposits | 13,994,749 | 13,954,574 | 0 | 13,954,574 | 0 | |||||||||||||||
Short-term borrowings | 351,327 | 351,327 | 0 | 351,327 | 0 | |||||||||||||||
Long-term borrowings | 1,499,103 | 1,475,237 | 0 | 1,475,237 | 0 | |||||||||||||||
Derivative financial liabilities | 3,002 | 3,002 | 0 | 3,002 | 0 |
Nine Months Ended September 30, 2018 | ||||||||||||||||
Shares | Aggregate Intrinsic Value | Weighted Average | ||||||||||||||
Remaining Contractual Term (Yrs.) | Exercise Price | |||||||||||||||
Outstanding at January 1, 2018 | 1,558,438 | $ | 31.09 | |||||||||||||
Granted | 276,192 | 37.60 | ||||||||||||||
Exercised | (60,161 | ) | 23.03 | |||||||||||||
Forfeited or expired | (24,007 | ) | 32.66 | |||||||||||||
|
|
|
| |||||||||||||
Outstanding at September 30, 2018 | 1,750,462 | $ | 9,624,912 | 5.8 | $ | 32.36 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Exercisable at September 30, 2018 | 1,169,402 | $ | 9,508,502 | 4.4 | $ | 28.78 | ||||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019 | ||||||||||||||||
Weighted Average | ||||||||||||||||
Shares | Aggregate Intrinsic Value | Remaining Contractual Term (Yrs.) | Exercise Price | |||||||||||||
Outstanding at January 1, 2019 | 1,730,389 | $ | 32.43 | |||||||||||||
Granted | 240,205 | 38.49 | ||||||||||||||
Exercised | (47,960 | ) | 21.92 | |||||||||||||
Forfeited or expired | (12,548 | ) | 35.27 | |||||||||||||
Outstanding at June 30, 2019 | 1,910,086 | $ | 9,445,566 | 5.7 | $ | 33.43 | ||||||||||
Exercisable at June 30, 2019 | 1,314,149 | $ | 9,355,396 | 4.3 | $ | 30.76 | ||||||||||
Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||
Nonvested at January 1, 2018 | 507,871 | $ | 7.89 | |||||
Granted | 276,192 | 7.56 | ||||||
Vested | (187,815 | ) | 7.53 | |||||
Forfeited or expired | (15,188 | ) | 7.67 | |||||
|
|
|
| |||||
Nonvested at September 30, 2018 | 581,060 | $ | 7.86 | |||||
|
|
|
|
2019:
Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||
Nonvested at January 1, 2019 | 575,672 | $ | 7.86 | |||||
Granted | 240,205 | 7.16 | ||||||
Vested | (210,876 | ) | 7.74 | |||||
Forfeited or expired | (9,064 | ) | 7.65 | |||||
Nonvested at June 30, 2019 | 595,937 | $ | 7.62 | |||||
Number of Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||
Outstanding at January 1, 2018 | 170,496 | $ | 40.05 | |||||
Granted | 97,004 | 37.60 | ||||||
Vested | (62,411 | ) | 37.59 | |||||
Forfeited | (4,253 | ) | 38.42 | |||||
|
|
|
| |||||
Outstanding at September 30, 2018 | 200,836 | $ | 39.67 | |||||
|
|
|
|
Number of Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||
Outstanding at January 1, 2019 | 199,303 | $ | 39.67 | |||||
Granted | 126,427 | 38.49 | ||||||
Vested | (73,535 | ) | 39.28 | |||||
Forfeited | (2,539 | ) | 39.49 | |||||
Outstanding at June 30, 2019 | 249,656 | $ | 39.19 | |||||
first half of 2019.
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Service cost | $ | 673 | $ | 574 | $ | 1,997 | $ | 1,705 | ||||||||
Interest cost | 1,324 | 1,293 | 3,927 | 3,837 | ||||||||||||
Expected return on plan assets | (2,578 | ) | (2,072 | ) | (7,651 | ) | (6,148 | ) | ||||||||
Recognized net actuarial loss | 1,174 | 1,111 | 3,485 | 3,298 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net periodic pension (benefit) cost | $ | 593 | $ | 906 | $ | 1,758 | $ | 2,692 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Weighted-Average Assumptions: | ||||||||||||||||
Discount rate | 3.83 | % | 4.49 | % | 3.83 | % | 4.49 | % | ||||||||
Expected return on assets | 7.00 | % | 7.00 | % | 7.00 | % | 7.00 | % | ||||||||
Rate of compensation increase (prior to age 45) | 3.50 | % | 3.50 | % | 3.50 | % | 3.50 | % | ||||||||
Rate of compensation increase | 3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Service cost | $ | 561 | $ | 666 | $ | 1,116 | $ | 1,324 | ||||||||
Interest cost | 1,459 | 1,308 | 2,901 | 2,603 | ||||||||||||
Expected return on plan assets | (2,356 | ) | (2,551 | ) | (4,686 | ) | (5,073 | ) | ||||||||
Recognized net actuarial loss | 1,184 | 1,162 | 2,355 | 2,311 | ||||||||||||
Net periodic pension (benefit) cost | $ | 848 | $ | 585 | $ | 1,686 | $ | 1,165 | ||||||||
Weighted-Average Assumptions: | ||||||||||||||||
Discount rate | 4.52 | % | 3.83 | % | 4.52 | % | 3.83 | % | ||||||||
Expected return on assets | 7.00 | % | 7.00 | % | 7.00 | % | 7.00 | % | ||||||||
Rate of compensation increase (prior to age 45) | 3.50 | % | 3.50 | % | 3.50 | % | 3.50 | % | ||||||||
Rate of compensation increase | 3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % |
On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. The Tax Act lowered the Federal corporate tax rate from 35% to 21% effective January 1, 2018 and made numerous other tax law changes. U.S. generally accepted accounting principles (GAAP) requires companies to recognize the effect of tax law changes in the period of enactment. As a result of the Tax Act, United was required to remeasure deferred tax assets and liabilities at the new tax rate and as a result, recorded deferred tax expense of $37,732 in the fourth quarter of 2017. Reasonable estimates were made based on the Company’s analysis of the Tax Act. This provisional amount may be adjusted in future periods during 2018 when additional information is obtained as provided for under Staff Accounting Bulletin 118 (“SAB 118”). Additional information that may affect our provisional amount would include further clarification and guidance on how the IRS will implement tax reform, further clarification and guidance on how state taxing authorities will implement tax reform and the related effect on the Company’s state income tax returns, completion of United’s 2017 tax return filings, and the potential for additional guidance from the SEC or the FASB related to the Tax Act. Management continues to evaluate other potential impacts of the Tax Act. The Company did not identify items for which the income tax effects of the Tax Act have not been completed and a reasonable estimate could not be determined as of September 30, 2018.
2018.
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net Income | $ | 64,412 | $ | 56,738 | $ | 192,392 | $ | 132,606 | ||||||||
Available for sale (“AFS”) securities: | ||||||||||||||||
AFS securities with OTTI charges during the period | 0 | 0 | 0 | (60 | ) | |||||||||||
Related income tax effect | 0 | 0 | 0 | 22 | ||||||||||||
Less: OTTI charges recognized in net income | 0 | 0 | 0 | 60 | ||||||||||||
Related income tax benefit | 0 | 0 | 0 | (22 | ) | |||||||||||
Reclassification of previous noncredit OTTI to credit OTTI | 0 | 0 | 0 | 0 | ||||||||||||
Related income tax benefit | 0 | 0 | 0 | 0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net unrealized (losses) gains on AFS securities with OTTI | 0 | 0 | 0 | 0 | ||||||||||||
AFS securities – all other: | ||||||||||||||||
Change in net unrealized gain on AFS securities arising during the period | (9,995 | ) | 3,584 | (42,696 | ) | 14,846 | ||||||||||
Related income tax effect | 2,329 | (1,326 | ) | 11,621 | (5,493 | ) | ||||||||||
Net reclassification adjustment for (gains) losses included in net income | 114 | (467 | ) | 290 | (1,444 | ) | ||||||||||
Related income tax expense (benefit) | (27 | ) | 173 | (68 | ) | 534 | ||||||||||
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|
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|
| |||||||||
(7,579 | ) | 1,964 | (30,853 | ) | 8,443 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net effect of AFS securities on other comprehensive income | (7,579 | ) | 1,964 | (30,853 | ) | 8,443 | ||||||||||
Held to maturity (“HTM”) securities: | ||||||||||||||||
Accretion on the unrealized loss for securities transferred from AFS to the HTM investment portfolio prior to call or maturity | 2 | 2 | 6 | 6 | ||||||||||||
Related income tax expense | (0 | ) | (0 | ) | (2 | ) | (2 | ) | ||||||||
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|
|
|
|
|
| |||||||||
Net effect of HTM securities on other comprehensive income | 2 | 2 | 4 | 4 | ||||||||||||
Pension plan: | ||||||||||||||||
Recognized net actuarial loss | 1,174 | 1,111 | 3,485 | 3,298 | ||||||||||||
Related income tax benefit | (256 | ) | (394 | ) | (782 | ) | (1,191 | ) | ||||||||
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| |||||||||
Net effect of change in pension plan asset on other comprehensive income | 918 | 717 | 2,703 | 2,107 | ||||||||||||
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|
|
|
|
|
|
| |||||||||
Total change in other comprehensive income | (6,659 | ) | 2,683 | (28,146 | ) | 10,554 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Comprehensive Income | $ | 57,753 | $ | 59,421 | $ | 164,246 | $ | 143,160 | ||||||||
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|
|
|
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Income | $ | 67,207 | $ | 66,274 | $ | 130,849 | $ | 127,980 | ||||||||
Available for sale (“AFS”) securities: | ||||||||||||||||
AFS securities with OTTI charges during the period | (75 | ) | 0 | (75 | ) | 0 | ||||||||||
Related income tax effect | 17 | 0 | 17 | 0 | ||||||||||||
Less: OTTI charges recognized in net income | 75 | 0 | 75 | 0 | ||||||||||||
Related income tax benefit | (17 | ) | 0 | (17 | ) | 0 | ||||||||||
Reclassification of previous noncredit OTTI to credit OTTI | 2,188 | 0 | 2,188 | 0 | ||||||||||||
Related income tax benefit | (510 | ) | 0 | (510 | ) | 0 | ||||||||||
Net unrealized (losses) gains on AFS securities with OTTI | 1,678 | 0 | 1,678 | 0 | ||||||||||||
AFS securities – all other: | ||||||||||||||||
Change in net unrealized gain on AFS securities arising during the period | 21,141 | (10,684 | ) | 43,379 | (32,701 | ) | ||||||||||
Related income tax effect | (4,925 | ) | 4,162 | (10,107 | ) | 9,292 | ||||||||||
Net reclassification adjustment for (gains) losses included in net income | 130 | 27 | (218 | ) | 176 | |||||||||||
Related income tax expense (benefit) | (30 | ) | (6 | ) | 51 | (41 | ) | |||||||||
16,316 | (6,501 | ) | 33,105 | (23,274 | ) | |||||||||||
Net effect of AFS securities on other comprehensive income | 17,994 | (6,501 | ) | 34,783 | (23,274 | ) | ||||||||||
Held to maturity (“HTM”) securities: | ||||||||||||||||
Accretion on the unrealized loss for securities transferred from AFS to the HTM investment portfolio prior to call or maturity | 0 | 2 | 0 | 4 | ||||||||||||
Related income tax expense | (0 | ) | (1 | ) | (0 | ) | (2 | ) | ||||||||
Net effect of HTM securities on other comprehensive income | 0 | 1 | 0 | 2 | ||||||||||||
Pension plan: | ||||||||||||||||
Recognized net actuarial loss | 1,184 | 1,162 | 2,355 | 2,311 | ||||||||||||
Related income tax benefit | (275 | ) | (110 | ) | (536 | ) | (526 | ) | ||||||||
Net effect of change in pension plan asset on other comprehensive income | 909 | 1,052 | 1,819 | 1,785 | ||||||||||||
Total change in other comprehensive income | 18,903 | (5,448 | ) | 36,602 | (21,487 | ) | ||||||||||
