Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 28, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | CITY NATIONAL CORP | |
Entity Central Index Key | 201,461 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 55,777,997 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and due from banks | $ 434,087 | $ 336,470 |
Due from banks - interest-bearing | 1,424,109 | 119,981 |
Federal funds sold and securities purchased under resale agreements | 200,000 | 200,000 |
Securities available-for-sale - cost $5,304,000 and $5,894,509 at September 30, 2015 and December 31, 2014, respectively | ||
Securities pledged as collateral | 16,697 | 14,654 |
Held in portfolio | 5,292,490 | 5,868,329 |
Securities held-to-maturity - fair value $3,598,902 and $3,484,647 at September 30, 2015 and December 31, 2014, respectively | ||
Securities pledged as collateral | 515,963 | 521,262 |
Held in portfolio | 2,990,492 | 2,905,769 |
Trading securities | 154,706 | 173,188 |
Loans and leases, excluding acquired impaired loans | 22,536,584 | 20,337,206 |
Less: Allowance for loan and lease losses | 317,157 | 310,149 |
Loans and leases, excluding acquired impaired loans, net | 22,219,427 | 20,027,057 |
Acquired impaired loans, net of allowance for loan losses | 393,879 | 502,371 |
Net loans and leases | 22,613,306 | 20,529,428 |
Premises and equipment, net | 210,314 | 207,700 |
Deferred tax asset | 234,680 | 233,811 |
Goodwill | 637,918 | 635,868 |
Customer-relationship intangibles, net | 30,987 | 34,831 |
Affordable housing investments | 222,877 | 186,423 |
Customers' acceptance liability | 1,650 | 17,664 |
Other real estate owned ($8,310 and $12,760 covered by FDIC loss share at September 30, 2015 and December 31, 2014, respectively) | 13,894 | 23,496 |
FDIC indemnification asset | 28,164 | 50,511 |
Other assets | 553,390 | 537,847 |
Total assets | 35,575,724 | 32,597,232 |
Liabilities | ||
Demand deposits | 20,796,610 | 18,030,021 |
Interest checking deposits | 2,625,541 | 2,736,391 |
Money market deposits | 6,682,601 | 6,198,798 |
Savings deposits | 496,510 | 469,931 |
Time deposits-under $250,000 | 262,905 | 292,613 |
Time deposits-$250,000 and over | 309,195 | 380,349 |
Total deposits | 31,173,362 | 28,108,103 |
Short-term borrowings | 6,490 | 322,861 |
Long-term debt | 650,078 | 638,600 |
Reserve for off-balance sheet credit commitments | 29,972 | 27,811 |
Acceptances outstanding | 1,650 | 17,664 |
Other liabilities | 570,004 | 499,514 |
Total liabilities | 32,431,556 | 29,614,553 |
Redeemable noncontrolling interest | $ 32,847 | $ 39,978 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Preferred stock, par value $1.00 per share; 5,000,000 shares authorized; 275,000 shares issued at September 30, 2015 and December 31, 2014 | $ 267,616 | $ 267,616 |
Common stock, par value $1.00 per share; 75,000,000 shares authorized; 55,695,762 and 55,162,455 shares issued at September 30, 2015 and December 31, 2014, respectively | 55,696 | 55,162 |
Additional paid-in capital | 621,716 | 578,046 |
Accumulated other comprehensive income (loss) | 2,500 | (7,074) |
Retained earnings | 2,182,259 | 2,071,230 |
Treasury shares, at cost - 304,920 and 377,224 shares at September 30, 2015 and December 31, 2014, respectively | (18,466) | (22,279) |
Total common shareholders' equity | 2,843,705 | 2,675,085 |
Total shareholders' equity | 3,111,321 | 2,942,701 |
Total liabilities and shareholders' equity | $ 35,575,724 | $ 32,597,232 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Securities available-for-sale, cost (in dollars) | $ 5,304,000 | $ 5,894,509 |
Securities held-to-maturity, fair value (in dollars) | 3,598,902 | 3,484,647 |
Other real estate owned, covered by FDIC loss share (in dollars) | $ 8,310 | $ 12,760 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 275,000 | 275,000 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 55,695,762 | 55,162,455 |
Treasury shares | 304,920 | 377,224 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Interest Income | ||||
Loans and leases | $ 200,405 | $ 181,647 | $ 588,962 | $ 538,343 |
Securities | 40,601 | 43,863 | 123,869 | 128,910 |
Due from banks - interest-bearing | 931 | 363 | 1,500 | 1,183 |
Federal funds sold and securities purchased under resale agreements | 1,203 | 1,721 | 3,578 | 4,568 |
Total interest income | 243,140 | 227,594 | 717,909 | 673,004 |
Interest Expense | ||||
Deposits | 1,877 | 2,033 | 5,676 | 6,227 |
Federal funds purchased and securities sold under repurchase agreements | 79 | |||
Subordinated debt | 3,746 | 4,722 | 11,239 | 16,943 |
Other long-term debt | 5,260 | 5,063 | 15,568 | 15,158 |
Total interest expense | 10,883 | 11,818 | 32,562 | 38,328 |
Net interest income | 232,257 | 215,776 | 685,347 | 634,676 |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (6,000) | (8,000) | 4,000 | (9,000) |
Provision for losses on acquired impaired loans | 1,148 | 589 | 2,736 | 3,783 |
Net interest income after provision | 237,109 | 223,187 | 678,611 | 639,893 |
Noninterest Income | ||||
Trust and investment fees | 57,978 | 56,834 | 171,986 | 164,739 |
Brokerage and mutual fund fees | 11,735 | 11,021 | 33,757 | 35,303 |
Cash management and deposit transaction charges | 12,783 | 12,200 | 38,277 | 36,361 |
International services | 11,686 | 12,233 | 34,128 | 34,111 |
FDIC loss sharing expense, net | (9,854) | (9,606) | (27,350) | (40,850) |
(Loss) gain on disposal of assets | (1,264) | 2,985 | 384 | 12,649 |
Gain on sale of securities | 30 | 14 | 5,331 | 7,503 |
Other | 21,777 | 22,311 | 72,674 | 60,771 |
Impairment loss on securities: | ||||
Total other-than-temporary impairment loss on securities | (325) | (318) | (662) | (566) |
Less: Portion of loss recognized in other comprehensive income | 325 | 243 | 325 | 243 |
Net impairment loss recognized in earnings | (75) | (337) | (323) | |
Total noninterest income | 104,871 | 107,917 | 328,850 | 310,264 |
Noninterest Expense | ||||
Salaries and employee benefits | 148,790 | 142,210 | 438,039 | 417,902 |
Net occupancy of premises | 18,168 | 15,862 | 50,420 | 48,551 |
Legal and professional fees | 18,105 | 14,350 | 52,391 | 45,693 |
Information services | 11,658 | 10,260 | 32,166 | 29,069 |
Depreciation and amortization | 9,478 | 8,276 | 33,968 | 23,989 |
Amortization of intangibles | 1,241 | 1,426 | 3,844 | 4,367 |
Marketing and advertising | 7,718 | 7,576 | 25,486 | 26,333 |
Office services and equipment | 4,922 | 5,038 | 15,160 | 15,235 |
Other real estate owned | 1,321 | 2,360 | 5,146 | 6,165 |
FDIC assessments | 5,442 | 4,629 | 15,812 | 8,785 |
Other operating | 11,200 | 10,927 | 31,713 | 29,259 |
Total noninterest expense | 238,043 | 222,914 | 704,145 | 655,348 |
Income before income taxes | 103,937 | 108,190 | 303,316 | 294,809 |
Income taxes | 32,208 | 37,452 | 100,489 | 103,571 |
Net income | 71,729 | 70,738 | 202,827 | 191,238 |
Less: Net (loss) income attributable to noncontrolling interest | (79) | 847 | 954 | 2,056 |
Net income attributable to City National Corporation | 71,808 | 69,891 | 201,873 | 189,182 |
Less: Dividends on preferred stock | 4,093 | 4,093 | 12,281 | 12,281 |
Net income available to common shareholders | $ 67,715 | $ 65,798 | $ 189,592 | $ 176,901 |
Net income per common share, basic (in dollars per share) | $ 1.20 | $ 1.18 | $ 3.38 | $ 3.19 |
Net income per common share, diluted (in dollars per share) | $ 1.18 | $ 1.17 | $ 3.32 | $ 3.15 |
Weighted-average common shares outstanding, basic (in shares) | 55,829 | 55,031 | 55,668 | 54,893 |
Weighted-average common shares outstanding, diluted (in shares) | 56,687 | 55,765 | 56,552 | 55,616 |
Dividends per common share (in dollars per share) | $ 0.70 | $ 0.33 | $ 1.40 | $ 0.99 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 71,729 | $ 70,738 | $ 202,827 | $ 191,238 |
Securities available-for-sale: | ||||
Net unrealized gains (losses) arising during the period | 4,473 | (9,547) | 11,941 | 12,586 |
Reclassification adjustment for net gains included in net income | (7) | (4) | (2,154) | (4,396) |
Non-credit related impairment loss | (189) | (141) | (189) | (141) |
Foreign currency translation adjustments | (17) | (24) | ||
Total other comprehensive (loss) income | 4,260 | (9,692) | 9,574 | 8,049 |
Comprehensive income | 75,989 | 61,046 | 212,401 | 199,287 |
Less: Comprehensive (loss) income attributable to noncontrolling interest | (79) | 847 | 954 | 2,056 |
Comprehensive income attributable to City National Corporation | $ 76,068 | $ 60,199 | $ 211,447 | $ 197,231 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cash Flows From Operating Activities | ||||
Net income | $ 71,729 | $ 70,738 | $ 202,827 | $ 191,238 |
Adjustments to net income: | ||||
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (6,000) | (8,000) | 4,000 | (9,000) |
Provision for losses on acquired impaired loans | 1,148 | 589 | 2,736 | 3,783 |
Depreciation and amortization | 9,478 | 8,276 | 33,968 | 23,989 |
Amortization of intangibles | 1,241 | 1,426 | 3,844 | 4,367 |
Share-based employee compensation expense | 15,943 | 16,116 | ||
Deferred income tax benefit | (7,860) | (3,391) | ||
Gain on disposal of assets | 1,264 | (2,985) | (384) | (12,649) |
Gain on sale of securities | (30) | (14) | (5,331) | (7,503) |
Impairment loss on securities | 75 | 337 | 323 | |
Other, net | 27,570 | 22,063 | ||
Net change in: | ||||
Trading securities | 18,372 | (43,608) | ||
Other assets and other liabilities, net | (18,192) | (44,520) | ||
Net cash provided by operating activities | 277,830 | 141,208 | ||
Cash Flows From Investing Activities | ||||
Purchase of securities available-for-sale | (1,921,396) | (1,537,655) | ||
Sales of securities available-for-sale | 700 | 1,000 | 401,534 | 627,102 |
Maturities and paydowns of securities available-for-sale | 2,096,132 | 1,527,117 | ||
Purchase of securities held-to-maturity | (299,383) | (615,295) | ||
Maturities and paydowns of securities held-to-maturity | 216,979 | 119,727 | ||
Loan originations, net of principal collections | (2,048,750) | (1,970,596) | ||
Net payments for premises and equipment | (38,297) | (34,446) | ||
Proceeds from sale of business | 7,053 | |||
Other investing activities, net | (2,216) | 13,976 | ||
Net cash used in investing activities | (1,595,397) | (1,863,017) | ||
Cash Flows From Financing Activities | ||||
Net increase in deposits | 3,065,259 | 2,276,543 | ||
Net (decrease) increase in federal funds purchased | (320,000) | |||
Issuance of long-term debt | 53,054 | 31,759 | ||
Repayment of long-term debt | (37,946) | (135,473) | ||
Proceeds from exercise of stock options | 30,737 | 21,734 | ||
Tax benefit from exercise of stock options | 5,769 | 4,022 | ||
Cash dividends paid | (70,650) | (66,624) | ||
Other financing activities, net | (6,911) | (17,268) | ||
Net cash provided by financing activities | 2,719,312 | 2,114,693 | ||
Net increase in cash and cash equivalents | 1,401,745 | 392,884 | ||
Cash and cash equivalents at beginning of year | 656,451 | 935,946 | ||
Cash and cash equivalents at end of period | $ 2,058,196 | $ 1,328,830 | 2,058,196 | 1,328,830 |
Cash paid during the period for: | ||||
Interest | 40,086 | 48,019 | ||
Income taxes | 63,200 | 102,757 | ||
Non-cash investing activities: | ||||
Transfer of loans to other real estate owned | $ 4,200 | $ 11,364 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred stock | Common stock | Additional paid-in capital | Accumulated other comprehensive (loss) income | Retained earnings | Treasury shares | Total | |
Balance (As Reported) at Dec. 31, 2013 | $ 267,616 | $ 54,667 | $ 541,210 | $ (15,641) | $ 1,918,163 | $ (25,029) | $ 2,740,986 | |
Balance at Dec. 31, 2013 | 267,616 | $ 54,667 | 541,210 | (15,641) | 1,906,222 | (25,029) | 2,729,045 | |
Balance (in shares) (As Reported) at Dec. 31, 2013 | 54,667,295 | |||||||
Balance (in shares) at Dec. 31, 2013 | 54,667,295 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | [1] | 189,182 | 189,182 | |||||
Other comprehensive income (loss), net of tax | 8,049 | 8,049 | ||||||
Issuance of shares under share-based compensation plans | $ 391 | 14,402 | 2,688 | 17,481 | ||||
Issuance of shares under share-based compensation plans (in shares) | 390,442 | |||||||
Share-based employee compensation expense | 13,305 | 13,305 | ||||||
Tax benefit from share-based compensation plans | 4,188 | 4,188 | ||||||
Dividends : Preferred | (12,281) | (12,281) | ||||||
Dividends: Common | (54,877) | (54,877) | ||||||
Net change in deferred compensation plans | 884 | (2) | 882 | |||||
Change in redeemable noncontrolling interest | (8,167) | (8,167) | ||||||
Balance at Sep. 30, 2014 | 267,616 | $ 55,058 | 565,822 | (7,592) | 2,028,246 | (22,343) | 2,886,807 | |
Balance (in shares) at Sep. 30, 2014 | 55,057,737 | |||||||
Balance at Dec. 31, 2014 | 267,616 | $ 55,162 | 578,046 | (7,074) | 2,071,230 | (22,279) | 2,942,701 | |
Balance (in shares) at Dec. 31, 2014 | 55,162,455 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | [1] | 201,873 | 201,873 | |||||
Other comprehensive income (loss), net of tax | 9,574 | 9,574 | ||||||
Issuance of shares under share-based compensation plans | $ 533 | 22,958 | 3,814 | 27,305 | ||||
Issuance of shares under share-based compensation plans (in shares) | 532,616 | |||||||
Share-based employee compensation expense | 12,241 | 12,241 | ||||||
Tax benefit from share-based compensation plans | 8,012 | 8,012 | ||||||
Dividends : Preferred | (12,281) | (12,281) | ||||||
Dividends: Common | (78,563) | (78,563) | ||||||
Net change in deferred compensation plans | $ 1 | 847 | (1) | 847 | ||||
Net change in deferred compensation plans (in shares) | 691 | |||||||
Change in redeemable noncontrolling interest | (388) | (388) | ||||||
Balance at Sep. 30, 2015 | $ 267,616 | $ 55,696 | $ 621,716 | $ 2,500 | $ 2,182,259 | $ (18,466) | $ 3,111,321 | |
Balance (in shares) at Sep. 30, 2015 | 55,695,762 | |||||||
[1] | Net income excludes net income attributable to redeemable noncontrolling interest of $954 and $2,056 for the nine-month periods ended September 30, 2015 and 2014, respectively. Redeemable noncontrolling interest is reflected in the mezzanine section of the consolidated balance sheets. See Note 17 of the Notes to the Unaudited Consolidated Financial Statements. |
CONSOLIDATED STATEMENTS OF CHA8
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | ||
Net income attributable to redeemable noncontrolling interest | $ 954 | $ 2,056 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Organization City National Corporation (the “Corporation”) is the holding company for City National Bank (the “Bank”). The Bank delivers banking, investment and trust services through 75 offices in Southern California, the San Francisco Bay area, Nevada, New York City, Nashville, Tennessee and Atlanta, Georgia. As of September 30, 2015, the Corporation had four consolidated investment advisory affiliates and one unconsolidated subsidiary, Business Bancorp Capital Trust I. Because the Bank comprises substantially all of the business of the Corporation, references to the “Company” mean the Corporation and the Bank together. The Corporation is approved as a financial holding company pursuant to the Gramm-Leach-Bliley Act of 1999. Consolidation The consolidated financial statements of the Company include the accounts of the Corporation, its non-bank subsidiaries, the Bank and the Bank’s wholly owned subsidiaries, after the elimination of all material intercompany transactions. It also includes noncontrolling interest, which is the portion of equity in a subsidiary not attributable to a parent. Redeemable noncontrolling interests are noncontrolling ownership interests that are redeemable at the option of the holder or outside the control of the issuer. The redeemable noncontrolling interests of third parties in the Corporation’s investment advisory affiliates are not considered to be permanent equity and are reflected in the mezzanine section between liabilities and equity in the consolidated balance sheets. Noncontrolling interests’ share of subsidiary earnings is reflected as Net income attributable to noncontrolling interest in the consolidated statements of income. The Company’s investment management and wealth advisory affiliates are organized as limited liability companies. The Corporation generally owns a majority position in each affiliate and certain management members of each affiliate own the remaining shares. The Corporation has contractual arrangements with certain of its affiliates whereby a percentage of revenue is allocable to fund affiliate operating expenses (“operating share”) while the remaining portion of revenue (“distributable revenue”) is allocable to the Corporation and the noncontrolling owners. The remaining affiliates operate on a profit based model where the Corporation and management members participate in the net income of the affiliate. All majority-owned affiliates that meet the prescribed criteria for consolidation are consolidated. The Corporation’s interests in investment management affiliates in which it holds a noncontrolling share are accounted for using the equity method. Additionally, the Company has various interests in variable interest entities (“VIEs”) that are not required to be consolidated. See Note 16 for a more detailed discussion on VIEs. Use of Estimates The Company’s accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) and practices in the financial services industry. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and income and expenses during the reporting period. Circumstances and events that differ significantly from those underlying the Company’s estimates and assumptions could cause actual financial results to differ from those estimates. The material estimates included in the financial statements relate to the allowance for loan and lease losses, the reserve for off-balance sheet credit commitments, other real estate owned (“OREO”), valuation of share-based compensation awards, income taxes, goodwill and intangible asset impairment, securities impairment, private equity and alternative investments impairment, valuation of assets and liabilities acquired in business combinations, including contingent consideration liabilities, subsequent valuations of acquired impaired loans, Federal Deposit Insurance Corporation (“FDIC”) indemnification asset, valuation of noncontrolling interest, and the valuation of financial assets and liabilities reported at fair value. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements. The Company’s estimates and assumptions are expected to change as changes in market conditions and the Company’s portfolio occur in subsequent periods. Basis of Presentation The Company is on the accrual basis of accounting for income and expenses. The results of operations reflect any adjustments, all of which are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q, and which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. In accordance with the usual practice of banks, assets and liabilities of individual trust, agency and fiduciary funds have not been included in the financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The results for the 2015 interim periods are not necessarily indicative of the results expected for the full year. The Company has not made any significant changes in its critical accounting policies or in its estimates and assumptions from those disclosed in its 2014 Annual Report other than the adoption of new accounting pronouncements and other authoritative guidance that became effective for the Company on or after January 1, 2015. Refer to Accounting Pronouncements for discussion of accounting pronouncements adopted in 2015. Certain prior period amounts have been reclassified to conform to the current period presentation. Accounting Pronouncements The following is a summary of accounting pronouncements that became effective during the nine months ended September 30, 2015: · In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-01, Investments—Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects (“ASU 2014-01”). ASU 2014-01 permits an entity to make an accounting policy election to apply a proportionate amortization method to its low income housing tax credit investments if certain conditions are met. Under the proportionate amortization method, an investor amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the amortization in the income statement as a component of income taxes attributable to continuing operations. On January 1, 2015, the Company adopted ASU 2014-01 and elected to apply the proportionate amortization method to its low income housing tax credit investments. Following adoption, the Company recognizes amortization of its tax credit investments as a component of income taxes. The Company previously recognized amortization as a component of noninterest expense. Prior periods presented in the Company’s consolidated financial statements have been adjusted to reflect retrospective adoption of ASU 2014-01 as follows: Consolidated Balance Sheet As of December 31, 2014 (in thousands) As Reported As Adjusted (Unaudited) Assets Deferred tax asset $ $ Affordable housing investments Other assets Shareholders’ equity Retained earnings Consolidated Statement of Income For the three months ended For the nine months ended September 30, 2014 September 30, 2014 (in thousands, except per share amounts) As Reported As Adjusted As Reported As Adjusted (Unaudited) (Unaudited) Noninterest expense Other operating $ $ $ $ Income taxes Net income Net income per common share, basic $ $ $ $ Net income per common share, diluted $ $ $ $ Consolidated Statement of Cash Flows For the nine months ended September 30, 2014 (in thousands) As Reported As Adjusted (Unaudited) Cash Flows From Operating Activities Net income $ $ Adjustments to net income: Deferred income tax benefit ) ) Other, net Net change in: Other assets and other liabilities, net ) ) · In January 2014, the FASB issued ASU 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (“ASU 2014-04”). ASU 2014-04 requires entities to reclassify consumer mortgage loans collateralized by residential real estate to OREO when either (1) the creditor obtains legal title to the residential real estate property or (2) the borrower conveys all interest in the property to the creditor to satisfy the loan by completing a deed in lieu of foreclosure or similar agreement. The Company adopted ASU 2014-04 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements. · In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The Company adopted ASU 2014-08 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements. · In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other repurchase agreements. Going forward, these transactions will all be accounted for as secured borrowings. Under the new guidance, parties to a repurchase financing transaction will be required to separately account for the initial transfer of the financial asset and the related repurchase agreement. The initial transfer of the financial asset would be accounted for as a sale by the transferor only if all criteria for derecognition have been met. ASU 2014-11 requires new or expanded disclosures for repurchase agreements and similar transactions accounted for as secured borrowings. The Company adopted ASU 2014-11 effective January 1, 2015. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements. The following is a summary of recently issued accounting pronouncements: · In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis , which significantly changes the consolidation analysis required under U.S. GAAP. The new consolidation guidance maintains two models: one for assessing most corporate entities based on the notion that majority voting rights indicate control (the voting model) and another for assessing entities that may be controlled through other means, such as management contracts or subordinated financial support (the variable interest model). Under the new guidance, limited partnerships will be VIEs, unless the limited partners have either substantive kick-out or participating rights. The ASU also changes the effect that fees paid to a decision maker or service provider have on the consolidation analysis. For entities other than limited partnerships, the ASU clarifies how to determine whether the equity holders (as a group) have power over the entity. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is allowed for all entities, but the guidance must be applied as of the beginning of the annual period containing the adoption date. Entities have the option of using either a full or modified retrospective approach for adoption. The Company is assessing the impact of the new guidance on its consolidated financial statements. · In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which requires the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The amendments in this ASU are to be applied on a retrospective basis. Adoption of the new guidance is not expected to have a significant impact on the Company’s consolidated financial statements. · In April 2015, the FASB issued ASU 2015-05, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . Cloud computing arrangements include: (a) software as a service; (b) platform as a service; (c) infrastructure as a service; and (d) other similar hosting arrangements. Under the ASU, if a cloud computing arrangement contains a software license, the customer would account for the fees related to the software license element in a manner consistent with how the acquisition of other software licenses is accounted for under Accounting Standards Codification (“ASC”) 350-40. If the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. Entities may adopt the guidance either (1) prospectively to arrangements entered into or materially modified after the effective date, or (2) retrospectively. The Company is assessing the impact of the new guidance on its consolidated financial statements. · In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date to defer by one year the effective dates of the revenue recognition standard ASU 2014-09. As a result, the standard would be effective for public entities for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company is assessing the impact of the new revenue recognition guidance on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | Note 2. Fair Value Measurements The following tables summarize assets and liabilities measured at fair value as of September 30, 2015 and December 31, 2014 by level in the fair value hierarchy: Fair Value Measurements at Reporting Date Using (in thousands) Balance as of September 30, 2015 Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Measured on a Recurring Basis Assets Securities available-for-sale: U.S. Treasury $ $ $ — $ — Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency — — CMOs - Non-agency — — State and municipal — Other debt securities — — Trading securities — Derivative assets (1) Contingent consideration asset (1) — — Total assets at fair value $ $ $ $ Liabilities Derivative liabilities $ $ $ $ — Contingent consideration liability — — FDIC clawback liability — — Other liabilities — — Total liabilities at fair value (2) $ $ $ $ Redeemable noncontrolling interest $ $ — $ — $ Measured on a Nonrecurring Basis Assets Other real estate owned (3) $ $ — $ — $ Private equity and alternative investments — — Total assets at fair value $ $ — $ — $ (1) Reported in Other assets in the consolidated balance sheets. (2) Reported in Other liabilities in the consolidated balance sheets. (3) Includes covered OREO. Fair Value Measurements at Reporting Date Using (in thousands) Balance as of December 31, 2014 Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Measured on a Recurring Basis Assets Securities available-for-sale: U.S. Treasury $ $ $ — $ — Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency — — CMOs - Non-agency — — State and municipal — Other debt securities — — Equity securities and mutual funds — — Trading securities — Derivative assets (1) Contingent consideration asset (1) — — Total assets at fair value $ $ $ $ Liabilities Derivative liabilities $ $ $ $ — Contingent consideration liability — — FDIC clawback liability — — Other liabilities — — Total liabilities at fair value (2) $ $ $ $ Redeemable noncontrolling interest $ $ — $ — $ Measured on a Nonrecurring Basis Assets Other real estate owned (3) $ $ — $ — $ Total assets at fair value $ $ — $ — $ (1) Reported in Other assets in the consolidated balance sheets. (2) Reported in Other liabilities in the consolidated balance sheets. (3) Includes covered OREO. At September 30, 2015, $5.55 billion, or approximately 16 percent, of the Company’s total assets were recorded at fair value on a recurring basis, compared with $6.11 billion, or 19 percent, at December 31, 2014. The majority of these financial assets were valued using Level 1 or Level 2 inputs. Less than one percent of total assets were measured using Level 3 inputs. At September 30, 2015, $136.2 million of the Company’s total liabilities were recorded at fair value using mostly Level 2 or Level 3 inputs, compared with $102.3 million at December 31, 2014. There were no transfers between Level 1 and Level 2 of the fair value hierarchy for assets or liabilities measured on a recurring basis during the nine months ended September 30, 2015. At September 30, 2015, $11.1 million of the Company’s total assets were recorded at fair value on a nonrecurring basis, compared with $5.6 million at December 31, 2014. These assets represent less than one percent of total assets and were measured using Level 3 inputs. Recurring Fair Value Measurements Assets and liabilities for which fair value measurement is based on significant unobservable inputs are classified as Level 3 in the fair value hierarchy. The following table provides a reconciliation of the beginning and ending balances for Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30 , 2015 and 2014. Level 3 Assets and Liabilities Measured on a Recurring Basis For the nine months ended September 30, 2015 (in thousands) Securities Available-for- Sale Equity Warrants Contingent Consideration Asset Contingent Consideration Liability FDIC Clawback Liability Balance, beginning of period $ $ $ $ ) $ ) Total realized/unrealized gains (losses): Included in earnings — ) ) ) Included in other comprehensive income — — — — Additions — — — — Settlements ) — — — — Other (1) — — — ) — Balance, end of period $ $ $ $ ) $ ) For the nine months ended September 30, 2014 (in thousands) Securities Available-for- Sale Equity Warrants Contingent Consideration Asset Contingent Consideration Liability FDIC Clawback Liability Balance, beginning of period $ $ — $ — $ ) $ ) Total realized/unrealized gains (losses): Included in earnings — — — ) Included in other comprehensive income ) — — — — Additions — — — Settlements ) ) — — Other (1) — — — ) — Balance, end of period $ $ $ $ ) $ ) (1) Other rollforward activity consists of accretion of discount related to the contingent consideration liability. Redeemable noncontrolling interest is classified as Level 3 in the fair value hierarchy and measured on a recurring basis. Redeemable noncontrolling interest is valued based on a combination of factors, including but not limited to, observable valuation of firms similar to the affiliates, multiples of revenue or profit, unique investment products or performance track records, strength in the marketplace, projected discounted cash flow scenarios, strategic value of affiliates to other entities, as well as unique sources of value specific to an individual firm. The methodology used to fair value these interests is consistent with the industry practice of valuing similar types of instruments. Refer to Note 17, Noncontrolling Interest , for a rollforward of activity for the nine months ended September 30 , 2015 and 2014. Level 3 assets measured at fair value on a recurring basis include municipal auction rate securities that are classified in securities available-for-sale, a contingent consideration asset and equity warrants classified as derivative assets. Municipal auction rate securities were valued using an average yield on California variable rate notes that were comparable in credit rating and maturity to the securities held, plus a liquidity premium. The contingent consideration asset represents the fair value of future payments to be received on the sale of the Company’s retirement services recordkeeping business. The fair value of contingent consideration was determined by discounting the expected future cash flows using a bond rate for an investment grade finance company. Equity warrants in private companies obtained in association with certain loan transactions are measured at fair value on a recurring basis using the Black-Scholes option pricing model. Key inputs to the valuation model include current share estimated fair value, strike price, volatility, expected life, risk-free interest rate, and market and liquidity discounts. Several of the inputs to the valuation model incorporate assumptions by management that are not observable in the market; consequently, the valuation of warrants is classified in Level 3 of the fair value hierarchy. Refer to Note 11, Derivative Instruments, for additional discussion of equity warrants. Level 3 liabilities measured at fair value on a recurring basis consist of contingent consideration and an FDIC clawback liability that are included in other liabilities. As part of its acquisition of Rochdale Investment Management, LLC and associated entities (collectively, “Rochdale”), the Company entered into a contingent consideration arrangement that requires the Company to pay additional cash consideration to Rochdale’s former shareholders at certain points in time over the six years after the date of acquisition if certain criteria, such as revenue growth and pre-tax margin, are met. In 2014, the Company made total contingent consideration payments to Rochdale’s former shareholders of approximately $17.4 million. The fair value of the remaining contingent consideration was estimated using a probability-weighted discounted cash flow model. Although the acquisition agreement does not set a limit on the total payment, the Company estimates that the remaining consideration payment could be in the range of $17 million to $46 million, but will ultimately be determined based on actual future results. The contingent consideration liability is remeasured to fair value at each reporting date until its settlement. The FDIC c lawback liability was valued using the discounted cash flow method based on the terms specified in loss-sharing agreements with the FDIC, the actual FDIC payments collected, and the following unobservable inputs: (1) risk-adjusted discount rate reflecting the Bank’s