Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 26, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | Hilltop Holdings Inc. | ||
Entity Central Index Key | 1265131 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1.40 | ||
Entity Common Stock, Shares Outstanding | 100,296,330 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Assets | ||
Cash and due from banks | $782,473,000 | $713,099,000 |
Federal funds sold and securities purchased under agreements to resell | 30,602,000 | 32,924,000 |
Securities: | ||
Trading, at fair value | 65,717,000 | 58,846,000 |
Available for sale, at fair value (amortized cost of $924,755 and $1,256,862, respectively) | 925,535,000 | 1,203,143,000 |
Held to maturity, at amortized cost (fair value of $118,345) | 118,209,000 | 0 |
Total securities | 1,109,461,000 | 1,261,989,000 |
Loans held for sale | 1,309,693,000 | 1,089,039,000 |
Non-covered loans, net of unearned income | 3,920,476,000 | 3,514,646,000 |
Allowance for non-covered loan losses | -37,041,000 | -33,241,000 |
Non-covered loans, net | 3,883,435,000 | 3,481,405,000 |
Covered loans, net of allowance of $4,611 and $1,061, respectively | 638,029,000 | 1,005,308,000 |
Broker-dealer and clearing organization receivables | 167,884,000 | 119,317,000 |
Insurance premiums receivable | 25,066,000 | 25,597,000 |
Deferred policy acquisition costs | 20,416,000 | 20,991,000 |
Premises and equipment, net | 206,991,000 | 200,706,000 |
FDIC indemnification asset | 130,437,000 | 188,291,000 |
Covered other real estate owned | 136,945,000 | 142,833,000 |
Mortgage servicing rights | 36,155,000 | 20,149,000 |
Other assets | 453,238,000 | 279,745,000 |
Goodwill | 251,808,000 | 251,808,000 |
Other intangible assets, net | 59,783,000 | 70,921,000 |
Total assets | 9,242,416,000 | 8,904,122,000 |
Deposits: | ||
Noninterest-bearing | 2,076,385,000 | 1,773,749,000 |
Interest-bearing | 4,293,507,000 | 4,949,169,000 |
Total deposits | 6,369,892,000 | 6,722,918,000 |
Broker-dealer and clearing organization payables | 179,042,000 | 129,678,000 |
Reserve for losses and loss adjustment expenses | 29,716,000 | 27,468,000 |
Unearned insurance premiums | 88,176,000 | 88,422,000 |
Short-term borrowings | 762,696,000 | 342,087,000 |
Notes payable | 56,684,000 | 56,327,000 |
Junior subordinated debentures | 67,012,000 | 67,012,000 |
Other liabilities | 227,959,000 | 158,288,000 |
Total liabilities | 7,781,177,000 | 7,592,200,000 |
Commitments and contingencies (see Notes 18 and 19) | ||
Hilltop stockholders' equity: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; Series B, liquidation value per share of $1,000; 114,068 shares issued and outstanding | 114,068,000 | 114,068,000 |
Common stock, $0.01 par value, 125,000,000 and 100,000,000 shares authorized; 90,181,888 and 90,175,688 shares issued and outstanding, respectively | 902,000 | 902,000 |
Additional paid-in capital | 1,390,788,000 | 1,388,641,000 |
Accumulated other comprehensive income (loss) | 651,000 | -34,863,000 |
Accumulated deficit | -45,957,000 | -157,607,000 |
Total Hilltop stockholders' equity | 1,460,452,000 | 1,311,141,000 |
Noncontrolling interests | 787,000 | 781,000 |
Total stockholders' equity | 1,461,239,000 | 1,311,922,000 |
Total liabilities and stockholders' equity | $9,242,416,000 | $8,904,122,000 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ||
Available for sale, amortized cost (in dollars) | $924,755 | $1,256,862 |
Held to maturity, fair value (in dollars) | 118,345 | |
Covered loans, allowance | $4,611 | $1,061 |
Statement | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 125,000,000 | 100,000,000 |
Common stock, shares issued | 90,181,888 | 90,175,688 |
Common stock, shares outstanding | 90,181,888 | 90,175,688 |
Series B Preferred Stock | ||
Statement | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, liquidation value per share (in dollars per share) | $1,000 | $1,000 |
Preferred stock, shares issued | 114,068 | 114,068 |
Preferred stock, shares outstanding | 114,068 | 114,068 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest income: | |||
Loans, including fees | $341,458 | $284,782 | $23,900 |
Securities: | |||
Taxable | 29,206 | 27,078 | 13,116 |
Tax-exempt | 4,681 | 4,775 | 464 |
Federal funds sold and securities purchased under agreements to resell | 52 | 113 | 106 |
Interest-bearing deposits with banks | 1,602 | 1,848 | 801 |
Other | 11,770 | 10,479 | 651 |
Total interest income | 388,769 | 329,075 | 39,038 |
Interest expense: | |||
Deposits | 15,742 | 14,877 | 1,013 |
Short-term borrowings | 2,205 | 1,814 | 215 |
Notes payable | 2,532 | 10,512 | 8,613 |
Junior subordinated debentures | 2,360 | 2,409 | 212 |
Other | 4,789 | 3,262 | 143 |
Total interest expense | 27,628 | 32,874 | 10,196 |
Net interest income | 361,141 | 296,201 | 28,842 |
Provision for loan losses | 16,933 | 37,158 | 3,800 |
Net interest income after provision for loan losses | 344,208 | 259,043 | 25,042 |
Noninterest income: | |||
Net realized gains on securities | 4,937 | 112 | |
Net gains from sale of loans and other mortgage production income | 390,361 | 457,531 | 50,384 |
Mortgage loan origination fees | 63,011 | 79,736 | 7,224 |
Net insurance premiums earned | 164,524 | 157,533 | 146,701 |
Investment and securities advisory fees and commissions | 101,874 | 93,093 | 11,238 |
Bargain purchase gain | 12,585 | ||
Other | 79,541 | 44,670 | 8,573 |
Total noninterest income | 799,311 | 850,085 | 224,232 |
Noninterest expense: | |||
Employees' compensation and benefits | 490,706 | 480,496 | 60,972 |
Loss and loss adjustment expenses | 94,429 | 110,755 | 109,159 |
Policy acquisition and other underwriting expenses | 46,942 | 46,289 | 43,658 |
Occupancy and equipment, net | 101,697 | 86,248 | 7,360 |
Other | 231,579 | 187,947 | 34,368 |
Total noninterest expense | 965,353 | 911,735 | 255,517 |
Income (loss) before income taxes | 178,166 | 197,393 | -6,243 |
Income tax expense (benefit) | 65,608 | 70,684 | -1,145 |
Net income (loss) | 112,558 | 126,709 | -5,098 |
Less: Net income attributable to noncontrolling interest | 908 | 1,367 | 494 |
Income (loss) attributable to Hilltop | 111,650 | 125,342 | -5,592 |
Dividends on preferred stock | 5,703 | 4,327 | 259 |
Income (loss) applicable to Hilltop common stockholders | $105,947 | $121,015 | ($5,851) |
Earnings (loss) per common share: | |||
Basic (in dollars per share) | $1.18 | $1.43 | ($0.10) |
Diluted (in dollars per share) | $1.17 | $1.40 | ($0.10) |
Weighted average share information: | |||
Basic (in shares) | 89,710 | 84,382 | 58,754 |
Diluted (in shares) | 90,573 | 90,331 | 58,754 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net income (loss) | $112,558 | $126,709 | ($5,098) |
Other comprehensive income (loss): | |||
Unrealized gains (losses) on securities available for sale, net of tax of $22,268, $(21,972) and $(3,172), respectively | 40,090 | -39,709 | -5,889 |
Reclassification adjustment for gains included in net income, net of tax of $(2,582) $(1,793) and $0, and other | -4,576 | -3,248 | |
Comprehensive income (loss) | 148,072 | 83,752 | -10,987 |
Less: comprehensive income attributable to noncontrolling interest | 908 | 1,367 | 494 |
Comprehensive income (loss) applicable to Hilltop | $147,164 | $82,385 | ($11,481) |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Unrealized gains (losses) on securities available for sale, tax | $22,268 | ($21,972) | ($3,172) |
Other Comprehensive Income Loss Reclassification Adjustment Tax | ($2,582) | ($1,793) | $0 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Parent | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest | Total |
In Thousands, except Share data, unless otherwise specified | ||||||||
Balance at Dec. 31, 2011 | $655,383 | $565 | $918,192 | $13,983 | ($277,357) | $655,383 | ||
Balance (in shares) at Dec. 31, 2011 | 56,501,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | -5,592 | -5,592 | 494 | -5,098 | ||||
Other comprehensive income | -5,889 | -5,889 | -5,889 | |||||
Stock-based compensation expense | 450 | 450 | 450 | |||||
Common stock issued to board members | 50 | 50 | 50 | |||||
Common stock issued to board members (in shares) | 4,000 | |||||||
Issuance of preferred stock | 114,068 | 114,068 | 114,068 | |||||
Issuance of preferred stock (in shares) | 114,000 | |||||||
Dividends on preferred stock | -259 | -259 | -259 | |||||
Issuance of common stock | 387,583 | 271 | 387,312 | 387,583 | ||||
Issuance of common stock (in shares) | 27,123,000 | |||||||
Cash distributions to noncontrolling interest | -229 | -229 | ||||||
Repurchase and retirement of common stock | -1,298 | -1 | -1,297 | -1,298 | ||||
Repurchase and retirement of common stock (in shares) | -141,000 | |||||||
Acquired noncontrolling interest | 1,789 | 1,789 | ||||||
Balance at Dec. 31, 2012 | 1,144,496 | 114,068 | 835 | 1,304,448 | 8,094 | -282,949 | 2,054 | 1,146,550 |
Balance (in shares) at Dec. 31, 2012 | 114,000 | 83,487,000 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 125,342 | 125,342 | 1,367 | 126,709 | ||||
Other comprehensive income | -42,957 | -42,957 | -42,957 | |||||
Stock-based compensation expense | 1,671 | 1,671 | 1,671 | |||||
Common stock issued to board members | 149 | 149 | 149 | |||||
Common stock issued to board members (in shares) | 10,000 | |||||||
Dividends on preferred stock | -4,327 | -4,327 | -4,327 | |||||
Issuance of common stock | 86,767 | 62 | 86,705 | 86,767 | ||||
Issuance of common stock (in shares) | 6,208,000 | |||||||
Cash distributions to noncontrolling interest | -2,640 | -2,640 | ||||||
Issuance of restricted common stock | 5 | -5 | ||||||
Issuance of restricted common stock (in shares) | 471,000 | |||||||
Balance at Dec. 31, 2013 | 1,311,141 | 114,068 | 902 | 1,388,641 | -34,863 | -157,607 | 781 | 1,311,922 |
Balance (in shares) at Dec. 31, 2013 | 114,000 | 90,176,000 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 111,650 | 111,650 | 908 | 112,558 | ||||
Other comprehensive income | 35,514 | 35,514 | 35,514 | |||||
Stock-based compensation expense | 4,653 | 4,653 | 4,653 | |||||
Common stock issued to board members | 208 | 208 | 208 | |||||
Common stock issued to board members (in shares) | 9,000 | |||||||
Forfeiture of restricted common stock awards | -12 | -12 | -12 | |||||
Forfeiture of restricted common stock awards (in shares) | -3,000 | |||||||
Dividends on preferred stock | -5,703 | -5,703 | -5,703 | |||||
Issuance of common stock | 3,001 | 3,001 | 3,001 | |||||
Cash distributions to noncontrolling interest | -902 | -902 | ||||||
Balance at Dec. 31, 2014 | $1,460,452 | $114,068 | $902 | $1,390,788 | $651 | ($45,957) | $787 | $1,461,239 |
Balance (in shares) at Dec. 31, 2014 | 114,000 | 90,182,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Activities | |||
Net income (loss) | $112,558 | $126,709 | ($5,098) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||
Provision for loan losses | 16,933 | 37,158 | 3,800 |
Depreciation, amortization and accretion, net | -83,279 | -53,794 | -2,533 |
Net realized gains on securities | -4,937 | -112 | |
Bargain purchase gain | -12,585 | ||
Net gain on investment in SWS common stock | -5,985 | ||
Deferred income taxes | -22,782 | 15,829 | -6,426 |
Other, net | 19,000 | 6,249 | 612 |
Net change in trading securities | -6,871 | 31,267 | 12,900 |
Net change in broker-dealer and clearing organization receivables | -145,283 | 21,219 | 43,309 |
Net change in other assets | -36,167 | 7,465 | -541 |
Net change in broker-dealer and clearing organization payables | 214,755 | -55,247 | -46,509 |
Net change in loss and loss adjustment expense reserve | 2,248 | -6,544 | -10,823 |
Net change in unearned insurance premiums | -246 | 5,824 | 1,937 |
Net change in other liabilities | 57,329 | -34,540 | 9,025 |
Net gains from sale of loans | -390,361 | -457,531 | -50,384 |
Loans originated for sale | -10,839,905 | -11,752,800 | -1,344,577 |
Proceeds from loans sold | 11,016,636 | 12,522,963 | 1,510,639 |
Net cash provided by (used in) operating activities | -91,420 | 396,705 | 115,219 |
Investing Activities | |||
Proceeds from maturities and principal reductions of securities held to maturity | 5,203 | ||
Proceeds from sales, maturities and principal reductions of securities available for sale | 315,166 | 381,890 | 77,445 |
Purchases of securities held to maturity | -123,520 | ||
Purchases of securities available for sale | -49,156 | -372,998 | -224,893 |
Net change in loans | 103,031 | -140,437 | 10,673 |
Purchases of premises and equipment and other assets | -43,186 | -33,066 | -17,412 |
Proceeds from sales of premises and equipment and other real estate owned | 69,400 | 21,233 | 1,377 |
Net cash paid (received) for Federal Home Loan Bank and Federal Reserve Bank stock | -17,114 | 4,600 | |
Net cash from acquisition | 362,695 | 165,679 | |
Net cash provided by investing activities | 259,824 | 223,917 | 12,869 |
Financing Activities | |||
Net change in deposits | -518,417 | -210,491 | 207,997 |
Net change in short-term borrowings | 420,609 | -386,163 | -185,812 |
Proceeds from notes payable | 3,000 | 2,000 | |
Payments on notes payable | -2,643 | -3,262 | -766 |
Payments to repurchase common stock | -1,298 | ||
Dividends paid on preferred stock | -5,619 | -2,985 | |
Net cash distributed to noncontrolling interest | -902 | -2,640 | -229 |
Other, net | 2,620 | 2,482 | -40 |
Net cash provided by (used in) financing activities | -101,352 | -601,059 | 19,852 |
Net change in cash and cash equivalents | 67,052 | 19,563 | 147,940 |
Cash and cash equivalents, beginning of year | 746,023 | 726,460 | 578,520 |
Cash and cash equivalents, end of year | 813,075 | 746,023 | 726,460 |
Supplemental Disclosures of Cash Flow Information | |||
Cash paid for interest | 28,846 | 31,805 | 10,371 |
Cash paid for income taxes, net of refunds | 26,859 | 73,802 | -184 |
Supplemental Schedule of Non-Cash Activities | |||
Conversion of available for sale investment to SWS common stock | 71,502 | ||
Redemption of senior exchangeable notes for common stock | 83,950 | ||
Conversion of loans to other real estate owned | 67,542 | 25,639 | |
Preferred stock issued in acquisition | 114,068 | ||
Common stock issued in acquisition | $387,583 |
Summary_of_Significant_Account
Summary of Significant Accounting and Reporting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting and Reporting Policies | |
Summary of Significant Accounting and Reporting Policies | 1. Summary of Significant Accounting and Reporting Policies |
Nature of Operations | |
Hilltop Holdings Inc. (“Hilltop” and, collectively with its subsidiaries, the “Company”) is a financial holding company registered under the Bank Holding Company Act of 1956, as amended by the Gramm-Leach-Bliley Act of 1999. On November 30, 2012, Hilltop acquired PlainsCapital Corporation pursuant to a plan of merger whereby PlainsCapital Corporation merged with and into a wholly owned subsidiary of Hilltop (the “PlainsCapital Merger”), which continued as the surviving entity under the name “PlainsCapital Corporation” (“PlainsCapital”). | |
The Company has two primary operating business units, PlainsCapital and National Lloyds Corporation (“NLC”). PlainsCapital is a financial holding company, headquartered in Dallas, Texas, that provides, through its subsidiaries, an array of financial products and services. In addition to traditional banking services, PlainsCapital provides residential mortgage lending, investment banking, public finance advisory, wealth and investment management, treasury management, fixed income sales, asset management, and correspondent clearing services. NLC is a property and casualty insurance holding company that provides, through its subsidiaries, fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other areas of the southern United States. | |
The operating results of Hilltop for the year ended December 31, 2012 include the results from the operations acquired in the PlainsCapital Merger for the month ended December 31, 2012. Certain disclosures within the notes to consolidated financial statements are specific to financial products and services of PlainsCapital and its subsidiaries and therefore include information at December 31, 2014 and 2013 and relating to the post-acquisition years ended December 31, 2014 and 2013 and one month period ended December 31, 2012. | |
On September 13, 2013 (the “Bank Closing Date”), PlainsCapital Bank (the “Bank”) assumed substantially all of the liabilities, including all of the deposits, and acquired substantially all of the assets of Edinburg, Texas-based First National Bank (“FNB”) from the Federal Deposit Insurance Corporation (the “FDIC”), as receiver, and reopened former FNB branches acquired from the FDIC under the “PlainsCapital Bank” name (the “FNB Transaction”). Pursuant to the Purchase and Assumption Agreement (the “P&A Agreement”), the Bank and the FDIC entered into loss-share agreements whereby the FDIC agreed to share in the losses of certain covered loans and covered other real estate owned (“OREO”) that the Bank acquired, as further described in Note 2 to the consolidated financial statements. The acquisition of FNB’s expansive branch network allowed the Bank to increase its presence in Texas to include the Rio Grande Valley, Houston, Corpus Christi, Laredo and El Paso markets, among others. | |
Basis of Presentation | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates regarding the allowance for loan losses, the fair values of financial instruments, the amounts receivable under the loss-share agreements with the FDIC (“FDIC Indemnification Asset”), reserves for losses and loss adjustment expenses, the mortgage loan indemnification liability, and the potential impairment of assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. | |
The presentation of the Company’s historical consolidated financial statements has been modified and certain items in the 2012 financial statements have been reclassified to conform to the current period presentation, which is more consistent with that of a financial institution that provides an array of financial products and services. | |
Hilltop owns 100% of the outstanding stock of PlainsCapital. PlainsCapital owns 100% of the outstanding stock of the Bank and 100% of the membership interest in PlainsCapital Equity, LLC. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”), PCB-ARC, Inc. and RGV-ARC, Inc. The Bank has a 100% membership interest in First Southwest Holdings, LLC (“First Southwest”) and PlainsCapital Securities, LLC. | |
Hilltop also owns 100% of NLC, which operates through its wholly owned subsidiaries, National Lloyds Insurance Company (“NLIC”) and American Summit Insurance Company (“ASIC”). | |
PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC, the controlling and sole managing member of PrimeLending Ventures, LLC (“Ventures”). | |
The principal subsidiaries of First Southwest are First Southwest Company, LLC (“FSC”), a broker-dealer registered with the Securities and Exchange Commission (the “SEC”) and the Financial Industry Regulatory Authority and a member of the New York Stock Exchange (“NYSE”), and First Southwest Asset Management, LLC, a registered investment advisor under the Investment Advisors Act of 1940. | |
The consolidated financial statements include the accounts of the above-named entities. All significant intercompany transactions and balances have been eliminated. Noncontrolling interests have been recorded for minority ownership in entities that are not wholly owned and are presented in compliance with the provisions of Noncontrolling Interest in Subsidiary Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). | |
On October 2, 2014, as discussed in Note 4 to the consolidated financial statements, Hilltop exercised the SWS Warrant (defined hereafter) in full and paid the aggregate exercise price by the automatic elimination of the $50.0 million aggregate principal amount note due to Hilltop under the credit agreement. Consequently, Hilltop owned approximately 21% of the outstanding shares of SWS Group, Inc. (“SWS”) common stock. Contemporaneous with the exercise of the SWS Warrant, Hilltop changed the accounting method for its investment in SWS common stock and elected to account for its investment in accordance with the provisions of the Fair Value Option Subsections of the ASC (“Fair Value Option”) as permitted by GAAP. Hilltop had previously accounted for its investment in SWS common stock as an available for sale security. Under the Fair Value Option, Hilltop’s investment in SWS common stock is recorded at fair value effective October 2, 2014, with changes in fair value being recorded in other noninterest income within the consolidated statement of operations rather than as a component of other comprehensive income. Hilltop’s election to apply the provisions of the Fair Value Option resulted in Hilltop recording those unrealized gains previously associated with its investment in SWS common stock of $7.2 million. For the period from October 3, 2014 through December 31, 2014, the change in fair value of Hilltop’s investment in SWS common stock resulted in a loss of $1.2 million. In the aggregate, Hilltop recorded a $6.0 million net gain in other noninterest income within the consolidated statement of operations during 2014. At December 31, 2014, Hilltop’s investment in SWS common stock is included in other assets within the consolidated balance sheet and is recorded at fair value. | |
PlainsCapital also owns 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which are not included in the consolidated financial statements under the requirements of the Variable Interest Entities Subsections of the ASC, because the primary beneficiaries of the Trusts are not within the consolidated group. | |
Acquisition Accounting | |
Acquisitions are accounted for under the acquisition method of accounting. Purchased assets, including identifiable intangible assets, and assumed liabilities are recorded at their respective acquisition date fair values. If the fair value of net assets purchased exceeds the consideration given, a “bargain purchase gain” is recognized. If the consideration given exceeds the fair value of the net assets received, goodwill is recognized. | |
Securities Purchased Under Agreements to Resell | |
Securities purchased under agreements to resell (reverse repurchase agreements or reverse repos) are treated as collateralized financings and are carried at the amounts at which the securities will subsequently be resold as specified in the agreements. PlainsCapital is in possession of collateral with a fair value equal to or in excess of the contract amounts. | |
Securities | |
Management classifies securities at the time of purchase and reassesses such designation at each balance sheet date. Transfers between categories from these reassessments are rare. Securities held for resale to facilitate principal transactions with customers, as well as certain securities acquired in the PlainsCapital Merger, are classified as trading, and are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. Hilltop reports interest income on trading securities as interest income on securities and other changes in fair value as other noninterest income. | |
Securities held but not intended to be held to maturity or on a long-term basis are classified as available for sale. Securities included in this category are those that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates, resultant prepayment risk, and other factors related to interest rate and resultant prepayment risk changes. Securities available for sale are carried at fair value. Unrealized holding gains and losses on securities available for sale, net of taxes, are reported in other comprehensive income (loss) until realized. Premiums and discounts are recognized in interest income using the effective interest method and consider any optionality that may be embedded in the security. | |
Purchases and sales (and related gain or loss) of securities are recorded on the trade date, based on specific identification. Declines in the fair value of available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the other-than-temporary impairment (“OTTI”) is related to credit losses. The amount of the OTTI related to other factors is recognized in other comprehensive income (loss). In estimating OTTI, management considers in developing its best estimate of cash flows, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, (iii) the historic and implied volatility of the security, (iv) failure of the issuer to make scheduled interest payments and (v) changes to the rating of the security by a rating agency. | |
Loans Held for Sale | |
Loans held for sale consist primarily of single-family residential mortgages funded through PrimeLending. These loans are generally on the consolidated balance sheet for no more than 30 days. Substantially all mortgage loans originated by PrimeLending are sold in the secondary market, the majority with servicing released. Mortgage loans held for sale are carried at fair value under the provisions of the Fair Value Option. Changes in the fair value of the loans held for sale are recognized in earnings and fees and costs associated with origination are recognized as incurred. The specific identification method is used to determine realized gains and losses on sales of loans, which are reported as net gains (losses) in noninterest income. Loans sold are subject to certain indemnification provisions with investors, including the repurchase of loans sold and repayment of certain sales proceeds to investors under certain conditions. In addition, certain mortgage loans guaranteed by U.S. Government agencies and sold into Government National Mortgage Association (“GNMA”) pools may, under certain conditions specified in the government programs, become subject to repurchase by PrimeLending. Such loans subject to repurchase no longer qualify for sale accounting and are reported as loans held for sale in the consolidated balance sheets. | |
Loans | |
Originated Loans | |
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal reduced by unearned income, net unamortized deferred fees and an allowance for loan losses. Unearned income on installment loans and interest on other loans is recognized using the effective interest method. Net fees received for providing loan commitments and letters of credit that result in loans are deferred and amortized to interest income over the life of the related loan, beginning with the initial borrowing. Net fees on commitments and letters of credit that are not expected to be funded are amortized to noninterest income over the commitment period. Income on direct financing leases is recognized on a basis that achieves a constant periodic rate of return on the outstanding investment. | |
Impaired loans include non-accrual loans, troubled debt restructurings and partially charged-off loans. The accrual of interest on impaired loans is discontinued when, in management’s opinion, there is a clear indication that the borrower’s cash flow may not be sufficient to meet principal and interest payments as they become due according to the terms of the loan agreement, which is generally when a loan is 90 days past due unless the loan is both well secured and in the process of collection. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is charged against income. If the ultimate collectability of principal, wholly or partially, is in doubt, any payment received on a loan on which the accrual of interest has been suspended is applied to reduce principal to the extent necessary to eliminate such doubt. Once the collection of the remaining recorded loan balance is fully expected, interest income is recognized on a cash basis. | |
The Bank originates loans to customers primarily in Texas. Although the Bank has diversified loan and leasing portfolios and, generally, holds collateral against amounts advanced to customers, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the region and of the industries in which its debtors operate, which consist primarily of energy, agribusiness, wholesale/retail trade, construction and real estate. PrimeLending originates loans to customers in its offices, which are located throughout the United States. Substantially all mortgage loans originated by PrimeLending are sold in the secondary market, the majority with servicing released, although PrimeLending does retain servicing in certain circumstances. FSC makes loans to customers through margin transactions. FSC controls risk by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines, which may vary based upon market conditions. Securities owned by customers and held as collateral for margin loans are not included in the consolidated financial statements. | |
Acquired Loans | |
Management has defined the loans acquired in a business combination as acquired loans. Acquired loans are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan losses. Acquired loans were segregated between those considered to be credit impaired and those without credit impairment at acquisition. To make this determination, management considered such factors as past due status, nonaccrual status and credit risk ratings. The fair value of acquired performing loans was determined by discounting expected cash flows, both principal and interest, at prevailing market interest rates. The difference between the fair value and principal balances due at acquisition date, the fair value discount, is accreted into income over the estimated life of each loan. | |
Purchased credit impaired (“PCI”) loans acquired in the PlainsCapital Merger are accounted for on an individual loan basis, while PCI loans acquired in the FNB Transaction are accounted for both in pools and on an individual loan basis. The Company has established under its PCI accounting policy a framework to aggregate certain acquired loans into various loan pools based on a minimum of two layers of common risk characteristics for the purpose of determining their respective fair values as of their acquisition dates, and for applying the subsequent recognition and measurement provisions for income accretion and impairment testing. The common risk characteristics used for the pooling of the FNB PCI loans are risk grade and loan collateral type. | |
PCI loans showed evidence of credit deterioration that makes it probable that all contractually required principal and interest payments will not be collected. Their fair value was initially based on an estimate of cash flows, both principal and interest, expected to be collected, discounted at prevailing market rates of interest. Management estimated cash flows using key assumptions such as default rates, loss severity rates assuming default, prepayment speeds and estimated collateral values. The excess of cash flows expected to be collected from a loan or pool over its estimated fair value at acquisition is referred to as the accretable yield and is recognized in interest income using an effective yield method over the remaining life of the loan or pool. Subsequent to acquisition, management must update these estimates of cash flows expected to be collected at each reporting date. These updates require the continued use of key assumptions and estimates, similar to those used in the initial estimate of fair value. | |
The Bank accretes the discount for PCI loans for which it can predict the timing and amount of cash flows. PCI loans for which a discount is accreted are considered performing. | |
Allowance for Loan Losses | |
Originated Loans | |
The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses inherent in the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses inherent in the loan portfolio at the balance sheet date. The allowance for loan losses includes allowance allocations calculated in accordance with the Receivables and Contingencies Topics of the ASC. The level of the allowance reflects management’s continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions, and unidentified losses inherent in the current loan portfolio. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. While management utilizes its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Bank’s control, including the performance of the Bank’s loan portfolio, the economy and changes in interest rates. | |
The Bank’s allowance for loan losses consists of three elements: (i) specific valuation allowances established for probable losses on impaired loans; (ii) general historical valuation allowances calculated based on historical loan loss experience for homogenous loans with similar collateral; and (iii) valuation allowances to adjust general reserves based on recent economic conditions and other qualitative risk factors both internal and external to the Bank. | |
Acquired Loans | |
Purchased loans acquired in a business combination are recorded at their estimated fair value on their purchase date with no carryover of the related allowance for loan losses. Loans without evidence of credit impairment at acquisition are subsequently evaluated for any required allowance at each reporting date. An allowance for loan losses is calculated using a methodology similar to that described above for originated loans. The allowance as determined for each loan collateral type is compared to the remaining fair value discount for that loan collateral type. If greater, the excess is recognized as an addition to the allowance through a provision for loan losses. If less than the discount, no additional allowance is recorded. Charge-offs and losses first reduce any remaining fair value discount for the loan and once the discount is depleted, losses are applied against the allowance established for that loan. | |
For PCI loans, cash flows expected to be collected are recast at each reporting date for each loan or pool. These evaluations require the continued use and updating of key assumptions and estimates such as default rates, loss severity given default and prepayment speed assumptions, similar to those used for the initial fair value estimate. Management judgment must be applied in developing these assumptions. If expected cash flows for a loan or pool decreases, an increase in the allowance for loan losses is made through a charge to the provision for loan losses. If expected cash flows for a loan increase, any previously established allowance for loan losses is reversed and any remaining difference increases the accretable yield which will be taken into income over the remaining life of the loan or pool. | |
Assets Segregated for Regulatory Purposes | |
Under certain conditions, FSC may be required to segregate cash and securities in a special reserve account for the benefit of customers under Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Assets segregated under the provisions of the Exchange Act are not available for general corporate purposes. FSC was required to segregate $76.0 million in cash and securities at December 31, 2014, which is included in other assets within the consolidated balance sheet. At December 31, 2013, FSC was not required to segregate cash and securities. | |
FSC was not required to segregate cash or securities in a special reserve account for the benefit of proprietary accounts of introducing broker-dealers at December 31, 2014 and 2013. | |
Broker-Dealer and Clearing Organization Transactions | |
Amounts recorded in broker-dealer and clearing organization receivables and payables include securities lending activities, as well as amounts related to securities transactions for either FSC customers or for the account of FSC. Securities-borrowed and securities-loaned transactions are generally reported as collateralized financings except where letters of credit or other securities are used as collateral. Securities-borrowed transactions require FSC to deposit cash, letters of credit, or other collateral with the lender. With respect to securities loaned, FSC receives collateral in the form of cash or other assets in an amount generally in excess of the market value of securities loaned. FSC monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as necessary. Interest income and interest expense associated with collateralized financings is included in the accompanying consolidated statements of operations. | |
Insurance Premiums Receivable | |
Insurance premiums receivable include premiums written and not yet collected. NLC routinely evaluates the receivable balance to determine if an allowance for uncollectible amounts is necessary. At December 31, 2014 and 2013, NLC determined that no valuation allowance was necessary. | |
Deferred Policy Acquisition Costs | |
Costs of acquiring insurance vary with and are primarily related to the successful acquisition of new and renewal business, primarily consisting of commissions, premium taxes and underwriting expenses, and are deferred and amortized over the terms of the policies or reinsurance treaties to which they relate. Proceeds from reinsurance transactions that represent recovery of acquisition costs reduce applicable unamortized acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense in proportion to net revenue recognized. Future investment income is considered in determining the recoverability of deferred policy acquisition costs. NLC regularly reviews the categories of acquisition costs that are deferred and assesses the recoverability of this asset. A premium deficiency and a corresponding charge to income is recognized if the sum of the expected loss and loss adjustment expenses, unamortized policy acquisition costs, and maintenance costs exceed related unearned insurance premiums and anticipated investment income. At December 31, 2014 and 2013, there was no premium deficiency. | |
Reinsurance | |
In the normal course of business, NLC seeks to reduce the loss that may arise from catastrophes or other events that could cause unfavorable underwriting results by reinsuring certain levels of risk in various areas of exposure with other insurance enterprises or reinsurers. Amounts recoverable from reinsurers are estimated in a manner consistent with the reinsured policy. NLC routinely evaluates the receivable balance to determine if any uncollectible balances exist. | |
Net insurance premiums earned, losses and loss adjustment expenses (“LAE”) and policy acquisition and other underwriting expenses are reported net of the amounts related to reinsurance ceded to other companies. Amounts recoverable from reinsurers related to the portions of the liability for losses and LAE and unearned insurance premiums ceded to them are included in other assets within the consolidated balance sheets. Reinsurance assumed from other companies, including assumed premiums written and earned and losses and LAE, is accounted for in the same manner as direct insurance written. | |
Premises and Equipment | |
Premises and equipment are stated at cost less accumulated depreciation and amortization computed principally on the straight-line method over the estimated useful lives of the assets, which range between 3 and 40 years. Gains or losses on disposals of premises and equipment are included in results of operations. | |
FDIC Indemnification Asset | |
The Company has elected to account for the FDIC Indemnification Asset in accordance with FASB ASC 805. The FDIC Indemnification Asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreements. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted into noninterest income within the consolidated statements of operations over the life of the FDIC Indemnification Asset. The FDIC Indemnification Asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered portfolio. These adjustments are measured on the same basis as the related covered loans and covered OREO. Any increases in cash flow of the covered assets over those expected will reduce the FDIC Indemnification Asset, and any decreases in cash flow of the covered assets under those expected will increase the FDIC Indemnification Asset. Any amortization of changes in value is limited to the contractual term of the loss-share agreements. Increases and decreases to the FDIC Indemnification Asset are recorded as adjustments to noninterest income within the consolidated statements of operations over the life of the loss-share agreements. | |
Covered Other Real Estate Owned | |
Acquired OREO subject to FDIC loss-share agreements is referred to as “covered OREO” and reported separately in the consolidated balance sheets. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered OREO at the collateral’s fair value, less selling costs. Covered OREO was initially recorded at its estimated fair value based on similar market comparable valuations, less estimated selling costs. Subsequently, loan collateral transferred to OREO is recorded at its net realizable value. Any subsequent valuation adjustments due to declines in fair value of the covered OREO will be charged to noninterest expense, and will be partially offset by noninterest income representing the corresponding increase to the FDIC Indemnification Asset for loss reimbursements. Any recoveries of previous valuation decreases will be credited to noninterest expense with a corresponding charge to noninterest income for the portion of the recovery that is due to the FDIC. | |
Other Real Estate Owned | |
Real estate acquired through foreclosure is included in other assets within the consolidated balance sheets and is carried at management’s estimate of fair value less costs to sell. Any excess of recorded investment over fair value less cost to sell is charged against the allowance for loan losses when property is initially transferred to OREO. Subsequent to the initial transfer to OREO, valuation adjustments are charged against earnings. Valuation adjustments, revenue and expenses from operations of the properties and resulting gains or losses on sale are included in other noninterest expense within the consolidated statements of operations. | |
Debt Issuance Costs | |
The Company capitalizes debt issuance costs associated with financing of debt. These costs are amortized on a straight-line basis, which approximates the effective interest method, over the repayment term of the loans. Debt issuance costs of $2.3 million and $0.2 million in 2013 and 2012 were amortized and included in interest expense within the consolidated statements of operations. In November 2013, the total remaining unamortized balance of $2.1 million was expensed as a result of the redemption of all outstanding 7.5% Senior Exchangeable Notes due 2025 (“the Notes”), as further described in Note 13 to the consolidated financial statements. | |
Goodwill | |
Goodwill, which represents the excess of cost over the fair value of the net assets acquired, is allocated to reporting units and tested for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount should be assessed. The Company performs required annual impairment tests of its goodwill and other intangible assets as of October 1st for each of its reporting units. Prior to testing goodwill for impairment, the Company has the option to assess on a qualitative basis whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If determined, based on its assessment of qualitative factors that it is more likely than not that fair value of a reporting unit is less than its carrying amount, the Company will proceed to test goodwill for impairment as a part of a two-step process. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. | |
Intangibles and Other Long-Lived Assets | |
Intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. The Company’s intangible assets primarily relate to core deposits, trade names, customer and agent relationships and noncompete agreements. Intangible assets with definite useful lives are generally amortized on the straight-line method over their estimated lives, although certain intangibles, including core deposits and customer and agent relationships, are amortized on an accelerated basis. Amortization of intangible assets is recorded in other noninterest expense within the consolidated statements of operations. Intangible assets with indefinite useful lives are tested for impairment annually, or more often if events or circumstances indicate there may be impairment, and not amortized until their lives are determined to be definite. Intangible assets with definite useful lives, premises and equipment, and other long-lived assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value. | |
Mortgage Servicing Rights | |
The Company determines its classes of residential mortgage servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures its servicing assets at fair value and reports changes in fair value through earnings. Fair value adjustments that encompass market-driven valuation changes and the runoff in value that occurs from the passage of time are each separately reported. | |
Retained mortgage servicing rights (“MSR”) are measured at fair value as of the date of sale of the related mortgage loan. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. | |
The model assumptions and the MSR fair value estimates are compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. The expected life of the loan can vary from management’s estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management’s estimates would negatively impact the recorded value of the MSR. The value of the MSR is also dependent upon the discount rate used in the model, which is based on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of the MSR. | |
Derivative Financial Instruments | |
The Company’s hedging policies permit the use of various derivative financial instruments, including forward commitments, and interest rate swaps and swaptions, to manage interest rate risk or to hedge specified assets and liabilities. The Company’s derivative financial instruments also include interest rate lock commitments (“IRLCs”) executed with its customers that allow those customers to obtain a mortgage loan on a future date at an agreed-upon interest rate. The IRLCs, forward commitments, and interest rate swaps and swaptions meet the definition of a derivative under the provisions of the Derivatives and Hedging Topic of the ASC. | |
Derivatives are recorded at fair value in the consolidated balance sheets. To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract. If derivative instruments are designated as hedges of fair values, the change in the fair value of both the derivative instrument and the hedged item are included in current earnings. Changes in the fair value of derivatives designated as hedges of cash flows are recorded in other comprehensive income (loss). Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the line item where the hedged item’s effect on earnings is recorded. | |
Reserve for Losses and Loss Adjustment Expenses | |
The liability for losses and LAE includes an amount determined from loss reports and individual cases and an amount, based on past experience, for losses incurred but not reported. Such liabilities are necessarily based on estimates and, while management believes that the amount is adequate, the ultimate liability may be in excess of or less than the amounts provided. The methods for making such estimates and for establishing the resulting liability are continually reviewed, and any adjustments are reflected in earnings currently. The liability for losses and loss adjustment expenses has not been reduced for reinsurance recoverable. | |
Loss Contingencies | |
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. | |
Stock-Based Compensation | |
Stock-based compensation expense for all share-based awards granted is based on the grant date fair value estimated in accordance with the provisions of the Stock Compensation Topic of the ASC. The Company recognizes these compensation costs for only those awards expected to vest over the service period of the award. | |
Advertising | |
Advertising costs are expensed as incurred. Advertising expense totaled $4.6 million, $5.3 million and $0.4 million during 2014, 2013 and 2012, respectively. | |
Income Taxes | |
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded for the estimated future tax effects of the temporary difference between the tax basis and book basis of assets and liabilities reported in the accompanying consolidated balance sheets. The provision for income tax expense or benefit differs from the amounts of income taxes currently payable because certain items of income and expense included in the consolidated financial statements are recognized in different time periods by taxing authorities. Interest and penalties incurred related to tax matters are charged to other interest expense or other noninterest expense, respectively. | |
Benefits from uncertain tax positions are recognized in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority having full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of cumulative benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the reporting period in which that threshold is no longer met. The Company did not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. At December 31, 2014, the net unrecognized tax benefit was $0.4 million. If the Company were to prevail on all uncertain tax positions, the effect would be a benefit to the Company’s effective tax rate. Due to uncertainties in any tax audit outcome, estimates of the ultimate settlement of unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimate. | |
Deferred tax assets, including net operating loss and tax credit carry forwards, are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that any portion of these tax attributes will not be realized. Periodic reviews of the carrying amount of deferred tax assets are made when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Based on that evaluation, management determined at December 31, 2014 that it was appropriate to establish a valuation allowance on the portion of the deferred tax asset associated with its capital losses from investments that could not be carried back to prior tax years. The Company has no valuation allowance on the remainder of its deferred tax assets at December 31, 2014 or 2013. | |
Cash Flow Reporting | |
For the purpose of presentation in the consolidated statements of cash flows, cash and cash equivalents are defined as the amount included in the consolidated balance sheets caption “Cash and due from banks” and the portion of the amount in the caption “Federal funds sold and securities purchased under agreements to resell” that represents federal funds sold. Cash equivalents have original maturities of three months or less. | |
Basic and Diluted Net Income (Loss) Per Share | |
Nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of earnings per share pursuant to the two-class method prescribed by the Earnings Per Share Topic of the ASC. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. During 2013, as discussed in Note 20 to the consolidated financial statements, Hilltop issued Restricted Stock Awards which qualify as participating securities. | |
Net earnings, less any preferred dividends accumulated for the period (whether or not declared), is allocated between the common stock and participating securities pursuant to the two-class method. Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares. | |
Diluted earnings per common share is computed in a similar manner, except that first the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares, excluding the participating securities, were issued using the treasury stock method. During 2014, stock options and RSUs are the only potentially dilutive non-participating instruments issued by Hilltop, while potentially dilutive non-participating instruments during 2013 included stock options, RSUs and the Notes, which were called for redemption during the fourth quarter of 2013. Next, the Company determines and includes in the diluted earnings per common share calculation the more dilutive effect of the participating securities using the treasury stock method or the two-class method. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company. | |
Acquisitions
Acquisitions | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Acquisitions | |||||||||||
Acquisitions | 2. Acquisitions | ||||||||||
FNB Transaction | |||||||||||
On the Bank Closing Date, the Bank assumed substantially all of the liabilities, including all of the deposits, and acquired substantially all of the assets of FNB from the FDIC in an FDIC-assisted transaction. As part of the P&A Agreement, the Bank and the FDIC entered into loss-share agreements covering future losses incurred on certain acquired loans and OREO. The Company refers to acquired commercial and single family residential loan portfolios and OREO that are subject to the loss-share agreements as “covered loans” and “covered OREO”, respectively, and these assets are presented as separate line items in the Company’s consolidated balance sheets. Collectively, covered loans and covered OREO are referred to as “covered assets”. Pursuant to the loss-share agreements, the FDIC has agreed to reimburse the Bank the following amounts with respect to the covered assets: (i) 80% of losses on the first $240.4 million of losses incurred; (ii) 0% of losses in excess of $240.4 million up to and including $365.7 million of losses incurred; and (iii) 80% of losses in excess of $365.7 million of losses incurred. The Bank has also agreed to reimburse the FDIC for any subsequent recoveries. The loss-share agreements for commercial and single family residential loans are in effect for 5 years and 10 years, respectively, from the Bank Closing Date, and the loss recovery provisions to the FDIC are in effect for 8 years and 10 years, respectively, from the Bank Closing Date. The asset arising from the loss-share agreements, referred to as the “FDIC Indemnification Asset,” is measured separately from the covered loan portfolio because the agreements are not contractually embedded in the covered loans and are not transferable should the Bank choose to dispose of the covered loans. | |||||||||||
In accordance with the loss-share agreements, the Bank may be required to make a “true-up” payment to the FDIC approximately ten years following the Bank Closing Date if the FDIC’s initial estimate of losses on covered assets is greater than the actual realized losses. The “true-up” payment is calculated using a defined formula set forth in the P&A Agreement. | |||||||||||
The operations of FNB are included in the Company’s operating results beginning September 14, 2013. For the period from September 14, 2013 through December 31, 2013, FNB’s operations included net interest income of $32.0 million, other revenues of $20.4 million and net income of $18.5 million. Such operating results included a bargain purchase gain of $12.6 million, before taxes of $4.5 million, and are not necessarily indicative of future operating results. FNB’s results of operations prior to the Bank Closing Date are not included in the Company’s consolidated operating results. | |||||||||||
During 2013, transaction-related expenses of $0.1 million associated with the FNB Transaction are included in noninterest expense within the consolidated statement of operations. Such expenses were for professional services and other incremental costs associated with the integration of FNB’s operations. | |||||||||||
The FNB Transaction was accounted for using the acquisition method of accounting and, accordingly, purchased assets, including identifiable intangible assets and assumed liabilities, were recorded at their respective fair values as of the Bank Closing Date using significant estimates and assumptions to value certain identifiable assets acquired and liabilities assumed. The amounts are subject to adjustments based upon final settlement with the FDIC. The terms of the P&A Agreement provide for the FDIC to indemnify the Bank against claims with respect to liabilities and assets of FNB or any of its affiliates not assumed or otherwise purchased by the Bank and with respect to certain other claims by third parties. | |||||||||||
A summary of the net assets received from the FDIC in the FNB Transaction and the estimated fair value adjustments resulting in the bargain purchase gain are presented below (in thousands). | |||||||||||
Cost basis net assets on September 13, 2013 | $ | 215,000 | |||||||||
Cash payment received from the FDIC | 45,000 | ||||||||||
Fair value adjustments: | |||||||||||
Securities | (3,341 | ) | |||||||||
Loans | (343,068 | ) | |||||||||
Premises and equipment | 3,565 | ||||||||||
Other real estate owned | (79,273 | ) | |||||||||
FDIC indemnification asset | 185,680 | ||||||||||
Other intangible assets | 4,270 | ||||||||||
Deposits | (8,282 | ) | |||||||||
Other | (6,966 | ) | |||||||||
Bargain purchase gain | $ | 12,585 | |||||||||
In FDIC-assisted transactions, only certain assets and liabilities are transferred to the acquirer and, depending on the nature and amount of the acquirer’s bid, the FDIC may be required to make a cash payment to the acquirer or the acquirer may be required to make a payment to the FDIC. In the FNB Transaction, cost basis net assets of $215.0 million and an initial cash payment received from the FDIC of $45.0 million were transferred to the Bank. This initial cash payment from the FDIC is subject to adjustment and settlement. The bargain purchase gain represents the excess of the estimated fair value of the assets acquired over the estimated fair value of the liabilities assumed. | |||||||||||
The FDIC bid form provided a list of properties (branches and support facilities) owned by FNB for sale at fixed prices. The Bank purchased 44 properties owned by FNB in connection with its bid for an aggregate purchase price of $59.5 million. For those properties owned by FNB that the Bank declined to purchase in its bid, the Bank had exclusive options to purchase those properties following the Bank Closing Date. In connection with those options, the Bank purchased an additional seven properties owned by FNB during 2013, for an aggregate purchase price of $4.9 million. The Bank also had an option to assume the leases of properties leased by FNB. The Bank was required to purchase all data management equipment and, other certain special assets, furniture, fixtures and equipment, in each case at an appraised value for any properties purchased or leased by the Bank. The Bank paid $10.3 million to the FDIC during 2013 for furniture, fixtures and data management equipment. The Bank was required to pay rent to the FDIC on properties owned or leased by FNB and furniture and equipment at such properties until it surrendered such properties to the FDIC. | |||||||||||
The resulting fair values of the identifiable assets acquired, and liabilities assumed, of FNB at September 13, 2013 are summarized in the following table (in thousands). | |||||||||||
Cash and due from banks | $ | 362,695 | |||||||||
Securities | 286,214 | ||||||||||
Non-covered loans | 42,884 | ||||||||||
Covered loans | 1,116,583 | ||||||||||
Premises and equipment | 78,399 | ||||||||||
FDIC indemnification asset | 185,680 | ||||||||||
Covered other real estate owned | 135,187 | ||||||||||
Other assets | 26,300 | ||||||||||
Other intangible assets | 4,270 | ||||||||||
Total identifiable assets acquired | 2,238,212 | ||||||||||
Deposits | (2,211,740 | ) | |||||||||
Other liabilities | (13,887 | ) | |||||||||
Total liabilities assumed | (2,225,627 | ) | |||||||||
Net identifiable assets acquired/bargain purchase gain | $ | 12,585 | |||||||||
The Bank acquired loans both with and without evidence of credit quality deterioration since origination. Based on purchase date valuations, the Bank’s portfolio of acquired loans had a fair value of $1.2 billion as of the Bank Closing Date, with no carryover of any allowance for loan losses. Acquired loans were segregated between those considered to be PCI loans and those without credit impairment at acquisition. The following table presents details on acquired loans at the Bank Closing Date (in thousands). | |||||||||||
Loans, excluding | PCI | Total | |||||||||
PCI Loans | Loans | Loans | |||||||||
Commercial and industrial | $ | 47,874 | $ | 47,751 | $ | 95,625 | |||||
Real estate | 242,998 | 611,219 | 854,217 | ||||||||
Construction and land development | 26,669 | 158,247 | 184,916 | ||||||||
Consumer | 19,095 | 5,614 | 24,709 | ||||||||
Total | $ | 336,636 | $ | 822,831 | $ | 1,159,467 | |||||
The following table presents information about the acquired PCI loans at the Bank Closing Date (in thousands). | |||||||||||
Contractually required principal and interest payments | $ | 1,533,667 | |||||||||
Nonaccretable difference | 542,241 | ||||||||||
Cash flows expected to be collected | 991,426 | ||||||||||
Accretable difference | 168,595 | ||||||||||
Fair value of loans acquired with a deterioration of credit quality | $ | 822,831 | |||||||||
The following table presents information about the acquired loans without credit impairment at the Bank Closing Date (in thousands). | |||||||||||
Contractually required principal and interest payments | $ | 466,754 | |||||||||
Contractual cash flows not expected to be collected | 43,783 | ||||||||||
Fair value at acquisition | 336,636 | ||||||||||
PlainsCapital Merger | |||||||||||
After the close of business on November 30, 2012, Hilltop acquired PlainsCapital Corporation in a stock and cash transaction. PlainsCapital Corporation merged with and into a wholly owned subsidiary of Hilltop, which continued as the surviving entity under the name “PlainsCapital Corporation”. Based on Hilltop’s closing stock price on November 30, 2012, the total purchase price was $813.5 million, consisting of 27.1 million shares of common stock, $311.8 million in cash and the issuance of 114,068 shares of Hilltop Non-Cumulative Perpetual Preferred Stock, Series B (the “Hilltop Series B Preferred Stock”) in exchange on a one-for-one basis for the outstanding shares of PlainsCapital Non-Cumulative Perpetual Preferred Stock, Series C, all of which were held by the United States Department of the Treasury (the “U.S. Treasury”). | |||||||||||
The PlainsCapital Merger was accounted for using the acquisition method of accounting, and accordingly, purchased assets, including identifiable intangible assets, and assumed liabilities were recorded at their respective acquisition date fair values. The components of the consideration paid are shown in the following table (in thousands). | |||||||||||
Fair value of consideration paid: | |||||||||||
Common stock issued | $ | 387,584 | |||||||||
Preferred stock issued | 114,068 | ||||||||||
Cash | 311,805 | ||||||||||
Total consideration paid | $ | 813,457 | |||||||||
The resulting fair values of the identifiable assets acquired, and liabilities assumed, of PlainsCapital at December 1, 2012 are summarized in the following table (in thousands). | |||||||||||
Cash and due from banks | $ | 393,132 | |||||||||
Federal funds sold and securities purchased agreements to resell | 84,352 | ||||||||||
Securities | 730,779 | ||||||||||
Loans held for sale | 1,520,833 | ||||||||||
Loans, net | 3,195,309 | ||||||||||
Broker-dealer and clearing organization receivables | 149,457 | ||||||||||
Premises and equipment | 96,886 | ||||||||||
Other intangible assets | 70,650 | ||||||||||
Other assets | 241,876 | ||||||||||
Total identifiable assets acquired | 6,483,274 | ||||||||||
Deposits | 4,463,069 | ||||||||||
Broker-dealer and clearing organization payables | 263,894 | ||||||||||
Short-term borrowings | 914,062 | ||||||||||
Notes payable | 10,855 | ||||||||||
Junior subordinated debentures | 67,012 | ||||||||||
Other liabilities | 180,998 | ||||||||||
Total liabilities assumed | 5,899,890 | ||||||||||
Net identifiable assets acquired | 583,384 | ||||||||||
Goodwill resulting from the acquisition | 230,073 | ||||||||||
Net assets acquired | $ | 813,457 | |||||||||
The amount of goodwill recorded in connection with the PlainsCapital Merger is not deductible for tax purposes. For further information regarding goodwill recorded in connection with the PlainsCapital Merger, refer to Note 9, Goodwill and Other Intangible Assets. | |||||||||||
During 2012, transaction expenses of $6.6 million associated with the PlainsCapital Merger are included in noninterest expense within the consolidated statement of operations. Such expenses were for professional services and other incremental costs associated with the integration of PlainsCapital’s operations. | |||||||||||
In connection with the PlainsCapital Merger, Hilltop acquired loans both with and without evidence of credit quality deterioration since origination. The acquired loans were initially recorded at fair value with no carryover of any allowance for loan losses. Acquired loans were segregated between those considered to be PCI loans and those without credit impairment at acquisition. The following table presents details on acquired loans at the acquisition date (in thousands). | |||||||||||
Loans, excluding | PCI | Total | |||||||||
PCI Loans | Loans | Loans | |||||||||
Commercial and industrial | $ | 1,684,706 | $ | 74,911 | $ | 1,759,617 | |||||
Real estate | 1,077,295 | 63,866 | 1,141,161 | ||||||||
Construction and land development | 232,313 | 34,008 | 266,321 | ||||||||
Consumer | 28,131 | 79 | 28,210 | ||||||||
Total | $ | 3,022,445 | $ | 172,864 | $ | 3,195,309 | |||||
The following table presents information about the PCI loans at acquisition (in thousands). | |||||||||||
Contractually required principal and interest payments | $ | 252,818 | |||||||||
Nonaccretable difference | 61,527 | ||||||||||
Cash flows expected to be collected | 191,291 | ||||||||||
Accretable difference | 18,427 | ||||||||||
Fair value of loans acquired with a deterioration of credit quality | $ | 172,864 | |||||||||
The following table presents information about the acquired loans without credit impairment at acquisition (in thousands). | |||||||||||
Contractually required principal and interest payments | $ | 3,498,554 | |||||||||
Contractual cash flows not expected to be collected | 92,526 | ||||||||||
Fair value at acquisition | 3,022,445 | ||||||||||
Pro Forma Results of Operations | |||||||||||
The operations acquired in the FNB Transaction are included in the Company’s operating results beginning September 14, 2013. The purchase of assets and assumption of certain liabilities of FNB from the FDIC, as receiver, was sufficiently significant to require disclosure of historical financial statements and related pro forma financial disclosure. Due to the nature and magnitude of the FNB Transaction, coupled with the federal assistance and protection resulting from the FDIC loss-share agreements, historical financial information of FNB is not relevant to future operations. The Company has omitted certain historical financial information and the related pro forma financial information of FNB pursuant to the guidance provided in Staff Accounting Bulletin Topic 1.K, Financial Statements of Acquired Troubled Financial Institutions (“SAB 1:K”), and a request for relief granted by the SEC. SAB 1:K provides relief from the requirements of Rule 3-05 of Regulation S-X in certain instances, such as the FNB Transaction, where a registrant engages in an acquisition of a significant amount of assets of a troubled financial institution for which audited financial statements are not reasonably available and in which federal assistance is so pervasive as to substantially reduce the relevance of such information to an assessment of future operations. Therefore, no additional historical pro forma information regarding FNB is provided below. | |||||||||||
The results of operations acquired in the PlainsCapital Merger have been included in the Company’s consolidated financial results since December 1, 2012. The following table discloses the impact of PlainsCapital on the Company’s results of operations (excluding the impact of acquisition-related merger and restructuring charges discussed below) since the acquisition date through December 31, 2012 (in thousands). The table also presents pro forma results had the PlainsCapital Merger taken place on January 1, 2011 and includes the estimated impact of purchase accounting adjustments. The purchase accounting adjustments reflect the impact of recording the acquired loans at fair value, including the estimated accretion of the purchase discount on the loan portfolio. Accretion estimates were based on the acquisition date purchase discount on the loan portfolio, as it was not practicable to determine the amount of discount that would have been recorded based on economic conditions that existed on January 1, 2011. The pro forma results do not include any potential operating cost savings as a result of the PlainsCapital Merger. Further, certain costs associated with any restructuring or integration | |||||||||||
activities are also not reflected in the pro forma results. Pro forma results include any acquisition-related merger and restructuring charges incurred during the period. The pro forma results are not indicative of what would have occurred had the PlainsCapital Merger taken place on the indicated date. | |||||||||||
PlainsCapital | Pro Forma Combined | ||||||||||
Acquisition Date | Twelve Months | ||||||||||
through | Ended | ||||||||||
December 31, 2012 | December 31, 2012 | ||||||||||
Net interest income | $ | 24,029 | $ | 221,635 | |||||||
Other revenues | 70,085 | 901,347 | |||||||||
Net income | 8,361 | 75,138 | |||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||
Fair Value Measurements | 3. Fair Value Measurements | ||||||||||||||||||||||||||||
Fair Value Measurements and Disclosures | |||||||||||||||||||||||||||||
The Company determines fair values in compliance with The Fair Value Measurements and Disclosures Topic of the ASC (the “Fair Value Topic”). The Fair Value Topic defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The Fair Value Topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Fair Value Topic assumes that transactions upon which fair value measurements are based occur in the principal market for the asset or liability being measured. Further, fair value measurements made under the Fair Value Topic exclude transaction costs and are not the result of forced transactions. | |||||||||||||||||||||||||||||
The Fair Value Topic creates a fair value hierarchy that classifies fair value measurements based upon the inputs used in valuing the assets or liabilities that are the subject of fair value measurements. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs, as indicated below. | |||||||||||||||||||||||||||||
· | Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. | ||||||||||||||||||||||||||||
· | Level 2 Inputs: Observable inputs other than Level 1 prices. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, prepayment speeds, default rates, credit risks, loss severities, etc.), and inputs that are derived from or corroborated by market data, among others. | ||||||||||||||||||||||||||||
· | Level 3 Inputs: Unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Level 3 inputs include pricing models and discounted cash flow techniques, among others. | ||||||||||||||||||||||||||||
Fair Value Option | |||||||||||||||||||||||||||||
The Company has elected to measure substantially all of PrimeLending’s mortgage loans held for sale and retained MSR at fair value, under the provisions of the Fair Value Option. The Company elected to apply the provisions of the Fair Value Option to these items so that it would have the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. At December 31, 2014, the aggregate fair value of PrimeLending’s mortgage loans held for sale accounted for under the Fair Value Option was $1.27 billion, and the unpaid principal balance of those loans was $1.22 billion. At December 31, 2013, the aggregate fair value of PrimeLending’s mortgage loans held for sale accounted for under the Fair Value Option was $1.06 billion, and the unpaid principal balance of those loans was $1.04 billion. The interest component of fair value is reported as interest income on loans in the accompanying consolidated statements of operations. | |||||||||||||||||||||||||||||
On October 2, 2014, as discussed in Note 1 to the consolidated financial statements, Hilltop elected to measure its investment in SWS common stock under the provisions of the Fair Value Option. At December 31, 2014, the fair value of Hilltop’s investment in SWS common stock was $70.3 million and is included in other assets within the consolidated balance sheet. | |||||||||||||||||||||||||||||
The Company holds a number of financial instruments that are measured at fair value on a recurring basis, either by the application of the Fair Value Option or other authoritative pronouncements. The fair values of those instruments are determined primarily using Level 2 inputs, as further described below. | |||||||||||||||||||||||||||||