Total Comprehensive Income | $ | 86,110 | $ | 60,826 | $ | 167,451 | $ | 106,493 | ||||||||
Changes in Accumulated Other Comprehensive Income (AOCI) by Component(a) | ||||||||||||||||
For the Nine Months Ended September 30, 2018 | ||||||||||||||||
Unrealized Gains/ Losses on AFS Securities | Accretion on the unrealized loss for securities transferred from AFS to the HTM | Defined Benefit Pension Items | Total | |||||||||||||
Balance at January 1, 2018 | ($ | 6,204 | ) | ($ | 46 | ) | ($ | 35,775 | ) | ($ | 42,025 | ) | ||||
Cumulative effect of adopting Accounting Standard Update2016-01 | (136 | ) | 0 | 0 | (136 | ) | ||||||||||
Reclass due to adopting Accounting Standard Update2018-02 | (1,632 | ) | 0 | (4,721 | ) | (6,353 | ) | |||||||||
Other comprehensive income before reclassification | (31,075 | ) | 4 | 0 | (31,071 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | 222 | 0 | 2,703 | 2,925 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net current-period other comprehensive income, net of tax | (30,853 | ) | 4 | 2,703 | (28,146 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance at September 30, 2018 | ($ | 38,825 | ) | ($ | 42 | ) | ($ | 37,793 | ) | ($ | 76,660 | ) | ||||
|
|
|
|
|
|
|
|
Changes in Accumulated Other Comprehensive Income (AOCI) by Component (a) |
For the Six Months Ended June 30, 2019 |
Unrealized Gains/Losses on AFS Securities | Accretion on the unrealized loss for securities transferred from AFS to the HTM | Defined Benefit Pension Items | Total | |||||||||||||
Balance at January 1, 2019 | ($ | 18,289 | ) | ($ | 50 | ) | ($ | 36,680 | ) | ($ | 57,019 | ) | ||||
Reclass due to adopting Accounting Standard Update 2017-12 | 0 | 50 | 0 | 50 | ||||||||||||
Other comprehensive income before reclassification | 33,272 | 0 | 0 | 33,272 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | 1,511 | 0 | 1,819 | 3,330 | ||||||||||||
Net current-period other comprehensive income, net of tax | 34,783 | 0 | 1,819 | 36,602 | ||||||||||||
Balance at June 30, 2019 | $ | 16,494 | $ | 0 | ($ | 36,861 | ) | ($ | 20,367 | ) | ||||||
(a) | All amounts arenet-of-tax. |
Reclassifications out of Accumulated Other Comprehensive Income (AOCI) | ||||||
For the Nine Months Ended September 30, 2018 | ||||||
Details about AOCI Components | Amount Reclassified from AOCI | Affected Line Item in the Statement Where Net Income is Presented | ||||
Available for sale (“AFS”) securities: | ||||||
Reclassification of previous noncredit OTTI to credit OTTI | $ | 0 | Net investment securities (losses) gains | |||
Net reclassification adjustment for losses (gains) included in net income | 290 | Net investment securities (losses) gains | ||||
|
| |||||
290 | Total before tax | |||||
Related income tax effect | (68 | ) | Tax expense | |||
|
| |||||
222 | Net of tax | |||||
Pension plan: | ||||||
Recognized net actuarial loss | 3,485 | (a) | ||||
|
| |||||
3,485 | Total before tax | |||||
Related income tax effect | (782 | ) | Tax expense | |||
|
| |||||
2,703 | Net of tax | |||||
|
| |||||
Total reclassifications for the period | $ | 2,925 | ||||
|
|
Reclassifications out of Accumulated Other Comprehensive Income (AOCI) |
For the Six Months Ended June 30, 2019 |
Details about AOCI Components | Amount Reclassified from AOCI | Affected Line Item in the Statement Where Net Income is Presented | ||||
Available for sale (“AFS”) securities: | ||||||
Reclassification of previous noncredit OTTI to credit OTTI | $ | 2,188 | Net investment securities (losses) gains | |||
Net reclassification adjustment for losses (gains) included in net income | (218 | ) | Net investment securities (losses) gains | |||
1,970 | Total before tax | |||||
Related income tax effect | (459 | ) | Tax expense | |||
1,511 | Net of tax | |||||
Pension plan: | ||||||
Recognized net actuarial loss | 2,355 | (a) | ||||
2,355 | Total before tax | |||||
Related income tax effect | (536 | ) | Tax expense | |||
1,819 | Net of tax | |||||
Total reclassifications for the period | $ | 3,330 | ||||
(a) | This AOCI component is included in the |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Distributed earnings allocated to common stock | $ | 35,234 | $ | 34,587 | $ | 106,429 | $ | 95,871 | ||||||||
Undistributed earnings allocated to common stock | 29,060 | 22,065 | 85,617 | 36,518 | ||||||||||||
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| |||||||||
Net earnings allocated to common shareholders | $ | 64,294 | $ | 56,652 | $ | 192,046 | $ | 132,389 | ||||||||
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|
|
| |||||||||
Average common shares outstanding | 103,617,590 | 104,760,153 | 104,382,094 | 95,040,664 | ||||||||||||
Equivalents from stock options | 316,369 | 307,969 | 297,782 | 409,962 | ||||||||||||
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|
|
|
|
|
| |||||||||
Average diluted shares outstanding | 103,933,959 | 105,068,122 | 104,679,876 | 95,450,626 | ||||||||||||
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|
|
|
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|
| |||||||||
Earnings per basic common share | $ | 0.62 | $ | 0.54 | $ | 1.84 | $ | 1.39 | ||||||||
Earnings per diluted common share | $ | 0.62 | $ | 0.54 | $ | 1.83 | $ | 1.39 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Distributed earnings allocated to common stock | $ | 34,604 | $ | 35,516 | $ | 69,276 | $ | 71,195 | ||||||||
Undistributed earnings allocated to common stock | 32,446 | 30,637 | 61,276 | 56,557 | ||||||||||||
Net earnings allocated to common shareholders | $ | 67,050 | $ | 66,153 | $ | 130,552 | $ | 127,752 | ||||||||
Average common shares outstanding | 101,773,643 | 104,682,910 | 101,833,880 | 104,770,681 | ||||||||||||
Equivalents from stock options | 274,202 | 269,878 | 265,929 | 287,333 | ||||||||||||
Average diluted shares outstanding | 102,047,845 | 104,952,788 | 102,099,809 | 105,058,014 | ||||||||||||
Earnings per basic common share | $ | 0.66 | $ | 0.63 | $ | 1.28 | $ | 1.22 | ||||||||
Earnings per diluted common share | $ | 0.66 | $ | 0.63 | $ | 1.28 | $ | 1.22 |
Description | Issuance Date | Amount of Capital Securities Issued | Interest Rate | Maturity Date | ||||||
United Statutory Trust III | December 17, 2003 | $ | 20,000 | 3-month LIBOR + 2.85% | December 17, 2033 | |||||
United Statutory Trust IV | December 19, 2003 | $ | 25,000 | 3-month LIBOR + 2.85% | January 23, 2034 | |||||
United Statutory Trust V | July 12, 2007 | $ | 50,000 | 3-month LIBOR + 1.55% | October 1, 2037 | |||||
United Statutory Trust VI | September 20, 2007 | $ | 30,000 | 3-month LIBOR + 1.30% | December 15, 2037 | |||||
Premier Statutory Trust II | September 25, 2003 | $ | 6,000 | 3-month LIBOR + 3.10% | October 8, 2033 | |||||
Premier Statutory Trust III | May 16, 2005 | $ | 8,000 | 3-month LIBOR + 1.74% | June 15, 2035 | |||||
Premier Statutory Trust IV | June 20, 2006 | $ | 14,000 | 3-month LIBOR + 1.55% | September 23, 2036 | |||||
Premier Statutory Trust V | December 14, 2006 | $ | 10,000 | 3-month LIBOR + 1.61% | March 1, 2037 | |||||
Centra Statutory Trust I | September 20, 2004 | $ | 10,000 | 3-month LIBOR + 2.29% | September 20, 2034 | |||||
Centra Statutory Trust II | June 15, 2006 | $ | 10,000 | 3-month LIBOR + 1.65% | July 7, 2036 | |||||
Virginia Commerce Trust II | December 19, 2002 | $ | 15,000 | 6-month LIBOR + 3.30% | December 19, 2032 | |||||
Virginia Commerce Trust III | December 20, 2005 | $ | 25,000 | 3-month LIBOR + 1.42% | February 23, 2036 | |||||
Cardinal Statutory Trust I | July 27, 2004 | $ | 20,000 | 3-month LIBOR + 2.40% | September 15, 2034 | |||||
UFBC Capital Trust I | December 30, 2004 | $ | 5,000 | 3-month LIBOR + 2.10% | March 15, 2035 |
Description | Issuance Date | Amount of Capital Securities Issued | Interest Rate | Maturity Date | ||||||||
United Statutory Trust III | December 17, 2003 | $ | 20,000 | 3-month LIBOR + 2.85% | December 17, 2033 | |||||||
United Statutory Trust IV | December 19, 2003 | $ | 25,000 | 3-month LIBOR + 2.85% | January 23, 2034 | |||||||
United Statutory Trust V | July 12, 2007 | $ | 50,000 | 3-month LIBOR + 1.55% | October 1, 2037 | |||||||
United Statutory Trust VI | September 20, 2007 | $ | 30,000 | 3-month LIBOR + 1.30% | December 15, 2037 | |||||||
Premier Statutory Trust II | September 25, 2003 | $ | 6,000 | 3-month LIBOR + 3.10% | October 8, 2033 | |||||||
Premier Statutory Trust III | May 16, 2005 | $ | 8,000 | 3-month LIBOR + 1.74% | June 15, 2035 | |||||||
Premier Statutory Trust IV | June 20, 2006 | $ | 14,000 | 3-month LIBOR + 1.55% | September 23, 2036 | |||||||
Premier Statutory Trust V | December 14, 2006 | $ | 10,000 | 3-month LIBOR + 1.61% | March 1, 2037 | |||||||
Centra Statutory Trust I | September 20, 2004 | $ | 10,000 | 3-month LIBOR + 2.29% | September 20, 2034 | |||||||
Centra Statutory Trust II | June 15, 2006 | $ | 10,000 | 3-month LIBOR + 1.65% | July 7, 2036 | |||||||
Virginia Commerce Trust II | December 19, 2002 | $ | 15,000 | 6-month LIBOR + 3.30% | December 19, 2032 | |||||||
Virginia Commerce Trust III | December 20, 2005 | $ | 25,000 | 3-month LIBOR + 1.42% | February 23, 2036 | |||||||
Cardinal Statutory Trust I | July 27, 2004 | $ | 20,000 | 3-month LIBOR + 2.40% | September 15, 2034 | |||||||
UFBC Capital Trust I | December 30, 2004 | $ | 5,000 | 3-month LIBOR + 2.10% | March 15, 2035 |
As of September 30, 2018 | As of December 31, 2017 | |||||||||||||||||||||||
Aggregate Assets | Aggregate Liabilities | Risk Of Loss(1) | Aggregate Assets | Aggregate Liabilities | Risk Of Loss(1) | |||||||||||||||||||
Trust preferred securities | $ | 257,873 | $ | 248,921 | $ | 8,952 | $ | 266,669 | $ | 257,674 | $ | 8,995 |
As of June 30, 2019 | As of December 31, 2018 | |||||||||||||||||||||||
Aggregate Assets | Aggregate Liabilities | Risk Of Loss (1) | Aggregate Assets | Aggregate Liabilities | Risk Of Loss (1) | |||||||||||||||||||
Trust preferred securities | $ | 257,888 | $ | 248,746 | $ | 9,142 | $ | 257,754 | $ | 248,741 | $ | 9,013 |
(1) | Represents investment in VIEs. |
As a result of the Cardinal acquisition in April 2017,
Through its community banking segment, United offers a full range of products and services through various delivery channels. In particular, the community banking segment includes both commercial and consumer lending and provides customers with such products as commercial loans, real estate loans, business financing and consumer loans. In addition, this segment provides customers with several choices of deposit products including demand deposit accounts, savings accounts and certificates of deposit as well as investment and financial advisory services to businesses and individuals, including financial planning, retirement/estate planning, and investment management. The mortgage banking segment engages primarily in the origination and acquisition of residential mortgages for sale into the secondary market though George Mason.
