Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 25, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Hilltop Holdings Inc. | |
Entity Central Index Key | 1,265,131 | |
Trading Symbol | hth | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 94,595,843 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 405,682 | $ 486,977 |
Federal funds sold | 468 | 405 |
Assets segregated for regulatory purposes | 220,115 | 186,578 |
Securities purchased under agreements to resell | 164,656 | 186,537 |
Securities: | ||
Trading, at fair value | 660,314 | 730,685 |
Available for sale, at fair value (amortized cost of $893,500 and $748,255, respectively) | 874,496 | 744,319 |
Held to maturity, at amortized cost (fair value of $332,388 and $349,939, respectively) | 348,163 | 355,849 |
Equity, at fair value | 21,555 | 21,241 |
Total securities | 1,904,528 | 1,852,094 |
Loans held for sale | 1,524,980 | 1,715,357 |
Non-covered loans, net of unearned income | 6,796,278 | 6,273,669 |
Allowance for non-covered loan losses | (58,861) | (60,957) |
Non-covered loans, net | 6,737,417 | 6,212,712 |
Covered loans, net of allowance of $1,291 and $2,729, respectively | 142,737 | 179,400 |
Broker-dealer and clearing organization receivables | 1,491,507 | 1,464,378 |
Premises and equipment, net | 236,172 | 177,577 |
FDIC indemnification asset | 22,831 | 29,340 |
Covered other real estate owned | 29,856 | 36,744 |
Other assets | 551,758 | 549,447 |
Goodwill | 291,435 | 251,808 |
Other intangible assets, net | 40,394 | 36,432 |
Total assets | 13,764,536 | 13,365,786 |
Deposits: | ||
Noninterest-bearing | 2,525,677 | 2,411,849 |
Interest-bearing | 5,764,556 | 5,566,270 |
Total deposits | 8,290,233 | 7,978,119 |
Broker-dealer and clearing organization payables | 1,396,401 | 1,287,563 |
Short-term borrowings | 1,216,649 | 1,206,424 |
Securities sold, not yet purchased, at fair value | 179,582 | 232,821 |
Notes payable | 220,192 | 208,809 |
Junior subordinated debentures | 67,012 | 67,012 |
Other liabilities | 430,309 | 470,231 |
Total liabilities | 11,800,378 | 11,450,979 |
Commitments and contingencies (see Notes 13 and 14) | ||
Hilltop stockholders' equity: | ||
Common stock, $0.01 par value, 125,000,000 shares authorized; 94,593,561 and 95,982,184 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 946 | 960 |
Additional paid-in capital | 1,504,467 | 1,526,369 |
Accumulated other comprehensive loss | (14,722) | (394) |
Retained earnings | 448,923 | 384,545 |
Deferred compensation employee stock trust, net | 860 | 848 |
Employee stock trust (10,971 and 11,672 shares, at cost, respectively) | (252) | (247) |
Total Hilltop stockholders' equity | 1,940,222 | 1,912,081 |
Noncontrolling interests | 23,936 | 2,726 |
Total stockholders' equity | 1,964,158 | 1,914,807 |
Total liabilities and stockholders' equity | $ 13,764,536 | $ 13,365,786 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Available for sale, amortized cost | $ 893,500 | $ 748,255 |
Held to maturity, fair value | 332,388 | 349,939 |
Covered loans, allowance | $ 1,291 | $ 2,729 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 94,593,561 | 95,982,184 |
Common stock, shares outstanding | 94,593,561 | 95,982,184 |
Employee stock trust, shares | 10,971 | 11,672 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest income: | ||||
Loans, including fees | $ 113,535 | $ 102,546 | $ 317,403 | $ 306,330 |
Securities borrowed | 16,346 | 11,404 | 50,132 | 29,054 |
Securities: | ||||
Taxable | 11,994 | 10,214 | 35,463 | 25,647 |
Tax-exempt | 1,717 | 1,471 | 5,186 | 4,090 |
Other | 4,734 | 3,309 | 13,542 | 8,370 |
Total interest income | 148,326 | 128,944 | 421,726 | 373,491 |
Interest expense: | ||||
Deposits | 12,353 | 6,841 | 31,164 | 16,995 |
Securities loaned | 13,984 | 8,935 | 42,798 | 22,756 |
Short-term borrowings | 7,831 | 4,567 | 18,340 | 9,633 |
Notes payable | 2,702 | 2,680 | 7,636 | 8,320 |
Junior subordinated debentures | 955 | 774 | 2,695 | 2,229 |
Other | 160 | 167 | 484 | 502 |
Total interest expense | 37,985 | 23,964 | 103,117 | 60,435 |
Net interest income | 110,341 | 104,980 | 318,609 | 313,056 |
Provision (recovery) for loan losses | (371) | 1,260 | (1,838) | 8,818 |
Net interest income after provision (recovery) for loan losses | 110,712 | 103,720 | 320,447 | 304,238 |
Noninterest income: | ||||
Net gains from sale of loans and other mortgage production income | 116,243 | 138,498 | 354,488 | 416,336 |
Mortgage loan origination fees | 27,004 | 25,256 | 76,948 | 70,788 |
Securities commissions and fees | 36,968 | 38,735 | 114,005 | 115,596 |
Investment and securities advisory fees and commissions | 23,487 | 25,620 | 63,806 | 73,359 |
Net insurance premiums earned | 34,185 | 34,493 | 102,605 | 106,653 |
Other | 31,810 | 35,875 | 72,422 | 131,876 |
Total noninterest income | 269,697 | 298,477 | 784,274 | 914,608 |
Noninterest expense: | ||||
Employees' compensation and benefits | 205,575 | 209,747 | 588,807 | 611,352 |
Occupancy and equipment, net | 29,015 | 29,073 | 84,695 | 84,285 |
Professional services | 27,984 | 25,560 | 78,959 | 77,301 |
Loss and loss adjustment expenses | 18,712 | 31,234 | 58,653 | 86,118 |
Other | 54,425 | 58,228 | 171,316 | 181,529 |
Total noninterest expense | 335,711 | 353,842 | 982,430 | 1,040,585 |
Income before income taxes | 44,698 | 48,355 | 122,291 | 178,261 |
Income tax expense | 7,600 | 18,003 | 26,122 | 58,792 |
Net income | 37,098 | 30,352 | 96,169 | 119,469 |
Less: Net income attributable to noncontrolling interest | 1,293 | 146 | 2,843 | 353 |
Income attributable to Hilltop | $ 35,805 | $ 30,206 | $ 93,326 | $ 119,116 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.38 | $ 0.31 | $ 0.98 | $ 1.22 |
Diluted (in dollars per share) | 0.38 | 0.31 | 0.98 | 1.22 |
Cash dividends declared per common share | $ 0.07 | $ 0.06 | $ 0.21 | $ 0.18 |
Weighted average share information: | ||||
Basic (in shares) | 94,554 | 96,096 | 95,264 | 97,554 |
Diluted (in shares) | 94,610 | 96,306 | 95,355 | 97,803 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 37,098 | $ 30,352 | $ 96,169 | $ 119,469 |
Other comprehensive income: | ||||
Net unrealized gains (losses) on securities available for sale, net of tax of $(847), $263, $(3,335) and $1,190, respectively | (2,900) | 473 | (11,751) | 2,109 |
Reclassification adjustment for gains (losses) included in net income, net of tax of $7, $0, $7 and $(5), respectively | 24 | 24 | (9) | |
Comprehensive income | 34,222 | 30,825 | 84,442 | 121,569 |
Less: comprehensive income attributable to noncontrolling interest | 1,293 | 146 | 2,843 | 353 |
Comprehensive income applicable to Hilltop | $ 32,929 | $ 30,679 | $ 81,599 | $ 121,216 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net unrealized gains (losses) on securities available for sale and other, tax | $ (847) | $ 263 | $ (3,335) | $ 1,190 |
Other comprehensive income reclassification adjustment, tax | $ 7 | $ 0 | $ 7 | $ (5) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Hilltop. | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit). | Deferred Compensation Employee Stock Trust, Net | Employee Stock Trust | Noncontrolling Interest | Total |
Balance at Dec. 31, 2016 | $ 1,870,509 | $ 985 | $ 1,572,877 | $ 485 | $ 295,568 | $ 903 | $ (309) | $ 4,011 | $ 1,874,520 |
Balance (in shares) at Dec. 31, 2016 | 98,544,000 | 15,000 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 119,116 | 119,116 | 353 | 119,469 | |||||
Other comprehensive income | 2,100 | 2,100 | 2,100 | ||||||
Stock-based compensation expense | 8,396 | 8,396 | 8,396 | ||||||
Common stock issued to board members | 327 | 327 | 327 | ||||||
Common stock issued to board members (in shares) | 12,000 | ||||||||
Issuance of common stock related to share-based awards, net | (2,430) | $ 3 | (2,433) | (2,430) | |||||
Issuance of common stock related to share-based awards, net (in shares) | 264,000 | ||||||||
Repurchase of common stock | (74,454) | $ (29) | (53,998) | (20,427) | (74,454) | ||||
Repurchase of common stock (in shares) | (2,916,000) | ||||||||
Dividends on common stock | (17,384) | (17,384) | (17,384) | ||||||
Deferred compensation plan | 5 | (63) | $ 68 | 5 | |||||
Deferred compensation plan (in shares) | (3,000) | ||||||||
Net cash distributed to noncontrolling interest | (1,193) | (1,193) | |||||||
Balance at Sep. 30, 2017 | 1,906,185 | $ 959 | 1,525,169 | 2,585 | 376,873 | 840 | $ (241) | 3,171 | 1,909,356 |
Balance (in shares) at Sep. 30, 2017 | 95,904,000 | 12,000 | |||||||
Balance at Dec. 31, 2017 | 1,912,081 | $ 960 | 1,526,369 | (394) | 384,545 | 848 | $ (247) | 2,726 | 1,914,807 |
Balance (in shares) at Dec. 31, 2017 | 95,982,000 | 12,000 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 93,326 | 93,326 | 2,843 | 96,169 | |||||
Other comprehensive income | (11,727) | (11,727) | (11,727) | ||||||
Stock-based compensation expense | 6,725 | 6,725 | 6,725 | ||||||
Common stock issued to board members | 513 | 513 | 513 | ||||||
Common stock issued to board members (in shares) | 22,000 | ||||||||
Issuance of common stock related to share-based awards, net | (1,808) | $ 3 | (1,811) | (1,808) | |||||
Issuance of common stock related to share-based awards, net (in shares) | 292,000 | ||||||||
Repurchase of common stock | (38,821) | $ (17) | (27,329) | (11,475) | $ (38,821) | ||||
Repurchase of common stock (in shares) | (1,702,000) | (1,702,696) | |||||||
Dividends on common stock | (20,074) | (20,074) | $ (20,074) | ||||||
Deferred compensation plan | 7 | 12 | $ (5) | 7 | |||||
Deferred compensation plan (in shares) | (1,000) | ||||||||
Adoption of accounting standards (Note 2) | (2,601) | 2,601 | |||||||
Net cash contributed from noncontrolling interest | 18,367 | 18,367 | |||||||
Balance at Sep. 30, 2018 | $ 1,940,222 | $ 946 | $ 1,504,467 | $ (14,722) | $ 448,923 | $ 860 | $ (252) | $ 23,936 | $ 1,964,158 |
Balance (in shares) at Sep. 30, 2018 | 94,594,000 | 11,000 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||
Cash dividends declared per common share | $ 0.07 | $ 0.06 | $ 0.21 | $ 0.18 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities | ||
Net income | $ 96,169 | $ 119,469 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Provision (recovery) for loan losses | (1,838) | 8,818 |
Depreciation, amortization and accretion, net | 3,558 | (11,300) |
Net realized gains on securities | (14) | |
Net change in fair value of equity securities | 396 | |
Deferred income taxes | 653 | 6,013 |
Other, net | 6,355 | 8,540 |
Net change in securities purchased under agreements to resell | 21,881 | (45,224) |
Net change in trading securities | 70,371 | (410,877) |
Net change in broker-dealer and clearing organization receivables | (42,516) | (157,908) |
Net change in FDIC indemnification asset | 24,637 | |
Net change in other assets | 39,208 | (35,967) |
Net change in broker-dealer and clearing organization payables | 85,409 | 223,043 |
Net change in other liabilities | (79,283) | (100,970) |
Net change in securities sold, not yet purchased | (53,239) | 19,620 |
Proceeds from sale of mortgage servicing rights asset | 9,303 | 17,499 |
Net gains from sales of loans | (354,488) | (416,336) |
Loans originated for sale | (11,148,919) | (11,251,438) |
Proceeds from loans sold | 11,665,782 | 11,520,363 |
Net cash provided by (used in) operating activities | 318,802 | (482,032) |
Investing Activities | ||
Proceeds from maturities and principal reductions of securities held to maturity | 36,729 | 42,185 |
Proceeds from sales, maturities and principal reductions of securities available for sale | 190,266 | 248,578 |
Proceeds from sales, maturities and principal reductions of equity securities | 3 | |
Purchases of securities held to maturity | (29,377) | (58,831) |
Purchases of securities available for sale | (276,710) | (415,282) |
Purchases of equity securities | (719) | |
Net change in loans | (113,918) | (206,362) |
Purchases of premises and equipment and other assets | (60,473) | (20,093) |
Proceeds from sales of premises and equipment and other real estate owned | 18,440 | 27,333 |
Net cash received from (paid for) Federal Home Loan Bank and Federal Reserve Bank stock | (5,447) | 14,540 |
Net cash paid for acquisition | (63,245) | |
Net cash used in investing activities | (304,451) | (367,932) |
Financing Activities | ||
Net change in deposits | (40,850) | 547,163 |
Net change in short-term borrowings | 10,225 | 59,912 |
Proceeds from notes payable | 455,776 | 285,806 |
Payments on notes payable | (444,312) | (303,472) |
Payments to repurchase common stock | (38,821) | (27,388) |
Dividends paid on common stock | (20,074) | (17,384) |
Net cash contributed from (distributed to) noncontrolling interest | 18,367 | (1,193) |
Taxes paid on employee stock awards netting activity | (1,806) | (2,431) |
Other, net | (551) | (501) |
Net cash provided by (used in) financing activities | (62,046) | 540,512 |
Net change in cash and cash equivalents | (47,695) | (309,452) |
Cash and cash equivalents, beginning of period | 673,960 | 871,757 |
Cash and cash equivalents, end of period | 626,265 | 562,305 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash to Consolidated Balance Sheets | ||
Total cash, cash equivalents and restricted cash | 673,960 | 871,757 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid for interest | 101,402 | 57,504 |
Cash paid for income taxes, net of refunds | 5,806 | 69,863 |
Supplemental Schedule of Non-Cash Activities | ||
Construction in progress related to build-to-suit lease obligations | 23,773 | |
Conversion of loans to other real estate owned | 5,868 | 8,319 |
Additions to mortgage servicing rights | $ 21,090 | $ 8,429 |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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. The Company’s primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank (the “Bank”). In addition, the Company provides an array of financial products and services through its broker-dealer, mortgage origination and insurance subsidiaries. The Company, headquartered in Dallas, Texas, provides its products and services through three primary business units, PlainsCapital Corporation (“PCC”), Hilltop Securities Holdings LLC (“Securities Holdings”) and National Lloyds Corporation (“NLC”). PCC is a financial holding company that provides, through its subsidiaries, traditional banking, wealth and investment management and treasury management services primarily in Texas and residential mortgage lending throughout the United States. Securities Holdings is a holding company that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, equity trading, clearing, securities lending, structured finance and retail brokerage services throughout the United States. 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. On August 1, 2018, the Company acquired privately-held, Houston-based The Bank of River Oaks (“BORO”) in an all-cash transaction (the “BORO Acquisition”). Pursuant to the terms of the definitive agreement, the Company paid cash in the aggregate amount of $85 million to the shareholders and option holders of BORO. Based on preliminary purchase date valuations, the fair value of the assets acquired was $434.8 million, including $326.6 million in loans, while the fair value of liabilities assumed was $389.4 million, consisting primarily of $376.4 million in deposits. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, these financial statements contain all adjustments necessary for a fair statement of the results of the interim periods presented. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”). Results for interim periods are not necessarily indicative of results to be expected for a full year or any future period. The preparation of financial statements in conformity with 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 from the Federal Deposit Insurance Corporation (the “FDIC”) under loss-share agreements (the “FDIC Indemnification Asset”), reserves for losses and loss adjustment expenses (“LAE”), 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. As discussed in Note 3 to the consolidated financial statements, the BORO Acquisition purchase date valuations associated with loans, intangibles and taxes are considered preliminary because management’s review and approval of certain key assumptions is not complete. Hilltop owns 100% of the outstanding stock of PCC. PCC owns 100% of the outstanding stock of the Bank and 100% of the membership interest in Hilltop Opportunity Partners LLC, formerly known as PlainsCapital Equity, LLC, a merchant bank utilized to facilitate investments in companies engaged in non-financial activities. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”). PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds an ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC 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 (“VIE”) Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) because the primary beneficiaries of the Trusts are not within the consolidated group. Hilltop has a 100% membership interest in Securities Holdings, which operates through its wholly owned subsidiaries, Hilltop Securities Inc. (“Hilltop Securities”), Hilltop Securities Independent Network Inc. (“HTS Independent Network”) (collectively, the “Hilltop Broker-Dealers”) and First Southwest Asset Management, LLC. Hilltop Securities is a broker-dealer registered with the SEC and Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”), HTS Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA, and First Southwest Asset Management, LLC is a registered investment adviser under the Investment Advisers Act of 1940. Hilltop also owns 100% of NLC, which operates through its wholly owned subsidiaries, National Lloyds Insurance Company (“NLIC”) and American Summit Insurance Company (“ASIC”). In addition, Hilltop owns 100% of the membership interest in each of HTH Hillcrest Project LLC and Hilltop Investments I, LLC. Hilltop Investments I, LLC owns 50% of the membership interest in HTH Diamond Hillcrest Land LLC which is consolidated under the aforementioned VIE Subsections of the ASC. These entities are related to the Hilltop Plaza investment discussed in detail in Note 13 to the consolidated financial statements. The consolidated financial statements include the accounts of the above-named entities. 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 ASC. Certain reclassifications have been made to the prior period consolidated financial statements to conform with the current period presentation, including reclassifications due to the adoption of new accounting pronouncements. In preparing these consolidated financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all stockholders and other financial statement users, or filed with the SEC. Significant accounting policies are detailed in Note 1 to the consolidated financial statements included in the Company’s 2017 Form 10-K. As a result of the adoption of Accounting Standards Update (“ASU”) 2016-01 and ASU 2016-18, the Company has updated its accounting policies related to securities and cash flow reporting, respectively, as presented below. Securities Management classifies securities at the time of purchase and reassesses such designation at each balance sheet date. Securities held for resale to facilitate principal transactions with customers 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. Debt 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. Debt securities available for sale are carried at fair value. Unrealized holding gains and losses on debt 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. Equity securities are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. Equity securities that do not have readily determinable fair values are initially recorded at cost and are remeasured when there is (i) an observable transaction involving the same investment, (ii) an observable transaction involving a similar investment from the same issuer or (iii) an impairment. These remeasurements are reflected in the consolidated statements of operations. 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 debt 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. Cash Flow Reporting For the purpose of presentation in the consolidated statements of cash flows, cash, cash equivalents and restricted cash are defined as the amounts included in the consolidated balance sheet captions “Cash and due from banks”, “Federal funds sold” and “Assets segregated for regulatory purposes.” Cash equivalents have original maturities of three months or less. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2018 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | 2. Recently Issued Accounting Standards Adoption of New Accounting Standards In June 2018, FASB issued ASU 2018-07 which expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company early adopted the amendment as of July 1, 2018, which did not have a significant effect on its consolidated financial statements. In February 2018, FASB issued ASU 2018-02 to help organizations address certain stranded income tax effects in accumulated other comprehensive income (“AOCI”) resulting from the Tax Cuts and Jobs Act of 2017 (“Tax Legislation”). The amendment provides an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the changes in the U.S. federal corporate income tax rate in the Tax Legislation (or portion thereof) is recorded. The amendment also includes disclosure requirements regarding the issuer’s accounting policy for releasing income tax effects from AOCI. The amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. As permitted within the amendment, the Company elected to early adopt and apply the provisions of this amendment as of January 1, 2018. The adoption of the amendment resulted in a reclassification of $0.1 million from AOCI to retained earnings, representing an increase to retained earnings. This reclassification is included within the adoption of accounting standards line item in the consolidated statements of stockholders’ equity. In May 2017, FASB issued ASU 2017-09 which provides clarity and reduces both diversity in practice and cost and complexity associated with changes to the terms or conditions of a share-based payment award and, specifically, which changes require an entity to apply modification accounting. The amendments in this update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted the amendments as of January 1, 2018, which did not have a significant effect on the Company’s consolidated financial statements. In January 2017, FASB issued ASU 2017-01 which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendment is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2017, using the prospective method. The Company adopted the amendment as of January 1, 2018 and will prospectively apply its provisions. In November 2016, FASB issued ASU 2016-18 which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. We have adopted the requirements of the new standard as of January 1, 2018. As a result, assets segregated for regulatory purposes, which consist of cash and cash equivalents, are now included in the beginning-of-period and end-of-period total amounts shown on the statements of cash flows for the nine months ended September 30, 2018 and 2017. Furthermore, the consolidated statements of cash flows now include disclosure of the line items in the consolidated balance sheets which make up cash, cash equivalents and restricted cash. The quarterly reports on Form 10-Q for the periods ended March 31, 2018 and June 30, 2018, filed with the SEC on April 26, 2018 and July 26, 2018, respectively, incorrectly included the change in assets segregated for regulatory purposes in the operating section of the statements of cash flows. Previously disclosed net changes in assets segregated for regulatory purposes of ($11.6) million and $58.2 million for the three months ended March 31, 2018 and six months ended June 30, 2018, respectively, should have been excluded from the cash flows from operating activities and the beginning-of-period and end-of-period balances of assets segregated for regulatory purposes should have been included in total cash, cash equivalents and restricted cash. Accordingly, net cash provided by operating activities for the three months ended March 31, 2018, originally reported as $173.9 million, should have been $185.5 million, and net cash used in operating activities for the six months ended June 30, 2018, originally reported as ($261.2) million, should have been ($319.4) million. Management has evaluated the quantitative and qualitative impact of the error to previously issued unaudited consolidated statements of cash flows and concluded that the previously issued consolidated financial statements were not materially misstated. However, management has elected to revise the unaudited consolidated statements of cash flows for each of the three months ended March 31, 2018 and six months ended June 30, 2018 in its future filings in order to correctly reflect the change in presentation of assets segregated for regulatory purposes. The balance of assets segregated for regulatory purposes was $186.6 million, $198.2 million and $128.4 million at January 1, 2018 (the date of adoption), March 31, 2018 and June 30, 2018, respectively. The correction had no impact on the Company’s financial condition or results of operations for the periods presented. In October 2016, FASB issued ASU 2016-16 which addresses improvement in accounting for income tax consequences of intra-equity transfers of assets other than inventory. The amendment requires that an entity recognize the income tax consequences of the intra-equity transfer of an asset other than inventory when the transfer occurs. The amendment was effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2017, using the modified retrospective transition method. The Company adopted the amendment as of January 1, 2018, which did not have a significant effect on its consolidated financial statements. In August 2016, FASB issued ASU 2016-15 to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2017 using a retrospective transition method. The Company adopted the amendments as of January 1, 2018, which did not have a significant effect on the Company’s consolidated financial statements. In January 2016, FASB issued ASU 2016-01 related to financial instruments and subsequently issued technical corrections to the amendment in ASU 2018-03. The amendments require that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. The amendments also impact financial liabilities under the Fair Value Option and the presentation and disclosure requirements for financial instruments and modify the required process used to evaluate deferred tax assets on available for sale securities. The amendments are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted the amendments as of January 1, 2018, which resulted in $21.2 million of securities being reclassified from available for sale to equity within the consolidated balance sheets consistent with the provisions of the amendments, while certain other equity investments of $42.8 million are included in other assets within the consolidated balance sheets at September 30, 2018. The adoption of the amendments also resulted in $2.5 million being reclassified from accumulated other comprehensive income to retained earnings, representing an increase to retained earnings as of January 1, 2018. This reclassification is included within the adoption of accounting standards line item in the consolidated statement of stockholders’ equity. All subsequent changes in fair value related to these equity investments will be recognized in net income. Additionally, the enhanced disclosures required by the amendments are included within the notes to the consolidated financial statements, including the disclosure of the fair value of the loan portfolio using an exit price method instead of the prior discounted cash flow method. These disclosure changes did not have a significant effect on the Company’s consolidated financial statements. On January 1, 2018, the Company adopted the provisions of ASC 606, Revenue from Contracts with Customers , using the modified, cumulative-effect approach wherein the guidance is applied only to existing contracts as of the date of initial application and to new contracts entered into thereafter. The new standard 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 standard 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. Revenue from the Company’s mortgage origination and insurance segments are not in the scope of the new guidance, while certain revenue from contracts with customers within the broker-dealer and banking segments are subject to the new guidance. The revenue recognition policies within the Company’s broker-dealer segment were affected upon adoption of ASC 606. Specifically, the new guidance required changes to the principal versus agent conclusion for certain advisory and underwriting revenues and expenses which, as of January 1, 2018, are recorded on a gross basis while legacy guidance required these revenues to be recognized net of the related expenses. Conversely, certain contract costs related to clearing and retail operations are now netted against the revenues while the legacy guidance required these revenues and expenses to be recognized on a gross basis. These changes did not have a material effect on the Company’s consolidated financial statements during the three and nine months ended September 30, 2018. As the measurement and timing of revenue recognition was not affected for any of the Company’s revenue streams, the implementation of the new guidance had no impact on opening retained earnings as of January 1, 2018. The Company’s broker-dealer segment has six primary lines of business: (i) public finance, (ii) capital markets, (iii) retail, (iv) structured finance, (v) clearing services and (vi) securities lending. Revenue from contracts with customers subject to the guidance in ASC 606 from the broker-dealer segment is included within the securities commissions and fees and investment and securities advisory fees and commissions line items within the consolidated statements of operations. Commissions and fees revenue is generally recognized at a point in time upon the delivery of contracted services based on a predefined contractual amount or on the trade date for trade execution services based on prevailing market prices and internal and regulatory guidelines. The Company’s banking segment has three primary lines of business: (i) business banking, (ii) personal banking and (iii) wealth and investment management. Revenue from contracts with customers subject to the guidance in ASC 606 from the banking segment (certain retail and trust fees) is included within the other noninterest income line item within the consolidated statements of operations. Retail and trust fees are generally recognized at the time the related transaction occurs or when services are completed. Fees are based on the dollar amount of the transaction or are otherwise predefined in contracts associated with each customer account depending on the type of account and services provided. There were no material changes to the revenue recognition policies of the banking segment upon adoption. Accounting Standards Issued But Not Yet Adopted In August 2018, FASB issued ASU 2018-15 which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software licenses). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendment also includes presentation and disclosure provisions regarding capitalized implementation costs. The amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the provisions of the amendment and the impact on its future consolidated financial statements. In August 2018, FASB issued ASU 2018-13 which includes various removals, modifications and additions to existing guidance regarding fair value disclosures. The amendments are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the provisions of the amendments but does not expect the amendments to have a material impact on its future consolidated financial statements. In July 2018, FASB issued ASU 2018-09 which clarifies, corrects and makes minor improvements to a wide variety of topics in the ASC. The amendments make the ASC easier to understand and apply by eliminating inconsistencies and providing clarifications. The transition and effective dates are based on the facts and circumstances of each amendment, with some amendments becoming effective upon issuance of the ASU, and others becoming effective for annual periods beginning after December 15, 2018. Those amendments that were effective upon issuance of the ASU did not have a significant impact on the Company’s consolidated financial statements. The Company is currently evaluating the impact of the adoption of the other amendments on its future consolidated financial statements. In August 2017, FASB issued ASU 2017-12 which provides targeted improvements to accounting for hedging activities. The purpose of the amendment is to better align a company’s risk management activities with its financial reporting for hedging relationships, to simplify the hedge accounting requirements and to improve the disclosures of hedging arrangements. The amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, and all transition requirements and elections should be applied to hedging relationships existing on the date of adoption. The Company has not historically applied hedge accounting to its derivative transactions. However, the Company is currently evaluating the provisions of the amendment and the impact, if any, on its future consolidated financial statements. In June 2016, FASB issued ASU 2016-13 which sets forth a “current expected credit loss” (CECL) model which requires entities to measure all credit losses expected over the life of an exposure (or pool of exposures) for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The new standard, which is codified in ASC 326, Financial Instruments – Credit Losses , replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. The new standard also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The new standard is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2019 with a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption. The Company does not intend to adopt the provisions of the new standard early. The Company’s cross-functional team has begun the implementation of new credit forecasting models and a credit scoring system that will be utilized to estimate the likelihood of default and loss severity as a part of its credit loss estimation methodology in accordance with the new standard. In addition, the Company continues to identify and assess key interpretive policy issues, as well as design and build new or modified policies and procedures that will be used to calculate its credit loss reserves. However, the magnitude of the change in allowance for loan losses upon adoption will depend on, among other things, the portfolio composition and quality at the adoption date, as well as economic conditions and forecasts at that time. In February 2016, FASB issued ASU 2016-02 related to leases and subsequently issued amendments and technical corrections in ASU 2018-01, ASU 2018-10 and ASU 2018-11. The new standard, which is codified in ASC 842, Leases , is intended to increase transparency and comparability among organizations and require lessees to record a right-to-use asset and liability representing the obligation to make lease payments for long-term leases. Accounting by lessors will remain largely unchanged. The new standard is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Adoption will require a modified retrospective transition where the lessees and lessors are required to recognize and measure leases at the date of adoption which is January 1, 2019 for calendar year-end entities. The Company’s implementation efforts are ongoing, including the installation of an enhanced technology solution, which will aid in determining the magnitude of the increases in assets and liabilities and their impact on the consolidated financial statements. The Company expects to recognize lease liabilities and corresponding right-of-use assets (at their present value) related to predominantly all of the future minimum lease payments required under operating leases as disclosed in Note 18 to the consolidated financial statements in the 2017 Form 10-K. Upon implementation, the balance sheet effects of the new lease accounting standard will also impact regulatory capital ratios, performance ratios, and other measures which are dependent upon asset or liability balances. The Company expects to record operating lease liabilities in the range of approximately $105 million to $125 million and right-to-use assets in the range of approximately $100 million to $120 million upon adoption of the new standard. However, the population of contracts subject to balance sheet recognition, their initial measurement and the expected impact to the aforementioned balances and measures remain under evaluation. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Acquisition | |