Available For Sale Securities — Most securities available for sale are reported at fair value using Level 2 inputs. The Company obtains fair value measurements from independent pricing services. As the Company is responsible for the determination of fair value, control processes are designed to ensure that the fair values received from independent pricing services are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the financial instruments’ terms and conditions, among other things. For public common and preferred equity stocks, the determination of fair value uses Level 1 inputs based on observable market transactions. Regarding the note receivable from SWS and the SWS Warrant prior to October 2, 2014, the determination of fair value used Level 3 inputs such as internal or external fund manager valuations based on unobservable inputs including recent filings, operating results, balance sheet stability, growth and other business and market sector fundamentals. | |||||||||||||||||||||||||||||
Trading Securities — Trading securities are reported at fair value using either Level 1 or Level 2 inputs in the same manner as discussed previously for securities available for sale. | |||||||||||||||||||||||||||||
Loans Held for Sale — Mortgage loans held for sale are reported at fair value, as discussed above, using Level 2 inputs that consist of commitments on hand from investors or prevailing market prices. These instruments are held for relatively short periods, typically no more than 30 days. As a result, changes in instrument-specific credit risk are not a significant component of the change in fair value. Mortgage loans that are non-performing, including monitored loans, are reported at fair value using Level 3 inputs. | |||||||||||||||||||||||||||||
Derivatives — Derivatives are reported at fair value using either Level 2 or Level 3 inputs. PrimeLending and FSC use dealer quotes to value forward purchase commitments and forward sale commitments, respectively, executed for both hedging and non-hedging purposes. PrimeLending also issues IRLCs to its customers and FSC issues forward purchase commitments to its clients that are valued based on the change in the fair value of the underlying mortgage loan from inception of the IRLC or purchase commitment to the balance sheet date, adjusted for projected loan closing rates. PrimeLending determines the value of the underlying mortgage loan as discussed in “Loans Held for Sale”, above. FSC determines the value of the underlying mortgage loan from prices of comparable securities used to value forward sale commitments. Additionally, PrimeLending uses dealer quotes to value interest rate swaps and swaptions executed to hedge its MSR asset and First Southwest entered into a derivative option agreement (“Fee Award Option”) valued using discounted cash flow and probability of exercise. The Fee Award Option was exercised during the fourth quarter of 2014. | |||||||||||||||||||||||||||||
Mortgage servicing rights asset — The MSR asset is reported at fair value using Level 3 inputs. Fair value is determined by projecting net servicing cash flows, which are then discounted to estimate the fair value. The fair value of the MSR asset is impacted by a variety of factors. Prepayment rates and discount rates, the most significant unobservable inputs, are discussed further in Note 10 to the consolidated financial statements. | |||||||||||||||||||||||||||||
Investment in SWS Common Stock — The investment in SWS common stock is reported at fair value using quoted market prices for SWS’s common stock as traded on the NYSE, which is considered a Level 1 input. | |||||||||||||||||||||||||||||
The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands). | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
December 31, 2014 | Inputs | Inputs | Inputs | Fair Value | |||||||||||||||||||||||||
Trading securities | $ | 39 | $ | 65,678 | $ | — | $ | 65,717 | |||||||||||||||||||||
Available for sale securities | 13,762 | 911,773 | — | 925,535 | |||||||||||||||||||||||||
Loans held for sale | — | 1,263,135 | 9,017 | 1,272,152 | |||||||||||||||||||||||||
Derivative assets | — | 23,805 | — | 23,805 | |||||||||||||||||||||||||
MSR asset | — | — | 36,155 | 36,155 | |||||||||||||||||||||||||
Investment in SWS common stock | 70,282 | — | — | 70,282 | |||||||||||||||||||||||||
Trading liabilities | — | 48 | — | 48 | |||||||||||||||||||||||||
Derivative liabilities | — | 12,849 | — | 12,849 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
December 31, 2013 | Inputs | Inputs | Inputs | Fair Value | |||||||||||||||||||||||||
Trading securities | $ | 33 | $ | 58,813 | $ | — | $ | 58,846 | |||||||||||||||||||||
Available for sale securities | 22,079 | 1,121,011 | 60,053 | 1,203,143 | |||||||||||||||||||||||||
Loans held for sale | — | 1,031,988 | 27,729 | 1,059,717 | |||||||||||||||||||||||||
Derivative assets | — | 23,564 | — | 23,564 | |||||||||||||||||||||||||
MSR asset | — | — | 20,149 | 20,149 | |||||||||||||||||||||||||
Trading liabilities | — | 46 | — | 46 | |||||||||||||||||||||||||
Derivative liabilities | — | 139 | 5,600 | 5,739 | |||||||||||||||||||||||||
The following table includes a rollforward for those financial instruments measured at fair value using Level 3 inputs (in thousands). | |||||||||||||||||||||||||||||
Total Gains or Losses | |||||||||||||||||||||||||||||
(Realized or Unrealized) | |||||||||||||||||||||||||||||
Balance at | Included in Other | ||||||||||||||||||||||||||||
Beginning of | Purchases/ | Sales/ | Transfers into | Included in | Comprehensive | Balance at | |||||||||||||||||||||||
Year | Additions | Reductions | Level 3 | Net Income | Income (Loss) | End of Year | |||||||||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||||||||||||||
Available for sale securities | $ | 60,053 | $ | — | $ | (61,283 | ) | $ | — | $ | 1,848 | $ | (618 | ) | $ | — | |||||||||||||
Loans held for sale | 27,729 | 24,851 | (44,597 | ) | — | 1,034 | — | 9,017 | |||||||||||||||||||||
MSR asset | 20,149 | 35,056 | (11,387 | ) | — | (7,663 | ) | — | 36,155 | ||||||||||||||||||||
Derivative liabilities | (5,600 | ) | (177 | ) | 6,827 | — | (1,050 | ) | — | — | |||||||||||||||||||
Total | $ | 102,331 | $ | 59,730 | $ | (110,440 | ) | $ | — | $ | (5,831 | ) | $ | (618 | ) | $ | 45,172 | ||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||||||
Available for sale securities | $ | 56,277 | $ | — | $ | — | $ | — | $ | 2,166 | $ | 1,610 | $ | 60,053 | |||||||||||||||
Loans held for sale | — | — | — | 27,729 | — | — | 27,729 | ||||||||||||||||||||||
MSR asset | 2,080 | 13,886 | — | — | 4,183 | — | 20,149 | ||||||||||||||||||||||
Derivative liabilities | (4,490 | ) | — | — | — | (1,110 | ) | — | (5,600 | ) | |||||||||||||||||||
Total | $ | 53,867 | $ | 13,886 | $ | — | $ | 27,729 | $ | 5,239 | $ | 1,610 | $ | 102,331 | |||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||||||
Available for sale securities | $ | 60,377 | $ | — | $ | — | $ | — | $ | 1,867 | $ | (5,967 | ) | $ | 56,277 | ||||||||||||||
MSR asset | — | 2,204 | — | — | (124 | ) | — | 2,080 | |||||||||||||||||||||
Derivative liabilities | — | (4,455 | ) | — | — | (35 | ) | — | (4,490 | ) | |||||||||||||||||||
Total | $ | 60,377 | $ | (2,251 | ) | $ | — | $ | — | $ | 1,708 | $ | (5,967 | ) | $ | 53,867 | |||||||||||||
All net realized and unrealized gains (losses) in the table above are reflected in the accompanying consolidated financial statements. The available for sale securities noted in the table above reflect Hilltop’s note receivable from SWS and the SWS Warrant. On October 2, 2014, as discussed in Note 1 to the consolidated financial statements, Hilltop exercised the SWS Warrant in full and paid the aggregate exercise price by the automatic elimination of the $50.0 million aggregate principal amount note due to Hilltop under the credit agreement. Excluding these available for sale securities and derivative liabilities representing the Fee Award Option entered into by First Southwest, the unrealized gains (losses) relate to financial instruments still held at December 31, 2014. | |||||||||||||||||||||||||||||
For Level 3 financial instruments measured at fair value on a recurring basis at December 31, 2014, the significant unobservable inputs used in the fair value measurements were as follows. | |||||||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||||||
Financial instrument | Valuation Technique | Unobservable Input | Average / Range | ||||||||||||||||||||||||||
Loans held for sale | Discounted cash flow / Market comparable | Projected price | 82 - 92% | ||||||||||||||||||||||||||
Mortgage servicing rights asset | Discounted cash flow | Constant prepayment rate Discount rate | 12.17% | ||||||||||||||||||||||||||
11.01% | |||||||||||||||||||||||||||||
The fair value of certain loans held for sale that are either non-standard (i.e. loans that cannot be sold through normal sale channels) or non-performing is measured using unobservable inputs. The fair value of such loans is generally based upon estimates of expected cash flows using unobservable inputs including listing prices of comparable assets, uncorroborated expert opinions, and/or management’s knowledge of underlying collateral. | |||||||||||||||||||||||||||||
The MSR asset, as discussed previously, is valued by projecting net servicing cash flows, which are then discounted to estimate the fair value. The fair value of the MSR asset is impacted by a variety of factors. Prepayment rates and discount rates, the most significant unobservable inputs, are discussed further in Note 10 to the consolidated financial statements. | |||||||||||||||||||||||||||||
The Company had no transfers between Levels 1 and 2 during the periods presented. | |||||||||||||||||||||||||||||
The following table presents the changes in fair value for instruments that are reported at fair value under the Fair Value Option (in thousands). | |||||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Other | Total | Other | Total | Other | Total | ||||||||||||||||||||||||
Net | Noninterest | Changes in | Net | Noninterest | Changes in | Net | Noninterest | Changes in | |||||||||||||||||||||
Gains (Losses) | Income | Fair Value | Gains (Losses) | Income | Fair Value | Gains (Losses) | Income | Fair Value | |||||||||||||||||||||
Loans held for sale | $ | 31,805 | $ | — | $ | 31,805 | $ | (19,353 | ) | $ | — | $ | (19,353 | ) | $ | (3,297 | ) | $ | — | $ | (3,297 | ) | |||||||
Investment in SWS common stock | — | 5,985 | 5,985 | — | — | — | — | — | — | ||||||||||||||||||||
Mortgage servicing rights asset | (7,663 | ) | — | (7,663 | ) | 4,183 | — | 4,183 | (124 | ) | — | (124 | ) | ||||||||||||||||
Time deposits | — | — | — | — | 12 | 12 | — | 7 | 7 | ||||||||||||||||||||
The Company also determines the fair value of certain assets and liabilities on a non-recurring basis. In particular, the fair value of all of the assets and liabilities purchased in the PlainsCapital Merger was determined at the acquisition date, while fair value of all assets acquired and liabilities assumed in the FNB Transaction was determined at the Bank Closing Date. In addition, facts and circumstances may dictate a fair value measurement when there is evidence of impairment. Assets and liabilities measured on a non-recurring basis include the items discussed below. | |||||||||||||||||||||||||||||
Impaired Loans — The Company reports impaired loans based on the underlying fair value of the collateral through specific allowances within the allowance for loan losses. PCI loans with a fair value of $172.9 million and $822.8 million were acquired by the Company upon completion of the PlainsCapital Merger and the FNB Transaction, respectively. Substantially all PCI loans acquired in the FNB Transaction are covered by FDIC loss-share agreements. The fair value of PCI loans was determined using Level 3 inputs, including estimates of expected cash flows that incorporated significant unobservable inputs regarding default rates, loss severity rates assuming default, prepayment speeds and estimated collateral values. At December 31, 2014, these inputs included estimated weighted average default rates, loss severity rates and prepayment speed assumptions of 47%, 51% and 0%, respectively, for those PCI loans acquired in the PlainsCapital Merger and 63%, 38% and 4%, respectively, for those PCI loans acquired in the FNB Transaction. The resulting weighted average expected loss on PCI loans associated with each of the PlainsCapital Merger and the FNB Transaction was 24%. | |||||||||||||||||||||||||||||
The Company obtains updated appraisals of the fair value of collateral securing impaired collateral dependent loans at least annually, in accordance with regulatory guidelines. The Company also reviews the fair value of such collateral on a quarterly basis. If the quarterly review indicates that the fair value of the collateral may have deteriorated, the Company will order an updated appraisal of the fair value of the collateral. Since the Company obtains updated appraisals when evidence of a decline in the fair value of collateral exists, it typically does not adjust appraised values. | |||||||||||||||||||||||||||||
Other Real Estate Owned — The Company reports OREO at fair value less estimated cost to sell. Any excess of recorded investment over fair value, less cost to sell, is charged against either the allowance for loan losses or the related PCI pool discount when property is initially transferred to OREO. Subsequent to the initial transfer to OREO, downward valuation adjustments are charged against earnings. The Company determines fair value primarily using independent appraisals of OREO properties. The resulting fair value measurements are classified as Level 2 or Level 3 inputs, depending upon the extent to which unobservable inputs determine the fair value measurement. The Company considers a number of factors in determining the extent to which specific fair value measurements utilize unobservable inputs, including, but not limited to, the inherent subjectivity in appraisals, the length of time elapsed since the receipt of independent market price or appraised value, and current market conditions. At December 31, 2014, the most significant unobservable input used in the determination of fair value of OREO was a discount to independent appraisals for estimated holding periods of OREO properties. Such discount was 1% per month for estimated holding periods of 6 to 24 months. Level 3 inputs were used to determine the fair value of a large group of smaller balance properties that were acquired in the FNB Transaction. In the FNB Transaction, the Bank acquired OREO of $135.2 million, all of which is covered by FDIC loss-share agreements. At December 31, 2014 and 2013, the estimated fair value of covered OREO was $136.9 million and $142.8 million, respectively, and the underlying fair value measurements utilize Level 2 and Level 3 inputs. The fair value of non-covered OREO at December 31, 2014 and 2013 was $0.8 million and $4.8 million, respectively, and is included in other assets within the consolidated balance sheets. During the reported periods, all fair value measurements for non-covered OREO utilized Level 2 inputs. | |||||||||||||||||||||||||||||
The following table presents information regarding certain assets and liabilities measured at fair value on a non-recurring basis for which a change in fair value has been recorded during reporting periods subsequent to initial recognition (in thousands). | |||||||||||||||||||||||||||||
Total Gains (Losses) for the | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Year Ended December 31, | |||||||||||||||||||||||||
December 31, 2014 | Inputs | Inputs | Inputs | Fair Value | 2014 | 2013 | |||||||||||||||||||||||
Non-covered impaired loans | $ | — | $ | — | $ | 26,823 | $ | 26,823 | $ | (2,182 | ) | $ | (3,558 | ) | |||||||||||||||
Covered impaired loans | — | — | 55,213 | 55,213 | (3,652 | ) | — | ||||||||||||||||||||||
Non-covered other real estate owned | — | 409 | — | 409 | (372 | ) | 430 | ||||||||||||||||||||||
Covered other real estate owned | — | 47,198 | 15,855 | 63,052 | (19,672 | ) | — | ||||||||||||||||||||||
The Fair Value of Financial Instruments Subsection of the ASC requires disclosure of the fair value of financial assets and liabilities, including the financial assets and liabilities previously discussed. The methods for determining estimated fair value for financial assets and liabilities measured at fair value on a recurring or non-recurring basis are discussed above. For other financial assets and liabilities, the Company utilizes quoted market prices, if available, to estimate the fair value of financial instruments. Because no quoted market prices exist for a significant portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows, and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the estimates provided herein do not necessarily indicate amounts which could be realized in a current transaction. Further, as it is management’s intent to hold a significant portion of its financial instruments to maturity, it is not probable that the fair values shown below will be realized in a current transaction. | |||||||||||||||||||||||||||||
Because of the wide range of permissible valuation techniques and the numerous estimates which must be made, it may be difficult to make reasonable comparisons of the Company’s fair value information to that of other financial institutions. The aggregate estimated fair value amount should in no way be construed as representative of the underlying value of Hilltop and its subsidiaries. The following methods and assumptions are typically used in estimating the fair value disclosures for financial instruments: | |||||||||||||||||||||||||||||
Cash and Cash Equivalents — For cash and due from banks and federal funds sold, the carrying amount is a reasonable estimate of fair value. | |||||||||||||||||||||||||||||
Held to Maturity Securities — For securities held to maturity, estimated fair value equals quoted market price, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. | |||||||||||||||||||||||||||||
Loans Held for Sale — Loans held for sale consist primarily of certain mortgage loans held for sale that are subject to purchase by related parties. Such loans are reported at fair value, as discussed above, using Level 2 inputs that consist of commitments on hand from investors or prevailing market prices. | |||||||||||||||||||||||||||||
Loans — The fair value of non-covered and covered loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. | |||||||||||||||||||||||||||||
Broker-Dealer and Clearing Organization Receivables — The carrying amount approximates their fair value. | |||||||||||||||||||||||||||||
FDIC Indemnification Asset — The fair value of the FDIC Indemnification Asset is based on Level 3 inputs, including the discounted value of expected future cash flows under the loss-share agreements. The discount rate contemplates the credit worthiness of the FDIC as counterparty to this asset, and considers an incremental discount rate risk premium reflective of the inherent uncertainty associated with the timing of the cash flows. | |||||||||||||||||||||||||||||
Deposits — The estimated fair value of demand deposits, savings accounts and NOW accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. The carrying amount for variable-rate certificates of deposit approximates their fair values. | |||||||||||||||||||||||||||||
Broker-Dealer and Clearing Organization Payables — The carrying amount approximates their fair value. | |||||||||||||||||||||||||||||
Short-Term Borrowings — The carrying amounts of federal funds purchased, borrowings under repurchase agreements, Federal Home Loan Bank (“FHLB”) and other short-term borrowings approximate their fair values. | |||||||||||||||||||||||||||||
Debt — The fair values are estimated using discounted cash flow analysis based on current incremental borrowing rates for similar types of borrowing arrangements. | |||||||||||||||||||||||||||||
The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands). | |||||||||||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
December 31, 2014 | Amount | Inputs | Inputs | Inputs | Total | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 813,075 | $ | 813,075 | $ | — | $ | — | $ | 813,075 | |||||||||||||||||||
Held to maturity securities | 118,209 | — | 118,345 | — | 118,345 | ||||||||||||||||||||||||
Loans held for sale | 37,541 | — | 37,541 | — | 37,541 | ||||||||||||||||||||||||
Non-covered loans, net | 3,883,435 | — | 378,425 | 3,528,769 | 3,907,194 | ||||||||||||||||||||||||
Covered loans, net | 638,029 | — | — | 767,751 | 767,751 | ||||||||||||||||||||||||
Broker-dealer and clearing organization receivables | 167,884 | — | 167,884 | — | 167,884 | ||||||||||||||||||||||||
FDIC indemnification asset | 130,437 | — | — | 130,437 | 130,437 | ||||||||||||||||||||||||
Other assets | 59,432 | — | 43,937 | 15,495 | 59,432 | ||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | 6,369,892 | — | 6,365,555 | — | 6,365,555 | ||||||||||||||||||||||||
Broker-dealer and clearing organization payables | 179,042 | — | 179,042 | — | 179,042 | ||||||||||||||||||||||||
Short-term borrowings | 762,696 | — | 762,696 | — | 762,696 | ||||||||||||||||||||||||
Debt | 123,696 | — | 117,028 | — | 117,028 | ||||||||||||||||||||||||
Other liabilities | 2,144 | — | 2,144 | — | 2,144 | ||||||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
December 31, 2013 | Amount | Inputs | Inputs | Inputs | Total | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 746,023 | $ | 746,023 | $ | — | $ | — | $ | 746,023 | |||||||||||||||||||
Loans held for sale | 29,322 | — | 29,322 | — | 29,322 | ||||||||||||||||||||||||
Non-covered loans, net | 3,481,405 | — | 281,712 | 3,119,319 | 3,401,031 | ||||||||||||||||||||||||
Covered loans, net | 1,005,308 | — | — | 997,371 | 997,371 | ||||||||||||||||||||||||
Broker-dealer and clearing organization receivables | 119,317 | — | 119,317 | — | 119,317 | ||||||||||||||||||||||||
FDIC indemnification asset | 188,291 | — | — | 188,291 | 188,291 | ||||||||||||||||||||||||
Other assets | 66,055 | — | 43,946 | 22,109 | 66,055 | ||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | 6,722,918 | — | 6,722,909 | — | 6,722,909 | ||||||||||||||||||||||||
Broker-dealer and clearing organization payables | 129,678 | — | 129,678 | — | 129,678 | ||||||||||||||||||||||||
Short-term borrowings | 342,087 | — | 342,087 | — | 342,087 | ||||||||||||||||||||||||
Debt | 123,339 | — | 114,671 | — | 114,671 | ||||||||||||||||||||||||
Other liabilities | 3,362 | — | 3,362 | — | 3,362 | ||||||||||||||||||||||||
The deferred income amounts arising from unrecognized financial instruments are not significant. These financial instruments also have contractual interest rates at or above current market rates. Therefore, no fair value disclosure is provided for these items. | |||||||||||||||||||||||||||||
Securities
Securities | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Securities | ||||||||||||||||||
Securities | 4. Securities | |||||||||||||||||
The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). No securities were classified as held to maturity at December 31, 2013. | ||||||||||||||||||
Available for Sale | ||||||||||||||||||
Gross | Gross | |||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||
December 31, 2014 | Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury securities | $ | 19,382 | $ | 264 | $ | (33 | ) | $ | 19,613 | |||||||||
U.S. government agencies: | ||||||||||||||||||
Bonds | 522,008 | 1,749 | (7,516 | ) | 516,241 | |||||||||||||
Residential mortgage-backed securities | 51,363 | 1,672 | (137 | ) | 52,898 | |||||||||||||
Collateralized mortgage obligations | 89,291 | 133 | (2,300 | ) | 87,124 | |||||||||||||
Corporate debt securities | 93,406 | 5,125 | (59 | ) | 98,472 | |||||||||||||
States and political subdivisions | 135,419 | 2,083 | (717 | ) | 136,785 | |||||||||||||
Commercial mortgage-backed securities | 593 | 47 | — | 640 | ||||||||||||||
Equity securities | 13,293 | 469 | — | 13,762 | ||||||||||||||
Totals | $ | 924,755 | $ | 11,542 | $ | (10,762 | ) | $ | 925,535 | |||||||||
Available for Sale | ||||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||
December 31, 2013 | Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury securities | $ | 43,684 | $ | 82 | $ | (238 | ) | $ | 43,528 | |||||||||
U.S. government agencies: | ||||||||||||||||||
Bonds | 717,909 | 550 | (55,727 | ) | 662,732 | |||||||||||||
Residential mortgage-backed securities | 59,936 | 735 | (584 | ) | 60,087 | |||||||||||||
Collateralized mortgage obligations | 124,502 | 349 | (4,390 | ) | 120,461 | |||||||||||||
Corporate debt securities | 72,376 | 4,610 | (378 | ) | 76,608 | |||||||||||||
States and political subdivisions | 162,955 | 388 | (6,508 | ) | 156,835 | |||||||||||||
Commercial mortgage-backed securities | 691 | 69 | — | 760 | ||||||||||||||
Equity securities | 20,067 | 2,012 | — | 22,079 | ||||||||||||||
Note receivable | 42,674 | 5,235 | — | 47,909 | ||||||||||||||
Warrant | 12,068 | 76 | — | 12,144 | ||||||||||||||
Totals | $ | 1,256,862 | $ | 14,106 | $ | (67,825 | ) | $ | 1,203,143 | |||||||||
Held to Maturity | ||||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||
December 31, 2014 | Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury securities | $ | 25,008 | $ | — | $ | (6 | ) | $ | 25,002 | |||||||||
U.S. government agencies: | ||||||||||||||||||
Residential mortgage-backed securities | 29,782 | 528 | — | 30,310 | ||||||||||||||
Collateralized mortgage obligations | 57,328 | — | (430 | ) | 56,898 | |||||||||||||
States and political subdivisions | 6,091 | 47 | (3 | ) | 6,135 | |||||||||||||
Totals | $ | 118,209 | $ | 575 | $ | (439 | ) | $ | 118,345 | |||||||||
At December 31, 2013, available for sale securities included 1,475,387 shares of SWS common stock, a $50.0 million aggregate principal amount note issued by SWS and a warrant to purchase 8,695,652 shares of SWS common stock (the “SWS Warrant”). SWS issued the note in July 2011 under a credit agreement pursuant to a senior unsecured loan from Hilltop. The note bore interest at a rate of 8.0% per annum, was prepayable by SWS subject to certain conditions after three years, and had a maturity of five years. The SWS Warrant provided for the purchase of 8,695,652 shares of SWS common stock at an exercise price of $5.75 per share, subject to anti-dilution adjustments. On October 2, 2014, Hilltop exercised the SWS Warrant in full and paid the aggregate exercise price by the automatic elimination of the $50.0 million aggregate principal amount note due to Hilltop under the credit agreement. Consequently, Hilltop owned 10,171,039 shares of SWS common stock, representing approximately 21% of the outstanding shares of SWS common stock as of October 4, 2014, and is no longer a lender under the credit agreement. As discussed in Note 1 to the consolidated financial statements, Hilltop’s investment in SWS common stock is accounted for under the provisions of the Fair Value Option effective October 2, 2014. Hilltop’s election to apply the provisions of the Fair Value Option resulted in Hilltop recording those unrealized gains previously associated with its investment in SWS common stock of $7.2 million. At December 31, 2014, Hilltop’s investment in SWS common stock is included in other assets within the consolidated balance sheet and is recorded at a fair value of $70.3 million. | ||||||||||||||||||
Information regarding available for sale securities that were in an unrealized loss position is shown in the following table (dollars in thousands). | ||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||
Number of | Unrealized | Number of | Unrealized | |||||||||||||||
Available for Sale | Securities | Fair Value | Losses | Securities | Fair Value | Losses | ||||||||||||
U.S. treasury securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | 4 | $ | 7,703 | $ | 27 | 6 | $ | 12,748 | $ | 238 | ||||||||
Unrealized loss for twelve months or longer | 1 | 1,706 | 6 | — | — | — | ||||||||||||
5 | 9,409 | 33 | 6 | 12,748 | 238 | |||||||||||||
U.S. government agencies: | ||||||||||||||||||
Bonds: | ||||||||||||||||||
Unrealized loss for less than twelve months | 3 | 34,847 | 153 | 35 | 526,817 | 45,274 | ||||||||||||
Unrealized loss for twelve months or longer | 22 | 373,035 | 7,363 | 5 | 90,931 | 10,453 | ||||||||||||
25 | 407,882 | 7,516 | 40 | 617,748 | 55,727 | |||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | — | — | — | 2 | 2,194 | 54 | ||||||||||||
Unrealized loss for twelve months or longer | 4 | 11,056 | 137 | 3 | 9,309 | 530 | ||||||||||||
4 | 11,056 | 137 | 5 | 11,503 | 584 | |||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||
Unrealized loss for less than twelve months | 3 | 7,141 | 40 | 7 | 84,054 | 4,320 | ||||||||||||
Unrealized loss for twelve months or longer | 8 | 61,108 | 2,260 | 2 | 4,995 | 70 | ||||||||||||
11 | 68,249 | 2,300 | 9 | 89,049 | 4,390 | |||||||||||||
Corporate debt securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | — | — | — | 7 | 10,754 | 378 | ||||||||||||
Unrealized loss for twelve months or longer | 1 | 1,939 | 59 | — | — | — | ||||||||||||
1 | 1,939 | 59 | 7 | 10,754 | 378 | |||||||||||||
States and political subdivisions: | ||||||||||||||||||
Unrealized loss for less than twelve months | 7 | 4,432 | 7 | 46 | 30,245 | 669 | ||||||||||||
Unrealized loss for twelve months or longer | 81 | 54,178 | 710 | 150 | 96,882 | 5,839 | ||||||||||||
88 | 58,610 | 717 | 196 | 127,127 | 6,508 | |||||||||||||
Total available for sale: | ||||||||||||||||||
Unrealized loss for less than twelve months | 17 | 54,123 | 227 | 103 | 666,812 | 50,933 | ||||||||||||
Unrealized loss for twelve months or longer | 117 | 503,022 | 10,535 | 160 | 202,117 | 16,892 | ||||||||||||
134 | $ | 557,145 | $ | 10,762 | 263 | $ | 868,929 | $ | 67,825 | |||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||
Number of | Unrealized | Number of | Unrealized | |||||||||||||||
Securities | Fair Value | Losses | Securities | Fair Value | Losses | |||||||||||||
Held to Maturity | ||||||||||||||||||
U.S. treasury securities: | ||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | 1 | $ | 25,002 | $ | 6 | — | $ | — | $ | — | ||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
1 | 25,002 | 6 | — | — | — | |||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||
Unrealized loss for less than twelve months | 2 | 56,898 | 430 | — | — | — | ||||||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
2 | 56,898 | 430 | — | — | — | |||||||||||||
States and political subdivisions: | ||||||||||||||||||
Unrealized loss for less than twelve months | 4 | 1,899 | 3 | — | — | — | ||||||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
4 | 1,899 | 3 | — | — | — | |||||||||||||
Total held to maturity: | ||||||||||||||||||
Unrealized loss for less than twelve months | 7 | 83,799 | 439 | — | — | — | ||||||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
7 | $ | 83,799 | $ | 439 | — | $ | — | $ | — | |||||||||
During 2014, 2013 and 2012, the Company did not record any other-than-temporary impairments. While all of the investments are monitored for potential other-than-temporary impairment, the Company’s analysis and experience indicate that these available for sale investments generally do not present a significant risk of other-than-temporary-impairment, as fair value should recover over time. Factors considered in the Company’s analysis include the reasons for the unrealized loss position, the severity and duration of the unrealized loss position, credit worthiness, and forecasted performance of the investee. While some of the securities held in the investment portfolio have decreased in value since the date of acquisition, the severity of loss and the duration of the loss position are not believed to be significant enough to warrant other-than-temporary impairment of the securities. The Company does not intend, nor is it likely that the Company will be required, to sell these securities before the recovery of the cost basis. Therefore, management does not believe any other-than-temporary impairments exist at December 31, 2014. | ||||||||||||||||||
Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. The amortized cost and fair value of securities, excluding trading and available for sale equity securities, at December 31, 2014 are shown by contractual maturity below (in thousands). | ||||||||||||||||||
Available for Sale | Held to Maturity | |||||||||||||||||
Amortized | Amortized | |||||||||||||||||
Cost | Fair Value | Cost | Fair Value | |||||||||||||||
Due in one year or less | $ | 24,639 | $ | 24,881 | $ | 25,008 | $ | 25,002 | ||||||||||
Due after one year through five years | 69,196 | 72,671 | — | — | ||||||||||||||
Due after five years through ten years | 64,048 | 67,345 | 1,195 | 1,194 | ||||||||||||||
Due after ten years | 612,332 | 606,214 | 4,896 | 4,941 | ||||||||||||||
770,215 | 771,111 | 31,099 | 31,137 | |||||||||||||||
Residential mortgage-backed securities | 51,363 | 52,898 | 29,782 | 30,310 | ||||||||||||||
Collateralized mortgage obligations | 89,291 | 87,124 | 57,328 | 56,898 | ||||||||||||||
Commercial mortgage-backed securities | 593 | 640 | — | — | ||||||||||||||
$ | 911,462 | $ | 911,773 | $ | 118,209 | $ | 118,345 | |||||||||||
The Company realized a net gain of $2.1 million and net losses of $2.8 million and $0.7 million from its trading securities portfolio during the years ended December 31, 2014 and 2013 and the month ended December 31, 2012, respectively, which are recorded as a component of other noninterest income within the consolidated statements of operations. | ||||||||||||||||||
Securities with a carrying amount of $895.5 million and $1.0 billion (with a fair value of $890.3 million and $938.1 million, respectively) at December 31, 2014 and 2013, were pledged to secure public and trust deposits, federal funds purchased and securities sold under agreements to repurchase, and for other purposes as required or permitted by law. | ||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations consist principally of GNMA, Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) pass-through and participation certificates. GNMA securities are guaranteed by the full faith and credit of the United States, while FNMA and FHLMC securities are fully guaranteed by those respective United States government-sponsored agencies, and conditionally guaranteed by the full faith and credit of the United States. | ||||||||||||||||||
At December 31, 2014 and 2013, NLC had investments on deposit in custody for various state insurance departments with carrying values of $9.2 million and $9.4 million, respectively. | ||||||||||||||||||
NonCovered_Loans_and_Allowance
Non-Covered Loans and Allowance for Non-Covered Loan Losses | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Non-Covered Loans and Allowance for Non-Covered Loan Loss | ||||||||||||||||||||||||||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | 5. Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||||||||||||||||||||||||
Non-covered loans refer to loans not covered by the FDIC loss-share agreements. Covered loans are discussed in Note 6 to the consolidated financial statements. Non-covered loans summarized by portfolio segment are as follows (in thousands). | ||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Commercial and industrial | $ | 1,758,851 | $ | 1,637,266 | ||||||||||||||||||||||
Real estate | 1,694,835 | 1,457,253 | ||||||||||||||||||||||||
Construction and land development | 413,643 | 364,551 | ||||||||||||||||||||||||
Consumer | 53,147 | 55,576 | ||||||||||||||||||||||||
3,920,476 | 3,514,646 | |||||||||||||||||||||||||
Allowance for non-covered loan losses | (37,041 | ) | (33,241 | ) | ||||||||||||||||||||||
Total non-covered loans, net of allowance | $ | 3,883,435 | $ | 3,481,405 | ||||||||||||||||||||||
The Bank has lending policies in place with the goal of establishing an asset portfolio that will provide a return on stockholders’ equity sufficient to maintain capital to assets ratios that meet or exceed established regulations. Loans are underwritten with careful consideration of the borrower’s financial condition, the specific purpose of the loan, the primary sources of repayment and any collateral pledged to secure the loan. | ||||||||||||||||||||||||||
Underwriting procedures address financial components based on the size or complexity of the credit. The financial components include, but are not limited to, current and projected cash flows, shock analysis and/or stress testing, and trends in appropriate balance sheet and statement of operations ratios. Collateral analysis includes a complete description of the collateral, as well as determining values, monitoring requirements, loan to value ratios, concentration risk, appraisal requirements and other information relevant to the collateral being pledged. Guarantor analysis includes liquidity and cash flow analysis based on the significance the guarantors are expected to serve as secondary repayment sources. The Bank’s underwriting standards are governed by adherence to its loan policy. The loan policy provides for specific guidelines by portfolio segment, including commercial and industrial, real estate, construction and land development, and consumer loans. Within each individual portfolio segment, permissible and impermissible loan types are explicitly outlined. Within the loan types, minimum requirements for the underwriting factors listed above are provided. | ||||||||||||||||||||||||||
The Bank maintains a loan review department that reviews credit risk in response to both external and internal factors that potentially impact the performance of either individual loans or the overall loan portfolio. The loan review process reviews the creditworthiness of borrowers and determines compliance with the loan policy. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel. Results of these reviews are presented to management and the Bank’s board of directors. | ||||||||||||||||||||||||||
In connection with the PlainsCapital Merger and the FNB Transaction, the Company acquired non-covered loans both with and without evidence of credit quality deterioration since origination. The following table presents the carrying values and the outstanding balances of the non-covered PCI loans (in thousands). | ||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Carrying amount | $ | 48,909 | $ | 100,392 | ||||||||||||||||||||||
Outstanding balance | 67,740 | 141,983 | ||||||||||||||||||||||||
Changes in the accretable yield for the non-covered PCI loans were as follows (in thousands). | ||||||||||||||||||||||||||
Year Ended December 31, | Month Ended | |||||||||||||||||||||||||
2014 | 2013 | December 31, 2012 | ||||||||||||||||||||||||
Balance, beginning of period | $ | 17,601 | $ | 17,553 | $ | 18,427 | ||||||||||||||||||||
Additions | — | 622 | — | |||||||||||||||||||||||
Reclassifications from (to) nonaccretable difference, net (1) | 15,225 | 18,793 | — | |||||||||||||||||||||||
Disposals of loans | (4,927 | ) | (3,692 | ) | (22 | ) | ||||||||||||||||||||
Accretion | (15,085 | ) | (15,675 | ) | (852 | ) | ||||||||||||||||||||
Balance, end of period | $ | 12,814 | $ | 17,601 | $ | 17,553 | ||||||||||||||||||||
(1) Reclassifications from nonaccretable difference are primarily due to net increases in expected cash flows in the quarterly recasts. Reclassifications to nonaccretable difference occur when accruing loans are moved to nonaccrual and expected cash flows are no longer predictable and the accretable yield is eliminated. | ||||||||||||||||||||||||||
The remaining nonaccretable difference for non-covered PCI loans was $18.4 million and $38.6 million at December 31, 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Impaired loans exhibit a clear indication that the borrower’s cash flow may not be sufficient to meet principal and interest payments, which is generally when a loan is 90 days past due unless the asset is both well secured and in the process of collection. Non-covered impaired loans include non-accrual loans, troubled debt restructurings (“TDRs”), PCI loans and partially charged-off loans. | ||||||||||||||||||||||||||
Non-covered impaired loans include non-accrual loans, TDRs, PCI loans and partially charged-off loans. The amounts shown in following tables include loans accounted for on an individual basis, as well as acquired loans accounted for in pools (“Pooled Loans”). For Pooled Loans, the recorded investment with allowance and the related allowance consider impairment measured at the pool level. Non-covered impaired loans are summarized by class in the following tables (in thousands). | ||||||||||||||||||||||||||
Unpaid | Recorded | Recorded | Total | |||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | ||||||||||||||||||||||
December 31, 2014 | Principal Balance | No Allowance | Allowance | Investment | Allowance | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 51,036 | $ | 14,096 | $ | 11,783 | $ | 25,879 | $ | 3,341 | ||||||||||||||||
Unsecured | 4,120 | 92 | 68 | 160 | — | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 29,865 | 7,243 | 15,536 | 22,779 | 1,878 | |||||||||||||||||||||
Secured by residential properties | 4,701 | 1,583 | 1,390 | 2,973 | 85 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | — | |||||||||||||||||||||
Commercial construction loans and land development | 16,108 | 8,062 | 1,819 | 9,881 | 154 | |||||||||||||||||||||
Consumer | 5,785 | 171 | 1,967 | 2,138 | 282 | |||||||||||||||||||||
$ | 111,615 | $ | 31,247 | $ | 32,563 | $ | 63,810 | $ | 5,740 | |||||||||||||||||
Unpaid | Recorded | Recorded | Total | |||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | ||||||||||||||||||||||
December 31, 2013 | Principal Balance | No Allowance | Allowance | Investment | Allowance | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 63,636 | $ | 21,540 | $ | 17,147 | $ | 38,687 | $ | 3,126 | ||||||||||||||||
Unsecured | 11,865 | 336 | 1,204 | 1,540 | 15 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 49,437 | 20,317 | 16,070 | 36,387 | 339 | |||||||||||||||||||||
Secured by residential properties | 5,407 | 1,745 | 1,648 | 3,393 | 39 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 33 | — | — | — | — | |||||||||||||||||||||
Commercial construction loans and land development | 48,628 | 15,337 | 4,592 | 19,929 | 39 | |||||||||||||||||||||
Consumer | 7,946 | 4,509 | — | 4,509 | — | |||||||||||||||||||||
$ | 186,952 | $ | 63,784 | $ | 40,661 | $ | 104,445 | $ | 3,558 | |||||||||||||||||
Average investment in non-covered impaired loans is summarized by class in the following table (in thousands). | ||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 30,626 | $ | 51,670 | ||||||||||||||||||||||
Unsecured | 802 | 2,432 | ||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 29,517 | 45,887 | ||||||||||||||||||||||||
Secured by residential properties | 2,984 | 4,862 | ||||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | 354 | ||||||||||||||||||||||||
Commercial construction loans and land development | 14,849 | 26,090 | ||||||||||||||||||||||||
Consumer | 3,324 | 2,293 | ||||||||||||||||||||||||
$ | 82,102 | $ | 133,588 | |||||||||||||||||||||||
Non-covered non-accrual loans, excluding those classified as held for sale, are summarized by class in the following table (in thousands). | ||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 16,488 | $ | 15,430 | ||||||||||||||||||||||
Unsecured | 160 | 1,300 | ||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 438 | 2,638 | ||||||||||||||||||||||||
Secured by residential properties | 1,253 | 398 | ||||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | ||||||||||||||||||||||||
Commercial construction loans and land development | 703 | 112 | ||||||||||||||||||||||||
Consumer | — | — | ||||||||||||||||||||||||
$ | 19,042 | $ | 19,878 | |||||||||||||||||||||||
At December 31, 2014 and 2013, non-covered non-accrual loans included non-covered PCI loans of $6.6 million and $15.8 million, respectively, for which discount accretion has been suspended because the extent and timing of cash flows from these non-covered PCI loans can no longer be reasonably estimated. In addition to the non-covered non-accrual loans in the table above, $3.0 million and $3.5 million of real estate loans secured by residential properties and classified as held for sale were in non-accrual status at December 31, 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Interest income including recoveries and cash payments recorded on non-covered impaired loans was $3.3 million, $3.2 million and $0.9 million for the years ended December 31, 2014 and 2013 and the month ended December 31, 2012, respectively. | ||||||||||||||||||||||||||
The Bank classifies loan modifications as TDRs when it concludes that it has both granted a concession to a debtor and that the debtor is experiencing financial difficulties. Loan modifications are typically structured to create affordable payments for the debtor and can be achieved in a variety of ways. The Bank modifies loans by reducing interest rates and/or lengthening loan amortization schedules. The Bank also reconfigures a single loan into two or more loans (“A/B Note”). The typical A/B Note restructure results in a “bad” loan which is charged off and a “good” loan or loans the terms of which comply with the Bank’s customary underwriting policies. The debt charged off on the “bad” loan is not forgiven to the debtor. | ||||||||||||||||||||||||||
The outstanding balance of TDRs granted in the twelve months ended December 31, 2014 and 2013, respectively, is shown in the following tables (in thousands). There were no TDRs granted during the month ended December 31, 2012. At December 31, 2014 and 2013, the Bank had $0.5 million and $0.5 million in unadvanced commitments to borrowers whose loans have been restructured in TDRs. | ||||||||||||||||||||||||||
Recorded Investment in Loans Modified by | ||||||||||||||||||||||||||
Interest Rate | Payment Term | Total | ||||||||||||||||||||||||
Year Ended December 31, 2014 | A/B Note | Adjustment | Extension | Modification | ||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | 2,465 | $ | 2,465 | ||||||||||||||||||
Unsecured | — | — | — | — | ||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | — | — | 317 | 317 | ||||||||||||||||||||||
Secured by residential properties | — | — | 248 | 248 | ||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | ||||||||||||||||||||||
Commercial construction loans and land development | — | — | 128 | 128 | ||||||||||||||||||||||
Consumer | — | — | — | — | ||||||||||||||||||||||
$ | — | $ | — | $ | 3,158 | $ | 3,158 | |||||||||||||||||||
Recorded Investment in Loans Modified by | ||||||||||||||||||||||||||
Interest Rate | Payment Term | Total | ||||||||||||||||||||||||
Year Ended December 31, 2013 | A/B Note | Adjustment | Extension | Modification | ||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | 10,390 | $ | 10,390 | ||||||||||||||||||
Unsecured | — | — | — | — | ||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | — | — | 279 | 279 | ||||||||||||||||||||||
Secured by residential properties | — | — | 777 | 777 | ||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | ||||||||||||||||||||||
Commercial construction loans and land development | — | — | — | — | ||||||||||||||||||||||
Consumer | — | — | — | — | ||||||||||||||||||||||
$ | — | $ | — | $ | 11,446 | $ | 11,446 | |||||||||||||||||||
There were no TDRs granted in the twelve months preceding December 31, 2014 and 2013, for which a payment was at least 30 days past due in 2014 and 2013, respectively. | ||||||||||||||||||||||||||
An analysis of the aging of the Bank’s non-covered loan portfolio is shown in the following tables (in thousands). | ||||||||||||||||||||||||||
Accruing Loans | ||||||||||||||||||||||||||
(Non-PCI) | ||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | |||||||||||||||||||
December 31, 2014 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | ||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 6,073 | $ | 964 | $ | 8,022 | $ | 15,059 | $ | 1,620,000 | $ | 13,374 | $ | 1,648,433 | $ | — | ||||||||||
Unsecured | 35 | 3 | — | 38 | 110,312 | 68 | 110,418 | — | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 67 | — | — | 67 | 1,173,504 | 22,341 | 1,195,912 | — | ||||||||||||||||||
Secured by residential properties | 454 | 1,187 | — | 1,641 | 495,472 | 1,810 | 498,923 | — | ||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 175 | — | — | 175 | 64,871 | — | 65,046 | — | ||||||||||||||||||
Commercial construction loans and land development | 4,319 | — | 575 | 4,894 | 334,525 | 9,178 | 348,597 | — | ||||||||||||||||||
Consumer | 414 | 37 | — | 451 | 50,558 | 2,138 | 53,147 | — | ||||||||||||||||||
$ | 11,537 | $ | 2,191 | $ | 8,597 | $ | 22,325 | $ | 3,849,242 | $ | 48,909 | $ | 3,920,476 | $ | — | |||||||||||
Accruing Loans | ||||||||||||||||||||||||||
(Non-PCI) | ||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | |||||||||||||||||||
December 31, 2013 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | ||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 2,171 | $ | 277 | $ | 1,354 | $ | 3,802 | $ | 1,492,793 | $ | 35,372 | $ | 1,531,967 | $ | 272 | ||||||||||
Unsecured | 333 | 9 | 60 | 402 | 103,453 | 1,444 | 105,299 | 59 | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 192 | — | 132 | 324 | 1,044,437 | 36,255 | 1,081,016 | — | ||||||||||||||||||
Secured by residential properties | 1,045 | 36 | 203 | 1,284 | 371,958 | 2,995 | 376,237 | 203 | ||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 415 | — | — | 415 | 64,664 | — | 65,079 | — | ||||||||||||||||||
Commercial construction loans and land development | 41 | 881 | 112 | 1,034 | 278,621 | 19,817 | 299,472 | — | ||||||||||||||||||
Consumer | 201 | 60 | — | 261 | 50,806 | 4,509 | 55,576 | — | ||||||||||||||||||
$ | 4,398 | $ | 1,263 | $ | 1,861 | $ | 7,522 | $ | 3,406,732 | $ | 100,392 | $ | 3,514,646 | $ | 534 | |||||||||||
In addition to the non-covered loans shown in the table above, $19.2 million and $6.8 million of loans included in loans held for sale were 90 days past due and accruing interest at December 31, 2014 and 2013, respectively. These loans, which are guaranteed by U.S. government agencies and were previously sold into GNMA loan pools, are subject to repurchase by PrimeLending. | ||||||||||||||||||||||||||
Management tracks credit quality trends on a quarterly basis related to: (i) past due levels, (ii) non-performing asset levels, (iii) classified loan levels, (iv) net charge-offs, and (v) general economic conditions in the state and local markets. | ||||||||||||||||||||||||||
The Bank utilizes a risk grading matrix to assign a risk grade to each of the loans in its portfolio. A risk rating is assigned based on an assessment of the borrower’s management, collateral position, financial capacity, and economic factors. The general characteristics of the various risk grades are described below. | ||||||||||||||||||||||||||
Pass — “Pass” loans present a range of acceptable risks to the Bank. Loans that would be considered virtually risk-free are rated Pass — low risk. Loans that exhibit sound standards based on the grading factors above and present a reasonable risk to the Bank are rated Pass — normal risk. Loans that exhibit a minor weakness in one or more of the grading criteria but still present an acceptable risk to the Bank are rated Pass — high risk. | ||||||||||||||||||||||||||
Special Mention — “Special Mention” loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in a deterioration of the repayment prospects for the loans and weaken the Bank’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Bank to sufficient risk to require adverse classification. | ||||||||||||||||||||||||||
Substandard — “Substandard” loans are inadequately protected by the current sound worth and paying capacity of the obligor or the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Many substandard loans are considered impaired. | ||||||||||||||||||||||||||
PCI — “PCI” loans exhibited evidence of credit deterioration at acquisition that made it probable that all contractually required principal payments would not be collected. | ||||||||||||||||||||||||||
The following tables present the internal risk grades of non-covered loans, as previously described, in the portfolio by class (in thousands). | ||||||||||||||||||||||||||
December 31, 2014 | Pass | Special Mention | Substandard | PCI | Total | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 1,566,208 | $ | 1,105 | $ | 67,746 | $ | 13,374 | $ | 1,648,433 | ||||||||||||||||
Unsecured | 110,256 | — | 94 | 68 | 110,418 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 1,151,454 | 712 | 21,405 | 22,341 | 1,195,912 | |||||||||||||||||||||
Secured by residential properties | 492,549 | — | 4,564 | 1,810 | 498,923 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 65,046 | — | — | — | 65,046 | |||||||||||||||||||||
Commercial construction loans and land development | 338,078 | — | 1,341 | 9,178 | 348,597 | |||||||||||||||||||||
Consumer | 50,968 | — | 41 | 2,138 | 53,147 | |||||||||||||||||||||
$ | 3,774,559 | $ | 1,817 | $ | 95,191 | $ | 48,909 | $ | 3,920,476 | |||||||||||||||||
December 31, 2013 | Pass | Special Mention | Substandard | PCI | Total | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 1,450,734 | $ | 16,840 | $ | 29,021 | $ | 35,372 | $ | 1,531,967 | ||||||||||||||||
Unsecured | 103,674 | 12 | 169 | 1,444 | 105,299 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 1,038,930 | 4,436 | 1,395 | 36,255 | 1,081,016 | |||||||||||||||||||||
Secured by residential properties | 367,758 | — | 5,484 | 2,995 | 376,237 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 65,079 | — | — | — | 65,079 | |||||||||||||||||||||
Commercial construction loans and land development | 275,808 | 3,384 | 463 | 19,817 | 299,472 | |||||||||||||||||||||
Consumer | 51,052 | 1 | 14 | 4,509 | 55,576 | |||||||||||||||||||||
$ | 3,353,035 | $ | 24,673 | $ | 36,546 | $ | 100,392 | $ | 3,514,646 | |||||||||||||||||
Allowance for Loan Losses | ||||||||||||||||||||||||||
The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses inherent in the existing portfolio of loans. Management has responsibility for determining the level of the allowance for loan losses, subject to review by the Audit Committee of the Company’s Board of Directors and the Loan Review Committee of the Bank’s board of directors. | ||||||||||||||||||||||||||
It is management’s responsibility at the end of each quarter, or more frequently as deemed necessary, to analyze the level of the allowance for loan losses to ensure that it is appropriate for the estimated credit losses in the portfolio consistent with the Interagency Policy Statement on the Allowance for Loan and Lease Losses and the Receivables and Contingencies Topics of the ASC. Estimated credit losses are the probable current amount of loans that the Company will be unable to collect given facts and circumstances as of the evaluation date. When management determines that a loan or portion thereof is uncollectible, the loan, or portion thereof, is charged off against the allowance for loan losses, or for acquired loans accounted for in pools, charged against the pool discount. Recoveries on charge-offs that occurred prior to the PlainsCapital Merger represent contractual cash flows not expected to be collected and are recorded as accretion income. Recoveries on loans charged-off subsequent to the PlainsCapital Merger are credited to the allowance for loan loss, except for recoveries on loans accounted for in pools, which are credited to the pool discount. The Bank’s loan portfolio is designated into two populations: acquired loans and originated loans. The allowance for loan losses is calculated separately for acquired and originated loans. | ||||||||||||||||||||||||||
Originated Loans | ||||||||||||||||||||||||||
The Company has developed a methodology that seeks to determine an allowance within the scope of the Receivables and Contingencies Topics of the ASC. Each of the loans that has been determined to be impaired is within the scope of the Receivables Topic. Impaired loans that are equal to or greater than $0.5 million are individually evaluated using one of three impairment measurement methods as of the evaluation date: (1) the present value of expected future discounted cash flows on the loan, (2) the loan’s observable market price, or (3) the fair value of the collateral if the loan is collateral dependent. Specific reserves are provided in the estimate of the allowance based on the measurement of impairment under these three methods, except for collateral dependent loans, which require the fair value method. All non-impaired loans are within the scope of the Contingencies Topic. Estimates of loss for the Contingencies Topic are calculated based on historical loss, adjusted for qualitative or environmental factors. The Bank uses a rolling three year average net loss rate to calculate historical loss factors. The analysis is conducted by call report category, and further disaggregates commercial and industrial loans by collateral type. The analysis considers charge-offs and recoveries in determining the loss rate; therefore net charge-off experience is used. The historical loss calculation for the quarter is calculated by dividing the current quarter net charge-offs for each loan category by the quarter ended loan category balance. The Bank utilizes a weighted average loss rate to better represent recent trends. The Bank weights the most recent four quarter average at 120% versus the oldest four quarters at 80%. | ||||||||||||||||||||||||||
While historical loss experience provides a reasonable starting point for the analysis, historical losses are not the sole basis upon which the Company determines the appropriate level for the allowance for loan losses. Management considers recent qualitative or environmental factors that are likely to cause estimated credit losses associated with the existing portfolio to differ from historical loss experience, including but not limited to: | ||||||||||||||||||||||||||
· | changes in the volume and severity of past due, nonaccrual and classified loans; | |||||||||||||||||||||||||
· | changes in the nature, volume and terms of loans in the portfolio; | |||||||||||||||||||||||||
· | changes in lending policies and procedures; | |||||||||||||||||||||||||
· | changes in economic and business conditions and developments that affect the collectability of the portfolio; | |||||||||||||||||||||||||
· | changes in lending management and staff; | |||||||||||||||||||||||||
· | changes in the loan review system and the degree of oversight by the Bank’s board of directors; and | |||||||||||||||||||||||||
· | any concentrations of credit and changes in the level of such concentrations. | |||||||||||||||||||||||||
Changes in the volume and severity of past due, nonaccrual and classified loans, as well as changes in the nature, volume and terms of loans in the portfolio are key indicators of changes that could indicate a necessary adjustment to the historical loss factors. The magnitude of the impact of these factors on the qualitative assessment of the allowance for loan loss changes from quarter to quarter. | ||||||||||||||||||||||||||
The loan review program is designed to identify and monitor problem loans by maintaining a credit grading process, requiring that timely and appropriate changes be made to reviewed loans and coordinating the delivery of the information necessary to assess the appropriateness of the allowance for loan losses. Loans are evaluated for impaired status when: (i) payments on the loan are delayed, typically by 90 days or more (unless the loan is both well secured and in the process of collection), (ii) the loan becomes classified, (iii) the loan is being reviewed in the normal course of the loan review scope, or (iv) the loan is identified by the servicing officer as a problem. | ||||||||||||||||||||||||||
Homogeneous loans, such as consumer installment loans, residential mortgage loans and home equity loans, are not individually reviewed and are generally risk graded at the same levels. The risk grade and reserves are established for each homogeneous pool of loans based on the expected net charge-offs from current trends in delinquencies, losses or historical experience and general economic conditions. At December 31, 2014 and 2013, there were no material delinquencies in these types of loans. | ||||||||||||||||||||||||||
Acquired Loans | ||||||||||||||||||||||||||
Loans acquired in a business combination are recorded at their estimated fair value on their purchase date and with no carryover of the related allowance for loan losses. Loans without evidence of credit impairment at acquisition are subsequently evaluated for any required allowance at each reporting date. An allowance for loan losses is calculated using a methodology similar to that described above for originated loans. The allowance as determined for each loan collateral type is compared to the remaining fair value discount for that loan collateral type. If greater, the excess is recognized as an addition to the allowance through a provision for loan losses. If less than the discount, no additional allowance is recorded. Charge-offs and losses first reduce any remaining fair value discount for the loan and once the discount is depleted, losses are applied against the allowance established for that loan. | ||||||||||||||||||||||||||
PCI loans acquired in the PlainsCapital Merger are accounted for on an individual loan basis, while PCI loans acquired in the FNB Transaction are accounted for both in pools and at the individual loan level. Cash flows expected to be collected are recast quarterly for each loan or pool. These evaluations require the continued use and updating of key assumptions and estimates such as default rates, loss severity given default and prepayment speed assumptions, similar to those used for the initial fair value estimate. Management judgment must be applied in developing these assumptions. If expected cash flows for a loan or pool decreases, an increase in the allowance for loan losses is made through a charge to the provision for loan losses. If expected cash flows for a loan or pool increase, any previously established allowance for loan losses is reversed and any remaining difference increases the accretable yield which will be taken into income over the remaining life of the loan. | ||||||||||||||||||||||||||
The allowance for both originated and acquired loans is subject to regulatory examinations and determinations as to appropriateness, which may take into account such factors as the methodology used to calculate the allowance and the size of the allowance. | ||||||||||||||||||||||||||
Changes in the allowance for non-covered loan losses, distributed by portfolio segment, are shown below (in thousands). | ||||||||||||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
Year Ended December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Balance, beginning of year | $ | 16,865 | $ | 8,331 | $ | 7,957 | $ | 88 | $ | 33,241 | ||||||||||||||||
Provision charged to operations | 6,116 | 2,696 | (1,692 | ) | 627 | 7,747 | ||||||||||||||||||||
Loans charged off | (6,926 | ) | (114 | ) | — | (359 | ) | (7,399 | ) | |||||||||||||||||
Recoveries on charged off loans | 2,944 | 218 | 185 | 105 | 3,452 | |||||||||||||||||||||
Balance, end of year | $ | 18,999 | $ | 11,131 | $ | 6,450 | $ | 461 | $ | 37,041 | ||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
Year Ended December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Balance, beginning of year | $ | 1,845 | $ | 977 | $ | 582 | $ | 5 | $ | 3,409 | ||||||||||||||||
Provision charged to operations | 20,940 | 7,281 | 7,634 | 238 | 36,093 | |||||||||||||||||||||
Loans charged off | (9,359 | ) | (209 | ) | (524 | ) | (216 | ) | (10,308 | ) | ||||||||||||||||
Recoveries on charged off loans | 3,439 | 282 | 265 | 61 | 4,047 | |||||||||||||||||||||
Balance, end of year | $ | 16,865 | $ | 8,331 | $ | 7,957 | $ | 88 | $ | 33,241 | ||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
Month Ended December 31, 2012 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Balance, beginning of period | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Provision charged to operations | 2,236 | 977 | 582 | 5 | 3,800 | |||||||||||||||||||||
Loans charged off | (391 | ) | — | — | — | (391 | ) | |||||||||||||||||||
Recoveries on charged off loans | — | — | — | — | — | |||||||||||||||||||||
Balance, end of period | $ | 1,845 | $ | 977 | $ | 582 | $ | 5 | $ | 3,409 | ||||||||||||||||
The non-covered loan portfolio was distributed by portfolio segment and impairment methodology as shown below (in thousands). | ||||||||||||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 11,842 | $ | 1,420 | $ | 703 | $ | — | $ | 13,965 | ||||||||||||||||
Loans collectively evaluated for impairment | 1,733,567 | 1,669,264 | 403,762 | 51,009 | 3,857,602 | |||||||||||||||||||||
PCI Loans | 13,442 | 24,151 | 9,178 | 2,138 | 48,909 | |||||||||||||||||||||
$ | 1,758,851 | $ | 1,694,835 | $ | 413,643 | $ | 53,147 | $ | 3,920,476 | |||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 2,273 | $ | 373 | $ | 112 | $ | — | $ | 2,758 | ||||||||||||||||
Loans collectively evaluated for impairment | 1,598,177 | 1,417,630 | 344,622 | 51,067 | 3,411,496 | |||||||||||||||||||||
PCI Loans | 36,816 | 39,250 | 19,817 | 4,509 | 100,392 | |||||||||||||||||||||
$ | 1,637,266 | $ | 1,457,253 | $ | 364,551 | $ | 55,576 | $ | 3,514,646 | |||||||||||||||||
The allowance for non-covered loan losses was distributed by portfolio segment and impairment methodology as shown below (in thousands). | ||||||||||||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 421 | $ | — | $ | — | $ | — | $ | 421 | ||||||||||||||||
Loans collectively evaluated for impairment | 15,658 | 9,168 | 6,296 | 179 | 31,301 | |||||||||||||||||||||
PCI Loans | 2,920 | 1,963 | 154 | 282 | 5,319 | |||||||||||||||||||||
$ | 18,999 | $ | 11,131 | $ | 6,450 | $ | 461 | $ | 37,041 | |||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 421 | $ | — | $ | — | $ | — | $ | 421 | ||||||||||||||||
Loans collectively evaluated for impairment | 13,724 | 7,953 | 7,918 | 88 | 29,683 | |||||||||||||||||||||
PCI Loans | 2,720 | 378 | 39 | — | 3,137 | |||||||||||||||||||||
$ | 16,865 | $ | 8,331 | $ | 7,957 | $ | 88 | $ | 33,241 | |||||||||||||||||
Covered_Assets_and_Indemnifica
Covered Assets and Indemnification Asset | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Covered Assets and Indemnification Asset | |||||||||||||||||||||||||||
Covered Assets and Indemnification Asset. | 6. Covered Assets and Indemnification Asset | ||||||||||||||||||||||||||
As discussed in Note 2 to the consolidated financial statements, the Bank assumed substantially all of the liabilities, including all of the deposits, and acquired substantially all of the assets of FNB in an FDIC-assisted transaction on September 13, 2013. Pursuant to the loss-share agreements, the FDIC has agreed to reimburse the Bank the following amounts with respect to the covered assets: (i) 80% of losses on the first $240.4 million of losses incurred; (ii) 0% of losses in excess of $240.4 million up to and including $365.7 million of losses incurred; and (iii) 80% of losses in excess of $365.7 million of losses incurred. The Bank has also agreed to reimburse the FDIC for any subsequent recoveries. The loss-share agreements for commercial and single family residential loans are in effect for 5 years and 10 years, respectively, from the Bank Closing Date, and the loss recovery provisions to the FDIC are in effect for 8 years and 10 years, respectively, from the Bank Closing Date. The asset arising from the loss-share agreements, referred to as the “FDIC Indemnification Asset,” is measured separately from the covered loan portfolio because the agreements are not contractually embedded in the covered loans and are not transferable should the Bank choose to dispose of the covered loans. | |||||||||||||||||||||||||||
In accordance with the loss-share agreements, the Bank may be required to make a “true-up” payment to the FDIC approximately ten years following the Bank Closing Date if the FDIC’s initial estimate of losses on covered assets is greater than the actual realized losses. The “true-up” payment is calculated using a defined formula set forth in the P&A Agreement. | |||||||||||||||||||||||||||
Covered Loans and Allowance for Covered Loan Losses | |||||||||||||||||||||||||||
Loans acquired in the FNB Transaction that are subject to a loss-share agreement are referred to as “covered loans” and reported separately in the consolidated balance sheets. Covered loans are reported exclusive of the cash flow reimbursements that may be received from the FDIC. | |||||||||||||||||||||||||||
The Bank’s portfolio of acquired covered loans had a fair value of $1.1 billion as of the Bank Closing Date, with no carryover of any allowance for loan losses. Acquired covered loans were preliminarily segregated between those considered to be PCI loans and those without credit impairment at acquisition. | |||||||||||||||||||||||||||
In connection with the FNB Transaction, the Bank acquired loans both with and without evidence of credit quality deterioration since origination. The Company’s accounting policies for acquired covered loans, including covered PCI loans, are consistent with that of acquired non-covered loans, as described in Note 5 to the consolidated financial statements. The Company has established under its PCI accounting policy a framework to aggregate certain acquired covered loans into various loan pools based on a minimum of two layers of common risk characteristics for the purpose of determining their respective fair values as of their acquisition dates, and for applying the subsequent recognition and measurement provisions for income accretion and impairment testing. | |||||||||||||||||||||||||||
The following table presents the carrying value of the covered loans summarized by portfolio segment (in thousands). | |||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Commercial and industrial | $ | 30,780 | $ | 66,943 | |||||||||||||||||||||||
Real estate | 552,850 | 787,982 | |||||||||||||||||||||||||
Construction and land development | 59,010 | 151,444 | |||||||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||||||
Total covered loans | 642,640 | 1,006,369 | |||||||||||||||||||||||||
Allowance for covered loans | (4,611 | ) | (1,061 | ) | |||||||||||||||||||||||
Total covered loans, net of allowance | $ | 638,029 | $ | 1,005,308 | |||||||||||||||||||||||
The following table presents the carrying value and the outstanding contractual balance of the covered PCI loans (in thousands). | |||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Carrying amount | $ | 435,388 | $ | 729,156 | |||||||||||||||||||||||
Outstanding balance | 685,393 | 1,022,514 | |||||||||||||||||||||||||
Changes in the accretable yield for the covered PCI loans were as follows (in thousands). | |||||||||||||||||||||||||||
Period from | |||||||||||||||||||||||||||
Year Ended | September 14, 2013 | ||||||||||||||||||||||||||
December 31, | through December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Balance, beginning of period | $ | 156,548 | $ | — | |||||||||||||||||||||||
Additions | — | 167,974 | |||||||||||||||||||||||||
Reclassifications from (to) nonaccretable difference, net (1) | 105,470 | 3,492 | |||||||||||||||||||||||||
Transfer of loans to covered OREO (2) | 7,703 | 4,407 | |||||||||||||||||||||||||
Accretion | (76,228 | ) | (19,325 | ) | |||||||||||||||||||||||
Balance, end of period | $ | 193,493 | $ | 156,548 | |||||||||||||||||||||||
(1) Reclassifications from nonaccretable difference are primarily due to net increases in expected cash flows in the quarterly recasts. Reclassifications to nonaccretable difference occur when accruing loans are moved to nonaccrual and expected cash flows are no longer predictable and the accretable yield is eliminated. | |||||||||||||||||||||||||||
(2) Transfer of loans to covered OREO is the difference between the value removed from the pool and the expected cash flows for the loan. | |||||||||||||||||||||||||||
The remaining nonaccretable difference for covered PCI loans was $382.5 million and $517.9 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||||||||||||
Covered impaired loans include non-accrual loans, TDRs, PCI loans and partially charged-off loans. Substantially all covered impaired loans are PCI loans. The amounts shown in following tables include Pooled Loans, as well as loans accounted for on an individual basis. For Pooled Loans, the recorded investment with allowance and the related allowance consider impairment measured at the pool level. | |||||||||||||||||||||||||||
Covered impaired loans are summarized by class in the following tables (in thousands). | |||||||||||||||||||||||||||
Unpaid | Recorded | Recorded | Total | ||||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | |||||||||||||||||||||||