At and For the Three Months Ended September 30, 2018 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 149,770 | $ | 388 | $ | (3,168 | ) | $ | 1,785 | $ | 148,775 | |||||||||
Provision for loans losses | 4,808 | 0 | 0 | 0 | 4,808 | |||||||||||||||
Other income | 18,717 | 16,478 | 58 | (3,567 | ) | 31,686 | ||||||||||||||
Other expense | 75,255 | 17,957 | 1,885 | (1,782 | ) | 93,315 | ||||||||||||||
Income taxes | 19,296 | (246 | ) | (1,124 | ) | 0 | 17,926 | |||||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||
Net income (loss) | $ | 69,128 | $ | (845 | ) | $ | (3,871 | ) | $ | 0 | $ | 64,412 | ||||||||
|
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|
|
|
|
|
|
|
| |||||||||||
Total assets (liabilities) | $ | 19,080,734 | $ | 288,638 | $ | 12,545 | $ | (194,274 | ) | $ | 19,187,643 | |||||||||
Average assets (liabilities) | 18,982,530 | 303,556 | 5,468 | (243,867 | ) | 19,047,689 | ||||||||||||||
At and For the Three Months Ended September 30, 2017 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 152,886 | $ | (36 | ) | $ | (2,574 | ) | $ | 0 | $ | 150,276 | ||||||||
Provision for loans losses | 7,279 | 0 | 0 | 0 | 7,279 | |||||||||||||||
Other income | 18,373 | 19,936 | (80 | ) | 0 | 38,229 | ||||||||||||||
Other expense | 74,553 | 24,036 | (1,937 | ) | 0 | 96,652 | ||||||||||||||
Income taxes | 29,490 | (1,332 | ) | (322 | ) | 0 | 27,836 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) | $ | 59,937 | $ | (2,804 | ) | $ | (395 | ) | $ | 0 | $ | 56,738 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets (liabilities) | $ | 19,083,318 | $ | 350,483 | $ | (900 | ) | $ | (302,923 | ) | $ | 19,129,978 | ||||||||
Average assets (liabilities) | 18,889,710 | 321,744 | (13,994 | ) | (269,675 | ) | 18,927,785 | |||||||||||||
At and For the Nine Months Ended September 30, 2018 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 444,840 | $ | 1,028 | $ | (8,794 | ) | $ | 4,866 | $ | 441,940 | |||||||||
Provision for loans losses | 16,190 | 0 | 0 | 0 | 16,190 | |||||||||||||||
Other income | 53,952 | 54,829 | (696 | ) | (9,200 | ) | 98,885 | |||||||||||||
Other expense | 224,240 | 57,566 | (295 | ) | (4,334 | ) | 277,177 | |||||||||||||
Income taxes | 57,519 | (385 | ) | (2,068 | ) | 0 | 55,066 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) | $ | 200,843 | $ | (1,324 | ) | $ | (7,127 | ) | $ | 0 | $ | 192,392 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets (liabilities) | $ | 19,080,734 | $ | 288,638 | $ | 12,545 | $ | (194,274 | ) | $ | 19,187,643 | |||||||||
Average assets (liabilities) | 18,718,295 | 284,100 | 8,043 | (240,505 | ) | 18,769,934 |
At and For the Three Months Ended June 30, 2019 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 152,517 | $ | 111 | $ | (3,209 | ) | $ | 1,134 | $ | 150,553 | |||||||||
Provision for loans losses | 5,417 | 0 | 0 | 0 | 5,417 | |||||||||||||||
Other income | 18,398 | 23,501 | 53 | (2,157 | ) | 39,795 | ||||||||||||||
Other expense | 82,304 | 18,771 | 143 | (1,023 | ) | 100,195 | ||||||||||||||
Income taxes | 17,207 | 1,004 | (682 | ) | 0 | 17,529 | ||||||||||||||
Net income (loss) | $ | 65,987 | $ | 3,837 | $ | (2,617 | ) | $ | 0 | $ | 67,207 | |||||||||
Total assets (liabilities) | $ | 19,735,901 | $ | 442,188 | $ | 16,729 | $ | (312,279 | ) | $ | 19,882,539 | |||||||||
Average assets (liabilities) | 19,447,629 | 326,525 | 5,387 | (263,687 | ) | 19,515,854 | ||||||||||||||
At and For the Three Months Ended June 30, 2018 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 149,448 | $ | 264 | $ | (3,032 | ) | $ | 2,442 | $ | 149,122 | |||||||||
Provision for loans losses | 6,204 | 0 | 0 | 0 | 6,204 | |||||||||||||||
Other income | 17,465 | 23,468 | 68 | (4,994 | ) | 36,007 | ||||||||||||||
Other expense | 76,495 | 21,225 | (1,758 | ) | (2,552 | ) | 93,410 | |||||||||||||
Income taxes | 18,948 | 564 | (271 | ) | 0 | 19,241 | ||||||||||||||
Net income (loss) | $ | 65,266 | $ | 1,943 | $ | (935 | ) | $ | 0 | $ | 66,274 | |||||||||
Total assets (liabilities) | $ | 19,112,133 | $ | 388,292 | $ | 10,895 | $ | (303,717 | ) | $ | 19,207,603 | |||||||||
Average assets (liabilities) | 18,658,168 | 335,781 | 6,776 | (288,341 | ) | 18,712,384 |
At and For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 401,044 | $ | 54 | $ | (6,957 | ) | $ | 0 | $ | 394,141 | |||||||||
Provision for loans losses | 21,429 | 0 | 0 | 0 | 21,429 | |||||||||||||||
Other income | 53,409 | 42,329 | 3,143 | 0 | 98,881 | |||||||||||||||
Other expense | 215,935 | 42,744 | 12,952 | 0 | 271,631 | |||||||||||||||
Income taxes | 73,214 | (39 | ) | (5,819 | ) | 0 | 67,356 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) | $ | 143,875 | $ | (322 | ) | $ | (10,947 | ) | $ | 0 | $ | 132,606 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets (liabilities) | $ | 19,083,318 | $ | 350,483 | $ | (900 | ) | $ | (302,923 | ) | $ | 19,129,978 | ||||||||
Average assets (liabilities) | 17,180,219 | 187,118 | (20,402 | ) | (159,291 | ) | 17,187,644 |
At and For the Six Months Ended June 30, 2019 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 298,407 | $ | 166 | $ | (6,532 | ) | $ | 2,680 | $ | 294,721 | |||||||||
Provision for loans losses | 10,413 | 0 | 0 | 0 | 10,413 | |||||||||||||||
Other income | 36,050 | 39,607 | 255 | (4,894 | ) | 71,018 | ||||||||||||||
Other expense | 158,298 | 33,613 | (77 | ) | (2,214 | ) | 189,620 | |||||||||||||
Income taxes | 34,873 | 1,286 | (1,302 | ) | 0 | 34,857 | ||||||||||||||
Net income (loss) | $ | 130,873 | $ | 4,874 | $ | (4,898 | ) | $ | 0 | $ | 130,849 | |||||||||
Total assets (liabilities) | $ | 19,735,901 | $ | 442,188 | $ | 16,729 | $ | (312,279 | ) | $ | 19,882,539 | |||||||||
Average assets (liabilities) | 19,324,956 | 296,008 | 1,824 | (239,281 | ) | 19,383,507 |
At and For the Six Months Ended June 30, 2018 | ||||||||||||||||||||
Community Banking | Mortgage Banking | Other | Intersegment Eliminations | Consolidated | ||||||||||||||||
Net interest income | $ | 295,070 | $ | 640 | $ | (5,626 | ) | $ | 3,081 | $ | 293,165 | |||||||||
Provision for loans losses | 11,382 | 0 | 0 | 0 | 11,382 | |||||||||||||||
Other income | 35,235 | 38,351 | (754 | ) | (5,633 | ) | 67,199 | |||||||||||||
Other expense | 148,986 | 39,609 | (2,181 | ) | (2,552 | ) | 183,862 | |||||||||||||
Income taxes | 38,224 | (139 | ) | (945 | ) | 0 | 37,140 | |||||||||||||
Net income (loss) | $ | 131,713 | $ | (479 | ) | $ | (3,254 | ) | $ | 0 | $ | 127,980 | ||||||||
Total assets (liabilities) | $ | 19,112,133 | $ | 388,292 | $ | 10,895 | $ | (303,717 | ) | $ | 19,207,603 | |||||||||
Average assets (liabilities) | 18,583,975 | 274,211 | 9,231 | (238,796 | ) | 18,628,621 |
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
ACQUISITIONS
On April 21, 2017, United acquired 100% of the outstanding common stock of Cardinal Financial Corporation (“Cardinal”), headquartered in Tysons Corner, Virginia. The acquisition of Cardinal expands United’s existing footprint in the Washington, D.C. Metropolitan Statistical Area (“MSA”). Cardinal also operated George Mason Mortgage, LLC (“George Mason”), a residential mortgage lending company based in Fairfax, Virginia with offices located in Virginia, Maryland, North Carolina, South Carolina and the District of Columbia. As a result of the merger, George Mason became an indirectly-owned subsidiary of United. The Cardinal merger was accounted for under the acquisition method of accounting. At consummation, Cardinal had assets of $4.14 billion, portfolio loans of $3.31 billion and deposits of $3.34 billion.