credit risk, plus a liquidity premium, and (2) loan performance assumptions such as prepayments and losses. There were no transfers into or out of Level 3 assets or liabilities measured on a recurring basis during the nine months ended September 30, 2015 and 2014. Nonrecurring Fair Value Measurements Assets measured at fair value on a nonrecurring basis using significant unobservable inputs include certain collateral dependent impaired loans, OREO for which fair value is not solely based on market observable inputs, and certain private equity and alternative investments. Private equity and alternative investments do not have readily determinable fair values. These investments are carried at cost and evaluated for impairment on a quarterly basis. Due to the lack of readily determinable fair values for these investments, the impairment assessment is based primarily on a review of investment performance and whether the Company expects to recover the cost of an investment. The table below provides information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements. The weight assigned to each input is based on the facts and circumstances that exist at the date of measurement. Information About Nonrecurring Level 3 Fair Value Measurements (in thousands) Fair Value at September 30, 2015 Valuation Method Unobservable Inputs Other real estate owned $ Third-party appraisal - Fair values are primarily based on unadjusted appraised values. - A limited number of properties are valued using comparable sales values resulting in discounts to appraised values ranging from 12% to 22%. Private equity and alternative investments $ See note (1) - See note (1) - Fair values reflect discounts to investment carrying amounts ranging from 27% to 86%. (1) Fair values are based on management’s assumptions regarding recoverability of an investment based on a range of factors including, but not limited to, nature and age of the investment, actual and forecasted investment performance, fund operating results, recent and planned transactions, general and industry specific market conditions, performance of comparable companies and investment exit strategies. For assets measured at fair value on a nonrecurring basis, the following table presents the total net gains and losses, which include charge-offs, recoveries, specific reserves, OREO valuation write-downs and write-ups, gains and losses on sales of OREO, and impairment write-downs on private equity investments, recognized in the three and nine months ended September 30 , 2015 and 2014: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2015 2014 2015 2014 Collateral dependent impaired loans: Commercial real estate mortgages $ — $ — $ — $ ) Residential mortgages — — Other real estate owned (1) ) ) ) Private equity and alternative investments ) — ) — Total net (losses) gains recognized $ ) $ ) $ ) $ (1) Net gains and losses on OREO include amounts related to covered OREO, a significant portion of which is payable to or reimbursable by the FDIC. Fair Value of Financial Instruments A financial instrument is broadly defined as cash, evidence of an ownership interest in another entity, or a contract that imposes a contractual obligation on one entity and conveys a corresponding right to a second entity to require delivery or exchange of financial assets or liabilities. Refer to Note 1, Summary of Significant Accounting Policies, in the Company’s 2014 Form 10-K for additional information on fair value measurements. The disclosure does not include estimated fair value amounts for assets and liabilities which are not defined as financial instruments but which have significant value. These assets and liabilities include the value of customer-relationship intangibles, goodwill, affordable housing investments carried at cost, other assets, deferred taxes and other liabilities. Accordingly, the total of the fair values presented does not represent the underlying value of the Company. The following tables summarize the carrying amounts and estimated fair values of those financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets. The tables also provide information on the level in the fair value hierarchy for inputs used in determining the fair value of those financial instruments. Most financial assets and financial liabilities for which carrying amount equals fair value are considered by the Company to be Level 1 measurements in the fair value hierarchy. September 30, 2015 Carrying Total Fair Value Measurements Using (in millions) Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ $ $ $ — $ — Due from banks - interest-bearing — — Securities purchased under resale agreements — — Securities held-to-maturity — — Loans and leases, net of allowance — — Acquired impaired loans, net of allowance — — FDIC indemnification asset — — Investment in FHLB and FRB stock — — Financial Liabilities: Deposits $ $ $ — $ $ Short-term borrowings — — Long-term debt — December 31, 2014 Carrying Total Fair Value Measurements Using (in millions) Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ $ $ $ — $ — Due from banks - interest-bearing — — Securities purchased under resale agreements — — Securities held-to-maturity — — Loans and leases, net of allowance — — Acquired impaired loans, net of allowance — — FDIC indemnification asset — — Investment in FHLB and FRB stock — — Financial Liabilities: Deposits $ $ $ — $ $ Short-term borrowings — Long-term debt — Following is a description of the methods and assumptions used in estimating the fair values of these financial instruments: Cash and due from banks and Due from banks—interest-bearing — For these short-term instruments, the carrying amount is a reasonable estimate of fair value. Securities purchased under resale agreements — The fair value of securities purchased under term resale agreements is determined using a combination of quoted market prices and observable market inputs such as interest rates and credit spreads. Securities held-to-maturity — For securities held-to-maturity, the fair value is generally determined by quoted market prices, where available, or based on observable market inputs appropriate for the type of security. Loans and leases — Loans and leases, excluding acquired impaired loans, are not recorded at fair value on a recurring basis . Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. Due to the lack of activity in the secondary market for the types of loans in the Company’s portfolio, a model-based approach is used for determining the fair value of loans for purposes of the disclosures in the previous tables. The fair value of loans is estimated by discounting future cash flows using discount rates that incorporate the Company’s assumptions for current market yields, credit risk and liquidity premiums. Loan cash flow projections are based on contractual loan terms adjusted for the impact of current interest rate levels on borrower behavior, including prepayments. Loan prepayment assumptions are based on industry standards for the type of loans being valued. Projected cash flows are discounted using yield curves based on current market conditions. Yield curves are constructed by product type using the Company’s loan pricing model for like-quality credits. The discount rates used in the model represent the rates the Company would offer to current borrowers for like-quality credits. These rates could be different from what other financial institutions could offer for these loans. Acquired impaired loans — The fair value of acquired impaired loans is based on estimates of future loan cash flows and appropriate discount rates, which incorporate the Company’s assumptions about market funding cost and liquidity premium. The future loan cash flows are estimated using the Company’s assumptions concerning the amount and timing of principal and interest payments, prepayments and credit losses. FDIC indemnification asset — The fair value of the FDIC indemnification asset is estimated by discounting expected cash flows with appropriate market discount rates. Investment in FHLB and FRB stock — Investments in Federal Home Loan Bank of San Francisco (“FHLB”) and Federal Reserve Bank (“FRB”) stock are recorded at cost. Ownership of these securities is restricted to member banks and the securities do not have a readily determinable market value. Purchases and sales of these securities are at par value with the issuer. The fair value of investments in FHLB and FRB stock is equal to the carrying amount. Deposits — The fair value of demand and interest checking deposits, savings deposits, and certain money market accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit (“CD”) is determined by discounting expected future cash flows using the rates offered by the Company for deposits of similar type and remaining maturity at the measurement date. This value is compared to the termination value of each CD given the Company’s standard early withdrawal penalties. The fair value reported is the higher of the discounted present value of each CD and the termination value after the recovery of prepayment penalties. The Company reviews pricing for its CD products weekly. This review gives consideration to market pricing for products of similar type and maturity offered by other financial institutions. Short-term borrowings — The fair value of nonrecourse debt is determined by discounting expected cash flows with appropriate market discount rates. The carrying amount of the remaining short-term borrowings is a reasonable estimate of fair value. Long-term debt — The fair value of long-term debt, excluding nonrecourse debt, is obtained through third-party pricing sources . The fair value of nonrecourse debt is determined by discounting expected cash flows with appropriate market discount rates. Off-balance sheet commitments, which include commitments to extend credit, are excluded from the tables. A reasonable estimate of fair value for these instruments is the carrying amount of deferred fees and the reserve for any credit losses related to these off-balance sheet instruments. This estimate is not material to the Company’s financial position. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2015 | |
Securities | |
Securities | Note 3. Securities At September 30, 2015, the Company had total securities of $8.97 billion, comprised of securities available-for-sale at fair value of $5.31 billion, securities held-to-maturity at amortized cost of $3.51 billion and trading securities at fair value of $154.7 million. At December 31, 2014, the Company had total securities of $9.48 billion, comprised of securities available-for-sale at fair value of $5.88 billion, securities held-to-maturity at amortized cost of $3.43 billion and trading securities at fair value of $173.2 million. The following is a summary of amortized cost and estimated fair value for the major categories of securities available-for-sale and securities held-to-maturity at September 30, 2015 and December 31, 2014: Gross Gross Amortized Unrealized Unrealized (in thousands) Cost Gains Losses Fair Value September 30, 2015 Securities available-for-sale: U.S. Treasury $ $ $ ) $ Federal agency - Debt ) Federal agency - MBS ) CMOs - Federal agency ) CMOs - Non-agency ) State and municipal ) Other debt securities ) Total securities available-for-sale $ $ $ ) $ Securities held-to-maturity (1): Federal agency - Debt $ $ $ ) $ Federal agency - MBS ) CMOs - Federal agency ) State and municipal ) Other debt securities ) Total securities held-to-maturity $ $ $ ) $ December 31, 2014 Securities available-for-sale: U.S. Treasury $ $ $ ) $ Federal agency - Debt ) Federal agency - MBS ) CMOs - Federal agency ) CMOs - Non-agency ) State and municipal ) Other debt securities — Total debt securities ) Equity securities and mutual funds ) Total securities available-for-sale $ $ $ ) $ Securities held-to-maturity (1): Federal agency - Debt $ $ $ ) $ Federal agency - MBS ) CMOs - Federal agency ) State and municipal ) Other debt securities ) Total securities held-to-maturity $ $ $ ) $ (1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost. Proceeds from sales of securities available-for-sale were $0.7 million and $401.5 million for the three and nine months ended September 30, 2015, compared with $1.0 million and $627.1 million for the three and nine months ended September 30, 2014. There were no sales of securities held-to-maturity during the three and nine months ended September 30, 2015 and 2014. The following table provides the gross realized gains and losses on the sales and calls of securities (including trading securities): For the three months ended For the nine months ended September 30, September 30, (in thousands) 2015 2014 2015 2014 Gross realized gains $ $ $ $ Gross realized losses ) ) ) ) Net realized gains $ $ $ $ Interest income on securities for the three months ended September 30, 2015 and 2014 is comprised of: (i) taxable interest income of $33.4 million and $37.5 million, respectively, (ii) nontaxable interest income of $7.2 million and $6.4 million, respectively, and (iii) dividend income of $22 thousand for the current and prior-year quarter. Interest income on securities for the nine months ended September 30, 2015 and 2014 is comprised of: (i) taxable interest income of $102.5 million and $111.0 million, respectively, (ii) nontaxable interest income of $21.3 million and $17.9 million, respectively, and (iii) dividend income of $52 thousand and $47 thousand, respectively. The following table provides the expected remaining maturities of debt securities included in the securities portfolio at September 30, 2015, except for maturities of mortgage-backed securities which are allocated according to the average life of expected cash flows. Average expected maturities will differ from contractual maturities because of the amortizing nature of the loan collateral and prepayment behavior of borrowers. (in thousands) One year or less Over 1 year through 5 years Over 5 years through 10 years Over 10 years Total Securities available-for-sale: U.S. Treasury $ $ $ — $ — $ Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency — CMOs - Non-agency — State and municipal — Other — — Total debt securities available-for-sale $ $ $ $ $ Amortized cost $ $ $ $ $ Securities held-to-maturity: Federal agency - Debt $ — $ $ $ $ Federal agency - MBS CMOs - Federal agency — State and municipal Other — — — Total debt securities held-to-maturity at amortized cost $ $ $ $ $ Impairment Assessment The Company performs a quarterly assessment of debt and equity securities in its investment portfolio to determine whether a decline in fair value below amortized cost is other-than-temporary. Amortized cost includes adjustments made to the cost of an investment for amortization, accretion, collection of cash and previous other-than-temporary impairment recognized in earnings. The Company’s impairment assessment of debt securities takes the following factors into consideration: the length of time and the extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer, including events specific to the issuer or industry; defaults or deferrals of scheduled interest and principal payments; external credit ratings; and whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. For equity securities, the evaluation of whether an impairment is other-than-temporary is based on whether and when an equity security will recover in value and whether the Company has the intent and ability to hold the equity security until the anticipated recovery in value occurs. If a decline in fair value is determined to be other-than-temporary, the cost basis of the individual security is written down to fair value which then becomes the security’s new cost basis. The new cost basis is not adjusted for subsequent recoveries in fair value. Other-than-temporary impairment losses on equity securities are recognized in earnings. For debt securities, if the Company intends to sell an impaired security or it is more likely than not it will be required to sell a security prior to recovery of its amortized cost, an impairment loss is recognized in earnings for the entire difference between the amortized cost and fair value of the security on the measurement date. If the Company does not intend to sell the security or it is not more likely than not it will be required to sell the security prior to recovery of its amortized cost, the credit loss component of impairment is recognized in earnings. A credit loss is the difference between the amortized cost of the security and the present value of cash flows expected to be collected, discounted at the security’s effective interest rate at the date of acquisition. Impairment associated with factors other than credit, such as market liquidity, is recognized in other comprehensive income, net of tax. Securities Deemed to be Other-Than-Temporarily Impaired The Company recorded no impairment losses in earnings on securities available-for-sale for the three months ended September 30, 2015 and $0.3 million for the nine months ended September 30, 2015. The Company recorded impairment losses in earnings of $0.1 million and $0.3 million for the three and nine months ended September 30, 2014. The Company recognized after-tax amounts of $0.2 million and $0.1 million of non-credit-related other-than-temporary impairment in accumulated other comprehensive income or loss (“AOCI”) on securities classified as available-for-sale at September 30, 2015 and 2014, respectively. No impairment losses were recognized in earnings or AOCI for securities held-to-maturity during the three and nine months ended September 30, 2015 and 2014. The following table summarizes the changes in cumulative credit-related other-than-temporary impairment recognized in earnings for debt securities for the three and nine months ended September 30, 2015 and 2014. Credit-related other-than-temporary impairment that was recognized in earnings is reflected as an “Initial credit-related impairment” if the period reported is the first time the security had a credit impairment. A credit-related other-than-temporary impairment is reflected as a “Subsequent credit-related impairment” if the period reported is not the first time the security had a credit impairment. Cumulative impairment is reduced for securities with previously recognized credit-related impairment that were sold or redeemed during the period. Cumulative impairment is further adjusted for other changes in expected cash flows. For the three months ended For the nine months ended September 30, September 30, (in thousands) 2015 2014 2015 2014 Balance, beginning of period $ $ $ $ Subsequent credit-related impairment — Reduction for securities sold or redeemed — — — ) Balance, end of period $ $ $ $ The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that the securities have been in a continuous unrealized loss position as of September 30, 2015 and December 31, 2014. The table also includes investment securities that had both a credit-related impairment recognized in earnings and a non-credit-related impairment recognized in AOCI. Less than 12 months 12 months or greater Total (in thousands) Fair Value Estimated Unrealized Loss Fair Value Estimated Unrealized Loss Fair Value Estimated Unrealized Loss September 30, 2015 Securities available-for-sale: U.S. Treasury $ $ $ — $ — $ $ Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency CMOs - Non-agency — — State and municipal Other debt securities — — Total securities available-for-sale $ $ $ $ $ $ Securities held-to-maturity: Federal agency - Debt $ — $ — $ $ $ $ Federal agency - MBS CMOs - Federal agency State and municipal Other debt securities — — Total securities held-to-maturity $ $ $ $ $ $ December 31, 2014 Securities available-for-sale: U.S. Treasury $ $ $ — $ — $ $ Federal agency - Debt Federal agency - MBS — CMOs - Federal agency CMOs - Non-agency State and municipal Total debt securities Equity securities and mutual funds — — Total securities available-for-sale $ $ $ $ $ $ Securities held-to-maturity: Federal agency - Debt $ — $ — $ $ $ $ Federal agency - MBS CMOs - Federal agency State and municipal Other debt securities — — Total securities held-to-maturity $ $ $ $ $ $ At September 30, 2015, the Company had securities available-for-sale with a fair value of $2.26 billion and securities held-to-maturity with a fair value of $541.9 million in an unrealized loss position. The debt securities in an unrealized loss position totaled 332 and included 1 U.S. Treasury note, 3 federal agency debt securities, 13 federal agency MBS, 113 federal agency CMOs, 3 non-agency CMOs, 196 state and municipal securities and 3 other debt securities. At December 31, 2014, the Company had securities available-for-sale with a fair value of $3.50 billion and securities held-to-maturity with a fair value of $1.11 billion in an unrealized loss position. The debt securities in an unrealized loss position totaled 436 and included 2 U.S. Treasury notes, 37 federal agency debt securities, 23 federal agency MBS, 141 federal agency CMOs, 3 non-agency CMOs, 225 state and municipal securities and 5 other debt securities. At December 31, 2014, the Company had one equity security in an unrealized loss position. |
Other Investments
Other Investments | 9 Months Ended |
Sep. 30, 2015 | |
Other Investments | |
Other Investments | Note 4. Other Investments FHLB and FRB Stock The Company’s investment in stock issued by the FHLB and FRB totaled $50.6 million and $58.4 million at September 30, 2015 and December 31, 2014, respectively. Ownership of government agency securities is restricted to member banks, and the securities do not have readily determinable market values. The Company records investments in FHLB and FRB stock at cost in Other assets of the consolidated balance sheets and evaluates these investments for impairment. The Company expects to recover the full amount invested in FHLB and FRB stock. Private Equity and Alternative Investments The Company has ownership interests in a limited number of private equity, venture capital, real estate and hedge funds that are not publicly traded and do not have readily determinable fair values. These investments are carried at cost in the Other assets section of the consolidated balance sheets and are net of impairment write-downs, if applicable. The Company’s investments in these funds totaled $24.1 million and $29.2 million at September 30, 2015 and December 31, 2014. A summary of investments by fund type is provided below: (in thousands) September 30, December 31, Fund Type 2015 2014 Private equity and venture capital $ $ Real estate Hedge Other (1) Total $ $ (1) Includes direct investments in a limited number of start-up companies. Management reviews these investments quarterly for impairment. The impairment assessment includes a review of the most recent financial statements and investment reports for each fund and discussions with fund management. An impairment loss is recognized if the Company does not expect to recover the cost of an investment. The impairment loss is recognized in Other noninterest income in the consolidated statements of income. The new cost basis of the investment is not adjusted for subsequent recoveries in value. The Company recognized $0.5 million and $2.2 million in impairment losses on its investments during the three and nine months ended September 30, 2015. The Company recognized no impairment losses during the three and nine months ended September 30, 2014. The table below provides information as of September 30, 2015 on private equity and alternative investments measured at fair value on a nonrecurring basis due to the recognition of impairment: (in thousands) Fund Type Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period Private equity and venture capital $ $ None (1) N/A Other — None N/A Total $ $ (1) Funds make periodic distributions of income but do not permit redemptions prior to the end of the investment term. |
Loans, Allowance for Loan and L
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments | 9 Months Ended |
Sep. 30, 2015 | |
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments | |
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments | Note 5. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments The following is a summary of the major categories of loans: Loans and Leases September 30, December 31, (in thousands) 2015 2014 Commercial $ $ Commercial real estate mortgages Residential mortgages Real estate construction Home equity loans and lines of credit Installment Lease financing Loans and leases, excluding acquired impaired loans Less: Allowance for loan and lease losses ) ) Loans and leases, excluding acquired impaired loans, net Acquired impaired loans Less: Allowance for loan losses ) ) Acquired impaired loans, net Total loans and leases $ $ Total loans and leases, net $ $ The loan amounts above include deferred costs, net of unamortized fees, of $3.5 million and $0.2 million as of September 30, 2015 and December 31, 2014, respectively. Concentrations of credit risk arise when a number of clients are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company’s lending activities are predominantly in California, and to a lesser extent, New York, the Company has various specialty lending businesses that lend to businesses located throughout the United States of America and in certain foreign countries to facilitate trade finance activities. Excluding acquired impaired loans, at September 30, 2015, California represented 72 percent of total loans outstanding and New York represented 10 percent. The remaining 18 percent of total loans outstanding represented other states and countries. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio and credit performance depends on the economic stability of Southern California. Credit performance also depends, to a lesser extent, on economic conditions in the San Francisco Bay area and New York. Within the Company’s acquired impaired loan portfolio at September 30, 2015, the five states with the largest concentration were California (29 percent), Texas (12 percent), Arizona (6 percent), Ohio (6 percent) and Nevada (6 percent). The remaining 41 percent of total acquired impaired loans outstanding represented other states. Acquired Impaired Loans Acquired impaired loans represent loans acquired in FDIC-assisted acquisitions that are accounted for under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). Loans are accounted for under ASC 310-30 when there is evidence of credit deterioration since origination and for which it is probable, at acquisition, that the Company would be unable to collect all contractually required payments. The Company evaluated the acquired loans from its FDIC-assisted acquisitions and concluded that all loans, with the exception of a small population, met the requirements of ASC 310-30. The following is a summary of the major categories of acquired impaired loans: September 30, December 31, (in thousands) 2015 2014 Commercial $ $ Commercial real estate mortgages Residential mortgages Real estate construction Home equity loans and lines of credit Installment Acquired impaired loans Less: Allowance for loan losses ) ) Acquired impaired loans, net $ $ The following table provides information on acquired impaired loans and loss-sharing terms by acquired entity: (in thousands) Imperial Capital Bank 1st Pacific Bank Sun West Bank Nevada Commerce Bank Total Acquired impaired loans as of: September 30, 2015 $ $ $ $ $ December 31, 2014 As of September 30, 2015: FDIC indemnification asset $ $ $ — $ $ FDIC clawback liability — Expiration date of FDIC loss sharing: Commercial (1) 12/31/2016 6/30/2015 6/30/2015 6/30/2016 Residential 12/31/2019 5/31/2020 5/31/2020 4/30/2021 Termination date of FDIC loss-sharing agreements: Commercial (1) 12/19/2017 5/8/2018 5/29/2018 6/30/2019 Residential 12/31/2019 5/31/2020 5/31/2020 4/30/2021 (1) The Company is subject to sharing 80 percent of its recoveries with the FDIC up to the last day of the quarter in which the termination dates of the commercial loss-sharing agreements occur. FDIC loss sharing under the commercial loss-sharing agreements for 1 st Pacific Bank of California and Sun West Bank ended on June 30, 2015. As a result, losses recognized on assets subject to these agreements are no longer shared with the FDIC effective July 1, 2015. However, the Company is still subject to sharing 80 percent of its recoveries with the FDIC for the time period as indicated in the table above. At September 30, 2015, $377.1 million of acquired impaired loans were covered under the FDIC loss-sharing agreements and $22.4 million of acquired impaired loans were not covered. The excess of cash flows expected to be collected over the carrying value of the underlying acquired impaired loans is referred to as the accretable yield. This amount is not reported in the consolidated balance sheets but is accreted into interest income over the remaining estimated lives of the underlying pools of loans. Changes in the accretable yield for acquired impaired loans were as follows for the nine months ended September 30, 2015 and 2014: For the nine months ended September 30, (in thousands) 2015 2014 Balance, beginning of period $ $ Accretion ) ) Reclassifications from nonaccretable difference Disposals and other ) ) Balance, end of period $ $ The factors that most significantly affect estimates of cash flows expected to be collected, and accordingly the accretable yield balance, include: (i) changes in credit assumptions, including both credit loss amounts and timing; (ii) changes in prepayment assumptions; and (iii) changes in interest rates for variable-rate loans. Reclassifications between accretable yield and nonaccretable difference may vary from period to period as the Company periodically updates its cash flow projections. The reclassification of nonaccretable difference to accretable yield during 2015 was principally driven by positive changes in cash flows, resulting mainly from changes in credit assumptions. The Company recorded an indemnification asset related to its FDIC-assisted acquisitions, which represents the present value of the expected reimbursement from the FDIC for expected losses on acquired loans, OREO and unfunded commitments. The difference between the carrying value of the FDIC indemnification asset and the undiscounted cash flow that the Company expects to collect from the FDIC is accreted or amortized into noninterest income up until the expiration date of the FDIC loss sharing. Refer to the preceding table for a list of expiration dates of FDIC loss sharing by acquired entity. The FDIC indemnification asset is reviewed on a quarterly basis and adjusted based on changes in cash flow projections. The FDIC indemnification asset from all FDIC-assisted acquisitions was $28.2 million at September 30, 2015 and $50.5 million at December 31, 2014. Credit Quality on Loans and Leases, Excluding Acquired Impaired Loans Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses, reserve for off-balance sheet credit commitments and provision for credit losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance and reserve to the levels deemed appropriate by management, as determined through application of the Company’s allowance methodology. The provision for credit losses reflects management’s judgment of the adequacy of the allowance for loan and lease losses and the reserve for off-balance sheet credit commitments. It is determined through quarterly analytical reviews of the loan and commitment portfolios and consideration of such other factors as the Company’s loan and lease loss experience, trends in problem loans, concentrations of credit risk, underlying collateral values, and current economic conditions, as well as the results of the Company’s ongoing credit review process. As conditions change, the Company’s level of provisioning and the allowance for loan and lease losses and reserve for off-balance sheet credit commitments may change. The relative significance of risk considerations used in measuring the allowance for loan and lease losses will vary by portfolio segment. For commercial loans, the primary risk consideration is a borrower’s ability to generate sufficient cash flows to repay their loan. Secondary considerations include the creditworthiness of guarantors and the valuation of collateral. In addition to the creditworthiness of a borrower, the type and location of real estate collateral is an important risk factor for commercial real estate and real estate construction loans. The primary risk considerations for consumer loans are a borrower’s personal cash flow and liquidity, as well as collateral value. For commercial, non-homogenous loans that are not impaired, the Company derives loss factors for each risk grade and loan type via a process that begins with estimates of probable losses inherent in the portfolio based upon various statistical analyses. The factors considered in the analysis include loan type, migration analysis, in which historical delinquency and credit loss experience is applied to the portfolio, as well as analyses that reflect current trends and conditions. Each portfolio of smaller balance homogeneous loans, including residential first mortgages, installment, revolving credit and most other consumer loans, is collectively evaluated for loss potential. The quantitative portion of the allowance for loan and lease losses is adjusted for qualitative factors to account for model imprecision and to incorporate the range of probable outcomes inherent in the estimates used for the allowance. The Company has a qualitative factor matrix to determine the amount of reserves needed for judgmental factors that are not attributable to or reflected in the quantitative model. The methodology to determine the qualitative reserves includes segmenting the Company’s portfolio into three loan categories: commercial real estate secured, commercial and consumer. The qualitative reserve factors are separated into numerically informed and judgmental categories. Numerically informed factors are linked to defined macroeconomic or bank specific criteria, such as portfolio growth, problem loan trends and concentrations. Judgmental factors are based on the Company’s assessment of factors that include, but are not limited to, the legal and regulatory environment, internal systems and procedures, and entry into a new business. Each factor is assigned a risk level and a risk weight in points which is aggregated to determine the level of qualitative reserves. The factors are updated quarterly to reflect changing conditions. A portion of the allowance for loan and lease losses is attributed to impaired loans that are individually measured for