December 31, 2014 | Principal Balance | No Allowance | Allowance | Investment | Allowance | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 26,447 | $ | 7,436 | $ | 6,636 | $ | 14,072 | $ | 265 | |||||||||||||||||
Unsecured | 14,111 | 2,107 | 4,697 | 6,804 | 882 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 387,302 | 193,111 | 35,142 | 228,253 | 2,381 | ||||||||||||||||||||||
Secured by residential properties | 235,505 | 129,571 | 12,918 | 142,489 | 937 | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 2,749 | 1,018 | 354 | 1,372 | 69 | ||||||||||||||||||||||
Commercial construction loans and land development | 94,949 | 45,646 | — | 45,646 | — | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 761,063 | $ | 378,889 | $ | 59,747 | $ | 438,636 | $ | 4,534 | ||||||||||||||||||
Unpaid | Recorded | Recorded | Total | ||||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | |||||||||||||||||||||||
December 31, 2013 | Principal Balance | No Allowance | Allowance | Investment | Allowance | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 43,957 | $ | 28,611 | $ | — | $ | 28,611 | $ | — | |||||||||||||||||
Unsecured | 16,280 | 9,008 | 882 | 9,890 | 882 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 528,825 | 365,346 | — | 365,346 | — | ||||||||||||||||||||||
Secured by residential properties | 289,094 | 199,581 | — | 199,581 | — | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 8,920 | 5,280 | — | 5,280 | — | ||||||||||||||||||||||
Commercial construction loans and land development | 183,117 | 121,363 | — | 121,363 | — | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 1,070,193 | $ | 729,189 | $ | 882 | $ | 730,071 | $ | 882 | ||||||||||||||||||
Average investment in covered impaired loans is summarized by class in the following table (in thousands). | |||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 21,296 | $ | 14,260 | |||||||||||||||||||||||
Unsecured | 8,347 | 4,945 | |||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 296,780 | 182,653 | |||||||||||||||||||||||||
Secured by residential properties | 170,931 | 99,686 | |||||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 3,039 | 2,353 | |||||||||||||||||||||||||
Commercial construction loans and land development | 83,505 | 60,682 | |||||||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||||||
$ | 583,898 | $ | 364,579 | ||||||||||||||||||||||||
Covered non-accrual loans, excluding those classified as held for sale, are summarized by class in the following table (in thousands). | |||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 442 | $ | 91 | |||||||||||||||||||||||
Unsecured | 883 | 882 | |||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 30,823 | 40 | |||||||||||||||||||||||||
Secured by residential properties | 1,046 | 209 | |||||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 1,018 | 575 | |||||||||||||||||||||||||
Commercial construction loans and land development | 11 | — | |||||||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||||||
$ | 34,223 | $ | 1,797 | ||||||||||||||||||||||||
At December 31, 2014, covered non-accrual loans included covered PCI loans of $31.2 million for which discount accretion has been suspended because the extent and timing of cash flows from these covered PCI loans can no longer be reasonably estimated. | |||||||||||||||||||||||||||
Interest income recorded on covered accruing impaired loans and on covered non-accrual loans during 2014 and 2013 was nominal. Except as noted above, covered PCI loans are considered to be performing due to the application of the accretion method. | |||||||||||||||||||||||||||
The Bank classifies loan modifications of covered loans as TDRs in a manner consistent with that of non-covered loans as discussed in Note 5 to the consolidated financial statements. The outstanding balance of TDRs granted in the twelve months ended December 31, 2014 is shown in the following table (in thousands). Pooled Loans are not in the scope of the disclosure requirements for TDRs. There were no TDRs granted during the year ended December 31, 2013. At December 31, 2014, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs. | |||||||||||||||||||||||||||
Recorded Investment in Loans Modified by | |||||||||||||||||||||||||||
Interest Rate | Payment Term | Total | |||||||||||||||||||||||||
Year Ended December 31, 2014 | A/B Note | Adjustment | Extension | Modification | |||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Unsecured | — | — | — | — | |||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | — | — | — | — | |||||||||||||||||||||||
Secured by residential properties | 369 | 326 | — | 695 | |||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | |||||||||||||||||||||||
Commercial construction loans and land development | — | — | — | — | |||||||||||||||||||||||
Consumer | — | — | — | — | |||||||||||||||||||||||
$ | 369 | $ | 326 | $ | — | $ | 695 | ||||||||||||||||||||
An analysis of the aging of the Bank’s covered loan portfolio is shown in the following tables (in thousands). | |||||||||||||||||||||||||||
Accruing Loans | |||||||||||||||||||||||||||
(Non-PCI) | |||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | ||||||||||||||||||||
December 31, 2014 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | |||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | 454 | $ | 454 | $ | 8,681 | $ | 13,630 | $ | 22,765 | $ | 11 | |||||||||||
Unsecured | 10 | — | — | 10 | 1,200 | 6,805 | 8,015 | — | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 876 | — | 105 | 981 | 41,576 | 227,772 | 270,329 | — | |||||||||||||||||||
Secured by residential properties | 3,089 | 493 | 405 | 3,987 | 137,342 | 141,192 | 282,521 | 48 | |||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | — | — | 896 | 896 | 390 | 354 | 1,640 | — | |||||||||||||||||||
Commercial construction loans and land development | 39 | 25 | 8 | 72 | 11,663 | 45,635 | 57,370 | 8 | |||||||||||||||||||
Consumer | — | — | — | — | — | — | — | — | |||||||||||||||||||
$ | 4,014 | $ | 518 | $ | 1,868 | $ | 6,400 | $ | 200,852 | $ | 435,388 | $ | 642,640 | $ | 67 | ||||||||||||
Accruing Loans | |||||||||||||||||||||||||||
(Non-PCI) | |||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | ||||||||||||||||||||
December 31, 2013 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | |||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 3,904 | $ | 10 | $ | 81 | $ | 3,995 | $ | 20,918 | $ | 28,520 | $ | 53,433 | $ | — | |||||||||||
Unsecured | 10 | 259 | — | 269 | 3,351 | 9,890 | 13,510 | — | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 999 | — | 40 | 1,039 | 63,780 | 365,306 | 430,125 | — | |||||||||||||||||||
Secured by residential properties | 1,679 | 678 | 209 | 2,566 | 155,919 | 199,372 | 357,857 | — | |||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 1,861 | — | 576 | 2,437 | 5,026 | 4,705 | 12,168 | — | |||||||||||||||||||
Commercial construction loans and land development | 244 | 20 | — | 264 | 17,649 | 121,363 | 139,276 | — | |||||||||||||||||||
Consumer | — | — | — | — | — | — | — | — | |||||||||||||||||||
$ | 8,697 | $ | 967 | $ | 906 | $ | 10,570 | $ | 266,643 | $ | 729,156 | $ | 1,006,369 | $ | — | ||||||||||||
The Bank assigns a risk grade to each of its covered loans in a manner consistent with the existing loan review program and risk grading matrix used for non-covered loans, as described in Note 5 to the consolidated financial statements. The following tables present the internal risk grades of covered loans in the portfolio by class (in thousands). | |||||||||||||||||||||||||||
December 31, 2014 | Pass | Special Mention | Substandard | PCI | Total | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 7,712 | $ | — | $ | 1,423 | $ | 13,630 | $ | 22,765 | |||||||||||||||||
Unsecured | 1,210 | — | — | 6,805 | 8,015 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 35,973 | — | 6,584 | 227,772 | 270,329 | ||||||||||||||||||||||
Secured by residential properties | 133,756 | — | 7,573 | 141,192 | 282,521 | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 268 | — | 1,018 | 354 | 1,640 | ||||||||||||||||||||||
Commercial construction loans and land development | 9,501 | — | 2,234 | 45,635 | 57,370 | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 188,420 | $ | — | $ | 18,832 | $ | 435,388 | $ | 642,640 | ||||||||||||||||||
December 31, 2013 | Pass | Special Mention | Substandard | PCI | Total | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 24,152 | $ | — | $ | 761 | $ | 28,520 | $ | 53,433 | |||||||||||||||||
Unsecured | 3,040 | — | 580 | 9,890 | 13,510 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 59,343 | 3,310 | 2,166 | 365,306 | 430,125 | ||||||||||||||||||||||
Secured by residential properties | 155,439 | — | 3,046 | 199,372 | 357,857 | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 6,087 | — | 1,376 | 4,705 | 12,168 | ||||||||||||||||||||||
Commercial construction loans and land development | 17,806 | — | 107 | 121,363 | 139,276 | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 265,867 | $ | 3,310 | $ | 8,036 | $ | 729,156 | $ | 1,006,369 | ||||||||||||||||||
The Bank’s impairment methodology for the covered loans is consistent with that of non-covered loans as discussed in Note 5 to the consolidated financial statements. To the extent there is experienced or projected credit deterioration on the acquired covered loan pools subsequent to amounts estimated at the previous quarterly recast date and expected cash flows for a loan or pool decreases, an increase in the allowance for loan losses is made through a charge to the provision for loan losses. If expected cash flows for a loan or pool increase, any previously established allowance for loan losses is reversed and any remaining difference increases the accretable yield which will be taken into income over the remaining life of the loan. | |||||||||||||||||||||||||||
Additionally, provision for credit losses will be recorded on advances on covered loans subsequent to the acquisition date in a manner consistent with the allowance for non-covered loan losses. | |||||||||||||||||||||||||||
Changes in the allowance for covered loan losses, distributed by portfolio segment, are shown below (in thousands). The year ended December 31, 2013 below refers to the period from September 14, 2013 through December 31, 2013. | |||||||||||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
Year Ended December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Balance, beginning of year | $ | 1,053 | $ | 8 | $ | — | $ | — | $ | 1,061 | |||||||||||||||||
Provision charged to operations | 230 | 8,725 | 231 | — | 9,186 | ||||||||||||||||||||||
Loans charged off | (90 | ) | (5,399 | ) | (147 | ) | — | (5,636 | ) | ||||||||||||||||||
Recoveries on charged off loans | — | — | — | — | — | ||||||||||||||||||||||
Balance, end of year | $ | 1,193 | $ | 3,334 | $ | 84 | $ | — | $ | 4,611 | |||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Balance, beginning of year | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Provision charged to operations | 1,057 | 8 | — | — | 1,065 | ||||||||||||||||||||||
Loans charged off | (4 | ) | — | — | — | (4 | ) | ||||||||||||||||||||
Recoveries on charged off loans | — | — | — | — | — | ||||||||||||||||||||||
Balance, end of year | $ | 1,053 | $ | 8 | $ | — | $ | — | $ | 1,061 | |||||||||||||||||
The covered loan portfolio was distributed by portfolio segment and impairment methodology as shown below (in thousands). | |||||||||||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | 801 | $ | — | $ | 801 | |||||||||||||||||
Loans collectively evaluated for impairment | 10,345 | 183,886 | 12,220 | — | 206,451 | ||||||||||||||||||||||
PCI Loans | 20,435 | 368,964 | 45,989 | — | 435,388 | ||||||||||||||||||||||
$ | 30,780 | $ | 552,850 | $ | 59,010 | $ | — | $ | 642,640 | ||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Loans collectively evaluated for impairment | 28,533 | 223,304 | 25,376 | — | 277,213 | ||||||||||||||||||||||
PCI Loans | 38,410 | 564,678 | 126,068 | — | 729,156 | ||||||||||||||||||||||
$ | 66,943 | $ | 787,982 | $ | 151,444 | $ | — | $ | 1,006,369 | ||||||||||||||||||
The allowance for covered loan losses was distributed by portfolio segment and impairment methodology as shown below (in thousands). | |||||||||||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Loans collectively evaluated for impairment | 46 | 16 | 15 | — | 77 | ||||||||||||||||||||||
PCI Loans | 1,147 | 3,318 | 69 | — | 4,534 | ||||||||||||||||||||||
$ | 1,193 | $ | 3,334 | $ | 84 | $ | — | $ | 4,611 | ||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Loans collectively evaluated for impairment | 171 | 8 | — | — | 179 | ||||||||||||||||||||||
PCI Loans | 882 | — | — | — | 882 | ||||||||||||||||||||||
$ | 1,053 | $ | 8 | $ | — | $ | — | $ | 1,061 | ||||||||||||||||||
Covered Other Real Estate Owned | |||||||||||||||||||||||||||
A summary of the activity in covered OREO is as follows (in thousands). | |||||||||||||||||||||||||||
Period from | |||||||||||||||||||||||||||
Year Ended | September 14, 2013 | ||||||||||||||||||||||||||
December 31, | through December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Balance, beginning of period | $ | 142,833 | $ | — | |||||||||||||||||||||||
Fair value of assets acquired as of Bank Closing Date | — | 135,187 | |||||||||||||||||||||||||
Additions to covered OREO | 64,934 | 19,185 | |||||||||||||||||||||||||
Dispositions of covered OREO | (51,150 | ) | (11,539 | ) | |||||||||||||||||||||||
Valuation adjustments in the period | (19,672 | ) | — | ||||||||||||||||||||||||
Balance, end of period | $ | 136,945 | $ | 142,833 | |||||||||||||||||||||||
During 2014, the Bank wrote down certain covered OREO assets to fair value to reflect new appraisals on certain OREO acquired in the FNB Transaction and OREO acquired from the foreclosure on certain loans acquired in the FNB Transaction. Although the Bank recorded a fair value discount on the acquired assets upon acquisition, in some cases additional downward valuations were required. | |||||||||||||||||||||||||||
These additional downward valuation adjustments reflect changes to the assumptions regarding the fair value of the OREO, including in some cases the intended use of the OREO due to the availability of more information as well as the passage of time. The process of determining fair value is subjective in nature and requires the use of significant estimates and assumptions. Although the Bank makes market-based assumptions when valuing acquired assets, new information may come to light that causes estimates to increase or decrease. When the Bank determines, based on subsequent information, that its estimates require adjustment, the Bank records the adjustment. The accounting for such adjustments requires that the decreases to fair value be recorded at the time such new information is received, while increases to fair value are recorded when the asset is subsequently sold. All of the impairments recorded during 2014 related to covered assets subject to the loss-share agreements with the FDIC. | |||||||||||||||||||||||||||
A summary of the activity in the FDIC Indemnification Asset is as follows (in thousands). | |||||||||||||||||||||||||||
Period from | |||||||||||||||||||||||||||
Year Ended | September 14, 2013 | ||||||||||||||||||||||||||
December 31, | through December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Balance, beginning of period | $ | 188,291 | $ | — | |||||||||||||||||||||||
Fair value of assets acquired as of Bank Closing Date | — | 185,680 | |||||||||||||||||||||||||
FDIC Indemnification Asset accretion (amortization) | 3,445 | 1,699 | |||||||||||||||||||||||||
Transfers to due from FDIC and other | (61,299 | ) | 912 | ||||||||||||||||||||||||
Balance, end of period | $ | 130,437 | $ | 188,291 | |||||||||||||||||||||||
As of December 31, 2014, the Bank had billed $60.4 million to the FDIC, which represented covered losses and expenses through September 30, 2014, of which $38.5 million had been collected as of December 31, 2014. The remaining $21.9 million was received during January 2015. | |||||||||||||||||||||||||||
Cash_and_Due_from_Banks
Cash and Due from Banks | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and Due from Banks | ||||||||
Cash and Due from Banks | 7. Cash and Due from Banks | |||||||
Cash and due from banks consisted of the following (in thousands). | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Cash on hand | $ | 47,947 | $ | 59,451 | ||||
Clearings and collection items | 76,381 | 64,193 | ||||||
Deposits at Federal Reserve Bank | 425,704 | 364,709 | ||||||
Deposits at Federal Home Loan Bank | 1,500 | 1,500 | ||||||
Deposits in FDIC-insured institutions | 230,941 | 223,246 | ||||||
$ | 782,473 | $ | 713,099 | |||||
The amounts above include interest-bearing deposits of $628.3 million and $565.3 million at December 31, 2014 and 2013, respectively. Cash on hand and deposits at the Federal Reserve Bank satisfy regulatory reserve requirements at December 31, 2014. | ||||||||
Premises_and_Equipment
Premises and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Premises and Equipment | ||||||||
Premises and Equipment | 8. Premises and Equipment | |||||||
The components of premises and equipment are summarized as follows (in thousands). | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Land and premises | $ | 122,560 | $ | 121,211 | ||||
Furniture and equipment | 142,255 | 107,644 | ||||||
264,815 | 228,855 | |||||||
Less accumulated depreciation and amortization | (57,824 | ) | (28,149 | ) | ||||
$ | 206,991 | $ | 200,706 | |||||
The amounts shown above include assets recorded under capital leases of $6.6 million and $7.1 million, net of accumulated amortization of $1.2 million and $0.6 million at December 31, 2014 and 2013, respectively. | ||||||||
Occupancy expense was reduced by rental income of $2.4 million, $1.8 million and $0.1 million during 2014, 2013 and 2012, respectively. Depreciation and amortization expense on premises and equipment, which includes amortization of capital leases, amounted to $30.7 million, $24.8 million and $1.9 million in 2014, 2013 and 2012, respectively. | ||||||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||
Goodwill and Other Intangible Assets | 9. Goodwill and Other Intangible Assets | ||||||||||||
At both December 31, 2014 and 2013, the carrying amount of goodwill of $251.8 million was comprised of $24.0 million recorded in connection with the acquisition of NLC, and as discussed in Note 2 to the consolidated financial statements, $227.8 million recorded in connection with the PlainsCapital Merger. | |||||||||||||
Other intangible assets of $59.8 million and $70.9 million at December 31, 2014 and 2013, respectively, include an indefinite lived intangible asset with an estimated fair value of $3.0 million related to state licenses acquired as a part of the NLC acquisition in January 2007. | |||||||||||||
The Company tests goodwill and other intangible assets having an indefinite useful life for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment. Goodwill impairment testing is performed at the reporting unit level, which is one level below an operating segment. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill. The Company performs required annual impairment tests of its goodwill and other intangible assets as of October 1st for each of its reporting units. | |||||||||||||
The goodwill impairment analysis is a two-step test. The first step, used to identify potential impairment, involves comparing each reporting unit’s estimated fair value to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment. The Company has estimated fair values of reporting units based on both a market and income approach using historic, normalized actual and forecast results. | |||||||||||||
The second step involves calculating an implied fair value of goodwill for each reporting unit for which the first step indicated impairment. The implied fair value of goodwill is determined in a manner similar to the amount of goodwill calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit, as determined in the first step, over the aggregate estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted. | |||||||||||||
At October 1, 2014, the Company determined that the estimated fair value of each of its reporting units exceeded its carrying value and therefore the second step as described above was not performed. Based on this evaluation, the Company concluded that the goodwill and other identifiable intangible assets were fully realizable at December 31, 2014. | |||||||||||||
The Company’s evaluation includes multiple assumptions, including estimated discounted cash flows and other estimates that may change over time. If future discounted cash flows become less than those projected by the Company, future impairment charges may become necessary that could have a materially adverse impact on the Company’s results of operations and financial condition. As quoted market prices in active stock markets are relevant evidence of fair value, a significant decline in the Company’s common stock trading price may indicate an impairment of goodwill. | |||||||||||||
The carrying value of intangible assets subject to amortization was as follows (in thousands). | |||||||||||||
Estimated | Gross | Net | |||||||||||
Useful Life | Intangible | Accumulated | Intangible | ||||||||||
December 31, 2014 | (Years) | Assets | Amortization | Assets | |||||||||
Core deposits | 12-Jul | $ | 38,770 | $ | (12,104 | ) | $ | 26,666 | |||||
Trademarks and trade names | 20-Oct | 20,000 | (3,723 | ) | 16,277 | ||||||||
Noncompete agreements | 6-Apr | 11,650 | (4,794 | ) | 6,856 | ||||||||
Customer contracts and relationships | 12-Aug | 14,100 | (7,729 | ) | 6,371 | ||||||||
Agent relationships | 13 | 3,600 | (2,987 | ) | 613 | ||||||||
$ | 88,120 | $ | (31,337 | ) | $ | 56,783 | |||||||
Estimated | Gross | Net | |||||||||||
Useful Life | Intangible | Accumulated | Intangible | ||||||||||
December 31, 2013 | (Years) | Assets | Amortization | Assets | |||||||||
Core deposits | 12-Jul | $ | 38,770 | $ | (6,159 | ) | $ | 32,611 | |||||
Trademarks and trade names | 20-Oct | 20,000 | (2,589 | ) | 17,411 | ||||||||
Noncompete agreements | 6-Apr | 11,650 | (2,492 | ) | 9,158 | ||||||||
Customer contracts and relationships | 12-Aug | 14,100 | (6,210 | ) | 7,890 | ||||||||
Agent relationships | 13 | 3,600 | (2,749 | ) | 851 | ||||||||
$ | 88,120 | $ | (20,199 | ) | $ | 67,921 | |||||||
Amortization expense related to intangible assets during 2014, 2013 and 2012 was $11.1 million, $11.1 million and $2.0 million, respectively. | |||||||||||||
The estimated aggregate future amortization expense for intangible assets at December 31, 2014 is as follows (in thousands). | |||||||||||||
2015 | $ | 11,020 | |||||||||||
2016 | 10,182 | ||||||||||||
2017 | 9,254 | ||||||||||||
2018 | 7,429 | ||||||||||||
2019 | 6,489 | ||||||||||||
Thereafter | 12,409 | ||||||||||||
$ | 56,783 | ||||||||||||
Mortgage_Servicing_Rights
Mortgage Servicing Rights | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Mortgage Servicing Rights | |||||||||||
Mortgage Servicing Rights | 10. Mortgage Servicing Rights | ||||||||||
The following tables present the changes in fair value of the Company’s MSR and other information related to the serviced portfolio (dollars in thousands). | |||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Balance, beginning of period | $ | 20,149 | $ | 2,080 | $ | — | |||||
Additions | 35,056 | 13,886 | 2,204 | ||||||||
Sales | (11,387 | ) | — | — | |||||||
Changes in fair value: | |||||||||||
Due to changes in model inputs or assumptions (1) | (5,267 | ) | 4,782 | (51 | ) | ||||||
Due to customer payments | (2,396 | ) | (599 | ) | (73 | ) | |||||
Balance, end of period | $ | 36,155 | $ | 20,149 | $ | 2,080 | |||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Mortgage loans serviced for others | $ | 3,645,220 | $ | 1,965,883 | |||||||
MSR as a percentage of serviced mortgage loans | 0.99 | % | 1.02 | % | |||||||
(1) Primarily represents changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates and the refinement of other MSR model assumptions. | |||||||||||
The key assumptions used in measuring the fair value of the Company’s MSR were as follows. | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Weighted average constant prepayment rate | 12.17 | % | 9.72 | % | |||||||
Weighted average discount rate | 11.01 | % | 12.37 | % | |||||||
Weighted average life (in years) | 6.3 | 7.6 | |||||||||
A sensitivity analysis of the fair value of the Company’s MSR to certain key assumptions is presented in the following table (in thousands). | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Constant prepayment rate: | |||||||||||
Impact of 10% adverse change | $ | (1,648 | ) | $ | (601 | ) | |||||
Impact of 20% adverse change | (3,169 | ) | (1,170 | ) | |||||||
Discount rate: | |||||||||||
Impact of 100 basis point adverse change | (1,431 | ) | (631 | ) | |||||||
Impact of 200 basis point adverse change | (2,753 | ) | (1,236 | ) | |||||||
This sensitivity analysis presents the effect of hypothetical changes in key assumptions on the fair value of the MSR. The effect of such hypothetical change in assumptions generally cannot be extrapolated because the relationship of the change in one key assumption to the change in the fair value of the MSR is not linear. In addition, in the analysis, the impact of an adverse change in one key assumption is calculated independent of any impact on other assumptions. In reality, changes in one assumption may change another assumption. | |||||||||||
Contractually specified servicing fees, late fees and ancillary fees earned of $13.3 million, $3.2 million and $0.4 million during the years ended December 31, 2014 and 2013 and the month ended December 31, 2012, respectively, were included in other noninterest income within the consolidated statements of operations. | |||||||||||
Deposits
Deposits | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deposits | ||||||||
Deposits | 11. Deposits | |||||||
Deposits are summarized as follows (in thousands). | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Noninterest-bearing demand | $ | 2,076,385 | $ | 1,773,749 | ||||
Interest-bearing: | ||||||||
NOW accounts | 1,242,110 | 1,083,596 | ||||||
Money market | 861,851 | 878,578 | ||||||
Brokered - money market | 79,937 | 276,760 | ||||||
Demand | 136,886 | 47,636 | ||||||
Savings | 299,051 | 357,325 | ||||||
Time | 1,575,910 | 2,110,947 | ||||||
Brokered - time | 97,762 | 194,327 | ||||||
$ | 6,369,892 | $ | 6,722,918 | |||||
At December 31, 2014, the scheduled maturities of interest-bearing time deposits are as follows (in thousands). | ||||||||
2015 | $ | 1,066,373 | ||||||
2016 | 179,185 | |||||||
2017 | 380,913 | |||||||
2018 | 41,185 | |||||||
2019 and thereafter | 6,016 | |||||||
$ | 1,673,672 | |||||||
Shortterm_Borrowings
Short-term Borrowings | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Short-term Borrowings | |||||||||||
Short-term Borrowings | 12. Short-term Borrowings | ||||||||||
Short-term borrowings are summarized as follows (in thousands). | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Federal funds purchased | $ | 128,100 | $ | 137,225 | |||||||
Securities sold under agreements to repurchase | 136,396 | 107,462 | |||||||||
Federal Home Loan Bank notes | 375,000 | — | |||||||||
Short-term bank loans | 123,200 | 97,400 | |||||||||
$ | 762,696 | $ | 342,087 | ||||||||
Federal funds purchased and securities sold under agreements to repurchase generally mature daily, on demand, or on some other short-term basis. The Bank and FSC execute transactions to sell securities under agreements to repurchase with both customers and broker-dealers. Securities involved in these transactions are held by the Bank, FSC or the dealer. | |||||||||||
Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). | |||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Average balance during the period | $ | 319,806 | $ | 281,067 | $ | 277,470 | |||||
Average interest rate during the period | 0.17 | % | 0.19 | % | 0.25 | % | |||||
Maximum month-end balance during the period | 535,232 | 415,730 | 355,350 | ||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Average interest rate at end of period | 0.15 | % | 0.16 | % | |||||||
Securities underlying the agreements at end of period: | |||||||||||
Carrying value | $ | 166,734 | $ | 144,991 | |||||||
Estimated fair value | $ | 163,852 | $ | 138,719 | |||||||
FHLB notes mature over terms not exceeding 365 days and are collateralized by FHLB Dallas stock, nonspecified real estate loans and certain specific commercial real estate loans. At December 31, 2014, the Bank had available collateral of $1.4 billion, substantially all of which was blanket collateral. Other information regarding FHLB notes is shown in the following tables (dollars in thousands). | |||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Average balance during the period | $ | 261,550 | $ | 106,415 | $ | 301,613 | |||||
Average interest rate during the period | 0.18 | % | 0.13 | % | 0.14 | % | |||||
Maximum month-end balance during the period | 575,000 | 525,000 | 250,000 | ||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Average interest rate at end of period | 0.16 | % | — | ||||||||
FSC uses short-term bank loans periodically to finance securities owned, margin loans to customers and correspondents, and underwriting activities. Interest on the borrowings varies with the federal funds rate. The weighted average interest rate on the borrowings at December 31, 2014 and 2013 was 1.07% and 1.15%, respectively. | |||||||||||
Notes_Payable
Notes Payable | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Notes Payable | ||||||||
Notes Payable | 13. Notes Payable | |||||||
Notes payable consisted of the following (in thousands). | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
NLIC note payable due May 2033, three-month LIBOR plus 4.10% (4.35% at December 31, 2014) with interest payable quarterly | $ | 10,000 | $ | 10,000 | ||||
NLIC note payable due September 2033, three-month LIBOR plus 4.05% (4.30% at December 31, 2014) with interest payable quarterly | 10,000 | 10,000 | ||||||
ASIC note payable due April 2034, three-month LIBOR plus 4.05% (4.30% at December 31, 2014) with interest payable quarterly | 7,500 | 7,500 | ||||||
First Southwest nonrecourse notes, due January 2035 with interest payable quarterly | 4,184 | 6,827 | ||||||
Insurance company note payable due March 2035, three-month LIBOR plus 3.40% (3.65% at December 31, 2014) with interest payable quarterly | 20,000 | 20,000 | ||||||
Insurance company line of credit due December 31, 2015, 3.25% plus a calculated index rate (4.00% at December 31, 2014) with interest payable quarterly | 5,000 | 2,000 | ||||||
$ | 56,684 | $ | 56,327 | |||||
NLIC, ASIC and Insurance Company Notes Payable | ||||||||
The NLIC and ASIC notes payable to unaffiliated companies are each subordinated in right of payment to all policy claims and other indebtedness of NLIC and ASIC, respectively. Further, all payments of principal and interest require the prior approval of the Insurance Commissioner of the State of Texas and are only payable to the extent that the statutory surplus of NLIC exceeds $30 million and ASIC exceeds $15 million. | ||||||||
The NLIC, ASIC and Insurance Company loan agreements relating to the notes payable contain various covenants pertaining to limitations on additional debt, dividends, officer and director compensation, and minimum capital requirements. The Company was in compliance with the covenants at December 31, 2014. | ||||||||
NLC has entered into an indenture relating to the NLIC, ASIC and Insurance Company notes payable which provides that (i) if a person or group becomes the beneficial owner directly or indirectly of 50% or more of its equity securities and (ii) if NLC’s ratings are downgraded by a nationally recognized statistical rating organization (as defined in the Exchange Act), then each holder of the notes governed by such indenture has the right to require that NLC purchase such holder’s notes in whole or in part at a price equal to 100% of the outstanding principal amount. | ||||||||
First Southwest Nonrecourse Notes | ||||||||
In 2005, First Southwest participated in a monetization of future cash flows totaling $95.3 million from several tobacco companies owed to a law firm under a settlement agreement (“Fee Award”). In connection with the transaction, a special purpose entity that is consolidated with First Southwest issued $30.3 million of nonrecourse notes to finance the purchase of the Fee Award, to establish a reserve account and to fund issuance costs. Cash flows from the settlement are the sole source of payment for the notes. The notes carry an interest rate of 8.58% that can increase to 10.08% under certain credit conditions. The First Southwest nonrecourse notes were paid off in January 2015. | ||||||||
Insurance Company Line of Credit | ||||||||
The Company’s insurance subsidiary has a line of credit with a financial institution which allows for borrowings by NLC of up to $7.5 million and is collateralized by substantially all of NLC’s assets. The loan agreements relating to the line of credit contain various financial and other covenants which must be maintained until all indebtedness to the financial institution is repaid. The Company was in compliance with the covenants at December 31, 2014. | ||||||||
Principal Maturities | ||||||||
At December 31, 2014, notes payable outstanding of $56.7 million includes scheduled maturities of $5.0 million during 2015 and $51.7 million during 2033 and thereafter. | ||||||||
Senior Exchangeable Notes Due 2025 | ||||||||
In August 2005, HTH Operating Partnership LP, a wholly owned subsidiary of Hilltop (“OP”), entered into an Indenture under which OP issued $96.6 million aggregate principal amount of 7.5% Senior Exchangeable Notes due 2025, or the Notes, to qualified institutional buyers in a private transaction. On October 15, 2013, OP called for redemption all outstanding Notes on November 14, 2013 (the “Redemption Date”). The outstanding Notes at October 15, 2013 of $90.9 million, including $6.9 million aggregate principal amount held by the Company’s insurance company subsidiaries, were redeemed at a redemption price equal to the principal amount of the Notes, plus accrued and unpaid interest up to, but excluding, the Redemption Date. At any time prior to the Redemption Date, holders of the Notes could exchange the Notes for shares of Hilltop common stock at the rate of 73.94998 shares per $1,000 principal amount of the Notes (or approximately $13.52 per share). In lieu of delivery of Hilltop common stock upon the exercise by a holder of its exchange right, OP could elect to pay such holder of the Notes an amount in cash (or a combination of Hilltop common stock and cash) in respect of all or a portion of such holder’s Notes equal to the closing price of Hilltop’s common stock for the five consecutive trading days commencing on and including the third business day following the exercise of such exchange right. As of the closing of the redemption, the Notes held by third party investors were exchanged for 6,208,005 shares of Hilltop common stock and an aggregate cash payment of $11.1 million was made in exchange for the Notes held by the Company’s insurance company subsidiaries. | ||||||||
The Notes were senior unsecured obligations of OP and were exchangeable, at the option of the holders, into shares of Hilltop common stock at an initial exchange rate of 69.8812 shares per $1,000 principal amount of the Notes (equal to an initial exchange price of approximately $14.31 per share), subject to adjustment and, in the event of specified corporate transactions involving Hilltop or OP, an additional make-whole premium. Upon exchange, OP had the option to deliver, in lieu of shares of common stock, cash or a combination of cash and shares of common stock. The Notes were treated as a combined instrument at the date of issuance and not bifurcated to separately account for any embedded derivative instruments principally because, in accordance with ASC 815, Derivatives and Hedging, (i) the conversion feature is indexed to Hilltop’s common stock and would be classified in stockholders’ equity if it were a freestanding derivative and (ii) the put and call option features were clearly and closely related to the Notes at fixed conversion amounts. | ||||||||
According to the terms of the Notes, their initial exchange rate was adjustable for certain events, including the issuance to all holders of Hilltop common stock of rights entitling them to purchase Hilltop common stock at less than their current market price. Accordingly, as a result of a rights offering in January 2007, in which all holders of Hilltop common stock were offered the right to purchase shares at $8.00 per share, the initial exchange rate of the Notes was adjusted to 73.94998 shares per $1,000 principal amount of the Notes (equal to an exchange rate of $13.52 per share). | ||||||||
In November 2011, Hilltop’s insurance company subsidiaries purchased $6.9 million, par value, of the Notes in open market transactions at an average cost of 107.26% of par. | ||||||||
On October 15, 2013, Hilltop entered into a First Supplemental Indenture pursuant to which Hilltop guaranteed the obligations of OP under the Indenture. | ||||||||
Junior_Subordinated_Debentures
Junior Subordinated Debentures and Trust Preferred Securities | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Junior Subordinated Debentures and Trust Preferred Securities | |||||||
Junior Subordinated Debentures and Trust Preferred Securities | 14. Junior Subordinated Debentures and Trust Preferred Securities | ||||||
PlainsCapital has four statutory Trusts, three of which were formed under the laws of the state of Connecticut and one of which, PCC Statutory Trust IV, was formed under the laws of the state of Delaware. The Trusts were created for the sole purpose of issuing and selling preferred securities and common securities, using the resulting proceeds to acquire junior subordinated debentures issued by PlainsCapital (the “Debentures”). Accordingly, the Debentures are the sole assets of the Trusts, and payments under the Debentures are the sole revenue of the Trusts. All of the common securities are owned by PlainsCapital; however, PlainsCapital is not the primary beneficiary of the Trusts. Accordingly, the Trusts are not included in the Company’s consolidated financial statements. | |||||||
The Trusts have issued $65,000,000 of floating rate preferred securities and $2,012,000 of common securities and have invested the proceeds from the securities in floating rate Debentures of PlainsCapital. Information regarding the PlainsCapital Debentures is shown in the following table (in thousands). | |||||||
Investor | Issue Date | Amount | |||||
PCC Statutory Trust I | July 31, 2001 | $ | 18,042 | ||||
PCC Statutory Trust II | March 26, 2003 | $ | 18,042 | ||||
PCC Statutory Trust III | September 17, 2003 | $ | 15,464 | ||||
PCC Statutory Trust IV | February 22, 2008 | $ | 15,464 | ||||
The stated term of the Debentures is 30 years with interest payable quarterly. The rate on the Debentures, which resets quarterly, is 3-month LIBOR plus an average spread of 3.22%. The total average interest rate at December 31, 2014 was 3.47%. The term, rate and other features of the preferred securities are the same as the Debentures. PlainsCapital’s obligations under the Debentures and related documents, taken together, constitute a full and unconditional guarantee of the Trust’s obligations under the preferred securities. | |||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | 15. Income Taxes | ||||||||||
The significant components of the income tax provision (benefit) are as follows (in thousands). | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 85,303 | $ | 51,441 | $ | 4,346 | |||||
State | 3,087 | 3,414 | 935 | ||||||||
88,390 | 54,855 | 5,281 | |||||||||
Deferred: | |||||||||||
Federal | (21,851 | ) | 14,573 | (5,649 | ) | ||||||
State | (931 | ) | 1,256 | (777 | ) | ||||||
(22,782 | ) | 15,829 | (6,426 | ) | |||||||
$ | 65,608 | $ | 70,684 | $ | (1,145 | ) | |||||
The income tax provision (benefit) differs from the amount that would be computed by applying the statutory Federal income tax rate of 35% to income (loss) before income taxes as a result of the following (in thousands). | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Computed tax at federal statutory rate | $ | 62,358 | $ | 69,088 | $ | (2,185 | ) | ||||
Tax effect of: | |||||||||||
Tax-exempt income, net | (2,085 | ) | (2,042 | ) | (151 | ) | |||||
State income taxes | 1,401 | 3,035 | 103 | ||||||||
Valuation allowance | 1,950 | — | — | ||||||||
Nondeductible expenses | 2,201 | 2,363 | 352 | ||||||||
Minority interest | (318 | ) | (479 | ) | (174 | ) | |||||
Nondeductible transaction costs | 102 | — | 1,151 | ||||||||
Prior year return to provision adjustment | 360 | (1,141 | ) | (150 | ) | ||||||
Other | (361 | ) | (140 | ) | (91 | ) | |||||
$ | 65,608 | $ | 70,684 | $ | (1,145 | ) | |||||
The components of the tax effects of temporary differences that give rise to the net deferred tax asset included in other assets within the consolidated balance sheets are as follows (in thousands). | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforward | $ | 15,919 | $ | 15,919 | |||||||
Covered loans | 53,195 | 47,770 | |||||||||
Purchase accounting adjustment - loans | 15,110 | 27,997 | |||||||||
Allowance for loan losses | 15,255 | 12,383 | |||||||||
Compensation and benefits | 22,498 | 16,946 | |||||||||
Indemnification agreements | 6,631 | 8,308 | |||||||||
Foreclosed property | 13,458 | 13,589 | |||||||||
Capital loss carryforward | 1,950 | — | |||||||||
Net unrealized change in securities and other investments | — | 19,428 | |||||||||
Other | 14,793 | 16,216 | |||||||||
158,809 | 178,556 | ||||||||||
Deferred tax liabilities: | |||||||||||
Premises and equipment | 13,567 | 13,269 | |||||||||
FDIC Indemnification Asset | 38,546 | 67,841 | |||||||||
Intangible assets | 18,989 | 22,708 | |||||||||
Derivatives | 9,368 | 9,428 | |||||||||
Net unrealized change in securities and other investments | 260 | — | |||||||||
Loan servicing | 13,531 | 7,480 | |||||||||
Other | 19,646 | 17,972 | |||||||||
113,907 | 138,698 | ||||||||||
Total net deferred tax asset | 44,902 | 39,858 | |||||||||
Less valuation allowance | (1,950 | ) | — | ||||||||
Net deferred tax asset | $ | 42,952 | $ | 39,858 | |||||||
At December 31, 2014 and 2013, the Company had net operating loss carryforwards for Federal income tax purposes of $45.5 million. The net operating loss carryforwards are subject to separate return limitations on their usage. These net operating loss carry-forwards expire in 2023 and later years. The Company expects to realize its current deferred tax asset for these net operating loss carryforwards through the implementation of certain tax planning strategies, core earnings, and reversal of timing differences. The Company recorded a valuation allowance of $1.9 million during 2014 against its gross deferred tax asset for capital loss carryforwards. The amount of the deferred tax asset considered realizable, however, could increase during the carryforward period if unexpected capital gains are recognized. The Company has no valuation allowance on the remainder of its deferred tax assets at December 31, 2014 or 2013. | |||||||||||
GAAP requires the measurement of uncertain tax positions. Uncertain tax positions are the difference between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for accounting purposes. At December 31, 2014, the total amount of gross unrecognized tax benefits established in the current year was $0.6 million, of which $0.4 million if recognized, would favorably impact the Company’s effective tax rate. There were no uncertain tax positions at December 31, 2013. The Company does not anticipate a significant change in the unrecognized tax benefits within the next twelve months. | |||||||||||
The Company files income tax returns in U.S. federal and numerous state jurisdictions. The Company is subject to tax audits in numerous jurisdictions in the U.S. until the applicable statute of limitations expires. The Company is no longer subject to U.S. federal tax examinations for tax years prior to 2011. The Company is open for various state tax audits for tax years 2010 and later. The Company is currently under income tax examination by several state authorities for tax years 2010, 2011 and 2012. The Company does not expect any significant liability to arise as a result of the examinations. | |||||||||||
Employee_Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2014 | |
Employee Benefits | |
Employee Benefits | 16. Employee Benefits |
Hilltop and its subsidiaries have benefit plans that provide for elective deferrals by employees under Section 401(k) of the Internal Revenue Code. Employee contributions are determined by the level of employee participation and related salary levels per Internal Revenue Service regulations. Hilltop and its subsidiaries match a portion of employee contributions to the plan based on entity-specific factors including the level of normal operating earnings and the amount of eligible employees’ contributions and salaries. In addition, Hilltop, PlainsCapital and the Bank make additional contributions to employees’ 401(k) accounts based on achievement of certain corporate objectives. The amount charged to operating expense for these matching contributions totaled $8.8 million, $7.5 million and $0.7 million during 2014, 2013 and 2012, respectively. | |
In connection with the PlainsCapital Merger, PlainsCapital terminated its employee stock ownership plan (“ESOP”) and distributed the assets held by the ESOP (consisting of cash and shares of Hilltop common stock) to ESOP participants. | |
Effective upon the completion of the PlainsCapital Merger, the Company recorded a liability of $8.9 million associated with separate retention agreements entered into between Hilltop and two executive officers of PlainsCapital. | |
The Bank purchased $15.0 million of flexible premium universal life insurance in 2001 to help finance the annual expense incurred in providing various employee benefits. At December 31, 2014 and 2013, the carrying value of the policies included in other assets was $24.8 million and $24.5 million, respectively. For the years ended December 31, 2014 and 2013 and the month ended December 31, 2012, the Bank recorded income of $0.4 million, $0.4 million and $0.1 million, respectively, related to the policies that was reported in other noninterest income within the consolidated statement of operations. | |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions | |
Related Party Transactions | 17. Related Party Transactions |
Pursuant to a Management Services Agreement, as amended, Diamond A Administration Company LLC, or Diamond A, an affiliate of Gerald J. Ford, the current Chairman of the Board of Hilltop and the beneficial owner of 17.2% of Hilltop common stock at December 31, 2014, provided certain management services to the Company, including, among others, financial and acquisition evaluation, and office space to Hilltop. The services and office space were provided at a cost of $91,500 per month, plus reasonable out-of-pocket expenses. The services provided under this agreement include those of Hilltop directors, including Gerald J. Ford, Kenneth Russell and Carl B. Webb. Prior to Jeremy B. Ford assuming the role of Chief Executive Officer of Hilltop, he provided services to Hilltop under the Management Services Agreement. Hilltop also agreed to indemnify and hold harmless Diamond A for its performance or provision of these services, except for gross negligence and willful misconduct. Further, Diamond A’s maximum aggregate liability for damages under this agreement is limited to the amounts paid to Diamond A under this agreement during twelve months prior to that cause of action. In connection with the PlainsCapital Merger on November 30, 2012, the Management Services Agreement was terminated. However, pursuant to a Sublease Agreement, Diamond A currently provides office space to Hilltop at a cost of $24,030 per month. This Sublease Agreement continues in effect until July 31, 2018 or such earlier date that the base lease expires. | |
Jeremy B. Ford, a director and the Chief Executive Officer of Hilltop, is the beneficiary of a trust that owns a 49% limited partnership interest in Diamond A Financial, L.P. Diamond A Financial, L.P. owned 17.2% of the outstanding Hilltop common stock at December 31, 2014. He also is a director and the Secretary of Diamond A Administration Company, LLC, which has provided management services and office space to Hilltop as described the preceding paragraph. Diamond A Administration Company, LLC is owned by Hunter’s Glen/Ford, Ltd., a limited partnership in which a trust for the benefit of Jeremy B. Ford is a 46% limited partner. | |
Jeremy B. Ford is the son of Gerald J. Ford. Corey G. Prestidge, Hilltop’s General Counsel and Secretary, is the son-in-law of Gerald J. Ford. Accordingly, Messrs. Jeremy Ford and Corey Prestidge are brothers-in-law. | |
In the ordinary course of business, the Bank has granted loans to certain directors, executive officers and their affiliates (collectively referred to as related parties) totaling $32.7 million and $8.0 million at December 31, 2014 and 2013, respectively. These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other unaffiliated persons and do not involve more than normal risk of collectability. For such loans during 2014, total principal additions were $11.9 million, total principal payments were $10.4 million and additions due to changes in status as a related party were $23.2 million. | |
At December 31, 2014 and 2013, the Bank held deposits of related parties of $161.9 million and $154.0 million, respectively. | |
A related party is the lessor in an operating lease with the Bank. The Bank’s minimum payment under the lease is $0.5 million annually through 2028, for an aggregate remaining obligation of $7.0 million. | |
The Bank purchases loans from a company for which a related party serves as a director, president and chief executive officer. At both December 31, 2014 and 2013, the outstanding balance of the purchased loans was $6.0 million. The loans were purchased with recourse to the company in the ordinary course of business and the related party had no direct financial interest in the transactions. | |
PlainsCapital Equity, LLC is a limited partner in certain limited partnerships that have received loans from the Bank. The Bank made those loans in the normal course of business, using underwriting standards and offering terms that are substantially the same as those used or offered to non-affiliated borrowers. At December 31, 2014 and 2013, the Bank had outstanding loans of $0.2 million and $3.0 million, respectively, in which PlainsCapital Equity, LLC had a limited partnership interest. The investment of PlainsCapital Equity, LLC in these limited partnerships was $3.8 million and $3.7 million at December 31, 2014 and 2013, respectively. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Commitments and Contingencies | |||||||||||
Commitments and Contingencies | 18. Commitments and Contingencies | ||||||||||
The Bank acts as agent on behalf of certain correspondent banks in the purchase and sale of federal funds that aggregated $7.5 million at December 31, 2013. At December 31, 2014, there were no such amounts outstanding. | |||||||||||
Legal Matters | |||||||||||
The Company is subject to loss contingencies related to litigation, claims, investigations and legal and administrative cases and proceedings arising in the ordinary course of business. The Company evaluates these contingencies based on information currently available, including advice of counsel. The Company establishes accruals for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. Any accruals are periodically reviewed and may be adjusted as circumstances change. Some of the Company’s exposure with respect to loss contingencies may be offset by applicable insurance coverage. In determining the amounts of any accruals or estimates of possible loss contingencies however, the Company does not take into account the availability of insurance coverage. When it is practicable, the Company estimates loss contingencies for possible litigation and claims, whether or not there is an accrued probable loss. When the Company is able to estimate such possible losses, and when it estimates that it is reasonably possible it could incur losses, in excess of amounts accrued, the Company is required to make a disclosure of the aggregate estimation. However, as available information changes, the matters for which the Company is able to estimate, as well as the estimates themselves will be adjusted, accordingly. | |||||||||||
Assessments of litigation and claims exposures are difficult due to many factors that involve inherent unpredictability. Those factors include the following: the varying stages of the proceedings, particularly in the early stages; unspecified, unsupported, or uncertain damages; damages other than compensatory, such as punitive damages; a matter presenting meaningful legal uncertainties, including novel issues of law; multiple defendants and jurisdictions; whether discovery has begun or not or discovery is not complete; meaningful settlement discussions have not commenced; and whether the claim involves a class action and if so, how the class is defined. As a result of some of these factors, the Company may be unable to estimate reasonably possible losses with respect to some or all of the pending and threatened litigation and claims asserted against the Company. | |||||||||||
Each of Hilltop, Hilltop Securities Holdings LLC (“Hilltop Securities”), formerly Peruna LLC (wholly owned subsidiary of Hilltop), SWS and the individual members of the board of directors of SWS have been named as defendants in two purported stockholder class action lawsuits arising out of the merger. Both lawsuits were filed in Delaware Chancery Court (Joseph Arceri v. SWS Group, Inc. et al and Chaile Steinberg v. SWS Group, Inc. et al filed April 8, 2014 and April 11, 2014, respectively). On May 13, 2014, the Delaware Chancery Court consolidated the two actions (the “Consolidated Action”) for all purposes. On June 10, 2014, plaintiffs filed a consolidated amended complaint. The complaint generally alleges, among other things, that the SWS board of directors breached its fiduciary duties to stockholders by failing to take steps to maximize stockholder value or to engage in a fair sale process before approving the merger, that the SWS board of directors labored under conflicts of interest, that certain provisions of the merger agreement unduly restrict SWS’s ability to negotiate with other potential bidders, and that the other defendants aided and abetted the SWS board of director’s breaches of fiduciary duty. The complaint further alleges, among other things, that the proxy statement/prospectus filed by Hilltop on May 29, 2014 omits or misstates certain material information. The complaints seek relief that includes, among other things, an injunction prohibiting the consummation of the merger, rescission to the extent the merger terms have already been implemented, damages for the alleged breaches of fiduciary duty, and the payment of plaintiffs’ attorneys’ fees and costs. | |||||||||||
On November 13, 2014, the parties to the Consolidated Action entered into a memorandum of understanding (the “MOU”) reflecting the terms of an agreement, subject to final approval by the Court and certain other conditions, to settle the Consolidated Action. Pursuant to the MOU, defendants, without admitting any wrongdoing, agreed to make certain supplemental disclosures requested by plaintiffs in the Consolidated Action, as set forth in SWS’s Current Report on Form 8-K dated November 14, 2014. In addition, Hilltop agreed to forbear from asserting certain rights under the Agreement and Plan of Merger, dated as of March 31, 2014, by and among Hilltop, Hilltop Securities and SWS. The MOU further contemplates that, following confirmatory discovery, the parties will enter into a stipulation of settlement, which will be subject to customary conditions, including court approval following notice to the former stockholders of SWS. If the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement, that the applicable court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the MOU. | |||||||||||
Following completion of Hilltop’s acquisition of SWS, several purported holders of shares of SWS common stock, representing a total of approximately 8.43 million shares of common stock of SWS, filed petitions in the Court of Chancery of the State of Delaware seeking appraisal for their shares pursuant to Section 262 of the Delaware General Corporation Law. The actions are captioned as follows: Highland Select Equity Master Fund, L.P. et al. v. SWS Group, Inc. et al., C.A. No. 10554-VCG; Lone Star Value Investors, LP et al. v. SWS Group, Inc. et al., C.A. No. 10572-VCG; Merlin Partners, LP et al. v. SWS Group, Inc. et al., C.A. No. 10578-VCG. The Company believes these claims are without merit and intends to vigorously defend these actions. | |||||||||||
On or about November 2, 2012, FSC, along with thirteen other defendants, was named in a lawsuit pending in the state of Rhode Island Superior Court styled Rhode Island Economic Development Corporation v. Wells Fargo Securities, LLC, et al. FSC is included in connection with its role as financial advisor to the State of Rhode Island, specifically in connection with the Rhode Island Economic Development Corporation’s issuance of $75 million in bonds to finance a loan to 38 Studios, LLC. FSC intends to defend itself vigorously in this action. | |||||||||||
The Company is involved in information-gathering requests and investigations (both formal and informal), as well as reviews, examinations and proceedings (collectively, “Inquiries”) by various governmental regulatory agencies, law enforcement authorities and self-regulatory bodies regarding certain of its businesses, business practices and policies, as well as the conduct of persons with whom it does business. Additional Inquiries will arise from time to time. In connection with those Inquiries, the Company receives document requests, subpoenas and other requests for information. The Inquiries, including the Inquiry described below, could develop into administrative, civil or criminal proceedings or enforcement actions that could result in consequences that have a material effect on the Company’s consolidated financial position, results of operations or cash flows as a whole. Such consequences could include adverse judgments, findings, settlements, penalties, fines, orders, injunctions, restitution, or alterations in the Company’s business practices, and could result in additional expenses and collateral costs, including reputational damage. | |||||||||||
As a part of an industry-wide inquiry, PrimeLending received a subpoena from the Office of Inspector General of the U.S. Department of Housing and Urban Development regarding mortgage-related practices, including those relating to origination practices for loans insured by the Federal Housing Administration (the “FHA”). On August 20, 2014, PrimeLending received a Civil Investigative Demand from the United States Department of Justice (the “DOJ”) related to this Inquiry. According to the Civil Investigative Demand, the DOJ is conducting an investigation to determine whether PrimeLending has violated the False Claims Act in connection with originating and underwriting single-family residential mortgage loans insured by the FHA. No allegations have been asserted against PrimeLending. PrimeLending cannot predict the ultimate outcome of this investigation, and cannot make a reasonable estimate of potential liability, if any, at this time. PrimeLending is cooperating with the investigation and continues to respond to the Civil Investigative Demand. | |||||||||||
While the final outcome of litigation and claims exposures or of any Inquiries is inherently unpredictable, management is currently of the opinion that the outcome of pending and threatened litigation and Inquiries will not have a material effect on the Company’s business, consolidated financial position, results of operations or cash flows as a whole. However, in the event of unexpected future developments, it is reasonably possible that an adverse outcome in any of the matters discussed above could be material to the Company’s business, consolidated financial position, results of operations or cash flows for any particular reporting period of occurrence. | |||||||||||
Other Contingencies | |||||||||||
The mortgage origination segment may be responsible for errors or omissions relating to its representations and warranties that each loan sold meets certain requirements, including representations as to underwriting standards and the validity of certain borrower representations in connection with the loan. If determined to be at fault, the mortgage origination segment either repurchases the affected loan from the investor or reimburses the investor’s losses. The mortgage origination segment has established an indemnification liability reserve for such probable losses. | |||||||||||
Generally, the mortgage origination segment first becomes aware that an investor believes a loss has been incurred on a sold loan when it receives a written request from the investor to repurchase the loan or reimburse the investor’s losses. Upon completing its review of the investor’s request, the mortgage origination segment establishes a specific claims reserve for the loan if it concludes its obligation to the investor is both probable and reasonably estimable. | |||||||||||
An additional reserve has been established for probable investor losses that may have been incurred, but not yet reported to the mortgage origination segment based upon a reasonable estimate of such losses. Factors considered in the calculation of this reserve include, but are not limited to, the total volume of loans sold exclusive of specific investor requests, actual investor claim settlements and the severity of estimated losses resulting from future claims, and the mortgage origination segment’s history of successfully curing defects identified in investor claim requests. While the mortgage origination segment’s sales contracts typically include borrower early payment default repurchase provisions, these provisions have not been a primary driver of investor claims to date, and therefore, are not a primary factor considered in the calculation of this reserve. | |||||||||||
At December 31, 2014 and 2013, the mortgage origination segment’s indemnification liability reserve totaled $17.6 million and $21.1 million, respectively. The provision for indemnification losses was $3.1 million, $3.5 million and $0.4 million during the years ended December 31, 2014 and 2013 and the month ended December 31, 2012, respectively. | |||||||||||
The following tables provide for a roll-forward of claims activity for loans put-back to the mortgage origination segment based upon an alleged breach of a representation or warranty with respect to a loan sold and related indemnification liability reserve activity (in thousands). | |||||||||||
Representation and Warranty Specific Claims Activity - Origination | |||||||||||
Loan Balance | |||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Balance, beginning of period | $ | 51,912 | $ | 39,693 | $ | 35,217 | |||||
Claims made | 50,558 | 40,001 | 6,463 | ||||||||
Claims resolved with no payment | (29,257 | ) | (17,746 | ) | (1,565 | ) | |||||
Repurchases | (15,439 | ) | (6,255 | ) | (422 | ) | |||||
Indemnification payments | (3,868 | ) | (3,781 | ) | — | ||||||
Balance, end of period | $ | 53,906 | $ | 51,912 | $ | 39,693 | |||||
Indemnification Liability Reserve Activity | |||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Balance, beginning of period | $ | 21,121 | $ | 18,964 | $ | 18,544 | |||||
Additions for new sales | 3,109 | 3,539 | 420 | ||||||||
Repurchases | (1,593 | ) | (251 | ) | (31 | ) | |||||
Early payment defaults | (143 | ) | (528 | ) | (51 | ) | |||||
Indemnification payments | (1,708 | ) | (1,003 | ) | — | ||||||
Change in estimate | (3,167 | ) | 400 | 82 | |||||||
Balance, end of period | $ | 17,619 | $ | 21,121 | $ | 18,964 | |||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Reserve for Indemnification Liability: | |||||||||||
Specific claims | $ | 7,912 | $ | 12,179 | |||||||
Incurred but not reported claims | 9,707 | 8,942 | |||||||||
Total | $ | 17,619 | $ | 21,121 | |||||||
Although management considers the total indemnification liability reserve to be appropriate, there may be changes in the reserve over time to address incurred losses, due to unanticipated adverse changes in the economy and historical loss patterns, discrete events adversely affecting specific borrowers or industries, and/or actions taken by institutions or investors. The impact of such matters is considered in the reserving process when probable and estimable. | |||||||||||
In connection with the FNB Transaction, the Bank entered into two loss-share agreements with the FDIC that collectively cover $1.2 billion of loans and OREO acquired in the FNB Transaction. Pursuant to the loss-share agreements, the FDIC has agreed to reimburse the Bank the following amounts with respect to the covered assets: (i) 80% of losses on the first $240.4 million of losses incurred; (ii) 0% of losses in excess of $240.4 million up to and including $365.7 million of losses incurred; and (iii) 80% of losses in excess of $365.7 million of losses incurred. The Bank has also agreed to reimburse the FDIC for any subsequent recoveries. The loss-share agreements for commercial and single family residential loans are in effect for 5 years and 10 years, respectively, from the Bank Closing Date and the loss recovery provisions to the FDIC are in effect for 8 years and 10 years, respectively, from the Bank Closing Date. In accordance with the loss-share agreements, the Bank may be required to make a “true-up” payment to the FDIC approximately ten years following the Bank Closing Date if the FDIC’s initial estimate of losses on covered assets is greater than the actual realized losses. The “true-up” payment is calculated using a defined formula set forth in the P&A Agreement. As of December 31, 2014, the Bank estimated that covered losses and reimbursable expenses exceed $240.4 million, but do not exceed $365.7 million. Unless the estimates of covered losses and reimbursable expenses exceed $365.7 million, the Bank will not record additional reimbursement receivable from the FDIC. As of December 31, 2014, the Bank had billed $75.5 million of covered net losses to the FDIC, of which 80%, or $60.4 million, are reimbursable under the loss-share agreements. As of December 31, 2014, the Bank had received aggregate reimbursements of $38.5 million from the FDIC. | |||||||||||
As discussed in Note 16 to the consolidated financial statements, effective upon completion of the PlainsCapital Merger, Hilltop entered into separate retention agreements with two executive officers of PlainsCapital, one having an initial term of three years (with automatic one-year renewals at the end of two years and each anniversary thereof) and the other having an initial term of two years (with automatic one-year renewals at the end of the first year and each anniversary thereof). Each of these retention agreements provides for severance pay benefits if the executive officer’s employment is terminated without “cause”. | |||||||||||
In addition to these retention agreements, Hilltop and its subsidiaries maintain employment contracts with certain officers that provide for benefits in the event of a “change in control” as defined in these agreements. | |||||||||||
Hilltop and its subsidiaries lease space, primarily for branch facilities and automated teller machines, under noncancelable operating leases with remaining terms, including renewal options, of 1 to 15 years and under capital leases with remaining terms of 11 to 15 years. Rental expense under the operating leases was $31.4 million, $29.2 million and $2.9 million in 2014, 2013 and 2012, respectively. Future minimum lease payments under these agreements follow (in thousands). | |||||||||||
Operating Leases | Capital Leases | ||||||||||
2015 | $ | 24,588 | $ | 1,090 | |||||||
2016 | 19,677 | 1,103 | |||||||||
2017 | 14,561 | 1,129 | |||||||||
2018 | 12,565 | 1,167 | |||||||||
2019 | 7,211 | 1,187 | |||||||||
Thereafter | 28,169 | 10,348 | |||||||||
Total minimum lease payments | $ | 106,771 | 16,024 | ||||||||
Amount representing interest | (6,126 | ) | |||||||||
Present value of minimum lease payments | $ | 9,898 | |||||||||
Financial_Instruments_with_Off
Financial Instruments with Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2014 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | 19. Financial Instruments with Off-Balance Sheet Risk |
The Bank is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit that involve varying degrees of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. Such financial instruments are recorded in the consolidated financial statements when they are funded or related fees are incurred or received. The contract amounts of those instruments reflect the extent of involvement (and therefore the exposure to credit loss) the Bank has in particular classes of financial instruments. | |
Commitments to extend credit are agreements to lend to a customer provided that the terms established in the contract are met. Commitments generally have fixed expiration dates and may require payment of fees. Because some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers. | |
In the aggregate, the Bank had outstanding unused commitments to extend credit of $1.4 billion at December 31, 2014 and outstanding financial and performance standby letters of credit of $45.1 million at December 31, 2014. | |
The Bank uses the same credit policies in making commitments and standby letters of credit as it does for on-balance sheet instruments. The amount of collateral obtained, if deemed necessary, in these transactions is based on management’s credit evaluation of the borrower. Collateral held varies but may include real estate, accounts receivable, marketable securities, interest-bearing deposit accounts, inventory, and property, plant and equipment. | |
In the normal course of business, FSC executes, settles, and finances various securities transactions that may expose FSC to off-balance sheet risk in the event that a customer or counterparty does not fulfill its contractual obligations. Examples of such transactions include the sale of securities not yet purchased by customers or for the account of FSC, use of derivatives to support certain non-profit housing organization clients, clearing agreements between FSC and various clearinghouses and broker-dealers, secured financing arrangements that involve pledged securities, and when-issued underwriting and purchase commitments. | |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2014 | |
Stock-Based Compensation | |
Stock-Based Compensation | 20. Stock-Based Compensation |
Pursuant to the Hilltop Holdings 2012 Equity Incentive Plan (the “2012 Plan”), the Company may grant nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights and other awards to employees of the Company, its subsidiaries and outside directors of the Company. Upon the approval by stockholders and effectiveness of the 2012 Plan in September 2012, no additional awards were permissible under the 2003 Equity Incentive Plan (the “2003 Plan”). In the aggregate, 4,000,000 shares of common stock may be delivered pursuant to awards granted under the 2012 Plan. At December 31, 2014, 3,078,374 shares of common stock remain available for issuance pursuant to the 2012 Plan. | |
During 2014, the Compensation Committee of the Board of Directors of the Company awarded certain executives and key employees an aggregate of 444,175 restricted stock units (“RSUs”) pursuant to the 2012 Plan, of which 434,864 remain outstanding at December 31, 2014. At December 31, 2014, 364,827 of the outstanding RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 70,037 outstanding RSUs vest based upon the achievement of certain performance goals over a three-year period. These RSUs are subject to service conditions set forth in the award agreements, with associated costs recognized on a straight-line basis over the respective vesting periods. The weighted average grant date fair value related to these RSUs was $23.16 per share. At December 31, 2014, unrecognized compensation expense related to these RSUs was $7.9 million, which will be amortized through December 2017. The RSUs are not transferable, and the shares of common stock issuable upon conversion of vested RSUs are generally subject to transfer restrictions for a period of one year following conversion, subject to certain exceptions. In addition, the applicable RSU award agreements provide for accelerated vesting under certain conditions. | |