The results of operations of Cardinal are included in the consolidated results of operations from their respective dates of acquisition. As a result of the Cardinal acquisition, the first nine months of 2018 was impacted by increased levels of average balances, income, and expense as compared to the first nine months of 2017. In addition, the first nine months of 2017 included $24.99 million of merger-related expenses from the Cardinal acquisition.
Where the
Allowance for Credit Losses
As explained in Note 6, Allowance for Credit Losses to the unaudited Consolidated Financial Statements as of June 30, 2019 were unchanged from the allowance policies disclosed in United’s Annual Report on Form
Investment Securities
Accounting estimates are used in the presentationOperations.”
required to sell an impaired debt security before recovery of its amortized cost basis less any current period credit loss, other-than-temporary impairment is recognized in earnings. The amount recognized in earnings is equal to the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date. If United does not intend to sell, and is not more likely than not they will be required to sell the impaired debt security prior to recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment is separated into the following: 1) the amount representing the credit loss, which is recognized in earnings, and 2) the amount related to all other factors, which is recognized in other comprehensive income. For additional information on management’s consideration of investment valuation and other-than-temporary impairment, see Note 3, Investment Securities, and Note 12, Fair Value Measurements, to the unaudited consolidated financial statements.
Accounting for Acquired Loans
Loans acquired are initially recorded at their acquisition date fair values. The fair value of the acquired loans is based on the present value of the expected cash flows, including principal, interest and prepayments. Periodic principal and interest cash flows are adjusted for expected losses and prepayments, then discounted to determine the present value and summed to arrive at the estimated fair value. Fair value estimates involve assumptions and judgments as to credit risk, interest rate risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values and discount rate.
Acquired loans are divided into loans with evidence of credit quality deterioration, which are accounted for under ASC Topic310-30 (acquired impaired) and loans that do not meet this criteria, which are accounted for under ASC Topic310-20 (acquired performing). Acquired impaired loans have experienced a deterioration of credit quality from origination to acquisition for which it is probable that United will be unable to collect all contractually required payments receivable, including both principal and interest. In the assessment of credit quality, numerous assumptions, interpretations and judgments must be made, based on internal and third-party credit quality information and ultimately the determination as to the probability that all contractual cash flows will not be able to be collected. This is a point in time assessment and inherently subjective due to the nature of the available information and judgment involved.
Subsequent to the acquisition date, United continues to estimate the amount and timing of cash flows expected to be collected on acquired impaired loans. Increases in expected cash flows will generally result in a recovery of any previously recorded allowance for loan losses, to the extent applicable, and/or a reclassification from the nonaccretable difference to accretable yield, which will be recognized prospectively. The present value of any decreases in expected cash flows after the acquisition date will generally result in an impairment charge recorded as a provision for loan losses, resulting in an increase to the allowance for loan losses.
For acquired performing loans, the difference between the acquisition date fair value and the contractual amounts due at the acquisition date represents the fair value adjustment. Fair value adjustments may be discounts (or premiums) to a loan’s cost basis and are accreted (or amortized) to interest income over the loan’s remaining life using the level yield method. Subsequent to the acquisition date, the methods utilized to estimate the required allowance for loan losses for these loans is similar to originated loans.
See Note 2, Merger and Acquisitions, and Note 4, Loans, to the unaudited Consolidated Financial Statements for information regarding United’s acquired loans disclosures.
Income Taxes
United’s calculation of income tax provision is inherently complex due to the various different tax laws and jurisdictions in which we operate and requires management’s use of estimates and judgments in its determination. The current income tax liability also includes income tax expense related to our uncertain tax positions as required
in ASC Topic 740, “Income Taxes.” Changes to the estimated accrued taxes can occur due to changes in tax rates, implementation of new business strategies, resolution of issues with taxing authorities and recently enacted statutory, judicial and regulatory guidance. These changes can be material to the Company’s operating results for any particular reporting period. The analysis of the income tax provision requires the assessments of the relative risks and merits of the appropriate tax treatment of transactions, filing positions, filing methods and taxable income calculations after considering statutes, regulations, judicial precedent and other information. United strives to keep abreast of changes in the tax laws and the issuance of regulations which may impact tax reporting and provisions for income tax expense. United is also subject to audit by federal and state authorities. Because the application of tax laws is subject to varying interpretations, results of these audits may produce indicated liabilities which differ from United’s estimates and provisions. United continually evaluates its exposure to possible tax assessments arising from audits and records its estimate of probable exposure based on current facts and circumstances. The potential impact to United’s operating results for any of the changes cannot be reasonably estimated. See Note 15, Income Taxes, to the unaudited Consolidated Financial Statements for information regarding United’s ASC Topic 740 disclosures.
Use of Fair Value Measurements
United determines the fair value of its financial instruments based on the fair value hierarchy established in ASC Topic 820, whereby the fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC Topic 820 establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs in the methodology for determining fair value are observable or unobservable. Observable inputs reflect market-based information obtained from independent sources (Level 1 or Level 2), while unobservable inputs reflect management’s estimate of market data (Level 3). For assets and liabilities that are actively traded and have quoted prices or observable market data, a minimal amount of subjectivity concerning fair value is needed. Prices and values obtained from third party vendors that do not reflect forced liquidation or distressed sales are not adjusted by management. When quoted prices or observable market data are not available, management’s judgment is necessary to estimate fair value.
At September 30, 2018, approximately 13.34% of total assets, or $2.56 billion, consisted of financial instruments recorded at fair value. Of this total, approximately 90.12% or $2.31 billion of these financial instruments used valuation methodologies involving observable market data, collectively Level 1 and Level 2 measurements, to determine fair value. Approximately $252.87 million or 9.88% of these financial instruments were valued using unobservable market information or Level 3 measurements. Most of these financial instruments valued using unobservable market information were pooled trust preferred investment securities classified asavailable-for-sale. At September 30, 2018, only $197 thousand or less than 1% of total liabilities were recorded at fair value. This entire amount was valued using methodologies involving observable market data. United does not believe that any changes in the unobservable inputs used to value the financial instruments mentioned above would have a material impact on United’s results of operations, liquidity, or capital resources. See Note 12, Fair Value Measurements, to the unaudited Consolidated Financial Statements for additional information regarding ASC Topic 820 and its impact on United’s financial statements.
Any material effect on the financial statements related to these critical accounting areas are further discussed in this MD&A.
or 14.67%. Loans held for sale decreased $31.76 million or 11.94%. Cash and cash equivalents decreased $411.48 million or 24.70%. Other assets were relatively flat, increasing $1.32$19.54 million or less than 1%. In addition, United adopted the new accounting standard for leases effective January 1, 2019, as previously mentioned, resulting in a $63.11 million operating lease
2018.
(Dollars in thousands) | September 30 2018 | December 31 2017 | $ Change | % Change | ||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 101,565 | $ | 114,758 | $ | (13,193 | ) | (11.50 | %) | |||||||
State and political subdivisions | 252,246 | 303,869 | (51,623 | ) | (16.99 | %) | ||||||||||
Mortgage-backed securities | 1,491,871 | 1,274,962 | 216,909 | 17.01 | % | |||||||||||
Asset-backed securities | 223,602 | 109,970 | 113,632 | 103.33 | % | |||||||||||
Market equity securities | 0 | 9,878 | (9,878 | ) | (100.00 | %) | ||||||||||
Trust preferred collateralized debt obligations | 6,154 | 34,269 | (28,115 | ) | (82.04 | %) | ||||||||||
Single issue trust preferred securities | 8,104 | 12,560 | (4,456 | ) | (35.48 | %) | ||||||||||
Corporate securities | 95,025 | 28,490 | 66,535 | 233.54 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total available for sale securities, at fair value | $ | 2,178,567 | $ | 1,888,756 | $ | 289,811 | 15.34 | % | ||||||||
|
|
|
|
|
|
|
|
June 30 | December 31 | |||||||||||||||
(Dollars in thousands) | 2019 | 2018 | $ Change | % Change | ||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 74,484 | $ | 85,890 | $ | (11,406 | ) | (13.28 | %) | |||||||
State and political subdivisions | 181,259 | 208,988 | (27,729 | ) | (13.27 | %) | ||||||||||
Mortgage-backed securities | 1,456,266 | 1,594,509 | (138,243 | ) | (8.67 | %) | ||||||||||
Asset-backed securities | 268,854 | 271,970 | (3,116 | ) | (1.15 | %) | ||||||||||
Trust preferred collateralized debt obligations | 5,413 | 5,917 | (504 | ) | (8.52 | %) | ||||||||||
Single issue trust preferred securities | 16,844 | 8,362 | 8,482 | 101.44 | % | |||||||||||
Corporate securities | 342,671 | 161,403 | 181,268 | 112.31 | % | |||||||||||
Total available for sale securities, at fair value | $ | 2,345,791 | $ | 2,337,039 | $ | 8,752 | 0.37 | % | ||||||||
The following table summarizes the changes in the held to maturity securities since year-end 2018: | ||||||||||||||||
June 30 | December 31 | |||||||||||||||
(Dollars in thousands) | 2019 | 2018 | $ Change | % Change | ||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 5,015 | $ | 5,074 | $ | (59 | ) | (1.16 | %) | |||||||
State and political subdivisions | 1,426 | 5,473 | (4,047 | ) | (73.94 | %) | ||||||||||
Mortgage-backed securities | 0 | 20 | (20 | ) | (100.00 | %) | ||||||||||
Single issue trust preferred securities | 0 | 9,412 | (9,412 | ) | (100.00 | %) | ||||||||||
Other corporate securities | 20 | 20 | 0 | 0.00 | % | |||||||||||
Total held to maturity securities, at amortized cost | $ | 6,461 | $ | 19,999 | $ | (13,538 | ) | (67.69 | %) | |||||||
The following table summarizes the changes in the held to maturity securities sinceyear-end 2017:
(Dollars in thousands) | September 30 2018 | December 31 2017 | $ Change | % Change | ||||||||||||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies | $ | 5,103 | $ | 5,187 | $ | (84 | ) | (1.62 | %) | |||||||
State and political subdivisions | 5,798 | 5,797 | 1 | 0.02 | % | |||||||||||
Mortgage-backed securities | 21 | 23 | (2 | ) | (8.70 | %) | ||||||||||
Single issue trust preferred securities | 9,409 | 9,401 | 8 | 0.09 | % | |||||||||||
Other corporate securities | 20 | 20 | 0 | 0.00 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total held to maturity securities, at amortized cost | $ | 20,351 | $ | 20,428 | $ | (77 | ) | (0.38 | %) | |||||||
|
|
|
|
|
|
|
|
The single issue trust preferred securities relate to securities of financial institutions.
Security | Moodys | S&P | Fitch | Amortized Cost | Fair Value | Unrealized Loss/ (Gain) | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Emigrant Bank | NR | NR | WD | $ | 5,720 | $ | 4,950 | $ | 770 | |||||||||||||||
M&T Bank | NR | BBB- | BBB- | 3,028 | 3,155 | (127 | ) | |||||||||||||||||
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|
|
|
|
| |||||||||||||||||||
$ | 8,748 | $ | 8,105 | $ | 643 | |||||||||||||||||||
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|
|
|
|
|
Additionally, the Company owns two single-issue trust preferred securities that are classified asheld-to-maturity and include at least one rating below investment grade. These securities include SunTrust Bank (amortized cost balance of $7.43 million) and Royal Bank of Scotland (amortized cost balance of $977 thousand).