Acquisition | 3. Acquisition BORO Acquisition On August 1, 2018, the Company completed its acquisition of BORO in an $85 million all-cash transaction as discussed in Note 1 to the consolidated financial statements. The operations of BORO are included in the Bank’s operating results beginning August 1, 2018. BORO’s results of operations prior to the acquisition date are not included in the Company’s consolidated operating results. The BORO Acquisition 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 resulting preliminary fair values of the identifiable assets acquired and liabilities assumed from BORO at August 1, 2018 are summarized in the following table (in thousands). Cash and due from banks $ 21,756 Securities 60,477 Non-covered loans, net 326,618 Other assets 25,912 Total identifiable assets acquired 434,763 Deposits 376,393 Short-term borrowings 10,000 Other liabilities 2,996 Total liabilities assumed 389,389 Net identifiable assets acquired 45,374 Preliminary goodwill resulting from the acquisition 39,627 Net assets acquired $ 85,001 The preliminary goodwill of $39.6 million resulting from the acquisition represents the inherent long-term value expected from the business opportunities created from combining BORO with the Company. The Company used significant estimates and assumptions to value the identifiable assets acquired and liabilities assumed. Because management’s review and approval of certain key assumptions is not yet complete, the purchase date valuations related to loans, intangibles and taxes are considered preliminary and are subject to change for up to one year after the acquisition date. While the Company is in the process of finalizing its purchase price allocation, significant changes are not anticipated. The amount of goodwill recorded in connection with the Company’s acquisition of BORO is not deductible for tax purposes. Included within the fair value of other assets in the table above are identifiable core deposits intangible assets recorded in connection with the BORO Acquisition of $10.0 million. During both the three and nine months ended September 30, 2018, transaction- and integration-related expenses of $6.6 million associated with the BORO Acquisition are included in noninterest expense within the consolidated statement of operations. Such expenses were for professional services and other incremental employee costs associated with the integration of BORO’s operations. In connection with the BORO Acquisition, the Company 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 purchased credit impaired (“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 $ 98,259 $ 2,127 $ Real estate 174,675 5,389 Construction and land development 37,134 — 37,134 Consumer 9,021 13 9,034 Total $ 319,089 $ 7,529 $ The following table presents information about the PCI loans at acquisition (in thousands). Contractually required principal and interest payments $ 10,730 Nonaccretable difference 2,859 Cash flows expected to be collected 7,871 Accretable difference 342 Fair value of loans acquired with a deterioration of credit quality $ 7,529 The following table presents information about the acquired loans without credit impairment at acquisition (in thousands). Contractually required principal and interest payments $ 381,551 Contractual cash flows not expected to be collected 15,286 Fair value at acquisition 319,089 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 4. 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 includes 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 (such as interest rates, yield curves, prepayment speeds, default rates, credit risks and loss severities), 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 mortgage servicing rights (“MSR”) asset 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 September 30, 2018 and December 31, 2017, the aggregate fair value of PrimeLending’s mortgage loans held for sale accounted for under the Fair Value Option was $1.39 billion and $1.58 billion, respectively, and the unpaid principal balance of those loans was $1.35 billion and $1.53 billion, respectively. The interest component of fair value is reported as interest income on loans in the accompanying consolidated statements of operations. 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. Those inputs include quotes from mortgage loan investors and derivatives dealers and data from independent pricing services. The fair value of loans held for sale is determined using an exit price method. 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 September 30, 2018 Inputs Inputs Inputs Fair Value Trading securities $ 2,341 $ 657,973 $ — $ 660,314 Available for sale securities — 874,496 — 874,496 Equity securities 21,555 — — 21,555 Loans held for sale — 1,333,257 54,365 1,387,622 Derivative assets — 45,979 — 45,979 MSR asset — — 68,804 68,804 Securities sold, not yet purchased 116,965 62,617 — 179,582 Derivative liabilities — 15,291 — 15,291 Level 1 Level 2 Level 3 Total December 31, 2017 Inputs Inputs Inputs Fair Value Trading securities $ 3,329 $ 727,356 $ — $ 730,685 Available for sale securities — 744,319 — 744,319 Equity securities 21,241 — — 21,241 Loans held for sale — 1,544,631 36,972 1,581,603 Derivative assets — 34,150 — 34,150 MSR asset — — 54,714 54,714 Securities sold, not yet purchased 156,586 76,235 — 232,821 Derivative liabilities — 13,197 — 13,197 The following tables include 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/ Included in Comprehensive Balance at Period Additions Reductions Net Income Income (Loss) End of Period Three months ended September 30, 2018 Loans held for sale $ 40,781 $ 19,156 $ (4,614) $ (958) $ — $ 54,365 MSR asset 57,373 11,361 — 70 — 68,804 Total $ 98,154 $ 30,517 $ (4,614) $ (888) $ — $ 123,169 Nine months ended September 30, 2018 Loans held for sale $ 36,972 $ 39,706 $ (17,127) $ (5,186) $ — $ 54,365 MSR asset 54,714 21,090 (9,303) 2,303 — 68,804 Total $ 91,686 $ 60,796 $ (26,430) $ (2,883) $ — $ 123,169 Three months ended September 30, 2017 Loans held for sale 30,037 8,881 (5,685) (1,688) — 31,545 MSR asset 43,580 5,939 — (1,753) — 47,766 Total $ 73,617 $ 14,820 $ (5,685) $ (3,441) $ — $ 79,311 Nine months ended September 30, 2017 Loans held for sale 35,801 25,384 (23,108) (6,532) — 31,545 MSR asset 61,968 8,429 (17,499) (5,132) — 47,766 Total $ 97,769 $ 33,813 $ (40,607) $ (11,664) $ — $ 79,311 All net realized and unrealized gains (losses) in the tables above are reflected in the accompanying consolidated financial statements. The unrealized gains (losses) relate to financial instruments still held at September 30, 2018. For Level 3 financial instruments measured at fair value on a recurring basis at September 30, 2018, the significant unobservable inputs used in the fair value measurements were as follows. Range Financial instrument Valuation Technique Unobservable Inputs (Weighted-Average) Loans held for sale Discounted cash flows / Market comparable Projected price 92 - 96 % ( 95 %) MSR asset Discounted cash flows Constant prepayment rate 9.15 % Discount rate 11.11 % The fair value of certain loans held for sale that cannot be sold through normal sale channels or are non-performing is measured using Level 3 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, which is included in other assets within the Company’s consolidated balance sheets, is reported at fair value using Level 3 inputs. The MSR asset 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 8 to the consolidated financial statements. The Company had no transfers between Levels 1 and 2 during the periods presented. The following table presents those changes in fair value of instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (20,417) $ — $ (20,417) $ (4,443) $ — $ (4,443) MSR asset 70 — 70 (1,753) — (1,753) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (12,693) $ — $ (12,693) $ 26,650 $ — $ 26,650 MSR asset 2,303 — 2,303 (5,132) — (5,132) The Company also determines the fair value of certain assets and liabilities on a non-recurring basis. 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 individually 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, $822.8 million, $73.5 million and $7.5 million were acquired by the Company upon completion of the merger with PCC (the “PlainsCapital Merger”), the FDIC-assisted transaction whereby the Bank acquired certain assets and assumed certain liabilities of Edinburg, Texas-based First National Bank (“FNB”) on September 13, 2013 (the “FNB Transaction”), the acquisition of SWS Group, Inc. (“SWS”) in a stock and cash transaction (the "SWS Merger"), whereby SWS’s banking subsidiary, Southwest Securities, FSB, was merged into the Bank, and the BORO Acquisition, respectively (collectively, the “Bank Transactions”). Substantially all PCI loans acquired in the FNB Transaction were 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 on acquired loans accounted for in pools (“Pooled Loans”), and estimated collateral values. At September 30, 2018, estimates for these significant unobservable inputs were as follows. PCI Loans PlainsCapital FNB SWS BORO Merger Transaction Merger Acquisition Weighted average default rate % % % % Weighted average loss severity rate % % % % Weighted average prepayment speed % % % % At September 30, 2018, the resulting weighted average expected loss on PCI loans associated with the PlainsCapital Merger, FNB Transaction, SWS Merger and BORO Acquisition was 55%, 5%, 20% and 26%, respectively. 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 orders an updated appraisal of the fair value of the collateral. Because 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 determines fair value primarily using independent appraisals of other real estate owned (“OREO”) properties. The resulting fair value measurements are classified as Level 2 inputs. In the FNB Transaction, the Bank acquired OREO of $135.2 million, all of which were covered by FDIC loss-share agreements. At September 30, 2018 and December 31, 2017, the estimated fair value of covered OREO was $29.9 million and $36.7 million, respectively, and the underlying fair value measurements utilized Level 2 inputs. The fair value of non-covered OREO at September 30, 2018 and December 31, 2017 was $2.7 million and $3.9 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 subsequent to initial recognition 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 Total Gains (Losses) for the Level 1 Level 2 Level 3 Total Three Months Ended September 30, Nine Months Ended September 30, September 30, 2018 Inputs Inputs Inputs Fair Value 2018 2017 2018 2017 Non-covered impaired loans $ — $ — $ 17,749 $ 17,749 $ (15) $ 793 $ (1,486) $ 323 Covered impaired loans — — 63,194 63,194 683 (787) 1,429 (1,764) Non-covered other real estate owned — 529 — 529 (91) (135) (167) (258) Covered other real estate owned — 19,555 — 19,555 (303) (388) (2,027) (2,523) 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. In accordance with ASU 2016-01, effective January 1, 2018, the fair values of non-covered and covered loans are measured using an exit price method. There have been no other changes to the methods for determining estimated fair value for financial assets and liabilities as described in detail in Note 3 to the consolidated financial statements included in the Company’s 2017 Form 10-K. 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 September 30, 2018 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 406,150 $ 406,150 $ — $ — $ 406,150 Assets segregated for regulatory purposes 220,115 220,115 — — 220,115 Securities purchased under agreements to resell 164,656 — 164,656 — 164,656 Held to maturity securities 348,163 — 332,388 — 332,388 Loans held for sale 137,358 — 137,358 — 137,358 Non-covered loans, net 6,737,417 — 593,276 6,240,441 6,833,717 Covered loans, net 142,737 — — 217,503 217,503 Broker-dealer and clearing organization receivables 1,491,507 — 1,491,507 — 1,491,507 FDIC indemnification asset 22,831 — — 22,831 22,831 Other assets 70,998 — 69,940 1,058 70,998 Financial liabilities: Deposits 8,290,233 — 8,279,098 — 8,279,098 Broker-dealer and clearing organization payables 1,396,401 — 1,396,401 — 1,396,401 Short-term borrowings 1,216,649 — 1,216,649 — 1,216,649 Debt 287,204 — 284,921 — 284,921 Other liabilities 6,032 — 6,032 — 6,032 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2017 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 487,382 $ 487,382 $ — $ — $ 487,382 Assets segregated for regulatory purposes 186,578 186,578 — — 186,578 Securities purchased under agreements to resell 186,537 — 186,537 — 186,537 Held to maturity securities 355,849 — 349,939 — 349,939 Loans held for sale 133,754 — 133,754 — 133,754 Non-covered loans, net 6,212,712 — 577,889 5,828,868 6,406,757 Covered loans, net 179,400 — — 269,386 269,386 Broker-dealer and clearing organization receivables 1,464,378 — 1,464,378 — 1,464,378 FDIC indemnification asset 29,340 — — 20,122 20,122 Other assets 64,862 — 59,053 5,809 64,862 Financial liabilities: Deposits 7,978,119 — 7,973,101 — 7,973,101 Broker-dealer and clearing organization payables 1,287,563 — 1,287,563 — 1,287,563 Short-term borrowings 1,206,424 — 1,206,424 — 1,206,424 Debt 275,821 — 289,719 — 289,719 Other liabilities 4,795 — 4,795 — 4,795 The Company held equity investments other than securities of $42.8 million and $38.7 million at September 30, 2018 and December 31, 2017, respectively, which are included within other assets in the consolidated balance sheets. Of the $42.8 million of such equity investments held at September 30, 2018, $26.4 million do not have readily determinable fair values and each is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The following table presents the adjustments to the carrying value of these investments (in thousands). Three months ended, Nine months ended, September 30, 2018 September 30, 2018 Balance, beginning of period $ 26,151 $ 22,946 Additional investments — 1,411 Upward adjustments 265 3,642 Impairments and downward adjustments (1) (1,584) Dispositions — — Balance, end of period $ 26,415 $ 26,415 |
Securities
Securities | 9 Months Ended |
Sep. 30, 2018 | |
Securities | |
Securities | 5. Securities The fair value of trading securities is summarized as follows (in thousands). September 30, December 31, 2018 2017 U.S. Treasury securities $ 2,328 $ — U.S. government agencies: Bonds 30,223 52,078 Residential mortgage-backed securities 360,091 372,817 Commercial mortgage-backed securities 5,781 6,125 Collateralized mortgage obligations 35,708 5,122 Corporate debt securities 74,249 96,182 States and political subdivisions 119,751 170,413 Unit investment trusts 24,013 22,612 Private-label securitized product 4,806 1,631 Other 3,364 3,705 Totals $ 660,314 $ 730,685 The Hilltop Broker-Dealers enter into transactions that represent commitments to purchase and deliver securities at prevailing future market prices to facilitate customer transactions and satisfy such commitments. Accordingly, the Hilltop Broker-Dealers’ ultimate obligations may exceed the amount recognized in the financial statements. These securities, which are carried at fair value and reported as securities sold, not yet purchased in the consolidated balance sheets, had a value of $179.6 million and $232.8 million at September 30, 2018 and December 31, 2017, respectively. The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). Available for Sale Amortized Unrealized Unrealized September 30, 2018 Cost Gains Losses Fair Value U.S. Treasury securities $ 18,314 $ — $ (150) $ 18,164 U.S. government agencies: Bonds 80,879 326 (858) 80,347 Residential mortgage-backed securities 379,759 81 (10,627) 369,213 Commercial mortgage-backed securities 11,760 34 (205) 11,589 Collateralized mortgage obligations 290,576 213 (7,614) 283,175 Corporate debt securities 56,647 277 (507) 56,417 States and political subdivisions 55,565 477 (451) 55,591 Totals $ 893,500 $ 1,408 $ (20,412) $ 874,496 Available for Sale Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. Treasury securities $ 24,665 $ 107 $ (103) $ 24,669 U.S. government agencies: Bonds 96,177 829 (366) 96,640 Residential mortgage-backed securities 246,707 538 (3,740) 243,505 Commercial mortgage-backed securities 11,966 105 (48) 12,023 Collateralized mortgage obligations 237,848 106 (4,142) 233,812 Corporate debt securities 66,868 1,819 (25) 68,662 States and political subdivisions 64,024 1,099 (115) 65,008 Totals $ 748,255 $ 4,603 $ (8,539) $ 744,319 Held to Maturity Amortized Unrealized Unrealized September 30, 2018 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 39,017 $ — $ (2,283) $ 36,734 Residential mortgage-backed securities 22,804 — (605) 22,199 Commercial mortgage-backed securities 87,296 5 (3,065) 84,236 Collateralized mortgage obligations 148,399 — (7,264) 141,135 States and political subdivisions 50,647 17 (2,580) 48,084 Totals $ 348,163 $ 22 $ (15,797) $ 332,388 Held to Maturity Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 39,015 $ — $ (1,188) $ 37,827 Residential mortgage-backed securities 16,130 44 — 16,174 Commercial mortgage-backed securities 71,373 241 (735) 70,879 Collateralized mortgage obligations 173,928 19 (3,969) 169,978 States and political subdivisions 55,403 437 (759) 55,081 Totals $ 355,849 $ 741 $ (6,651) $ 349,939 Additionally, the Company had unrealized net gains of $0.1 million and $1.6 million from equity securities with fair values of $21.6 million and $21.2 million held at September 30, 2018 and December 31, 2017, respectively. The Company recognized net gains of $0.1 million during the three months ended September 30, 2018, and net losses of $0.4 million during the nine months ended September 30, 2018, due to changes in the fair value of equity securities still held at the balance sheet date. During the three and nine months ended September 30, 2018, net gains recognized from equity securities sold were nominal. Information regarding available for sale, held to maturity and equity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). September 30, 2018 December 31, 2017 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. treasury securities: Unrealized loss for less than twelve months 5 $ 12,855 $ 91 6 $ 15,449 $ 69 Unrealized loss for twelve months or longer 4 5,309 59 1 4,150 34 9 18,164 150 7 19,599 103 U.S. government agencies: Bonds: Unrealized loss for less than twelve months 10 33,051 152 10 83,476 366 Unrealized loss for twelve months or longer 2 20,192 705 — — — 12 53,243 857 10 83,476 366 Residential mortgage-backed securities: Unrealized loss for less than twelve months 37 219,163 3,721 15 121,968 820 Unrealized loss for twelve months or longer 18 130,927 6,906 11 93,358 2,920 55 350,090 10,627 26 215,326 3,740 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 1 2,882 9 1 5,048 48 Unrealized loss for twelve months or longer 1 4,883 196 — — — 2 7,765 205 1 5,048 48 Collateralized mortgage obligations: Unrealized loss for less than twelve months 19 86,977 1,383 16 90,886 819 Unrealized loss for twelve months or longer 25 126,497 6,231 17 80,492 3,323 44 213,474 7,614 33 171,378 4,142 Corporate debt securities: Unrealized loss for less than twelve months 29 34,933 432 1 5,073 25 Unrealized loss for twelve months or longer 1 1,923 76 — — — 30 36,856 508 1 5,073 25 States and political subdivisions: Unrealized loss for less than twelve months 80 28,786 182 9 6,981 97 Unrealized loss for twelve months or longer 11 6,100 269 9 2,876 18 91 34,886 451 18 9,857 115 Total available for sale: Unrealized loss for less than twelve months 181 418,647 5,970 58 328,881 2,244 Unrealized loss for twelve months or longer 62 295,831 14,442 38 180,876 6,295 243 $ 714,478 $ 20,412 96 $ 509,757 $ 8,539 September 30, 2018 December 31, 2017 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Held to Maturity U.S. government agencies: Bonds: Unrealized loss for less than twelve months 1 $ 5,674 $ 326 1 $ 5,950 $ 50 Unrealized loss for twelve months or longer 3 31,060 1,957 3 31,877 1,138 4 36,734 2,283 4 37,827 1,188 Residential mortgage-backed securities: Unrealized loss for less than twelve months 4 22,199 605 — — — Unrealized loss for twelve months or longer — — — — — — 4 22,199 605 — — — Commercial mortgage-backed securities: Unrealized loss for less than twelve months 11 40,122 1,057 7 39,396 271 Unrealized loss for twelve months or longer 7 37,325 2,008 2 12,659 464 18 77,447 3,065 9 52,055 735 Collateralized mortgage obligations: Unrealized loss for less than twelve months 7 16,262 519 10 37,064 264 Unrealized loss for twelve months or longer 18 124,873 6,745 12 128,270 3,705 25 141,135 7,264 22 165,334 3,969 States and political subdivisions: Unrealized loss for less than twelve months 55 23,981 681 22 11,079 71 Unrealized loss for twelve months or longer 51 19,179 1,899 46 18,598 688 106 43,160 2,580 68 29,677 759 Total held to maturity: Unrealized loss for less than twelve months 78 108,238 3,188 40 93,489 656 Unrealized loss for twelve months or longer 79 212,437 12,609 63 191,404 5,995 157 $ 320,675 $ 15,797 103 $ 284,893 $ 6,651 Equity Common and preferred stock: Unrealized loss for less than twelve months — — — 1 944 13 Unrealized loss for twelve months or longer — — — 1 6,800 103 — $ — $ — 2 $ 7,744 $ 116 During the three and nine months ended September 30, 2018 and 2017, the Company did not record any OTTI. While some of the securities held in the Company’s investment portfolio have decreased in value since the date of acquisition, the severity of loss and the duration of the loss position are not significant enough to warrant recording any OTTI of the securities. 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. The Company does not intend to sell, nor does the Company believe that it is likely that the Company will be required to sell, these securities before the recovery of the cost basis. 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 equity securities, at September 30, 2018 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 $ 49,477 $ 49,466 $ 1,398 $ 1,396 Due after one year through five years 104,633 103,861 25,735 24,447 Due after five years through ten years 34,663 34,218 4,914 4,769 Due after ten years 22,632 22,974 57,617 54,206 211,405 210,519 89,664 84,818 Residential mortgage-backed securities 379,759 369,213 22,804 22,199 Collateralized mortgage obligations 290,576 283,175 148,399 141,135 Commercial mortgage-backed securities 11,760 11,589 87,296 84,236 $ 893,500 $ 874,496 $ 348,163 $ 332,388 The Company realized net gains from its trading portfolio of $3.2 million and $5.8 million during the three months ended September 30, 2018 and 2017, respectively, and $5.1 million and $18.7 million during the nine months ended September 30, 2018 and 2017, respectively. In addition, the Hilltop Broker-Dealers realized net gains from structured product trading activities of $12.2 million and $21.8 million during the three months ended September 30, 2018 and 2017, respectively, and $29.7 million and $38.8 million during the nine months ended September 30, 2018 and 2017, respectively. All such realized net gains are recorded as a component of other noninterest income within the consolidated statements of operations. Securities with a carrying amount of $571.3 million and $738.5 million (with a fair value of $552.4 million and $730.1 million, respectively) at September 30, 2018 and December 31, 2017, respectively, were pledged by the Bank 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. Substantially all of these pledged securities were included in our available for sale and held to maturity securities portfolios at September 30, 2018 and December 31, 2017. Mortgage-backed securities and collateralized mortgage obligations consist primarily of Government National Mortgage Association (“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 September 30, 2018 and December 31, 2017, NLC had investments on deposit in custody for various state insurance departments with aggregate carrying values of $12.1 million and $9.3 million, respectively. |
Non-Covered Loans and Allowance
Non-Covered Loans and Allowance for Non-Covered Loan Losses | 9 Months Ended |
Sep. 30, 2018 | |
Non-Covered Loans and Allowance for Non-Covered Loan Losses | |
Non-Covered Loans and Allowance for Non-Covered Loan Losses | 6. 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 7 to the consolidated financial statements. Non-covered loans summarized by portfolio segment are as follows (in thousands). September 30, December 31, 2018 2017 Commercial and industrial $ 1,722,097 $ 1,681,205 Real estate 3,381,757 3,011,524 Construction and land development 1,052,409 962,605 Consumer 46,739 40,446 Broker-dealer (1) 593,276 577,889 6,796,278 6,273,669 Allowance for non-covered loan losses (58,861) (60,957) Total non-covered loans, net of allowance $ 6,737,417 $ 6,212,712 (1) Represents margin loans to customers and correspondents associated with our broker-dealer segment operations. In connection with the Bank Transactions, 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 non-covered PCI loans (in thousands). September 30, December 31, 2018 2017 Carrying amount $ 32,553 $ 37,204 Outstanding balance 47,698 51,064 Changes in the accretable yield for non-covered PCI loans were as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 5,259 $ 9,793 $ 7,013 $ 13,116 Additions 340 — 340 — Reclassifications from nonaccretable difference, net (1) 1,053 277 1,603 854 Disposals of loans — (603) (98) (664) Accretion (1,504) (1,851) (3,710) (5,690) Balance, end of period $ 5,148 $ 7,616 $ 5,148 $ 7,616 (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 non-accrual and expected cash flows are no longer predictable and the accretable yield is eliminated. The remaining nonaccretable difference for non-covered PCI loans was $21.3 million and $19.2 million at September 30, 2018 and December 31, 2017, respectively. Impaired loans exhibit a clear indication that the borrower’s cash flow may not be sufficient to meet contractual principal and interest payments, which generally occurs 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. The amounts shown in the following tables include loans accounted for on an individual basis, as well as acquired 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, segregated between those considered to be PCI loans and those without credit impairment at acquisition, are summarized by class in the following tables (in thousands). Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related September 30, 2018 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 15,988 $ 4,392 $ 1,136 $ 5,528 $ 22 Unsecured 2,108 1,385 — 1,385 — Real estate: Secured by commercial properties 30,671 13,556 7,514 21,070 891 Secured by residential properties 6,149 1,879 1,974 3,853 319 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 1,189 183 524 707 112 Consumer 2,039 10 — 10 — Broker-dealer — — — — — 58,144 21,405 11,148 32,553 1,344 Non-PCI Commercial and industrial: Secured 25,012 12,878 5,010 17,888 2,739 Unsecured 590 13 — 13 — Real estate: Secured by commercial properties 6,717 3,076 3,130 6,206 782 Secured by residential properties 1,225 769 — 769 — Construction and land development: Residential construction loans 15 — — — — Commercial construction loans and land development 3,475 2,857 545 3,402 49 Consumer 152 45 — 45 — Broker-dealer — — — — — 37,186 19,638 8,685 28,323 3,570 $ 95,330 $ 41,043 $ 19,833 $ 60,876 $ 4,914 Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related December 31, 2017 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 19,752 $ 3,610 $ 2,489 $ 6,099 $ 89 Unsecured — — — — — Real estate: Secured by commercial properties 34,598 7,583 12,092 19,675 1,391 Secured by residential properties 12,600 5,307 4,558 9,865 325 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 2,001 428 1,010 1,438 215 Consumer 2,377 12 115 127 18 Broker-dealer — — — — — 71,328 16,940 20,264 37,204 2,038 Non-PCI Commercial and industrial: Secured 23,666 15,308 2,072 17,380 365 Unsecured 761 616 — 616 — Real estate: Secured by commercial properties 15,504 10,934 3,686 14,620 932 Secured by residential properties 1,596 1,177 — 1,177 — Construction and land development: Residential construction loans 15 — — — — Commercial construction loans and land development 653 — 611 611 93 Consumer 162 56 — 56 — Broker-dealer — — — — — 42,357 28,091 6,369 34,460 1,390 $ 113,685 $ 45,031 $ 26,633 $ 71,664 $ 3,428 Average recorded investment in non-covered impaired loans is summarized by class in the following table (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Commercial and industrial: Secured $ 23,654 $ 20,452 $ 23,448 $ 18,717 Unsecured 912 713 1,007 817 Real estate: Secured by commercial properties 28,488 35,458 30,786 36,606 Secured by residential properties 4,677 11,412 7,832 11,387 Construction and land development: Residential construction loans — — — 14 Commercial construction loans and land development 2,798 2,590 3,079 3,204 Consumer 52 324 119 382 Broker-dealer — — — — $ 60,581 $ 70,949 $ 66,271 $ 71,127 Non-covered non-accrual loans, excluding those classified as held for sale, are summarized by class in the following table (in thousands). September 30, December 31, 2018 2017 Commercial and industrial: Secured $ 21,310 $ 20,262 Unsecured 13 616 Real estate: Secured by commercial properties 7,506 14,620 Secured by residential properties 1,178 1,614 Construction and land development: Residential construction loans — — Commercial construction loans and land development 3,402 611 Consumer 45 56 Broker-dealer — — $ 33,454 $ 37,779 At September 30, 2018 and December 31, 2017, non-covered non-accrual loans included non-covered PCI loans of $5.1 million and $3.3 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, $3.3 million and $2.7 million of real estate loans secured by residential properties and classified as held for sale were in non-accrual status at September 30, 2018 and December 31, 2017, respectively. Interest income, including recoveries and cash payments, recorded on non-covered impaired loans was $0.2 million and nominal during the three months ended September 30, 2018 and 2017, respectively, and $0.4 million and $0.3 million during the nine months ended September 30, 2018 and 2017, respectively. Except as noted above, non-covered PCI loans are considered to be performing due to the application of the accretion method. 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 may also reconfigure 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 Bank did not grant any TDRs during three or nine months ended September 30, 2018 or during the three months ended September 30, 2017. Information regarding TDRs granted during the nine months ended September 30, 2017 is shown in the following tables (dollars in thousands). At September 30, 2018 and December 31, 2017, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs. Nine Months Ended September 30, 2017 Number of Balance at Balance at Loans Extension End of Period Commercial and industrial: Secured 1 $ 1,357 $ 1,235 Unsecured — — — Real estate: Secured by commercial properties 1 1,481 1,385 Secured by residential properties — — — Construction and land development: Residential construction loans — — — Commercial construction loans and land development 1 655 626 Consumer — — — Broker-dealer — — — 3 $ 3,493 $ 3,246 All of the non-covered loan modifications included in the tables above involved payment term extensions. The Bank did not grant principal reductions on any restructured non-covered loans during the three and nine months ended September 30, 2018 and 2017. The following table presents information regarding TDRs granted during the twelve months preceding September 30, 2018 and 2017, respectively, for which a payment was at least 30 days past due (dollars in thousands). Twelve Months Preceding September 30, 2018 Twelve Months Preceding September 30, 2017 Number of Balance at Balance at Number of Balance at Balance at Loans Extension End of Period Loans Extension End of Period Commercial and industrial: Secured — $ — $ — — $ — $ — Unsecured — — — — — — Real estate: Secured by commercial properties 1 3,294 3,130 1 1,481 1,385 Secured by residential properties — — — — — — Construction and land development: Residential construction loans — — — — — — Commercial construction loans and land development — — — — — — Consumer — — — — — — Broker-dealer — — — — — — 1 $ 3,294 $ 3,130 1 $ 1,481 $ 1,385 An analysis of the aging of the Company’s non-covered loan portfolio is shown in the following tables (in thousands). Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total Past Due September 30, 2018 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ 17,853 $ 12,710 $ 6,035 $ 36,598 $ 1,528,645 $ 5,528 $ 1,570,771 $ 3,544 Unsecured 2,417 460 — 2,877 147,064 1,385 151,326 — Real estate: Secured by commercial properties 6,970 3,130 1,821 11,921 2,445,812 21,070 2,478,803 — Secured by residential properties 1,248 663 696 2,607 896,494 3,853 902,954 688 Construction and land development: Residential construction loans 739 — — 739 240,901 — 241,640 — Commercial construction loans and land development 3,100 1,035 — 4,135 805,927 707 810,769 — Consumer 373 1,293 — 1,666 45,063 10 46,739 — Broker-dealer — — — — 593,276 — 593,276 — $ 32,700 $ 19,291 $ 8,552 $ 60,543 $ 6,703,182 $ 32,553 $ 6,796,278 $ 4,232 Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total Past Due December 31, 2017 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ 2,060 $ 312 $ 5,714 $ 8,086 $ 1,544,131 $ 6,099 $ 1,558,316 $ 640 Unsecured 642 — — 642 122,247 — 122,889 — Real estate: Secured by commercial properties 442 — 2,195 2,637 2,213,331 19,675 2,235,643 — Secured by residential properties 1,490 1,290 418 3,198 762,818 9,865 775,881 — Construction and land development: Residential construction loans 315 — — 315 176,937 — 177,252 — Commercial construction loans and land development 1,370 101 — 1,471 782,444 1,438 785,353 — Consumer 194 20 — 214 40,105 127 40,446 — Broker-dealer — — — — 577,889 — 577,889 — $ 6,513 $ 1,723 $ 8,327 $ 16,563 $ 6,219,902 $ 37,204 $ 6,273,669 $ 640 In addition to the non-covered loans shown in the tables above, PrimeLending had $76.4 million and $84.5 million of loans included in loans held for sale (with an aggregate unpaid principal balance of $77.2 million and $85.2 million, respectively) that were 90 days past due and accruing interest at September 30, 2018 and December 31, 2017, respectively. These loans are guaranteed by U.S. government agencies and include loans that are subject to repurchase, or have been repurchased, 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 state and local markets. The Company utilizes a risk grading matrix to assign a risk grade to each of the loans in its portfolio with the exception of broker-dealer margin loans. 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 Company. 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 Company 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 Company 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 Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company 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 Company 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). September 30, 2018 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 1,499,468 $ 7,289 $ 58,486 $ 5,528 $ 1,570,771 Unsecured 148,499 122 1,320 1,385 151,326 Real estate: Secured by commercial properties 2,399,783 — 57,950 21,070 2,478,803 Secured by residential properties 885,974 — 13,127 3,853 902,954 Construction and land development: Residential construction loans 241,640 — — — 241,640 Commercial construction loans and land development 806,594 — 3,468 707 810,769 Consumer 46,634 — 95 10 46,739 Broker-dealer 593,276 — — — 593,276 $ 6,621,868 $ 7,411 $ 134,446 $ 32,553 $ 6,796,278 December 31, 2017 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 1,483,502 $ 17,354 $ 51,361 $ 6,099 $ 1,558,316 Unsecured 121,774 — 1,115 — 122,889 Real estate: Secured by commercial properties 2,154,595 7,647 53,726 19,675 2,235,643 Secured by residential properties 756,091 — 9,925 9,865 775,881 Construction and land development: Residential construction loans 177,252 — — — 177,252 Commercial construction loans and land development 780,905 2,259 751 1,438 785,353 Consumer 40,211 — 108 127 40,446 Broker-dealer 577,889 — — — 577,889 $ 6,092,219 $ 27,260 $ 116,986 $ 37,204 $ 6,273,669 Allowance for Loan Losses The allowance for loan losses is subject to regulatory examinations and determinations as to adequacy, which may take into account such factors as the methodology used to calculate the allowance and the size of the allowance. The Company’s analysis of 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 is described in detail in Note 5 to the consolidated financial statements included in the Company’s 2017 Form 10-K. Changes in the allowance for non-covered loan losses, distributed by portfolio segment, are shown below (in thousands). Commercial and Construction and Three Months Ended September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 23,517 $ 28,584 $ 7,271 $ 207 $ 417 $ 59,996 Provision (recovery) for loan losses (242) 450 443 27 (371) 307 Loans charged off (1,820) — — (26) — (1,846) Recoveries on charged off loans 366 31 — 7 — 404 Balance, end of period $ 21,821 $ 29,065 $ 7,714 $ 215 $ 46 $ 58,861 Commercial and Construction and Nine Months Ended September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 23,674 $ 28,775 $ 7,844 $ 311 $ 353 $ 60,957 Provision (recovery) for loan losses (123) 186 (130) (82) (307) (456) Loans charged off (5,236) (30) — (69) — (5,335) Recoveries on charged off loans 3,506 134 — 55 — 3,695 Balance, end of period $ 21,821 $ 29,065 $ 7,714 $ 215 $ 46 $ 58,861 Commercial and Construction and Three Months Ended September 30, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 21,834 $ 28,734 $ 7,645 $ 524 $ 471 $ 59,208 Provision (recovery) for loan losses 2,165 (1,278) 144 (147) (405) 479 Loans charged off (1,264) (5) (3) (33) — (1,305) Recoveries on charged off loans 280 88 4 25 — 397 Balance, end of period $ 23,015 $ 27,539 $ 7,790 $ 369 $ 66 $ 58,779 Commercial and Construction and Nine Months Ended September 30, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 21,369 $ 25,236 $ 7,002 $ 424 $ 155 $ 54,186 Provision (recovery) for loan losses 3,376 2,424 796 74 (89) 6,581 Loans charged off (3,070) (305) (13) (194) — (3,582) Recoveries on charged off loans 1,340 184 5 65 — 1,594 Balance, end of period $ 23,015 $ 27,539 $ 7,790 $ 369 $ 66 $ 58,779 The non-covered loan portfolio was distributed by portfolio segment and impairment methodology as shown below (in thousands). Commercial and Construction and September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 17,255 $ 5,947 $ 3,402 $ — $ — $ 26,604 Loans collectively evaluated for impairment 1,697,929 3,350,887 1,048,300 46,729 593,276 6,737,121 PCI Loans 6,913 24,923 707 10 — 32,553 $ 1,722,097 $ 3,381,757 $ 1,052,409 $ 46,739 $ 593,276 $ 6,796,278 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 16,819 $ 13,782 $ 611 $ — $ — $ 31,212 Loans collectively evaluated for impairment 1,658,287 2,968,202 960,556 40,319 577,889 6,205,253 PCI Loans 6,099 29,540 1,438 127 — 37,204 $ 1,681,205 $ 3,011,524 $ 962,605 $ 40,446 $ 577,889 $ 6,273,669 The allowance for non-covered loan losses was distributed by portfolio segment and impairment methodology as shown below (in thousands). Commercial and Construction and September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 2,739 $ 782 $ 49 $ — $ — $ 3,570 Loans collectively evaluated for impairment 19,060 27,073 7,553 215 46 53,947 PCI Loans 22 1,210 112 — — 1,344 $ 21,821 $ 29,065 $ 7,714 $ 215 $ 46 $ 58,861 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 365 $ 932 $ 93 $ — $ — $ 1,390 Loans collectively evaluated for impairment 23,220 26,127 7,536 293 353 57,529 PCI Loans 89 1,716 215 18 — 2,038 $ 23,674 $ 28,775 $ 7,844 $ 311 $ 353 $ 60,957 |
Covered Assets and Indemnificat
Covered Assets and Indemnification Asset | 9 Months Ended |
Sep. 30, 2018 | |
Covered Assets and Indemnification Asset | |
Covered Assets and Indemnification Asset | 7. Covered Assets and Indemnification Asset At the close of business on September 30, 2018, the loss-share agreement for commercial assets with the FDIC expired, except for certain obligations on the part of the Bank that survived. As discussed in Note 25 to the consolidated financial statements, on October 17, 2018, the Bank and the FDIC entered into a Termination Agreement pursuant to which each of the loss-share agreements for single family residential assets and commercial assets were terminated in exchange for the payment by the FDIC to the Bank of $6.26 million. The Bank acquired certain assets and assumed certain liabilities of FNB in connection with an FDIC-assisted transaction on September 13, 2013 (the “Bank Closing Date”). As part of the Purchase and Assumption Agreement by and among the FDIC (as receiver of FNB), the Bank and the FDIC (the “P&A Agreement”), the Bank and the FDIC entered into loss-share agreements covering future losses incurred on certain acquired loans and OREO. As of September 30, 2018, 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 were referred to as “covered assets”. Pursuant to the loss-share agreements, the FDIC had agreed to reimburse the Bank the following amounts with respect to the covered assets: (i) 80% of net losses on the first $240.4 million of net losses incurred; (ii) 0% of net losses in excess of $240.4 million up to and including $365.7 million of net losses incurred; and (iii) 80% of net losses in excess of $365.7 million of net losses incurred. Net losses were defined as book value losses plus certain defined expenses incurred in the resolution of assets, less subsequent recoveries. Under the loss-share agreement for commercial assets through September 30, 2018, the amount of subsequent recoveries that were reimbursable to the FDIC for a particular asset was limited to book value losses and expenses actually billed plus any book value charge-offs incurred prior to the Bank Closing Date. There was no limit on the amount of subsequent recoveries reimbursable to the FDIC under the loss-share agreement for single family residential assets. The loss-share agreements for commercial and single family residential assets were originally in effect for approximately five years and ten years, respectively, from the Bank Closing Date, and the loss recovery provisions to the FDIC were in effect for eight years and ten 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 were not contractually embedded in the covered loans and were not transferable should the Bank had chosen to dispose of the covered loans. In accordance with the loss-share agreements, the Bank may have been required to make a “true-up” payment to the FDIC approximately ten years following the Bank Closing Date if its actual net realized losses over the life of the loss-share agreements were less than the FDIC’s initial estimate of losses on covered assets. The “true-up” payment was calculated using a defined formula set forth in the P&A Agreement. At September 30, 2018, the Bank had recorded a related “true-up” payment accrual of $16.6 million based on the then-current estimate of aggregate realized losses on covered assets over the life of the loss-share agreements. Covered Loans and Allowance for Covered Loan Losses Loans acquired in the FNB Transaction that were 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 the accounting policies for acquired non-covered loans, as described in Note 6 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 similar 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). September 30, December 31, 2018 2017 Commercial and industrial $ 890 $ 1,055 Real estate 141,858 179,359 Construction and land development 1,280 1,715 144,028 182,129 Allowance for covered loans (1,291) (2,729) Total covered loans, net of allowance $ 142,737 $ 179,400 The following table presents the carrying value and the outstanding contractual balance of covered PCI loans (in thousands). September 30, December 31, 2018 2017 Carrying amount $ 65,004 $ 87,113 Outstanding balance 138,490 179,019 Changes in the accretable yield for covered PCI loans were as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 81,393 $ 128,307 $ 91,833 $ 143,731 Reclassifications from nonaccretable difference, net (1) 5,649 4,096 15,364 27,120 Transfer of loans to covered OREO (2) (142) (77) (989) (857) Accretion (6,987) (10,040) (26,295) (47,708) Balance, end of period $ 79,913 $ 122,286 $ 79,913 $ 122,286 (1) Reclassifications from nonaccretable difference are primarily due to net increases in expected cash flows in the quarterly recasts, but may also include the reclassification and immediate income recognition of nonaccretable difference due to the favorable resolution of loans accounted for individually. Reclassifications to nonaccretable difference occur when accruing loans are moved to non-accrual 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 $51.5 million and $72.7 million at September 30, 2018 and December 31, 2017, respectively. During the three and nine months ended September 30, 2018 and 2017, a combination of factors affecting the inputs to the Bank’s quarterly recast process led to the reclassifications from nonaccretable difference to accretable yield. These transfers resulted from revised cash flows that reflect better-than-expected performance of the covered PCI loan portfolio as a result of the Bank’s strategic decision to dedicate resources to the liquidation of covered loans during the noted periods. Covered impaired loans include non-accrual loans, TDRs, PCI loans and partially charged-off loans. The amounts shown in the 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, segregated between those considered to be PCI loans and those without credit impairment at acquisition, are summarized by class in the following tables (in thousands). Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related September 30, 2018 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 3,156 $ — $ 130 $ 130 $ 14 Unsecured 5,380 — — — — Real estate: Secured by commercial properties 50,379 1,580 6,671 8,251 469 Secured by residential properties 112,174 186 56,437 56,623 785 Construction and land development: Residential construction loans 643 — — — — Commercial construction loans and land development 9,790 — — — — 181,522 1,766 63,238 65,004 1,268 Non-PCI Commercial and industrial: Secured 44 — — — — Unsecured — — — — — Real estate: Secured by commercial properties — — — — — Secured by residential properties 7,236 6,048 — 6,048 — Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 9 5 — 5 — 7,289 6,053 — 6,053 — $ 188,811 $ 7,819 $ 63,238 $ 71,057 $ 1,268 Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related December 31, 2017 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 3,783 $ — $ 194 $ 194 $ 19 Unsecured 5,732 — — — — Real estate: Secured by commercial properties 80,223 2,388 21,171 23,559 1,817 Secured by residential properties 125,361 249 63,107 63,356 861 Construction and land development: Residential construction loans 672 — — — — Commercial construction loans and land development 11,118 4 — 4 — 226,889 2,641 84,472 87,113 2,697 Non-PCI Commercial and industrial: Secured 44 — — — — Unsecured — — — — — Real estate: Secured by commercial properties — — — — — Secured by residential properties 6,279 5,370 — 5,370 — Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 18 12 — 12 — 6,341 5,382 — 5,382 — $ 233,230 $ 8,023 $ 84,472 $ 92,495 $ 2,697 Average investment in covered impaired loans is summarized by class in the following table (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Commercial and industrial: Secured $ 139 $ 396 $ 162 $ 775 Unsecured — 105 — 170 Real estate: Secured by commercial properties 12,817 28,110 15,905 39,323 Secured by residential properties 63,082 68,843 65,699 73,093 Construction and land development: Residential construction loans — — — — Commercial construction loans and land development 5 1,384 11 2,762 $ 76,043 $ 98,838 $ 81,777 $ 116,123 Covered non-accrual loans are summarized by class in the following table (in thousands). September 30, December 31, 2018 2017 Commercial and industrial: Secured $ — $ — Unsecured — — Real estate: Secured by commercial properties — — Secured by residential properties 5,772 5,087 Construction and land development: Residential construction loans — — Commercial construction loans and land development 5 17 $ 5,777 $ 5,104 At both September 30, 2018 and December 31, 2017, there were no covered non-accrual loans included in covered PCI loans for which discount accretion had been suspended because the extent and timing of cash flows from these covered PCI loans could no longer be reasonably estimated. Interest income, including recoveries and cash payments, recorded on covered impaired loans was $0.3 million and $0.9 million during the three months ended September 30, 2018 and 2017, respectively, while interest income, including recoveries and cash payments, recorded on covered impaired loans during was $0.6 million and $1.2 million during the nine months ended September 30, 2018 and 2017, respectively. 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 6 to the consolidated financial statements. The Bank did not grant any TDRs during the three and nine months ended September 30, 2018 and 2017. Pooled Loans are not in the scope of the disclosure requirements for TDRs. At September 30, 2018 and December 31, 2017, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs. There were no TDRs granted during the twelve months preceding September 30, 2018 or 2017 for which payment was at least 30 days past due. An analysis of the aging of the Bank’s covered loan portfolio is shown in the following tables (in thousands). Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total (Non ‑ PCI) Past Due September 30, 2018 30 ‑ 59 Days 60 ‑ 89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ — $ — $ — $ — $ 760 $ 130 $ 890 $ — Unsecured — — — — — — — — Real estate: Secured by commercial properties 65 — — 65 8,799 8,251 17,115 — Secured by residential properties 2,342 555 2,293 5,190 62,930 56,623 124,743 — Construction and land development: Residential construction loans — — — — — — — — Commercial construction loans and land development — — — — 1,280 — 1,280 — $ 2,407 $ 555 $ 2,293 $ 5,255 $ 73,769 $ 65,004 $ 144,028 $ — Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total (Non ‑ PCI) Past Due December 31, 2017 30 ‑ 59 Days 60 ‑ 89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ — $ — $ — $ — $ 861 $ 194 $ 1,055 $ — Unsecured — — — — — — — — Real estate: Secured by commercial properties 209 113 — 322 11,472 23,559 35,353 — Secured by residential properties 5,624 1,211 3,226 10,061 70,589 63,356 144,006 283 Construction and land development: Residential construction loans — — — — — — — — Commercial construction loans and land development 38 — — 38 1,673 4 1,715 — $ 5,871 $ 1,324 $ 3,226 $ 10,421 $ 84,595 $ 87,113 $ 182,129 $ 283 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 6 to the consolidated financial statements. The following tables present the internal risk grades of covered loans in the portfolio by class (in thousands). September 30, 2018 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 379 $ — $ 381 $ 130 $ 890 Unsecured — — — — — Real estate: Secured by commercial properties 8,168 — 696 8,251 17,115 Secured by residential properties 64,100 395 3,625 56,623 124,743 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 1,264 — 16 — 1,280 $ 73,911 $ 395 $ 4,718 $ 65,004 $ 144,028 December 31, 2017 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 429 $ — $ 432 $ 194 $ 1,055 Unsecured — — — — — Real estate: Secured by commercial properties 10,961 — 833 23,559 35,353 Secured by residential properties 68,544 356 11,750 63,356 144,006 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 1,649 — 62 4 1,715 $ 81,583 $ 356 $ 13,077 $ 87,113 $ 182,129 The Bank’s impairment methodology for covered loans is consistent with the methodology for non-covered loans, and is discussed in detail in Notes 5 and 6 to the consolidated financial statements included in the Company’s 2017 Form 10-K. Changes in the allowance for covered loan losses, distributed by portfolio segment, are shown below (in thousands). Commercial and Construction and Three months ended September 30, 2018 Industrial Real Estate Land Development Total Balance, beginning of period $ 19 $ 1,955 $ — $ 1,974 Recovery of loan losses (1) (677) — (678) Loans charged off — (6) — (6) Recoveries on charged off loans — 1 — 1 Balance, end of period $ 18 $ 1,273 $ — $ 1,291 Commercial and Construction and Nine months ended September 30, 2018 Industrial Real Estate Land Development Total Balance, beginning of period $ 24 $ 2,702 $ 3 $ 2,729 Recovery of loan losses (6) (1,367) (9) (1,382) Loans charged off — (63) — (63) Recoveries on charged off loans — 1 6 7 Balance, end of period $ 18 $ 1,273 $ — $ 1,291 Commercial and Construction and Three months ended September 30, 2017 Industrial Real Estate Land Development Total Balance, beginning of period $ 47 $ 684 $ 628 $ 1,359 Provision (recovery) for loan losses 34 1,093 (346) 781 Loans charged off — — — — Recoveries on charged off loans — — 1 1 Balance, end of period $ 81 $ 1,777 $ 283 $ 2,141 Commercial and Construction and Nine months ended September 30, 2017 Industrial Real Estate Land Development Total Balance, beginning of period $ 35 $ 378 $ — $ 413 Provision for loan losses 46 1,915 276 2,237 Loans charged off (6) (521) — (527) Recoveries on charged off loans 6 5 7 18 Balance, end of period $ 81 $ 1,777 $ 283 $ 2,141 The covered loan portfolio was distributed by portfolio segment and impairment methodology as shown below (in thousands). Commercial and Construction and September 30, 2018 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 760 76,984 1,280 79,024 PCI Loans 130 64,874 — 65,004 $ 890 $ 141,858 $ 1,280 $ 144,028 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 861 92,444 1,711 95,016 PCI Loans 194 86,915 4 87,113 $ 1,055 $ 179,359 $ 1,715 $ 182,129 The allowance for covered loan losses was distributed by portfolio segment and impairment methodology as shown below (in thousands). Commercial and Construction and September 30, 2018 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 4 19 — 23 PCI Loans 14 1,254 — 1,268 $ 18 $ 1,273 $ — $ 1,291 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 5 24 3 32 PCI Loans 19 2,678 — 2,697 $ 24 $ 2,702 $ 3 $ 2,729 Covered Other Real Estate Owned A summary of the activity in covered OREO is as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 34,895 $ 42,304 $ 36,744 $ 51,642 Additions to covered OREO 438 1,039 5,284 6,166 Dispositions of covered OREO (5,173) (2,612) (10,145) (14,942) Valuation adjustments in the period (304) (388) (2,027) (2,523) Balance, end of period $ 29,856 $ 40,343 $ 29,856 $ 40,343 During the three and nine months ended September 30, 2018 and 2017, 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 FNB 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. The downward valuations recorded during the three and nine months ended September 30, 2018 and 2017 were related to covered assets subject to the loss-share agreements with the FDIC, which were terminated on October 17, 2018. 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 the initially recorded 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. FDIC Indemnification Asset A summary of the activity in the FDIC Indemnification Asset is as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 23,525 $ 40,304 $ 29,340 $ 71,313 FDIC Indemnification Asset accretion (amortization) (694) (5,348) (6,509) (13,533) Transfers to due from FDIC and other — (1,813) — (24,637) Balance, end of period $ 22,831 $ 33,143 $ 22,831 $ 33,143 As of September 30, 2018, the Bank had billed $147.8 million to and collected $145.8 million from the FDIC, which represented reimbursable covered losses and expenses through September 30, 2017. The previously discussed termination of the FDIC loss-share agreements includes settlement of all unbilled amounts since September 30, 2017. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 2018 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | 8. Mortgage Servicing Rights The following tables present the changes in fair value of the Company’s MSR asset, as included in other assets within the consolidated balance sheets, and other information related to the serviced portfolio (dollars in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 57,373 $ 43,580 $ 54,714 $ 61,968 Additions 11,361 5,939 21,090 8,429 Sales — — (9,303) (17,499) Changes in fair value: Due to changes in model inputs or assumptions (1) 1,311 (550) 5,984 (1,757) Due to customer payoffs (1,241) (1,203) (3,681) (3,375) Balance, end of period $ 68,804 $ 47,766 $ 68,804 $ 47,766 September 30, December 31, 2018 2017 Mortgage loans serviced for others $ 4,939,171 $ 4,762,042 MSR asset as a percentage of serviced mortgage loans 1.39 % 1.15 % (1) Primarily represents normal customer payments, 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 asset were as follows. September 30, December 31, 2018 2017 Weighted average constant prepayment rate 9.15 % 10.93 % Weighted average discount rate 11.11 % 11.03 % Weighted average life (in years) 7.7 6.9 A sensitivity analysis of the fair value of the Company’s MSR asset to certain key assumptions is presented in the following table (in thousands). September 30, December 31, 2018 2017 Constant prepayment rate: Impact of 10% adverse change $ (1,962) $ (1,948) Impact of 20% adverse change (3,980) (3,839) Discount rate: Impact of 10% adverse change (2,899) (2,135) Impact of 20% adverse change (5,556) (4,103) This sensitivity analysis presents the effect of hypothetical changes in key assumptions on the fair value of the MSR asset. 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 asset 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 $5.4 million and $4.2 million during the three months ended September 30, 2018 and 2017, respectively, and $17.3 million and $15.7 million during the nine months ended September 30, 2018 and 2017, respectively, were included in net gains from sale of loans and other mortgage production income within the consolidated statements of operations. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2018 | |
Deposits | |
Deposits | 9. Deposits Deposits are summarized as follows (in thousands). September 30, December 31, 2018 2017 Noninterest-bearing demand $ 2,525,677 $ 2,411,849 Interest-bearing: NOW accounts 1,256,547 1,202,752 Money market 2,559,451 2,222,555 Brokered - money market 11,547 101,624 Demand 407,059 411,771 Savings 184,869 218,812 Time 1,345,083 1,313,482 Brokered - time — 95,274 $ 8,290,233 $ 7,978,119 |
Short-term Borrowings
Short-term Borrowings | 9 Months Ended |
Sep. 30, 2018 | |
Short-term Borrowings | |
Short-term Borrowings | 10. Short-term Borrowings Short-term borrowings are summarized as follows (in thousands). September 30, December 31, 2018 2017 Federal funds purchased $ 88,075 $ 101,775 Securities sold under agreements to repurchase 459,574 539,149 Federal Home Loan Bank 400,000 250,000 Short-term bank loans 269,000 315,500 $ 1,216,649 $ 1,206,424 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 the Hilltop Broker-Dealers execute transactions to sell securities under agreements to repurchase with both customers and other broker-dealers. Securities involved in these transactions are held by the Bank, the Hilltop Broker-Dealers or a third-party dealer. Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). Nine Months Ended September 30, 2018 2017 Average balance during the period $ 683,835 $ 549,425 Average interest rate during the period 1.76 % 0.98 % September 30, December 31, 2018 2017 Average interest rate at end of period 2.01 % 1.21 % Securities underlying the agreements at end of period: Carrying value $ 474,266 $ 581,636 Estimated fair value $ 490,719 $ 598,300 Federal Home Loan Bank (“FHLB”) short-term borrowings 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. Other information regarding FHLB short-term borrowings is shown in the following tables (dollars in thousands). Nine Months Ended September 30, 2018 2017 Average balance during the period $ 253,022 $ 435,531 Average interest rate during the period 2.04 % 1.05 % September 30, December 31, 2018 2017 Average interest rate at end of period % % The Hilltop Broker-Dealers use 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 September 30, 2018 and December 31, 2017 was 3.08% and 2.27%, respectively. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Notes Payable | |
Notes Payable | 11. Notes Payable Notes payable consisted of the following (in thousands). September 30, December 31, 2018 2017 Senior Notes due April 2025, net of discount of $1,431 and $1,545, respectively $ 148,569 $ 148,455 FHLB notes, net of premium of $241 and $436, respectively, with maturities ranging from September 2020 to June 2030 4,497 19,402 NLIC note payable due May 2033 10,000 10,000 NLIC note payable due September 2033 10,000 10,000 ASIC note payable due April 2034 7,500 7,500 Insurance company line of credit due December 31, 2018 — 1,000 Ventures Management lines of credit due January 2019 39,626 12,452 $ 220,192 $ 208,809 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Company applies an estimated annual effective rate to interim period pre-tax income to calculate the income tax provision for the quarter in accordance with the principal method prescribed by the accounting guidance established for computing income taxes in interim periods. The Company’s effective tax rates were 17.0% and 37.2% during the three months ended September 30, 2018 and 2017, respectively, and 21.4% and 33.0% during the nine months ended September 30, 2018 and 2017, respectively. The 2018 effective tax rates are lower than the applicable statutory rates due to tax planning strategies in conjunction with the Tax Legislation and research and development studies. In addition, a tax benefit was recognized from the portion of the indemnification reserve that was a deductible settlement amount from the PrimeLending inquiry from the United States Department of Justice (“DOJ”) as discussed in Note 13 and Note 25 to the consolidated financial statements. The effective tax rate during the three months ended September 30, 2017 was higher than the statutory rate primarily due to state income taxes. The effective tax rate during the nine months ended September 30, 2017 was lower than the statutory rate primarily due to a nontaxable increase to other noninterest income recorded as part of the resolution of the SWS matter as discussed in Note 13 to the consolidated financial statements, as the SWS Merger was a tax-free reorganization under Section 368(a) the Internal Revenue Code. The decreases in the Company’s effective tax rates from periods in 2017 to periods in 2018 were primarily driven by the reduction in the corporate tax rate from 35% to 21% pursuant to the enactment of the Tax Legislation. Deferred tax asset amounts recorded in December 2017 following enactment of the Tax Legislation are final as of September 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies 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. A portion 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, the Company does not take into account the availability of insurance coverage, other than that provided by reinsurers in the insurance segment. When it is practicable, the Company estimates loss contingencies for possible litigation and claims, whether or not there is accrued probable loss. When the Company is able to estimate such probably 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. As available information changes, however, the matters for which the Company is able to estimate, as well as the estimate 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 is complete; whether meaningful settlement discussions have 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. Following completion of Hilltop’s acquisition of SWS, several purported holders of shares of SWS common stock (the “Petitioners”) filed petitions in the Court of Chancery of the State of Delaware (the “Court”) seeking appraisal for their shares pursuant to Section 262 of the Delaware General Corporation Law. These petitions were consolidated as In re SWS Group, Inc. , C.A. No. 10554-VCG. On May 30, 2017, the Court issued its Memorandum Opinion in the matter. The Court found the “fair value” of the shares of SWS common stock as of the date of the transaction was $6.38 per share. Accordingly, Hilltop paid cash of $6.38 per share, plus statutory interest from the effective date of the merger until the date of payment, to the Petitioners and the other stockholders of SWS who properly demanded appraisal rights under Delaware law, collectively representing 7,438,453 shares. Each outstanding share of SWS common stock, other than shares held by Hilltop, in treasury by SWS or by stockholders who properly demanded appraisal rights under Delaware law, was converted into the right to receive 0.2496 shares of Hilltop common stock and $1.94 in cash, the aggregate value of which was $6.92 per share of SWS common stock as of the effective date of the merger. The resolution of this matter resulted in 1,856,638 shares of HTH common stock, which had been held in escrow during the pendency of the proceeding, being returned to the Company’s pool of authorized but unissued shares of common stock and a pre-tax net increase to other noninterest income of $11.6 million during the second quarter of 2017. This change in common stock is reflected in repurchases of common stock within the consolidated statements of stockholders’ equity. Certain Petitioners filed an appeal to the Court’s Memorandum Opinion. On February 23, 2018, the Delaware Supreme Court affirmed the decision of the lower Court. 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 (“HUD”) 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 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. In order to avoid the delay, uncertainty, inconvenience and expense of protracted ligation, on October 23, 2018, PrimeLending entered into a Settlement Agreement and an Indemnification Agreement with the DOJ and HUD, respectively. In these agreements, PrimeLending did not admit to any liability or wrongdoing, and the DOJ and HUD did not make any concessions with respect to their alleged claims. These agreements provide for payments to each of the DOJ and HUD of $6.75 million. In exchange for these payments, each of the DOJ and HUD released any civil claims it may have related to certain loans originated by PrimeLending. As of September 30, 2018, the amount was included in the Company's recorded indemnification reserve liability. Accordingly, the Company’s operating results or financial condition will not be materially impacted in future periods. 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, except related to specific matters disclosed above, 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 matter, including 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. Indemnification Liability Reserve The mortgage origination segment may be responsible to agencies, investors, or other parties 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 or indemnifies the claimant against loss. The mortgage origination segment has established an indemnification liability reserve for such probable losses. Generally, the mortgage origination segment first becomes aware that an agency, investor, or other party believes a loss has been incurred on a sold loan when it receives a written request from the claimant to repurchase the loan or reimburse the claimant’s losses. Upon completing its review of the claimant’s request, the mortgage origination segment establishes a specific claims reserve for the loan if it concludes its obligation to the claimant is both probable and reasonably estimable. An additional reserve has been established for probable agency, investor or other party 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 claimant requests, actual 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 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 claims to date, and therefore, are not a primary factor considered in the calculation of this reserve. At September 30, 2018 and December 31, 2017, the mortgage origination segment’s indemnification liability reserve totaled $24.2 million and $23.5 million, respectively. The provision for indemnification losses was $0.9 million and $2.5 million during the three months ended September 30, 2018 and 2017, respectively, and $2.6 million and $4.5 million during the nine months ended September 30, 2018 and 2017, respectively. The following tables provide for a rollforward 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 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 30,545 $ 32,554 $ 33,702 $ 40,669 Claims made 5,477 10,618 17,827 27,647 Claims resolved with no payment (578) (10,991) (12,331) (29,079) Repurchases (3,513) (1,326) (6,847) (3,014) Indemnification payments — — (420) (5,368) Balance, end of period $ 31,931 $ 30,855 $ 31,931 $ 30,855 Indemnification Liability Reserve Activity Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 23,910 $ 22,367 $ 23,472 $ 18,239 Additions for new sales 857 2,488 2,599 4,480 Repurchases (228) (158) (474) (283) Early payment defaults (72) (41) (259) (170) Indemnification payments (4) — (124) (713) Change in reserves for loans sold in prior years (292) — (1,043) 3,103 Balance, end of period $ 24,171 $ 24,656 $ 24,171 $ 24,656 September 30, December 31, 2018 2017 Reserve for Indemnification Liability (1) : Specific claims $ 14,375 $ 646 Incurred but not reported claims 9,796 22,826 Total $ 24,171 $ 23,472 (1) As a result of the DOJ and HUD agreements discussed above, at September 30, 2018, the Reserve for Indemnification Liability reflects $13.5 million of specific claims that were included in incurred but not reported claims in prior periods. 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. Hilltop Plaza Investment On July 31, 2018, HTH Diamond Hillcrest Land LLC (“Hillcrest Land LLC”) purchased approximately 1.7 acres of land in the City of University Park, Texas for $38.5 million. Hillcrest Land LLC is owned equally between Hilltop Investments I, LLC, a wholly owned entity of Hilltop, and Diamond Ground, LLC, an affiliate of Gerald J. Ford, the current Chairman of the Board of Hilltop. Each of Hilltop Investments I, LLC and Diamond Ground, LLC contributed $19.3 million to Hillcrest Land LLC to complete the purchase. As the voting rights of Hillcrest Land LLC are shared equally between the Company and Diamond Ground, LLC, there is no primary beneficiary, and Diamond Ground, LLC’s interest in Hillcrest Land LLC has been reflected as a noncontrolling interest in the Company’s consolidated financial statements. Therefore, the Company has consolidated Hillcrest Land LLC under the VIE model according to the “most-closely associated” test. The purchased land is included within premises and equipment, net in the consolidated balance sheets. Any income (loss) associated with Hillcrest Land LLC is included within other noninterest income in the consolidated statements of operations. Gerald J. Ford beneficially owned 16.4% of Hilltop common stock as of September 30, 2018 and is the father of Jeremy Ford, a director and the President and Co-Principal Executive Officer of Hilltop, and the father-in-law of Corey Prestidge, the Executive Vice President, General Counsel and Secretary of Hilltop. Trusts for which Jeremy Ford and the wife of Corey Prestidge are a beneficiary own 10.2% and 10.1%, respectively, of Diamond Ground, LLC. In connection with the purchase of the land, Hillcrest Land LLC entered into a 99-year ground lease of the land with three tenants-in-common: SPC Park Plaza Partners LLC (“Park Plaza LLC”), an unaffiliated entity which received an undivided 50% leasehold interest; HTH Hillcrest Project LLC (“HTH Project LLC”), a wholly owned subsidiary of Hilltop, which received an undivided 25% leasehold interest; and Diamond Hillcrest, LLC (“Diamond Hillcrest”), an entity owned by Mr. Gerald J. Ford, which received an undivided 25% leasehold interest (collectively, the “Co-Owners”). The ground lease is triple net. The base rent from the Co-Owners under the ground lease commences 18 months after the ground lease was signed at $1.8 million per year and increases 1.0% per year each January 1 thereafter. The ground lease was classified as an operating lease under ASC 840, and the accounting commencement date was determined to be July 31, 2018, the date the land was available to the Co-Owners. Concurrent with the ground lease, the Co-Owners entered into an agreement to purchase the improvements currently being constructed on the land, which is a mixed-use project containing a six-story building (“Hilltop Plaza”). HTH Project LLC and Diamond Hillcrest each own an undivided 25% interest in Hilltop Plaza. Park Plaza LLC owns the remaining undivided 50% interest in Hilltop Plaza. Park Plaza LLC has agreed to serve as the Co-Owner property manager under the Co-Owners Agreement; however, certain actions require unanimous approval of all Co-Owners. Hilltop Plaza will be funded through a $41.0 million construction loan from an unaffiliated third party bank, as well as cash contributions of $5.3 million from each of HTH Project LLC and Diamond Hillcrest. HTH Project LLC’s undivided interest in Hilltop Plaza is accounted for as an equity method investment as the tenants-in-common have joint control over decisions regarding Hilltop Plaza. The investment is included within other assets in the consolidated balance sheets and any income (loss) is included within other noninterest income in the consolidated statements of operations. Hilltop and the Bank entered into leases for an aggregate of approximately 72,000 of the total 120,000 square feet of rentable space in Hilltop Plaza to serve as the headquarters for both companies. The two separate 129-month office and retail leases have combined total base rent of approximately $35 million with the first nine months of rent abated. Move-in is expected in the fourth quarter of 2019. The office and retail leases were considered under the build-to-suit provisions of ASC 840, and the Company was determined to be the accounting owner of the project as its affiliate, HTH Project LLC, has an equity investment in the project. As such, the assets of Hilltop Plaza are recognized during the construction period as costs are incurred to construct the asset, with a corresponding liability representing the costs paid for by the lessor (the Co-Owners). At September 30, 2018, the $23.8 million of costs incurred to date are included within premises and equipment and other liabilities, respectively, in the consolidated balance sheets. The Company will reassess its accounting ownership of the assets under construction as of January 1, 2019 upon implementation of ASC 842, the new lease accounting standard. All intercompany transactions associated with the Hilltop Plaza investment and the related transactions discussed above are eliminated in consolidation. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 9 Months Ended |
Sep. 30, 2018 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | 14. 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 $2.2 billion at September 30, 2018 and outstanding financial and performance standby letters of credit of $23.3 million at September 30, 2018. 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, the Hilltop Broker-Dealers execute, settle, and finance various securities transactions that may expose the Hilltop Broker-Dealers 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 accounts of the Hilltop Broker-Dealers, use of derivatives to support certain non-profit housing organization clients and to hedge changes in the fair value of certain securities, clearing agreements between the Hilltop Broker-Dealers and various clearinghouses and broker-dealers, secured financing arrangements that involve pledged securities, and when-issued underwriting and purchase commitments. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | 15. Stock-Based Compensation Pursuant to the Hilltop Holdings Inc. 2012 Equity Incentive Plan (the “2012 Plan”), the Company may grant nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance awards, dividend equivalent rights and other awards to employees of the Company, its subsidiaries and outside directors of the Company. In the aggregate, 4,000,000 shares of common stock may be delivered pursuant to awards granted under the 2012 Plan. At September 30, 2018, 1,205,713 shares of common stock remained available for issuance pursuant to awards granted under the 2012 Plan, excluding shares that may be delivered pursuant to outstanding awards. Compensation expense related to the 2012 Plan was $2.4 million and $2.8 million during the three months ended September 30, 2018 and 2017, respectively, and $7.2 million and $8.7 million during the nine months ended September 30, 2018 and 2017, respectively. During the nine months ended September 30, 2018 and 2017, Hilltop granted 22,269 and 11,959 shares of common stock, respectively, pursuant to the 2012 Plan to certain non-employee members of the Company’s board of directors for services rendered to the Company. Restricted Stock Units The following table summarizes information about nonvested RSU activity for the nine months ended September 30, 2018 (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value Balance, December 31, 2017 1,318 $ 20.89 Granted 510 $ 24.00 Vested/Released (369) $ 19.84 Forfeited (103) $ 19.98 Balance, September 30, 2018 1,356 $ 22.42 Vested/Released RSUs include an aggregate of 77,444 shares withheld to satisfy employee statutory tax obligations during the nine months ended September 30, 2018. Pursuant to certain RSU award agreements, an aggregate of 17,481 vested RSUs at September 30, 2018 require deferral of the settlement in shares and statutory tax obligations to a future date. During the nine months ended September 30, 2018, the Compensation Committee of the board of directors of the Company awarded certain executives and key employees an aggregate of 486,155 RSUs pursuant to the 2012 Plan. At September 30, 2018, 387,197 of these outstanding RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 84,626 of these outstanding RSUs will cliff vest based upon the achievement of certain performance goals over a three-year period. At September 30, 2018, in the aggregate, 1,096,759 of the outstanding RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 258,773 outstanding RSUs cliff vest based upon the achievement of certain performance goals over a three-year period. At September 30, 2018, unrecognized compensation expense related to outstanding RSUs of $16.0 million is expected to be recognized over a weighted average period of 1.47 years. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2018 | |
Regulatory Matters | |
Regulatory Matters | 16. Regulatory Matters Banking and Hilltop PlainsCapital, which includes the Bank and PrimeLending, and Hilltop are subject to various regulatory capital requirements administered by 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 PlainsCapital and Hilltop 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 Company performs reviews of the classification and calculation of risk-weighted assets to ensure accuracy and compliance with the Basel III regulatory capital requirements. 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 common equity Tier 1, Tier 1 and total capital (as defined) to risk-weighted assets (as defined). In order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers, Basel III also implemented a capital conservation buffer, which requires a banking organization to hold a buffer above its minimum risk-based capital requirements. This buffer will help to ensure that banking organizations conserve capital when it is most needed, allowing them to better weather periods of economic stress. The buffer is measured relative to risk-weighted assets. The phase-in of the capital conservation buffer requirements began on January 1, 2016 for Hilltop and PlainsCapital. Based on the actual ratios as shown in the table below, Hilltop and PlainsCapital exceed each of the capital conservation buffer requirements in effect as of September 30, 2018, as well as the fully phased-in requirements through 2019. The following table shows PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including conservation buffer in effect at the end of the period and on a fully phased-in basis as if such requirements were currently in effect as measured at September 30, 2018 and December 31, 2017, respectively (dollars in thousands). Based on actual capital amounts and ratios shown in the following table, PlainsCapital’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. Minimum Capital Requirements Including Conservation Buffer In Effect at Fully To Be Well Actual End of Period Phased In Capitalized Amount Ratio Ratio Ratio Ratio September 30, 2018 Tier 1 capital (to average assets): PlainsCapital $ 1,151,669 11.86 % 4.0 % 4.0 % 5.0 % Hilltop 1,675,285 12.40 % 4.0 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,151,669 13.88 % 6.375 % 7.0 % 6.5 % Hilltop 1,629,899 16.95 % 6.375 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,151,669 13.88 % 7.875 % 8.5 % 8.0 % Hilltop 1,675,285 17.42 % 7.875 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,213,970 14.63 % 9.875 % 10.5 % 10.0 % Hilltop 1,718,018 17.87 % 9.875 % 10.5 % N/A Minimum Capital Requirements Including Conservation Buffer In Effect at Fully To Be Well Actual End of Period Phased In Capitalized Amount Ratio Ratio Ratio Ratio December 31, 2017 Tier 1 capital (to average assets): PlainsCapital $ 1,147,527 12.32 % 4.0 % 4.0 % 5.0 % Hilltop 1,688,358 12.94 % 4.0 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,147,527 14.47 % 5.75 % 7.0 % 6.5 % Hilltop 1,639,009 17.71 % 5.75 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,147,527 14.47 % 7.25 % 8.5 % 8.0 % Hilltop 1,688,358 18.24 % 7.25 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,212,793 15.29 % 9.25 % 10.5 % 10.0 % Hilltop 1,738,325 18.78 % 9.25 % 10.5 % N/A As discussed in Note 25 to the consolidated financial statements, on October 17, 2018, the Bank and the FDIC entered into a Termination Agreement pursuant to which each of the loss-share agreements for single family residential assets and commercial assets were terminated. As a result, for purposes of risk-based capital calculations in future periods, the risk-weighting of the assets that were previously covered by the loss-share agreements with the FDIC will increase from 20% to 100%. Broker-Dealer Pursuant to the net capital requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Hilltop Securities has elected to determine its net capital requirements using the alternative method. Accordingly, Hilltop Securities 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 and $1,000,000, respectively, or 2% of aggregate debit balances, as defined in Rule 15c3-3 promulgated under the Exchange Act. Additionally, the net capital rule of the NYSE provides that equity capital may not be withdrawn or cash dividends paid if resulting net capital would be less than 5% of the aggregate debit items. HTS Independent Network follows the primary (aggregate indebtedness) method, as defined in Rule 15c3-1 promulgated under the Exchange Act, which requires the maintenance of the larger of minimum net capital of $250,000 or 1/15 of aggregate indebtedness. At September 30, 2018, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). HTS Hilltop Independent Securities Network Net capital $ 214,906 $ 3,307 Less: required net capital 9,836 250 Excess net capital $ 205,070 $ 3,057 Net capital as a percentage of aggregate debit items 43.7 % Net capital in excess of 5% aggregate debit items $ 190,317 Under certain conditions, Hilltop Securities 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 Exchange Act. Assets segregated under the provisions of the Exchange Act are not available for general corporate purposes. At September 30, 2018 and December 31, 2017, the Hilltop Broker-Dealers held cash of $220.1 million and $186.6 million, respectively, segregated in special reserve bank accounts for the benefit of customers. The Hilltop Broker-Dealers were not required to segregate cash and securities in special reserve accounts for the benefit of proprietary accounts of introducing broker-dealers at September 30, 2018 or December 31, 2017. Mortgage Origination As a mortgage originator, PrimeLending and its subsidiaries are subject to minimum net worth and liquidity requirements established by HUD and GNMA, as applicable. On an annual basis, PrimeLending and its subsidiaries submit audited financial statements to HUD and GNMA, as applicable, documenting their respective compliance with minimum net worth and liquidity requirements. As of September 30, 2018, PrimeLending and its subsidiaries’ net worth and liquidity exceeded the amounts required by both HUD and GNMA, as applicable. 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 statutory accounting practices of the National Association of Insurance Commissioners (“NAIC”) 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). September 30, December 31, 2018 2017 Statutory capital and surplus: National Lloyds Insurance Company $ 99,195 $ 93,812 American Summit Insurance Company 18,158 22,778 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Statutory net income (loss): National Lloyds Insurance Company $ 5,442 $ (4,147) $ 6,576 $ (10,663) American Summit Insurance Company (2,765) (1,216) (1,482) (693) 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 September 30, 2018, 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 September 30, 2018, the Company's insurance subsidiaries' RBC ratio exceeded the level at which regulatory action would be required. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 17. Stockholders’ Equity Dividends On October 25, 2018, the Company announced that its board of directors declared a quarterly cash dividend of $0.07 per common share, payable on November 30, 2018, to all common stockholders of record as of the close of business on November 15, 2018. Stock Repurchase Program In January 2018, the Hilltop board of directors authorized a stock repurchase program through January 2019 pursuant to which the Company was originally authorized to repurchase, in the aggregate, up to $50.0 million of its outstanding common stock. In July 2018, the Hilltop board of directors authorized an increase to the aggregate amount of common stock the Company may repurchase under this program to $100.0 million, which is inclusive of repurchases to offset dilution related to grants of stock-based compensation. During the nine months ended September 30, 2018, the Company paid $38.8 million to repurchase an aggregate of 1,702,696 shares of common stock at an average price of $22.81 per share. These shares were returned to the Company’s pool of authorized but unissued shares of common stock. The purchases were funded from available cash balances. The Company’s stock repurchase program and related accounting policy are discussed in detail in Note 1 and Note 22 to the consolidated financial statements included in the Company’s 2017 Form 10-K. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 18. 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 Bank’s net interest margin. PrimeLending has interest rate risk relative to interest rate lock commitments (“IRLCs”) and its inventory of mortgage loans held for sale. PrimeLending is exposed to such interest 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”) and Eurodollar futures. Additionally, PrimeLending has interest rate risk relative to its MSR asset and uses derivative instruments, including interest rate swaps, swaptions, and U.S. Treasury bond futures and options to hedge this risk. The Hilltop Broker-Dealers use 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. Additionally, Hilltop Securities uses both U.S. Treasury bond and Eurodollar futures to hedge changes in the fair value of their securities. Non-Hedging Derivative Instruments and the Fair Value Option As discussed in Note 4 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, interest rate swaps and swaptions, and U.S. Treasury bond futures and options 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 increased $2.2 million and decreased $9.9 million during the three months ended September 30, 2018 and 2017, respectively, and increased $9.0 million and decreased $0.4 million during the nine months ended September 30, 2018 and 2017, respectively. These 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 assets, 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 4 to the consolidated financial statements. The fair values of the Hilltop Broker-Dealers’ and the Bank’s derivative instruments are recorded in other assets or other liabilities, as appropriate. The fair values of the Hilltop Broker-Dealers’ derivative instruments increased $3.6 million and decreased $3.6 million during the three months ended September 30, 2018 and 2017, respectively, while the fair values of the Bank’s derivative instruments changed nominally during the three months ended September 30, 2018 and 2017, respectively. The fair values of the Hilltop Broker-Dealers’ derivative instruments increased $1.4 million and $12.6 million during the nine months ended September 30, 2018 and 2017, respectively, while the fair values of the Bank’s derivative instruments increased $0.1 million and $0.2 million during the nine months ended September 30, 2018 and 2017, respectively. Derivative positions are presented in the following table (in thousands). September 30, 2018 December 31, 2017 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments: IRLCs $ 1,023,165 $ 20,427 $ 850,850 $ 18,851 Customer-based written options 31,200 (122) 21,637 38 Customer-based purchased options 31,200 122 21,637 (38) Commitments to purchase MBSs 2,832,755 2,172 2,831,635 (921) Commitments to sell MBSs 4,858,032 7,894 4,963,498 2,972 Interest rate swaps 22,780 195 25,971 51 U.S. Treasury bond futures and options (1) 242,900 — 214,500 — Eurodollar futures (1) 696,000 — — — (1) Changes in the fair value of these contracts are settled daily with the respective counterparties of PrimeLending and the Hilltop Broker-Dealers. PrimeLending had cash collateral advances totaling $8.4 million and $0.8 million to offset net liability derivative positions on its commitments to sell MBSs at September 30, 2018 and December 31, 2017, respectively. In addition, PrimeLending and the Hilltop Broker-Dealers advanced cash collateral totaling $2.3 million and $3.2 million on U.S. Treasury bond futures and options and Eurodollar futures at September 30, 2018 and December 31, 2017, respectively. These amounts are included in other assets within the consolidated balance sheets. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Offsetting | |