impairment. This measurement is based on the present value of expected future cash flows discounted using the loan’s contractual effective rate, the fair value of collateral or the secondary market value of the loan. The allowance for loan and lease losses is decreased by the amount of charge-offs and increased by the amount of recoveries. Generally, commercial, commercial real estate and real estate construction loans are charged off immediately when it is determined that advances to the borrower are in excess of the calculated current fair value of the collateral and if a borrower is deemed incapable of repayment of unsecured debt, there is little or no prospect for near term improvement and no realistic strengthening action of significance pending. Consumer loans are charged off based on delinquency, ranging from 60 days for overdrafts to 180 days for secured consumer loans, or earlier when it is determined that the loan is uncollectible due to a triggering event, such as bankruptcy, fraud or death. The following is a summary of activity in the allowance for loan and lease losses and period-end recorded investment balances of loans evaluated for impairment, excluding acquired impaired loans, for the three and nine months ended September 30, 2015 and 2014. Activity is provided by loan portfolio segment which is consistent with the Company’s methodology for determining the allowance for loan and lease losses. (in thousands) Commercial (1) Commercial Real Estate Mortgages Residential Mortgages Real Estate Construction Home Equity Loans and Lines of Credit Installment Qualitative Total Three months ended September 30, 2015 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) — — — — ) — ) Recoveries — Net recoveries (charge-offs) ) — (Reversal of) provision for credit losses ) ) ) ) Transfers from reserve for off-balance sheet credit commitments — — — — — — Ending balance $ $ $ $ $ $ $ $ Nine months ended September 30, 2015 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) — — — — ) — ) Recoveries — Net recoveries (charge-offs) ) — (Reversal of) provision for credit losses ) ) ) Transfers to reserve for off-balance sheet credit commitments — — — — — — ) ) Ending balance $ $ $ $ $ $ $ $ Ending balance of allowance: Individually evaluated for impairment $ $ $ $ — $ — $ — $ — $ Collectively evaluated for impairment Loans and leases, excluding acquired impaired loans Ending balance of loans and leases: Loans and leases, excluding acquired impaired loans $ $ $ $ $ $ $ — $ Individually evaluated for impairment — — Collectively evaluated for impairment — (1) Includes lease financing loans. (in thousands) Commercial (1) Commercial Real Estate Mortgages Residential Mortgages Real Estate Construction Home Equity Loans and Lines of Credit Installment Qualitative Total Three months ended September 30, 2014 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) — — — — ) — ) Recoveries — Net recoveries — (Reversal of) provision for credit losses ) ) ) Transfers to reserve for off-balance sheet credit commitments — — — — — — ) ) Ending balance $ $ $ $ $ $ $ $ Nine months ended September 30, 2014 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) ) ) — ) ) — ) Recoveries — Net (charge-offs) recoveries ) ) — (Reversal of) provision for credit losses ) ) ) ) ) Transfers from (to) reserve for off-balance sheet credit commitments — — — — — ) Ending balance $ $ $ $ $ $ $ $ Ending balance of allowance: Individually evaluated for impairment $ $ $ — $ — $ — $ — $ — $ Collectively evaluated for impairment Loans and leases, excluding acquired impaired loans Ending balance of loans and leases: Loans and leases, excluding acquired impaired loans $ $ $ $ $ $ $ — $ Individually evaluated for impairment — — Collectively evaluated for impairment — (1) Includes lease financing loans. Off-balance sheet credit exposures include loan commitments and letters of credit. The following table provides a summary of activity in the reserve for off-balance sheet credit commitments for the three and nine months ended September 30, 2015 and 2014: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2015 2014 2015 2014 Balance, beginning of period $ $ $ $ Transfers (to) from allowance for loan and lease losses ) ) Balance, end of period $ $ $ $ The reserve for off-balance sheet credit commitments decreased $0.1 million and increased $2.2 million during the three and nine months ended September 30, 2015, respectively. The change was due to normal fluctuations in the amount of reserves required due to changes in the composition, amount and quality of risk ratings of borrowers associated with the off-balance sheet commitments. Increases and decreases in the reserve for off-balance sheet credit commitments are reflected as an allocation of provision expense from or to the allowance for loan and lease losses. Impaired Loans and Leases The Company considers a loan to be impaired when it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows discounted at the loan’s effective interest rate, except that if the loan is collateral dependent, the impairment is measured by using the fair value of the loan’s collateral. As a final alternative, the observable market price of the debt may be used to assess impairment. Nonperforming loans greater than $1 million are individually evaluated for impairment based upon the borrower’s overall financial condition, resources, and payment record, and the prospects for support from any financially responsible guarantors. For borrowers with multiple loans totaling $1 million or more, this threshold is applied at the total relationship level. Loans under $1 million are measured for impairment using historical loss factors. When the measurement of the impaired loan is less than the recorded amount of the loan, an impairment is recognized by creating a valuation allowance with a corresponding charge to the allowance for loan and lease losses or by adjusting an existing valuation allowance for the impaired loan. Information on impaired loans, excluding acquired impaired loans, at September 30, 2015, December 31, 2014 and September 30, 2014 is provided in the following tables: Unpaid For the three months ended September 30, 2015 For the nine months ended September 30, 2015 (in thousands) Recorded Investment Contractual Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized September 30, 2015 With no related allowance recorded: Commercial $ $ $ — $ $ $ $ Commercial real estate mortgages — Residential mortgages: Fixed — Variable — — — — — — Total residential mortgages — Real estate construction: Land — Total real estate construction — Home equity loans and lines of credit — Total with no related allowance $ $ $ — $ $ $ $ With an allowance recorded: Commercial $ $ $ $ $ $ $ Commercial real estate mortgages — Residential mortgages: Variable Total residential mortgages Total with an allowance $ $ $ $ $ $ $ Total impaired loans by type: Commercial $ $ $ $ $ $ $ Commercial real estate mortgages Residential mortgages Real estate construction — Home equity loans and lines of credit — Total impaired loans $ $ $ $ $ $ $ (in thousands) Recorded Investment Unpaid Contractual Principal Balance Related Allowance December 31, 2014 With no related allowance recorded: Commercial $ $ $ — Commercial real estate mortgages — Residential mortgages: Fixed — Variable — Total residential mortgages — Real estate construction: Land — Total real estate construction — Home equity loans and lines of credit — Total with no related allowance $ $ $ — With an allowance recorded: Commercial $ $ $ Commercial real estate mortgages Residential mortgages: Variable Total residential mortgages Total with an allowance $ $ $ Total impaired loans by type: Commercial $ $ $ Commercial real estate mortgages Residential mortgages Real estate construction — Home equity loans and lines of credit — Total impaired loans $ $ $ Unpaid For the three months ended September 30, 2014 For the nine months ended September 30, 2014 (in thousands) Recorded Investment Contractual Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized September 30, 2014 With no related allowance recorded: Commercial $ $ $ — $ $ $ $ Commercial real estate mortgages — Residential mortgages: Fixed — Variable — Total residential mortgages — Real estate construction: Construction — — — — — Land — Total real estate construction — Home equity loans and lines of credit — — — Installment: Consumer — — — — Total installment — — — — Total with no related allowance $ $ $ — $ $ $ $ With an allowance recorded: Commercial $ $ $ $ $ — $ $ — Commercial real estate mortgages Residential mortgages: Variable — — — — Total residential mortgages — — — — Installment: Consumer — — — — Total installment — — — — Total with an allowance $ $ $ $ $ $ $ Total impaired loans by type: Commercial $ $ $ $ $ $ $ Commercial real estate mortgages Residential mortgages — Real estate construction — Home equity loans and lines of credit — — — Installment — — — Total impaired loans $ $ $ $ $ $ $ Impaired loans at September 30, 2015 and December 31, 2014 included $33.1 million and $30.6 million, respectively, of loans that are on accrual status. With the exception of restructured loans on accrual status and a limited number of loans on cash basis nonaccrual for which the full collection of principal and interest is expected, interest income is not recognized on impaired loans until the principal balance of these loans is paid off. Troubled Debt Restructured Loans The following table provides a summary of loans modified in a troubled debt restructuring during the three months ended September 30, 2015. There were no loans modified in a troubled debt restructuring during the three months ended September 30, 2014. (in thousands) Number of Contracts Pre-Modification Outstanding Principal Period-End Outstanding Principal Financial Effects (1) Three months ended September 30, 2015 Commercial $ $ $ — Commercial real estate mortgages — Home equity loans and lines of credit — Total troubled debt restructured loans $ $ $ — (1) Financial effects are comprised of charge-offs and specific reserves recognized on troubled debt restructured (“TDR”) loans at modification date. The following table provides a summary of loans modified in a troubled debt restructuring during the nine months ended September 30, 2015 and 2014: (in thousands) Number of Contracts Pre-Modification Outstanding Principal Period-End Outstanding Principal Financial Effects (1) Nine months ended September 30, 2015 Commercial $ $ $ — Commercial real estate mortgages — Residential mortgages: Fixed — Home equity loans and lines of credit — Total troubled debt restructured loans $ $ $ — Nine months ended September 30, 2014 Commercial $ $ $ — Residential mortgages: Variable Installment: Consumer — Total troubled debt restructured loans $ $ $ (1) Financial effects are comprised of charge-offs and specific reserves recognized on TDR loans at modification date. A restructuring constitutes a troubled debt restructuring when a lender, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. Loans with pre-modification outstanding balances totaling $3.0 million and $4.4 million were modified in troubled debt restructurings during the three and nine months ended September 30, 2015. Loans with pre-modification outstanding balances totaling $8.8 million were modified in troubled debt restructurings during the nine months ended September 30, 2014. The concessions granted in the restructurings completed in 2015 largely consisted of maturity extensions. The unpaid principal balance of TDR loans was $27.3 million, before specific reserves of $0.4 million, at September 30, 2015 and $34.3 million, before specific reserves of $0.7 million, at December 31, 2014. The net decrease in TDR loans from December 31, 2014 was primarily attributable to payments received on existing TDR loans totaling $8.5 million and charge-offs totaling $3.1 million on an existing TDR loan. These decreases were partially offset by additions totaling $4.4 million. Loans modified in troubled debt restructurings are impaired loans at the time of restructuring and subject to the same measurement criteria as all other impaired loans. A TDR loan is considered to be in default when payments are 90 days or more past due. The following table provides a summary of TDR loans that subsequently defaulted during the three and nine months ended September 30, 2015 that had been modified as a troubled debt restructuring during the 12 months prior to their default. The Company had no TDR loans that subsequently defaulted during the three and nine months ended September 30, 2014. For three months ended September 30, 2015 For nine months ended September 30, 2015 (in thousands) Number of Contracts Period-End Outstanding Principal Period-End Specific Reserve Number of Contracts Period-End Outstanding Principal Period-End Specific Reserve Commercial $ $ — $ $ — Commercial real estate mortgages — — — — Total loans that subsequently defaulted $ $ — $ $ — All other TDR loans were performing in accordance with their restructured terms at September 30, 2015. As of September 30, 2015, there were $0.3 million of outstanding commitments to lend additional funds on restructured loans. Past Due and Nonaccrual Loans and Leases Loans are considered past due following the date when either interest or principal is contractually due and unpaid. The following tables provide a summary of past due and nonaccrual loans, excluding acquired impaired loans, at September 30, 2015 and December 31, 2014 based upon the length of time the loans have been past due: (in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days and Accruing Nonaccrual Total Past Due and Nonaccrual Loans Current Total Loans and Leases September 30, 2015 Commercial $ $ $ — $ $ $ $ Commercial real estate mortgages — — Residential mortgages: Fixed — Variable — Total residential mortgages — Real estate construction: Construction — — — — — Land — — — Total real estate construction — — — Home equity loans and lines of credit Installment: Commercial — — — — — Consumer Total installment Lease financing — — Total $ $ $ $ $ $ $ (in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days and Accruing Nonaccrual Total Past Due and Nonaccrual Loans Current Total Loans and Leases December 31, 2014 Commercial $ $ $ $ $ $ $ Commercial real estate mortgages — — Residential mortgages: Fixed — Variable — — Total residential mortgages — Real estate construction: Construction — — — — — Land — — — Total real estate construction — — — Home equity loans and lines of credit — Installment: Commercial — — — — — Consumer Total installment Lease financing — Total $ $ $ $ $ $ $ Credit Quality Monitoring The Company closely monitors and assesses credit quality and credit risk in the loan and lease portfolio on an ongoing basis. Loan risk classifications are continuously reviewed and updated. The following table provides a summary of the loan and lease portfolio, excluding acquired impaired loans, by loan type and credit quality classification as of September 30, 2015 and December 31, 2014. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those loans that are classified as substandard or doubtful consistent with regulatory guidelines. September 30, 2015 December 31, 2014 (in thousands) Nonclassified Classified Total Nonclassified Classified Total Commercial $ $ $ $ $ $ Commercial real estate mortgages Residential mortgages: Fixed Variable Total residential mortgages Real estate construction: Construction — Land Total real estate construction Home equity loans and lines of credit Installment: Commercial — — Consumer Total installment Lease financing Total $ $ $ $ $ $ Credit Quality on Acquired Impaired Loans The following is a summary of activity in the allowance for losses on acquired impaired loans: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2015 2014 2015 2014 Balance, beginning of period $ $ $ $ Provision for losses Change in allowance due to loan removals ) ) ) ) Balance, end of period $ $ $ $ The allowance for losses on acquired impaired loans was $5.6 million, $8.6 million and $9.4 million as of September 30, 2015, December 31, 2014 and September 30, 2014, respectively. The Company recorded provision expense of $1.1 million and $2.7 million during the three and nine months ended September 30, 2015, respectively. The Company recorded provision expense of $0.6 million and $3.8 million during the three and nine months ended September 30, 2014, respectively. The Company updates its cash flow projections for acquired impaired loans accounted for under ASC 310-30 on a quarterly basis, and may recognize provision expense or reversal of provision for loan losses as a result of that analysis. The provision expense or reversal of provision for losses on acquired impaired loans is the result of changes in expected cash flows, both amount and timing, due to actual loan performance and the Company’s revised loan loss and prepayment forecasts. The revisions of these forecasts were based on the results of management’s review of market conditions, the credit quality of outstanding acquired impaired loans and the analysis of loan performance data since the acquisition of the acquired impaired loans. The allowance for losses is adjusted for any loan removals, which occur when a loan has been fully paid off, fully charged off, sold or transferred to OREO. Acquired impaired loans are generally considered accruing and performing loans as the loans accrete interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, acquired impaired loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated. There were no acquired impaired loans that were on nonaccrual status as of September 30, 2015 and December 31, 2014. At September 30, 2015, acquired impaired loans that were 30 to 89 days delinquent totaled $0.9 million and acquired impaired loans that were 90 days or more past due on accrual status totaled $20.4 million. At December 31, 2014, acquired impaired loans that were 30 to 89 days delinquent totaled $7.4 million and acquired impaired loans that were 90 days or more past due on accrual status totaled $28.3 million. |
Other Real Estate Owned
Other Real Estate Owned | 9 Months Ended |
Sep. 30, 2015 | |
Other Real Estate Owned. | |
Other Real Estate Owned | Note 6. Other Real Estate Owned The following table provides a summary of OREO activity for the three months ended September 30, 2015 and 2014: For the three months ended September 30, 2015 For the three months ended September 30, 2014 (in thousands) Non-Covered OREO Covered OREO Total Non-Covered OREO Covered OREO Total Balance, beginning of period $ $ $ $ $ $ Additions — Sales — ) ) ) ) ) Valuation adjustments ) ) ) ) ) ) Balance, end of period $ $ $ $ $ $ The following table provides a summary of OREO activity for the nine months ended September 30, 2015 and 2014: For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 (in thousands) Non-Covered OREO Covered OREO Total Non-Covered OREO Covered OREO Total Balance, beginning of period $ $ $ $ $ $ Additions — Sales ) ) ) ) ) ) Valuation adjustments ) ) ) ) ) ) Balance, end of period $ $ $ $ $ $ At September 30, 2015, OREO was $13.9 million and included $8.3 million of covered OREO. At December 31, 2014, OREO was $23.5 million and included $12.8 million of covered OREO. The balance of OREO at September 30, 2015 and December 31, 2014 is net of valuation allowances of $2.4 million and $7.4 million, respectively. At September 30, 2015, the Company’s recorded investment in residential mortgage loans, excluding acquired impaired loans, for which foreclosure proceedings had been initiated totaled $7.3 million. Covered OREO expenses and valuation write-downs are recorded in the noninterest expense section of the consolidated statements of income and gains or losses on sale of covered OREO are recognized in the noninterest income section. Under the loss-sharing agreements, 80 percent of eligible covered OREO expenses, valuation write-downs, and losses on sales are reimbursable to the Company from the FDIC, and 80 percent of covered gains on sales are payable to the FDIC. The portion of these expenses and income shared with the FDIC is recorded in FDIC loss sharing income (expense), net in the noninterest income section of the consolidated statements of income. |
Borrowed Funds
Borrowed Funds | 9 Months Ended |
Sep. 30, 2015 | |
Borrowed Funds | |
Borrowed Funds | Note 7. Borrowed Funds Short-term borrowings consist of funds with remaining maturities of one year or less, and long-term debt consists of borrowings with remaining maturities greater than one year. The components of short-term borrowings and long-term debt as of September 30, 2015 and December 31, 2014 are provided below: (in thousands) (1) September 30, 2015 December 31, 2014 Short-term borrowings Federal funds purchased $ — $ Current portion of nonrecourse debt (2) Total short-term borrowings $ $ Long-term debt Senior notes: City National Corporation - 5.25% Senior Notes Due September 2020 $ $ Subordinated debt: City National Bank - 9.00% Subordinated Notes Due August 2019 City National Bank - 5.375% Subordinated Notes Due July 2022 Junior subordinated debt: Floating Rate Business Bancorp Capital Trust I Securities due November 2034 (3) Nonrecourse debt (2) Other long-term debt (4) Total long-term debt $ $ (1) The carrying value of certain borrowed funds is net of discount which is being amortized into interest expense. (2) Nonrecourse debt bears interest at an average rate of 3.83 percent as of September 30, 2015 and has maturity dates ranging from November 2015 to February 2023. (3) These floating rate securities bear interest of three-month LIBOR plus 1.965 percent which is reset quarterly. As of September 30, 2015, the interest rate was approximately 2.29 percent. (4) Other long-term debt includes a note payable that bears a fixed interest rate of 5.64 percent and is scheduled to mature in June 2017. The Company holds debt affiliated with First American Equipment Finance (“FAEF”), its wholly-owned equipment finance subsidiary. FAEF assigns the future rentals of certain lease financing loans to financial institutions on a nonrecourse basis at fixed interest rates. In return for future minimum lease rentals assigned, FAEF receives a discounted cash payment. Proceeds from discounting are reflected in the table above as nonrecourse debt. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Shareholders' Equity | |
Shareholders' Equity | Note 8. Shareholders’ Equity The components of AOCI at September 30, 2015 and December 31, 2014 are as follows: (in thousands) September 30, 2015 December 31, 2014 Net unrealized gain (loss) on securities available-for-sale $ $ ) Foreign currency translation adjustments ) ) Total accumulated other comprehensive income (loss) $ $ ) The following table presents the tax effects allocated to each component of other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014: For the three months ended September 30, 2015 For the three months ended September 30, 2014 (in thousands) Pre-tax Tax expense (benefit) Net-of-tax Pre-tax Tax expense (benefit) Net-of-tax Securities available-for-sale: Net unrealized gains (losses) arising during the period $ $ $ $ ) $ ) $ ) Reclassification adjustment for net gains included in net income (1) ) ) ) ) ) ) Non-credit related impairment loss ) ) ) ) ) ) Total securities available-for-sale ) ) ) Foreign currency translation adjustments ) — ) — — — Total other comprehensive income (loss) $ $ $ $ ) $ ) $ ) For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 (in thousands) Pre-tax Tax expense (benefit) Net-of-tax Pre-tax Tax expense (benefit) Net-of-tax Securities available-for-sale: Net unrealized gains arising during the period $ $ $ $ $ $ Reclassification adjustment for net gains included in net income (1) ) ) ) ) ) ) Non-credit related impairment loss ) ) ) ) ) ) Total securities available-for-sale Foreign currency translation adjustments ) — ) — — — Total other comprehensive income $ $ $ $ $ $ (1) Recognized in Gain on sale of securities in the consolidated statements of income. The following table summarizes the Company’s share repurchases for the three months ended September 30, 2015. All repurchases relate to shares withheld or previously owned shares used to pay taxes due upon vesting of restricted stock. There were no issuer repurchases of the Corporation’s common stock as part of its repurchase plan for the three months ended September 30, 2015. Period Total Number of Shares Purchased Average Price Paid per Share July 1, 2015 to July 31, 2015 $ August 1, 2015 to August 31, 2015 — — September 1, 2015 to September 30, 2015 Total share repurchases |
Earnings per Common Share
Earnings per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings per Common Share | |
Earnings per Common Share | Note 9. Earnings per Common Share The Company applies the two-class method of computing basic and diluted earnings per common share (“EPS”). Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted stock and restricted stock units under a share-based compensation plan that qualify as participating securities. The computation of basic and diluted EPS for the three and nine months ended September 30, 2015 and 2014 is presented in the following table: For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share amounts) (1) 2015 2014 2015 2014 Basic EPS: Net income attributable to City National Corporation $ $ $ $ Less: Dividends on preferred stock Net income available to common shareholders $ $ $ $ Less: Earnings allocated to participating securities Earnings allocated to common shareholders $ $ $ $ Weighted-average common shares outstanding Basic earnings per common share $ $ $ $ Diluted EPS: Earnings allocated to common shareholders (2) $ $ $ $ Weighted-average common shares outstanding Dilutive effect of equity awards Weighted-average diluted common shares outstanding Diluted earnings per common share $ $ $ $ (1) Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, for further discussion. (2) Earnings allocated to common shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to common shareholders and participating securities for the purposes of calculating diluted EPS. The average price of the Company’s common stock for the period is used to determine the dilutive effect of outstanding stock options. Antidilutive stock options are not included in the calculation of diluted EPS. There were 0.4 million and 0.7 million average outstanding stock options that were antidilutive for the three months ended September 30, 2015 and 2014, respectively. There were 0.4 million and 0.7 million average outstanding stock options that were antidilutive for the nine months ended September 30, 2015 and 2014, respectively. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Compensation | |
Share-Based Compensation | Note 10. Share-Based Compensation On September 30, 2015, the Company had one share-based compensation plan, the Amended and Restated City National Corporation 2008 Omnibus Plan (the “Plan”), which was originally approved by the Company’s shareholders on April 23, 2008. No new awards have been or will be granted under predecessor plans since the adoption of the Plan. The Plan permits the grant of stock options, restricted stock, restricted stock units, cash-settled restricted stock units, performance shares, performance share units, performance units and stock appreciation rights, or any combination thereof, to the Company’s eligible employees and non-employee directors. No grants of performance shares, performance share units or stock appreciation rights had been made as of September 30, 2015. At September 30, 2015, there were approximately 2.4 million shares available for future grants. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for further discussion of the Company’s share-based compensation plan. The compensation cost that has been recognized for all share-based awards was $4.7 million and $15.9 million for the three and nine months ended September 30, 2015, respectively, compared with $5.5 million and $16.1 million for the three and nine months ended September 30, 2014. The total income tax benefit recognized in the consolidated statements of income for share-based compensation arrangements was $2.0 million and $6.7 million for the three and nine months ended September 30, 2015, respectively, compared with $2.3 million and $6.7 million for the three and nine months ended September 30, 2014. The Company received $30.7 million and $21.7 million in cash for the exercise of stock options during the nine months ended September 30, 2015 and 2014, respectively. The actual tax benefit realized for the tax deductions from stock option exercises was $6.0 million and $3.2 million for the nine months ended September 30, 2015 and 2014, respectively. To estimate the fair value of stock option awards, the Company uses the Black-Scholes methodology, which incorporates the assumptions summarized in the table below: For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 Weighted-average volatility % % % % Dividend yield % % % % Expected term (in years) Risk-free interest rate % % % % Using the Black-Scholes methodology, the weighted-average grant-date fair values of options granted during the nine months ended September 30, 2015 and 2014 were $21.79 and $17.93, respectively. The total intrinsic value of options exercised during the nine months ended September 30, 2015 and 2014 was $15.8 million and $7.7 million, respectively. A summary of option activity and related information for the nine months ended September 30, 2015 is presented below: Weighted- Weighted- Average Aggregate Average Number of Exercise Intrinsic Remaining Shares Price Value Contractual Options (in thousands) (per share) (in thousands) (1) Term Outstanding at January 1, 2015 $ Granted Exercised ) Forfeited or expired ) Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $ (1) Includes in-the-money options only. A summary of changes in unvested options and related information for the nine months ended September 30, 2015 is presented below: Weighted-Average Number of Grant Date Shares Fair Value Unvested Options (in thousands) (per share) Unvested at January 1, 2015 $ Granted Vested ) Forfeited ) Unvested at September 30, 2015 $ The number of options vested during the nine months ended September 30, 2015 and 2014 was 514,850 and 551,992, respectively. The total fair value of options vested during the nine months ended September 30, 2015 and 2014 was $7.6 million and $8.1 million, respectively. As of September 30, 2015, there was $13.2 million of unrecognized compensation cost related to unvested stock options granted under the Company’s plans. That cost is expected to be recognized over a weighted-average period of 2.6 years. A summary of changes in restricted stock and related information for the nine months ended September 30, 2015 is presented below: Weighted-Average Number of Grant Date Shares Fair Value Restricted Stock (1) (in thousands) (per share) Unvested at January 1, 2015 $ Granted Vested ) Forfeited ) Unvested at September 30, 2015 $ (1) Includes restricted stock units. Restricted stock is valued at the closing price of the Company’s stock on the date of award. The weighted-average grant-date fair value of restricted stock granted during the nine months ended September 30, 2015 and 2014 was $90.47 and $73.64, respectively. The number of restricted shares vested during the nine months ended September 30, 2015 and 2014 was 145,663 and 180,799, respectively. The total fair value of restricted stock vested was $8.0 million during the nine months ended September 30, 2015 and 2014. As of September 30, 2015, the unrecognized compensation cost related to restricted stock granted under the Company’s plans was $16.2 million. That cost is expected to be recognized over a weighted-average period of 3.3 years. Cash-settled restricted stock units are initially valued at the closing price of the Company’s stock on the date of award. They are subsequently remeasured to the closing price of the Company’s stock at each reporting date until settlement. A summary of changes in cash-settled restricted stock units for the nine months ended September 30, 2015 is presented below: Number of Shares Cash-Settled Restricted Stock Units (in thousands) Unvested at January 1, 2015 Granted Vested ) Forfeited ) Unvested at September 30, 2015 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments | |
Derivative Instruments | Note 11. Derivative Instruments The Company may use interest-rate swaps to mitigate interest-rate risk associated with changes to (1) the fair value of certain fixed-rate deposits and borrowings (fair value hedges) and (2) certain cash flows related to future interest payments on variable rate loans (cash flow hedges). Interest-rate swap agreements involve the exchange of fixed and variable rate interest payments between counterparties based upon a notional principal amount and maturity date. The Company recognizes derivatives as assets or liabilities on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction. The Company also offers various derivative products to clients and enters into derivative transactions in due course. These transactions are not linked to specific Company assets or liabilities in the consolidated balance sheets or to forecasted transactions in a hedge relationship and, therefore, do not qualify for hedge accounting. The following table summarizes the fair value and balance sheet classification of derivative instruments as of September 30, 2015 and December 31, 2014. The notional amount of the contract is not recorded on the consolidated balance sheets, but is used as the basis for determining the amount of interest payments to be exchanged between the counterparties. If a counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset. Notional Amounts and Fair Values of Derivative Instruments September 30, 2015 December 31, 2014 (in millions) (1) Notional Amount Derivative Assets Derivative Liabilities Notional Amount Derivative Assets Derivative Liabilities Derivatives not designated as hedging instruments Interest rate contracts: Swaps $ $ $ $ $ $ Interest-rate caps, floors and collars Total interest-rate contracts Option contracts — — — — Foreign exchange contracts: Spot and forward contracts Options purchased — — — Options written — — — Total foreign exchange contracts Equity warrants — — Total derivatives not designated as hedging instruments $ $ $ $ $ $ (1) The Company offsets mark-to-market adjustments, interest receivable and interest payable on interest-rate swaps that are executed with the same counterparty under a master netting agreement, and reports the net balance in other assets or other liabilities in the consolidated balance sheets. For purposes of this disclosure, mark-to-market adjustments, interest receivable and interest payable are presented on a gross basis. Derivatives Designated as Hedging Instruments The Company had no hedging instruments as of September 30, 2015 and December 31, 2014. Derivatives Not Designated as Hedging Instruments Derivative contracts not designated as hedges are composed primarily of interest-rate contracts with certain commercial clients that are largely offset by paired trades with unrelated bank counterparties. The Company also enters into foreign exchange contracts with its clients and counterparty banks primarily for the purpose of offsetting or hedging the clients’ transaction and economic exposures arising out of commercial transactions. The Company also obtains equity warrants in association with certain lending transactions. Derivative contracts not designated as hedges are carried at fair value each reporting period with changes in fair value recorded as a part of Noninterest income in the consolidated statements of income. The table below provides the amount of gains and losses on these derivative contracts for the three and nine months ended September 30, 2015 and 2014: (in millions) Derivatives Not Designated as Location in Consolidated For the three months ended September 30, For the nine months ended September 30, Hedging Instruments Statements of Income 2015 2014 2015 2014 Interest-rate contracts Other noninterest income $ ) $ — $ ) $ ) Option contracts Other noninterest income — ) Foreign exchange contracts (1) International services income Equity warrants Other noninterest income — Total income $ $ $ $ (1) Includes spread and translation gains (losses) on foreign exchange spot, forward and option contracts. In the course of negotiating credit facilities, the Company may obtain rights to acquire stock in the form of equity warrants in primarily private, venture-backed technology companies. The warrants grant the Company an option to purchase a specific number of shares of stock in the underlying company at a specific price within a specific time period. The warrant agreements typically contain a net share settlement provision (cashless exercise) which gives the Company the option to receive at exercise a number of shares equal to the intrinsic value of the warrant divided by the share price. Equity warrants are accounted for as derivatives under ASC Topic 815, Derivatives and Hedging, and are recorded as derivative assets at their estimated fair value on the grant date. The warrant portfolio is reviewed quarterly for changes in fair value. Subsequent changes in the fair value of warrants are recognized in Other noninterest income in the consolidated statements of income. If a warrant is exercised or paid out for cash, the gain is recorded in Other noninterest income in the consolidated statements of income. Credit Risk Exposure and Collateral The Company’s swap agreements require the deposit of cash or marketable debt securities as collateral based on certain risk thresholds. These requirements apply individually to the Corporation and to the Bank. Additionally, certain of the Company’s swap contracts contain security agreements that include credit-risk-related contingent features. Under these agreements, the collateral requirements are based on the Company’s credit rating from the major credit rating agencies. The amount of collateral required may vary by counterparty based on a range of credit ratings that correspond with exposure thresholds established in the derivative agreements. If the credit ratings on the Company’s debt were to fall below the level associated with a particular exposure threshold and the derivatives with a counterparty are in a net liability position that exceeds that threshold, the counterparty could request immediate payment or delivery of collateral for the difference between the net liability amount and the exposure threshold. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position on September 30, 2015 was $22.0 million. The Company delivered collateral in the form of securities valued at $11.1 million on swap agreements that had credit-risk-related contingent features and were in a net liability position at September 30, 2015. The Company’s interest-rate swaps had no credit risk exposure at September 30, 2015 and December 31, 2014, respectively. The credit exposure represents the cost to replace, on a present value basis and at current market rates, all contracts by trading counterparty having an aggregate positive market value, net of margin collateral received. The Company enters into master netting agreements with swap counterparties to mitigate credit risk. Under these agreements, the net amount due from or payable to each counterparty is settled on the contract payment date. No collateral had been received from swap counterparties at September 30, 2015 and December 31, 2014. The Company delivered collateral in the form of securities valued at $5.6 million and cash totaling $66.0 million on swap agreements that did not have credit-risk-related contingent features at September 30, 2015. At September 30, 2015, the Company had delivered cash collateral on foreign exchange contracts totaling $1.1 million and received cash collateral on foreign exchange contracts totaling $1.0 million. See Note 12 , Balance Sheet Offsetting , of the Notes to the Unaudited Consolidated Financial Statements for additional information about the Company’s derivative instruments subject to master netting agreements. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2015 | |
Balance Sheet Offsetting | |
Balance Sheet Offsetting | Note 12. Balance Sheet Offsetting Assets and liabilities relating to certain financial instruments, including derivatives, securities purchased under resale agreements (“reverse repurchase agreements”) and securities sold under repurchase agreements (“repurchase agreements”), may be eligible for offset in the consolidated balance sheet as permitted under accounting guidance. The Company is party to transactions involving derivative instruments that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty. Certain derivative transactions may require the Company to receive or pledge marketable debt securities as collateral based on certain risk thresholds. The Company also enters into reverse repurchase agreements and collateral swap agreements. Under reverse repurchase agreements, the Company has the right to claim securities collateral if the counterparty fails to perform. Collateral swap agreements involve the exchange of securities collateral under simultaneous repurchase and reverse repurchase agreements with the same bank counterparty. These agreements have the same principal amounts, inception dates and maturity dates, and have been offset against each other in the balance sheet as permitted under the netting provisions of ASC Topic 210-20-45, Balance Sheet — Offsetting . Securities swaps totaled $500.0 million at September 30, 2015. At September 30, 2015, the Company had delivered collateral consisting of agency mortgage-backed securities with a fair value of approximately $534.2 million on the repurchase agreement and accepted collateral consisting of corporate and municipal bonds with a fair value of approximately $521.0 million on the reverse repurchase agreement. Securities that have been pledged by counterparties as collateral are not recorded in the Company’s consolidated balance sheet unless the counterparty defaults. Securities that have been pledged by the Company to counterparties continue to be reported in the Company’s consolidated balance sheet unless the Company defaults. The Company also offers various derivative products to clients and enters into derivative transactions in due course. These derivative contracts are offset by paired trades with unrelated bank counterparties. Certain derivative transactions with clients are not subject to master netting arrangements and have been excluded from the balance sheet offsetting tables below. The following tables provide information about financial instruments that are eligible for offset at September 30, 2015 and December 31, 2014: Gross Gross Net Amount Presented Gross Amounts Not Offset in the Balance Sheet (in thousands) Amount Recognized Amount Offset in the Balance Sheet Securities Collateral Cash Collateral Net Amount September 30, 2015 Financial assets: Reverse repurchase agreements $ $ ) $ $ ) $ — $ Derivatives not designated as hedging instruments ) — — Total financial assets $ $ ) $ $ ) $ — $ Financial liabilities: Repurchase agreements $ $ ) $ — $ — $ — $ — Derivatives not designated as hedging instruments ) ) ) Total financial liabilities $ $ ) $ $ ) $ ) $ Gross Gross Net Amount Presented Gross Amounts Not Offset in the Balance Sheet (in thousands) Amount Recognized Amount Offset in the Balance Sheet Securities Collateral Cash Collateral Net Amount December 31, 2014 Financial assets: Reverse repurchase agreements $ $ ) $ $ ) $ — $ Derivatives not designated as hedging instruments ) — — Total financial assets $ $ ) $ $ ) $ — $ Financial liabilities: Repurchase agreements $ $ ) $ — $ — $ — $ — Derivatives not designated as hedging instruments ) ) ) Total financial liabilities $ $ ) $ $ ) $ ) $ |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | Note 13. Income Taxes The Company recognized income tax expense of $32.2 million and $100.5 million for the three and nine months ended September 30, 2015, respectively. The Company recognized income tax expense of $37.5 million and $103.6 million for the same periods in 2014. The Company recognizes accrued interest and penalties relating to uncertain tax positions as an income tax provision expense. The Company recognized a benefit on accrued interest and penalties of $0.3 million for both the nine months ended September 30, 2015 and 2014. The Company had approximately $2.2 million and $2.5 million of accrued interest and penalties as of September 30, 2015 and December 31, 2014, respectively. The Company and its subsidiaries file federal and various state income tax returns. The Company is currently being audited by the Internal Revenue Service (“IRS”) for the tax year 2014 and 2015. The Company is also under audit with the California Franchise Tax Board for the tax years 2005 to 2007. The Company has recorded a $1.1 million tax benefit in the current quarter in connection with the pending completion of the Franchise Tax Board audit. From time to time, there may be differences in opinion with respect to the tax treatment of certain transactions. If a tax position which was previously recognized on the consolidated financial statements is no longer more likely than not to be sustained upon a challenge from the taxing authorities, the tax benefit from the tax position will be derecognized. The Company did not have any material tax positions for which previously recognized benefits were derecognized during the nine-month period ended September 30, 2015. Prior period income tax expense has been adjusted to reflect the adoption of ASU 2014-01 on January 1, 2015. See Note 1, Summary of Significant Accounting Policies , for further discussion of ASU 2014-01. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 14. Employee Benefit Plans Defined Contribution Plan The Company has a profit-sharing retirement plan with an Internal Revenue Code Section 401(k) feature covering eligible employees. Employer contributions are made annually into a trust fund and are allocated to participants based on their salaries. The profit sharing contribution requirement is based on a percentage of annual operating income subject to a percentage of salary cap. Eligible employees may contribute up to 50 percent of their salary to the 401(k) plan, but not more than the maximum allowed under IRS regulations. The Company matches 50 percent of the first 6 percent of covered compensation. The Company recorded total profit sharing and matching contribution expense of $6.4 million and $18.7 million for the three and nine months ended September 30, 2015, respectively. Profit sharing and matching contribution expense was $6.1 million and $16.8 million for the same periods in 2014, respectively. Deferred Compensation Plan The Company offers a deferred compensation plan for eligible employees and non-employee directors. Participants under the employee plan may make an annual irrevocable election to defer a portion of base salary and up to 100 percent of commission and incentive compensation while employed with the Company. Participants under the non-employee director plan also may make an annual irrevocable election to defer all or part of annual retainers, annual awards, committee chair retainers and meeting fees (collectively, “directors’ fees”) until board service with the Company ceases. The deferred compensation plans are nonqualified plans under IRS regulations. Deferrals are made on a pretax basis and are allocated among the investment crediting options available under the plans as directed by the plan participants. The Company informally funds plan benefits through the purchase of life insurance policies which are recorded in Other assets on the consolidated balance sheets. Participant deferrals are recorded in Other liabilities on the consolidated balance sheets. Employee salaries and non-employee directors’ fees deferred under the plan are charged to Salaries and employee benefits and Other operating expense, respectively, on the consolidated statements of income. Earnings on plan assets, net of benefits payable to plan participants, are reported in Salaries and employee benefits on the consolidated statements of income. The Company recorded net expenses of $37 thousand and $0.4 million related to the deferred compensation plan for the three and nine months ended September 30, 2015. The Company recorded net expenses of $0.1 million and $0.6 million for the same periods in 2014, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 15. Commitments and Contingencies In the normal course of business, the Company issues financial guarantees in the form of letters of credit. Standby letters of credit are commitments issued by the Company to guarantee the obligations of its client to beneficiaries. Commercial letters of credit are issued on behalf of clients to ensure payment in connection with trade transactions. Exposure to credit loss in the event of nonperformance by the other party to the letters of credit is represented by the contractual notional amount. At September 30, 2015, the Company had $679.6 million outstanding in letters of credit, of which $567.6 million relate to standby letters of credit and $112.0 million relate to commercial letters of credit. The Company had $718.0 million outstanding in letters of credit at December 31, 2014, of which $607.6 million relate to standby letters of credit and $110.4 million relate to commercial letters of credit. In connection with the liquidation of an investment acquired in a previous bank merger, the Company has an outstanding long-term indemnity. The maximum liability under the indemnity is $23.0 million, but the Company does not expect to make any payments of more than nominal amounts under the terms of this indemnity. The Company entered into contingent consideration arrangements associated with its acquisition of Rochdale and the sale of its retirement services recordkeeping business. Contingent consideration represents additional purchase price consideration to be transferred from the acquirer to the seller if certain future events or conditions are met. See Note 2, Fair Value Measurements, for additional information about the contingent consideration asset and liability. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2015 | |
Variable Interest Entities | |
Variable Interest Entities | Note 16. Variable Interest Entities The Company holds ownership interests in certain special-purpose entities formed to provide affordable housing. The Company evaluates its interest in these entities to determine whether they meet the definition of a VIE and whether the Company is required to consolidate these entities. The Company is not the primary beneficiary of the affordable housing VIEs in which it holds interests and is therefore not required to consolidate these entities. The investment in these entities is initially recorded at cost, which approximates the maximum exposure to loss as a result of the Company’s involvement with these unconsolidated entities. Subsequently, the carrying value is amortized over the stream of available tax credits and benefits. The Company expects to recover its investments over time, primarily through realization of federal low-income housing tax credits. The balance of the investments in these entities was $222.9 million at September 30, 2015 and $186.4 million at December 31, 2014, and is included in Affordable housing investments in the consolidated balance sheets. Unfunded commitments for affordable housing investments were $93.8 million at September 30, 2015. These unfunded commitments are recorded in Other liabilities in the consolidated balance sheets. The Company also has ownership interests in several private equity and alternative investment funds that are VIEs. The Company is not a primary beneficiary and, therefore, is not required to consolidate these VIEs. The investment in these entities is carried at cost and net of impairments, which approximates the maximum exposure to loss as a result of the Company’s involvement with these entities. The Company expects to recover its investments over time, primarily through the allocation of fund income, gains or losses on the sale of fund assets, dividends or interest income. The balance in these entities was $24.1 million and $29.2 million at September 30, 2015 and December 31, 2014, respectively, and is included in Other assets in the consolidated balance sheets. Income associated with these investments is reported in Other noninterest income in the consolidated statements of income. |
Noncontrolling Interest
Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2015 | |
Noncontrolling Interest | |
Noncontrolling Interest | Note 17. Noncontrolling Interest In accordance with ASC Topic 810, Consolidation , and EITF Topic D-98, Classification and Measurement of Redeemable Securities (“Topic D-98”), the Company reports noncontrolling interest in its majority-owned affiliates as Redeemable noncontrolling interest in the mezzanine section between liabilities and equity in the consolidated financial statements. Topic D-98 specifies that securities that are redeemable at the option of the holder or outside the control of the issuer are not considered permanent equity and should be classified in the mezzanine section. The Corporation holds a majority ownership interest in four investment management and wealth advisory affiliates that it consolidates. In general, the management of each majority-owned affiliate has a significant noncontrolling ownership position in its firm and supervises the day-to-day operations of the affiliate. The Corporation is in regular contact with each affiliate regarding its operations and is an active participant in the management of the affiliates through its position on each firm’s board. The Corporation’s investment in each affiliate is governed by operating agreements and other arrangements which provide the Corporation certain rights, benefits and obligations. The Corporation determines the appropriate method of accounting based upon these agreements and the factors contained therein. All majority-owned affiliates that have met the criteria for consolidation are included in the consolidated financial statements. All material intercompany balances and transactions are eliminated. The Company applies the equity method of accounting for certain investments where it holds a noncontrolling interest. For equity method investments in asset managers, the Company’s portion of income before taxes is included in Trust and investment fees in the consolidated statements of income. As of September 30, 2015, affiliate noncontrolling owners held equity interests with an estimated fair value of $32.8 million. This estimate reflects the maximum obligation to purchase equity interests in the affiliates. The events which would require the Company to purchase the equity interests may occur in the near term or over a longer period of time. The terms of the put provisions vary by agreement, but the value of the put is at the approximate fair value of the interests. The parent company carries key man life insurance policies to fund a portion of these conditional purchase obligations in the event of the death of certain key holders. The following is a summary of activity for redeemable noncontrolling interest for the nine months ended September 30, 2015 and 2014: For the nine months ended September 30, (in thousands) 2015 2014 Balance, beginning of period $ $ Net income Distributions to redeemable noncontrolling interest ) ) Additions and redemptions, net ) ) Adjustments to fair value Balance, end of period $ $ |
Segment Results
Segment Results | 9 Months Ended |
Sep. 30, 2015 | |
Segment Results | |
Segment Results | Note 18. Segment Results The Company has three reportable segments: Commercial and Private Banking, Wealth Management and Other. The factors considered in determining whether individual operating segments could be aggregated include that the operating segments: (i) offer the same products and services, (ii) offer services to the same types of clients, (iii) provide services in the same manner and (iv) operate in the same regulatory environment. The management accounting process measures the performance of the operating segments based on the Company’s management structure and is not necessarily comparable with similar information for other financial services companies. If the management structures and/or the allocation process changes, allocations, transfers and assignments may change. The Commercial and Private Banking reportable segment is the aggregation of the Commercial and Private Banking, Real Estate, Entertainment, Corporate Banking, Core Branch Banking and FAEF operating segments, as well as the acquired impaired loan portfolio. The Commercial and Private Banking segment provides banking products and services, including commercial and mortgage lending, lines of credit, equipment lease financing, deposits, cash management services, international trade finance and letters of credit to small and medium-sized businesses, entrepreneurs and affluent individuals. This segment primarily serves clients in California, New York, Nevada, Tennessee and Georgia. FAEF serves clients nationwide. The Wealth Management segment includes the Corporation’s investment advisory affiliates and the Bank’s Wealth Management Services. The asset management affiliates and the Wealth Management division of the Bank make the following investment advisory and wealth management resources and expertise available to individual and institutional clients: investment management, wealth advisory services, brokerage, retirement, estate and financial planning and personal, business, custodial and employee trust services. The Wealth Management segment also advises and makes available mutual funds under the name of City National Rochdale Funds. Both the asset management affiliates and the Bank’s Wealth Management division provide proprietary and nonproprietary products and offer a full spectrum of investment solutions in multiple asset classes and investment styles, including fixed-income instruments, mutual funds, domestic and international equities, and alternative investments such as hedge funds. This segment serves clients nationwide. The Other segment includes all other subsidiaries of the Company, the corporate administration departments, including the Treasury Department and the Asset Liability Funding Center, that have not been allocated to the other segments, and inter-segment eliminations for revenue recognized in multiple segments for management reporting purposes. The Company uses traditional matched-maturity funds transfer pricing methodology. However, both positive and negative variances occur over time when transfer pricing non-maturing balance sheet items such as demand deposits. These variances, offset in the Funding Center, are evaluated at least annually by management and allocated back to the business segments as deemed necessary. Business segment earnings are the primary measure of the segment’s performance as evaluated by management. Business segment earnings include direct revenue and expenses of the segment as well as corporate and inter-company cost allocations. Allocations of corporate expenses, such as data processing and human resources, are calculated based on estimated activity or usage levels for the fiscal year. Costs associated with intercompany support and services groups, such as Operational Services, are allocated to each business segment based on actual services used. Capital is allocated based on the estimated risk within each business segment. The methodology of allocating capital is based on each business segment’s credit, market, and operational risk profile. If applicable, any provision for credit losses is allocated based on various credit factors, including, but not limited to, credit risk ratings, credit rating fluctuation, charge-offs and recoveries and loan growth. Provision for income taxes is allocated to the segments based on the Company’s effective tax rate. Exposure to market risk is managed in the Company’s Treasury department. Interest-rate risk is mostly removed from the Commercial and Private Banking segment and transferred to the Funding Center through a fund transfer pricing (“FTP”) methodology and allocation model. The FTP model records a cost of funds or credit for funds using a combination of matched maturity funding for fixed term assets and liabilities and a blended rate for the remaining assets and liabilities with varying maturities. The Bank’s investment portfolio and unallocated equity are included in the Other segment. Amortization expense associated with customer-relationship intangibles is charged to the affected operating segments. Selected financial information for each segment is presented in the following tables. Commercial and Private Banking includes all revenue and costs from products and services utilized by clients of Commercial and Private Banking, including both revenue and costs for Wealth Management products and services. The revenues and costs associated with Wealth Management products and services that are allocated to Commercial and Private Banking for management reporting purposes are eliminated in the Other segment. The current period reflects any changes made in the process or methodology for allocations to the reportable segments. Prior period segment results have been revised to conform to current period presentation. For the three months ended September 30, 2015 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ (Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans ) — — ) Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net loss attributable to noncontrolling interest — ) — ) Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — For the three months ended September 30, 2014 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ (Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans ) — — ) Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest — — Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — For the nine months ended September 30, 2015 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ Provision for credit losses on loans and leases, excluding acquired impaired loans — — Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest — — Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — For the nine months ended September 30, 2014 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ (Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans ) — — ) Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest — — Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Event | |
Subsequent Event | Note 19. Subsequent Event On January 22, 2015, the Corporation entered into an Agreement and Plan of Merger with Royal Bank of Canada, a Canadian chartered bank (“Royal Bank of Canada”) and RBC USA Holdco Corporation, a Delaware corporation and wholly owned subsidiary of Royal Bank of Canada (“Holdco”), pursuant to which the Corporation will merge with and into Holdco with Holdco surviving the merger as a wholly owned subsidiary of Royal Bank of Canada. On October 7, 2015, the Company and Royal Bank of Canada announced that they had received approval from both the Board of Governors of the Federal Reserve System and the Office of the Superintendent of Financial Institutions in Canada to complete the merger of the two companies. The merger is expected to close on November 2, 2015, subject to the satisfaction of customary closing conditions . |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Organization | Organization City National Corporation (the “Corporation”) is the holding company for City National Bank (the “Bank”). The Bank delivers banking, investment and trust services through 75 offices in Southern California, the San Francisco Bay area, Nevada, New York City, Nashville, Tennessee and Atlanta, Georgia. As of September 30, 2015, the Corporation had four consolidated investment advisory affiliates and one unconsolidated subsidiary, Business Bancorp Capital Trust I. Because the Bank comprises substantially all of the business of the Corporation, references to the “Company” mean the Corporation and the Bank together. The Corporation is approved as a financial holding company pursuant to the Gramm-Leach-Bliley Act of 1999. |
Consolidation | Consolidation The consolidated financial statements of the Company include the accounts of the Corporation, its non-bank subsidiaries, the Bank and the Bank’s wholly owned subsidiaries, after the elimination of all material intercompany transactions. It also includes noncontrolling interest, which is the portion of equity in a subsidiary not attributable to a parent. Redeemable noncontrolling interests are noncontrolling ownership interests that are redeemable at the option of the holder or outside the control of the issuer. The redeemable noncontrolling interests of third parties in the Corporation’s investment advisory affiliates are not considered to be permanent equity and are reflected in the mezzanine section between liabilities and equity in the consolidated balance sheets. Noncontrolling interests’ share of subsidiary earnings is reflected as Net income attributable to noncontrolling interest in the consolidated statements of income. The Company’s investment management and wealth advisory affiliates are organized as limited liability companies. The Corporation generally owns a majority position in each affiliate and certain management members of each affiliate own the remaining shares. The Corporation has contractual arrangements with certain of its affiliates whereby a percentage of revenue is allocable to fund affiliate operating expenses (“operating share”) while the remaining portion of revenue (“distributable revenue”) is allocable to the Corporation and the noncontrolling owners. The remaining affiliates operate on a profit based model where the Corporation and management members participate in the net income of the affiliate. All majority-owned affiliates that meet the prescribed criteria for consolidation are consolidated. The Corporation’s interests in investment management affiliates in which it holds a noncontrolling share are accounted for using the equity method. Additionally, the Company has various interests in variable interest entities (“VIEs”) that are not required to be consolidated. See Note 16 for a more detailed discussion on VIEs. |
Use of Estimates | Use of Estimates The Company’s accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) and practices in the financial services industry. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and income and expenses during the reporting period. Circumstances and events that differ significantly from those underlying the Company’s estimates and assumptions could cause actual financial results to differ from those estimates. The material estimates included in the financial statements relate to the allowance for loan and lease losses, the reserve for off-balance sheet credit commitments, other real estate owned (“OREO”), valuation of share-based compensation awards, income taxes, goodwill and intangible asset impairment, securities impairment, private equity and alternative investments impairment, valuation of assets and liabilities acquired in business combinations, including contingent consideration liabilities, subsequent valuations of acquired impaired loans, Federal Deposit Insurance Corporation (“FDIC”) indemnification asset, valuation of noncontrolling interest, and the valuation of financial assets and liabilities reported at fair value. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements. The Company’s estimates and assumptions are expected to change as changes in market conditions and the Company’s portfolio occur in subsequent periods. |