Security | Moodys | S&P | Fitch | Amortized Cost | Fair Value | Unrealized Loss/ (Gain) | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Emigrant Bank | NR | NR | WD | $ | 5,729 | $ | 5,240 | $ | 489 | |||||||||||||||
SunTrust Bank | Baa2 | NR | BB+ | 4,958 | 4,600 | 358 | ||||||||||||||||||
M&T Bank | NR | BBB- | BBB- | 3,036 | 3,211 | (175 | ) | |||||||||||||||||
SunTrust Bank | NR | BB+ | BB+ | 2,480 | 2,282 | 198 | ||||||||||||||||||
HSBC | Baa2 | BBB+ | NR | 1,000 | 710 | 290 | ||||||||||||||||||
Royal Bank of Scotland | Baa3 | BB+ | BBB | 977 | 801 | 176 | ||||||||||||||||||
$ | 18,180 | $ | 16,844 | $ | 1,336 | |||||||||||||||||||
(Dollars in thousands) | September 30 2018 | December 31 2017 | $ Change | % Change | ||||||||||||
Loans held for sale | $ | 234,196 | $ | 265,955 | $ | (31,759 | ) | (11.94 | %) | |||||||
|
|
|
|
|
|
|
| |||||||||
Commercial, financial, and agricultural: | ||||||||||||||||
Owner-occupied commercial real estate | $ | 1,336,434 | $ | 1,361,629 | $ | (25,195 | ) | (1.85 | %) | |||||||
Nonowner-occupied commercial real estate | 4,341,501 | 4,451,298 | (109,797 | ) | (2.47 | %) | ||||||||||
Other commercial loans | 1,932,919 | 1,998,979 | (66,060 | ) | (3.30 | %) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total commercial, financial, and agricultural | $ | 7,610,854 | $ | 7,811,906 | $ | (201,052 | ) | (2.57 | %) | |||||||
Residential real estate | 3,387,268 | 2,996,171 | 391,097 | 13.05 | % | |||||||||||
Construction & land development | 1,379,985 | 1,504,907 | (124,922 | ) | (8.30 | %) | ||||||||||
Consumer: | ||||||||||||||||
Bankcard | 9,530 | 10,314 | (784 | ) | (7.60 | %) | ||||||||||
Other consumer | 899,074 | 704,039 | 195,035 | 27.70 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total gross loans | $ | 13,286,711 | $ | 13,027,337 | $ | 259,374 | 1.99 | % | ||||||||
Less: Unearned income | (9,971 | ) | (15,916 | ) | 5,945 | (37.35 | %) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Loans, net of unearned income | $ | 13,276,740 | $ | 13,011,421 | $ | 265,319 | 2.04 | % | ||||||||
|
|
|
|
|
|
|
|
June 30 | December 31 | |||||||||||||||
(Dollars in thousands) | 2019 | 2018 | $ Change | % Change | ||||||||||||
Loans held for sale | $ | 370,593 | $ | 249,846 | $ | 120,747 | 48.33 | % | ||||||||
Commercial, financial, and agricultural: | ||||||||||||||||
Owner-occupied commercial real estate | $ | 1,239,954 | $ | 1,291,790 | $ | (51,836 | ) | (4.01 | %) | |||||||
Nonowner-occupied commercial real estate | 4,194,064 | 4,303,613 | (109,549 | ) | (2.55 | %) | ||||||||||
Other commercial loans | 2,021,953 | 1,957,641 | 64,312 | 3.29 | % | |||||||||||
Total commercial, financial, and agricultural | $ | 7,455,971 | $ | 7,553,044 | $ | (97,073 | ) | (1.29 | %) | |||||||
Residential real estate | 3,674,005 | 3,501,393 | 172,612 | 4.93 | % | |||||||||||
Construction & land development | 1,464,064 | 1,410,468 | 53,596 | 3.80 | % | |||||||||||
Consumer: | ||||||||||||||||
Bankcard | 9,380 | 10,203 | (823 | ) | (8.07 | %) | ||||||||||
Other consumer | 1,036,526 | 954,424 | 82,102 | 8.60 | % | |||||||||||
Total gross loans | $ | 13,639,946 | $ | 13,429,532 | $ | 210,414 | 1.57 | % | ||||||||
Less: Unearned income | (4,680 | ) | (7,310 | ) | 2,630 | (35.98 | %) | |||||||||
Total Loans, net of unearned income | $ | 13,635,266 | $ | 13,422,222 | $ | 213,044 | 1.59 | % | ||||||||
September 30, 2018 | ||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Residential real estate | Construction & land development | Consumer | Total | |||||||||||||||
Originated | 4,780,708 | $ | 2,511,741 | $ | 1,098,457 | $ | 903,085 | $ | 9,293,991 | |||||||||||
Acquired | 2,830,146 | 875,527 | 281,528 | 5,519 | 3,992,720 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total gross loans | $ | 7,610,854 | $ | 3,387,268 | $ | 1,379,985 | $ | 908,604 | $ | 13,286,711 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2017 | ||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Residential real estate | Construction & land development | Consumer | Total | |||||||||||||||
Originated | $ | 4,647,745 | $ | 1,974,804 | $ | 1,032,629 | $ | 707,661 | $ | 8,362,839 | ||||||||||
Acquired | 3,164,161 | 1,021,367 | 472,278 | 6,692 | 4,664,498 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total gross loans | $ | 7,811,906 | $ | 2,996,171 | $ | 1,504,907 | $ | 714,353 | $ | 13,027,337 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2018:
June 30, 2019 | ||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Residential real estate | Construction & land development | Consumer | Total | |||||||||||||||
Originated | $ | 5,101,650 | $ | 2,944,711 | $ | 1,273,243 | $ | 1,041,262 | $ | 10,360,866 | ||||||||||
Acquired | 2,354,321 | 729,294 | 190,821 | 4,644 | 3,279,080 | |||||||||||||||
Total gross loans | $ | 7,455,971 | $ | 3,674,005 | $ | 1,464,064 | $ | 1,045,906 | $ | 13,639,946 | ||||||||||
December 31, 2018 | ||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Residential real estate | Construction & land development | Consumer | Total | |||||||||||||||
Originated | $ | 4,887,688 | $ | 2,686,817 | $ | 1,179,676 | $ | 959,392 | $ | 9,713,573 | ||||||||||
Acquired | 2,665,356 | 814,576 | 230,792 | 5,235 | 3,715,959 | |||||||||||||||
Total gross loans | $ | 7,553,044 | $ | 3,501,393 | $ | 1,410,468 | $ | 964,627 | $ | 13,429,532 | ||||||||||
derivative assets, $1.77 million in prepaid assets and $2.34 million in accounts receivables for the first half of 2019.
2018.
Interest-bearing deposits consists of interest-bearing checking (NOW), regular savings, interest-bearing MMDA, and time deposit account balances. Interest-bearing MMDAs increased $2.14 billion$101.67 million or 1.71 % while NOW accounts decreased $1.80 billion$7.38 million or 1.97% since 2017 due mainly to of $1.67 billion from NOW accounts to interest-bearing MMDAs to reduce United’s reserve requirement at its Federal Reserve Bank. Otherwise, interest-bearing MMDAs increased $464.76 million or 12.37% as brokered MMDAs, commercial MMDAs, and personal MMDAs were up $219.72 million, $110.56 million, and $68.56 million, respectively. In addition, public funds MMDAs increased $65.92 million. Excluding the sweep activity,Bank, NOW accounts decreased $125.63$155.25 million or 5.82%7.84% mainly due to a decrease of $180.28$141.70 million in personal NOW accounts and a $24.25$39.33 million decrease in commercialpublic funds NOW accounts. Partially offsetting these decreases was an increase of $78.90$25.78 million in public fundscommercial NOW accounts.
accounts, respectively.
under $100,000.
(Dollars in thousands) | September 30 2018 | December 31 2017 | $ Change | % Change | ||||||||||||
Demand deposits | $ | 1,900,015 | $ | 4,294,687 | $ | (2,394,672 | ) | (55.76 | %) | |||||||
Interest-bearing checking | 357,477 | 2,156,974 | (1,799,497 | ) | (83.43 | %) | ||||||||||
Regular savings | 997,610 | 1,034,100 | (36,490 | ) | (3.53 | %) | ||||||||||
Money market accounts | 8,465,689 | 3,756,259 | 4,709,430 | 125.38 | % | |||||||||||
Time deposits under $100,000 | 729,737 | 795,137 | (65,400 | ) | (8.23 | %) | ||||||||||
Time deposits over $100,000 (1) | 1,640,644 | 1,793,434 | (152,790 | ) | (8.52 | %) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total deposits | $ | 14,091,172 | $ | 13,830,591 | $ | 260,581 | 1.88 | % | ||||||||
|
|
|
|
|
|
|
|
June 30 | December 31 | |||||||||||||||
(Dollars in thousands) | 2019 | 2018 | $ Change | % Change | ||||||||||||
Demand deposits | $ | 3,123,634 | $ | 3,212,878 | $ | (89,244 | ) | (2.78 | %) | |||||||
Interest-bearing checking | 367,115 | 374,495 | (7,380 | ) | (1.97 | %) | ||||||||||
Regular savings | 966,559 | 954,961 | 11,598 | 1.21 | % | |||||||||||
Money market accounts | 7,261,789 | 7,157,028 | 104,761 | 1.46 | % | |||||||||||
Time deposits under $100,000 | 721,387 | 712,313 | 9,074 | 1.27 | % | |||||||||||
Time deposits over $100,000 (1) | 1,963,601 | 1,583,074 | 380,527 | 24.04 | % | |||||||||||
Total deposits | $ | 14,404,085 | $ | 13,994,749 | $ | 409,336 | 2.92 | % | ||||||||
(1) | Includes time deposits of $250,000 or more of |
2019.
(Dollars in thousands) | September 30 2018 | December 31 2017 | $ Change | % Change | ||||||||||||
Federal funds purchased | $ | 25,790 | $ | 16,235 | $ | 9,555 | 58.85 | % | ||||||||
Short-term securities sold under agreements to repurchase | 153,718 | 261,352 | (107,634 | ) | (41.18 | %) | ||||||||||
Long-term securities sold under agreements to repurchase | 0 | 50,000 | (50,000 | ) | (100.00 | %) | ||||||||||
Short-term FHLB advances | 200,000 | 200,000 | 0 | 0.00 | % | |||||||||||
Long-term FHLB advances | 1,084,781 | 1,071,531 | 13,250 | 1.24 | % | |||||||||||
Issuances of trust preferred capital securities | 234,590 | 242,446 | (7,856 | ) | (3.24 | %) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total borrowings | $ | 1,698,879 | $ | 1,841,564 | $ | 142,685 | (7.75 | %) | ||||||||
|
|
|
|
|
|
|
|
June 30 | December 31 | |||||||||||||||
(Dollars in thousands) | 2019 | 2018 | $ Change | % Change | ||||||||||||
Federal funds purchased | $ | 0 | $ | 23,400 | $ | (23,400 | ) | (100.00 | %) | |||||||
Short-term securities sold under agreements to repurchase | 122,159 | 152,927 | (30,768 | ) | (20.12 | %) | ||||||||||
Short-term FHLB advances | 0 | 175,000 | (175,000 | ) | (100.00 | %) | ||||||||||
Long-term FHLB advances | 1,548,032 | 1,264,198 | 283,834 | 22.45 | % | |||||||||||
Issuances of trust preferred capital securities | 235,535 | 234,905 | 630 | 0.27 | % | |||||||||||
Total borrowings | $ | 1,905,726 | $ | 1,850,430 | $ | 55,296 | 2.99 | % | ||||||||
liabilities increased $4.86 million and derivative liabilities increased $2.62 million. Partially offsetting these increases was a decrease of $4.43 million in business franchise taxes payable and a $3.70 million decrease in accrued employee expenses due to decreases of $2.67 million and $2.03 million in deferred compensation and incentives payable, respectively.