Balance Sheet Offsetting | 19. 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 September 30, 2018 Securities borrowed: Institutional counterparties $ 1,453,985 $ — $ 1,453,985 $ (1,395,791) $ — $ 58,194 Interest rate options: Customer counterparties 122 — 122 — — 122 Interest rate swaps: Institutional counterparties 195 — 195 (223) — (28) Reverse repurchase agreements: Institutional counterparties 164,656 — 164,656 (163,869) — 787 Forward MBS derivatives: Institutional counterparties 13,684 (293) 13,391 (6,160) — 7,231 $ 1,632,642 $ (293) $ 1,632,349 $ (1,566,043) $ — $ 66,306 December 31, 2017 Securities borrowed: Institutional counterparties $ 1,386,821 $ — $ 1,386,821 $ (1,327,536) $ — $ 59,285 Interest rate options: Customer counterparties 38 — 38 — — 38 Reverse repurchase agreements: Institutional counterparties 186,537 — 186,537 (186,026) — 511 Forward MBS derivatives: Institutional counterparties 3,576 — 3,576 (3,576) — — $ 1,576,972 $ — $ 1,576,972 $ (1,517,138) $ — $ 59,834 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 Liabilities Balance Sheet Balance Sheet Instruments Pledged Amount September 30, 2018 Securities loaned: Institutional counterparties $ 1,340,502 $ — $ 1,340,502 $ (1,283,453) $ — $ 57,049 Interest rate options: Institutional counterparties 122 — 122 — — 122 Repurchase agreements: Institutional counterparties 409,424 — 409,424 (409,424) — — Customer counterparties 50,150 — 50,150 (50,150) — — Forward MBS derivatives: Institutional counterparties 3,325 — 3,325 (3,325) — — $ 1,803,523 $ — $ 1,803,523 $ (1,746,352) $ — $ 57,171 December 31, 2017 Securities loaned: Institutional counterparties $ 1,215,093 $ — $ 1,215,093 $ (1,157,198) $ — $ 57,895 Interest rate options: Institutional counterparties 38 — 38 — — 38 Interest rate swaps: Institutional counterparties 35 (86) (51) (1,059) — (1,110) Repurchase agreements: Institutional counterparties 409,058 — 409,058 (409,058) — — Customer counterparties 130,091 — 130,091 (130,091) — — Forward MBS derivatives: Institutional counterparties 2,696 (1,171) 1,525 (1,295) — 230 $ 1,757,011 $ (1,257) $ 1,755,754 $ (1,698,701) $ — $ 57,053 Secured Borrowing Arrangements Secured Borrowings (Repurchase Agreements) — The Company participates in transactions involving securities sold under repurchase agreements, which are secured borrowings and generally mature one to thirty days from the transaction date or involve arrangements with no definite termination date. Securities sold under repurchase agreements are reflected at the amount of cash received in connection with the transactions. The Company may be required to provide additional collateral based on the fair value of the underlying securities, which is monitored on a daily basis. Securities Lending Activities — The Company’s securities lending activities include lending securities for other broker-dealers, lending institutions and its own clearing and retail operations. These activities involve lending securities to other broker-dealers to cover short sales, to complete transactions in which there has been a failure to deliver securities by the required settlement date and as a conduit for financing activities. When lending securities, the Company receives cash or similar collateral and generally pays interest (based on the amount of cash deposited) to the other party to the transaction. Securities lending transactions are executed pursuant to written agreements with counterparties that generally require securities loaned to be marked-to-market on a daily basis. The Company receives collateral in the form of cash in an amount generally in excess of the fair value of securities loaned. The Company monitors the fair value of securities loaned on a daily basis, with additional collateral obtained or refunded, as necessary. Collateral adjustments are made on a daily basis through the facilities of various clearinghouses. The Company is a principal in these securities lending transactions and is liable for losses in the event of a failure of any other party to honor its contractual obligation. Management sets credit limits with each counterparty and reviews these limits regularly to monitor the risk level with each counterparty. The Company is subject to credit risk through its securities lending activities if securities prices decline rapidly because the value of the Company’s collateral could fall below the amount of the indebtedness it secures. In rapidly appreciating markets, credit risk increases due to short positions. The Company’s securities lending business subjects the Company to credit risk if a counterparty fails to perform or if collateral securing its obligations is insufficient. In securities transactions, the Company is subject to credit risk during the period between the execution of a trade and the settlement by the customer. The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both September 30, 2018 and December 31, 2017. Remaining Contractual Maturities Overnight and Greater Than September 30, 2018 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: U.S. Treasury and agency securities $ 86,476 $ — $ — $ — $ 86,476 Asset-backed securities 373,098 — — — 373,098 Securities lending transactions: Corporate securities 182 — — — 182 Equity securities 1,340,320 — — — 1,340,320 Total $ 1,800,076 $ — $ — $ — $ 1,800,076 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,800,076 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2017 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: U.S. Treasury and agency securities $ 181,915 $ — $ — $ — $ 181,915 Asset-backed securities 357,234 — — — 357,234 Securities lending transactions: Corporate securities 11,499 — — — 11,499 Equity securities 1,203,594 — — — 1,203,594 Total $ 1,754,242 $ — $ — $ — $ 1,754,242 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,754,242 Amount related to agreements not included in offsetting disclosure above $ — |
Broker-Dealer and Clearing Orga
Broker-Dealer and Clearing Organization Receivables and Payables | 9 Months Ended |
Sep. 30, 2018 | |
Broker-Dealer and Clearing Organization Receivables and Payables | |
Broker-Dealer and Clearing Organization Receivables and Payables | 20. Broker-Dealer and Clearing Organization Receivables and Payables Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). September 30, December 31, 2018 2017 Receivables: Securities borrowed $ 1,453,985 $ 1,386,821 Securities failed to deliver 18,294 25,491 Trades in process of settlement — 29,412 Other 19,228 22,654 $ 1,491,507 $ 1,464,378 Payables: Securities loaned $ 1,340,502 $ 1,215,093 Correspondents 22,477 30,160 Securities failed to receive 15,663 37,864 Trades in process of settlement 12,043 — Other 5,716 4,446 $ 1,396,401 $ 1,287,563 |
Reserves for Losses and Loss Ad
Reserves for Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Reserves for Losses and Loss Adjustment Expenses | |
Reserve for Losses and Loss Adjustment Expenses | 21. Reserve for Losses and Loss Adjustment Expenses A summary of NLC’s reserve for unpaid losses and LAE, as included in other liabilities within the consolidated balance sheets, is as follows (in thousands). September 30, December 31, 2018 2017 Reserve for unpaid losses and allocated LAE balance, net $ 16,831 $ 17,470 Reinsurance recoverables on unpaid losses 5,038 11,495 Unallocated LAE 934 1,248 Reserve for unpaid losses and LAE balance, gross $ 22,803 $ 30,213 A summary of claims loss reserve development activity is presented in the following table (dollars in thousands). September 30, 2018 Total of IBNR Reserves Plus Expected Cumulative Accident Nine Months Ended September 30, 2018 Development on Number of Year Paid Incurred Reported Claims Reported Claims 2014 $ 83,703 $ 84,000 $ 45 13,104 2015 86,453 87,157 279 15,034 2016 82,967 84,439 874 21,373 2017 85,787 88,566 1,885 22,027 2018 43,442 54,709 5,880 10,039 Total 382,352 $ 398,871 312 All outstanding reserves prior to 2014, net of reinsurance $ 16,831 Reserve for unpaid losses and allocated LAE, net of reinsurance |
Reinsurance Activity
Reinsurance Activity | 9 Months Ended |
Sep. 30, 2018 | |
Reinsurance Activity | |
Reinsurance Activity | 22. 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 September 30, 2018, total reinsurance recoverables and receivables had a carrying value of $9.1 million, which is included in other assets within the consolidated balance sheets. There was no allowance for uncollectible accounts at September 30, 2018, based on NLC’s quality requirements. The effects of reinsurance on premiums written and earned are summarized as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Written Earned Written Earned Written Earned Written Earned Premiums from direct business $ 32,738 $ 33,399 $ 33,909 $ 36,096 $ 101,624 $ 100,139 $ 107,497 $ 110,048 Reinsurance assumed 3,414 3,181 3,200 2,993 10,023 9,292 9,427 8,721 Reinsurance ceded (2,353) (2,395) (4,028) (4,596) (6,698) (6,826) (10,215) (12,116) Net premiums $ 33,799 $ 34,185 $ 33,081 $ 34,493 $ 104,949 $ 102,605 $ 106,709 $ 106,653 The effects of reinsurance on incurred losses and LAE are as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Losses and LAE incurred $ 19,158 $ 67,152 $ 56,479 $ 122,806 Reinsurance recoverables (446) (35,918) 2,174 (36,688) Net loss and LAE incurred $ 18,712 $ 31,234 $ 58,653 $ 86,118 Catastrophic coverage At September 30, 2018, 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 $6.0 million of reinsurance coverage in excess of its $2.0 million retention to bridge to the primary program. The reinsurance for NLIC and ASIC in excess of $8 million is comprised of three layers of protection: $17 million in excess of $8 million retention and/or loss; $30 million in excess of $25 million loss; and $50 million in excess of $55 million loss. NLIC and ASIC retain no participation in any of the layers, beyond the first $8 million and $1.5 million, respectively. At September 30, 2018, total retention for any one catastrophe that affects both NLIC and ASIC was limited to $8 million in the aggregate. Effective January 1, 2018, NLC renewed its underlying excess of loss contract that provides $10 million aggregate coverage in excess of NLC’s per event retention of $1.0 million and aggregate retention of $17.5 million for sub-catastrophic events. As of January 1, 2018, NLC retains 17.5% participation in this coverage, up from no participation during 2017. |
Segment and Related Information
Segment and Related Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment and Related Information | |
Segment and Related Information | 23. 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 Company’s President and Co-Chief Executive Officer and the Company’s Vice Chairman and Co-Chief Executive Officer. The banking segment includes the operations of the Bank, and since August 1, 2018, the operations of the former BORO acquired in the BORO Acquisition. The broker-dealer segment includes the operations of Securities Holdings, the mortgage origination segment is composed of PrimeLending, and 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, merchant banking investment opportunities 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, acquisition costs and the activities related to the Hilltop Plaza investment. Balance sheet amounts not discussed previously and the elimination of intercompany transactions are included in “All Other and Eliminations.” The following tables present certain information about reportable business segment revenues, operating results, goodwill and assets (in thousands). Mortgage All Other and Hilltop Three Months Ended September 30, 2018 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 94,921 $ 12,432 $ 363 $ 733 $ (3,275) $ 5,167 $ 110,341 Recovery of loan losses — (371) — — — — (371) Noninterest income 11,365 82,834 144,400 36,724 523 (6,149) 269,697 Noninterest expense 67,714 85,713 140,006 33,807 8,656 (185) 335,711 Income (loss) before income taxes $ 38,572 $ 9,924 $ 4,757 $ 3,650 $ (11,408) $ (797) $ 44,698 Mortgage All Other and Hilltop Nine Months Ended September 30, 2018 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 269,517 $ 37,873 $ 2,009 $ 2,313 $ (7,848) $ 14,745 $ 318,609 Recovery of loan losses (1,531) (307) — — — — (1,838) Noninterest income 32,188 224,969 434,262 108,288 1,246 (16,679) 784,274 Noninterest expense 192,626 241,456 420,736 104,532 23,399 (319) 982,430 Income (loss) before income taxes $ 110,610 $ 21,693 $ 15,535 $ 6,069 $ (30,001) $ (1,615) $ 122,291 Mortgage All Other and Hilltop Three Months Ended September 30, 2017 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 89,322 $ 12,215 $ 94 $ 864 $ (2,589) $ 5,074 $ 104,980 Provision (recovery) for loan losses 1,665 (405) — — — — 1,260 Noninterest income 11,414 91,418 163,758 36,839 182 (5,134) 298,477 Noninterest expense 62,750 83,836 151,056 47,015 9,325 (140) 353,842 Income (loss) before income taxes $ 36,321 $ 20,202 $ 12,796 $ (9,312) $ (11,732) $ 80 $ 48,355 Mortgage All Other and Hilltop Nine Months Ended September 30, 2017 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 273,595 $ 31,052 $ (791) $ 1,982 $ (7,413) $ 14,631 $ 313,056 Provision (recovery) for loan losses 8,907 (89) — — — — 8,818 Noninterest income 49,323 266,779 487,033 113,562 12,792 (14,881) 914,608 Noninterest expense 186,075 252,395 444,263 133,444 25,010 (602) 1,040,585 Income (loss) before income taxes $ 127,936 $ 45,525 $ 41,979 $ (17,900) $ (19,631) $ 352 $ 178,261 Mortgage All Other and Hilltop Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated September 30, 2018 Goodwill $ 247,368 $ 7,008 $ 13,071 $ 23,988 $ — $ — $ 291,435 Total assets $ 9,946,278 $ 3,341,891 $ 1,767,554 $ 283,253 $ 2,136,398 $ (3,710,838) $ 13,764,536 December 31, 2017 Goodwill $ 207,741 $ 7,008 $ 13,071 $ 23,988 $ — $ — $ 251,808 Total assets $ 9,558,718 $ 3,394,911 $ 1,937,327 $ 291,639 $ 2,106,978 $ (3,923,787) $ 13,365,786 The Company performs required annual impairment tests of its goodwill as of October 1st. The goodwill impairment tests require the Company to make judgments in determining what assumptions to use in the calculations. The process consists of estimating the fair value of each reporting unit based on valuation techniques, including a discounted cash flow model using revenue and profit forecasts and recent industry transaction and trading multiples of peers, and comparing those estimated fair values with the carrying values of the assets and liabilities of the reporting unit, which includes the allocated goodwill. The broker-dealer, mortgage origination and insurance reporting units have experienced lower-than-forecasted operating results during the first nine months of 2018. These conditions will be considered during the respective annual impairment evaluations of goodwill as of October 1, 2018. If the estimated fair value is less than the carrying value, the Company would be required to recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. |
Earnings per Common Share
Earnings per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings per Common Share | |
Earnings per Common Share | 24. Earnings per Common 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. Restricted Stock Awards were the only instruments issued by Hilltop which previously qualified as participating securities through August 2017 when these awards vested. 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 the three and nine months ended September 30, 2018, RSUs were the only potentially dilutive non-participating instruments issued by Hilltop. 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. The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Basic earnings per share: Income attributable to Hilltop $ 35,805 $ 30,206 $ 93,326 $ 119,116 Less: income applicable to participating shares — — — — Net earnings available to Hilltop common stockholders $ 35,805 $ 30,206 $ 93,326 $ 119,116 Weighted average shares outstanding - basic 94,554 96,096 95,264 97,554 Basic earnings per common share $ 0.38 $ 0.31 $ 0.98 $ 1.22 Diluted earnings per share: Income attributable to Hilltop $ 35,805 $ 30,206 $ 93,326 $ 119,116 Weighted average shares outstanding - basic 94,554 96,096 95,264 97,554 Effect of potentially dilutive securities 56 210 91 249 Weighted average shares outstanding - diluted 94,610 96,306 95,355 97,803 Diluted earnings per common share $ 0.38 $ 0.31 $ 0.98 $ 1.22 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events | |
Subsequent Events | 25. Subsequent Events On October 16, 2018, the Company’s merchant bank subsidiary, Hilltop Opportunity Partners, disposed of an investment made in December 2017 for $16.2 million, resulting in a gain of approximately $5 million. This gain will be recognized as a component of other noninterest income within our consolidated statement of operations during the fourth quarter of 2018. At the close of business on September 30, 2018, the loss-share agreement for commercial assets with the FDIC expired, except for certain obligations on the part of the Bank that survived. On October 17, 2018, the Bank and the FDIC entered into a Termination Agreement pursuant to which each of the loss-share agreements terminated in exchange for the payment by the FDIC to the Bank of $6.26 million. These funds were received on October 19, 2018. Pursuant to the Termination Agreement, all rights and obligations of the Bank and the FDIC under the FDIC loss-share agreements, including, among others, the true-up provisions and the settlement of loss-share and expense reimbursement claims, have been resolved and terminated. In October 2018, in conjunction with the receipt of the $6.26 million noted above, the FDIC Indemnification Asset of $22.8 million and the FDIC true-up accrual of $16.6 million were removed with no further impact to the Company’s consolidated statements of operations. As previously discussed in detail within Note 13 to the consolidated financial statements, on October 23, 2018, PrimeLending entered into a Settlement Agreement and an Indemnification Agreement with the DOJ and HUD, respectively. In these agreements, PrimeLending did not admit to any liability or wrongdoing, and the DOJ and HUD did not make any concessions with respect to their alleged claims. These agreements provide for payments of $13.5 million to the DOJ and HUD in the aggregate. In exchange for these payments, each of the DOJ and HUD released any civil claims they may have related to certain loans originated by PrimeLending. As of September 30, 2018, the amount was included in the Company's recorded indemnification liability reserve. Accordingly, the Company’s operating results or financial condition will not be materially impacted in future periods. |
Schedule I - Insurance Incurred
Schedule I - Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | 9 Months Ended |
Sep. 30, 2018 | |
Schedule Of Insurance Incurred And Cumulative Paid Losses And Allocated Loss Adjustment Expenses, Net Of Reinsurance | |
Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | SCHEDULE I – Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (dollars in thousands) Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance September 30, 2018 Total of Incurred But Not Reported Reserves Plus Cumulative September 30, 2018 Development Number of Accident 2014 2015 2016 2017 2018 On Reported Reported Year Unaudited Unaudited Unaudited Unaudited Unaudited Claims Claims 2014 $ 107,793 $ 85,037 $ 84,221 $ 84,074 $ 84,000 $ 45 13,104 2015 89,646 88,477 87,262 87,157 279 15,034 2016 84,771 85,189 84,439 874 21,373 2017 87,899 88,566 1,885 22,027 2018 54,709 5,880 10,039 $ 398,871 Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance September 30, 2018 Accident 2014 2015 2016 2017 2018 Year Unaudited Unaudited Unaudited Unaudited Unaudited 2014 $ 70,831 $ 79,713 $ 81,684 $ 83,346 $ 83,703 2015 71,820 82,940 85,507 86,453 2016 71,543 81,682 82,967 2017 77,675 85,787 2018 43,442 Total $ 382,352 All outstanding reserves prior to 2014, net of reinsurance 312 Reserve for unpaid losses and allocated loss adjustment expenses, net of reinsurance $ 16,831 |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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. The Company’s primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank (the “Bank”). In addition, the Company provides an array of financial products and services through its broker-dealer, mortgage origination and insurance subsidiaries. The Company, headquartered in Dallas, Texas, provides its products and services through three primary business units, PlainsCapital Corporation (“PCC”), Hilltop Securities Holdings LLC (“Securities Holdings”) and National Lloyds Corporation (“NLC”). PCC is a financial holding company that provides, through its subsidiaries, traditional banking, wealth and investment management and treasury management services primarily in Texas and residential mortgage lending throughout the United States. Securities Holdings is a holding company that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, equity trading, clearing, securities lending, structured finance and retail brokerage services throughout the United States. 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. On August 1, 2018, the Company acquired privately-held, Houston-based The Bank of River Oaks (“BORO”) in an all-cash transaction (the “BORO Acquisition”). Pursuant to the terms of the definitive agreement, the Company paid cash in the aggregate amount of $85 million to the shareholders and option holders of BORO. Based on preliminary purchase date valuations, the fair value of the assets acquired was $434.8 million, including $326.6 million in loans, while the fair value of liabilities assumed was $389.4 million, consisting primarily of $376.4 million in deposits. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, these financial statements contain all adjustments necessary for a fair statement of the results of the interim periods presented. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”). Results for interim periods are not necessarily indicative of results to be expected for a full year or any future period. The preparation of financial statements in conformity with 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 from the Federal Deposit Insurance Corporation (the “FDIC”) under loss-share agreements (the “FDIC Indemnification Asset”), reserves for losses and loss adjustment expenses (“LAE”), 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. As discussed in Note 3 to the consolidated financial statements, the BORO Acquisition purchase date valuations associated with loans, intangibles and taxes are considered preliminary because management’s review and approval of certain key assumptions is not complete. Hilltop owns 100% of the outstanding stock of PCC. PCC owns 100% of the outstanding stock of the Bank and 100% of the membership interest in Hilltop Opportunity Partners LLC, formerly known as PlainsCapital Equity, LLC, a merchant bank utilized to facilitate investments in companies engaged in non-financial activities. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”). PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds an ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC 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 (“VIE”) Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) because the primary beneficiaries of the Trusts are not within the consolidated group. Hilltop has a 100% membership interest in Securities Holdings, which operates through its wholly owned subsidiaries, Hilltop Securities Inc. (“Hilltop Securities”), Hilltop Securities Independent Network Inc. (“HTS Independent Network”) (collectively, the “Hilltop Broker-Dealers”) and First Southwest Asset Management, LLC. Hilltop Securities is a broker-dealer registered with the SEC and Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”), HTS Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA, and First Southwest Asset Management, LLC is a registered investment adviser under the Investment Advisers Act of 1940. Hilltop also owns 100% of NLC, which operates through its wholly owned subsidiaries, National Lloyds Insurance Company (“NLIC”) and American Summit Insurance Company (“ASIC”). In addition, Hilltop owns 100% of the membership interest in each of HTH Hillcrest Project LLC and Hilltop Investments I, LLC. Hilltop Investments I, LLC owns 50% of the membership interest in HTH Diamond Hillcrest Land LLC which is consolidated under the aforementioned VIE Subsections of the ASC. These entities are related to the Hilltop Plaza investment discussed in detail in Note 13 to the consolidated financial statements. The consolidated financial statements include the accounts of the above-named entities. 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 ASC. Certain reclassifications have been made to the prior period consolidated financial statements to conform with the current period presentation, including reclassifications due to the adoption of new accounting pronouncements. In preparing these consolidated financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all stockholders and other financial statement users, or filed with the SEC. Significant accounting policies are detailed in Note 1 to the consolidated financial statements included in the Company’s 2017 Form 10-K. As a result of the adoption of Accounting Standards Update (“ASU”) 2016-01 and ASU 2016-18, the Company has updated its accounting policies related to securities and cash flow reporting, respectively, as presented below. |
Securities | Securities Management classifies securities at the time of purchase and reassesses such designation at each balance sheet date. Securities held for resale to facilitate principal transactions with customers 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. Debt 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. Debt securities available for sale are carried at fair value. Unrealized holding gains and losses on debt 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. Equity securities are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. Equity securities that do not have readily determinable fair values are initially recorded at cost and are remeasured when there is (i) an observable transaction involving the same investment, (ii) an observable transaction involving a similar investment from the same issuer or (iii) an impairment. These remeasurements are reflected in the consolidated statements of operations. 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 debt 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. |
Cash Flow Reporting | Cash Flow Reporting For the purpose of presentation in the consolidated statements of cash flows, cash, cash equivalents and restricted cash are defined as the amounts included in the consolidated balance sheet captions “Cash and due from banks”, “Federal funds sold” and “Assets segregated for regulatory purposes.” Cash equivalents have original maturities of three months or less. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Acquisition | |
Summary of fair values of the identifiable assets acquired, and liabilities assumed | The resulting preliminary fair values of the identifiable assets acquired and liabilities assumed from BORO at August 1, 2018 are summarized in the following table (in thousands). Cash and due from banks $ 21,756 Securities 60,477 Non-covered loans, net 326,618 Other assets 25,912 Total identifiable assets acquired 434,763 Deposits 376,393 Short-term borrowings 10,000 Other liabilities 2,996 Total liabilities assumed 389,389 Net identifiable assets acquired 45,374 Preliminary goodwill resulting from the acquisition 39,627 Net assets acquired $ 85,001 |
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 $ 98,259 $ 2,127 $ Real estate 174,675 5,389 Construction and land development 37,134 — 37,134 Consumer 9,021 13 9,034 Total $ 319,089 $ 7,529 $ |
Schedule of PCI Loans at acquisition | The following table presents information about the PCI loans at acquisition (in thousands). Contractually required principal and interest payments $ 10,730 Nonaccretable difference 2,859 Cash flows expected to be collected 7,871 Accretable difference 342 Fair value of loans acquired with a deterioration of credit quality $ 7,529 |
Schedule of acquired loans without credit impairment | The following table presents information about the acquired loans without credit impairment at acquisition (in thousands). Contractually required principal and interest payments $ 381,551 Contractual cash flows not expected to be collected 15,286 Fair value at acquisition 319,089 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 Inputs Inputs Inputs Fair Value Trading securities $ 2,341 $ 657,973 $ — $ 660,314 Available for sale securities — 874,496 — 874,496 Equity securities 21,555 — — 21,555 Loans held for sale — 1,333,257 54,365 1,387,622 Derivative assets — 45,979 — 45,979 MSR asset — — 68,804 68,804 Securities sold, not yet purchased 116,965 62,617 — 179,582 Derivative liabilities — 15,291 — 15,291 Level 1 Level 2 Level 3 Total December 31, 2017 Inputs Inputs Inputs Fair Value Trading securities $ 3,329 $ 727,356 $ — $ 730,685 Available for sale securities — 744,319 — 744,319 Equity securities 21,241 — — 21,241 Loans held for sale — 1,544,631 36,972 1,581,603 Derivative assets — 34,150 — 34,150 MSR asset — — 54,714 54,714 Securities sold, not yet purchased 156,586 76,235 — 232,821 Derivative liabilities — 13,197 — 13,197 |
Rollforward for financial instruments measured at fair value using Level 3 inputs | The following tables include 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/ Included in Comprehensive Balance at Period Additions Reductions Net Income Income (Loss) End of Period Three months ended September 30, 2018 Loans held for sale $ 40,781 $ 19,156 $ (4,614) $ (958) $ — $ 54,365 MSR asset 57,373 11,361 — 70 — 68,804 Total $ 98,154 $ 30,517 $ (4,614) $ (888) $ — $ 123,169 Nine months ended September 30, 2018 Loans held for sale $ 36,972 $ 39,706 $ (17,127) $ (5,186) $ — $ 54,365 MSR asset 54,714 21,090 (9,303) 2,303 — 68,804 Total $ 91,686 $ 60,796 $ (26,430) $ (2,883) $ — $ 123,169 Three months ended September 30, 2017 Loans held for sale 30,037 8,881 (5,685) (1,688) — 31,545 MSR asset 43,580 5,939 — (1,753) — 47,766 Total $ 73,617 $ 14,820 $ (5,685) $ (3,441) $ — $ 79,311 Nine months ended September 30, 2017 Loans held for sale 35,801 25,384 (23,108) (6,532) — 31,545 MSR asset 61,968 8,429 (17,499) (5,132) — 47,766 Total $ 97,769 $ 33,813 $ (40,607) $ (11,664) $ — $ 79,311 |
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 September 30, 2018, the significant unobservable inputs used in the fair value measurements were as follows. Range Financial instrument Valuation Technique Unobservable Inputs (Weighted-Average) Loans held for sale Discounted cash flows / Market comparable Projected price 92 - 96 % ( 95 %) MSR asset Discounted cash flows Constant prepayment rate 9.15 % Discount rate 11.11 % |
Schedule of changes in fair value for instruments reported at fair value under the Fair Value Option | The following table presents those changes in fair value of instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (20,417) $ — $ (20,417) $ (4,443) $ — $ (4,443) MSR asset 70 — 70 (1,753) — (1,753) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (12,693) $ — $ (12,693) $ 26,650 $ — $ 26,650 MSR asset 2,303 — 2,303 (5,132) — (5,132) |
Schedule of significant unobservable inputs weighted average rates on Impaired Loans | At September 30, 2018, estimates for these significant unobservable inputs were as follows. PCI Loans PlainsCapital FNB SWS BORO Merger Transaction Merger Acquisition Weighted average default rate % % % % Weighted average loss severity rate % % % % Weighted average prepayment speed % % % % |
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 Total Gains (Losses) for the Level 1 Level 2 Level 3 Total Three Months Ended September 30, Nine Months Ended September 30, September 30, 2018 Inputs Inputs Inputs Fair Value 2018 2017 2018 2017 Non-covered impaired loans $ — $ — $ 17,749 $ 17,749 $ (15) $ 793 $ (1,486) $ 323 Covered impaired loans — — 63,194 63,194 683 (787) 1,429 (1,764) Non-covered other real estate owned — 529 — 529 (91) (135) (167) (258) Covered other real estate owned — 19,555 — 19,555 (303) (388) (2,027) (2,523) |
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 September 30, 2018 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 406,150 $ 406,150 $ — $ — $ 406,150 Assets segregated for regulatory purposes 220,115 220,115 — — 220,115 Securities purchased under agreements to resell 164,656 — 164,656 — 164,656 Held to maturity securities 348,163 — 332,388 — 332,388 Loans held for sale 137,358 — 137,358 — 137,358 Non-covered loans, net 6,737,417 — 593,276 6,240,441 6,833,717 Covered loans, net 142,737 — — 217,503 217,503 Broker-dealer and clearing organization receivables 1,491,507 — 1,491,507 — 1,491,507 FDIC indemnification asset 22,831 — — 22,831 22,831 Other assets 70,998 — 69,940 1,058 70,998 Financial liabilities: Deposits 8,290,233 — 8,279,098 — 8,279,098 Broker-dealer and clearing organization payables 1,396,401 — 1,396,401 — 1,396,401 Short-term borrowings 1,216,649 — 1,216,649 — 1,216,649 Debt 287,204 — 284,921 — 284,921 Other liabilities 6,032 — 6,032 — 6,032 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2017 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 487,382 $ 487,382 $ — $ — $ 487,382 Assets segregated for regulatory purposes 186,578 186,578 — — 186,578 Securities purchased under agreements to resell 186,537 — 186,537 — 186,537 Held to maturity securities 355,849 — 349,939 — 349,939 Loans held for sale 133,754 — 133,754 — 133,754 Non-covered loans, net 6,212,712 — 577,889 5,828,868 6,406,757 Covered loans, net 179,400 — — 269,386 269,386 Broker-dealer and clearing organization receivables 1,464,378 — 1,464,378 — 1,464,378 FDIC indemnification asset 29,340 — — 20,122 20,122 Other assets 64,862 — 59,053 5,809 64,862 Financial liabilities: Deposits 7,978,119 — 7,973,101 — 7,973,101 Broker-dealer and clearing organization payables 1,287,563 — 1,287,563 — 1,287,563 Short-term borrowings 1,206,424 — 1,206,424 — 1,206,424 Debt 275,821 — 289,719 — 289,719 Other liabilities 4,795 — 4,795 — 4,795 |
Schedule of adjustments to the carrying value of these investments | The following table presents the adjustments to the carrying value of these investments (in thousands). Three months ended, Nine months ended, September 30, 2018 September 30, 2018 Balance, beginning of period $ 26,151 $ 22,946 Additional investments — 1,411 Upward adjustments 265 3,642 Impairments and downward adjustments (1) (1,584) Dispositions — — Balance, end of period $ 26,415 $ 26,415 |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Securities | |
Summary of trading securities | The fair value of trading securities is summarized as follows (in thousands). September 30, December 31, 2018 2017 U.S. Treasury securities $ 2,328 $ — U.S. government agencies: Bonds 30,223 52,078 Residential mortgage-backed securities 360,091 372,817 Commercial mortgage-backed securities 5,781 6,125 Collateralized mortgage obligations 35,708 5,122 Corporate debt securities 74,249 96,182 States and political subdivisions 119,751 170,413 Unit investment trusts 24,013 22,612 Private-label securitized product 4,806 1,631 Other 3,364 3,705 Totals $ 660,314 $ 730,685 |
Summary of amortized cost and fair value of available for sale securities | The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). Available for Sale Amortized Unrealized Unrealized September 30, 2018 Cost Gains Losses Fair Value U.S. Treasury securities $ 18,314 $ — $ (150) $ 18,164 U.S. government agencies: Bonds 80,879 326 (858) 80,347 Residential mortgage-backed securities 379,759 81 (10,627) 369,213 Commercial mortgage-backed securities 11,760 34 (205) 11,589 Collateralized mortgage obligations 290,576 213 (7,614) 283,175 Corporate debt securities 56,647 277 (507) 56,417 States and political subdivisions 55,565 477 (451) 55,591 Totals $ 893,500 $ 1,408 $ (20,412) $ 874,496 Available for Sale Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. Treasury securities $ 24,665 $ 107 $ (103) $ 24,669 U.S. government agencies: Bonds 96,177 829 (366) 96,640 Residential mortgage-backed securities 246,707 538 (3,740) 243,505 Commercial mortgage-backed securities 11,966 105 (48) 12,023 Collateralized mortgage obligations 237,848 106 (4,142) 233,812 Corporate debt securities 66,868 1,819 (25) 68,662 States and political subdivisions 64,024 1,099 (115) 65,008 Totals $ 748,255 $ 4,603 $ (8,539) $ 744,319 |
Summary of amortized cost and fair value of held to maturity securities | Held to Maturity Amortized Unrealized Unrealized September 30, 2018 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 39,017 $ — $ (2,283) $ 36,734 Residential mortgage-backed securities 22,804 — (605) 22,199 Commercial mortgage-backed securities 87,296 5 (3,065) 84,236 Collateralized mortgage obligations 148,399 — (7,264) 141,135 States and political subdivisions 50,647 17 (2,580) 48,084 Totals $ 348,163 $ 22 $ (15,797) $ 332,388 Held to Maturity Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 39,015 $ — $ (1,188) $ 37,827 Residential mortgage-backed securities 16,130 44 — 16,174 Commercial mortgage-backed securities 71,373 241 (735) 70,879 Collateralized mortgage obligations 173,928 19 (3,969) 169,978 States and political subdivisions 55,403 437 (759) 55,081 Totals $ 355,849 $ 741 $ (6,651) $ 349,939 |
Schedule of information regarding available for sale securities that were in an unrealized loss position | Information regarding available for sale, held to maturity and equity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). September 30, 2018 December 31, 2017 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. treasury securities: Unrealized loss for less than twelve months 5 $ 12,855 $ 91 6 $ 15,449 $ 69 Unrealized loss for twelve months or longer 4 5,309 59 1 4,150 34 9 18,164 150 7 19,599 103 U.S. government agencies: Bonds: Unrealized loss for less than twelve months 10 33,051 152 10 83,476 366 Unrealized loss for twelve months or longer 2 20,192 705 — — — 12 53,243 857 10 83,476 366 Residential mortgage-backed securities: Unrealized loss for less than twelve months 37 219,163 3,721 15 121,968 820 Unrealized loss for twelve months or longer 18 130,927 6,906 11 93,358 2,920 55 350,090 10,627 26 215,326 3,740 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 1 2,882 9 1 5,048 48 Unrealized loss for twelve months or longer 1 4,883 196 — — — 2 7,765 205 1 5,048 48 Collateralized mortgage obligations: Unrealized loss for less than twelve months 19 86,977 1,383 16 90,886 819 Unrealized loss for twelve months or longer 25 126,497 6,231 17 80,492 3,323 44 213,474 7,614 33 171,378 4,142 Corporate debt securities: Unrealized loss for less than twelve months 29 34,933 432 1 5,073 25 Unrealized loss for twelve months or longer 1 1,923 76 — — — 30 36,856 508 1 5,073 25 States and political subdivisions: Unrealized loss for less than twelve months 80 28,786 182 9 6,981 97 Unrealized loss for twelve months or longer 11 6,100 269 9 2,876 18 91 34,886 451 18 9,857 115 Total available for sale: Unrealized loss for less than twelve months 181 418,647 5,970 58 328,881 2,244 Unrealized loss for twelve months or longer 62 295,831 14,442 38 180,876 6,295 243 $ 714,478 $ 20,412 96 $ 509,757 $ 8,539 |