Basis of Presentation | Basis of Presentation The Company is on the accrual basis of accounting for income and expenses. The results of operations reflect any adjustments, all of which are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q, and which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. In accordance with the usual practice of banks, assets and liabilities of individual trust, agency and fiduciary funds have not been included in the financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The results for the 2015 interim periods are not necessarily indicative of the results expected for the full year. The Company has not made any significant changes in its critical accounting policies or in its estimates and assumptions from those disclosed in its 2014 Annual Report other than the adoption of new accounting pronouncements and other authoritative guidance that became effective for the Company on or after January 1, 2015. Refer to Accounting Pronouncements for discussion of accounting pronouncements adopted in 2015. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Accounting Pronouncements | Accounting Pronouncements The following is a summary of accounting pronouncements that became effective during the nine months ended September 30, 2015: · In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-01, Investments—Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects (“ASU 2014-01”). ASU 2014-01 permits an entity to make an accounting policy election to apply a proportionate amortization method to its low income housing tax credit investments if certain conditions are met. Under the proportionate amortization method, an investor amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the amortization in the income statement as a component of income taxes attributable to continuing operations. On January 1, 2015, the Company adopted ASU 2014-01 and elected to apply the proportionate amortization method to its low income housing tax credit investments. Following adoption, the Company recognizes amortization of its tax credit investments as a component of income taxes. The Company previously recognized amortization as a component of noninterest expense. Prior periods presented in the Company’s consolidated financial statements have been adjusted to reflect retrospective adoption of ASU 2014-01 as follows: Consolidated Balance Sheet As of December 31, 2014 (in thousands) As Reported As Adjusted (Unaudited) Assets Deferred tax asset $ $ Affordable housing investments Other assets Shareholders’ equity Retained earnings Consolidated Statement of Income For the three months ended For the nine months ended September 30, 2014 September 30, 2014 (in thousands, except per share amounts) As Reported As Adjusted As Reported As Adjusted (Unaudited) (Unaudited) Noninterest expense Other operating $ $ $ $ Income taxes Net income Net income per common share, basic $ $ $ $ Net income per common share, diluted $ $ $ $ Consolidated Statement of Cash Flows For the nine months ended September 30, 2014 (in thousands) As Reported As Adjusted (Unaudited) Cash Flows From Operating Activities Net income $ $ Adjustments to net income: Deferred income tax benefit ) ) Other, net Net change in: Other assets and other liabilities, net ) ) · In January 2014, the FASB issued ASU 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (“ASU 2014-04”). ASU 2014-04 requires entities to reclassify consumer mortgage loans collateralized by residential real estate to OREO when either (1) the creditor obtains legal title to the residential real estate property or (2) the borrower conveys all interest in the property to the creditor to satisfy the loan by completing a deed in lieu of foreclosure or similar agreement. The Company adopted ASU 2014-04 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements. · In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The Company adopted ASU 2014-08 effective January 1, 2015 on a prospective basis. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements. · In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other repurchase agreements. Going forward, these transactions will all be accounted for as secured borrowings. Under the new guidance, parties to a repurchase financing transaction will be required to separately account for the initial transfer of the financial asset and the related repurchase agreement. The initial transfer of the financial asset would be accounted for as a sale by the transferor only if all criteria for derecognition have been met. ASU 2014-11 requires new or expanded disclosures for repurchase agreements and similar transactions accounted for as secured borrowings. The Company adopted ASU 2014-11 effective January 1, 2015. Adoption of the new guidance did not have a significant impact on the Company’s consolidated financial statements. The following is a summary of recently issued accounting pronouncements: · In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis , which significantly changes the consolidation analysis required under U.S. GAAP. The new consolidation guidance maintains two models: one for assessing most corporate entities based on the notion that majority voting rights indicate control (the voting model) and another for assessing entities that may be controlled through other means, such as management contracts or subordinated financial support (the variable interest model). Under the new guidance, limited partnerships will be VIEs, unless the limited partners have either substantive kick-out or participating rights. The ASU also changes the effect that fees paid to a decision maker or service provider have on the consolidation analysis. For entities other than limited partnerships, the ASU clarifies how to determine whether the equity holders (as a group) have power over the entity. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is allowed for all entities, but the guidance must be applied as of the beginning of the annual period containing the adoption date. Entities have the option of using either a full or modified retrospective approach for adoption. The Company is assessing the impact of the new guidance on its consolidated financial statements. · In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which requires the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The amendments in this ASU are to be applied on a retrospective basis. Adoption of the new guidance is not expected to have a significant impact on the Company’s consolidated financial statements. · In April 2015, the FASB issued ASU 2015-05, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . Cloud computing arrangements include: (a) software as a service; (b) platform as a service; (c) infrastructure as a service; and (d) other similar hosting arrangements. Under the ASU, if a cloud computing arrangement contains a software license, the customer would account for the fees related to the software license element in a manner consistent with how the acquisition of other software licenses is accounted for under Accounting Standards Codification (“ASC”) 350-40. If the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. Entities may adopt the guidance either (1) prospectively to arrangements entered into or materially modified after the effective date, or (2) retrospectively. The Company is assessing the impact of the new guidance on its consolidated financial statements. · In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date to defer by one year the effective dates of the revenue recognition standard ASU 2014-09. As a result, the standard would be effective for public entities for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company is assessing the impact of the new revenue recognition guidance on its consolidated financial statements. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of Condensed Financial Statements | Consolidated Balance Sheet As of December 31, 2014 (in thousands) As Reported As Adjusted (Unaudited) Assets Deferred tax asset $ $ Affordable housing investments Other assets Shareholders’ equity Retained earnings Consolidated Statement of Income For the three months ended For the nine months ended September 30, 2014 September 30, 2014 (in thousands, except per share amounts) As Reported As Adjusted As Reported As Adjusted (Unaudited) (Unaudited) Noninterest expense Other operating $ $ $ $ Income taxes Net income Net income per common share, basic $ $ $ $ Net income per common share, diluted $ $ $ $ Consolidated Statement of Cash Flows For the nine months ended September 30, 2014 (in thousands) As Reported As Adjusted (Unaudited) Cash Flows From Operating Activities Net income $ $ Adjustments to net income: Deferred income tax benefit ) ) Other, net Net change in: Other assets and other liabilities, net ) ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Summary of assets and liabilities measured at fair value by level | Fair Value Measurements at Reporting Date Using (in thousands) Balance as of September 30, 2015 Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Measured on a Recurring Basis Assets Securities available-for-sale: U.S. Treasury $ $ $ — $ — Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency — — CMOs - Non-agency — — State and municipal — Other debt securities — — Trading securities — Derivative assets (1) Contingent consideration asset (1) — — Total assets at fair value $ $ $ $ Liabilities Derivative liabilities $ $ $ $ — Contingent consideration liability — — FDIC clawback liability — — Other liabilities — — Total liabilities at fair value (2) $ $ $ $ Redeemable noncontrolling interest $ $ — $ — $ Measured on a Nonrecurring Basis Assets Other real estate owned (3) $ $ — $ — $ Private equity and alternative investments — — Total assets at fair value $ $ — $ — $ (1) Reported in Other assets in the consolidated balance sheets. (2) Reported in Other liabilities in the consolidated balance sheets. (3) Includes covered OREO. Fair Value Measurements at Reporting Date Using (in thousands) Balance as of December 31, 2014 Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Measured on a Recurring Basis Assets Securities available-for-sale: U.S. Treasury $ $ $ — $ — Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency — — CMOs - Non-agency — — State and municipal — Other debt securities — — Equity securities and mutual funds — — Trading securities — Derivative assets (1) Contingent consideration asset (1) — — Total assets at fair value $ $ $ $ Liabilities Derivative liabilities $ $ $ $ — Contingent consideration liability — — FDIC clawback liability — — Other liabilities — — Total liabilities at fair value (2) $ $ $ $ Redeemable noncontrolling interest $ $ — $ — $ Measured on a Nonrecurring Basis Assets Other real estate owned (3) $ $ — $ — $ Total assets at fair value $ $ — $ — $ (1) Reported in Other assets in the consolidated balance sheets. (2) Reported in Other liabilities in the consolidated balance sheets. (3) Includes covered OREO. |
Schedule of reconciliation of Level 3 assets and liabilities measured on a recurring basis | For the nine months ended September 30, 2015 (in thousands) Securities Available-for- Sale Equity Warrants Contingent Consideration Asset Contingent Consideration Liability FDIC Clawback Liability Balance, beginning of period $ $ $ $ ) $ ) Total realized/unrealized gains (losses): Included in earnings — ) ) ) Included in other comprehensive income — — — — Additions — — — — Settlements ) — — — — Other (1) — — — ) — Balance, end of period $ $ $ $ ) $ ) For the nine months ended September 30, 2014 (in thousands) Securities Available-for- Sale Equity Warrants Contingent Consideration Asset Contingent Consideration Liability FDIC Clawback Liability Balance, beginning of period $ $ — $ — $ ) $ ) Total realized/unrealized gains (losses): Included in earnings — — — ) Included in other comprehensive income ) — — — — Additions — — — Settlements ) ) — — Other (1) — — — ) — Balance, end of period $ $ $ $ ) $ ) (1) Other rollforward activity consists of accretion of discount related to the contingent consideration liability. |
Information About Nonrecurring Level 3 Fair Value Measurements | (in thousands) Fair Value at September 30, 2015 Valuation Method Unobservable Inputs Other real estate owned $ Third-party appraisal - Fair values are primarily based on unadjusted appraised values. - A limited number of properties are valued using comparable sales values resulting in discounts to appraised values ranging from 12% to 22%. Private equity and alternative investments $ See note (1) - See note (1) - Fair values reflect discounts to investment carrying amounts ranging from 27% to 86%. (1) Fair values are based on management’s assumptions regarding recoverability of an investment based on a range of factors including, but not limited to, nature and age of the investment, actual and forecasted investment performance, fund operating results, recent and planned transactions, general and industry specific market conditions, performance of comparable companies and investment exit strategies. |
Schedule of total gains and losses for assets measured at fair value on a nonrecurring basis | For the three months ended September 30, For the nine months ended September 30, (in thousands) 2015 2014 2015 2014 Collateral dependent impaired loans: Commercial real estate mortgages $ — $ — $ — $ ) Residential mortgages — — Other real estate owned (1) ) ) ) Private equity and alternative investments ) — ) — Total net (losses) gains recognized $ ) $ ) $ ) $ (1) Net gains and losses on OREO include amounts related to covered OREO, a significant portion of which is payable to or reimbursable by the FDIC. |
Schedule of carrying amounts and fair values of financial instruments | September 30, 2015 Carrying Total Fair Value Measurements Using (in millions) Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ $ $ $ — $ — Due from banks - interest-bearing — — Securities purchased under resale agreements — — Securities held-to-maturity — — Loans and leases, net of allowance — — Acquired impaired loans, net of allowance — — FDIC indemnification asset — — Investment in FHLB and FRB stock — — Financial Liabilities: Deposits $ $ $ — $ $ Short-term borrowings — — Long-term debt — December 31, 2014 Carrying Total Fair Value Measurements Using (in millions) Amount Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ $ $ $ — $ — Due from banks - interest-bearing — — Securities purchased under resale agreements — — Securities held-to-maturity — — Loans and leases, net of allowance — — Acquired impaired loans, net of allowance — — FDIC indemnification asset — — Investment in FHLB and FRB stock — — Financial Liabilities: Deposits $ $ $ — $ $ Short-term borrowings — Long-term debt — |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Securities | |
Summary of amortized cost and estimated fair value for the major categories of securities available-for-sale and held-to-maturity | Gross Gross Amortized Unrealized Unrealized (in thousands) Cost Gains Losses Fair Value September 30, 2015 Securities available-for-sale: U.S. Treasury $ $ $ ) $ Federal agency - Debt ) Federal agency - MBS ) CMOs - Federal agency ) CMOs - Non-agency ) State and municipal ) Other debt securities ) Total securities available-for-sale $ $ $ ) $ Securities held-to-maturity (1): Federal agency - Debt $ $ $ ) $ Federal agency - MBS ) CMOs - Federal agency ) State and municipal ) Other debt securities ) Total securities held-to-maturity $ $ $ ) $ December 31, 2014 Securities available-for-sale: U.S. Treasury $ $ $ ) $ Federal agency - Debt ) Federal agency - MBS ) CMOs - Federal agency ) CMOs - Non-agency ) State and municipal ) Other debt securities — Total debt securities ) Equity securities and mutual funds ) Total securities available-for-sale $ $ $ ) $ Securities held-to-maturity (1): Federal agency - Debt $ $ $ ) $ Federal agency - MBS ) CMOs - Federal agency ) State and municipal ) Other debt securities ) Total securities held-to-maturity $ $ $ ) $ (1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost. |
Schedule of gross realized gains and losses on sales and calls of securities (including trading securities) available-for-sale | For the three months ended For the nine months ended September 30, September 30, (in thousands) 2015 2014 2015 2014 Gross realized gains $ $ $ $ Gross realized losses ) ) ) ) Net realized gains $ $ $ $ |
Schedule of remaining maturities of debt securities included in the securities portfolio | (in thousands) One year or less Over 1 year through 5 years Over 5 years through 10 years Over 10 years Total Securities available-for-sale: U.S. Treasury $ $ $ — $ — $ Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency — CMOs - Non-agency — State and municipal — Other — — Total debt securities available-for-sale $ $ $ $ $ Amortized cost $ $ $ $ $ Securities held-to-maturity: Federal agency - Debt $ — $ $ $ $ Federal agency - MBS CMOs - Federal agency — State and municipal Other — — — Total debt securities held-to-maturity at amortized cost $ $ $ $ $ |
Schedule of roll forward of credit-related other-than-temporary impairment recognized in earnings for debt securities | For the three months ended For the nine months ended September 30, September 30, (in thousands) 2015 2014 2015 2014 Balance, beginning of period $ $ $ $ Subsequent credit-related impairment — Reduction for securities sold or redeemed — — — ) Balance, end of period $ $ $ $ |
Summary of the gross unrealized losses and fair value of investment securities that are in an unrealized loss position aggregated by investment category and length of time | Less than 12 months 12 months or greater Total (in thousands) Fair Value Estimated Unrealized Loss Fair Value Estimated Unrealized Loss Fair Value Estimated Unrealized Loss September 30, 2015 Securities available-for-sale: U.S. Treasury $ $ $ — $ — $ $ Federal agency - Debt — — Federal agency - MBS — — CMOs - Federal agency CMOs - Non-agency — — State and municipal Other debt securities — — Total securities available-for-sale $ $ $ $ $ $ Securities held-to-maturity: Federal agency - Debt $ — $ — $ $ $ $ Federal agency - MBS CMOs - Federal agency State and municipal Other debt securities — — Total securities held-to-maturity $ $ $ $ $ $ December 31, 2014 Securities available-for-sale: U.S. Treasury $ $ $ — $ — $ $ Federal agency - Debt Federal agency - MBS — CMOs - Federal agency CMOs - Non-agency State and municipal Total debt securities Equity securities and mutual funds — — Total securities available-for-sale $ $ $ $ $ $ Securities held-to-maturity: Federal agency - Debt $ — $ — $ $ $ $ Federal agency - MBS CMOs - Federal agency State and municipal Other debt securities — — Total securities held-to-maturity $ $ $ $ $ $ |
Other Investments (Tables)
Other Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Investments | |
Summary of investments by fund type | (in thousands) September 30, December 31, Fund Type 2015 2014 Private equity and venture capital $ $ Real estate Hedge Other (1) Total $ $ (1) Includes direct investments in a limited number of start-up companies. |
Schedule of private equity and alternative investments measured at fair value on a nonrecurring basis | (in thousands) Fund Type Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period Private equity and venture capital $ $ None (1) N/A Other — None N/A Total $ $ (1) Funds make periodic distributions of income but do not permit redemptions prior to the end of the investment term. |
Loans, Allowance for Loan and33
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments | |
Summary of loans | Loans and Leases September 30, December 31, (in thousands) 2015 2014 Commercial $ $ Commercial real estate mortgages Residential mortgages Real estate construction Home equity loans and lines of credit Installment Lease financing Loans and leases, excluding acquired impaired loans Less: Allowance for loan and lease losses ) ) Loans and leases, excluding acquired impaired loans, net Acquired impaired loans Less: Allowance for loan losses ) ) Acquired impaired loans, net Total loans and leases $ $ Total loans and leases, net $ $ |
Summary of major categories of acquired impaired loans | September 30, December 31, (in thousands) 2015 2014 Commercial $ $ Commercial real estate mortgages Residential mortgages Real estate construction Home equity loans and lines of credit Installment Acquired impaired loans Less: Allowance for loan losses ) ) Acquired impaired loans, net $ $ |
Schedule of information on acquired impaired loans and loss-sharing terms by acquired entity | (in thousands) Imperial Capital Bank 1st Pacific Bank Sun West Bank Nevada Commerce Bank Total Acquired impaired loans as of: September 30, 2015 $ $ $ $ $ December 31, 2014 As of September 30, 2015: FDIC indemnification asset $ $ $ — $ $ FDIC clawback liability — Expiration date of FDIC loss sharing: Commercial (1) 12/31/2016 6/30/2015 6/30/2015 6/30/2016 Residential 12/31/2019 5/31/2020 5/31/2020 4/30/2021 Termination date of FDIC loss-sharing agreements: Commercial (1) 12/19/2017 5/8/2018 5/29/2018 6/30/2019 Residential 12/31/2019 5/31/2020 5/31/2020 4/30/2021 (1) The Company is subject to sharing 80 percent of its recoveries with the FDIC up to the last day of the quarter in which the termination dates of the commercial loss-sharing agreements occur. |
Summary of accretable yield for acquired impaired loans | For the nine months ended September 30, (in thousands) 2015 2014 Balance, beginning of period $ $ Accretion ) ) Reclassifications from nonaccretable difference Disposals and other ) ) Balance, end of period $ $ |
Summary of allowance for loan and lease losses on excluding acquired impaired loans | (in thousands) Commercial (1) Commercial Real Estate Mortgages Residential Mortgages Real Estate Construction Home Equity Loans and Lines of Credit Installment Qualitative Total Three months ended September 30, 2015 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) — — — — ) — ) Recoveries — Net recoveries (charge-offs) ) — (Reversal of) provision for credit losses ) ) ) ) Transfers from reserve for off-balance sheet credit commitments — — — — — — Ending balance $ $ $ $ $ $ $ $ Nine months ended September 30, 2015 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) — — — — ) — ) Recoveries — Net recoveries (charge-offs) ) — (Reversal of) provision for credit losses ) ) ) Transfers to reserve for off-balance sheet credit commitments — — — — — — ) ) Ending balance $ $ $ $ $ $ $ $ Ending balance of allowance: Individually evaluated for impairment $ $ $ $ — $ — $ — $ — $ Collectively evaluated for impairment Loans and leases, excluding acquired impaired loans Ending balance of loans and leases: Loans and leases, excluding acquired impaired loans $ $ $ $ $ $ $ — $ Individually evaluated for impairment — — Collectively evaluated for impairment — (1) Includes lease financing loans. (in thousands) Commercial (1) Commercial Real Estate Mortgages Residential Mortgages Real Estate Construction Home Equity Loans and Lines of Credit Installment Qualitative Total Three months ended September 30, 2014 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) — — — — ) — ) Recoveries — Net recoveries — (Reversal of) provision for credit losses ) ) ) Transfers to reserve for off-balance sheet credit commitments — — — — — — ) ) Ending balance $ $ $ $ $ $ $ $ Nine months ended September 30, 2014 Allowance for loan and lease losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs ) ) ) — ) ) — ) Recoveries — Net (charge-offs) recoveries ) ) — (Reversal of) provision for credit losses ) ) ) ) ) Transfers from (to) reserve for off-balance sheet credit commitments — — — — — ) Ending balance $ $ $ $ $ $ $ $ Ending balance of allowance: Individually evaluated for impairment $ $ $ — $ — $ — $ — $ — $ Collectively evaluated for impairment Loans and leases, excluding acquired impaired loans Ending balance of loans and leases: Loans and leases, excluding acquired impaired loans $ $ $ $ $ $ $ — $ Individually evaluated for impairment — — Collectively evaluated for impairment — (1) Includes lease financing loans. |
Summary of activity in the reserve for off-balance sheet credit commitments | For the three months ended September 30, For the nine months ended September 30, (in thousands) 2015 2014 2015 2014 Balance, beginning of period $ $ $ $ Transfers (to) from allowance for loan and lease losses ) ) Balance, end of period $ $ $ $ |
Schedule of impaired loans, excluding acquired impaired loans | Unpaid For the three months ended September 30, 2015 For the nine months ended September 30, 2015 (in thousands) Recorded Investment Contractual Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized September 30, 2015 With no related allowance recorded: Commercial $ $ $ — $ $ $ $ Commercial real estate mortgages — Residential mortgages: Fixed — Variable — — — — — — Total residential mortgages — Real estate construction: Land — Total real estate construction — Home equity loans and lines of credit — Total with no related allowance $ $ $ — $ $ $ $ With an allowance recorded: Commercial $ $ $ $ $ $ $ Commercial real estate mortgages — Residential mortgages: Variable Total residential mortgages Total with an allowance $ $ $ $ $ $ $ Total impaired loans by type: Commercial $ $ $ $ $ $ $ Commercial real estate mortgages Residential mortgages Real estate construction — Home equity loans and lines of credit — Total impaired loans $ $ $ $ $ $ $ (in thousands) Recorded Investment Unpaid Contractual Principal Balance Related Allowance December 31, 2014 With no related allowance recorded: Commercial $ $ $ — Commercial real estate mortgages — Residential mortgages: Fixed — Variable — Total residential mortgages — Real estate construction: Land — Total real estate construction — Home equity loans and lines of credit — Total with no related allowance $ $ $ — With an allowance recorded: Commercial $ $ $ Commercial real estate mortgages Residential mortgages: Variable Total residential mortgages Total with an allowance $ $ $ Total impaired loans by type: Commercial $ $ $ Commercial real estate mortgages Residential mortgages Real estate construction — Home equity loans and lines of credit — Total impaired loans $ $ $ Unpaid For the three months ended September 30, 2014 For the nine months ended September 30, 2014 (in thousands) Recorded Investment Contractual Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized September 30, 2014 With no related allowance recorded: Commercial $ $ $ — $ $ $ $ Commercial real estate mortgages — Residential mortgages: Fixed — Variable — Total residential mortgages — Real estate construction: Construction — — — — — Land — Total real estate construction — Home equity loans and lines of credit — — — Installment: Consumer — — — — Total installment — — — — Total with no related allowance $ $ $ — $ $ $ $ With an allowance recorded: Commercial $ $ $ $ $ — $ $ — Commercial real estate mortgages Residential mortgages: Variable — — — — Total residential mortgages — — — — Installment: Consumer — — — — Total installment — — — — Total with an allowance $ $ $ $ $ $ $ Total impaired loans by type: Commercial $ $ $ $ $ $ $ Commercial real estate mortgages Residential mortgages — Real estate construction — Home equity loans and lines of credit — — — Installment — — — Total impaired loans $ $ $ $ $ $ $ |
Schedule of troubled debt restructured loans | (in thousands) Number of Contracts Pre-Modification Outstanding Principal Period-End Outstanding Principal Financial Effects (1) Three months ended September 30, 2015 Commercial $ $ $ — Commercial real estate mortgages — Home equity loans and lines of credit — Total troubled debt restructured loans $ $ $ — (1) Financial effects are comprised of charge-offs and specific reserves recognized on troubled debt restructured (“TDR”) loans at modification date. (in thousands) Number of Contracts Pre-Modification Outstanding Principal Period-End Outstanding Principal Financial Effects (1) Nine months ended September 30, 2015 Commercial $ $ $ — Commercial real estate mortgages — Residential mortgages: Fixed — Home equity loans and lines of credit — Total troubled debt restructured loans $ $ $ — Nine months ended September 30, 2014 Commercial $ $ $ — Residential mortgages: Variable Installment: Consumer — Total troubled debt restructured loans $ $ $ (1) Financial effects are comprised of charge-offs and specific reserves recognized on TDR loans at modification date. |
Schedule of troubled debt restructured loans that have subsequently defaulted | For three months ended September 30, 2015 For nine months ended September 30, 2015 (in thousands) Number of Contracts Period-End Outstanding Principal Period-End Specific Reserve Number of Contracts Period-End Outstanding Principal Period-End Specific Reserve Commercial $ $ — $ $ — Commercial real estate mortgages — — — — Total loans that subsequently defaulted $ $ — $ $ — |
Summary of past due loans, excluding acquired impaired loans, based upon the length of time the loans have been past due | (in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days and Accruing Nonaccrual Total Past Due and Nonaccrual Loans Current Total Loans and Leases September 30, 2015 Commercial $ $ $ — $ $ $ $ Commercial real estate mortgages — — Residential mortgages: Fixed — Variable — Total residential mortgages — Real estate construction: Construction — — — — — Land — — — Total real estate construction — — — Home equity loans and lines of credit Installment: Commercial — — — — — Consumer Total installment Lease financing — — Total $ $ $ $ $ $ $ (in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days and Accruing Nonaccrual Total Past Due and Nonaccrual Loans Current Total Loans and Leases December 31, 2014 Commercial $ $ $ $ $ $ $ Commercial real estate mortgages — — Residential mortgages: Fixed — Variable — — Total residential mortgages — Real estate construction: Construction — — — — — Land — — — Total real estate construction — — — Home equity loans and lines of credit — Installment: Commercial — — — — — Consumer Total installment Lease financing — Total $ $ $ $ $ $ $ |
Summary of the loan and lease portfolio, excluding acquired impaired loans, by loan type and credit quality classification | September 30, 2015 December 31, 2014 (in thousands) Nonclassified Classified Total Nonclassified Classified Total Commercial $ $ $ $ $ $ Commercial real estate mortgages Residential mortgages: Fixed Variable Total residential mortgages Real estate construction: Construction — Land Total real estate construction Home equity loans and lines of credit Installment: Commercial — — Consumer Total installment Lease financing Total $ $ $ $ $ $ |
Summary of the allowance for loan losses on acquired impaired loans | For the three months ended September 30, For the nine months ended September 30, (in thousands) 2015 2014 2015 2014 Balance, beginning of period $ $ $ $ Provision for losses Change in allowance due to loan removals ) ) ) ) Balance, end of period $ $ $ $ |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Real Estate Owned. | |
Summary of OREO activity | For the three months ended September 30, 2015 For the three months ended September 30, 2014 (in thousands) Non-Covered OREO Covered OREO Total Non-Covered OREO Covered OREO Total Balance, beginning of period $ $ $ $ $ $ Additions — Sales — ) ) ) ) ) Valuation adjustments ) ) ) ) ) ) Balance, end of period $ $ $ $ $ $ For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 (in thousands) Non-Covered OREO Covered OREO Total Non-Covered OREO Covered OREO Total Balance, beginning of period $ $ $ $ $ $ Additions — Sales ) ) ) ) ) ) Valuation adjustments ) ) ) ) ) ) Balance, end of period $ $ $ $ $ $ |
Borrowed Funds (Tables)
Borrowed Funds (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Borrowed Funds | |
Schedule of short-term borrowings and long-term debt | (in thousands) (1) September 30, 2015 December 31, 2014 Short-term borrowings Federal funds purchased $ — $ Current portion of nonrecourse debt (2) Total short-term borrowings $ $ Long-term debt Senior notes: City National Corporation - 5.25% Senior Notes Due September 2020 $ $ Subordinated debt: City National Bank - 9.00% Subordinated Notes Due August 2019 City National Bank - 5.375% Subordinated Notes Due July 2022 Junior subordinated debt: Floating Rate Business Bancorp Capital Trust I Securities due November 2034 (3) Nonrecourse debt (2) Other long-term debt (4) Total long-term debt $ $ (1) The carrying value of certain borrowed funds is net of discount which is being amortized into interest expense. (2) Nonrecourse debt bears interest at an average rate of 3.83 percent as of September 30, 2015 and has maturity dates ranging from November 2015 to February 2023. (3) These floating rate securities bear interest of three-month LIBOR plus 1.965 percent which is reset quarterly. As of September 30, 2015, the interest rate was approximately 2.29 percent. (4) Other long-term debt includes a note payable that bears a fixed interest rate of 5.64 percent and is scheduled to mature in June 2017. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Shareholders' Equity | |
Schedule of components of AOCI | (in thousands) September 30, 2015 December 31, 2014 Net unrealized gain (loss) on securities available-for-sale $ $ ) Foreign currency translation adjustments ) ) Total accumulated other comprehensive income (loss) $ $ ) |
Schedule of components of total comprehensive income (loss) | For the three months ended September 30, 2015 For the three months ended September 30, 2014 (in thousands) Pre-tax Tax expense (benefit) Net-of-tax Pre-tax Tax expense (benefit) Net-of-tax Securities available-for-sale: Net unrealized gains (losses) arising during the period $ $ $ $ ) $ ) $ ) Reclassification adjustment for net gains included in net income (1) ) ) ) ) ) ) Non-credit related impairment loss ) ) ) ) ) ) Total securities available-for-sale ) ) ) Foreign currency translation adjustments ) — ) — — — Total other comprehensive income (loss) $ $ $ $ ) $ ) $ ) For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 (in thousands) Pre-tax Tax expense (benefit) Net-of-tax Pre-tax Tax expense (benefit) Net-of-tax Securities available-for-sale: Net unrealized gains arising during the period $ $ $ $ $ $ Reclassification adjustment for net gains included in net income (1) ) ) ) ) ) ) Non-credit related impairment loss ) ) ) ) ) ) Total securities available-for-sale Foreign currency translation adjustments ) — ) — — — Total other comprehensive income $ $ $ $ $ $ (1) Recognized in Gain on sale of securities in the consolidated statements of income. |
Summary of entity's share repurchases activity | Period Total Number of Shares Purchased Average Price Paid per Share July 1, 2015 to July 31, 2015 $ August 1, 2015 to August 31, 2015 — — September 1, 2015 to September 30, 2015 Total share repurchases |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings per Common Share | |
Schedule of basic and diluted EPS | For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share amounts) (1) 2015 2014 2015 2014 Basic EPS: Net income attributable to City National Corporation $ $ $ $ Less: Dividends on preferred stock Net income available to common shareholders $ $ $ $ Less: Earnings allocated to participating securities Earnings allocated to common shareholders $ $ $ $ Weighted-average common shares outstanding Basic earnings per common share $ $ $ $ Diluted EPS: Earnings allocated to common shareholders (2) $ $ $ $ Weighted-average common shares outstanding Dilutive effect of equity awards Weighted-average diluted common shares outstanding Diluted earnings per common share $ $ $ $ (1) Certain prior period amounts have been adjusted to reflect the adoption of ASU 2014-01. See Note 1, Summary of Significant Accounting Policies, for further discussion. (2) Earnings allocated to common shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to common shareholders and participating securities for the purposes of calculating diluted EPS. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Compensation | |