2.53% from
Sinceyear-end 2017, accumulated
2019.
$33.91.
As previously mentioned, United completed its acquisition of Cardinal on April 21, 2017. The financial results of Cardinal are included in United’s results from the acquisition date. As a result of the acquisition, the first nine months of 2018 were impacted for increased levels of average balances, income, and expense as compared to the first nine months of 2017. In addition, the first nine months of 2017 included merger-related expenses of $24.99 million due to the Cardinal acquisition.
2018. United’s Federal Reserve peer group’s (bank holding companies with total assets over $10 billion) most recently reported average return on assets and average return on equity were 1.21% and 9.96%, respectively, for the first three months of 2019. For the second quarter and first half of 2019, United’s annualized return on average tangible equity was 14.90% and 14.78%, respectively, as compared to 15.14% and 14.72% for the second quarter and first half of 2018, respectively.
Three Months Ended | Six Months Ended | |||||||||||||||
(Dollars in thousands) | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Return on Average Tangible Equity: | ||||||||||||||||
(a) Net Income (GAAP) | $ | 67,207 | $ | 66,274 | $ | 130,849 | $ | 127,980 | ||||||||
(b) Number of days | 91 | 91 | 181 | 181 | ||||||||||||
Average Total Shareholders’ Equity (GAAP) | $ | 3,220,987 | $ | 3,276,099 | $ | 3,299,061 | $ | 3,274,639 | ||||||||
Less: Average Total Intangibles | (1,512,400 | ) | (1,520,253 | ) | (1,513,279 | ) | (1,521,323 | ) | ||||||||
(c) Average Tangible Equity (non-GAAP) | $ | 1,808,587 | $ | 1,755,846 | $ | 1,785,782 | $ | 1,753,316 | ||||||||
Return on Tangible Equity (non-GAAP) [(a) / (b)] x 365 / (c) | 14.90 | % | 15.14 | % | 14.78 | % | 14.72 | % |
2018.
2018. These increases were due mainly to penalties incurred during the second quarter of 2019 on the prepayment of FHLB advances.
As a result of the Cardinal acquisition,
2018.
second quarter of 2017.2018. The increase was due mainly due to an increase inincreased fees from brokeragetrust and trustbrokerage services. Noninterest expense was $75.26$82.30 million for the thirdsecond quarter of 2018,2019, compared to $74.55$76.50 million for the same period of 2017.2018. The increase of $702 thousand$5.81 million in noninterest expense was primarily attributable to an increase in Federal Deposit Insurance Corporation (FDIC) insurance expense as United Bank is now considered a large institution and subject to increased assessment rates.
penalties on the prepayment of FHLB advances.
higher FDIC insurance premiums due to United Bank now being considered a large institution and subject to increased assessment rates.
Generally, interest income for the first nine monthshalf of 20182019 increased from the first nine monthshalf of 2017 because2018 due to a higher level of the earning assets added from the Cardinal acquisition.assets. The higher amount ofincrease in interest expense for the first nine monthshalf of 20182019 from the first nine monthshalf of 20172018 was due mainly to the interest-bearing liabilities added from the Cardinal acquisition and higher market interest rates. In addition, loan accretion on acquired loans for the first nine months of 2018 increased from the same time period last year. For the purpose of this remaining discussion, net interest income is presented on a
Tax-equivalent net interest income for the first nine months of 2018 was $445.21 million, an increase of $44.90 million or 11.22% from the first nine months of 2017. This increase intax-equivalent net interest income was primarily attributable to an increase in average earning assets from the Cardinal acquisition. Average earning assets increased $1.26 billion or 8.31% from the first nine months of 2017 as average net loans increased $1.09 billion or 8.85% for the first nine months of 2018. Average investment securities increased $613.07 million or 37.40% while short-term investments decreased $436.05 million or 34.00%. The first nine months of 2018 average yield on earning assets increased 34 basis points from the first nine months of 2017 due to higher market interest rates and additional loan accretion of $9.99 million on acquired loans. Loan accretion was $34.38 million and $24.40 million for the first nine months of 2018 and 2017, respectively. Partially offsetting the increases totax-equivalent net interest income for the first nine months of 2018 was an increase of 39 basis points in the average cost of funds as compared to the first nine months of 2017 due to higher market interest rates. The net interest margin of 3.61%3.53% for the first nine months of 2018 was an increase of 9 basis points from the net interest margin of 3.52% for the first nine months of 2017.
On a linked-quarter basis,tax-equivalent net interest income for the third quarter of 2018 was relatively flat from the second quarter of 2018, decreasing $413 thousand or less than 1% due to a combination of a $265.94 million or 2.40% increase in interest bearing funds and an increase of 22 basis points in the average cost of funds as a result of higher market interest rates. In addition, loan accretion on acquired loans decreased $497 thousand. Partially offsetting these decreases totax-equivalent net interest income for the third quarter of 20182019 was a $334.54 million or 2.04% increase in the average earning assets and a 5 basis points increase in the yield on average earning assets. Specifically, average short-term investments increased $262.13 million or 40.37%. Average net loans and average investment securities were relatively flat for the third quarterdecrease of 2018, increasing $80.23 million and decreasing $7.82 million, respectively from the second quarter of 2018. The net interest margin of 3.56% for the third quarter of 2018 decreased 1114 basis points from the net interest margin of 3.67% for the second quarter of 2018.
Three Months Ended | ||||||||||||
(Dollars in thousands) | September 30 2018 | September 30 2017 | June 30 2018 | |||||||||
Loan accretion | $ | 11,559 | $ | 12,805 | $ | 12,056 | ||||||
Certificates of deposit | 311 | 817 | 311 | |||||||||
Long-term borrowings | 269 | 268 | 268 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 12,139 | $ | 13,890 | $ | 12,635 | ||||||
|
|
|
|
|
|
Nine Months Ended | ||||||||
(Dollars in thousands) | September 30 2018 | September 30 2017 | ||||||
Loan accretion | $ | 34,381 | $ | 24,395 | ||||
Certificates of deposit | 948 | 1,640 | ||||||
Long-term borrowings | 806 | 348 | ||||||
|
|
|
| |||||
Tax-equivalent net interest income | $ | 36,135 | $ | 26,383 | ||||
|
|
|
|
2018:
Three Months Ended | ||||||||||||
June 30 | June 30 | March 31 | ||||||||||
(Dollars in thousands) | 2019 | 2018 | 2019 | |||||||||
Loan accretion | $ | 14,451 | $ | 12,056 | $ | 8,544 | ||||||
Certificates of deposit | 197 | 311 | 198 | |||||||||
Long-term borrowings | 269 | 268 | 268 | |||||||||
Total | $ | 14,917 | $ | 12,635 | $ | 9,010 | ||||||
Six Months Ended | ||||||||
June 30 | June 30 | |||||||
(Dollars in thousands) | 2019 | 2018 | ||||||
Loan accretion | $ | 22,995 | $ | 22,822 | ||||
Certificates of deposit | 395 | 637 | ||||||
Long-term borrowings | 537 | 537 | ||||||
Tax-equivalent net interest income | $ | 23,927 | $ | 23,996 | ||||
Three Months Ended | ||||||||||||
(Dollars in thousands) | September 30 2018 | September 30 2017 | June 30 2018 | |||||||||
Net interest income, GAAP basis | $ | 148,775 | $ | 150,276 | $ | 149,122 | ||||||
Tax-equivalent adjustment (1) | 1,049 | 2,092 | 1,115 | |||||||||
|
|
|
|
|
| |||||||
Tax-equivalent net interest income | $ | 149,824 | $ | 152,368 | $ | 150,237 | ||||||
|
|
|
|
|
|
Nine Months Ended | ||||||||
(Dollars in thousands) | September 30 2018 | September 30 2017 | ||||||
Net interest income, GAAP basis | $ | 441,940 | $ | 394,141 | ||||
Tax-equivalent adjustment (1) | 3,268 | 6,168 | ||||||
|
|
|
| |||||
Tax-equivalent net interest income | $ | 445,208 | $ | 400,309 | ||||
|
|
|
|
Three Months Ended | ||||||||||||
June 30 | June 30 | March 31 | ||||||||||
(Dollars in thousands) | 2019 | 2018 | 2019 | |||||||||
Net interest income, GAAP basis | $ | 150,553 | $ | 149,122 | $ | 144,168 | ||||||
Tax-equivalent adjustment (1) | 977 | 1,115 | 993 | |||||||||
Tax-equivalent net interest income | $ | 151,530 | $ | 150,237 | $ | 145,161 | ||||||
Six Months Ended | ||||||||
June 30 | June 30 | |||||||
(Dollars in thousands) | 2019 | 2018 | ||||||
Net interest income, GAAP basis | $ | 294,721 | $ | 293,165 | ||||
Tax-equivalent adjustment (1) | 1,970 | 2,219 | ||||||
Tax-equivalent net interest income | $ | 296,691 | $ | 295,384 | ||||
(1) | The |
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | |||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest (1) | Avg. Rate (1) | Average Balance | Interest (1) | Avg. Rate (1) | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Earning Assets: | ||||||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell and other short-term investments | $ | 911,414 | $ | 5,485 | 2.39 | % | $ | 1,246,742 | $ | 4,874 | 1.55 | % | ||||||||||||
Investment Securities: | ||||||||||||||||||||||||
Taxable | 2,064,332 | 13,994 | 2.71 | % | 1,533,444 | 9,406 | 2.45 | % | ||||||||||||||||
Tax-exempt | 220,197 | 1,673 | 3.04 | % | 259,189 | 2,284 | 3.52 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Securities | 2,284,529 | 15,667 | 2.74 | % | 1,792,633 | 11,690 | 2.61 | % | ||||||||||||||||
Loans, net of unearned income (2) | 13,627,932 | 164,927 | 4.81 | % | 13,607,933 | 157,111 | 4.59 | % | ||||||||||||||||
Allowance for loan losses | (77,103 | ) | (73,031 | ) | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net loans | 13,550,829 | 4.83 | % | 13,534,902 | 4.61 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total earning assets | 16,746,772 | $ | 186,079 | 4.42 | % | 16,574,277 | $ | 173,675 | 4.16 | % | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Other assets | 2,300,917 | 2,353,508 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
TOTAL ASSETS | $ | 19,047,689 | $ | 18,927,785 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Interest-Bearing Funds: | ||||||||||||||||||||||||
Interest-bearing deposits | $ | 9,588,327 | $ | 26,368 | 1.09 | % | $ | 9,837,967 | $ | 14,227 | 0.57 | % | ||||||||||||
Short-term borrowings | 212,566 | 618 | 1.15 | % | 325,631 | 430 | 0.52 | % | ||||||||||||||||
Long-term borrowings | 1,543,004 | 9,269 | 2.38 | % | 1,364,417 | 6,650 | 1.93 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Interest-Bearing Funds | 11,343,897 | 36,255 | 1.27 | % | 11,528,015 | 21,307 | 0.73 | % | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Noninterest-bearing deposits | 4,338,309 | 4,036,653 | ||||||||||||||||||||||
Accrued expenses and other liabilities | 102,534 | 97,575 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
TOTAL LIABILITIES | 15,784,740 | 15,662,243 | ||||||||||||||||||||||
SHAREHOLDERS’ EQUITY | 3,262,949 | 3,265,542 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 19,047,689 | $ | 18,927,785 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
NET INTEREST INCOME | $ | 149,824 | $ | 152,368 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