Schedule of held-to-maturity and equity securities continuous unrealized loss position | September 30, 2018 December 31, 2017 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Held to Maturity U.S. government agencies: Bonds: Unrealized loss for less than twelve months 1 $ 5,674 $ 326 1 $ 5,950 $ 50 Unrealized loss for twelve months or longer 3 31,060 1,957 3 31,877 1,138 4 36,734 2,283 4 37,827 1,188 Residential mortgage-backed securities: Unrealized loss for less than twelve months 4 22,199 605 — — — Unrealized loss for twelve months or longer — — — — — — 4 22,199 605 — — — Commercial mortgage-backed securities: Unrealized loss for less than twelve months 11 40,122 1,057 7 39,396 271 Unrealized loss for twelve months or longer 7 37,325 2,008 2 12,659 464 18 77,447 3,065 9 52,055 735 Collateralized mortgage obligations: Unrealized loss for less than twelve months 7 16,262 519 10 37,064 264 Unrealized loss for twelve months or longer 18 124,873 6,745 12 128,270 3,705 25 141,135 7,264 22 165,334 3,969 States and political subdivisions: Unrealized loss for less than twelve months 55 23,981 681 22 11,079 71 Unrealized loss for twelve months or longer 51 19,179 1,899 46 18,598 688 106 43,160 2,580 68 29,677 759 Total held to maturity: Unrealized loss for less than twelve months 78 108,238 3,188 40 93,489 656 Unrealized loss for twelve months or longer 79 212,437 12,609 63 191,404 5,995 157 $ 320,675 $ 15,797 103 $ 284,893 $ 6,651 Equity Common and preferred stock: Unrealized loss for less than twelve months — — — 1 944 13 Unrealized loss for twelve months or longer — — — 1 6,800 103 — $ — $ — 2 $ 7,744 $ 116 |
Schedule of amortized cost and fair value of securities, excluding trading and equity available for sale securities, by contractual maturity | The amortized cost and fair value of securities, excluding trading and equity securities, at September 30, 2018 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 $ 49,477 $ 49,466 $ 1,398 $ 1,396 Due after one year through five years 104,633 103,861 25,735 24,447 Due after five years through ten years 34,663 34,218 4,914 4,769 Due after ten years 22,632 22,974 57,617 54,206 211,405 210,519 89,664 84,818 Residential mortgage-backed securities 379,759 369,213 22,804 22,199 Collateralized mortgage obligations 290,576 283,175 148,399 141,135 Commercial mortgage-backed securities 11,760 11,589 87,296 84,236 $ 893,500 $ 874,496 $ 348,163 $ 332,388 |
Non-Covered Loans and Allowan_2
Non-Covered Loans and Allowance for Non-Covered Loan Losses (Tables) - Noncovered | 9 Months Ended |
Sep. 30, 2018 | |
Loans | |
Summary of non-covered loans by portfolio segment | Non-covered loans summarized by portfolio segment are as follows (in thousands). September 30, December 31, 2018 2017 Commercial and industrial $ 1,722,097 $ 1,681,205 Real estate 3,381,757 3,011,524 Construction and land development 1,052,409 962,605 Consumer 46,739 40,446 Broker-dealer (1) 593,276 577,889 6,796,278 6,273,669 Allowance for non-covered loan losses (58,861) (60,957) Total non-covered loans, net of allowance $ 6,737,417 $ 6,212,712 (1) Represents margin loans to customers and correspondents associated with our broker-dealer segment operations. |
Schedule of carrying values and the outstanding balances of the PCI loans | The following table presents the carrying values and the outstanding balances of non-covered PCI loans (in thousands). September 30, December 31, 2018 2017 Carrying amount $ 32,553 $ 37,204 Outstanding balance 47,698 51,064 |
Schedule of changes in the accretable yield for the PCI loans | Changes in the accretable yield for non-covered PCI loans were as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 5,259 $ 9,793 $ 7,013 $ 13,116 Additions 340 — 340 — Reclassifications from nonaccretable difference, net (1) 1,053 277 1,603 854 Disposals of loans — (603) (98) (664) Accretion (1,504) (1,851) (3,710) (5,690) Balance, end of period $ 5,148 $ 7,616 $ 5,148 $ 7,616 (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 non-accrual and expected cash flows are no longer predictable and the accretable yield is eliminated. |
Summary of impaired loans by class | Non-covered impaired loans, segregated between those considered to be PCI loans and those without credit impairment at acquisition, are summarized by class in the following tables (in thousands). Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related September 30, 2018 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 15,988 $ 4,392 $ 1,136 $ 5,528 $ 22 Unsecured 2,108 1,385 — 1,385 — Real estate: Secured by commercial properties 30,671 13,556 7,514 21,070 891 Secured by residential properties 6,149 1,879 1,974 3,853 319 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 1,189 183 524 707 112 Consumer 2,039 10 — 10 — Broker-dealer — — — — — 58,144 21,405 11,148 32,553 1,344 Non-PCI Commercial and industrial: Secured 25,012 12,878 5,010 17,888 2,739 Unsecured 590 13 — 13 — Real estate: Secured by commercial properties 6,717 3,076 3,130 6,206 782 Secured by residential properties 1,225 769 — 769 — Construction and land development: Residential construction loans 15 — — — — Commercial construction loans and land development 3,475 2,857 545 3,402 49 Consumer 152 45 — 45 — Broker-dealer — — — — — 37,186 19,638 8,685 28,323 3,570 $ 95,330 $ 41,043 $ 19,833 $ 60,876 $ 4,914 Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related December 31, 2017 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 19,752 $ 3,610 $ 2,489 $ 6,099 $ 89 Unsecured — — — — — Real estate: Secured by commercial properties 34,598 7,583 12,092 19,675 1,391 Secured by residential properties 12,600 5,307 4,558 9,865 325 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 2,001 428 1,010 1,438 215 Consumer 2,377 12 115 127 18 Broker-dealer — — — — — 71,328 16,940 20,264 37,204 2,038 Non-PCI Commercial and industrial: Secured 23,666 15,308 2,072 17,380 365 Unsecured 761 616 — 616 — Real estate: Secured by commercial properties 15,504 10,934 3,686 14,620 932 Secured by residential properties 1,596 1,177 — 1,177 — Construction and land development: Residential construction loans 15 — — — — Commercial construction loans and land development 653 — 611 611 93 Consumer 162 56 — 56 — Broker-dealer — — — — — 42,357 28,091 6,369 34,460 1,390 $ 113,685 $ 45,031 $ 26,633 $ 71,664 $ 3,428 |
Summary of average investment in impaired loans by class | Average recorded investment in non-covered impaired loans is summarized by class in the following table (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Commercial and industrial: Secured $ 23,654 $ 20,452 $ 23,448 $ 18,717 Unsecured 912 713 1,007 817 Real estate: Secured by commercial properties 28,488 35,458 30,786 36,606 Secured by residential properties 4,677 11,412 7,832 11,387 Construction and land development: Residential construction loans — — — 14 Commercial construction loans and land development 2,798 2,590 3,079 3,204 Consumer 52 324 119 382 Broker-dealer — — — — $ 60,581 $ 70,949 $ 66,271 $ 71,127 |
Summary of non-accrual loans by class | Non-covered non-accrual loans, excluding those classified as held for sale, are summarized by class in the following table (in thousands). September 30, December 31, 2018 2017 Commercial and industrial: Secured $ 21,310 $ 20,262 Unsecured 13 616 Real estate: Secured by commercial properties 7,506 14,620 Secured by residential properties 1,178 1,614 Construction and land development: Residential construction loans — — Commercial construction loans and land development 3,402 611 Consumer 45 56 Broker-dealer — — $ 33,454 $ 37,779 |
Schedule of information regarding TDRs granted | The Bank did not grant any TDRs during three or nine months ended September 30, 2018 or during the three months ended September 30, 2017. Information regarding TDRs granted during the nine months ended September 30, 2017 is shown in the following tables (dollars in thousands). At September 30, 2018 and December 31, 2017, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs. Nine Months Ended September 30, 2017 Number of Balance at Balance at Loans Extension End of Period Commercial and industrial: Secured 1 $ 1,357 $ 1,235 Unsecured — — — Real estate: Secured by commercial properties 1 1,481 1,385 Secured by residential properties — — — Construction and land development: Residential construction loans — — — Commercial construction loans and land development 1 655 626 Consumer — — — Broker-dealer — — — 3 $ 3,493 $ 3,246 All of the non-covered loan modifications included in the tables above involved payment term extensions. The Bank did not grant principal reductions on any restructured non-covered loans during the three and nine months ended September 30, 2018 and 2017. The following table presents information regarding TDRs granted during the twelve months preceding September 30, 2018 and 2017, respectively, for which a payment was at least 30 days past due (dollars in thousands). Twelve Months Preceding September 30, 2018 Twelve Months Preceding September 30, 2017 Number of Balance at Balance at Number of Balance at Balance at Loans Extension End of Period Loans Extension End of Period Commercial and industrial: Secured — $ — $ — — $ — $ — Unsecured — — — — — — Real estate: Secured by commercial properties 1 3,294 3,130 1 1,481 1,385 Secured by residential properties — — — — — — Construction and land development: Residential construction loans — — — — — — Commercial construction loans and land development — — — — — — Consumer — — — — — — Broker-dealer — — — — — — 1 $ 3,294 $ 3,130 1 $ 1,481 $ 1,385 |
Schedule of analysis of the aging of the entity's loan portfolio | An analysis of the aging of the Company’s non-covered loan portfolio is shown in the following tables (in thousands). Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total Past Due September 30, 2018 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ 17,853 $ 12,710 $ 6,035 $ 36,598 $ 1,528,645 $ 5,528 $ 1,570,771 $ 3,544 Unsecured 2,417 460 — 2,877 147,064 1,385 151,326 — Real estate: Secured by commercial properties 6,970 3,130 1,821 11,921 2,445,812 21,070 2,478,803 — Secured by residential properties 1,248 663 696 2,607 896,494 3,853 902,954 688 Construction and land development: Residential construction loans 739 — — 739 240,901 — 241,640 — Commercial construction loans and land development 3,100 1,035 — 4,135 805,927 707 810,769 — Consumer 373 1,293 — 1,666 45,063 10 46,739 — Broker-dealer — — — — 593,276 — 593,276 — $ 32,700 $ 19,291 $ 8,552 $ 60,543 $ 6,703,182 $ 32,553 $ 6,796,278 $ 4,232 Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total Past Due December 31, 2017 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ 2,060 $ 312 $ 5,714 $ 8,086 $ 1,544,131 $ 6,099 $ 1,558,316 $ 640 Unsecured 642 — — 642 122,247 — 122,889 — Real estate: Secured by commercial properties 442 — 2,195 2,637 2,213,331 19,675 2,235,643 — Secured by residential properties 1,490 1,290 418 3,198 762,818 9,865 775,881 — Construction and land development: Residential construction loans 315 — — 315 176,937 — 177,252 — Commercial construction loans and land development 1,370 101 — 1,471 782,444 1,438 785,353 — Consumer 194 20 — 214 40,105 127 40,446 — Broker-dealer — — — — 577,889 — 577,889 — $ 6,513 $ 1,723 $ 8,327 $ 16,563 $ 6,219,902 $ 37,204 $ 6,273,669 $ 640 |
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). September 30, 2018 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 1,499,468 $ 7,289 $ 58,486 $ 5,528 $ 1,570,771 Unsecured 148,499 122 1,320 1,385 151,326 Real estate: Secured by commercial properties 2,399,783 — 57,950 21,070 2,478,803 Secured by residential properties 885,974 — 13,127 3,853 902,954 Construction and land development: Residential construction loans 241,640 — — — 241,640 Commercial construction loans and land development 806,594 — 3,468 707 810,769 Consumer 46,634 — 95 10 46,739 Broker-dealer 593,276 — — — 593,276 $ 6,621,868 $ 7,411 $ 134,446 $ 32,553 $ 6,796,278 December 31, 2017 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 1,483,502 $ 17,354 $ 51,361 $ 6,099 $ 1,558,316 Unsecured 121,774 — 1,115 — 122,889 Real estate: Secured by commercial properties 2,154,595 7,647 53,726 19,675 2,235,643 Secured by residential properties 756,091 — 9,925 9,865 775,881 Construction and land development: Residential construction loans 177,252 — — — 177,252 Commercial construction loans and land development 780,905 2,259 751 1,438 785,353 Consumer 40,211 — 108 127 40,446 Broker-dealer 577,889 — — — 577,889 $ 6,092,219 $ 27,260 $ 116,986 $ 37,204 $ 6,273,669 |
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 Three Months Ended September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 23,517 $ 28,584 $ 7,271 $ 207 $ 417 $ 59,996 Provision (recovery) for loan losses (242) 450 443 27 (371) 307 Loans charged off (1,820) — — (26) — (1,846) Recoveries on charged off loans 366 31 — 7 — 404 Balance, end of period $ 21,821 $ 29,065 $ 7,714 $ 215 $ 46 $ 58,861 Commercial and Construction and Nine Months Ended September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 23,674 $ 28,775 $ 7,844 $ 311 $ 353 $ 60,957 Provision (recovery) for loan losses (123) 186 (130) (82) (307) (456) Loans charged off (5,236) (30) — (69) — (5,335) Recoveries on charged off loans 3,506 134 — 55 — 3,695 Balance, end of period $ 21,821 $ 29,065 $ 7,714 $ 215 $ 46 $ 58,861 Commercial and Construction and Three Months Ended September 30, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 21,834 $ 28,734 $ 7,645 $ 524 $ 471 $ 59,208 Provision (recovery) for loan losses 2,165 (1,278) 144 (147) (405) 479 Loans charged off (1,264) (5) (3) (33) — (1,305) Recoveries on charged off loans 280 88 4 25 — 397 Balance, end of period $ 23,015 $ 27,539 $ 7,790 $ 369 $ 66 $ 58,779 Commercial and Construction and Nine Months Ended September 30, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Balance, beginning of period $ 21,369 $ 25,236 $ 7,002 $ 424 $ 155 $ 54,186 Provision (recovery) for loan losses 3,376 2,424 796 74 (89) 6,581 Loans charged off (3,070) (305) (13) (194) — (3,582) Recoveries on charged off loans 1,340 184 5 65 — 1,594 Balance, end of period $ 23,015 $ 27,539 $ 7,790 $ 369 $ 66 $ 58,779 |
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 September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 17,255 $ 5,947 $ 3,402 $ — $ — $ 26,604 Loans collectively evaluated for impairment 1,697,929 3,350,887 1,048,300 46,729 593,276 6,737,121 PCI Loans 6,913 24,923 707 10 — 32,553 $ 1,722,097 $ 3,381,757 $ 1,052,409 $ 46,739 $ 593,276 $ 6,796,278 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 16,819 $ 13,782 $ 611 $ — $ — $ 31,212 Loans collectively evaluated for impairment 1,658,287 2,968,202 960,556 40,319 577,889 6,205,253 PCI Loans 6,099 29,540 1,438 127 — 37,204 $ 1,681,205 $ 3,011,524 $ 962,605 $ 40,446 $ 577,889 $ 6,273,669 |
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 September 30, 2018 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 2,739 $ 782 $ 49 $ — $ — $ 3,570 Loans collectively evaluated for impairment 19,060 27,073 7,553 215 46 53,947 PCI Loans 22 1,210 112 — — 1,344 $ 21,821 $ 29,065 $ 7,714 $ 215 $ 46 $ 58,861 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Consumer Broker-Dealer Total Loans individually evaluated for impairment $ 365 $ 932 $ 93 $ — $ — $ 1,390 Loans collectively evaluated for impairment 23,220 26,127 7,536 293 353 57,529 PCI Loans 89 1,716 215 18 — 2,038 $ 23,674 $ 28,775 $ 7,844 $ 311 $ 353 $ 60,957 |
Covered Assets and Indemnific_2
Covered Assets and Indemnification Asset (Tables) - Covered | 9 Months Ended |
Sep. 30, 2018 | |
Loans | |
Summary of carrying value of the loans | The following table presents the carrying value of the covered loans summarized by portfolio segment (in thousands). September 30, December 31, 2018 2017 Commercial and industrial $ 890 $ 1,055 Real estate 141,858 179,359 Construction and land development 1,280 1,715 144,028 182,129 Allowance for covered loans (1,291) (2,729) Total covered loans, net of allowance $ 142,737 $ 179,400 |
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 covered PCI loans (in thousands). September 30, December 31, 2018 2017 Carrying amount $ 65,004 $ 87,113 Outstanding balance 138,490 179,019 |
Schedule of changes in the accretable yield for the PCI loans | Changes in the accretable yield for covered PCI loans were as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 81,393 $ 128,307 $ 91,833 $ 143,731 Reclassifications from nonaccretable difference, net (1) 5,649 4,096 15,364 27,120 Transfer of loans to covered OREO (2) (142) (77) (989) (857) Accretion (6,987) (10,040) (26,295) (47,708) Balance, end of period $ 79,913 $ 122,286 $ 79,913 $ 122,286 (1) Reclassifications from nonaccretable difference are primarily due to net increases in expected cash flows in the quarterly recasts, but may also include the reclassification and immediate income recognition of nonaccretable difference due to the favorable resolution of loans accounted for individually. Reclassifications to nonaccretable difference occur when accruing loans are moved to non-accrual 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 impaired loans by class | Covered impaired loans, segregated between those considered to be PCI loans and those without credit impairment at acquisition, are summarized by class in the following tables (in thousands). Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related September 30, 2018 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 3,156 $ — $ 130 $ 130 $ 14 Unsecured 5,380 — — — — Real estate: Secured by commercial properties 50,379 1,580 6,671 8,251 469 Secured by residential properties 112,174 186 56,437 56,623 785 Construction and land development: Residential construction loans 643 — — — — Commercial construction loans and land development 9,790 — — — — 181,522 1,766 63,238 65,004 1,268 Non-PCI Commercial and industrial: Secured 44 — — — — Unsecured — — — — — Real estate: Secured by commercial properties — — — — — Secured by residential properties 7,236 6,048 — 6,048 — Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 9 5 — 5 — 7,289 6,053 — 6,053 — $ 188,811 $ 7,819 $ 63,238 $ 71,057 $ 1,268 Unpaid Recorded Recorded Total Contractual Investment with Investment with Recorded Related December 31, 2017 Principal Balance No Allowance Allowance Investment Allowance PCI Commercial and industrial: Secured $ 3,783 $ — $ 194 $ 194 $ 19 Unsecured 5,732 — — — — Real estate: Secured by commercial properties 80,223 2,388 21,171 23,559 1,817 Secured by residential properties 125,361 249 63,107 63,356 861 Construction and land development: Residential construction loans 672 — — — — Commercial construction loans and land development 11,118 4 — 4 — 226,889 2,641 84,472 87,113 2,697 Non-PCI Commercial and industrial: Secured 44 — — — — Unsecured — — — — — Real estate: Secured by commercial properties — — — — — Secured by residential properties 6,279 5,370 — 5,370 — Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 18 12 — 12 — 6,341 5,382 — 5,382 — $ 233,230 $ 8,023 $ 84,472 $ 92,495 $ 2,697 |
Summary of average investment in impaired loans by class | Average investment in covered impaired loans is summarized by class in the following table (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Commercial and industrial: Secured $ 139 $ 396 $ 162 $ 775 Unsecured — 105 — 170 Real estate: Secured by commercial properties 12,817 28,110 15,905 39,323 Secured by residential properties 63,082 68,843 65,699 73,093 Construction and land development: Residential construction loans — — — — Commercial construction loans and land development 5 1,384 11 2,762 $ 76,043 $ 98,838 $ 81,777 $ 116,123 |
Summary of non-accrual loans by class | Covered non-accrual loans are summarized by class in the following table (in thousands). September 30, December 31, 2018 2017 Commercial and industrial: Secured $ — $ — Unsecured — — Real estate: Secured by commercial properties — — Secured by residential properties 5,772 5,087 Construction and land development: Residential construction loans — — Commercial construction loans and land development 5 17 $ 5,777 $ 5,104 |
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 Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total (Non ‑ PCI) Past Due September 30, 2018 30 ‑ 59 Days 60 ‑ 89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ — $ — $ — $ — $ 760 $ 130 $ 890 $ — Unsecured — — — — — — — — Real estate: Secured by commercial properties 65 — — 65 8,799 8,251 17,115 — Secured by residential properties 2,342 555 2,293 5,190 62,930 56,623 124,743 — Construction and land development: Residential construction loans — — — — — — — — Commercial construction loans and land development — — — — 1,280 — 1,280 — $ 2,407 $ 555 $ 2,293 $ 5,255 $ 73,769 $ 65,004 $ 144,028 $ — Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current PCI Total (Non ‑ PCI) Past Due December 31, 2017 30 ‑ 59 Days 60 ‑ 89 Days 90 Days or More Past Due Loans Loans Loans Loans 90 Days or More Commercial and industrial: Secured $ — $ — $ — $ — $ 861 $ 194 $ 1,055 $ — Unsecured — — — — — — — — Real estate: Secured by commercial properties 209 113 — 322 11,472 23,559 35,353 — Secured by residential properties 5,624 1,211 3,226 10,061 70,589 63,356 144,006 283 Construction and land development: Residential construction loans — — — — — — — — Commercial construction loans and land development 38 — — 38 1,673 4 1,715 — $ 5,871 $ 1,324 $ 3,226 $ 10,421 $ 84,595 $ 87,113 $ 182,129 $ 283 |
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). September 30, 2018 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 379 $ — $ 381 $ 130 $ 890 Unsecured — — — — — Real estate: Secured by commercial properties 8,168 — 696 8,251 17,115 Secured by residential properties 64,100 395 3,625 56,623 124,743 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 1,264 — 16 — 1,280 $ 73,911 $ 395 $ 4,718 $ 65,004 $ 144,028 December 31, 2017 Pass Special Mention Substandard PCI Total Commercial and industrial: Secured $ 429 $ — $ 432 $ 194 $ 1,055 Unsecured — — — — — Real estate: Secured by commercial properties 10,961 — 833 23,559 35,353 Secured by residential properties 68,544 356 11,750 63,356 144,006 Construction and land development: Residential construction loans — — — — — Commercial construction loans and land development 1,649 — 62 4 1,715 $ 81,583 $ 356 $ 13,077 $ 87,113 $ 182,129 |
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 Three months ended September 30, 2018 Industrial Real Estate Land Development Total Balance, beginning of period $ 19 $ 1,955 $ — $ 1,974 Recovery of loan losses (1) (677) — (678) Loans charged off — (6) — (6) Recoveries on charged off loans — 1 — 1 Balance, end of period $ 18 $ 1,273 $ — $ 1,291 Commercial and Construction and Nine months ended September 30, 2018 Industrial Real Estate Land Development Total Balance, beginning of period $ 24 $ 2,702 $ 3 $ 2,729 Recovery of loan losses (6) (1,367) (9) (1,382) Loans charged off — (63) — (63) Recoveries on charged off loans — 1 6 7 Balance, end of period $ 18 $ 1,273 $ — $ 1,291 Commercial and Construction and Three months ended September 30, 2017 Industrial Real Estate Land Development Total Balance, beginning of period $ 47 $ 684 $ 628 $ 1,359 Provision (recovery) for loan losses 34 1,093 (346) 781 Loans charged off — — — — Recoveries on charged off loans — — 1 1 Balance, end of period $ 81 $ 1,777 $ 283 $ 2,141 Commercial and Construction and Nine months ended September 30, 2017 Industrial Real Estate Land Development Total Balance, beginning of period $ 35 $ 378 $ — $ 413 Provision for loan losses 46 1,915 276 2,237 Loans charged off (6) (521) — (527) Recoveries on charged off loans 6 5 7 18 Balance, end of period $ 81 $ 1,777 $ 283 $ 2,141 |
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 September 30, 2018 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 760 76,984 1,280 79,024 PCI Loans 130 64,874 — 65,004 $ 890 $ 141,858 $ 1,280 $ 144,028 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 861 92,444 1,711 95,016 PCI Loans 194 86,915 4 87,113 $ 1,055 $ 179,359 $ 1,715 $ 182,129 |
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 September 30, 2018 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 4 19 — 23 PCI Loans 14 1,254 — 1,268 $ 18 $ 1,273 $ — $ 1,291 Commercial and Construction and December 31, 2017 Industrial Real Estate Land Development Total Loans individually evaluated for impairment $ — $ — $ — $ — Loans collectively evaluated for impairment 5 24 3 32 PCI Loans 19 2,678 — 2,697 $ 24 $ 2,702 $ 3 $ 2,729 |
Summary of the activity in covered OREO | A summary of the activity in covered OREO is as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 34,895 $ 42,304 $ 36,744 $ 51,642 Additions to covered OREO 438 1,039 5,284 6,166 Dispositions of covered OREO (5,173) (2,612) (10,145) (14,942) Valuation adjustments in the period (304) (388) (2,027) (2,523) Balance, end of period $ 29,856 $ 40,343 $ 29,856 $ 40,343 |
Summary of the activity in the FDIC Indemnification Asset | A summary of the activity in the FDIC Indemnification Asset is as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 23,525 $ 40,304 $ 29,340 $ 71,313 FDIC Indemnification Asset accretion (amortization) (694) (5,348) (6,509) (13,533) Transfers to due from FDIC and other — (1,813) — (24,637) Balance, end of period $ 22,831 $ 33,143 $ 22,831 $ 33,143 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Mortgage Servicing Rights | |
Schedule of change in fair value of the Company's MSR, as included in other assets within the consolidated balance sheets | The following tables present the changes in fair value of the Company’s MSR asset, as included in other assets within the consolidated balance sheets, and other information related to the serviced portfolio (dollars in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 57,373 $ 43,580 $ 54,714 $ 61,968 Additions 11,361 5,939 21,090 8,429 Sales — — (9,303) (17,499) Changes in fair value: Due to changes in model inputs or assumptions (1) 1,311 (550) 5,984 (1,757) Due to customer payoffs (1,241) (1,203) (3,681) (3,375) Balance, end of period $ 68,804 $ 47,766 $ 68,804 $ 47,766 September 30, December 31, 2018 2017 Mortgage loans serviced for others $ 4,939,171 $ 4,762,042 MSR asset as a percentage of serviced mortgage loans 1.39 % 1.15 % (1) Primarily represents normal customer payments, 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 | September 30, December 31, 2018 2017 Weighted average constant prepayment rate 9.15 % 10.93 % Weighted average discount rate 11.11 % 11.03 % Weighted average life (in years) 7.7 6.9 |
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 asset to certain key assumptions is presented in the following table (in thousands). September 30, December 31, 2018 2017 Constant prepayment rate: Impact of 10% adverse change $ (1,962) $ (1,948) Impact of 20% adverse change (3,980) (3,839) Discount rate: Impact of 10% adverse change (2,899) (2,135) Impact of 20% adverse change (5,556) (4,103) |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deposits | |
Summary of deposits | Deposits are summarized as follows (in thousands). September 30, December 31, 2018 2017 Noninterest-bearing demand $ 2,525,677 $ 2,411,849 Interest-bearing: NOW accounts 1,256,547 1,202,752 Money market 2,559,451 2,222,555 Brokered - money market 11,547 101,624 Demand 407,059 411,771 Savings 184,869 218,812 Time 1,345,083 1,313,482 Brokered - time — 95,274 $ 8,290,233 $ 7,978,119 |
Short-term Borrowings (Tables)
Short-term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Short-term borrowings | |
Schedule of short-term borrowings | Short-term borrowings are summarized as follows (in thousands). September 30, December 31, 2018 2017 Federal funds purchased $ 88,075 $ 101,775 Securities sold under agreements to repurchase 459,574 539,149 Federal Home Loan Bank 400,000 250,000 Short-term bank loans 269,000 315,500 $ 1,216,649 $ 1,206,424 |
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). Nine Months Ended September 30, 2018 2017 Average balance during the period $ 683,835 $ 549,425 Average interest rate during the period 1.76 % 0.98 % September 30, December 31, 2018 2017 Average interest rate at end of period 2.01 % 1.21 % Securities underlying the agreements at end of period: Carrying value $ 474,266 $ 581,636 Estimated fair value $ 490,719 $ 598,300 |
FHLB notes | |
Short-term borrowings | |
Schedule of short-term borrowings | Other information regarding FHLB short-term borrowings is shown in the following tables (dollars in thousands). Nine Months Ended September 30, 2018 2017 Average balance during the period $ 253,022 $ 435,531 Average interest rate during the period 2.04 % 1.05 % September 30, December 31, 2018 2017 Average interest rate at end of period % % |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Notes Payable | |
Schedule of notes payable | Notes payable consisted of the following (in thousands). September 30, December 31, 2018 2017 Senior Notes due April 2025, net of discount of $1,431 and $1,545, respectively $ 148,569 $ 148,455 FHLB notes, net of premium of $241 and $436, respectively, with maturities ranging from September 2020 to June 2030 4,497 19,402 NLIC note payable due May 2033 10,000 10,000 NLIC note payable due September 2033 10,000 10,000 ASIC note payable due April 2034 7,500 7,500 Insurance company line of credit due December 31, 2018 — 1,000 Ventures Management lines of credit due January 2019 39,626 12,452 $ 220,192 $ 208,809 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 rollforward 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 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 30,545 $ 32,554 $ 33,702 $ 40,669 Claims made 5,477 10,618 17,827 27,647 Claims resolved with no payment (578) (10,991) (12,331) (29,079) Repurchases (3,513) (1,326) (6,847) (3,014) Indemnification payments — — (420) (5,368) Balance, end of period $ 31,931 $ 30,855 $ 31,931 $ 30,855 Indemnification Liability Reserve Activity Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance, beginning of period $ 23,910 $ 22,367 $ 23,472 $ 18,239 Additions for new sales 857 2,488 2,599 4,480 Repurchases (228) (158) (474) (283) Early payment defaults (72) (41) (259) (170) Indemnification payments (4) — (124) (713) Change in reserves for loans sold in prior years (292) — (1,043) 3,103 Balance, end of period $ 24,171 $ 24,656 $ 24,171 $ 24,656 September 30, December 31, 2018 2017 Reserve for Indemnification Liability (1) : Specific claims $ 14,375 $ 646 Incurred but not reported claims 9,796 22,826 Total $ 24,171 $ 23,472 (1) As a result of the DOJ and HUD agreements discussed above, at September 30, 2018, the Reserve for Indemnification Liability reflects $13.5 million of specific claims that were included in incurred but not reported claims in prior periods. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock-Based Compensation | |
Schedule of nonvested RSU activity | The following table summarizes information about nonvested RSU activity for the nine months ended September 30, 2018 (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value Balance, December 31, 2017 1,318 $ 20.89 Granted 510 $ 24.00 Vested/Released (369) $ 19.84 Forfeited (103) $ 19.98 Balance, September 30, 2018 1,356 $ 22.42 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Regulatory Matters | |
Schedule of comparison of the Plain Capital'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 PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including conservation buffer in effect at the end of the period and on a fully phased-in basis as if such requirements were currently in effect as measured at September 30, 2018 and December 31, 2017, respectively (dollars in thousands). Based on actual capital amounts and ratios shown in the following table, PlainsCapital’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. Minimum Capital Requirements Including Conservation Buffer In Effect at Fully To Be Well Actual End of Period Phased In Capitalized Amount Ratio Ratio Ratio Ratio September 30, 2018 Tier 1 capital (to average assets): PlainsCapital $ 1,151,669 11.86 % 4.0 % 4.0 % 5.0 % Hilltop 1,675,285 12.40 % 4.0 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,151,669 13.88 % 6.375 % 7.0 % 6.5 % Hilltop 1,629,899 16.95 % 6.375 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,151,669 13.88 % 7.875 % 8.5 % 8.0 % Hilltop 1,675,285 17.42 % 7.875 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,213,970 14.63 % 9.875 % 10.5 % 10.0 % Hilltop 1,718,018 17.87 % 9.875 % 10.5 % N/A Minimum Capital Requirements Including Conservation Buffer In Effect at Fully To Be Well Actual End of Period Phased In Capitalized Amount Ratio Ratio Ratio Ratio December 31, 2017 Tier 1 capital (to average assets): PlainsCapital $ 1,147,527 12.32 % 4.0 % 4.0 % 5.0 % Hilltop 1,688,358 12.94 % 4.0 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,147,527 14.47 % 5.75 % 7.0 % 6.5 % Hilltop 1,639,009 17.71 % 5.75 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,147,527 14.47 % 7.25 % 8.5 % 8.0 % Hilltop 1,688,358 18.24 % 7.25 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,212,793 15.29 % 9.25 % 10.5 % 10.0 % Hilltop 1,738,325 18.78 % 9.25 % 10.5 % N/A |
Schedule of net capital position | At September 30, 2018, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). HTS Hilltop Independent Securities Network Net capital $ 214,906 $ 3,307 Less: required net capital 9,836 250 Excess net capital $ 205,070 $ 3,057 Net capital as a percentage of aggregate debit items 43.7 % Net capital in excess of 5% aggregate debit items $ 190,317 |
Summary of statutory capital and surplus and statutory net income (loss) 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). September 30, December 31, 2018 2017 Statutory capital and surplus: National Lloyds Insurance Company $ 99,195 $ 93,812 American Summit Insurance Company 18,158 22,778 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Statutory net income (loss): National Lloyds Insurance Company $ 5,442 $ (4,147) $ 6,576 $ (10,663) American Summit Insurance Company (2,765) (1,216) (1,482) (693) |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Financial Instruments | |
Schedule of derivative positions | Derivative positions are presented in the following table (in thousands). September 30, 2018 December 31, 2017 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments: IRLCs $ 1,023,165 $ 20,427 $ 850,850 $ 18,851 Customer-based written options 31,200 (122) 21,637 38 Customer-based purchased options 31,200 122 21,637 (38) Commitments to purchase MBSs 2,832,755 2,172 2,831,635 (921) Commitments to sell MBSs 4,858,032 7,894 4,963,498 2,972 Interest rate swaps 22,780 195 25,971 51 U.S. Treasury bond futures and options (1) 242,900 — 214,500 — Eurodollar futures (1) 696,000 — — — (1) Changes in the fair value of these contracts are settled daily with the respective counterparties of PrimeLending and the Hilltop Broker-Dealers. |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 Securities borrowed: Institutional counterparties $ 1,453,985 $ — $ 1,453,985 $ (1,395,791) $ — $ 58,194 Interest rate options: Customer counterparties 122 — 122 — — 122 Interest rate swaps: Institutional counterparties 195 — 195 (223) — (28) Reverse repurchase agreements: Institutional counterparties 164,656 — 164,656 (163,869) — 787 Forward MBS derivatives: Institutional counterparties 13,684 (293) 13,391 (6,160) — 7,231 $ 1,632,642 $ (293) $ 1,632,349 $ (1,566,043) $ — $ 66,306 December 31, 2017 Securities borrowed: Institutional counterparties $ 1,386,821 $ — $ 1,386,821 $ (1,327,536) $ — $ 59,285 Interest rate options: Customer counterparties 38 — 38 — — 38 Reverse repurchase agreements: Institutional counterparties 186,537 — 186,537 (186,026) — 511 Forward MBS derivatives: Institutional counterparties 3,576 — 3,576 (3,576) — — $ 1,576,972 $ — $ 1,576,972 $ (1,517,138) $ — $ 59,834 |
Schedule of the liabilities subject to an enforceable master netting arrangement or repurchase agreements | 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 Liabilities Balance Sheet Balance Sheet Instruments Pledged Amount September 30, 2018 Securities loaned: Institutional counterparties $ 1,340,502 $ — $ 1,340,502 $ (1,283,453) $ — $ 57,049 Interest rate options: Institutional counterparties 122 — 122 — — 122 Repurchase agreements: Institutional counterparties 409,424 — 409,424 (409,424) — — Customer counterparties 50,150 — 50,150 (50,150) — — Forward MBS derivatives: Institutional counterparties 3,325 — 3,325 (3,325) — — $ 1,803,523 $ — $ 1,803,523 $ (1,746,352) $ — $ 57,171 December 31, 2017 Securities loaned: Institutional counterparties $ 1,215,093 $ — $ 1,215,093 $ (1,157,198) $ — $ 57,895 Interest rate options: Institutional counterparties 38 — 38 — — 38 Interest rate swaps: Institutional counterparties 35 (86) (51) (1,059) — (1,110) Repurchase agreements: Institutional counterparties 409,058 — 409,058 (409,058) — — Customer counterparties 130,091 — 130,091 (130,091) — — Forward MBS derivatives: Institutional counterparties 2,696 (1,171) 1,525 (1,295) — 230 $ 1,757,011 $ (1,257) $ 1,755,754 $ (1,698,701) $ — $ 57,053 |
Schedule of contractual maturities of repurchase agreements and secured borrowing transactions | The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both September 30, 2018 and December 31, 2017. Remaining Contractual Maturities Overnight and Greater Than September 30, 2018 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: U.S. Treasury and agency securities $ 86,476 $ — $ — $ — $ 86,476 Asset-backed securities 373,098 — — — 373,098 Securities lending transactions: Corporate securities 182 — — — 182 Equity securities 1,340,320 — — — 1,340,320 Total $ 1,800,076 $ — $ — $ — $ 1,800,076 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,800,076 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2017 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: U.S. Treasury and agency securities $ 181,915 $ — $ — $ — $ 181,915 Asset-backed securities 357,234 — — — 357,234 Securities lending transactions: Corporate securities 11,499 — — — 11,499 Equity securities 1,203,594 — — — 1,203,594 Total $ 1,754,242 $ — $ — $ — $ 1,754,242 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,754,242 Amount related to agreements not included in offsetting disclosure above $ — |
Broker-Dealer and Clearing Or_2
Broker-Dealer and Clearing Organization Receivables and Payables (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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). September 30, December 31, 2018 2017 Receivables: Securities borrowed $ 1,453,985 $ 1,386,821 Securities failed to deliver 18,294 25,491 Trades in process of settlement — 29,412 Other 19,228 22,654 $ 1,491,507 $ 1,464,378 Payables: Securities loaned $ 1,340,502 $ 1,215,093 Correspondents 22,477 30,160 Securities failed to receive 15,663 37,864 Trades in process of settlement 12,043 — Other 5,716 4,446 $ 1,396,401 $ 1,287,563 |
Reserves for Losses and Loss _2
Reserves for Losses and Loss Adjustment Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Reserves for Losses and Loss Adjustment Expenses | |
Schedule of information regarding the reserve for unpaid losses and loss adjustment expenses ("LAE") as included in other liabilities within the consolidated balance sheets | A summary of NLC’s reserve for unpaid losses and LAE, as included in other liabilities within the consolidated balance sheets, is as follows (in thousands). September 30, December 31, 2018 2017 Reserve for unpaid losses and allocated LAE balance, net $ 16,831 $ 17,470 Reinsurance recoverables on unpaid losses 5,038 11,495 Unallocated LAE 934 1,248 Reserve for unpaid losses and LAE balance, gross $ 22,803 $ 30,213 |
Summary of claims loss reserve development activity | A summary of claims loss reserve development activity is presented in the following table (dollars in thousands). September 30, 2018 Total of IBNR Reserves Plus Expected Cumulative Accident Nine Months Ended September 30, 2018 Development on Number of Year Paid Incurred Reported Claims Reported Claims 2014 $ 83,703 $ 84,000 $ 45 13,104 2015 86,453 87,157 279 15,034 2016 82,967 84,439 874 21,373 2017 85,787 88,566 1,885 22,027 2018 43,442 54,709 5,880 10,039 Total 382,352 $ 398,871 312 All outstanding reserves prior to 2014, net of reinsurance $ 16,831 Reserve for unpaid losses and allocated LAE, net of reinsurance |
Reinsurance Activity (Tables)
Reinsurance Activity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Reinsurance Activity | |
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). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Written Earned Written Earned Written Earned Written Earned Premiums from direct business $ 32,738 $ 33,399 $ 33,909 $ 36,096 $ 101,624 $ 100,139 $ 107,497 $ 110,048 Reinsurance assumed 3,414 3,181 3,200 2,993 10,023 9,292 9,427 8,721 Reinsurance ceded (2,353) (2,395) (4,028) (4,596) (6,698) (6,826) (10,215) (12,116) Net premiums $ 33,799 $ 34,185 $ 33,081 $ 34,493 $ 104,949 $ 102,605 $ 106,709 $ 106,653 |