Summary of assumptions to estimate the fair value of stock option awards | For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 Weighted-average volatility % % % % Dividend yield % % % % Expected term (in years) Risk-free interest rate % % % % |
Summary of options activity and related information under the Plan | Weighted- Weighted- Average Aggregate Average Number of Exercise Intrinsic Remaining Shares Price Value Contractual Options (in thousands) (per share) (in thousands) (1) Term Outstanding at January 1, 2015 $ Granted Exercised ) Forfeited or expired ) Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $ (1) Includes in-the-money options only. |
Summary of changes in unvested options and related information under the Plan | Weighted-Average Number of Grant Date Shares Fair Value Unvested Options (in thousands) (per share) Unvested at January 1, 2015 $ Granted Vested ) Forfeited ) Unvested at September 30, 2015 $ |
Share-based compensation | |
Summary of changes in restricted stock and related information under the Plan | Weighted-Average Number of Grant Date Shares Fair Value Restricted Stock (1) (in thousands) (per share) Unvested at January 1, 2015 $ Granted Vested ) Forfeited ) Unvested at September 30, 2015 $ (1) Includes restricted stock units. |
Cash-settled restricted stock units | |
Share-based compensation | |
Summary of changes in restricted stock and related information under the Plan | Number of Shares Cash-Settled Restricted Stock Units (in thousands) Unvested at January 1, 2015 Granted Vested ) Forfeited ) Unvested at September 30, 2015 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments | |
Summary of notional amount and fair values of derivative instruments | September 30, 2015 December 31, 2014 (in millions) (1) Notional Amount Derivative Assets Derivative Liabilities Notional Amount Derivative Assets Derivative Liabilities Derivatives not designated as hedging instruments Interest rate contracts: Swaps $ $ $ $ $ $ Interest-rate caps, floors and collars Total interest-rate contracts Option contracts — — — — Foreign exchange contracts: Spot and forward contracts Options purchased — — — Options written — — — Total foreign exchange contracts Equity warrants — — Total derivatives not designated as hedging instruments $ $ $ $ $ $ (1) The Company offsets mark-to-market adjustments, interest receivable and interest payable on interest-rate swaps that are executed with the same counterparty under a master netting agreement, and reports the net balance in other assets or other liabilities in the consolidated balance sheets. For purposes of this disclosure, mark-to-market adjustments, interest receivable and interest payable are presented on a gross basis. |
Schedule of the amount of gains and losses on derivative contracts not designated as hedges | (in millions) Derivatives Not Designated as Location in Consolidated For the three months ended September 30, For the nine months ended September 30, Hedging Instruments Statements of Income 2015 2014 2015 2014 Interest-rate contracts Other noninterest income $ ) $ — $ ) $ ) Option contracts Other noninterest income — ) Foreign exchange contracts (1) International services income Equity warrants Other noninterest income — Total income $ $ $ $ (1) Includes spread and translation gains (losses) on foreign exchange spot, forward and option contracts. |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Balance Sheet Offsetting | |
Schedule of information about financial instruments that are eligible for offset | Gross Gross Net Amount Presented Gross Amounts Not Offset in the Balance Sheet (in thousands) Amount Recognized Amount Offset in the Balance Sheet Securities Collateral Cash Collateral Net Amount September 30, 2015 Financial assets: Reverse repurchase agreements $ $ ) $ $ ) $ — $ Derivatives not designated as hedging instruments ) — — Total financial assets $ $ ) $ $ ) $ — $ Financial liabilities: Repurchase agreements $ $ ) $ — $ — $ — $ — Derivatives not designated as hedging instruments ) ) ) Total financial liabilities $ $ ) $ $ ) $ ) $ Gross Gross Net Amount Presented Gross Amounts Not Offset in the Balance Sheet (in thousands) Amount Recognized Amount Offset in the Balance Sheet Securities Collateral Cash Collateral Net Amount December 31, 2014 Financial assets: Reverse repurchase agreements $ $ ) $ $ ) $ — $ Derivatives not designated as hedging instruments ) — — Total financial assets $ $ ) $ $ ) $ — $ Financial liabilities: Repurchase agreements $ $ ) $ — $ — $ — $ — Derivatives not designated as hedging instruments ) ) ) Total financial liabilities $ $ ) $ $ ) $ ) $ |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Noncontrolling Interest | |
Schedule of summary for redeemable noncontrolling interest | For the nine months ended September 30, (in thousands) 2015 2014 Balance, beginning of period $ $ Net income Distributions to redeemable noncontrolling interest ) ) Additions and redemptions, net ) ) Adjustments to fair value Balance, end of period $ $ |
Segment Results (Tables)
Segment Results (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Results | |
Schedule of segment results | For the three months ended September 30, 2015 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ (Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans ) — — ) Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net loss attributable to noncontrolling interest — ) — ) Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — For the three months ended September 30, 2014 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ (Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans ) — — ) Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest — — Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — For the nine months ended September 30, 2015 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ Provision for credit losses on loans and leases, excluding acquired impaired loans — — Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest — — Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — For the nine months ended September 30, 2014 Commercial and Wealth Consolidated (in thousands) Private Banking Management Other Company Earnings Summary: Net interest income $ $ $ $ (Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans ) — — ) Provision for losses on acquired impaired loans — — Noninterest income ) Depreciation and amortization Noninterest expense ) Income before income taxes Provision for income taxes Net income Less: Net income attributable to noncontrolling interest — — Net income attributable to City National Corporation $ $ $ $ Selected Average Balances: Loans and leases, excluding acquired impaired loans $ $ — $ $ Acquired impaired loans — — Total assets Deposits Goodwill — Customer-relationship intangibles, net — |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)$ / shares | Sep. 30, 2014USD ($)$ / shares | Sep. 30, 2015USD ($)item$ / shares | Sep. 30, 2014USD ($)$ / shares | Dec. 31, 2014USD ($) | |
Summary of Significant Accounting Policies | |||||
Number of offices for delivery of banking, investment and trust services | item | 75 | ||||
Number of investment advisory affiliates | item | 4 | ||||
Number of unconsolidated subsidiary | item | 1 | ||||
Assets | |||||
Deferred tax asset | $ 234,680 | $ 234,680 | $ 233,811 | ||
Affordable Housing Investments | 222,877 | 222,877 | 186,423 | ||
Other Assets | 553,390 | 553,390 | 537,847 | ||
Shareholders' equity | |||||
Retained earnings | 2,182,259 | 2,182,259 | 2,071,230 | ||
Noninterest Expense | |||||
Other operating | 11,200 | $ 10,927 | 31,713 | $ 29,259 | |
Income taxes | 32,208 | 37,452 | 100,489 | 103,571 | |
Net income | $ 71,729 | $ 70,738 | $ 202,827 | $ 191,238 | |
Net income per common share, basic (in dollars per share) | $ / shares | $ 1.20 | $ 1.18 | $ 3.38 | $ 3.19 | |
Net income per common share, diluted (in dollars per share) | $ / shares | $ 1.18 | $ 1.17 | $ 3.32 | $ 3.15 | |
Cash Flows From Operating Activities | |||||
Net income | $ 71,729 | $ 70,738 | $ 202,827 | $ 191,238 | |
Adjustments to net income: | |||||
Deferred income tax benefit | (7,860) | (3,391) | |||
Other, net | 27,570 | 22,063 | |||
Net change in: | |||||
Other assets and other liabilities, net | $ (18,192) | (44,520) | |||
As Reported | |||||
Assets | |||||
Deferred tax asset | 230,376 | ||||
Affordable Housing Investments | 203,010 | ||||
Other Assets | 537,826 | ||||
Shareholders' equity | |||||
Retained earnings | 2,084,361 | ||||
Noninterest Expense | |||||
Other operating | 15,215 | 41,628 | |||
Income taxes | 34,404 | 90,521 | |||
Net income | $ 69,498 | $ 191,919 | |||
Net income per common share, basic (in dollars per share) | $ / shares | $ 1.16 | $ 3.20 | |||
Net income per common share, diluted (in dollars per share) | $ / shares | $ 1.15 | $ 3.16 | |||
Cash Flows From Operating Activities | |||||
Net income | $ 69,498 | $ 191,919 | |||
Adjustments to net income: | |||||
Deferred income tax benefit | (3,758) | ||||
Other, net | 21,706 | ||||
Net change in: | |||||
Other assets and other liabilities, net | (44,477) | ||||
As Adjusted | |||||
Assets | |||||
Deferred tax asset | 233,811 | ||||
Affordable Housing Investments | 186,423 | ||||
Other Assets | 537,847 | ||||
Shareholders' equity | |||||
Retained earnings | $ 2,071,230 | ||||
Noninterest Expense | |||||
Other operating | 10,927 | 29,259 | |||
Income taxes | 37,452 | 103,571 | |||
Net income | $ 70,738 | $ 191,238 | |||
Net income per common share, basic (in dollars per share) | $ / shares | $ 1.18 | $ 3.19 | |||
Net income per common share, diluted (in dollars per share) | $ / shares | $ 1.17 | $ 3.15 | |||
Cash Flows From Operating Activities | |||||
Net income | $ 70,738 | $ 191,238 | |||
Adjustments to net income: | |||||
Deferred income tax benefit | (3,391) | ||||
Other, net | 22,063 | ||||
Net change in: | |||||
Other assets and other liabilities, net | $ (44,520) |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Fair value assets and liabilities measured on recurring and nonrecurring basis | |||||
Fair value of assets transfers from Level 1 to Level 2 | $ 0 | $ 0 | |||
Fair value of assets transfers from Level 2 to Level 1 | 0 | 0 | |||
Fair value of liabilities transfers from Level 1 to Level 2 | 0 | 0 | |||
Assets | |||||
Securities available-for-sale | 5,309,187 | 5,309,187 | $ 5,882,983 | ||
Trading securities | 154,706 | 154,706 | 173,188 | ||
Liabilities | |||||
FDIC clawback liability | 16,608 | 16,608 | |||
Redeemable noncontrolling interest | 32,847 | 32,847 | 39,978 | ||
U.S. Treasury | |||||
Assets | |||||
Securities available-for-sale | 390,329 | 390,329 | 116,926 | ||
Federal agency - Debt | |||||
Assets | |||||
Securities available-for-sale | 286,360 | 286,360 | 1,398,581 | ||
Federal agency - MBS | |||||
Assets | |||||
Securities available-for-sale | 92,881 | 92,881 | 104,526 | ||
CMOs - Federal agency | |||||
Assets | |||||
Securities available-for-sale | 3,536,128 | 3,536,128 | 3,580,590 | ||
CMOs - Non-agency | |||||
Assets | |||||
Securities available-for-sale | 20,431 | 20,431 | 24,014 | ||
State and municipal | |||||
Assets | |||||
Securities available-for-sale | 360,744 | 360,744 | 479,031 | ||
Other debt securities | |||||
Assets | |||||
Securities available-for-sale | 622,314 | 622,314 | 176,169 | ||
Equity securities and mutual funds | |||||
Assets | |||||
Securities available-for-sale | 3,146 | ||||
Measured on a Recurring Basis | Quoted Prices in Active Markets Level 1 | |||||
Assets | |||||
Trading securities | 146,710 | 146,710 | 171,778 | ||
Derivatives assets | 8,454 | 8,454 | 6,106 | ||
Total assets at fair value | 545,493 | 545,493 | 297,956 | ||
Liabilities | |||||
Derivative liabilities | 8,800 | 8,800 | 6,623 | ||
Total liabilities at fair value | 8,800 | 8,800 | 6,623 | ||
Measured on a Recurring Basis | Quoted Prices in Active Markets Level 1 | U.S. Treasury | |||||
Assets | |||||
Securities available-for-sale | 390,329 | 390,329 | 116,926 | ||
Measured on a Recurring Basis | Quoted Prices in Active Markets Level 1 | Equity securities and mutual funds | |||||
Assets | |||||
Securities available-for-sale | 3,146 | ||||
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | |||||
Assets | |||||
Trading securities | 7,996 | 7,996 | 1,410 | ||
Derivatives assets | 71,487 | 71,487 | 44,598 | ||
Total assets at fair value | 4,994,871 | 4,994,871 | 5,805,372 | ||
Liabilities | |||||
Derivative liabilities | 72,976 | 72,976 | 44,686 | ||
Other liabilities | 797 | 797 | 946 | ||
Total liabilities at fair value | 73,773 | 73,773 | 45,632 | ||
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | Federal agency - Debt | |||||
Assets | |||||
Securities available-for-sale | 286,360 | 286,360 | 1,398,581 | ||
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | Federal agency - MBS | |||||
Assets | |||||
Securities available-for-sale | 92,881 | 92,881 | 104,526 | ||
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | CMOs - Federal agency | |||||
Assets | |||||
Securities available-for-sale | 3,536,128 | 3,536,128 | 3,580,590 | ||
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | CMOs - Non-agency | |||||
Assets | |||||
Securities available-for-sale | 20,431 | 20,431 | 24,014 | ||
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | State and municipal | |||||
Assets | |||||
Securities available-for-sale | 357,274 | 357,274 | 475,484 | ||
Measured on a Recurring Basis | Significant Other Observable Inputs Level 2 | Other debt securities | |||||
Assets | |||||
Securities available-for-sale | 622,314 | 622,314 | 176,169 | ||
Measured on a Recurring Basis | Significant Unobservable Inputs Level 3 | |||||
Assets | |||||
Derivatives assets | 2,235 | 2,235 | 882 | ||
Contingent consideration asset | 2,605 | 2,605 | 2,930 | ||
Total assets at fair value | 8,310 | 8,310 | 7,359 | ||
Liabilities | |||||
Contingent consideration liability | 36,985 | 36,985 | 34,983 | ||
FDIC clawback liability | 16,608 | 16,608 | 15,106 | ||
Total liabilities at fair value | 53,593 | 53,593 | 50,089 | ||
Redeemable noncontrolling interest | $ 32,847 | $ 32,847 | $ 39,978 | ||
Measured on a Recurring Basis | Significant Unobservable Inputs Level 3 | Maximum | |||||
Assets | |||||
Percent of total assets | 1.00% | 1.00% | 1.00% | ||
Measured on a Recurring Basis | Significant Unobservable Inputs Level 3 | State and municipal | |||||
Assets | |||||
Securities available-for-sale | $ 3,470 | $ 3,470 | $ 3,547 | ||
Measured on a Nonrecurring Basis | |||||
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis | |||||
Total net (losses) gains recognized | (1,203) | $ (276) | (4,153) | $ 860 | |
Measured on a Nonrecurring Basis | Commercial real estate mortgages | |||||
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis | |||||
Collateral dependent impaired loans: | (5) | ||||
Measured on a Nonrecurring Basis | Residential mortgages | |||||
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis | |||||
Collateral dependent impaired loans: | 7 | 81 | |||
Measured on a Nonrecurring Basis | Other real estate owned | |||||
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis | |||||
Total net (losses) gains recognized | (653) | $ (283) | (1,973) | $ 784 | |
Measured on a Nonrecurring Basis | Private equity and alternative investments | |||||
Net (losses) gains recognized for assets measured at fair value on nonrecurring basis | |||||
Total net (losses) gains recognized | (550) | (2,180) | |||
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3 | |||||
Assets | |||||
Total assets at fair value | $ 11,131 | $ 11,131 | $ 5,644 | ||
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3 | Maximum | |||||
Assets | |||||
Percent of total assets | 1.00% | 1.00% | 1.00% | ||
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3 | Other real estate owned | |||||
Assets | |||||
Total assets at fair value | $ 9,544 | $ 9,544 | $ 5,644 | ||
Measured on a Nonrecurring Basis | Significant Unobservable Inputs Level 3 | Private equity and alternative investments | |||||
Assets | |||||
Total assets at fair value | 1,587 | 1,587 | |||
Fair Value | |||||
Liabilities | |||||
Total liabilities at fair value | 136,200 | 136,200 | 102,300 | ||
Fair Value | Measured on a Recurring Basis | |||||
Assets | |||||
Trading securities | 154,706 | 154,706 | 173,188 | ||
Derivatives assets | 82,176 | 82,176 | 51,586 | ||
Contingent consideration asset | 2,605 | 2,605 | 2,930 | ||
Total assets at fair value | $ 5,548,674 | $ 5,548,674 | $ 6,110,687 | ||
Percent of total assets | 16.00% | 16.00% | 19.00% | ||
Liabilities | |||||
Derivative liabilities | $ 81,776 | $ 81,776 | $ 51,309 | ||
Contingent consideration liability | 36,985 | 36,985 | 34,983 | ||
FDIC clawback liability | 16,608 | 16,608 | 15,106 | ||
Other liabilities | 797 | 797 | 946 | ||
Total liabilities at fair value | 136,166 | 136,166 | 102,344 | ||
Redeemable noncontrolling interest | 32,847 | 32,847 | 39,978 | ||
Fair Value | Measured on a Recurring Basis | U.S. Treasury | |||||
Assets | |||||
Securities available-for-sale | 390,329 | 390,329 | 116,926 | ||
Fair Value | Measured on a Recurring Basis | Federal agency - Debt | |||||
Assets | |||||
Securities available-for-sale | 286,360 | 286,360 | 1,398,581 | ||
Fair Value | Measured on a Recurring Basis | Federal agency - MBS | |||||
Assets | |||||
Securities available-for-sale | 92,881 | 92,881 | 104,526 | ||
Fair Value | Measured on a Recurring Basis | CMOs - Federal agency | |||||
Assets | |||||
Securities available-for-sale | 3,536,128 | 3,536,128 | 3,580,590 | ||
Fair Value | Measured on a Recurring Basis | CMOs - Non-agency | |||||
Assets | |||||
Securities available-for-sale | 20,431 | 20,431 | 24,014 | ||
Fair Value | Measured on a Recurring Basis | State and municipal | |||||
Assets | |||||
Securities available-for-sale | 360,744 | 360,744 | 479,031 | ||
Fair Value | Measured on a Recurring Basis | Other debt securities | |||||
Assets | |||||
Securities available-for-sale | 622,314 | 622,314 | 176,169 | ||
Fair Value | Measured on a Recurring Basis | Equity securities and mutual funds | |||||
Assets | |||||
Securities available-for-sale | 3,146 | ||||
Fair Value | Measured on a Nonrecurring Basis | |||||
Assets | |||||
Total assets at fair value | 11,131 | 11,131 | 5,644 | ||
Fair Value | Measured on a Nonrecurring Basis | Other real estate owned | |||||
Assets | |||||
Total assets at fair value | 9,544 | 9,544 | $ 5,644 | ||
Fair Value | Measured on a Nonrecurring Basis | Private equity and alternative investments | |||||
Assets | |||||
Total assets at fair value | $ 1,587 | $ 1,587 |
Fair Value Measurements (Deta45
Fair Value Measurements (Detail 2) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Total realized/unrealized gains (losses): | ||
Transfers into/out of level 3, assets | $ 0 | $ 0 |
Transfers into/out of level 3, liabilities | 0 | 0 |
Securities Available-for-Sale | ||
Level 3 Assets Measured on a Recurring Basis | ||
Balance, beginning of period | 3,547 | 3,633 |
Total realized/unrealized gains (losses): | ||
Included in other comprehensive income | 23 | (9) |
Settlements | (100) | (100) |
Balance, end of period | 3,470 | 3,524 |
Equity Warrants | ||
Level 3 Assets Measured on a Recurring Basis | ||
Balance, beginning of period | 882 | |
Total realized/unrealized gains (losses): | ||
Included in earnings | 65 | 78 |
Additions | 1,288 | 631 |
Settlements | (29) | |
Balance, end of period | 2,235 | 680 |
Contingent Consideration Asset | ||
Level 3 Assets Measured on a Recurring Basis | ||
Balance, beginning of period | 2,930 | |
Total realized/unrealized gains (losses): | ||
Included in earnings | (325) | |
Additions | 2,930 | |
Balance, end of period | $ 2,605 | $ 2,930 |
Fair Value Measurements (Deta46
Fair Value Measurements (Detail 3) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Minimum | ||
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements | ||
Adjustments to appraised values from use of comparable sales values or income approaches (as a percent) | 12.00% | |
Adjustments to investment carrying amounts (as a percent) | 27.00% | |
Maximum | ||
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements | ||
Adjustments to appraised values from use of comparable sales values or income approaches (as a percent) | 22.00% | |
Adjustments to investment carrying amounts (as a percent) | 86.00% | |
Other real estate owned | ||
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements | ||
Fair value of assets | $ 9,544 | |
Private equity and alternative investments | ||
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements | ||
Fair value of assets | 1,587 | |
Fair Value | Measured on a Recurring Basis | ||
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements | ||
Fair value of assets | 5,548,674 | $ 6,110,687 |
Fair Value | Measured on a Nonrecurring Basis | ||
Information about valuation method, inputs and assumptions for nonrecurring Level 3 fair value measurements | ||
Fair value of assets | $ 11,131 | $ 5,644 |
Fair Value Measurements (Deta47
Fair Value Measurements (Detail 4) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Rochdale Investment Management, LLC | |||
Total realized/unrealized gains (losses): | |||
Contingent consideration paid to shareholders | $ 17,400 | ||
Contingent Consideration Liability | |||
Level 3 Liabilities Measured on a Recurring Basis | |||
Balance, beginning of period | $ (34,983) | $ (49,900) | |
Total realized/unrealized gains (losses): | |||
Included in earnings | (727) | ||
Settlements | 17,266 | ||
Other | (1,275) | (1,859) | |
Balance, end of period | $ (36,985) | (34,493) | |
Contingent Consideration Liability | Rochdale Investment Management, LLC | |||
Total realized/unrealized gains (losses): | |||
Business Acquisition Period of Additional Cash Consideration Payment | 6 years | ||
Low-end of the potential range of estimate of total consideration payment | $ 17,000 | ||
High-end of the potential range of estimate of total consideration payment | 46,000 | ||
FDIC Clawback Liability | |||
Level 3 Liabilities Measured on a Recurring Basis | |||
Balance, beginning of period | (15,106) | (11,967) | |
Total realized/unrealized gains (losses): | |||
Included in earnings | (1,502) | (2,557) | |
Balance, end of period | $ (16,608) | $ (14,524) |
Fair Value Measurements (Deta48
Fair Value Measurements (Detail 5) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Financial Assets: | ||
Cash and due from banks | $ 434,087 | $ 336,470 |
Due from banks - interest-bearing | 1,424,109 | 119,981 |
Securities purchased under resale agreements | 200,302 | 200,108 |
Securities held-to-maturity | 3,598,902 | 3,484,647 |
Loans and leases, net of allowance | 22,219,427 | 20,027,057 |
Acquired impaired loans, net of allowance | 393,879 | 502,371 |
FDIC indemnification asset | 28,164 | 50,511 |
Investment in FHLB and FRB stock | 50,600 | 58,400 |
Quoted Prices in Active Markets Level 1 | ||
Financial Assets: | ||
Cash and due from banks | 434,100 | 336,500 |
Due from banks - interest-bearing | 1,424,100 | 120,000 |
Financial Liabilities: | ||
Short-term borrowings | 320,000 | |
Significant Other Observable Inputs Level 2 | ||
Financial Assets: | ||
Securities purchased under resale agreements | 201,000 | 201,100 |
Securities held-to-maturity | 3,598,900 | 3,484,600 |
Investment in FHLB and FRB stock | 50,600 | 58,400 |
Financial Liabilities: | ||
Deposits | 30,601,300 | 27,435,100 |
Long-term debt | 614,700 | 605,300 |
Significant Unobservable Inputs Level 3 | ||
Financial Assets: | ||
Loans and leases, net of allowance | 22,772,000 | 20,576,900 |
Acquired impaired loans, net of allowance | 443,000 | 549,100 |
FDIC indemnification asset | 22,400 | 40,200 |
Financial Liabilities: | ||
Deposits | 573,000 | 674,500 |
Short-term borrowings | 6,500 | 2,900 |
Long-term debt | 111,200 | 99,000 |
Carrying Amount | ||
Financial Assets: | ||
Cash and due from banks | 434,100 | 336,500 |
Due from banks - interest-bearing | 1,424,100 | 120,000 |
Securities purchased under resale agreements | 200,000 | 200,000 |
Securities held-to-maturity | 3,506,500 | 3,427,000 |
Loans and leases, net of allowance | 22,219,400 | 20,027,100 |
Acquired impaired loans, net of allowance | 393,900 | 502,400 |
FDIC indemnification asset | 28,200 | 50,500 |
Investment in FHLB and FRB stock | 50,600 | 58,400 |
Financial Liabilities: | ||
Deposits | 31,173,400 | 28,108,100 |
Short-term borrowings | 6,500 | 322,900 |
Long-term debt | 650,100 | 638,600 |
Fair Value | ||
Financial Assets: | ||
Cash and due from banks | 434,100 | 336,500 |
Due from banks - interest-bearing | 1,424,100 | 120,000 |
Securities purchased under resale agreements | 201,000 | 201,100 |
Securities held-to-maturity | 3,598,900 | 3,484,600 |
Loans and leases, net of allowance | 22,772,000 | 20,576,900 |
Acquired impaired loans, net of allowance | 443,000 | 549,100 |
FDIC indemnification asset | 22,400 | 40,200 |
Investment in FHLB and FRB stock | 50,600 | 58,400 |
Financial Liabilities: | ||
Deposits | 31,174,300 | 28,109,600 |
Short-term borrowings | 6,500 | 322,900 |
Long-term debt | $ 725,900 | $ 704,300 |
Securities (Detail)
Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Realized gains and losses | |||||
Gross realized gains | $ 50 | $ 19 | $ 5,475 | $ 7,989 | |
Gross realized losses | (20) | (5) | (144) | (486) | |
Net realized gains | 30 | 14 | 5,331 | 7,503 | |
Securities available-for-sale: | |||||
Amortized Cost | 5,304,000 | 5,304,000 | $ 5,894,509 | ||
Gross Unrealized Gains | 28,101 | 28,101 | 32,788 | ||
Gross Unrealized Losses | (22,914) | (22,914) | (44,314) | ||
Fair Value | 5,309,187 | 5,309,187 | 5,882,983 | ||
Securities held-to-maturity: | |||||
Held-to-maturity Securities, Amortized Cost | 3,506,455 | 3,506,455 | 3,427,031 | ||
Gross Unrealized Gains | 97,547 | 97,547 | 72,659 | ||
Gross Unrealized Losses | (5,100) | (5,100) | (15,043) | ||
Fair Value | 3,598,902 | 3,598,902 | 3,484,647 | ||
Sales of securities available-for-sale | 700 | 1,000 | 401,534 | 627,102 | |
Sales of securities held-to-maturity | 0 | 0 | |||
Interest and dividend income on securities (including trading securities) | |||||
Taxable interest income | 33,400 | 37,500 | 102,500 | 111,000 | |
Nontaxable interest income | 7,200 | 6,400 | 21,300 | 17,900 | |
Dividend income | 22 | $ 22 | 52 | $ 47 | |
Trading securities | 154,706 | 154,706 | 173,188 | ||
Total securities | 8,970,000 | 8,970,000 | 9,480,000 | ||
Total debt securities | |||||
Securities available-for-sale: | |||||
Amortized Cost | 5,893,001 | ||||
Gross Unrealized Gains | 30,800 | ||||
Gross Unrealized Losses | (43,964) | ||||
Fair Value | 5,309,187 | 5,309,187 | 5,879,837 | ||
Securities held-to-maturity: | |||||
Held-to-maturity Securities, Amortized Cost | 3,506,455 | 3,506,455 | |||
U.S. Treasury | |||||
Securities available-for-sale: | |||||
Amortized Cost | 390,098 | 390,098 | 116,919 | ||
Gross Unrealized Gains | 232 | 232 | 17 | ||
Gross Unrealized Losses | (1) | (1) | (10) | ||
Fair Value | 390,329 | 390,329 | 116,926 | ||
Federal agency - Debt | |||||
Securities available-for-sale: | |||||
Amortized Cost | 285,616 | 285,616 | 1,401,303 | ||
Gross Unrealized Gains | 758 | 758 | 558 | ||
Gross Unrealized Losses | (14) | (14) | (3,280) | ||
Fair Value | 286,360 | 286,360 | 1,398,581 | ||
Securities held-to-maturity: | |||||
Held-to-maturity Securities, Amortized Cost | 445,721 | 445,721 | 292,932 | ||
Gross Unrealized Gains | 11,742 | 11,742 | 6,430 | ||
Gross Unrealized Losses | (27) | (27) | (255) | ||
Fair Value | 457,436 | 457,436 | 299,107 | ||
Federal agency - MBS | |||||
Securities available-for-sale: | |||||
Amortized Cost | 91,690 | 91,690 | 102,939 | ||
Gross Unrealized Gains | 1,851 | 1,851 | 2,601 | ||
Gross Unrealized Losses | (660) | (660) | (1,014) | ||
Fair Value | 92,881 | 92,881 | 104,526 | ||
Securities held-to-maturity: | |||||
Held-to-maturity Securities, Amortized Cost | 575,071 | 575,071 | 553,589 | ||
Gross Unrealized Gains | 19,039 | 19,039 | 13,427 | ||
Gross Unrealized Losses | (227) | (227) | (2,275) | ||
Fair Value | 593,883 | 593,883 | 564,741 | ||
CMOs - Federal agency | |||||
Securities available-for-sale: | |||||
Amortized Cost | 3,538,000 | 3,538,000 | 3,599,831 | ||
Gross Unrealized Gains | 19,867 | 19,867 | 19,628 | ||
Gross Unrealized Losses | (21,739) | (21,739) | (38,869) | ||
Fair Value | 3,536,128 | 3,536,128 | 3,580,590 | ||
Securities held-to-maturity: | |||||
Held-to-maturity Securities, Amortized Cost | 1,630,388 | 1,630,388 | 1,811,574 | ||
Gross Unrealized Gains | 44,862 | 44,862 | 29,998 | ||
Gross Unrealized Losses | (2,057) | (2,057) | (10,292) | ||
Fair Value | 1,673,193 | 1,673,193 | 1,831,280 | ||
CMOs - Non-agency | |||||
Securities available-for-sale: | |||||
Amortized Cost | 20,749 | 20,749 | 24,385 | ||
Gross Unrealized Gains | 25 | 25 | 40 | ||
Gross Unrealized Losses | (343) | (343) | (411) | ||
Fair Value | 20,431 | 20,431 | 24,014 | ||
State and municipal | |||||
Securities available-for-sale: | |||||
Amortized Cost | 356,623 | 356,623 | 473,272 | ||
Gross Unrealized Gains | 4,249 | 4,249 | 6,139 | ||
Gross Unrealized Losses | (128) | (128) | (380) | ||
Fair Value | 360,744 | 360,744 | 479,031 | ||
Securities held-to-maturity: | |||||
Held-to-maturity Securities, Amortized Cost | 769,646 | 769,646 | 682,705 | ||
Gross Unrealized Gains | 21,704 | 21,704 | 22,732 | ||
Gross Unrealized Losses | (2,788) | (2,788) | (1,997) | ||
Fair Value | 788,562 | 788,562 | 703,440 | ||
Other debt securities | |||||
Securities available-for-sale: | |||||
Amortized Cost | 621,224 | 621,224 | 174,352 | ||
Gross Unrealized Gains | 1,119 | 1,119 | 1,817 | ||
Gross Unrealized Losses | (29) | (29) | |||
Fair Value | 622,314 | 622,314 | 176,169 | ||
Securities held-to-maturity: | |||||
Held-to-maturity Securities, Amortized Cost | 85,629 | 85,629 | 86,231 | ||
Gross Unrealized Gains | 200 | 200 | 72 | ||
Gross Unrealized Losses | (1) | (1) | (224) | ||
Fair Value | $ 85,828 | $ 85,828 | 86,079 | ||
Equity securities and mutual funds | |||||
Securities available-for-sale: | |||||
Amortized Cost | 1,508 | ||||
Gross Unrealized Gains | 1,988 | ||||
Gross Unrealized Losses | (350) | ||||
Fair Value | $ 3,146 |
Securities (Detail 2)
Securities (Detail 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Fair Value | $ 5,309,187 | $ 5,882,983 |
Expected remaining maturities of debt securities held-to-maturity, amortized cost | ||
Total of debt securities held-to-maturity, amortized cost | 3,506,455 | 3,427,031 |
Total debt securities | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 863,802 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 4,268,028 | |
Securities available-for-sale, Over 5 years through 10 years, fair value | 173,986 | |
Securities available-for-sale, Over 10 years, fair value | 3,371 | |
Fair Value | 5,309,187 | 5,879,837 |
Expected remaining maturities of debt securities available-for-sale, amortized cost | ||
Securities available-for-sale, One year or less, amortized cost | 861,509 | |
Securities available-for-sale, Over 1 year through 5 years, amortized cost | 4,264,720 | |
Securities available-for-sale, Over 5 years through 10 years, amortized cost | 174,371 | |
Securities available-for-sale, Over 10 years, amortized cost | 3,400 | |
Total of debt securities available-for-sale, amortized cost | 5,304,000 | |
Expected remaining maturities of debt securities held-to-maturity, amortized cost | ||
Securities held-to-maturity, One year or less, amortized cost | 9,631 | |
Securities held-to-maturity, Over 1 year through 5 years, amortized cost | 1,189,769 | |
Securities held-to-maturity, Over 5 years through 10 years, amortized cost | 2,011,485 | |
Securities held-to-maturity, Over 10 years, amortized cost | 295,570 | |
Total of debt securities held-to-maturity, amortized cost | 3,506,455 | |
U.S. Treasury | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 269,754 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 120,575 | |
Fair Value | 390,329 | 116,926 |
Federal agency - Debt | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 179,603 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 106,757 | |
Fair Value | 286,360 | 1,398,581 |
Expected remaining maturities of debt securities held-to-maturity, amortized cost | ||
Securities held-to-maturity, Over 1 year through 5 years, amortized cost | 45,000 | |
Securities held-to-maturity, Over 5 years through 10 years, amortized cost | 209,125 | |
Securities held-to-maturity, Over 10 years, amortized cost | 191,596 | |
Total of debt securities held-to-maturity, amortized cost | 445,721 | 292,932 |
Federal agency - MBS | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 1,819 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 91,062 | |
Fair Value | 92,881 | 104,526 |
Expected remaining maturities of debt securities held-to-maturity, amortized cost | ||
Securities held-to-maturity, One year or less, amortized cost | 10 | |
Securities held-to-maturity, Over 1 year through 5 years, amortized cost | 74,949 | |
Securities held-to-maturity, Over 5 years through 10 years, amortized cost | 495,583 | |
Securities held-to-maturity, Over 10 years, amortized cost | 4,529 | |
Total of debt securities held-to-maturity, amortized cost | 575,071 | 553,589 |
CMOs - Federal agency | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 119,443 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 3,248,817 | |
Securities available-for-sale, Over 5 years through 10 years, fair value | 167,868 | |
Fair Value | 3,536,128 | 3,580,590 |
Expected remaining maturities of debt securities held-to-maturity, amortized cost | ||
Securities held-to-maturity, One year or less, amortized cost | 8,724 | |
Securities held-to-maturity, Over 1 year through 5 years, amortized cost | 773,640 | |
Securities held-to-maturity, Over 5 years through 10 years, amortized cost | 848,024 | |
Total of debt securities held-to-maturity, amortized cost | 1,630,388 | 1,811,574 |
CMOs - Non-agency | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 1,079 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 13,234 | |
Securities available-for-sale, Over 5 years through 10 years, fair value | 6,118 | |
Fair Value | 20,431 | 24,014 |
State and municipal | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 165,254 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 192,119 | |
Securities available-for-sale, Over 10 years, fair value | 3,371 | |
Fair Value | 360,744 | 479,031 |
Expected remaining maturities of debt securities held-to-maturity, amortized cost | ||
Securities held-to-maturity, One year or less, amortized cost | 897 | |
Securities held-to-maturity, Over 1 year through 5 years, amortized cost | 210,551 | |
Securities held-to-maturity, Over 5 years through 10 years, amortized cost | 458,753 | |
Securities held-to-maturity, Over 10 years, amortized cost | 99,445 | |