During 2013, the Compensation Committee of the Board of Directors of the Company awarded certain executives and key employees a total of 471,000 restricted shares of common stock (“Restricted Stock Awards”) pursuant to the 2012 Plan, of which 466,000 remain outstanding at December 31, 2014. These Restricted Stock Awards generally cliff vest on the third anniversary of the grant date and are subject to service conditions set forth in the award agreements, with associated costs recognized on a straight-line basis over the respective vesting periods. The weighted average grant date fair value related to these Restricted Stock Awards was $13.32 per share. At December 31, 2014, unrecognized compensation expense related to these Restricted Stock Awards was $2.7 million, which will be amortized through September 2016. The award agreements governing these Restricted Stock Awards provide for accelerated vesting under certain conditions. | |
During 2014, 2013 and 2012, Hilltop granted 9,519, 9,343 and 5,183 shares of common stock, respectively, to independent members of the Company’s Board of Directors for services rendered to the Company pursuant to the 2012 Plan. | |
Stock options granted on November 2, 2011 to two senior executives pursuant to the 2003 Plan to purchase an aggregate of 600,000 shares of the Company’s common stock (the “Stock Option Awards”) at an exercise price of $7.70 per share were outstanding at December 31, 2014. These Stock Option Awards vest in five equal installments beginning on the grant date, with the remainder vesting on each grant date anniversary through 2015. At December 31, 2014, unrecognized compensation expense related to these Stock Option Awards was $49 thousand, which will be amortized through October 2015. These Stock Option Awards expire on November 2, 2016. The fair value for these Stock Option Awards granted was estimated using the Black-Scholes option pricing model with an expected volatility of 25%, a risk-free interest rate of 0.96%, a dividend yield rate of zero, a five-year expected life of the options and a forfeiture rate of 15%. | |
Compensation expense related to the plans was $4.7 million, $1.7 million and $0.5 million during 2014, 2013 and 2012, respectively. | |
Regulatory_Matters
Regulatory Matters | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Regulatory Matters | |||||||||||||||||
Regulatory Matters | 21. Regulatory Matters | ||||||||||||||||
Bank | |||||||||||||||||
The Bank and Hilltop are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct, material effect on the consolidated financial statements. The regulations require us to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. | |||||||||||||||||
Quantitative measures established by regulation to ensure capital adequacy require the companies to maintain minimum amounts and ratios (set forth in the following table) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of Tier 1 and total capital (as defined) to risk-weighted assets (as defined). | |||||||||||||||||
In July 2013, federal banking regulators released final rules for the regulation of capital and liquidity for U.S. banking organizations, establishing a new comprehensive capital framework (“Basel III”) for U.S. banking organizations that will become effective for reporting periods beginning after January 1, 2015 (subject to a phase-in period through January 2019). | |||||||||||||||||
In addition, under the final rules, bank holding companies with less than $15 billion in assets as of December 31, 2009 are allowed to continue to include junior subordinated debentures in Tier 1 capital, subject to certain restrictions. However, if an institution grows to above $15 billion in assets as a result of an acquisition, or organically grows to above $15 billion in assets and then makes an acquisition, the combined trust preferred issuances must be phased out of Tier 1 and into Tier 2 capital (75% in 2015 and 100% in 2016). All of the debentures issued to the Trusts, less the common stock of the Trusts, qualified as Tier 1 capital as of December 31, 2014, under guidance issued by the Board of Governors of the Federal Reserve System. | |||||||||||||||||
Management believes that, as of December 31, 2014, Hilltop and the Bank would meet all applicable capital adequacy requirements under the Basel III capital rules for banks with less than $15 billion in assets on a fully phased-in basis as if such requirements were currently in effect. | |||||||||||||||||
During September 2013, Hilltop and PlainsCapital contributed capital of $35.0 million and $25.0 million, respectively, to the Bank to provide additional capital in connection with the FNB Transaction. | |||||||||||||||||
The following table shows the Bank’s and Hilltop’s consolidated actual capital amounts and ratios compared to the regulatory minimum capital requirements and the Bank’s regulatory minimum capital requirements needed to qualify as a “well-capitalized” institution (dollars in thousands), without giving effect to the final Basel III capital rules. | |||||||||||||||||
To Be Well Capitalized | |||||||||||||||||
Minimum Capital | Minimum Capital | ||||||||||||||||
Actual | Requirements | Requirements | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||
December 31, 2014 | |||||||||||||||||
Tier 1 capital (to average assets): | |||||||||||||||||
Bank | $ | 845,656 | 10.31 | % | $ | 328,025 | 4 | % | $ | 410,031 | 5 | % | |||||
Hilltop | 1,231,724 | 14.17 | % | 347,619 | 4 | % | N/A | N/A | |||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||
Bank | 845,656 | 13.74 | % | 246,099 | 4 | % | 369,148 | 6 | % | ||||||||
Hilltop | 1,231,724 | 19.02 | % | 259,078 | 4 | % | N/A | N/A | |||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||
Bank | 888,744 | 14.45 | % | 492,198 | 8 | % | 615,247 | 10 | % | ||||||||
Hilltop | 1,275,023 | 19.69 | % | 518,157 | 8 | % | N/A | N/A | |||||||||
December 31, 2013 | |||||||||||||||||
Tier 1 capital (to average assets): | |||||||||||||||||
Bank | $ | 762,364 | 9.29 | % | $ | 328,275 | 4 | % | $ | 410,344 | 5 | % | |||||
Hilltop | 1,112,424 | 12.81 | % | 347,480 | 4 | % | N/A | N/A | |||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||
Bank | 762,364 | 13.38 | % | 227,984 | 4 | % | 341,976 | 6 | % | ||||||||
Hilltop | 1,112,424 | 18.53 | % | 240,159 | 4 | % | N/A | N/A | |||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||
Bank | 797,771 | 14.00 | % | 455,968 | 8 | % | 569,960 | 10 | % | ||||||||
Hilltop | 1,148,736 | 19.13 | % | 480,318 | 8 | % | N/A | N/A | |||||||||
To be considered “adequately capitalized” (as defined) under regulatory requirements, the Bank must maintain minimum Tier 1 capital to total average assets and Tier 1 capital to risk-weighted assets ratios of 4%, and a total capital to risk-weighted assets ratio of 8%. Based on the actual capital amounts and ratios shown in the previous table, the Bank’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. | |||||||||||||||||
A reconciliation of equity capital to Tier 1 and total capital (as defined) is as follows (in thousands). | |||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||
Bank | Hilltop | Bank | Hilltop | ||||||||||||||
Total equity capital | $ | 1,104,048 | $ | 1,460,452 | $ | 985,519 | $ | 1,311,141 | |||||||||
Add: | |||||||||||||||||
Minority interests | 787 | 787 | 781 | 781 | |||||||||||||
Trust preferred securities | — | 65,000 | — | 65,000 | |||||||||||||
Net unrealized holding losses on securities available for sale and held in trust | 3,484 | (651 | ) | 42,901 | 34,863 | ||||||||||||
Deduct: | |||||||||||||||||
Goodwill and other disallowed intangible assets | (259,048 | ) | (290,052 | ) | (264,822 | ) | (297,174 | ) | |||||||||
Other | (3,615 | ) | (3,812 | ) | (2,015 | ) | (2,187 | ) | |||||||||
Tier 1 capital (as defined) | 845,656 | 1,231,724 | 762,364 | 1,112,424 | |||||||||||||
Add: Allowable Tier 2 capital | |||||||||||||||||
Allowance for loan losses | 43,088 | 43,088 | 35,407 | 35,407 | |||||||||||||
Net unrealized holding losses on equity securities | — | 211 | — | 905 | |||||||||||||
Total capital (as defined) | $ | 888,744 | $ | 1,275,023 | $ | 797,771 | $ | 1,148,736 | |||||||||
Broker-Dealer | |||||||||||||||||
Pursuant to the net capital requirements of the Exchange Act, FSC has elected to determine its net capital requirements using the alternative method. Accordingly, FSC is required to maintain minimum net capital, as defined in Rule 15c3-1 promulgated under the Exchange Act, equal to the greater of $250,000 or 2% of aggregate debit balances, as defined in Rule 15c3-3 promulgated under the Exchange Act. At December 31, 2014, FSC had net capital of $64.3 million (the minimum net capital requirement was $5.3 million), net capital maintained by FSC was 24% of aggregate debits, and net capital in excess of the minimum requirement was $59.0 million. | |||||||||||||||||
Mortgage Origination | |||||||||||||||||
As a mortgage originator, PrimeLending is subject to minimum net worth requirements established by the United States Department of Housing and Urban Development (“HUD”) and the GNMA. On an annual basis, PrimeLending submits audited financial statements to HUD and GNMA documenting PrimeLending’s compliance with its minimum net worth requirements. In addition, PrimeLending monitors compliance on an ongoing basis and, as of December 31, 2014, PrimeLending’s net worth exceeded the amounts required by both HUD and GNMA. | |||||||||||||||||
Insurance | |||||||||||||||||
The statutory financial statements of the Company’s insurance subsidiaries, which are domiciled in the State of Texas, are presented on the basis of accounting practices prescribed or permitted by the Texas Department of Insurance. Texas has adopted the National Association of Insurance Commissioners’ (“NAIC”) statutory accounting practices as the basis of its statutory accounting practices with certain differences that are not significant to the insurance company subsidiaries’ statutory equity. | |||||||||||||||||
A summary of statutory capital and surplus and statutory net income (loss) of each insurance subsidiary is as follows (in thousands). | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Capital and surplus: | |||||||||||||||||
National Lloyds Insurance Company | $ | 113,023 | $ | 98,602 | |||||||||||||
American Summit Insurance Company | 28,966 | 26,452 | |||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Statutory net income (loss): | |||||||||||||||||
National Lloyds Insurance Company | $ | 14,893 | $ | 3,583 | $ | (3,858 | ) | ||||||||||
American Summit Insurance Company | 2,554 | 521 | 972 | ||||||||||||||
Regulations of the Texas Department of Insurance require insurance companies to maintain minimum levels of statutory surplus to ensure their ability to meet their obligations to policyholders. At December 31, 2014, the Company’s insurance subsidiaries had statutory surplus in excess of the minimum required. | |||||||||||||||||
The NAIC has adopted a risk based capital (“RBC”) formula for insurance companies that establishes minimum capital requirements indicating various levels of available regulatory action on an annual basis relating to insurance risk, asset credit risk, interest rate risk and business risk. The RBC formula is used by the NAIC and certain state insurance regulators as an early warning tool to identify companies that require additional scrutiny or regulatory action. At December 31, 2014, the Company’s insurance subsidiaries’ RBC ratio exceeded the level at which regulatory action would be required. | |||||||||||||||||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity | |
Stockholders' Equity | 22. Stockholders’ Equity |
The Bank is subject to certain restrictions on the amount of dividends it may declare without prior regulatory approval. At December 31, 2014, $225.6 million of its earnings was available for dividend declaration without prior regulatory approval. | |
At December 31, 2014, the maximum aggregate dividend that may be paid to NLC from its insurance company subsidiaries in 2015 without regulatory approval is $17.8 million. | |
Series B Preferred Stock | |
As discussed in Note 2, and as a result of the PlainsCapital Merger, the outstanding shares of PlainsCapital’s Non-Cumulative Perpetual Preferred Stock, Series C, all of which were held by the U.S. Treasury, were converted on a one-for-one basis into shares of Hilltop Series B Preferred Stock. The terms of the Hilltop Series B Preferred Stock provide for the payment of non-cumulative dividends on a quarterly basis. The dividend rate, as a percentage of the liquidation amount, fluctuated until December 31, 2013 based upon changes in the level of “qualified small business lending” (“QSBL”) by the Bank. The shares of Hilltop Series B Preferred Stock are senior to shares of Hilltop common stock with respect to dividends and liquidation preference, and qualify as Tier 1 Capital for regulatory purposes. At both December 31, 2014 and 2013, $114.1 million of Hilltop Series B Preferred Stock was outstanding. | |
The dividend rate on the Hilltop Series B Preferred Stock is fixed at 5.0% from January 1, 2014 until March 26, 2016, based upon the level of QSBL at September 30, 2013. Beginning March 27, 2016, the dividend rate on any outstanding shares of Hilltop Series B Preferred Stock will be fixed at nine percent (9%) per annum. | |
The terms of the Hilltop Series B Preferred Stock restrict Hilltop’s ability to pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment on its common stock and other Hilltop capital stock ranking junior to the Hilltop Series B Preferred Stock, and on other preferred stock and other stock ranking on a parity with the Hilltop Series B Preferred Stock, in the event that Hilltop does not declare dividends on the Hilltop Series B Preferred Stock during any dividend period. | |
As long as shares of Hilltop Series B Preferred Stock remain outstanding, Hilltop may not pay dividends to its common stockholders (nor may Hilltop repurchase or redeem any shares of its common stock) during any quarter in which the Company fails to declare and pay dividends on the Hilltop Series B Preferred Stock and for the next three quarters following such failure. In addition, under the terms of the Hilltop Series B Preferred Stock, Hilltop may only declare and pay dividends on its common stock (or repurchase shares of Hilltop common stock), if, after payment of such dividend, the dollar amount of Hilltop’s Tier 1 capital would be at least ninety percent (90%) of Tier 1 capital as of September 27, 2011, excluding any charge-offs and redemptions of the Hilltop Series B Preferred Stock. | |
The Company may redeem the Hilltop Series B Preferred Stock at any time at its option, at a redemption price of 100% of the liquidation amount plus accrued but unpaid dividends, subject to the approval of the Company’s federal banking regulator. | |
Other_Noninterest_Income_and_E
Other Noninterest Income and Expense | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Other Noninterest Income and Expense | |||||||||||
Other Noninterest Income and Expense | 23. Other Noninterest Income and Expense | ||||||||||
The following tables show the components of other noninterest income and expense (in thousands). | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Other noninterest income: | |||||||||||
Change in fair value of FSC derivatives | $ | 16,228 | $ | 11,427 | $ | 238 | |||||
Commission and insurance agency income | 3,380 | 2,765 | 2,159 | ||||||||
Direct bill fees and insurance service fee income | 5,719 | 5,697 | 5,174 | ||||||||
FDIC Indemnification Asset accretion | 3,445 | 1,699 | — | ||||||||
Net gain (loss) from trading securities portfolio | 2,126 | (2,773 | ) | (646 | ) | ||||||
Net gain on investment in SWS common stock | 5,985 | — | — | ||||||||
Rent and other income from other real estate owned | 5,703 | 625 | — | ||||||||
Revenue from check and stored value cards | 7,614 | 4,682 | 276 | ||||||||
Service charges on depositor accounts | 16,730 | 11,376 | 724 | ||||||||
Trust fees | 6,330 | 5,050 | 411 | ||||||||
Other | 6,281 | 4,122 | 237 | ||||||||
$ | 79,541 | $ | 44,670 | $ | 8,573 | ||||||
Other noninterest expense: | |||||||||||
Accounting fees | $ | 5,247 | $ | 5,455 | $ | 2,269 | |||||
Acquisition costs | 1,406 | 117 | 6,570 | ||||||||
Amortization of intangible assets | 11,138 | 11,087 | 1,986 | ||||||||
Data processing | 23,096 | 17,922 | 4,033 | ||||||||
Funding fees | 2,521 | 4,403 | 593 | ||||||||
Management fees | — | — | 1,025 | ||||||||
Marketing | 21,372 | 17,257 | 2,245 | ||||||||
Other professional services | 39,310 | 32,526 | 5,004 | ||||||||
Printing, stationery and supplies | 4,902 | 4,583 | 735 | ||||||||
Repossession and foreclosure | 17,621 | 3,546 | 47 | ||||||||
Telecommunications | 11,249 | 8,350 | 834 | ||||||||
Unreimbursed loan closing costs | 32,669 | 30,095 | 5,944 | ||||||||
Other | 61,048 | 52,606 | 3,083 | ||||||||
$ | 231,579 | $ | 187,947 | $ | 34,368 | ||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Derivative Financial Instruments | ||||||||||||||
Derivative Financial Instruments | 24. Derivative Financial Instruments | |||||||||||||
The Company uses various derivative financial instruments to mitigate interest rate risk. The Bank’s interest rate risk management strategy involves effectively managing the re-pricing characteristics of certain assets and liabilities to mitigate potential adverse impacts from changes in interest rates on the net interest margin. PrimeLending has interest rate risk relative to IRLCs and its inventory of mortgage loans held for sale. PrimeLending is exposed to such rate risk from the time an IRLC is made to an applicant to the time the related mortgage loan is sold. To mitigate interest rate risk, PrimeLending executes forward commitments to sell mortgage-backed securities (“MBSs”). Additionally, PrimeLending has interest rate risk relative to its MSR asset. During the three months ended September 30, 2014, PrimeLending began using derivative instruments, including interest rate swaps and swaptions, to hedge this risk. FSC uses forward commitments to both purchase and sell MBSs to facilitate customer transactions and as a means to hedge related exposure to interest rate risk in certain inventory positions. | ||||||||||||||
Non-Hedging Derivative Instruments and the Fair Value Option | ||||||||||||||
As discussed in Note 3 to the consolidated financial statements, the Company has elected to measure substantially all mortgage loans held for sale at fair value under the provisions of the Fair Value Option. The election provides the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without applying complex hedge accounting provisions. The fair values of PrimeLending’s IRLCs, forward commitments, and interest rate swaps and swaptions are recorded in other assets or other liabilities, as appropriate, and changes in the fair values of these derivative instruments are recorded as a component of net gains from sale of loans and other mortgage production income. The fair value of PrimeLending’s derivative instruments decreased $16.3 million during the year ended December 31, 2014, compared with an increase of $8.2 million during the year ended December 31, 2013 and a decrease of $5.9 million during the month ended December 31, 2012. Changes in fair value are attributable to changes in the volume of IRLCs, mortgage loans held for sale, commitments to purchase and sell MBSs and MSR, and changes in market interest rates. Changes in market interest rates also conversely affect the value of PrimeLending’s mortgage loans held for sale and its MSR asset, which are measured at fair value under the Fair Value Option. The effect of the change in market interest rates on PrimeLending’s loans held for sale and MSR asset is discussed in Note 3 to the consolidated financial statements. The fair values of FSC’s derivative instruments are recorded in other assets or other liabilities, as appropriate, and the fair values of FSC’s derivatives increased $16.2 million, $11.4 million and $0.2 million for the years ended December 31, 2014 and 2013 and the month ended December 31, 2012, respectively. The changes in fair value were recorded as a component of other noninterest income. | ||||||||||||||
Derivative positions are presented in the following table (in thousands). | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Notional | Estimated | Notional | Estimated | |||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||
Derivative instruments: | ||||||||||||||
IRLCs | $ | 621,216 | $ | 17,057 | $ | 602,467 | $ | 12,151 | ||||||
Commitments to purchase MBSs | 510,553 | 6,040 | 236,305 | (109 | ) | |||||||||
Commitments to sell MBSs | 1,968,768 | (12,566 | ) | 1,645,332 | 11,383 | |||||||||
Interest rate swaps and swaptions | 83,000 | 425 | — | — | ||||||||||
Fee Award Option | — | — | 20,432 | (5,600 | ) | |||||||||
PrimeLending has advanced cash collateral totaling $6.6 million and $1.3 million to offset net liability derivative positions on its commitments to sell MBSs at December 31, 2014 and 2013, respectively. In addition, PrimeLending has advanced cash collateral totaling $3.3 million in initial margin on its interest rate swaps and swaptions at December 31, 2014. These amounts are included in other assets within the consolidated balance sheets. | ||||||||||||||
Balance_Sheet_Offsetting
Balance Sheet Offsetting | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Balance Sheet Offsetting | ||||||||||||||||||||
Balance Sheet Offsetting | 25. Balance Sheet Offsetting | |||||||||||||||||||
Certain financial instruments, including resale and repurchase agreements, securities lending arrangements and derivatives, may be eligible for offset in the consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). | ||||||||||||||||||||
Gross Amounts Not Offset in | ||||||||||||||||||||
Net Amounts | the Balance Sheet | |||||||||||||||||||
Gross Amounts | Gross Amounts | of Assets | Cash | |||||||||||||||||
of Recognized | Offset in the | Presented in the | Financial | Collateral | Net | |||||||||||||||
Assets | Balance Sheet | Balance Sheet | Instruments | Pledged | Amount | |||||||||||||||
December 31, 2014 | ||||||||||||||||||||
Securities borrowed: | ||||||||||||||||||||
Institutional counterparties | $ | 152,899 | $ | — | $ | 152,899 | $ | (152,899 | ) | $ | — | $ | — | |||||||
Interest rate swaps and swaptions: | ||||||||||||||||||||
Institutional counterparties | 425 | — | 425 | — | — | 425 | ||||||||||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 41 | — | 41 | — | — | 41 | ||||||||||||||
$ | 153,365 | $ | — | $ | 153,365 | $ | (152,899 | ) | $ | — | $ | 466 | ||||||||
December 31, 2013 | ||||||||||||||||||||
Securities borrowed: | ||||||||||||||||||||
Institutional counterparties | $ | 107,365 | $ | — | $ | 107,365 | $ | (107,365 | ) | $ | — | $ | — | |||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 11,489 | (76 | ) | 11,413 | — | (286 | ) | 11,127 | ||||||||||||
$ | 118,854 | $ | (76 | ) | $ | 118,778 | $ | (107,365 | ) | $ | (286 | ) | $ | 11,127 | ||||||
Gross Amounts Not Offset in | ||||||||||||||||||||
Net Amounts | the Balance Sheet | |||||||||||||||||||
Gross Amounts | Gross Amounts | of Liabilities | Cash | |||||||||||||||||
of Recognized | Offset in the | Presented in the | Financial | Collateral | Net | |||||||||||||||
Liabities | Balance Sheet | Balance Sheet | Instruments | Pledged | Amount | |||||||||||||||
December 31, 2014 | ||||||||||||||||||||
Securities loaned: | ||||||||||||||||||||
Institutional counterparties | $ | 117,822 | $ | — | $ | 117,822 | $ | (117,822 | ) | $ | — | $ | — | |||||||
Repurchase agreements: | ||||||||||||||||||||
Customer counterparties | 136,396 | — | 136,396 | (136,396 | ) | — | — | |||||||||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 12,829 | (223 | ) | 12,606 | — | (6,137 | ) | 6,469 | ||||||||||||
$ | 267,047 | $ | (223 | ) | $ | 266,824 | $ | (254,218 | ) | $ | (6,137 | ) | $ | 6,469 | ||||||
December 31, 2013 | ||||||||||||||||||||
Securities loaned: | ||||||||||||||||||||
Institutional counterparties | $ | 74,913 | $ | — | $ | 74,913 | $ | (74,913 | ) | $ | — | $ | — | |||||||
Repurchase agreements: | ||||||||||||||||||||
Customer counterparties | 107,462 | — | 107,462 | (107,462 | ) | — | — | |||||||||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 30 | — | 30 | — | (17 | ) | 13 | |||||||||||||
$ | 182,405 | $ | — | $ | 182,405 | $ | (182,375 | ) | $ | (17 | ) | $ | 13 | |||||||
BrokerDealer_and_Clearing_Orga
Broker-Dealer and Clearing Organization Receivables and Payables | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Broker-Dealer and Clearing Organization Receivables and Payables | ||||||||
Broker-Dealer and Clearing Organization Receivables and Payables | 26. Broker-Dealer and Clearing Organization Receivables and Payables | |||||||
Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Receivables: | ||||||||
Securities borrowed | $ | 152,899 | $ | 107,365 | ||||
Securities failed to deliver | 3,497 | 7,160 | ||||||
Clearing organizations | 11,471 | 4,698 | ||||||
Due from dealers | 17 | 94 | ||||||
$ | 167,884 | $ | 119,317 | |||||
Payables: | ||||||||
Securities loaned | $ | 117,822 | $ | 74,913 | ||||
Correspondents | 51,930 | 44,852 | ||||||
Securities failed to receive | 5,960 | 5,523 | ||||||
Clearing organizations | 3,330 | 4,390 | ||||||
$ | 179,042 | $ | 129,678 | |||||
Deferred_Policy_Acquisition_Co
Deferred Policy Acquisition Costs | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deferred Policy Acquisition Costs. | ||||||||
Deferred Policy Acquisition Costs | 27. Deferred Policy Acquisition Costs | |||||||
Policy acquisition expenses, primarily commissions, premium taxes and underwriting expenses related to the successful issuance of a new or renewal policy incurred by NLC are deferred and charged against income ratably over the terms of the related policies. A summary of the activity in deferred policy acquisition costs is as follows (in thousands). | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Balance, beginning of year | $ | 20,991 | $ | 19,812 | ||||
Acquisition expenses capitalized | 41,034 | 41,771 | ||||||
Amortization charged to income | (41,609 | ) | (40,592 | ) | ||||
Balance, end of year | $ | 20,416 | $ | 20,991 | ||||
Amortization is included in policy acquisition and other underwriting expenses in the accompanying consolidated statements of operations. | ||||||||
Reserves_for_Losses_and_Loss_A
Reserves for Losses and Loss Adjustment Expenses | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Reserves for Losses and Loss Adjustment Expenses | |||||||||||
Reserves for Losses and Loss Adjustment Expenses | 28. Reserve for Losses and Loss Adjustment Expenses | ||||||||||
A rollforward of NLC’s reserve for unpaid losses and LAE is as follows (in thousands). | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance, beginning of year | $ | 27,468 | $ | 34,012 | $ | 44,835 | |||||
Less reinsurance recoverables | (4,508 | ) | (10,385 | ) | (25,083 | ) | |||||
Net balance, beginning of year | 22,960 | 23,627 | 19,752 | ||||||||
Incurred related to: | |||||||||||
Current year | 86,642 | 110,096 | 109,328 | ||||||||
Prior years | 7,787 | 659 | (169 | ) | |||||||
Total incurred | 94,429 | 110,755 | 109,159 | ||||||||
Payments related to: | |||||||||||
Current year | (73,841 | ) | (96,284 | ) | (90,743 | ) | |||||
Prior years | (18,147 | ) | (15,138 | ) | (14,541 | ) | |||||
Total payments | (91,988 | ) | (111,422 | ) | (105,284 | ) | |||||
Net balance, end of year | 25,401 | 22,960 | 23,627 | ||||||||
Plus reinsurance recoverables | 4,315 | 4,508 | 10,385 | ||||||||
Balance, end of year | $ | 29,716 | $ | 27,468 | $ | 34,012 | |||||
The increase in the NLC’s reserves at December 31, 2014 as compared with December 31, 2013 of $2.2 million is primarily due to increased reserves attributable to the prior period adverse development. This prior period adverse development totaled $7.8 million during 2014 and was primarily related to litigation emerging from a series of hail storms within the 2012 accident year. | |||||||||||
Reinsurance_Activity
Reinsurance Activity | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Reinsurance Activity | ||||||||||||||||||||
Reinsurance Activity | 29. Reinsurance Activity | |||||||||||||||||||
NLC limits the maximum net loss that can arise from large risks or risks in concentrated areas of exposure by reinsuring (ceding) certain levels of risk. Substantial amounts of business are ceded, and these reinsurance contracts do not relieve NLC from its obligations to policyholders. Such reinsurance includes quota share, excess of loss, catastrophe, and other forms of reinsurance on essentially all property and casualty lines of insurance. Net insurance premiums earned, losses and LAE and policy acquisition and other underwriting expenses are reported net of the amounts related to reinsurance ceded to other companies. Amounts recoverable from reinsurers related to the portions of the liability for losses and LAE and unearned insurance premiums ceded to them are reported as assets. Failure of reinsurers to honor their obligations could result in losses to NLC; consequently, allowances are established for amounts deemed uncollectible as NLC evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. At December 31 2014, reinsurance receivables have a carrying value of $4.9 million, which is included in other assets within the consolidated balance sheet. There was no allowance for uncollectible accounts at December 31, 2014, based on NLC’s quality requirements. | ||||||||||||||||||||
Reinsurers with a balance in excess of 5% of the Company’s outstanding reinsurance receivables at December 31, 2014 are listed below (in thousands). | ||||||||||||||||||||
Balances | ||||||||||||||||||||
Due From | A.M. Best | |||||||||||||||||||
Reinsurers | Rating | |||||||||||||||||||
Federal Emergency Management Agency | $ | 3,476 | N/A | |||||||||||||||||
Everest Re | 480 | A+ | ||||||||||||||||||
Lloyd’s Syndicate # 2001 | 432 | A+ | ||||||||||||||||||
R+V Versicherung AG | 360 | N/A | ||||||||||||||||||
General Reinsurance | 320 | A++ | ||||||||||||||||||
Lloyd’s Syndicate #2791 | 273 | N/A | ||||||||||||||||||
$ | 5,341 | |||||||||||||||||||
The effects of reinsurance on premiums written and earned are summarized as follows (in thousands). | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | |||||||||||||||
Premiums from direct business | $ | 172,464 | $ | 173,496 | $ | 173,982 | $ | 168,942 | $ | 163,780 | $ | 162,383 | ||||||||
Reinsurance assumed | 9,746 | 8,960 | 7,987 | 7,202 | 6,422 | 5,882 | ||||||||||||||
Reinsurance ceded | (17,845 | ) | (17,932 | ) | (18,528 | ) | (18,611 | ) | (19,751 | ) | (21,564 | ) | ||||||||
Net premiums | $ | 164,365 | $ | 164,524 | $ | 163,441 | $ | 157,533 | $ | 150,451 | $ | 146,701 | ||||||||
The effects of reinsurance on incurred losses are as follows (in thousands). | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Loss and LAE incurred | $ | 97,011 | $ | 117,089 | $ | 115,347 | ||||||||||||||
Reinsurance recoverables | (2,582 | ) | (6,334 | ) | (6,188 | ) | ||||||||||||||
Net loss and LAE incurred | $ | 94,429 | $ | 110,755 | $ | 109,159 | ||||||||||||||
Multi-line excess of loss coverage | ||||||||||||||||||||
In addition to the catastrophe reinsurance noted below, both NLIC and ASIC participate in an excess of loss program placed with various reinsurers. This program is limited to each risk with respect to property and liability in the amount of $500,000 for each of NLIC and ASIC. Each of NLIC and ASIC retain $500,000 in this program. | ||||||||||||||||||||
Catastrophic coverage | ||||||||||||||||||||
NLC’s liabilities for losses and loss adjustment expenses include liabilities for reported losses, liabilities for incurred but not reported, or IBNR, losses and liabilities for loss adjustment expenses, or LAE, less a reduction for reinsurance recoverables related to those liabilities. The amount of liabilities for reported claims is based primarily on a claim-by-claim evaluation of coverage, liability, injury severity or scope of property damage, and any other information considered relevant to estimating exposure presented by the claim. The amounts of liabilities for IBNR losses and LAE are estimated on the basis of historical trends, adjusted for changes in loss costs, underwriting standards, policy provisions, product mix and other factors. Estimating the liability for unpaid losses and LAE is inherently judgmental and is influenced by factors that are subject to significant variation. Liabilities for LAE are intended to cover the ultimate cost of settling claims, including investigation and defense of lawsuits resulting from such claims. Based upon the contractual terms of the reinsurance agreements, reinsurance recoverables offset, in part, NLC’s gross liabilities. | ||||||||||||||||||||
At December 31, 2014, NLC had catastrophic excess of loss reinsurance coverage of losses per event in excess of $8 million retention by NLIC and $1.5 million retention by ASIC. ASIC maintained an underlying layer of coverage, providing $6.5 million in excess of its $1.5 million retention to bridge to the primary program. The reinsurance in excess of $8 million is comprised of four layers of protection: $17 million in excess of $8 million retention; $25 million in excess of $25 million loss; $50 million in excess of $50 million loss and $40 million in excess of $100 million loss. NLIC and ASIC retain no participation in any of the layers, beyond the first $8 million and $1.5 million, respectively. At December 31, 2014, total retention for any one catastrophe that affects both NLIC and ASIC was limited to $8 million in the aggregate. | ||||||||||||||||||||
Effective July 1, 2013, NLC renewed its catastrophic reinsurance contract for its third and fourth layers of reinsurance for a two year period. In the contract renewal, the coverage provided by the fourth layer changed to reflect the reduction of exposure in Texas primarily as a result of NLIC exiting the Texas coast and reducing its exposure in Harris County, Texas. The coverage provides $40 million in excess of $100 million loss, resulting in catastrophic excess of loss reinsurance coverage up to $140 million. Effective January 1, 2014, NLC renewed its reinsurance contract for its first and second layers of reinsurance for an eighteen month period. | ||||||||||||||||||||
Effective January 1, 2015, NLC renewed its underlying excess of loss contract that provides $10 million aggregate coverage for sub-catastrophic events. NLC retains a 9% participation in this coverage. | ||||||||||||||||||||
During 2014, NLC experienced no significant catastrophes that resulted in losses in excess of retention at NLIC, compared to two significant catastrophes during 2013 and one significant catastrophe during 2012. NLC did not experience any significant catastrophe that resulted in losses in excess of retention at ASIC during 2014, 2013 or 2012. There were eight tornado, hail and wind storms during 2014 that fit the coverage criteria for the underlying excess of loss contract providing aggregate coverage for sub-catastrophic events. These events had a gross incurred loss total of $21.7 million, which developed a reinsured recoverable of $1.8 million at the 66% subscription level. The two tornado, hail and wind storms that exceeded retention in 2013 had incurred losses of $18.3 million. The Texas hail storm that exceeded retention in 2012 had incurred losses of $8.3 million. These losses have no effect on net loss and LAE incurred because the catastrophic events exceeded retention levels and are fully recoverable. The primary financial effect beyond the reinsurance retention is additional reinstatement premium payable to the affected reinsurers. Reinstatement premiums during 2014, 2013 and 2012 of $0.2 million, $0.3 million and $0.5 million, respectively, are recorded as ceded premiums. | ||||||||||||||||||||
Segment_and_Related_Informatio
Segment and Related Information | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Segment and Related Information | |||||||||||||||||||||||
Segment and Related Information | 30. Segment and Related Information | ||||||||||||||||||||||
The Company currently has four reportable business segments that are organized primarily by the core products offered to the segments’ respective customers. These segments reflect the manner in which operations are managed and the criteria used by the Company’s chief operating decision maker function to evaluate segment performance, develop strategy and allocate resources. The chief operating decision maker function consists of the President and Chief Executive Officer of the Company and the Chief Executive Officer of PlainsCapital. | |||||||||||||||||||||||
The banking segment includes the operations of the Bank, which, since September 14, 2013, includes the operations acquired in the FNB Transaction. The broker-dealer (formerly financial advisory) segment is composed of First Southwest. The mortgage origination segment is composed of PrimeLending. The insurance segment is composed of NLC. | |||||||||||||||||||||||
Corporate includes certain activities not allocated to specific business segments. These activities include holding company financing and investing activities, and management and administrative services to support the overall operations of the Company including, but not limited to, certain executive management, corporate relations, legal, finance and acquisition costs not allocated to business segments. | |||||||||||||||||||||||
Balance sheet amounts for remaining subsidiaries not discussed previously and the elimination of intercompany transactions are included in “All Other and Eliminations.” The following tables present certain information about reportable segment revenues, operating results, goodwill and assets (in thousands). | |||||||||||||||||||||||
Mortgage | All Other and | Hilltop | |||||||||||||||||||||
Year Ended December 31, 2014 | Banking | Broker-Dealer | Origination | Insurance | Corporate | Eliminations | Consolidated | ||||||||||||||||
Net interest income (expense) | $ | 334,377 | $ | 12,144 | $ | (12,591 | ) | $ | 3,672 | $ | 5,219 | $ | 18,320 | $ | 361,141 | ||||||||
Provision for loan losses | 16,916 | 17 | — | — | — | — | 16,933 | ||||||||||||||||
Noninterest income | 67,438 | 119,451 | 456,776 | 173,577 | 5,985 | (23,916 | ) | 799,311 | |||||||||||||||
Noninterest expense | 245,790 | 124,715 | 431,820 | 151,541 | 13,878 | (2,391 | ) | 965,353 | |||||||||||||||
Income (loss) before income taxes | $ | 139,109 | $ | 6,863 | $ | 12,365 | $ | 25,708 | $ | (2,674 | ) | $ | (3,205 | ) | $ | 178,166 | |||||||
Mortgage | All Other and | Hilltop | |||||||||||||||||||||
Year Ended December 31, 2013 | Banking | Broker-Dealer | Origination | Insurance | Corporate | Eliminations | Consolidated | ||||||||||||||||
Net interest income (expense) | $ | 293,254 | $ | 12,064 | $ | (37,840 | ) | $ | 7,442 | $ | (1,597 | ) | $ | 22,878 | $ | 296,201 | |||||||
Provision for loan losses | 37,140 | 18 | — | — | — | — | 37,158 | ||||||||||||||||
Noninterest income | 71,045 | 102,714 | 537,497 | 166,163 | — | (27,334 | ) | 850,085 | |||||||||||||||
Noninterest expense | 155,102 | 112,360 | 472,284 | 166,006 | 10,439 | (4,456 | ) | 911,735 | |||||||||||||||
Income (loss) before income taxes | $ | 172,057 | $ | 2,400 | $ | 27,373 | $ | 7,599 | $ | (12,036 | ) | $ | — | $ | 197,393 | ||||||||
Mortgage | All Other and | Hilltop | |||||||||||||||||||||
Year Ended December 31, 2012 | Banking | Broker-Dealer | Origination | Insurance | Corporate | Eliminations | Consolidated | ||||||||||||||||
Net interest income (expense) | $ | 24,885 | $ | 1,191 | $ | (4,987 | ) | $ | 4,730 | $ | 39 | $ | 2,984 | $ | 28,842 | ||||||||
Provision for loan losses | 3,670 | 130 | — | — | — | — | 3,800 | ||||||||||||||||
Noninterest income | 4,601 | 10,909 | 57,618 | 154,147 | — | (3,043 | ) | 224,232 | |||||||||||||||
Noninterest expense | 16,130 | 11,078 | 50,296 | 163,585 | 14,487 | (59 | ) | 255,517 | |||||||||||||||
Income (loss) before income taxes | $ | 9,686 | $ | 892 | $ | 2,335 | $ | (4,708 | ) | $ | (14,448 | ) | $ | — | $ | (6,243 | ) | ||||||
December 31, 2014 | |||||||||||||||||||||||
Goodwill | $ | 207,741 | $ | 7,008 | $ | 13,071 | $ | 23,988 | $ | — | $ | — | $ | 251,808 | |||||||||
Total assets | $ | 8,036,729 | $ | 758,636 | $ | 1,498,846 | $ | 328,693 | $ | 1,522,655 | $ | (2,903,142 | ) | $ | 9,242,416 | ||||||||
December 31, 2013 | |||||||||||||||||||||||
Goodwill | $ | 207,741 | $ | 7,008 | $ | 13,071 | $ | 23,988 | $ | — | $ | — | $ | 251,808 | |||||||||
Total assets | $ | 7,981,517 | $ | 520,412 | $ | 1,249,091 | $ | 308,160 | $ | 1,316,398 | $ | (2,471,456 | ) | $ | 8,904,122 | ||||||||
Earnings_Loss_per_Common_Share
Earnings (Loss) per Common Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Earnings (loss) per Common Share | |||||||||||
Earnings (Loss) per Common Share | 31. Earnings (Loss) per Common Share | ||||||||||
The following table presents the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data). | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Basic earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | $ | 105,947 | $ | 121,015 | $ | (5,851 | ) | ||||
Less: income applicable to participating shares | (547 | ) | (672 | ) | — | ||||||
Net earnings (loss) available to Hilltop common stockholders | $ | 105,400 | $ | 120,343 | $ | (5,851 | ) | ||||
Weighted average shares outstanding - basic | 89,710 | 84,382 | 58,754 | ||||||||
Basic earnings (loss) per common share | $ | 1.18 | $ | 1.43 | $ | (0.10 | ) | ||||
Diluted earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | $ | 105,947 | $ | 121,015 | $ | (5,851 | ) | ||||
Add: interest expense on senior exchangeable notes (net of tax) | — | 5,059 | — | ||||||||
Net earnings (loss) available to Hilltop common stockholders | $ | 105,947 | $ | 126,074 | $ | (5,851 | ) | ||||
Weighted average shares outstanding - basic | 89,710 | 84,382 | 58,754 | ||||||||
Effect of potentially dilutive securities | 863 | 5,949 | — | ||||||||
Weighted average shares outstanding - diluted | 90,573 | 90,331 | 58,754 | ||||||||
Diluted earnings (loss) per common share | $ | 1.17 | $ | 1.4 | $ | (0.10 | ) | ||||
During 2012, the computation of diluted loss per common share did not include 6,208,000 equivalent shares issuable upon conversion of the Notes as the equivalent exchange rate per share was in excess of the average stock prices for the noted period. Additionally, options to purchase 688,000 weighted average outstanding shares of Hilltop’s common stock were not included in the computation of diluted loss per common share during 2012, as their inclusion would have been anti-dilutive. | |||||||||||
Condensed_Financial_Statements
Condensed Financial Statements of Parent | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Condensed Financial Statements of Parent | |||||||||||
Condensed Financial Statements of Parent | 32. Condensed Financial Statements of Parent | ||||||||||
Condensed financial statements of Hilltop (parent only) follow (in thousands). Investments in subsidiaries are determined using the equity method of accounting. | |||||||||||
Condensed Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Investment income | $ | 5,219 | $ | 6,635 | $ | 7,035 | |||||
Interest expense | — | 8,232 | 6,996 | ||||||||
Net gain on investment in SWS common stock | 5,985 | — | — | ||||||||
General and administrative expense | 13,878 | 10,439 | 14,488 | ||||||||
Loss before income taxes, equity in undistributed earnings of subsidiaries and preferred stock activity | (2,674 | ) | (12,036 | ) | (14,449 | ) | |||||
Income tax benefit | (592 | ) | (4,680 | ) | (3,313 | ) | |||||
Equity in undistributed earnings of subsidiaries | 114,640 | 134,065 | 6,038 | ||||||||
Net income (loss) | $ | 112,558 | $ | 126,709 | $ | (5,098 | ) | ||||
Other comprehensive income (loss), net | 35,514 | (43,418 | ) | (4,900 | ) | ||||||
Comprehensive income (loss) | $ | 148,072 | $ | 83,291 | $ | (9,998 | ) | ||||
Condensed Balance Sheets | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 145,948 | $ | 163,856 | $ | 204,754 | |||||
Securities, available for sale | — | 69,023 | 64,082 | ||||||||
Investment in subsidiaries | 1,218,182 | 1,069,226 | 944,546 | ||||||||
Investment in SWS common stock | 70,282 | — | — | ||||||||
Other assets | 88,243 | 14,293 | 27,743 | ||||||||
Total assets | $ | 1,522,655 | $ | 1,316,398 | $ | 1,241,125 | |||||
Liabilities and Stockholders’ Equity | |||||||||||
Accounts payable and accrued expenses | $ | 62,203 | $ | 5,257 | $ | 5,779 | |||||
Notes payable | — | — | 90,850 | ||||||||
Stockholders’ equity | 1,460,452 | 1,311,141 | 1,144,496 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,522,655 | $ | 1,316,398 | $ | 1,241,125 | |||||
Condensed Statements of Cash Flows | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating Activities | |||||||||||
Net income (loss) | $ | 112,558 | $ | 126,709 | $ | (5,098 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Equity in undistributed earnings of subsidiaries | (114,640 | ) | (134,065 | ) | (6,038 | ) | |||||
Deferred income taxes | 156 | 8,850 | (1,011 | ) | |||||||
Net gain on investment in SWS common stock | (5,985 | ) | — | — | |||||||
Loss on redemption of senior exchangeable notes | — | 3,733 | — | ||||||||
Other, net | (1,379 | ) | 132 | (3,370 | ) | ||||||
Net cash provided by (used in) operating activities | (9,290 | ) | 5,359 | (15,517 | ) | ||||||
Investing Activities | |||||||||||
Advance to subsidiary | (6,000 | ) | — | — | |||||||
Capital contribution to subsidiary | — | (35,000 | ) | — | |||||||
Cash paid for acquisition | — | — | (311,805 | ) | |||||||
Net cash used in investing activities | (6,000 | ) | (35,000 | ) | (311,805 | ) | |||||
Financing Activities | |||||||||||
Payments to repurchase common stock | — | — | (1,298 | ) | |||||||
Redemption of senior exchangeable notes | — | (11,088 | ) | — | |||||||
Dividends paid on preferred stock | (5,619 | ) | (2,985 | ) | — | ||||||
Other, net | 3,001 | 2,816 | — | ||||||||
Net cash used in financing activities | (2,618 | ) | (11,257 | ) | (1,298 | ) | |||||
Net change in cash and cash equivalents | (17,908 | ) | (40,898 | ) | (328,620 | ) | |||||
Cash and cash equivalents, beginning of year | 163,856 | 204,754 | 533,374 | ||||||||
Cash and cash equivalents, end of year | $ | 145,948 | $ | 163,856 | $ | 204,754 | |||||
Supplemental Schedule of Non-Cash Activities | |||||||||||
Conversion of available for sale investment in SWS common stock | $ | 71,502 | $ | — | $ | — | |||||
Redemption of senior exchangeable notes for common stock | $ | — | $ | 83,950 | $ | — | |||||
Preferred stock issued in acquisition | $ | — | $ | — | $ | 114,068 | |||||
Common stock issued in acquisition | $ | — | $ | — | $ | 387,583 | |||||
During September 2013, Hilltop contributed capital of $35.0 million to the Bank to provide additional capital in connection with the FNB Transaction. | |||||||||||
As discussed in Note 1 to the consolidated financial statements, Hilltop’s investment in SWS common stock is accounted for under the provisions of the Fair Value Option effective October 2, 2014. Hilltop had previously accounted for its investments in SWS as available for sale securities. Under the Fair Value Option, Hilltop’s investment in SWS common stock is recorded at fair value, with changes in fair value being recorded in other noninterest income within Hilltop’s condensed statement of operations rather than as a component of other comprehensive income. Hilltop’s election to apply the provisions of the Fair Value Option resulted in Hilltop recording those unrealized gains previously associated with its investment in SWS common stock of $7.2 million. For the period from October 3, 2014 through December 31, 2014, the change in fair value of Hilltop’s investment in SWS common stock resulted in a loss of $1.2 million. In the aggregate, Hilltop recorded a $6.0 million net gain in income within Hilltop’s condensed statement of operations during 2014. | |||||||||||
Recently_Issued_Accounting_Sta
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2014 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | 33. Recently Issued Accounting Standards |
In November 2014, the FASB issued ASU 2014-17 to provide companies with the option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The election to apply pushdown accounting can be made either in the period in which the change of control occurred, or in a subsequent period. If the election is made in a subsequent period, the application of this guidance would be considered a change in accounting principle. The amendments in this ASU are effective as of November 18, 2014. The adoption will not have a significant impact on the Company’s consolidated financial statements. | |
In August 2014, the FASB issued ASU No. 2014-14 to reduce diversity in practice by clarifying how to classify and measure certain government-guaranteed mortgage loans upon foreclosure. The amendment is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014 and may be adopted using either a modified retrospective transition method or a prospective transition method. The Company adopted the amendment as of January 1, 2015 using the prospective transition method and does not expect the amendment to have a significant effect on its future consolidated financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09 which clarifies the principles for recognizing revenue from contracts with customers. The amendment outlines a single comprehensive model for entities to depict the transfer of goods or services to customers in amounts that reflect the payment to which a company expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The amendment is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2016 and may be adopted using either a full retrospective transition method or a modified retrospective transition method. Early adoption is not permitted. The Company is currently evaluating the provisions of the amendment and the impact on its future consolidated financial statements. | |
In April 2014, the FASB issued ASU No. 2014-08 which raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The amendment is intended to reduce the frequency of disposals reported as discontinued operations by focusing on strategic shifts that have or will have a major effect on an entity’s operations and financial results and will permit companies to have continuing cash flows and significant continuing involvement with the disposed component. The amendment is effective for disposals (or classifications as held for sale) and acquired businesses or nonprofit activities that are classified as held for sale upon acquisition that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. As such, the Company will evaluate the provisions of the amendment as it relates to any potential disposals or acquisitions beginning on or after January 1, 2015. | |
In January 2014, the FASB issued ASU No. 2014-04 to clarify that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014 and may be adopted using either a modified retrospective transition method or a prospective transition method. The Company adopted the amendment as of January 1, 2015 using the prospective transition method and does not expect the amendment to have a significant effect on its future consolidated financial statements. | |
In July 2013, the FASB issued ASU No. 2013-11 to require an entity to present an unrecognized tax benefit, or portion thereof, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendment became effective for the Company on January 1, 2014, and its adoption did not have any effect on the Company’s consolidated financial statements as the amendment is to be applied prospectively to all unrecognized tax benefits that exist at the balance sheet date. | |
Selected_Quarterly_Financial_I
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Selected Quarterly Financial Information (Unaudited) | |||||||||||||||||
Selected Quarterly Financial Information (Unaudited) | 34. Selected Quarterly Financial Information (Unaudited) | ||||||||||||||||
Selected quarterly financial information is summarized as follows (in thousands, except per share data). | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Fourth | Third | Second | First | Full | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
Interest income | $ | 99,316 | $ | 93,217 | $ | 104,408 | $ | 91,828 | $ | 388,769 | |||||||
Interest expense | 7,802 | 7,457 | 5,962 | 6,407 | 27,628 | ||||||||||||
Net interest income | 91,514 | 85,760 | 98,446 | 85,421 | 361,141 | ||||||||||||
Provision for loan losses | 4,125 | 4,033 | 5,533 | 3,242 | 16,933 | ||||||||||||
Noninterest income | 213,795 | 212,135 | 203,281 | 170,100 | 799,311 | ||||||||||||
Noninterest expense | 246,768 | 254,744 | 251,212 | 212,629 | 965,353 | ||||||||||||
Income before income taxes | 54,416 | 39,118 | 44,982 | 39,650 | 178,166 | ||||||||||||
Income tax provision | 20,950 | 14,010 | 16,294 | 14,354 | 65,608 | ||||||||||||
Net income | 33,466 | 25,108 | 28,688 | 25,296 | 112,558 | ||||||||||||
Less: Net income attributable to noncontrolling interest | 325 | 296 | 177 | 110 | 908 | ||||||||||||
Income attributable to Hilltop | $ | 33,141 | $ | 24,812 | $ | 28,511 | $ | 25,186 | $ | 111,650 | |||||||
Dividends on preferred stock | 1,425 | 1,426 | 1,426 | 1,426 | 5,703 | ||||||||||||
Income applicable to Hilltop common stockholders | $ | 31,716 | $ | 23,386 | $ | 27,085 | $ | 23,760 | $ | 105,947 | |||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.35 | $ | 0.26 | $ | 0.30 | $ | 0.26 | $ | 1.18 | |||||||
Diluted | $ | 0.35 | $ | 0.26 | $ | 0.30 | $ | 0.26 | $ | 1.17 | |||||||
Year Ended December 31, 2013 | |||||||||||||||||
Fourth | Third | Second | First | Full | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
Interest income | $ | 98,601 | $ | 79,702 | $ | 76,168 | $ | 74,604 | $ | 329,075 | |||||||
Interest expense | 10,002 | 7,786 | 7,743 | 7,343 | 32,874 | ||||||||||||
Net interest income | 88,599 | 71,916 | 68,425 | 67,261 | 296,201 | ||||||||||||
Provision for loan losses | 2,206 | 10,658 | 11,289 | 13,005 | 37,158 | ||||||||||||
Noninterest income | 182,479 | 215,095 | 239,233 | 213,278 | 850,085 | ||||||||||||
Noninterest expense | 219,752 | 216,592 | 260,400 | 214,991 | 911,735 | ||||||||||||
Income before income taxes | 49,120 | 59,761 | 35,969 | 52,543 | 197,393 | ||||||||||||
Income tax provision | 18,090 | 20,115 | 13,309 | 19,170 | 70,684 | ||||||||||||
Net income | 31,030 | 39,646 | 22,660 | 33,373 | 126,709 | ||||||||||||
Less: Net income attributable to noncontrolling interest | 160 | 339 | 568 | 300 | 1,367 | ||||||||||||
Income attributable to Hilltop | $ | 30,870 | $ | 39,307 | $ | 22,092 | $ | 33,073 | $ | 125,342 | |||||||
Dividends on preferred stock | 1,342 | 1,133 | 1,149 | 703 | 4,327 | ||||||||||||
Income applicable to Hilltop common stockholders | $ | 29,528 | $ | 38,174 | $ | 20,943 | $ | 32,370 | $ | 121,015 | |||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.34 | $ | 0.45 | $ | 0.25 | $ | 0.39 | $ | 1.43 | |||||||
Diluted | $ | 0.34 | $ | 0.43 | $ | 0.24 | $ | 0.39 | $ | 1.40 | |||||||
Subsequent_Events
Subsequent Events | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Subsequent Events | |||||
Subsequent Events | 35. Subsequent Events | ||||
On January 1, 2015, Hilltop completed its acquisition of SWS in a stock and cash transaction, whereby SWS merged with and into Hilltop Securities, a wholly owned subsidiary of Hilltop formed for the purpose of facilitating this transaction (the “SWS Merger”). SWS’s broker-dealer subsidiaries, Southwest Securities, Inc. (“Southwest Securities”) and SWS Financial Services, Inc. (“SWS Financial”), became subsidiaries of Hilltop Securities. Immediately following the SWS Merger, SWS’s banking subsidiary, Southwest Securities, FSB, was merged into the Bank, an indirect wholly owned subsidiary of Hilltop. As a result of the SWS Merger, each outstanding share of SWS common stock was converted into the right to receive 0.2496 shares of Hilltop common stock and $1.94 in cash, equating to $6.92 per share based on Hilltop’s closing price on December 31, 2014 and resulting in an aggregate purchase price of $349.0 million, consisting of 10.0 million shares of common stock, $78.2 million in cash and $70.3 million associated with Hilltop’s existing investment in SWS common stock. Additionally, due to appraisal rights proceedings filed in connection with the SWS Merger, the merger consideration is subject to change, and is therefore, preliminary as of the date of this report. The SWS Merger will be accounted for using the acquisition method of accounting, and accordingly, purchased assets, including identifiable intangible assets and assumed liabilities will be recorded at their respective acquisition date fair values. Because of (i) the short time period between the acquisition date and the date the Company’s financial statements were issued (February 26, 2015) and (ii) the work of third party specialists engaged to assist in valuing certain assets and liabilities, along with management’s review and approval, not being complete, the Company used significant estimates and assumptions to value certain identifiable assets acquired and liabilities assumed. The acquisition date valuations related to loans, premises and equipment, intangible assets, assumed liabilities and taxes are considered preliminary and could differ significantly when finalized. | |||||
A summary of the preliminary estimated fair values of the identifiable assets acquired, and liabilities assumed, of SWS at January 1, 2015 are summarized in the following table (in thousands). | |||||
Cash and due from banks | $ | 118,538 | |||
Federal funds sold and securities purchased agreements to resell | 44,741 | ||||
Assets segregated for regulatory purposes | 181,610 | ||||
Securities | 707,476 | ||||
Non-covered loans, net | 854,778 | ||||
Broker-dealer and clearing organization receivables | 1,261,022 | ||||
Other assets | 118,910 | ||||
Total identifiable assets acquired | 3,287,075 | ||||
Deposits | (1,287,394 | ) | |||
Broker-dealer and clearing organization payables | (1,113,075 | ) | |||
Short-term borrowings | (164,240 | ) | |||
Advances from Federal Home Loan Bank | (76,643 | ) | |||
Other liabilities | (216,411 | ) | |||
Total liabilities assumed | (2,857,763 | ) | |||
Preliminary estimated bargain purchase gain | (80,326 | ) | |||
348,986 | |||||
Less Hilltop existing investment in SWS | (70,282 | ) | |||
Net identifiable assets acquired | $ | 278,704 | |||
The following table discloses the impact of SWS on the Company’s results of operations (excluding the impact of acquisition-related merger and restructuring charges discussed below). The table also presents unaudited pro forma results had the SWS Merger taken place on January 1, 2014 and includes the estimated impact of purchase accounting adjustments (in thousands). The purchase accounting adjustments reflect the impact of recording the acquired loans at fair value, including the estimated accretion of the purchase discount on the loan portfolio. The unaudited pro forma results do not include any potential operating cost savings as a result of the SWS Merger. Further, certain costs associated with any restructuring or integration activities are also not reflected in the unaudited pro forma results. Unaudited pro forma results exclude nonrecurring items resulting directly from the SWS Merger and that do not have a continuing impact on results of operations. | |||||
The unaudited pro forma results are not indicative of what would have occurred had the SWS Merger taken place on the indicated date. | |||||
Twelve Months | |||||
Ended | |||||
December 31, 2014 | |||||
Net interest income | $ | 420,894 | |||
Other revenues | 1,005,701 | ||||
Net income | 110,279 | ||||
In connection with the SWS Merger, FSC and its related entities also became subsidiaries of Hilltop Securities. First Southwest, Southwest Securities and SWS Financial will continue to operate as separate broker-dealers, under coordinated leadership, until such time as the necessary regulatory approvals are obtained and systems integrations are complete. | |||||
Summary_of_Significant_Account1
Summary of Significant Accounting and Reporting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting and Reporting Policies | |
Nature of Operations | Nature of Operations |
Hilltop Holdings Inc. (“Hilltop” and, collectively with its subsidiaries, the “Company”) is a financial holding company registered under the Bank Holding Company Act of 1956, as amended by the Gramm-Leach-Bliley Act of 1999. On November 30, 2012, Hilltop acquired PlainsCapital Corporation pursuant to a plan of merger whereby PlainsCapital Corporation merged with and into a wholly owned subsidiary of Hilltop (the “PlainsCapital Merger”), which continued as the surviving entity under the name “PlainsCapital Corporation” (“PlainsCapital”). | |
The Company has two primary operating business units, PlainsCapital and National Lloyds Corporation (“NLC”). PlainsCapital is a financial holding company, headquartered in Dallas, Texas, that provides, through its subsidiaries, an array of financial products and services. In addition to traditional banking services, PlainsCapital provides residential mortgage lending, investment banking, public finance advisory, wealth and investment management, treasury management, fixed income sales, asset management, and correspondent clearing services. NLC is a property and casualty insurance holding company that provides, through its subsidiaries, fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other areas of the southern United States. | |
The operating results of Hilltop for the year ended December 31, 2012 include the results from the operations acquired in the PlainsCapital Merger for the month ended December 31, 2012. Certain disclosures within the notes to consolidated financial statements are specific to financial products and services of PlainsCapital and its subsidiaries and therefore include information at December 31, 2014 and 2013 and relating to the post-acquisition years ended December 31, 2014 and 2013 and one month period ended December 31, 2012. | |
On September 13, 2013 (the “Bank Closing Date”), PlainsCapital Bank (the “Bank”) assumed substantially all of the liabilities, including all of the deposits, and acquired substantially all of the assets of Edinburg, Texas-based First National Bank (“FNB”) from the Federal Deposit Insurance Corporation (the “FDIC”), as receiver, and reopened former FNB branches acquired from the FDIC under the “PlainsCapital Bank” name (the “FNB Transaction”). Pursuant to the Purchase and Assumption Agreement (the “P&A Agreement”), the Bank and the FDIC entered into loss-share agreements whereby the FDIC agreed to share in the losses of certain covered loans and covered other real estate owned (“OREO”) that the Bank acquired, as further described in Note 2 to the consolidated financial statements. The acquisition of FNB’s expansive branch network allowed the Bank to increase its presence in Texas to include the Rio Grande Valley, Houston, Corpus Christi, Laredo and El Paso markets, among others. | |
Basis of Presentation | Basis of Presentation |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates regarding the allowance for loan losses, the fair values of financial instruments, the amounts receivable under the loss-share agreements with the FDIC (“FDIC Indemnification Asset”), reserves for losses and loss adjustment expenses, the mortgage loan indemnification liability, and the potential impairment of assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. | |
The presentation of the Company’s historical consolidated financial statements has been modified and certain items in the 2012 financial statements have been reclassified to conform to the current period presentation, which is more consistent with that of a financial institution that provides an array of financial products and services. | |
Hilltop owns 100% of the outstanding stock of PlainsCapital. PlainsCapital owns 100% of the outstanding stock of the Bank and 100% of the membership interest in PlainsCapital Equity, LLC. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”), PCB-ARC, Inc. and RGV-ARC, Inc. The Bank has a 100% membership interest in First Southwest Holdings, LLC (“First Southwest”) and PlainsCapital Securities, LLC. | |
Hilltop also owns 100% of NLC, which operates through its wholly owned subsidiaries, National Lloyds Insurance Company (“NLIC”) and American Summit Insurance Company (“ASIC”). | |
PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC, the controlling and sole managing member of PrimeLending Ventures, LLC (“Ventures”). | |
The principal subsidiaries of First Southwest are First Southwest Company, LLC (“FSC”), a broker-dealer registered with the Securities and Exchange Commission (the “SEC”) and the Financial Industry Regulatory Authority and a member of the New York Stock Exchange (“NYSE”), and First Southwest Asset Management, LLC, a registered investment advisor under the Investment Advisors Act of 1940. | |
The consolidated financial statements include the accounts of the above-named entities. All significant intercompany transactions and balances have been eliminated. Noncontrolling interests have been recorded for minority ownership in entities that are not wholly owned and are presented in compliance with the provisions of Noncontrolling Interest in Subsidiary Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). | |
On October 2, 2014, as discussed in Note 4 to the consolidated financial statements, Hilltop exercised the SWS Warrant (defined hereafter) in full and paid the aggregate exercise price by the automatic elimination of the $50.0 million aggregate principal amount note due to Hilltop under the credit agreement. Consequently, Hilltop owned approximately 21% of the outstanding shares of SWS Group, Inc. (“SWS”) common stock. Contemporaneous with the exercise of the SWS Warrant, Hilltop changed the accounting method for its investment in SWS common stock and elected to account for its investment in accordance with the provisions of the Fair Value Option Subsections of the ASC (“Fair Value Option”) as permitted by GAAP. Hilltop had previously accounted for its investment in SWS common stock as an available for sale security. Under the Fair Value Option, Hilltop’s investment in SWS common stock is recorded at fair value effective October 2, 2014, with changes in fair value being recorded in other noninterest income within the consolidated statement of operations rather than as a component of other comprehensive income. Hilltop’s election to apply the provisions of the Fair Value Option resulted in Hilltop recording those unrealized gains previously associated with its investment in SWS common stock of $7.2 million. For the period from October 3, 2014 through December 31, 2014, the change in fair value of Hilltop’s investment in SWS common stock resulted in a loss of $1.2 million. In the aggregate, Hilltop recorded a $6.0 million net gain in other noninterest income within the consolidated statement of operations during 2014. At December 31, 2014, Hilltop’s investment in SWS common stock is included in other assets within the consolidated balance sheet and is recorded at fair value. | |
PlainsCapital also owns 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which are not included in the consolidated financial statements under the requirements of the Variable Interest Entities Subsections of the ASC, because the primary beneficiaries of the Trusts are not within the consolidated group. | |
Acquisition Accounting | Acquisition Accounting |
Acquisitions are accounted for under the acquisition method of accounting. Purchased assets, including identifiable intangible assets, and assumed liabilities are recorded at their respective acquisition date fair values. If the fair value of net assets purchased exceeds the consideration given, a “bargain purchase gain” is recognized. If the consideration given exceeds the fair value of the net assets received, goodwill is recognized. | |
Securities Purchased Under Agreements to Resell | Securities Purchased Under Agreements to Resell |
Securities purchased under agreements to resell (reverse repurchase agreements or reverse repos) are treated as collateralized financings and are carried at the amounts at which the securities will subsequently be resold as specified in the agreements. PlainsCapital is in possession of collateral with a fair value equal to or in excess of the contract amounts. | |
Securities | Securities |
Management classifies securities at the time of purchase and reassesses such designation at each balance sheet date. Transfers between categories from these reassessments are rare. Securities held for resale to facilitate principal transactions with customers, as well as certain securities acquired in the PlainsCapital Merger, are classified as trading, and are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. Hilltop reports interest income on trading securities as interest income on securities and other changes in fair value as other noninterest income. | |
Securities held but not intended to be held to maturity or on a long-term basis are classified as available for sale. Securities included in this category are those that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates, resultant prepayment risk, and other factors related to interest rate and resultant prepayment risk changes. Securities available for sale are carried at fair value. Unrealized holding gains and losses on securities available for sale, net of taxes, are reported in other comprehensive income (loss) until realized. Premiums and discounts are recognized in interest income using the effective interest method and consider any optionality that may be embedded in the security. | |
Purchases and sales (and related gain or loss) of securities are recorded on the trade date, based on specific identification. Declines in the fair value of available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the other-than-temporary impairment (“OTTI”) is related to credit losses. The amount of the OTTI related to other factors is recognized in other comprehensive income (loss). In estimating OTTI, management considers in developing its best estimate of cash flows, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, (iii) the historic and implied volatility of the security, (iv) failure of the issuer to make scheduled interest payments and (v) changes to the rating of the security by a rating agency. | |
Loans Held for Sale | Loans Held for Sale |
Loans held for sale consist primarily of single-family residential mortgages funded through PrimeLending. These loans are generally on the consolidated balance sheet for no more than 30 days. Substantially all mortgage loans originated by PrimeLending are sold in the secondary market, the majority with servicing released. Mortgage loans held for sale are carried at fair value under the provisions of the Fair Value Option. Changes in the fair value of the loans held for sale are recognized in earnings and fees and costs associated with origination are recognized as incurred. The specific identification method is used to determine realized gains and losses on sales of loans, which are reported as net gains (losses) in noninterest income. Loans sold are subject to certain indemnification provisions with investors, including the repurchase of loans sold and repayment of certain sales proceeds to investors under certain conditions. In addition, certain mortgage loans guaranteed by U.S. Government agencies and sold into Government National Mortgage Association (“GNMA”) pools may, under certain conditions specified in the government programs, become subject to repurchase by PrimeLending. Such loans subject to repurchase no longer qualify for sale accounting and are reported as loans held for sale in the consolidated balance sheets. | |
Loans | Loans |
Originated Loans | |
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal reduced by unearned income, net unamortized deferred fees and an allowance for loan losses. Unearned income on installment loans and interest on other loans is recognized using the effective interest method. Net fees received for providing loan commitments and letters of credit that result in loans are deferred and amortized to interest income over the life of the related loan, beginning with the initial borrowing. Net fees on commitments and letters of credit that are not expected to be funded are amortized to noninterest income over the commitment period. Income on direct financing leases is recognized on a basis that achieves a constant periodic rate of return on the outstanding investment. | |