INTEREST SPREAD | 3.15 | % | 3.43 | % | ||||||||||||||||||||
NET INTEREST MARGIN | 3.56 | % | 3.65 | % |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest (1) | Avg. Rate (1) | Average Balance | Interest (1) | Avg. Rate (1) | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Earning Assets: | ||||||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell and other short-term investments | $ | 770,625 | $ | 5,405 | 2.81 | % | $ | 649,282 | $ | 3,465 | 2.14 | % | ||||||||||||
Investment Securities: | ||||||||||||||||||||||||
Taxable | 2,455,549 | 17,748 | 2.89 | % | 2,049,301 | 13,810 | 2.70 | % | ||||||||||||||||
Tax-exempt | 159,781 | 1,218 | 3.05 | % | 243,048 | 1,811 | 2.98 | % | ||||||||||||||||
Total Securities | 2,615,330 | 18,966 | 2.90 | % | 2,292,349 | 15,621 | 2.73 | % | ||||||||||||||||
Loans, net of unearned income (2) | 13,888,716 | 175,851 | 5.08 | % | 13,547,371 | 160,029 | 4.74 | % | ||||||||||||||||
Allowance for loan losses | (76,682 | ) | (76,773 | ) | ||||||||||||||||||||
Net loans | 13,812,034 | 5.10 | % | 13,470,598 | 4.76 | % | ||||||||||||||||||
Total earning assets | 17,197,989 | $ | 200,222 | 4.67 | % | 16,412,229 | $ | 179,115 | 4.37 | % | ||||||||||||||
Other assets | 2,317,865 | 2,300,155 | ||||||||||||||||||||||
TOTAL ASSETS | $ | 19,515,854 | $ | 18,712,384 | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Interest-Bearing Funds: | ||||||||||||||||||||||||
Interest-bearing deposits | $ | 9,753,724 | $ | 35,455 | 1.46 | % | $ | 9,210,282 | $ | 19,076 | 0.83 | % | ||||||||||||
Short-term borrowings | 136,230 | 608 | 1.79 | % | 208,058 | 464 | 0.89 | % | ||||||||||||||||
Long-term borrowings | 1,879,154 | 12,629 | 2.70 | % | 1,659,613 | 9,338 | 2.26 | % | ||||||||||||||||
Total Interest-Bearing Funds | 11,769,108 | 48,692 | 1.66 | % | 11,077,953 | 28,878 | 1.05 | % | ||||||||||||||||
Noninterest-bearing deposits | 4,240,050 | 4,255,840 | ||||||||||||||||||||||
Accrued expenses and other liabilities | 185,709 | 102,492 | ||||||||||||||||||||||
TOTAL LIABILITIES | 16,194,867 | 15,436,285 | ||||||||||||||||||||||
SHAREHOLDERS’ EQUITY | 3,320,987 | 3,276,099 | ||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 19,515,854 | $ | 18,712,384 | ||||||||||||||||||||
NET INTEREST INCOME | $ | 151,530 | $ | 150,237 | ||||||||||||||||||||
INTEREST SPREAD | 3.01 | % | 3.32 | % | ||||||||||||||||||||
NET INTEREST MARGIN | 3.53 | % | 3.67 | % |
(1) | The interest income and the yields on federally nontaxable loans and investment securities are presented on a |
(2) | Nonaccruing loans are included in the daily average loan amounts outstanding. |
Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | |||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest (1) | Avg. Rate (1) | Average Balance | Interest (1) | Avg. Rate (1) | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Earning Assets: | ||||||||||||||||||||||||
Federal funds sold and securities repurchased under agreements to resell and other short-term investments | $ | 846,537 | $ | 13,867 | 2.19 | % | $ | 1,282,589 | $ | 11,345 | 1.18 | % | ||||||||||||
Investment Securities: | ||||||||||||||||||||||||
Taxable | 2,012,841 | 39,679 | 2.63 | % | 1,412,221 | 26,226 | 2.48 | % | ||||||||||||||||
Tax-exempt | 239,617 | 5,339 | 2.97 | % | 227,171 | 6,242 | 3.66 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Securities | 2,252,458 | 45,018 | 2.66 | % | 1,639,392 | 32,468 | 2.64 | % | ||||||||||||||||
Loans, net of unearned income (2) | 13,451,316 | 474,598 | 4.72 | % | 12,360,252 | 409,643 | 4.43 | % | ||||||||||||||||
Allowance for loan losses | (76,819 | ) | (72,904 | ) | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net loans | 13,374,497 | 4.74 | % | 12,287,348 | 4.46 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total earning assets | 16,473,492 | $ | 533,483 | 4.33 | % | 15,209,329 | $ | 453,456 | 3.99 | % | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Other assets | 2,296,442 | 1,978,315 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
TOTAL ASSETS | $ | 18,769,934 | $ | 17,187,644 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Interest-Bearing Funds: | ||||||||||||||||||||||||
Interest-bearing deposits | $ | 9,384,890 | $ | 61,101 | 0.87 | % | $ | 9,024,232 | $ | 35,281 | 0.52 | % | ||||||||||||
Short-term borrowings | 235,388 | 1,503 | 0.85 | % | 298,213 | 1,149 | 0.52 | % | ||||||||||||||||
Long-term borrowings | 1,518,997 | 25,671 | 2.26 | % | 1,286,583 | 16,717 | 1.74 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Interest-Bearing Funds | 11,139,275 | 88,275 | 1.06 | % | 10,609,028 | 53,147 | 0.67 | % | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Non-interest bearing deposits | 4,256,707 | 3,639,507 | ||||||||||||||||||||||
Accrued expenses and other liabilities | 103,163 | 90,112 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
TOTAL LIABILITIES | 15,499,145 | 14,338,647 | ||||||||||||||||||||||
SHAREHOLDERS’ EQUITY | 3,270,789 | 2,848,997 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 18,769,934 | $ | 17,187,644 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
NET INTEREST INCOME | $ | 445,208 | $ | 400,309 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
INTEREST SPREAD | 3.27 | % | 3.32 | % | ||||||||||||||||||||
NET INTEREST MARGIN | 3.61 | % | 3.52 | % |
Six Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest (1) | Avg. Rate (1) | Average Balance | Interest (1) | Avg. Rate (1) | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Earning Assets: | ||||||||||||||||||||||||
Federal funds sold and securities repurchased under agreements to resell and other short-term investments | $ | 754,865 | $ | 11,242 | 3.00 | % | $ | 813,562 | $ | 8,382 | 2.08 | % | ||||||||||||
Investment Securities: | ||||||||||||||||||||||||
Taxable | 2,419,202 | 35,111 | 2.90 | % | 1,986,668 | 25,685 | 2.59 | % | ||||||||||||||||
Tax-exempt | 163,077 | 2,516 | 3.09 | % | 249,488 | 3,666 | 2.94 | % | ||||||||||||||||
Total Securities | 2,582,279 | 37,627 | 2.91 | % | 2,236,156 | 29,351 | 2.63 | % | ||||||||||||||||
Loans, net of unearned income (2) | 13,800,985 | 341,443 | 4.98 | % | 13,361,545 | 309,671 | 4.67 | % | ||||||||||||||||
Allowance for loan losses | (76,722 | ) | (76,675 | ) | ||||||||||||||||||||
Net loans | 13,724,263 | 5.01 | % | 13,284,870 | 4.70 | % | ||||||||||||||||||
Total earning assets | 17,061,407 | $ | 390,312 | 4.60 | % | 16,334,588 | $ | 347,404 | 4.28 | % | ||||||||||||||
Other assets | 2,322,100 | 2,294,033 | ||||||||||||||||||||||
TOTAL ASSETS | $ | 19,383,507 | $ | 18,628,621 | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Interest-Bearing Funds: | ||||||||||||||||||||||||
Interest-bearing deposits | $ | 9,724,379 | $ | 68,093 | 1.41 | % | $ | 9,281,485 | $ | 34,733 | 0.75 | % | ||||||||||||
Short-term borrowings | 154,811 | 1,299 | 1.69 | % | 246,988 | 885 | 0.72 | % | ||||||||||||||||
Long-term borrowings | 1,788,790 | 24,229 | 2.73 | % | 1,506,795 | 16,402 | 2.20 | % | ||||||||||||||||
Total Interest-Bearing Funds | 11,667,980 | 93,621 | 1.62 | % | 11,035,268 | 52,020 | 0.95 | % | ||||||||||||||||
Non-interest bearing deposits | 4,230,598 | 4,215,230 | ||||||||||||||||||||||
Accrued expenses and other liabilities | 185,868 | 103,484 | ||||||||||||||||||||||
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TOTAL LIABILITIES | 16,084,446 | 15,353,982 | ||||||||||||||||||||||
SHAREHOLDERS’ EQUITY | 3,299,061 | 3,274,639 | ||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 19,383,507 | $ | 18,628,621 | ||||||||||||||||||||
NET INTEREST INCOME | $ | 296,691 | $ | 295,384 | ||||||||||||||||||||
INTEREST SPREAD | 2.98 | % | 3.33 | % | ||||||||||||||||||||
NET INTEREST MARGIN | 3.50 | % | 3.64 | % |
(1) | The interest income and the yields on federally nontaxable loans and investment securities are presented on a |
(2) | Nonaccruing loans are included in the daily average loan amounts outstanding. |
several large commercial relationships in 2017. On a linked-quarter basis, the provision for loan losses decreased $1.40 million and net charge-offs decreased $720 thousand from the second quarter of 2018. These lower amounts of provision expense and net charge-offs for the third quarterfirst half of 20182019 compared to the second quarterfirst half of 2018 were due to a reduction in nonperforming loans requiring
September 30, 2018 | December 31, | |||||||||||||||||||||||
(In thousands) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Nonaccrual loans (1) | ||||||||||||||||||||||||
Originated | $ | 55,147 | $ | 97,971 | $ | 77,111 | $ | 83,146 | $ | 64,312 | $ | 58,121 | ||||||||||||
Acquired | 11,407 | 10,832 | 6,414 | 8,043 | 10,739 | 3,807 | ||||||||||||||||||
Loans which are contractually past due 90 days or more as to interest or principal, and are still accruing interest | ||||||||||||||||||||||||
Originated | 10,478 | 7,288 | 7,763 | 11,462 | 10,868 | 10,015 | ||||||||||||||||||
Acquired | 5,471 | 2,515 | 823 | 166 | 807 | 1,029 | ||||||||||||||||||
Restructured loans (1) | ||||||||||||||||||||||||
Originated | 62,278 | 48,709 | 21,115 | 23,890 | 22,234 | 8,157 | ||||||||||||||||||
Acquired | 1,348 | 1,420 | 37 | 0 | 0 | 0 | ||||||||||||||||||
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Total nonperforming loans | $ | 146,129 | $ | 168,735 | $ | 113,263 | $ | 126,707 | $ | 108,960 | $ | 81,129 | ||||||||||||
Other real estate owned | 18,786 | 24,348 | 31,510 | 32,228 | 38,778 | 38,182 | ||||||||||||||||||
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TOTAL NONPERFORMING ASSETS | $ | 164,915 | $ | 193,083 | $ | 144,773 | $ | 158,935 | $ | 147,738 | $ | 119,311 | ||||||||||||
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June 30, | December 31, | |||||||||||||||||||||||
(In thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||
Nonaccrual loans (1) | ||||||||||||||||||||||||
Originated | $ | 60,731 | $ | 57,258 | $ | 97,971 | $ | 77,111 | $ | 83,146 | $ | 64,312 | ||||||||||||
Acquired | 10,392 | 11,286 | 10,832 | 6,414 | 8,043 | 10,739 | ||||||||||||||||||
Loans which are contractually past due 90 days or more as to interest or principal and are still accruing interest (1) | ||||||||||||||||||||||||
Originated | 9,485 | 11,945 | 7,288 | 7,763 | 11,462 | 10,868 | ||||||||||||||||||
Acquired | 3,244 | 2,906 | 2,515 | 823 | 166 | 807 | ||||||||||||||||||
Restructured loans (1) | ||||||||||||||||||||||||
Originated | 55,155 | 58,101 | 48,709 | 21,115 | 23,890 | 22,234 | ||||||||||||||||||
Acquired | 3,595 | 1,324 | 1,420 | 37 | 0 | 0 | ||||||||||||||||||
Total nonperforming loans | $ | 142,602 | $ | 142,820 | $ | 168,835 | $ | 113,263 | $ | 126,707 | $ | 108,960 | ||||||||||||
Other real estate owned | 14,469 | 16,865 | 24,348 | 31,510 | 32,228 | 38,778 | ||||||||||||||||||
TOTAL NONPERFORMING ASSETS | $ | 157,071 | $ | 159,685 | $ | 193,083 | $ | 144,773 | $ | 158,935 | $ | 147,738 | ||||||||||||
(1) | Restructured loans that were contractually past due 90 days or moreas to interest or principal and are still accruing interest or on nonaccrual status for the indicated periods are included in “Restructured loans” and not “Loans which are contractually past due 90 days or moreas to interest or principal and are still accruing interest” or “Nonaccrual loans” (see Note |
2018.