Schedule of effects of reinsurance on incurred losses | The effects of reinsurance on incurred losses and LAE are as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Losses and LAE incurred $ 19,158 $ 67,152 $ 56,479 $ 122,806 Reinsurance recoverables (446) (35,918) 2,174 (36,688) Net loss and LAE incurred $ 18,712 $ 31,234 $ 58,653 $ 86,118 |
Segment and Related Informati_2
Segment and Related Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 business segment revenues, operating results, goodwill and assets (in thousands). Mortgage All Other and Hilltop Three Months Ended September 30, 2018 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 94,921 $ 12,432 $ 363 $ 733 $ (3,275) $ 5,167 $ 110,341 Recovery of loan losses — (371) — — — — (371) Noninterest income 11,365 82,834 144,400 36,724 523 (6,149) 269,697 Noninterest expense 67,714 85,713 140,006 33,807 8,656 (185) 335,711 Income (loss) before income taxes $ 38,572 $ 9,924 $ 4,757 $ 3,650 $ (11,408) $ (797) $ 44,698 Mortgage All Other and Hilltop Nine Months Ended September 30, 2018 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 269,517 $ 37,873 $ 2,009 $ 2,313 $ (7,848) $ 14,745 $ 318,609 Recovery of loan losses (1,531) (307) — — — — (1,838) Noninterest income 32,188 224,969 434,262 108,288 1,246 (16,679) 784,274 Noninterest expense 192,626 241,456 420,736 104,532 23,399 (319) 982,430 Income (loss) before income taxes $ 110,610 $ 21,693 $ 15,535 $ 6,069 $ (30,001) $ (1,615) $ 122,291 Mortgage All Other and Hilltop Three Months Ended September 30, 2017 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 89,322 $ 12,215 $ 94 $ 864 $ (2,589) $ 5,074 $ 104,980 Provision (recovery) for loan losses 1,665 (405) — — — — 1,260 Noninterest income 11,414 91,418 163,758 36,839 182 (5,134) 298,477 Noninterest expense 62,750 83,836 151,056 47,015 9,325 (140) 353,842 Income (loss) before income taxes $ 36,321 $ 20,202 $ 12,796 $ (9,312) $ (11,732) $ 80 $ 48,355 Mortgage All Other and Hilltop Nine Months Ended September 30, 2017 Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated Net interest income (expense) $ 273,595 $ 31,052 $ (791) $ 1,982 $ (7,413) $ 14,631 $ 313,056 Provision (recovery) for loan losses 8,907 (89) — — — — 8,818 Noninterest income 49,323 266,779 487,033 113,562 12,792 (14,881) 914,608 Noninterest expense 186,075 252,395 444,263 133,444 25,010 (602) 1,040,585 Income (loss) before income taxes $ 127,936 $ 45,525 $ 41,979 $ (17,900) $ (19,631) $ 352 $ 178,261 Mortgage All Other and Hilltop Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated September 30, 2018 Goodwill $ 247,368 $ 7,008 $ 13,071 $ 23,988 $ — $ — $ 291,435 Total assets $ 9,946,278 $ 3,341,891 $ 1,767,554 $ 283,253 $ 2,136,398 $ (3,710,838) $ 13,764,536 December 31, 2017 Goodwill $ 207,741 $ 7,008 $ 13,071 $ 23,988 $ — $ — $ 251,808 Total assets $ 9,558,718 $ 3,394,911 $ 1,937,327 $ 291,639 $ 2,106,978 $ (3,923,787) $ 13,365,786 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings per Common Share | |
Schedule of the computation of basic and diluted earnings per common share | The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Basic earnings per share: Income attributable to Hilltop $ 35,805 $ 30,206 $ 93,326 $ 119,116 Less: income applicable to participating shares — — — — Net earnings available to Hilltop common stockholders $ 35,805 $ 30,206 $ 93,326 $ 119,116 Weighted average shares outstanding - basic 94,554 96,096 95,264 97,554 Basic earnings per common share $ 0.38 $ 0.31 $ 0.98 $ 1.22 Diluted earnings per share: Income attributable to Hilltop $ 35,805 $ 30,206 $ 93,326 $ 119,116 Weighted average shares outstanding - basic 94,554 96,096 95,264 97,554 Effect of potentially dilutive securities 56 210 91 249 Weighted average shares outstanding - diluted 94,610 96,306 95,355 97,803 Diluted earnings per common share $ 0.38 $ 0.31 $ 0.98 $ 1.22 |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies - Basis of Presentation, Ownership (Details) $ in Thousands | Aug. 01, 2018USD ($) | Sep. 30, 2018item |
Basis of Presentation | ||
Number of primary business units | item | 3 | |
BORO | ||
Basis of Presentation | ||
Aggregate purchase price, cash | $ 85,000 | |
Total identifiable assets acquired | 434,763 | |
Non-covered loans, net | 326,618 | |
Total liabilities assumed | 389,389 | |
Deposits | $ 376,393 | |
PPC | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
Securities Holdings | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
NLC | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
HTH Hillcrest Project LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
Hilltop Investments I, LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
PPC | PlainsCapital (the Bank) | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
PPC | Hilltop Opportunity Partners LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
PPC | PCC Statutory Trusts | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
PlainsCapital (the Bank) | PrimeLending | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
PrimeLending | Ventures Management | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
Hilltop Investments I, LLC | Hillcrest Land LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 50.00% |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Mar. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Recent Accounting Pronouncements | ||||||
Accumulated other comprehensive income (loss) | $ (14,722) | $ (394) | ||||
Retained earnings | 448,923 | 384,545 | ||||
Net cash used in operating activities | 318,802 | $ (482,032) | ||||
Amount required to be segregated in cash and securities for the benefit of customers | 220,115 | $ 207,336 | 186,578 | |||
Equity securities | 21,555 | 21,241 | ||||
Other equity investments | $ 42,800 | $ 38,700 | ||||
Broker-Dealer | ||||||
Recent Accounting Pronouncements | ||||||
Number of primary lines of business | item | 6 | |||||
Banking | ||||||
Recent Accounting Pronouncements | ||||||
Number of primary lines of business | item | 3 | |||||
ASU 2018-02 | Other Assets | ||||||
Recent Accounting Pronouncements | ||||||
Other equity investments | $ 42,800 | |||||
ASU 2016-18 | ||||||
Recent Accounting Pronouncements | ||||||
Net cash used in operating activities | $ 185,500 | $ (319,400) | ||||
Amount required to be segregated in cash and securities for the benefit of customers | 198,200 | 128,400 | $ 186,600 | |||
Previously Reported | ASU 2016-18 | ||||||
Recent Accounting Pronouncements | ||||||
Net change in assets segregated for regulatory purposes | (11,600) | 58,200 | ||||
Net cash used in operating activities | $ 173,900 | $ (261,200) | ||||
Adjustment | ASU 2018-02 | ||||||
Recent Accounting Pronouncements | ||||||
Accumulated other comprehensive income (loss) | (100) | |||||
Retained earnings | 100 | |||||
Adjustment | ASU 2016-01 | ||||||
Recent Accounting Pronouncements | ||||||
Accumulated other comprehensive income (loss) | (2,500) | |||||
Retained earnings | 2,500 | |||||
Equity securities | 21,200 | |||||
Proforma Adjustment | ASU 2016-02 | Minimum | ||||||
Recent Accounting Pronouncements | ||||||
Operating lease liabilities | 105,000 | |||||
Operating Lease, Right-of-Use Asset | 100,000 | |||||
Proforma Adjustment | ASU 2016-02 | Maximum | ||||||
Recent Accounting Pronouncements | ||||||
Operating lease liabilities | 125,000 | |||||
Operating Lease, Right-of-Use Asset | $ 120,000 | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 | ASU 2014-09 | ||||||
Recent Accounting Pronouncements | ||||||
Retained earnings | $ 0 |
Acquisition - Consideration Pai
Acquisition - Consideration Paid (Details) $ in Millions | Aug. 01, 2018USD ($) |
BORO | |
Acquisitions | |
Cash | $ 85 |
Acquisition - Identifiable Asse
Acquisition - Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Aug. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Fair values of the identifiable assets acquired, and liabilities assumed | ||||
Preliminary goodwill resulting from the acquisition | $ 291,435 | $ 291,435 | $ 251,808 | |
BORO | ||||
Fair values of the identifiable assets acquired, and liabilities assumed | ||||
Cash and due from banks | $ 21,756 | |||
Securities | 60,477 | |||
Non-covered loans, net | 326,618 | |||
Other assets | 25,912 | |||
Total identifiable assets acquired | 434,763 | |||
Deposits | 376,393 | |||
Short-term borrowings | 10,000 | |||
Other liabilities | 2,996 | |||
Total liabilities assumed | 389,389 | |||
Net identifiable assets acquired | 45,374 | |||
Preliminary goodwill resulting from the acquisition | 39,627 | |||
Net identifiable assets acquired | $ 85,001 | |||
Allocation to intangible assets | ||||
Period within which the acquisition valuations are subject To change | 1 year | |||
Transaction and integration related expenses | $ 6,600 | $ 6,600 | ||
Core Deposits | BORO | ||||
Allocation to intangible assets | ||||
Intangible Assets | $ 10,000 |
Acquisition - Acquired Loans at
Acquisition - Acquired Loans at Acquisition Date (Details) - BORO $ in Thousands | Aug. 01, 2018USD ($) |
Information about the acquired loans at acquisition | |
Carryover of Allowance for Loan and Lease Losses, Loans Acquired | $ 0 |
Total loans | 326,618 |
Commercial and industrial | |
Information about the acquired loans at acquisition | |
Total loans | 100,386 |
Real estate | |
Information about the acquired loans at acquisition | |
Total loans | 180,064 |
Construction and land development | |
Information about the acquired loans at acquisition | |
Total loans | 37,134 |
Consumer | |
Information about the acquired loans at acquisition | |
Total loans | 9,034 |
Non-PCI | |
Information about the acquired loans at acquisition | |
Total loans | 319,089 |
Non-PCI | Commercial and industrial | |
Information about the acquired loans at acquisition | |
Total loans | 98,259 |
Non-PCI | Real estate | |
Information about the acquired loans at acquisition | |
Total loans | 174,675 |
Non-PCI | Construction and land development | |
Information about the acquired loans at acquisition | |
Total loans | 37,134 |
Non-PCI | Consumer | |
Information about the acquired loans at acquisition | |
Total loans | 9,021 |
PCI loans | |
Information about the acquired loans at acquisition | |
Total loans | 7,529 |
PCI loans | Commercial and industrial | |
Information about the acquired loans at acquisition | |
Total loans | 2,127 |
PCI loans | Real estate | |
Information about the acquired loans at acquisition | |
Total loans | 5,389 |
PCI loans | Consumer | |
Information about the acquired loans at acquisition | |
Total loans | $ 13 |
Acquisition - Loans at Acquisit
Acquisition - Loans at Acquisition, Additional Info. and Pro Forma Results (Details) - BORO $ in Thousands | Aug. 01, 2018USD ($) |
Acquisitions | |
Total loans | $ 326,618 |
PCI loans | |
Acquisitions | |
Contractually required principal and interest payments | 10,730 |
Nonaccretable difference | 2,859 |
Cash flows expected to be collected | 7,871 |
Accretable difference | 342 |
Total loans | 7,529 |
Non-PCI | |
Acquisitions | |
Contractually required principal and interest payments | 381,551 |
Contractual cash flows not expected to be collected | 15,286 |
Total loans | $ 319,089 |
Fair Value Measurements - FV Op
Fair Value Measurements - FV Option (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Measurements | ||
Mortgage loans held for sale, fair value | $ 1,390 | $ 1,580 |
Mortgage loans held for sale, unpaid principal balance | $ 1,350 | $ 1,530 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financial assets: | ||
Trading securities | $ 660,314 | $ 730,685 |
Available for sale securities | 874,496 | 744,319 |
Equity securities | 21,555 | 21,241 |
Financial liabilities: | ||
Securities sold, not yet purchased | 179,582 | 232,821 |
Recurring | ||
Financial assets: | ||
Trading securities | 660,314 | 730,685 |
Available for sale securities | 874,496 | 744,319 |
Equity securities | 21,555 | 21,241 |
Loans held for sale | 1,387,622 | 1,581,603 |
Derivative assets | 45,979 | 34,150 |
MSR asset | 68,804 | 54,714 |
Financial liabilities: | ||
Securities sold, not yet purchased | 179,582 | 232,821 |
Derivative liabilities | 15,291 | 13,197 |
Recurring | Level 1 | ||
Financial assets: | ||
Trading securities | 2,341 | 3,329 |
Equity securities | 21,555 | 21,241 |
Financial liabilities: | ||
Securities sold, not yet purchased | 116,965 | 156,586 |
Recurring | Level 2 | ||
Financial assets: | ||
Trading securities | 657,973 | 727,356 |
Available for sale securities | 874,496 | 744,319 |
Loans held for sale | 1,333,257 | 1,544,631 |
Derivative assets | 45,979 | 34,150 |
Financial liabilities: | ||
Securities sold, not yet purchased | 62,617 | 76,235 |
Derivative liabilities | 15,291 | 13,197 |
Recurring | Level 3 | ||
Financial assets: | ||
Loans held for sale | 54,365 | 36,972 |
MSR asset | $ 68,804 | $ 54,714 |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward, Level 3 (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Asset balance, beginning of period | $ 98,154 | $ 73,617 | $ 91,686 | $ 97,769 |
Purchases/Additions | 30,517 | 14,820 | 60,796 | 33,813 |
Sales/Reductions | (4,614) | (5,685) | (26,430) | (40,607) |
Total gains or losses (realized or unrealized): | ||||
Included in Net Income | (888) | (3,441) | (2,883) | (11,664) |
Asset balance, end of period | 123,169 | 79,311 | 123,169 | 79,311 |
Loans Held for Sale | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Asset balance, beginning of period | 40,781 | 30,037 | 36,972 | 35,801 |
Purchases/Additions | 19,156 | 8,881 | 39,706 | 25,384 |
Sales/Reductions | (4,614) | (5,685) | (17,127) | (23,108) |
Total gains or losses (realized or unrealized): | ||||
Included in Net Income | (958) | (1,688) | (5,186) | (6,532) |
Asset balance, end of period | 54,365 | 31,545 | 54,365 | 31,545 |
MSR | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Asset balance, beginning of period | 57,373 | 43,580 | 54,714 | 61,968 |
Purchases/Additions | 11,361 | 5,939 | 21,090 | 8,429 |
Sales/Reductions | (9,303) | (17,499) | ||
Total gains or losses (realized or unrealized): | ||||
Included in Net Income | 70 | (1,753) | 2,303 | (5,132) |
Asset balance, end of period | $ 68,804 | $ 47,766 | $ 68,804 | $ 47,766 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3, Inputs, Recurring (Details) - Level 3 - Recurring - Discounted cash flow | 9 Months Ended |
Sep. 30, 2018 | |
Loans Held for Sale | Weighted average | |
Significant unobservable inputs used in the fair value measurements | |
Projected price (as a percent) | 95.00% |
Loans Held for Sale | Minimum | |
Significant unobservable inputs used in the fair value measurements | |
Projected price (as a percent) | 92.00% |
Loans Held for Sale | Maximum | |
Significant unobservable inputs used in the fair value measurements | |
Projected price (as a percent) | 96.00% |
MSR | Weighted average | |
Significant unobservable inputs used in the fair value measurements | |
Constant prepayment rate (as a percent) | 9.15% |
Discount rates (as a percent) | 11.11% |
Fair Value Measurements - Chang
Fair Value Measurements - Change in FV (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Transfers Between Level 1 and Level 2 | ||||
Transfers of assets from level 1 to level 2 | $ 0 | $ 0 | $ 0 | $ 0 |
Transfers of assets from level 2 to level 1 | 0 | 0 | 0 | 0 |
Transfers of liabilities from level 1 to level 2 | 0 | 0 | 0 | 0 |
Transfers of liabilities from level 2 to level 1 | 0 | 0 | 0 | 0 |
Fair Value Option | ||||
Net Gains (Losses) | 116,243 | 138,498 | 354,488 | 416,336 |
Other Noninterest Income | 31,810 | 35,875 | 72,422 | 131,876 |
Loans Held for Sale | ||||
Fair Value Option | ||||
Net Gains (Losses) | (20,417) | (4,443) | (12,693) | 26,650 |
Total Changes in Fair Value | (20,417) | (4,443) | (12,693) | 26,650 |
MSR | ||||
Fair Value Option | ||||
Net Gains (Losses) | 70 | (1,753) | 2,303 | (5,132) |
Total Changes in Fair Value | $ 70 | $ (1,753) | $ 2,303 | $ (5,132) |
Fair Value Measurements - Impai
Fair Value Measurements - Impaired Loans (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2018 | Aug. 01, 2018 | Jan. 01, 2015 | Sep. 13, 2013 | Nov. 30, 2012 | |
BORO | |||||
Fair value measurements | |||||
Fair value of loans acquired | $ 326,618 | ||||
BORO | PCI loans | |||||
Fair value measurements | |||||
Fair value of loans acquired | 7,529 | ||||
Level 3 | PPC | PCI loans | |||||
Fair value measurements | |||||
Fair value of loans acquired | $ 172,900 | ||||
Level 3 | PPC | PCI loans | Weighted average | |||||
Fair Value Inputs [Abstract] | |||||
Weighted average default rate | 83.00% | ||||
Weighted average loss severity rate | 67.00% | ||||
Weighted average prepayment speed | 0.00% | ||||
Weighted average expected loss | 55.00% | ||||
Level 3 | FNB | PCI loans | |||||
Fair value measurements | |||||
Fair value of loans acquired | $ 822,800 | ||||
Level 3 | FNB | PCI loans | Weighted average | |||||
Fair Value Inputs [Abstract] | |||||
Weighted average default rate | 35.00% | ||||
Weighted average loss severity rate | 13.00% | ||||
Weighted average prepayment speed | 6.00% | ||||
Weighted average expected loss | 5.00% | ||||
Level 3 | SWS | PCI loans | |||||
Fair value measurements | |||||
Fair value of loans acquired | $ 73,500 | ||||
Level 3 | SWS | PCI loans | Weighted average | |||||
Fair Value Inputs [Abstract] | |||||
Weighted average default rate | 70.00% | ||||
Weighted average loss severity rate | 28.00% | ||||
Weighted average prepayment speed | 0.00% | ||||
Weighted average expected loss | 20.00% | ||||
Level 3 | BORO | PCI loans | |||||
Fair value measurements | |||||
Fair value of loans acquired | $ 7,500 | ||||
Level 3 | BORO | PCI loans | Weighted average | |||||
Fair Value Inputs [Abstract] | |||||
Weighted average default rate | 63.00% | ||||
Weighted average loss severity rate | 45.00% | ||||
Weighted average prepayment speed | 0.00% | ||||
Weighted average expected loss | 26.00% |
Fair Value Measurements - OREO
Fair Value Measurements - OREO (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 13, 2013 | |
Fair Value | |||||||||
Non-covered impaired loans | $ 6,737,417 | $ 6,737,417 | $ 6,212,712 | ||||||
Covered impaired loans | 142,737 | 142,737 | 179,400 | ||||||
Covered other real estate owned | 29,856 | $ 40,343 | 29,856 | $ 40,343 | $ 34,895 | 36,744 | $ 42,304 | $ 51,642 | |
Total Gains (Losses) of impaired loans | 371 | (1,260) | 1,838 | (8,818) | |||||
Covered | |||||||||
Fair Value | |||||||||
Covered impaired loans | 142,737 | 142,737 | 179,400 | ||||||
Total Gains (Losses) of impaired loans | 678 | (781) | 1,382 | (2,237) | |||||
Noncovered | |||||||||
Fair Value | |||||||||
Non-covered impaired loans | 6,737,417 | 6,737,417 | 6,212,712 | ||||||
Total Gains (Losses) of impaired loans | (307) | (479) | 456 | (6,581) | |||||
Estimate of Fair Value | |||||||||
Fair Value | |||||||||
Non-covered impaired loans | 6,833,717 | 6,833,717 | 6,406,757 | ||||||
Covered impaired loans | 217,503 | 217,503 | 269,386 | ||||||
Level 2 | Estimate of Fair Value | |||||||||
Fair Value | |||||||||
Non-covered impaired loans | 593,276 | 593,276 | 577,889 | ||||||
Level 2 | Estimate of Fair Value | Covered | |||||||||
Fair Value | |||||||||
Covered other real estate owned | 29,900 | 29,900 | 36,700 | ||||||
Level 2 | Estimate of Fair Value | Noncovered | |||||||||
Fair Value | |||||||||
Non-covered other real estate owned | 2,700 | 2,700 | 3,900 | ||||||
Level 3 | Estimate of Fair Value | |||||||||
Fair Value | |||||||||
Non-covered impaired loans | 6,240,441 | 6,240,441 | 5,828,868 | ||||||
Covered impaired loans | 217,503 | 217,503 | $ 269,386 | ||||||
Nonrecurring | Estimate of Fair Value | Covered | |||||||||
Fair Value | |||||||||
Covered impaired loans | 63,194 | 63,194 | |||||||
Covered other real estate owned | 19,555 | 19,555 | |||||||
Total Gains (Losses) of impaired loans | 683 | (787) | 1,429 | (1,764) | |||||
Total Gains (Losses) of other real estate owned | (303) | (388) | (2,027) | (2,523) | |||||
Nonrecurring | Estimate of Fair Value | Noncovered | |||||||||
Fair Value | |||||||||
Non-covered impaired loans | 17,749 | 17,749 | |||||||
Non-covered other real estate owned | 529 | 529 | |||||||
Total Gains (Losses) of impaired loans | (15) | 793 | (1,486) | 323 | |||||
Total Gains (Losses) of other real estate owned | (91) | $ (135) | (167) | $ (258) | |||||
Nonrecurring | Level 2 | FNB | Covered | PlainsCapital (the Bank) | |||||||||
Fair value measurements | |||||||||
Acquired OREO | $ 135,200 | ||||||||
Nonrecurring | Level 2 | Estimate of Fair Value | Covered | |||||||||
Fair Value | |||||||||
Covered other real estate owned | 19,555 | 19,555 | |||||||
Nonrecurring | Level 2 | Estimate of Fair Value | Noncovered | |||||||||
Fair Value | |||||||||
Non-covered other real estate owned | 529 | 529 | |||||||
Nonrecurring | Level 3 | Estimate of Fair Value | Covered | |||||||||
Fair Value | |||||||||
Covered impaired loans | 63,194 | 63,194 | |||||||
Nonrecurring | Level 3 | Estimate of Fair Value | Noncovered | |||||||||
Fair Value | |||||||||
Non-covered impaired loans | $ 17,749 | $ 17,749 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Financial assets: | ||||||
Held to maturity securities | $ 332,388 | $ 349,939 | ||||
Non-covered loans, net | 6,737,417 | 6,212,712 | ||||
Covered loans, net | 142,737 | 179,400 | ||||
Broker-dealer and clearing organization receivables | 1,491,507 | 1,464,378 | ||||
FDIC indemnification asset | 22,831 | $ 23,525 | 29,340 | $ 33,143 | $ 40,304 | $ 71,313 |
Financial liabilities: | ||||||
Broker-dealer and clearing organization payables | 1,396,401 | 1,287,563 | ||||
Carrying Amount | ||||||
Financial assets: | ||||||
Cash and cash equivalents | 406,150 | 487,382 | ||||
Assets segregated for regulatory purposes | 220,115 | 186,578 | ||||
Securities purchased under agreements to resell | 164,656 | 186,537 | ||||
Held to maturity securities | 348,163 | 355,849 | ||||
Loans held for sale | 137,358 | 133,754 | ||||
Non-covered loans, net | 6,737,417 | 6,212,712 | ||||
Covered loans, net | 142,737 | 179,400 | ||||
Broker-dealer and clearing organization receivables | 1,491,507 | 1,464,378 | ||||
FDIC indemnification asset | 22,831 | 29,340 | ||||
Other assets | 70,998 | 64,862 | ||||
Financial liabilities: | ||||||
Deposits | 8,290,233 | 7,978,119 | ||||
Broker-dealer and clearing organization payables | 1,396,401 | 1,287,563 | ||||
Short-term borrowings | 1,216,649 | 1,206,424 | ||||
Debt | 287,204 | 275,821 | ||||
Other liabilities | 6,032 | 4,795 | ||||
Estimate of Fair Value | ||||||
Financial assets: | ||||||
Cash and cash equivalents | 406,150 | 487,382 | ||||
Assets segregated for regulatory purposes | 220,115 | 186,578 | ||||
Securities purchased under agreements to resell | 164,656 | 186,537 | ||||
Held to maturity securities | 332,388 | 349,939 | ||||
Loans held for sale | 137,358 | 133,754 | ||||
Non-covered loans, net | 6,833,717 | 6,406,757 | ||||
Covered loans, net | 217,503 | 269,386 | ||||
Broker-dealer and clearing organization receivables | 1,491,507 | 1,464,378 | ||||
FDIC indemnification asset | 22,831 | 20,122 | ||||
Other assets | 70,998 | 64,862 | ||||
Financial liabilities: | ||||||
Deposits | 8,279,098 | 7,973,101 | ||||
Broker-dealer and clearing organization payables | 1,396,401 | 1,287,563 | ||||
Short-term borrowings | 1,216,649 | 1,206,424 | ||||
Debt | 284,921 | 289,719 | ||||
Other liabilities | 6,032 | 4,795 | ||||
Estimate of Fair Value | Level 1 | ||||||
Financial assets: | ||||||
Cash and cash equivalents | 406,150 | 487,382 | ||||
Assets segregated for regulatory purposes | 220,115 | 186,578 | ||||
Estimate of Fair Value | Level 2 | ||||||
Financial assets: | ||||||
Securities purchased under agreements to resell | 164,656 | 186,537 | ||||
Held to maturity securities | 332,388 | 349,939 | ||||
Loans held for sale | 137,358 | 133,754 | ||||
Non-covered loans, net | 593,276 | 577,889 | ||||
Broker-dealer and clearing organization receivables | 1,491,507 | 1,464,378 | ||||
Other assets | 69,940 | 59,053 | ||||
Financial liabilities: | ||||||
Deposits | 8,279,098 | 7,973,101 | ||||
Broker-dealer and clearing organization payables | 1,396,401 | 1,287,563 | ||||
Short-term borrowings | 1,216,649 | 1,206,424 | ||||
Debt | 284,921 | 289,719 | ||||
Other liabilities | 6,032 | 4,795 | ||||
Estimate of Fair Value | Level 3 | ||||||
Financial assets: | ||||||
Non-covered loans, net | 6,240,441 | 5,828,868 | ||||
Covered loans, net | 217,503 | 269,386 | ||||
FDIC indemnification asset | 22,831 | 20,122 | ||||
Other assets | $ 1,058 | $ 5,809 |
Fair Value Measurements - Adjus
Fair Value Measurements - Adjustments to the carrying value of investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value Measurements | |||
Other equity investments | $ 42,800 | $ 42,800 | $ 38,700 |
Adjustments to the carrying value of these investments | |||
Balance, beginning of period | 26,151 | 22,946 | |
Additional investments | 1,411 | ||
Upward adjustments | 265 | 3,642 | |
Impairments and downward adjustments | (1) | (1,584) | |
Balance, end of period | $ 26,415 | $ 26,415 |
Securities - Trading Securities
Securities - Trading Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of fair value of trading securities | ||
Trading Securities | $ 660,314 | $ 730,685 |
Investment-related Liabilities | ||
Securities sold, not yet purchased, at fair value | 179,582 | 232,821 |
US Treasury Securities | ||
Schedule of fair value of trading securities | ||
Trading Securities | 2,328 | |
Bonds | ||
Schedule of fair value of trading securities | ||
Trading Securities | 30,223 | 52,078 |
Residential mortgage-backed Securities | ||
Schedule of fair value of trading securities | ||
Trading Securities | 360,091 | 372,817 |
Commercial mortgage-backed securities | ||
Schedule of fair value of trading securities | ||
Trading Securities | 5,781 | 6,125 |
Collateralized mortgage obligations | ||
Schedule of fair value of trading securities | ||
Trading Securities | 35,708 | 5,122 |
Corporate securities | ||
Schedule of fair value of trading securities | ||
Trading Securities | 74,249 | 96,182 |
States and political subdivisions | ||
Schedule of fair value of trading securities | ||
Trading Securities | 119,751 | 170,413 |
Unit investment trusts | ||
Schedule of fair value of trading securities | ||
Trading Securities | 24,013 | 22,612 |
Private-label securitized product | ||
Schedule of fair value of trading securities | ||
Trading Securities | 4,806 | 1,631 |
Other | ||
Schedule of fair value of trading securities | ||
Trading Securities | $ 3,364 | $ 3,705 |
Securities - AFS and HTM, Amort
Securities - AFS and HTM, Amortized Cost and FV (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Available for sale | |||
Total amortized cost | $ 893,500 | $ 893,500 | $ 748,255 |
Gross Unrealized Gains | 1,408 | 1,408 | 4,603 |
Gross Unrealized Losses | (20,412) | (20,412) | (8,539) |
Fair Value | 874,496 | 874,496 | 744,319 |
Held to maturity | |||
Amortized cost | 348,163 | 348,163 | 355,849 |
Unrealized Gains | 22 | 22 | 741 |
Unrealized Losses | (15,797) | (15,797) | (6,651) |
Held to maturity, fair value | 332,388 | 332,388 | 349,939 |
Unrealized net gains from equity securities | 100 | 1,600 | |
Equity, at fair value | 21,555 | 21,555 | 21,241 |
Recognized net gain (loss) on equity securities | 100 | (400) | |
US Treasury Securities | |||
Available for sale | |||
Total amortized cost | 18,314 | 18,314 | 24,665 |
Gross Unrealized Gains | 107 | ||
Gross Unrealized Losses | (150) | (150) | (103) |
Fair Value | 18,164 | 18,164 | 24,669 |
Bonds | |||
Available for sale | |||
Total amortized cost | 80,879 | 80,879 | 96,177 |
Gross Unrealized Gains | 326 | 326 | 829 |
Gross Unrealized Losses | (858) | (858) | (366) |
Fair Value | 80,347 | 80,347 | 96,640 |
Held to maturity | |||
Amortized cost | 39,017 | 39,017 | 39,015 |
Unrealized Losses | (2,283) | (2,283) | (1,188) |
Held to maturity, fair value | 36,734 | 36,734 | 37,827 |
Residential mortgage-backed Securities | |||
Available for sale | |||
Total amortized cost | 379,759 | 379,759 | 246,707 |
Gross Unrealized Gains | 81 | 81 | 538 |
Gross Unrealized Losses | (10,627) | (10,627) | (3,740) |
Fair Value | 369,213 | 369,213 | 243,505 |
Held to maturity | |||
Amortized cost | 22,804 | 22,804 | 16,130 |
Unrealized Gains | 44 | ||
Unrealized Losses | (605) | (605) | |
Held to maturity, fair value | 22,199 | 22,199 | 16,174 |
Commercial mortgage-backed securities | |||
Available for sale | |||
Total amortized cost | 11,760 | 11,760 | 11,966 |
Gross Unrealized Gains | 34 | 34 | 105 |
Gross Unrealized Losses | (205) | (205) | (48) |
Fair Value | 11,589 | 11,589 | 12,023 |
Held to maturity | |||
Amortized cost | 87,296 | 87,296 | 71,373 |
Unrealized Gains | 5 | 5 | 241 |
Unrealized Losses | (3,065) | (3,065) | (735) |
Held to maturity, fair value | 84,236 | 84,236 | 70,879 |
Collateralized mortgage obligations | |||
Available for sale | |||
Total amortized cost | 290,576 | 290,576 | 237,848 |
Gross Unrealized Gains | 213 | 213 | 106 |
Gross Unrealized Losses | (7,614) | (7,614) | (4,142) |
Fair Value | 283,175 | 283,175 | 233,812 |
Held to maturity | |||
Amortized cost | 148,399 | 148,399 | 173,928 |
Unrealized Gains | 19 | ||
Unrealized Losses | (7,264) | (7,264) | (3,969) |
Held to maturity, fair value | 141,135 | 141,135 | 169,978 |
Corporate securities | |||
Available for sale | |||
Total amortized cost | 56,647 | 56,647 | 66,868 |
Gross Unrealized Gains | 277 | 277 | 1,819 |
Gross Unrealized Losses | (507) | (507) | (25) |
Fair Value | 56,417 | 56,417 | 68,662 |
States and political subdivisions | |||
Available for sale | |||
Total amortized cost | 55,565 | 55,565 | 64,024 |
Gross Unrealized Gains | 477 | 477 | 1,099 |
Gross Unrealized Losses | (451) | (451) | (115) |
Fair Value | 55,591 | 55,591 | 65,008 |
Held to maturity | |||
Amortized cost | 50,647 | 50,647 | 55,403 |
Unrealized Gains | 17 | 17 | 437 |
Unrealized Losses | (2,580) | (2,580) | (759) |
Held to maturity, fair value | $ 48,084 | $ 48,084 | $ 55,081 |
Securities - AFS in an Unrealiz
Securities - AFS in an Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2018USD ($)item | Dec. 31, 2017USD ($)item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 181 | 58 |
Unrealized loss for twelve months or longer | item | 62 | 38 |
Total | item | 243 | 96 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 418,647 | $ 328,881 |
Unrealized loss for twelve months or longer | 295,831 | 180,876 |
Total | 714,478 | 509,757 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 5,970 | 2,244 |
Unrealized loss for twelve months or longer | 14,442 | 6,295 |
Total | $ 20,412 | $ 8,539 |
US Treasury Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 5 | 6 |
Unrealized loss for twelve months or longer | item | 4 | 1 |
Total | item | 9 | 7 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 12,855 | $ 15,449 |
Unrealized loss for twelve months or longer | 5,309 | 4,150 |
Total | 18,164 | 19,599 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 91 | 69 |
Unrealized loss for twelve months or longer | 59 | 34 |
Total | $ 150 | $ 103 |
Bonds | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 10 | 10 |
Unrealized loss for twelve months or longer | item | 2 | |
Total | item | 12 | 10 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 33,051 | $ 83,476 |
Unrealized loss for twelve months or longer | 20,192 | |
Total | 53,243 | 83,476 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 152 | 366 |
Unrealized loss for twelve months or longer | 705 | |
Total | $ 857 | $ 366 |
Residential mortgage-backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 37 | 15 |
Unrealized loss for twelve months or longer | item | 18 | 11 |
Total | item | 55 | 26 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 219,163 | $ 121,968 |
Unrealized loss for twelve months or longer | 130,927 | 93,358 |
Total | 350,090 | 215,326 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 3,721 | 820 |
Unrealized loss for twelve months or longer | 6,906 | 2,920 |
Total | $ 10,627 | $ 3,740 |
Commercial mortgage-backed securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 1 | 1 |
Unrealized loss for twelve months or longer | item | 1 | |
Total | item | 2 | 1 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 2,882 | $ 5,048 |
Unrealized loss for twelve months or longer | 4,883 | |
Total | 7,765 | 5,048 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 9 | 48 |
Unrealized loss for twelve months or longer | 196 | |
Total | $ 205 | $ 48 |
Collateralized mortgage obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 19 | 16 |
Unrealized loss for twelve months or longer | item | 25 | 17 |
Total | item | 44 | 33 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 86,977 | $ 90,886 |
Unrealized loss for twelve months or longer | 126,497 | 80,492 |
Total | 213,474 | 171,378 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 1,383 | 819 |
Unrealized loss for twelve months or longer | 6,231 | 3,323 |
Total | $ 7,614 | $ 4,142 |
Corporate securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 29 | 1 |
Unrealized loss for twelve months or longer | item | 1 | |
Total | item | 30 | 1 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 34,933 | $ 5,073 |
Unrealized loss for twelve months or longer | 1,923 | |
Total | 36,856 | 5,073 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 432 | 25 |
Unrealized loss for twelve months or longer | 76 | |
Total | $ 508 | $ 25 |
States and political subdivisions | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 80 | 9 |
Unrealized loss for twelve months or longer | item | 11 | 9 |
Total | item | 91 | 18 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 28,786 | $ 6,981 |
Unrealized loss for twelve months or longer | 6,100 | 2,876 |
Total | 34,886 | 9,857 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 182 | 97 |
Unrealized loss for twelve months or longer | 269 | 18 |
Total | $ 451 | $ 115 |
Securities - HTM in an Unrealiz
Securities - HTM in an Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2018USD ($)item | Dec. 31, 2017USD ($)item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 78 | 40 |
Unrealized loss for twelve months or longer | item | 79 | 63 |
Total | item | 157 | 103 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 108,238 | $ 93,489 |
Unrealized loss for twelve months or longer | 212,437 | 191,404 |
Total | 320,675 | 284,893 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 3,188 | 656 |
Unrealized loss for twelve months or longer | 12,609 | 5,995 |
Total | $ 15,797 | $ 6,651 |
Bonds | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 1 | 1 |
Unrealized loss for twelve months or longer | item | 3 | 3 |
Total | item | 4 | 4 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 5,674 | $ 5,950 |
Unrealized loss for twelve months or longer | 31,060 | 31,877 |
Total | 36,734 | 37,827 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 326 | 50 |
Unrealized loss for twelve months or longer | 1,957 | 1,138 |
Total | $ 2,283 | $ 1,188 |
Residential mortgage-backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 4 | |
Total | item | 4 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 22,199 | |
Total | 22,199 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 605 | |
Total | $ 605 | |
Commercial mortgage-backed securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 11 | 7 |
Unrealized loss for twelve months or longer | item | 7 | 2 |
Total | item | 18 | 9 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 40,122 | $ 39,396 |
Unrealized loss for twelve months or longer | 37,325 | 12,659 |
Total | 77,447 | 52,055 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 1,057 | 271 |
Unrealized loss for twelve months or longer | 2,008 | 464 |
Total | $ 3,065 | $ 735 |
Collateralized mortgage obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 7 | 10 |
Unrealized loss for twelve months or longer | item | 18 | 12 |
Total | item | 25 | 22 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 16,262 | $ 37,064 |
Unrealized loss for twelve months or longer | 124,873 | 128,270 |
Total | 141,135 | 165,334 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 519 | 264 |
Unrealized loss for twelve months or longer | 6,745 | 3,705 |
Total | $ 7,264 | $ 3,969 |
States and political subdivisions | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 55 | 22 |
Unrealized loss for twelve months or longer | item | 51 | 46 |
Total | item | 106 | 68 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 23,981 | $ 11,079 |
Unrealized loss for twelve months or longer | 19,179 | 18,598 |
Total | 43,160 | 29,677 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 681 | 71 |
Unrealized loss for twelve months or longer | 1,899 | 688 |
Total | $ 2,580 | $ 759 |
Securities - Equity Securities
Securities - Equity Securities Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2017USD ($)item |
Number of securities | |
Unrealized loss for less than twelve months | item | 1 |
Unrealized loss for twelve months or longer | item | 1 |
Total | item | 2 |
Fair Value | |
Unrealized loss for less than twelve months | $ 944 |
Unrealized loss for twelve months or longer | 6,800 |
Total | 7,744 |
Unrealized Losses | |
Unrealized loss for less than twelve months | 13 |
Unrealized loss for twelve months or longer | 103 |
Total | $ 116 |
Securities - AFS Contractual Ma
Securities - AFS Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
AFS, Amortized Cost, Rolling Maturity | ||
Due in one year or less | $ 49,477 | |
Due after one year through five years | 104,633 | |
Due after five years through ten years | 34,663 | |
Due after ten years | 22,632 | |
Total | 211,405 | |
Total amortized cost | 893,500 | $ 748,255 |
AFS, Fair Value, Rolling Maturity | ||
Due in one year or less | 49,466 | |
Due after one year through five years | 103,861 | |
Due after five years through ten years | 34,218 | |
Due after ten years | 22,974 | |
Total | 210,519 | |
Fair Value | 874,496 | 744,319 |
Residential mortgage-backed Securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 379,759 | |
Total amortized cost | 379,759 | 246,707 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 369,213 | |
Fair Value | 369,213 | 243,505 |
Collateralized mortgage obligations | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 290,576 | |
Total amortized cost | 290,576 | 237,848 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 283,175 | |
Fair Value | 283,175 | $ 233,812 |
Commercial mortgage-backed Securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 11,760 | |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | $ 11,589 |
Securities - HTM Contractual Ma
Securities - HTM Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
HTM, Amortized Cost, Rolling Maturities | ||
Due in one year or less | $ 1,398 | |
Due after one year through five years | 25,735 | |
Due after five years through ten years | 4,914 | |
Due after ten years | 57,617 | |
Total | 89,664 | |
Amortized cost | 348,163 | $ 355,849 |
HTM, Fair Value, Rolling Maturities | ||
Due in one year or less | 1,396 | |
Due after one year through five years | 24,447 | |
Due after five years through ten years | 4,769 | |
Due after ten years | 54,206 | |
Total | 84,818 | |
Fair Value | 332,388 | 349,939 |
Residential mortgage-backed Securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 22,804 | |
Amortized cost | 22,804 | 16,130 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 22,199 | |
Fair Value | 22,199 | 16,174 |
Collateralized mortgage obligations | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 148,399 | |
Amortized cost | 148,399 | 173,928 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 141,135 | |
Fair Value | 141,135 | $ 169,978 |
Commercial mortgage-backed Securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 87,296 | |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | $ 84,236 |
Securities - Additional Informa
Securities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Securities | |||||
Realized net gains from trading securities portfolio | $ 3.2 | $ 5.8 | $ 5.1 | $ 18.7 | |
Carrying amount of securities pledged | 571.3 | 571.3 | $ 738.5 | ||
Fair value of securities pledged | 552.4 | 552.4 | 730.1 | ||
Hilltop Broker-Dealers | |||||
Securities | |||||
Realized net gains from trading securities portfolio | 12.2 | $ 21.8 | 29.7 | $ 38.8 | |
NLC | |||||
Securities | |||||
Deposit with various state insurance departments | $ 12.1 | $ 12.1 | $ 9.3 |
Non-Covered Loans and Allowan_3
Non-Covered Loans and Allowance for Non-Covered Loan Losses - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Loans | ||||||
Total loans | $ 6,796,278 | $ 6,273,669 | ||||
Allowance for loan losses | (58,861) | (60,957) | ||||
Non-covered loans, net | 6,737,417 | 6,212,712 | ||||
Noncovered | ||||||
Loans | ||||||
Total loans | 6,796,278 | 6,273,669 | ||||
Allowance for loan losses | (58,861) | $ (59,996) | (60,957) | $ (58,779) | $ (59,208) | $ (54,186) |
Non-covered loans, net | 6,737,417 | 6,212,712 | ||||
Noncovered | Commercial and industrial | ||||||
Loans | ||||||
Total loans | 1,722,097 | 1,681,205 | ||||
Allowance for loan losses | (21,821) | (23,517) | (23,674) | (23,015) | (21,834) | (21,369) |
Noncovered | Real estate | ||||||
Loans | ||||||
Total loans | 3,381,757 | 3,011,524 | ||||
Allowance for loan losses | (29,065) | (28,584) | (28,775) | (27,539) | (28,734) | (25,236) |
Noncovered | Construction and land development | ||||||
Loans | ||||||
Total loans | 1,052,409 | 962,605 | ||||
Allowance for loan losses | (7,714) | (7,271) | (7,844) | (7,790) | (7,645) | (7,002) |
Noncovered | Consumer | ||||||
Loans | ||||||
Total loans | 46,739 | 40,446 | ||||
Allowance for loan losses | (215) | (207) | (311) | (369) | (524) | (424) |
Noncovered | Broker-dealer | ||||||