Impaired loans include non-accrual loans, troubled debt restructurings and partially charged-off loans. The accrual of interest on impaired loans is discontinued when, in management’s opinion, there is a clear indication that the borrower’s cash flow may not be sufficient to meet principal and interest payments as they become due according to the terms of the loan agreement, which is generally when a loan is 90 days past due unless the loan is both well secured and in the process of collection. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is charged against income. If the ultimate collectability of principal, wholly or partially, is in doubt, any payment received on a loan on which the accrual of interest has been suspended is applied to reduce principal to the extent necessary to eliminate such doubt. Once the collection of the remaining recorded loan balance is fully expected, interest income is recognized on a cash basis. | |
The Bank originates loans to customers primarily in Texas. Although the Bank has diversified loan and leasing portfolios and, generally, holds collateral against amounts advanced to customers, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the region and of the industries in which its debtors operate, which consist primarily of energy, agribusiness, wholesale/retail trade, construction and real estate. PrimeLending originates loans to customers in its offices, which are located throughout the United States. Substantially all mortgage loans originated by PrimeLending are sold in the secondary market, the majority with servicing released, although PrimeLending does retain servicing in certain circumstances. FSC makes loans to customers through margin transactions. FSC controls risk by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines, which may vary based upon market conditions. Securities owned by customers and held as collateral for margin loans are not included in the consolidated financial statements. | |
Acquired Loans | |
Management has defined the loans acquired in a business combination as acquired loans. Acquired loans are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan losses. Acquired loans were segregated between those considered to be credit impaired and those without credit impairment at acquisition. To make this determination, management considered such factors as past due status, nonaccrual status and credit risk ratings. The fair value of acquired performing loans was determined by discounting expected cash flows, both principal and interest, at prevailing market interest rates. The difference between the fair value and principal balances due at acquisition date, the fair value discount, is accreted into income over the estimated life of each loan. | |
Purchased credit impaired (“PCI”) loans acquired in the PlainsCapital Merger are accounted for on an individual loan basis, while PCI loans acquired in the FNB Transaction are accounted for both in pools and on an individual loan basis. The Company has established under its PCI accounting policy a framework to aggregate certain acquired loans into various loan pools based on a minimum of two layers of common risk characteristics for the purpose of determining their respective fair values as of their acquisition dates, and for applying the subsequent recognition and measurement provisions for income accretion and impairment testing. The common risk characteristics used for the pooling of the FNB PCI loans are risk grade and loan collateral type. | |
PCI loans showed evidence of credit deterioration that makes it probable that all contractually required principal and interest payments will not be collected. Their fair value was initially based on an estimate of cash flows, both principal and interest, expected to be collected, discounted at prevailing market rates of interest. Management estimated cash flows using key assumptions such as default rates, loss severity rates assuming default, prepayment speeds and estimated collateral values. The excess of cash flows expected to be collected from a loan or pool over its estimated fair value at acquisition is referred to as the accretable yield and is recognized in interest income using an effective yield method over the remaining life of the loan or pool. Subsequent to acquisition, management must update these estimates of cash flows expected to be collected at each reporting date. These updates require the continued use of key assumptions and estimates, similar to those used in the initial estimate of fair value. | |
The Bank accretes the discount for PCI loans for which it can predict the timing and amount of cash flows. PCI loans for which a discount is accreted are considered performing. | |
Allowance for Loan Losses | Allowance for Loan Losses |
Originated Loans | |
The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses inherent in the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses inherent in the loan portfolio at the balance sheet date. The allowance for loan losses includes allowance allocations calculated in accordance with the Receivables and Contingencies Topics of the ASC. The level of the allowance reflects management’s continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions, and unidentified losses inherent in the current loan portfolio. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. While management utilizes its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Bank’s control, including the performance of the Bank’s loan portfolio, the economy and changes in interest rates. | |
The Bank’s allowance for loan losses consists of three elements: (i) specific valuation allowances established for probable losses on impaired loans; (ii) general historical valuation allowances calculated based on historical loan loss experience for homogenous loans with similar collateral; and (iii) valuation allowances to adjust general reserves based on recent economic conditions and other qualitative risk factors both internal and external to the Bank. | |
Acquired Loans | |
Purchased loans acquired in a business combination are recorded at their estimated fair value on their purchase date with no carryover of the related allowance for loan losses. Loans without evidence of credit impairment at acquisition are subsequently evaluated for any required allowance at each reporting date. An allowance for loan losses is calculated using a methodology similar to that described above for originated loans. The allowance as determined for each loan collateral type is compared to the remaining fair value discount for that loan collateral type. If greater, the excess is recognized as an addition to the allowance through a provision for loan losses. If less than the discount, no additional allowance is recorded. Charge-offs and losses first reduce any remaining fair value discount for the loan and once the discount is depleted, losses are applied against the allowance established for that loan. | |
For PCI loans, cash flows expected to be collected are recast at each reporting date for each loan or pool. These evaluations require the continued use and updating of key assumptions and estimates such as default rates, loss severity given default and prepayment speed assumptions, similar to those used for the initial fair value estimate. Management judgment must be applied in developing these assumptions. If expected cash flows for a loan or pool decreases, an increase in the allowance for loan losses is made through a charge to the provision for loan losses. If expected cash flows for a loan increase, any previously established allowance for loan losses is reversed and any remaining difference increases the accretable yield which will be taken into income over the remaining life of the loan or pool. | |
Assets Segregated for Regulatory Purposes | Assets Segregated for Regulatory Purposes |
Under certain conditions, FSC may be required to segregate cash and securities in a special reserve account for the benefit of customers under Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Assets segregated under the provisions of the Exchange Act are not available for general corporate purposes. FSC was required to segregate $76.0 million in cash and securities at December 31, 2014, which is included in other assets within the consolidated balance sheet. At December 31, 2013, FSC was not required to segregate cash and securities. | |
FSC was not required to segregate cash or securities in a special reserve account for the benefit of proprietary accounts of introducing broker-dealers at December 31, 2014 and 2013. | |
Broker-Dealer and Clearing Organization Transactions | Broker-Dealer and Clearing Organization Transactions |
Amounts recorded in broker-dealer and clearing organization receivables and payables include securities lending activities, as well as amounts related to securities transactions for either FSC customers or for the account of FSC. Securities-borrowed and securities-loaned transactions are generally reported as collateralized financings except where letters of credit or other securities are used as collateral. Securities-borrowed transactions require FSC to deposit cash, letters of credit, or other collateral with the lender. With respect to securities loaned, FSC receives collateral in the form of cash or other assets in an amount generally in excess of the market value of securities loaned. FSC monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as necessary. Interest income and interest expense associated with collateralized financings is included in the accompanying consolidated statements of operations. | |
Insurance Premiums Receivable | Insurance Premiums Receivable |
Insurance premiums receivable include premiums written and not yet collected. NLC routinely evaluates the receivable balance to determine if an allowance for uncollectible amounts is necessary. At December 31, 2014 and 2013, NLC determined that no valuation allowance was necessary. | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs |
Costs of acquiring insurance vary with and are primarily related to the successful acquisition of new and renewal business, primarily consisting of commissions, premium taxes and underwriting expenses, and are deferred and amortized over the terms of the policies or reinsurance treaties to which they relate. Proceeds from reinsurance transactions that represent recovery of acquisition costs reduce applicable unamortized acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense in proportion to net revenue recognized. Future investment income is considered in determining the recoverability of deferred policy acquisition costs. NLC regularly reviews the categories of acquisition costs that are deferred and assesses the recoverability of this asset. A premium deficiency and a corresponding charge to income is recognized if the sum of the expected loss and loss adjustment expenses, unamortized policy acquisition costs, and maintenance costs exceed related unearned insurance premiums and anticipated investment income. At December 31, 2014 and 2013, there was no premium deficiency. | |
Reinsurance | Reinsurance |
In the normal course of business, NLC seeks to reduce the loss that may arise from catastrophes or other events that could cause unfavorable underwriting results by reinsuring certain levels of risk in various areas of exposure with other insurance enterprises or reinsurers. Amounts recoverable from reinsurers are estimated in a manner consistent with the reinsured policy. NLC routinely evaluates the receivable balance to determine if any uncollectible balances exist. | |
Net insurance premiums earned, losses and loss adjustment expenses (“LAE”) and policy acquisition and other underwriting expenses are reported net of the amounts related to reinsurance ceded to other companies. Amounts recoverable from reinsurers related to the portions of the liability for losses and LAE and unearned insurance premiums ceded to them are included in other assets within the consolidated balance sheets. Reinsurance assumed from other companies, including assumed premiums written and earned and losses and LAE, is accounted for in the same manner as direct insurance written. | |
Premises and Equipment | Premises and Equipment |
Premises and equipment are stated at cost less accumulated depreciation and amortization computed principally on the straight-line method over the estimated useful lives of the assets, which range between 3 and 40 years. Gains or losses on disposals of premises and equipment are included in results of operations. | |
FDIC Indemnification Asset | FDIC Indemnification Asset |
The Company has elected to account for the FDIC Indemnification Asset in accordance with FASB ASC 805. The FDIC Indemnification Asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreements. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted into noninterest income within the consolidated statements of operations over the life of the FDIC Indemnification Asset. The FDIC Indemnification Asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered portfolio. These adjustments are measured on the same basis as the related covered loans and covered OREO. Any increases in cash flow of the covered assets over those expected will reduce the FDIC Indemnification Asset, and any decreases in cash flow of the covered assets under those expected will increase the FDIC Indemnification Asset. Any amortization of changes in value is limited to the contractual term of the loss-share agreements. Increases and decreases to the FDIC Indemnification Asset are recorded as adjustments to noninterest income within the consolidated statements of operations over the life of the loss-share agreements. | |
Covered Other Real Estate Owned | Covered Other Real Estate Owned |
Acquired OREO subject to FDIC loss-share agreements is referred to as “covered OREO” and reported separately in the consolidated balance sheets. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered OREO at the collateral’s fair value, less selling costs. Covered OREO was initially recorded at its estimated fair value based on similar market comparable valuations, less estimated selling costs. Subsequently, loan collateral transferred to OREO is recorded at its net realizable value. Any subsequent valuation adjustments due to declines in fair value of the covered OREO will be charged to noninterest expense, and will be partially offset by noninterest income representing the corresponding increase to the FDIC Indemnification Asset for loss reimbursements. Any recoveries of previous valuation decreases will be credited to noninterest expense with a corresponding charge to noninterest income for the portion of the recovery that is due to the FDIC. | |
Other Real Estate Owned | Other Real Estate Owned |
Real estate acquired through foreclosure is included in other assets within the consolidated balance sheets and is carried at management’s estimate of fair value less costs to sell. Any excess of recorded investment over fair value less cost to sell is charged against the allowance for loan losses when property is initially transferred to OREO. Subsequent to the initial transfer to OREO, valuation adjustments are charged against earnings. Valuation adjustments, revenue and expenses from operations of the properties and resulting gains or losses on sale are included in other noninterest expense within the consolidated statements of operations. | |
Debt Issuance Costs | Debt Issuance Costs |
The Company capitalizes debt issuance costs associated with financing of debt. These costs are amortized on a straight-line basis, which approximates the effective interest method, over the repayment term of the loans. Debt issuance costs of $2.3 million and $0.2 million in 2013 and 2012 were amortized and included in interest expense within the consolidated statements of operations. In November 2013, the total remaining unamortized balance of $2.1 million was expensed as a result of the redemption of all outstanding 7.5% Senior Exchangeable Notes due 2025 (“the Notes”), as further described in Note 13 to the consolidated financial statements. | |
Goodwill | Goodwill |
Goodwill, which represents the excess of cost over the fair value of the net assets acquired, is allocated to reporting units and tested for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount should be assessed. The Company performs required annual impairment tests of its goodwill and other intangible assets as of October 1st for each of its reporting units. Prior to testing goodwill for impairment, the Company has the option to assess on a qualitative basis whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If determined, based on its assessment of qualitative factors that it is more likely than not that fair value of a reporting unit is less than its carrying amount, the Company will proceed to test goodwill for impairment as a part of a two-step process. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. | |
Intangibles and Other Long-Lived Assets | Intangibles and Other Long-Lived Assets |
Intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. The Company’s intangible assets primarily relate to core deposits, trade names, customer and agent relationships and noncompete agreements. Intangible assets with definite useful lives are generally amortized on the straight-line method over their estimated lives, although certain intangibles, including core deposits and customer and agent relationships, are amortized on an accelerated basis. Amortization of intangible assets is recorded in other noninterest expense within the consolidated statements of operations. Intangible assets with indefinite useful lives are tested for impairment annually, or more often if events or circumstances indicate there may be impairment, and not amortized until their lives are determined to be definite. Intangible assets with definite useful lives, premises and equipment, and other long-lived assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value. | |
Mortgage Servicing Rights | Mortgage Servicing Rights |
The Company determines its classes of residential mortgage servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures its servicing assets at fair value and reports changes in fair value through earnings. Fair value adjustments that encompass market-driven valuation changes and the runoff in value that occurs from the passage of time are each separately reported. | |
Retained mortgage servicing rights (“MSR”) are measured at fair value as of the date of sale of the related mortgage loan. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. | |
The model assumptions and the MSR fair value estimates are compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. The expected life of the loan can vary from management’s estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management’s estimates would negatively impact the recorded value of the MSR. The value of the MSR is also dependent upon the discount rate used in the model, which is based on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of the MSR. | |
Derivative Financial Instruments | Derivative Financial Instruments |
The Company’s hedging policies permit the use of various derivative financial instruments, including forward commitments, and interest rate swaps and swaptions, to manage interest rate risk or to hedge specified assets and liabilities. The Company’s derivative financial instruments also include interest rate lock commitments (“IRLCs”) executed with its customers that allow those customers to obtain a mortgage loan on a future date at an agreed-upon interest rate. The IRLCs, forward commitments, and interest rate swaps and swaptions meet the definition of a derivative under the provisions of the Derivatives and Hedging Topic of the ASC. | |
Derivatives are recorded at fair value in the consolidated balance sheets. To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract. If derivative instruments are designated as hedges of fair values, the change in the fair value of both the derivative instrument and the hedged item are included in current earnings. Changes in the fair value of derivatives designated as hedges of cash flows are recorded in other comprehensive income (loss). Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the line item where the hedged item’s effect on earnings is recorded. | |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses |
The liability for losses and LAE includes an amount determined from loss reports and individual cases and an amount, based on past experience, for losses incurred but not reported. Such liabilities are necessarily based on estimates and, while management believes that the amount is adequate, the ultimate liability may be in excess of or less than the amounts provided. The methods for making such estimates and for establishing the resulting liability are continually reviewed, and any adjustments are reflected in earnings currently. The liability for losses and loss adjustment expenses has not been reduced for reinsurance recoverable. | |
Loss Contingencies | Loss Contingencies |
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. | |
Stock-Based Compensation | Stock-Based Compensation |
Stock-based compensation expense for all share-based awards granted is based on the grant date fair value estimated in accordance with the provisions of the Stock Compensation Topic of the ASC. The Company recognizes these compensation costs for only those awards expected to vest over the service period of the award. | |
Advertising | Advertising |
Advertising costs are expensed as incurred. Advertising expense totaled $4.6 million, $5.3 million and $0.4 million during 2014, 2013 and 2012, respectively. | |
Income Taxes | Income Taxes |
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded for the estimated future tax effects of the temporary difference between the tax basis and book basis of assets and liabilities reported in the accompanying consolidated balance sheets. The provision for income tax expense or benefit differs from the amounts of income taxes currently payable because certain items of income and expense included in the consolidated financial statements are recognized in different time periods by taxing authorities. Interest and penalties incurred related to tax matters are charged to other interest expense or other noninterest expense, respectively. | |
Benefits from uncertain tax positions are recognized in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority having full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of cumulative benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the reporting period in which that threshold is no longer met. The Company did not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. At December 31, 2014, the net unrecognized tax benefit was $0.4 million. If the Company were to prevail on all uncertain tax positions, the effect would be a benefit to the Company’s effective tax rate. Due to uncertainties in any tax audit outcome, estimates of the ultimate settlement of unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimate. | |
Deferred tax assets, including net operating loss and tax credit carry forwards, are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that any portion of these tax attributes will not be realized. Periodic reviews of the carrying amount of deferred tax assets are made when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Based on that evaluation, management determined at December 31, 2014 that it was appropriate to establish a valuation allowance on the portion of the deferred tax asset associated with its capital losses from investments that could not be carried back to prior tax years. The Company has no valuation allowance on the remainder of its deferred tax assets at December 31, 2014 or 2013. | |
Cash Flow Reporting | Cash Flow Reporting |
For the purpose of presentation in the consolidated statements of cash flows, cash and cash equivalents are defined as the amount included in the consolidated balance sheets caption “Cash and due from banks” and the portion of the amount in the caption “Federal funds sold and securities purchased under agreements to resell” that represents federal funds sold. Cash equivalents have original maturities of three months or less. | |
Basic and Diluted Net Income (Loss) Per Share | Basic and Diluted Net Income (Loss) Per Share |
Nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of earnings per share pursuant to the two-class method prescribed by the Earnings Per Share Topic of the ASC. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. During 2013, as discussed in Note 20 to the consolidated financial statements, Hilltop issued Restricted Stock Awards which qualify as participating securities. | |
Net earnings, less any preferred dividends accumulated for the period (whether or not declared), is allocated between the common stock and participating securities pursuant to the two-class method. Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares. | |
Diluted earnings per common share is computed in a similar manner, except that first the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares, excluding the participating securities, were issued using the treasury stock method. During 2014, stock options and RSUs are the only potentially dilutive non-participating instruments issued by Hilltop, while potentially dilutive non-participating instruments during 2013 included stock options, RSUs and the Notes, which were called for redemption during the fourth quarter of 2013. Next, the Company determines and includes in the diluted earnings per common share calculation the more dilutive effect of the participating securities using the treasury stock method or the two-class method. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company. | |
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Acquisitions | |||||||||||
Summary of the net assets received from the FDIC and the estimated fair value adjustments resulting in the bargain purchase gain | A summary of the net assets received from the FDIC in the FNB Transaction and the estimated fair value adjustments resulting in the bargain purchase gain are presented below (in thousands). | ||||||||||
Cost basis net assets on September 13, 2013 | $ | 215,000 | |||||||||
Cash payment received from the FDIC | 45,000 | ||||||||||
Fair value adjustments: | |||||||||||
Securities | (3,341 | ) | |||||||||
Loans | (343,068 | ) | |||||||||
Premises and equipment | 3,565 | ||||||||||
Other real estate owned | (79,273 | ) | |||||||||
FDIC indemnification asset | 185,680 | ||||||||||
Other intangible assets | 4,270 | ||||||||||
Deposits | (8,282 | ) | |||||||||
Other | (6,966 | ) | |||||||||
Bargain purchase gain | $ | 12,585 | |||||||||
FNB | |||||||||||
Acquisitions | |||||||||||
Summary of fair values of the identifiable assets acquired, and liabilities assumed | The resulting fair values of the identifiable assets acquired, and liabilities assumed, of FNB at September 13, 2013 are summarized in the following table (in thousands). | ||||||||||
Cash and due from banks | $ | 362,695 | |||||||||
Securities | 286,214 | ||||||||||
Non-covered loans | 42,884 | ||||||||||
Covered loans | 1,116,583 | ||||||||||
Premises and equipment | 78,399 | ||||||||||
FDIC indemnification asset | 185,680 | ||||||||||
Covered other real estate owned | 135,187 | ||||||||||
Other assets | 26,300 | ||||||||||
Other intangible assets | 4,270 | ||||||||||
Total identifiable assets acquired | 2,238,212 | ||||||||||
Deposits | (2,211,740 | ) | |||||||||
Other liabilities | (13,887 | ) | |||||||||
Total liabilities assumed | (2,225,627 | ) | |||||||||
Net identifiable assets acquired/bargain purchase gain | $ | 12,585 | |||||||||
Schedule of loans acquired in business combination | The following table presents details on acquired loans at the Bank Closing Date (in thousands). | ||||||||||
Loans, excluding | PCI | Total | |||||||||
PCI Loans | Loans | Loans | |||||||||
Commercial and industrial | $ | 47,874 | $ | 47,751 | $ | 95,625 | |||||
Real estate | 242,998 | 611,219 | 854,217 | ||||||||
Construction and land development | 26,669 | 158,247 | 184,916 | ||||||||
Consumer | 19,095 | 5,614 | 24,709 | ||||||||
Total | $ | 336,636 | $ | 822,831 | $ | 1,159,467 | |||||
Plains Capital | |||||||||||
Acquisitions | |||||||||||
Summary of fair values of the identifiable assets acquired, and liabilities assumed | The resulting fair values of the identifiable assets acquired, and liabilities assumed, of PlainsCapital at December 1, 2012 are summarized in the following table (in thousands). | ||||||||||
Cash and due from banks | $ | 393,132 | |||||||||
Federal funds sold and securities purchased agreements to resell | 84,352 | ||||||||||
Securities | 730,779 | ||||||||||
Loans held for sale | 1,520,833 | ||||||||||
Loans, net | 3,195,309 | ||||||||||
Broker-dealer and clearing organization receivables | 149,457 | ||||||||||
Premises and equipment | 96,886 | ||||||||||
Other intangible assets | 70,650 | ||||||||||
Other assets | 241,876 | ||||||||||
Total identifiable assets acquired | 6,483,274 | ||||||||||
Deposits | 4,463,069 | ||||||||||
Broker-dealer and clearing organization payables | 263,894 | ||||||||||
Short-term borrowings | 914,062 | ||||||||||
Notes payable | 10,855 | ||||||||||
Junior subordinated debentures | 67,012 | ||||||||||
Other liabilities | 180,998 | ||||||||||
Total liabilities assumed | 5,899,890 | ||||||||||
Net identifiable assets acquired | 583,384 | ||||||||||
Goodwill resulting from the acquisition | 230,073 | ||||||||||
Net assets acquired | $ | 813,457 | |||||||||
Schedule of loans acquired in business combination | The following table presents details on acquired loans at the acquisition date (in thousands). | ||||||||||
Loans, excluding | PCI | Total | |||||||||
PCI Loans | Loans | Loans | |||||||||
Commercial and industrial | $ | 1,684,706 | $ | 74,911 | $ | 1,759,617 | |||||
Real estate | 1,077,295 | 63,866 | 1,141,161 | ||||||||
Construction and land development | 232,313 | 34,008 | 266,321 | ||||||||
Consumer | 28,131 | 79 | 28,210 | ||||||||
Total | $ | 3,022,445 | $ | 172,864 | $ | 3,195,309 | |||||
Schedule of components of the consideration paid | The components of the consideration paid are shown in the following table (in thousands). | ||||||||||
Fair value of consideration paid: | |||||||||||
Common stock issued | $ | 387,584 | |||||||||
Preferred stock issued | 114,068 | ||||||||||
Cash | 311,805 | ||||||||||
Total consideration paid | $ | 813,457 | |||||||||
Schedule of pro forma results | PlainsCapital | Pro Forma Combined | |||||||||
Acquisition Date | Twelve Months | ||||||||||
through | Ended | ||||||||||
December 31, 2012 | December 31, 2012 | ||||||||||
Net interest income | $ | 24,029 | $ | 221,635 | |||||||
Other revenues | 70,085 | 901,347 | |||||||||
Net income | 8,361 | 75,138 | |||||||||
Plains Capital | PCI loans | |||||||||||
Acquisitions | |||||||||||
Schedule of loans acquired in business combination | The following table presents information about the PCI loans at acquisition (in thousands). | ||||||||||
Contractually required principal and interest payments | $ | 252,818 | |||||||||
Nonaccretable difference | 61,527 | ||||||||||
Cash flows expected to be collected | 191,291 | ||||||||||
Accretable difference | 18,427 | ||||||||||
Fair value of loans acquired with a deterioration of credit quality | $ | 172,864 | |||||||||
Plains Capital | Loans not impaired at acquisition | |||||||||||
Acquisitions | |||||||||||
Schedule of loans acquired in business combination | The following table presents information about the acquired loans without credit impairment at acquisition (in thousands). | ||||||||||
Contractually required principal and interest payments | $ | 3,498,554 | |||||||||
Contractual cash flows not expected to be collected | 92,526 | ||||||||||
Fair value at acquisition | 3,022,445 | ||||||||||
Bank | FNB | PCI loans | |||||||||||
Acquisitions | |||||||||||
Schedule of information about the loans at Bank Closing Date | The following table presents information about the acquired PCI loans at the Bank Closing Date (in thousands). | ||||||||||
Contractually required principal and interest payments | $ | 1,533,667 | |||||||||
Nonaccretable difference | 542,241 | ||||||||||
Cash flows expected to be collected | 991,426 | ||||||||||
Accretable difference | 168,595 | ||||||||||
Fair value of loans acquired with a deterioration of credit quality | $ | 822,831 | |||||||||
Bank | FNB | Loans not impaired at acquisition | |||||||||||
Acquisitions | |||||||||||
Schedule of information about the loans at Bank Closing Date | The following table presents information about the acquired loans without credit impairment at the Bank Closing Date (in thousands). | ||||||||||
Contractually required principal and interest payments | $ | 466,754 | |||||||||
Contractual cash flows not expected to be collected | 43,783 | ||||||||||
Fair value at acquisition | 336,636 | ||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||
Schedule of information regarding financial assets and liabilities measured at fair value on a recurring basis | The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands). | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
December 31, 2014 | Inputs | Inputs | Inputs | Fair Value | |||||||||||||||||||||||||
Trading securities | $ | 39 | $ | 65,678 | $ | — | $ | 65,717 | |||||||||||||||||||||
Available for sale securities | 13,762 | 911,773 | — | 925,535 | |||||||||||||||||||||||||
Loans held for sale | — | 1,263,135 | 9,017 | 1,272,152 | |||||||||||||||||||||||||
Derivative assets | — | 23,805 | — | 23,805 | |||||||||||||||||||||||||
MSR asset | — | — | 36,155 | 36,155 | |||||||||||||||||||||||||
Investment in SWS common stock | 70,282 | — | — | 70,282 | |||||||||||||||||||||||||
Trading liabilities | — | 48 | — | 48 | |||||||||||||||||||||||||
Derivative liabilities | — | 12,849 | — | 12,849 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
December 31, 2013 | Inputs | Inputs | Inputs | Fair Value | |||||||||||||||||||||||||
Trading securities | $ | 33 | $ | 58,813 | $ | — | $ | 58,846 | |||||||||||||||||||||
Available for sale securities | 22,079 | 1,121,011 | 60,053 | 1,203,143 | |||||||||||||||||||||||||
Loans held for sale | — | 1,031,988 | 27,729 | 1,059,717 | |||||||||||||||||||||||||
Derivative assets | — | 23,564 | — | 23,564 | |||||||||||||||||||||||||
MSR asset | — | — | 20,149 | 20,149 | |||||||||||||||||||||||||
Trading liabilities | — | 46 | — | 46 | |||||||||||||||||||||||||
Derivative liabilities | — | 139 | 5,600 | 5,739 | |||||||||||||||||||||||||
Roll forward for financial instruments measured at fair value using Level 3 inputs | The following table includes a rollforward for those financial instruments measured at fair value using Level 3 inputs (in thousands). | ||||||||||||||||||||||||||||
Total Gains or Losses | |||||||||||||||||||||||||||||
(Realized or Unrealized) | |||||||||||||||||||||||||||||
Balance at | Included in Other | ||||||||||||||||||||||||||||
Beginning of | Purchases/ | Sales/ | Transfers into | Included in | Comprehensive | Balance at | |||||||||||||||||||||||
Year | Additions | Reductions | Level 3 | Net Income | Income (Loss) | End of Year | |||||||||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||||||||||||||
Available for sale securities | $ | 60,053 | $ | — | $ | (61,283 | ) | $ | — | $ | 1,848 | $ | (618 | ) | $ | — | |||||||||||||
Loans held for sale | 27,729 | 24,851 | (44,597 | ) | — | 1,034 | — | 9,017 | |||||||||||||||||||||
MSR asset | 20,149 | 35,056 | (11,387 | ) | — | (7,663 | ) | — | 36,155 | ||||||||||||||||||||
Derivative liabilities | (5,600 | ) | (177 | ) | 6,827 | — | (1,050 | ) | — | — | |||||||||||||||||||
Total | $ | 102,331 | $ | 59,730 | $ | (110,440 | ) | $ | — | $ | (5,831 | ) | $ | (618 | ) | $ | 45,172 | ||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||||||
Available for sale securities | $ | 56,277 | $ | — | $ | — | $ | — | $ | 2,166 | $ | 1,610 | $ | 60,053 | |||||||||||||||
Loans held for sale | — | — | — | 27,729 | — | — | 27,729 | ||||||||||||||||||||||
MSR asset | 2,080 | 13,886 | — | — | 4,183 | — | 20,149 | ||||||||||||||||||||||
Derivative liabilities | (4,490 | ) | — | — | — | (1,110 | ) | — | (5,600 | ) | |||||||||||||||||||
Total | $ | 53,867 | $ | 13,886 | $ | — | $ | 27,729 | $ | 5,239 | $ | 1,610 | $ | 102,331 | |||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||||||
Available for sale securities | $ | 60,377 | $ | — | $ | — | $ | — | $ | 1,867 | $ | (5,967 | ) | $ | 56,277 | ||||||||||||||
MSR asset | — | 2,204 | — | — | (124 | ) | — | 2,080 | |||||||||||||||||||||
Derivative liabilities | — | (4,455 | ) | — | — | (35 | ) | — | (4,490 | ) | |||||||||||||||||||
Total | $ | 60,377 | $ | (2,251 | ) | $ | — | $ | — | $ | 1,708 | $ | (5,967 | ) | $ | 53,867 | |||||||||||||
Schedule of significant unobservable inputs used in the fair value measurements | For Level 3 financial instruments measured at fair value on a recurring basis at December 31, 2014, the significant unobservable inputs used in the fair value measurements were as follows. | ||||||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||||||
Financial instrument | Valuation Technique | Unobservable Input | Average / Range | ||||||||||||||||||||||||||
Loans held for sale | Discounted cash flow / Market comparable | Projected price | 82 - 92% | ||||||||||||||||||||||||||
Mortgage servicing rights asset | Discounted cash flow | Constant prepayment rate Discount rate | 12.17% | ||||||||||||||||||||||||||
11.01% | |||||||||||||||||||||||||||||
Schedule of changes in fair value for instruments reported at fair value under the Fair Value Option | The following table presents the changes in fair value for instruments that are reported at fair value under the Fair Value Option (in thousands). | ||||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Other | Total | Other | Total | Other | Total | ||||||||||||||||||||||||
Net | Noninterest | Changes in | Net | Noninterest | Changes in | Net | Noninterest | Changes in | |||||||||||||||||||||
Gains (Losses) | Income | Fair Value | Gains (Losses) | Income | Fair Value | Gains (Losses) | Income | Fair Value | |||||||||||||||||||||
Loans held for sale | $ | 31,805 | $ | — | $ | 31,805 | $ | (19,353 | ) | $ | — | $ | (19,353 | ) | $ | (3,297 | ) | $ | — | $ | (3,297 | ) | |||||||
Investment in SWS common stock | — | 5,985 | 5,985 | — | — | — | — | — | — | ||||||||||||||||||||
Mortgage servicing rights asset | (7,663 | ) | — | (7,663 | ) | 4,183 | — | 4,183 | (124 | ) | — | (124 | ) | ||||||||||||||||
Time deposits | — | — | — | — | 12 | 12 | — | 7 | 7 | ||||||||||||||||||||
Schedule of information regarding certain assets and liabilities measured at fair value on a non-recurring basis for which a change in fair value has been recorded during reporting periods subsequent to initial recognition | The following table presents information regarding certain assets and liabilities measured at fair value on a non-recurring basis for which a change in fair value has been recorded during reporting periods subsequent to initial recognition (in thousands). | ||||||||||||||||||||||||||||
Total Gains (Losses) for the | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Year Ended December 31, | |||||||||||||||||||||||||
December 31, 2014 | Inputs | Inputs | Inputs | Fair Value | 2014 | 2013 | |||||||||||||||||||||||
Non-covered impaired loans | $ | — | $ | — | $ | 26,823 | $ | 26,823 | $ | (2,182 | ) | $ | (3,558 | ) | |||||||||||||||
Covered impaired loans | — | — | 55,213 | 55,213 | (3,652 | ) | — | ||||||||||||||||||||||
Non-covered other real estate owned | — | 409 | — | 409 | (372 | ) | 430 | ||||||||||||||||||||||
Covered other real estate owned | — | 47,198 | 15,855 | 63,052 | (19,672 | ) | — | ||||||||||||||||||||||
Schedule of carrying values and estimated fair values of financial instruments | The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands). | ||||||||||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
December 31, 2014 | Amount | Inputs | Inputs | Inputs | Total | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 813,075 | $ | 813,075 | $ | — | $ | — | $ | 813,075 | |||||||||||||||||||
Held to maturity securities | 118,209 | — | 118,345 | — | 118,345 | ||||||||||||||||||||||||
Loans held for sale | 37,541 | — | 37,541 | — | 37,541 | ||||||||||||||||||||||||
Non-covered loans, net | 3,883,435 | — | 378,425 | 3,528,769 | 3,907,194 | ||||||||||||||||||||||||
Covered loans, net | 638,029 | — | — | 767,751 | 767,751 | ||||||||||||||||||||||||
Broker-dealer and clearing organization receivables | 167,884 | — | 167,884 | — | 167,884 | ||||||||||||||||||||||||
FDIC indemnification asset | 130,437 | — | — | 130,437 | 130,437 | ||||||||||||||||||||||||
Other assets | 59,432 | — | 43,937 | 15,495 | 59,432 | ||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | 6,369,892 | — | 6,365,555 | — | 6,365,555 | ||||||||||||||||||||||||
Broker-dealer and clearing organization payables | 179,042 | — | 179,042 | — | 179,042 | ||||||||||||||||||||||||
Short-term borrowings | 762,696 | — | 762,696 | — | 762,696 | ||||||||||||||||||||||||
Debt | 123,696 | — | 117,028 | — | 117,028 | ||||||||||||||||||||||||
Other liabilities | 2,144 | — | 2,144 | — | 2,144 | ||||||||||||||||||||||||
Estimated Fair Value | |||||||||||||||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
December 31, 2013 | Amount | Inputs | Inputs | Inputs | Total | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 746,023 | $ | 746,023 | $ | — | $ | — | $ | 746,023 | |||||||||||||||||||
Loans held for sale | 29,322 | — | 29,322 | — | 29.322 | ||||||||||||||||||||||||
Non-covered loans, net | 3,481,405 | — | 281,712 | 3,119,319 | 3,401,031 | ||||||||||||||||||||||||
Covered loans, net | 1,005,308 | — | — | 997,371 | 997,371 | ||||||||||||||||||||||||
Broker-dealer and clearing organization receivables | 119,317 | — | 119,317 | — | 119,317 | ||||||||||||||||||||||||
FDIC indemnification asset | 188,291 | — | — | 188,291 | 188,291 | ||||||||||||||||||||||||
Other assets | 66,055 | — | 43,946 | 22,109 | 66,055 | ||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | 6,722,918 | — | 6,722,909 | — | 6,722,909 | ||||||||||||||||||||||||
Broker-dealer and clearing organization payables | 129,678 | — | 129,678 | — | 129,678 | ||||||||||||||||||||||||
Short-term borrowings | 342,087 | — | 342,087 | — | 342,087 | ||||||||||||||||||||||||
Debt | 123,339 | — | 114,671 | — | 114,671 | ||||||||||||||||||||||||
Other liabilities | 3,362 | — | 3,362 | — | 3,362 | ||||||||||||||||||||||||
Securities_Tables
Securities (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Securities | ||||||||||||||||||
Summary of amortized cost and fair value of securities, excluding trading securities | The amortized cost and fair value of available for sale are summarized as follows (in thousands). | |||||||||||||||||
Available for Sale | ||||||||||||||||||
Gross | Gross | |||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||
December 31, 2014 | Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury securities | $ | 19,382 | $ | 264 | $ | (33 | ) | $ | 19,613 | |||||||||
U.S. government agencies: | ||||||||||||||||||
Bonds | 522,008 | 1,749 | (7,516 | ) | 516,241 | |||||||||||||
Residential mortgage-backed securities | 51,363 | 1,672 | (137 | ) | 52,898 | |||||||||||||
Collateralized mortgage obligations | 89,291 | 133 | (2,300 | ) | 87,124 | |||||||||||||
Corporate debt securities | 93,406 | 5,125 | (59 | ) | 98,472 | |||||||||||||
States and political subdivisions | 135,419 | 2,083 | (717 | ) | 136,785 | |||||||||||||
Commercial mortgage-backed securities | 593 | 47 | — | 640 | ||||||||||||||
Equity securities | 13,293 | 469 | — | 13,762 | ||||||||||||||
Totals | $ | 924,755 | $ | 11,542 | $ | (10,762 | ) | $ | 925,535 | |||||||||
Available for Sale | ||||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||
December 31, 2013 | Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury securities | $ | 43,684 | $ | 82 | $ | (238 | ) | $ | 43,528 | |||||||||
U.S. government agencies: | ||||||||||||||||||
Bonds | 717,909 | 550 | (55,727 | ) | 662,732 | |||||||||||||
Residential mortgage-backed securities | 59,936 | 735 | (584 | ) | 60,087 | |||||||||||||
Collateralized mortgage obligations | 124,502 | 349 | (4,390 | ) | 120,461 | |||||||||||||
Corporate debt securities | 72,376 | 4,610 | (378 | ) | 76,608 | |||||||||||||
States and political subdivisions | 162,955 | 388 | (6,508 | ) | 156,835 | |||||||||||||
Commercial mortgage-backed securities | 691 | 69 | — | 760 | ||||||||||||||
Equity securities | 20,067 | 2,012 | — | 22,079 | ||||||||||||||
Note receivable | 42,674 | 5,235 | — | 47,909 | ||||||||||||||
Warrant | 12,068 | 76 | — | 12,144 | ||||||||||||||
Totals | $ | 1,256,862 | $ | 14,106 | $ | (67,825 | ) | $ | 1,203,143 | |||||||||
Summary of amortized cost and fair value of held to maturity securities | The amortized cost and fair value of held to maturity securities are summarized as follows (in thousands). | |||||||||||||||||
Held to Maturity | ||||||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||||
December 31, 2014 | Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury securities | $ | 25,008 | $ | — | $ | (6 | ) | $ | 25,002 | |||||||||
U.S. government agencies: | ||||||||||||||||||
Residential mortgage-backed securities | 29,782 | 528 | — | 30,310 | ||||||||||||||
Collateralized mortgage obligations | 57,328 | — | (430 | ) | 56,898 | |||||||||||||
States and political subdivisions | 6,091 | 47 | (3 | ) | 6,135 | |||||||||||||
Totals | $ | 118,209 | $ | 575 | $ | (439 | ) | $ | 118,345 | |||||||||
Schedule of information regarding available for sale securities that were in an unrealized loss position | Information regarding available for sale securities that were in an unrealized loss position is shown in the following table (dollars in thousands). | |||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||
Number of | Unrealized | Number of | Unrealized | |||||||||||||||
Available for Sale | Securities | Fair Value | Losses | Securities | Fair Value | Losses | ||||||||||||
U.S. treasury securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | 4 | $ | 7,703 | $ | 27 | 6 | $ | 12,748 | $ | 238 | ||||||||
Unrealized loss for twelve months or longer | 1 | 1,706 | 6 | — | — | — | ||||||||||||
5 | 9,409 | 33 | 6 | 12,748 | 238 | |||||||||||||
U.S. government agencies: | ||||||||||||||||||
Bonds: | ||||||||||||||||||
Unrealized loss for less than twelve months | 3 | 34,847 | 153 | 35 | 526,817 | 45,274 | ||||||||||||
Unrealized loss for twelve months or longer | 22 | 373,035 | 7,363 | 5 | 90,931 | 10,453 | ||||||||||||
25 | 407,882 | 7,516 | 40 | 617,748 | 55,727 | |||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | — | — | — | 2 | 2,194 | 54 | ||||||||||||
Unrealized loss for twelve months or longer | 4 | 11,056 | 137 | 3 | 9,309 | 530 | ||||||||||||
4 | 11,056 | 137 | 5 | 11,503 | 584 | |||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||
Unrealized loss for less than twelve months | 3 | 7,141 | 40 | 7 | 84,054 | 4,320 | ||||||||||||
Unrealized loss for twelve months or longer | 8 | 61,108 | 2,260 | 2 | 4,995 | 70 | ||||||||||||
11 | 68,249 | 2,300 | 9 | 89,049 | 4,390 | |||||||||||||
Corporate debt securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | — | — | — | 7 | 10,754 | 378 | ||||||||||||
Unrealized loss for twelve months or longer | 1 | 1,939 | 59 | — | — | — | ||||||||||||
1 | 1,939 | 59 | 7 | 10,754 | 378 | |||||||||||||
States and political subdivisions: | ||||||||||||||||||
Unrealized loss for less than twelve months | 7 | 4,432 | 7 | 46 | 30,245 | 669 | ||||||||||||
Unrealized loss for twelve months or longer | 81 | 54,178 | 710 | 150 | 96,882 | 5,839 | ||||||||||||
88 | 58,610 | 717 | 196 | 127,127 | 6,508 | |||||||||||||
Total available for sale: | ||||||||||||||||||
Unrealized loss for less than twelve months | 17 | 54,123 | 227 | 103 | 666,812 | 50,933 | ||||||||||||
Unrealized loss for twelve months or longer | 117 | 503,022 | 10,535 | 160 | 202,117 | 16,892 | ||||||||||||
134 | $ | 557,145 | $ | 10,762 | 263 | $ | 868,929 | $ | 67,825 | |||||||||
Schedule of information regarding held to maturity securities that were in an unrealized loss position | ||||||||||||||||||
The amortized cost and fair value of held to maturity are summarized as follows (in thousands). | ||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||
Number of | Unrealized | Number of | Unrealized | |||||||||||||||
Securities | Fair Value | Losses | Securities | Fair Value | Losses | |||||||||||||
Held to Maturity | ||||||||||||||||||
U.S. treasury securities: | ||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||
Unrealized loss for less than twelve months | 1 | $ | 25,002 | $ | 6 | — | $ | — | $ | — | ||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
1 | 25,002 | 6 | — | — | — | |||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||
Unrealized loss for less than twelve months | 2 | 56,898 | 430 | — | — | — | ||||||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
2 | 56,898 | 430 | — | — | — | |||||||||||||
States and political subdivisions: | ||||||||||||||||||
Unrealized loss for less than twelve months | 4 | 1,899 | 3 | — | — | — | ||||||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
4 | 1,899 | 3 | — | — | — | |||||||||||||
Total held to maturity: | ||||||||||||||||||
Unrealized loss for less than twelve months | 7 | 83,799 | 439 | — | — | — | ||||||||||||
Unrealized loss for twelve months or longer | — | — | — | — | — | — | ||||||||||||
7 | $ | 83,799 | $ | 439 | — | $ | — | $ | — | |||||||||
Schedule of amortized cost and fair value of securities, excluding trading and equity available for sale securities and the available for sale warrant by contractual maturity | The amortized cost and fair value of securities, excluding trading and available for sale equity securities, at December 31, 2014 are shown by contractual maturity below (in thousands). | |||||||||||||||||
Available for Sale | Held to Maturity | |||||||||||||||||
Amortized | Amortized | |||||||||||||||||
Cost | Fair Value | Cost | Fair Value | |||||||||||||||
Due in one year or less | $ | 24,639 | $ | 24,881 | $ | 25,008 | $ | 25,002 | ||||||||||
Due after one year through five years | 69,196 | 72,671 | — | — | ||||||||||||||
Due after five years through ten years | 64,048 | 67,345 | 1,195 | 1,194 | ||||||||||||||
Due after ten years | 612,332 | 606,214 | 4,896 | 4,941 | ||||||||||||||
770,215 | 771,111 | 31,099 | 31,137 | |||||||||||||||
Residential mortgage-backed securities | 51,363 | 52,898 | 29,782 | 30,310 | ||||||||||||||
Collateralized mortgage obligations | 89,291 | 87,124 | 57,328 | 56,898 | ||||||||||||||
Commercial mortgage-backed securities | 593 | 640 | — | — | ||||||||||||||
$ | 911,462 | $ | 911,773 | $ | 118,209 | $ | 118,345 | |||||||||||
NonCovered_Loans_and_Allowance1
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Tables) (Noncovered) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Noncovered | ||||||||||||||||||||||||||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||||||||||||||||||||||||||
Summary of non-covered loans by portfolio segment | Non-covered loans summarized by portfolio segment are as follows (in thousands). | |||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Commercial and industrial | $ | 1,758,851 | $ | 1,637,266 | ||||||||||||||||||||||
Real estate | 1,694,835 | 1,457,253 | ||||||||||||||||||||||||
Construction and land development | 413,643 | 364,551 | ||||||||||||||||||||||||
Consumer | 53,147 | 55,576 | ||||||||||||||||||||||||
3,920,476 | 3,514,646 | |||||||||||||||||||||||||
Allowance for non-covered loan losses | (37,041 | ) | (33,241 | ) | ||||||||||||||||||||||
Total non-covered loans, net of allowance | $ | 3,883,435 | $ | 3,481,405 | ||||||||||||||||||||||
Schedule of carrying values and the outstanding balances of the PCI loans | The following table presents the carrying values and the outstanding balances of the non-covered PCI loans (in thousands). | |||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Carrying amount | $ | 48,909 | $ | 100,392 | ||||||||||||||||||||||
Outstanding balance | 67,740 | 141,983 | ||||||||||||||||||||||||
Schedule of changes in the accretable yield for the PCI loans | Changes in the accretable yield for the non-covered PCI loans were as follows (in thousands). | |||||||||||||||||||||||||
Year Ended December 31, | Month Ended | |||||||||||||||||||||||||
2014 | 2013 | December 31, 2012 | ||||||||||||||||||||||||
Balance, beginning of period | $ | 17,601 | $ | 17,553 | $ | 18,427 | ||||||||||||||||||||
Additions | — | 622 | — | |||||||||||||||||||||||
Reclassifications from (to) nonaccretable difference, net (1) | 15,225 | 18,793 | — | |||||||||||||||||||||||
Disposals of loans | (4,927 | ) | (3,692 | ) | (22 | ) | ||||||||||||||||||||
Accretion | (15,085 | ) | (15,675 | ) | (852 | ) | ||||||||||||||||||||
Balance, end of period | $ | 12,814 | $ | 17,601 | $ | 17,553 | ||||||||||||||||||||
(1) Reclassifications from nonaccretable difference are primarily due to net increases in expected cash flows in the quarterly recasts. Reclassifications to nonaccretable difference occur when accruing loans are moved to nonaccrual and expected cash flows are no longer predictable and the accretable yield is eliminated. | ||||||||||||||||||||||||||
Summary of PCI loans by class | Non-covered impaired loans are summarized by class in the following tables (in thousands). | |||||||||||||||||||||||||
Unpaid | Recorded | Recorded | Total | |||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | ||||||||||||||||||||||
December 31, 2014 | Principal Balance | No Allowance | Allowance | Investment | Allowance | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 51,036 | $ | 14,096 | $ | 11,783 | $ | 25,879 | $ | 3,341 | ||||||||||||||||
Unsecured | 4,120 | 92 | 68 | 160 | — | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 29,865 | 7,243 | 15,536 | 22,779 | 1,878 | |||||||||||||||||||||
Secured by residential properties | 4,701 | 1,583 | 1,390 | 2,973 | 85 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | — | |||||||||||||||||||||
Commercial construction loans and land development | 16,108 | 8,062 | 1,819 | 9,881 | 154 | |||||||||||||||||||||
Consumer | 5,785 | 171 | 1,967 | 2,138 | 282 | |||||||||||||||||||||
$ | 111,615 | $ | 31,247 | $ | 32,563 | $ | 63,810 | $ | 5,740 | |||||||||||||||||
Unpaid | Recorded | Recorded | Total | |||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | ||||||||||||||||||||||
December 31, 2013 | Principal Balance | No Allowance | Allowance | Investment | Allowance | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 63,636 | $ | 21,540 | $ | 17,147 | $ | 38,687 | $ | 3,126 | ||||||||||||||||
Unsecured | 11,865 | 336 | 1,204 | 1,540 | 15 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 49,437 | 20,317 | 16,070 | 36,387 | 339 | |||||||||||||||||||||
Secured by residential properties | 5,407 | 1,745 | 1,648 | 3,393 | 39 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 33 | — | — | — | — | |||||||||||||||||||||
Commercial construction loans and land development | 48,628 | 15,337 | 4,592 | 19,929 | 39 | |||||||||||||||||||||
Consumer | 7,946 | 4,509 | — | 4,509 | — | |||||||||||||||||||||
$ | 186,952 | $ | 63,784 | $ | 40,661 | $ | 104,445 | $ | 3,558 | |||||||||||||||||
Summary of average investment in PCI loans by class | Average investment in non-covered impaired loans is summarized by class in the following table (in thousands). | |||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 30,626 | $ | 51,670 | ||||||||||||||||||||||
Unsecured | 802 | 2,432 | ||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 29,517 | 45,887 | ||||||||||||||||||||||||
Secured by residential properties | 2,984 | 4,862 | ||||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | 354 | ||||||||||||||||||||||||
Commercial construction loans and land development | 14,849 | 26,090 | ||||||||||||||||||||||||
Consumer | 3,324 | 2,293 | ||||||||||||||||||||||||
$ | 82,102 | $ | 133,588 | |||||||||||||||||||||||
Summary of non-accrual loans by class, excluding those classified as held for sale | Non-covered non-accrual loans, excluding those classified as held for sale, are summarized by class in the following table (in thousands). | |||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 16,488 | $ | 15,430 | ||||||||||||||||||||||
Unsecured | 160 | 1,300 | ||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 438 | 2,638 | ||||||||||||||||||||||||
Secured by residential properties | 1,253 | 398 | ||||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | ||||||||||||||||||||||||
Commercial construction loans and land development | 703 | 112 | ||||||||||||||||||||||||
Consumer | — | — | ||||||||||||||||||||||||
$ | 19,042 | $ | 19,878 | |||||||||||||||||||||||
Schedule of information regarding TDRs granted | The outstanding balance of TDRs granted in the twelve months ended December 31, 2014 and 2013, respectively, is shown in the following tables (in thousands). | |||||||||||||||||||||||||
Recorded Investment in Loans Modified by | ||||||||||||||||||||||||||
Interest Rate | Payment Term | Total | ||||||||||||||||||||||||
Year Ended December 31, 2014 | A/B Note | Adjustment | Extension | Modification | ||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | 2,465 | $ | 2,465 | ||||||||||||||||||
Unsecured | — | — | — | — | ||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | — | — | 317 | 317 | ||||||||||||||||||||||
Secured by residential properties | — | — | 248 | 248 | ||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | ||||||||||||||||||||||
Commercial construction loans and land development | — | — | 128 | 128 | ||||||||||||||||||||||
Consumer | — | — | — | — | ||||||||||||||||||||||
$ | — | $ | — | $ | 3,158 | $ | 3,158 | |||||||||||||||||||
Recorded Investment in Loans Modified by | ||||||||||||||||||||||||||
Interest Rate | Payment Term | Total | ||||||||||||||||||||||||
Year Ended December 31, 2013 | A/B Note | Adjustment | Extension | Modification | ||||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | 10,390 | $ | 10,390 | ||||||||||||||||||
Unsecured | — | — | — | — | ||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | — | — | 279 | 279 | ||||||||||||||||||||||
Secured by residential properties | — | — | 777 | 777 | ||||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | ||||||||||||||||||||||
Commercial construction loans and land development | — | — | — | — | ||||||||||||||||||||||
Consumer | — | — | — | — | ||||||||||||||||||||||
$ | — | $ | — | $ | 11,446 | $ | 11,446 | |||||||||||||||||||
Schedule of analysis of the aging of the entity's loan portfolio | An analysis of the aging of the Bank’s non-covered loan portfolio is shown in the following tables (in thousands). | |||||||||||||||||||||||||
Accruing Loans | ||||||||||||||||||||||||||
(Non-PCI) | ||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | |||||||||||||||||||
December 31, 2014 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | ||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 6,073 | $ | 964 | $ | 8,022 | $ | 15,059 | $ | 1,620,000 | $ | 13,374 | $ | 1,648,433 | $ | — | ||||||||||
Unsecured | 35 | 3 | — | 38 | 110,312 | 68 | 110,418 | — | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 67 | — | — | 67 | 1,173,504 | 22,341 | 1,195,912 | — | ||||||||||||||||||
Secured by residential properties | 454 | 1,187 | — | 1,641 | 495,472 | 1,810 | 498,923 | — | ||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 175 | — | — | 175 | 64,871 | — | 65,046 | — | ||||||||||||||||||
Commercial construction loans and land development | 4,319 | — | 575 | 4,894 | 334,525 | 9,178 | 348,597 | — | ||||||||||||||||||
Consumer | 414 | 37 | — | 451 | 50,558 | 2,138 | 53,147 | — | ||||||||||||||||||
$ | 11,537 | $ | 2,191 | $ | 8,597 | $ | 22,325 | $ | 3,849,242 | $ | 48,909 | $ | 3,920,476 | $ | — | |||||||||||
Accruing Loans | ||||||||||||||||||||||||||
(Non-PCI) | ||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | |||||||||||||||||||
December 31, 2013 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | ||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 2,171 | $ | 277 | $ | 1,354 | $ | 3,802 | $ | 1,492,793 | $ | 35,372 | $ | 1,531,967 | $ | 272 | ||||||||||
Unsecured | 333 | 9 | 60 | 402 | 103,453 | 1,444 | 105,299 | 59 | ||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 192 | — | 132 | 324 | 1,044,437 | 36,255 | 1,081,016 | — | ||||||||||||||||||
Secured by residential properties | 1,045 | 36 | 203 | 1,284 | 371,958 | 2,995 | 376,237 | 203 | ||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 415 | — | — | 415 | 64,664 | — | 65,079 | — | ||||||||||||||||||
Commercial construction loans and land development | 41 | 881 | 112 | 1,034 | 278,621 | 19,817 | 299,472 | — | ||||||||||||||||||
Consumer | 201 | 60 | — | 261 | 50,806 | 4,509 | 55,576 | — | ||||||||||||||||||
$ | 4,398 | $ | 1,263 | $ | 1,861 | $ | 7,522 | $ | 3,406,732 | $ | 100,392 | $ | 3,514,646 | $ | 534 | |||||||||||
Schedule of internal risk grades of loans by class | The following tables present the internal risk grades of non-covered loans, as previously described, in the portfolio by class (in thousands). | |||||||||||||||||||||||||
December 31, 2014 | Pass | Special Mention | Substandard | PCI | Total | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 1,566,208 | $ | 1,105 | $ | 67,746 | $ | 13,374 | $ | 1,648,433 | ||||||||||||||||
Unsecured | 110,256 | — | 94 | 68 | 110,418 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 1,151,454 | 712 | 21,405 | 22,341 | 1,195,912 | |||||||||||||||||||||
Secured by residential properties | 492,549 | — | 4,564 | 1,810 | 498,923 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 65,046 | — | — | — | 65,046 | |||||||||||||||||||||
Commercial construction loans and land development | 338,078 | — | 1,341 | 9,178 | 348,597 | |||||||||||||||||||||
Consumer | 50,968 | — | 41 | 2,138 | 53,147 | |||||||||||||||||||||
$ | 3,774,559 | $ | 1,817 | $ | 95,191 | $ | 48,909 | $ | 3,920,476 | |||||||||||||||||
December 31, 2013 | Pass | Special Mention | Substandard | PCI | Total | |||||||||||||||||||||
Commercial and industrial: | ||||||||||||||||||||||||||
Secured | $ | 1,450,734 | $ | 16,840 | $ | 29,021 | $ | 35,372 | $ | 1,531,967 | ||||||||||||||||
Unsecured | 103,674 | 12 | 169 | 1,444 | 105,299 | |||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Secured by commercial properties | 1,038,930 | 4,436 | 1,395 | 36,255 | 1,081,016 | |||||||||||||||||||||
Secured by residential properties | 367,758 | — | 5,484 | 2,995 | 376,237 | |||||||||||||||||||||
Construction and land development: | ||||||||||||||||||||||||||
Residential construction loans | 65,079 | — | — | — | 65,079 | |||||||||||||||||||||
Commercial construction loans and land development | 275,808 | 3,384 | 463 | 19,817 | 299,472 | |||||||||||||||||||||
Consumer | 51,052 | 1 | 14 | 4,509 | 55,576 | |||||||||||||||||||||
$ | 3,353,035 | $ | 24,673 | $ | 36,546 | $ | 100,392 | $ | 3,514,646 | |||||||||||||||||
Schedule of changes in the allowance for loan losses by portfolio segment | Changes in the allowance for non-covered loan losses, distributed by portfolio segment, are shown below (in thousands). | |||||||||||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
Year Ended December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Balance, beginning of year | $ | 16,865 | $ | 8,331 | $ | 7,957 | $ | 88 | $ | 33,241 | ||||||||||||||||
Provision charged to operations | 6,116 | 2,696 | (1,692 | ) | 627 | 7,747 | ||||||||||||||||||||
Loans charged off | (6,926 | ) | (114 | ) | — | (359 | ) | (7,399 | ) | |||||||||||||||||
Recoveries on charged off loans | 2,944 | 218 | 185 | 105 | 3,452 | |||||||||||||||||||||
Balance, end of year | $ | 18,999 | $ | 11,131 | $ | 6,450 | $ | 461 | $ | 37,041 | ||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
Year Ended December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Balance, beginning of year | $ | 1,845 | $ | 977 | $ | 582 | $ | 5 | $ | 3,409 | ||||||||||||||||
Provision charged to operations | 20,940 | 7,281 | 7,634 | 238 | 36,093 | |||||||||||||||||||||
Loans charged off | (9,359 | ) | (209 | ) | (524 | ) | (216 | ) | (10,308 | ) | ||||||||||||||||
Recoveries on charged off loans | 3,439 | 282 | 265 | 61 | 4,047 | |||||||||||||||||||||
Balance, end of year | $ | 16,865 | $ | 8,331 | $ | 7,957 | $ | 88 | $ | 33,241 | ||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
Month Ended December 31, 2012 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Balance, beginning of period | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Provision charged to operations | 2,236 | 977 | 582 | 5 | 3,800 | |||||||||||||||||||||
Loans charged off | (391 | ) | — | — | — | (391 | ) | |||||||||||||||||||
Recoveries on charged off loans | — | — | — | — | — | |||||||||||||||||||||
Balance, end of period | $ | 1,845 | $ | 977 | $ | 582 | $ | 5 | $ | 3,409 | ||||||||||||||||
Schedule of loan portfolio distributed by portfolio segment and impairment methodology | The non-covered loan portfolio was distributed by portfolio segment and impairment methodology as shown below (in thousands). | |||||||||||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 11,842 | $ | 1,420 | $ | 703 | $ | — | $ | 13,965 | ||||||||||||||||
Loans collectively evaluated for impairment | 1,733,567 | 1,669,264 | 403,762 | 51,009 | 3,857,602 | |||||||||||||||||||||
PCI Loans | 13,442 | 24,151 | 9,178 | 2,138 | 48,909 | |||||||||||||||||||||
$ | 1,758,851 | $ | 1,694,835 | $ | 413,643 | $ | 53,147 | $ | 3,920,476 | |||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 2,273 | $ | 373 | $ | 112 | $ | — | $ | 2,758 | ||||||||||||||||
Loans collectively evaluated for impairment | 1,598,177 | 1,417,630 | 344,622 | 51,067 | 3,411,496 | |||||||||||||||||||||
PCI Loans | 36,816 | 39,250 | 19,817 | 4,509 | 100,392 | |||||||||||||||||||||
$ | 1,637,266 | $ | 1,457,253 | $ | 364,551 | $ | 55,576 | $ | 3,514,646 | |||||||||||||||||
Schedule of allowance for loan losses distributed by portfolio segment and impairment methodology | The allowance for non-covered loan losses was distributed by portfolio segment and impairment methodology as shown below (in thousands). | |||||||||||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 421 | $ | — | $ | — | $ | — | $ | 421 | ||||||||||||||||
Loans collectively evaluated for impairment | 15,658 | 9,168 | 6,296 | 179 | 31,301 | |||||||||||||||||||||
PCI Loans | 2,920 | 1,963 | 154 | 282 | 5,319 | |||||||||||||||||||||
$ | 18,999 | $ | 11,131 | $ | 6,450 | $ | 461 | $ | 37,041 | |||||||||||||||||
Commercial and | Construction and | |||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | |||||||||||||||||||||
Loans individually evaluated for impairment | $ | 421 | $ | — | $ | — | $ | — | $ | 421 | ||||||||||||||||
Loans collectively evaluated for impairment | 13,724 | 7,953 | 7,918 | 88 | 29,683 | |||||||||||||||||||||
PCI Loans | 2,720 | 378 | 39 | — | 3,137 | |||||||||||||||||||||
$ | 16,865 | $ | 8,331 | $ | 7,957 | $ | 88 | $ | 33,241 | |||||||||||||||||
Covered_Assets_and_Indemnifica1
Covered Assets and Indemnification Asset (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Covered assets and indemnification asset | |||||||||||||||||||||||||||
Summary of the activity in covered OREO | A summary of the activity in covered OREO is as follows (in thousands). | ||||||||||||||||||||||||||
Period from | |||||||||||||||||||||||||||
Year Ended | September 14, 2013 | ||||||||||||||||||||||||||
December 31, | through December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Balance, beginning of period | $ | 142,833 | $ | — | |||||||||||||||||||||||
Fair value of assets acquired as of Bank Closing Date | — | 135,187 | |||||||||||||||||||||||||
Additions to covered OREO | 64,934 | 19,185 | |||||||||||||||||||||||||
Dispositions of covered OREO | (51,150 | ) | (11,539 | ) | |||||||||||||||||||||||
Valuation adjustments in the period | (19,672 | ) | — | ||||||||||||||||||||||||
Balance, end of period | $ | 136,945 | $ | 142,833 | |||||||||||||||||||||||
Summary of the activity in the FDIC Indemnification Asset | A summary of the activity in the FDIC Indemnification Asset is as follows (in thousands). | ||||||||||||||||||||||||||
Period from | |||||||||||||||||||||||||||
Year Ended | September 14, 2013 | ||||||||||||||||||||||||||
December 31, | through December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Balance, beginning of period | $ | 188,291 | $ | — | |||||||||||||||||||||||
Fair value of assets acquired as of Bank Closing Date | — | 185,680 | |||||||||||||||||||||||||
FDIC Indemnification Asset accretion (amortization) | 3,445 | 1,699 | |||||||||||||||||||||||||
Transfers to due from FDIC and other | (61,299 | ) | 912 | ||||||||||||||||||||||||
Balance, end of period | $ | 130,437 | $ | 188,291 | |||||||||||||||||||||||
Covered | |||||||||||||||||||||||||||
Covered assets and indemnification asset | |||||||||||||||||||||||||||
Summary of carrying value of the loans | The following table presents the carrying value of the covered loans summarized by portfolio segment (in thousands). | ||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Commercial and industrial | $ | 30,780 | $ | 66,943 | |||||||||||||||||||||||
Real estate | 552,850 | 787,982 | |||||||||||||||||||||||||
Construction and land development | 59,010 | 151,444 | |||||||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||||||
Total covered loans | 642,640 | 1,006,369 | |||||||||||||||||||||||||
Allowance for covered loans | (4,611 | ) | (1,061 | ) | |||||||||||||||||||||||
Total covered loans, net of allowance | $ | 638,029 | $ | 1,005,308 | |||||||||||||||||||||||
Summary of non-accrual loans by class, excluding those classified as held for sale | Covered non-accrual loans, excluding those classified as held for sale, are summarized by class in the following table (in thousands). | ||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 442 | $ | 91 | |||||||||||||||||||||||
Unsecured | 883 | 882 | |||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 30,823 | 40 | |||||||||||||||||||||||||
Secured by residential properties | 1,046 | 209 | |||||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 1,018 | 575 | |||||||||||||||||||||||||
Commercial construction loans and land development | 11 | — | |||||||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||||||
$ | 34,223 | $ | 1,797 | ||||||||||||||||||||||||
Summary of TDR's granted during the period | The outstanding balance of TDRs granted in the twelve months ended December 31, 2014 is shown in the following table (in thousands). | ||||||||||||||||||||||||||
Recorded Investment in Loans Modified by | |||||||||||||||||||||||||||
Interest Rate | Payment Term | Total | |||||||||||||||||||||||||
Year Ended December 31, 2014 | A/B Note | Adjustment | Extension | Modification | |||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Unsecured | — | — | — | — | |||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | — | — | — | — | |||||||||||||||||||||||
Secured by residential properties | 369 | 326 | — | 695 | |||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | — | — | — | — | |||||||||||||||||||||||
Commercial construction loans and land development | — | — | — | — | |||||||||||||||||||||||
Consumer | — | — | — | — | |||||||||||||||||||||||
$ | 369 | $ | 326 | $ | — | $ | 695 | ||||||||||||||||||||
Schedule of internal risk grades of loans | The following tables present the internal risk grades of covered loans in the portfolio by class (in thousands). | ||||||||||||||||||||||||||
December 31, 2014 | Pass | Special Mention | Substandard | PCI | Total | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 7,712 | $ | — | $ | 1,423 | $ | 13,630 | $ | 22,765 | |||||||||||||||||
Unsecured | 1,210 | — | — | 6,805 | 8,015 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 35,973 | — | 6,584 | 227,772 | 270,329 | ||||||||||||||||||||||
Secured by residential properties | 133,756 | — | 7,573 | 141,192 | 282,521 | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 268 | — | 1,018 | 354 | 1,640 | ||||||||||||||||||||||
Commercial construction loans and land development | 9,501 | — | 2,234 | 45,635 | 57,370 | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 188,420 | $ | — | $ | 18,832 | $ | 435,388 | $ | 642,640 | ||||||||||||||||||
December 31, 2013 | Pass | Special Mention | Substandard | PCI | Total | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 24,152 | $ | — | $ | 761 | $ | 28,520 | $ | 53,433 | |||||||||||||||||