Total of debt securities held-to-maturity, amortized cost | 769,646 | 682,705 |
Other debt securities | ||
Expected remaining maturities of debt securities available-for-sale, fair value | ||
Securities available-for-sale, One year or less, fair value | 126,850 | |
Securities available-for-sale, Over 1 year through 5 years, fair value | 495,464 | |
Fair Value | 622,314 | 176,169 |
Expected remaining maturities of debt securities held-to-maturity, amortized cost | ||
Securities held-to-maturity, Over 1 year through 5 years, amortized cost | 85,629 | |
Total of debt securities held-to-maturity, amortized cost | $ 85,629 | $ 86,231 |
Securities (Detail 3)
Securities (Detail 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Available-for-sale securities | ||||
Impairment losses recognized in earnings on other-than-temporarily impaired securities | $ 75 | $ 337 | $ 323 | |
Impairment losses, net of tax, recognized in other comprehensive loss on other-than-temporarily impaired securities | $ 189 | 141 | 189 | 141 |
Impairment losses recognized in earnings income for securities held- to-maturity | 0 | 0 | 0 | 0 |
Total debt securities | ||||
Changes in cumulative credit related other-than-temporary impairment recognized in earnings | ||||
Balance, beginning of period | 2,587 | 2,395 | 2,470 | 4,549 |
Subsequent credit-related impairment | 75 | 117 | 323 | |
Reduction for securities sold or redeemed | (2,402) | |||
Balance, end of period | $ 2,587 | $ 2,470 | $ 2,587 | $ 2,470 |
Securities (Detail 4)
Securities (Detail 4) $ in Thousands | Sep. 30, 2015USD ($)security | Dec. 31, 2014USD ($)securityitem |
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 990,556 | $ 2,027,804 |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 4,090 | 6,728 |
Securities available-for-sale, Fair Value, 12 months or greater | 1,266,874 | 1,472,436 |
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater | 18,824 | 37,586 |
Securities available-for-sale, Fair Value, Total | 2,257,430 | 3,500,240 |
Securities available-for-sale, Estimated Unrealized Loss, Total | 22,914 | 44,314 |
Securities held-to-maturity: | ||
Securities held-to-maturity, Fair Value, Less than 12 months | 291,472 | 283,478 |
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months | 2,349 | 2,568 |
Securities held-to-maturity, Fair Value, 12 months or greater | 250,473 | 824,838 |
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater | 2,751 | 12,475 |
Securities held-to-maturity, Fair Value, Total | 541,945 | 1,108,316 |
Securities held-to-maturity, Estimated Unrealized Loss, Total | 5,100 | 15,043 |
U.S. Treasury | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | 17,001 | 15,814 |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 1 | 10 |
Securities available-for-sale, Fair Value, Total | 17,001 | 15,814 |
Securities available-for-sale, Estimated Unrealized Loss, Total | $ 1 | $ 10 |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 1 | 2 |
Federal agency - Debt | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 17,556 | $ 1,008,234 |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 14 | 2,622 |
Securities available-for-sale, Fair Value, 12 months or greater | 135,868 | |
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater | 658 | |
Securities available-for-sale, Fair Value, Total | 17,556 | 1,144,102 |
Securities available-for-sale, Estimated Unrealized Loss, Total | 14 | 3,280 |
Securities held-to-maturity: | ||
Securities held-to-maturity, Fair Value, 12 months or greater | 5,739 | 26,316 |
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater | 27 | 255 |
Securities held-to-maturity, Fair Value, Total | 5,739 | 26,316 |
Securities held-to-maturity, Estimated Unrealized Loss, Total | $ 27 | $ 255 |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 3 | 37 |
Federal agency - MBS | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 35 | |
Securities available-for-sale, Fair Value, 12 months or greater | $ 53,639 | 57,970 |
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater | 660 | 1,014 |
Securities available-for-sale, Fair Value, Total | 53,639 | 58,005 |
Securities available-for-sale, Estimated Unrealized Loss, Total | 660 | 1,014 |
Securities held-to-maturity: | ||
Securities held-to-maturity, Fair Value, Less than 12 months | 21,649 | 4,800 |
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months | 25 | 21 |
Securities held-to-maturity, Fair Value, 12 months or greater | 26,077 | 114,856 |
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater | 202 | 2,254 |
Securities held-to-maturity, Fair Value, Total | 47,726 | 119,656 |
Securities held-to-maturity, Estimated Unrealized Loss, Total | $ 227 | $ 2,275 |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 13 | 23 |
CMOs - Federal agency | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 690,496 | $ 871,026 |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 3,947 | 3,417 |
Securities available-for-sale, Fair Value, 12 months or greater | 1,197,026 | 1,261,695 |
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater | 17,792 | 35,452 |
Securities available-for-sale, Fair Value, Total | 1,887,522 | 2,132,721 |
Securities available-for-sale, Estimated Unrealized Loss, Total | 21,739 | 38,869 |
Securities held-to-maturity: | ||
Securities held-to-maturity, Fair Value, Less than 12 months | 136,388 | 202,014 |
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months | 596 | 2,247 |
Securities held-to-maturity, Fair Value, 12 months or greater | 184,818 | 588,019 |
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater | 1,461 | 8,045 |
Securities held-to-maturity, Fair Value, Total | 321,206 | 790,033 |
Securities held-to-maturity, Estimated Unrealized Loss, Total | $ 2,057 | $ 10,292 |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 113 | 141 |
CMOs - Non-agency | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 1,949 | |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 15 | |
Securities available-for-sale, Fair Value, 12 months or greater | $ 12,739 | 12,720 |
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater | 343 | 396 |
Securities available-for-sale, Fair Value, Total | 12,739 | 14,669 |
Securities available-for-sale, Estimated Unrealized Loss, Total | $ 343 | $ 411 |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 3 | 3 |
State and municipal | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 65,670 | $ 130,208 |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 99 | 314 |
Securities available-for-sale, Fair Value, 12 months or greater | 3,470 | 4,183 |
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater | 29 | 66 |
Securities available-for-sale, Fair Value, Total | 69,140 | 134,391 |
Securities available-for-sale, Estimated Unrealized Loss, Total | 128 | 380 |
Securities held-to-maturity: | ||
Securities held-to-maturity, Fair Value, Less than 12 months | 118,335 | 14,851 |
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months | 1,727 | 76 |
Securities held-to-maturity, Fair Value, 12 months or greater | 33,839 | 95,647 |
Securities held-to-maturity, Estimated Unrealized Loss, 12 months or greater | 1,061 | 1,921 |
Securities held-to-maturity, Fair Value, Total | 152,174 | 110,498 |
Securities held-to-maturity, Estimated Unrealized Loss, Total | $ 2,788 | $ 1,997 |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 196 | 225 |
Other debt securities | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 199,833 | |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 29 | |
Securities available-for-sale, Fair Value, Total | 199,833 | |
Securities available-for-sale, Estimated Unrealized Loss, Total | 29 | |
Securities held-to-maturity: | ||
Securities held-to-maturity, Fair Value, Less than 12 months | 15,100 | $ 61,813 |
Securities held-to-maturity, Estimated Unrealized Loss, Less than 12 months | 1 | 224 |
Securities held-to-maturity, Fair Value, Total | 15,100 | 61,813 |
Securities held-to-maturity, Estimated Unrealized Loss, Total | $ 1 | $ 224 |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 3 | 5 |
Total debt securities | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 2,027,266 | |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 6,378 | |
Securities available-for-sale, Fair Value, 12 months or greater | 1,472,436 | |
Securities available-for-sale, Estimated Unrealized Loss, 12 months or greater | 37,586 | |
Securities available-for-sale, Fair Value, Total | 3,499,702 | |
Securities available-for-sale, Estimated Unrealized Loss, Total | $ 43,964 | |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | security | 332 | 436 |
Equity securities and mutual funds | ||
Securities available-for-sale: | ||
Securities available-for-sale, Fair Value, Less than 12 months | $ 538 | |
Securities available-for-sale, Estimated Unrealized Loss, Less than 12 months | 350 | |
Securities available-for-sale, Fair Value, Total | 538 | |
Securities available-for-sale, Estimated Unrealized Loss, Total | $ 350 | |
Other information | ||
Number of available-for-sale and held-to-maturity securities in the unrealized loss position | item | 1 |
Other Investments (Detail)
Other Investments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
FHLB and FRB Stock | |||||
Investment in FRB and FHLB stock | $ 50,600 | $ 50,600 | $ 58,400 | ||
Private Equity and Alternative Investments | |||||
Investments carried at cost | 24,143 | 24,143 | 29,212 | ||
Recognized impairment losses on cost method investments | 500 | $ 0 | 2,200 | $ 0 | |
Alternative Investments Measured at Fair Value on a Nonrecurring Basis | |||||
Fair Value | 1,587 | 1,587 | |||
Unfunded Commitments | 273 | 273 | |||
Private equity and alternative investments | |||||
Private Equity and Alternative Investments | |||||
Investments carried at cost | 15,949 | 15,949 | 18,605 | ||
Alternative Investments Measured at Fair Value on a Nonrecurring Basis | |||||
Fair Value | 1,337 | 1,337 | |||
Unfunded Commitments | 273 | 273 | |||
Real estate | |||||
Private Equity and Alternative Investments | |||||
Investments carried at cost | 6,776 | 6,776 | 7,081 | ||
Hedge | |||||
Private Equity and Alternative Investments | |||||
Investments carried at cost | 1,168 | 1,168 | 1,668 | ||
Other | |||||
Private Equity and Alternative Investments | |||||
Investments carried at cost | 250 | 250 | $ 1,858 | ||
Alternative Investments Measured at Fair Value on a Nonrecurring Basis | |||||
Fair Value | $ 250 | $ 250 |
Loans, Allowance for Loan and54
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | $ 22,536,584 | $ 20,337,206 | $ 19,347,988 | |||
Less: Allowance for loan and lease losses | (317,157) | $ (316,922) | (310,149) | (312,703) | $ (311,276) | $ (302,584) |
Loans and leases, excluding acquired impaired loans, net | 22,219,427 | 20,027,057 | ||||
Acquired impaired loans | 399,527 | 510,979 | ||||
Less: Allowance for loan losses | (5,648) | (8,075) | (8,608) | (9,368) | (9,103) | (15,922) |
Acquired impaired loans, net | 393,879 | 502,371 | ||||
Total loans and leases | 22,936,111 | 20,848,185 | ||||
Net loans and leases | 22,613,306 | 20,529,428 | ||||
Net deferred costs (fees) | 3,500 | 200 | ||||
FDIC indemnification asset | 28,164 | 50,511 | ||||
FDIC clawback liability | 16,608 | |||||
Acquired impaired loans covered under the FDIC loss-sharing agreements | 377,100 | |||||
Acquired impaired loans not covered under the FDIC loss-sharing agreements | 22,400 | |||||
Imperial Capital Bank | ||||||
Accounts notes and loans receivable | ||||||
Acquired impaired loans | 359,723 | 456,177 | ||||
FDIC indemnification asset | 25,960 | |||||
1st Pacific Bank | ||||||
Accounts notes and loans receivable | ||||||
Acquired impaired loans | 18,981 | 23,895 | ||||
FDIC indemnification asset | 760 | |||||
FDIC clawback liability | 13,395 | |||||
Sun West Bank | ||||||
Accounts notes and loans receivable | ||||||
Acquired impaired loans | 6,356 | 9,353 | ||||
FDIC clawback liability | 2,801 | |||||
Nevada Commerce Bank | ||||||
Accounts notes and loans receivable | ||||||
Acquired impaired loans | 14,467 | 21,554 | ||||
FDIC indemnification asset | 1,444 | |||||
FDIC clawback liability | 412 | |||||
Commercial | ||||||
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | 10,253,592 | 9,360,976 | ||||
Acquired impaired loans | $ 994 | 1,969 | ||||
Sharing of recoveries with FDIC on expiration date (as a percent) | 80.00% | |||||
Sharing of recoveries with FDIC on termination date (as a percent) | 80.00% | |||||
Commercial real estate mortgages | ||||||
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | $ 3,947,746 | 3,539,703 | 3,565,188 | |||
Less: Allowance for loan and lease losses | (48,506) | (48,649) | (44,745) | (50,989) | (50,651) | (50,678) |
Acquired impaired loans | 376,335 | 481,689 | ||||
Residential mortgages | ||||||
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | 5,709,272 | 5,106,803 | 5,023,213 | |||
Less: Allowance for loan and lease losses | (9,848) | (9,660) | (10,296) | (11,467) | (10,296) | (11,540) |
Acquired impaired loans | 3,391 | 4,455 | ||||
Real estate construction | ||||||
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | 932,422 | 710,224 | 585,232 | |||
Less: Allowance for loan and lease losses | (11,577) | (10,652) | (9,115) | (8,745) | (7,191) | (6,351) |
Acquired impaired loans | 16,042 | 18,790 | ||||
Home equity loans and lines of credit | ||||||
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | 799,711 | 785,796 | 759,258 | |||
Less: Allowance for loan and lease losses | (5,278) | (5,404) | (6,609) | (7,028) | (6,575) | (6,677) |
Acquired impaired loans | 2,612 | 3,820 | ||||
Installment | ||||||
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | 206,156 | 184,613 | 178,803 | |||
Less: Allowance for loan and lease losses | (2,290) | $ (2,208) | (2,228) | $ (2,384) | $ (2,284) | $ (1,842) |
Acquired impaired loans | 153 | 256 | ||||
Lease financing | ||||||
Accounts notes and loans receivable | ||||||
Loans and leases, excluding acquired impaired loans | $ 687,685 | $ 649,091 |
Loans, Allowance for Loan and55
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 2) - Credit Risk | 9 Months Ended |
Sep. 30, 2015item | |
Acquired impaired loans | |
Concentrations of credit risk | |
Number of states with largest concentration by loan type | 5 |
Total loans outstanding | Excluding acquired impaired loans | California | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 72.00% |
Total loans outstanding | Excluding acquired impaired loans | New York | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 10.00% |
Total loans outstanding | Excluding acquired impaired loans | Other states and countries | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 18.00% |
Total loans outstanding | Acquired impaired loans | California | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 29.00% |
Total loans outstanding | Acquired impaired loans | Texas | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 12.00% |
Total loans outstanding | Acquired impaired loans | Nevada | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 6.00% |
Total loans outstanding | Acquired impaired loans | Ohio | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 6.00% |
Total loans outstanding | Acquired impaired loans | Arizona | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 6.00% |
Total loans outstanding | Acquired impaired loans | Other states | |
Concentrations of credit risk | |
Percent of total loans outstanding (as a percent) | 41.00% |
Loans, Allowance for Loan and56
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 3) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in Accretable Yield for Acquired Impaired Loans | ||
Balance at the beginning of the period | $ 168,469 | $ 219,018 |
Accretion | (28,131) | (36,067) |
Reclassification from nonaccretable difference | 19,545 | 25,636 |
Disposals and other | (23,239) | (28,628) |
Balance at the end of the period | $ 136,644 | $ 179,959 |
Charge off of consumer loans, delinquency period for overdrafts, low end of range | 60 days | |
Charge off of consumer loans, delinquency period for secured consumer loans | 180 days |
Loans, Allowance for Loan and57
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 4) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Allowance for Loan and Lease Losses | |||||
Beginning Balance | $ 316,922 | $ 311,276 | $ 310,149 | $ 302,584 | |
Charge-offs | (4,816) | (3,849) | (11,024) | (19,510) | |
Recoveries | 10,999 | 14,399 | 16,193 | 30,595 | |
Net recoveries (charge-offs) | 6,183 | 10,550 | 5,169 | 11,085 | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (6,000) | (8,000) | 4,000 | (9,000) | |
Transfers from (to) reserve for off-balance sheet credit commitments | 52 | (1,123) | (2,161) | 8,034 | |
Ending Balance | 317,157 | 312,703 | 317,157 | 312,703 | |
Allowance individually evaluated for impairment | 2,609 | 1,595 | 2,609 | 1,595 | |
Allowance collectively evaluated for impairment | 314,548 | 311,108 | 314,548 | 311,108 | |
Loans and leases, excluding acquired impaired loans | 22,536,584 | 19,347,988 | 22,536,584 | 19,347,988 | $ 20,337,206 |
Loans and leases, individually evaluated for impairment | 59,892 | 58,575 | 59,892 | 58,575 | |
Loans and leases, collectively evaluated for impairment | 22,476,692 | 19,289,413 | 22,476,692 | 19,289,413 | |
Reserve for Off Balance Sheet Credit Commitments | |||||
Balance, beginning of the year | 30,024 | 24,787 | 27,811 | 33,944 | |
Transfers (to) from allowance for loan and lease losses | (52) | 1,123 | 2,161 | (8,034) | |
Balance, end of the year | 29,972 | 25,910 | 29,972 | 25,910 | |
Commercial (includes lease financing) | |||||
Allowance for Loan and Lease Losses | |||||
Beginning Balance | 124,314 | 126,279 | 115,855 | 117,103 | |
Charge-offs | (4,576) | (3,773) | (10,276) | (18,594) | |
Recoveries | 10,514 | 6,202 | 12,229 | 15,437 | |
Net recoveries (charge-offs) | 5,938 | 2,429 | 1,953 | (3,157) | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | 2,939 | (5,762) | 15,383 | (353) | |
Transfers from (to) reserve for off-balance sheet credit commitments | 9,353 | ||||
Ending Balance | 133,191 | 122,946 | 133,191 | 122,946 | |
Allowance individually evaluated for impairment | 2,315 | 1,304 | 2,315 | 1,304 | |
Allowance collectively evaluated for impairment | 130,876 | 121,642 | 130,876 | 121,642 | |
Loans and leases, excluding acquired impaired loans | 10,941,277 | 9,236,294 | 10,941,277 | 9,236,294 | |
Loans and leases, individually evaluated for impairment | 18,185 | 16,316 | 18,185 | 16,316 | |
Loans and leases, collectively evaluated for impairment | 10,923,092 | 9,219,978 | 10,923,092 | 9,219,978 | |
Commercial real estate mortgages | |||||
Allowance for Loan and Lease Losses | |||||
Beginning Balance | 48,649 | 50,651 | 44,745 | 50,678 | |
Charge-offs | (5) | ||||
Recoveries | 68 | 225 | 1,270 | 352 | |
Net recoveries (charge-offs) | 68 | 225 | 1,270 | 347 | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (211) | 113 | 2,491 | (36) | |
Ending Balance | 48,506 | 50,989 | 48,506 | 50,989 | |
Allowance individually evaluated for impairment | 255 | 291 | 255 | 291 | |
Allowance collectively evaluated for impairment | 48,251 | 50,698 | 48,251 | 50,698 | |
Loans and leases, excluding acquired impaired loans | 3,947,746 | 3,565,188 | 3,947,746 | 3,565,188 | 3,539,703 |
Loans and leases, individually evaluated for impairment | 22,918 | 25,551 | 22,918 | 25,551 | |
Loans and leases, collectively evaluated for impairment | 3,924,828 | 3,539,637 | 3,924,828 | 3,539,637 | |
Residential mortgages | |||||
Allowance for Loan and Lease Losses | |||||
Beginning Balance | 9,660 | 10,296 | 10,296 | 11,540 | |
Charge-offs | (482) | ||||
Recoveries | 34 | 33 | 110 | 258 | |
Net recoveries (charge-offs) | 34 | 33 | 110 | (224) | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | 154 | 1,138 | (558) | 151 | |
Ending Balance | 9,848 | 11,467 | 9,848 | 11,467 | |
Allowance individually evaluated for impairment | 39 | 39 | |||
Allowance collectively evaluated for impairment | 9,809 | 11,467 | 9,809 | 11,467 | |
Loans and leases, excluding acquired impaired loans | 5,709,272 | 5,023,213 | 5,709,272 | 5,023,213 | 5,106,803 |
Loans and leases, individually evaluated for impairment | 11,850 | 7,785 | 11,850 | 7,785 | |
Loans and leases, collectively evaluated for impairment | 5,697,422 | 5,015,428 | 5,697,422 | 5,015,428 | |
Real estate construction | |||||
Allowance for Loan and Lease Losses | |||||
Beginning Balance | 10,652 | 7,191 | 9,115 | 6,351 | |
Recoveries | 142 | 7,729 | 1,852 | 12,804 | |
Net recoveries (charge-offs) | 142 | 7,729 | 1,852 | 12,804 | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | 783 | (6,175) | 610 | (10,410) | |
Ending Balance | 11,577 | 8,745 | 11,577 | 8,745 | |
Allowance collectively evaluated for impairment | 11,577 | 8,745 | 11,577 | 8,745 | |
Loans and leases, excluding acquired impaired loans | 932,422 | 585,232 | 932,422 | 585,232 | 710,224 |
Loans and leases, individually evaluated for impairment | 5,802 | 6,610 | 5,802 | 6,610 | |
Loans and leases, collectively evaluated for impairment | 926,620 | 578,622 | 926,620 | 578,622 | |
Home equity loans and lines of credit | |||||
Allowance for Loan and Lease Losses | |||||
Beginning Balance | 5,404 | 6,575 | 6,609 | 6,677 | |
Charge-offs | (165) | ||||
Recoveries | 37 | 52 | 110 | 254 | |
Net recoveries (charge-offs) | 37 | 52 | 110 | 89 | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (163) | 401 | (1,441) | 262 | |
Ending Balance | 5,278 | 7,028 | 5,278 | 7,028 | |
Allowance collectively evaluated for impairment | 5,278 | 7,028 | 5,278 | 7,028 | |
Loans and leases, excluding acquired impaired loans | 799,711 | 759,258 | 799,711 | 759,258 | 785,796 |
Loans and leases, individually evaluated for impairment | 1,137 | 2,313 | 1,137 | 2,313 | |
Loans and leases, collectively evaluated for impairment | 798,574 | 756,945 | 798,574 | 756,945 | |
Installment | |||||
Allowance for Loan and Lease Losses | |||||
Beginning Balance | 2,208 | 2,284 | 2,228 | 1,842 | |
Charge-offs | (240) | (76) | (748) | (264) | |
Recoveries | 204 | 158 | 622 | 1,490 | |
Net recoveries (charge-offs) | (36) | 82 | (126) | 1,226 | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | 118 | 18 | 188 | (684) | |
Ending Balance | 2,290 | 2,384 | 2,290 | 2,384 | |
Allowance collectively evaluated for impairment | 2,290 | 2,384 | 2,290 | 2,384 | |
Loans and leases, excluding acquired impaired loans | 206,156 | 178,803 | 206,156 | 178,803 | $ 184,613 |
Loans and leases, collectively evaluated for impairment | 206,156 | 178,803 | 206,156 | 178,803 | |
Qualitative | |||||
Allowance for Loan and Lease Losses | |||||
Beginning Balance | 116,035 | 108,000 | 121,301 | 108,393 | |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (9,620) | 2,267 | (12,673) | 2,070 | |
Transfers from (to) reserve for off-balance sheet credit commitments | 52 | (1,123) | (2,161) | (1,319) | |
Ending Balance | 106,467 | 109,144 | 106,467 | 109,144 | |
Allowance collectively evaluated for impairment | $ 106,467 | $ 109,144 | $ 106,467 | $ 109,144 |
Loans, Allowance for Loan and58
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 5) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Recorded Investment | |||||
With no related allowance recorded | $ 37,605 | $ 43,708 | $ 37,605 | $ 43,708 | $ 45,611 |
With an allowance recorded | 22,287 | 14,867 | 22,287 | 14,867 | 15,611 |
Total impaired loans | 59,892 | 58,575 | 59,892 | 58,575 | 61,222 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 47,087 | 49,654 | 47,087 | 49,654 | 51,987 |
With an allowance recorded | 26,539 | 17,691 | 26,539 | 17,691 | 18,352 |
Total impaired loans | 73,626 | 67,345 | 73,626 | 67,345 | 70,339 |
Related Allowance | |||||
Total impaired loans | 2,609 | 1,595 | 2,609 | 1,595 | 728 |
Average Recorded Investment | |||||
With no related allowance recorded | 36,391 | 50,899 | 38,828 | 64,807 | |
With an allowance recorded | 18,778 | 23,196 | 17,074 | 22,593 | |
Total impaired loans | 55,169 | 74,095 | 55,902 | 87,400 | |
Interest Income Recognized | |||||
With no related allowance recorded | 315 | 343 | 883 | 1,387 | |
With an allowance recorded | 121 | 73 | 358 | 203 | |
Total impaired loans | 436 | 416 | 1,241 | 1,590 | |
Commercial | |||||
Recorded Investment | |||||
With no related allowance recorded | 4,784 | 6,653 | 4,784 | 6,653 | 8,894 |
With an allowance recorded | 13,401 | 9,663 | 13,401 | 9,663 | 6,470 |
Total impaired loans | 18,185 | 16,316 | 18,185 | 16,316 | 15,364 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 10,605 | 6,684 | 10,605 | 6,684 | 9,182 |
With an allowance recorded | 17,347 | 12,134 | 17,347 | 12,134 | 8,878 |
Total impaired loans | 27,952 | 18,818 | 27,952 | 18,818 | 18,060 |
Related Allowance | |||||
Total impaired loans | 2,315 | 1,304 | 2,315 | 1,304 | 399 |
Average Recorded Investment | |||||
With no related allowance recorded | 3,619 | 6,817 | 4,395 | 10,653 | |
With an allowance recorded | 9,869 | 15,957 | 8,090 | 15,869 | |
Total impaired loans | 13,488 | 22,774 | 12,485 | 26,522 | |
Interest Income Recognized | |||||
With no related allowance recorded | 71 | 38 | 94 | 205 | |
With an allowance recorded | 95 | 138 | |||
Total impaired loans | 166 | 38 | 232 | 205 | |
Commercial real estate mortgages | |||||
Recorded Investment | |||||
With no related allowance recorded | 17,921 | 20,347 | 17,921 | 20,347 | 19,858 |
With an allowance recorded | 4,997 | 5,204 | 4,997 | 5,204 | 5,184 |
Total impaired loans | 22,918 | 25,551 | 22,918 | 25,551 | 25,042 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 19,095 | 22,698 | 19,095 | 22,698 | 22,416 |
With an allowance recorded | 5,311 | 5,557 | 5,311 | 5,557 | 5,526 |
Total impaired loans | 24,406 | 28,255 | 24,406 | 28,255 | 27,942 |
Related Allowance | |||||
Total impaired loans | 255 | 291 | 255 | 291 | 281 |
Average Recorded Investment | |||||
With no related allowance recorded | 17,947 | 24,290 | 18,398 | 29,478 | |
With an allowance recorded | 5,008 | 5,214 | 5,061 | 5,293 | |
Total impaired loans | 22,955 | 29,504 | 23,459 | 34,771 | |
Interest Income Recognized | |||||
With no related allowance recorded | 200 | 219 | 605 | 903 | |
With an allowance recorded | 73 | 142 | 191 | ||
Total impaired loans | 200 | 292 | 747 | 1,094 | |
Residential mortgages | |||||
Recorded Investment | |||||
With no related allowance recorded | 7,961 | 7,785 | 7,961 | 7,785 | 7,980 |
With an allowance recorded | 3,889 | 3,889 | 3,957 | ||
Total impaired loans | 11,850 | 7,785 | 11,850 | 7,785 | 11,937 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 8,255 | 8,139 | 8,255 | 8,139 | 8,256 |
With an allowance recorded | 3,881 | 3,881 | 3,948 | ||
Total impaired loans | 12,136 | 8,139 | 12,136 | 8,139 | 12,204 |
Related Allowance | |||||
Total impaired loans | 39 | 39 | 48 | ||
Average Recorded Investment | |||||
With no related allowance recorded | 7,981 | 7,190 | 7,915 | 7,456 | |
With an allowance recorded | 3,901 | 2,000 | 3,923 | 1,419 | |
Total impaired loans | 11,882 | 9,190 | 11,838 | 8,875 | |
Interest Income Recognized | |||||
With no related allowance recorded | 14 | 50 | 40 | 98 | |
With an allowance recorded | 26 | 78 | 11 | ||
Total impaired loans | 40 | 50 | 118 | 109 | |
Fixed | |||||
Recorded Investment | |||||
With no related allowance recorded | 7,961 | 2,015 | 7,961 | 2,015 | 7,756 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 8,255 | 2,254 | 8,255 | 2,254 | 7,994 |
Average Recorded Investment | |||||
With no related allowance recorded | 7,981 | 3,406 | 7,859 | 3,459 | |
Interest Income Recognized | |||||
With no related allowance recorded | 14 | 10 | 40 | 30 | |
Variable | |||||
Recorded Investment | |||||
With no related allowance recorded | 5,770 | 5,770 | 224 | ||
With an allowance recorded | 3,889 | 3,889 | 3,957 | ||
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 5,885 | 5,885 | 262 | ||
With an allowance recorded | 3,881 | 3,881 | 3,948 | ||
Related Allowance | |||||
Total impaired loans | 39 | 39 | 48 | ||
Average Recorded Investment | |||||
With no related allowance recorded | 3,784 | 56 | 3,997 | ||
With an allowance recorded | 3,901 | 2,000 | 3,923 | 1,419 | |
Interest Income Recognized | |||||
With no related allowance recorded | 40 | 68 | |||
With an allowance recorded | 26 | 78 | 11 | ||
Real estate construction | |||||
Recorded Investment | |||||
With no related allowance recorded | 5,802 | 6,610 | 5,802 | 6,610 | 6,609 |
Total impaired loans | 5,802 | 6,610 | 5,802 | 6,610 | 6,609 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 6,885 | 8,758 | 6,885 | 8,758 | 8,758 |
Total impaired loans | 6,885 | 8,758 | 6,885 | 8,758 | 8,758 |
Average Recorded Investment | |||||
With no related allowance recorded | 5,809 | 9,728 | 6,801 | 14,335 | |
Total impaired loans | 5,809 | 9,728 | 6,801 | 14,335 | |
Interest Income Recognized | |||||
With no related allowance recorded | 28 | 35 | 142 | 180 | |
Total impaired loans | 28 | 35 | 142 | 180 | |
Construction | |||||
Average Recorded Investment | |||||
With no related allowance recorded | 2,742 | ||||
Interest Income Recognized | |||||
With no related allowance recorded | 76 | ||||
Land. | |||||
Recorded Investment | |||||
With no related allowance recorded | 5,802 | 6,610 | 5,802 | 6,610 | 6,609 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 6,885 | 8,758 | 6,885 | 8,758 | 8,758 |
Average Recorded Investment | |||||
With no related allowance recorded | 5,809 | 9,728 | 6,801 | 11,593 | |
Interest Income Recognized | |||||
With no related allowance recorded | 28 | 35 | 142 | 104 | |
Home equity loans and lines of credit | |||||
Recorded Investment | |||||
With no related allowance recorded | 1,137 | 2,313 | 1,137 | 2,313 | 2,270 |
Total impaired loans | 1,137 | 2,313 | 1,137 | 2,313 | 2,270 |
Unpaid Contractual Principal Balance | |||||
With no related allowance recorded | 2,247 | 3,375 | 2,247 | 3,375 | 3,375 |
Total impaired loans | 2,247 | 3,375 | 2,247 | 3,375 | $ 3,375 |
Average Recorded Investment | |||||
With no related allowance recorded | 1,035 | 2,874 | 1,319 | 2,881 | |
Total impaired loans | 1,035 | 2,874 | 1,319 | 2,881 | |
Interest Income Recognized | |||||
With no related allowance recorded | 2 | 2 | |||
Total impaired loans | $ 2 | $ 2 | |||
Installment | |||||
Average Recorded Investment | |||||
With no related allowance recorded | 4 | ||||
With an allowance recorded | 25 | 12 | |||
Total impaired loans | 25 | 16 | |||
Interest Income Recognized | |||||
With no related allowance recorded | 1 | 1 | |||
With an allowance recorded | 1 | ||||
Total impaired loans | 1 | 2 | |||
Consumer Installment loan | |||||
Average Recorded Investment | |||||
With no related allowance recorded | 4 | ||||
With an allowance recorded | 25 | 12 | |||
Interest Income Recognized | |||||
With no related allowance recorded | $ 1 | 1 | |||
With an allowance recorded | $ 1 |
Loans, Allowance for Loan and59
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 6) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)item | Sep. 30, 2014item | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($)item | Dec. 31, 2014USD ($) | |
Financing Receivable, Impaired | |||||
Impaired loans on accrual status | $ 33,100 | $ 33,100 | $ 30,600 | ||
TDR loans | 27,300 | 27,300 | 34,300 | ||
Specific Reserves | $ 400 | 400 | $ 700 | ||
Decrease to TDR loans | 8,500 | ||||
Charge off to TDR loans | $ 3,100 | ||||
Total Troubled Debt Restructured Loans | |||||
Financing Receivable, Impaired | |||||
Number of Contracts | item | 4 | 0 | 8 | 5 | |
Pre-Modification Outstanding Principal | $ 2,967 | $ 4,405 | $ 8,824 | ||
Period-End Outstanding Principal | $ 2,960 | $ 4,270 | 8,446 | ||
Financial Effects | $ 55 | ||||
Commercial | |||||
Financing Receivable, Impaired | |||||
Number of Contracts | item | 2 | 3 | 2 | ||
Pre-Modification Outstanding Principal | $ 2,575 | $ 3,206 | $ 4,098 | ||
Period-End Outstanding Principal | $ 2,570 | $ 3,091 | $ 3,799 | ||
Commercial real estate mortgages | |||||
Financing Receivable, Impaired | |||||
Number of Contracts | item | 1 | 2 | |||
Pre-Modification Outstanding Principal | $ 187 | $ 605 | |||
Period-End Outstanding Principal | $ 185 | $ 593 | |||
Fixed | |||||
Financing Receivable, Impaired | |||||
Number of Contracts | item | 1 | ||||
Pre-Modification Outstanding Principal | $ 302 | ||||
Period-End Outstanding Principal | $ 299 | ||||
Variable | |||||
Financing Receivable, Impaired | |||||
Number of Contracts | item | 2 | ||||
Pre-Modification Outstanding Principal | $ 4,676 | ||||
Period-End Outstanding Principal | 4,647 | ||||
Financial Effects | $ 5 | ||||
Home equity loans and lines of credit | |||||
Financing Receivable, Impaired | |||||
Number of Contracts | item | 1 | 2 | |||
Pre-Modification Outstanding Principal | $ 205 | $ 292 | |||
Period-End Outstanding Principal | $ 205 | $ 287 | |||
Consumer Installment loan | |||||
Financing Receivable, Impaired | |||||
Number of Contracts | item | 1 | ||||
Pre-Modification Outstanding Principal | $ 50 | ||||
Financial Effects | $ 50 |
Loans, Allowance for Loan and60
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 7) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015USD ($)item | Sep. 30, 2015USD ($)item | Sep. 30, 2014item | |
Troubled debt restructured loans | |||
Commitments to lend additional funds on restructured loans | $ 300 | $ 300 | |
Total Troubled Debt Restructured Loans | |||
Troubled debt restructured loans | |||
Number of contracts | item | 2 | 3 | 0 |
Period-End Outstanding Principal | $ 2,570 | $ 2,634 | |
Commercial | |||
Troubled debt restructured loans | |||
Number of contracts | item | 2 | 2 | |
Period-End Outstanding Principal | $ 2,570 | $ 2,570 | |
Commercial real estate mortgages | |||
Troubled debt restructured loans | |||
Number of contracts | item | 1 | ||
Period-End Outstanding Principal | $ 64 |
Loans, Allowance for Loan and61
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 8) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Past Due Loans and Leases | |||
30-59 Days Past Due | $ 10,224 | $ 9,800 | |
60-89 Days Past Due | 13,304 | 2,103 | |
Greater Than 90 Days and Accruing | 3,461 | 1,515 | |
Nonaccrual | 34,522 | 42,167 | |
Total Past Due and Nonaccrual Loans | 61,511 | 55,585 | |
Current | 22,475,073 | 20,281,621 | |
Total Loans and Leases | 22,536,584 | 20,337,206 | $ 19,347,988 |
Commercial | |||
Past Due Loans and Leases | |||
30-59 Days Past Due | 5,094 | 8,462 | |
60-89 Days Past Due | 1,550 | 325 | |
Greater Than 90 Days and Accruing | 148 | ||
Nonaccrual | 14,728 | 15,096 | |
Total Past Due and Nonaccrual Loans | 21,372 | 24,031 | |
Current | 10,232,220 | 9,336,945 | |
Total Loans and Leases | 10,253,592 | 9,360,976 | |
Commercial real estate mortgages | |||
Past Due Loans and Leases | |||
30-59 Days Past Due | 3,847 | 693 | |
Nonaccrual | 2,368 | 3,575 | |