Loans | ||||||
Total loans | 593,276 | 577,889 | ||||
Allowance for loan losses | $ (46) | $ (417) | $ (353) | $ (66) | $ (471) | $ (155) |
Non-Covered Loans and Allowan_4
Non-Covered Loans and Allowance for Non-Covered Loan Losses - PCI Loans (Details) - PCI loans - Noncovered - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Carrying values and the outstanding contractual balances of the PCI loans | |||||
Carrying amount | $ 32,553 | $ 32,553 | $ 37,204 | ||
Outstanding balance | 47,698 | 47,698 | 51,064 | ||
Changes in the accretable yield for the acquired impaired loans | |||||
Balance, beginning of period | 5,259 | $ 9,793 | 7,013 | $ 13,116 | |
Additions | 340 | 340 | |||
Reclassifications from nonaccretable difference, net | 1,053 | 277 | 1,603 | 854 | |
Disposals of loans | (603) | (98) | (664) | ||
Accretion | (1,504) | (1,851) | (3,710) | (5,690) | |
Balance, end of period | 5,148 | $ 7,616 | 5,148 | $ 7,616 | |
Nonaccretable difference | $ 21,300 | $ 21,300 | $ 19,200 |
Non-Covered Loans and Allowan_5
Non-Covered Loans and Allowance for Non-Covered Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Impaired loans | |||||
Days outstanding loans and leases receivable are generally considered past due | 90 days | ||||
Noncovered | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | $ 95,330 | $ 95,330 | $ 113,685 | ||
Recorded Investment with No Allowance | 41,043 | 41,043 | 45,031 | ||
Recorded Investment with Allowance | 19,833 | 19,833 | 26,633 | ||
Total Recorded Investment | 60,876 | 60,876 | 71,664 | ||
Related Allowance | 4,914 | 4,914 | 3,428 | ||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 60,581 | $ 70,949 | 66,271 | $ 71,127 | |
Non-accrual loans | |||||
Non-accrual loans | 33,454 | 33,454 | 37,779 | ||
Interest income recorded on accruing impaired loans | 200 | 200 | 400 | 300 | |
Noncovered | Secured | |||||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 23,654 | 20,452 | 23,448 | 18,717 | |
Non-accrual loans | |||||
Non-accrual loans | 21,310 | 21,310 | 20,262 | ||
Noncovered | Unsecured | |||||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 912 | 713 | 1,007 | 817 | |
Non-accrual loans | |||||
Non-accrual loans | 13 | 13 | 616 | ||
Noncovered | Secured by Commercial Properties | |||||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 28,488 | 35,458 | 30,786 | 36,606 | |
Non-accrual loans | |||||
Non-accrual loans | 7,506 | 7,506 | 14,620 | ||
Noncovered | Secured by Residential Properties | |||||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 4,677 | 11,412 | 7,832 | 11,387 | |
Non-accrual loans | |||||
Non-accrual loans | 1,178 | 1,178 | 1,614 | ||
Non-accrual loans held for sale | 3,300 | 3,300 | 2,700 | ||
Noncovered | Residential Construction Loans | |||||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 14 | ||||
Noncovered | Commercial construction loans and land development | |||||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 2,798 | 2,590 | 3,079 | 3,204 | |
Non-accrual loans | |||||
Non-accrual loans | 3,402 | 3,402 | 611 | ||
Noncovered | Consumer | |||||
Average investment in non-covered impaired loans | |||||
Average investment in non-covered impaired loans | 52 | $ 324 | 119 | $ 382 | |
Non-accrual loans | |||||
Non-accrual loans | 45 | 45 | 56 | ||
Noncovered | PCI loans | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 58,144 | 58,144 | 71,328 | ||
Recorded Investment with No Allowance | 21,405 | 21,405 | 16,940 | ||
Recorded Investment with Allowance | 11,148 | 11,148 | 20,264 | ||
Total Recorded Investment | 32,553 | 32,553 | 37,204 | ||
Related Allowance | 1,344 | 1,344 | 2,038 | ||
Non-accrual loans | |||||
Non-accrual loans | 5,100 | 5,100 | 3,300 | ||
Noncovered | PCI loans | Secured | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 15,988 | 15,988 | 19,752 | ||
Recorded Investment with No Allowance | 4,392 | 4,392 | 3,610 | ||
Recorded Investment with Allowance | 1,136 | 1,136 | 2,489 | ||
Total Recorded Investment | 5,528 | 5,528 | 6,099 | ||
Related Allowance | 22 | 22 | 89 | ||
Noncovered | PCI loans | Unsecured | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 2,108 | 2,108 | |||
Recorded Investment with No Allowance | 1,385 | 1,385 | |||
Total Recorded Investment | 1,385 | 1,385 | |||
Noncovered | PCI loans | Secured by Commercial Properties | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 30,671 | 30,671 | 34,598 | ||
Recorded Investment with No Allowance | 13,556 | 13,556 | 7,583 | ||
Recorded Investment with Allowance | 7,514 | 7,514 | 12,092 | ||
Total Recorded Investment | 21,070 | 21,070 | 19,675 | ||
Related Allowance | 891 | 891 | 1,391 | ||
Noncovered | PCI loans | Secured by Residential Properties | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 6,149 | 6,149 | 12,600 | ||
Recorded Investment with No Allowance | 1,879 | 1,879 | 5,307 | ||
Recorded Investment with Allowance | 1,974 | 1,974 | 4,558 | ||
Total Recorded Investment | 3,853 | 3,853 | 9,865 | ||
Related Allowance | 319 | 319 | 325 | ||
Noncovered | PCI loans | Commercial construction loans and land development | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 1,189 | 1,189 | 2,001 | ||
Recorded Investment with No Allowance | 183 | 183 | 428 | ||
Recorded Investment with Allowance | 524 | 524 | 1,010 | ||
Total Recorded Investment | 707 | 707 | 1,438 | ||
Related Allowance | 112 | 112 | 215 | ||
Noncovered | PCI loans | Consumer | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 2,039 | 2,039 | 2,377 | ||
Recorded Investment with No Allowance | 10 | 10 | 12 | ||
Recorded Investment with Allowance | 115 | ||||
Total Recorded Investment | 10 | 10 | 127 | ||
Related Allowance | 18 | ||||
Noncovered | Non-PCI | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 37,186 | 37,186 | 42,357 | ||
Recorded Investment with No Allowance | 19,638 | 19,638 | 28,091 | ||
Recorded Investment with Allowance | 8,685 | 8,685 | 6,369 | ||
Total Recorded Investment | 28,323 | 28,323 | 34,460 | ||
Related Allowance | 3,570 | 3,570 | 1,390 | ||
Noncovered | Non-PCI | Secured | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 25,012 | 25,012 | 23,666 | ||
Recorded Investment with No Allowance | 12,878 | 12,878 | 15,308 | ||
Recorded Investment with Allowance | 5,010 | 5,010 | 2,072 | ||
Total Recorded Investment | 17,888 | 17,888 | 17,380 | ||
Related Allowance | 2,739 | 2,739 | 365 | ||
Noncovered | Non-PCI | Unsecured | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 590 | 590 | 761 | ||
Recorded Investment with No Allowance | 13 | 13 | 616 | ||
Total Recorded Investment | 13 | 13 | 616 | ||
Noncovered | Non-PCI | Secured by Commercial Properties | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 6,717 | 6,717 | 15,504 | ||
Recorded Investment with No Allowance | 3,076 | 3,076 | 10,934 | ||
Recorded Investment with Allowance | 3,130 | 3,130 | 3,686 | ||
Total Recorded Investment | 6,206 | 6,206 | 14,620 | ||
Related Allowance | 782 | 782 | 932 | ||
Noncovered | Non-PCI | Secured by Residential Properties | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 1,225 | 1,225 | 1,596 | ||
Recorded Investment with No Allowance | 769 | 769 | 1,177 | ||
Total Recorded Investment | 769 | 769 | 1,177 | ||
Noncovered | Non-PCI | Residential Construction Loans | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 15 | 15 | 15 | ||
Noncovered | Non-PCI | Commercial construction loans and land development | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 3,475 | 3,475 | 653 | ||
Recorded Investment with No Allowance | 2,857 | 2,857 | |||
Recorded Investment with Allowance | 545 | 545 | 611 | ||
Total Recorded Investment | 3,402 | 3,402 | 611 | ||
Related Allowance | 49 | 49 | 93 | ||
Noncovered | Non-PCI | Consumer | |||||
Non-covered impaired loans | |||||
Unpaid Contractual Principal balance | 152 | 152 | 162 | ||
Recorded Investment with No Allowance | 45 | 45 | 56 | ||
Total Recorded Investment | $ 45 | $ 45 | $ 56 |
Non-Covered Loans and Allowan_6
Non-Covered Loans and Allowance for Non-Covered Loan Losses - TDRs (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018item | Sep. 30, 2017item | Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($)loanitem | |
AB Note | Minimum | PlainsCapital (the Bank) | ||||
TDRs, Non-covered loans | ||||
Number of loans into which a single loan may be reconfigured | item | 2 | |||
Noncovered | ||||
TDRs, Non-covered loans | ||||
Number of TDR loans granted | item | 0 | 0 | 0 | |
Noncovered | Payment Term Extension | ||||
TDRs, Non-covered loans | ||||
Number of TDR loans granted | item | 3 | |||
TDR at extension | $ 3,493 | |||
Total Modifications | $ 3,246 | |||
Number of TDRs granted in preceding twelve months for which payment was at least 30 days past due | item | 1 | 1 | ||
TDR modifications, in which a payment was at least 30 days past due | $ 3,294 | $ 1,481 | ||
TDR with payment at least 30 days past due | $ 3,130 | $ 1,385 | ||
Noncovered | Secured | Payment Term Extension | ||||
TDRs, Non-covered loans | ||||
Number of TDR loans granted | loan | 1 | |||
TDR at extension | $ 1,357 | |||
Total Modifications | $ 1,235 | |||
Noncovered | Secured by Commercial Properties | Payment Term Extension | ||||
TDRs, Non-covered loans | ||||
Number of TDR loans granted | loan | 1 | |||
TDR at extension | $ 1,481 | |||
Total Modifications | $ 1,385 | |||
Number of TDRs granted in preceding twelve months for which payment was at least 30 days past due | item | 1 | 1 | ||
TDR modifications, in which a payment was at least 30 days past due | $ 3,294 | $ 1,481 | ||
TDR with payment at least 30 days past due | $ 3,130 | $ 1,385 | ||
Noncovered | Commercial construction loans and land development | Payment Term Extension | ||||
TDRs, Non-covered loans | ||||
Number of TDR loans granted | loan | 1 | |||
TDR at extension | $ 655 | |||
Total Modifications | $ 626 |
Non-Covered Loans and Allowan_7
Non-Covered Loans and Allowance for Non-Covered Loan Losses - Aging (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | $ 6,796,278 | $ 6,273,669 |
Noncovered | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 60,543 | 16,563 |
Current Loans | 6,703,182 | 6,219,902 |
Total loans | 6,796,278 | 6,273,669 |
Accruing Loans Past Due 90 Days or More | 4,232 | 640 |
Noncovered | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 32,700 | 6,513 |
Noncovered | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 19,291 | 1,723 |
Noncovered | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 8,552 | 8,327 |
Noncovered | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 32,553 | 37,204 |
Noncovered | Secured | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 36,598 | 8,086 |
Current Loans | 1,528,645 | 1,544,131 |
Total loans | 1,570,771 | 1,558,316 |
Accruing Loans Past Due 90 Days or More | 3,544 | 640 |
Noncovered | Secured | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 17,853 | 2,060 |
Noncovered | Secured | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 12,710 | 312 |
Noncovered | Secured | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 6,035 | 5,714 |
Noncovered | Secured | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 5,528 | 6,099 |
Noncovered | Unsecured | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 2,877 | 642 |
Current Loans | 147,064 | 122,247 |
Total loans | 151,326 | 122,889 |
Noncovered | Unsecured | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 2,417 | 642 |
Noncovered | Unsecured | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 460 | |
Noncovered | Unsecured | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 1,385 | |
Noncovered | Secured by Commercial Properties | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 11,921 | 2,637 |
Current Loans | 2,445,812 | 2,213,331 |
Total loans | 2,478,803 | 2,235,643 |
Noncovered | Secured by Commercial Properties | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 6,970 | 442 |
Noncovered | Secured by Commercial Properties | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 3,130 | |
Noncovered | Secured by Commercial Properties | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 1,821 | 2,195 |
Noncovered | Secured by Commercial Properties | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 21,070 | 19,675 |
Noncovered | Secured by Residential Properties | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 2,607 | 3,198 |
Current Loans | 896,494 | 762,818 |
Total loans | 902,954 | 775,881 |
Accruing Loans Past Due 90 Days or More | 688 | |
Noncovered | Secured by Residential Properties | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 1,248 | 1,490 |
Noncovered | Secured by Residential Properties | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 663 | 1,290 |
Noncovered | Secured by Residential Properties | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 696 | 418 |
Noncovered | Secured by Residential Properties | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 3,853 | 9,865 |
Noncovered | Residential Construction Loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 739 | 315 |
Current Loans | 240,901 | 176,937 |
Total loans | 241,640 | 177,252 |
Noncovered | Residential Construction Loans | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 739 | 315 |
Noncovered | Commercial construction loans and land development | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 4,135 | 1,471 |
Current Loans | 805,927 | 782,444 |
Total loans | 810,769 | 785,353 |
Noncovered | Commercial construction loans and land development | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 3,100 | 1,370 |
Noncovered | Commercial construction loans and land development | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 1,035 | 101 |
Noncovered | Commercial construction loans and land development | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 707 | 1,438 |
Noncovered | Consumer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 1,666 | 214 |
Current Loans | 45,063 | 40,105 |
Total loans | 46,739 | 40,446 |
Noncovered | Consumer | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 373 | 194 |
Noncovered | Consumer | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 1,293 | 20 |
Noncovered | Consumer | PCI loans | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 10 | 127 |
Noncovered | Broker-dealer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Current Loans | 593,276 | 577,889 |
Total loans | 593,276 | 577,889 |
Noncovered | PrimeLending | U.S. Government Agencies | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Accruing Loans Past Due 90 Days or More | 76,400 | 84,500 |
Unpaid principal balance loans past due 90 days or more | $ 77,200 | $ 85,200 |
Non-Covered Loans and Allowan_8
Non-Covered Loans and Allowance for Non-Covered Loan Losses - Internal Risk Grades (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Internal risk grades of non-covered loans | ||
Total loans | $ 6,796,278 | $ 6,273,669 |
Noncovered | ||
Internal risk grades of non-covered loans | ||
Total loans | 6,796,278 | 6,273,669 |
Noncovered | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 6,621,868 | 6,092,219 |
Noncovered | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total loans | 7,411 | 27,260 |
Noncovered | Substandard | ||
Internal risk grades of non-covered loans | ||
Total loans | 134,446 | 116,986 |
Noncovered | Secured | ||
Internal risk grades of non-covered loans | ||
Total loans | 1,570,771 | 1,558,316 |
Noncovered | Secured | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 1,499,468 | 1,483,502 |
Noncovered | Secured | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total loans | 7,289 | 17,354 |
Noncovered | Secured | Substandard | ||
Internal risk grades of non-covered loans | ||
Total loans | 58,486 | 51,361 |
Noncovered | Unsecured | ||
Internal risk grades of non-covered loans | ||
Total loans | 151,326 | 122,889 |
Noncovered | Unsecured | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 148,499 | 121,774 |
Noncovered | Unsecured | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total loans | 122 | |
Noncovered | Unsecured | Substandard | ||
Internal risk grades of non-covered loans | ||
Total loans | 1,320 | 1,115 |
Noncovered | Secured by Commercial Properties | ||
Internal risk grades of non-covered loans | ||
Total loans | 2,478,803 | 2,235,643 |
Noncovered | Secured by Commercial Properties | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 2,399,783 | 2,154,595 |
Noncovered | Secured by Commercial Properties | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total loans | 7,647 | |
Noncovered | Secured by Commercial Properties | Substandard | ||
Internal risk grades of non-covered loans | ||
Total loans | 57,950 | 53,726 |
Noncovered | Secured by Residential Properties | ||
Internal risk grades of non-covered loans | ||
Total loans | 902,954 | 775,881 |
Noncovered | Secured by Residential Properties | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 885,974 | 756,091 |
Noncovered | Secured by Residential Properties | Substandard | ||
Internal risk grades of non-covered loans | ||
Total loans | 13,127 | 9,925 |
Noncovered | Residential Construction Loans | ||
Internal risk grades of non-covered loans | ||
Total loans | 241,640 | 177,252 |
Noncovered | Residential Construction Loans | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 241,640 | 177,252 |
Noncovered | Commercial construction loans and land development | ||
Internal risk grades of non-covered loans | ||
Total loans | 810,769 | 785,353 |
Noncovered | Commercial construction loans and land development | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 806,594 | 780,905 |
Noncovered | Commercial construction loans and land development | Special Mention | ||
Internal risk grades of non-covered loans | ||
Total loans | 2,259 | |
Noncovered | Commercial construction loans and land development | Substandard | ||
Internal risk grades of non-covered loans | ||
Total loans | 3,468 | 751 |
Noncovered | Consumer | ||
Internal risk grades of non-covered loans | ||
Total loans | 46,739 | 40,446 |
Noncovered | Consumer | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 46,634 | 40,211 |
Noncovered | Consumer | Substandard | ||
Internal risk grades of non-covered loans | ||
Total loans | 95 | 108 |
Noncovered | Broker-dealer | ||
Internal risk grades of non-covered loans | ||
Total loans | 593,276 | 577,889 |
Noncovered | Broker-dealer | Pass | ||
Internal risk grades of non-covered loans | ||
Total loans | 593,276 | 577,889 |
Noncovered | PCI loans | ||
Internal risk grades of non-covered loans | ||
Total loans | 32,553 | 37,204 |
Noncovered | PCI loans | Secured | ||
Internal risk grades of non-covered loans | ||
Total loans | 5,528 | 6,099 |
Noncovered | PCI loans | Unsecured | ||
Internal risk grades of non-covered loans | ||
Total loans | 1,385 | |
Noncovered | PCI loans | Secured by Commercial Properties | ||
Internal risk grades of non-covered loans | ||
Total loans | 21,070 | 19,675 |
Noncovered | PCI loans | Secured by Residential Properties | ||
Internal risk grades of non-covered loans | ||
Total loans | 3,853 | 9,865 |
Noncovered | PCI loans | Commercial construction loans and land development | ||
Internal risk grades of non-covered loans | ||
Total loans | 707 | 1,438 |
Noncovered | PCI loans | Consumer | ||
Internal risk grades of non-covered loans | ||
Total loans | $ 10 | $ 127 |
Non-Covered Loans and Allowan_9
Non-Covered Loans and Allowance for Non-Covered Loan Losses - Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | $ 60,957 | |||||
Provision (recovery) for loan losses | $ (371) | $ 1,260 | (1,838) | $ 8,818 | ||
Balance, end of period | 58,861 | 58,861 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | $ 6,796,278 | $ 6,273,669 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | 58,861 | 60,957 | 58,861 | 60,957 | ||
Noncovered | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 59,996 | 59,208 | 60,957 | 54,186 | ||
Provision (recovery) for loan losses | 307 | 479 | (456) | 6,581 | ||
Loans charged off | (1,846) | (1,305) | (5,335) | (3,582) | ||
Recoveries on charged off loans | 404 | 397 | 3,695 | 1,594 | ||
Balance, end of period | 58,861 | 58,779 | 58,861 | 58,779 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment | 26,604 | 31,212 | ||||
Loans collectively evaluated for impairment | 6,737,121 | 6,205,253 | ||||
Total loans | 6,796,278 | 6,273,669 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment, allowance | 3,570 | 1,390 | ||||
Loans collectively evaluated for impairment, allowance | 53,947 | 57,529 | ||||
Total loans, allowance | 59,996 | 59,208 | 60,957 | 54,186 | 58,861 | 60,957 |
Noncovered | Commercial and industrial | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 23,517 | 21,834 | 23,674 | 21,369 | ||
Provision (recovery) for loan losses | (242) | 2,165 | (123) | 3,376 | ||
Loans charged off | (1,820) | (1,264) | (5,236) | (3,070) | ||
Recoveries on charged off loans | 366 | 280 | 3,506 | 1,340 | ||
Balance, end of period | 21,821 | 23,015 | 21,821 | 23,015 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment | 17,255 | 16,819 | ||||
Loans collectively evaluated for impairment | 1,697,929 | 1,658,287 | ||||
Total loans | 1,722,097 | 1,681,205 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment, allowance | 2,739 | 365 | ||||
Loans collectively evaluated for impairment, allowance | 19,060 | 23,220 | ||||
Total loans, allowance | 23,517 | 21,834 | 23,674 | 21,369 | 21,821 | 23,674 |
Noncovered | Real estate | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 28,584 | 28,734 | 28,775 | 25,236 | ||
Provision (recovery) for loan losses | 450 | (1,278) | 186 | 2,424 | ||
Loans charged off | (5) | (30) | (305) | |||
Recoveries on charged off loans | 31 | 88 | 134 | 184 | ||
Balance, end of period | 29,065 | 27,539 | 29,065 | 27,539 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment | 5,947 | 13,782 | ||||
Loans collectively evaluated for impairment | 3,350,887 | 2,968,202 | ||||
Total loans | 3,381,757 | 3,011,524 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment, allowance | 782 | 932 | ||||
Loans collectively evaluated for impairment, allowance | 27,073 | 26,127 | ||||
Total loans, allowance | 28,584 | 28,734 | 28,775 | 25,236 | 29,065 | 28,775 |
Noncovered | Construction and land development | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 7,271 | 7,645 | 7,844 | 7,002 | ||
Provision (recovery) for loan losses | 443 | 144 | (130) | 796 | ||
Loans charged off | (3) | (13) | ||||
Recoveries on charged off loans | 4 | 5 | ||||
Balance, end of period | 7,714 | 7,790 | 7,714 | 7,790 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment | 3,402 | 611 | ||||
Loans collectively evaluated for impairment | 1,048,300 | 960,556 | ||||
Total loans | 1,052,409 | 962,605 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans individually evaluated for impairment, allowance | 49 | 93 | ||||
Loans collectively evaluated for impairment, allowance | 7,553 | 7,536 | ||||
Total loans, allowance | 7,271 | 7,645 | 7,844 | 7,002 | 7,714 | 7,844 |
Noncovered | Consumer | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 207 | 524 | 311 | 424 | ||
Provision (recovery) for loan losses | 27 | (147) | (82) | 74 | ||
Loans charged off | (26) | (33) | (69) | (194) | ||
Recoveries on charged off loans | 7 | 25 | 55 | 65 | ||
Balance, end of period | 215 | 369 | 215 | 369 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment | 46,729 | 40,319 | ||||
Total loans | 46,739 | 40,446 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment, allowance | 215 | 293 | ||||
Total loans, allowance | 207 | 524 | 311 | 424 | 215 | 311 |
Noncovered | Broker-dealer | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 417 | 471 | 353 | 155 | ||
Provision (recovery) for loan losses | (371) | (405) | (307) | (89) | ||
Balance, end of period | 46 | 66 | 46 | 66 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment | 593,276 | 577,889 | ||||
Total loans | 593,276 | 577,889 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment, allowance | 46 | 353 | ||||
Total loans, allowance | 417 | $ 471 | 353 | $ 155 | 46 | 353 |
Noncovered | PCI loans | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 2,038 | |||||
Balance, end of period | 1,344 | 1,344 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | 32,553 | 37,204 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | 1,344 | 2,038 | 1,344 | 2,038 | ||
Noncovered | PCI loans | Commercial and industrial | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 89 | |||||
Balance, end of period | 22 | 22 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | 6,913 | 6,099 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | 22 | 89 | 22 | 89 | ||
Noncovered | PCI loans | Real estate | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 1,716 | |||||
Balance, end of period | 1,210 | 1,210 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | 24,923 | 29,540 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | 1,210 | 1,716 | 1,210 | 1,716 | ||
Noncovered | PCI loans | Construction and land development | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 215 | |||||
Balance, end of period | 112 | 112 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | 707 | 1,438 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | $ 112 | 215 | 112 | 215 | ||
Noncovered | PCI loans | Consumer | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 18 | |||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | $ 10 | 127 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | $ 18 | $ 18 |
Covered Assets and Indemnific_3
Covered Assets and Indemnification Asset - Indemnification Asset (Details) - USD ($) $ in Thousands | Oct. 17, 2018 | Sep. 13, 2013 | Sep. 30, 2018 |
Loans | |||
Payment by the FDIC to bank | $ 145,800 | ||
PlainsCapital (the Bank) | Subsequent Events | Termination Agreement With FDIC | |||
Loans | |||
Payment by the FDIC to bank | $ 6,260 | ||
PlainsCapital (the Bank) | FNB | Covered | |||
Loans | |||
Percentage of net losses to be absorbed by FDIC on the first $240.4 million of net losses incurred as per the loss sharing agreement | 80.00% | ||
Threshold amount of net losses incurred for 80% of net losses to be absorbed by FDIC as per the loss sharing agreement, first layer | $ 240,400 | ||
Percentage of net losses to be absorbed by FDIC in excess of $240.4 million up to and including $365.7 million of net losses incurred as per the loss sharing agreement | 0.00% | ||
Percentage of net losses to be absorbed by FDIC in excess of $365.7 million of net losses incurred as per the loss sharing agreement | 80.00% | ||
Threshold amount of net losses incurred for 0% of net losses to be absorbed by FDIC as per the loss sharing agreement, second layer | $ 365,700 | ||
Threshold limit of subsequent recoveries reimbursable to the FDIC under the loss share agreement | $ 0 | ||
Period for which payment is required to be made to the FDIC of true-up amount | 10 years | ||
Payment accrual based on the current aggregate estimate of realized losses | $ 16,600 | ||
PlainsCapital (the Bank) | FNB | Covered | Commercial Loan | |||
Loans | |||
Period of loss-sharing agreements in effect | 5 years | ||
Period of loss recovery provisions in effect | 8 years | ||
PlainsCapital (the Bank) | FNB | Covered | Single Family Residential Loans | |||
Loans | |||
Period of loss-sharing agreements in effect | 10 years | ||
Period of loss recovery provisions in effect | 10 years |
Covered Assets and Indemnific_4
Covered Assets and Indemnification Asset - Covered Loans Summary (Details) $ in Thousands | Sep. 13, 2013USD ($) | Sep. 30, 2018USD ($)item | Dec. 31, 2017USD ($) |
Covered Loans | |||
Allowance for covered loans | $ (1,291) | $ (2,729) | |
Total covered loans, net of allowance | 142,737 | 179,400 | |
Covered | |||
Covered Loans | |||
Total covered loans | 144,028 | 182,129 | |
Allowance for covered loans | (1,291) | (2,729) | |
Total covered loans, net of allowance | 142,737 | 179,400 | |
Covered | Commercial and industrial | |||
Covered Loans | |||
Total covered loans | 890 | 1,055 | |
Covered | Real estate | |||
Covered Loans | |||
Total covered loans | 141,858 | 179,359 | |
Covered | Construction and land development | |||
Covered Loans | |||
Total covered loans | $ 1,280 | $ 1,715 | |
Covered | Acquired loans | |||
Loans | |||
Fair value of loans acquired | $ 1,100,000 | ||
Carryover of the allowance for loan losses recorded | $ 0 | ||
Minimum number of layers of common risk | item | 2 |
Covered Assets and Indemnific_5
Covered Assets and Indemnification Asset - Covered PCI Loans (Details) - Covered - PCI loans - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Carrying value and the outstanding contractual balance of the covered PCI loans | |||||
Carrying amount | $ 65,004 | $ 65,004 | $ 87,113 | ||
Outstanding balance | 138,490 | 138,490 | 179,019 | ||
Changes in the accretable yield for the acquired impaired loans | |||||
Balance, beginning of period | 81,393 | $ 128,307 | 91,833 | $ 143,731 | |
Reclassifications from nonaccretable difference, net | 5,649 | 4,096 | 15,364 | 27,120 | |
Transfer of loans to covered OREO | (142) | (77) | (989) | (857) | |
Accretion | (6,987) | (10,040) | (26,295) | (47,708) | |
Balance, end of period | 79,913 | $ 122,286 | 79,913 | $ 122,286 | |
Nonaccretable difference | $ 51,500 | $ 51,500 | $ 72,700 |
Covered Assets and Indemnific_6
Covered Assets and Indemnification Asset - Impaired Loans (Details) - Covered - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Impaired loans | |||||
Unpaid Contractual Principal Balance | $ 188,811 | $ 188,811 | $ 233,230 | ||
Recorded Investment with No Allowance | 7,819 | 7,819 | 8,023 | ||
Recorded Investment with Allowance | 63,238 | 63,238 | 84,472 | ||
Total Recorded Investment | 71,057 | 71,057 | 92,495 | ||
Related Allowance | 1,268 | 1,268 | 2,697 | ||
Average investment in covered impaired loans | |||||
Average investment | 76,043 | $ 98,838 | 81,777 | $ 116,123 | |
Non-accrual loans | |||||
Non-accrual loans | 5,777 | 5,777 | 5,104 | ||
Interest income recorded | 300 | 900 | 600 | 1,200 | |
Secured | |||||
Average investment in covered impaired loans | |||||
Average investment | 139 | 396 | 162 | 775 | |
Unsecured | |||||
Average investment in covered impaired loans | |||||
Average investment | 105 | 170 | |||
Secured by Commercial Properties | |||||
Average investment in covered impaired loans | |||||
Average investment | 12,817 | 28,110 | 15,905 | 39,323 | |
Secured by Residential Properties | |||||
Average investment in covered impaired loans | |||||
Average investment | 63,082 | 68,843 | 65,699 | 73,093 | |
Non-accrual loans | |||||
Non-accrual loans | 5,772 | 5,772 | 5,087 | ||
Commercial construction loans and land development | |||||
Average investment in covered impaired loans | |||||
Average investment | 5 | $ 1,384 | 11 | $ 2,762 | |
Non-accrual loans | |||||
Non-accrual loans | 5 | 5 | 17 | ||
PCI loans | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 181,522 | 181,522 | 226,889 | ||
Recorded Investment with No Allowance | 1,766 | 1,766 | 2,641 | ||
Recorded Investment with Allowance | 63,238 | 63,238 | 84,472 | ||
Total Recorded Investment | 65,004 | 65,004 | 87,113 | ||
Related Allowance | 1,268 | 1,268 | 2,697 | ||
Non-accrual loans | |||||
Non-accrual loans | 0 | 0 | 0 | ||
PCI loans | Secured | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 3,156 | 3,156 | 3,783 | ||
Recorded Investment with Allowance | 130 | 130 | 194 | ||
Total Recorded Investment | 130 | 130 | 194 | ||
Related Allowance | 14 | 14 | 19 | ||
PCI loans | Unsecured | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 5,380 | 5,380 | 5,732 | ||
PCI loans | Secured by Commercial Properties | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 50,379 | 50,379 | 80,223 | ||
Recorded Investment with No Allowance | 1,580 | 1,580 | 2,388 | ||
Recorded Investment with Allowance | 6,671 | 6,671 | 21,171 | ||
Total Recorded Investment | 8,251 | 8,251 | 23,559 | ||
Related Allowance | 469 | 469 | 1,817 | ||
PCI loans | Secured by Residential Properties | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 112,174 | 112,174 | 125,361 | ||
Recorded Investment with No Allowance | 186 | 186 | 249 | ||
Recorded Investment with Allowance | 56,437 | 56,437 | 63,107 | ||
Total Recorded Investment | 56,623 | 56,623 | 63,356 | ||
Related Allowance | 785 | 785 | 861 | ||
PCI loans | Residential Construction Loans | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 643 | 643 | 672 | ||
PCI loans | Commercial construction loans and land development | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 9,790 | 9,790 | 11,118 | ||
Recorded Investment with No Allowance | 4 | ||||
Total Recorded Investment | 4 | ||||
Non-PCI | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 7,289 | 7,289 | 6,341 | ||
Recorded Investment with No Allowance | 6,053 | 6,053 | 5,382 | ||
Total Recorded Investment | 6,053 | 6,053 | 5,382 | ||
Non-PCI | Secured | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 44 | 44 | 44 | ||
Non-PCI | Secured by Residential Properties | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 7,236 | 7,236 | 6,279 | ||
Recorded Investment with No Allowance | 6,048 | 6,048 | 5,370 | ||
Total Recorded Investment | 6,048 | 6,048 | 5,370 | ||
Non-PCI | Commercial construction loans and land development | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 9 | 9 | 18 | ||
Recorded Investment with No Allowance | 5 | 5 | 12 | ||
Total Recorded Investment | $ 5 | $ 5 | $ 12 |
Covered Assets and Indemnific_7
Covered Assets and Indemnification Asset - TDRs (Details) - Covered - loan | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Recorded Investment in loans | ||||
Number of TDR loans granted | 0 | 0 | 0 | 0 |
Number of TDRs granted in preceding twelve months for which payment was at least 30 days past due | 0 | 0 |
Covered Assets and Indemnific_8
Covered Assets and Indemnification Asset - Aging (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Covered Assets and Indemnification Asset | ||
Total loans | $ 6,796,278 | $ 6,273,669 |
Covered | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 5,255 | 10,421 |
Current Loans | 73,769 | 84,595 |
Total loans | 144,028 | 182,129 |
Accruing Loans Past Due 90 Days or More | 283 | |
Covered | Financing Receivables, 30 to 59 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 2,407 | 5,871 |
Covered | Financing Receivables, 60 to 89 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 555 | 1,324 |
Covered | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 2,293 | 3,226 |
Covered | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 65,004 | 87,113 |
Covered | Secured | ||
Covered Assets and Indemnification Asset | ||
Current Loans | 760 | 861 |
Total loans | 890 | 1,055 |
Covered | Secured | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 130 | 194 |
Covered | Secured by Commercial Properties | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 65 | 322 |
Current Loans | 8,799 | 11,472 |
Total loans | 17,115 | 35,353 |
Covered | Secured by Commercial Properties | Financing Receivables, 30 to 59 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 65 | 209 |
Covered | Secured by Commercial Properties | Financing Receivables, 60 to 89 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 113 | |
Covered | Secured by Commercial Properties | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 8,251 | 23,559 |
Covered | Secured by Residential Properties | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 5,190 | 10,061 |
Current Loans | 62,930 | 70,589 |
Total loans | 124,743 | 144,006 |
Accruing Loans Past Due 90 Days or More | 283 | |
Covered | Secured by Residential Properties | Financing Receivables, 30 to 59 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 2,342 | 5,624 |
Covered | Secured by Residential Properties | Financing Receivables, 60 to 89 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 555 | 1,211 |
Covered | Secured by Residential Properties | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 2,293 | 3,226 |
Covered | Secured by Residential Properties | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | 56,623 | 63,356 |
Covered | Commercial construction loans and land development | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 38 | |
Current Loans | 1,280 | 1,673 |
Total loans | $ 1,280 | 1,715 |
Covered | Commercial construction loans and land development | Financing Receivables, 30 to 59 Days Past Due | ||
Covered Assets and Indemnification Asset | ||
Total Past Due Loans | 38 | |
Covered | Commercial construction loans and land development | PCI loans | ||
Covered Assets and Indemnification Asset | ||
Total loans | $ 4 |
Covered Assets and Indemnific_9
Covered Assets and Indemnification Asset - Internal Risk Grades (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Internal risk grades of covered loans in the portfolio | ||
Total loans | $ 6,796,278 | $ 6,273,669 |
Covered | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 144,028 | 182,129 |
Covered | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 65,004 | 87,113 |
Covered | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 73,911 | 81,583 |
Covered | Special Mention | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 395 | 356 |
Covered | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 4,718 | 13,077 |
Covered | Secured | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 890 | 1,055 |
Covered | Secured | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 130 | 194 |
Covered | Secured | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 379 | 429 |
Covered | Secured | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 381 | 432 |
Covered | Secured by Commercial Properties | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 17,115 | 35,353 |
Covered | Secured by Commercial Properties | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 8,251 | 23,559 |
Covered | Secured by Commercial Properties | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 8,168 | 10,961 |
Covered | Secured by Commercial Properties | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 696 | 833 |
Covered | Secured by Residential Properties | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 124,743 | 144,006 |
Covered | Secured by Residential Properties | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 56,623 | 63,356 |
Covered | Secured by Residential Properties | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 64,100 | 68,544 |
Covered | Secured by Residential Properties | Special Mention | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 395 | 356 |
Covered | Secured by Residential Properties | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 3,625 | 11,750 |
Covered | Commercial construction loans and land development | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 1,280 | 1,715 |
Covered | Commercial construction loans and land development | PCI loans | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 4 | |
Covered | Commercial construction loans and land development | Pass | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | 1,264 | 1,649 |
Covered | Commercial construction loans and land development | Substandard | ||
Internal risk grades of covered loans in the portfolio | ||
Total loans | $ 16 | $ 62 |
Covered Assets and Indemnifi_10
Covered Assets and Indemnification Asset - Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | $ 60,957 | |||||
Provision (recovery) for loan losses | $ (371) | $ 1,260 | (1,838) | $ 8,818 | ||
Balance, end of period | 58,861 | 58,861 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | $ 6,796,278 | $ 6,273,669 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | 58,861 | 60,957 | 58,861 | 60,957 | ||
Covered | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 1,974 | 1,359 | 2,729 | 413 | ||
Provision (recovery) for loan losses | (678) | 781 | (1,382) | 2,237 | ||
Loans charged off | (6) | (63) | (527) | |||
Recoveries on charged off loans | 1 | 1 | 7 | 18 | ||
Balance, end of period | 1,291 | 2,141 | 1,291 | 2,141 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment | 79,024 | 95,016 | ||||
Total loans | 144,028 | 182,129 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment, allowance | 23 | 32 | ||||
Total loans, allowance | 1,974 | 1,359 | 2,729 | 413 | 1,291 | 2,729 |
Covered | Commercial and industrial | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 19 | 47 | 24 | 35 | ||
Provision (recovery) for loan losses | (1) | 34 | (6) | 46 | ||
Loans charged off | (6) | |||||
Recoveries on charged off loans | 6 | |||||
Balance, end of period | 18 | 81 | 18 | 81 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment | 760 | 861 | ||||
Total loans | 890 | 1,055 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment, allowance | 4 | 5 | ||||
Total loans, allowance | 19 | 47 | 24 | 35 | 18 | 24 |
Covered | Real estate | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 1,955 | 684 | 2,702 | 378 | ||
Provision (recovery) for loan losses | (677) | 1,093 | (1,367) | 1,915 | ||
Loans charged off | (6) | (63) | (521) | |||
Recoveries on charged off loans | 1 | 1 | 5 | |||
Balance, end of period | 1,273 | 1,777 | 1,273 | 1,777 | ||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment | 76,984 | 92,444 | ||||
Total loans | 141,858 | 179,359 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment, allowance | 19 | 24 | ||||
Total loans, allowance | 1,955 | 684 | 2,702 | 378 | 1,273 | 2,702 |
Covered | Construction and land development | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 628 | 3 | ||||
Provision (recovery) for loan losses | (346) | (9) | 276 | |||
Recoveries on charged off loans | 1 | 6 | 7 | |||
Balance, end of period | 283 | 283 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment | 1,280 | 1,711 | ||||