Unsecured | 3,040 | — | 580 | 9,890 | 13,510 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 59,343 | 3,310 | 2,166 | 365,306 | 430,125 | ||||||||||||||||||||||
Secured by residential properties | 155,439 | — | 3,046 | 199,372 | 357,857 | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 6,087 | — | 1,376 | 4,705 | 12,168 | ||||||||||||||||||||||
Commercial construction loans and land development | 17,806 | — | 107 | 121,363 | 139,276 | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 265,867 | $ | 3,310 | $ | 8,036 | $ | 729,156 | $ | 1,006,369 | ||||||||||||||||||
Schedule of changes in the allowance for loan losses by portfolio segment | Changes in the allowance for covered loan losses, distributed by portfolio segment, are shown below (in thousands). | ||||||||||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
Year Ended December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Balance, beginning of year | $ | 1,053 | $ | 8 | $ | — | $ | — | $ | 1,061 | |||||||||||||||||
Provision charged to operations | 230 | 8,725 | 231 | — | 9,186 | ||||||||||||||||||||||
Loans charged off | (90 | ) | (5,399 | ) | (147 | ) | — | (5,636 | ) | ||||||||||||||||||
Recoveries on charged off loans | — | — | — | — | — | ||||||||||||||||||||||
Balance, end of year | $ | 1,193 | $ | 3,334 | $ | 84 | $ | — | $ | 4,611 | |||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Balance, beginning of year | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Provision charged to operations | 1,057 | 8 | — | — | 1,065 | ||||||||||||||||||||||
Loans charged off | (4 | ) | — | — | — | (4 | ) | ||||||||||||||||||||
Recoveries on charged off loans | — | — | — | — | — | ||||||||||||||||||||||
Balance, end of year | $ | 1,053 | $ | 8 | $ | — | $ | — | $ | 1,061 | |||||||||||||||||
Schedule of loan portfolio distributed by portfolio segment and impairment methodology | The covered loan portfolio was distributed by portfolio segment and impairment methodology as shown below (in thousands). | ||||||||||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | 801 | $ | — | $ | 801 | |||||||||||||||||
Loans collectively evaluated for impairment | 10,345 | 183,886 | 12,220 | — | 206,451 | ||||||||||||||||||||||
PCI Loans | 20,435 | 368,964 | 45,989 | — | 435,388 | ||||||||||||||||||||||
$ | 30,780 | $ | 552,850 | $ | 59,010 | $ | — | $ | 642,640 | ||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Loans collectively evaluated for impairment | 28,533 | 223,304 | 25,376 | — | 277,213 | ||||||||||||||||||||||
PCI Loans | 38,410 | 564,678 | 126,068 | — | 729,156 | ||||||||||||||||||||||
$ | 66,943 | $ | 787,982 | $ | 151,444 | $ | — | $ | 1,006,369 | ||||||||||||||||||
Schedule of allowance for loan losses distributed by portfolio segment and impairment methodology | The allowance for covered loan losses was distributed by portfolio segment and impairment methodology as shown below (in thousands). | ||||||||||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2014 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Loans collectively evaluated for impairment | 46 | 16 | 15 | — | 77 | ||||||||||||||||||||||
PCI Loans | 1,147 | 3,318 | 69 | — | 4,534 | ||||||||||||||||||||||
$ | 1,193 | $ | 3,334 | $ | 84 | $ | — | $ | 4,611 | ||||||||||||||||||
Commercial and | Construction and | ||||||||||||||||||||||||||
December 31, 2013 | Industrial | Real Estate | Land Development | Consumer | Total | ||||||||||||||||||||||
Loans individually evaluated for impairment | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Loans collectively evaluated for impairment | 171 | 8 | — | — | 179 | ||||||||||||||||||||||
PCI Loans | 882 | — | — | — | 882 | ||||||||||||||||||||||
$ | 1,053 | $ | 8 | $ | — | $ | — | $ | 1,061 | ||||||||||||||||||
Covered | Bank | |||||||||||||||||||||||||||
Covered assets and indemnification asset | |||||||||||||||||||||||||||
Schedule of analysis of the aging of the entity's loan portfolio | An analysis of the aging of the Bank’s covered loan portfolio is shown in the following tables (in thousands). | ||||||||||||||||||||||||||
Accruing Loans | |||||||||||||||||||||||||||
(Non-PCI) | |||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | ||||||||||||||||||||
December 31, 2014 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | |||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | — | $ | — | $ | 454 | $ | 454 | $ | 8,681 | $ | 13,630 | $ | 22,765 | $ | 11 | |||||||||||
Unsecured | 10 | — | — | 10 | 1,200 | 6,805 | 8,015 | — | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 876 | — | 105 | 981 | 41,576 | 227,772 | 270,329 | — | |||||||||||||||||||
Secured by residential properties | 3,089 | 493 | 405 | 3,987 | 137,342 | 141,192 | 282,521 | 48 | |||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | — | — | 896 | 896 | 390 | 354 | 1,640 | — | |||||||||||||||||||
Commercial construction loans and land development | 39 | 25 | 8 | 72 | 11,663 | 45,635 | 57,370 | 8 | |||||||||||||||||||
Consumer | — | — | — | — | — | — | — | — | |||||||||||||||||||
$ | 4,014 | $ | 518 | $ | 1,868 | $ | 6,400 | $ | 200,852 | $ | 435,388 | $ | 642,640 | $ | 67 | ||||||||||||
Accruing Loans | |||||||||||||||||||||||||||
(Non-PCI) | |||||||||||||||||||||||||||
Loans Past Due | Loans Past Due | Loans Past Due | Total | Current | PCI | Total | Past Due | ||||||||||||||||||||
December 31, 2013 | 30-59 Days | 60-89 Days | 90 Days or More | Past Due Loans | Loans | Loans | Loans | 90 Days or More | |||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 3,904 | $ | 10 | $ | 81 | $ | 3,995 | $ | 20,918 | $ | 28,520 | $ | 53,433 | $ | — | |||||||||||
Unsecured | 10 | 259 | — | 269 | 3,351 | 9,890 | 13,510 | — | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 999 | — | 40 | 1,039 | 63,780 | 365,306 | 430,125 | — | |||||||||||||||||||
Secured by residential properties | 1,679 | 678 | 209 | 2,566 | 155,919 | 199,372 | 357,857 | — | |||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 1,861 | — | 576 | 2,437 | 5,026 | 4,705 | 12,168 | — | |||||||||||||||||||
Commercial construction loans and land development | 244 | 20 | — | 264 | 17,649 | 121,363 | 139,276 | — | |||||||||||||||||||
Consumer | — | — | — | — | — | — | — | — | |||||||||||||||||||
$ | 8,697 | $ | 967 | $ | 906 | $ | 10,570 | $ | 266,643 | $ | 729,156 | $ | 1,006,369 | $ | — | ||||||||||||
Covered | PCI loans | |||||||||||||||||||||||||||
Covered assets and indemnification asset | |||||||||||||||||||||||||||
Schedule of carrying value and the outstanding balance of the PCI loans | The following table presents the carrying value and the outstanding contractual balance of the covered PCI loans (in thousands). | ||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Carrying amount | $ | 435,388 | $ | 729,156 | |||||||||||||||||||||||
Outstanding balance | 685,393 | 1,022,514 | |||||||||||||||||||||||||
Schedule of changes in the accretable yield for the PCI loans | Changes in the accretable yield for the covered PCI loans were as follows (in thousands). | ||||||||||||||||||||||||||
Period from | |||||||||||||||||||||||||||
Year Ended | September 14, 2013 | ||||||||||||||||||||||||||
December 31, | through December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Balance, beginning of period | $ | 156,548 | $ | — | |||||||||||||||||||||||
Additions | — | 167,974 | |||||||||||||||||||||||||
Reclassifications from (to) nonaccretable difference, net (1) | 105,470 | 3,492 | |||||||||||||||||||||||||
Transfer of loans to covered OREO (2) | 7,703 | 4,407 | |||||||||||||||||||||||||
Accretion | (76,228 | ) | (19,325 | ) | |||||||||||||||||||||||
Balance, end of period | $ | 193,493 | $ | 156,548 | |||||||||||||||||||||||
(1) Reclassifications from nonaccretable difference are primarily due to net increases in expected cash flows in the quarterly recasts. Reclassifications to nonaccretable difference occur when accruing loans are moved to nonaccrual and expected cash flows are no longer predictable and the accretable yield is eliminated. | |||||||||||||||||||||||||||
(2) Transfer of loans to covered OREO is the difference between the value removed from the pool and the expected cash flows for the loan. | |||||||||||||||||||||||||||
Summary of PCI loans by class | Covered impaired loans are summarized by class in the following tables (in thousands). | ||||||||||||||||||||||||||
Unpaid | Recorded | Recorded | Total | ||||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | |||||||||||||||||||||||
December 31, 2014 | Principal Balance | No Allowance | Allowance | Investment | Allowance | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 26,447 | $ | 7,436 | $ | 6,636 | $ | 14,072 | $ | 265 | |||||||||||||||||
Unsecured | 14,111 | 2,107 | 4,697 | 6,804 | 882 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 387,302 | 193,111 | 35,142 | 228,253 | 2,381 | ||||||||||||||||||||||
Secured by residential properties | 235,505 | 129,571 | 12,918 | 142,489 | 937 | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 2,749 | 1,018 | 354 | 1,372 | 69 | ||||||||||||||||||||||
Commercial construction loans and land development | 94,949 | 45,646 | — | 45,646 | — | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 761,063 | $ | 378,889 | $ | 59,747 | $ | 438,636 | $ | 4,534 | ||||||||||||||||||
Unpaid | Recorded | Recorded | Total | ||||||||||||||||||||||||
Contractual | Investment with | Investment with | Recorded | Related | |||||||||||||||||||||||
December 31, 2013 | Principal Balance | No Allowance | Allowance | Investment | Allowance | ||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 43,957 | $ | 28,611 | $ | — | $ | 28,611 | $ | — | |||||||||||||||||
Unsecured | 16,280 | 9,008 | 882 | 9,890 | 882 | ||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 528,825 | 365,346 | — | 365,346 | — | ||||||||||||||||||||||
Secured by residential properties | 289,094 | 199,581 | — | 199,581 | — | ||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 8,920 | 5,280 | — | 5,280 | — | ||||||||||||||||||||||
Commercial construction loans and land development | 183,117 | 121,363 | — | 121,363 | — | ||||||||||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||||||||||
$ | 1,070,193 | $ | 729,189 | $ | 882 | $ | 730,071 | $ | 882 | ||||||||||||||||||
Summary of average investment in PCI loans by class | Average investment in covered impaired loans is summarized by class in the following table (in thousands). | ||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Commercial and industrial: | |||||||||||||||||||||||||||
Secured | $ | 21,296 | $ | 14,260 | |||||||||||||||||||||||
Unsecured | 8,347 | 4,945 | |||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||
Secured by commercial properties | 296,780 | 182,653 | |||||||||||||||||||||||||
Secured by residential properties | 170,931 | 99,686 | |||||||||||||||||||||||||
Construction and land development: | |||||||||||||||||||||||||||
Residential construction loans | 3,039 | 2,353 | |||||||||||||||||||||||||
Commercial construction loans and land development | 83,505 | 60,682 | |||||||||||||||||||||||||
Consumer | — | — | |||||||||||||||||||||||||
$ | 583,898 | $ | 364,579 | ||||||||||||||||||||||||
Cash_and_Due_from_Banks_Tables
Cash and Due from Banks (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and Due from Banks | ||||||||
Schedule of cash and due from banks | Cash and due from banks consisted of the following (in thousands). | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Cash on hand | $ | 47,947 | $ | 59,451 | ||||
Clearings and collection items | 76,381 | 64,193 | ||||||
Deposits at Federal Reserve Bank | 425,704 | 364,709 | ||||||
Deposits at Federal Home Loan Bank | 1,500 | 1,500 | ||||||
Deposits in FDIC-insured institutions | 230,941 | 223,246 | ||||||
$ | 782,473 | $ | 713,099 | |||||
Premises_and_Equipment_Tables
Premises and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Premises and Equipment | ||||||||
Summary of the components of premises and equipment | ||||||||
The components of premises and equipment are summarized as follows (in thousands). | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Land and premises | $ | 122,560 | $ | 121,211 | ||||
Furniture and equipment | 142,255 | 107,644 | ||||||
264,815 | 228,855 | |||||||
Less accumulated depreciation and amortization | (57,824 | ) | (28,149 | ) | ||||
$ | 206,991 | $ | 200,706 | |||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||
Schedule of carrying value of intangible assets subject to amortization | The carrying value of intangible assets subject to amortization was as follows (in thousands). | ||||||||||||
Estimated | Gross | Net | |||||||||||
Useful Life | Intangible | Accumulated | Intangible | ||||||||||
December 31, 2014 | (Years) | Assets | Amortization | Assets | |||||||||
Core deposits | 12-Jul | $ | 38,770 | $ | (12,104 | ) | $ | 26,666 | |||||
Trademarks and trade names | 20-Oct | 20,000 | (3,723 | ) | 16,277 | ||||||||
Noncompete agreements | 6-Apr | 11,650 | (4,794 | ) | 6,856 | ||||||||
Customer contracts and relationships | 12-Aug | 14,100 | (7,729 | ) | 6,371 | ||||||||
Agent relationships | 13 | 3,600 | (2,987 | ) | 613 | ||||||||
$ | 88,120 | $ | (31,337 | ) | $ | 56,783 | |||||||
Estimated | Gross | Net | |||||||||||
Useful Life | Intangible | Accumulated | Intangible | ||||||||||
December 31, 2013 | (Years) | Assets | Amortization | Assets | |||||||||
Core deposits | 12-Jul | $ | 38,770 | $ | (6,159 | ) | $ | 32,611 | |||||
Trademarks and trade names | 20-Oct | 20,000 | (2,589 | ) | 17,411 | ||||||||
Noncompete agreements | 6-Apr | 11,650 | (2,492 | ) | 9,158 | ||||||||
Customer contracts and relationships | 12-Aug | 14,100 | (6,210 | ) | 7,890 | ||||||||
Agent relationships | 13 | 3,600 | (2,749 | ) | 851 | ||||||||
$ | 88,120 | $ | (20,199 | ) | $ | 67,921 | |||||||
Schedule of estimated aggregate future amortization expense for intangible assets | The estimated aggregate future amortization expense for intangible assets at December 31, 2014 is as follows (in thousands). | ||||||||||||
2015 | $ | 11,020 | |||||||||||
2016 | 10,182 | ||||||||||||
2017 | 9,254 | ||||||||||||
2018 | 7,429 | ||||||||||||
2019 | 6,489 | ||||||||||||
Thereafter | 12,409 | ||||||||||||
$ | 56,783 | ||||||||||||
Mortgage_Servicing_Rights_Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Mortgage Servicing Rights | |||||||||||
Schedule of change in fair value of the Company's MSR | The following tables present the changes in fair value of the Company’s MSR and other information related to the serviced portfolio (dollars in thousands). | ||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Balance, beginning of period | $ | 20,149 | $ | 2,080 | $ | — | |||||
Additions | 35,056 | 13,886 | 2,204 | ||||||||
Sales | (11,387 | ) | — | — | |||||||
Changes in fair value: | |||||||||||
Due to changes in model inputs or assumptions (1) | (5,267 | ) | 4,782 | (51 | ) | ||||||
Due to customer payments | (2,396 | ) | (599 | ) | (73 | ) | |||||
Balance, end of period | $ | 36,155 | $ | 20,149 | $ | 2,080 | |||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Mortgage loans serviced for others | $ | 3,645,220 | $ | 1,965,883 | |||||||
MSR as a percentage of serviced mortgage loans | 0.99 | % | 1.02 | % | |||||||
(1) Primarily represents changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates and the refinement of other MSR model assumptions. | |||||||||||
Schedule of key assumptions used in measuring the fair value of the Company's MSR | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Weighted average constant prepayment rate | 12.17 | % | 9.72 | % | |||||||
Weighted average discount rate | 11.01 | % | 12.37 | % | |||||||
Weighted average life (in years) | 6.3 | 7.6 | |||||||||
Schedule of sensitivity analysis of fair value of the Company's MSR to certain key assumptions | A sensitivity analysis of the fair value of the Company’s MSR to certain key assumptions is presented in the following table (in thousands). | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Constant prepayment rate: | |||||||||||
Impact of 10% adverse change | $ | (1,648 | ) | $ | (601 | ) | |||||
Impact of 20% adverse change | (3,169 | ) | (1,170 | ) | |||||||
Discount rate: | |||||||||||
Impact of 100 basis point adverse change | (1,431 | ) | (631 | ) | |||||||
Impact of 200 basis point adverse change | (2,753 | ) | (1,236 | ) | |||||||
Deposits_Tables
Deposits (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deposits | ||||||||
Summary of deposits | Deposits are summarized as follows (in thousands). | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Noninterest-bearing demand | $ | 2,076,385 | $ | 1,773,749 | ||||
Interest-bearing: | ||||||||
NOW accounts | 1,242,110 | 1,083,596 | ||||||
Money market | 861,851 | 878,578 | ||||||
Brokered - money market | 79,937 | 276,760 | ||||||
Demand | 136,886 | 47,636 | ||||||
Savings | 299,051 | 357,325 | ||||||
Time | 1,575,910 | 2,110,947 | ||||||
Brokered - time | 97,762 | 194,327 | ||||||
$ | 6,369,892 | $ | 6,722,918 | |||||
Summary of scheduled maturities of interest-bearing time deposits | At December 31, 2014, the scheduled maturities of interest-bearing time deposits are as follows (in thousands). | |||||||
2015 | $ | 1,066,373 | ||||||
2016 | 179,185 | |||||||
2017 | 380,913 | |||||||
2018 | 41,185 | |||||||
2019 and thereafter | 6,016 | |||||||
$ | 1,673,672 | |||||||
Shortterm_Borrowings_Tables
Short-term Borrowings (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Short-term borrowings | |||||||||||
Schedule of short-term borrowings | Short-term borrowings are summarized as follows (in thousands). | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Federal funds purchased | $ | 128,100 | $ | 137,225 | |||||||
Securities sold under agreements to repurchase | 136,396 | 107,462 | |||||||||
Federal Home Loan Bank notes | 375,000 | — | |||||||||
Short-term bank loans | 123,200 | 97,400 | |||||||||
$ | 762,696 | $ | 342,087 | ||||||||
Schedule of federal funds purchased and securities sold under agreements to repurchase | |||||||||||
Short-term borrowings | |||||||||||
Schedule of short-term borrowings | Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). | ||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Average balance during the period | $ | 319,806 | $ | 281,067 | $ | 277,470 | |||||
Average interest rate during the period | 0.17 | % | 0.19 | % | 0.25 | % | |||||
Maximum month-end balance during the period | 535,232 | 415,730 | 355,350 | ||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Average interest rate at end of period | 0.15 | % | 0.16 | % | |||||||
Securities underlying the agreements at end of period: | |||||||||||
Carrying value | $ | 166,734 | $ | 144,991 | |||||||
Estimated fair value | $ | 163,852 | $ | 138,719 | |||||||
Federal Home Loan Bank notes | |||||||||||
Short-term borrowings | |||||||||||
Schedule of short-term borrowings | Other information regarding FHLB notes is shown in the following tables (dollars in thousands). | ||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Average balance during the period | $ | 261,550 | $ | 106,415 | $ | 301,613 | |||||
Average interest rate during the period | 0.18 | % | 0.13 | % | 0.14 | % | |||||
Maximum month-end balance during the period | 575,000 | 525,000 | 250,000 | ||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Average interest rate at end of period | 0.16 | % | — | ||||||||
Notes_Payable_Tables
Notes Payable (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Notes Payable | ||||||||
Schedule of notes payable | Notes payable consisted of the following (in thousands). | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
NLIC note payable due May 2033, three-month LIBOR plus 4.10% (4.35% at December 31, 2014) with interest payable quarterly | $ | 10,000 | $ | 10,000 | ||||
NLIC note payable due September 2033, three-month LIBOR plus 4.05% (4.30% at December 31, 2014) with interest payable quarterly | 10,000 | 10,000 | ||||||
ASIC note payable due April 2034, three-month LIBOR plus 4.05% (4.30% at December 31, 2014) with interest payable quarterly | 7,500 | 7,500 | ||||||
First Southwest nonrecourse notes, due January 2035 with interest payable quarterly | 4,184 | 6,827 | ||||||
Insurance company note payable due March 2035, three-month LIBOR plus 3.40% (3.65% at December 31, 2014) with interest payable quarterly | 20,000 | 20,000 | ||||||
Insurance company line of credit due December 31, 2015, 3.25% plus a calculated index rate (4.00% at December 31, 2014) with interest payable quarterly | 5,000 | 2,000 | ||||||
$ | 56,684 | $ | 56,327 | |||||
Junior_Subordinated_Debentures1
Junior Subordinated Debentures and Trust Preferred Securities (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Junior Subordinated Debentures and Trust Preferred Securities | |||||||
Schedule of information regarding the PlainsCapital Debentures | Information regarding the PlainsCapital Debentures is shown in the following table (in thousands). | ||||||
Investor | Issue Date | Amount | |||||
PCC Statutory Trust I | July 31, 2001 | $ | 18,042 | ||||
PCC Statutory Trust II | March 26, 2003 | $ | 18,042 | ||||
PCC Statutory Trust III | September 17, 2003 | $ | 15,464 | ||||
PCC Statutory Trust IV | February 22, 2008 | $ | 15,464 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of components of the provision for income tax provision (benefit) | The significant components of the income tax provision (benefit) are as follows (in thousands). | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 85,303 | $ | 51,441 | $ | 4,346 | |||||
State | 3,087 | 3,414 | 935 | ||||||||
88,390 | 54,855 | 5,281 | |||||||||
Deferred: | |||||||||||
Federal | (21,851 | ) | 14,573 | (5,649 | ) | ||||||
State | (931 | ) | 1,256 | (777 | ) | ||||||
(22,782 | ) | 15,829 | (6,426 | ) | |||||||
$ | 65,608 | $ | 70,684 | $ | (1,145 | ) | |||||
Schedule of reconciliation of the income tax provision (benefit) and the amount that would be computed by applying the statutory Federal income tax rate to income (loss) before income taxes | The income tax provision (benefit) differs from the amount that would be computed by applying the statutory Federal income tax rate of 35% to income (loss) before income taxes as a result of the following (in thousands). | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Computed tax at federal statutory rate | $ | 62,358 | $ | 69,088 | $ | (2,185 | ) | ||||
Tax effect of: | |||||||||||
Tax-exempt income, net | (2,085 | ) | (2,042 | ) | (151 | ) | |||||
State income taxes | 1,401 | 3,035 | 103 | ||||||||
Valuation allowance | 1,950 | — | — | ||||||||
Nondeductible expenses | 2,201 | 2,363 | 352 | ||||||||
Minority interest | (318 | ) | (479 | ) | (174 | ) | |||||
Nondeductible transaction costs | 102 | — | 1,151 | ||||||||
Prior year return to provision adjustment | 360 | (1,141 | ) | (150 | ) | ||||||
Other | (361 | ) | (140 | ) | (91 | ) | |||||
$ | 65,608 | $ | 70,684 | $ | (1,145 | ) | |||||
Schedule of components of the tax effects of temporary differences that give rise to the net deferred tax asset | The components of the tax effects of temporary differences that give rise to the net deferred tax asset included in other assets within the consolidated balance sheets are as follows (in thousands). | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforward | $ | 15,919 | $ | 15,919 | |||||||
Covered loans | 53,195 | 47,770 | |||||||||
Purchase accounting adjustment - loans | 15,110 | 27,997 | |||||||||
Allowance for loan losses | 15,255 | 12,383 | |||||||||
Compensation and benefits | 22,498 | 16,946 | |||||||||
Indemnification agreements | 6,631 | 8,308 | |||||||||
Foreclosed property | 13,458 | 13,589 | |||||||||
Capital loss carryforward | 1,950 | — | |||||||||
Net unrealized change in securities and other investments | — | 19,428 | |||||||||
Other | 14,793 | 16,216 | |||||||||
158,809 | 178,556 | ||||||||||
Deferred tax liabilities: | |||||||||||
Premises and equipment | 13,567 | 13,269 | |||||||||
FDIC Indemnification Asset | 38,546 | 67,841 | |||||||||
Intangible assets | 18,989 | 22,708 | |||||||||
Derivatives | 9,368 | 9,428 | |||||||||
Net unrealized change in securities and other investments | 260 | — | |||||||||
Loan servicing | 13,531 | 7,480 | |||||||||
Other | 19,646 | 17,972 | |||||||||
113,907 | 138,698 | ||||||||||
Total net deferred tax asset | 44,902 | 39,858 | |||||||||
Less valuation allowance | (1,950 | ) | — | ||||||||
Net deferred tax asset | $ | 42,952 | $ | 39,858 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Commitments and Contingencies | |||||||||||
Schedule of roll-forward of claims activity for loans put-back to the mortgage origination segment | The following tables provide for a roll-forward of claims activity for loans put-back to the mortgage origination segment based upon an alleged breach of a representation or warranty with respect to a loan sold and related indemnification liability reserve activity (in thousands). | ||||||||||
Representation and Warranty Specific Claims Activity - Origination | |||||||||||
Loan Balance | |||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Balance, beginning of period | $ | 51,912 | $ | 39,693 | $ | 35,217 | |||||
Claims made | 50,558 | 40,001 | 6,463 | ||||||||
Claims resolved with no payment | (29,257 | ) | (17,746 | ) | (1,565 | ) | |||||
Repurchases | (15,439 | ) | (6,255 | ) | (422 | ) | |||||
Indemnification payments | (3,868 | ) | (3,781 | ) | — | ||||||
Balance, end of period | $ | 53,906 | $ | 51,912 | $ | 39,693 | |||||
Indemnification Liability Reserve Activity | |||||||||||
Year Ended December 31, | Month Ended | ||||||||||
2014 | 2013 | December 31, 2012 | |||||||||
Balance, beginning of period | $ | 21,121 | $ | 18,964 | $ | 18,544 | |||||
Additions for new sales | 3,109 | 3,539 | 420 | ||||||||
Repurchases | (1,593 | ) | (251 | ) | (31 | ) | |||||
Early payment defaults | (143 | ) | (528 | ) | (51 | ) | |||||
Indemnification payments | (1,708 | ) | (1,003 | ) | — | ||||||
Change in estimate | (3,167 | ) | 400 | 82 | |||||||
Balance, end of period | $ | 17,619 | $ | 21,121 | $ | 18,964 | |||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Reserve for Indemnification Liability: | |||||||||||
Specific claims | $ | 7,912 | $ | 12,179 | |||||||
Incurred but not reported claims | 9,707 | 8,942 | |||||||||
Total | $ | 17,619 | $ | 21,121 | |||||||
Schedule of future minimum lease payments under non-cancelable operating and capital leases | Future minimum lease payments under these agreements follow (in thousands). | ||||||||||
Operating Leases | Capital Leases | ||||||||||
2015 | $ | 24,588 | $ | 1,090 | |||||||
2016 | 19,677 | 1,103 | |||||||||
2017 | 14,561 | 1,129 | |||||||||
2018 | 12,565 | 1,167 | |||||||||
2019 | 7,211 | 1,187 | |||||||||
Thereafter | 28,169 | 10,348 | |||||||||
Total minimum lease payments | $ | 106,771 | 16,024 | ||||||||
Amount representing interest | (6,126 | ) | |||||||||
Present value of minimum lease payments | $ | 9,898 | |||||||||
Regulatory_Matters_Tables
Regulatory Matters (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Regulatory Matters | |||||||||||||||||
Schedule of comparison of the Bank's and Hilltop's consolidated actual capital amounts and ratios to the regulatory minimum requirements and the Bank's regulatory minimum capital requirements and the Bank's regulatory minimum capital requirements needed to qualify as a well-capitalized institution without giving effect to the final Basel III capital rules adopted by the Federal Reserve Board | The following table shows the Bank’s and Hilltop’s consolidated actual capital amounts and ratios compared to the regulatory minimum capital requirements and the Bank’s regulatory minimum capital requirements needed to qualify as a “well-capitalized” institution (dollars in thousands), without giving effect to the final Basel III capital rules. | ||||||||||||||||
To Be Well Capitalized | |||||||||||||||||
Minimum Capital | Minimum Capital | ||||||||||||||||
Actual | Requirements | Requirements | |||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||
December 31, 2014 | |||||||||||||||||
Tier 1 capital (to average assets): | |||||||||||||||||
Bank | $ | 845,656 | 10.31 | % | $ | 328,025 | 4 | % | $ | 410,031 | 5 | % | |||||
Hilltop | 1,231,724 | 14.17 | % | 347,619 | 4 | % | N/A | N/A | |||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||
Bank | 845,656 | 13.74 | % | 246,099 | 4 | % | 369,148 | 6 | % | ||||||||
Hilltop | 1,231,724 | 19.02 | % | 259,078 | 4 | % | N/A | N/A | |||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||
Bank | 888,744 | 14.45 | % | 492,198 | 8 | % | 615,247 | 10 | % | ||||||||
Hilltop | 1,275,023 | 19.69 | % | 518,157 | 8 | % | N/A | N/A | |||||||||
December 31, 2013 | |||||||||||||||||
Tier 1 capital (to average assets): | |||||||||||||||||
Bank | $ | 762,364 | 9.29 | % | $ | 328,275 | 4 | % | $ | 410,344 | 5 | % | |||||
Hilltop | 1,112,424 | 12.81 | % | 347,480 | 4 | % | N/A | N/A | |||||||||
Tier 1 capital (to risk-weighted assets): | |||||||||||||||||
Bank | 762,364 | 13.38 | % | 227,984 | 4 | % | 341,976 | 6 | % | ||||||||
Hilltop | 1,112,424 | 18.53 | % | 240,159 | 4 | % | N/A | N/A | |||||||||
Total capital (to risk-weighted assets): | |||||||||||||||||
Bank | 797,771 | 14.00 | % | 455,968 | 8 | % | 569,960 | 10 | % | ||||||||
Hilltop | 1,148,736 | 19.13 | % | 480,318 | 8 | % | N/A | N/A | |||||||||
Schedule of reconciliation of equity capital to Tier 1 and total capital (as defined) | A reconciliation of equity capital to Tier 1 and total capital (as defined) is as follows (in thousands). | ||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||
Bank | Hilltop | Bank | Hilltop | ||||||||||||||
Total equity capital | $ | 1,104,048 | $ | 1,460,452 | $ | 985,519 | $ | 1,311,141 | |||||||||
Add: | |||||||||||||||||
Minority interests | 787 | 787 | 781 | 781 | |||||||||||||
Trust preferred securities | — | 65,000 | — | 65,000 | |||||||||||||
Net unrealized holding losses on securities available for sale and held in trust | 3,484 | (651 | ) | 42,901 | 34,863 | ||||||||||||
Deduct: | |||||||||||||||||
Goodwill and other disallowed intangible assets | (259,048 | ) | (290,052 | ) | (264,822 | ) | (297,174 | ) | |||||||||
Other | (3,615 | ) | (3,812 | ) | (2,015 | ) | (2,187 | ) | |||||||||
Tier 1 capital (as defined) | 845,656 | 1,231,724 | 762,364 | 1,112,424 | |||||||||||||
Add: Allowable Tier 2 capital | |||||||||||||||||
Allowance for loan losses | 43,088 | 43,088 | 35,407 | 35,407 | |||||||||||||
Net unrealized holding losses on equity securities | — | 211 | — | 905 | |||||||||||||
Total capital (as defined) | $ | 888,744 | $ | 1,275,023 | $ | 797,771 | $ | 1,148,736 | |||||||||
Summary of statutory capital and surplus and statutory net income of each insurance subsidiary | A summary of statutory capital and surplus and statutory net income (loss) of each insurance subsidiary is as follows (in thousands). | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Capital and surplus: | |||||||||||||||||
National Lloyds Insurance Company | $ | 113,023 | $ | 98,602 | |||||||||||||
American Summit Insurance Company | 28,966 | 26,452 | |||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Statutory net income (loss): | |||||||||||||||||
National Lloyds Insurance Company | $ | 14,893 | $ | 3,583 | $ | (3,858 | ) | ||||||||||
American Summit Insurance Company | 2,554 | 521 | 972 | ||||||||||||||
Other_Noninterest_Income_and_E1
Other Noninterest Income and Expense (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Other Noninterest Income and Expense | |||||||||||
Schedule of components of other noninterest income and expense | The following tables show the components of other noninterest income and expense (in thousands). | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Other noninterest income: | |||||||||||
Change in fair value of FSC derivatives | $ | 16,228 | $ | 11,427 | $ | 238 | |||||
Commission and insurance agency income | 3,380 | 2,765 | 2,159 | ||||||||
Direct bill fees and insurance service fee income | 5,719 | 5,697 | 5,174 | ||||||||
FDIC Indemnification Asset accretion | 3,445 | 1,699 | — | ||||||||
Net gain (loss) from trading securities portfolio | 2,126 | (2,773 | ) | (646 | ) | ||||||
Net gain on investment in SWS common stock | 5,985 | — | — | ||||||||
Rent and other income from other real estate owned | 5,703 | 625 | — | ||||||||
Revenue from check and stored value cards | 7,614 | 4,682 | 276 | ||||||||
Service charges on depositor accounts | 16,730 | 11,376 | 724 | ||||||||
Trust fees | 6,330 | 5,050 | 411 | ||||||||
Other | 6,281 | 4,122 | 237 | ||||||||
$ | 79,541 | $ | 44,670 | $ | 8,573 | ||||||
Other noninterest expense: | |||||||||||
Accounting fees | $ | 5,247 | $ | 5,455 | $ | 2,269 | |||||
Acquisition costs | 1,406 | 117 | 6,570 | ||||||||
Amortization of intangible assets | 11,138 | 11,087 | 1,986 | ||||||||
Data processing | 23,096 | 17,922 | 4,033 | ||||||||
Funding fees | 2,521 | 4,403 | 593 | ||||||||
Management fees | — | — | 1,025 | ||||||||
Marketing | 21,372 | 17,257 | 2,245 | ||||||||
Other professional services | 39,310 | 32,526 | 5,004 | ||||||||
Printing, stationery and supplies | 4,902 | 4,583 | 735 | ||||||||
Repossession and foreclosure | 17,621 | 3,546 | 47 | ||||||||
Telecommunications | 11,249 | 8,350 | 834 | ||||||||
Unreimbursed loan closing costs | 32,669 | 30,095 | 5,944 | ||||||||
Other | 61,048 | 52,606 | 3,083 | ||||||||
$ | 231,579 | $ | 187,947 | $ | 34,368 | ||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Derivative Financial Instruments | ||||||||||||||
Schedule of derivative positions | Derivative positions are presented in the following table (in thousands). | |||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Notional | Estimated | Notional | Estimated | |||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||
Derivative instruments: | ||||||||||||||
IRLCs | $ | 621,216 | $ | 17,057 | $ | 602,467 | $ | 12,151 | ||||||
Commitments to purchase MBSs | 510,553 | 6,040 | 236,305 | (109 | ) | |||||||||
Commitments to sell MBSs | 1,968,768 | (12,566 | ) | 1,645,332 | 11,383 | |||||||||
Interest rate swaps and swaptions | 83,000 | 425 | — | — | ||||||||||
Fee Award Option | — | — | 20,432 | (5,600 | ) | |||||||||
Balance_Sheet_Offsetting_Table
Balance Sheet Offsetting (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Balance Sheet Offsetting | ||||||||||||||||||||
Schedule of the assets subject to an enforceable master netting arrangement or repurchase agreements | The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). | |||||||||||||||||||
Gross Amounts Not Offset in | ||||||||||||||||||||
Net Amounts | the Balance Sheet | |||||||||||||||||||
Gross Amounts | Gross Amounts | of Assets | Cash | |||||||||||||||||
of Recognized | Offset in the | Presented in the | Financial | Collateral | Net | |||||||||||||||
Assets | Balance Sheet | Balance Sheet | Instruments | Pledged | Amount | |||||||||||||||
December 31, 2014 | ||||||||||||||||||||
Securities borrowed: | ||||||||||||||||||||
Institutional counterparties | $ | 152,899 | $ | — | $ | 152,899 | $ | (152,899 | ) | $ | — | $ | — | |||||||
Interest rate swaps and swaptions: | ||||||||||||||||||||
Institutional counterparties | 425 | — | 425 | — | — | 425 | ||||||||||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 41 | — | 41 | — | — | 41 | ||||||||||||||
$ | 153,365 | $ | — | $ | 153,365 | $ | (152,899 | ) | $ | — | $ | 466 | ||||||||
December 31, 2013 | ||||||||||||||||||||
Securities borrowed: | ||||||||||||||||||||
Institutional counterparties | $ | 107,365 | $ | — | $ | 107,365 | $ | (107,365 | ) | $ | — | $ | — | |||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 11,489 | (76 | ) | 11,413 | — | (286 | ) | 11,127 | ||||||||||||
$ | 118,854 | $ | (76 | ) | $ | 118,778 | $ | (107,365 | ) | $ | (286 | ) | $ | 11,127 | ||||||
Schedule of the liabilities subject to an enforceable master netting arrangement or repurchase agreements | The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). | |||||||||||||||||||
Gross Amounts Not Offset in | ||||||||||||||||||||
Net Amounts | the Balance Sheet | |||||||||||||||||||
Gross Amounts | Gross Amounts | of Liabilities | Cash | |||||||||||||||||
of Recognized | Offset in the | Presented in the | Financial | Collateral | Net | |||||||||||||||
Liabities | Balance Sheet | Balance Sheet | Instruments | Pledged | Amount | |||||||||||||||
December 31, 2014 | ||||||||||||||||||||
Securities loaned: | ||||||||||||||||||||
Institutional counterparties | $ | 117,822 | $ | — | $ | 117,822 | $ | (117,822 | ) | $ | — | $ | — | |||||||
Repurchase agreements: | ||||||||||||||||||||
Customer counterparties | 136,396 | — | 136,396 | (136,396 | ) | — | — | |||||||||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 12,829 | (223 | ) | 12,606 | — | (6,137 | ) | 6,469 | ||||||||||||
$ | 267,047 | $ | (223 | ) | $ | 266,824 | $ | (254,218 | ) | $ | (6,137 | ) | $ | 6,469 | ||||||
December 31, 2013 | ||||||||||||||||||||
Securities loaned: | ||||||||||||||||||||
Institutional counterparties | $ | 74,913 | $ | — | $ | 74,913 | $ | (74,913 | ) | $ | — | $ | — | |||||||
Repurchase agreements: | ||||||||||||||||||||
Customer counterparties | 107,462 | — | 107,462 | (107,462 | ) | — | — | |||||||||||||
Forward MBS derivatives: | ||||||||||||||||||||
Institutional counterparties | 30 | — | 30 | — | (17 | ) | 13 | |||||||||||||
$ | 182,405 | $ | — | $ | 182,405 | $ | (182,375 | ) | $ | (17 | ) | $ | 13 | |||||||
BrokerDealer_and_Clearing_Orga1
Broker-Dealer and Clearing Organization Receivables and Payables (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Broker-Dealer and Clearing Organization Receivables and Payables | ||||||||
Schedule of broker-dealer and clearing organization receivables and payables | Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Receivables: | ||||||||
Securities borrowed | $ | 152,899 | $ | 107,365 | ||||
Securities failed to deliver | 3,497 | 7,160 | ||||||
Clearing organizations | 11,471 | 4,698 | ||||||
Due from dealers | 17 | 94 | ||||||
$ | 167,884 | $ | 119,317 | |||||
Payables: | ||||||||
Securities loaned | $ | 117,822 | $ | 74,913 | ||||
Correspondents | 51,930 | 44,852 | ||||||
Securities failed to receive | 5,960 | 5,523 | ||||||
Clearing organizations | 3,330 | 4,390 | ||||||
$ | 179,042 | $ | 129,678 | |||||
Deferred_Policy_Acquisition_Co1
Deferred Policy Acquisition Cost (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deferred Policy Acquisition Costs. | ||||||||
Schedule of activity in deferred policy acquisition costs | A summary of the activity in deferred policy acquisition costs is as follows (in thousands). | |||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Balance, beginning of year | $ | 20,991 | $ | 19,812 | ||||
Acquisition expenses capitalized | 41,034 | 41,771 | ||||||
Amortization charged to income | (41,609 | ) | (40,592 | ) | ||||
Balance, end of year | $ | 20,416 | $ | 20,991 | ||||
Reserves_for_Unpaid_Losses_and
Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Reserves for Losses and Loss Adjustment Expenses | |||||||||||
Schedule of information regarding the reserve for unpaid losses and LAE | A rollforward of NLC’s reserve for unpaid losses and LAE is as follows (in thousands). | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance, beginning of year | $ | 27,468 | $ | 34,012 | $ | 44,835 | |||||
Less reinsurance recoverables | (4,508 | ) | (10,385 | ) | (25,083 | ) | |||||
Net balance, beginning of year | 22,960 | 23,627 | 19,752 | ||||||||
Incurred related to: | |||||||||||
Current year | 86,642 | 110,096 | 109,328 | ||||||||
Prior years | 7,787 | 659 | (169 | ) | |||||||
Total incurred | 94,429 | 110,755 | 109,159 | ||||||||
Payments related to: | |||||||||||
Current year | (73,841 | ) | (96,284 | ) | (90,743 | ) | |||||
Prior years | (18,147 | ) | (15,138 | ) | (14,541 | ) | |||||
Total payments | (91,988 | ) | (111,422 | ) | (105,284 | ) | |||||
Net balance, end of year | 25,401 | 22,960 | 23,627 | ||||||||
Plus reinsurance recoverables | 4,315 | 4,508 | 10,385 | ||||||||
Balance, end of year | $ | 29,716 | $ | 27,468 | $ | 34,012 | |||||
Reinsurance_Activity_Tables
Reinsurance Activity (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Reinsurance Activity | ||||||||||||||||||||
Schedule of reinsurers with a balance in excess of 5% of outstanding reinsurance receivables | Reinsurers with a balance in excess of 5% of the Company’s outstanding reinsurance receivables at December 31, 2014 are listed below (in thousands). | |||||||||||||||||||
Balances | ||||||||||||||||||||
Due From | A.M. Best | |||||||||||||||||||
Reinsurers | Rating | |||||||||||||||||||
Federal Emergency Management Agency | $ | 3,476 | N/A | |||||||||||||||||
Everest Re | 480 | A+ | ||||||||||||||||||
Lloyd’s Syndicate # 2001 | 432 | A+ | ||||||||||||||||||
R+V Versicherung AG | 360 | N/A | ||||||||||||||||||
General Reinsurance | 320 | A++ | ||||||||||||||||||
Lloyd’s Syndicate #2791 | 273 | N/A | ||||||||||||||||||
$ | 5,341 | |||||||||||||||||||
Schedule of effects of reinsurance on premiums written and earned | The effects of reinsurance on premiums written and earned are summarized as follows (in thousands). | |||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | |||||||||||||||
Premiums from direct business | $ | 172,464 | $ | 173,496 | $ | 173,982 | $ | 168,942 | $ | 163,780 | $ | 162,383 | ||||||||
Reinsurance assumed | 9,746 | 8,960 | 7,987 | 7,202 | 6,422 | 5,882 | ||||||||||||||
Reinsurance ceded | (17,845 | ) | (17,932 | ) | (18,528 | ) | (18,611 | ) | (19,751 | ) | (21,564 | ) | ||||||||
Net premiums | $ | 164,365 | $ | 164,524 | $ | 163,441 | $ | 157,533 | $ | 150,451 | $ | 146,701 | ||||||||
Schedule of effects of reinsurance on incurred losses | The effects of reinsurance on incurred losses are as follows (in thousands). | |||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Loss and LAE incurred | $ | 97,011 | $ | 117,089 | $ | 115,347 | ||||||||||||||
Reinsurance recoverables | (2,582 | ) | (6,334 | ) | (6,188 | ) | ||||||||||||||
Net loss and LAE incurred | $ | 94,429 | $ | 110,755 | $ | 109,159 | ||||||||||||||
Segment_and_Related_Informatio1
Segment and Related Information (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Segment and Related Information | |||||||||||||||||||||||
Schedule of information about the segment revenues, operating results, goodwill, and assets of entity's reportable segments | The following tables present certain information about reportable segment revenues, operating results, goodwill and assets (in thousands). | ||||||||||||||||||||||
Mortgage | All Other and | Hilltop | |||||||||||||||||||||
Year Ended December 31, 2014 | Banking | Broker-Dealer | Origination | Insurance | Corporate | Eliminations | Consolidated | ||||||||||||||||
Net interest income (expense) | $ | 334,377 | $ | 12,144 | $ | (12,591 | ) | $ | 3,672 | $ | 5,219 | $ | 18,320 | $ | 361,141 | ||||||||
Provision for loan losses | 16,916 | 17 | — | — | — | — | 16,933 | ||||||||||||||||
Noninterest income | 67,438 | 119,451 | 456,776 | 173,577 | 5,985 | (23,916 | ) | 799,311 | |||||||||||||||
Noninterest expense | 245,790 | 124,715 | 431,820 | 151,541 | 13,878 | (2,391 | ) | 965,353 | |||||||||||||||
Income (loss) before income taxes | $ | 139,109 | $ | 6,863 | $ | 12,365 | $ | 25,708 | $ | (2,674 | ) | $ | (3,205 | ) | $ | 178,166 | |||||||
Mortgage | All Other and | Hilltop | |||||||||||||||||||||
Year Ended December 31, 2013 | Banking | Broker-Dealer | Origination | Insurance | Corporate | Eliminations | Consolidated | ||||||||||||||||
Net interest income (expense) | $ | 293,254 | $ | 12,064 | $ | (37,840 | ) | $ | 7,442 | $ | (1,597 | ) | $ | 22,878 | $ | 296,201 | |||||||
Provision for loan losses | 37,140 | 18 | — | — | — | — | 37,158 | ||||||||||||||||
Noninterest income | 71,045 | 102,714 | 537,497 | 166,163 | — | (27,334 | ) | 850,085 | |||||||||||||||
Noninterest expense | 155,102 | 112,360 | 472,284 | 166,006 | 10,439 | (4,456 | ) | 911,735 | |||||||||||||||
Income (loss) before income taxes | $ | 172,057 | $ | 2,400 | $ | 27,373 | $ | 7,599 | $ | (12,036 | ) | $ | — | $ | 197,393 | ||||||||
Mortgage | All Other and | Hilltop | |||||||||||||||||||||
Year Ended December 31, 2012 | Banking | Broker-Dealer | Origination | Insurance | Corporate | Eliminations | Consolidated | ||||||||||||||||
Net interest income (expense) | $ | 24,885 | $ | 1,191 | $ | (4,987 | ) | $ | 4,730 | $ | 39 | $ | 2,984 | $ | 28,842 | ||||||||
Provision for loan losses | 3,670 | 130 | — | — | — | — | 3,800 | ||||||||||||||||
Noninterest income | 4,601 | 10,909 | 57,618 | 154,147 | — | (3,043 | ) | 224,232 | |||||||||||||||
Noninterest expense | 16,130 | 11,078 | 50,296 | 163,585 | 14,487 | (59 | ) | 255,517 | |||||||||||||||
Income (loss) before income taxes | $ | 9,686 | $ | 892 | $ | 2,335 | $ | (4,708 | ) | $ | (14,448 | ) | $ | — | $ | (6,243 | ) | ||||||
December 31, 2014 | |||||||||||||||||||||||
Goodwill | $ | 207,741 | $ | 7,008 | $ | 13,071 | $ | 23,988 | $ | — | $ | — | $ | 251,808 | |||||||||
Total assets | $ | 8,036,729 | $ | 758,636 | $ | 1,498,846 | $ | 328,693 | $ | 1,522,655 | $ | (2,903,142 | ) | $ | 9,242,416 | ||||||||
December 31, 2013 | |||||||||||||||||||||||
Goodwill | $ | 207,741 | $ | 7,008 | $ | 13,071 | $ | 23,988 | $ | — | $ | — | $ | 251,808 | |||||||||
Total assets | $ | 7,981,517 | $ | 520,412 | $ | 1,249,091 | $ | 308,160 | $ | 1,316,398 | $ | (2,471,456 | ) | $ | 8,904,122 | ||||||||
Earnings_Loss_per_Common_Share1
Earnings (Loss) per Common Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Earnings (loss) per Common Share | |||||||||||
Schedule of the computation of basic and diluted earnings (loss) per common share | The following table presents the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data). | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Basic earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | $ | 105,947 | $ | 121,015 | $ | (5,851 | ) | ||||
Less: income applicable to participating shares | (547 | ) | (672 | ) | — | ||||||
Net earnings (loss) available to Hilltop common stockholders | $ | 105,400 | $ | 120,343 | $ | (5,851 | ) | ||||
Weighted average shares outstanding - basic | 89,710 | 84,382 | 58,754 | ||||||||
Basic earnings (loss) per common share | $ | 1.18 | $ | 1.43 | $ | (0.10 | ) | ||||
Diluted earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | $ | 105,947 | $ | 121,015 | $ | (5,851 | ) | ||||
Add: interest expense on senior exchangeable notes (net of tax) | — | 5,059 | — | ||||||||
Net earnings (loss) available to Hilltop common stockholders | $ | 105,947 | $ | 126,074 | $ | (5,851 | ) | ||||
Weighted average shares outstanding - basic | 89,710 | 84,382 | 58,754 | ||||||||
Effect of potentially dilutive securities | 863 | 5,949 | — | ||||||||
Weighted average shares outstanding - diluted | 90,573 | 90,331 | 58,754 | ||||||||
Diluted earnings (loss) per common share | $ | 1.17 | $ | 1.4 | $ | (0.10 | ) | ||||
Condensed_Financial_Statements1
Condensed Financial Statements of Parent (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Condensed Financial Statements of Parent | |||||||||||
Schedule of Condensed Statements of Operations and Comprehensive Income (Loss) | Condensed financial statements of Hilltop (parent only) follow (in thousands). Investments in subsidiaries are determined using the equity method of accounting. | ||||||||||
Condensed Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Investment income | $ | 5,219 | $ | 6,635 | $ | 7,035 | |||||
Interest expense | — | 8,232 | 6,996 | ||||||||
Net gain on investment in SWS common stock | 5,985 | — | — | ||||||||
General and administrative expense | 13,878 | 10,439 | 14,488 | ||||||||
Loss before income taxes, equity in undistributed earnings of subsidiaries and preferred stock activity | (2,674 | ) | (12,036 | ) | (14,449 | ) | |||||
Income tax benefit | (592 | ) | (4,680 | ) | (3,313 | ) | |||||
Equity in undistributed earnings of subsidiaries | 114,640 | 134,065 | 6,038 | ||||||||
Net income (loss) | $ | 112,558 | $ | 126,709 | $ | (5,098 | ) | ||||
Other comprehensive income (loss), net | 35,514 | (43,418 | ) | (4,900 | ) | ||||||
Comprehensive income (loss) | $ | 148,072 | $ | 83,291 | $ | (9,998 | ) | ||||
Schedule of Condensed Balance Sheets | Condensed financial statements of Hilltop (parent only) follow (in thousands). Investments in subsidiaries are determined using the equity method of accounting. | ||||||||||
Condensed Balance Sheets | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 145,948 | $ | 163,856 | $ | 204,754 | |||||
Securities, available for sale | — | 69,023 | 64,082 | ||||||||
Investment in subsidiaries | 1,218,182 | 1,069,226 | 944,546 | ||||||||
Investment in SWS common stock | 70,282 | — | — | ||||||||
Other assets | 88,243 | 14,293 | 27,743 | ||||||||
Total assets | $ | 1,522,655 | $ | 1,316,398 | $ | 1,241,125 | |||||
Liabilities and Stockholders’ Equity | |||||||||||
Accounts payable and accrued expenses | $ | 62,203 | $ | 5,257 | $ | 5,779 | |||||
Notes payable | — | — | 90,850 | ||||||||
Stockholders’ equity | 1,460,452 | 1,311,141 | 1,144,496 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,522,655 | $ | 1,316,398 | $ | 1,241,125 | |||||
Schedule of Condensed Statements of Cash Flows | Condensed financial statements of Hilltop (parent only) follow (in thousands). Investments in subsidiaries are determined using the equity method of accounting. | ||||||||||
Condensed Statements of Cash Flows | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating Activities | |||||||||||
Net income (loss) | $ | 112,558 | $ | 126,709 | $ | (5,098 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Equity in undistributed earnings of subsidiaries | (114,640 | ) | (134,065 | ) | (6,038 | ) | |||||
Deferred income taxes | 156 | 8,850 | (1,011 | ) | |||||||
Net gain on investment in SWS common stock | (5,985 | ) | — | — | |||||||
Loss on redemption of senior exchangeable notes | — | 3,733 | — | ||||||||
Other, net | (1,379 | ) | 132 | (3,370 | ) | ||||||
Net cash provided by (used in) operating activities | (9,290 | ) | 5,359 | (15,517 | ) | ||||||
Investing Activities | |||||||||||
Advance to subsidiary | (6,000 | ) | — | — | |||||||
Capital contribution to subsidiary | — | (35,000 | ) | — | |||||||
Cash paid for acquisition | — | — | (311,805 | ) | |||||||
Net cash used in investing activities | (6,000 | ) | (35,000 | ) | (311,805 | ) | |||||
Financing Activities | |||||||||||
Payments to repurchase common stock | — | — | (1,298 | ) | |||||||
Redemption of senior exchangeable notes | — | (11,088 | ) | — | |||||||
Dividends paid on preferred stock | (5,619 | ) | (2,985 | ) | — | ||||||
Other, net | 3,001 | 2,816 | — | ||||||||
Net cash used in financing activities | (2,618 | ) | (11,257 | ) | (1,298 | ) | |||||
Net change in cash and cash equivalents | (17,908 | ) | (40,898 | ) | (328,620 | ) | |||||
Cash and cash equivalents, beginning of year | 163,856 | 204,754 | 533,374 | ||||||||
Cash and cash equivalents, end of year | $ | 145,948 | $ | 163,856 | $ | 204,754 | |||||
Supplemental Schedule of Non-Cash Activities | |||||||||||
Conversion of available for sale investment in SWS common stock | $ | 71,502 | $ | — | $ | — | |||||
Redemption of senior exchangeable notes for common stock | $ | — | $ | 83,950 | $ | — | |||||
Preferred stock issued in acquisition | $ | — | $ | — | $ | 114,068 | |||||
Common stock issued in acquisition | $ | — | $ | — | $ | 387,583 | |||||
Selected_Quarterly_Financial_I1
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Selected Quarterly Financial Information (Unaudited) | |||||||||||||||||
Schedule of quarterly financial information | Selected quarterly financial information is summarized as follows (in thousands, except per share data). | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Fourth | Third | Second | First | Full | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
Interest income | $ | 99,316 | $ | 93,217 | $ | 104,408 | $ | 91,828 | $ | 388,769 | |||||||
Interest expense | 7,802 | 7,457 | 5,962 | 6,407 | 27,628 | ||||||||||||
Net interest income | 91,514 | 85,760 | 98,446 | 85,421 | 361,141 | ||||||||||||
Provision for loan losses | 4,125 | 4,033 | 5,533 | 3,242 | 16,933 | ||||||||||||
Noninterest income | 213,795 | 212,135 | 203,281 | 170,100 | 799,311 | ||||||||||||
Noninterest expense | 246,768 | 254,744 | 251,212 | 212,629 | 965,353 | ||||||||||||
Income before income taxes | 54,416 | 39,118 | 44,982 | 39,650 | 178,166 | ||||||||||||
Income tax provision | 20,950 | 14,010 | 16,294 | 14,354 | 65,608 | ||||||||||||
Net income | 33,466 | 25,108 | 28,688 | 25,296 | 112,558 | ||||||||||||
Less: Net income attributable to noncontrolling interest | 325 | 296 | 177 | 110 | 908 | ||||||||||||
Income attributable to Hilltop | $ | 33,141 | $ | 24,812 | $ | 28,511 | $ | 25,186 | $ | 111,650 | |||||||
Dividends on preferred stock | 1,425 | 1,426 | 1,426 | 1,426 | 5,703 | ||||||||||||
Income applicable to Hilltop common stockholders | $ | 31,716 | $ | 23,386 | $ | 27,085 | $ | 23,760 | $ | 105,947 | |||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.35 | $ | 0.26 | $ | 0.30 | $ | 0.26 | $ | 1.18 | |||||||
Diluted | $ | 0.35 | $ | 0.26 | $ | 0.30 | $ | 0.26 | $ | 1.17 | |||||||
Year Ended December 31, 2013 | |||||||||||||||||
Fourth | Third | Second | First | Full | |||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
Interest income | $ | 98,601 | $ | 79,702 | $ | 76,168 | $ | 74,604 | $ | 329,075 | |||||||
Interest expense | 10,002 | 7,786 | 7,743 | 7,343 | 32,874 | ||||||||||||
Net interest income | 88,599 | 71,916 | 68,425 | 67,261 | 296,201 | ||||||||||||
Provision for loan losses | 2,206 | 10,658 | 11,289 | 13,005 | 37,158 | ||||||||||||
Noninterest income | 182,479 | 215,095 | 239,233 | 213,278 | 850,085 | ||||||||||||
Noninterest expense | 219,752 | 216,592 | 260,400 | 214,991 | 911,735 | ||||||||||||
Income before income taxes | 49,120 | 59,761 | 35,969 | 52,543 | 197,393 | ||||||||||||
Income tax provision | 18,090 | 20,115 | 13,309 | 19,170 | 70,684 | ||||||||||||
Net income | 31,030 | 39,646 | 22,660 | 33,373 | 126,709 | ||||||||||||
Less: Net income attributable to noncontrolling interest | 160 | 339 | 568 | 300 | 1,367 | ||||||||||||
Income attributable to Hilltop | $ | 30,870 | $ | 39,307 | $ | 22,092 | $ | 33,073 | $ | 125,342 | |||||||
Dividends on preferred stock | 1,342 | 1,133 | 1,149 | 703 | 4,327 | ||||||||||||
Income applicable to Hilltop common stockholders | $ | 29,528 | $ | 38,174 | $ | 20,943 | $ | 32,370 | $ | 121,015 | |||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.34 | $ | 0.45 | $ | 0.25 | $ | 0.39 | $ | 1.43 | |||||||
Diluted | $ | 0.34 | $ | 0.43 | $ | 0.24 | $ | 0.39 | $ | 1.40 | |||||||
Subsequent_Events_Tables
Subsequent Events (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Subsequent Events | |||||
Subsequent Events | A summary of the preliminary estimated fair values of the identifiable assets acquired, and liabilities assumed, of SWS at January 1, 2015 are summarized in the following table (in thousands). | ||||
Cash and due from banks | $ | 118,538 | |||
Federal funds sold and securities purchased agreements to resell | 44,741 | ||||
Assets segregated for regulatory purposes | 181,610 | ||||
Securities | 707,476 | ||||
Non-covered loans, net | 854,778 | ||||
Broker-dealer and clearing organization receivables | 1,261,022 | ||||
Other assets | 118,910 | ||||
Total identifiable assets acquired | 3,287,075 | ||||
Deposits | (1,287,394 | ) | |||
Broker-dealer and clearing organization payables | (1,113,075 | ) | |||
Short-term borrowings | (164,240 | ) | |||
Advances from Federal Home Loan Bank | (76,643 | ) | |||
Other liabilities | (216,411 | ) | |||
Total liabilities assumed | (2,857,763 | ) | |||
Preliminary estimated bargain purchase gain | (80,326 | ) | |||
348,986 | |||||
Less Hilltop existing investment in SWS | (70,282 | ) | |||
Net identifiable assets acquired | $ | 278,704 | |||
Schedule of pro forma results | |||||
Twelve Months | |||||
Ended | |||||
December 31, 2014 | |||||
Net interest income | $ | 420,894 | |||
Other revenues | 1,005,701 | ||||
Net income | 110,279 | ||||
Summary_of_Significant_Account2
Summary of Significant Accounting and Reporting Policies (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 02, 2014 | Dec. 31, 2014 | |
item | |||||
Basis of Presentation | |||||
Number of primary operating business units | 2 | 2 | |||
Unrealized gains associated with SWS common stock | $11,542,000 | $14,106,000 | $11,542,000 | ||
Other non interest income | 6,281,000 | 4,122,000 | 237,000 | ||
Plains Capital | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by the reporting entity | 100.00% | ||||
Bank | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
Plains Capital Equity LLC | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
Prime Lending | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
Pcbarc | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
FSC | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
Plains Capital Securities LLC | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
Plains Capital Insurance Services LLC | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
NLC | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by the reporting entity | 100.00% | ||||
Prime Lending Ventures Management LLC | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
PCC Statutory Trusts | |||||
Basis of Presentation | |||||
Ownership percentage of subsidiary owned by subsidiary of the reporting entity | 100.00% | ||||
SWS | |||||
Basis of Presentation | |||||
Elimination of aggregate principal amount note | 50,000,000 | ||||
Unrealized gains associated with SWS common stock | 7,200,000 | ||||
Loss due to change in fair value | 1,200,000 | ||||
Other non interest income | $6,000,000 | ||||
SWS | Common Stock | |||||
Basis of Presentation | |||||
Percentage of outstanding shares of SWS common stock owned by the entity | 21.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting and Reporting Policies (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 13, 2013 | |
Assets Segregated for Regulatory Purposes | |||
Amount required to be segregated in cash and securities | $76,000,000 | ||
Insurance Premiums Receivable | |||
Valuation allowance for uncollectible amounts | 0 | 0 | |
Deferred Policy Acquisition Costs | |||
Premium deficiency | 0 | 0 | |
Maximum | |||
Loans Held for Sale | |||
Loans held-for-sale, period reported on balance sheet | 30 days | ||
Number of layers of common risk characteristics based on which certain acquired loans aggregated into various loan pools to determine respective fair values | 2 | ||
Loans held for sale | Maximum | |||
Loans Held for Sale | |||
Loans held-for-sale, period reported on balance sheet | 30 days | ||
Acquired loans | |||
Loans Held for Sale | |||
Carryover of the allowance for loan losses recorded | 0 | ||
Covered | Acquired loans | |||
Loans Held for Sale | |||
Carryover of the allowance for loan losses recorded | 0 | ||
Noncovered | Loans not impaired at acquisition | |||
Loans Held for Sale | |||
Additional allowance recorded when allowance is less than remaining fair value of discount | 0 | ||
Noncovered | Acquired loans | |||
Loans Held for Sale | |||
Carryover of the allowance for loan losses recorded | $0 |
Summary_of_Significant_Account4
Summary of Significant Accounting and Reporting Policies (Details 3) (Property, Plant and Equipment) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum | |
Premises and Equipment | |
Estimated useful lives | 3 years |
Maximum | |
Premises and Equipment | |
Estimated useful lives | 40 years |
Summary_of_Significant_Account5
Summary of Significant Accounting and Reporting Policies (Details 4) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2013 |
Debt Instrument [Line Items] | ||||
Debt issuance costs amortized | $2.30 | $0.20 | ||
Advertising | ||||
Advertising expense | 4.6 | 5.3 | 0.4 | |
Income Taxes | ||||
Unrecognized tax benefit | 0.4 | |||
Senior exchangeable notes 7.50 percent due 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs amortized | $2.10 | |||
Interest rate (as a percent) | 7.50% |
Acquisitions_Details
Acquisitions (Details) (USD $) | 12 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Nov. 30, 2012 | Dec. 31, 2012 | Sep. 13, 2013 | Sep. 13, 2013 | Dec. 01, 2012 | |
item | |||||||||
Acquisitions | |||||||||
Bargain purchase gain | $12,585,000 | ||||||||
Transaction-related expenses | 1,406,000 | 117,000 | 6,570,000 | ||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Goodwill resulting from acquisition | 251,808,000 | 251,808,000 | 251,808,000 | ||||||
FNB | |||||||||
Acquisitions | |||||||||
Net interest income | 32,000,000 | ||||||||
Other revenues | 20,400,000 | ||||||||
Net income | 18,500,000 | ||||||||
Plains Capital | |||||||||
Acquisitions | |||||||||
Net interest income | 24,029,000 | ||||||||
Other revenues | 70,085,000 | ||||||||
Net income | 8,361,000 | ||||||||
Transaction-related expenses | 6,600,000 | ||||||||
Net assets received from the FDIC and the estimated fair value adjustments resulting in the bargain purchase gain | |||||||||
Securities | 730,779,000 | ||||||||
Loans | 3,195,309,000 | ||||||||
Premises and equipment | 96,886,000 | ||||||||
Other intangible assets | 70,650,000 | ||||||||
Deposits | 4,463,069,000 | ||||||||
Other | 180,998,000 | ||||||||
Net assets acquired | 813,457,000 | ||||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Cash and due from banks | 393,132,000 | ||||||||
Federal funds sold and securities purchased agreements to resell | 84,352,000 | ||||||||
Securities | 730,779,000 | ||||||||
Loans held for sale | 1,520,833,000 | ||||||||
Loans | 3,195,309,000 | ||||||||
Broker/dealer and clearing organization receivables | 149,457,000 | ||||||||
Premises and equipment | 96,886,000 | ||||||||
Other assets | 241,876,000 | ||||||||
Other intangible assets | 70,650,000 | ||||||||
Total identifiable assets acquired | 6,483,274,000 | ||||||||
Deposits | -4,463,069,000 | ||||||||
Broker-dealer and clearing organization payables | 263,894,000 | ||||||||
Short-term borrowings | 914,062,000 | ||||||||
Notes payable | 10,855,000 | ||||||||
Junior subordinated debentures | 67,012,000 | ||||||||
Other liabilities | -180,998,000 | ||||||||
Total liabilities assumed | 5,899,890,000 | ||||||||
Net identifiable assets acquired/ bargain purchase gain | 583,384,000 | ||||||||
Goodwill resulting from acquisition | 230,073,000 | ||||||||
Net assets acquired | 813,457,000 | ||||||||
Components of the consideration paid | |||||||||
Cash | 311,805,000 | ||||||||
Total consideration paid | 813,457,000 | ||||||||
Plains Capital | Common Stock | |||||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Shares of stock issued | 27,100,000 | ||||||||
Components of the consideration paid | |||||||||
Stock issued | 387,584,000 | ||||||||
Plains Capital | Preferred Stock | |||||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Shares of stock issued | 114,068 | ||||||||
Number of shares issued for each outstanding share of preferred stock | 1 | ||||||||
Components of the consideration paid | |||||||||
Stock issued | 114,068,000 | ||||||||
Bank | FNB | |||||||||
Acquisitions | |||||||||
Percentage of losses to be absorbed by FDIC on the first $240.4 million of losses incurred as per the loss sharing agreement | 80.00% | 80.00% | |||||||
Threshold amount of losses incurred for 80% of losses to be absorbed by FDIC as per the loss sharing agreement, first layer | 240,400,000 | 240,400,000 | |||||||
Percentage of losses to be absorbed by FDIC in excess of $240.4 million up to and including $365.7 million of losses incurred as per the loss sharing agreement | 0.00% | 0.00% | |||||||
Threshold amount of losses incurred for 0% of losses to be absorbed by FDIC as per the loss sharing agreement, second layer | 365,700,000 | 365,700,000 | |||||||
Percentage of losses to be absorbed by FDIC in excess of $365.7 million of losses incurred as per the loss sharing agreement | 80.00% | 80.00% | |||||||
Period for which payment is required to be made to the FDIC of true-up amount | 10 years | ||||||||
Bargain purchase gain | 12,600,000 | ||||||||
Tax on bargain purchase gain | 4,500,000 | ||||||||
Transaction-related expenses | 100,000 | ||||||||
Net assets received from the FDIC and the estimated fair value adjustments resulting in the bargain purchase gain | |||||||||
Cost basis net assets | 215,000,000 | 215,000,000 | |||||||
Cash payment received from the FDIC | 45,000,000 | ||||||||
Securities | 286,214,000 | 286,214,000 | |||||||
Loans | 1,200,000,000 | 1,200,000,000 | |||||||
Premises and equipment | 78,399,000 | 78,399,000 | |||||||
FDIC indemnification asset | 185,680,000 | 185,680,000 | |||||||
Other intangible assets | 4,270,000 | 4,270,000 | |||||||
Deposits | 2,211,740,000 | 2,211,740,000 | |||||||
Other | 13,887,000 | 13,887,000 | |||||||
Number of properties purchased from the FDIC | 44 | ||||||||
Aggregate purchase price of properties purchased from the FDIC | 59,500,000 | ||||||||
Number of additional properties purchased pursuant to exercise of option from the FDIC | 7 | ||||||||
Aggregate purchase price of additional properties purchased pursuant to exercise of option from the FDIC | 4,900,000 | ||||||||
Exercise of right to purchase furniture and equipment | 10,300,000 | ||||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Cash and due from banks | 362,695,000 | 362,695,000 | |||||||
Securities | 286,214,000 | 286,214,000 | |||||||
Loans | 1,200,000,000 | 1,200,000,000 | |||||||
Premises and equipment | 78,399,000 | 78,399,000 | |||||||
FDIC indemnification asset | 185,680,000 | 185,680,000 | |||||||
Other assets | 26,300,000 | 26,300,000 | |||||||
Other intangible assets | 4,270,000 | 4,270,000 | |||||||
Total identifiable assets acquired | 2,238,212,000 | 2,238,212,000 | |||||||
Deposits | -2,211,740,000 | -2,211,740,000 | |||||||
Other liabilities | -13,887,000 | -13,887,000 | |||||||
Total liabilities assumed | 2,225,627,000 | 2,225,627,000 | |||||||
Net identifiable assets acquired/ bargain purchase gain | 12,585,000 | 12,585,000 | |||||||
Bank | FNB | Fair value adjustments | |||||||||
Net assets received from the FDIC and the estimated fair value adjustments resulting in the bargain purchase gain | |||||||||
Securities | -3,341,000 | -3,341,000 | |||||||
Loans | -343,068,000 | -343,068,000 | |||||||
Premises and equipment | 3,565,000 | 3,565,000 | |||||||
Other real estate owned | -79,273,000 | -79,273,000 | |||||||
FDIC indemnification asset | 185,680,000 | 185,680,000 | |||||||
Other intangible assets | 4,270,000 | 4,270,000 | |||||||
Deposits | 8,282,000 | 8,282,000 | |||||||
Other | 6,966,000 | 6,966,000 | |||||||
Net assets acquired | 12,585,000 | 12,585,000 | |||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Securities | -3,341,000 | -3,341,000 | |||||||
Loans | -343,068,000 | -343,068,000 | |||||||
Premises and equipment | 3,565,000 | 3,565,000 | |||||||
FDIC indemnification asset | 185,680,000 | 185,680,000 | |||||||
Other real estate owned | -79,273,000 | -79,273,000 | |||||||
Other intangible assets | 4,270,000 | 4,270,000 | |||||||
Deposits | -8,282,000 | -8,282,000 | |||||||
Other liabilities | -6,966,000 | -6,966,000 | |||||||
Net assets acquired | 12,585,000 | 12,585,000 | |||||||
Bank | FNB | Covered | |||||||||
Net assets received from the FDIC and the estimated fair value adjustments resulting in the bargain purchase gain | |||||||||
Loans | 1,116,583,000 | 1,116,583,000 | |||||||
Other real estate owned | 135,187,000 | 135,187,000 | |||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Loans | 1,116,583,000 | 1,116,583,000 | |||||||
Other real estate owned | 135,187,000 | 135,187,000 | |||||||
Bank | FNB | Covered | Commercial loan | |||||||||
Acquisitions | |||||||||
Period of loss-sharing agreements in effect | 5 years | 5 years | |||||||
Period of loss recovery provisions in effect | 8 years | 8 years | |||||||
Bank | FNB | Covered | Single family residential loans | |||||||||
Acquisitions | |||||||||
Period of loss-sharing agreements in effect | 10 years | 10 years | |||||||
Period of loss recovery provisions in effect | 10 years | 10 years | |||||||
Bank | FNB | Noncovered | |||||||||
Net assets received from the FDIC and the estimated fair value adjustments resulting in the bargain purchase gain | |||||||||
Loans | 42,884,000 | 42,884,000 | |||||||
Fair values of the identifiable assets acquired, and liabilities assumed | |||||||||
Loans | $42,884,000 | $42,884,000 |
Acquisitions_Details_2
Acquisitions (Details 2) (USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2012 | Sep. 13, 2013 |
Plains Capital | ||
Acquisitions | ||
Carryover of the allowance for loan losses recorded | $0 | |
Total loans | 3,195,309 | |
Plains Capital | Commercial and industrial | ||
Acquisitions | ||
Total loans | 1,759,617 | |
Plains Capital | Real estate | ||
Acquisitions | ||
Total loans | 1,141,161 | |
Plains Capital | Construction and land development | ||
Acquisitions | ||
Total loans | 266,321 | |
Plains Capital | Consumer | ||
Acquisitions | ||
Total loans | 28,210 | |
Plains Capital | Loans not impaired at acquisition | ||
Acquisitions | ||
Total loans | 3,022,445 | |
Plains Capital | Loans not impaired at acquisition | Commercial and industrial | ||
Acquisitions | ||
Total loans | 1,684,706 | |
Plains Capital | Loans not impaired at acquisition | Real estate | ||
Acquisitions | ||
Total loans | 1,077,295 | |
Plains Capital | Loans not impaired at acquisition | Construction and land development | ||
Acquisitions | ||
Total loans | 232,313 | |
Plains Capital | Loans not impaired at acquisition | Consumer | ||
Acquisitions | ||
Total loans | 28,131 | |
Plains Capital | PCI loans | ||
Acquisitions | ||
Total loans | 172,864 | |
Plains Capital | PCI loans | Commercial and industrial | ||
Acquisitions | ||
Total loans | 74,911 | |
Plains Capital | PCI loans | Real estate | ||
Acquisitions | ||
Total loans | 63,866 | |
Plains Capital | PCI loans | Construction and land development | ||
Acquisitions | ||
Total loans | 34,008 | |
Plains Capital | PCI loans | Consumer | ||
Acquisitions | ||
Total loans | 79 | |
Bank | FNB | ||
Acquisitions | ||
Carryover of the allowance for loan losses recorded | 0 | |
Total loans | 1,159,467 | |
Bank | FNB | Commercial and industrial | ||
Acquisitions | ||
Total loans | 95,625 | |
Bank | FNB | Real estate | ||
Acquisitions | ||
Total loans | 854,217 | |
Bank | FNB | Construction and land development | ||
Acquisitions | ||
Total loans | 184,916 | |
Bank | FNB | Consumer | ||
Acquisitions | ||
Total loans | 24,709 | |
Bank | FNB | Loans not impaired at acquisition | ||
Acquisitions | ||
Total loans | 336,636 | |
Bank | FNB | Loans not impaired at acquisition | Commercial and industrial | ||
Acquisitions | ||
Total loans | 47,874 | |
Bank | FNB | Loans not impaired at acquisition | Real estate | ||
Acquisitions | ||
Total loans | 242,998 | |
Bank | FNB | Loans not impaired at acquisition | Construction and land development | ||
Acquisitions | ||
Total loans | 26,669 | |
Bank | FNB | Loans not impaired at acquisition | Consumer | ||
Acquisitions | ||
Total loans | 19,095 | |
Bank | FNB | PCI loans | ||
Acquisitions | ||
Total loans | 822,831 | |
Bank | FNB | PCI loans | Commercial and industrial | ||
Acquisitions | ||
Total loans | 47,751 | |
Bank | FNB | PCI loans | Real estate | ||
Acquisitions | ||
Total loans | 611,219 | |
Bank | FNB | PCI loans | Construction and land development | ||
Acquisitions | ||
Total loans | 158,247 | |
Bank | FNB | PCI loans | Consumer | ||
Acquisitions | ||
Total loans | $5,614 |
Acquisitions_Details_3
Acquisitions (Details 3) (USD $) | 3 Months Ended | 1 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Nov. 30, 2012 | Sep. 13, 2013 |
FNB | |||||
Acquisitions | |||||
Net interest income | $32,000 | ||||
Other revenues | 20,400 | ||||
Net income | 18,500 | ||||
Plains Capital | |||||
Acquisitions | |||||
Total loans | 3,195,309 | ||||
Net interest income | 24,029 | ||||
Other revenues | 70,085 | ||||
Net income | 8,361 | ||||
Pro Forma Results of Operations | |||||
Net interest income | 221,635 | ||||
Other revenues | 901,347 | ||||
Net income | 75,138 | ||||
Plains Capital | PCI loans | |||||
Acquisitions | |||||
Contractually required principal and interest payments | 252,818 | ||||
Nonaccretable difference | 61,527 | ||||
Cash flows expected to be collected | 191,291 | ||||
Accretable difference | 18,427 | ||||
Total loans | 172,864 | ||||
Plains Capital | Loans not impaired at acquisition | |||||
Acquisitions | |||||
Contractually required principal and interest payments | 3,498,554 | ||||
Contractual cash flows not expected to be collected | 92,526 | ||||
Total loans | 3,022,445 | ||||
Bank | FNB | |||||
Acquisitions | |||||
Total loans | 1,159,467 | ||||
Bank | FNB | PCI loans | |||||
Acquisitions | |||||
Contractually required principal and interest payments | 1,533,667 | ||||
Nonaccretable difference | 542,241 | ||||
Cash flows expected to be collected | 991,426 | ||||
Accretable difference | 168,595 | ||||
Total loans | 822,831 | ||||
Bank | FNB | Loans not impaired at acquisition | |||||
Acquisitions | |||||