Total Past Due and Nonaccrual Loans | 6,215 | 4,268 | |
Current | 3,941,531 | 3,535,435 | |
Total Loans and Leases | 3,947,746 | 3,539,703 | 3,565,188 |
Residential mortgages | |||
Past Due Loans and Leases | |||
60-89 Days Past Due | 8,157 | 1,474 | |
Greater Than 90 Days and Accruing | 2,458 | 921 | |
Nonaccrual | 10,588 | 11,943 | |
Total Past Due and Nonaccrual Loans | 21,203 | 14,338 | |
Current | 5,688,069 | 5,092,465 | |
Total Loans and Leases | 5,709,272 | 5,106,803 | 5,023,213 |
Fixed | |||
Past Due Loans and Leases | |||
60-89 Days Past Due | 2,556 | 309 | |
Greater Than 90 Days and Accruing | 305 | 921 | |
Nonaccrual | 10,000 | 10,365 | |
Total Past Due and Nonaccrual Loans | 12,861 | 11,595 | |
Current | 1,475,111 | 1,390,357 | |
Total Loans and Leases | 1,487,972 | 1,401,952 | |
Variable | |||
Past Due Loans and Leases | |||
60-89 Days Past Due | 5,601 | 1,165 | |
Greater Than 90 Days and Accruing | 2,153 | ||
Nonaccrual | 588 | 1,578 | |
Total Past Due and Nonaccrual Loans | 8,342 | 2,743 | |
Current | 4,212,958 | 3,702,108 | |
Total Loans and Leases | 4,221,300 | 3,704,851 | |
Real estate construction | |||
Past Due Loans and Leases | |||
Nonaccrual | 3,460 | 6,598 | |
Total Past Due and Nonaccrual Loans | 3,460 | 6,598 | |
Current | 928,962 | 703,626 | |
Total Loans and Leases | 932,422 | 710,224 | 585,232 |
Construction | |||
Past Due Loans and Leases | |||
Current | 900,928 | 686,990 | |
Total Loans and Leases | 900,928 | 686,990 | |
Land. | |||
Past Due Loans and Leases | |||
Nonaccrual | 3,460 | 6,598 | |
Total Past Due and Nonaccrual Loans | 3,460 | 6,598 | |
Current | 28,034 | 16,636 | |
Total Loans and Leases | 31,494 | 23,234 | |
Home equity loans and lines of credit | |||
Past Due Loans and Leases | |||
30-59 Days Past Due | 910 | ||
60-89 Days Past Due | 3,072 | 39 | |
Greater Than 90 Days and Accruing | 460 | 100 | |
Nonaccrual | 3,340 | 4,864 | |
Total Past Due and Nonaccrual Loans | 7,782 | 5,003 | |
Current | 791,929 | 780,793 | |
Total Loans and Leases | 799,711 | 785,796 | 759,258 |
Installment | |||
Past Due Loans and Leases | |||
30-59 Days Past Due | 373 | 324 | |
60-89 Days Past Due | 68 | 113 | |
Greater Than 90 Days and Accruing | 543 | 346 | |
Nonaccrual | 37 | 84 | |
Total Past Due and Nonaccrual Loans | 1,021 | 867 | |
Current | 205,135 | 183,746 | |
Total Loans and Leases | 206,156 | 184,613 | $ 178,803 |
Commercial Installment loan | |||
Past Due Loans and Leases | |||
Current | 228 | 298 | |
Total Loans and Leases | 228 | 298 | |
Consumer Installment loan | |||
Past Due Loans and Leases | |||
30-59 Days Past Due | 373 | 324 | |
60-89 Days Past Due | 68 | 113 | |
Greater Than 90 Days and Accruing | 543 | 346 | |
Nonaccrual | 37 | 84 | |
Total Past Due and Nonaccrual Loans | 1,021 | 867 | |
Current | 204,907 | 183,448 | |
Total Loans and Leases | 205,928 | 184,315 | |
Lease financing | |||
Past Due Loans and Leases | |||
30-59 Days Past Due | 321 | ||
60-89 Days Past Due | 457 | 152 | |
Nonaccrual | 1 | 7 | |
Total Past Due and Nonaccrual Loans | 458 | 480 | |
Current | 687,227 | 648,611 | |
Total Loans and Leases | $ 687,685 | $ 649,091 |
Loans, Allowance for Loan and62
Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Detail 9) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | $ 22,536,584 | $ 19,347,988 | $ 22,536,584 | $ 19,347,988 | $ 20,337,206 |
Covered Loans Allowance | |||||
Balance, beginning of period | 8,075 | 9,103 | 8,608 | 15,922 | |
Provision for losses | 1,148 | 589 | 2,736 | 3,783 | |
Change in allowance due to loan removals | (3,575) | (324) | (5,696) | (10,337) | |
Balance, end of period | 5,648 | 9,368 | 5,648 | 9,368 | |
Acquired impaired loans | |||||
Covered Loans Allowance | |||||
Loans on nonaccrual status | 0 | 0 | 0 | ||
Acquired impaired loans 30 to 89 days delinquent | 900 | 900 | 7,400 | ||
Loans 90 days or more past due on accrual status | 20,400 | 20,400 | 28,300 | ||
Commercial | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 10,253,592 | 10,253,592 | 9,360,976 | ||
Commercial real estate mortgages | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 3,947,746 | 3,565,188 | 3,947,746 | 3,565,188 | 3,539,703 |
Residential mortgages | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 5,709,272 | 5,023,213 | 5,709,272 | 5,023,213 | 5,106,803 |
Fixed | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 1,487,972 | 1,487,972 | 1,401,952 | ||
Variable | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 4,221,300 | 4,221,300 | 3,704,851 | ||
Real estate construction | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 932,422 | 585,232 | 932,422 | 585,232 | 710,224 |
Construction | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 900,928 | 900,928 | 686,990 | ||
Land. | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 31,494 | 31,494 | 23,234 | ||
Home equity loans and lines of credit | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 799,711 | 759,258 | 799,711 | 759,258 | 785,796 |
Installment | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 206,156 | $ 178,803 | 206,156 | $ 178,803 | 184,613 |
Commercial Installment loan | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 228 | 228 | 298 | ||
Consumer Installment loan | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 205,928 | 205,928 | 184,315 | ||
Lease financing | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 687,685 | 687,685 | 649,091 | ||
Nonclassified | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 22,304,555 | 22,304,555 | 20,146,374 | ||
Nonclassified | Commercial | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 10,153,594 | 10,153,594 | 9,304,636 | ||
Nonclassified | Commercial real estate mortgages | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 3,905,035 | 3,905,035 | 3,511,229 | ||
Nonclassified | Residential mortgages | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 5,659,313 | 5,659,313 | 5,050,898 | ||
Nonclassified | Fixed | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 1,467,932 | 1,467,932 | 1,375,175 | ||
Nonclassified | Variable | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 4,191,381 | 4,191,381 | 3,675,723 | ||
Nonclassified | Real estate construction | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 926,630 | 926,630 | 696,380 | ||
Nonclassified | Construction | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 900,928 | 900,928 | 679,744 | ||
Nonclassified | Land. | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 25,702 | 25,702 | 16,636 | ||
Nonclassified | Home equity loans and lines of credit | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 773,425 | 773,425 | 754,694 | ||
Nonclassified | Installment | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 205,457 | 205,457 | 183,488 | ||
Nonclassified | Commercial Installment loan | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 228 | 228 | 298 | ||
Nonclassified | Consumer Installment loan | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 205,229 | 205,229 | 183,190 | ||
Nonclassified | Lease financing | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 681,101 | 681,101 | 645,049 | ||
Classified | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 232,029 | 232,029 | 190,832 | ||
Classified | Commercial | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 99,998 | 99,998 | 56,340 | ||
Classified | Commercial real estate mortgages | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 42,711 | 42,711 | 28,474 | ||
Classified | Residential mortgages | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 49,959 | 49,959 | 55,905 | ||
Classified | Fixed | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 20,040 | 20,040 | 26,777 | ||
Classified | Variable | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 29,919 | 29,919 | 29,128 | ||
Classified | Real estate construction | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 5,792 | 5,792 | 13,844 | ||
Classified | Construction | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 7,246 | ||||
Classified | Land. | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 5,792 | 5,792 | 6,598 | ||
Classified | Home equity loans and lines of credit | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 26,286 | 26,286 | 31,102 | ||
Classified | Installment | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 699 | 699 | 1,125 | ||
Classified | Consumer Installment loan | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | 699 | 699 | 1,125 | ||
Classified | Lease financing | |||||
Financing Receivable, Recorded Investment | |||||
Loans and leases, excluding acquired impaired loans | $ 6,584 | $ 6,584 | $ 4,042 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
OREO activity | |||||
Balance, beginning of period | $ 17,268 | $ 22,213 | $ 23,496 | $ 38,092 | |
Additions | 285 | 7,233 | 4,200 | 11,364 | |
Sales | (2,963) | (4,449) | (11,367) | (23,357) | |
Valuation adjustments | (696) | (395) | (2,435) | (1,497) | |
Balance, end of period | 13,894 | 24,602 | 13,894 | 24,602 | |
OREO Valuation Allowances | 2,400 | 2,400 | $ 7,400 | ||
Non-Covered OREO | |||||
OREO activity | |||||
Balance, beginning of period | 5,957 | 4,269 | 10,736 | 12,611 | |
Additions | 5,957 | 6,068 | |||
Sales | (83) | (4,779) | (8,523) | ||
Valuation adjustments | (373) | (28) | (373) | (41) | |
Balance, end of period | 5,584 | 10,115 | 5,584 | 10,115 | |
Residential mortgage loans in process of foreclosure | 7,300 | ||||
Covered OREO | |||||
OREO activity | |||||
Balance, beginning of period | 11,311 | 17,944 | 12,760 | 25,481 | |
Additions | 285 | 1,276 | 4,200 | 5,296 | |
Sales | (2,963) | (4,366) | (6,588) | (14,834) | |
Valuation adjustments | (323) | (367) | (2,062) | (1,456) | |
Balance, end of period | $ 8,310 | $ 14,487 | $ 8,310 | $ 14,487 | |
FDIC reimbursement (as a percent) | 80.00% | ||||
Payable to FDIC (as a percent) | 80.00% |
Borrowed Funds (Detail)
Borrowed Funds (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Short-term borrowings | ||
Total short-term borrowings | $ 6,490 | $ 322,861 |
Long-term debt | ||
Long-term debt | 650,078 | 638,600 |
5.25% Senior Notes Due September 2020 | City National Corporation | ||
Long-term debt | ||
Long-term debt | $ 299,597 | $ 299,540 |
Fixed interest rate (as a percent) | 5.25% | 5.25% |
9.00% Subordinated Notes Due August 2019 | City National Bank: | ||
Long-term debt | ||
Long-term debt | $ 75,000 | $ 75,000 |
Fixed interest rate (as a percent) | 9.00% | 9.00% |
5.375% Subordinated Notes Due July 2022 | City National Bank: | ||
Long-term debt | ||
Long-term debt | $ 149,995 | $ 149,994 |
Fixed interest rate (as a percent) | 5.375% | 5.375% |
Floating Rate Securities Due November 2034 | Business Bancorp Capital Trust I | ||
Long-term debt | ||
Long-term debt | $ 5,155 | $ 5,155 |
Variable rate basis | three-month LIBOR | |
Basis spread (as a percent) | 1.965% | |
Interest rate as of reporting date (as a percent) | 2.29% | |
Nonrecourse debt | ||
Short-term borrowings | ||
Current portion of nonrecourse debt | $ 6,490 | 2,861 |
Long-term debt | ||
Long-term debt | $ 110,713 | 99,139 |
Average interest rate (as a percent) | 3.83% | |
Other long-term debt | ||
Long-term debt | ||
Long-term debt | $ 9,618 | 9,772 |
Fixed interest rate (as a percent) | 5.64% | |
Federal funds purchased | ||
Short-term borrowings | ||
Federal funds purchased | $ 320,000 |
Shareholders' Equity (Detail)
Shareholders' Equity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Jul. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Components of AOCI | |||||||
Net unrealized gain ( loss) on securities available-for-sale | $ 2,528 | $ 2,528 | $ 2,528 | $ (7,070) | |||
Foreign currency translation adjustments | (28) | (28) | (28) | (4) | |||
Total accumulated other comprehensive income (loss) | $ 2,500 | 2,500 | 2,500 | $ (7,074) | |||
Securities available-for-sale: | |||||||
Net unrealized gains (losses) arising during the period | 7,741 | $ (16,386) | 20,617 | $ 21,646 | |||
Reclassification adjustment for net gains included in net income | (12) | (7) | (3,703) | (7,558) | |||
Non-credit related impairment loss | (325) | (243) | (325) | (243) | |||
Total securities available for sale | 7,404 | (16,636) | 16,589 | 13,845 | |||
Foreign currency translation adjustments | (17) | (24) | |||||
Total other comprehensive income (loss) | 7,387 | (16,636) | 16,565 | 13,845 | |||
Components and related tax effects of other comprehensive income (loss) | |||||||
Net unrealized gains (losses) arising during the period | 3,268 | (6,839) | 8,676 | 9,060 | |||
Reclassification adjustment for net gains included in net income, taxes | (5) | (3) | (1,549) | (3,162) | |||
Non-credit related impairment loss, taxes | (136) | (102) | (136) | (102) | |||
Total securities available for sale | 3,127 | (6,944) | 6,991 | 5,796 | |||
Total other comprehensive income | 3,127 | (6,944) | 6,991 | 5,796 | |||
Components of other comprehensive income (loss), net of tax | |||||||
Net unrealized gains (losses) arising during the period | 4,473 | (9,547) | 11,941 | 12,586 | |||
Reclassification adjustment for net gains/losses included in net income | (7) | (4) | (2,154) | (4,396) | |||
Non-credit related impairment loss | (189) | (141) | (189) | (141) | |||
Total securities available for sale | 4,277 | (9,692) | 9,598 | 8,049 | |||
Foreign currency translation adjustments | (17) | (24) | |||||
Total other comprehensive (loss) income | $ 4,260 | $ (9,692) | $ 9,574 | $ 8,049 | |||
Common shares repurchased | |||||||
Total number of Shares Purchased | 2,897 | 1,609 | 4,506 | ||||
Average Price Paid per Share (in dollars per share) | $ 86.89 | $ 89.65 | $ 87.87 |
Earnings per Common Share (Deta
Earnings per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic EPS: | ||||
Net income attributable to City National Corporation | $ 71,808 | $ 69,891 | $ 201,873 | $ 189,182 |
Less: Dividends on preferred stock | 4,093 | 4,093 | 12,281 | 12,281 |
Net income available to common shareholders | 67,715 | 65,798 | 189,592 | 176,901 |
Less: Earnings allocated to participating securities | 576 | 644 | 1,664 | 1,801 |
Earnings allocated to common shareholders | $ 67,139 | $ 65,154 | $ 187,928 | $ 175,100 |
Weighted-average common shares outstanding | 55,829 | 55,031 | 55,668 | 54,893 |
Basic earnings per common share (in dollars per share) | $ 1.20 | $ 1.18 | $ 3.38 | $ 3.19 |
Diluted EPS: | ||||
Earnings allocated to common shareholders | $ 67,143 | $ 65,160 | $ 187,943 | $ 175,116 |
Weighted-average common shares outstanding | 55,829 | 55,031 | 55,668 | 54,893 |
Dilutive effect of equity awards (in shares) | 858 | 734 | 884 | 723 |
Weighted-average diluted common shares outstanding | 56,687 | 55,765 | 56,552 | 55,616 |
Diluted earnings per common share (in dollars per share) | $ 1.18 | $ 1.17 | $ 3.32 | $ 3.15 |
Stock options | ||||
Antidilutive securities not included in calculation of diluted EPS: | ||||
Antidilutive securities not included in calculation of diluted EPS (in shares) | 400 | 700 | 400 | 700 |
Share-Based Compensation (Detai
Share-Based Compensation (Detail) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)planshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)plan$ / sharesshares | Sep. 30, 2014USD ($)$ / shares | |
Share-based compensation | ||||
Number of share-based compensation plans | plan | 1 | 1 | ||
Shares available for future grants | shares | 2.4 | 2.4 | ||
Compensation cost recognized for share-based awards | $ 4,700 | $ 5,500 | $ 15,900 | $ 16,100 |
Total income tax benefit recognized for share-based compensation arrangements | $ 2,000 | $ 2,300 | 6,700 | 6,700 |
Cash received from the exercise of stock options | 30,737 | 21,734 | ||
Actual tax benefit realized for the tax deductions from stock option exercises | $ 6,000 | $ 3,200 | ||
Stock options | ||||
Share-based compensation, fair value | ||||
Weighted-average volatility (as a percent) | 26.35% | 27.08% | 26.66% | 27.35% |
Dividend yield (as a percent) | 1.58% | 1.72% | 1.55% | 1.79% |
Expected term | 5 years 5 months 16 days | 5 years 5 months 16 days | 6 years 18 days | 6 years 22 days |
Risk-free interest rate (as a percent) | 1.76% | 1.97% | 1.78% | 1.99% |
Weighted-average grant-date fair values of options granted (in dollars per share) | $ / shares | $ 21.79 | $ 17.93 | ||
Total intrinsic value of options exercised | $ 15,800 | $ 7,700 |
Share-Based Compensation (Det68
Share-Based Compensation (Detail 2) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of option activity and related information | ||
Number of Options Outstanding, beginning of the period (in shares) | 3,971,000 | |
Number of options granted (in shares) | 377,000 | |
Number of options exercised (in shares) | (516,000) | |
Number of options forfeited or expired (in shares) | (33,000) | |
Number of Options Outstanding, end of the period (in shares) | 3,799,000 | |
Weighted-Average Exercise Price of Options Outstanding, beginning of the period (in dollars per share) | $ 57.40 | |
Weighted-Average Exercise Price of Options Granted (in dollars per share) | 90.47 | |
Weighted-Average Exercise Price of Options Exercised (in dollars per share) | 59.60 | |
Weighted-Average Exercise Price of Options Forfeited or expired (in dollars per share) | 67.64 | |
Weighted-Average Exercise Price of Options Outstanding, end of the period (in dollars per share) | $ 60.29 | |
Outstanding Aggregate Intrinsic Value of in-the-money Options | $ 106,387 | |
Weighted-Average Remaining Contractual Term Outstanding | 5 years 3 months 29 days | |
Number of Options Exercisable (in shares) | 2,691,000 | |
Weighted-Average Exercise Price of options exercisable (in dollars per share) | $ 55.62 | |
Aggregate Intrinsic Value of in-the-money Options Exercisable | $ 87,297 | |
Weighted-Average Remaining Contractual Term Exercisable | 4 years 1 month 13 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options Unvested and related information | ||
Unvested at the beginning of the period (in shares) | 1,269,000 | |
Granted (in shares) | 377,000 | |
Vested (in shares) | (514,850) | (551,992) |
Forfeited (in shares) | (23,000) | |
Unvested at the end of the period (in shares) | 1,108,000 | |
Unvested at the beginning of the period (in dollars per share) | $ 14.80 | |
Granted (in dollars per share) | 21.79 | $ 17.93 |
Vested (in dollars per share) | 14.78 | |
Forfeited (in dollars per share) | 15.41 | |
Unvested at the end of the period (in dollars per share) | $ 17.17 | |
Total fair value of options vested | $ 7,600 | $ 8,100 |
Unrecognized compensation cost related to unvested stock options granted | $ 13,200 | |
Period of recognition for unrecognized compensation cost related to unvested stock options granted | 2 years 7 months 6 days |
Share-Based Compensation (Det69
Share-Based Compensation (Detail 3) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of changes in restricted stock and related information | ||
Weighted-Average Grant Date Fair Value Granted (in dollars per share) | $ 90.47 | |
Restricted stock | ||
Summary of changes in restricted stock and related information | ||
Unvested at the beginning of the period (in shares) | 525,000 | |
Granted (in shares) | 100,000 | |
Vested (in shares) | (145,663) | (180,799) |
Forfeited (in shares) | (5,000) | |
Unvested at the end of the period (in shares) | 474,000 | |
Weighted-Average Grant Date Fair Value, beginning of the period (in dollars per share) | $ 60.60 | |
Weighted-Average Grant Date Fair Value Granted (in dollars per share) | 90.47 | $ 73.64 |
Weighted-Average Grant Date Fair Value Vested (in dollars per share) | 54.80 | |
Weighted-Average Grant Date Fair Value Forfeited (in dollars per share) | 68 | |
Weighted-Average Grant Date Fair Value, end of the period (in dollars per share) | $ 68.60 | |
Total fair value of awards vested during the period | $ 8 | $ 8 |
Unrecognized compensation cost | $ 16.2 | |
Period for recognition of unrecognized compensation cost | 3 years 3 months 18 days | |
Cash-settled restricted stock units | ||
Summary of changes in restricted stock and related information | ||
Unvested at the beginning of the period (in shares) | 174,000 | |
Granted (in shares) | 14,000 | |
Vested (in shares) | (44,000) | |
Forfeited (in shares) | (3,000) | |
Unvested at the end of the period (in shares) | 141,000 |
Derivative Instruments (Detail)
Derivative Instruments (Detail) $ in Millions | Sep. 30, 2015USD ($)item | Dec. 31, 2014USD ($)item |
Derivative | ||
Number of Hedging instruments | item | 0 | 0 |
Derivatives not designated as hedging instruments | ||
Derivative | ||
Notional Amount | $ 4,843.1 | $ 4,344.7 |
Derivative Assets | 82.4 | 53.2 |
Derivative Liabilities | 82 | 52.9 |
Derivatives not designated as hedging instruments | Option contracts | ||
Derivative | ||
Notional Amount | 1.9 | |
Derivative Assets | 0.4 | |
Derivatives not designated as hedging instruments | Interest-Rate Contracts | ||
Derivative | ||
Notional Amount | 4,021.7 | 3,531.8 |
Derivative Assets | 71.7 | 45.5 |
Derivative Liabilities | 73.2 | 46 |
Derivatives not designated as hedging instruments | Interest-Rate Swaps | ||
Derivative | ||
Notional Amount | 3,556.1 | 3,094.5 |
Derivative Assets | 71.5 | 44.7 |
Derivative Liabilities | 73 | 45.2 |
Derivatives not designated as hedging instruments | Interest Rate Caps, Floors and Collars | ||
Derivative | ||
Notional Amount | 465.6 | 437.3 |
Derivative Assets | 0.2 | 0.8 |
Derivative Liabilities | 0.2 | 0.8 |
Derivatives not designated as hedging instruments | Spot and forward contracts | ||
Derivative | ||
Notional Amount | 815.9 | 802.7 |
Derivative Assets | 8.5 | 6.1 |
Derivative Liabilities | 8.8 | 6.6 |
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | ||
Derivative | ||
Notional Amount | 815.9 | 808.7 |
Derivative Assets | 8.5 | 6.4 |
Derivative Liabilities | 8.8 | 6.9 |
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | Options purchased | Purchase | ||
Derivative | ||
Notional Amount | 3 | |
Derivative Assets | 0.1 | |
Derivative Liabilities | 0.1 | |
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | Options purchased | Sale | ||
Derivative | ||
Notional Amount | 3 | |
Derivative Assets | 0.2 | |
Derivative Liabilities | 0.2 | |
Equity Warrants | Derivatives not designated as hedging instruments | ||
Derivative | ||
Notional Amount | 5.5 | 2.3 |
Derivative Assets | $ 2.2 | $ 0.9 |
Derivative Instruments (Detail
Derivative Instruments (Detail 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Foreign Exchange Contracts | |||||
Credit Risk Exposure and Collateral | |||||
Cash collateral received | $ 1 | $ 1 | |||
Cash collateral delivered | 1.1 | 1.1 | |||
Derivatives not designated as hedging instruments | |||||
Derivative instruments gain (loss) | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | 7.2 | $ 8.8 | 23.4 | $ 23.4 | |
Derivatives not designated as hedging instruments | Interest-Rate Contracts | Other noninterest income | |||||
Derivative instruments gain (loss) | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | (1.3) | (0.9) | (1) | ||
Derivatives not designated as hedging instruments | Option contracts. | Other noninterest income | |||||
Derivative instruments gain (loss) | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | 0.1 | (0.1) | 0.1 | ||
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | International services income | |||||
Derivative instruments gain (loss) | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | 8.3 | $ 8.7 | 24.1 | 24.2 | |
Derivatives designated and not designated as hedging instruments | |||||
Credit Risk Exposure and Collateral | |||||
Aggregate fair value of derivatives with credit-risk-related contingent features, net liability position | 22 | 22 | |||
Collateral delivered on swap agreements in the form of securities, with credit-risk-related contingent features | 11.1 | 11.1 | |||
Derivatives designated and not designated as hedging instruments | Interest-Rate Swaps | |||||
Credit Risk Exposure and Collateral | |||||
Interest-rate swap credit risk exposure | 0 | 0 | $ 0 | ||
Collateral received from swap counterparties | 0 | 0 | $ 0 | ||
Collateral delivered on swap agreements, without credit-risk-related contingent features | 5.6 | 5.6 | |||
Collateral delivered on swap agreements in the form of cash, without credit-risk-related contingent features | 66 | 66 | |||
Equity Warrants | Derivatives not designated as hedging instruments | Other noninterest income | |||||
Derivative instruments gain (loss) | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | $ 0.2 | $ 0.3 | $ 0.1 |
Balance Sheet Offsetting (Detai
Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Reverse repurchase agreements | ||
Gross Amount Recognized | $ 700,555 | $ 700,149 |
Gross amount Offset | (500,253) | (500,041) |
Net Amount Presented in the Balance Sheet | 200,302 | 200,108 |
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral | (200,000) | (200,000) |
Net Amount | 302 | 108 |
Repurchase agreements | ||
Gross Amount Recognized | 500,253 | 500,041 |
Gross Amount Offset | (500,253) | (500,041) |
Derivatives not designated as hedging instruments | Swap | ||
Financial instruments that are eligible for offset | ||
Principal amount of collateral swap agreement | 500,000 | |
Financial assets | ||
Fair Value of Securities Pledged as Collateral | 534,200 | |
Financial liabilities | ||
Fair Value of Securities Received as Collateral | 521,000 | |
Derivatives not designated as hedging instruments | Master netting arrangements and similar agreements | ||
Financial assets | ||
Gross Amount Recognized | 8,661 | 7,669 |
Gross Amount Offset | (207) | (1,562) |
Net Amount Presented in the Balance Sheet | 8,454 | 6,107 |
Net Amount | 8,454 | 6,107 |
Financial liabilities | ||
Gross Amount Recognized | 81,776 | 51,125 |
Gross Amount Offset | (207) | (1,562) |
Net Amount Presented in the Balance Sheet | 81,569 | 49,563 |
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral | (16,697) | (14,654) |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | (57,162) | (28,046) |
Net Amount | 7,710 | 6,863 |
Derivatives designated and not designated as hedging instruments | Master netting arrangements and similar agreements | ||
Financial assets | ||
Gross Amount Recognized | 709,216 | 707,818 |
Gross Amount Offset | (500,460) | (501,603) |
Net Amount Presented in the Balance Sheet | 208,756 | 206,215 |
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral | (200,000) | (200,000) |
Net Amount | 8,756 | 6,215 |
Financial Liabilities | ||
Gross Amount Recognized | 582,029 | 551,166 |
Gross Amount Offset | (500,460) | (501,603) |
Net Amount Presented in the Balance Sheet | 81,569 | 49,563 |
Gross Amounts Not Offset in the Balance Sheet, Securities Collateral | (16,697) | (14,654) |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | (57,162) | (28,046) |
Net Amount | $ 7,710 | $ 6,863 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income tax expense (benefit) | |||||
Interest and penalties expense (benefit) relating to uncertain tax positions | $ (300) | $ (300) | |||
Accrued interest and penalties relating to uncertain tax positions | $ 2,200 | 2,200 | $ 2,500 | ||
Income taxes | 32,208 | $ 37,452 | $ 100,489 | $ 103,571 | |
California Franchise Tax Board [Member] | |||||
Income tax expense (benefit) | |||||
Tax benefit | $ 1,100 |
Employee Benefit Plans (Detail)
Employee Benefit Plans (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Benefit Plans | ||||
Maximum contribution by employee (as a percent) | 50.00% | |||
Percentage of employer contribution of first 6 percent of covered compensation | 50.00% | |||
Maximum employee contribution matched by employer as a percentage of covered compensation | 6.00% | |||
Profit sharing and matching contribution expense | $ 6,400 | $ 6,100 | $ 18,700 | $ 16,800 |
Percentage of incentive compensation | 100.00% | 100.00% | ||
Net deferred compensation expense | $ 37 | $ 100 | $ 400 | $ 600 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Commitments and Contingencies | ||
Maximum liability under indemnity in connection with liquidation of an investment acquired | $ 23 | |
Commitments and Contingencies. | ||
Letters of Credit | ||
Commitments and Contingencies | ||
Commitments and Contingencies. | $ 679.6 | $ 718 |
Standby letters of credit, included within letters of credit | ||
Commitments and Contingencies | ||
Commitments and Contingencies. | 567.6 | 607.6 |
Commercial letters of credit, including within letters of credit | ||
Commitments and Contingencies | ||
Commitments and Contingencies. | $ 112 | $ 110.4 |
Variable Interest Entities (Det
Variable Interest Entities (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Variable Interest Entities | ||
Affordable housing investments | $ 222,877 | $ 186,423 |
Affordable Housing VIEs - not primary beneficiary | ||
Variable Interest Entities | ||
Affordable housing investments | 222,900 | 186,400 |
Unfunded commitments for affordable housing investments | 93,800 | |
Aggregate carrying value of private equity and alternative investment funds | $ 24,100 | $ 29,200 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Detail) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | |
Redeemable Noncontrolling Interest | ||
Number of firms in which entity holds majority ownership interest | item | 4 | |
Fair value of noncontrolling owners equity interests | $ 39,978 | |
Redeemable noncontrolling interest | ||
Balance, beginning of period | 39,978 | |
Net income | 954 | $ 2,056 |
Balance, end of period | $ 32,847 | |
Redeemable Noncontrolling Interest | ||
Redeemable Noncontrolling Interest | ||
Number of firms in which entity holds majority ownership interest | item | 4 | |
Fair value of noncontrolling owners equity interests | $ 39,978 | 39,768 |
Redeemable noncontrolling interest | ||
Balance, beginning of period | 39,978 | 39,768 |
Net income | 954 | 2,056 |
Distributions to redeemable noncontrolling interest | (2,430) | (2,366) |
Additions and redemptions, net | (6,043) | (403) |
Adjustments to fair value | 388 | 8,167 |
Balance, end of period | $ 32,847 | $ 47,222 |
Segment Results (Detail)
Segment Results (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | |
Segment Results | ||||
Number of reportable segments | item | 3 | |||
Earnings Summary: | ||||
Net interest income | $ 232,257 | $ 215,776 | $ 685,347 | $ 634,676 |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (6,000) | (8,000) | 4,000 | (9,000) |
(Reversal of) provision for losses on acquired impaired loans | 1,148 | 589 | 2,736 | 3,783 |
Noninterest income | 104,871 | 107,917 | 328,850 | 310,264 |
Depreciation and amortization | 10,719 | 9,702 | 37,812 | 28,356 |
Noninterest expense | 227,324 | 213,212 | 666,333 | 626,992 |
Income before income taxes | 103,937 | 108,190 | 303,316 | 294,809 |
Provision for income taxes | 32,208 | 37,452 | 100,489 | 103,571 |
Net income | 71,729 | 70,738 | 202,827 | 191,238 |
Less: Net (loss) income attributable to noncontrolling interest | (79) | 847 | 954 | 2,056 |
Net income attributable to City National Corporation | 71,808 | 69,891 | 201,873 | 189,182 |
Selected Average Balances: | ||||
Loans and leases, excluding acquired impaired loans | 21,969,592 | 18,837,760 | 21,224,326 | 18,050,616 |
Acquired impaired loans | 420,308 | 580,200 | 455,786 | 639,592 |
Total assets | 34,451,160 | 30,896,357 | 33,205,126 | 30,097,514 |
Deposits | 30,106,057 | 26,830,633 | 28,854,337 | 26,043,449 |
Goodwill | 637,918 | 642,255 | 636,660 | 642,498 |
Customer-relationship intangibles, net | 31,714 | 37,024 | 32,918 | 38,505 |
Other segment | ||||
Earnings Summary: | ||||
Net interest income | 5,494 | 10,521 | 21,114 | 30,541 |
Noninterest income | (16,931) | (12,278) | (45,412) | (26,652) |
Depreciation and amortization | 6,398 | 5,119 | 24,502 | 14,665 |
Noninterest expense | (20,915) | (19,869) | (68,315) | (56,308) |
Income before income taxes | 3,080 | 12,993 | 19,515 | 45,532 |
Provision for income taxes | 954 | 4,533 | 6,486 | 16,109 |
Net income | 2,126 | 8,460 | 13,029 | 29,423 |
Net income attributable to City National Corporation | 2,126 | 8,460 | 13,029 | 29,423 |
Selected Average Balances: | ||||
Loans and leases, excluding acquired impaired loans | 56,038 | 60,002 | 57,460 | 57,583 |
Total assets | 11,330,543 | 10,675,661 | 10,761,541 | 10,586,949 |
Deposits | 54,447 | 277,930 | 104,932 | 254,929 |
Commercial and Private Banking | ||||
Earnings Summary: | ||||
Net interest income | 226,171 | 204,803 | 662,184 | 602,879 |
(Reversal of) provision for credit losses on loans and leases, excluding acquired impaired loans | (6,000) | (8,000) | 4,000 | (9,000) |
(Reversal of) provision for losses on acquired impaired loans | 1,148 | 589 | 2,736 | 3,783 |
Noninterest income | 51,675 | 50,906 | 158,718 | 135,498 |
Depreciation and amortization | 2,482 | 2,786 | 7,688 | 8,381 |
Noninterest expense | 188,367 | 175,844 | 563,775 | 517,022 |
Income before income taxes | 91,849 | 84,490 | 242,703 | 218,191 |
Provision for income taxes | 28,440 | 29,478 | 80,661 | 77,192 |
Net income | 63,409 | 55,012 | 162,042 | 140,999 |
Net income attributable to City National Corporation | 63,409 | 55,012 | 162,042 | 140,999 |
Selected Average Balances: | ||||
Loans and leases, excluding acquired impaired loans | 21,913,554 | 18,777,758 | 21,166,866 | 17,993,033 |
Acquired impaired loans | 420,308 | 580,200 | 455,786 | 639,592 |
Total assets | 22,390,469 | 19,482,692 | 21,704,604 | 18,814,041 |
Deposits | 29,953,606 | 26,481,108 | 28,654,702 | 25,710,863 |
Goodwill | 393,176 | 393,176 | 393,176 | 393,176 |
Customer-relationship intangibles, net | 1,315 | 2,335 | 1,460 | 2,717 |
Wealth Management | ||||
Earnings Summary: | ||||
Net interest income | 592 | 452 | 2,049 | 1,256 |
Noninterest income | 70,127 | 69,289 | 215,544 | 201,418 |
Depreciation and amortization | 1,839 | 1,797 | 5,622 | 5,310 |
Noninterest expense | 59,872 | 57,237 | 170,873 | 166,278 |
Income before income taxes | 9,008 | 10,707 | 41,098 | 31,086 |
Provision for income taxes | 2,814 | 3,441 | 13,342 | 10,270 |
Net income | 6,194 | 7,266 | 27,756 | 20,816 |
Less: Net (loss) income attributable to noncontrolling interest | (79) | 847 | 954 | 2,056 |
Net income attributable to City National Corporation | 6,273 | 6,419 | 26,802 | 18,760 |
Selected Average Balances: | ||||
Total assets | 730,148 | 738,004 | 738,981 | 696,524 |
Deposits | 98,004 | 71,595 | 94,703 | 77,657 |
Goodwill | 244,742 | 249,079 | 243,484 | 249,322 |
Customer-relationship intangibles, net | $ 30,399 | $ 34,689 | $ 31,458 | $ 35,788 |
Uncategorized Items - cyn-20150
Label | Element | Value |
Effect Of Adjustments Due To Accounting Standards Update | cyn_EffectOfAdjustmentsDueToAccountingStandardsUpdate | $ (11,941) |
Retained Earnings [Member] | ||
Effect Of Adjustments Due To Accounting Standards Update | cyn_EffectOfAdjustmentsDueToAccountingStandardsUpdate | $ (11,941) |