loans.
contractually due. Measuring impairment of a loan requires judgment and estimates, and the eventual outcomes may differ from those estimates. Impairment is measured based upon the present value of expected future cash flows from the loan
United’s loan administration policies are focused on the risk characteristics of the loan portfolio in terms of loan approval and credit quality. The commercial loan portfolio is monitored for possible concentrations of credit in one or more industries. Management has lending limits as a percentage of capital per type of credit concentration in an effort to ensure adequate diversification within the portfolio. Most of United’s commercial loans are secured by real estate located in West Virginia, southeastern Ohio, Pennsylvania, Virginia, Maryland and the District of Columbia. It is the opinion of management that these commercial loans do not pose any unusual risks and that adequate consideration has been given to these loans in establishing the allowance for credit losses.
2018.
For the third quarter of 2018, net gains and losses on investment securities’ activity declined $619 thousand from the third quarter of 2017. A net loss on investment securities of $152 thousand was recorded for the third quarter
of 2018 as compared to a net gain on investment securities of $467 thousand for the third quarter of 2017. The net loss and gain were mainly due to sales of investment securities. For the first nine months of 2018, United recorded a net loss of $692 thousand on investment securities’ activity as compared to a net gain of $5.15 million for the first nine months of 2017. A net gain of $3.77 million on the redemption of an investment security was recorded during the first quarter of 2017.
Fees from brokerage services for the third quarter and first nine months of 2018 increased $707 thousand and $1.15 million, respectively, from the third quarter and first nine months of 2017 due to increased volume.
FeesMason. In addition, fees from deposit services for the first nine months of 2018 increased $345$411 thousand from the first nine months of 2017. The increase was mainly due to higherincreased income from debit card and automated teller machine (ATM)overdraft fees. Fees from deposits services were flat forPartially offsetting the third quarter of 2018 compared to the third quarter of 2017, decreasing $71 thousand or less than 1%.
Bankcard fees for the third quarter and first nine months of 2018 increased $217 thousand and $952 thousand, respectively, from the third quarter and first nine months of 2017 due to increased volume.
On a linked-quarter basis, noninterest income for the third quarter of 2018 decreased $4.32 million or 12.00% from the second quarter of 2018 due mainly toincreases was a decrease of $5.42 million$501 thousand in income from mortgage banking activities. The decrease was due mainly to a change in fair value of $6.15 million on George Mason’s interest rate lock commitments. In addition, net gains and losses on investment securities’ activity decreased $97 thousand. Partially offsetting these decreases in noninterest income was a $834 thousand increase in fees from brokerage services as well as a $253 thousand increase in fees from deposit services and a $246 thousand increase in fees from trust services mainlybank-owned life insurance resulting due to increased volume.
the recognition of proceeds from death benefits in the first quarter of 2019.
2018. These increases were due mainly to the recognition of $5.11 million in penalties to prepay FHLB advances during the second quarter of 2019.
incentives.
Net occupancy expense decreased $2.86 million or 7.60% for first nine months of 2018 as compared to the same period in the prior year. Included in net occupancy expense for the first nine months of 2017 were charges of $5.93 million for the termination of leases and the reduction in the value of leasehold improvements for closed offices in the Cardinal acquisition. Net occupancy was flat for the third quarter of 2018, decreasing only $91 thousand or less than 1% from the third quarter of 2017.
Data processing expense increased $2.76 million or 18.46% for the first nine months of 2018 as compared to the same period in the prior year due to additional processing aslower fees from a result of the Cardinal acquisition.
new contract.
income tax credits.
properties.
depending on changes in interest rates. Derivative contracts are carried at fair value and not notional value on the consolidated balance sheet. Because the derivative contracts recorded on the balance sheet at SeptemberJune 30, 20182019 do not present the amounts that may ultimately be paid under these contracts, they are excluded from the contractual obligations table in the 20172018 Form
purchases proceeds on sales of investments over proceeds from sales.purchases. During the first ninesix months of 2018,2019, net cash of $38.02$378.75 million was used inprovided by financing activities due primarily to repaymentsnet growth of $148.08$409.73 million in deposits and net advances of $285.00 million in long-term FHLB advances. These funding activities were partially offset by a net repayment of $229.17 million in short-term borrowings and cash dividends paid of $107.05 million and the repurchase of treasury stock for $51.32$69.73 million for the first ninesix months of 2018. Partially offsetting is a growth in deposits of $261.53 million and a net repayment long-term FHLB advances of $15.00 million.
2019. The net effect of the cash flow activities was a decreasean increase in cash and cash equivalents of $411.48$233.18 million for the first ninesix months of 2018.
2019.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
2018.
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Change in Interest Rates (basis points) | Percentage Change in Net Interest Income | |||||||
September 30, 2018 | December 31, 2017 | |||||||
+200 | (1.89 | %) | (1.22 | %) | ||||
+100 | (0.90 | %) | (0.48 | %) | ||||
-100 | 1.60 | % | (0.18 | %) | ||||
-200 | (0.26 | %) | — |
2018:
Change in Interest Rates (basis points) | Percentage Change in Net Interest Income | |||||||
June 30, 2019 | December 31, 2018 | |||||||
+200 | (1.97 | %) | (2.71 | %) | ||||
+100 | (0.70 | %) | (1.29 | %) | ||||
-100 | 0.44 | % | 0.97 | % | ||||
-200 | (1.80 | %) | (0.97 | %) |
would decrease net interest income by an estimated 1.89%1.97% over one year as of SeptemberJune 30, 2018,2019, as compared to a decrease of 1.22%2.71% as of December 31, 2017.2018. A 100 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 1.60%0.44% over one year as of SeptemberJune 30, 2018 as compared to a decreasean increase of 0.18%0.97%, over one year as of December 31, 2017.2018. A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 0.26%1.80% over one year as of SeptemberJune 30, 2018. With the federal funds rate at 1.50% at2019 as compared to a decrease of 0.97% over one year as of December 31, 2017, management believed a 200 basis point immediate, sustained decline in rates was highly unlikely.
2018.
2019.
Item 4. | CONTROLS AND PROCEDURES |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
2018.
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased (1) (2) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans (3) | Maximum Number of Shares that May Yet be Purchased Under the Plans (3) | ||||||||||||
7/01 – 7/31/2018 | 389,400 | $ | 37.02 | 389,400 | 648,100 | |||||||||||
8/01 – 8/31/2018 | 4 | $ | 38.01 | 0 | 648,100 | |||||||||||
9/01 – 9/30/2018 | 25,000 | $ | 36.83 | 25,000 | 623,100 | |||||||||||
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Total | 414,404 | $ | 37.01 | 414,400 | ||||||||||||
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Period | Total Number of Shares Purchased (1) (2) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans (3) | Maximum Number of Shares that May Yet be Purchased Under the Plans (3) | ||||||||||||
4/01 – 4/30/2019 | 31,500 | $ | 36.19 | 31,500 | 2,096,500 | |||||||||||
5/01 – 5/31/2019 | 15,004 | $ | 36.50 | 15,000 | 2,081,500 | |||||||||||
6/01 – 6/30/2019 | 120,100 | $ | 36.17 | 120,100 | 1,961,400 | |||||||||||
Total | 166,604 | $ | 36.20 | 166,600 | ||||||||||||
(1) | Includes shares exchanged in connection with the exercise of stock options and the vesting of restricted shares under United’s long-term incentive plans. Shares are purchased or vested pursuant to the terms of the applicable plan and not pursuant to a publicly announced stock repurchase plan. No shares were exchanged by participants in United’s long-term incentive plans for the quarter ended |
(2) | Includes shares purchased in open market transactions by United for a rabbi trust to provide payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries. For the quarter ended |
(3) | In |
Item 3. | DEFAULTS UPON SENIOR SECURITIES |
Item 4. | MINE SAFETY DISCLOSURES |
Item 5. | OTHER INFORMATION |
(a) | None. |
(b) | No changes were made to the procedures by which security holders may recommend nominees to United’s Board of Directors. |
ExhibitNo. Description
No. 2.1 3.1 3.2 31.1 31.2 32.1 32.2 101 (XBRL)(Inline XBRL) (filed herewith)
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UNITED BANKSHARES, INC. | ||||||||
(Registrant) | ||||||||
Date: | August 9, 2019 | /s/ Richard M. Adams | ||||||
Richard M. Adams, Chairman of the Board and Chief Executive Officer | ||||||||
Date: | August 9, 2019 | /s/ W. Mark Tatterson | ||||||
W. Mark Tatterson, Executive Vice President and Chief Financial Officer |
89