Contractually required principal and interest payments | 466,754 | ||||
Contractual cash flows not expected to be collected | 43,783 | ||||
Total loans | $336,636 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Measurements | ||
Aggregate fair value of PrimeLending's mortgage loans held for sale accounted for under the Fair Value Option | 1,270,000,000 | $1,060,000,000 |
Unpaid principal balance of PrimeLending loans held for sale accounted under the fair value option | 1,220,000,000 | 1,040,000,000 |
Financial assets and liabilities | ||
Trading securities | 65,717,000 | 58,846,000 |
Available for sale securities | 925,535,000 | 1,203,143,000 |
Mortgage servicing asset | 36,155,000 | 20,149,000 |
Maximum | ||
Fair value measurements | ||
Holding period of mortgage loans held for sale | 30 days | |
Level 2 | ||
Financial assets and liabilities | ||
Loans held for sale | 37,541,000 | 29,322,000 |
Time deposits | 6,365,555,000 | 6,722,909,000 |
Estimate of Fair Value Measurement | ||
Financial assets and liabilities | ||
Loans held for sale | 37,541,000 | 29,322,000 |
Time deposits | 6,365,555,000 | 6,722,909,000 |
Recurring | Level 1 | ||
Financial assets and liabilities | ||
Trading securities | 39,000 | 33,000 |
Available for sale securities | 13,762,000 | 22,079,000 |
Investment in SWS common stock | 70,282,000 | |
Recurring | Level 2 | ||
Financial assets and liabilities | ||
Trading securities | 65,678,000 | 58,813,000 |
Available for sale securities | 911,773,000 | 1,121,011,000 |
Loans held for sale | 1,263,135,000 | 1,031,988,000 |
Derivative assets | 23,805,000 | 23,564,000 |
Trading liabilities | 48,000 | 46,000 |
Derivative liabilities | 12,849,000 | 139,000 |
Recurring | Level 3 | ||
Financial assets and liabilities | ||
Available for sale securities | 60,053,000 | |
Loans held for sale | 9,017,000 | 27,729,000 |
Mortgage servicing asset | 36,155,000 | 20,149,000 |
Derivative liabilities | 5,600,000 | |
Recurring | Estimate of Fair Value Measurement | ||
Financial assets and liabilities | ||
Trading securities | 65,717,000 | 58,846,000 |
Available for sale securities | 925,535,000 | 1,203,143,000 |
Loans held for sale | 1,272,152,000 | 1,059,717,000 |
Derivative assets | 23,805,000 | 23,564,000 |
Mortgage servicing asset | 36,155,000 | 20,149,000 |
Investment in SWS common stock | 70,282,000 | |
Trading liabilities | 48,000 | 46,000 |
Derivative liabilities | 12,849,000 | $5,739,000 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 0 Months Ended | 12 Months Ended | ||
Oct. 02, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
SWS | ||||
Total gains or losses (realized or unrealized): | ||||
Elimination of aggregate principal amount note | $50,000,000 | |||
Level 3 | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Balance, beginning of Period | 102,331,000 | 53,867,000 | 60,377,000 | |
Purchases/Additions | 59,730,000 | 13,886,000 | -2,251,000 | |
Sales/Reductions | -110,440,000 | |||
Transfers into Level 3 | 27,729,000 | |||
Total gains or losses (realized or unrealized): | ||||
Included in Net Income (Loss) | -5,831,000 | 5,239,000 | 1,708,000 | |
Included in other comprehensive income (loss) | -618,000 | 1,610,000 | -5,967,000 | |
Balance, end of Period | 45,172,000 | 102,331,000 | 53,867,000 | |
Level 3 | Available for sale securities | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Balance, beginning of Period | 60,053,000 | 56,277,000 | 60,377,000 | |
Sales/Reductions | -61,283,000 | |||
Total gains or losses (realized or unrealized): | ||||
Included in Net Income (Loss) | 1,848,000 | 2,166,000 | 1,867,000 | |
Included in other comprehensive income (loss) | -618,000 | 1,610,000 | -5,967,000 | |
Balance, end of Period | 60,053,000 | 56,277,000 | ||
Level 3 | Loans held for sale | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Balance, beginning of Period | 27,729,000 | |||
Purchases/Additions | 24,851,000 | |||
Sales/Reductions | -44,597,000 | |||
Transfers into Level 3 | 27,729,000 | |||
Total gains or losses (realized or unrealized): | ||||
Included in Net Income (Loss) | 1,034,000 | |||
Balance, end of Period | 9,017,000 | 27,729,000 | ||
Level 3 | MSR | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Balance, beginning of Period | 20,149,000 | 2,080,000 | ||
Purchases/Additions | 35,056,000 | 13,886,000 | 2,204,000 | |
Sales/Reductions | -11,387,000 | |||
Total gains or losses (realized or unrealized): | ||||
Included in Net Income (Loss) | -7,663,000 | 4,183,000 | -124,000 | |
Balance, end of Period | 36,155,000 | 20,149,000 | 2,080,000 | |
Level 3 | Derivative Liabilities | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Balance, beginning of Period | -5,600,000 | -4,490,000 | ||
Purchases/Additions | -177,000 | -4,455,000 | ||
Sales/Reductions | 6,827,000 | |||
Total gains or losses (realized or unrealized): | ||||
Included in Net Income (Loss) | -1,050,000 | -1,110,000 | -35,000 | |
Balance, end of Period | ($5,600,000) | ($4,490,000) |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (Level 3, Recurring, Discounted cash flow) | 12 Months Ended |
Dec. 31, 2014 | |
Loans held for sale | Minimum | |
Significant unobservable inputs used in the fair value measurements | |
Discount rates (as a percent) | 82.00% |
Loans held for sale | Maximum | |
Significant unobservable inputs used in the fair value measurements | |
Discount rates (as a percent) | 92.00% |
MSR | Weighted average | |
Significant unobservable inputs used in the fair value measurements | |
Discount rates (as a percent) | 11.01% |
Constant prepayment rate (as a percent) | 12.17% |
Fair_Value_Measurements_Detail3
Fair Value Measurements (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value Measurements | |||
Transfers of assets from level 1 to level 2 | $0 | $0 | |
Transfers of assets from level 2 to level 1 | 0 | 0 | |
Transfers of liabilities from level 1 to level 2 | 0 | 0 | |
Transfers of liabilities from level 2 to level 1 | 0 | 0 | |
Changes in Fair Value for Assets and Liabilities Reported at Fair Value under Fair Value Option | |||
Net Gains (Losses) from Sale of Loans | 390,361 | 457,531 | 50,384 |
Other Noninterest Income | 79,541 | 44,670 | 8,573 |
Loans held for sale | |||
Changes in Fair Value for Assets and Liabilities Reported at Fair Value under Fair Value Option | |||
Net Gains (Losses) from Sale of Loans | 31,805 | -19,353 | -3,297 |
Total Changes in Fair Value | 31,805 | -19,353 | -3,297 |
Investment in SWS common stock | |||
Changes in Fair Value for Assets and Liabilities Reported at Fair Value under Fair Value Option | |||
Other Noninterest Income | 5,985 | ||
Total Changes in Fair Value | 5,985 | ||
MSR | |||
Changes in Fair Value for Assets and Liabilities Reported at Fair Value under Fair Value Option | |||
Net Gains (Losses) from Sale of Loans | -7,663 | 4,183 | -124 |
Total Changes in Fair Value | -7,663 | 4,183 | 124 |
Time deposits | |||
Changes in Fair Value for Assets and Liabilities Reported at Fair Value under Fair Value Option | |||
Other Noninterest Income | 12 | 7 | |
Total Changes in Fair Value | $12 | $7 |
Fair_Value_Measurements_Detail4
Fair Value Measurements (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Nov. 30, 2012 | Sep. 13, 2013 | |
Fair value measurements | ||||||||||||||
Non-covered impaired loans | $3,883,435,000 | $3,481,405,000 | $3,883,435,000 | $3,481,405,000 | $3,481,405,000 | |||||||||
Covered impaired loans | 638,029,000 | 1,005,308,000 | 638,029,000 | 1,005,308,000 | 1,005,308,000 | |||||||||
Covered other real estate owned | 136,945,000 | 142,833,000 | 136,945,000 | 142,833,000 | 142,833,000 | |||||||||
Total Gains (Losses) of impaired loans | 4,125,000 | 4,033,000 | 5,533,000 | 3,242,000 | 2,206,000 | 10,658,000 | 11,289,000 | 13,005,000 | 16,933,000 | 37,158,000 | 3,800,000 | |||
Covered | ||||||||||||||
Fair value measurements | ||||||||||||||
Covered impaired loans | 638,029,000 | 1,005,308,000 | 638,029,000 | 1,005,308,000 | 1,005,308,000 | |||||||||
Total Gains (Losses) of impaired loans | 9,186,000 | 1,065,000 | ||||||||||||
Noncovered | ||||||||||||||
Fair value measurements | ||||||||||||||
Non-covered impaired loans | 3,883,435,000 | 3,481,405,000 | 3,883,435,000 | 3,481,405,000 | 3,481,405,000 | |||||||||
Total Gains (Losses) of impaired loans | 7,747,000 | 36,093,000 | ||||||||||||
Plains Capital | ||||||||||||||
Fair value measurements | ||||||||||||||
Fair value of loans acquired | 3,195,309,000 | |||||||||||||
Plains Capital | PCI loans | ||||||||||||||
Fair value measurements | ||||||||||||||
Fair value of loans acquired | 172,864,000 | |||||||||||||
FNB | Bank | ||||||||||||||
Fair value measurements | ||||||||||||||
Fair value of loans acquired | 1,159,467,000 | |||||||||||||
FNB | Covered | Bank | ||||||||||||||
Fair value measurements | ||||||||||||||
Acquired OREO | 135,187,000 | |||||||||||||
FNB | PCI loans | Bank | ||||||||||||||
Fair value measurements | ||||||||||||||
Fair value of loans acquired | 822,831,000 | |||||||||||||
Level 2 | ||||||||||||||
Fair value measurements | ||||||||||||||
Non-covered impaired loans | 378,425,000 | 281,712,000 | 378,425,000 | 281,712,000 | 281,712,000 | |||||||||
Level 3 | ||||||||||||||
Fair value measurements | ||||||||||||||
Non-covered impaired loans | 3,528,769,000 | 3,119,319,000 | 3,528,769,000 | 3,119,319,000 | 3,119,319,000 | |||||||||
Covered impaired loans | 767,751,000 | 997,371,000 | 767,751,000 | 997,371,000 | 997,371,000 | |||||||||
Estimate of Fair Value Measurement | ||||||||||||||
Fair value measurements | ||||||||||||||
Non-covered impaired loans | 3,907,194,000 | 3,401,031,000 | 3,907,194,000 | 3,401,031,000 | 3,401,031,000 | |||||||||
Covered impaired loans | 767,751,000 | 997,371,000 | 767,751,000 | 997,371,000 | 997,371,000 | |||||||||
Non-recurring | Covered | ||||||||||||||
Fair value measurements | ||||||||||||||
Total Gains (Losses) of impaired loans | -3,652,000 | |||||||||||||
Total Gains (Losses) of other real estate owned | -19,672,000 | |||||||||||||
Non-recurring | Noncovered | ||||||||||||||
Fair value measurements | ||||||||||||||
Total Gains (Losses) of impaired loans | -2,182,000 | -3,558,000 | ||||||||||||
Total Gains (Losses) of other real estate owned | -372,000 | 430,000 | ||||||||||||
Non-recurring | Level 2 | Covered | ||||||||||||||
Fair value measurements | ||||||||||||||
Covered other real estate owned | 47,198,000 | 47,198,000 | ||||||||||||
Non-recurring | Level 2 | Noncovered | ||||||||||||||
Fair value measurements | ||||||||||||||
Non-covered other real estate owned | 409,000 | 409,000 | ||||||||||||
Non-recurring | Level 2 | Estimate of Fair Value Measurement | Covered | ||||||||||||||
Fair value measurements | ||||||||||||||
Other real estate owned | 136,900,000 | 142,800,000 | 136,900,000 | 142,800,000 | 142,800,000 | |||||||||
Non-recurring | Level 2 | Estimate of Fair Value Measurement | Noncovered | ||||||||||||||
Fair value measurements | ||||||||||||||
Other real estate owned | 800,000 | 4,800,000 | 800,000 | 4,800,000 | 4,800,000 | |||||||||
Non-recurring | Level 3 | Covered | ||||||||||||||
Fair value measurements | ||||||||||||||
Covered impaired loans | 55,213,000 | 55,213,000 | ||||||||||||
Covered other real estate owned | 15,855,000 | 15,855,000 | ||||||||||||
Non-recurring | Level 3 | Covered | Bank | ||||||||||||||
Fair value measurements | ||||||||||||||
Acquired OREO | 135,200,000 | 135,200,000 | ||||||||||||
Non-recurring | Level 3 | Noncovered | ||||||||||||||
Fair value measurements | ||||||||||||||
Non-covered impaired loans | 26,823,000 | 26,823,000 | ||||||||||||
Non-recurring | Level 3 | Plains Capital | PCI loans | ||||||||||||||
Fair value measurements | ||||||||||||||
Fair value of loans acquired | 172,900,000 | 172,900,000 | ||||||||||||
Default rate (as a percent) | 47.00% | |||||||||||||
Loss severity rate (as a percent) | 51.00% | |||||||||||||
Prepayment speeds (as a percent) | 0.00% | |||||||||||||
Non-recurring | Level 3 | FNB | PCI loans | ||||||||||||||
Fair value measurements | ||||||||||||||
Fair value of loans acquired | 822,800,000 | 822,800,000 | ||||||||||||
Default rate (as a percent) | 63.00% | |||||||||||||
Loss severity rate (as a percent) | 38.00% | |||||||||||||
Prepayment speeds (as a percent) | 4.00% | |||||||||||||
Weighted average expected loss (as a percent) | 24.00% | |||||||||||||
Non-recurring | Level 3 | Estimate of Fair Value Measurement | ||||||||||||||
Fair value measurements | ||||||||||||||
Discount rate of OREO per month (as a percent) | 1.00% | |||||||||||||
Non-recurring | Level 3 | Estimate of Fair Value Measurement | Minimum | ||||||||||||||
Fair value measurements | ||||||||||||||
Estimated holding period of discount rate per month of OREO | 6 months | |||||||||||||
Non-recurring | Level 3 | Estimate of Fair Value Measurement | Maximum | ||||||||||||||
Fair value measurements | ||||||||||||||
Estimated holding period of discount rate per month of OREO | 24 months | |||||||||||||
Non-recurring | Level 3 | Estimate of Fair Value Measurement | Covered | ||||||||||||||
Fair value measurements | ||||||||||||||
Other real estate owned | 136,900,000 | 142,800,000 | 136,900,000 | 142,800,000 | 142,800,000 | |||||||||
Non-recurring | Estimate of Fair Value Measurement | Covered | ||||||||||||||
Fair value measurements | ||||||||||||||
Covered impaired loans | 55,213,000 | 55,213,000 | ||||||||||||
Covered other real estate owned | 63,052,000 | 63,052,000 | ||||||||||||
Non-recurring | Estimate of Fair Value Measurement | Noncovered | ||||||||||||||
Fair value measurements | ||||||||||||||
Non-covered impaired loans | 26,823,000 | 26,823,000 | ||||||||||||
Non-covered other real estate owned | $409,000 | $409,000 |
Fair_Value_Measurements_Detail5
Fair Value Measurements (Details 6) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financial assets: | ||
Held to maturity securities | $118,345 | |
Non-covered loans, net | 3,883,435 | 3,481,405 |
Covered loans | 638,029 | 1,005,308 |
Broker-dealer and clearing organization receivables | 167,884 | 119,317 |
FDIC indemnification asset | 130,437 | 188,291 |
Financial liabilities: | ||
Broker-dealer and clearing organization payables | 179,042 | 129,678 |
Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 813,075 | 746,023 |
Level 2 | ||
Financial assets: | ||
Held to maturity securities | 118,345 | |
Loans held for sale | 37,541 | 29,322 |
Non-covered loans, net | 378,425 | 281,712 |
Broker-dealer and clearing organization receivables | 167,884 | 119,317 |
Other assets | 43,937 | 43,946 |
Financial liabilities: | ||
Deposits | 6,365,555 | 6,722,909 |
Broker-dealer and clearing organization payables | 179,042 | 129,678 |
Short-term borrowings | 762,696 | 342,087 |
Debt | 117,028 | 114,671 |
Other liabilities | 2,144 | 3,362 |
Level 3 | ||
Financial assets: | ||
Non-covered loans, net | 3,528,769 | 3,119,319 |
Covered loans | 767,751 | 997,371 |
FDIC indemnification asset | 130,437 | 188,291 |
Other assets | 15,495 | 22,109 |
Estimate of Fair Value Measurement | ||
Financial assets: | ||
Cash and cash equivalents | 813,075 | 746,023 |
Held to maturity securities | 118,345 | |
Loans held for sale | 37,541 | 29,322 |
Non-covered loans, net | 3,907,194 | 3,401,031 |
Covered loans | 767,751 | 997,371 |
Broker-dealer and clearing organization receivables | 167,884 | 119,317 |
FDIC indemnification asset | 130,437 | 188,291 |
Other assets | 59,432 | 66,055 |
Financial liabilities: | ||
Deposits | 6,365,555 | 6,722,909 |
Broker-dealer and clearing organization payables | 179,042 | 129,678 |
Short-term borrowings | 762,696 | 342,087 |
Debt | 117,028 | 114,671 |
Other liabilities | 2,144 | 3,362 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 813,075 | 746,023 |
Held to maturity securities | 118,209 | |
Loans held for sale | 37,541 | 29,322 |
Non-covered loans, net | 3,883,435 | 3,481,405 |
Covered loans | 638,029 | 1,005,308 |
Broker-dealer and clearing organization receivables | 167,884 | 119,317 |
FDIC indemnification asset | 130,437 | 188,291 |
Other assets | 59,432 | 66,055 |
Financial liabilities: | ||
Deposits | 6,369,892 | 6,722,918 |
Broker-dealer and clearing organization payables | 179,042 | 129,678 |
Short-term borrowings | 762,696 | 342,087 |
Debt | 123,696 | 123,339 |
Other liabilities | $2,144 | $3,362 |
Securities_Details
Securities (Details) (USD $) | 0 Months Ended | 1 Months Ended | ||
Oct. 02, 2014 | Jul. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | |
Available for sale | ||||
Amortized Cost | $924,755,000 | $1,256,862,000 | ||
Gross Unrealized Gains | 11,542,000 | 14,106,000 | ||
Gross Unrealized Losses | -10,762,000 | -67,825,000 | ||
Fair Value | 925,535,000 | 1,203,143,000 | ||
SWS | ||||
Available for sale | ||||
Gross Unrealized Gains | 7,200,000 | |||
Elimination of aggregate principal amount note | 50,000,000 | |||
SWS | Notes receivable | ||||
Available for sale | ||||
Aggregate principal amount of senior unsecured loan | 50,000,000 | |||
Interest rate on senior unsecured loan (as a percent) | 8.00% | |||
Period after issuance in which senior unsecured loan may be prepaid | 3 years | |||
Maturity term of senior unsecured loan | 5 years | |||
US Treasury securities | ||||
Available for sale | ||||
Amortized Cost | 19,382,000 | 43,684,000 | ||
Gross Unrealized Gains | 264,000 | 82,000 | ||
Gross Unrealized Losses | -33,000 | -238,000 | ||
Fair Value | 19,613,000 | 43,528,000 | ||
Bonds | ||||
Available for sale | ||||
Amortized Cost | 522,008,000 | 717,909,000 | ||
Gross Unrealized Gains | 1,749,000 | 550,000 | ||
Gross Unrealized Losses | -7,516,000 | -55,727,000 | ||
Fair Value | 516,241,000 | 662,732,000 | ||
Residential mortgage-backed securities | ||||
Available for sale | ||||
Amortized Cost | 51,363,000 | 59,936,000 | ||
Gross Unrealized Gains | 1,672,000 | 735,000 | ||
Gross Unrealized Losses | -137,000 | -584,000 | ||
Fair Value | 52,898,000 | 60,087,000 | ||
Collateralized mortgage obligations | ||||
Available for sale | ||||
Amortized Cost | 89,291,000 | 124,502,000 | ||
Gross Unrealized Gains | 133,000 | 349,000 | ||
Gross Unrealized Losses | -2,300,000 | -4,390,000 | ||
Fair Value | 87,124,000 | 120,461,000 | ||
Corporate debt securities | ||||
Available for sale | ||||
Amortized Cost | 93,406,000 | 72,376,000 | ||
Gross Unrealized Gains | 5,125,000 | 4,610,000 | ||
Gross Unrealized Losses | -59,000 | -378,000 | ||
Fair Value | 98,472,000 | 76,608,000 | ||
States and political subdivisions | ||||
Available for sale | ||||
Amortized Cost | 135,419,000 | 162,955,000 | ||
Gross Unrealized Gains | 2,083,000 | 388,000 | ||
Gross Unrealized Losses | -717,000 | -6,508,000 | ||
Fair Value | 136,785,000 | 156,835,000 | ||
Commercial mortgage backed securities | ||||
Available for sale | ||||
Amortized Cost | 593,000 | 691,000 | ||
Gross Unrealized Gains | 47,000 | 69,000 | ||
Fair Value | 640,000 | 760,000 | ||
Equity securities | ||||
Available for sale | ||||
Amortized Cost | 13,293,000 | 20,067,000 | ||
Gross Unrealized Gains | 469,000 | 2,012,000 | ||
Fair Value | 13,762,000 | 22,079,000 | ||
Notes receivable | ||||
Available for sale | ||||
Amortized Cost | 42,674,000 | |||
Gross Unrealized Gains | 5,235,000 | |||
Fair Value | 47,909,000 | |||
Warrant | ||||
Available for sale | ||||
Amortized Cost | 12,068,000 | |||
Gross Unrealized Gains | 76,000 | |||
Fair Value | 12,144,000 | |||
Warrant | SWS | ||||
Available for sale | ||||
Number of shares of common stock available to purchase under warrant | 8,695,652 | |||
Warrants exercise price (in dollars per share) | $5.75 | |||
Ownership interest percentage the entity would own if warrant was fully exercised | 21.00% | |||
Common Stock | SWS | ||||
Available for sale | ||||
Gross Unrealized Gains | 7,200,000 | |||
Number of shares included within the available for sale equity securities | 10,171,039 | 1,475,387 | ||
Investment in SWS common stock | $70,300,000 |
Securities_Detail_2
Securities (Detail 2) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Held to maturity securities | ||
Amortized Cost | $118,209,000 | $0 |
Unrealized Gains | 575,000 | |
Unrealized Losses | -439,000 | |
Fair Value | 118,345,000 | |
US Treasury securities | ||
Held to maturity securities | ||
Amortized Cost | 25,008,000 | |
Unrealized Losses | -6,000 | |
Fair Value | 25,002,000 | |
Residential mortgage-backed securities | ||
Held to maturity securities | ||
Amortized Cost | 29,782,000 | |
Unrealized Gains | 528,000 | |
Fair Value | 30,310,000 | |
Collateralized mortgage obligations | ||
Held to maturity securities | ||
Amortized Cost | 57,328,000 | |
Unrealized Losses | -430,000 | |
Fair Value | 56,898,000 | |
States and political subdivisions | ||
Held to maturity securities | ||
Amortized Cost | 6,091,000 | |
Unrealized Gains | 47,000 | |
Unrealized Losses | -3,000 | |
Fair Value | $6,135,000 |
Securities_Details_3
Securities (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | item | item |
Number of Securities | ||
Unrealized loss for less than twelve months | 17 | 103 |
Unrealized loss for twelve months or longer | 117 | 160 |
Total | 134 | 263 |
Fair Value | ||
Unrealized loss for less than twelve months | $54,123 | $666,812 |
Unrealized loss for twelve months or longer | 503,022 | 202,117 |
Estimated Fair Value, Total | 557,145 | 868,929 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 227 | 50,933 |
Unrealized loss for twelve months or longer | 10,535 | 16,892 |
Total | 10,762 | 67,825 |
US Treasury securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | 4 | 6 |
Unrealized loss for twelve months or longer | 1 | |
Total | 5 | 6 |
Fair Value | ||
Unrealized loss for less than twelve months | 7,703 | 12,748 |
Unrealized loss for twelve months or longer | 1,706 | |
Estimated Fair Value, Total | 9,409 | 12,748 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 27 | 238 |
Unrealized loss for twelve months or longer | 6 | |
Total | 33 | 238 |
Bonds | ||
Number of Securities | ||
Unrealized loss for less than twelve months | 3 | 35 |
Unrealized loss for twelve months or longer | 22 | 5 |
Total | 25 | 40 |
Fair Value | ||
Unrealized loss for less than twelve months | 34,847 | 526,817 |
Unrealized loss for twelve months or longer | 373,035 | 90,931 |
Estimated Fair Value, Total | 407,882 | 617,748 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 153 | 45,274 |
Unrealized loss for twelve months or longer | 7,363 | 10,453 |
Total | 7,516 | 55,727 |
Residential mortgage-backed securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | 2 | |
Unrealized loss for twelve months or longer | 4 | 3 |
Total | 4 | 5 |
Fair Value | ||
Unrealized loss for less than twelve months | 2,194 | |
Unrealized loss for twelve months or longer | 11,056 | 9,309 |
Estimated Fair Value, Total | 11,056 | 11,503 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 54 | |
Unrealized loss for twelve months or longer | 137 | 530 |
Total | 137 | 584 |
Collateralized mortgage obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | 3 | 7 |
Unrealized loss for twelve months or longer | 8 | 2 |
Total | 11 | 9 |
Fair Value | ||
Unrealized loss for less than twelve months | 7,141 | 84,054 |
Unrealized loss for twelve months or longer | 61,108 | 4,995 |
Estimated Fair Value, Total | 68,249 | 89,049 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 40 | 4,320 |
Unrealized loss for twelve months or longer | 2,260 | 70 |
Total | 2,300 | 4,390 |
Corporate debt securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | 7 | |
Unrealized loss for twelve months or longer | 1 | |
Total | 1 | 7 |
Fair Value | ||
Unrealized loss for less than twelve months | 10,754 | |
Unrealized loss for twelve months or longer | 1,939 | |
Estimated Fair Value, Total | 1,939 | 10,754 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 378 | |
Unrealized loss for twelve months or longer | 59 | |
Total | 59 | 378 |
States and political subdivisions | ||
Number of Securities | ||
Unrealized loss for less than twelve months | 7 | 46 |
Unrealized loss for twelve months or longer | 81 | 150 |
Total | 88 | 196 |
Fair Value | ||
Unrealized loss for less than twelve months | 4,432 | 30,245 |
Unrealized loss for twelve months or longer | 54,178 | 96,882 |
Estimated Fair Value, Total | 58,610 | 127,127 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 7 | 669 |
Unrealized loss for twelve months or longer | 710 | 5,839 |
Total | $717 | $6,508 |
Securities_Details_4
Securities (Details 4) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
item | |
Number of Securities | |
Unrealized loss for less than twelve months | 7 |
Total | 7 |
Fair Value | |
Unrealized loss for less than twelve months | $83,799 |
Total | 83,799 |
Unrealized Losses | |
Unrealized loss for less than twelve months | 439 |
Total | 439 |
Residential mortgage-backed securities | |
Number of Securities | |
Unrealized loss for less than twelve months | 1 |
Total | 1 |
Fair Value | |
Unrealized loss for less than twelve months | 25,002 |
Total | 25,002 |
Unrealized Losses | |
Unrealized loss for less than twelve months | 6 |
Total | 6 |
Collateralized mortgage obligations | |
Number of Securities | |
Unrealized loss for less than twelve months | 2 |
Total | 2 |
Fair Value | |
Unrealized loss for less than twelve months | 56,898 |
Total | 56,898 |
Unrealized Losses | |
Unrealized loss for less than twelve months | 430 |
Total | 430 |
States and political subdivisions | |
Number of Securities | |
Unrealized loss for less than twelve months | 4 |
Total | 4 |
Fair Value | |
Unrealized loss for less than twelve months | 1,899 |
Total | 1,899 |
Unrealized Losses | |
Unrealized loss for less than twelve months | 3 |
Total | $3 |
Securities_Details_5
Securities (Details 5) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Amortized Cost | |
Due in one year or less | $24,639 |
Due after one year through five years | 69,196 |
Due after five years through ten years | 64,048 |
Due after ten years | 612,332 |
Total | 770,215 |
Total amortized cost | 911,462 |
Fair Value | |
Due in one year or less | 24,881 |
Due after one year through five years | 72,671 |
Due after five years through ten years | 67,345 |
Due after ten years | 606,214 |
Total | 771,111 |
Fair Value | 911,773 |
Residential mortgage-backed securities | |
Amortized Cost | |
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 51,363 |
Fair Value | |
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 52,898 |
Collateralized mortgage obligations | |
Amortized Cost | |
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 89,291 |
Fair Value | |
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 87,124 |
Commercial mortgage backed securities | |
Amortized Cost | |
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 593 |
Fair Value | |
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | $640 |
Securities_Details_6
Securities (Details 6) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Securities | |||
Realized net gain (loss) from trading securities portfolio | $2,100,000 | ($2,800,000) | ($700,000) |
Carrying amount of securities pledged | 895,500,000,000 | 1,000,000 | |
Fair value of securities pledged | 890,300,000 | 938,100,000 | |
Deposit with various state insurance departments | 9,200,000 | 9,400,000 | |
Amortized Cost | |||
Due in one year or less | 25,008,000 | ||
Due after five years through ten years | 1,195,000 | ||
Due after ten years | 4,896,000 | ||
Total | 31,099,000 | ||
Total amortized cost | 118,209,000 | 0 | |
Fair Value | |||
Due in one year or less | 25,002,000 | ||
Due after five years through ten years | 1,194,000 | ||
Due after ten years | 4,941,000 | ||
Total | 31,137,000 | ||
Fair Value | 118,345,000 | ||
Residential mortgage-backed securities | |||
Amortized Cost | |||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 29,782,000 | ||
Total amortized cost | 29,782,000 | ||
Fair Value | |||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 30,310,000 | ||
Fair Value | 30,310,000 | ||
Collateralized mortgage obligations | |||
Amortized Cost | |||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 57,328,000 | ||
Total amortized cost | 57,328,000 | ||
Fair Value | |||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 56,898,000 | ||
Fair Value | $56,898,000 |
NonCovered_Loans_and_Allowance2
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Covered assets and indemnification asset | |||
Total loans | $3,920,476 | $3,514,646 | |
Allowance for loan losses | -37,041 | -33,241 | -3,409 |
Non-covered loans, net | 3,883,435 | 3,481,405 | |
Commercial and industrial | |||
Covered assets and indemnification asset | |||
Allowance for loan losses | -1,845 | ||
Real estate | |||
Covered assets and indemnification asset | |||
Allowance for loan losses | -977 | ||
Construction and land development | |||
Covered assets and indemnification asset | |||
Allowance for loan losses | -582 | ||
Consumer | |||
Covered assets and indemnification asset | |||
Allowance for loan losses | -5 | ||
Noncovered | |||
Covered assets and indemnification asset | |||
Total loans | 3,920,476 | 3,514,646 | |
Allowance for loan losses | -37,041 | -33,241 | -3,409 |
Non-covered loans, net | 3,883,435 | 3,481,405 | |
Noncovered | Commercial and industrial | |||
Covered assets and indemnification asset | |||
Total loans | 1,758,851 | 1,637,266 | |
Allowance for loan losses | -18,999 | -16,865 | -1,845 |
Noncovered | Real estate | |||
Covered assets and indemnification asset | |||
Total loans | 1,694,835 | 1,457,253 | |
Allowance for loan losses | -11,131 | -8,331 | -977 |
Noncovered | Construction and land development | |||
Covered assets and indemnification asset | |||
Total loans | 413,643 | 364,551 | |
Allowance for loan losses | -6,450 | -7,957 | -582 |
Noncovered | Consumer | |||
Covered assets and indemnification asset | |||
Total loans | 53,147 | 55,576 | |
Allowance for loan losses | -461 | -88 | -5 |
Bank | Noncovered | |||
Covered assets and indemnification asset | |||
Total loans | 3,920,476 | 3,514,646 | |
Bank | Noncovered | Consumer | |||
Covered assets and indemnification asset | |||
Total loans | $53,147 | $55,576 |
NonCovered_Loans_and_Allowance3
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Details 2) (PCI loans, USD $) | 1 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2012 |
Plains Capital | ||||
Changes in the accretable yield for the acquired impaired loans | ||||
Nonaccretable difference | $61,527 | |||
Plains Capital | Noncovered | ||||
Carrying values and the outstanding contractual balances of the PCI loans | ||||
Carrying amount | 48,909 | 100,392 | ||
Outstanding balance | 67,740 | 141,983 | ||
Changes in the accretable yield for the acquired impaired loans | ||||
Balance, beginning of period | 18,427 | 17,601 | 17,553 | |
Additions | 622 | |||
Reclassifications from (to) nonaccretable difference, net( | 15,225 | 18,793 | ||
Disposals of loans | -22 | -4,927 | -3,692 | |
Accretion | -852 | -15,085 | -15,675 | |
Balance, end of period | 17,553 | 12,814 | 17,601 | |
Plains Capital Corporation and FNB Transaction | Noncovered | ||||
Changes in the accretable yield for the acquired impaired loans | ||||
Nonaccretable difference | $18,400 | $38,600 |
NonCovered_Loans_and_Allowance4
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Details 3) (USD $) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Covered PCI loans | |||
Days outstanding loans and leases receivable are generally considered past due | 90 days | ||
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | $583,898,000 | ||
Noncovered | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 111,615,000 | 186,952,000 | |
Recorded Investment with No Allowance | 31,247,000 | 63,784,000 | |
Recorded Investment with Allowance | 32,563,000 | 40,661,000 | |
Total Recorded Investment | 63,810,000 | 104,445,000 | |
Related Allowance | 5,740,000 | 3,558,000 | |
Non-accrual loans | 19,042,000 | 19,878,000 | |
Interest income recorded on accruing impaired loans | 900,000 | 3,300,000 | 3,200,000 |
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 82,102,000 | 133,588,000 | |
Noncovered | Secured | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 51,036,000 | 63,636,000 | |
Recorded Investment with No Allowance | 14,096,000 | 21,540,000 | |
Recorded Investment with Allowance | 11,783,000 | 17,147,000 | |
Total Recorded Investment | 25,879,000 | 38,687,000 | |
Related Allowance | 3,341,000 | 3,126,000 | |
Non-accrual loans | 16,488,000 | 15,430,000 | |
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 30,626,000 | 51,670,000 | |
Noncovered | Unsecured | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 4,120,000 | 11,865,000 | |
Recorded Investment with No Allowance | 92,000 | 336,000 | |
Recorded Investment with Allowance | 68,000 | 1,204,000 | |
Total Recorded Investment | 160,000 | 1,540,000 | |
Related Allowance | 15,000 | ||
Non-accrual loans | 160,000 | 1,300,000 | |
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 802,000 | 2,432,000 | |
Noncovered | Secured by commercial properties | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 29,865,000 | 49,437,000 | |
Recorded Investment with No Allowance | 7,243,000 | 20,317,000 | |
Recorded Investment with Allowance | 15,536,000 | 16,070,000 | |
Total Recorded Investment | 22,779,000 | 36,387,000 | |
Related Allowance | 1,878,000 | 339,000 | |
Non-accrual loans | 438,000 | 2,638,000 | |
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 29,517,000 | 45,887,000 | |
Noncovered | Secured by residential properties | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 4,701,000 | 5,407,000 | |
Recorded Investment with No Allowance | 1,583,000 | 1,745,000 | |
Recorded Investment with Allowance | 1,390,000 | 1,648,000 | |
Total Recorded Investment | 2,973,000 | 3,393,000 | |
Related Allowance | 85,000 | 39,000 | |
Non-accrual loans | 1,253,000 | 398,000 | |
Non-accrual loans held for sale | 3,000,000 | 3,500,000 | |
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 2,984,000 | 4,862,000 | |
Noncovered | Residential construction loans | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 33,000 | ||
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 354,000 | ||
Noncovered | Commercial construction loans and land development | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 16,108,000 | 48,628,000 | |
Recorded Investment with No Allowance | 8,062,000 | 15,337,000 | |
Recorded Investment with Allowance | 1,819,000 | 4,592,000 | |
Total Recorded Investment | 9,881,000 | 19,929,000 | |
Related Allowance | 154,000 | 39,000 | |
Non-accrual loans | 703,000 | 112,000 | |
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 14,849,000 | 26,090,000 | |
Noncovered | Consumer | |||
Covered PCI loans | |||
Unpaid Contractual Principal balance | 5,785,000 | 7,946,000 | |
Recorded Investment with No Allowance | 171,000 | 4,509,000 | |
Recorded Investment with Allowance | 1,967,000 | ||
Total Recorded Investment | 2,138,000 | 4,509,000 | |
Related Allowance | 282,000 | ||
Average investment in non-covered impaired loans | |||
Average investment in non-covered impaired loans | 3,324,000 | 2,293,000 | |
Noncovered | PCI loans | |||
Covered PCI loans | |||
Non-accrual loans | $6,600,000 | $15,800,000 |
NonCovered_Loans_and_Allowance5
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Details 4) (USD $) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
item | item | item | |
AB Note | Minimum | Bank | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Number of loans into which a single loan is reconfigured | 2 | ||
Noncovered | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Number of TDRs granted | 0 | ||
Total Modifications | $3,158,000 | $11,446,000 | |
Number of TDRs granted in preceding twelve months | 0 | 0 | |
Noncovered | Bank | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Unadvanced commitments to borrowers | 500,000 | 500,000 | |
Noncovered | Payment Term Extension | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 3,158,000 | 11,446,000 | |
Noncovered | Secured | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 2,465,000 | 10,390,000 | |
Noncovered | Secured | Payment Term Extension | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 2,465,000 | 10,390,000 | |
Noncovered | Secured by commercial properties | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 317,000 | 279,000 | |
Noncovered | Secured by commercial properties | Payment Term Extension | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 317,000 | 279,000 | |
Noncovered | Secured by residential properties | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 248,000 | 777,000 | |
Noncovered | Secured by residential properties | Payment Term Extension | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 248,000 | 777,000 | |
Noncovered | Commercial construction loans and land development | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | 128,000 | ||
Noncovered | Commercial construction loans and land development | Payment Term Extension | |||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |||
Total Modifications | $128,000 |
NonCovered_Loans_and_Allowance6
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Details 5) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | $3,920,476 | $3,514,646 |
Noncovered | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 3,920,476 | 3,514,646 |
Noncovered | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 48,909 | 100,392 |
Noncovered | Secured | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 13,374 | 35,372 |
Noncovered | Unsecured | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 68 | 1,444 |
Noncovered | Secured by commercial properties | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 22,341 | 36,255 |
Noncovered | Secured by residential properties | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 1,810 | 2,995 |
Noncovered | Commercial construction loans and land development | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 9,178 | 19,817 |
Noncovered | Consumer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 53,147 | 55,576 |
Noncovered | Consumer | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 2,138 | 4,509 |
Noncovered | Bank | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 11,537 | 4,398 |
Loans past Due 60-89 Days | 2,191 | 1,263 |
Loans past Due 90 Days or More | 8,597 | 1,861 |
Total Past Due Loans | 22,325 | 7,522 |
Current Loans | 3,849,242 | 3,406,732 |
Total loans | 3,920,476 | 3,514,646 |
Accruing Loans Past Due 90 Days or More | 534 | |
Noncovered | Bank | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 48,909 | 100,392 |
Noncovered | Bank | Secured | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 6,073 | 2,171 |
Loans past Due 60-89 Days | 964 | 277 |
Loans past Due 90 Days or More | 8,022 | 1,354 |
Total Past Due Loans | 15,059 | 3,802 |
Current Loans | 1,620,000 | 1,492,793 |
Total loans | 1,648,433 | 1,531,967 |
Accruing Loans Past Due 90 Days or More | 272 | |
Noncovered | Bank | Secured | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 13,374 | 35,372 |
Noncovered | Bank | Unsecured | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 35 | 333 |
Loans past Due 60-89 Days | 3 | 9 |
Loans past Due 90 Days or More | 60 | |
Total Past Due Loans | 38 | 402 |
Current Loans | 110,312 | 103,453 |
Total loans | 110,418 | 105,299 |
Accruing Loans Past Due 90 Days or More | 59 | |
Noncovered | Bank | Unsecured | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 68 | 1,444 |
Noncovered | Bank | Secured by commercial properties | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 67 | 192 |
Loans past Due 90 Days or More | 132 | |
Total Past Due Loans | 67 | 324 |
Current Loans | 1,173,504 | 1,044,437 |
Total loans | 1,195,912 | 1,081,016 |
Noncovered | Bank | Secured by commercial properties | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 22,341 | 36,255 |
Noncovered | Bank | Secured by residential properties | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 454 | 1,045 |
Loans past Due 60-89 Days | 1,187 | 36 |
Loans past Due 90 Days or More | 203 | |
Total Past Due Loans | 1,641 | 1,284 |
Current Loans | 495,472 | 371,958 |
Total loans | 498,923 | 376,237 |
Accruing Loans Past Due 90 Days or More | 203 | |
Noncovered | Bank | Secured by residential properties | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 1,810 | 2,995 |
Noncovered | Bank | Residential construction loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 175 | 415 |
Total Past Due Loans | 175 | 415 |
Current Loans | 64,871 | 64,664 |
Total loans | 65,046 | 65,079 |
Noncovered | Bank | Commercial construction loans and land development | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 4,319 | 41 |
Loans past Due 60-89 Days | 881 | |
Loans past Due 90 Days or More | 575 | 112 |
Total Past Due Loans | 4,894 | 1,034 |
Current Loans | 334,525 | 278,621 |
Total loans | 348,597 | 299,472 |
Noncovered | Bank | Commercial construction loans and land development | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 9,178 | 19,817 |
Noncovered | Bank | Consumer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans past Due 30-59 Days | 414 | 201 |
Loans past Due 60-89 Days | 37 | 60 |
Total Past Due Loans | 451 | 261 |
Current Loans | 50,558 | 50,806 |
Total loans | 53,147 | 55,576 |
Noncovered | Bank | Consumer | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 2,138 | 4,509 |
Noncovered | Prime Lending | U.S. government agencies | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Accruing Loans Past Due 90 Days or More | $19,200 | $6,800 |
NonCovered_Loans_and_Allowance7
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Details 6) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
item | ||
Internal risk grades of non-covered loans | ||
Total | 3,920,476 | $3,514,646 |
Bank | ||
Internal risk grades of non-covered loans | ||
Number of types of loans | 2 | |
Noncovered | ||
Internal risk grades of non-covered loans | ||
Total | 3,920,476 | 3,514,646 |
Noncovered | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 3,920,476 | 3,514,646 |
Noncovered | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 3,774,559 | 3,353,035 |
Noncovered | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total | 1,817 | 24,673 |
Noncovered | Substandard | ||
Internal risk grades of non-covered loans | ||
Total | 95,191 | 36,546 |
Noncovered | Secured | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 1,648,433 | 1,531,967 |
Noncovered | Secured | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 1,566,208 | 1,450,734 |
Noncovered | Secured | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total | 1,105 | 16,840 |
Noncovered | Secured | Substandard | ||
Internal risk grades of non-covered loans | ||
Total | 67,746 | 29,021 |
Noncovered | Unsecured | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 110,418 | 105,299 |
Noncovered | Unsecured | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 110,256 | 103,674 |
Noncovered | Unsecured | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total | 12 | |
Noncovered | Unsecured | Substandard | ||
Internal risk grades of non-covered loans | ||
Total | 94 | 169 |
Noncovered | Secured by commercial properties | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 1,195,912 | 1,081,016 |
Noncovered | Secured by commercial properties | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 1,151,454 | 1,038,930 |
Noncovered | Secured by commercial properties | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total | 712 | 4,436 |
Noncovered | Secured by commercial properties | Substandard | ||
Internal risk grades of non-covered loans | ||
Total | 21,405 | 1,395 |
Noncovered | Secured by residential properties | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 498,923 | 376,237 |
Noncovered | Secured by residential properties | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 492,549 | 367,758 |
Noncovered | Secured by residential properties | Substandard | ||
Internal risk grades of non-covered loans | ||
Total | 4,564 | 5,484 |
Noncovered | Residential construction loans | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 65,046 | 65,079 |
Noncovered | Residential construction loans | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 65,046 | 65,079 |
Noncovered | Commercial construction loans and land development | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 348,597 | 299,472 |
Noncovered | Commercial construction loans and land development | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 338,078 | 275,808 |
Noncovered | Commercial construction loans and land development | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total | 3,384 | |
Noncovered | Commercial construction loans and land development | Substandard | ||
Internal risk grades of non-covered loans | ||
Total | 1,341 | 463 |
Noncovered | Consumer | ||
Internal risk grades of non-covered loans | ||
Total | 53,147 | 55,576 |
Noncovered | Consumer | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 53,147 | 55,576 |
Noncovered | Consumer | Pass | ||
Internal risk grades of non-covered loans | ||
Total | 50,968 | 51,052 |
Noncovered | Consumer | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total | 1 | |
Noncovered | Consumer | Substandard | ||
Internal risk grades of non-covered loans | ||
Total | 41 | 14 |
Noncovered | PCI loans | ||
Internal risk grades of non-covered loans | ||
Total | 48,909 | 100,392 |
Noncovered | PCI loans | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 48,909 | 100,392 |
Noncovered | PCI loans | Secured | ||
Internal risk grades of non-covered loans | ||
Total | 13,374 | 35,372 |
Noncovered | PCI loans | Secured | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 13,374 | 35,372 |
Noncovered | PCI loans | Unsecured | ||
Internal risk grades of non-covered loans | ||
Total | 68 | 1,444 |
Noncovered | PCI loans | Unsecured | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 68 | 1,444 |
Noncovered | PCI loans | Secured by commercial properties | ||
Internal risk grades of non-covered loans | ||
Total | 22,341 | 36,255 |
Noncovered | PCI loans | Secured by commercial properties | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 22,341 | 36,255 |
Noncovered | PCI loans | Secured by residential properties | ||
Internal risk grades of non-covered loans | ||
Total | 1,810 | 2,995 |
Noncovered | PCI loans | Secured by residential properties | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 1,810 | 2,995 |
Noncovered | PCI loans | Commercial construction loans and land development | ||
Internal risk grades of non-covered loans | ||
Total | 9,178 | 19,817 |
Noncovered | PCI loans | Commercial construction loans and land development | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 9,178 | 19,817 |
Noncovered | PCI loans | Consumer | ||
Internal risk grades of non-covered loans | ||
Total | 2,138 | 4,509 |
Noncovered | PCI loans | Consumer | Bank | ||
Internal risk grades of non-covered loans | ||
Total | 2,138 | $4,509 |
NonCovered_Loans_and_Allowance8
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Details 7) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in the allowance for loan losses | |||||||||||
Balance, beginning of period | $33,241 | $3,409 | $33,241 | $3,409 | |||||||
Provision charged to operations | 4,125 | 4,033 | 5,533 | 3,242 | 2,206 | 10,658 | 11,289 | 13,005 | 16,933 | 37,158 | 3,800 |
Loans charged off | -391 | ||||||||||
Balance, end of period | 37,041 | 33,241 | 37,041 | 33,241 | 3,409 | ||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 3,920,476 | 3,514,646 | 3,920,476 | 3,514,646 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 37,041 | 33,241 | 37,041 | 33,241 | 3,409 | ||||||
Commercial and industrial | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Provision charged to operations | 2,236 | ||||||||||
Loans charged off | -391 | ||||||||||
Balance, end of period | 1,845 | ||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 1,845 | ||||||||||
Real estate | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Provision charged to operations | 977 | ||||||||||
Balance, end of period | 977 | ||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 977 | ||||||||||
Construction and land development | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Provision charged to operations | 582 | ||||||||||
Balance, end of period | 582 | ||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 582 | ||||||||||
Consumer | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Provision charged to operations | 5 | ||||||||||
Balance, end of period | 5 | ||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 5 | ||||||||||
Acquired loans | |||||||||||
Allowance for loan losses | |||||||||||
Carryover of the allowance for loan losses recorded | 0 | ||||||||||
Originated Financing Receivable [Member] | |||||||||||
Allowance for loan losses | |||||||||||
Rolling period considered for average net loss rate to calculate historical loss factors | 3 years | ||||||||||
Weighted average loss rate for recent four quarters (as a percent) | 120.00% | ||||||||||
Weighted average loss rate for oldest four quarters (as a percent) | 80.00% | ||||||||||
Originated Financing Receivable [Member] | Minimum | |||||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Loans individually evaluated for impairment | 500 | 500 | |||||||||
Noncovered | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, beginning of period | 33,241 | 3,409 | 33,241 | 3,409 | |||||||
Provision charged to operations | 7,747 | 36,093 | |||||||||
Loans charged off | -7,399 | -10,308 | |||||||||
Recoveries on charged off loans | 3,452 | 4,047 | |||||||||
Balance, end of period | 37,041 | 33,241 | 37,041 | 33,241 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Loans individually evaluated for impairment | 13,965 | 2,758 | 13,965 | 2,758 | |||||||
Loans collectively evaluated for impairment | 3,857,602 | 3,411,496 | 3,857,602 | 3,411,496 | |||||||
Total loans | 3,920,476 | 3,514,646 | 3,920,476 | 3,514,646 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Loans individually evaluated for impairment | 421 | 421 | 421 | 421 | |||||||
Loans collectively evaluated for impairment | 31,301 | 29,683 | 31,301 | 29,683 | |||||||
Total loans | 37,041 | 33,241 | 37,041 | 33,241 | |||||||
Noncovered | Commercial and industrial | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, beginning of period | 16,865 | 1,845 | 16,865 | 1,845 | |||||||
Provision charged to operations | 6,116 | 20,940 | |||||||||
Loans charged off | -6,926 | -9,359 | |||||||||
Recoveries on charged off loans | 2,944 | 3,439 | |||||||||
Balance, end of period | 18,999 | 16,865 | 18,999 | 16,865 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Loans individually evaluated for impairment | 11,842 | 2,273 | 11,842 | 2,273 | |||||||
Loans collectively evaluated for impairment | 1,733,567 | 1,598,177 | 1,733,567 | 1,598,177 | |||||||
Total loans | 1,758,851 | 1,637,266 | 1,758,851 | 1,637,266 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Loans individually evaluated for impairment | 421 | 421 | 421 | 421 | |||||||
Loans collectively evaluated for impairment | 15,658 | 13,724 | 15,658 | 13,724 | |||||||
Total loans | 18,999 | 16,865 | 18,999 | 16,865 | |||||||
Noncovered | Real estate | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, beginning of period | 8,331 | 977 | 8,331 | 977 | |||||||
Provision charged to operations | 2,696 | 7,281 | |||||||||
Loans charged off | -114 | -209 | |||||||||
Recoveries on charged off loans | 218 | 282 | |||||||||
Balance, end of period | 11,131 | 8,331 | 11,131 | 8,331 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Loans individually evaluated for impairment | 1,420 | 373 | 1,420 | 373 | |||||||
Loans collectively evaluated for impairment | 1,669,264 | 1,417,630 | 1,669,264 | 1,417,630 | |||||||
Total loans | 1,694,835 | 1,457,253 | 1,694,835 | 1,457,253 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Loans collectively evaluated for impairment | 9,168 | 7,953 | 9,168 | 7,953 | |||||||
Total loans | 11,131 | 8,331 | 11,131 | 8,331 | |||||||
Noncovered | Construction and land development | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, beginning of period | 7,957 | 582 | 7,957 | 582 | |||||||
Provision charged to operations | -1,692 | 7,634 | |||||||||
Loans charged off | -524 | ||||||||||
Recoveries on charged off loans | 185 | 265 | |||||||||
Balance, end of period | 6,450 | 7,957 | 6,450 | 7,957 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Loans individually evaluated for impairment | 703 | 112 | 703 | 112 | |||||||
Loans collectively evaluated for impairment | 403,762 | 344,622 | 403,762 | 344,622 | |||||||
Total loans | 413,643 | 364,551 | 413,643 | 364,551 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Loans collectively evaluated for impairment | 6,296 | 7,918 | 6,296 | 7,918 | |||||||
Total loans | 6,450 | 7,957 | 6,450 | 7,957 | |||||||
Noncovered | Consumer | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, beginning of period | 88 | 5 | 88 | 5 | |||||||
Provision charged to operations | 627 | 238 | |||||||||
Loans charged off | -359 | -216 | |||||||||
Recoveries on charged off loans | 105 | 61 | |||||||||
Balance, end of period | 461 | 88 | 461 | 88 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Loans collectively evaluated for impairment | 51,009 | 51,067 | 51,009 | 51,067 | |||||||
Total loans | 53,147 | 55,576 | 53,147 | 55,576 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Loans collectively evaluated for impairment | 179 | 88 | 179 | 88 | |||||||
Total loans | 461 | 88 | 461 | 88 | |||||||
Noncovered | Loans not impaired at acquisition | |||||||||||
Allowance for loan losses | |||||||||||
Additional allowance recorded when allowance is less than remaining fair value of discount | 0 | ||||||||||
Noncovered | PCI loans | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, end of period | 5,319 | 3,137 | 5,319 | 3,137 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 48,909 | 100,392 | 48,909 | 100,392 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 5,319 | 3,137 | 5,319 | 3,137 | |||||||
Noncovered | PCI loans | Commercial and industrial | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, end of period | 2,920 | 2,720 | 2,920 | 2,720 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 13,442 | 36,816 | 13,442 | 36,816 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 2,920 | 2,720 | 2,920 | 2,720 | |||||||
Noncovered | PCI loans | Real estate | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, end of period | 1,963 | 378 | 1,963 | 378 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 24,151 | 39,250 | 24,151 | 39,250 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 1,963 | 378 | 1,963 | 378 | |||||||
Noncovered | PCI loans | Construction and land development | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, end of period | 154 | 39 | 154 | 39 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 9,178 | 19,817 | 9,178 | 19,817 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 154 | 39 | 154 | 39 | |||||||
Noncovered | PCI loans | Consumer | |||||||||||
Changes in the allowance for loan losses | |||||||||||
Balance, end of period | 282 | 282 | |||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 2,138 | 4,509 | 2,138 | 4,509 | |||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||
Total loans | 282 | 282 | |||||||||
Noncovered | Acquired loans | |||||||||||
Allowance for loan losses | |||||||||||
Carryover of the allowance for loan losses recorded | $0 |
Covered_Assets_and_Indemnifica2
Covered Assets and Indemnification Asset (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Sep. 13, 2013 | Sep. 13, 2013 | Dec. 31, 2013 | |
Covered assets and indemnification asset | ||||
Allowance for covered loans | ($4,611,000) | ($1,061,000) | ||
Total covered loans, net of allowance | 638,029,000 | 1,005,308,000 | ||
Acquired loans | ||||
Covered assets and indemnification asset | ||||
Carryover of the allowance for loan losses recorded | 0 | |||
Covered | ||||
Covered assets and indemnification asset | ||||
Total covered loans | 642,640,000 | 1,006,369,000 | ||
Allowance for covered loans | -4,611,000 | -1,061,000 | ||
Total covered loans, net of allowance | 638,029,000 | 1,005,308,000 | ||
Covered | Commercial and industrial | ||||
Covered assets and indemnification asset | ||||
Total covered loans | 30,780,000 | 66,943,000 | ||
Covered | Real estate | ||||
Covered assets and indemnification asset | ||||
Total covered loans | 552,850,000 | 787,982,000 | ||
Covered | Construction and land development | ||||
Covered assets and indemnification asset | ||||
Total covered loans | 59,010,000 | 151,444,000 | ||
Covered | Acquired loans | ||||
Covered assets and indemnification asset | ||||
Fair value of loans acquired | 1,100,000,000 | 1,100,000,000 | ||
Carryover of the allowance for loan losses recorded | 0 | |||
Bank | FNB | ||||
Covered assets and indemnification asset | ||||
Percentage of losses to be absorbed by FDIC on the first $240.4 million of losses incurred as per the loss sharing agreement | 80.00% | 80.00% | ||
Threshold amount of losses incurred for 80% of losses to be absorbed by FDIC as per the loss sharing agreement, first layer | 240,400,000 | 240,400,000 | ||
Percentage of losses to be absorbed by FDIC in excess of $240.4 million up to and including $365.7 million of losses incurred as per the loss sharing agreement | 0.00% | 0.00% | ||
Threshold amount of losses incurred for 0% of losses to be absorbed by FDIC as per the loss sharing agreement, second layer | 365,700,000 | 365,700,000 | ||
Percentage of losses to be absorbed by FDIC in excess of $365.7 million of losses incurred as per the loss sharing agreement | 80.00% | 80.00% | ||
Period for which payment is required to be made to the FDIC of true-up amount | 10 years | |||
Fair value of loans acquired | 1,159,467,000 | 1,159,467,000 | ||
Carryover of the allowance for loan losses recorded | 0 | |||
Bank | FNB | Commercial and industrial | ||||
Covered assets and indemnification asset | ||||
Fair value of loans acquired | 95,625,000 | 95,625,000 | ||
Bank | FNB | Real estate | ||||
Covered assets and indemnification asset | ||||
Fair value of loans acquired | 854,217,000 | 854,217,000 | ||
Bank | FNB | Construction and land development | ||||
Covered assets and indemnification asset | ||||
Fair value of loans acquired | 184,916,000 | 184,916,000 | ||
Bank | FNB | Consumer | ||||
Covered assets and indemnification asset | ||||
Fair value of loans acquired | $24,709,000 | $24,709,000 | ||
Bank | FNB | Covered | Commercial loan | ||||
Covered assets and indemnification asset | ||||
Period of loss-sharing agreements in effect | 5 years | 5 years | ||
Period of loss recovery provisions in effect | 8 years | 8 years | ||
Bank | FNB | Covered | Single family residential loans | ||||
Covered assets and indemnification asset | ||||
Period of loss-sharing agreements in effect | 10 years | 10 years | ||
Period of loss recovery provisions in effect | 10 years | 10 years |
Covered_Assets_and_Indemnifica3
Covered Assets and Indemnification Asset (Details 2) (Covered, PCI loans, USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
Covered | PCI loans | ||
Carrying value and the outstanding contractual balance of the covered PCI loans | ||
Carrying amount | $729,156 | $435,388 |
Outstanding balance | 1,022,514 | 685,393 |
Changes in the accretable yield for the covered PCI loans | ||
Balance, beginning of period | 156,548 | |
Additions | 167,974 | |
Reclassifications from (to) nonaccretable difference, net( | 3,492 | 105,470 |
Transfer of loans to covered OREO | 4,407 | 7,703 |
Accretion | -19,325 | -76,228 |
Balance, end of period | 156,548 | 193,493 |
Nonaccretable difference | $517,900 | $382,500 |
Covered_Assets_and_Indemnifica4
Covered Assets and Indemnification Asset (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Covered PCI loans | ||
Average investment | $583,898 | |
Covered | ||
Covered PCI loans | ||
Non-accrual loans | 34,223 | 1,797 |
Covered | Secured | ||
Covered PCI loans | ||
Non-accrual loans | 442 | 91 |
Covered | Unsecured | ||
Covered PCI loans | ||
Non-accrual loans | 883 | 882 |
Covered | Secured by commercial properties | ||
Covered PCI loans | ||
Non-accrual loans | 30,823 | 40 |
Covered | Secured by residential properties | ||
Covered PCI loans | ||
Non-accrual loans | 1,046 | 209 |
Covered | Residential construction loans | ||
Covered PCI loans | ||
Non-accrual loans | 1,018 | 575 |
Covered | Commercial construction loans and land development | ||
Covered PCI loans | ||
Non-accrual loans | 11 | |
Covered | PCI loans | ||
Covered PCI loans | ||
Unpaid Contractual Principal Balance | 761,063 | 1,070,193 |
Recorded Investment with No Allowance | 378,889 | 729,189 |
Recorded Investment with Allowance | 59,747 | 882 |
Total Recorded Investment | 438,636 | 730,071 |
Related Allowance | 4,534 | 882 |
Average investment | 364,579 | |
Non-accrual loans | 31,200 | |
Covered | PCI loans | Secured | ||
Covered PCI loans | ||
Unpaid Contractual Principal Balance | 26,447 | 43,957 |
Recorded Investment with No Allowance | 7,436 | 28,611 |
Recorded Investment with Allowance | 6,636 | |
Total Recorded Investment | 14,072 | 28,611 |
Related Allowance | 265 | |
Average investment | 21,296 | 14,260 |
Covered | PCI loans | Unsecured | ||
Covered PCI loans | ||
Unpaid Contractual Principal Balance | 14,111 | 16,280 |
Recorded Investment with No Allowance | 2,107 | 9,008 |
Recorded Investment with Allowance | 4,697 | 882 |
Total Recorded Investment | 6,804 | 9,890 |
Related Allowance | 882 | 882 |
Average investment | 8,347 | 4,945 |
Covered | PCI loans | Secured by commercial properties | ||
Covered PCI loans | ||
Unpaid Contractual Principal Balance | 387,302 | 528,825 |
Recorded Investment with No Allowance | 193,111 | 365,346 |
Recorded Investment with Allowance | 35,142 | |
Total Recorded Investment | 228,253 | 365,346 |
Related Allowance | 2,381 | |
Average investment | 296,780 | 182,653 |
Covered | PCI loans | Secured by residential properties | ||
Covered PCI loans | ||
Unpaid Contractual Principal Balance | 235,505 | 289,094 |
Recorded Investment with No Allowance | 129,571 | 199,581 |
Recorded Investment with Allowance | 12,918 | |
Total Recorded Investment | 142,489 | 199,581 |
Related Allowance | 937 | |
Average investment | 170,931 | 99,686 |
Covered | PCI loans | Residential construction loans | ||
Covered PCI loans | ||
Unpaid Contractual Principal Balance | 2,749 | 8,920 |
Recorded Investment with No Allowance | 1,018 | 5,280 |
Recorded Investment with Allowance | 354 | |
Total Recorded Investment | 1,372 | 5,280 |
Related Allowance | 69 | |
Average investment | 3,039 | 2,353 |
Covered | PCI loans | Commercial construction loans and land development | ||
Covered PCI loans | ||
Unpaid Contractual Principal Balance | 94,949 | 183,117 |
Recorded Investment with No Allowance | 45,646 | 121,363 |
Total Recorded Investment | 45,646 | 121,363 |
Average investment | $83,505 | $60,682 |
Covered_Assets_and_Indemnifica5
Covered Assets and Indemnification Asset (Details 4) (Covered, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Covered Loans | |
Total Modifications | $695 |
AB Note | |
Covered Loans | |
Total Modifications | 369 |
Interest Rate Adjustment | |
Covered Loans | |
Total Modifications | 326 |
Secured by residential properties | |
Covered Loans | |
Total Modifications | 695 |
Secured by residential properties | AB Note | |
Covered Loans | |
Total Modifications | 369 |
Secured by residential properties | Interest Rate Adjustment | |
Covered Loans | |
Total Modifications | $326 |
Covered_Assets_and_Indemnifica6
Covered Assets and Indemnification Asset (Details 5) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Covered Assets and Indemnification Asset | ||
Total loans | $3,920,476 | $3,514,646 |
Covered | ||
Covered Assets and Indemnification Asset | ||
Total loans | 642,640 | 1,006,369 |
Covered | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 435,388 | 729,156 |
Covered | Secured | ||
Covered Assets and Indemnification Asset | ||
Total loans | 22,765 | 53,433 |
Covered | Secured | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 13,630 | 28,520 |
Covered | Unsecured | ||
Covered Assets and Indemnification Asset | ||
Total loans | 8,015 | 13,510 |
Covered | Unsecured | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 6,805 | 9,890 |
Covered | Secured by commercial properties | ||
Covered Assets and Indemnification Asset | ||
Total loans | 270,329 | 430,125 |
Covered | Secured by commercial properties | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 227,772 | 365,306 |
Covered | Secured by residential properties | ||
Covered Assets and Indemnification Asset | ||
Total loans | 282,521 | 357,857 |
Covered | Secured by residential properties | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 141,192 | 199,372 |
Covered | Residential construction loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 1,640 | 12,168 |
Covered | Residential construction loans | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 354 | 4,705 |
Covered | Commercial construction loans and land development | ||
Covered Assets and Indemnification Asset | ||
Total loans | 57,370 | 139,276 |
Covered | Commercial construction loans and land development | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 45,635 | 121,363 |
Bank | Covered | ||
Covered Assets and Indemnification Asset | ||
Loans past Due 30-59 Days | 4,014 | 8,697 |
Loans past Due 60-89 Days | 518 | 967 |
Loans past Due 90 Days or More | 1,868 | 906 |
Total Past Due Loans | 6,400 | 10,570 |
Current Loans | 200,852 | 266,643 |
Total loans | 642,640 | 1,006,369 |
Accruing Loans Past Due 90 Days or More | 67 | |
Bank | Covered | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 435,388 | 729,156 |
Bank | Covered | Secured | ||
Covered Assets and Indemnification Asset | ||
Loans past Due 30-59 Days | 3,904 | |
Loans past Due 60-89 Days | 10 | |
Loans past Due 90 Days or More | 454 | 81 |
Total Past Due Loans | 454 | 3,995 |
Current Loans | 8,681 | 20,918 |
Total loans | 22,765 | 53,433 |
Accruing Loans Past Due 90 Days or More | 11 | |
Bank | Covered | Secured | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 13,630 | 28,520 |
Bank | Covered | Unsecured | ||
Covered Assets and Indemnification Asset | ||
Loans past Due 30-59 Days | 10 | 10 |
Loans past Due 60-89 Days | 259 | |
Total Past Due Loans | 10 | 269 |
Current Loans | 1,200 | 3,351 |
Total loans | 8,015 | 13,510 |
Bank | Covered | Unsecured | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 6,805 | 9,890 |
Bank | Covered | Secured by commercial properties | ||
Covered Assets and Indemnification Asset | ||
Loans past Due 30-59 Days | 876 | 999 |
Loans past Due 90 Days or More | 105 | 40 |
Total Past Due Loans | 981 | 1,039 |
Current Loans | 41,576 | 63,780 |
Total loans | 270,329 | 430,125 |
Bank | Covered | Secured by commercial properties | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 227,772 | 365,306 |
Bank | Covered | Secured by residential properties | ||
Covered Assets and Indemnification Asset | ||
Loans past Due 30-59 Days | 3,089 | 1,679 |
Loans past Due 60-89 Days | 493 | 678 |
Loans past Due 90 Days or More | 405 | 209 |
Total Past Due Loans | 3,987 | 2,566 |
Current Loans | 137,342 | 155,919 |
Total loans | 282,521 | 357,857 |
Accruing Loans Past Due 90 Days or More | 48 | |
Bank | Covered | Secured by residential properties | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 141,192 | 199,372 |
Bank | Covered | Residential construction loans | ||
Covered Assets and Indemnification Asset | ||
Loans past Due 30-59 Days | 1,861 | |
Loans past Due 90 Days or More | 896 | 576 |
Total Past Due Loans | 896 | 2,437 |
Current Loans | 390 | 5,026 |
Total loans | 1,640 | 12,168 |
Bank | Covered | Residential construction loans | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 354 | 4,705 |
Bank | Covered | Commercial construction loans and land development | ||
Covered Assets and Indemnification Asset | ||
Loans past Due 30-59 Days | 39 | 244 |
Loans past Due 60-89 Days | 25 | 20 |
Loans past Due 90 Days or More | 8 | |
Total Past Due Loans | 72 | 264 |
Current Loans | 11,663 | 17,649 |
Total loans | 57,370 | 139,276 |
Accruing Loans Past Due 90 Days or More | 8 | |
Bank | Covered | Commercial construction loans and land development | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | $45,635 | $121,363 |
Covered_Assets_and_Indemnifica7
Covered Assets and Indemnification Asset (Details 6) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Internal risk grades of covered loans in the portfolio | ||
Total | $3,920,476 | $3,514,646 |
Covered | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 642,640 | 1,006,369 |
Covered | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 435,388 | 729,156 |
Covered | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 188,420 | 265,867 |
Covered | Special Mention | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 3,310 | |
Covered | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 18,832 | 8,036 |
Covered | Secured | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 22,765 | 53,433 |
Covered | Secured | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 13,630 | 28,520 |
Covered | Secured | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 7,712 | 24,152 |
Covered | Secured | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 1,423 | 761 |
Covered | Unsecured | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 8,015 | 13,510 |
Covered | Unsecured | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 6,805 | 9,890 |
Covered | Unsecured | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 1,210 | 3,040 |
Covered | Unsecured | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 580 | |
Covered | Secured by commercial properties | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 270,329 | 430,125 |
Covered | Secured by commercial properties | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 227,772 | 365,306 |
Covered | Secured by commercial properties | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 35,973 | 59,343 |
Covered | Secured by commercial properties | Special Mention | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 3,310 | |
Covered | Secured by commercial properties | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 6,584 | 2,166 |
Covered | Secured by residential properties | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 282,521 | 357,857 |
Covered | Secured by residential properties | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 141,192 | 199,372 |
Covered | Secured by residential properties | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 133,756 | 155,439 |
Covered | Secured by residential properties | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 7,573 | 3,046 |
Covered | Residential construction loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 1,640 | 12,168 |
Covered | Residential construction loans | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 354 | 4,705 |
Covered | Residential construction loans | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 268 | 6,087 |
Covered | Residential construction loans | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 1,018 | 1,376 |
Covered | Commercial construction loans and land development | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 57,370 | 139,276 |
Covered | Commercial construction loans and land development | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 45,635 | 121,363 |
Covered | Commercial construction loans and land development | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total | 9,501 | 17,806 |
Covered | Commercial construction loans and land development | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total | $2,234 | $107 |
Covered_Assets_and_Indemnifica8
Covered Assets and Indemnification Asset (Details 7) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Sep. 13, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in the allowance for loan losses | |||||||||||||
Balance, beginning of period | $33,241 | $3,409 | $33,241 | $3,409 | |||||||||
Provision charged to operations | 4,125 | 4,033 | 5,533 | 3,242 | 2,206 | 10,658 | 11,289 | 13,005 | 16,933 | 37,158 | 3,800 | ||
Loans charged off | -391 | ||||||||||||
Balance, end of period | 37,041 | 33,241 | 33,241 | 37,041 | 33,241 | 3,409 | |||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 3,920,476 | 3,514,646 | 3,514,646 | 3,920,476 | 3,514,646 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 37,041 | 33,241 | 33,241 | 37,041 | 33,241 | 3,409 | |||||||
Activity in covered OREO | |||||||||||||
Balance, beginning of period | 142,833 | 142,833 | |||||||||||
Fair value of assets acquired as of Bank Closing Date | 135,187 | ||||||||||||
Additions to covered OREO | 19,185 | 64,934 | |||||||||||
Dispositions of covered OREO | -11,539 | -51,150 | |||||||||||
Valuation adjustments in the period | -19,672 | ||||||||||||
Balance, end of period | 136,945 | 142,833 | 142,833 | 136,945 | 142,833 | ||||||||
Activity in the FDIC Indemnification Asset | |||||||||||||