Total loans | 1,280 | 1,715 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Loans collectively evaluated for impairment, allowance | 3 | |||||
Total loans, allowance | $ 628 | 3 | $ 283 | 3 | ||
Covered | PCI loans | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 2,697 | |||||
Balance, end of period | 1,268 | 1,268 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | 65,004 | 87,113 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | 1,268 | 2,697 | 1,268 | 2,697 | ||
Covered | PCI loans | Commercial and industrial | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 19 | |||||
Balance, end of period | 14 | 14 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | 130 | 194 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | 14 | 19 | 14 | 19 | ||
Covered | PCI loans | Real estate | ||||||
Changes in the allowance for loan losses | ||||||
Balance, beginning of period | 2,678 | |||||
Balance, end of period | 1,254 | 1,254 | ||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | 64,874 | 86,915 | ||||
Allowance for loan losses distributed by portfolio segment and impairment methodology | ||||||
Total loans, allowance | $ 1,254 | $ 2,678 | $ 1,254 | 2,678 | ||
Covered | PCI loans | Construction and land development | ||||||
Loan portfolio distributed by portfolio segment and impairment methodology | ||||||
Total loans | $ 4 |
Covered Assets and Indemnifi_11
Covered Assets and Indemnification Asset - Covered OREO (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Activity in covered OREO | ||||
Balance, beginning of period | $ 34,895 | $ 42,304 | $ 36,744 | $ 51,642 |
Additions to covered OREO | 438 | 1,039 | 5,284 | 6,166 |
Dispositions of covered OREO | (5,173) | (2,612) | (10,145) | (14,942) |
Valuation adjustments in the period | (304) | (388) | (2,027) | (2,523) |
Balance, end of period | $ 29,856 | $ 40,343 | $ 29,856 | $ 40,343 |
Covered Assets and Indemnifi_12
Covered Assets and Indemnification Asset - FDIC Indemnification Asset (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Activity in the FDIC Indemnification Asset | ||||
Balance, beginning of period | $ 23,525 | $ 40,304 | $ 29,340 | $ 71,313 |
FDIC Indemnification Asset accretion (amortization) | (694) | (5,348) | (6,509) | (13,533) |
Transfers to due from FDIC and other | (1,813) | (24,637) | ||
Balance, end of period | $ 22,831 | $ 33,143 | 22,831 | $ 33,143 |
FDIC, collections billed | 147,800 | |||
FDIC, collections received | $ 145,800 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - MSR - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Change in fair value of mortgage servicing rights | |||||
Balance, beginning of year | $ 57,373 | $ 43,580 | $ 54,714 | $ 61,968 | $ 61,968 |
Additions | 11,361 | 5,939 | 21,090 | 8,429 | |
Sales | (9,303) | (17,499) | |||
Changes in fair value: Due to changes in model inputs or assumptions | 1,311 | (550) | 5,984 | (1,757) | |
Changes in fair value: Due to customer payoffs | (1,241) | (1,203) | (3,681) | (3,375) | |
Balance, end of year | 68,804 | $ 47,766 | 68,804 | $ 47,766 | 54,714 |
Mortgage loans serviced for others | $ 4,939,171 | $ 4,939,171 | $ 4,762,042 | ||
MSR asset as a percentage of serviced mortgage loans | 1.39% | 1.39% | 1.15% | ||
Key Assumptions | |||||
Weighted average constant prepayment rate (as a percent) | 9.15% | 10.93% | |||
Weighted average discount rate (as a percent) | 11.11% | 11.03% | |||
Weighted average life (in years) | 7 years 8 months 12 days | 6 years 10 months 24 days |
Mortgage Servicing Rights - Sen
Mortgage Servicing Rights - Sensitivity Analysis (Details) - MSR - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Sensitivity analysis | |||||
Constant prepayment rate: Impact of 10% adverse change | $ (1,962) | $ (1,962) | $ (1,948) | ||
Constant prepayment rate: Impact of 20% adverse change | (3,980) | (3,980) | (3,839) | ||
Discount rate: Impact of 10% adverse change | (2,899) | (2,899) | (2,135) | ||
Discount rate: Impact of 20% adverse change | (5,556) | (5,556) | $ (4,103) | ||
Contractually specified servicing fees, late fees and ancillary fees | $ 5,400 | $ 4,200 | $ 17,300 | $ 15,700 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Deposits | ||
Noninterest-bearing demand | $ 2,525,677 | $ 2,411,849 |
Interest-bearing: | ||
NOW accounts | 1,256,547 | 1,202,752 |
Money market | 2,559,451 | 2,222,555 |
Brokered - money market | 11,547 | 101,624 |
Demand | 407,059 | 411,771 |
Savings | 184,869 | 218,812 |
Time | 1,345,083 | 1,313,482 |
Brokered - time | 95,274 | |
Total deposits | $ 8,290,233 | $ 7,978,119 |
Short-term Borrowings (Details)
Short-term Borrowings (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Short-term borrowings | |||
Short-term borrowings | $ 1,216,649 | $ 1,206,424 | |
Hilltop Broker-Dealers | |||
Short-term borrowings | |||
Weighted average interest rate (as a percent) | 3.08% | 2.27% | |
Federal funds purchased. | |||
Short-term borrowings | |||
Short-term borrowings | $ 88,075 | $ 101,775 | |
Securities sold under agreement to repurchase. | |||
Short-term borrowings | |||
Short-term borrowings | 459,574 | 539,149 | |
FHLB notes | |||
Short-term borrowings | |||
Short-term borrowings | 400,000 | $ 250,000 | |
Average balance during the year | $ 253,022 | $ 435,531 | |
Average interest rate during the year | 2.04% | 1.05% | |
Average interest rate at end of year (as a percent) | 2.33% | 1.30% | |
FHLB notes | Maximum | |||
Short-term borrowings | |||
Maturity term of debt | 365 days | ||
Short-term bank loans. | |||
Short-term borrowings | |||
Short-term borrowings | $ 269,000 | $ 315,500 | |
Federal funds purchased and securities sold under agreements to repurchase. | |||
Short-term borrowings | |||
Average balance during the year | $ 683,835 | $ 549,425 | |
Average interest rate during the year | 1.76% | 0.98% | |
Average interest rate at end of year (as a percent) | 2.01% | 1.21% | |
Securities underlying the agreements at end of period: Carrying value | $ 474,266 | $ 581,636 | |
Securities underlying the agreements at end of period: Estimated fair value | $ 490,719 | $ 598,300 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument | ||
Notes payable | $ 220,192 | $ 208,809 |
Senior Notes due April 2025 | ||
Debt Instrument | ||
Notes payable | 148,569 | 148,455 |
Unamortized discount | 1,431 | 1,545 |
FHLB notes | ||
Debt Instrument | ||
Notes payable | 4,497 | 19,402 |
Unamortized premium | 241 | 436 |
NLIC note payable due May 2033 | ||
Debt Instrument | ||
Notes payable | 10,000 | 10,000 |
NLIC note payable due September 2033 | ||
Debt Instrument | ||
Notes payable | 10,000 | 10,000 |
ASIC note payable due April 2034 | ||
Debt Instrument | ||
Notes payable | 7,500 | 7,500 |
Insurance company line of credit due December 31, 2018 | ||
Debt Instrument | ||
Notes payable | 1,000 | |
Ventures Management line of credit | ||
Debt Instrument | ||
Notes payable | $ 39,626 | $ 12,452 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Taxes | |||||
Effective income tax rate (as a percent) | 17.00% | 37.20% | 21.40% | 33.00% | |
Statutory Federal income tax rate (as a percent) | 21.00% | 35.00% |
Commitments and Contingencies -
Commitments and Contingencies - Legal (Details) | Oct. 23, 2018USD ($) | May 30, 2017USD ($)$ / sharesshares | Jan. 01, 2015$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
SWS | ||||||||||
Commitments and Contingencies | ||||||||||
Fair value acquisition price (in dollars per share) | $ / shares | $ 6.92 | |||||||||
Consideration paid in cash | $ / shares | $ 1.94 | |||||||||
Conversion of common stock | 0.2496 | |||||||||
Representation and Warranty Claims | ||||||||||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | ||||||||||
Balance, beginning of period | $ 30,545,000 | $ 32,554,000 | $ 33,702,000 | $ 40,669,000 | ||||||
Claims made | 5,477,000 | 10,618,000 | 17,827,000 | 27,647,000 | ||||||
Claims resolved with no payment | (578,000) | (10,991,000) | (12,331,000) | (29,079,000) | ||||||
Repurchases | (3,513,000) | (1,326,000) | (6,847,000) | (3,014,000) | ||||||
Indemnification payments | (420,000) | (5,368,000) | ||||||||
Balance, end of period | 31,931,000 | 30,855,000 | $ 32,554,000 | 31,931,000 | 30,855,000 | |||||
Reserve for Indemnification Liability: | ||||||||||
Total | 30,545,000 | 32,554,000 | 32,554,000 | 33,702,000 | 40,669,000 | $ 31,931,000 | $ 33,702,000 | |||
Indemnification Agreement | ||||||||||
Commitments and Contingencies | ||||||||||
Provision for indemnification losses | 900,000 | 2,500,000 | 2,600,000 | 4,500,000 | ||||||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | ||||||||||
Balance, beginning of period | 23,910,000 | 22,367,000 | 23,472,000 | 18,239,000 | ||||||
Additions for new sales | 857,000 | 2,488,000 | 2,599,000 | 4,480,000 | ||||||
Repurchases | (228,000) | (158,000) | (474,000) | (283,000) | ||||||
Early payment defaults | (72,000) | (41,000) | (259,000) | (170,000) | ||||||
Indemnification payments | (4,000) | (124,000) | (713,000) | |||||||
Change in reserves for loans sold in prior years | (292,000) | (1,043,000) | 3,103,000 | |||||||
Balance, end of period | 24,171,000 | 24,656,000 | 22,367,000 | 24,171,000 | 24,656,000 | |||||
Reserve for Indemnification Liability: | ||||||||||
Specific claims | 14,375,000 | 646,000 | ||||||||
Incurred but not reported claims | 9,796,000 | 22,826,000 | ||||||||
Total | $ 23,910,000 | $ 22,367,000 | 22,367,000 | 23,472,000 | $ 18,239,000 | $ 24,171,000 | $ 23,472,000 | |||
DOJ and HUD agreements increase in specific claims that were included in incurred but not reported claims in prior periods | $ 13,500,000 | |||||||||
Shareholder Lawsuits | SWS | ||||||||||
Commitments and Contingencies | ||||||||||
Fair value acquisition price (in dollars per share) | $ / shares | $ 6.38 | |||||||||
Consideration paid in cash | $ / shares | $ 6.38 | |||||||||
Number of shares of SWS common stock held by purported shareholders | shares | 7,438,453 | |||||||||
Stock released from escrow and returned to unissued shares of common stock | $ 1,856,638 | |||||||||
Pre-tax net increase to noninterest income | $ 11,600,000 | |||||||||
Subsequent Events | Settlement To DOJ | ||||||||||
Commitments and Contingencies | ||||||||||
Reserve for settlement | $ 6,750,000 | |||||||||
Subsequent Events | Settlement To HUD | ||||||||||
Commitments and Contingencies | ||||||||||
Reserve for settlement | $ 6,750,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Hilltop Plaza Investment (Details) $ in Millions | Jul. 31, 2018USD ($)aitem | Sep. 30, 2018USD ($)ft²tenantitem |
Gerald J. Ford | Hilltop | ||
Commitments and Contingencies | ||
Ownership interest (as a percent) | 16.40% | |
Jeremy Ford | Diamond Ground, LLC | ||
Commitments and Contingencies | ||
Ownership interest (as a percent) | 10.20% | |
Wife of Corey Prestidge | Diamond Ground, LLC | ||
Commitments and Contingencies | ||
Ownership interest (as a percent) | 10.10% | |
Hilltop Plaza | ||
Commitments and Contingencies | ||
Construction Loan | $ 41 | |
Net Rentable Area | ft² | 120,000 | |
Costs incurred and capitalized | $ 23.8 | |
Hilltop and the Bank | Hilltop Plaza | ||
Commitments and Contingencies | ||
Area of building subject to lease | ft² | 72,000 | |
Number of office and retail lease | item | 2 | |
Total base rent | $ 35 | |
Rent abated | 9 months | |
Hilltop | Hilltop Plaza | ||
Commitments and Contingencies | ||
Term of contract | 129 months | |
PlainsCapital (the Bank) | Hilltop Plaza | ||
Commitments and Contingencies | ||
Term of contract | 129 months | |
Hillcrest Land LLC | ||
Commitments and Contingencies | ||
Acres of land | a | 1.7 | |
Payments to acquire land | $ 38.5 | |
Primary Beneficiary | item | 0 | |
Ground lease term | 99 years | |
Number of tenants | tenant | 3 | |
Ground lease commences | 18 months | |
Ground lease | $ 1.8 | |
Annual ground lease increase (as percent) | 1.00% | |
Hilltop Investments I, LLC | ||
Commitments and Contingencies | ||
Investment contribution | $ 19.3 | |
Diamond Ground, LLC | ||
Commitments and Contingencies | ||
Investment contribution | $ 19.3 | |
Park Plaza | ||
Commitments and Contingencies | ||
Leasehold interest | 50.00% | |
Park Plaza | Hilltop Plaza | ||
Commitments and Contingencies | ||
Ownership interest (as percent) | 50.00% | |
HTH Hillcrest Project LLC | ||
Commitments and Contingencies | ||
Leasehold interest | 25.00% | |
HTH Hillcrest Project LLC | Hilltop Plaza | ||
Commitments and Contingencies | ||
Ownership interest (as percent) | 25.00% | |
Cash contributions | $ 5.3 | |
Diamond Hillcrest | ||
Commitments and Contingencies | ||
Leasehold interest | 25.00% | |
Diamond Hillcrest | Hilltop Plaza | ||
Commitments and Contingencies | ||
Ownership interest (as percent) | 25.00% |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Details) $ in Millions | Sep. 30, 2018USD ($) |
Unused commitments to extend credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 2,200 |
Standby letters of credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 23.3 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan Information (Details) - 2012 Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock based compensation | ||||
Number of awards approved for grant (in shares) | 4,000,000 | 4,000,000 | ||
Common stock remaining available for issuance (in shares) | 1,205,713 | 1,205,713 | ||
Compensation expense | $ 2.4 | $ 2.8 | $ 7.2 | $ 8.7 |
Board of Directors | ||||
Stock based compensation | ||||
Common shares granted to members of board of directors as compensation for director services | 22,269 | 11,959 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - 2012 Plan - RSUs shares in Thousands | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of shares outstanding | |
Balance at the beginning of the period ( in shares) | shares | 1,318 |
Granted (in shares) | shares | 510 |
Vested/Released (in shares) | shares | (369) |
Forfeited (in shares) | shares | (103) |
Balance at the end of the period ( in shares) | shares | 1,356 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 20.89 |
Grant date fair value (in dollars per share) | $ / shares | 24 |
Vested/Released (in dollars per share) | $ / shares | 19.84 |
Forfeited (in dollars per share) | $ / shares | 19.98 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 22.42 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
RSUs and RSAs | |
Stock based compensation | |
Vested/Released number of shares withheld to satisfy employee statutory tax obligations (in shares) | 77,444 |
2012 Plan | RSUs | |
Stock based compensation | |
Vested RSUs which require deferral of share settlement and statutory tax obligations | 17,481 |
Number of shares awarded (in shares) | 510,000 |
Number of awards subject to time-based vesting (in shares) | 1,096,759 |
Number of awards vesting upon achievement of performance goals (in shares) | 258,773 |
Performance period | 3 years |
Vesting period | 3 years |
Unrecognized compensation expense | $ | $ 16 |
Weighted average period for unrecognized compensation expense (in years) | 1 year 5 months 19 days |
2012 Plan | Certain Executives and Key Employees | RSUs | |
Stock based compensation | |
Number of shares awarded (in shares) | 486,155 |
Number of awards subject to time-based vesting (in shares) | 387,197 |
Number of awards vesting upon achievement of performance goals (in shares) | 84,626 |
Performance period | 3 years |
Vesting period | 3 years |
Regulatory Matters - Minimum Ca
Regulatory Matters - Minimum Capital Requirements (Details) - USD ($) $ in Thousands | Oct. 17, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Termination Agreement With FDIC | Minimum | |||
Total capital (to risk-weighted assets) | |||
Percentage of risk weighting assets | 20.00% | ||
Termination Agreement With FDIC | Maximum | |||
Total capital (to risk-weighted assets) | |||
Percentage of risk weighting assets | 100.00% | ||
PlainsCapital (the Bank) | |||
Tier 1 capital (to average assets) | |||
Actual Amount | $ 1,151,669 | $ 1,147,527 | |
Actual Ratio (as a percent) | 11.86% | 12.32% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 4.00% | 4.00% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 4.00% | 4.00% | |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 5.00% | 5.00% | |
Common equity Tier 1 capital (to risk weighted assets) | |||
Actual Amount | $ 1,151,669 | $ 1,147,527 | |
Actual Ratio (as a percent) | 13.88% | 14.47% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 6.375% | 5.75% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 7.00% | 7.00% | |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 6.50% | 6.50% | |
Tier 1 capital (to risk-weighted assets) | |||
Actual Amount | $ 1,151,669 | $ 1,147,527 | |
Actual Ratio (as a percent) | 13.88% | 14.47% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 7.875% | 7.25% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 8.50% | 8.50% | |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 8.00% | 8.00% | |
Total capital (to risk-weighted assets) | |||
Actual Amount | $ 1,213,970 | $ 1,212,793 | |
Actual Ratio (as a percent) | 14.63% | 15.29% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 9.875% | 9.25% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 10.50% | 10.50% | |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 10.00% | 10.00% | |
Hilltop | |||
Tier 1 capital (to average assets) | |||
Actual Amount | $ 1,675,285 | $ 1,688,358 | |
Actual Ratio (as a percent) | 12.40% | 12.94% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 4.00% | 4.00% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 4.00% | 4.00% | |
Common equity Tier 1 capital (to risk weighted assets) | |||
Actual Amount | $ 1,629,899 | $ 1,639,009 | |
Actual Ratio (as a percent) | 16.95% | 17.71% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 6.375% | 5.75% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 7.00% | 7.00% | |
Tier 1 capital (to risk-weighted assets) | |||
Actual Amount | $ 1,675,285 | $ 1,688,358 | |
Actual Ratio (as a percent) | 17.42% | 18.24% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 7.875% | 7.25% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 8.50% | 8.50% | |
Total capital (to risk-weighted assets) | |||
Actual Amount | $ 1,718,018 | $ 1,738,325 | |
Actual Ratio (as a percent) | 17.87% | 18.78% | |
Minimum Capital Requirement Including Conservation Buffer in effect at end of period, ratio (as a percent) | 9.875% | 9.25% | |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 10.50% | 10.50% |
Regulatory Matters - Net Capita
Regulatory Matters - Net Capital Position, Broker-Dealers (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 220,115 | $ 186,578 | $ 207,336 |
Hilltop Securities | |||
Net Capital | |||
Net capital | 214,906 | ||
Less required net capital | 9,836 | ||
Excess net capital | $ 205,070 | ||
Net capital as a percentage of aggregate debit items | 43.70% | ||
Net capital in excess of 5% aggregate debt items | $ 190,317 | ||
HTS Independent Network | |||
Net Capital | |||
Net capital | 3,307 | ||
Less required net capital | 250 | ||
Excess net capital | 3,057 | ||
Hilltop Broker-Dealers | |||
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 220,100 | $ 186,600 |
Regulatory Matters - Insurance
Regulatory Matters - Insurance Subsidiaries (Details) - Texas Department of Insurance - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
NLIC | |||||
Insurance | |||||
Statutory capital and surplus | $ 99,195 | $ 99,195 | $ 93,812 | ||
Statutory net income (loss) | 5,442 | $ (4,147) | 6,576 | $ (10,663) | |
ASIC | |||||
Insurance | |||||
Statutory capital and surplus | 18,158 | 18,158 | $ 22,778 | ||
Statutory net income (loss) | $ (2,765) | $ (1,216) | $ (1,482) | $ (693) |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Oct. 25, 2018 | Jul. 31, 2018 | Jan. 31, 2018 | |
Stockholders' Equity | |||||
Dividend declared per share | $ 0.07 | ||||
Repurchase common stock authorized amount | $ 100,000 | $ 50,000 | |||
Payments to repurchase shares | $ 38,821 | $ 27,388 | |||
Repurchase of common stock (in shares) | 1,702,696 | ||||
Average price (per share) | $ 22.81 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Not Designated as Hedging Instrument | PrimeLending | |||||
Derivative financial instruments | |||||
Net gain (loss) due to changes in the fair value of the derivative instruments | $ 2,200 | $ (9,900) | $ 9,000 | $ (400) | |
Not Designated as Hedging Instrument | Hilltop Broker-Dealers | |||||
Derivative financial instruments | |||||
Net gain (loss) due to changes in the fair value of the derivative instruments | 3,600 | $ (3,600) | 1,400 | 12,600 | |
Not Designated as Hedging Instrument | PlainsCapital (the Bank) | |||||
Derivative financial instruments | |||||
Net gain (loss) due to changes in the fair value of the derivative instruments | 100 | $ 200 | |||
Interest Rate Lock Commitments | |||||
Derivative financial instruments | |||||
Notional Amount | 1,023,165 | 1,023,165 | $ 850,850 | ||
Estimated Fair Value | 20,427 | 20,427 | 18,851 | ||
Customer-based written options | |||||
Derivative financial instruments | |||||
Notional Amount | 31,200 | 31,200 | 21,637 | ||
Estimated Fair Value | (122) | (122) | 38 | ||
Customer-based purchased options | |||||
Derivative financial instruments | |||||
Notional Amount | 31,200 | 31,200 | 21,637 | ||
Estimated Fair Value | 122 | 122 | (38) | ||
Commitments to Purchase MBSs | |||||
Derivative financial instruments | |||||
Notional Amount | 2,832,755 | 2,832,755 | 2,831,635 | ||
Estimated Fair Value | 2,172 | 2,172 | (921) | ||
Commitments to Sell MBSs | |||||
Derivative financial instruments | |||||
Notional Amount | 4,858,032 | 4,858,032 | 4,963,498 | ||
Estimated Fair Value | 7,894 | 7,894 | 2,972 | ||
Commitments to Sell MBSs | PrimeLending | |||||
Derivative financial instruments | |||||
Cash collateral advanced to offset net derivative liability | 8,400 | 8,400 | 800 | ||
Interest rate swaps | |||||
Derivative financial instruments | |||||
Notional Amount | 22,780 | 22,780 | 25,971 | ||
Estimated Fair Value | 195 | 195 | 51 | ||
U.S. Treasury bond futures and options | |||||
Derivative financial instruments | |||||
Notional Amount | 242,900 | 242,900 | 214,500 | ||
Eurodollar futures | |||||
Derivative financial instruments | |||||
Notional Amount | 696,000 | 696,000 | |||
Treasury bond futures and options and Eurodollar futures | PrimeLending and Hilltop Broker-Dealers | |||||
Derivative financial instruments | |||||
Cash collateral advanced to offset net derivative liability | $ 2,300 | $ 2,300 | $ 3,200 |
Balance Sheet Offsetting - Asse
Balance Sheet Offsetting - Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Reverse repurchase agreements: | ||
Net Amounts of Assets Presented in the Balance Sheet | $ 164,656 | $ 186,537 |
Total | ||
Gross Amounts of Recognized Assets | 1,632,642 | 1,576,972 |
Gross Amounts Offset in the Balance Sheet | (293) | |
Net Amounts of Assets Presented in the Balance Sheet | 1,632,349 | 1,576,972 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,566,043) | (1,517,138) |
Net Amount | 66,306 | 59,834 |
Institutional counterparties | ||
Securities borrowed: | ||
Gross Amounts of Recognized Assets | 1,453,985 | 1,386,821 |
Net Amounts of Assets Presented in the Balance Sheet | 1,453,985 | 1,386,821 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,395,791) | (1,327,536) |
Net Amount | 58,194 | 59,285 |
Interest Rate Options | Customer counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 122 | 38 |
Net Amounts of Assets Presented in the Balance Sheet | 122 | 38 |
Gross Amounts Not Offset in the Balance Sheet | ||
Net Amounts of Assets Presented in the Balance Sheet | 122 | 38 |
Interest rate swaps | Institutional counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 195 | |
Net Amounts of Assets Presented in the Balance Sheet | 195 | |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (223) | |
Net Amounts of Assets Presented in the Balance Sheet | (28) | |
Reverse repurchase agreements | Institutional counterparties | ||
Reverse repurchase agreements: | ||
Gross Amounts of Recognized Assets | 164,656 | 186,537 |
Net Amounts of Assets Presented in the Balance Sheet | 164,656 | 186,537 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (163,869) | (186,026) |
Net Amount | 787 | 511 |
Forward MBS Derivatives | Institutional counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 13,684 | 3,576 |
Gross Amounts Offset in the Balance Sheet | (293) | |
Net Amounts of Assets Presented in the Balance Sheet | 13,391 | 3,576 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (6,160) | (3,576) |
Net Amounts of Assets Presented in the Balance Sheet | $ 7,231 | $ 0 |
Balance Sheet Offsetting - Liab
Balance Sheet Offsetting - Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Total | ||
Gross Amounts of Recognized Liabilities | $ 1,803,523 | $ 1,757,011 |
Gross Amounts Offset in the Balance Sheet | (1,257) | |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,803,523 | 1,755,754 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,746,352) | (1,698,701) |
Net Amount | 57,171 | 57,053 |
Institutional counterparties | ||
Securities loaned: | ||
Gross Amounts of Recognized Liabilities | 1,340,502 | 1,215,093 |
Net Amounts of Liabilities Presented in the Balance Sheets | 1,340,502 | 1,215,093 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,283,453) | (1,157,198) |
Net Amount | 57,049 | 57,895 |
Institutional counterparties | Interest Rate Options | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 122 | 38 |
Net Amounts of Liabilities Presented in the Balance Sheet | 122 | 38 |
Gross Amounts Not Offset in the Balance Sheet | ||
Net Amount | 122 | 38 |
Institutional counterparties | Interest rate swaps | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 35 | |
Gross Amounts Offset in the Balance Sheet | (86) | |
Net Amounts of Liabilities Presented in the Balance Sheet | (51) | |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,059) | |
Net Amount | (1,110) | |
Institutional counterparties | Repurchase agreements | ||
Repurchase agreements: | ||
Gross Amounts of Recognized Liabilities | 409,424 | 409,058 |
Net Amounts of Liabilities Presented in the Balance Sheet | 409,424 | 409,058 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (409,424) | (409,058) |
Net Amount | 0 | 0 |
Institutional counterparties | Forward MBS Derivatives | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 3,325 | 2,696 |
Gross Amounts Offset in the Balance Sheet | (1,171) | |
Net Amounts of Liabilities Presented in the Balance Sheet | 3,325 | 1,525 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (3,325) | (1,295) |
Net Amount | 0 | 230 |
Customer counterparties | Repurchase agreements | ||
Repurchase agreements: | ||
Gross Amounts of Recognized Liabilities | 50,150 | 130,091 |
Net Amounts of Liabilities Presented in the Balance Sheet | 50,150 | 130,091 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (50,150) | (130,091) |
Net Amount | $ 0 | $ 0 |
Balance Sheet Offsetting - Secu
Balance Sheet Offsetting - Secured Borrowings (Details) $ in Thousands | Sep. 30, 2018USD ($)item | Dec. 31, 2017USD ($)item |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Number of repurchase-to-maturity transactions outstanding | item | 0 | 0 |
Total borrowings | $ 1,800,076 | $ 1,754,242 |
Gross amount of recognized liabilities for repurchase agreements and securities lending in offsetting disclosure above | 1,800,076 | 1,754,242 |
Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 1,800,076 | 1,754,242 |
US Treasury and agency securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 86,476 | 181,915 |
US Treasury and agency securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 86,476 | 181,915 |
Assets-backed securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 373,098 | 357,234 |
Assets-backed securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 373,098 | 357,234 |
Corporate securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 182 | 11,499 |
Corporate securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 182 | 11,499 |
Equity securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 1,340,320 | 1,203,594 |
Equity securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | $ 1,340,320 | $ 1,203,594 |
Broker-Dealer and Clearing Or_3
Broker-Dealer and Clearing Organization Receivables and Payables (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Receivables: | ||
Securities borrowed | $ 1,453,985 | $ 1,386,821 |
Securities failed to deliver | 18,294 | 25,491 |
Trades in process of settlement | 29,412 | |
Other | 19,228 | 22,654 |
Total receivables | 1,491,507 | 1,464,378 |
Payables: | ||
Securities loaned | 1,340,502 | 1,215,093 |
Correspondents | 22,477 | 30,160 |
Securities failed to receive | 15,663 | 37,864 |
Trades in process of settlement | 12,043 | |
Other | 5,716 | 4,446 |
Total Payables | $ 1,396,401 | $ 1,287,563 |
Reserves for Losses and Loss _3
Reserves for Losses and Loss Adjustment Expenses - Reserve (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Information regarding of the reserve for unpaid losses and loss adjustment expenses | ||
Reserve for unpaid losses and allocated LAE balance, net | $ 16,831 | $ 17,470 |
Reinsurance recoverables on unpaid losses | 5,038 | 11,495 |
Unallocated LAE | 934 | 1,248 |
Reserve for unpaid losses and LAE balance, gross | $ 22,803 | $ 30,213 |
Reserves for Losses and Loss _4
Reserves for Losses and Loss Adjustment Expenses - Activity (Details) $ in Thousands | Sep. 30, 2018USD ($)claim | Dec. 31, 2017USD ($) |
Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||
Total paid | $ 382,352 | |
Total incurred | 398,871 | |
All outstanding reserves prior to 2014, net of reinsurance | 312 | |
Reserve for unpaid losses and allocated LAE, net of reinsurance | 16,831 | $ 17,470 |
2,014 | ||
Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||
Total paid | 83,703 | |
Total incurred | 84,000 | |
Total of IBNR Reserves Plus Expected Development on Reported claims | $ 45 | |
Cumulative Number of Reported Claims | claim | 13,104 | |
2,015 | ||
Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||
Total paid | $ 86,453 | |
Total incurred | 87,157 | |
Total of IBNR Reserves Plus Expected Development on Reported claims | $ 279 | |
Cumulative Number of Reported Claims | claim | 15,034 | |
2,016 | ||
Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||
Total paid | $ 82,967 | |
Total incurred | 84,439 | |
Total of IBNR Reserves Plus Expected Development on Reported claims | $ 874 | |
Cumulative Number of Reported Claims | claim | 21,373 | |
2,017 | ||
Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||
Total paid | $ 85,787 | |
Total incurred | 88,566 | |
Total of IBNR Reserves Plus Expected Development on Reported claims | $ 1,885 | |
Cumulative Number of Reported Claims | claim | 22,027 | |
2,018 | ||
Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||
Total paid | $ 43,442 | |
Total incurred | 54,709 | |
Total of IBNR Reserves Plus Expected Development on Reported claims | $ 5,880 | |
Cumulative Number of Reported Claims | claim | 10,039 |
Reinsurance Activity - Credit R
Reinsurance Activity - Credit Risk (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Reinsurance Activity | |
Balances due from Companies | $ 9,100 |
Allowance for uncollectible accounts | $ 0 |
Reinsurance Activity - Effects
Reinsurance Activity - Effects of Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earned | ||||
Net premiums | $ 34,185 | $ 34,493 | $ 102,605 | $ 106,653 |
Effect of reinsurance on incurred losses | ||||
Net loss and LAE incurred | 18,712 | 31,234 | 58,653 | 86,118 |
Property and casualty | ||||
Written | ||||
Premiums from direct business | 32,738 | 33,909 | 101,624 | 107,497 |
Reinsurance assumed | 3,414 | 3,200 | 10,023 | 9,427 |
Reinsurance ceded | (2,353) | (4,028) | (6,698) | (10,215) |
Net premiums | 33,799 | 33,081 | 104,949 | 106,709 |
Earned | ||||
Premiums from direct business | 33,399 | 36,096 | 100,139 | 110,048 |
Reinsurance assumed | 3,181 | 2,993 | 9,292 | 8,721 |
Reinsurance ceded | (2,395) | (4,596) | (6,826) | (12,116) |
Net premiums | 34,185 | 34,493 | 102,605 | 106,653 |
Effect of reinsurance on incurred losses | ||||
Loss and LAE incurred | 19,158 | 67,152 | 56,479 | 122,806 |
Reinsurance recoverables | (446) | (35,918) | 2,174 | (36,688) |
Net loss and LAE incurred | $ 18,712 | $ 31,234 | $ 58,653 | $ 86,118 |
Reinsurance Activity - Coverage
Reinsurance Activity - Coverage (Details) $ in Millions | Jan. 01, 2018USD ($) | Sep. 30, 2018USD ($)item | Dec. 31, 2017 |
Catastrophic coverage | |||
Reinsurance activity | |||
Retention amount | $ 2 | ||
Reinsurance in excess of retention | 6 | ||
Catastrophic coverage | First layer of protection | |||
Reinsurance activity | |||
Retention amount | 8 | ||
Reinsurance in excess of retention | 17 | ||
Catastrophic coverage | Second layer of protection | |||
Reinsurance activity | |||
Retention amount | 25 | ||
Reinsurance coverage in losses per event | 30 | ||
Catastrophic coverage | Third layer of protection | |||
Reinsurance activity | |||
Retention amount | 55 | ||
Reinsurance coverage in losses per event | 50 | ||
NLIC | Catastrophic coverage | |||
Reinsurance activity | |||
Retention amount | 8 | ||
ASIC | Catastrophic coverage | |||
Reinsurance activity | |||
Retention amount | $ 1.5 | ||
NLC | |||
Reinsurance activity | |||
Number of layers of protection under reinsurance | item | 3 | ||
Aggregate coverage in excess of retention for per event retention and sub-catastrophic event | $ 10 | ||
Retention amount per event | $ 1 | ||
Participation retained (as a percent) | 17.50% | 0.00% | |
NLC | Catastrophic coverage | Sub-catastrophic | |||
Reinsurance activity | |||
Retention amount | $ 17.5 | ||
NLIC and ASIC | Catastrophic coverage | |||
Reinsurance activity | |||
Number of catastrophe that could be experienced with limited retention | item | 1 | ||
NLIC and ASIC | Catastrophic coverage | Maximum | |||
Reinsurance activity | |||
Retention amount | $ 8 |
Segment and Related Informati_3
Segment and Related Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Information about the revenues, operating results, goodwill and assets | |||||
Number of reportable segments | segment | 4 | ||||
Net interest income (expense) | $ 110,341 | $ 104,980 | $ 318,609 | $ 313,056 | |
Provision (recovery) for loan losses | (371) | 1,260 | (1,838) | 8,818 | |
Noninterest income | 269,697 | 298,477 | 784,274 | 914,608 | |
Noninterest expense | 335,711 | 353,842 | 982,430 | 1,040,585 | |
Income before income taxes | 44,698 | 48,355 | 122,291 | 178,261 | |
Goodwill | 291,435 | 291,435 | $ 251,808 | ||
Total assets | 13,764,536 | 13,764,536 | 13,365,786 | ||
Operating segment | Banking | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 94,921 | 89,322 | 269,517 | 273,595 | |
Provision (recovery) for loan losses | 1,665 | (1,531) | 8,907 | ||
Noninterest income | 11,365 | 11,414 | 32,188 | 49,323 | |
Noninterest expense | 67,714 | 62,750 | 192,626 | 186,075 | |
Income before income taxes | 38,572 | 36,321 | 110,610 | 127,936 | |
Goodwill | 247,368 | 247,368 | 207,741 | ||
Total assets | 9,946,278 | 9,946,278 | 9,558,718 | ||
Operating segment | Broker-Dealer | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 12,432 | 12,215 | 37,873 | 31,052 | |
Provision (recovery) for loan losses | (371) | (405) | (307) | (89) | |
Noninterest income | 82,834 | 91,418 | 224,969 | 266,779 | |
Noninterest expense | 85,713 | 83,836 | 241,456 | 252,395 | |
Income before income taxes | 9,924 | 20,202 | 21,693 | 45,525 | |
Goodwill | 7,008 | 7,008 | 7,008 | ||
Total assets | 3,341,891 | 3,341,891 | 3,394,911 | ||
Operating segment | Mortgage Origination | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 363 | 94 | 2,009 | (791) | |
Noninterest income | 144,400 | 163,758 | 434,262 | 487,033 | |
Noninterest expense | 140,006 | 151,056 | 420,736 | 444,263 | |
Income before income taxes | 4,757 | 12,796 | 15,535 | 41,979 | |
Goodwill | 13,071 | 13,071 | 13,071 | ||
Total assets | 1,767,554 | 1,767,554 | 1,937,327 | ||
Operating segment | Insurance Segment | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 733 | 864 | 2,313 | 1,982 | |
Noninterest income | 36,724 | 36,839 | 108,288 | 113,562 | |
Noninterest expense | 33,807 | 47,015 | 104,532 | 133,444 | |
Income before income taxes | 3,650 | (9,312) | 6,069 | (17,900) | |
Goodwill | 23,988 | 23,988 | 23,988 | ||
Total assets | 283,253 | 283,253 | 291,639 | ||
Corporate | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | (3,275) | (2,589) | (7,848) | (7,413) | |
Noninterest income | 523 | 182 | 1,246 | 12,792 | |
Noninterest expense | 8,656 | 9,325 | 23,399 | 25,010 | |
Income before income taxes | (11,408) | (11,732) | (30,001) | (19,631) | |
Total assets | 2,136,398 | 2,136,398 | 2,106,978 | ||
All Other and Eliminations. | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 5,167 | 5,074 | 14,745 | 14,631 | |
Noninterest income | (6,149) | (5,134) | (16,679) | (14,881) | |
Noninterest expense | (185) | (140) | (319) | (602) | |
Income before income taxes | (797) | $ 80 | (1,615) | $ 352 | |
Total assets | $ (3,710,838) | $ (3,710,838) | $ (3,923,787) |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic earnings per share: | ||||
Income attributable to Hilltop | $ 35,805 | $ 30,206 | $ 93,326 | $ 119,116 |
Net earnings available to Hilltop common stockholders | $ 35,805 | $ 30,206 | $ 93,326 | $ 119,116 |
Weighted average shares outstanding - basic | 94,554 | 96,096 | 95,264 | 97,554 |
Basic earnings per common share (in dollars per share) | $ 0.38 | $ 0.31 | $ 0.98 | $ 1.22 |
Diluted earnings per share: | ||||
Income attributable to Hilltop | $ 35,805 | $ 30,206 | $ 93,326 | $ 119,116 |
Weighted average shares outstanding - basic | 94,554 | 96,096 | 95,264 | 97,554 |
Effect of potentially dilutive securities (in shares) | 56 | 210 | 91 | 249 |
Weighted average shares outstanding - diluted | 94,610 | 96,306 | 95,355 | 97,803 |
Diluted earnings per common share (in dollars per share) | $ 0.38 | $ 0.31 | $ 0.98 | $ 1.22 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Oct. 23, 2018 | Oct. 17, 2018 | Oct. 16, 2018 | Oct. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Subsequent Events | ||||||||
Payment by the FDIC to bank | $ 145,800 | |||||||
FDIC Indemnification Asset amortization | $ 694 | $ 5,348 | $ 6,509 | $ 13,533 | ||||
Subsequent Events | Hilltop Opportunity Partners | ||||||||
Subsequent Events | ||||||||
Proceeds from sale maturity and collection of investments | $ 16,200 | |||||||
Gain on sale of investments | $ 5,000 | |||||||
Subsequent Events | Termination Agreement With FDIC | PlainsCapital (the Bank) | ||||||||
Subsequent Events | ||||||||
Payment by the FDIC to bank | $ 6,260 | |||||||
Removal of FDIC Indemnification Asset | $ 22,800 | |||||||
Reversal of FDIC true-up accrual | $ 16,600 | |||||||
Subsequent Events | Settlement Agreement Between PrimeLending, DOJ And HUD | ||||||||
Subsequent Events | ||||||||
Reserve for settlement | $ 13,500 |
Schedule I - Insurance Incurr_2
Schedule I - Insurance Incurred and Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net Of Reinsurance (Details) $ in Thousands | Sep. 30, 2018USD ($)claim | Dec. 31, 2017USD ($) |
Incurred losses and allocated loss adjustment expenses, net of reinsurance | ||
Total incurred | $ 398,871 | |
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance | ||
Total paid | 382,352 | |
All outstanding reserves prior to 2014, net of reinsurance | 312 | |
Reserve for unpaid losses and allocated loss adjustment expenses, net of reinsurance | 16,831 | $ 17,470 |
2,014 | ||
Incurred losses and allocated loss adjustment expenses, net of reinsurance | ||
2,014 | 107,793 | |
2,015 | 85,037 | |
2,016 | 84,221 | |
2,017 | 84,074 | |
Total incurred | 84,000 | |
Total of incurred but not reported reserves plus expected development on reported claims | $ 45 | |
Cumulative Number of Reported Claims | claim | 13,104 | |
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance | ||
2,014 | $ 70,831 | |
2,015 | 79,713 | |
2,016 | 81,684 | |
2,017 | 83,346 | |
Total paid | 83,703 | |
2,015 | ||
Incurred losses and allocated loss adjustment expenses, net of reinsurance | ||
2,015 | 89,646 | |
2,016 | 88,477 | |
2,017 | 87,262 | |
Total incurred | 87,157 | |
Total of incurred but not reported reserves plus expected development on reported claims | $ 279 | |
Cumulative Number of Reported Claims | claim | 15,034 | |
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance | ||
2,015 | $ 71,820 | |
2,016 | 82,940 | |
2,017 | 85,507 | |
Total paid | 86,453 | |
2,016 | ||
Incurred losses and allocated loss adjustment expenses, net of reinsurance | ||
2,016 | 84,771 | |
2,017 | 85,189 | |
Total incurred | 84,439 | |
Total of incurred but not reported reserves plus expected development on reported claims | $ 874 | |
Cumulative Number of Reported Claims | claim | 21,373 | |
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance | ||
2,016 | $ 71,543 | |
2,017 | 81,682 | |
Total paid | 82,967 | |
2,017 | ||
Incurred losses and allocated loss adjustment expenses, net of reinsurance | ||
2,017 | 87,899 | |
Total incurred | 88,566 | |
Total of incurred but not reported reserves plus expected development on reported claims | $ 1,885 | |
Cumulative Number of Reported Claims | claim | 22,027 | |
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance | ||
2,017 | $ 77,675 | |
Total paid | 85,787 | |
2,018 | ||
Incurred losses and allocated loss adjustment expenses, net of reinsurance | ||
Total incurred | 54,709 | |
Total of incurred but not reported reserves plus expected development on reported claims | $ 5,880 | |
Cumulative Number of Reported Claims | claim | 10,039 | |
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance | ||
Total paid | $ 43,442 |