Balance, beginning of period | 188,291 | 188,291 | |||||||||||
Fair value of assets acquired as of Bank Closing Date | 185,680 | ||||||||||||
FDIC Indemnification Asset accretion (amortization) | 1,699 | 3,445 | |||||||||||
Transfers to due from FDIC and other | 912 | -61,299 | |||||||||||
Balance, end of period | 130,437 | 188,291 | 188,291 | 130,437 | 188,291 | ||||||||
Commercial and industrial | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Provision charged to operations | 2,236 | ||||||||||||
Loans charged off | -391 | ||||||||||||
Balance, end of period | 1,845 | ||||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 1,845 | ||||||||||||
Real estate | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Provision charged to operations | 977 | ||||||||||||
Balance, end of period | 977 | ||||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 977 | ||||||||||||
Construction and land development | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Provision charged to operations | 582 | ||||||||||||
Balance, end of period | 582 | ||||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 582 | ||||||||||||
Consumer | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Provision charged to operations | 5 | ||||||||||||
Balance, end of period | 5 | ||||||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 5 | ||||||||||||
Covered | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Balance, beginning of period | 1,061 | 1,061 | |||||||||||
Provision charged to operations | 1,065 | 9,186 | |||||||||||
Loans charged off | -4 | -5,636 | |||||||||||
Balance, end of period | 4,611 | 1,061 | 1,061 | 4,611 | 1,061 | ||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Loans individually evaluated for impairment | 801 | 801 | |||||||||||
Loans collectively evaluated for impairment | 206,451 | 277,213 | 277,213 | 206,451 | 277,213 | ||||||||
Total loans | 642,640 | 1,006,369 | 1,006,369 | 642,640 | 1,006,369 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Loans collectively evaluated for impairment | 77 | 179 | 179 | 77 | 179 | ||||||||
Total loans | 4,611 | 1,061 | 1,061 | 4,611 | 1,061 | ||||||||
Covered | Commercial and industrial | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Balance, beginning of period | 1,053 | 1,053 | |||||||||||
Provision charged to operations | 1,057 | 230 | |||||||||||
Loans charged off | -4 | -90 | |||||||||||
Balance, end of period | 1,193 | 1,053 | 1,053 | 1,193 | 1,053 | ||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Loans collectively evaluated for impairment | 10,345 | 28,533 | 28,533 | 10,345 | 28,533 | ||||||||
Total loans | 30,780 | 66,943 | 66,943 | 30,780 | 66,943 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Loans collectively evaluated for impairment | 46 | 171 | 171 | 46 | 171 | ||||||||
Total loans | 1,193 | 1,053 | 1,053 | 1,193 | 1,053 | ||||||||
Covered | Real estate | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Balance, beginning of period | 8 | 8 | |||||||||||
Provision charged to operations | 8 | 8,725 | |||||||||||
Loans charged off | -5,399 | ||||||||||||
Balance, end of period | 3,334 | 8 | 8 | 3,334 | 8 | ||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Loans collectively evaluated for impairment | 183,886 | 223,304 | 223,304 | 183,886 | 223,304 | ||||||||
Total loans | 552,850 | 787,982 | 787,982 | 552,850 | 787,982 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Loans collectively evaluated for impairment | 16 | 8 | 8 | 16 | 8 | ||||||||
Total loans | 3,334 | 8 | 8 | 3,334 | 8 | ||||||||
Covered | Construction and land development | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Provision charged to operations | 231 | ||||||||||||
Loans charged off | -147 | ||||||||||||
Balance, end of period | 84 | 84 | |||||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Loans individually evaluated for impairment | 801 | 801 | |||||||||||
Loans collectively evaluated for impairment | 12,220 | 25,376 | 25,376 | 12,220 | 25,376 | ||||||||
Total loans | 59,010 | 151,444 | 151,444 | 59,010 | 151,444 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Loans collectively evaluated for impairment | 15 | 15 | |||||||||||
Total loans | 84 | 84 | |||||||||||
Covered | PCI loans | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Balance, end of period | 4,534 | 882 | 882 | 4,534 | 882 | ||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 435,388 | 729,156 | 729,156 | 435,388 | 729,156 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 4,534 | 882 | 882 | 4,534 | 882 | ||||||||
Covered | PCI loans | Commercial and industrial | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Balance, end of period | 1,147 | 882 | 882 | 1,147 | 882 | ||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 20,435 | 38,410 | 38,410 | 20,435 | 38,410 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 1,147 | 882 | 882 | 1,147 | 882 | ||||||||
Covered | PCI loans | Real estate | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Balance, end of period | 3,318 | 3,318 | |||||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 368,964 | 564,678 | 564,678 | 368,964 | 564,678 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 3,318 | 3,318 | |||||||||||
Covered | PCI loans | Construction and land development | |||||||||||||
Changes in the allowance for loan losses | |||||||||||||
Balance, end of period | 69 | 69 | |||||||||||
Loan portfolio distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | 45,989 | 126,068 | 126,068 | 45,989 | 126,068 | ||||||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | |||||||||||||
Total loans | $69 | $69 |
Cash_and_Due_from_Banks_Detail
Cash and Due from Banks (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Cash and Due from Banks | ||
Cash on hand | $47,947,000 | $59,451,000 |
Clearings and collection items | 76,381,000 | 64,193,000 |
Deposits at Federal Reserve Bank | 425,704,000 | 364,709,000 |
Deposits at Federal Home Loan Bank | 1,500,000 | 1,500,000 |
Deposits in FDIC-insured institutions | 230,941,000 | 223,246,000 |
Cash and due from banks | 782,473,000 | 713,099,000 |
Interest-bearing deposits | $628,300,000 | $565,300,000 |
Premises_and_Equipment_Details
Premises and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Premises and Equipment | |||
Premises and equipment, gross | $264,815,000 | $228,855,000 | |
Less accumulated depreciation and amortization | -57,824,000 | -28,149,000 | |
Premises and equipment, net | 206,991,000 | 200,706,000 | |
Assets recorded under capital leases | 6,600,000 | 7,100,000 | |
Accumulated amortization for assets under capital leases | 1,200,000 | 600,000 | |
Rental income | 2,400,000 | 1,800,000 | 100,000 |
Depreciation and amortization expense | 30,700,000 | 24,800,000 | 1,900,000 |
Land and premises | |||
Premises and Equipment | |||
Premises and equipment, gross | 122,560,000 | 121,211,000 | |
Furniture and equipment | |||
Premises and Equipment | |||
Premises and equipment, gross | $142,255,000 | $107,644,000 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 01, 2012 | |
Goodwill and Other Intangible Assets | |||
Carrying amount of goodwill | $251,808,000 | $251,808,000 | |
Other intangible assets | 59,783,000 | 70,921,000 | |
Estimated fair value of indefinite lived intangible assets related to state licenses acquired as a part of the NLC acquisition | 3,000,000 | 3,000,000 | |
NLC | |||
Goodwill and Other Intangible Assets | |||
Goodwill in connection with acquisition | 24,000,000 | 24,000,000 | |
Plains Capital | |||
Goodwill and Other Intangible Assets | |||
Carrying amount of goodwill | 230,073,000 | ||
Goodwill in connection with acquisition | $227,800,000 | $227,800,000 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $88,120 | $88,120 | |
Accumulated Amortization | -31,337 | -20,199 | |
Net Intangible Assets | 56,783 | 67,921 | |
Amortization expense related to intangible assets | 11,138 | 11,087 | 1,986 |
Estimated aggregate future amortization expense for intangible assets | |||
2015 | 11,020 | ||
2016 | 10,182 | ||
2017 | 9,254 | ||
2018 | 7,429 | ||
2019 | 6,489 | ||
Thereafter | 12,409 | ||
Net Intangible Assets | 56,783 | 67,921 | |
Core deposits | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | 38,770 | 38,770 | |
Accumulated Amortization | -12,104 | -6,159 | |
Net Intangible Assets | 26,666 | 32,611 | |
Estimated aggregate future amortization expense for intangible assets | |||
Net Intangible Assets | 26,666 | 32,611 | |
Core deposits | Minimum | |||
Other Intangible Assets | |||
Estimated Useful Life | 7 years | 7 years | |
Core deposits | Maximum | |||
Other Intangible Assets | |||
Estimated Useful Life | 12 years | 12 years | |
Trademarks and trade names | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | 20,000 | 20,000 | |
Accumulated Amortization | -3,723 | -2,589 | |
Net Intangible Assets | 16,277 | 17,411 | |
Estimated aggregate future amortization expense for intangible assets | |||
Net Intangible Assets | 16,277 | 17,411 | |
Trademarks and trade names | Minimum | |||
Other Intangible Assets | |||
Estimated Useful Life | 10 years | 10 years | |
Trademarks and trade names | Maximum | |||
Other Intangible Assets | |||
Estimated Useful Life | 20 years | 20 years | |
Noncompete agreements | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | 11,650 | 11,650 | |
Accumulated Amortization | -4,794 | -2,492 | |
Net Intangible Assets | 6,856 | 9,158 | |
Estimated aggregate future amortization expense for intangible assets | |||
Net Intangible Assets | 6,856 | 9,158 | |
Noncompete agreements | Minimum | |||
Other Intangible Assets | |||
Estimated Useful Life | 4 years | 4 years | |
Noncompete agreements | Maximum | |||
Other Intangible Assets | |||
Estimated Useful Life | 6 years | 6 years | |
Customer contracts and relationships | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | 14,100 | 14,100 | |
Accumulated Amortization | -7,729 | -6,210 | |
Net Intangible Assets | 6,371 | 7,890 | |
Estimated aggregate future amortization expense for intangible assets | |||
Net Intangible Assets | 6,371 | 7,890 | |
Customer contracts and relationships | Minimum | |||
Other Intangible Assets | |||
Estimated Useful Life | 8 years | 8 years | |
Customer contracts and relationships | Maximum | |||
Other Intangible Assets | |||
Estimated Useful Life | 12 years | 12 years | |
Agent relationships | |||
Other Intangible Assets | |||
Estimated Useful Life | 13 years | 13 years | |
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | 3,600 | 3,600 | |
Accumulated Amortization | -2,987 | -2,749 | |
Net Intangible Assets | 613 | 851 | |
Estimated aggregate future amortization expense for intangible assets | |||
Net Intangible Assets | $613 | $851 |
Mortgage_Servicing_Rights_Deta
Mortgage Servicing Rights (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Change in fair value of mortgage servicing rights | |||
Balance, end of period | $36,155 | $20,149 | |
MSR | |||
Assumptions used in measuring fair value | |||
Weighted average constant prepayment rate (as a percent) | 12.17% | 9.72% | |
Weighted average discount rate (as a percent) | 11.01% | 12.37% | |
Weighted average life | 6 years 3 months 18 days | 7 years 7 months 6 days | |
Change in fair value of mortgage servicing rights | |||
Balance, beginning of period | 20,149 | 2,080 | |
Additions | 2,204 | 35,056 | 13,886 |
Sales | -11,387 | ||
Changes in fair value: Due to changes in model inputs or assumptions | -51 | -5,267 | 4,782 |
Changes in fair value: Due to customer payments | -73 | -2,396 | -599 |
Balance, end of period | 2,080 | 36,155 | 20,149 |
Mortgage loans serviced for others | $3,645,220 | $1,965,883 | |
MSR as a percentage of serviced mortgage loans | 0.99% | 1.02% |
Mortgage_Servicing_Rights_Deta1
Mortgage Servicing Rights (Details 2) (MSR, USD $) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
MSR | |||
Sensitivity analysis | |||
Constant prepayment rate: Impact of 10% adverse change | ($1,648,000) | ($601,000) | |
Constant prepayment rate: Impact of 20% adverse change | -3,169,000 | -1,170,000 | |
Discount rate: Impact of 100 basis point adverse change | -1,431,000 | -631,000 | |
Discount rate: Impact of 200 basis point adverse change | -2,753,000 | -1,236,000 | |
Contractually specified servicing fees, late fees and ancillary fees | $400,000 | $13,300,000 | $3,200,000 |
Deposits_Details
Deposits (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deposits | ||
Noninterest-bearing demand | $2,076,385 | $1,773,749 |
Interest-bearing: | ||
NOW accounts | 1,242,110 | 1,083,596 |
Money market | 861,851 | 878,578 |
Brokered - money market | 79,937 | 276,760 |
Demand | 136,886 | 47,636 |
Savings | 299,051 | 357,325 |
Time | 1,575,910 | 2,110,947 |
Brokered - time | 97,762 | 194,327 |
Total deposits | 6,369,892 | 6,722,918 |
Scheduled maturities of interest-bearing time deposits | ||
2015 | 1,066,373 | |
2016 | 179,185 | |
2017 | 380,913 | |
2018 | 41,185 | |
2019 and thereafter | 6,016 | |
Time deposits | $1,673,672 |
Shortterm_Borrowings_Details
Short-term Borrowings (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Short-term borrowings | |||
Short-term borrowings | $762,696,000 | $342,087,000 | |
FSC | |||
Short-term borrowings | |||
Weighted average interest rate (as a percent) | 1.07% | 1.15% | |
Federal funds purchased | |||
Short-term borrowings | |||
Short-term borrowings | 128,100,000 | 137,225,000 | |
Securities sold under agreements to repurchase | |||
Short-term borrowings | |||
Short-term borrowings | 136,396,000 | 107,462,000 | |
Federal Home Loan Bank notes | |||
Short-term borrowings | |||
Short-term borrowings | 375,000,000 | ||
Average balance during the period | 261,550,000 | 106,415,000 | 301,613,000 |
Average interest rate during the period (as a percent) | 0.18% | 0.13% | 0.14% |
Maximum month-end balance during the period | 575,000,000 | 525,000,000 | 250,000,000 |
Average interest rate at end of period (as a percent) | 0.16% | ||
Amount of available collateral | 1,400,000,000 | ||
Federal Home Loan Bank notes | Maximum | |||
Short-term borrowings | |||
Maturity term of debt | 365 days | ||
Schedule of federal funds purchased and securities sold under agreements to repurchase | |||
Short-term borrowings | |||
Average balance during the period | 319,806,000 | 281,067,000 | 277,470,000 |
Average interest rate during the period (as a percent) | 0.17% | 0.19% | 0.25% |
Maximum month-end balance during the period | 535,232,000 | 415,730,000 | 355,350,000 |
Average interest rate at end of period (as a percent) | 0.15% | 0.16% | |
Carrying value | 166,734,000 | 144,991,000 | |
Estimated fair value | 163,852,000 | 138,719,000 | |
Short-term bank loans | |||
Short-term borrowings | |||
Short-term borrowings | $123,200,000 | $97,400,000 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | |||||
Oct. 15, 2013 | Oct. 15, 2013 | Nov. 30, 2013 | Jan. 31, 2007 | Aug. 31, 2005 | Nov. 30, 2011 | Dec. 31, 2014 | Dec. 31, 2005 | Dec. 31, 2013 | |
Notes payable | |||||||||
Notes payable | 56,684,000 | $56,327,000 | |||||||
Senior exchangeable notes 7.50 percent due 2025 | |||||||||
Notes payable | |||||||||
Interest rate (as a percent) | 7.50% | ||||||||
Number of shares per $1000 principal into which the debt can be exchanged | 0.07394998 | 0.07394998 | 0.0698812 | ||||||
Initial exchange price (in dollars per share) | $13.52 | $13.52 | $13.52 | $14.31 | |||||
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the exchange price for at least 20 trading days in order for the notes to be exchanged | 5 days | ||||||||
Aggregate cash payment to fund the redemption of notes | 11,100,000 | ||||||||
Aggregate number of shares of common stock issued` | 6,208,005 | ||||||||
Senior exchangeable notes 7.50 percent due 2025 | Common Class A | |||||||||
Notes payable | |||||||||
Price of common shares in rights offering (in dollars per share) | $8 | ||||||||
Senior exchangeable notes 7.50 percent due 2025 | NLC | |||||||||
Notes payable | |||||||||
Notes payable | 6,900,000 | 6,900,000 | |||||||
Par value of debts purchased (in dollars) | 6,900,000 | ||||||||
Average cost of debt purchased as a percentage of par value | 107.26% | ||||||||
Senior exchangeable notes 7.50 percent due 2025 | HTH Operating Partnership LP | |||||||||
Notes payable | |||||||||
Notes payable | 90,900,000 | 90,900,000 | |||||||
Aggregate principal amount | 96,600,000 | ||||||||
Interest rate (as a percent) | 7.50% | ||||||||
NLIC, ASIC and Insurance Company Notes Payable | |||||||||
Scheduled maturities | |||||||||
2015 | 5,000,000 | ||||||||
2033 and thereafter | 51,700,000 | ||||||||
NLIC, ASIC and Insurance Company Notes Payable | NLC | |||||||||
Notes payable | |||||||||
Minimum beneficial ownership (as a percent) | 50.00% | ||||||||
Minimum percentage of outstanding principal amount as a price at which each holder of the notes has the right to require the entity to purchase such holder's notes in whole or in part | 100.00% | ||||||||
NLIC, ASIC and Insurance Company Notes Payable | NLIC | |||||||||
Notes payable | |||||||||
Maximum amount of statutory surplus up to which debts will be payable | 30,000,000 | ||||||||
NLIC, ASIC and Insurance Company Notes Payable | ASIC | |||||||||
Notes payable | |||||||||
Maximum amount of statutory surplus up to which debts will be payable | 15,000,000 | ||||||||
NLIC note payable due May 2033, three-month LIBOR plus 4.10% | |||||||||
Notes payable | |||||||||
Notes payable | 10,000,000 | 10,000,000 | |||||||
NLIC note payable due May 2033, three-month LIBOR plus 4.10% | LIBOR | |||||||||
Notes payable | |||||||||
Base interest rate | three-month LIBOR | ||||||||
Margin on interest rate (as a percent) | 4.10% | ||||||||
Interest rate at year end (as a percent) | 4.35% | ||||||||
NLIC note payable due September 2033, three-month LIBOR plus 4.05% | |||||||||
Notes payable | |||||||||
Notes payable | 10,000,000 | 10,000,000 | |||||||
NLIC note payable due September 2033, three-month LIBOR plus 4.05% | LIBOR | |||||||||
Notes payable | |||||||||
Base interest rate | three-month LIBOR | ||||||||
Margin on interest rate (as a percent) | 4.05% | ||||||||
Interest rate at year end (as a percent) | 4.30% | ||||||||
ASIC note payable due April 2034, three-month LIBOR plus 4.05% | |||||||||
Notes payable | |||||||||
Notes payable | 7,500,000 | 7,500,000 | |||||||
ASIC note payable due April 2034, three-month LIBOR plus 4.05% | LIBOR | |||||||||
Notes payable | |||||||||
Base interest rate | three-month LIBOR | ||||||||
Margin on interest rate (as a percent) | 4.05% | ||||||||
Interest rate at year end (as a percent) | 4.30% | ||||||||
First Southwest nonrecourse notes, due January 2035 | |||||||||
Notes payable | |||||||||
Notes payable | 4,184,000 | 6,827,000 | |||||||
Interest rate (as a percent) | 8.58% | ||||||||
Debt issued | 30,300,000 | ||||||||
Total amount of Fee Award | 95,300,000 | ||||||||
Increased interest rate of debt (as a percent) | 10.08% | ||||||||
Insurance company note payable due March 2035, three-month LIBOR plus 3.40% | |||||||||
Notes payable | |||||||||
Notes payable | 20,000,000 | 20,000,000 | |||||||
Insurance company note payable due March 2035, three-month LIBOR plus 3.40% | LIBOR | |||||||||
Notes payable | |||||||||
Base interest rate | three-month LIBOR | ||||||||
Margin on interest rate (as a percent) | 3.40% | ||||||||
Interest rate at year end (as a percent) | 3.65% | ||||||||
Insurance company line of credit due September 2014, 3.25% plus a calculated index rate | |||||||||
Notes payable | |||||||||
Notes payable | 5,000,000 | 2,000,000 | |||||||
Interest rate (as a percent) | 3.25% | ||||||||
Interest rate at year end (as a percent) | 4.00% | ||||||||
Maximum borrowing capacity for NLC | 7,500,000 |
Junior_Subordinated_Debentures2
Junior Subordinated Debentures and Trust Preferred Securities (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Feb. 22, 2008 | Jul. 31, 2001 | Mar. 26, 2003 | Sep. 17, 2003 | |
Plains Capital | |||||
Junior subordinated debentures and trust preferred securities | |||||
Number of statutory trusts owned by subsidiary | 4 | ||||
Plains Capital | Special-purpose entity, parent not primary beneficiary | Debentures | Four statutory trusts | |||||
Junior subordinated debentures and trust preferred securities | |||||
Stated term | 30 years | ||||
Variable rate basis | 3-month LIBOR | ||||
Average spread on variable rate basis (as a percent) | 3.22% | ||||
Average interest rate (as a percent) | 3.47% | ||||
Plains Capital | Special-purpose entity, parent not primary beneficiary | Debentures | PCC Statutory Trust IV | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | $15,464,000 | ||||
Plains Capital | Special-purpose entity, parent not primary beneficiary | Debentures | PCC Statutory Trust I | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | 18,042,000 | ||||
Plains Capital | Special-purpose entity, parent not primary beneficiary | Debentures | PCC Statutory Trust II | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | 18,042,000 | ||||
Plains Capital | Special-purpose entity, parent not primary beneficiary | Debentures | PCC Statutory Trust III | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | 15,464,000 | ||||
Plains Capital | Connecticut | |||||
Junior subordinated debentures and trust preferred securities | |||||
Number of statutory trusts owned by subsidiary, which were formed under laws of state | 3 | ||||
Four statutory trusts | Special-purpose entity, parent not primary beneficiary | Floating rate preferred securities | |||||
Junior subordinated debentures and trust preferred securities | |||||
Floating rate preferred securities issued by the trusts | 65,000,000 | ||||
Four statutory trusts | Special-purpose entity, parent not primary beneficiary | Common Class A | |||||
Junior subordinated debentures and trust preferred securities | |||||
Floating rate preferred securities issued by the trusts | 2,012,000 | ||||
PCC Statutory Trust IV | Delaware | |||||
Junior subordinated debentures and trust preferred securities | |||||
Number of statutory trusts owned by subsidiary, which were formed under laws of state | 1 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||||||||||
Federal | $85,303 | $51,441 | $4,346 | ||||||||
State | 3,087 | 3,414 | 935 | ||||||||
Total | 88,390 | 54,855 | 5,281 | ||||||||
Deferred: | |||||||||||
Federal | -21,851 | 14,573 | -5,649 | ||||||||
State | -931 | 1,256 | -777 | ||||||||
Total | -22,782 | 15,829 | -6,426 | ||||||||
Income tax provision (benefit) | 20,950 | 14,010 | 16,294 | 14,354 | 18,090 | 20,115 | 13,309 | 19,170 | 65,608 | 70,684 | -1,145 |
Statutory Federal income tax rate (as a percent) | 35.00% | ||||||||||
Reconciliation of the income tax provision (benefit) and the amount that would be computed by applying the statutory federal income tax rate to income (loss) before income taxes | |||||||||||
Computed tax at federal statutory rate | 62,358 | 69,088 | -2,185 | ||||||||
Tax effect of: | |||||||||||
Tax-exempt income, net | -2,085 | -2,042 | -151 | ||||||||
State income taxes | 1,401 | 3,035 | 103 | ||||||||
Valuation allowance | 1,950 | ||||||||||
Nondeductible expenses | 2,201 | 2,363 | 352 | ||||||||
Minority interest | -318 | -479 | -174 | ||||||||
Nondeductible transaction costs | 102 | 1,151 | |||||||||
Prior year return to provision adjustment | 360 | -1,141 | -150 | ||||||||
Other | -361 | -140 | -91 | ||||||||
Income tax provision (benefit) | 20,950 | 14,010 | 16,294 | 14,354 | 18,090 | 20,115 | 13,309 | 19,170 | 65,608 | 70,684 | -1,145 |
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | 15,919 | 15,919 | 15,919 | 15,919 | |||||||
Covered loans | 53,195 | 47,770 | 53,195 | 47,770 | |||||||
Purchase accounting adjustment - loans | 15,110 | 27,997 | 15,110 | 27,997 | |||||||
Allowance for loan losses | 15,255 | 12,383 | 15,255 | 12,383 | |||||||
Compensation and benefits | 22,498 | 16,946 | 22,498 | 16,946 | |||||||
Indemnification agreements | 6,631 | 8,308 | 6,631 | 8,308 | |||||||
Foreclosed property | 13,458 | 13,589 | 13,458 | 13,589 | |||||||
Capital loss carryforward | 1,950 | 1,950 | |||||||||
Net unrealized change in securities and other investments | 19,428 | 19,428 | |||||||||
Other | 14,793 | 16,216 | 14,793 | 16,216 | |||||||
Less Valuation allowance | -1,950 | -1,950 | |||||||||
Deferred tax assets | 158,809 | 178,556 | 158,809 | 178,556 | |||||||
Total net deferred tax assets | 44,902 | 39,858 | 44,902 | 39,858 | |||||||
Deferred tax liabilities: | |||||||||||
Premises and equipment | 13,567 | 13,269 | 13,567 | 13,269 | |||||||
FDIC Indemnification Asset | 38,546 | 67,841 | 38,546 | 67,841 | |||||||
Intangible assets | 18,989 | 22,708 | 18,989 | 22,708 | |||||||
Derivatives | 9,368 | 9,428 | 9,368 | 9,428 | |||||||
Net unrealized change in securities and other investments | 260 | 260 | |||||||||
Loan servicing | 13,531 | 7,480 | 13,531 | 7,480 | |||||||
Other | 19,646 | 17,972 | 19,646 | 17,972 | |||||||
Total | 113,907 | 138,698 | 113,907 | 138,698 | |||||||
Net deferred tax asset | $42,952 | $39,858 | $42,952 | $39,858 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Net operating loss carryforwards | ||
Valuation allowance on deferred tax assets | $1,950,000 | |
Uncertain tax positions | ||
Gross unrecognized tax benefits | 600,000 | |
Recognized tax benefits | 400,000 | |
Liabilities for uncertain tax positions | 0 | |
Internal Revenue Service (IRS) [Member] | ||
Net operating loss carryforwards | ||
Regular income tax operating loss carryforwards | $45,500,000 | $45,500,000 |
Employee_Benefits_Details
Employee Benefits (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Nov. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2001 |
item | |||||
Employee Benefits | |||||
Matching contributions | $8.80 | $7.50 | $0.70 | ||
Liability recorded | 8.9 | ||||
Number of executive officers of PlainsCapital with retention agreements | 2 | ||||
Flexible premium universal life insurance | |||||
Amount of insurance purchased | 15 | ||||
Carrying value of the policies | 24.8 | 24.5 | |||
Income related to the policies | $0.40 | $0.40 | $0.10 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transactions | ||
Aggregate remaining lease obligation | $106,771,000 | |
Bank | ||
Related Party Transactions | ||
Deposits of related parties held | 161,900,000 | 154,000,000 |
Diamond A Administration Company LLC | Management Services Agreement [Member] | ||
Related Party Transactions | ||
Services and office space cost per month | 91,500 | |
Period prior to cause of action for which liability of related party is limited | 12 months | |
Diamond A Administration Company LLC | Sublease Agreement [Member] | ||
Related Party Transactions | ||
Services and office space cost per month | 24,030 | |
Diamond A Financial LP | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 17.20% | |
Directors Executive Officers and Affiliates | Bank | ||
Related Party Transactions | ||
Loans to related parties | 32,700,000 | 8,000,000 |
Total principal additions to loans | 11,900,000 | |
Total principal payments | 10,400,000 | |
Reductions due to changes in status as a related party | 23,200,000 | |
Lessor | Bank | Lease Agreements [Member] | ||
Related Party Transactions | ||
Future minimum payments due annually through 2028 | 500,000 | |
Aggregate remaining lease obligation | 7,000,000 | |
Related Party Company | Bank | ||
Related Party Transactions | ||
Loan Purchases | 6,000,000 | 6,000,000 |
Limited Partnership Investments of Plains Capital Equity LLC | ||
Related Party Transactions | ||
Investment in limited partnership | 3,800,000 | 3,700,000 |
Limited Partnership Investments of Plains Capital Equity LLC | Bank | ||
Related Party Transactions | ||
Loans to related parties | $200,000 | $3,000,000 |
Board of Directors Chairman | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 17.20% | |
Chief Executive Officer | Diamond A Administration Company LLC | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 46.00% | |
Chief Executive Officer | Diamond A Financial LP | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 49.00% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | |||
Share data in Millions, unless otherwise specified | Nov. 30, 2012 | Dec. 31, 2014 | Nov. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 13, 2013 | Sep. 13, 2013 | Nov. 02, 2012 | Apr. 30, 2014 |
item | item | item | item | ||||||
Commitments and Contingencies | |||||||||
Aggregate amount of federal funds purchased and sold for which the Bank acts as an agent on behalf of certain correspondent banks | $0 | ||||||||
Number of purported shareholder class action lawsuits | 2 | ||||||||
Number of shares of SWS common stock held by purported shareholders | 8.43 | ||||||||
Reserve for Indemnification Liability: | |||||||||
Number of executive officers | 2 | ||||||||
Retention Agreement | |||||||||
Reserve for Indemnification Liability: | |||||||||
Number of executive officers | 2 | ||||||||
Retention Agreement | Chief Executive Officer One of Plains Capital Bank | |||||||||
Reserve for Indemnification Liability: | |||||||||
Retention agreement term | 3 years | ||||||||
Renewal period of contract | 1 year | ||||||||
Period from date of agreement at which initial renewal of agreement may occur | 2 years | ||||||||
Retention Agreement | Chief Executive Officer Two of Plains Capital Bank | |||||||||
Reserve for Indemnification Liability: | |||||||||
Retention agreement term | 2 years | ||||||||
Renewal period of contract | 1 year | ||||||||
Representation and Warranty Claims | |||||||||
Commitments and Contingencies | |||||||||
Indemnification liability reserve | 53,906,000 | 39,693,000 | 51,912,000 | ||||||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | |||||||||
Balance, beginning of period | 51,912,000 | 35,217,000 | 39,693,000 | ||||||
Claims made | 50,558,000 | 6,463,000 | 40,001,000 | ||||||
Claims resolved with no payment | -29,257,000 | -1,565,000 | -17,746,000 | ||||||
Repurchases | -15,439,000 | -422,000 | -6,255,000 | ||||||
Indemnification payments | -3,868,000 | -3,781,000 | |||||||
Balance, end of period | 53,906,000 | 39,693,000 | 51,912,000 | ||||||
Reserve for Indemnification Liability: | |||||||||
Total | 53,906,000 | 39,693,000 | 51,912,000 | ||||||
Reserve for Indemnification liability established by mortgage origination segment | |||||||||
Commitments and Contingencies | |||||||||
Indemnification liability reserve | 17,619,000 | 18,964,000 | 21,121,000 | ||||||
Provision for indemnification losses | 3,100,000 | 400,000 | 3,500,000 | ||||||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | |||||||||
Balance, beginning of period | 21,121,000 | 18,544,000 | 18,964,000 | ||||||
Additions for new sales | 3,109,000 | 420,000 | 3,539,000 | ||||||
Repurchases | -1,593,000 | -31,000 | -251,000 | ||||||
Early payment defaults | -143,000 | -51,000 | -528,000 | ||||||
Indemnification payments | -1,708,000 | -1,003,000 | |||||||
Change in estimate | -3,167,000 | 82,000 | 400,000 | ||||||
Balance, end of period | 17,619,000 | 18,964,000 | 21,121,000 | ||||||
Reserve for Indemnification Liability: | |||||||||
Specific claims | 7,912,000 | 12,179,000 | |||||||
Incurred but not reported claims | 9,707,000 | 8,942,000 | |||||||
Total | 17,619,000 | 18,964,000 | 21,121,000 | ||||||
Bank | |||||||||
Commitments and Contingencies | |||||||||
Aggregate amount of federal funds purchased and sold for which the Bank acts as an agent on behalf of certain correspondent banks | 7,500,000 | ||||||||
Bank | FNB | |||||||||
Reserve for Indemnification Liability: | |||||||||
Number of loss-sharing agreements | 2 | ||||||||
Loans and OREO acquired | 1,200,000,000 | 1,200,000,000 | |||||||
Percentage of losses to be absorbed by FDIC on the first $240.4 million of losses incurred as per the loss sharing agreement | 80.00% | 80.00% | |||||||
Threshold amount of losses incurred for 80% of losses to be absorbed by FDIC as per the loss sharing agreement, first layer | 240,400,000 | 240,400,000 | |||||||
Percentage of losses to be absorbed by FDIC in excess of $240.4 million up to and including $365.7 million of losses incurred as per the loss sharing agreement | 0.00% | 0.00% | |||||||
Threshold amount of losses incurred for 0% of losses to be absorbed by FDIC as per the loss sharing agreement, second layer | 365,700,000 | 365,700,000 | |||||||
Percentage of losses to be absorbed by FDIC in excess of $365.7 million of losses incurred as per the loss sharing agreement | 80.00% | 80.00% | |||||||
Period for which payment is required to be made to the FDIC of true-up amount | 10 years | ||||||||
Covered net losses billed to the FDIC | 75,500,000 | ||||||||
Percentage of covered net losses reimbursable under the loss-share agreements | 80.00% | ||||||||
Amount of covered net losses reimbursable under the loss-share agreements | 60,400,000 | ||||||||
Aggregate reimbursements received | 38,500,000 | ||||||||
Bank | FNB | Covered | Commercial loan | |||||||||
Reserve for Indemnification Liability: | |||||||||
Period of loss-sharing agreements in effect | 5 years | ||||||||
Period of loss recovery provisions in effect | 8 years | ||||||||
Bank | FNB | Covered | Single family residential loans | |||||||||
Reserve for Indemnification Liability: | |||||||||
Period of loss-sharing agreements in effect | 10 years | ||||||||
Period of loss recovery provisions in effect | 10 years | ||||||||
Bank | FNB | Minimum | |||||||||
Reserve for Indemnification Liability: | |||||||||
Covered losses and reimbursable expenses | 240,400,000 | ||||||||
Bank | FNB | Maximum | |||||||||
Reserve for Indemnification Liability: | |||||||||
Covered losses and reimbursable expenses | 365,700,000 | ||||||||
First Southwest Company | |||||||||
Commitments and Contingencies | |||||||||
Number of defendants other than reporting entity | 13 | ||||||||
Amount of bonds to finance a loan to 38 Studios | $75,000,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments and Contingencies | |||
Rental expense under the operating leases | $31,400,000 | $29,200,000 | $2,900,000 |
Future minimum lease payments under operating leases | |||
2015 | 24,588,000 | ||
2016 | 19,677,000 | ||
2017 | 14,561,000 | ||
2018 | 12,565,000 | ||
2019 | 7,211,000 | ||
Thereafter | 28,169,000 | ||
Total minimum lease payments | 106,771,000 | ||
Future minimum lease payments under capital leases | |||
2015 | 1,090,000 | ||
2016 | 1,103,000 | ||
2017 | 1,129,000 | ||
2018 | 1,167,000 | ||
2019 | 1,187,000 | ||
Thereafter | 10,348,000 | ||
Total minimum lease payments | 16,024,000 | ||
Amount representing interest | -6,126,000 | ||
Present value of minimum lease payments | $9,898,000 | ||
Minimum | |||
Commitments and Contingencies | |||
Remaining terms of noncancelable operating leases | 1 year | ||
Remaining term of capital leases | 11 years | ||
Maximum | |||
Commitments and Contingencies | |||
Remaining terms of noncancelable operating leases | 15 years | ||
Remaining term of capital leases | 15 years |
Financial_Instruments_with_Off1
Financial Instruments with Off-Balance Sheet Risk (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Unused commitments to extend credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $1,400 |
Standby letters of credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $45.10 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Nov. 02, 2011 | |
item | |||||
Stock based compensation | |||||
Compensation expense | $4,700,000 | $1,700,000 | $500,000 | ||
2003 Plan | |||||
Stock based compensation | |||||
Number of additional awards permissible under the plan | 0 | ||||
2003 Plan | Stock Options Awards | |||||
Stock based compensation | |||||
Unrecognized compensation expense | 49,000 | ||||
Awards granted (in shares) | 600,000 | ||||
Number of senior executive officers to whom awards granted | 2 | ||||
Exercise price (in dollars per share) | $7.70 | ||||
Awards vesting in number of equal installments | 5 | ||||
Expected volatility (as a percent) | 25.00% | ||||
Risk-free interest rate (as a percent) | 0.96% | ||||
Dividend yield (as a percent) | 0.00% | ||||
Expected life | 5 years | ||||
Forfeiture rate (as a percent) | 15.00% | ||||
2012 Plan | |||||
Stock based compensation | |||||
Number of awards approved for grant (in shares) | 4,000,000 | ||||
Common stock remaining available for issuance (in shares) | 3,078,374 | ||||
2012 Plan | RSUs | |||||
Stock based compensation | |||||
Number of shares awarded to certain executives and key employees | 444,175 | ||||
Number of shares awarded to certain executives and key employees outstanding | 434,864 | ||||
Awards subject to time-based vesting (in shares) | 364,827 | ||||
Number of awards vesting upon achievement of performance goals (in shares) | 70,037 | ||||
Performance period | 3 years | ||||
Weighted average grant date fair value of awards (in dollars per share) | $23.16 | ||||
Unrecognized compensation expense | 7,900,000 | ||||
Transfer restrictions period | 1 year | ||||
2012 Plan | Restricted Stock Awards | |||||
Stock based compensation | |||||
Number of shares awarded to certain executives and key employees outstanding | 466,000 | ||||
Weighted average grant date fair value of awards (in dollars per share) | $13.32 | ||||
Unrecognized compensation expense | $2,700,000 | ||||
Awards granted (in shares) | 471,000 | ||||
2012 Plan | Board of Directors | |||||
Stock based compensation | |||||
Common shares granted to members of board of directors as compensation for director services | 9,519 | 9,343 | 5,183 |
Regulatory_Matters_Details
Regulatory Matters (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||||
Total equity capital | $1,460,452,000 | $1,311,141,000 | ||
Add: | ||||
Minority interests | 787,000 | 781,000 | ||
Bank | ||||
Tier 1 capital (to average assets) | ||||
Actual Amount | 845,656,000 | 762,364,000 | ||
Actual Ratio (as a percent) | 10.31% | 9.29% | ||
Minimum Capital Requirements, Amount | 328,025,000 | 328,275,000 | ||
Minimum Capital Requirements, Ratio (as a percent) | 4.00% | 4.00% | ||
Tier 1 capital (to risk-weighted assets) | ||||
Actual Amount | 845,656,000 | 762,364,000 | ||
Actual Ratio (as a percent) | 13.74% | 13.38% | ||
Minimum Capital Requirements, Amount | 246,099,000 | 227,984,000 | ||
Minimum Capital Requirements, Ratio (as a percent) | 4.00% | 4.00% | ||
Total capital (to risk-weighted assets) | ||||
Actual Amount | 888,744,000 | 797,771,000 | ||
Actual Ratio (as a percent) | 14.45% | 14.00% | ||
Minimum Capital Requirements, Amount | 492,198,000 | 455,968,000 | ||
Minimum Capital Requirements, Ratio (as a percent) | 8.00% | 8.00% | ||
Tier 1 capital (to average assets) | ||||
To Be Well Capitalized Minimum Capital Requirements, Amount | 410,031,000 | 410,344,000 | ||
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 5.00% | 5.00% | ||
Tier 1 capital (to risk-weighted assets) | ||||
To Be Well Capitalized Minimum Capital Requirements, Amount | 369,148,000 | 341,976,000 | ||
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 6.00% | 6.00% | ||
Total capital (to risk-weighted assets) | ||||
To Be Well Capitalized Minimum Capital Requirements, Amount | 615,247,000 | 569,960,000 | ||
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 10.00% | 10.00% | ||
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||||
Total equity capital | 1,104,048,000 | 985,519,000 | ||
Add: | ||||
Minority interests | 787,000 | 781,000 | ||
Net unrealized holding losses on securities available for sale and held in trust | 3,484,000 | 42,901,000 | ||
Deduct: | ||||
Goodwill and other disallowed intangible assets | -259,048,000 | -264,822,000 | ||
Other | -3,615,000 | -2,015,000 | ||
Tier 1 capital (as defined) | 845,656,000 | 762,364,000 | ||
Allowable Tier 2 capital | ||||
Allowance for loan losses | 43,088,000 | 35,407,000 | ||
Total capital (as defined) | 888,744,000 | 797,771,000 | ||
Bank | FNB | ||||
Total capital (to risk-weighted assets) | ||||
Actual Amount | 25,000,000 | |||
Allowable Tier 2 capital | ||||
Total capital (as defined) | 25,000,000 | |||
Hilltop Holdings Inc. | ||||
Tier 1 capital (to average assets) | ||||
Actual Amount | 1,231,724,000 | 1,112,424,000 | ||
Actual Ratio (as a percent) | 14.17% | 12.81% | ||
Minimum Capital Requirements, Amount | 347,619,000 | 347,480,000 | ||
Minimum Capital Requirements, Ratio (as a percent) | 4.00% | |||
Tier 1 capital (to risk-weighted assets) | ||||
Actual Amount | 1,231,724,000 | 1,112,424,000 | ||
Actual Ratio (as a percent) | 19.02% | 18.53% | ||
Minimum Capital Requirements, Amount | 259,078,000 | 240,159,000 | ||
Minimum Capital Requirements, Ratio (as a percent) | 4.00% | 4.00% | ||
Total capital (to risk-weighted assets) | ||||
Actual Amount | 1,275,023,000 | 1,148,736,000 | ||
Actual Ratio (as a percent) | 19.69% | 19.13% | ||
Minimum Capital Requirements, Amount | 518,157,000 | 480,318,000 | ||
Minimum Capital Requirements, Ratio (as a percent) | 8.00% | 8.00% | ||
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||||
Total equity capital | 1,460,452,000 | 1,311,141,000 | 1,144,496,000 | |
Add: | ||||
Minority interests | 787,000 | 781,000 | ||
Trust preferred securities | 65,000,000 | 65,000,000 | ||
Net unrealized holding losses on securities available for sale and held in trust | -651,000 | 34,863,000 | ||
Deduct: | ||||
Goodwill and other disallowed intangible assets | -290,052,000 | -297,174,000 | ||
Other | -3,812,000 | -2,187,000 | ||
Tier 1 capital (as defined) | 1,231,724,000 | 1,112,424,000 | ||
Allowable Tier 2 capital | ||||
Allowance for loan losses | 43,088,000 | 35,407,000 | ||
Net unrealized holding losses on equity securities | 211,000 | 905,000 | ||
Total capital (as defined) | 1,275,023,000 | 1,148,736,000 | ||
Hilltop Holdings Inc. | FNB | ||||
Total capital (to risk-weighted assets) | ||||
Actual Amount | 35,000,000 | |||
Allowable Tier 2 capital | ||||
Total capital (as defined) | 35,000,000 | |||
First Southwest Company | ||||
Financial Advisory | ||||
Net capital | 64,300,000 | |||
Minimum net capital requirement | 5,300,000 | |||
Net capital as a percentage of aggregate debits | 24.00% | |||
Net capital in excess of the minimum requirement | ($59,000,000) |
Regulatory_Matters_Details_2
Regulatory Matters (Details 2) (Texas Department of Insurance, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
NLIC | |||
Insurance | |||
Capital and surplus | $113,023 | $98,602 | |
Statutory net income (loss): | 14,893 | 3,583 | -3,858 |
ASIC | |||
Insurance | |||
Capital and surplus | 28,966 | 26,452 | |
Statutory net income (loss): | $2,554 | $521 | $972 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Sep. 27, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2012 | |
item | ||||
Stockholders' equity | ||||
Maximum dividends that may be paid without regulatory approval | 225,600,000 | |||
Preferred stock, shares outstanding | 114,068,000 | 114,068,000 | ||
NLC | ||||
Stockholders' equity | ||||
Maximum dividends that may be paid without regulatory approval | 17,800,000 | |||
Series B Preferred Stock | ||||
Stockholders' equity | ||||
Number of quarters after failure to declare and pay dividends on Series B Preferred Stock for which the entity may not pay dividends to common stockholders nor may repurchase or redeem any shares of common stock | 3 | |||
Tier 1 Dividend Threshold (as a percent) | 90.00% | 9.00% | ||
Redemption price as a percentage of the liquidation amount | 100.00% | |||
Series B Preferred Stock | Dividend Period One [Member] | ||||
Stockholders' equity | ||||
Dividend rate (as a percent) | 5.00% | |||
Plains Capital | Series B Preferred Stock | ||||
Stockholders' equity | ||||
Number of shares of Hilltop Series B Preferred Stock into which each outstanding share of PlainsCapital Non-Cumulative Perpetual Preferred Stock, Series C is converted | 1 |
Other_Noninterest_Income_and_E2
Other Noninterest Income and Expense (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other noninterest income: | |||
Change in fair value of FSC derivatives | $16,228 | $11,427 | $238 |
Commission and insurance agency income | 3,380 | 2,765 | 2,159 |
Direct bill fees and insurance service fee income | 5,719 | 5,697 | 5,174 |
FDIC Indemnification Asset accretion | 3,445 | 1,699 | |
Net gain (loss) from trading securities portfolio | 2,126 | -2,773 | -646 |
Net gain on investment in SWS common stock | 5,985 | ||
Rent and other income from other real estate owned | 5,703 | 625 | |
Revenue from check and stored value cards | 7,614 | 4,682 | 276 |
Service charges on depositor accounts | 16,730 | 11,376 | 724 |
Trust fees | 6,330 | 5,050 | 411 |
Other | 6,281 | 4,122 | 237 |
Other noninterest income | 79,541 | 44,670 | 8,573 |
Other noninterest expense: | |||
Accounting fees | 5,247 | 5,455 | 2,269 |
Acquisition costs | 1,406 | 117 | 6,570 |
Amortization of intangible assets | 11,138 | 11,087 | 1,986 |
Data processing | 23,096 | 17,922 | 4,033 |
Funding fees | 2,521 | 4,403 | 593 |
Management Fees | 1,025 | ||
Marketing | 21,372 | 17,257 | 2,245 |
Other professional services | 39,310 | 32,526 | 5,004 |
Printing, stationery and supplies | 4,902 | 4,583 | 735 |
Repossession and foreclosure | 17,621 | 3,546 | 47 |
Telecommunications | 11,249 | 8,350 | 834 |
Unreimbursed loan closing costs | 32,669 | 30,095 | 5,944 |
Other | 61,048 | 52,606 | 3,083 |
Other noninterest expense | 231,579 | 187,947 | 34,368 |
Hilltop Holdings Inc. | |||
Other noninterest income: | |||
Net gain on investment in SWS common stock | $5,985 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments to Sell MBSs | Other assets | |||
Derivative financial instruments | |||
Cash collateral advanced to offset net derivative liability | $6,600,000 | $1,300,000 | |
Not Designated as Hedging Instrument | First Southwest Company | |||
Derivative financial instruments | |||
Net gain (loss) due to changes in the fair value of the derivative instruments | 200,000 | 16,200,000 | 11,400,000 |
Not Designated as Hedging Instrument | Prime Lending | |||
Derivative financial instruments | |||
Net gain (loss) due to changes in the fair value of the derivative instruments | -5,900,000 | -16,300,000 | 8,200,000 |
Not Designated as Hedging Instrument | Commitments to Purchase MBSs | |||
Derivative financial instruments | |||
Notional Amount | 510,553,000 | 236,305,000 | |
Estimated Fair Value | 6,040,000 | -109,000 | |
Not Designated as Hedging Instrument | Commitments to Sell MBSs | |||
Derivative financial instruments | |||
Notional Amount | 1,968,768,000 | 1,645,332,000 | |
Estimated Fair Value | -12,566,000 | 11,383,000 | |
Interest Rate Lock Commitments | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 621,216,000 | 602,467,000 | |
Estimated Fair Value | 17,057,000 | 12,151,000 | |
Interest Rate Swap and Swaption | Other assets | |||
Derivative financial instruments | |||
Cash collateral advanced to offset net derivative liability | 3,300,000 | ||
Interest Rate Swap and Swaption | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 83,000,000 | ||
Estimated Fair Value | 425,000 | ||
Fee Award Option | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 20,432,000 | ||
Estimated Fair Value | ($5,600,000) |
Balance_Sheet_Offsetting_Detai
Balance Sheet Offsetting (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Total | ||
Gross Amounts of Recognized Assets | $153,365 | $118,854 |
Gross Amounts Offset in the Balance Sheet | -76 | |
Net Amounts of Assets Presented in the Balance Sheet | 153,365 | 118,778 |
Gross Amounts Not Offset in the Balance Sheets | ||
Financial Instruments | -152,899 | -107,365 |
Cash Collateral Pledged | -286 | |
Net Amount | 466 | 11,127 |
Institutional counterparties | ||
Securities Borrowed: | ||
Gross Amounts of Recognized Assets | 152,899 | 107,365 |
Net Amounts of Assets Presented in the Balance Sheets | 152,899 | 107,365 |
Gross Amounts Not Offset in the Balance Sheets | ||
Financial Instruments | -152,899 | -107,365 |
Forward MBS Derivatives | Institutional counterparties | ||
Derivatives | ||
Gross Amounts of Recognized Assets | 41 | 11,489 |
Gross Amounts Offset in the Balance Sheets | -76 | |
Net Amounts of Assets Presented in the Balance Sheets | 41 | 11,413 |
Gross Amounts Not Offset in the Balance Sheets | ||
Cash Collateral Pledged | -286 | |
Net Amount | 41 | 11,127 |
Interest rate swaps | Institutional counterparties | ||
Derivatives | ||
Gross Amounts of Recognized Assets | 425 | |
Net Amounts of Assets Presented in the Balance Sheets | 425 | |
Gross Amounts Not Offset in the Balance Sheets | ||
Net Amount | $425 |
Balance_Sheet_Offsetting_Detai1
Balance Sheet Offsetting (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Total | ||
Gross Amounts of Recognized Liabilities | $267,047 | $182,405 |
Gross Amounts Offset in the Balance Sheets | -223 | |
Net Amounts of Liabilities Presented in the Balance Sheets | 266,824 | 182,405 |
Gross Amounts Not Offset in the Balance Sheets | ||
Financial Instruments | -254,218 | -182,375 |
Cash Collateral Pledged | -6,137 | -17 |
Net Amount | 6,469 | 13 |
Institutional counterparties | ||
Securities Loaned: | ||
Gross Amounts of Recognized Liabilities | 117,822 | 74,913 |
Net Amounts of Liabilities Presented in the Balance Sheets | 117,822 | 74,913 |
Gross Amounts Not Offset in the Balance Sheets | ||
Financial Instruments | -117,822 | -74,913 |
Institutional counterparties | Forward MBS Derivatives | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 12,829 | 30 |
Gross Amounts Offset in the Balance Sheets | -223 | |
Net Amounts of Liabilities Presented in the Balance Sheets | 12,606 | 30 |
Gross Amounts Not Offset in the Balance Sheets | ||
Cash Collateral Pledged | -6,137 | -17 |
Net Amount | 6,469 | 13 |
Customer counterparties | ||
Repurchase Agreement: | ||
Gross Amounts of Recognized Liabilities | 136,396 | 107,462 |
Net Amounts of Liabilities Presented in the Balance Sheets | 136,396 | 107,462 |
Gross Amounts Not Offset in the Balance Sheets | ||
Financial Instruments | ($136,396) | ($107,462) |
BrokerDealer_and_Clearing_Orga2
Broker-Dealer and Clearing Organization Receivables and Payables (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Receivables: | ||
Securities borrowed | $152,899 | $107,365 |
Securities failed to deliver | 3,497 | 7,160 |
Clearing organizations | 11,471 | 4,698 |
Due from dealers | 17 | 94 |
Total receivables | 167,884 | 119,317 |
Payables: | ||
Securities loaned | 117,822 | 74,913 |
Correspondents | 51,930 | 44,852 |
Securities failed to receive | 5,960 | 5,523 |
Clearing organizations | 3,330 | 4,390 |
Total Payables | $179,042 | $129,678 |
Deferred_Policy_Acquisition_Co2
Deferred Policy Acquisition Cost (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Activity in deferred acquisition costs | ||
Balance, beginning of year | $20,991 | $19,812 |
Acquisition expenses capitalized | 41,034 | 41,771 |
Amortization charged to income | -41,609 | -40,592 |
Balance, end of year | $20,416 | $20,991 |
Reserves_for_Unpaid_Losses_and1
Reserves for Unpaid Losses and Loss Adjustment Expenses (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Information regarding of the reserve for unpaid losses and loss adjustment expenses | |||
Balance, beginning of period | $27,468,000 | $34,012,000 | $44,835,000 |
Less reinsurance recoverables | -4,508,000 | -10,385,000 | -25,083,000 |
Net balance, beginning of period | 22,960,000 | 23,627,000 | 19,752,000 |
Incurred related to: | |||
Current period | 86,642,000 | 110,096,000 | 109,328,000 |
Prior periods | 7,787,000 | 659,000 | -169,000 |
Total incurred | 94,429,000 | 110,755,000 | 109,159,000 |
Payments related to: | |||
Current period | -73,841,000 | -96,284,000 | -90,743,000 |
Prior periods | -18,147,000 | -15,138,000 | -14,541,000 |
Total payments | -91,988,000 | -111,422,000 | -105,284,000 |
Net balance, end of period | 25,401,000 | 22,960,000 | 23,627,000 |
Plus reinsurance recoverables | 4,315,000 | 4,508,000 | 10,385,000 |
Balance, end of period | 29,716,000 | 27,468,000 | 34,012,000 |
Change in insurance reserves | -7,787,000 | -659,000 | 169,000 |
Increase (decrease) in reserves | $7,800,000 | $2,200,000 |
Reinsurance_Activity_Details
Reinsurance Activity (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Reinsurance Activity | |
Allowance for uncollectible accounts | $0 |
Threshold percentage for disclosure of reinsurance recoverables | 5.00% |
Reinsurance activity | |
Balances due from Companies | 4,900 |
Federal Emergency Management Agency | |
Reinsurance activity | |
Balances due from Companies | 3,476 |
Everest Re | AM Best, A+ Rating | |
Reinsurance activity | |
Balances due from Companies | 480 |
Lloyds Syndicate 2001 | AM Best, A+ Rating | |
Reinsurance activity | |
Balances due from Companies | 432 |
RV Versicherung AG | |
Reinsurance activity | |
Balances due from Companies | 360 |
General Reinsurance | AM Best, A++ Rating | |
Reinsurance activity | |
Balances due from Companies | 320 |
Lloyds Syndicate 2791 | |
Reinsurance activity | |
Balances due from Companies | 273 |
Total | |
Reinsurance activity | |
Balances due from Companies | $5,341 |
Reinsurance_Activity_Details_2
Reinsurance Activity (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earned | |||
Net premiums, Earned | $164,524 | $157,533 | $146,701 |
Effect of reinsurance on incurred losses | |||
Loss and LAE incurred | 97,011 | 117,089 | 115,347 |
Reinsurance recoverables | -2,582 | -6,334 | -6,188 |
Net loss and LAE incurred | 94,429 | 110,755 | 109,159 |
Property and casualty | |||
Written | |||
Premiums from direct business | 172,464 | 173,982 | 163,780 |
Reinsurance assumed | 9,746 | 7,987 | 6,422 |
Reinsurance ceded | -17,845 | -18,528 | -19,751 |
Net premiums, Written | 164,365 | 163,441 | 150,451 |
Earned | |||
Premiums from direct business | 173,496 | 168,942 | 162,383 |
Reinsurance assumed | 8,960 | 7,202 | 5,882 |
Reinsurance ceded | -17,932 | -18,611 | -21,564 |
Net premiums, Earned | $164,524 | $157,533 | $146,701 |
Reinsurance_Activity_Details_3
Reinsurance Activity (Details 3) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 02, 2015 | Dec. 31, 2011 | Jul. 02, 2013 | Jan. 02, 2014 | |
Reinsurance activity | |||||||
Reinsurance Recoverables | $4,900,000 | ||||||
Multi-line excess of loss coverage | |||||||
Reinsurance activity | |||||||
Loss amount covered under reinsurance contract | 500,000 | ||||||
Reinsurance retention amount | 500,000 | ||||||
Catastrophic coverage | |||||||
Reinsurance activity | |||||||
Reinstatement premiums | 200,000 | 300,000 | 500,000 | ||||
Catastrophic coverage | First layer of protection | |||||||
Reinsurance activity | |||||||
Reinsurance retention amount | 8,000,000 | ||||||
Reinsurance coverage in losses per event | 17,000,000 | ||||||
Catastrophic coverage | Second layer of protection | |||||||
Reinsurance activity | |||||||
Loss amount covered under reinsurance contract | 25,000,000 | ||||||
Reinsurance coverage in losses per event | 25,000,000 | ||||||
Catastrophic coverage | Third layer of protection | |||||||
Reinsurance activity | |||||||
Loss amount covered under reinsurance contract | 50,000,000 | ||||||
Reinsurance coverage in losses per event | 50,000,000 | ||||||
Catastrophic coverage | Fourth layer of protection | |||||||
Reinsurance activity | |||||||
Loss amount covered under reinsurance contract | 100,000,000 | ||||||
Reinsurance coverage in losses per event | 40,000,000 | ||||||
ASIC | Catastrophic coverage | |||||||
Reinsurance activity | |||||||
Loss amount covered under reinsurance contract | 6,500,000 | ||||||
Reinsurance retention amount | 1,500,000 | ||||||
NLIC | Catastrophic coverage | |||||||
Reinsurance activity | |||||||
Reinsurance retention amount | 8,000,000 | ||||||
NLC | Catastrophic coverage | |||||||
Reinsurance activity | |||||||
Retention of losses (as a percent) | 9.00% | ||||||
Reinsurance retention amount | 8,000,000 | ||||||
Number of layers of protection under reinsurance | 4 | ||||||
Premiums on treaties | 10,000,000 | ||||||
Number of significant catastrophe experienced | 0 | 2 | 1 | ||||
Number of tornado, hail and wind storms experienced | 8 | 2 | |||||
Incurred losses | 21,700,000 | 18,300,000 | 8,300,000 | ||||
Reinsurance Recoverables | 1,800,000 | ||||||
NLC | Catastrophic coverage | Maximum | |||||||
Reinsurance activity | |||||||
Loss amount covered under reinsurance contract | 140,000,000 | ||||||
NLC | Catastrophic coverage | Fourth layer of protection | |||||||
Reinsurance activity | |||||||
Loss amount covered under reinsurance contract | 100,000,000 | ||||||
Reinsurance coverage in losses per event | 40,000,000 | ||||||
NLC | Catastrophic coverage | Third and fourth layer of protection | |||||||
Reinsurance activity | |||||||
Renewal period of reinsurance contract | 2 years | ||||||
NLC | Catastrophic coverage | First and second layers of protection | |||||||
Reinsurance activity | |||||||
Renewal period of reinsurance contract | 18 months | ||||||
NLIC and ASIC | Catastrophic coverage | Maximum | |||||||
Reinsurance activity | |||||||
Reinsurance retention amount | $8,000,000 |
Segment_and_Related_Informatio2
Segment and Related Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||||||||||
Segment and Related Information | |||||||||||
Number of reportable segments | 4 | ||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | $91,514 | $85,760 | $98,446 | $85,421 | $88,599 | $71,916 | $68,425 | $67,261 | $361,141 | $296,201 | $28,842 |
Provision for loan losses | 4,125 | 4,033 | 5,533 | 3,242 | 2,206 | 10,658 | 11,289 | 13,005 | 16,933 | 37,158 | 3,800 |
Noninterest income | 213,795 | 212,135 | 203,281 | 170,100 | 182,479 | 215,095 | 239,233 | 213,278 | 799,311 | 850,085 | 224,232 |
Noninterest expense | 246,768 | 254,744 | 251,212 | 212,629 | 219,752 | 216,592 | 260,400 | 214,991 | 965,353 | 911,735 | 255,517 |
Income (loss) before income taxes | 54,416 | 39,118 | 44,982 | 39,650 | 49,120 | 59,761 | 35,969 | 52,543 | 178,166 | 197,393 | -6,243 |
Goodwill | 251,808 | 251,808 | 251,808 | 251,808 | |||||||
Total assets | 9,242,416 | 8,904,122 | 9,242,416 | 8,904,122 | |||||||
Operating segment | Banking | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 334,377 | 293,254 | 24,885 | ||||||||
Provision for loan losses | 16,916 | 37,140 | 3,670 | ||||||||
Noninterest income | 67,438 | 71,045 | 4,601 | ||||||||
Noninterest expense | 245,790 | 155,102 | 16,130 | ||||||||
Income (loss) before income taxes | 139,109 | 172,057 | 9,686 | ||||||||
Goodwill | 207,741 | 207,741 | 207,741 | 207,741 | |||||||
Total assets | 8,036,729 | 7,981,517 | 8,036,729 | 7,981,517 | |||||||
Operating segment | Broker-Dealer | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 12,144 | 12,064 | 1,191 | ||||||||
Provision for loan losses | 17 | 18 | 130 | ||||||||
Noninterest income | 119,451 | 102,714 | 10,909 | ||||||||
Noninterest expense | 124,715 | 112,360 | 11,078 | ||||||||
Income (loss) before income taxes | 6,863 | 2,400 | 892 | ||||||||
Goodwill | 7,008 | 7,008 | 7,008 | 7,008 | |||||||
Total assets | 758,636 | 520,412 | 758,636 | 520,412 | |||||||
Operating segment | Mortgage origination | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | -12,591 | -37,840 | -4,987 | ||||||||
Noninterest income | 456,776 | 537,497 | 57,618 | ||||||||
Noninterest expense | 431,820 | 472,284 | 50,296 | ||||||||
Income (loss) before income taxes | 12,365 | 27,373 | 2,335 | ||||||||
Goodwill | 13,071 | 13,071 | 13,071 | 13,071 | |||||||
Total assets | 1,498,846 | 1,249,091 | 1,498,846 | 1,249,091 | |||||||
Operating segment | Insurance | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 3,672 | 7,442 | 4,730 | ||||||||
Noninterest income | 173,577 | 166,163 | 154,147 | ||||||||
Noninterest expense | 151,541 | 166,006 | 163,585 | ||||||||
Income (loss) before income taxes | 25,708 | 7,599 | -4,708 | ||||||||
Goodwill | 23,988 | 23,988 | 23,988 | 23,988 | |||||||
Total assets | 328,693 | 308,160 | 328,693 | 308,160 | |||||||
Corporate | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 5,219 | -1,597 | 39 | ||||||||
Noninterest income | 5,985 | ||||||||||
Noninterest expense | 13,878 | 10,439 | 14,487 | ||||||||
Income (loss) before income taxes | -2,674 | -12,036 | -14,448 | ||||||||
Total assets | 1,522,655 | 1,316,398 | 1,522,655 | 1,316,398 | |||||||
Segment Reconciling Items | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 18,320 | 22,878 | 2,984 | ||||||||
Noninterest income | -23,916 | -27,334 | -3,043 | ||||||||
Noninterest expense | -2,391 | -4,456 | -59 | ||||||||
Income (loss) before income taxes | -3,205 | ||||||||||
Total assets | ($2,903,142) | ($2,471,456) | ($2,903,142) | ($2,471,456) |
Earnings_Loss_per_Common_Share2
Earnings (Loss) per Common Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings (loss) per Common Share | |||||||||||
Weighted average shares outstanding - basic | 89,710,000 | 84,382,000 | 58,754,000 | ||||||||
Effect of potentially dilutive securities (in shares) | 863,000 | 5,949,000 | |||||||||
Weighted average shares outstanding - diluted | 90,573,000 | 90,331,000 | 58,754,000 | ||||||||
Basic earnings (loss) per common share (in dollars per share) | $0.35 | $0.26 | $0.30 | $0.26 | $0.34 | $0.45 | $0.25 | $0.39 | $1.18 | $1.43 | ($0.10) |
Diluted earnings (loss) per common share (in dollars per share) | $0.35 | $0.26 | $0.30 | $0.26 | $0.34 | $0.43 | $0.24 | $0.39 | $1.17 | $1.40 | ($0.10) |
Basic earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | $105,400 | $120,343 | ($5,851) | ||||||||
Diluted earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | 105,947 | 126,074 | -5,851 | ||||||||
Add: interest expense on senior exchangeable notes (net of tax) | 5,059 | ||||||||||
Restricted Stock Awards | |||||||||||
Basic earnings (loss) per share: | |||||||||||
Less: income applicable to participating shares | -547 | -672 | |||||||||
Senior exchangeable notes | |||||||||||
Weighted-average equivalent shares excluded from diluted loss: | |||||||||||
Weighted-average equivalent shares excluded from diluted loss | 6,208,000 | ||||||||||
Stock options | |||||||||||
Weighted-average equivalent shares excluded from diluted loss: | |||||||||||
Weighted-average equivalent shares excluded from diluted loss | 688,000 | ||||||||||
Common Stock | |||||||||||
Basic earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | 105,947 | 121,015 | -5,851 | ||||||||
Diluted earnings (loss) per share: | |||||||||||
Income (loss) applicable to Hilltop common stockholders | $105,947 | $121,015 | ($5,851) |
Condensed_Financial_Statements2
Condensed Financial Statements of Parent (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Interest expense | $7,802 | $7,457 | $5,962 | $6,407 | $10,002 | $7,786 | $7,743 | $7,343 | $27,628 | $32,874 | $10,196 |
Net gain on investment in SWS common stock | -5,985 | ||||||||||
Loss before income taxes, equity in undistributed earnings of subsidiaries and preferred stock activity | 54,416 | 39,118 | 44,982 | 39,650 | 49,120 | 59,761 | 35,969 | 52,543 | 178,166 | 197,393 | -6,243 |
Income tax expense (benefit) | 20,950 | 14,010 | 16,294 | 14,354 | 18,090 | 20,115 | 13,309 | 19,170 | 65,608 | 70,684 | -1,145 |
Net income (loss) | 33,466 | 25,108 | 28,688 | 25,296 | 31,030 | 39,646 | 22,660 | 33,373 | 112,558 | 126,709 | -5,098 |
Comprehensive income (loss) applicable to Hilltop | 147,164 | 82,385 | -11,481 | ||||||||
Hilltop Holdings Inc. | |||||||||||
Condensed Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Investment income | 5,219 | 6,635 | 7,035 | ||||||||
Interest expense | 8,232 | 6,996 | |||||||||
Net gain on investment in SWS common stock | -5,985 | ||||||||||
General and administrative expense | 13,878 | 10,439 | 14,488 | ||||||||
Loss before income taxes, equity in undistributed earnings of subsidiaries and preferred stock activity | -2,674 | -12,036 | -14,449 | ||||||||
Income tax expense (benefit) | -592 | -4,680 | -3,313 | ||||||||
Equity in undistributed earnings of subsidiaries | 114,640 | 134,065 | 6,038 | ||||||||
Net income (loss) | 112,558 | 126,709 | -5,098 | ||||||||
Other comprehensive income (loss), net | 35,514 | -43,418 | -4,900 | ||||||||
Comprehensive income (loss) applicable to Hilltop | $148,072 | $83,291 | ($9,998) |
Condensed_Financial_Statements3
Condensed Financial Statements of Parent (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Assets | |||
Cash and cash equivalents | $782,473 | $713,099 | |
Securities, available for sale | 925,535 | 1,203,143 | |
Other assets | 453,238 | 279,745 | |
Total assets | 9,242,416 | 8,904,122 | |
Liabilities and Stockholders' Equity | |||
Notes payable | 56,684 | 56,327 | |
Stockholders' equity | 1,460,452 | 1,311,141 | |
Total liabilities and stockholders' equity | 9,242,416 | 8,904,122 | |
Hilltop Holdings Inc. | |||
Assets | |||
Cash and cash equivalents | 145,948 | 163,856 | 204,754 |
Securities, available for sale | 69,023 | 64,082 | |
Investment in subsidiaries | 1,218,182 | 1,069,226 | 944,546 |
Other assets | 88,243 | 14,293 | 27,743 |
Total assets | 1,522,655 | 1,316,398 | 1,241,125 |
Liabilities and Stockholders' Equity | |||
Accounts payable and accrued expenses | 62,203 | 5,257 | 5,779 |
Notes payable | 90,850 | ||
Stockholders' equity | 1,460,452 | 1,311,141 | 1,144,496 |
Total liabilities and stockholders' equity | 1,522,655 | 1,316,398 | 1,241,125 |
SWS | |||
Assets | |||
Investment in subsidiaries | $70,282 |
Condensed_Financial_Statements4
Condensed Financial Statements of Parent (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Sep. 30, 2013 | Oct. 02, 2014 | Dec. 31, 2010 |
Operating Activities | |||||||||||||||
Net income (loss) | $33,466 | $25,108 | $28,688 | $25,296 | $31,030 | $39,646 | $22,660 | $33,373 | $112,558 | $126,709 | ($5,098) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||||||||||||||
Deferred income taxes | -22,782 | 15,829 | -6,426 | ||||||||||||
Net gain on investment in SWS common stock | -5,985 | ||||||||||||||
Net cash provided by (used in) operating activities | -91,420 | 396,705 | 115,219 | ||||||||||||
Investing Activities | |||||||||||||||
Net cash provided by investing activities | 259,824 | 223,917 | 12,869 | ||||||||||||
Unrealized gains associated with SWS common stock | 11,542 | 14,106 | 11,542 | 14,106 | 11,542 | ||||||||||
Other non interest income | 6,281 | 4,122 | 237 | ||||||||||||
Financing Activities | |||||||||||||||
Payments to repurchase common stock | -1,298 | ||||||||||||||
Redemption of senior exchangeable notes | -2,643 | -3,262 | -766 | ||||||||||||
Dividends paid on preferred stock | -5,619 | -2,985 | |||||||||||||
Other, net | 2,620 | 2,482 | -40 | ||||||||||||
Net cash provided by (used in) financing activities | -101,352 | -601,059 | 19,852 | ||||||||||||
Net change in cash and cash equivalents | 67,052 | 19,563 | 147,940 | ||||||||||||
Cash and cash equivalents, beginning of year | 746,023 | 726,460 | 746,023 | 726,460 | 578,520 | ||||||||||
Cash and cash equivalents, end of year | 813,075 | 746,023 | 813,075 | 746,023 | 726,460 | 813,075 | |||||||||
Supplemental Schedule of Non-Cash Activities | |||||||||||||||
Conversion of available for sale investment to SWS common stock | 71,502 | ||||||||||||||
Redemption of senior exchangeable notes for common stock | 83,950 | ||||||||||||||
Preferred stock issued in acquisition | 114,068 | ||||||||||||||
Common stock issued in acquisition | 387,583 | ||||||||||||||
SWS | |||||||||||||||
Investing Activities | |||||||||||||||
Unrealized gains associated with SWS common stock | 7,200 | ||||||||||||||
Loss due to change in fair value | 1,200 | ||||||||||||||
Other non interest income | 6,000 | ||||||||||||||
Hilltop Holdings Inc. | |||||||||||||||
Operating Activities | |||||||||||||||
Net income (loss) | 112,558 | 126,709 | -5,098 | ||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||||||||||||||
Equity in undistributed earnings of subsidiaries | -114,640 | -134,065 | -6,038 | ||||||||||||
Deferred income taxes | 156 | 8,850 | -1,011 | ||||||||||||
Net gain on investment in SWS common stock | -5,985 | ||||||||||||||
Loss on redemption of senior exchangeable notes | 3,733 | ||||||||||||||
Other, net | -1,379 | 132 | -3,370 | ||||||||||||
Net cash provided by (used in) operating activities | -9,290 | 5,359 | -15,517 | ||||||||||||
Investing Activities | |||||||||||||||
Advance to subsidiary | -6,000 | ||||||||||||||
Capital contribution to subsidiary | -35,000 | ||||||||||||||
Cash paid for acquisition | -311,805 | ||||||||||||||
Net cash provided by investing activities | -6,000 | -35,000 | -311,805 | ||||||||||||
Financing Activities | |||||||||||||||
Payments to repurchase common stock | -1,298 | ||||||||||||||
Redemption of senior exchangeable notes | -11,088 | ||||||||||||||
Dividends paid on preferred stock | -5,619 | -2,985 | |||||||||||||
Other, net | 3,001 | 2,816 | |||||||||||||
Net cash provided by (used in) financing activities | -2,618 | -11,257 | -1,298 | ||||||||||||
Net change in cash and cash equivalents | -17,908 | -40,898 | -328,620 | ||||||||||||
Cash and cash equivalents, beginning of year | 163,856 | 204,754 | 163,856 | 204,754 | 533,374 | ||||||||||
Cash and cash equivalents, end of year | 145,948 | 163,856 | 145,948 | 163,856 | 204,754 | 145,948 | 533,374 | ||||||||
Supplemental Schedule of Non-Cash Activities | |||||||||||||||
Conversion of available for sale investment to SWS common stock | 71,502 | ||||||||||||||
Redemption of senior exchangeable notes for common stock | 83,950 | ||||||||||||||
Preferred stock issued in acquisition | 114,068 | ||||||||||||||
Common stock issued in acquisition | 387,583 | ||||||||||||||
Hilltop Holdings Inc. | FNB | |||||||||||||||
Investing Activities | |||||||||||||||
Capital contribution to subsidiary | $35,000 |
Selected_Quarterly_Financial_I2
Selected Quarterly Financial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected Quarterly Financial Information (Unaudited) | |||||||||||
Interest income | $99,316 | $93,217 | $104,408 | $91,828 | $98,601 | $79,702 | $76,168 | $74,604 | $388,769 | $329,075 | $39,038 |
Interest expense | 7,802 | 7,457 | 5,962 | 6,407 | 10,002 | 7,786 | 7,743 | 7,343 | 27,628 | 32,874 | 10,196 |
Net interest income | 91,514 | 85,760 | 98,446 | 85,421 | 88,599 | 71,916 | 68,425 | 67,261 | 361,141 | 296,201 | 28,842 |
Provision for loan losses | 4,125 | 4,033 | 5,533 | 3,242 | 2,206 | 10,658 | 11,289 | 13,005 | 16,933 | 37,158 | 3,800 |
Noninterest income | 213,795 | 212,135 | 203,281 | 170,100 | 182,479 | 215,095 | 239,233 | 213,278 | 799,311 | 850,085 | 224,232 |
Noninterest expense | 246,768 | 254,744 | 251,212 | 212,629 | 219,752 | 216,592 | 260,400 | 214,991 | 965,353 | 911,735 | 255,517 |
Income (loss) before income taxes | 54,416 | 39,118 | 44,982 | 39,650 | 49,120 | 59,761 | 35,969 | 52,543 | 178,166 | 197,393 | -6,243 |
Income tax provision | 20,950 | 14,010 | 16,294 | 14,354 | 18,090 | 20,115 | 13,309 | 19,170 | 65,608 | 70,684 | -1,145 |
Net income (loss) | 33,466 | 25,108 | 28,688 | 25,296 | 31,030 | 39,646 | 22,660 | 33,373 | 112,558 | 126,709 | -5,098 |
Less: Net income attributable to noncontrolling interest | 325 | 296 | 177 | 110 | 160 | 339 | 568 | 300 | 908 | 1,367 | 494 |
Income (loss) attributable to Hilltop | 33,141 | 24,812 | 28,511 | 25,186 | 30,870 | 39,307 | 22,092 | 33,073 | 111,650 | 125,342 | -5,592 |
Dividends on preferred stock | 1,425 | 1,426 | 1,426 | 1,426 | 1,342 | 1,133 | 1,149 | 703 | 5,703 | 4,327 | |
Income (loss) applicable to Hilltop common stockholders | $31,716 | $23,386 | $27,085 | $23,760 | $29,528 | $38,174 | $20,943 | $32,370 | $105,947 | $121,015 | ($5,851) |
Earnings (loss) per common share: | |||||||||||
Basic (in dollars per share) | $0.35 | $0.26 | $0.30 | $0.26 | $0.34 | $0.45 | $0.25 | $0.39 | $1.18 | $1.43 | ($0.10) |
Diluted (in dollars per share) | $0.35 | $0.26 | $0.30 | $0.26 | $0.34 | $0.43 | $0.24 | $0.39 | $1.17 | $1.40 | ($0.10) |
Subsequent_Events_Details
Subsequent Events (Details) (SWS, USD $) | 12 Months Ended | 0 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Jan. 01, 2015 |
Pro Forma Results of Operations | ||
Net interest income | $420,894 | |
Other revenues | 1,005,701 | |
Net income | 110,279 | |
Subsequent Event | ||
Subsequent events | ||
Conversion of common stock | 0.2496 | |
Consideration paid in cash | $1.94 | |
Acquisition price (in dollars per share) | $6.92 | |
Aggregate purchase price | 349,000 | |
Payments by shares to acquire business | 10,000 | |
Conversion of common stock value | 78,200 | |
Fair values of the identifiable assets acquired, and liabilities assumed | ||
Cash and due from banks | 118,538 | |
Federal funds sold and securities purchased agreements to resell | 44,741 | |
Assets segregated for regulatory purposes | 181,610 | |
Securities | 707,476 | |
Non-covered loans, net | 854,778 | |
Broker/dealer and clearing organization receivables | 1,261,022 | |
Other assets | 118,910 | |
Total identifiable assets acquired | 3,287,075 | |
Deposits | -1,287,394 | |
Broker-dealer and clearing organization payables | -1,113,075 | |
Short-term borrowings | -164,240 | |
Advances from Federal Home Loan Bank | -76,643 | |
Other liabilities | -216,411 | |
Total liabilities assumed | -2,857,763 | |
Preliminary estimated bargain purchase gain | -80,326 | |
Net identifiable assets acquired/ bargain purchase gain | 348,986 | |
Less Hilltop existing investment in SWS | -70,282 | |
Net assets acquired | $278,704 |